03 May 2121

Schools cannot collect fees with respect to facilities not availed by students - Supreme Court of India

Case : Indian School, Jodhpur & Anr. v. State of Rajasthan & Ors. Civil Appeal No. 1724 of 2021 (Arising Out of SLP (C) No. 27881 of 2019) With 11 Similar Cases

Court : Supreme Court of India

Bench : Justice A. M. Khanwilkar and Justice Dinesh Maheshwari

Decided on : 03 May 2121

Relevant Statutes

 

Article 13(2),19(1)(g), 30,133 and 162 of the Constitution of India

Sections 2, 3, 4, 6 to 11,15,16 and 18 of the Rajasthan Schools (Regulation of Fee) Act, 2016

 Rules 3, 4, 6 to 8 and 11 of the Rajasthan Schools (Regulation of Fee) Rules,2017

 Right of Children to Free and Compulsory Education Act, 2009

Section 2,14,18, 22, 23, 38, 39 and 72 of the Disaster Management Act,2005

Section 4 of the Rajasthan Epidemic Diseases Act, 2020

Brief Facts and Procedural History

1. In the first set of appeals, the appellants challenged the validity of the Rajasthan Schools (Regulation of Fee) Act, 2016, in particular, Sections 3, 4, 6 to 11, 15 and 16 and the Rules framed thereunder Rajasthan Schools (Regulation of Fee) Rules, 2017, in particular Rules 3, 4, 6 to 8 and 11 being ultra vires the Constitution and abridge the fundamental right guaranteed under Article 19(1)(g) of the Constitution of India before the High Court of Judicature for Rajasthan at Jodhpur. The High Court, dismissed the challenge to the validity of the above said Act.

2. In the second set of appeals, two orders were issued by the State Authorities in the wake of COVID 19 pandemic regarding the school fees. The appellants challenged the above two orders before the Single Bench of High Court of Judicature for Rajasthan at Jaipur. The High Court stayed the orders and directed the school authorities to allow the students to continue their studies online and also to deposit only 70% of the tuition fees from the total fees chargeable for the period from March 2020 in three instalments.

3. Against this decision intra-court cross-appeals filed before the Division Bench of High Court. The court stayed the order passed by the Single Bench of the Rajasthan High Court. 

4.  Before the next date of hearing, by order dated 28.10.2020 the State Government issued the guidelines for charging of school fees for the academic session 2020-­21 by non­-government educational institutions from students/guardians. Which was again challenged before the Division Bench of the Rajasthan High Court.

5. By passing common judgment in all appeals and writ petitions filed by the appellants, the High Court disposed of the petitions and upheld the three orders passed by the State authorities.

Issues of the Case

In First Set:

Whether Sections 3, 4, 6 to 11, 15 and 16 of the   Rajasthan Schools (Regulation of Fee) Act, 2016 and Rules 3,4,6 to 8 of the Rajasthan Schools (Regulation of Fee) Rules,2017 is ultra vires the fundamental right guaranteed under   Article   19(1)(g) of the Constitution of India?

In Second Set:

Whether the order passed by the State authorities for reducing the school fees for private unaided schools is sustainable under the law?

The Observations of the Court

In First Set:

1. The Honourable Supreme Court noted that every private unaided school is free to devise its own fee structure but the same can be regulated by the Government in the interest of the public for preventing profiteering and/or charging capitation fees. Further, the regulatory measures are necessary to promote basic wellbeing for individuals in need.

2. The Honourable Supreme Court observed that there are large no. of private schools and a single fee determination committee cannot determine the fee of such schools in a proper manner in time. For that reason, the Rajasthan Schools (Regulation of Fee) Act, 2016 came into being to provide for the regulation of the collection of fees by schools in the State of Rajasthan and matters connected therewith and incidental thereto. The Act provides for a regulatory mechanism.  

3. On bare perusal of relevant sections and rules thereunder of the Rajasthan Schools (Regulation of Fee) Act of 2016, the court found that setting up of an independent final adjudicatory authority especially created for considering the question as to whether the fee structure proposed by the school management results in profiteering or otherwise, does not violate the fundamental right of the school management guaranteed under Article 19(1)(g) of the Constitution. The challenge is devoid of merit.

4. Further, the Rules framed thereunder gives additional powers to the School Level Fee Committee for ensuring compliances of the provisions of the Rajasthan Schools (Regulation of Fee) Act of 2016. The Rajasthan Schools (Regulation of Fee) Act of 2016 deals specifically with the subject of regulating fee structure propounded by the private unaided school management. Hence, there is no substance in this challenge.

In Second Set:

1. The Honourable Supreme Court noticed that the stated order makes no reference to the source of power under which it has been issued. To justify the exercise of that power, the respondents invoked four different perspectives. First, under Section 18 of the Rajasthan Schools (Regulation of Fee) Act of 2016. Second, under Article 162 of the Constitution. Third, under the Disaster Management Act, 2005. Lastly, under the Rajasthan Epidemic Diseases Act, 2020.

2. On 1st Perspective, the Honourable Supreme Court found that the order issued by the State Authorities is in violation of the Rajasthan Schools (Regulation of Fee) Act of 2016. There is no mechanism to modify the school fees once finalized in the manner provided by the Rajasthan Schools (Regulation of Fee) Act, 2016. The Court found that the order of the State Authorities is in conflict with the scheme of finalization of fee structure under the Rajasthan Schools (Regulation of Fee) Act, 2016 and also the binding effect thereof for the specified period of three academic years on all concerned.

3. On 2nd, the Honourable Supreme Court observed that determination of school fee structure including reduction of fixed school fee is the exclusive domain of the School Management, it is not open to the Legislature to make a law on that subject except to provide a statutory mechanism to regulate fees for ensuring that it does not result in commercialization and profiteering by the schools. Hence, Article 162 of the Constitution cannot be invoked.

4. On 3rd, the Honourable Supreme Court examined the provisions of the Disaster Management Act, 2005 and observed that there is no provision that allows interdicting the school fee structure fixed under the Rajasthan Schools (Regulation of Fee) Act, 2016. The Disaster Management Act, 2005 is not a panacea for all difficulties much less not concerning disaster management as such.

5. Even the last point urged by the state to justify the order falls to the ground. Under the Rajasthan Epidemic Diseases Act, 2020, the power to regulate cannot be invoked to control the tariffs, fees and cost of goods and services and in particular economic aspects of contractual matters between private parties or so to say school fees of private unaided schools.

6. The Honourable Supreme Court concluded that the appellants are justified. The School Managements are expected to be responsive and alive to the current situation and therefore necessary remedial measures should be taken to mitigate the hardship of students and parents. The schools should reschedule the fee payment in such a manner that no student is denied Right to Education so as to effectuate the adage “live and let live”.

The Decision Held by the Court

1In the first set of appeals this court hold that “the High Court rightly concluded that the provisions of the Rajasthan Schools (Regulation of Fee) Act, 2016 as well as the Rules of 2017 are intra vires the Constitution of India and not violative of Article 13(1) and 19(1)(g) of the Constitution”.

2. The second set of appeals are allowed and the impugned judgment and order of the High Court is quashed and set aside.

3. The contempt petition(s) pending before the High Court in connection with the subject matter of these appeals also stand disposed of. No order as to costs.

4. Further, to avoid multiplicity of proceedings including uncertainty of legal processes by over 36,000 schools in the determination of annual fee structure for the academic year 2020-21, as a onetime measure to do complete justice between the parties, Honourable Supreme Court proposes to issue following directions:

(i) The appellants (school Management of the concerned private unaided school) shall collect annual school fees from their students as fixed under the Act of 2016 for the academic year 2019-20, but by providing deduction of 15 per cent on that amount in lieu of unutilised facilities by the students during the relevant period of the academic year 2020-21.

(ii) The amount so payable by the concerned students be paid in six equal monthly Instalments before 05.08.2021 as noted in our order dated 08.02.2021.

(iii) Regardless of the above, it will be open to the appellants (concerned schools) to give further concession to their students or to evolve a different pattern for giving concession over and above those noted in clauses (i) and (ii) above.

(iv) The school Management shall not debar any student from attending either online classes or physical classes on account of non-payment of fees, arrears/outstanding fees including the instalments, referred to above, and shall not withhold the results of the examinations of any student on that account.

(v) If any individual request is made by the parent/ward finding it difficult to remit annual fees for the academic year 2020-21 in the above terms, the school Management to consider such representation on a case-to-case basis sympathetically.

(vi) The above arrangement will not affect the collection of fees for the academic year 2021-22, as is payable by the students of the concerned school as and when it becomes due and payable.

(vii) The school Management shall not withhold the name of any student/candidate for the ensuing Board examinations for Classes X and XII on the ground of nonpayment of fee/arrears for the academic year 2020 21, if any, on obtaining undertaking of the concerned parents/students

5. It is conscious of the fact that the court is issuing a general uniform direction of deduction of 15 per cent of the annual school fees in lieu of unutilised facilities/activities and not on the basis of actual data school wise.

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