REGULATION OF FEES & PANDEMIC
INDIAN SCHOOL, JODHPUR V. STATE OF RAJASTHAN, 03.05.2021
Shubham Budhiraja[1]
AM KHANWILKAR, J
DINESH MAHESHWARI, J
Summary of Judgment
The Pandemic happened and that the State Govt. while using Article 162
of Constitution and provisions of Disaster Management act, 2005 passed order to
suspend or reduce the school fees so affirmed by school level fees committee
under act of 2016. The Supreme Court held that act of 2016 is a self-contained
code and use of Article 162 was not justified because there is law already in
place for the subject matter and in such a situation, revert to Article 162
will not be justified. Also, revert to DM act was not justified because act of
2016 in its clear terms state that fees once fixed cannot be disturbed for 3
years unless there is element of capitation or profiteering. The State cannot
use Article 162 or DM act to disturb the private contract between the parties. The
best could have done was to mediate between school management and parents to
reduce the portion of expenses which were not incurred such as diesel cost,
etc. The Supreme Court further applied principle of quid-pro-quo and allowed
deduction of 15% from fees on account of saved overhead expenses due to covid
pandemic. The Supreme Court uphold the fees determination mechanism laid down
by act of 2016 and also stated that constitution of School level fees committee
or District fees regulation committee does not impact the management autonomy.
Hence, there is no violation of Article 19(1)(g) and provisions of 2016 act are
constitutionally valid.
(I) It is settled law that State can regulate the fees mechanism of private unaided school at initial stage itself
(II) To invoke DM Act, 2005 to regulate or reduce the school fees was unjustified especially when there is no element of capitation
(III) Article 162 cannot be used to invoke the powers in a field where law is already enacted and subject matter is self-contained code
(IV) State cannot pass orders in respect of
commercial or economic aspects of two private parties when state has no casual
connection to it
|
Case
Name |
Relevant
Remarks |
|
T.M.A. Pai Foundation |
Private unaided school
management must have absolute autonomy to determine the school fees. |
|
Modern Dental College and
Research Centre |
Though the fee can be fixed by
the educational institutions and it may vary from institution to institution
depending upon the quality of education provided by each of such institutions,
commercialization is not permissible; and in order to ensure that the
educational institutions are not indulging in commercialization and
exploitation, the Government is equipped with necessary powers to take
regulatory measures and to ensure that the private unaided schools keep
playing vital and pivotal role to spread education and not to make money |
|
Association of Private Dental
and Medical Colleges vs. State of M.P |
Every school management of private
unaided school is free to devise its own fee structure, but the same can be
regulated by the Government in the interests of general public for preventing
profiteering and/or charging of capitation fee. Further, fixation of fees
needs to be regulated and controlled at the initial stage itself regulatory measures are felt
necessary to promote basic wellbeing for individuals in need |
SCHEME OF 2016 ACT
The act of 2016 is a state
legislature. The earlier enactment on the selfsame subject did not include
provision of appeal against the orders of fee determination by the Fee
Determination Committee. This act applies to both aided and unaided schools in
state of Rajasthan. The term unaided school is not defined in act. The term
fees defined as amount by whatever named called collected directly or
indirectly by school for admission of a pupil in any standard for any course of
study and Section 8 of the act provides factors for determination of fees such
as location of school, Infrastructure, education standard, administrative
expenditure, reasonable revenue surplus for development, and Rule 10 provides
for additional factors such as strength of students, e-governance, supply of
books, provision of meals, etc.
SLFC & DFRC & SCHOOL AUTONOMY
The fees so determined by school
management have profiteering or capitation is a matter to decide by statutory
committee under Section 7/ 9 such as Divisional fees regulatory committee. The
adjudication by DFRC comes only when proposal of fees by management is refused
by SLFC and if SLFC have accepted the proposal of fees then whatever fees
decided will become final and no need for DFRC to adjudicate. The SLFC is
school specific whereas DFRC is independent regulatory authority empowered to
look into whether fees of any school is profiteering or capitation
Draw of lots can be one of the
ways of identifying the willing parent who could become member of the SLFC.
Whether the member should be chosen by election from amongst the willing
parents or draw of lots or by nomination including his/her eligibility
conditions, is a legislative policy
The SLFC so constituted would
continue to function for one academic year and the member chosen from Parent
Teachers Association is not eligible to participate again for a period of three
years thereafter from the date of expiry of his/her term as the member of the
SLFC. By this process, the parents representing different wards get opportunity
to be part of the SLFC.
The SLFC does not sit over the
proposal submitted by the school Management as a court of appeal, but only
reassures itself as to whether the proposed fee structure entails in
profiteering by the school on applying the parameters specified in Section 8
and Rule 10.
In other words, it is open to the
SLFC to take a different view regarding the school fees proposed by the school
Management and arrive at a different fee structure. If that counter proposal is
acceptable to the school Management, nothing further is required to be done and
the decision so taken by the school Management would become binding for three
academic years on all concerned. However, in case the school Management
disagrees with the recommendations of the SLFC, it is open to both sides,
namely, the school Management as well as the parents of wards to take the
matter to the DFRC for adjudication on that aspect. This mechanism does not in
any way hamper the autonomy of the schools and therefore the act and rules
nowhere violate fundamental rights under Article 19(1)(g)
2016 ACT & DISASTER MANAGEMENT ACT
A large number of people have
lost their jobs and livelihood as aftermath of such economic upheaval. The
parents who were under severe stress and even unable to manage their day to day
affairs and the basic need of their family made fervent representation to the
school Management(s) across the State. A public discourse in that regard
surfaced in the media which impelled the political dispensation to intervene.
Thus, on the directions of the Chief Minister of the State of Rajasthan, the
Department issued orders.
By its very nature, the direction
given by the State Government is in conflict with the scheme of finalization of
fee structure under the Act of 2016 and also the binding effect thereof for the
specified period of three academic years on all concerned..
State Government had no power,
whatsoever, to interdict the fee structure much less which has been finalized
and fixed by the concerned functionaries/authorities under the Act of 2016
itself before expiry of the statutory period as specified.
ARTICLE 162- USE OF EXECUTIVE POWERS
The executive power of a State
under Article 162 of the Constitution extends to the matters upon which the
legislature of the State has competency to legislate and is not confined to
matters over which legislation has already been passed. It is also well settled
that the State Government cannot go against the provisions of the Constitution
or any law. In any case, determination of fees including reduction thereof is
the exclusive prerogative of the management of the private unaided school. The
State can provide independent mechanism only to regulate that decision of the
school Management to the extent that it does not result in profiteering and
commercialization
It is not open to the State
Government to issue directions in respect of commercial or economic aspects of
legitimate subsisting contracts/transactions between two private parties with
which the State has no direct causal connection, in the guise of management of
pandemic situation or to provide “mitigation to one” of the two private parties
“at the cost of
the other”. This is akin to – rob Peter to pay
Paul.
It is one thing to say that the State may regulate
the fee structure of private unaided
schools to ensure that the school Management does not indulge in profiteering
and commercialization, but in the guise of exercise of that power, it cannot transcend
the line of regulation and impinge upon the autonomy of the school to fix and
collect “just” and “permissible” school fees from its students. It
is certainly not an essential commodity governed by the legislation such as
Essential Commodities Act, 1955 empowering the State to fix tariff or price
thereof.
SAVED OVERHEAD EXPENSES
In law, the school Management
cannot be heard to collect fees in respect of activities and facilities which
are, in fact, not provided to or availed by its students due to circumstances
beyond their control. Demanding fees even in respect of overheads on such
activities would be nothing short of indulging in profiteering and commercialization.
It is a well-known fact and judicial notice can also be taken that, due to
complete lockdown the schools were not allowed to open for substantially long
period during the academic year 2020-21.
Resultantly, the school
Management must have saved overheads and recurring cost on various items such
as petrol/diesel, electricity, maintenance cost, water charges, stationery
charges, etc. Indeed, overheads and operational cost so saved would be nothing,
but an amount undeservedly earned by the school without offering such
facilities to the students during the relevant period. Being fee, the principle
of quid pro quo must come into play.
CONCLUSION: The school management
will collect fees so determined under 2016 act for academic year 2019-20 but
after providing 15% deduction on account of saved overhead expenses and school
management will not debar any student to attend classes because of non-payment
of fees or any arrears
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