Vide Judgment dated 03.05.2021 in the case of Indian School, Jodhpur & Anr. v. State of Rajasthan & Ors., Civil Appeal No. 1724/2021, the Hon’ble Supreme Court of India decided some pertinent issues relating to regulation of fees in the Schools in the State of Rajasthan. To read more about it, please visit our Blog http://www.desikanoon.co.in/2021/05/supreme-court-reduction-tuition-fees-school-fee-covid-19-disaster-management-epidemic-pandemic.html Please subscribe and follow us on YouTube, Instagram, iTunes, Twitter, LinkedIn, Discord, Telegram and Facebook. Credits: Music by Wataboi from Pixabay Stay tuned for more updates. Thanks for listening!
There were two sets of petitions. In the first set of Petitions, private unaided schools had assailed the validity of the Rajasthan Schools (Regulation of Fee) Act, 2016 (in short, “Act of 2016”) and in the second set of Petitions, Orders directing deferment of collection of school fees including reduction of fees limited to 70% of Tuition Fees by CBSE Schools and 60% from Rajasthan Board Schools, in view of reduction of syllabus by the respective Boards due to the Covid-19 Pandemic.
FIRST SET OF PETITIONS
Grounds of Challenge to the Rajasthan Schools (Regulation of Fee) Act, 2016
1. Arbitrarily restricting the autonomy of the School to determine fee is violative of Article 19 (1) (g) of the Constitution of India.
2. The Constitution of School Level Fee Committee (SLFC) under the Act of 2016 wherein the School Management has only one representative against five parents, three teachers and one principal, restricts the autonomy of the School Management to regulate fees. Such parents could also be of those wards who are availing free education under the Right of Children to Free and Compulsory Education Act, 2009 (in short, “RTE Act”) and thereby have no stakes at all in relation to the School Fees.
3. The Division Fee Regulatory Committee (DFRC) and the Revision Committee constituted under the Act of 2016 have powers to issue summons, search, seizure and penalties thereby considering School Fees to be res extra commercium (thing that is outside purview of commerce) and endlessly embroiling the School in the process of appeal, revision and judicial proceeding putting their financial future in jeopardy.
4. The process of determining fees is a dynamic exercise and the factors enumerated under the Act of 2016 are vague, subjective and irrelevant. In TMA Pai Foundation & Ors. v. State of Karnataka & Ors., (2002) 8 SCC 481, it was observed that it is in the interests of the general public that autonomy and non-regulation of the school administration will ensure that more good quality schools will get established.
5. It was also urged that the field of regulation of fees of schools is already occupied by the RTE Act and the State Legislature cannot enact a law on the same subject.
Grounds taken by the State in relation to the Act of 2016
1. The State/Respondent cited various cases such as Modern Dental College and Research Centre & Ors. v. State of Madhya Pradesh & Ors., (2016) 7 SCC 353, wherein identical provisions enacted by various states in relation to fixation of fee by external committees were upheld.
2. Article 19 (1) (g) of the Constitution of India is not an absolute right and the State has the power to regulate such rights.
Observations by the Court in relation to the Act of 2016
1. It is not open to argue that the Government cannot provide for external regulatory mechanism for determination of school fees. The real question is whether the Act of 2016 stands the test of reasonableness and rationality and balances the rights of the School under Article 19 (1) (g).
2. The Court also considered the ground that the RTE Act already occupies the field and observed that the purpose of the RTE Act is completely different since it talks about free and compulsory education to the children of the age of 6-14 years and otherwise has no connection with the fee structure that is adopted by the Schools.
3. The Court considered the Act of 2016 in great depth and upheld the validity of the Act of 2016; however, it read down the following provisions: -
a. Section 4 that talks about lottery system was read down wherein even the parents of the wards admitted under the RTE Act could become a part of the SLFC. The Court held that the parents who are part of the SLFC must be willing, well-informed and capable of having a meaningful discourse on the proposal of fee structure. Such eligibility ought to be specified in the Act.
b. Section 7 was also read down to the extent that the constitution of DFRC under it must ensure that only those parents who wards are actually studying in the School at that point of time are a part of it and such parents should not be the members of SLFC of any school within the divisional area. Further, such parents should have basic knowledge about functioning of the Schools and that their ward should not have secured admission under the RTE Act.
c. Section 10 was also read down that deals with the Revision Committee wherein the decisions of the DFRC could be assailed, to the extent that in the Revision Committee as well, the stipulations contained in point b. hereinabove are followed.
SECOND SET OF PETITIONS
In the second set of Petitions, Orders were passed by the Rajasthan Government directing deferment of collection of school fees including reduction of fees limited to 70% of Tuition Fees by CBSE Schools and 60% from Rajasthan Board Schools, in view of reduction of syllabus by the respective Boards due to the Covid-19 Pandemic. Those Orders were upheld by the Division Bench of the Rajasthan High Court taking the view that such Orders could also be even in exercise of powers under the Disaster Management Act, 2005 (in short, “Act of 2005” of “DM Act”)
According to the Schools, they were already following the mandate of the Act of 2016 and the Fee was fixed by the SLFC and there is no provision under the Act of 2016 that permits such interference by the State Authorities in respect of School Fees. Further, it was urged that the Disaster Management Act has no applicability in the facts of the present case as it has nothing to do with regulation of fees.
According to the Hon’ble Supreme Court, the Disaster Management Act, 2005 provides for preparation of a plan for disaster management by concerned authorities and “it is the direct effect of disaster that is required to be mitigated and not indirect hardship caused to individuals much less in respect of contractual matters” and “in the scheme of the Act of 2005, there is nothing to indicate that the Authorities can interfere with contractual matters or indirect hardships — such as inability of parents to pay school fees due to pandemic situation. The Director, Secondary Education, in no way, is concerned with the preparation of a disaster plan or its enforcement and implementation under the Act of 2005.”
The State of Rajasthan also tried to invoke the Rajasthan Epidemic Disease Act, 2020, to justify its Orders. Section 4 of the said Act talks about permitting the government to regulate the functioning of offices, governmental, private and educational, but according to the Hon’ble Supreme Court, the same gives no authority to the State Government to decide about the fee structure of unaided private schools.
The Hon’ble Supreme Court also observed that the State Government cannot issue directions in respect of commercial or economic aspects of legitimate subsisting contracts (Contract between Students/Parents and Schools) between two private parties with which the State has no direct causal connection. It was further observed that “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.”
More strong remarks were made by the Hon’ble Supreme Court and it was stated that in the guise of curbing profiteering, the State “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” and “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.”
Another interesting argument that was taken by the Government/Respondent was that it was regulating the Fees while exercising the powers under Article 162 of the Constitution of India. Article 162 provides that the Executive/Government has the powers to make laws on all matters to which the Legislature of the State has power to make laws. On this argument, it was the view of the Hon’ble Supreme Court that plethora of cases decided earlier have held that determination of school fee structure is the exclusive prerogative of the School Management running a private unaided school and hence, in such cases, it is not open to the Legislature to make a law touching upon that aspect. In words of the Court, “Ex consequenti, the State Government also cannot exercise power under Article 162 of the Constitution in that regard.”
The Hon’ble Court stressed on the fact that the Disaster Management Act is not a panacea for all difficulties much less not concerning disaster management as such. While holding that the Government has no power reduce fees of the Schools, the Hon’ble Court also observed that this does not mean that the Schools have a Carte Blanche to be oblivious to the conditions of the Pandemic and the School Managements should “reschedule payment of school fee in such a way that not even a single student is left out or denied opportunity of pursuing his/her education, so as to effectuate the adage “live and let live”.”
Further, the Hon’ble Court also observed that the Schools can collect fees only in respect of activities and facilities which they are providing and demanding fees in respect of overheads that are not being incurred by them would be “nothing short of indulging in profiteering and commercialization.”
According to the Hon’ble Court, since the schools were not allowed to be open for a substantial period of time due to the Pandemic, they must have saved overheads and recurring costs on various items such as fuel, maintenance, water, stationery etc. Due to lack of empirical data in this regard, the Court observed that despite lack of mathematical exactitude, it would assume that the Schools must have saved around 15% of the annual school fees fixed by them for the relevant period.
In light of the above-stated reasoning, it was held by the Hon’ble Court that: -
1. The Schools shall provide a minimum of 15% deduction on the annual school fees to the students.
2. The amount so payable shall be paid in six equal monthly instalments before 05.08.2021.
3. No student shall be debarred or withheld from attending either online/physical classes on account of non-payment of fees and request to remit fees should be considered sympathetically by the Schools.
4. Such arrangement mentioned hereinabove will not affect the collection of fees for the academic year 2021-22.
OPINION AND CONCLUDING REMARKS
I have mixed feelings about this Judgment. On the one hand, the Hon’ble Court has artistically brought down every non-sensical argument of the Government/State to hold that regulation of fee is a private affair in case of private unaided schools but on the other hand, the Court went ahead with providing deduction in respect of fees that is to be collected by the Schools. Further, the students cannot be debarred by the Schools if their parents fail to deposit fees in respect of academic year 2020-21.
I think the overall winners in this entire battle of regulation of fees are the students and quite rightly so. They are the ones who would suffer most if the education were not imparted to them. But, in the garb of imparting education to the students, I respectfully submit that that the Hon’ble Court has left the parents without any consequences. I think it would be better if some form of mandatory direction with respect to the parents is also given that makes sure that the parents who are in a position to pay must pay the fees and failure to do so would entail liabilities not for their kid but directly on them. A small window of opportunity has been given to the unscrupulous parents who despite having the paying capacity may end up taking undue advantage of the leniency shown to them by the Court.
But be that as it may, Hon’ble Courts can do only so much in such uncertain times. The best part of the Judgment is that the Hon’ble Court considered each, and every argument advanced by all the sides in proper spirit and perspective and did not allow high-handedness or callousness to prevail.
I can just hope that our respective governments also start taking the matters at hand in a serious and a responsible manner, as is expected from every legitimate government. It is too bad that for every little thing, painstaking efforts have to be made by the Courts to balance the rights of the people vis-à-vis the powers of the government whereas such situations ought not to arise ever if the governments adopt a rational and a sympathetic view to the legitimate plights of the citizens of this country.