Delhi High Court Issues Notice In Appeals Challenging Order Allowing Pvt Unaided Schools To Collect Annual Fee, Development Charges In Lockdown

The Delhi High Court has issued notice in appeals filed by Delhi Government and students challenging the single judge bench decision allowing private schools from collecting Annual Charges and Development Fees from students in lockdown.

However, the bench has rejected the interim plea praying for stay of the aforesaid judgment.

A vacation bench comprising of Justice Rekha Palli and Justice Amit Bansal ordered thus:

"We are issuing notice. However, we are rejecting the interim application for stay."

"Ultimately, the managements of these unaided, private schools in the city, which do not receive any aid from the GNCTD and are solely dependent on the fee collected by them, would also need funds to sustain their operations and premises and continue imparting education online." Observed the Court while denying the interim relief.

The development came after the bench heard Senior Advocate Vikas Singh appearing for the appellant, Directorate of Education, Delhi Government and Senior Advocate Shyam Divan appearing for the Respondent in the matter.

During the course of hearing on Monday, Singh submitted before the Court that the reliance made by the Single judge on the Supreme Court's decision in Indian School, Jodhpur & And. vs. State of Rajasthan & Ors. was wrong for the reason that the case pertained to a situation wherein schools were reopening which was not the case in Delhi.

Furthermore, he also submitted that full tution fee is sufficient to take care of teachers salary. 

"60% of tution fee is sufficient to cover teachers salary. There is no income. Taxes will come when there is an income." Submitted Singh.

It was also submitted by Singh that at the best, the High Court could have asked the Government to go back to the respective school committee for deliberation of the issue.

Stating that the parents were being harassed, Singh prayed that the decision must be stayed and the case should be remanded back to the single judge.

"School going completely berserk. I have received a Whatsapp message just now from a parent. They are saying even transportation fees is charged from students on the basis of this order." Singh submitted.

Lastly, arguing that the matter pertaining to the Rajsthan decision concerned a situation wherein schools were reopened for classes 9th to 12th, Singh submitted that the single judge decison is "grossly unjust and illegal" which has to be stayed.

On the other hand, Divan submitted before the Court that the Supreme Court issued operative decisions for the benefit of students and that the government has no power to para phrase the same.

He also stated that the structure of the decision delivered by the single judge is not to follow the imprint of the Apex Court and that he was "acutely conscious that the facts were different."

"The entire analysis is completely independent of Supreme Court judgment. Court wants to give benefit to students. It's saying give installments. It's saying you cannot withhold education, you cant eject them from online classes." Divan submitted.

In view of the submissions made, the Court observed thus:

"Given the terrible exigencies of the pandemic, we have been forced to embrace new models for our institutions and virtual classes are our sole way of ensuring that the nation's children are being educated.Thus, one cannot gainsay the importance of these virtual classes and staying the impugned decision today without a deeper examination of the facts would only compromise with the ability of these schools to continue serving this critical function."

The Court also recorded the assurance given by Mr. Divan that all Annual Charges and Development Fee levied for the year 2021-22 would be recovered on the same principles applicable to the academic year 2020-21 under the impugned judgment.

In the aforesaid terms, the interim relief application for staying the judgement was rejected by the Court.

The clutch of pleas were filed assailing the order passed by the single judge bench comprising of Justice Jayant Nath wherein the bench had held thus:

"The impugned acts are prejudicial to the said Schools and would cause an unreasonable restriction in their functioning. In the above facts and circumstances, clearly the impugned orders dated 18.04.2020 and 28.08.2020 issued by the respondent to the extent that they forbid the petitioner/postpone collection of Annual Charges and Development Fees are illegal and ultra vires the powers of the respondent stipulated under the DSE Act and the Rules. The orders to that extent are quashed."

The Court observed that the department of education has the power to fix and collect fees by such unaided educational institutions only for the purpose to prevent commercialization of education by them.Observing that there was no finding recorded by the impugned orders that the collection of Annual Charges and Development Fees tantamounts to profiteering or collection of capitation fees by private unaided recognized schools, the Court held thus:

"A perusal of the impugned orders does not show that the entire body of private unaided recognized schools has indulged in profiteering or charging of capitation fees by seeking to collect Annual Charges and Development Fees in the stated facts and circumstances. As noted, the private recognized unaided schools are clearly dependent only on the fees collected to cover their salary, establishment and all other expenditure on the schools. Any regulations or order which seek to restrict or in-definitely postpone their powers to collect normal and usual fees as is sought to be done by the impugned orders is bound to create grave financial prejudice and harm to the schools."

Furthermore, the Court held:

"The respondent in the facts and circumstances has no power to indefinitely postpone the collection of Annual Charges and Development fees, as is sought to be done. The impugned acts are prejudicial to the said Schools and would cause an unreasonable restriction in their functioning. In the above facts and circumstances, clearly the impugned orders dated 18.04.2020 and 28.08.2020 issued by the respondent to the extent that they forbid the petitioner/postpone collection of Annual Charges and Development Fees are illegal and ultra vires the powers of the respondent stipulated under the DSE Act and the Rules. The orders to that extent are quashed."

While disposing of the petition the Court held that:

"The above directions given in paras (i) to (vii) will apply to the petitioner schools mutatis mutandis. However, clause (ii) has to be modified. The amount payable by concerned students will be paid in six monthly installments w.e.f. 10.06.2021."

Title: Directorate of Education v. Action Committee Unaided Recognized Private Schools

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