Authorities Under Disaster Management Act Have No Power To Alter Fee Structure Of Private Schools: Supreme Court

The Supreme Court held that the Statutory Authorities under the Disaster Management Act of 2005 have no power to deal with the subject of school fee structure of private unaided schools.

The Act is not a panacea for all difficulties much less not concerning disaster management as such, the bench comprising Justices AM Khanwilkar and Dinesh Maheshwari observed.

The court observed thus while allowing the appeal filed by Private School Managements who had challenged the Rajasthan Government orders regarding deferment of collection of school fees including reduction of fees limited to 70 per cent of tuition fees by schools affiliated with the Central Board of Secondary Education and 60 per cent from the schools affiliated with Rajasthan Board of Secondary Education, in view of reduction of syllabus by the respective­ Boards due to aftermath of pandemic (lockdown) from March 2020.'

Before the Apex court, school management contended that none of the provisions of the Disaster Management Act, 2005 or the Rajasthan Epidemic Diseases Act, 2020 or Rajasthan Schools (Regulation of Fee) Act, authorizes the State Government to reduce the quantum of fees to be collected by the private schools. The State defended the order contending that it has power for mitigating the concerns of the parents and for capacity building of the stakeholders as one of the measures under the Act of 2005.

Agreeing with the contention made by managements, the bench noted that there is no express provision in the Act of 2005 which empowers the Director, Secondary Education (or the State Government to issue order and directions in respect of school fee structure because of the pandemic situation

"Having regard to the purport of the Act of 2005, it is unfathomable as to how the State Authorities established under the stated Act can arrogate unto themselves power to issue directions to private parties on economic aspects of legitimate subsisting contractual matters or transactions between them inter se. In any case, the impugned order has not been issued by the State Authority referred to in the Act of 2005. It is not enough to say that the same was issued under the directions of the Chief Minister of the State. For, the Chief Minister is only the Chairperson (Ex officio) of the State Disaster Management Authority established under Section 14 of the Act of 2005. Suffice it to observe that there is no provision in the Act of 2005 which concerns or governs the subject of interdicting the school fee structure fixed under the Act of 2016.", the court said referring to the provisions of the Act.

The State, to defend its order, also had invoked the general provision in Section 4(2)(g) permitting the Government to regulate or restrict the functioning of offices, Government and private and educational institutions in the State, would not give authority to the State Government to decide about the fee structure of the concerned unaided private school.

"The measures enunciated in Section 4 of the Act of 2020 in no way deal with the "tariffs" of air, rail, road, hospital, temporary accommodation. It only enables the Authority to prohibit any usage or activities which the Government considers sufficient to spread or transmit epidemic diseases and for that purpose to inspect various places suspected of being infected with such diseases. Indeed, it  can regulate or restrict the functioning of offices, Government and private and educational institutions in the State. That, however, would be only in respect of manner of its use and its timings including to observe standard operating procedures to ensure that epidemic diseases do not transmit or spread on account of activities carried out therein. That power to regulate cannot be invoked to control the tariffs, fees or cost of goods and services and in particular economic aspects of contractual matters between two private parties or so to say school fees of private unaided schools. Accordingly, even the last point urged by the State to justify the impugned order dated 28.10.2020 falls to the ground.", the court said.

Case: Indian School, Jodhpur Vs. State Of Rajasthan [CA 1724 OF 2021]
Coram: Justices AM Khanwilkar and Dinesh Maheshwari
Citation: LL 2021 SC 240

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