Andhra Pradesh High Court Strikes Down GOs Fixing Fees Of Private Unaided Schools

A single-judge bench of Justice U. Durga Prasad Rao was adjudicating a batch of writ petitions filed by different Private Unaided School Associations, Junior College Management Associations, Junior Colleges and High Schools. Based on recommendations of the A.P. School Education Regulatory and Monitoring Commission, GO 53 determined the fee structure for Nursery to 10th class in private unaided schools in the State of A.P. for the block periods from 2021 till 2024 and GO 54 determined the fee structure of two years Intermediate course of private unaided junior colleges in the State of A.P. for block periods from 2021 till 2024.

The petitioners challenged the Orders on two grounds:- i) No prior notification calling for proposals of fee structure to individual institutions were made ii) Fee fixation was finalised by only relying upon the geographical location of education institutions, disregarding the other parameters envisaged in Rule 8 of A.P. School Education Regulatory and Monitoring Commission Rules, 2020 (APSERMC Rules).

While striking down the impugned orders, the court observed that State Governments are only accorded the power to regulate the fee structure under Rule 8 of A.P. School Education Regulatory and Monitoring Commission Rules, 2020. The state is given such powers under the rules to prevent schools from resorting to resorting to profiteering and collecting Capitation Fee. Agreeing with the contentions of the petitioner counsels, the court added that apex court judgments only allow the State Governments to undertake the regulation of fee structure and not the fixation of fees itself.

Court's Observations

Even for the purpose of regulation, the court observed that Rule 8(i) mandates that educational institutions shall submit the proposed fee structure of admissions along with relevant documents and books of accounts for scrutiny of the Commission. It also imposes responsibility on the Commission to issue "notification" in that regard from time to time.

"The phrase "based on" employed in the Rule explains that the responsibility of educational institutions to submit proposed fee structure and relevant record comes only after the notification is issued by the Commission. Therefore, it is clear that the Commission, whenever it proposes to recommend the fee structure, shall issue notification calling for the fee structure proposals from the institutions", the court remarked by pointing out that A.P School Education Regulatory and Monitoring Commission (APSERMC) has not issued any prior notification and chose to unilaterally decide the fee structure. The recommendations were made

Noting that the principles of natural justice have been violated by not issuing notifications calling for the fee proposals from the petitioners and other institutions under Rule 8, the court also adds that the Commission has not followed the parameters under the Rules for fixing the fees. In the absence of fee proposals being called from the concerned educational institutions, it is only imperative that APSERMC has not verified the six parameters to recommend the fees class and category wise.

The court also noted that the Government has attempted to fix the transportation charges that does not fall within the ambit of fees, which vitiates the legality of GOs.

The court also agreed with the petitioner's submission that geographical location alone cannot be the basis for fixation of fees. According to the court, there cannot be a blanket analysis of all educational institutions that are differently placed on account of their infrastructural facilities, services rendered, syllabus adopted, international standards adhered to etc.

"As per Rule 8(iv), in addition to location, other parameters shall also be taken into consideration by the Commission. It has to ultimately recommend the fee to be charged by the private educational institutions 'class' and 'category' wise. Therefore, the categorization of the educational institutions is an essential component for fixing the fee. Institutions can be categorized viz., A, B, C, D etc. basing on varied infrastructural and pedagogic facilities offered by them. It is a fact that all the educational institutions cannot and will not offer identical facilities. It is also a fact that for various reasons, particularly for having large space, high profiled concept schools and colleges are located even in Gram Panchayats, whereas medium and low-level schools and colleges are functioning in Municipalities and Corporation", the court clarified.

The court underscored that recommendation of fee structure for educational institutions belonging to different classes can be ascertained based on their category and location. About the post-fee fixation reconsideration option( if there is a grievance that the fee fixed by govt. is low) made available via the impugned orders, the court makes it clear that the rules do not envisage such a mechanism and it only talks about a pre-fixational exercise by inviting proposals. The East Godavari Private Schools Association had earlier contended that not even one of the 119 members of the petitioner's association was consulted and they were unaware of any meeting being called for by the Commission to discuss fee fixation with the school management association members.

Order

While allowing the writ petitions filed by private unaided schools and their organisations, the court set aside GOs.53 & 54 of 2021. APSERMC has also been directed by the court to issue notification as per the rules, based on which the educational institutions could submit the proposed fee structure for admissions along with books of accounts and other relevant documents. APSERMC is also required to accord an option of personal hearing to all concerned stakeholders and categorise the institutions based on the parameters under Rule 8. The said parameters include infrastructure of the institution, operational cost, medium of instructions, expenditure on the administration etc. In the order, the court has asked APSERMC to come up with a recommendation for the fee structure applicable to the block periods from 2021 – 2024 by 31^st March, 2022 by abiding the Rules.

Since the block period of 2021-2022 is currently in progress, the court has also allowed adjusting fees already collected by referring to the fresh fee structure recommendations made by the Government next year.

Court's Analysis Of TMA Pai Foundation, Islamic Academy of Education & P.A.Inamdar

The court also availed the opportunity to conjointly analyse the apex court judgments in TMA Pai Foundation v. State of Karnataka (2002), Islamic Academy of Education v. State of Karnataka (2003) & P.A. Inamdar v. State of Maharashtra (2005).

"While one section who sponsors the private educational institutions independent of government aid claims that the establishment and administration of private educational institutions is their fundamental right under Article 19(1)(g) of the Constitution and State's intervention therein is like a 'bull in a china shop', the other section i.e., the State and a section of the society clamour that though establishment of institutions is a fundamental right but not an absolute right so as to convert educational institutions into lucrative auction houses", the court noted at the outset.

The court observed that the 11-judge bench in TMA Pai balanced the opposing perspectives of state and private schools by granting the latter the discretion to fix the fees while allowing the former to regulate the charitable act of education by taking anti- capitation fee and anti-profiteering measures.

Further clarification has been rendered to TMA Pai case via five-judge bench judgment in the Islamic Academy of Education wherein the court ventured to give effect to the directions issued in TMA Pai by mandating that State Governments shall set up, in each State, a Committee headed by a retired High Court Judge and other members from different disciplines. Such a committee would then receive proposals of fee fixation from individual institutions for approval. Once the committee recommends any revisions and the fees are accordingly fixed, no additional charges can be levied by the educational institutions over and above the fixed fees for the next three years.

Subsequent, a 7-judge bench judgment in P.A Inamdar alleviated the doubts about Islamic Academy Judgment running contrary to the precedent in TMA Pai. The apex court noted that committees for monitoring admission procedure and determining fee structure are permissive regulatory measures for protecting the interests of the student community and the minorities as well.

"Legal provisions made by the State Legislatures or the scheme evolved by the Court for monitoring admission procedure and fee fixation do not violate the right of minorities under Article 30(1) or the right of minorities and non-minorities under Article 19(1)(g). They are reasonable restrictions in the interest of minority institutions permissible under Article 30(1) and in the interest of general public under Article 19(6) of the Constitution", the court observed back then.

The apex court construed the constitution of the Committees 'as a stopgap or ad hoc arrangement made in exercise of the power conferred on this Court by Article 142 of the Constitution until a suitable legislation or regulation framed by the State.'

The Andhra Pradesh High Court observed that the State Government of Andhra Pradesh enacted the A.P. School Education Regulatory and Monitoring Commission Act, 2019, and also framed the Rules thereunder in pursuance of the directions issued in Islamic Academy, which was confirmed by P.A Inamdar.

"Thus, on a conspectus of the jurisprudential exposition by the Apex Court, it is pellucidly clear that while it is the fundamental right of private unaided educational institutions, guaranteed under Article 19(1)(g) of the Constitution of India to establish and administer institutions which includes fixation of fee structure, at the same time, the State Governments have power and obligation to regulate the fee structure so as to prevent such institutions resorting to profiteering and collecting Capitation Fee', the court observed.

Case Title: East Godavari Private Schools Association & Ors. v. State of Andhra Pradesh & Connected Matters

Case No: W.P. Nos.18555, 18831, 18993 and 19145 of 2021 W.P.No.18555 of 2021