Karnataka High Court Strikes Down State Govt's Power To Regulate Fees For Unaided Private Schools

A single judge bench of Justice E S Indiresh referred to TMA Pai Foundation case and agreed that the decision on the fee structure must be left to the private unaided educational institutions, as those educational institutions do not seek or are not dependent upon any funds from the Government. It also agreed that their financial affairs are affected by giving admissions to students through RTE.

The bench thus observed that interference by the respondent-State insofar as fixing of fee by the private unaided educational institutions violates Article 14 of the Constitution.

The bench also declared Sections 2(11-A) and 124-A of the Act to be contrary to Article 14 of the Constitution Section 124-A is regarding the penalty for contravention of Section 48. Section 2(11-A) pertains to the constitution of the District Education Regulatory Authority to monitor these institutions.

The court also declared Sections 5-A (pertaining to Safety and security of students) and 112-A (Penalty for contravention of Section 5-A) of the Act to be contrary to Articles 14 and 19(1)(g) of the Constitution of India. Further it declared that any notifications issued by the state government under the said sections and rules are held unconstitutional and they are not applicable to private unaided educational institutions.

The Court however cautioned the institutions to not cross the 'Lakshman Rekha'. “The cardinal rule would be to act just, fair and reasonable while formulating the fee structure, so that, no child would be deprived of elementary education in this welfare State, to fulfil the dreams of founding fathers of the Constitution of India. Dreams of children shall run in reality of their blood and heart.”

Petitioners Arguments:

The petitioners, private unaided educational institutions, primarily argued that they are different from the aided educational institutions insofar as financial aspects and therefore, the fee structure of these private unaided educational institutions should be distinct and cannot be controlled by the Fee structure imposed by the respondent-State.

Further, relying upon the judgment in the case of TMA Pai, it was urged that these private educational institutions have a fundamental right guaranteed under Article 19(1)(g) of the Constitution of India, particularly in respect of admissions to the Institutions, and therefore, these institutions have an autonomy and independence to have their own fee structure.

Moreover, these institutions are not aided or funded by the State-Government and the fee structure of the StateGovernment is lesser than what has been prescribed by the institutions coming under the purview of RTE Act and therefore, Rule 10 of the Rules 1995, which provides for collection of fees, cannot be made applicable to the unaided private educational institutions and accordingly, sought for invalidating Rule 10 of Rules 1995 and Rule 4 of Rules 1999, as ultra vires the Constitution of India, so also, contrary to the law declared in T.M.A. PAI FOUNDATION case.

State opposed the pleas

The State government sought to justify the Notification dated 18th May, 2018, by which it sought to regulate fees in private unaided institutes. It submitted that the notification was issued taking into account the interest of Children and to control the educational institutions from charging capitation fee and becoming profit motive.”

Findings:

The bench relied heavily on Karnataka Unaided Schools V/S State Of Karnataka, whereby a Division bench of the High Court last year quashed Sections 5, 7(5)(b), 7(1)(e) and 38(1)(a) of the Act and Rule 18(2 & 3), Rule 19(3) of the Rules 1995, and Rule 4 of Rules 1999 as ultra vires the Constitution of India and contrary to the decision of TMA Pai.

The bench said “The same is binding on the petitioners, for in some of these writ petitions those provisions are impugned.”

Further the court said “Section 48 of the Act provides for Fees and Donations and Section 51 of the Act provides for Monies Received from sources other than grant shall be accounted. These two provisions run contrary to each other. Therefore, the right to levy, collect and charge fees, donations and other payments as provided under Section 48 of the Act, is to be held unconstitutional, as there is direct interference of the Government authorities with the administration of the private unaided educational institutions.”

It also said “When enabling provisions itself are unconstitutional and ultra vires, the penal provision flowing therefrom for violation of provisions, cannot be sustained. In that view of the matter, amending provision, i.e. Section 1(2)(iiia) of the Act, extending the Act to the schools affiliated to CBSE/ICSE, is beyond the competence of the Act.”

Noting that though Section 124-A provides for penalty for contravention of Section 48 of the Act. However, there are no relevant rules nor the Act provides for conducting investigation, extending opportunity to the erring private unaided educational institutions, before taking action under Section 48 following Section 124-A of the Act.

The bench held “On this count alone, these two provisions, i.e. Sections 48 and 124-A of the Act, violate principles of natural justice enunciated under Article 14 of the Constitution of India and therefore, the same are held to be invalidated.”

The bench also pointed that the state government, has not produced any document to satisfy the court that the impugned Notification/Amendment/Rules made to the Education Act, was Assented by the President and the said Notification/Amendment/Rules was assented by the Governor.

Following which it said, “I am of the opinion that any such amendment made to the Act without obtaining the Assent of the President in a field occupied by both the levels of the Government (concurrent list), amounts to procedural illegality and therefore, such amendment made to the Act requires to be held as unconstitutional on the question of competency. The impugned Notification/Amendment/Rules were gazetted without the Assent of the President, and same are unconstitutional.”

Rules for Safety of Children should be for all:

While striking down Section 5A the bench observed “No material has been produced by the respondent-Government showing that it has framed frame rules under Sections 5-A and 112-A of the Act, nor implemented the guidelines issued by the Hon'ble Supreme Court in the case of AVINASH MEHROTRA v. UNION OF INDIA reported in (2009)6 SCC 398 in respect of safety standards in schools and related requirements.

Following which it urged the government to “Frame an independent rule governing the safety standards to be maintained, not only in private schools, but also, in a strict sense implement the same in Government Schools.”

Thus it held “I am of the view that Section 5-A of the Act suffers from infirmity under Article 14 of the Constitution of India. In view of the fact that Section 5-A is contrary to Article 14 of the Constitution of India, hence the corresponding penal provision provided under Section 112-A of the Act, is also unconstitutional and is liable to be set aside.”

Case No: WRIT PETITION NO.6313 OF 2017 (EDN) C/W WRIT PETITION NOS. 33161 OF 2017, 47074 OF 2018, 47077 OF 2018, 5072 OF 2019, 6185 OF 2019, 9149 OF 2019, 11657 OF 2019, 14703 OF 2019, 6396 OF 2020, 15241 OF 2021, 15268 OF 2021 AND 16418 OF 2021

Citation: 2023 LiveLaw (Kar)14

Date of Order: 05-01-2023

Appearance: Senior Advocate Madhusudan R Naik, S. Basavaraju, Advocates, M.P. Srikanth, G.R. Mohan, Abhinav Ramanand, for petitioners.

Additional Advocate General Dhyan Chinnappa a/w AGA Pramodhini Kishan for respondents.

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