Schools At Liberty To Take Appropriate Legal Action To Recover Outstanding Fee From Students : Supreme Court

In a plea seeking clarification of top Court's order directing schools to not debar any student from attending classes on account of non­payment of fees, Supreme Court on Wednesday permitted the School Managements to initiate appropriate action in accordance with law for recovery of the outstanding fees from students who have defaulted.

A Bench comprising Justice AM Khanwilkar and Justice CT Ravikumar has left it open to the School Management to consider the requests, if any, made by parent or ward seeking some indulgence for just reasons, compassionately. 

The direction has been issued in a miscellaneous application filed seeking clarification that the Supreme Court's directions issued through its order dated 3rd May 2021 did not prohibit the schools from taking coercive action against the students who have failed to pay the instalments as per the arrangement predicated in that judgment.

The present application has been filed by Progressive Schools Association in a batch of appeals that were filed challenging a Rajasthan Government order, which permitted CBSE schools in the state to collect only 70% and state board schools to collect only 60% of the annual school fee.

The appeals were decided by a Bench led by Justice Khanwilkar in May when the Court had allowed the Schools to collect annual tuition fee after giving a deduction of 15% towards the savings made on account of overheads and operational costs. The Court had allowed six monthly instalments for the payment of fees.

The Supreme Court through its order dated 1st October 2021 has now clarified that the spirit of the direction given in its earlier judgment was to give time to the concerned parent/ward to pay the fees as specified including by way of instalments, and the same does not and did not extricate the parent or ward from the liability to pay the amount specified in the judgment in any manner.

According to the Bench, the School Management has rightly pointed out that the last date for paying the instalments referred to in the earlier judgment has already expired long back and despite that there are some parents who are still in arrears and have committed default.

The relevant observations in the order are :

"It is rightly pointed out by the School Management that the last date for paying the installments referred to in the stated judgment has already expired long back and despite that there are some parents/wards who are still in arrears and have committed default. It is open to the School Management to initiate appropriate action for recovery of the outstanding dues/amount, if any, in accordance with law. At the same time, if the concerned parent/ward seeks some indulgence for just reasons, it will be open to the School Management to consider such request compassionately. Besides this, nothing more is required to be said.

Obviously, if the final decision of the School Management on the request so made is unacceptable to the parent/ward, it will be open for such person to assail the same before the appropriate forum only in the event of the demand made being excessive and beyond the permissible amount in terms of the judgment dated 03.05.2021.

We reiterate that the recovery process should be strictly in accordance with law; and the pronouncement of this Court vide judgment dated 03.05.2021 in Civil Appeal No.1724 of 2021 and connected cases should be strictly adhered to by all concerned in its letter and spirit"

What were the other directions in the May 3 judgment?

Supreme Court through its order dated 3rd May 2021 had held that private schools demanding fees from students for the activities and facilities not availed by them due to the lockdown amounts to 'profiteering' and 'commercialization'.

Taking judicial notice of the fact that classes had been held online during the last academic year, the Supreme Court had observed that schools must have saved on overheads and operational costs. The Court reckoned that schools must have saved at least 15% in that way, and hence, they have to give a deduction in annual school fees to that extent. The Court said that the schools "must willingly and proactively" reduce fees to that extent.

Coram : Justices AM Khanwilkar and CT Ravikumar

Citation : LL 2021 SC 543

Click here to read/download the order