Delhi HC rules govt can only intervene to prevent profiteering, commercialisation of education in unaided schools

New Delhi, Oct 10 The Delhi High Court has observed that the Directorate of Education (DoE) does not possess “unbridled” authority to regulate the fees charged by unaided schools but can only intervene to prevent profiteering, commercialisation of education, and the charging of capitation fees.

A Bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela upheld a single-judge Bench’s decision quashing a DoE direction prohibiting fee hikes by Bluebells School International and Lilawati Vidya Mandir for the academic session 2017–18.

The single-judge Bench, in an order passed in February last year, allowed the writ petitions filed by the schools and quashed the DoE order to the extent it prescribed fee increases.

The appeals were filed by students through their parents and by the DOE, arguing that the government has the authority to regulate the fees to be charged by unaided schools under the Delhi School Education Act (DSEA), 1973.

In its judgment, the CJ Upadhyaya-led Bench framed the question “whether, in the facts of the present case, DoE can be said to be possessed with necessary power and jurisdiction to prohibit the privately run and unaided schools from increasing its fees in terms of the provisions contained in Section 17(3) and 18(4) of the DSEA, 1973 read with Rule 172 to 179 falling under Chapter XIV of DSER, 1973.”

The Delhi government argued that the Supreme Court judgment clearly empowered the DoE to regulate fees, arguing that “the Director has the authority to regulate the fees under Section 17(3) of the DSEA, 1973.”

Similarly, the counsel for the parents contended that “the government is equipped with necessary powers to take regulatory measures and ensure that educational institutions keep playing a vital and pivotal role to spread education and not to make money.”

On the other hand, the schools argued that “no interference would be warranted with the judgment of the learned Single Judge only on account of the fact that this Division Bench is unable to agree with the findings of the learned Single Judge, unless it is found that the view taken by the learned Single Judge is perverse or patently illegal”.

He also opposed any remand, stating it would be “an exercise in futility”.

After hearing the submissions, the CJI Upadhyaya held, “The Hon’ble Supreme Court in the said (Modern School v. Union of India) case, after reviewing the entire law regarding the extent of power of the government to regulate the fees to be charged by unaided schools, has clearly concluded that such regulation is permissible, however, only to the extent of checking profiteering, commercialisation and charging of capitation fee by the schools”.

It added that the power to regulate the fees to be charged by unaided schools cannot be construed as “unbridled power or authority to the State to regulate the fees chargeable by unaided schools.”

“The powers and authority, thus, available to the GNCTD under Section 17(3) of the DSEA, 1973 is to the said extent and also to ensure that profit/surplus generated by schools is not diverted for any other use or purpose; neither can it be used for personal gain or for other business or enterprise,” observed the Delhi High Court.

Dismissing the appeals of parents and the Delhi government, the CJ Upadhyay-led Bench reiterated the single-judge Bench observations that it will be open to the DoE to proceed afresh in accordance with law to determine whether there has been any violation of the law by the schools.

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