2021 (5) TMI 988 - SC - Indian Laws

Supreme Court upholds Rajasthan Schools Fee Act, provides solutions for fee collection during pandemic

INDIAN SCHOOL, JODHPUR & ANR. Versus STATE OF RAJASTHAN & ORS.

The Supreme Court upheld the validity of the Rajasthan Schools (Regulation of Fee) Act, 2016, and the Rules of 2017, with specific provisions read down to ... Seeking deferment of collection of school fees including reduction of fees - violation of Fundamental rights - violative of rights guaranteed under Article 19(1)(g) of the Constitution or not - whether the impugned enactment stands the test of reasonableness and rationality and balances the right of the educational institutions (private unaided schools) guaranteed to them under Article 19(1)(g) of the Constitution in the matter of determination of school fees? - HELD THAT:- The Act of 2016 has been enacted by the State legislature. It was enacted as it was noticed that the earlier enactment on the self­same subject did not include provision of appeal against the orders of fee determination by the Fee Determination Committee. It was also noticed that there are large number of private schools (approximately 34,000) and a single fee determination committee cannot determine the fee of such schools in a proper manner in time. For that reason, the Act of 2016 came into being to provide for regulation of collection of fees by schools in the State of Rajasthan and matters connected therewith and incidental thereto. It extends to the whole of the State of Rajasthan and applies to both aided and unaided schools. The appellants having failed to substantiate the challenge to the validity of the relevant provisions of the Act of 2016, must also fail with regard to the challenge to Rules 3, 4, 6 to 8 and 11 of the Rules of 2017. The fee structure determined by the school Management can be altered by the Adjudicatory Authorities only upon recording a negative finding on the factum of amount claimed towards school fees relating to particular activities is an essential expenditure or otherwise; and that the fee would be in excess of reasonable profit being ploughed back for the development of the institution or otherwise. The recovery of excess amount beyond permissible limit would result in profiteering and commercialisation. In our opinion, therefore, even Rule 11 is a relevant and reasonable provision and does not impact or abridge the fundamental right under Article 19(1)(g) of the Constitution. An uniform direction of deduction of 15 per cent of the annual school fees in lieu of unutilised facilities/activities and not on the basis of actual data school­wise, is granted. The conclusion of the High Cour is upheld, in rejecting the challenge to the validity of the impugned Act of 2016 and Rules framed thereunder. However, we do so by reading down Sections 4, 7 and 10 of the Act in the manner indicated in paragraphs 28; 37/38 and 42 respectively of this judgment. These provisions as interpreted be given effect to, henceforth, in conformity with the law declared in this judgment. Application disposed off. Issues Involved:1. Constitutionality of the Rajasthan Schools (Regulation of Fee) Act, 2016, and the Rajasthan Schools (Regulation of Fee) Rules, 2017.2. Legality of the orders issued by the State Authorities regarding deferment and reduction of school fees due to the COVID-19 pandemic.Detailed Analysis:Re: First Set of Appeals:1. Constitutionality of the Act of 2016 and Rules of 2017:- The appellants challenged the Act of 2016 and Rules of 2017 as ultra vires the Constitution, arguing they abridge the fundamental right under Article 19(1)(g) to carry on the occupation of imparting education, including autonomy to determine school fees.- The appellants contended that the constitution of the School Level Fee Committee (SLFC) with a majority of parents and teachers negates the effective control of the school management over fee determination.- The High Court upheld the Act, stating it is regulatory to prevent profiteering and commercialization in school education, not an invasion of the management's autonomy.- The Supreme Court agreed with the High Court's conclusion but noted the need for a detailed analysis of the provisions. It held that the Act of 2016 and Rules of 2017 are intra vires the Constitution but read down Sections 4, 7, and 10 to ensure they conform to constitutional principles.Re: Second Set of Appeals:1. Legality of Orders on Fee Deferment and Reduction Due to COVID-19:- The orders dated 09.04.2020, 07.07.2020, and 28.10.2020 issued by the State Authorities directed private schools to defer and reduce school fees due to the pandemic.- The Supreme Court held that the State Government had no authority to issue such orders under the Rajasthan Schools (Regulation of Fee) Act, 2016, the Disaster Management Act, 2005, or the Rajasthan Epidemic Diseases Act, 2020.- The Court emphasized that the fee structure fixed under the Act of 2016 is binding for three academic years and cannot be altered unilaterally by the State.- The Court directed the appellants to collect annual school fees for the academic year 2020-21 as fixed for 2019-20, with a 15% deduction for unutilized facilities, payable in six installments.Conclusion:- The Supreme Court upheld the validity of the Rajasthan Schools (Regulation of Fee) Act, 2016, and the Rules of 2017, with specific provisions read down to ensure constitutional compliance.- The orders issued by the State Authorities to defer and reduce school fees due to the pandemic were quashed as the State lacked the authority to issue such directions.- The Court provided a practical solution for fee collection during the pandemic, allowing a 15% deduction for unutilized facilities and permitting payment in installments.