Fee regulation of private unaided schools upheld, but a pandemic fee-reduction order was struck down as unauthorised

Private unaided schools' fee fixation may be regulated to prevent profiteering and commercialization, but the Rajasthan Schools (Regulation of Fee) Act, 2016 and the Rules of 2017 were upheld as a valid regulatory framework, subject to reading down of specified provisions to preserve constitutional balance. The Court rejected the Article 19(1)(g) challenge and held that the Act and Rules operate in a different field from the RTE Act. It further held that a COVID-19 fee-reduction direction could not override the statutory scheme under executive, disaster-management or epidemic powers, because fee structures already finalised under the Act could not be unilaterally altered. The order was therefore quashed, with limited fee adjustment directed for the relevant academic year.

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Issues: (i) Whether the Rajasthan Schools (Regulation of Fee) Act, 2016 and the Rajasthan Schools (Regulation of Fee) Rules, 2017 infringed the autonomy of private unaided schools and violated Article 19(1)(g) of the Constitution of India; (ii) Whether the order dated 28.10.2020 issued by the Director, Secondary Education reducing fee collection for the COVID-19 academic session could be sustained under the Rajasthan Schools (Regulation of Fee) Act, 2016, Article 162 of the Constitution of India, the Disaster Management Act, 2005 or the Rajasthan Epidemic Diseases Act, 2020.

Issue (i): Whether the Act of 2016 and the Rules of 2017 unlawfully curtailed the right of private unaided schools to fix and collect fees?

Analysis: The statutory scheme permits the management of a private unaided school to propose its fee structure, but subjects final approval to a broad-based School Level Fee Committee and, where necessary, adjudication by the Divisional Fee Regulatory Committee and Revision Committee. The Court treated this as a regulatory framework aimed at preventing profiteering and commercialization, not as an impermissible takeover of fee fixation. The factors in Section 8 of the Act and Rule 10 of the Rules were held to be objective and relevant, and the grievance that the legislation occupied a field already covered by the RTE Act was rejected because the two enactments operate in different spheres. Certain provisions were read down to align them with the constitutional balance between autonomy and regulation.

Conclusion: The Act of 2016 and the Rules of 2017 are valid, subject to reading down of Sections 4, 7 and 10 in the manner indicated in the judgment; the challenge under Article 19(1)(g) fails.

Issue (ii): Whether the order dated 28.10.2020 reducing fee collection for the COVID-19 academic session was authorised by law and could be justified under the State's executive or disaster-management powers?

Analysis: The Court held that Section 18 of the Act of 2016 does not authorise the State to alter fee structures already finalised under the statute, because such direction must remain consistent with the Act and its Rules. The Court further held that Article 162 cannot be used to override a self-contained statutory code governing school fees, and that the Disaster Management Act, 2005 and the Rajasthan Epidemic Diseases Act, 2020 do not confer power to regulate the economic terms of fee contracts between private parties. The impugned direction therefore transgressed the statutory framework, although the Court recognised the extraordinary pandemic context and the need to account for fees relating to unutilised facilities.

Conclusion: The order dated 28.10.2020 is unsustainable in law and is quashed.

Final Conclusion: The fee-regulation statute was upheld with limited reading down, but the pandemic fee-reduction order was invalidated; the appeals were accordingly disposed of with mixed relief, and a one-time fee adjustment for the relevant academic year was directed to balance competing interests.

Ratio Decidendi: A State may regulate fee fixation in private unaided schools to prevent profiteering and commercialization, but it cannot unilaterally alter a fee structure that a self-contained statute has already finalised unless the statute itself authorises such intervention.

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