Gujarat HC Upholds State’s Power To Check Excessive School Fee; Junks Challenge To Self-Financed School (Regulation Of Fees) Act [Read Judgment]

The Gujarat High Court has upheld the Gujarat Self-Financed Schools (Regulation of Fees) Act, 2017, to check excessive fee and profiteering by schools by fixing the maximum limit for pre­-primary and primary schools, secondary and higher secondary schools (general stream) and higher secondary schools (science stream) at Rs 15,000, Rs 25,000 and Rs 27,000, respectively.

A bench of Chief Justice R Subhash Reddy and Justice Vipul M Pancholi held, “The respondent State as legislative competence to enact the Gujarat Self Financed Schools (Regulation of Fees) Act, 2017 and the Rules framed thereunder, including for the schools affiliated to CBSC, ICSE and IB and the provisions of said Act and Rules framed thereunder are also not repugnant to the Right of Children to Free and Compulsory Education Act, 2009”.

The court was hearing a bunch of petitions in different categories: (a) The petitions filed by CBSE, ICSE and IB board, (b) the petitions filed by schools affiliated to state board, (c) the petitions filed by minority CBSE schools, (d) Writ Petition (PIL) filed by the parent for their representation and (e) one petition filed by parent for implementation of the said Act .

The schools, including the minority institutions, contended that the fee fixed under the Act is unrealistic, considering the expenses incurred on running a school.

The schools argued that there is a constant need to meet with the changing trends and demands, it is necessary that the schools have complete autonomy in financial matters so as to be able to plan their affairs and appropriately respond   to   all   financial  requirements including yearly increase of staff and teachers' salaries, inflationary pressures, repair and upkeep, upgrade of facilities, pay commission   burden,   improve   infrastructure   and   adopt   to   new technologies and upgrade facilities etc.

The minority institutions also argued that the fixation of fee under the Act is violative of Article 30 of the Constitution which provides them with autonomy.

The court, however, held that the autonomy guaranteed by the Constitution is subject to reasonable restriction to check profiteering.

Another petition filed by one Atulkumar Niranjanbhai Dave through advocate Vishal J Dave sought representation of Parents on the Fee Regulatory Committee for the purpose of determination of the fee in self-financed schools.

Dave had argued that the committee had no representation of parents who are the affected party in case of fee hike or profiteering and have no forum to air their grievances.

The court, however, held that there were experts on the committee to take care of concerns of all concerned.

The court also held that the provisions of RTE Act and the Regulation of Fees Act can very well be operated upon simultaneously without disobeying each other since “the main object of the RTE Act is to provide free and compulsory education to the children from disadvantaged and weaker sections from 1st Class to 8th Class so as to achieve the goal set by Article 21A of the Constitution, whereas the main objective of the impugned Act is to examine the proposal of self financed schools in respect of fees fixed by it and to determine the reasonability thereof”.

On schools’ argument that the CBSE already has rules in place to check excessive fee, the bench held, “It transpires that there is no Central Act or other statutory body to regulate CBSE schools. Even though the Bye­laws provide for disaffiliation in case of charge of excess fee, in CBSE Bye­laws, there is no effective mechanism provided for regulation of collection of fee”.

Facts: 

The Gujarat government came up with a Bill on March 30, 2017 to regulate and determine the fees of self-financed schools namely the Gujarat Self-Financed Schools (Regulation of Fees) Bill, 2017 “to make special provisions for fixation of fees for the self financed schools in the State and the matters connected therewith and incidental thereto.”

On April 25, 2017, the state government framed the rule wherein it was notified that pre-primary and primary schools,secondary and higher secondary schools (general stream) and higher secondary schools (science stream) charging more than Rs.15,000, Rs.25,000 and Rs.27,000, respectively, shall have to submit proposal for approval, fixation of fees in accordance with the provisions of the Act of 2017.

The Act provides for a Fee Regulatory Committee for the purpose of determination of the fee in self financed schools. It comprises of (a) retired District and Sessions Judge or a person who had been a member of All-India Service, having retired from a post not below the rank of Principal Secretary to Government or a person who had been a member of Indian Police Service, having retired from a post not below the rank of Additional Director General of Police, to be nominated by the Government, who shall be the Chairperson of the Committee; (b) the Chartered Accountant, to be nominated by the Government;(c) one Civil Engineer/ Government approved valuer, to be nominated by the Government;(d) one representative from the self financed school management of the respective zone, to be nominated by the Government; (e) one Academician of repute, to be nominated by the Government.

The committee is divided into four zones covering all four districts of the state.

The school management will now need to justify the proposal to increase fees before this committee.

While deciding the appeals, the Gujarat High Court concluded:

(A)The respondent State has legislative competence to enact the Gujarat Self Financed Schools (Regulation of Fees) Act, 2017 and the Rules framed thereunder, including for the schools affiliated to CBSC, ICSE and IB and the provisions of said Act ad Rules framed thereunder are also not repugnant to the Right of Children to Free and Compulsory Education Act, 2009.

(B) Sections 2(g), 2(r), 2(t), 2(u), 3, 8, 9, 10, 11 and 12 of the Gujarat Self Financed Schools (Regulation of Fees) Act, 2017 and the Rules 6,7 and 8 and Form II and its Annexures of the Gujarat Self Financed Schools (Regulation of Fees) Rules, 2017 are not violative of Article 14 and 19(1)(g) of the Constitution of India and the various restrictions in the above said provisions of the Act and Rules framed thereunder are reasonable restrictions, within the meaning of Article 19(6) of the Constitution of India.

(C)The provisions of the Gujarat Self Financed Schools Regulation of Fees) Act, 2017 and the Rules framed thereunder are not violative of the rights guaranteed under Article 30 of the Constitution of India with regard to the minority institutions.

(D) Constitution of Fee Regulatory Committee, and Fee Revision Committee under Sections 3 and 12 of the Gujarat Self Financed Schools (Regulation of Fees) Act, 2017 are not unconstitutional, as contended by the petitioners.

 (E) Provisions of the Gujarat   Self   Financed   Schools (Regulation   of   Fees)   Act,   2017   and   the   Rules   framed thereunder are not retrospective in nature, as pleaded by the petitioners.

(F) Notification dated 25.04.2017 issued Section 9(1) of the Gujarat Self Financed Schools (Regulation of Fees) Act, 2017 is valid. However, we permit the Association of various categories of schools to file representation to the Competent Authority within a period of six weeks from today for modification of exemption limit notified in the notification. If such representations are filed, the Competent Authority to consider such representations and pass appropriate orders within a period of six weeks thereafter.If the Competent Authority comes to the conclusion that exemption limit is required to be revised, it shall take necessary steps to issue necessary notification by publication in official gazette and same would be effective from the academic year 2018-­19.

(G)We further make it clear that it is open to the Self Financed schools which are required to submit proposal in Form II to the Fee Regulatory Committee for fixation of fees to propose fees not restricting to various types of fees notified under section 2(g) of the Gujarat Self Financed Schools (Regulation of Fees) Act, 2017 or type of income shown in Part ­IV (Annexure­ II) of financial information in the Rules, 2017. It is further open for such schools to propose any other fees to improve the quality of education and standard of schools. At the same time, such proposal should not amount to charging of exorbitant fees, or profiteering within the meaning of Section 2(r) of the Gujarat Self Financed Schools (Regulation of Fees) Act, 2017.

(H) We permit the Self Financed Schools to submit their proposal to the competent authority within a period of three weeks from today. The Self Financed Schools, which have already submitted proposals, are also permitted to file further documents, if any, within a period of three weeks from today. On such proposals, it is open for the competent authority to take further steps in accordance with law.

Read the Judgment Here