Indian School, Jodhpur & Anr. vs State of Rajasthan & Ors.

Rajasthan Schools (Regulation of Fee) Act, 2016 – s. 18 – Power to issue directions – On facts, order by the State AuthoritiesDirector, Secondary Education regarding deferment of collection of school fees, including reduction of 70% of tuition fees of CBSE affiliated schools and 60% of Rajasthan State Board affiliated schools due to pandemic – Challenge to, by the Management of the private unaided schools in the State of Rajasthan – High Court held that the State Government was competent and had jurisdiction to issue directions – On appeal, held: Director, Secondary Education had no authority whatsoever to issue direction in respect of fee structure determined under the Act of 2016 including to reduce the same for the academic year 2020-21 in respect of private unaided schools – Also order could not be sustained even in reference to executive power u/Art. 162 – Furthermore, it was not open to the State Government to issue directions in respect of commercial or economic aspects of legitimate subsisting contracts/transactions between two private parties with which the State has no direct causal connection,in the guise of management of pandemic situation– Also, no provision in the Act of 2005 which governs the subject of interdicting the school fee structure fixed under the 2016 Act – During the lockdown the School Management must have saved overhead and operational costs on various heads, as such issuance of direction of deduction of 15 per cent of the annual school fees in lieu of unutilised facilities/activities–DisasterManagement Act, 2005–Rajasthan Epidemic Relief Act, 2020 – Judicial notice. Disposing of the appeals, the Court

HELD: 1.1 The conclusion of the High Court in rejecting the challenge to the validity of the impugned Act of 2016Rajasthan Schools (Regulation of Fee) Act, 2016 and RulesRajasthan Schools (Regulation of Fee) Rules, 2017 framed thereunder is upheld.However, it is done so by reading down Sections 4, 7 and 10 of the Act in the manner indicated. These provisions as interpreted be given effect to, henceforth, in conformity with the law declared in this judgment. The High Court rightly concluded that the provisions of the Act of 2016 as well as the Rules of 2017 are intra vires the Constitution of India and not violative of Articles 13(2) and 19(1)(g) of the Constitution. [Para 52][58-D-F]

1.2 The appellants are justified in assailing the order dated 28.10.2020 issued by the Director, Secondary Education regarding deferment of collection of school fees and must succeed. However, that does not give licence to the appellants to be rigid and not be sensitive about aftermath of pandemic. The general 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 school-wise are issued. This is with a view to obviate avoidable litigation and to give finality to the issue of determination and collection of school fees for the academic year 2020-21, as a onetime measure. [Paras 114, 118][99-F-G; 102-C-D]

2. It is not open to argue that the Government cannot provide for external regulatory mechanism for determination of school fees or so to say fixation of “just” and “permissible” school fees at the initial stage itself. [Para 19][37-A-B]

T.M.A. Pai Foundation & Ors. vs. State of Karnataka & Ors. (2002) 8 SCC 481 : [2002] 3 Suppl. SCR 587; Society for Unaided Private Schools of Rajasthan vs. Union of India &Anr. (2012) 6 SCC 1 : [2012] 2 SCR 715; Islamic Academy of Education &Anr. vs. State of Karnataka & Ors. (2003) 6 SCC 697 : 2003 (2) Suppl. SCR 474; P.A. Inamdar & Ors. vs. State of Maharashtra & Ors. (2005) 6 SCC 537 : [2005] 2 Suppl. SCR 603; Modern School vs. Union of India & Ors. (2004) 5 SCC 583; Action Committee, Unaided Private Schools & Ors. vs. Director of Education, Delhi & Ors. (2009) 10 SCC

1 : [2009] 12 SCR 631; Modern Dental College and Research Centre & Ors. vs. State of Madhya Pradesh & Ors. (2016) 7 SCC 353 : 2004 (1) Suppl. SCR 668; Association of Private Dental and Medical Colleges vs. State of M.P. 2009 SCC Online MP 760 - referred to.

3.1 The Act of 2016 has been enacted by the State legislature.It was enacted as it was noticed that the earlier enactment on the self-same 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 Act provides for a regulatory mechanism.It is clear that the Act of 2016 applies to all the schools within the State of Rajasthan referred to in Section 2(t) including private schools as defined in Section 2(p).Section 3 of the Act of 2016 predicates that no school itself or on its behalf shall collect any fee in excess of the fee fixed or approved under the Act of 2016. [Para 20-22][37-B-E; 38-C-E]

3.2 After adverting to Section 8 and Rule 10, it is amply clear that the relevant factors for determination of reasonable school fees under the Act of 2016 and Rules framed thereunder have been duly articulated and are based on objective parameters. The factors referred to in Section 8 and Rule 10 for determination of fee are founded on the dictum of this Court, as relevant factors.The factor of location of the school is certainly relevant for determination of fee as are the other factors referred to in Section 8 and Rule 10.The totality of the effect of all the specified factors is to be reckoned for determining the school fees of the concerned school for the relevant period.The location of the school is not the only factor that is to be taken into account. [Para 25][40-A-C]

3.3 What is relevant is that the institution is entitled to fix its own fee structure, which may include reasonable revenue surplus for the purpose of development of education and expansion of the institution, as long as it does not entail in profiteering and commercialisation. Whether fee structure evolved by the concerned school results in profiteering or otherwise is a matter which eventually would become final with the determination/adjudication by the Statutory Regulatory Committees constituted under Sections 7 and 10 of the Act of 2016, namely, Divisional Fee Regulatory Committee (DFRC) and Revision Committee respectively, as the case may be.That adjudication, however, becomes necessary only if the School Level Fee Committee (SLFC) were to disapprove the proposal of the school Management regarding fee structure determined by the school.Whereas, if the SLFC were to accept the proposal of the school Management regarding fee structure as it is, that would be the fees under the Act of 2016 for the relevant period and then there would be no need for the DFRC to adjudicate upon the fixation of fee in the concerned school. [Para 26][40-C-F]

3.4 The SLFC is constituted institution or school wise, whereas the DFRC is an independent statutory regulatory authority empowered to enquire into the factum of whether fee structure of the given school determined by its Management entails in profiteering.In the event, the SLFC disapproves the proposal of the school Management, the dispensation provided for adjudication of the contentious position between the stakeholders in no manner violate the fundamental right of establishment of educational institution guaranteed under Article 19(1)(g) of the Constitution. [Para 27][40-G-H]

3.5 Section 4 predicates that every private school shall constitute the Parent-Teachers Association, which is to be formed by the head of the school within thirty days from the beginning of each academic year.Section 4(1)(b) envisages that every teacher of the school and parent of every student in the school shall be a member of the Parent-Teachers Association.Section 4(1)(c) provides that on formation of the Parent-Teachers Association, a lottery shall be conducted by drawing a lot of the willing parents to constitute the SLFC. It was urged that for choosing the willing parent to become member of the SLFC by draw of lots, no eligibility criteria has been prescribed in the Act of 2016 or the Rules of 2017.Besides, willing parent of the ward, who is admitted in the school against the 25 per cent quota of free education under the RTE Act, may also fit into this category even though he would have no stakes in the fee structure proposed by the school Management.The argument seems to be attractive, but for that reason the provision need not be struck down or declared as violative of any constitutional right of management of the school.This provision can be read down to mean that the draw of lots would be in respect of willing parents whose wards have been admitted against the seats other than the seats reserved for free education under the RTE Act.Further, for ensuring that the willing parent must be well-informed and capable of (meaningful) interacting in the discourse on the proposal of fee structure presented by the school Management, he/she must have some minimum educational qualification and also familiar with the development of school, management of finances and dynamics of quality education.The desirability of such eligibility of the willing parent ought to be specified.Absence of such provisions in the Act or Rules, however, can be no basis to suspect the validity of the provision in question. It is said so because draw of lots can be one of the ways of identifying the willing parent who could become member of the SLFC.Whether the member should be chosen by election from amongst the willing parents or draw of lots or by nomination including his/her eligibility conditions, is a legislative policy. [Para 28-29][42-C-H; 43-A-B]

3.6 The composition of the SLFC has been specified in Section 4(2)(a) of the Act of 2016.It consists of a Chairperson being representative of management of the private school nominated by such management; Secretary-Principal of the private school (Ex officio); three teachers nominated by the management of private school as to be the members of the SLFC; and five parents from Parent-Teachers Association chosen by a lottery conducted by drawing a lot of willing parents.The SLFC consists of ten members-five are, in a way, representatives or nominees of the Management and five parents from the ParentTeachers Association.The constitution of the SLFC and for the nature of its function, no fault can be found with Section 4 of the Act of 2016 much less on the ground that it violates the fundamental right to establish an educational institution. [Para 30][43-C-F]

3.7 On bare perusal of s. 6, it is noticed that the Management has the prerogative to submit its proposal regarding the fee structure in the given school.That proposal is submitted to the SLFC set up under Section 4 of the Act of 2016.The mechanism provided in Section 6 onwards would primarily apply to private unaided schools.Indeed, the expression “propose” used in Section 6(1) would mean that the proposal of the school Management is its in-principle decision regarding the fee structure for the relevant period.The usage of expression “propose” in no way undermines the autonomy of the school Management, in particular to determine its own fee structure for the relevant period.The consequence of proposal not being accepted by the SLFC is a different issue.Notably, the SLFC’s decision under Section 6(2) is not binding on the school Management.For, it is open to the school Management to then refer the matter for adjudication to the DFRC constituted under Section 7 of the Act of 2016, who in turn is obliged to decide the reference one way or the other.Indeed, that decision would be binding on both-the school Management as well as the parents, unless it is interdicted by the Revision Committee constituted under Section 10 of the Act of 2016 at the instance of the other party.To put it differently, the dispensation envisaged under Section 6 of the impugned Act of 2016 is not intended to undermine the autonomy of the school Management in the matter of determination of fee structure itself.What it envisages is that the school Management may determine its own fee structure, but may finalise or give effect to the same after interacting with the SLFC.It is a broad-based committee, consisting of representatives of the school Management as well as five parents from Parent-Teachers Association.This is merely a consultative process and democratisation of the decision-making process by taking all the stakeholders on board.The SLFC does not sit over the proposal submitted by the school Management as a court of appeal, but only reassures itself as to whether the proposed fee structure entails in profiteering by the school on applying the parameters specified in Section 8 and Rule 10. [Para 33, 35] [45-B-E, F-H; 46-A]

3.8 While deciding the school fees, the school Management/SLFC including the Statutory Regulatory Authorities, all concerned are guided by the factors delineated in Section 8 of the Act of 2016 and Rule 10 of the Rules of 2017.The process envisaged in Section 6 is democratic and consensual resolution of the issue of fee structure for the relevant period between the school Management and the parents’ representative being part of the SLFC.It is not to give final authority to the SLFC to determine the fee structure itself which, is the prerogative of the school Management as per Section 6(1) of the Act of 2016. Thus, the autonomy of the school Management to determine the fee structure itself in the first place is untrammelled and not undermined in any way. [Para 36][46-C-E]

3.9 From the bare perusal of Section 7(1), it is noticed that first five members are official members.It is a broad-based independent Committee which includes two representatives of private schools in the divisional area “nominated by the Divisional Commissioner” and similarly two representatives of parents “nominated by the Divisional Commissioner”.The representation is given to the concerned stakeholders in the matter of determination of fee structure and in particular in the matter of enquiry into the factum whether fee structure proposed by the concerned school Management entails in profiteering or otherwise. Thus understood, even Section 7 of the Act of 2016 does not violate the fundamental right guaranteed under Article 19(1)(g) of the Constitution in respect of establishment of educational institution.The dispensation provided in Section 7, is, thus, to create an independent machinery for adjudication of the question as to whether the fee structure proposed/determined by the school Management of the concerned school entails in profiteering, commercialisation or otherwise. [Para 37-38] [47-G-H; 48-A, D, F-G]

3.10 As regards challenge to Section 8 of the Act of 2016, the usage of expression “determination”, does not take away the autonomy of the school Management in determining its own fee structure.This provision is only an indicator as to what factors should be reckoned for determination of fee and on that scale the SLFC as well as the Statutory Regulatory Committees would be in a position to analyse the claim of the school Management.This provision, in fact, sets forth objective parameters as to what would be the reasonable fee structure – not resulting in profiteering and commercialisation by the school Management. [Para 39][48-G-H; 49-A]

3.11 Section 9 bestows power upon the DFRC to adjudicate the dispute between the school Management and Parent-Teachers Association regarding difference of opinion in respect of fee structure for the concerned school. It is significant to note that Section 9(5) makes it amply clear that the DFRC has no power to grant any interim stay to the fee determined by the Management.However, in light of Section 6(5) during the pendency of the appeal or reference before the DFRC, school Management is at liberty to collect fee of the previous academic year plus ten per cent increase in such fee till the final decision of the DFRC, as predicated in Section 6(5) of the Act of 2016.The decision of the DFRC is amenable to appeal before the Revision Committee constituted under Section 10 of the Act of 2016. None of these violate the fundamental right of the school Management guaranteed under Article 19(1)(g) of the Constitution to determine its own fee structure in any manner. [Para 41][51-B-D]

3.12 Section 10 deals with constitution of Revision Committee.This Committee discharges the function of an appellate authority where the aggrieved party, namely, school Management or the Parent-Teachers Association can assail the decision of the DFRC. This is again a broad-based independent Committee to consider the revision preferred against the decision of the DFRC, constituted on similar lines. Setting up of an independent final adjudicatory authority especially created for considering the question as to whether the fee structure proposed by the school Management results in profiteering or otherwise, it does not impinge upon the fundamental right of the school Management guaranteed under Article 19(1)(g) of the Constitution. [Para 42-43][51-D-E, F, H; 52-A]

3.13 Section 15 deals with consequences of contravention of the provisions of the Act of 2016 or the Rules made thereunder by an individual. Whereas, Section 16 deals with consequences of violation by a management and persons responsible therefor.It is unfathomable as to how these provisions can have the propensity to violate the fundamental right of the school Management under Article 19(1)(g) of the Constitution especially when violation of the mandate of certain compliances under the Act of 2016 and Rules framed thereunder has been made an offence and persons responsible for committing such violation can be proceeded with on that count. [Para 44][52-A-C]

3.14 Rule 3 provides for a procedure for conducting meeting of Parent-Teachers Association.The school Management can have no grievance regarding the procedure for conducting meeting of Parent-Teachers Association of the school concerned much less violating its fundamental right guaranteed under Article 19(1)(g) regarding establishment of educational institution and administration thereof, including determination of fee structure on its own. [Para 46][52-D-F]

3.15 Rule 4 is an enabling provision bestowing power coupled with duty in the Parent-Teachers Association. This in no way affect the right of the school Management in the matter of determination of school fees by itself. The purpose of the provision is to empower the Parent-Teachers Association to get information about tuition fees, term fees and fees for co-curricular activities, to facilitate it to analyse the claim of the school Management regarding the fee structure being reasonable or otherwise.It is on the basis of that information, the representatives of the ParentTeachers Association, forming part of the SLFC, will be in a position to meaningfully interact either to give counter offer or agree with the proposal submitted by the school Management. [Para 47][53-B-D]

3.16 Rule 6 gives additional powers to the SLFC for ensuring compliances of the provisions of the Act of 2016 and the Rules made thereunder including regarding determination of school fees. It cannot be understood as to how Rule 6 would come in the way or infringe the fundamental right of the school Management guaranteed under Article 19(1)(g) of the Constitution. [Para 48][54-B]

3.17 Rules 7 and 8 of the Rules deal with purely procedural matters and are in line with the powers and functions of the concerned Committees.The Rules provide for the manner in which the proposal is to be submitted by the school Management and to be taken forward.These provisions in no way affect the fundamental right guaranteed under Article 19(1)(g) of the Constitution much less autonomy of the school Management to determine the fee structure itself in the first place including the administration of the school as such. [Para 49][55-F-H]

3.18 Rule 11 by no stretch of imagination would affect the fundamental right of the school Management under Article 19(1)(g) of the Constitution much less to administer the school.This provision, however, is to ensure that a meaningful inquiry can be undertaken by the SLFC or the Statutory Regulatory-cum-Adjudicatory Authorities in determination of the fact whether the fee structure propounded by the school Management results in profiteering or otherwise. If information is furnished in any other manner (other than the manner specified in Rule 11), it would become difficult for the concerned Committees/Authorities to answer the contentious issue regarding profiteering.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. 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. [Para 50][57-C-F]

3.19 The submission that the issue regarding (school) fee, in particular capitation fee is already covered by the law enacted by the Parliament being RTE Act and for that reason, it was not open to the State to enact law on the same subject such as the impugned Act of 2016, is completely misplaced and tenuous.For, the purpose for which the RTE Act has been enacted by the Parliament is qualitatively different.It is to provide for free and compulsory education to all children of the age of 6 to 14 years, which is markedly different from the purpose for which the Act of 2016 has been enacted by the State legislature.Merely because the Central Act refers to the expression “capitation fee” as defined in Section 2(b) and also in Section 13 of the RTE Actmandating that no school or person shall, while admitting a child, collect any capitation fee, does not mean that the Central Act deals with the mechanism needed for regulating fee structure to ensure that the schools do not collect fees resulting in profiteering and commercialisation. By its very definition, the capitation fee under the Central Act means any kind of donation or contribution or payment other than the fee notified by the school.On the other hand, fee to be notified by the school is to be done under the impugned Act of 2016 after it is so determined by the school Management and approved by the SLFC or by the Statutory Regulatory Authorities, as the case may be. The field occupied by the Central Act is entirely different than the field occupied by the State legislation under the impugned Act of 2016.The impugned Act of 2016 deals specifically with the subject of regulating fee structure propounded by the private unaided school management. [Para 51][57-F-H; 58-A-D]

4.1 It is not open to the State Authorities to modify the school fees once fixed by the SLFC for the relevant academic year that too in the manner done by the Director, Secondary Education vide order dated 28.10.2020.The fact that the parties are at liberty to challenge the modification/reduction of school fees before the statutory forum does not justify the issue of such an order – unless the State Authorities have clear mandate to do so under the governing law.The departure made by the Director, Secondary Education vide order dated 28.10.2020 was not acceptable to the school Management, being ex facie illegal.It does not disclose the source of power under which it has been issued.At best, it can rely on the interim observations made by the High Court in the proceedings pending at the relevant time.Those observations cannot confer power on the State Authorities when no such power exists in the State Government in relation to modification/reduction of fee structure determined by the school Management and approved by the SLFC.Moreover, it is well-established that there can be no rigid uniform fee structure for all the private unaided schools in the State. The High Court erroneously assumed that the power exercised by the Director, Secondary Education was ascribable to Article 162 of the Constitution.For, the subject of school fees is fully covered and governed by the provisions of the Act of 2016 and the Rules framed thereunder.Therefore, in the name of policy decision, the impugned order dated 28.10.2020 cannot be sustained, which on the face of it is not in conformity with the express statutory provisions governing the subject of school fees. [Para 63] [70-F-H; 71-A-C]

4.2 Undeniably, an unprecedented situation has had evolved on account of complete lockdown due to pandemic.It had serious effect on the individuals, entrepreneurs, industries and the nation as a whole including in the matter of economy and purchasing capacity of one and all.A large number of people have lost their jobs and livelihood as aftermath of such economic upheaval.The parents who were under severe stress and even unable to manage their day-to-day affairs and the basic need of their family made fervent representation to the school Management(s) across the State.A public discourse in that regard surfaced in the media which impelled the political dispensation to intervene.Thus, on the directions of the Chief Minister of the State of Rajasthan, the Department initially issued order dated 09.04.2020 merely to defer the collection of school fees which restriction was extended by subsequent order dated 07.07.2020. [Para 86][81-C-F]

4.3 s. 18 does bestow power on the State Government to issue general or special directions to any school within the State.However, such direction must be consistent with the provisions of the Act of 2016 and the Rules framed thereunder.It cannot be in conflict with the mandate of the Act and the Rules.Additionally, such directions must be necessitated due to expediency for carrying out the purposes of the Act and the Rules or to give effect to the applicable provisions.If the direction issued by the State Government does not qualify these parameters, it must follow that the same has been issued in excess of power bestowed under Section 18 of the Act of 2016. [Para 91][82-F-G]

4.4 Two aspects are amply clear, after analysing the scheme of the Act of 2016.The first is that a firm mechanism has been specified under the Act of 2016 regarding determination of fee structure in the form of approval by the SLFC and, if required, adjudication by the DFRC and the Revision Committee.There is no express provision in the Act or Rules authorising the stated functionaries/authorities to modify the school fees once finalised in the manner provided by the Act of 2016.Whereas, the explicit mandate in the Act of 2016 is that, the fees so fixed by the concerned functionaries/authorities shall be binding on all concerned for three academic years.This is a clear indication of not altering the school fees unilaterally after it is fixed under the Act of 2016 in any manner for the specified period.By its very nature, the direction given by the State Government is in conflict with the scheme of finalisation of fee structure under the Act of 2016 and also the binding effect thereof for the specified period of three academic years on all concerned.Thus the direction issued by the State Government in the form of order dated 28.10.2020 does not satisfy the twin tests of being consistent with the provisions of the Act; and also being necessary or expedient for carrying out the purposes of the Act. [Para 92] [82-H; 83-A-D]

4.5 The order dated 28.10.2020 being in the nature of direction, has been issued in breach of the pre-conditions specified in Section 18 of the Act of 2016.As a matter of law, the State Government had no power, whatsoever, to interdict the fee structure much less which has been finalised and fixed by the concerned functionaries/authorities under the Act of 2016 itself before expiry of the statutory period as specified.As a result, Section 18 would be of no avail to the respondents, in particular the State Government to justify the order dated 28.10.2020. [Para 93][83-D-F]

4.6 It is well-established position that the executive power of a State under Article 162 of the Constitution extends to the matters upon which the legislature of the State has competency to legislate and is not confined to matters over which legislation has already been passed.It is also well-settled that the State Government cannot go against the provisions of the Constitution or any law.The subject of determination of fee structure and whether it entails in profiteering, is already covered by the legislation in the form of the Act of 2016 and the Rules framed thereunder.It is not as if there is no enactment covering that subject or any incidental aspects thereof.The Act of 2016, which in itself is a self-contained code on the said subject, not only provides for the manner in which the concerned school ought to finalise its fee structure, but also declares that the fee so finalised either by consensus or through adjudication mode shall be binding on all concerned for a period of three academic years.In any case, determination of fees including reduction thereof is the exclusive prerogative of the management of the private unaided school.The State can provide independent mechanism only to regulate that decision of the school Management to the extent that it does not result in profiteering and commercialisation. [Para 94][83-F-H; 84-A-C]

4.7 The fact remains that the direction issued in terms of impugned order dated 28.10.2020, on the face of it, collide with the dispensation specified in the Act of 2016 in the matter of determination of school fees and its binding effect on all concerned for a period of three academic years, without any exception.The fact that in the proceedings before the High Court the State Government had ratified the impugned order, does not take the matter any further.In that, there can be no ex post facto ratification by the State Government in respect of subject, on which, it itself could not issue such direction in law. [Para 96][84-E-G]

4.8 Notably, not only the subject of finalisation of fee structure and the matters incidental thereto have been codified in the form of the Act of 2016, but also a law has been enacted to deal with the matters during the pandemic situation in the form of Central Act, namely, the Disaster Management Act 2005 including the State legislation i.e., the Act of 2020.In fact, the State legislation deals with the subject of epidemic diseases and its management.Even those enactments do not vest any power in the State Government to issue direction with regard to commercial or economic aspects of matters between private parties with which the State has no direct causal connection. In other words, the power of the State Government to deal with matters during the pandemic situation have already been delineated by the Parliament as well as the State legislature. As such, it is not open to the State Government to issue directions in respect of commercial or economic aspects of legitimate subsisting contracts/transactions between two private parties with which the State has no direct causal connection, in the guise of management of pandemic situation or to provide “mitigation to one” of the two private parties “at the cost of the other”.It is a different matter, if as a policy, the State Government takes the responsibility to subsidise the school fees of students of private unaided schools, but cannot arrogate power to itself much less under Article 162 of the Constitution to issue impugned directions (to school Management to collect reduced school fee for the concerned academic year). There is no hesitation in observing that the asservation of the State Government of existence of power to issue directions even in respect of economic aspects of legitimate subsisting contracts/transactions between two private parties, if accepted in respect of fee structure of private unaided schools, is fraught with undefined infinite risk and uncertainty for the State.For, applying the same logic the State Government may have to assuage similar concerns in respect of other contractual matters or transactions between two private individuals in every aspect of life which may have bearing on right to life guaranteed under the Constitution.That would not only open pandora’s box, but also push the State Government to entertain demands including to grant subsidy, from different quarters and sections of the society in the name of mitigating measures making it financially impossible and unwieldy for the State and eventually burden the honest tax payers - who also deserve similar indulgence.Selective intervention of the State in response to such demands may also suffer from the vice of discrimination and also likely to impinge upon the rights of private individual(s) — the supplier of goods or service provider, as the case may be.The State cannot exercise executive power under Article 162 of the Constitution to denude the person offering service(s) or goods of his just claim to get fair compensation/cost from the recipient of such service(s) or goods, whence the State has no direct causal relationship therewith. [Para 97-98] [85-A-H; 86-A-B]

Rai Sahib Ram Jawaya Kapur & Ors. vs. State of Punjab AIR 1955 SC 549 : [1955] 2 SCR 225; Secretary, A.P.D. Jain Pathshala & Ors. vs. Shivaji Bhagwat More & Ors. (2011) 13 SCC 99 : [2011] 6 SCR 1173 – referred to.

4.9 It is one thing to say that the State may regulate the fee structure of private unaided schools to ensure that the school Management does not indulge in profiteering and commercialisation, but in the guise of exercise of that power, it cannot transcend the line of regulation and impinge upon the autonomy of the school to fix and collect “just” and “permissible” school fees from its students.It is certainly not an essential commodity governed by the legislation such as Essential Commodities Act, 1955 empowering the State to fix tariff or price thereof.In light of consistent enunciation by this Court including the Constitution Bench, that determination of school fee structure (which includes reduction of fixed school fee for the relevant period) is the exclusive prerogative of the school Management running a private unaided school, it is not open to the Legislature to make a law touching upon that aspect except to provide statutory mechanism to regulate fees for ensuring that it does not result in profiteering and commercialisation by the school Management. Ex-consequenti, the State Government also cannot exercise power under Article 162 of the Constitution in that regard. [Para 99][86-C-E]

4.10 The direction given in the impugned order to the school Management is to collect only specified percentage of annual tuition fees on the assumption that the schools will not be required to complete the course for the academic year 202021.This assumption has been rebutted by the appellants by relying on the instructions issued by the concerned Board indicating to the contrary.In any case, that does not extricate the school Management from incurring recurring capital and revenue expenditure including to pay their academic and non-academic staff their full salary and emoluments for the relevant period.For, no corresponding authority is given to the school Management to deduct suitable amount from their salaries.Thus, the effect of the impugned order is to reduce school fees determined under the Act in absence of authority to do so including under the Act of 2016.Further, on the face of it, the direction given is inconsistent with the provisions of the stated Act. To put it tersely, the impugned order issued is in respect of matters beyond the power of the State Government - to regulate the fee structure for ensuring that the school Management does not indulge in profiteering and commercialisation. Accordingly, the impugned order dated 28.10.2020 cannot be sustained even in reference to executive power under Article 162 of the Constitution. [Para 100][86-F-H; 87-A-B]

4.11 Having regard to the purport of the Act of 2005, it is unfathomable as to how the State Authorities established under the stated Act can arrogate unto themselves power to issue directions to private parties on economic aspects of legitimate subsisting contractual matters or transactions between them inter se.In any case, the impugned order has not been issued by the State Authority referred to in the Act of 2005.It is not enough to say that the same was issued under the directions of the Chief Minister of the State.For, the Chief Minister is only the Chairperson (Ex officio) of the State Disaster Management Authority established under Section 14 of the Act of 2005.There is no provision in the Act of 2005 which concerns or governs the subject of interdicting the school fee structure fixed under the Act of 2016. [Para 110][96-E-G]

4.12 Section 72 thereof predicates that the provisions of the Act would have overriding effect on other laws for the time being in force or anything inconsistent in any instrument having effect by virtue of any law other than the Act of 2005.This provision, however, would come into effect only if it is to be held that the Statutory Authorities under the Act of 2005 have power to deal with the subject of school fee structure of private unaided schools. Section 72 of the Act of 2005 cannot be the basis to justify the impugned order dated 28.10.2020.There is no express provision in the Act of 2005 which empowers the Director, Secondary Education (or the State Government) to issue order and directions in respect of school fee structure because of the pandemic situation. [Paras 101, 111][87-B; 96-G-H; 97-B]

4.13 Reliance placed on the provisions of the State legislation, namely, the Rajasthan Epidemic Diseases Act, 2020 would be of no avail to justify the impugned order dated 28.10.2020. The measures enunciated in Section 4 of the Act of 2020 in no way deal with the “tariffs” of air, rail, road, hospital, temporary accommodation.It only enables the Authority to prohibit any usage or activities which the Government considers sufficient to spread or transmit epidemic diseases and for that purpose to inspect various places suspected of being infected with such diseases.Indeed, it can regulate or restrict the functioning of offices, Government and private and educational institutions in the State.That, however, would be only in respect of manner of its use and its timings including to observe standard operating procedures to ensure that epidemic diseases do not transmit or spread on account of activities carried out therein.That power to regulate cannot be invoked to control the tariffs, fees or cost of goods and services and in particular economic aspects of contractual matters between two private parties or so to say school fees of private unaided schools. [Para 112][97-C; 98-F-H; 99-A]

4.14 A priori, it must follow that the Director, Secondary Education had no authority whatsoever to issue direction in respect of fee structure determined under the Act of 2016 including to reduce the same for the academic year 2020-21 in respect of private unaided schools.Having failed to trace the legitimate source of power under which the directions have been issued, the respondents - State Authorities cannot fall back upon the benign hope expressed by the High Court to do the needful in the backdrop of the representations made by several parents about the difficulties encountered by them due to pandemic situation.It would have been a different matter if the Director, Secondary Education had used his good offices to impress upon the school management(s) of the concerned school(s) to explore the mitigating measures/options on their own for the academic year 2020-21 and to give concession to their students to the extent possible at least in respect of unutilised facilities and savings on overheads by the school Management in that behalf or to give concession in the form of scholarship to deserving students.It is stated by the appellants that the school Management on their own had offered scholarship of 25 per cent of the annual fee to their students.In other words, the Director, Secondary Education could have mediated between the Association of the school Management and representatives of the Parent-Teachers Association for arriving at an amicable solution due to pandemic situation for the academic year 2020-21, on humanitarian grounds, but could not issue the impugned order when even the State had no power to issue the same. [Para 113][99-B-F]

4.15 The school Management supposedly engaged in doing charitable activity of imparting education, is expected to be responsive and alive to that situation and take necessary remedial measures to mitigate the hardship suffered by the students and their parents.It is for the school Management to reschedule payment of school fee in such a way that not even a single student is left out or denied opportunity of pursuing his/her education, so as to effectuate the adage “live and let live”. [Para 114][99-G-H; 100-A]

4.16 In law, the school Management cannot be heard to collect fees in respect of activities and facilities which are, in fact, not provided to or availed by its students due to circumstances beyond their control.Demanding fees even in respect of overheads on such activities would be nothing short of indulging in profiteering and commercialisation. It is a wellknown fact and judicial notice can also be taken that, due to complete lockdown the schools were not allowed to open for substantially long period during the academic year 202021.Resultantly, the school Management must have saved overheads and recurring cost on various items such as petrol/diesel, electricity, maintenance cost, water charges, stationery charges, etc.Indeed, overheads and operational cost so saved would be nothing, but an amount undeservedly earned by the school without offering such facilities to the students during the relevant period.Being fee, the principle of quid pro quo must come into play.However, no accurate (factual) empirical data has been furnished by either side about the extent to which such saving has been or could have been made or benefit derived by the school Management.Without insisting for mathematical exactitude approach, it is assumed that the school Management(s) must have saved around 15 per cent of the annual school fees fixed by the school/adjudicated by the Statutory Regulatory Authorities for the relevant period. [Para 115][100-B-E]

4.17 It is assumed that at least 15 per cent of the annual school fees would be towards overheads/expenses saved by the school Management.Arguendo, this assumption is on the higher side than the actual savings by the school Management of private unaided schools, yet there is an inclination to fix that percentage because the educational institutions are engaged in doing charitable activity of imparting and spreading education and not make money.That they must willingly and proactively do.Hence, collection of commensurate amount (15 per cent of the annual school fees for academic year 2020-2021), would be a case of profiteering and commercialisation by the school Management. [Para 116][100-E-H; 101-A]

4.18 Ordinarily, it would have been appropriate to relegate the parties before the Regulatory Authority to refix the school fees for the academic year 2020-21 after taking into account all aspects of the matter including the advantage gained by the school Management due to unspent overheads/expenses in respect of facilities not availed by the students.However, that course can be obviated by the arrangement that is proposed in terms of this judgment. To avoid multiplicity of proceedings (as school fee structure is linked to school – school wise) including uncertainty of legal processes by over 36,000 schools in determination of annual fee structure for the academic year 2020-21, as a one-time measure to do complete justice between the parties, the directions are issued:

(i)

The appellants (school Management of the concerned private unaided school) shall collect annual school fees from their students as fixed under the Act of 2016 for the academic year 2019-20, but by providing deduction of 15 per cent on that amount in lieu of unutilised facilities by the students during the relevant period of academic year 2020-21.

(ii)

The amount so payable by the concerned students be paid in six equal monthly instalments before 05.08.2021 as noted in the order dated 08.02.2021.

(iii)

It would be open to the appellants (concerned schools) to give further concession to their students or to evolve a different pattern for giving concession over and above those noted in clauses (i) and (ii).

(iv)

The school Management would not debar any student from attending either online classes or physical classes on account of non-payment of fees, arrears/outstanding fees including the installments, and would not withhold the results of the examinations of any student on that account.

(v)

If any individual request is made by the parent/ward finding it difficult to remit annual fees for the academic year 2020-21 in the above terms, the school

Management to consider such representation on case-to-case basis sympathetically.

(vi)

The said arrangement would not affect collection of fees for the academic year 2021-22, as is payable by the students of the concerned school as and when it becomes due and payable.

(vii) The school Management would not withhold the name of any student/candidate for the ensuing Board examinations for Classes X and XII on the ground of non-payment of fee/arrears for the academic year 2020-21, if any, on obtaining undertaking of the concerned parents/students. [Para 117][101-B-H; 102-A-B]

4.19 The quantum of deduction from annual school fees is limited to 15 per cent although the school Management had mentioned about its willingness to provide 25 per cent scholarship to deserving students, as the school Management is compelled to collect annual school fees for the academic year 2020-21 as was fixed for the academic year 2019-20 on which some of the school Management(s) could have legitimately asked for increase of at least 10 per cent in terms of Section 6(5) of the Act of 2016. [Para 118][102-D-E]

Ramjas School vs. Directorate of Education Writ Petition (C) No. 9688 of 2018; Naresh Kumar vs. Director of Education, Delhi Writ Petition (C) No. 2993 of 2020; Pramati Educational and Cultural Trust (Registered) & Ors. vs. Union of India & Ors. (2014) 8 SCC 1 : [2014] 11 SCR 712; State of M.P. & Ors. vs. Nandlal Jaiswal & Ors. (1986) 4 SCC 566 : [1987] 1 SCR 1; Pathan Mohammed Suleman Rehmatkhan vs. State of Gujarat & Ors. (2014) 4 SCC 156 : 2013 (12) SCR 446; High Court of Gujarat & Anr. vs. Gujarat Kishan Mazdoor Panchayat & Ors. (2003) 4 SCC 712 : [2003] 2 SCR 799; M.T. Khan & Ors. v. Govt. of A.P. & Ors. (2004) 2 SCC 267 : [2004] 1 SCR 117; N. Mani vs. Sangeetha Theatre & Ors. (2004) 12 SCC 278; Union of India vs. Moolchand Kharaiti Ram Trust (2018) 8 SCC 321 : [2018] 7 SCR 939 – referred to.