State can regulate pvt school fees, says Supreme Court | india | Hindustan Times
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State can regulate pvt school fees, says Supreme Court

india Updated: Aug 08, 2009 01:34 IST
Satya Prakash
Satya Prakash
Hindustan Times
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Private unaided schools in the city can fix their fees but with a rider — they cannot charge capitation fee (a one-time payment) or hike fees purely for profit. Case summary

Also, these schools can now divert funds to branches under the same management for educational purposes — something that was prohibited till now.

Striking a balance between autonomy of recognised unaided private schools and the need to check commercialisation of education, the Supreme Court on Friday dismissed review petitions filed by several schools against its 2004 verdict upholding the Delhi government’s power to regulate fees.

This means the court has approved the Delhi government’s power to regulate fees under the Delhi School Education Act, 1973 and its 2004 directions to schools prohibiting profiteering and capitation fee will attain finality.

The directions include maintaining accounts on the principles of accounting applicable to non-business/non-profit organisations, preparing financial statements every year — indicating income from fees, expenses towards salaries/
allowances of employees, provision for donation, gratuity, etc — and filing them with the education director.

On April 27, 2004, the SC had also upheld the Delhi Directorate of Education’s order of December 15, 1999 saying schools cannot transfer fees/funds collected from students to the society/trust that runs it or to any other institution. But on Friday, the SC modified its order to allow schools to divert funds.

On the matter of development fund, the SC had said: “Taking into account cost of inflation… schools should be permitted to charge development fee not exceeding 15 per cent of the total annual tuition fee.” This direction, too, remains.

Though the verdict came on petitions filed by schools in Delhi, in principle, it would be applicable to all such schools in India, said Ashok Agrawal, counsel for Delhi Avibhavak Mahasangh, a parents’ body that had raised the issue of commercialisation and profiteering by schools before the HC in 1997.

“It’s a welcome step. It has vindicated our stand and will help parents and students,” he added.

“It is a huge relief to harassed parents like us. Now… the Delhi government should intervene and help roll back fees,” said Varinder Arora, convener, Delhi School Parents Association.

An education department official, who did not want to be named, said the Delhi government would comment after it had received the judgment.