Chandigarh private schools to make balance sheets public

Published on May 29, 2021 12:29 AM IST

Punjab and Haryana high court upholds UT admn’s law that was challenged by private schools last year citing infringement of right to privacy

The court questioned as to why schools are afraid of uploading the financial statements on their websites. (Getty Images/iStockphoto)
The court questioned as to why schools are afraid of uploading the financial statements on their websites. (Getty Images/iStockphoto)
By, Chandigarh

The Punjab and Haryana high court on Friday upheld the Chandigarh administration’s law mandating private unaided schools to upload balance sheets on their websites.

Independent Schools’ Association Chandigarh, a body of 78 private schools, and Kabir Education Society, Chandigarh, had moved the high court last year, challenging various provisions of Punjab Regulation of Fee of Unaided Educational Institutions Act, 2016, as extended to the Union Territory of Chandigarh. The law was adopted by the UT in 2018.

The plea was filed after the UT administration issued show-cause notices to schools, asking as to why penalties should not be imposed against them for not uploading balance sheets for the last financial year. The schools had also challenged the constitution of Fee Regulatory Authority. Schools had argued that asking schools for uploading balance sheets violated their rights.

“The right to privacy is primarily for the individuals. Though the right to privacy is also available to artificial entities, but since the field of education is a charitable occupation, we do not find any reason to hold that uploading of the financial statements on the websites of the private educational institutions in any manner will breach the right to privacy,” the bench of justice Jaswant Singh and justice Sant Parkash said in its 107-page judgment on Friday.

‘Will help in achieving transparency’

The court also wondered as to why schools are afraid of uploading the financial statements on their websites.

“The intention of the institutions to not/resist upload(ing) the financial statements create(s) more suspicion. If the private institutes upload their financial statements on the websites, it will help in achieving the goal of transparency and accountability, which are essential features of a reasonable fee structure and it will also generate confidence in the parents,” the bench said, adding that the fee structure has to be disclosed in advance, at the beginning of the session, as it would help parents make appropriate arrangements or to look for alternative institutions.

The court further observed that provisions of the law in no manner infringe upon the autonomy or day-to-day functioning of the institution and same can’t be termed as “restrictive” or unreasonable.

“...occupation of education is not a business, but profession involving charitable activities. Therefore, it is well permissible to promulgate regulatory measures aimed for protecting the student community as the whole, and as well as to ensure maintenance of required standards of education, which are non-exploitative,” the bench observed, adding that educational institutions are vested with right to establish and administer an institution. However, the right is not absolute and such regulations are permissible.

‘Penal provisions not remediless’

As of schools’ reservations on penal provisions, the HC said that the same is attracted only in case of violation and not otherwise and also is not remediless. “... if no penal clause is incorporated in enactment, the purpose to be achieved by such enactment will be lost. The enactment would be nothing but a toothless tiger. It is only with the sword of penalty that the mechanism provided under the Act for regulating fee of unaided educational institutions can be implemented,” the bench asserted. The court also said that no prejudice has been caused by not inducting members from schools in the regulatory body.

Reacting to the judgment, Independent School Association (ISA) president HS Mamik said: “We will go through the detailed judgment and decide on the next course of action.” He maintained that uploading balance sheets will affect the governance of schools and compromise their privacy.

Nitin Goyal, president, Chandigarh Parents Association, said: “The education department should give schools a week or two to upload their balance sheets online, and take strict action against those who don’t comply.”

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