Maintaining a surplus cannot be seen as commercialisation of education: Delhi HC

The court further said that the directorate of education cannot act as an appellate body and reject the financial documents, in absence of any evidence, to show that the accounts were not prepared following applicable standards or were rejected by tax authorities

New Delhi: Planning and maintaining a surplus in their financial accounts by private unaided schools cannot be construed as commercialisation of education, the Delhi high court held on Wednesday, while quashing an order passed by the Delhi government that rejected the proposed fee hike of two city schools.

The court said schools are entitled to maintain a reasonable surplus for expansion of the system and development of education and noted that an increase in fees to generate funds for the betterment of infrastructure is permissible (HT ARCHIVE)

Mahavir Senior Model School and Mahavir Junior Model School had moved the high court challenging a decision the directorate of education (DoE) took in January 2019 that rejected their proposed fee hike.

Justice Sanjeev Narula said that since unaided schools are dependent only on the fee collected, they would like to earmark funds for specific purposes. “...It is only if such funds are being used purely for commercial gain, rather than for improvement and development of the school, can it be construed as a form of commercialisation of education,” the court said.

The court added that schools are entitled to maintain a reasonable surplus for expansion of the system and development of education and noted that an increase in fees to generate funds for the betterment of infrastructure is permissible.

The court further said that the DoE cannot act as an appellate body and reject the financial documents, in absence of any evidence, to show that the accounts were not prepared following applicable standards or were rejected by tax authorities.

The court said that the determination of what constitutes a ‘reasonable’ surplus would depend on various factors such as the size of the school, the level of infrastructure and facilities provided, salaries of the staff, and the overall financial position of the school.

The judge, however, also clarified that since private schools are discharging a public function, regulatory control of the state is essential to ensure that such schools operate within the parameters of the Delhi School Education Act, 1973 (DSEA), and not engage in commercialisation.