Private, unaided schools can raise fees at start of session without govt nod: Delhi HC

The bench saidschools increasing fees at the commencement of an academic session must submit a statement of proposed fees to the DoE before the session begins.

The Delhi high court on Friday held that private unaided recognised schools are not required to obtain prior permission or sanction from the Directorate of Education (DoE) to hike fees at the commencement of an academic session, clarifying that such a step is needed only when they seek to implement a fee hike during an ongoing academic session.

The court observed in its verdict that the DoE’s regulatory powers over fee fixation in private unaided recognised schools are narrowly limited. (REUTERS/ Representational)

However, adopting an equitable approach, a bench of justice Anup Jairam Bhambhani directed that the fee increases proposed by the respective schools in the statements submitted to the DoE would take effect only from the 2027 academic session. The bench clarified that no school would be permitted to demand or recover any arrears of fees or other charges retrospectively for previous academic sessions.

The bench clarified that schools increasing fees at the commencement of an academic session must submit a statement of proposed fees to the DoE before the session begins. However, private unaided recognised schools continue to enjoy financial autonomy and it is not for the DoE to “dictate” or “micro-manage” the manner in which their fiscal affairs are conducted, the justice said.

The court observed in its verdict that the DoE’s regulatory powers over fee fixation in private unaided recognised schools are narrowly limited and do not permit general interference. The court said that the mere existence of surplus funds in a school’s accounts cannot be the sole basis for the DoE to infer that the school is indulging in commercialisation.

“Under Section 17(3) of the Delhi School Education Act, 1973, no prior permission or sanction is required by a private, un-aided, recognised school to increase its fee at the commencement of an academic session; and the only statutory obligation upon a school is that it must file its statement of proposed fee with the DoE prior to commencement of an academic session,” the court said.

“... That under Section 17(3) of the Delhi School Education Act, 1973, however, a private, un- aided, recognised school does require prior approval of the DoE if the school proposes to implement a fee hike during an ongoing academic session,” the court said in its 120-page verdict.

The court cited Supreme Court precedents in cases of T.M.A. Pai Foundation, Islamic Academy, Modern School, and P.A. Inamdar.

In its verdict, the court further held that where a school proposes a fee hike during an ongoing academic session, it must submit its proposal to the DoE at least two months before the date from which the revised fee is sought to be implemented. The court also directed that the DoE must decide on such a proposal within the same two-month period, failing which the proposal would be deemed to have been approved.

The court delivered the verdict in a petition by 137 private, unaided, recognised schools against the DoE’s rejection of their proposals to increase fees from time to time, for the academic years 2016- 2017 to 2022-23.

The schools argued that, as private unaided recognised institutions, they are entitled under Article 19(1)(g) of the Constitution to function with substantial autonomy, including the freedom to determine their fee structures.

They contended that the DoE’s powers under the DSE Act are limited to preventing profiteering and commercialisation.

The DoE, represented by additional solicitor general Chetan Sharma, along with Delhi government’s standing counsel Sameer Vashisht, argued that as per the law, schools are required to seek permission before increasing their fee at any point in time.

Ultimately, the court set aside the DoE’s order of rejection, holding that the decisions stemmed from a “misconceived exercise” and were therefore “vitiated” and “untenable in law”.

In its verdict, the court held that even private, unaided, recognised schools operating under a “land clause” in their allotment letter, lease, or licence do not require prior approval for fee hikes at the commencement of an academic session, except where the increase is proposed during a session.

“This court is of the view... the only requirement is that a private, un-aided, recognised school must file its statement of fee with the DoE before commencement of every academic session in terms of section 17(3),” the court held.