# INDIAN SCHOOL, JODHPUR & ANR v. STATE OF RAJASTHAN & ORS

- **Citation:** [2021] 14 S.C.R. 1
- **Court:** Supreme Court of India
- **Decided:** 2021-05-03
- **Case number:** Civil Appeal No. 1724 of 2021
- **Bench:** A. M. Khanwilkar, Dinesh Maheshwari
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/indian-school-jodhpur-anr-v-state-of-rajasthan-ors-35362
- **Pages:** 103

## Headnote

Education/Educational Institutions:
Rajasthan Schools (Regulation of Fee) Act, 2016 - ss. 3, 4,
6-11, 15 and 16 - Rajasthan Schools (Regulation of Fee) Rules,
2017 - rr. 3, 4, 6-8 and 11 -Validity of - Challenge to, by the
Management of the private unaided schools in the State of Rajasthan,
on the ground of being ultra vires the Constitution; and violative of
Art. 19(1)(g) since it takes away autonomy to determine the School
fees - High Court rejected the challenge to the validity of the Act of
2016 and Rules framed thereunder - Justification of -Held: Justified
- 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 Arts. 13(2) and 19(1)(g) - However, it is
done so by reading down ss. 4, 7 and 10 -Act of 2016 provides for
the regulatory mechanism - Autonomy of the school Management
to determine the fee structure is untrammelled and not undermined
- Institution is entitled to fix its own fee structure, as long as it does
not entail in profiteering and commercialization - Thus, the order
passed by the High Court upheld - Constitutionof India - Arts 13(2)
and 19(1)(g).
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
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[2021] 14 S.C.R.
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 unutil

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[2021] 14 S.C.R. 1
1
INDIAN SCHOOL, JODHPUR & ANR.
v.
STATE OF RAJASTHAN & ORS.
(Civil Appeal No. 1724 of 2021)
MAY 03, 2021
[A. M. KHANWILKAR AND DINESH MAHESHWARI, JJ.]
Education/Educational Institutions:
Rajasthan Schools (Regulation of Fee) Act, 2016 - ss. 3, 4,
6-11, 15 and 16 - Rajasthan Schools (Regulation of Fee) Rules,
2017 - rr. 3, 4, 6-8 and 11 -Validity of - Challenge to, by the
Management of the private unaided schools in the State of Rajasthan,
on the ground of being ultra vires the Constitution; and violative of
Art. 19(1)(g) since it takes away autonomy to determine the School
fees - High Court rejected the challenge to the validity of the Act of
2016 and Rules framed thereunder - Justification of -Held: Justified
- 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 Arts. 13(2) and 19(1)(g) - However, it is
done so by reading down ss. 4, 7 and 10 -Act of 2016 provides for
the regulatory mechanism - Autonomy of the school Management
to determine the fee structure is untrammelled and not undermined
- Institution is entitled to fix its own fee structure, as long as it does
not entail in profiteering and commercialization - Thus, the order
passed by the High Court upheld - Constitutionof India - Arts 13(2)
and 19(1)(g).
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
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[2021] 14 S.C.R.
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]
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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
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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
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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
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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
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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
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"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
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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]
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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
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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
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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
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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
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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]
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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
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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
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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
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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.