* THE HIGH COURT OF DELHI AT NEW DELHI. Versus

* THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 4109/2013 Pronounced on: 19 th January, 2016 JUSTICE FOR ALL... Petitioner Through: Mr.Khagesh B. Jha, Advocate Versus GOVT OF NCT OF DELHI & ORS.... Respondents Through: Mr.Santosh Kumar Tripathi, ASC for GNCTD/R-1. Mr.Arun Birbal and Mr.Sanjay Singh, Advocates for DDA/R-2. Mr.Vikas Mahajan, CGSC with Mr.Rohan Gupta, Adv. for R-3. Mr.Rakesh Kr. Khanna, Senior Advocate with Mr.Kamal Gupta and Mr.Anirudh Tanwar, Advocates for R-4. CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE JAYANT NATH J U D G M E N T Ms. G. ROHINI, CHIEF JUSTICE: 1. This petition has been filed as a Public Interest Litigation seeking a direction that no private unaided school in Delhi which has been allotted land by the Delhi Development Authority shall enhance the fee without the prior sanction of the Director of Education. 2. It is pleaded in the petition: WP(C) No.4109/2013 Page 1 of 16

i) that as per Master Plan 2021 an allottee of land for the purpose of establishing an educational institution is under an obligation not to increase the tuition fees without prior sanction from the Director of Education (DoE) as held in Modern School vs. Union of India & Ors. (2004) 5 SCC 583. ii) that the unaided educational institutions in Delhi have failed to comply with the same and have been enhancing the fees without taking the prior permission of the DoE and thus indulging in profiteering and commercialization of school education. 3. The petitioner therefore, seeks a direction to the Director of Education (DoE), Govt. of NCT of Delhi to ensure compliance of terms of allotment letter regarding prior sanction for any increase in tuition fees by all the unaided private schools situated in public land allotted by Delhi Development Authority (DDA) and further to ensure that the fee fixation shall be on the basis of fee paying capacity of the residents of the locality for whose benefit the public land was allotted. The petitioner also seeks a direction to DDA to ensure compliance of Master Plan of Delhi (MPD), 2021 by initiating appropriate action against the erring institutions for violation of the terms of allotment. 4. We have heard the learned counsel for the petitioner as well as the learned counsels appearing for the respondents. 5. Section 17 of the Delhi School Education Act, 1973 ( For Short DSE Act ) which provides for fees and other charges reads as under: WP(C) No.4109/2013 Page 2 of 16

17. Fees and other charges.-(1) No aided school shall levy fee or collect any other charge or receive any other payment except those specified by the Director. (2) Every aided school having different rates of fees or other charges or different funds shall obtain prior approval of the prescribed authority before levying such fees or collecting such charges or creating such funds. (3) The manager of every recognised school, shall before the commencement of each academic session, file with the Director a full statement of the fees to be levied by such school during the ensuing academic session, and except with the prior approval of the Director, no such school shall charge, during that academic session, any fee in excess of the fee specified by its manager in the said statement. 6. The applicability of Section 17(3) to unaided schools and regulation of quantum of fees charged by them was considered in detail by the Supreme Court in Modern School vs. Union of India & Ors. (2004) 5 SCC 583 arising out of the order passed by a Division Bench of this Court in Delhi Abhibhavak Mahasangh v UOI and ors, AIR 1999, Del. 124 in a batch of appeals. In the said case, Division Bench of this Court held that no permission from Director of Education is necessary before or after fixing tuition fee, however, in case such fixing is found to be irrational and arbitrary, there are ample powers under the Act and Rules to issue directions to school to rectify it before resorting to harsh measures. It was also held that the question of commercialization of education and exploitation of parents by individual schools can be authoritatively determined on thorough examination of accounts and other records of each school. This court also declared that the Delhi School Education Act and the WP(C) No.4109/2013 Page 3 of 16

Rules framed thereunder prohibited transfer of funds from the schools to the society/trust or to other schools run by the same society/trust and appointed a Committee to examine the academics of each of the recognized unaided schools in Delhi. On the basis of the report submitted by the said Committee, the Director of Education, Govt. of NCT of Delhi issued certain directions to the Managing Committees of all recognized unaided schools under Section 24(3) read with Sections 18(4) and (5) of the Act by order dated 15.12.1999. 7. While considering the question whether the Director of Education has the authority to regulate the fees of unaided schools, the Supreme Court in Modern School vs. Union of India & Ors. (supra), held that the DoE is authorized to regulate the fees and other charges to prevent commercialisation of education and under Section 17(3) the DoE has the authority to regulate the fees. concluded: Accordingly, it was 27. In addition to the directions given by the Director of Education vide order DE.15/Act/Duggal.Com/ 203/99/23989-24938 dated 15 th December, 1999, we give further directions as mentioned hereinbelow: - (a) Every recognized unaided school covered by the Act shall maintain the accounts on the principles of accounting applicable to non-business organization/notfor-profit organization; In this connection, we inter alia direct every such school to prepare their financial statement consisting of Balancesheet, Profit & Loss Account, and Receipt & Payment Account. WP(C) No.4109/2013 Page 4 of 16

(b) Every school is required to file a statement of fees every year before the ensuing academic session under section 17(3) of the said Act with the Director. Such statement will indicate estimated income of the school derived from fees, estimated current operational expenses towards salaries and allowances payable to employees in terms of rule 177(1). Such estimate will also indicate provision for donation, gratuity, reserve fund and other items under rule 177(2) and savings thereafter, if any, in terms of the proviso to rule 177(1); (c) It shall be the duty of the Director of Education to ascertain whether terms of allotment of land by the Government to the schools have been complied with. We are shown a sample letter of allotment issued by the Delhi Development Authority issued to some of the schools which are recognized unaided schools. We reproduce herein clauses 16 & 17 of the sample letter of allotment:-- "16. The school shall not increase the rates of tuition fee without the prior sanction of the Directorate of Education, Delhi Admn. and shall follow the provisions of Delhi School Education Act/Rules, 1973 and other instructions issued from time to time. 17. The Delhi Public School Society shall ensure that percentage of free ship from the tuition fee as laid down under rules by the Delhi Administration, from time to time strictly complied. They will ensure admission to the student belonging to weaker sections to the extent of 25% and grant free ship to them." 28. We are directing the Director of Education to look into letters of allotment issued by the Government and ascertain whether they have been complied-with by the schools. This exercise shall be complied with within a period of three months from the date of communication of this judgment to the Director of WP(C) No.4109/2013 Page 5 of 16

Education. If in a given case, the Director finds noncompliance of the above terms, the Director shall take appropriate steps in this regard. (emphasis supplied) 8. After the judgment of the Seven Judges Bench in P.A. Inamdar & ors. vs. State of Maharashtra, (2005) 06 SCC 537, a review petition was filed seeking review of the judgment in Modern School vs. Union of India & Ors. (supra). The said review petition was dismissed vide judgment dated 07.08.2009 reported in (2009) 10 SCC 01, titled Action Committee Unaided private schools and Ors. vs. DOE, Delhi observing as under: 24. In this context it may be noted that in T.M.A. Pai Foundation case [(2002) 8 SCC 481] and in Islamic Academy of Education [(2003) 6 SCC 697] the principles for fixing fee structure have been illustrated. However, they were not exhaustive. They did not deal with determination of surplus and appropriation of savings. In fact in the majority view of the present matter, this Court has found that the above topics are not dealt with by the 1973 Rules and therefore Clause 8 was found not to be beyond Rule 177 or in conflict thereto as alleged. The additional directions given in the judgment of the majority vide para 27 in Modern School [(2004) 5 SCC 583] do not go beyond Rule 177 but they are a part of gap-filling exercise and discipline to be followed by the Management. For example: every school shall prepare balance sheet and profit and loss account. Such conditions do not supplant Rule 177. If reasonable fee structure is the test then transparency and accountability are equally important. In fact, as can be seen from reports of Duggal Committee and the earlier Committee, excessive fees stood charged in some cases despite the 1973 Rules because proper accounting discipline was not provided for in 1973 Rules. WP(C) No.4109/2013 Page 6 of 16

Therefore, the further directions given are merely gap fillers. Ultimately, Rule 177 seeks transparency and accountability and the further directions (in para 27) merely bring about that transparency. Lastly, it may be noted that the matter has come up to the Apex Court from public interest litigation. Hence there is no merit in the above plea. 25. Subject to the above clarification, review petitions stand dismissed with no order as to costs. 9. The specific case of the petitioner in the present case is that whenever land is allotted by DDA on perpetual lease hold basis for running the school, a specific clause is included in the allotment letter itself to the effect that the school shall not increase the rate of tuition fees without prior sanction of DoE, Delhi Administration and shall follow the provisions of Delhi School Education Act/Rules, 1973 and other instructions issued from time to time. It is alleged by the petitioner that in spite of the said specific term, the private unaided schools have been fixing the fees at very high rates, beyond the reach of the residents of the locality, without taking the prior permission of DoE. It is contended by the petitioner that the said action is in violation of the MPD and Zonal Development Plans of Delhi apart from the provisions of the DSE Act and the Rules made thereunder. It is also contended that the said schools are indulging in profiteering and commercialization of school education, which was disapproved by the Courts in several decisions. 10. In the counter affidavit filed on behalf of the respondent No.3/Land and Development Department, Ministry of Urban Development, it is stated that the Land and Development Office WP(C) No.4109/2013 Page 7 of 16

allotted plots to schools, colleges, universities at pre-determined concessional rates and that one of the conditions in the allotment letter is that the percentage of freeship from the tuition fees shall be governed by the Rules made by the Directorate of Education, Delhi Administration. Out of 29 schools to which the land has been allotted on concessional rates, it is found that 9 schools were not following the conditions of freeship and accordingly show-cause notices were already issued. It is also stated that the appropriate action for cancellation of allotment would be taken against those schools which fail to comply with the condition imposed. 11. In the counter affidavit filed by the Director of Education, it is stated that guidelines have been issued from time to regulate the fee hike in the recognized unaided schools. Further, in terms of the directions of the Supreme Court in Modern School vs. Union of India & Ors. (supra), a Circular dated 16.04.2010 has been issued reiterating as under: 1. It is reiterated that annual fee-hike is not mandatory. 2. All schools must, first of all, explore and exhaust the possibility of utilizing the existing funds/ reserves to meet any shortfall in payment of salary and allowances, as a consequence of increase in the salary and allowances of the employees. 3. The school should not consider the increase in fee to be the only source of augmenting their revenue. They should also venture upon other permissible measures for increasing revenue receipts. WP(C) No.4109/2013 Page 8 of 16

4. Interest on deposits made as a condition precedent to the recognition of the school and pledged in favour of the Govt., should also be utilized. 5. A part of reserve fund which has not been utilized for years together may also be used to meet the short fall before proposing a fee hike. 6. If after exhausting the above mentioned possibilities, a school still finds it necessary to hike the tuition-fee; it shall first take the major stake holders in the school system i.e. parents into confidence. Since parents have to bear the financial burden of a fee hike, it is imperative that the school presents its case of fee hike, with detailed financial statement to the committee of the duly elected Parents Teacher Association and obtain their concurrence to the proposed hike before the same is approved by the Managing Committee. 7. Instructions have been issued for constitution of Parent Teacher Association for Recognized Private Schools vide circular No. 1913 dated 12/04/2010 and these must be complied with. 8. The Tuition Fee shall be so determined as to cover the standard cost of establishment including provisions for DA, bonus, etc. and all terminal benefits, as also the expenditure of revenue nature concerning curricular activities. No fees shall be charged in excess of the amount so determined. 9. School shall not introduce any new head of account or collect any fee thereof other than those permitted. Fee/funds collected from the parents/students shall be utilized strictly in accordance with rules 176 and 177 of the Delhi School Education Rules, 1973. 10. If any school has collected fee in excess of that determined as per procedure prescribed here-above, the WP(C) No.4109/2013 Page 9 of 16

school shall refund/adjust the same against subsequent instalments of fee payable by students. 11. The DE nominees of the Managing Committee will ensure compliance of the instructions issued herein, by the Managing Committee of each school, while approving the fee structure. 12. However, it is contended by the respondent No.4, Action Committee Unaided Recognized Private Schools, which got itself impleaded as a party respondent that the clause in the letter of allotment of DDA that the school shall not increase the rate of tuition fees without prior sanction of DoE is unenforceable in the light of the law laid down in T.M.A. Pai vs. State of Karnataka and Ors. (2002) 6 SCC 481 that private unaided recognised schools have a fundamental right to establish and administer their schools which right includes their right to fix a reasonable fee structure. It is also contended that the lease deeds executed in their favour by DDA did not contain such a condition regarding prior approval of DoE for increasing the tuition fees. Much reliance has also been placed upon a later decision of the Division Bench of this Court dated 12.08.2011 in W.P.(C) No.7777 of 2009 and etc. titled Delhi Abhibhavak Mahasangh and Ors. vs. GNCTD and Ors. in support of their contention that no permission from DoE is required to be taken by private unaided schools before or after fixing the tuition fees. 13. Having given our thoughtful consideration to the rival submissions of the parties in the light of the principles of law laid down by the Courts, we are of the view that the issue regarding the WP(C) No.4109/2013 Page 10 of 16

liability of the private unaided schools situated on the land allotted by DDA at concessional rates has been conclusively decided in Modern Schools vs. Union of India and Ors. (supra). As noticed above, in paras 27(c) and 28 of the said judgment, specific directions were issued qua the private unaided schools situated in land allotted by DDA. The said directions may again be reproduced hereunder for ready reference: 27. (c) It shall be the duty of the Director of Education to ascertain whether terms of allotment of land by the Government to the schools have been complied with. We are shown a sample letter of allotment issued by the Delhi Development Authority issued to some of the schools which are recognized unaided schools. We reproduce herein clauses 16 & 17 of the sample letter of allotment:-- "16. The school shall not increase the rates of tuition fee without the prior sanction of the Directorate of Education, Delhi Admn. and shall follow the provisions of Delhi School Education Act/Rules, 1973 and other instructions issued from time to time. 17. The Delhi Public School Society shall ensure that percentage of free ship from the tuition fee as laid down under rules by the Delhi Administration, from time to time strictly complied. They will ensure admission to the student belonging to weaker sections to the extent of 25% and grant free ship to them." 28. We are directing the Director of Education to look into letters of allotment issued by the Government and ascertain whether they have been complied-with by the schools. This exercise shall be complied with within a WP(C) No.4109/2013 Page 11 of 16

period of three months from the date of communication of this judgment to the Director of Education. If in a given case, the Director finds non-compliance of the above terms, the Director shall take appropriate steps in this regard. 14. Though a review petition was filed after the judgment in P.A. Inamdar & Ors. vs. State of Maharashtra (supra), the same was dismissed and consequently, the directions in paras 27 (c) and 28 in Modern School vs. Union of India & Ors. (supra) stand good. 15. The reliance placed upon the decision of the Division Bench of this Court in W.P.(C) No.7777 of 2009 and etc. titled Delhi Abhibhavak Mahasangh and Ors. vs. GNCTD and Ors. by the learned counsel for the respondent No.4, according to us, is misplaced. As we could see, the issue regarding the liability of private unaided schools who are allotted the land at concessional rate by DDA was not the subject matter of the batch of petitions decided by the Division Bench. In the said batch of petitions, the Division Bench was considering the validity of the decisions of Govt. of NCT of Delhi (culminated in the order of the DoE dated 11.02.2009) in revising the school fees payable by the students studying in various private recognized schools in Delhi. Having extensively referred to the principles of law laid down in Modern School vs. UOI (supra), P.A. Inamdar & Ors. vs. State of Maharashtra (supra) and Action Committee Unaided private schools and ors v DOE, Delhi (supra), it was concluded by the Division Bench: WP(C) No.4109/2013 Page 12 of 16

62. With this, we revert back to the issues On Merits: The clear legal position which emerges from the combined reading of the judgments of the Supreme Court, directly on the issue of revising tuition fee by Delhi schools under the Delhi Education Act, and already stated in detail above, demonstrates that the schools cannot indulge in commercialization of education which would mean that the fee structure has to be kept within bound so as to avoid profiteering. At the same time, reasonable surplus is permissible as fund in the form of such surplus may be required for development of various activities in the schools for the benefit of students themselves. The guiding principle, in the process, is to strike a balance between autonomy of such institution and measures to be taken in avoiding commercialization of education. The autonomy of the schools can be ensured by giving first right to such schools to increase the fee. At the same time, quantum of fee to be charged by unaided schools is subject to regulation by the DoE which power is specifically conferred upon the DoE by virtue of Section 17(3) of 1973 Act. This is specifically held by the Supreme Court in Modern School(supra) and Action Committee Unaided Private Schools (supra). Normally, therefore, in the first instance, it is for the schools to fix their fee and/or increase the same which right is conferred upon the schools as recognized in TMA Pai(supra). The DoE can step in and interfere if hike in fee by a particular school is found to be excessive and perceived as indulging in profiteering. It would be a procedure to be resorted to routinely. However, validity of the orders dated 11.02.2009 passed by the DoE is to be judged in a different hue altogether. Situation arose because of the implementation of pay structure recommended by the 6th Pay Commission, which was to be done mid-session albeit from retrospective effect, i.e, with effect from 01.01.2006 All aided and unaided recognized schools in Delhi were under obligation to give increase to their teachers and staff members which WP(C) No.4109/2013 Page 13 of 16

resulted in substantial hike in pay package of the employees of these schools. Further, it happened across the board and it was not a situation specific to a particular school. As a result of this added financial burden whereas the schools wanted to increase the fee, PTAs on the other hand, maintained that some of the schools enjoyed robust financial health, which was sufficient to bear the additional monetary burden without hike in the fee to be charged from the students. This necessitated going into the records of each school. Therefore, in a situation like this where on the one hand, there was perceptible additional financial burden created on account of increase in the pay of the staff and on the other hand, the exercise demanded by the PTAs of going into the financial records of each schools was time consuming, the issuance of orders dated 11.02.2009 by the Government, as an interim measure, proposing to increase the tuition fee in the manner provided in the said order with a lid on the upper limit cannot be faulted with. It is moreso, when the proposed increase is not based on any whims of the DoE, but was preceded by the constitution of a Committee under the Chairmanship of Shri S.L Bansal, a retired I.A.S officer and the impugned orders were the result of the reports submitted by the said Committee after undertaking requisite exercise, albeit, of preliminary nature, but after giving hearing to all stakeholders. At this stage, while passing such an order, there could not have been any option, but to pass a general order for increase in fee. 16. In para 56 of the said judgment, the Division Bench has culled out the points answered by the Supreme Court in Modern School vs. UOI (supra) and Action Committee Unaided private schools and ors Vs. DOE, Delhi (supra) and the same may be usefully extracted hereunder: WP(C) No.4109/2013 Page 14 of 16

56. A conjoint reading of the judgments of the Supreme Court in Modern School (supra) as well as review petitions in the case of Action Committee Unaided Pvt. Schools (supra) would clearly demonstrate that the three points formulated are answered as under: 1) DoE has the Authority to regulate the quantum of fee charged by unaided schools under Section 17(3) of the 1973 Act. It has to ensure that the schools are not indulging in profiteering. 2) The direction of DoE that no fees/funds collected from parents/students shall be transferred from the Recognized Un-aided Schools Fund to the society or trust or any other institution, was valid. However, it could be transferred under the same society or trust, which aspect is clarified in the review petition. 3) Recognized unaided schools were entitled to set up Development Fund Account and could charge the students for the same, but that should not exceed 15% of the annual tuition fee. 17. Thus it is clear that the schools cannot indulge in profiteering and commercialization of school education. Quantum of fees to be charged by unaided schools is subject to regulation by DoE in terms of the power conferred under Section 17(3) of DSE Act, 1973 and he is competent to interfere if hike in fee by a particular school is found to be excessive and perceived as indulging in profiteering. So far as the unaided schools which are allotted land by DDA are concerned, in the light of the decision of the Supreme Court in Modern School vs. Union of India & Ors. (supra), we are clear in our mind that they are bound to comply with the stipulation in the letter of allotment. Para 28 of the majority judgment in Modern School vs. Union of India & Ors. (supra) upholds the binding nature of the stipulation in the letter WP(C) No.4109/2013 Page 15 of 16

of allotment issued by the DDA that the school shall not increase the rate of tuition fees without the prior sanction of DoE. 18. For the aforesaid reasons, we consider it appropriate to dispose of the writ petition with a direction that the respondent No.1/DoE shall ensure the compliance of term, if any, in the letter of allotment regarding the increase of the fees by all the recognized unaided schools which are allotted land by DDA. The respondent No.2/DDA shall also take appropriate steps in accordance with law in case of violation of such stipulation in the letter of allotment by the unaided schools. 19. The writ petition is accordingly disposed of. CHIEF JUSTICE JANUARY 19, 2016 kks/pmc JAYANT NATH, J WP(C) No.4109/2013 Page 16 of 16