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Judgment
Rekha Palli, J
C.Ms. No. 18383/2021 & 18384/2021 (for exemption) in LPA 179/2021,
C.Ms. No. 18387/2021 & 18388/2021 (for exemption) in LPA 180/2021,
C.Ms. No. 18511/2021 & 18512/2021 (for exemption) in LPA 184/2021
&
C.Ms. No. 18558/2021 & 1859/2021 (for exemption) in LPA 185/2021
Exemptions allowed, subject to all just exceptions.
The applications stand disposed of.
LPAs 179/2021, 180/2021, 184/2021 & 185/2021
The present batch of appeals under Clause X of the Letters Patent Appeal assails the order dated 31st May, 2021 passed by the learned Single
Judge in W.P. (C) No. 7526/2020 filed by the Action Committee Unaided Recognized Private Schools (hereinafter referred to as ‘respondent
Committee’) that comprises of 450 private unaided schools in the National Capital Territory (NCT) of Delhi. Under the impugned order, the
learned Single Judge has allowed the respondent Committee’s challenge to the circulars/orders issued by the Directorate of Education, GNCTD
on 18.04.2020 and 28.08.2020, by holding that the direction to postpone collection of Annual Charges and Development Fee from students until normal
functioning of schools is resumed is illegal and ultra vires the powers of the Directorate of Education under the Delhi School Education Act, 1973 (in
short ‘DSE Act’) and the Delhi School Education Rules, 1973 (in short ‘DSE Rules’).
Issue notice. Mr. Kamal Gupta, Advocate accepts notice on behalf of the Action Committee Unaided Recognized Private Schools. He prays for
and is granted three weeks’ time to file written submissions. Response thereto, if any, besides the written submissions, be filed by the appellants
before the next date. The parties are also granted liberty to file any documents forming part of the record which may not have been filed by the
appellants.
List the matter before the Roster Bench on 12th July, 2021.
C.M. No. 18382 (for stay) in LPA 179/2021
C.M. No. 18386 (for stay) in LPA 180/2021
C.M. No. 18510 (for stay) in LPA 184/2021
C.M. No. 18557 (for stay) in LPA 185/2021
These applications preferred by the Directorate of Education seek stay of the impugned order during the pendency of these appeals. Under the
impugned order, the learned Single Judge had passed the following directions:
“52. The fact remains, as noted above, that the schools are affecting some savings on account of the fact that the school are presently
physically shut. The Supreme Court has already dealt with the stated issue. The directions as passed by the Supreme Court in the case of
Indian School, Jodhpur & Anr. vs. State of Rajasthan & Ors. (supra) would clearly apply to the present case mutatis mutandis. Relevant
para of the said judgment reads as follows:-
128.Ordinarily, we would have thought it appropriate to relegate the parties before the Regulatory Authority to refix the school fees for
the academic year 2020-21 after taking into account all aspects of the matter including the advantage gained by the school Management
due to unspent overheads/expenses in respect of facilities not availed by the students. However, that course can be obviated by the
arrangement that we propose to direct in terms of this judgment. To avoid multiplicity of proceedings (as school fee structure is linked to
school-school wise) including uncertainty of legal processes by over 36,000 schools in determination of annual fee structure for the
academic year 2020-21, as a one-time measure to do complete justice between the parties, we propose the issue following directions:
(i) The appellants (school Management of the concerned private unaided school) shall collect annual school fees from their students as
fixed under the Act of 2016 for the academic year 2019-20, but by providing deduction of 15 per cent on that amount in lieu of unutilised
facilities by the students during the relevant period of academic year 2020-21.
(ii) The amount so payable by the concerned students be paid in six equal monthly instalments before 05.08.2021 as noted in our order
dated 08.02.2021.
(iii) Regardless of the above, it will be open to the appellants (concerned schools) to give further concession to their students or to evolve a
different pattern for giving concession over and above those noted in clauses (i) and (ii) above.
(iv) The school Management shall not debar any student from attending either online classes or physical classes on account of non-payment
of fees, arrears/ outstanding fees including the instalments, referred to above, and shall not withhold the results of the examinations of any
student on that account.
(v) If any individual request is made by the parent/ward finding it difficult to remit annual fees for the academic year 2020-21 in the above
terms, the school Management to consider such representation on case-to-case basis sympathetically.
(vi) The above arrangement will not affect collection of fees for the academic year 2021-22, as is payable by students of the concerned
school as and when it becomes due and payable. (vii) The school Management shall not withhold the name of any student/candidate for the
ensuring Board examinations for Classes X and XII on the ground of non-payment of fee/arrears for the academic year 2020-21, if any, on
obtaining undertaking of the concerned parents/students.
The above directions given in paras (i) to (vii) will apply to the petitioner schools mutatis mutandis. However, clause (ii) has to be
modified. The amount payable by concerned students will be paid in six monthly installments w.e.f. 10.06.2021.â€
Issue notice. Learned counsel for the respondent Committee accept notice.
With the consent of learned senior counsel for the parties, we have taken up the interim application for disposal today itself.
In support of the prayer for interim stay, Mr. Vikas Singh, learned senior counsel for the Directorate of Education as also Mr. Jha for the appellants
in LPA Nos. 179/2021, 180/2021 and 185/2021 have raised the following four grounds; the first being that the learned Single Judge has gravely erred
in passing the same directions as issued by the Supreme Court in Indian School, Jodhpur & Anr. Vs. State of Rajasthan (2021) SCC Online SC 359 by
overlooking the fact that the said judgment, pronounced on 03.05.2021 after the impugned judgment had been reserved but was yet to be pronounced,
pertains to an entirely different fact situation. In Indian School, Jodhpur (supra), the Supreme Court was dealing with two sets of appeals assailing the
orders passed by the Jaipur and Jodhpur Benches of the Rajasthan High Court affirming the decision of the State government to direct reduction of
school tuition fees on account of the pandemic. He submits that the learned Single judge also failed to appreciate that the decision of the Supreme
Court, in that case, to overturn the directions of the Rajasthan High Court came after it had noticed that the affected schools had already been
partially re-opened for the students of Classes IX to XII which merited the collection of applicable fee. He submits that in the present case, neither
have these schools seen any kind of re-opening, nor are they concerned with the tuition fee â€" the matter pertains to Annual Charges and
Development Fee.
He further submits that the decision of the Supreme Court in Indian School, Jodhpur (supra) was made in exercise of jurisdiction under Article 142 of
the Constitution of India - which power was not available with the learned Single Judge while passing the impugned judgment. He, therefore, submits
that the impugned judgment is liable to be set aside on this ground alone.
Mr. Singh then submits that the Ld. Single Judge has failed to consider the specific statements of the appellant in their affidavit that only 40-60%
of the amounts collected by way of tuition fee, the collection whereof was not interdicted in any manner, was being used for discharging the liability of
the schools towards staff salaries. Consequently, there was enough funds available with the schools to bear the burden of any development charges or
recurring charges payable by them, which may possibly have been reduced after the schools had closed on account of the pandemic w.e.f. March
2021.
Mr. Singh further submits that the Ld. Single Judge has failed to appreciate that the impugned circular of 18.04.2020 had already been upheld by a
Coordinate Bench of this Court on 24.04.2020 in Naresh Kumar Vs. Director of Education & Anr. W.P. (C) 2993/2020 and, therefore, it was not
open for the learned Single Judge to now intervene with the circular on any ground whatsoever.
Finally, Mr. Singh submits that the learned Single Judge has failed to appreciate the wide scope of powers available with the Directorate of
Education under Rule 43 of the DSE Rules which vest it with wide powers to issue any directions that it considers appropriate in public interest. He
also seeks to place reliance on Section 24 of the DSE Act which permits the Directorate to pass any order as may be deemed appropriate after
inspection of the schools. He, therefore, prays that the impugned order, being wholly erroneous, be stayed pending a final decision in these appellate
proceedings.
Countering the submissions of Mr Singh, Mr. Shyam Divan, learned senior counsel appearing on behalf of the respondent Committee submits that
the very premise on which these appeals have been filed is misplaced. He submits that the Directorate is erroneously urging that the learned Single
Judge has simpliciter adopted the directions given by the Supreme Court in Indian School, Jodhpur (supra). By drawing our attention to paragraphs 30
to 51 of the impugned judgment, he submits that the learned Single Judge has meticulously analysed the relevant provisions of the DSE Act and Rules,
before categorically concluding that the Directorate of Education had no power, whatsoever, to interject or interfere in private contracts executed
between the parents of the students and the schools, by directing the private, unaided schools to indefinitely postpone collection of Annual Charges and
Development Fee.
Mr. Divan contends that the learned Single Judge has rightly concluded that any such direction for interfering with a private contract in respect of
fee structure/development charges, etc. was permissible under the DSE Act only when the schools are found to be engaging in profiteering or
commercialisation. In fact, in Paragraph 49 of the impugned judgment, the learned Single Judge had noted that there was no finding in any of the
impugned circulars/orders that the schools affected by the directions thereunder were indulging in profiteering and commercialisation.
Mr. Divan further submits that in fact the learned Single Judge was also conscious of the undisputed position that the Member-schools of the
respondent Committee were bearing all annual development and maintenance expenses in respect of these schools, even though their physical
functioning was suspended. However, upon a holistic consideration of the matter and the admitted position that some of the expenses of these schools,
for e.g. electricity charges, may have marginally reduced, the learned Single Judge followed the principles adopted by the Supreme Court Indian
School, Jodhpur (supra). He, thus, contends that the directions issued by the learned Single Judge are, in fact, beneficial to the students.
Mr Divan further submits that although the State is forcibly seeking to curtail the right of private unaided schools to collect Annual Charges and
Development Fee, it has neither offered them any subsidy nor any concession in terms of tax payments during the pandemic period. On the other
hand, the schools have been directed to continue conducting virtualclasses so that there is no discontinuity in the students’ education. This, in itself,
he contends, makes it incumbent on the schools to continue functioning, which implies that they are bound to be incurring many expenses.
Mr Divan finally submits that once the learned Single Judge has come to a categorical conclusion that the impugned orders passed by the appellant
were ultra vires of the powers vested upon them , no interim LPA No.179/2021 & conn.matters order for stay on the impugned judgment ̉is warranted
. He submits that doing so would only bring into effect an order that was passed by an Authority de hors its statutory powers. In any event, the
learned Single Judge has also put in safeguards for the parents/students in the impugned judgment by permitting them to pay the amounts due under
monthly instalments and has also restrained the school managements from debarring any student from classes on account of non-payment of
fees/arrears/outstanding fees.
In conclusion, Mr Divan fairly submits that even though the managements of private unaided schools have been permitted under the impugned
order to collect the entire fee/charges applicable for the academic year 2021-22, in view of the fact that this Court is examining the present challenge
to the impugned judgment, the members of the respondent Committee, till the next date, will follow the same principles as set down for collecting
fee/charges for the years 2020-21 as have been laid down by the impugned order.
Mr. Puneet Mittal, learned senior counsel appearing for the Delhi Public School Society has also given similar assurance as Mr. Diwan.
Having given our thoughtful consideration to the submissions of the parties, we find that the learned Single Judge, after considering the provisions
of the DSE Act and Rules, especially Rule 43 relied upon by Mr. Singh, has rendered a categorical finding that the orders passed by the appellant
restraining the Committee Schools from Annual Charges and Development Fee till resumption of physical functioning of schools was not only contrary
to the contractual terms of the agreement between the schools and students’ parents but was also beyond the scope and ambit of the
appellant’s powers under the scheme of the DSE Act and Rules.
The aforesaid Rule 43, heavily relied upon the appellant in support of its case, reads as under:
“43. Power to issue instructions
The Administrator may, if he is of opinion that in the interest of school education in Delhi it is necessary so to do, issue such instructions in
relation to any matter, not covered by these rules, as he may deem fit.â€
On a perusal of this Rule, we are prima facie inclined to agree with the findings given by the learned Single Judge in the impugned order that the
scheme of the DSE Act and Rules do not vest the Directorate with any power to issue the kind of directions contained in the orders/circulars
impugned before it, considering that they have such far reaching financial implications upon the private unaided schools of NCT of Delhi. No doubt,
the statute vests the Directorate with supervisory power to ensure that these private schools, chosen by students and their parents out of their own
volition for the purpose of admission, do not indulge in commercialization and profiteering, however this right is salutary in nature and does not give any
license to the Directorate to pass directions that it perceives would be in public interest, without any basis therefor.
The Directorate has also vehemently contended that the learned Single Judge has erred in mechanically applying the directions issued by the
Supreme Court in Indian School, Jodhpur (supra) without noticing that the facts in the two cases are not pari materia. Even on this aspect, we are
prima facie unable to agree. It is an undisputed position that these schools have been reeling under the impact of the pandemic for over a year, during
which they were not only required to maintain the school premises and infrastructure, but also remain ready for the eventual re-opening of the schools,
besides incurring the expenditures of IT infrastructure and training for smooth functioning of online classes. Not to mention, they continue to incur the
expenditure of paying staff salaries. However, a perusal of paras 39 to 51 of the impugned judgment leave no manner of doubt that the learned Single
Judge has carefully combed through the facts of the present case, by making detailed notes of the recurring capital and revenue expenditure of the
schools during the pandemic when the students are not in physical attendance. While doing so, the learned Single Judge has also noticed that some
expenses, like electricity and stationary charges, would have undoubtedly reduced, but has, instead of setting down new parameters, followed the basic
principles laid down by the Supreme Court in Indian School, Jodhpur (supra). In this regard, we may refer to paragraphs 45 to 48 of the impugned
judgment which reads as under:
“45. The break-up of expenses related to Annual Charges have been elaborated above and the sub heads are not disputed. It broadly
includes the following expenses:
Hostel running expenses
Administrative & General Expenses
Rents, rates and taxes
Communication Expenses
Printing & Stationery
Electricity & Water charges
Travelling & Conveyance
Expenses of teaching & non teaching staff
Insurance charges
Promotional expenses
Remuneration of Auditors (including expenses reimbursed)
Repairs & maintenance of Building
Depreciation
Financial expenses such as interest on loans, loss on sale of fixed assets & investments
0ther expenses - Write offs and provisions
Miscellaneous expenses
Legal Expenses.
Similarly, the break-up of expenses related to Development Fees have been stated above and relate to the following expenditure:
Furniture, Benches
Chairs, Wall panelling, Green/Black Boards
Computers
Projectors
Smart Boards/ Touch Panels in classes
Water Coolers
Air conditioners
RO water treatment plant
Overhauling of electrical
Panels, switches, MCB's
Fire safety equipments
Fans and lights
Changing I repairing of doors and windows
Tiles, Lift
The issue that arises is that the schools are not physically open, can it be said that the expenses under the above heads are not being
incurred by the private unaided recognized schools? In my opinion, a bare perusal of the heads of expenses clearly demonstrates and
shows that most of the expenses are not correlated or connected with the actual physical opening of the schools for the students. Expenses
like rents, taxes, travelling, conveyance, insurance charges, remuneration of auditors, repair and maintenance of building and maintenance
of equipment, furniture and fixture are all expenses which will continue to be incurred by the schools irrespective of the physical shut down.
In case, the said repairs and expenses are not done, it is bound to cause damage to the building, infrastructure and functioning of the
schools.
Further, it cannot be said that the school building is completely shut. The building would remain functional for administrative reasons and
even, depending on facts and circumstances of the case, for conducting online classes, etc.
No doubt, the expenses under some of the heads will drop in the absence of actual full physical opening of the schools, namely,
expenses like, electricity, water, stationery, etc.â€
Finally, insofar as the appellant’s contention is concerned that these schools are barely using 40-60% of the tuition fee collected by them for
payment towards salaries, which sums are lying with them for their disposal, we find that there was absolutely no material produced in support of this
bald claim, either before the learned Single Judge or before us. In any event, in case this allegation had any truth, the appellant would have instituted
appropriate proceedings for profiteering against the erring schools.
Now, in Naresh Kumar (supra), the Court was considering a prayer for exemption from payment of tuition fee for all students during the
pandemic, in addition to the exemptions that were already accruing on account of the circular dated 17.04.2020 issued by the Directorate of
Education. Although that petition was rejected by the Court, we may note that it involved a completely different order passed by the Directorate and
was markedly different from the orders/circulars that we are concerned with today. Not to mention, a significant question decided under the judgment
impugned herein is the power of the Directorate to issue order/circulars of such nature under the scheme of the DSE Act and Rules, which was not in
issue before the Coordinate Bench in Naresh Kumar (supra). Even otherwise, we cannot lose sight of the fact that the decision in Naresh Kumar
(supra) was passed at a time when the pandemic had just set in and no one had thought that it would continue for this long. Therefore, the decision of
the Court in that case cannot be compared to the present one where we are a year into the pandemic and have had some time to settle into our new
reality.
Ultimately, the managements of these unaided, private schools in the city, which do not receive any aid from the GNCTD and are solely dependent
on the fee collected by them, would also need funds to sustain their operations and premises and continue imparting education online. Given the terrible
exigencies of the pandemic, we have been forced to embrace new models for our institutions and virtual classes are our sole way of ensuring that the
nation’s children are being educated. Thus, one cannot gainsay the importance of these virtual classes and staying the impugned decision today
without a deeper examination of the facts would only compromise with the ability of these schools to continue serving this critical function. That being
said, insofar as the difficulties that may be encountered by the parents of the students are concerned, learned counsel for the respondents have
already assured this Court that they would ensure that all Annual Charges and Development Fee levied for the year 2021-22 would be recovered on
the same principles applicable to the academic year 2020-21 under the impugned judgment.
Needless to say, these observations are prima facie in nature and the respondent Committee shall remain bound by the undertakings recorded in
Paragraphs 18 and 19 above.
The application is dismissed in the aforesaid terms.