Delhi Govt Can Regulate Private School Fees Only To Prevent Profiteering, Not To Control Fee Structure: High Court

The Delhi High Court has held that the Delhi Government's Directorate of Education (DoE) has the power to regulate fee structure of unaided private schools only to the extent necessary to curb profiteering, commercialization of education, and collection of capitation fees.

A division bench comprising Chief Justice DK Upadhyaya and Justice Tushar Rao Gedela clarified that the government cannot impose blanket restrictions or dictate fee increases by such schools.

“It is not that the fees to be charged by the schools cannot be regulated by the Government; however, regulation is permitted only to ensure that such schools do not indulge in profiteering or commercialization of education or in charging capitation fee,” the Court said.

It added that the regulatory measures which can be adopted by the Government would also encompass in its folds the measures to check that unaided schools do not utilize the profits or surplus for a purpose other than for the benefit of educational institution.

The Court emphasised that such fee structure must be fixed keeping in mind the infrastructure and other facilities available, salaries to be paid to the teachers and staff and future plans of expansion or betterment of the institution.

The Bench dismissed a batch of appeals filed by the Directorate of Education and various students challenging single judge order which had quashed the orders restraining Bluebells International School and Lilawati Vidya Mandir from increasing fees for the 2017–18 academic session.

The Court held that in was in complete agreement with the finding recorded by the Single Judge to the effect that the scope of interference of DoE with the fixation of fees charged by an unaided recognised school is restricted to a case in which the school engages in charging of capitation fee or indulges in profiteering.

“Accordingly, if on examination of the statement of fees to be filed by the schools, the DoE finds that the spending of the amount collected by the schools is not as per the provisions of DSEA, 1973 or the Rules made thereunder, appropriate action is permissible against the school which may be taken by the DoE,” the Court said.

“Such an action is also to ensure that the school concerned does not indulge in profiteering or commercialisation or charging of capitation fee, and further that the profits/surplus generated by the school is spent only for betterment of the school and such other purposes related to education and is not diverted for any other business or personal use of the management,” it added.

Title: RUMANA THROUGH FATHER MR HEMANT AND ORS v. BLUEBELLS INTERNATIONAL SCHOOL KAILASH AND ANR & other connected matters

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