Patna High Court Rejects Plea Against Birla Edutech For 'Commercializing Education', Says No Material To Show Violation Of CBSE Bye-Laws

In a plea seeking an inquiry against Birla Edutech Limited for allegedly commercializing education, the Patna High Court said that no blanket or fishing inquiry can be directed into all schools run under the franchisee Birla Open Minds without any specific material against it. 

The Court said that the Central Board of Secondary Education (CBSE) may initiate action only when specific material is brought to its notice indicating a violation of its affiliation bye-laws, particularly those governing financial transactions in the franchise process.

Justice Anil Kumar Sinha, in his order said, “this court is of the opinion that blanket fishing inquiry cannot be directed for all the schools being run in the name and style of Birla Open Minds School. However, if certain specific material is brought before the CBSE regarding violation of its bye-laws at the time of having affiliation including the money transaction, the CBSE shall be at liberty to proceed in accordance with law and in terms of its regulation and bye-laws in this regard.”

The above ruling was made in a writ petition filed by the Sarojani Educational Trust through the Founder Trustee of the Educational Trust - Dr. Nitish Kumar.

As per the factual matrix of the case, the petitioner Trust had approached Birla Edutech Limited in July 2019 to obtain a franchise for operating a Birla Open Minds School. The franchise was offered at a cost of ₹55 lakhs + GST, and was allegedly sought for using brand name, infrastructure visit, etc. Further, an additional ₹14 lakhs was later demanded and paid.

The petitioner, after initiating the CBSE affiliation process for the 2023-24 academic session, discovered that CBSE bye-laws prohibit the commercialization of education through such franchise arrangements. Notably, the CBSE's circular dated 06.02.2014, requires schools to submit an affidavit affirming that no monetary transaction is involved in exchange for the use of a franchiser's name, logo, or motto. Upon learning of this, the petitioner chose not to proceed with the franchise and notified the respondent of the regulatory violations.

It was further alleged by the educational trust that Birla Edutech had offered to mask the nature of the agreement by proposing a modified contract that would omit the term “franchisee,” suggesting an intent to circumvent CBSE rules. They contended that this was part of a larger pattern where hefty sums were clandestinely collected from various institutions for franchise rights.

On the other hand, the counsel for CBSE submitted that the petitioner brought a private dispute before this court by way of writ application insofar as the respondent organisation is a private entity granting franchisee to various schools in the name and style of Birla Open Minds School. The fishing inquiry of all the schools which have been running on the basis of franchisee given by the respondent organisation may not be directed.

Further, it was contended that if any specific complaint or material is brought before the CBSE regarding the transaction of fee/amount in lieu of grant of franchisee, the CBSE as per its bye-laws which has been amended in 2018 shall certainly take action against the erring school or entity. The CBSE is bound by its circular and the bye-laws and if any clandestine money transaction has taken place in obtaining franchisee, the CBSE would certainly take action against the erring school in accordance with law, it was lastly contended.

After hearing both sides, the High Court stated that a blanket inquiry cannot be directed and disposed of the plea. 

Case Title: Sarojani Educational Trust vs Central Board of Secondary Education and And

LL Citation: 2025 LiveLaw (Pat) 41

Click Here To Download Judgement