The Supreme Court has held that private schools demanding fees from students for the activities and facilities not availed by them due to the lockdown amounts to 'profiteering' and 'commercialization'. Taking judicial notice that classes have been held online during the last academic year, the Supreme Court observed that schools must have saved on overheads and operational costs. The Court reckoned that schools must have saved at least 15% in that way, and hence, they have to deduce annual school fees to that extent. The Court said that the schools "must willingly and proactively" reduce fees to that extent.
In this regard, the Court followed the precedents laid down in TMA Pai, PA Inamdar, and other cases that hold that the educational institutions' fees must be proportional to their services and cannot indulge in 'profiteering' or 'commercialization. The Court said that a private institution has the autonomy to fix its fees so long as it does not result in 'profiteering' and 'commercialization', and to that extent, the State has the power to impose regulations. The Court further said that the recovery of the excess amount beyond the permissible limit would result in profiteering and commercialization.
A bench comprising Justices AM Khanwilkar and Dinesh Maheshwari made this significant ruling in Indian School, Jodhpur vs State of Rajashtan and others. The bench dealt with a batch of appeals challenging a Rajasthan Government order, which permitted CBSE schools in the State to collect only 70% and state board schools to collect only 60% of the annual school fee.
The Supreme Court partly allowed the schools' appeal by allowing them to collect annual tuition fee after giving a deduction of 15% towards the savings made on account of overheads and operational costs. The Court has allowed six monthly instalments for the payment of fees.
The Court further observed that the school Management supposedly engaged in doing a charitable activity of imparting education is expected to be responsive and alive to that situation and take necessary remedial measures to mitigate the hardship suffered by the students and their parents. It is for the school Management to reschedule payment of school fee so that not even a single student is left out or denied the opportunity to pursue his/her education to effectuate the adage "live and let live".
While allowing schools to charge 85% of the annual fees, the Court also directed that no student should be debarred from attending either online classes or physical classes on account of non-payment of fees, arrears/outstanding fees including the instalments, and shall not withhold the results of the examinations of any student on that account.
Suppose any individual request is made by the parent/ward, finding it difficult to remit annual fees for the academic year 2020-21. In that case, the school Management must consider such representation on a case to case basis sympathetically.
The school Management shall not withhold the name of any student/candidate for the ensuing Board examinations for Classes X and XII on the ground of nonpayment of fee/arrears for the academic year 2020-21, if any, on obtaining undertaking of the concerned parents/students.
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