2020 (10) TMI 1265 - HC - Indian Laws

Seeking to allow substantial concession in fees as the physical conduct of classes has not been possible for more than six months and normal functioning may not resume in a full-fledged manner for several months more - COVID-19 pandemic situation. Sanjib Banerjee, J. HELD THAT - In the light of the discussion and purely as a one-time measure necessitated by the present unprecedented situation, the following directions are issued i. There will no increase in fees during financial year 2020-21. ii. From the month beginning April, 2020 till the month following the one in which the schools reopen in the physical mode, all 145 schools will offer a minimum of 20 per cent reduction of fees across the board. Non-essential charges for use of facilities not availed of will not be permissible. For instance, additional charges for laboratory, craft, sporting facilities or extracurricular activities or the like will not be permissible during the months that the schools have not functioned in the physical mode. Session fees traditionally charged periodically will be permissible, but again, subject to a maximum of 80 per cent of the quantum charged for the corresponding period in the financial year 2019-20. iii. The minimum figure of 20 per cent reduction in the monthly tuition fees will be on the basis of the tuition fees charged for the corresponding month in the previous financial year. iv. For the financial year 2020-21, a maximum of five per cent excess of revenue over expenditure will be permissible; the balance excess (without any mathematical precision) should be passed on by way of general concession or special concession in individual cases of extreme distress. If any school makes a loss as a consequence of following these directions, such loss can be made up in course of the next two financial years, 2021-22 and 2022-23, if normal physical functioning resumes by March 31, 2021. v. No amount towards the arrears on account of revision of pay to teachers or other employees can be passed on in the fees for financial year 2020-21. The amount on account of arrears may be recovered in 2021-22 and 2022-23, if normal physical functioning resumes by March 31, 2021. vi. There will be no increase in salaries of teachers or of other employees during financial year 2020-21. If any individual school has given effect to a higher pay-scale, the difference must not be realised out of the school fees during the financial year 2020-21. vii. Parents and guardians of students are requested not to avail of the reduction in schools fees, if their financial situation does not merit the reduction. However, if any set of guardians or parents obtains the benefit, no questions in such regard can be asked. viii. In addition to the across-the-board reduction, every school will entertain applications from parents or guardians for further reduction or waiver or exemption or delayed or installment payments, as the case may be. Every application in such regard must be supported by the financial statements of the parents or guardians so as to justify the request. The financial statements should be certified by any qualified auditor and accompanied by a declaration by the applicant parent or guardian verifying the particulars to be true and correct. ix. Each application will be considered on merit. Such applications have to be filed before the respective schools by November 15, 2020 and every application should be dealt with on an individual basis and a decision communicated to the applicant by December 31, 2020. Till the decision on the individual application is communicated and for a further period of two months thereafter, no coercive action should be taken against the relevant student. In other words, the student must be allowed every facility that a similarly placed other student would enjoy, including the name of such student being put forward for the board examinations, subject, however, to the fees payable to the board being tendered within time on behalf of the relevant student. x. When an application for further reduction or waiver or exemption or delayed payment of fees has been disposed of by the relevant school but the parents or guardians are aggrieved by the decision, an application may be filed, upon deposit of ₹ 1000/-, to a committee for further adjudication of the request and to assess the decision communicated by the relevant school. Such application has to be filed within 10 days of the rejection, in full or part, of the request being communicated to the relevant parents or guardians. xi. The committee referred to in the immediate preceding clause will be headed by Mr Tilok Bose, Senior Advocate as its chairperson and will be assisted by the Headmistress or Principal (the occupant of the higher of the two offices, if they are two) of Heritage School and Ms Priyanka Agarwal, Advocate for the parents in WPA 5890 of 2020. The committee will be empowered to engage an auditor or a firm of chartered accountants to assist the committee. The committee and the auditor appointed by the committee will look into the extent of reduction or exemption or the like sought and the feasibility thereof on the basis of the accounts of the relevant school for the financial year 2019- 20 and the financial figures for the first six months of the financial year 2020-21 as certified by the auditors of the relevant school. The two other members of the committee will assist the chairperson of the committee to arrive at an appropriate decision, but the chairperson will have the final say therein. xii. The deposit obtained by the committee will be retained by the committee and ₹ 800/- therefrom disbursed to the auditor or firm of chartered accountants for the first time the accounts of a particular school need to be assessed by the auditor or firm of chartered accountants. For every repeat exercise, meaning studying the accounts of the same school from the second time onwards, ₹ 500/- per case will be paid to the auditors. The balance amount in the hands of the committee will be used for the purpose of secretarial and managerial services the committee may be required to obtain. Any ultimate surplus has to be made over to court for the same to be dealt with in accordance with law. No remuneration is provided for any of the members of the committee and the court hopes that the members nominated graciously accept this onerous task in the larger public interest. xiii. By November 30, 2020, the committee should indicate a dedicated e-mail account whereat the appeals against the decisions of the schools may be filed. The e-mail ID should be communicated to Advocate-on-record for the petitioner in the lead matter for it to be disseminated to all parents and guardians. The money required to be deposited will be tendered in cash to a secretary or manager as may be indicated by the committee. The application will be deemed complete only upon the grievance in writing being forwarded to the relevant e-mail account and the deposit being made. No application will be entertained without the deposit being tendered. Full accounts of the monies received and expenses incurred must be maintained and presented in court, when sought. xiv. All schools should have the accounts for the financial year 2019-20 ready and also the accounts for the period of April to September, 2020 ready to be furnished within two days of the demand therefor by the committee. xv. Every application made before the committee must clearly indicate the name and other particulars of the student involved and furnish the e-mail ID of the school and its Principal or the like for the committee to communicate with the school. xvi. The committee must endeavour to dispose of every application within 45 days of the receipt thereof and the decision of the committee will be binding, subject to the relevant schools having a right to apply to this court in the present proceedings for the reconsideration thereof on cogent grounds. Till a dispute between the parents or guardians of a particular student and the relevant school is finally decided, no coercive action against the student may be taken by the school, whether to disallow the student from attending class in any form or taking any examination or for the candidature of such student being forwarded for any board examination (subject to the board s fees being tendered). xvii. The quantum of fees to be charged for every month will be indicated by the individual schools on any website and the notice-boards of the schools and informed to Advocate for the petitioner in WPA 5890 of 2020 for the same to be put up on a website that such petitioner must set up for this purpose. The fees payable for every month and the other periodic charges, like session fees, for the entire financial year 2020-21 should be indicated by the individual schools and put up on the website to be set up by the petitioner in WPA 5890 of 2020 by October 31, 2020. xviii. By November 30, 2020, the fees payable in terms of this order for the period up to November 30, 2020 should be tendered on behalf of all students of the 145 schools. To the extent the parents or guardians of the students apply for further reduction or waiver or exemption, they can pay the amount as possible by November 30, 2020 and copies of the applications for further reduction or the like should be deposited by such date. xix. With effect from December 8, 2020 all schools will be entitled to disallow students whose fees have not been paid in full in terms of this order and those who have not applied for reduction or waiver or the like. However, schools should ensure that this extreme step is taken only after exercising due care and caution. xx. No student will be entitled to apply for a transfer certificate without the full quantum of fees in terms of this order being first discharged. xxi. For the purpose of clarity, it is reiterated that fees payable by students to boards for examinations or otherwise shall have to be paid in addition to the monthly fees and other charges in terms of this order and no waiver or reduction of the fees or charges payable to the boards may be sought or granted. xxii. There will be no refund of the fees already paid. However, to the extent fees have already been paid which are in excess of the directions contained herein, suitable adjustments will be made over the remaining months of the financial year, unless the parents agree in writing otherwise. xxiii. The expenses incurred for developing the infrastructure of the schools should not be passed on to the students during the current financial year, though it will be open to recover the same from the students from financial year 2021-22 onwards, if the physical functioning resumes by March 31, 2021. xxiv. The cap of five per cent of the revenue over expenditure for the year 2020-21 will be subject to the exception that it may exceed the five per cent only if the general reduction afforded to the parents is not availed of by any of the parents and no student in financial distress has been denied additional concession despite being worthy. xxv. No unusual expense should be incurred during financial year 2020-21 and no development or infrastructure expense should be incurred unless absolutely unavoidable. xxvi. These directions will continue till such time that physical functioning of the schools resumes in the normal course. xxvii. The above directions for any form of concession will not apply to any of the 145 schools where the average monthly fee (calculated on an annual basis over the year from April, 2020 to March, 2021) is less than ₹ 800/-. However, such schools may voluntarily take such measures as deemed fit. The exception carved out is perceived to be reasonable since the quantum of concession in such cases will be nominal and the elaborate exercise may be unnecessary as the extent of possible profit is unlikely to be significant. But the monthly fees payable in such cases must be put up on the notice-boards and websites as in the other cases and without exception. xxviii.The other private unaided schools in the State should also abide by the directions mutatis mutandis, particularly since the matter has been heard extensively and as public interest litigation. However, only the disputes pertaining to the 145 schools included in WPA 5890 of 2020 may be referred to the committee constituted herein; and not the disputes pertaining to other private unaided schools in the State. Moushumi Bhattacharya, J. We repose faith in the fairness and competence of the Committee to take the process forward. We also wish to record our appreciation for counsel who have been extremely helpful with their suggestions for finding the best solution to the problem keeping the interest of the students foremost in their minds. Since the writ petitions are being made returnable on 7th December, 2020, the implementation of the directions will continue to be monitored by the court. Later Some of the appearing schools seek a stay of the operation of the order. Such prayer is considered and declined.

Summary

Issues Involved:
1. Maintainability of writ petitions against private unaided schools.
2. Applicability of Article 30(1) and Article 19(1)(g) of the Constitution.
3. Extent of judicial intervention in fee regulation.
4. Right to privacy concerning financial disclosures by schools.
5. Relief measures for fee concessions during the pandemic.

Detailed Analysis:

1. Maintainability of Writ Petitions Against Private Unaided Schools:
The court examined whether private unaided schools fall under the jurisdiction of Article 226 of the Constitution. It was held that private unaided schools performing public duties, such as imparting education, can be subject to writ jurisdiction. The court cited precedents indicating that the term "authority" under Article 226 must be interpreted broadly to include bodies performing public duties.

2. Applicability of Article 30(1) and Article 19(1)(g) of the Constitution:
The court addressed the objections raised by minority institutions under Article 30(1) and private unaided schools under Article 19(1)(g). It was determined that while these institutions have the right to administer their affairs, this right does not extend to profiteering. The court emphasized that educational institutions must be run on a non-profit basis, and any judicial scrutiny into fee structures to prevent profiteering does not violate these constitutional protections.

3. Extent of Judicial Intervention in Fee Regulation:
The court acknowledged the unprecedented nature of the pandemic and the resultant financial distress among parents. It was noted that schools have incurred lower operational costs due to the absence of physical classes. Consequently, the court issued directions for a 20% reduction in fees across the board for the specified period, with additional concessions to be considered on a case-by-case basis. The court also constituted a committee to adjudicate disputes regarding fee concessions.

4. Right to Privacy Concerning Financial Disclosures by Schools:
The court rejected the argument that requiring schools to disclose their financial statements violates the right to privacy. It was held that while the right to privacy is fundamental, it is not absolute and does not preclude judicial scrutiny in cases of alleged profiteering by educational institutions. The court emphasized that financial transparency is necessary to ensure fairness in the fee concession process.

5. Relief Measures for Fee Concessions During the Pandemic:
The court issued detailed directions to provide relief to parents and guardians. These included:
- No fee increase for the financial year 2020-21.
- A minimum 20% fee reduction from April 2020 until the resumption of physical classes.
- Prohibition of non-essential charges for unused facilities.
- A cap on revenue over expenditure at 5% for the financial year 2020-21.
- Establishment of a committee to adjudicate disputes regarding further fee reductions or waivers.

The court clarified that these measures are temporary and specific to the pandemic situation, and should not be used as a precedent for future fee regulation. The writ petitions will remain pending to monitor the implementation of these directions.

Conclusion:
The judgment balances the financial constraints of parents due to the pandemic with the operational needs of schools. It provides a structured mechanism for fee concessions while ensuring transparency and fairness. The court's approach underscores the importance of judicial intervention in extraordinary circumstances to uphold constitutional values and protect public interest.