Recently, the Supreme Court reaffirmed that civil courts retain jurisdiction to adjudicate fee recovery disputes initiated by unaided private schools, rejecting the Punjab and Haryana High Court’s interpretation that such matters are exclusively within the domain of the Fee and Fund Regulatory Committee (FFRC). In a batch of appeals filed by both schools and parents, the Court held that “there is no express or implied ouster of the jurisdiction of the civil court” under the Haryana School Education Act, 1995 or the Rules of 2003.
Brief Facts:
The dispute arose when an unaided private school filed multiple civil suits seeking recovery of increased tuition fees from students and their parents. The trial court decreed the suits, holding the parents liable to pay the balance fees, while making the recovery subject to any ruling by the FFRC. The appellate court upheld the decrees but directed that if the FFRC found the fee hike unjustified, the amounts already collected would have to be refunded.
Aggrieved by these directions, the school filed review petitions which were dismissed. This led to a total of 31 second appeals by the school and 27 second appeals by the parents. The Punjab & Haryana High Court allowed the parents' appeals, holding that civil court jurisdiction was barred in light of the remedy available under the amended rules and Section 22 of the Act.
Contentions of the Petitioner:
The counsel appearing for the appellant school, argued that no express or implied bar under Section 22 prevents schools from approaching civil courts for legitimate fee recovery. He pointed out that the FFRC’s jurisdiction, as per Rules 158A and 158B, is confined to complaints by students and parents regarding excessive fees or capitation charges, not for schools to recover dues.
He further submitted that the school had lawfully notified the fee hike and had continued providing education despite partial payments. The government’s attempt to cap fee hikes was struck down in 2011, and the suits were filed in 2014 within the limitation period. No parent or student had approached the FFRC or the court-appointed committee prior to the suit.
Contentions of the Respondent:
The counsel representing the respondents, argued that the school violated Rule 158 by not issuing proper notifications of the hike and that suits for earlier academic years were time-barred. It was also contended that the FFRC mechanism provided under the amended rules from 2014 barred civil courts from entertaining fee disputes.
Observations of the Court:
The Apex Court carefully examined the legislative scheme and precedents and made several critical observations, maintaining a strictly legal approach grounded in statutory interpretation and judicial policy. The Court held, "There is no ouster of jurisdiction as was found by the High Court especially since the remedy provided, even under the newly incorporated provisions in the year 2014, was to the students or their parents to approach the FFRC to ventilate their grievance of unreasonable and excessive fee hike."
The Bench clarified that no parallel remedy exists for schools under the FFRC mechanism to recover dues or enforce a legitimate hike in fees. Therefore, schools had no alternative but to approach civil courts.
On the core issue of jurisdiction, the Court stated, "There is no express or implied ouster of the civil court jurisdiction and even Section 22 of the Act provides only for the ouster of jurisdiction in respect of any matter in relation to which the Government or its officers are conferred with the power to adjudicate." Further, it was noted that, "The recovery of fees by an institution from the students or parent, is not a power conferred on the Government or its authorities by the statute or the rules prescribed." Referring to the landmark precedent in Dhulabhai v. State of M.P., the Court reiterated that civil court jurisdiction cannot be ousted unless the statute provides an effective alternative remedy and excludes civil remedy either expressly or by necessary implication.
The Court also emphasized the fairness of the trial court’s judgment, which had made the decree subject to the FFRC’s decision, a safeguard protecting the rights of students and parents. It held that the appellate court’s direction for a blanket refund of all fees in case of any adverse finding by the FFRC was legally untenable, as refunds should only be to the extent the fee hike is disallowed.
The Court concluded that the Review Petitions ought to have been allowed, observing, “We are clear in our minds that the Review Petitions ought to have been allowed since what was sought to be reviewed was an error apparent on the face of the record.”
The decision of the Court:
The Top Court allowed all the civil appeals, setting aside the orders of the High Court and restoring the trial court’s decree, subject to the FFRC’s findings. It also modified the interest component on the decretal amount to 6%, as rightly done by the appellate court.
Importantly, the Court reaffirmed that, "There can be no ouster of jurisdiction of the civil court found from the Act and Rules, either express or implied." The ruling ensures that unaided private schools retain the right to recover reasonable and properly notified fee hikes through civil courts, especially when no statutory enforcement mechanism is available to them under the regulatory framework.
Case Title: Apeejay School vs. Dhriti Duggal
Case No.: Special Leave Petition (Civil) No. 8544 of 2022
Coram: Chief Justice India B.R. Gavai, Justice K. Vinod Chandran, Justice N.V. Anjaria
Advocate for Petitioner: Adv. H.L. Tiku (Senior Advocate), Yasmeet Kaur (AOR), Vikas Kumar, Arun Kumar, Jayati Arora, Karan Gulwade, Samiksha Jain, Kedar R. Seludkar, Yasmeet Kaur, Vikas Kumar, Manish Paliwal, Kedar R Seludkar, Arun Kumar, Hitesh Wadhwa, M/s. Corporate Legal Partners
Advocate for Respondent: Adv. Santosh Kumar Tripathi (Senior Advocate), Khagesh B. Jha, Khagesh B Jha, Shikha Sharma Bagga, Siddharth Krishna Dwivedi (AOR), Mini Kaushik (AOR), Lokesh Kumar Choudhary (AOR)
