Delhi High Court
Master Yashvir Singh Chauhan ... vs Action Committee Unaided ... on 7 June, 2021
Via Video Conferencing
$~5-8
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision : 07.06.2021
+ LPA 179/2021, C.M. No. 18382/2021(for stay) & C.M. No.
18385/2021(leave to file appeal)
MASTER YASHVIR SINGH CHAUHAN THROUGH HIS
FATHER DALIP SINGH CHAUHAN AND ANR. ..... Appellants
Through: Mr. K.B. Jha with Ms. Shikha
Sharma Bagga , Advocates.
versus
ACTION COMMITTEE UNAIDED RECOGNISED PRIVATE
SCHOOLS & ANR. ..... Respondents
Through: Mr. Shyam Divan, Senior Advocate
with Mr. Kamal Gupta, Mr. Nipun
Jain and Mr. Sparsh Aggarwal,
Advocates.
+ LPA 180/2021, C.Ms. No. 18386/2021(for stay) &
18389/2021(leave to file appeal)
MASTER VIPUL YADAV AND ANR. ..... Appellants
Through: Mr. K.B. Jha with Ms. Shikha
Sharma Bagga , Advocates.
versus
ACTION COMMITTEE OF UNAIDED PRIVATE RECOGNIZED
SCHOOLS AND ANR. ..... Respondents
Through: Mr. Shyam Divan, Senior Advocate
with Mr. Kamal Gupta, Mr. Nipun
LPA No.179/2021 & conn.matters Page 1 of 17
Jain and Mr. Sparsh Aggarwal,
Advocates.
+ LPA 184/2021 & C.M. No. 18510/2021(for stay)
DIRECTORATE OF EDUCATION ..... Appellant
Through: Mr. Vikas Singh, Senior Advocate
with Mr. Santosh Kumar Tripathi,
SC GNCTD with Mr. Aditya P
Khanna, Mr. Shashank Tiwari and
Mr. Rajiv Tanwar, LA PSB DOE,
Advocates.
versus
ACTION COMMITTEE UNAIDED PRIVATE
SCHOOL ..... Respondent
Through: Mr. Shyam Divan, Senior Advocate
with Mr. Kamal Gupta, Mr. Nipun
Jain and Mr. Sparsh Aggarwal,
Advocates.
+ LPA 185/2021, C.Ms. No. 18557/2021 (for stay) &
18560/2021(leave to file appeal)
JUSTICE FOR ALL ..... Appellant
Through: Mr. K.B. Jha with Ms. Shikha
Sharma Bagga , Advocates.
versus
ACTION COMMITTEE UNAIDED RECOGNISED PRIVATE
SCHOOLS & ANR. ..... Respondents
LPA No.179/2021 & conn.matters Page 2 of 17
Through: Mr. Shyam Divan, Senior Advocate
with Mr. Kamal Gupta, Mr. Nipun
Jain and Mr. Sparsh Aggarwal,
Advocates.
CORAM:
HON'BLE MS. JUSTICE REKHA PALLI
HON'BLE MR. JUSTICE AMIT BANSAL
REKHA PALLI, J. (ORAL)
C.Ms. No. 18383/2021 & 18384/2021 (for exemption) in LPA 179/2021,
C.Ms. No. 18387/2021 & 18388/2021 (for exemption) in LPA 180/2021,
C.Ms. No. 18511/2021 & 18512/2021 (for exemption) in LPA 184/2021
&
C.Ms. No. 18558/2021 & 1859/2021 (for exemption) in LPA 185/2021
1. Exemptions allowed, subject to all just exceptions.
2. The applications stand disposed of.
LPAs 179/2021, 180/2021, 184/2021 & 185/2021
3. The present batch of appeals under Clause X of the Letters Patent
Appeal assails the order dated 31st May, 2021 passed by the learned Single
Judge in W.P. (C) No. 7526/2020 filed by the Action Committee Unaided
Recognized Private Schools (hereinafter referred to as 'respondent
Committee') that comprises of 450 private unaided schools in the National
Capital Territory (NCT) of Delhi. Under the impugned order, the learned
Single Judge has allowed the respondent Committee's challenge to the
circulars/orders issued by the Directorate of Education, GNCTD on
18.04.2020 and 28.08.2020, by holding that the direction to postpone
collection of Annual Charges and Development Fee from students until
normal functioning of schools is resumed is illegal and ultra vires the
powers of the Directorate of Education under the Delhi School Education
Act, 1973 (in short 'DSE Act') and the Delhi School Education Rules,
1973 (in short 'DSE Rules').
4. Issue notice. Mr. Kamal Gupta, Advocate accepts notice on behalf
of the Action Committee Unaided Recognized Private Schools. He prays
for and is granted three weeks' time to file written submissions. Response
thereto, if any, besides the written submissions, be filed by the appellants
before the next date. The parties are also granted liberty to file any
documents forming part of the record which may not have been filed by
the appellants.
5. List the matter before the Roster Bench on 12th July, 2021.
C.M. No. 18382 (for stay) in LPA 179/2021
C.M. No. 18386 (for stay) in LPA 180/2021
C.M. No. 18510 (for stay) in LPA 184/2021
C.M. No. 18557 (for stay) in LPA 185/2021
6. These applications preferred by the Directorate of Education seek
stay of the impugned order during the pendency of these appeals. Under
the impugned order, the learned Single Judge had passed the following
directions:
"52. The fact remains, as noted above, that the schools are
affecting some savings on account of the fact that the
school are presently physically shut. The Supreme Court
has already dealt with the stated issue. The directions as
passed by the Supreme Court in the case of Indian School,
Jodhpur & Anr. vs. State of Rajasthan & Ors. (supra)
would clearly apply to the present case mutatis mutandis.
Relevant para of the said judgment reads as follows:-
"128.Ordinarily, we would have thought it
appropriate to relegate the parties before the
Regulatory Authority to refix the school fees for the
academic year 2020-21 after taking into account all
aspects of the matter including the advantage gained
by the school Management due to unspent
overheads/expenses in respect of facilities not
availed by the students. However, that course can be
obviated by the arrangement that we propose to
direct in terms of this judgment. To avoid multiplicity
of proceedings (as school fee structure is linked to
school-school wise) including uncertainty of legal
processes by over 36,000 schools in determination of
annual fee structure for the academic year 2020-21,
as a one-time measure to do complete justice
between the parties, we propose the issue following
directions:
(i) The appellants (school Management of the
concerned private unaided school) shall collect
annual school fees from their students as fixed
under the Act of 2016 for the academic year
2019-20, but by providing deduction of 15 per
cent on that amount in lieu of unutilised facilities
by the students during the relevant period of
academic year 2020-21.
(ii) The amount so payable by the concerned
students be paid in six equal monthly instalments
before 05.08.2021 as noted in our order dated
08.02.2021.
(iii) Regardless of the above, it will be open to
the appellants (concerned schools) to give further
concession to their students or to evolve a
different pattern for giving concession over and
above those noted in clauses (i) and (ii) above.
(iv) The school Management shall not debar any
student from attending either online classes or
physical classes on account of non-payment of
fees, arrears/ outstanding fees including the
instalments, referred to above, and shall not
withhold the results of the examinations of any
student on that account.
(v) If any individual request is made by the
parent/ward finding it difficult to remit annual
fees for the academic year 2020-21 in the above
terms, the school Management to consider such
representation on case-to-case basis
sympathetically.
(vi) The above arrangement will not affect
collection of fees for the academic year 2021-22,
as is payable by students of the concerned school
as and when it becomes due and payable. (vii)
The school Management shall not withhold the
name of any student/candidate for the ensuring
Board examinations for Classes X and XII on the
ground of non-payment of fee/arrears for the
academic year 2020-21, if any, on obtaining
undertaking of the concerned parents/students."
53. The above directions given in paras (i) to (vii) will apply
to the petitioner schools mutatis mutandis. However, clause
(ii) has to be modified. The amount payable by concerned
students will be paid in six monthly installments w.e.f.
10.06.2021."
7. Issue notice. Learned counsel for the respondent Committee accept
notice.
8. With the consent of learned senior counsel for the parties, we have
taken up the interim application for disposal today itself.
9. In support of the prayer for interim stay, Mr. Vikas Singh, learned
senior counsel for the Directorate of Education as also Mr. Jha for the
appellants in LPA Nos. 179/2021, 180/2021 and 185/2021 have raised the
following four grounds; the first being that the learned Single Judge has
gravely erred in passing the same directions as issued by the Supreme
Court in Indian School, Jodhpur & Anr. Vs. State of Rajasthan (2021)
SCC Online SC 359 by overlooking the fact that the said judgment,
pronounced on 03.05.2021 after the impugned judgment had been
reserved but was yet to be pronounced, pertains to an entirely different
fact situation. In Indian School, Jodhpur (supra), the Supreme Court was
dealing with two sets of appeals assailing the orders passed by the Jaipur
and Jodhpur Benches of the Rajasthan High Court affirming the decision
of the State government to direct reduction of school tuition fees on
account of the pandemic. He submits that the learned Single judge also
failed to appreciate that the decision of the Supreme Court, in that case, to
overturn the directions of the Rajasthan High Court came after it had
noticed that the affected schools had already been partially re-opened for
the students of Classes IX to XII which merited the collection of
applicable fee. He submits that in the present case, neither have these
schools seen any kind of re-opening, nor are they concerned with the
tuition fee - the matter pertains to Annual Charges and Development Fee.
He further submits that the decision of the Supreme Court in Indian
School, Jodhpur (supra) was made in exercise of jurisdiction under
Article 142 of the Constitution of India - which power was not available
with the learned Single Judge while passing the impugned judgment. He,
therefore, submits that the impugned judgment is liable to be set aside on
this ground alone.
10. Mr. Singh then submits that the Ld. Single Judge has failed to
consider the specific statements of the appellant in their affidavit that only
40-60% of the amounts collected by way of tuition fee, the collection
whereof was not interdicted in any manner, was being used for
discharging the liability of the schools towards staff salaries.
Consequently, there was enough funds available with the schools to bear
the burden of any development charges or recurring charges payable by
them, which may possibly have been reduced after the schools had closed
on account of the pandemic w.e.f. March 2021.
11. Mr. Singh further submits that the Ld. Single Judge has failed to
appreciate that the impugned circular of 18.04.2020 had already been
upheld by a Coordinate Bench of this Court on 24.04.2020 in Naresh
Kumar Vs. Director of Education & Anr. W.P. (C) 2993/2020 and,
therefore, it was not open for the learned Single Judge to now intervene
with the circular on any ground whatsoever.
12. Finally, Mr. Singh submits that the learned Single Judge has failed
to appreciate the wide scope of powers available with the Directorate of
Education under Rule 43 of the DSE Rules which vest it with wide powers
to issue any directions that it considers appropriate in public interest. He
also seeks to place reliance on Section 24 of the DSE Act which permits
the Directorate to pass any order as may be deemed appropriate after
inspection of the schools. He, therefore, prays that the impugned order,
being wholly erroneous, be stayed pending a final decision in these
appellate proceedings.
13. Countering the submissions of Mr Singh, Mr. Shyam Divan, learned
senior counsel appearing on behalf of the respondent Committee submits
that the very premise on which these appeals have been filed is misplaced.
He submits that the Directorate is erroneously urging that the learned
Single Judge has simpliciter adopted the directions given by the Supreme
Court in Indian School, Jodhpur (supra). By drawing our attention to
paragraphs 30 to 51 of the impugned judgment, he submits that the learned
Single Judge has meticulously analysed the relevant provisions of the DSE
Act and Rules, before categorically concluding that the Directorate of
Education had no power, whatsoever, to interject or interfere in private
contracts executed between the parents of the students and the schools, by
directing the private, unaided schools to indefinitely postpone collection of
Annual Charges and Development Fee.
14. Mr. Divan contends that the learned Single Judge has rightly
concluded that any such direction for interfering with a private contract in
respect of fee structure/development charges, etc. was permissible under
the DSE Act only when the schools are found to be engaging in
profiteering or commercialisation. In fact, in Paragraph 49 of the
impugned judgment, the learned Single Judge had noted that there was no
finding in any of the impugned circulars/orders that the schools affected
by the directions thereunder were indulging in profiteering and
commercialisation.
15. Mr. Divan further submits that in fact the learned Single Judge was
also conscious of the undisputed position that the Member-schools of the
respondent Committee were bearing all annual development and
maintenance expenses in respect of these schools, even though their
physical functioning was suspended. However, upon a holistic
consideration of the matter and the admitted position that some of the
expenses of these schools, for e.g. electricity charges, may have
marginally reduced, the learned Single Judge followed the principles
adopted by the Supreme Court Indian School, Jodhpur (supra). He, thus,
contends that the directions issued by the learned Single Judge are, in fact,
beneficial to the students.
16. Mr Divan further submits that although the State is forcibly seeking
to curtail the right of private unaided schools to collect Annual Charges
and Development Fee, it has neither offered them any subsidy nor any
concession in terms of tax payments during the pandemic period. On the
other hand, the schools have been directed to continue conducting virtual
classes so that there is no discontinuity in the students' education. This, in
itself, he contends, makes it incumbent on the schools to continue
functioning, which implies that they are bound to be incurring many
expenses.
17. Mr Divan finally submits that once the learned Single Judge has
come to a categorical conclusion that the impugned orders passed by the
appellant were ultra vires of the powers vested upon them , no interim
order for stay on the impugned judgment ̉is warranted . He submits that
doing so would only bring into effect an order that was passed by an
Authority de hors its statutory powers. In any event, the learned Single
Judge has also put in safeguards for the parents/students in the impugned
judgment by permitting them to pay the amounts due under monthly
instalments and has also restrained the school managements from
debarring any student from classes on account of non-payment of
fees/arrears/outstanding fees.
18. In conclusion, Mr Divan fairly submits that even though the
managements of private unaided schools have been permitted under the
impugned order to collect the entire fee/charges applicable for the
academic year 2021-22, in view of the fact that this Court is examining the
present challenge to the impugned judgment, the members of the
respondent Committee, till the next date, will follow the same principles
as set down for collecting fee/charges for the years 2020-21 as have been
laid down by the impugned order.
19. Mr. Puneet Mittal, learned senior counsel appearing for the Delhi
Public School Society has also given similar assurance as Mr. Diwan.
20. Having given our thoughtful consideration to the submissions of the
parties, we find that the learned Single Judge, after considering the
provisions of the DSE Act and Rules, especially Rule 43 relied upon by
Mr. Singh, has rendered a categorical finding that the orders passed by the
appellant restraining the Committee Schools from Annual Charges and
Development Fee till resumption of physical functioning of schools was
not only contrary to the contractual terms of the agreement between the
schools and students' parents but was also beyond the scope and ambit of
the appellant's powers under the scheme of the DSE Act and Rules.
21. The aforesaid Rule 43, heavily relied upon the appellant in support of
its case, reads as under:
"43. Power to issue instructions
The Administrator may, if he is of opinion that in the
interest of school education in Delhi it is necessary so to do,
issue such instructions in relation to any matter, not covered
by these rules, as he may deem fit."
22. On a perusal of this Rule, we are prima facie inclined to agree with
the findings given by the learned Single Judge in the impugned order that
the scheme of the DSE Act and Rules do not vest the Directorate with
any power to issue the kind of directions contained in the orders/circulars
impugned before it, considering that they have such far reaching
financial implications upon the private unaided schools of NCT of Delhi.
No doubt, the statute vests the Directorate with supervisory power to
ensure that these private schools, chosen by students and their parents out
of their own volition for the purpose of admission, do not indulge in
commercialization and profiteering, however this right is salutary in
nature and does not give any license to the Directorate to pass directions
that it perceives would be in public interest, without any basis therefor.
23. The Directorate has also vehemently contended that the learned
Single Judge has erred in mechanically applying the directions issued by
the Supreme Court in Indian School, Jodhpur (supra) without noticing
that the facts in the two cases are not pari materia. Even on this aspect,
we are prima facie unable to agree. It is an undisputed position that these
schools have been reeling under the impact of the pandemic for over a
year, during which they were not only required to maintain the school
premises and infrastructure, but also remain ready for the eventual re-
opening of the schools, besides incurring the expenditures of IT
infrastructure and training for smooth functioning of online classes. Not
to mention, they continue to incur the expenditure of paying staff
salaries. However, a perusal of paras 39 to 51 of the impugned judgment
leave no manner of doubt that the learned Single Judge has carefully
combed through the facts of the present case, by making detailed notes of
the recurring capital and revenue expenditure of the schools during the
pandemic when the students are not in physical attendance. While doing
so, the learned Single Judge has also noticed that some expenses, like
electricity and stationary charges, would have undoubtedly reduced, but
has, instead of setting down new parameters, followed the basic
principles laid down by the Supreme Court in Indian School, Jodhpur
(supra). In this regard, we may refer to paragraphs 45 to 48 of the
impugned judgment which reads as under:
"45. The break-up of expenses related to Annual Charges
have been elaborated above and the sub heads are not
disputed. It broadly includes the following expenses:
1. Hostel running expenses
2. Administrative & General Expenses
3. Rents, rates and taxes
4. Communication Expenses
5. Printing & Stationery
6. Electricity & Water charges
7. Travelling & Conveyance
8. Expenses of teaching & non teaching staff
9. Insurance charges
10. Promotional expenses
11. Remuneration of Auditors (including expenses reimbursed)
12. Repairs & maintenance of Building
13. Depreciation
14. Financial expenses such as interest on loans, loss on sale of
fixed assets & investments
15. 0ther expenses - Write offs and provisions
16. Miscellaneous expenses
17. Legal Expenses.
46. Similarly, the break-up of expenses related to
Development Fees have been stated above and relate to the
following expenditure:
1. Furniture, Benches
2. Chairs, Wall panelling, Green/Black Boards
3. Computers
4. Projectors
5. Smart Boards/ Touch Panels in classes
6. Water Coolers
7. Air conditioners
8. RO water treatment plant
9. Overhauling of electrical
10. Panels, switches, MCB's
11. Fire safety equipments
12. Fans and lights
13. Changing I repairing of doors and windows
14. Tiles, Lift
47. The issue that arises is that the schools are not physically
open, can it be said that the expenses under the above heads
are not being incurred by the private unaided recognized
schools? In my opinion, a bare perusal of the heads of
expenses clearly demonstrates and shows that most of the
expenses are not correlated or connected with the actual
physical opening of the schools for the students. Expenses like
rents, taxes, travelling, conveyance, insurance charges,
remuneration of auditors, repair and maintenance of building
and maintenance of equipment, furniture and fixture are all
expenses which will continue to be incurred by the schools
irrespective of the physical shut down. In case, the said repairs
and expenses are not done, it is bound to cause damage to the
building, infrastructure and functioning of the schools.
Further, it cannot be said that the school building is
completely shut. The building would remain functional for
administrative reasons and even, depending on facts and
circumstances of the case, for conducting online classes, etc.
48. No doubt, the expenses under some of the heads will drop
in the absence of actual full physical opening of the schools,
namely, expenses like, electricity, water, stationery, etc."
24. Finally, insofar as the appellant's contention is concerned that
these schools are barely using 40-60% of the tuition fee collected by
them for payment towards salaries, which sums are lying with them for
their disposal, we find that there was absolutely no material produced in
support of this bald claim, either before the learned Single Judge or
before us. In any event, in case this allegation had any truth, the appellant
would have instituted appropriate proceedings for profiteering against the
erring schools.
25. Now, in Naresh Kumar (supra), the Court was considering a prayer
for exemption from payment of tuition fee for all students during the
pandemic, in addition to the exemptions that were already accruing on
account of the circular dated 17.04.2020 issued by the Directorate of
Education. Although that petition was rejected by the Court, we may note
that it involved a completely different order passed by the Directorate
and was markedly different from the orders/circulars that we are
concerned with today. Not to mention, a significant question decided
under the judgment impugned herein is the power of the Directorate to
issue order/circulars of such nature under the scheme of the DSE Act and
Rules, which was not in issue before the Coordinate Bench in Naresh
Kumar (supra). Even otherwise, we cannot lose sight of the fact that the
decision in Naresh Kumar (supra) was passed at a time when the
pandemic had just set in and no one had thought that it would continue
for this long. Therefore, the decision of the Court in that case cannot be
compared to the present one where we are a year into the pandemic and
have had some time to settle into our new reality.
26. Ultimately, the managements of these unaided, private
schools in the city, which do not receive any aid from the GNCTD and
are solely dependent on the fee collected by them, would also need funds
to sustain their operations and premises and continue imparting education
online. Given the terrible exigencies of the pandemic, we have been
forced to embrace new models for our institutions and virtual classes are
our sole way of ensuring that the nation's children are being educated.
Thus, one cannot gainsay the importance of these virtual classes and
staying the impugned decision today without a deeper examination of the
facts would only compromise with the ability of these schools to
continue serving this critical function. That being said, insofar as the
difficulties that may be encountered by the parents of the students are
concerned, learned counsel for the respondents have already assured this
Court that they would ensure that all Annual Charges and Development
Fee levied for the year 2021-22 would be recovered on the same
principles applicable to the academic year 2020-21 under the impugned
judgment.
27. Needless to say, these observations are prima facie in nature and the
respondent Committee shall remain bound by the undertakings recorded
in Paragraphs 18 and 19 above.
28. The application is dismissed in the aforesaid terms.
(REKHA PALLI)
VACATION JUDGE
(AMIT BANSAL)
VACATION JUDGE
JUNE 7, 2021
at/ak
