INDIAN SCHOOL, JODHPUR & ANR. v. STATE OF RAJASTHAN & ORS.

The Judgment of the Court was delivered by A. M. KHANWILKAR, J. D

1Copy pinpoint1. These two sets of appeals are being disposed of by this common judgment.

2Copy pinpoint2. In the first set of appeals, six appeals1 emanate from common judgment and order dated 14.08.2019 passed by the High Court of E Judicature for Rajasthan at Jodhpur and two other appeals2 against the judgment and order dated 11.02.2020 of the Jaipur Bench of the same High Court, which followed the earlier decision of the Jodhpur seat referred to above. In these matters, the appellants (Management(s) of private unaided schools in the State of Rajasthan) had assailed the validity of the Rajasthan Schools (Regulation of Fee) Act, 20163, in particular F Sections 3, 4, 6 to 11, 15 and 16 and the Rules framed thereunder titled Rajasthan Schools (Regulation of Fee) Rules, 20174, in particular Rules 3, 4, 6 to 8 and 11 thereof being ultra vires the Constitution and abridge the fundamental right guaranteed under Article 19(1)(g) of the Constitution of India. G 1 arising out of SLP (C) No. 27881 of 2019; SLP (C) Nos.27907-27916 of 2019; SLP (C) No. 27987 of 2019; SLP (C) No. 2942 of 2020; SLP (C) No. 5902 of 2020; and SLP (C) No …………. of 2021 @ Diary No(s). 6803 of 2020; 2 arising out of SLP (C) Nos. 5470 and 5589 of 2020 3 for short, “the Act of 2016” 4 H for short, “the Rules of 2017”

INDIAN SCHOOL, JODHPUR v. STATE OF RAJASTHAN 25 [A. M. KHANWILKAR, J.]

3Copy pinpoint3. In the second set of appeals, four appeals5, also filed by the A Management(s) of private unaided schools in the State of Rajasthan, emanate from the common judgment and order dated 18.12.2020 of the same High Court. In these appeals, the challenge is to the orders passed by the State Authorities on 09.04.2020, 07.07.2020 and 28.10.2020 regarding deferment of collection of school fees including reduction of B fees limited to 70 per cent of tuition fees by schools affiliated with the Central Board of Secondary Education and 60 per cent from the schools affiliated with Rajasthan Board of Secondary Education, in view of reduction of syllabus by the respective-Boards due to aftermath of pandemic (lockdown) from March 2020.

4Copy pinpoint4. The issues involved in all these appeals concern around 36,000 C private unaided schools including 220 minority private unaided schools in the State of Rajasthan governed by the provisions of the Act of 2016 referred to above. Accordingly, all these appeals were clubbed and heard analogously. However, as aforesaid, two broad issues would arise for our consideration. D Re: First Set:

5Copy pinpoint5. Reverting to the first set of appeals, the challenge is to the provisions of the Act of 2016 and Rules of 2017 being violative of rights guaranteed under Article 19(1)(g) of the Constitution to carry on occupation of imparting education which includes autonomy to determine E the school fees by the Managements of private unaided schools. It is urged that any restriction imposed in that regard would be arbitrary and unreasonable. Further, the impugned provisions inevitably limit the autonomy of the school Management of private unaided schools to the level of merely proposing the school fees to the School Level Fee F Committee6, in which the Management has only one representative as against eight others i.e., five parents, three teachers and one principal. This imbalance in the constitution of the SLFC negates the effective control of the Management in the affairs of the school and in particular the autonomy to determine its own school fees. Notably, five parents, who are appointed as members of the SLFC are chosen by draw of lots G from amongst the willing parents of the wards pursuing education in the schools concerned and could include even the wards who are availing 5 arising out of SLP (C) No …………. of 2021 @ Diary No(s). 44 of 2021; SLP (C) No. 431 of 2021; SLP (C) Nos. 577-579 of 2021; and SLP (C) No. 2494 of 2021 6 for short, “the SLFC” H

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A free education under the Right of Children to Free and Compulsory Education Act, 20097. In fact, the latter have no stakes in the matter of determination of school fees. As the willing parents are selected by lottery system, in the process even the person who has no modicum of knowledge of development of a school, management of finances and dynamics of quality education, would become part of the process of determination of school fees. The members of the SLFC would inevitably have conflicting interest. They would be interested in ensuring that minimum school fee is finalised. The nominated teachers may constantly seek favour of the Management by exploiting their position as member of the SLFC. In the process, an environment of constant difference of opinion would prevail between the school Management on one side and the parents of the wards and teachers, who would form part of the SLFC. Pertinently, the provisions of the impugned Act of 2016 give authority to the SLFC to override the proposal of the school Management in the matter of school fees to be collected from the wards during the relevant period. Effectively, the parents who are members of the SLFC, D would control the decision-making process impacting the autonomy of the school Management in regard to determination of school fees, guaranteed under Article 19(1)(g) of the Constitution. The parents- teachers duo who are part of the SLFC would have no intention or motivation to create new facilities or commitment to develop the school towards excellence. Moreover, they would not be accountable for anything that finally impacts the quality of education in the school concerned. It is only the school Management who would be held accountable in that regard, whilst school Management is denuded of its autonomy to determine school fees. The school fees so determined by the SLFC as per the provisions of the impugned Act of 2016, would remain unchanged and binding for next three years with no provision for increase in case of contingency of funds needed for new development or general inflation or hike in salary and wages of staff or any other legitimate purpose.

6Copy pinpoint6. The impugned Act of 2016 also gives wide powers to the G Divisional Fee Regulatory Committee8 and Revision Committee including power to issue summons, search, seizure and penalties as if the occupation of imparting education is akin to res extra commercium. The school

7 for short, “the RTE Act” 8 H for short, “the DFRC”

INDIAN SCHOOL, JODHPUR v. STATE OF RAJASTHAN 27 [A. M. KHANWILKAR, J.]

Management-appellants apprehend that dispute with regard to A determination of school fees would be endless and get embroiled in the process of appeal, revision and judicial proceedings. Resultantly, schools would suffer uncertainty in financial matters. Furthermore, there is no mechanism provided to guarantee the recovery of school fees after it is finally determined under the Act of 2016. The working of the impugned B Act of 2016 would eventually stifle the growth and development of the private unaided schools and that all schools — small and big, would be treated equally with same measure, which would be arbitrary and discriminatory and against the principle expounded by this Court that the school fees of private unaided schools should be school-based and not a rigid or uniform arrangement. According to the appellants, the factors enumerated for determination of school fees are vague, subjective and irrelevant. The crucial factors such as for making a good school are not even adverted to in Section 8 of the impugned Act of 2016. The process of determination of school fees is a dynamic exercise and could be effectively done by the school Management on its own while keeping in mind that establishing a school is essentially a charity. According to the appellants, the provisions of the impugned Act of 2016 are unworkable and violate the fundamental right guaranteed under Article 19(1)(g) of the Constitution. The State can only regulate the fees determined by the private unaided schools only if it shows that the same entails in profiteering or capitation, which is prohibited by law. E

7Copy pinpoint7. It is urged that by now it is well-established that the private unaided schools ought to have maximum autonomy with regard to administration including the right of appointment, disciplinary powers, admission of students and the “fees to be charged” as expounded by this Court in T.M.A. Pai Foundation & Ors. vs. State of Karnataka & F Ors.9. The Court noted that it is in the interests of the general public that more good quality schools are established. Autonomy and non-regulation of the school administration in matters referred to above will ensure that more such institutions are established. This view has been restated in Society for Unaided Private Schools of Rajasthan vs. Union of India & Anr.10. G

8Copy pinpoint8. According to the appellants, the activities of school level education are qualitatively different from that of professional level 9 (2002) 8 SCC 481 (paras 60 and 61) 10 (2012) 6 SCC 1 (paras 50 to 53) H

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A education. The determination of school fees, therefore, stands on a totally different footing than determination of fees for professional colleges for medicine etc. The impugned Act of 2016 falls foul of doctrine of proportionality — as restrictions imposed on the school Management in respect of determination of school fees have no cogent nexus/object sought to be achieved. B

9Copy pinpoint9. It is lastly urged that the legislative field regarding regulation of school fees is already occupied by the law made by the Parliament being the RTE Act11 and the Rules12 framed thereunder. Hence, it was not open to the State legislature to enact a law on the same subject.

10Copy pinpoint10. These points were urged even before the High Court at the instance of the appellants. The respondent-State countered the same on the argument that the impugned Act of 2016 was in the nature of a regulatory law, with complete autonomy to the school Management to decide about its fee structure which, however, could be given effect to upon approval given by the SLFC. The SLFC consists of not only parents of wards, but also the school Management and their representatives in the form of teachers. It ensures participation of all the stakeholders and democratisation of the decision-making process. The proposal of the school Management, if found to be in order, is generally approved and it is open to the SLFC to give counter suggestion which if acceptable to the school Management can be acted upon by it. In case there is a difference of opinion, only then the matter goes for adjudication of the rival claims before the DFRC and the decision of that Authority becomes binding on the parties. Further, the school Management, the SLFC as well as the Adjudicatory-cum-Regulatory Authority, each one of them is guided by the principles and factors delineated in Section 8 of the Act of 2016 and Rule 10 of the Rules of 2017 in the matter of determination of school fees. Such external regulation for fee fixation has been recognised and approved by this Court in successive decisions viz., Islamic Academy of Education & Anr. vs. State of Karnataka & Ors.13, P.A. Inamdar & Ors. vs. State of Maharashtra & Ors.14, Modern School G 11 Sections 13 and 16 of the RTE Act 12 The Right of Children to Free and Compulsory Education Rules, 2010 (Rules 12, 15 and 16) 13 (2003) 6 SCC 697 (5-Judge Bench) 14 (2005) 6 SCC 537 (7-Judge Bench) H

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vs. Union of India & Ors.15, Action Committee, Unaided Private A Schools & Ors. vs. Director of Education, Delhi & Ors.16 and Modern Dental College and Research Centre & Ors. vs. State of Madhya Pradesh & Ors.17. According to the respondent-State, the setting up of External Fee Regulatory Authority is consistent with the jurisprudential exposition of this Court and held not to be violative of Article 19(1)(g) or B Article 30 of the Constitution of India. According to the State, there is no ambiguity in the provisions of the Act of 2016. In that, the principles enunciated in the statutory provisions under consideration are not irrelevant or irrational as suggested by the appellants.

11Copy pinpoint11. The respondent-State has also refuted the challenge to the impugned Act of 2016 merely on the basis of its nomenclature. According C to the State, non-mentioning of the words prevention of profiteering and charging of capitation fee in the impugned Act of 2016, does not ipso facto make the same constitutionally suspect. It is urged that a Constitution Bench of this Court in Modern Dental College and Research Centre (supra) has upheld the validity of identical provisions D enacted by the State of Madhya Pradesh in relation to fixation of fee by external committees and, therefore, the challenge set up by the appellants cannot be countenanced.

12Copy pinpoint12. The respondent-State would urge that the High Court in the impugned judgment after adverting to the exposition of different E Constitution Benches of this Court, justly concluded that the impugned Act of 2016 did not violate Article 19(1)(g) of the Constitution as the right flowing therefrom was not an absolute fundamental right. Further, there is no substance in the grounds set forth to assail the validity of the impugned Act of 2016. F

13Copy pinpoint13. The High Court did advert to these arguments canvassed by both sides and eventually dismissed the challenge to the validity of the impugned Act of 2016 vide common judgment and order dated 14.08.2019. The High Court after adverting to the exposition in T.M.A. Pai Foundation (supra), Islamic Academy of Education (supra), Modern School (supra) and Modern Dental College and Research G Centre (supra), proceeded to dismiss the writ petitions by observing as follows: 15 (2004) 5 SCC 583 (3-Judge Bench) 16 (2009) 10 SCC 1 (3-Judge Bench) 17 (2016) 7 SCC 353 (5-Judge Bench) H

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A “19. Therefore, in the backdrop of law laid down by Constitution Bench in Modern Dental College & Research Centre (supra), if the impugned Act and the provisions sought to be assailed by the petitioners and the regulatory measures provided under the Rules are examined objectively with pragmatic approach, then, it would ipso facto reveal that State has not made any endeavour to trench into autonomy of petitioner-institutions. The provisions are regulatory in nature with the solemn object of preventing profiteering and commercialization in school education. The constitution of the Committee for regulating fee structure, by no stretch of imagination be construed as an attempt to completely bye-pass the school management. The Committee as such is chaired by representative of the management besides principal as a Secretary with three teachers nominated by the management and five parents nominated from parent teachers association. Thus, the contention of the petitioners that State has completely chipped the wings of management or invaded their autonomy is an euphonious plea bereft of any merit. The criteria for determining fee are also based on legitimate considerations provided under Section 8 of the Act. Thus, even while considering fee structure of the school, the Committee cannot be allowed to act at its whims and fancy but for adhering to the criteria laid down under Section 8 of the Act. That apart, the remedy against the fee determined by the Committee is also provided in the Statute by way of appeal/reference and second appeal, which sufficiently repudiate the contention of the petitioners about unreasonable restrictions on their autonomy within the mischief of unacceptable constraints envisaged under clause (6) of Article 19 of the Constitution.

20. Switching on to the coercive measures and penal provisions provided under the Statute and enforcement methodology prescribed under the Rules, it would be just and appropriate to observe that all these provisions are essential and necessary concomitant of regulatory mechanism for achieving desired objectives, and therefore cannot be categorized as unreasonable restrictions. In the overall scenario, we are also convinced that Sections 13 to 18 of the impugned Act and Rule 11 of the Rules are not intended to be invoked on sundry occasions for interfering H

INDIAN SCHOOL, JODHPUR v. STATE OF RAJASTHAN 31 [A. M. KHANWILKAR, J.]

with day to day functioning of the unaided recognized schools. A Thus, complaint of the petitioners about fanciful and capricious supplication of these provisions per se appears to be a far cry without any substance. Indisputably, the Rules are in the nature of subordinate legislation and framed by the Government in exercise of power under Section 19 of the Act for carrying out all or any of the purposes of the Act. Thus, the Rules as such are neither assailable on the ground of lack of legislative competence, nor for failure to conform to the parent statute under which Rules are made. Moreover, these rules are also not offending any right conferred on the petitioners under Part III of the Constitution or in violation of any provision of the Constitution, therefore, challenge to the Rules is wholly unsustainable.

21. The argument of the learned counsel for the petitioners, that the impugned Act is unconstitutional as being in derogation to Article 13(2) of the Constitution, appears to be quite alluring but of no substance. Analyzing this argument meticulously in the backdrop of lis involved in these matters, we have already repudiated the same. At the cost of repetition, we may reiterate here that the impugned Act and its other provisions are not taking away or abridges rights of the petitioners conferred by Part III of the Constitution. We may hasten to add that entire edifice of challenge in these petitions is alleged infraction of Article 19(1)(g) of the Constitution, which indisputably is not an absolute fundamental right. As observed hereinabove, the said fundamental right is subject to reasonable restrictions and such restrictions are permissible as they are aimed at seeking laudable objectives in the larger public interest. Therefore, viewed from any angle, the impugned provisions of the Act as well as Rules are intra-vires of the Constitution not being in violation of Article 13(2) and 19(1)(g) of the Constitution. The upshot of above discussion is that all these petitions fail and are hereby dismissed. The stay petitions are also dismissed and interim order passed on 9th of April, 2018 is vacated.”

14Copy pinpoint14. We have heard Mr. Pallav Shishodia, learned senior counsel for the appellants, Dr. Manish Singhvi and Mr. Devadatt Kamat, learned senior counsel for the State of Rajasthan. H

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15Copy pinpoint15. After cogitating over the rival arguments and considering the impugned judgment, we have no hesitation in observing that although the High Court was right in its conclusion, it has disposed of the challenge to the validity of different provisions of the impugned Act of 2016 and the Rules framed thereunder in a summary manner. We agree that merely adverting to the decisions of this Court was not enough. The High Court B should have then analysed the challenge to the respective provisions and also the overall scheme of the Act of 2016. Ordinarily, we would have relegated the parties before the High Court for reconsideration of the entire matter afresh. However, considering the nature of issues raised and the concerns expressed by the parties, we proceed to address the C challenge to the relevant provisions of the Act of 2016 in this judgment itself.

16Copy pinpoint16. Indeed, a Constitution Bench of this Court in T.M.A. Pai Foundation (supra) has expounded that the private unaided school management must have absolute autonomy to determine the school fees. D But at the same time the consistent view of this Court has been restated and enunciated by the Constitution Bench in Modern Dental College and Research Centre (supra) in paragraph 75 of the reported decision. In that, though the fee can be fixed by the educational institutions and it may vary from institution to institution depending upon the quality of education provided by each of such institutions, commercialisation is not permissible; and in order to ensure that the educational institutions are not indulging in commercialisation and exploitation, the Government is equipped with necessary powers to take regulatory measures and to ensure that the private unaided schools keep playing vital and pivotal role to spread education and not to make money. The Court further noted that when it comes to the notice of the Government that the institution was charging fee or other charges which are excessive, it has complete authority coupled with its duty to issue directions to such an institution to reduce the same so as to avoid profiteering and commercialisation.

17Copy pinpoint17. In paragraph 76 of the same decision, the Court then proceeded to consider the next question as to how a regulatory framework for ensuring that no excessive fee is charged by the educational institutions, can be put in place. For that, the Court adverted to the decision in T.M.A. Pai Foundation (supra), Islamic Academy of Education (supra), Modern School (supra) and P.A. Inamdar (supra) and noted that H

INDIAN SCHOOL, JODHPUR v. STATE OF RAJASTHAN 33 [A. M. KHANWILKAR, J.]

primary education is a fundamental right, but it was not an absolute right as private schools cannot be allowed to receive capitation fee or indulge in profiteering in the guise of autonomy to determine the school fees itself. The Court plainly noted that every school management of private unaided school is free to devise its own fee structure, but the same can be regulated by the Government in the interests of general public for preventing profiteering and/or charging of capitation fee. Further, fixation of fees needs to be regulated and controlled at the initial stage itself. The Constitution Bench noted with approval the exposition in Association of Private Dental and Medical Colleges vs. State of M.P.18, which reads thus: “42. We are of the view that Sections 4(1) and 4(8) of the 2007 C Act have to be read with Section 9(1) of the 2007 Act, which deals with factors which have to be taken into consideration by the Committee while determining the fee to be charged by a private unaided professional educational institution. A reading of sub- section (1) of Section 9 of the 2007 Act would show that the location of private unaided professional educational institution, the nature of the professional course, the cost of land and building, the available infrastructure, teaching, non-teaching staff and equipment, the expenditure on administration and maintenance, a reasonable surplus required for growth and development of the professional institution and any other relevant factor, have to be taken into consideration by the Committee while determining the fees to be charged by a private unaided professional educational institution. Thus, all the cost components of the particular private unaided professional educational institution as well as the reasonable surplus required for growth and development of the institution and all other factors relevant for imparting professional education have to be considered by the Committee while determining the fee. Section 4(8) of the 2007 Act further provides that the Committee may require a private aided or unaided professional educational institution to furnish information that may be necessary for enabling the Committee to determine the fees that may be charged by the institution in respect of each professional course. Each professional educational institution, therefore, can furnish information with regard to the fees that it

18 2009 SCC Online MP 760 H

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A proposes to charge from the candidates seeking admission taking into account all the cost components, the reasonable surplus required for growth and development and other factors relevant to impart professional education as mentioned in Section 9(1) of the 2007 Act and the function of the Committee is only to find out, after giving due opportunity of being heard to the institution as B provided in Section 9(2) of the 2007 Act whether the fees proposed by the institution to be charged to the student are based on the factors mentioned in Section 9(1) of the 2007 Act and did not amount to profiteering and commercialisation of the education. The word “determination” has been defined in Black’s Law C Dictionary, Eighth Edn., to mean a final decision by the Court or an administrative agency. The Committee, therefore, while determining the fee only gives the final approval to the proposed fee to be charged after being satisfied that it was based on the factors mentioned in Section 9(1) of the 2007 Act and there was no profiteering or commercialisation of education. The expression D “fixation of fees” in Section 4(1) of the 2007 Act means that the fee to be charged from candidates seeking admission in the private professional educational institution did not vary from student to student and also remained fixed for a certain period as mentioned in Section 4(8) of the 2007 Act. As has been held by the Supreme E Court in Peerless General Finance and Investment Co. Ltd. v. RBI 19, the Court has to examine the substance of the provisions of the law to find out whether provisions of the law impose reasonable restrictions in the interest of the general public. The provisions in Sections 4(1), 4(8) and 9 of the 2007 Act in substance empower the Committee to be only satisfied that the fee proposed by a private professional educational institution did not amount to profiteering or commercialisation of education and was based on the factors mentioned in Section 9(1) of the 2007 Act. The provisions of the 2007 Act do not therefore, violate the right of private professional educational institution to charge its own fee.”

18Copy pinpoint18. After having quoted the above exposition with approval in paragraph 81, the Court then proceeded to examine the need for a regulatory mechanism. It noted that the regulatory measures are felt

19 H (1992) 2 SCC 343

INDIAN SCHOOL, JODHPUR v. STATE OF RAJASTHAN 35 [A. M. KHANWILKAR, J.]

necessary to promote basic well-being for individuals in need. In A paragraphs 90 to 92 in Modern Dental College and Research Centre (supra), this Court noted as follows: “90. Thus, it is felt that in any welfare economy, even for private industries, there is a need for regulatory body and such a regulatory framework for education sector becomes all the more necessary. B It would be more so when, unlike other industries, commercialisation of education is not permitted as mandated by the Constitution of India, backed by various judgments of this Court to the effect that profiteering in the education is to be avoided.

91. Thus, when there can be regulators which can fix the charges for telecom companies in respect of various services that such companies provide to the consumers; when regulators can fix the premium and other charges which the insurance companies are supposed to receive from the persons who are insured; when regulators can fix the rates at which the producer of electricity is to supply the electricity to the distributors; we fail to understand as to why there cannot be a regulatory mechanism when it comes to education which is not treated as purely economic activity but welfare activity aimed at achieving more egalitarian and prosperous society by empowering the people of this country by educating them. In the field of education, therefore, this constitutional goal remains pivotal which makes it distinct and special in contradistinction with other economic activities as the purpose of education is to bring about social transformation and thereby a better society as it aims at creating better human resource which would contribute to the socio-economic and political upliftment of the nation. The concept of welfare of the society would apply more vigorously in the field of education. Even otherwise, for economist, education as an economic activity, favourably compared to those of other economic concerns like agriculture and industry, has its own inputs and outputs; and is thus analysed in terms of the basic economic tools like the laws of return, principle of equimarginal utility and the public finance. Guided by these principles, the State is supposed to invest in education up to a point where the socio-economic returns to education equal to those from other State expenditures, whereas the individual is guided in his decision to pay for a type of education H

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A by the possibility of returns accruable to him. All these considerations make out a case for setting up of a stable regulatory mechanism.

92. In this sense, when imparting of quality education to cross- section of the society, particularly, the weaker section and when such private educational institutions are to rub shoulders with the State managed educational institution to meet the challenge of the implementing ambitious constitutional promises, the matter is to be examined in a different hue. It is this spirit which we have kept in mind while balancing the right of these educational institutions given to them under Article 19(1)(g) on the one hand and reasonableness of the restrictions which have been imposed by the impugned legislation. The right to admission or right to fix the fee guaranteed to these appellants is not taken away completely, as feared. T.M.A. Pai Foundation 20 gives autonomy to such institutions which remains intact. Holding of CET under the control of the State does not impinge on this autonomy. Admission is still in the hands of these institutions. Once it is even conceded by the appellants that in admission of students “triple test” is to be met, the impugned legislation aims at that. After all, the sole purpose of holding CET is to adjudge merit and to ensure that admissions which are done by the educational institutions, are strictly on merit. E This is again to ensure larger public interest. It is beyond comprehension that merely by assuming the power to hold CET, fundamental right of the appellants to admit the students is taken away. Likewise, when it comes to fixation of fee, as already dealt with in detail, the main purpose is that the State acts as a regulator and satisfies itself that the fee which is proposed by the educational institution does not have the element of profiteering and also that no capitation fee, etc. is charged. In fact, this dual function of regulatory nature is going to advance the public interest inasmuch as those students who are otherwise meritorious but are not in a position to meet unreasonable demands of capitation fee, etc. are not deprived of getting admissions. The impugned provisions, therefore, are aimed at seeking laudable objectives in larger public interest. Law is not static, it has to change with changing times and changing social/societal conditions.”

20 H supra at footnote No.9

INDIAN SCHOOL, JODHPUR v. STATE OF RAJASTHAN 37 [A. M. KHANWILKAR, J.]

19Copy pinpoint19. After this jurisprudential exposition, it is not open to argue that the Government cannot provide for external regulatory mechanism for determination of school fees or so to say fixation of “just” and “permissible” school fees at the initial stage itself.

20Copy pinpoint20. The question is: whether the impugned enactment stands the test of reasonableness and rationality and balances the right of the educational institutions (private unaided schools) guaranteed to them under Article 19(1)(g) of the Constitution in the matter of determination of school fees? The Act of 2016 has been enacted by the State legislature. It was enacted as it was noticed that the earlier enactment on the self- same subject did not include provision of appeal against the orders of fee determination by the Fee Determination Committee. It was also noticed that there are large number of private schools (approximately 34,000) and a single fee determination committee cannot determine the fee of such schools in a proper manner in time. For that reason, the Act of 2016 came into being to provide for regulation of collection of fees by schools in the State of Rajasthan and matters connected therewith and incidental thereto. It extends to the whole of the State of Rajasthan and applies to both aided and unaided schools. The Act provides for a regulatory mechanism. The expression “aided school” is defined in Section 2(b) to mean a school receiving any sum of money as aid from the State Government. The expression “unaided school” has not been defined. It must, however, follow that all other private schools, other than aided schools would qualify that category (i.e., unaided private schools). The expression “school” has been defined in Section 2(t), which reads thus: “2. Definitions.- In this Act, unless the context otherwise requires,- F xxx xxx xxx (t) “school” means the school imparting elementary, secondary and senior secondary education recognized by the Government and managed by any management and affiliated to any Indian or foreign course or Board, whether aided, partially aided, un-aided G including the school run by the minority educational institution but does not include a school imparting religious instructions only;”

21Copy pinpoint21. The expression “private school” has been defined in Section 2(p), which reads thus: H

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A “2. Definitions.- In this Act, unless the context otherwise requires,- xxx xxx xxx (p) ”private school” means a school established and administered or maintained by any person or body of persons and which is a B recognized institution within the meaning of clause (q) of Section 2 of the Rajasthan Non-Government Educational Institutions Act, 1989 (Act No. 19 of 1992), but does not include - (i) an aided school; and (ii) a school established and administered or maintained by the C Central Government or the State Government or any local authority;” It is, thus, clear that the Act of 2016 applies to all the schools within the State of Rajasthan referred to in Section 2(t) including private schools as defined in Section 2(p). D

22Copy pinpoint22. Section 3 of the Act of 2016 predicates that no school itself or on its behalf shall collect any fee in excess of the fee fixed or approved under the Act of 2016. The expression “fee” has been defined in Section 2(h), which reads thus: “2. Definitions.- In this Act, unless the context otherwise E requires,- xxx xxx xxx (h) “fee” means any amount, by whatever name called, collected, directly or indirectly, by a school for admission of a pupil to any Standard or course of study;” F

23Copy pinpoint23. Besides the definition of expression “fee”, it would be apposite to advert to the factors for determination of fee under the Act of 2016 as delineated in Section 8 of the Act of 2016. The same reads thus: “8. Factors for determination of fee. - The following factors shall be considered while deciding the fee leviable by a school, namely: - (a) the location of the school; (b) the infrastructure made available to the students for the qualitative education, the facilities provided and as mentioned in the prospectus or web-site of the school;

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(c) the education standard of the school as the State A Government may prescribe; (d) the expenditure on administration and maintenance; (e) the excess fund generated from non-resident Indians, as a part of charity by the management and contribution by the Government for providing free-ship in fee or for other items under various Government schemes given to the school for the Scheduled Castes, the Scheduled Tribes, Other Backward Class and Special Backward Class students; (f) qualified teaching and non-teaching staff as per the norms and their salary components; (g) reasonable amount for yearly salary increments; (h) expenditure incurred on the students over total income of the school; (i) reasonable revenue surplus for the purpose of development of education and expansion of the school; and (j) any other factor as may be prescribed.”

24Copy pinpoint24. In addition to Section 8, it is essential to take note of Rule 10 of the Rules of 2017 which provides for additional factors to be reckoned for determination of school fees. Rule 10 reads thus: “10. Additional factors for determination of fee. - The following factors shall be considered while deciding the fee in addition to the factors specified in section 8 of the Act, namely:- (i) facilities made available by the school under e-governance F i.e. hardware and software facilities; (ii) strength of students; (iii) other facilities made available to students such as swimming pool, horse riding, shooting, archery and performing art etc.; G (iv) supply of books, notebooks, etc. and other educational material provided to students; (v) provision of meal or snacks; and (vi) any other factor submitted by the Management before the School Level Fee Committee.” H

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25Copy pinpoint25. After adverting to Section 8 and Rule 10, it is amply clear that the relevant factors for determination of reasonable school fees under the Act of 2016 and Rules framed thereunder have been duly articulated and are based on objective parameters. It was urged that clause (a) of Section 8 is vague. We find force in the argument of the respondent- State that the factors referred to in Section 8 and Rule 10 for determination of fee are founded on the dictum of this Court in successive reported precedents, as relevant factors. The factor of location of the school is certainly relevant for determination of fee as are the other factors referred to in Section 8 and Rule 10. The totality of the effect of all the specified factors is to be reckoned for determining the school fees of the concerned school for the relevant period. The location of the school is not the only factor that is to be taken into account.

26Copy pinpoint26. At the end, what is relevant is that the institution is entitled to fix its own fee structure, which may include reasonable revenue surplus for the purpose of development of education and expansion of the institution, as long as it does not entail in profiteering and commercialisation. Whether fee structure evolved by the concerned school results in profiteering or otherwise is a matter which eventually would become final with the determination/adjudication by the Statutory Regulatory Committees constituted under Sections 7 and 10 of the Act of 2016, namely, Divisional Fee Regulatory Committee (DFRC) and E Revision Committee respectively, as the case may be. That adjudication, however, becomes necessary only if the SLFC were to disapprove the proposal of the school Management regarding fee structure determined by the school. Whereas, if the SLFC were to accept the proposal of the school Management regarding fee structure as it is, that would be the fees under the Act of 2016 for the relevant period and then there would be no need for the DFRC to adjudicate upon the fixation of fee in the concerned school.

27Copy pinpoint27. The SLFC is constituted institution or school wise, whereas the DFRC is an independent statutory regulatory authority empowered to enquire into the factum of whether fee structure of the given school determined by its Management entails in profiteering. In the event, the SLFC disapproves the proposal of the school Management, the dispensation provided for adjudication of the contentious position between the stakeholders in no manner violate the fundamental right of establishment of educational institution guaranteed under Article 19(1)(g) H of the Constitution.

INDIAN SCHOOL, JODHPUR v. STATE OF RAJASTHAN 41 [A. M. KHANWILKAR, J.]

28Copy pinpoint28. Section 4 of the Act of 2016 provides for Parent-Teachers A Association, which reads thus: “4. Parent-Teachers Association. - (1)(a) Every private school shall constitute the Parent-Teachers Association. (b) The Parent-Teachers Association shall be formed by the head of the school within thirty days from the beginning of each B academic year. Every teacher of the school and parent of every student in the school shall be a member of the Parent-Teachers Association and an annual amount of rupees fifty, in case of urban area and rupees twenty, in case of rural area, shall be collected from each member of such association. C (c) On formation of the Parent-Teachers Association, a lottery shall be conducted by drawing a lot of the willing parents to constitute the School Level Fee Committee and a notice of one week before such lottery shall be given to the member of the Parent-Teachers Association. D (2)(a) The School Level Fee Committee shall consist of, -

F (b) The list of members of the School Level Fee Committee shall be displayed on the notice board within a period of fifteen days from formation of the School Level Fee Committee and copy thereof shall forthwith be forwarded to the District Education Officer concerned. G (c) The term of the School Level Fee Committee shall be for one academic year and no parent member shall be eligible for drawing a lot by lottery within the period of next three years since the expiry of his/her last term as the member of the School Level Fee Committee. H

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A (d) The School Level Fee Committee shall meet at least once in three months. The procedure to be followed for conducting the meeting of the School Level Fee Committee shall be such as may be prescribed. (e) The Parent-Teachers Association shall have a general meeting B at least once before the 15th August of every year. The procedure to be followed for conducting the meeting of the Parent-Teachers Association shall be such as may be prescribed. The Parent- Teachers Association shall discharge such duties and perform such functions as may be assigned to it under this Act and as may be prescribed.” C Section 4 predicates that every private school shall constitute the Parent-Teachers Association, which is to be formed by the head of the school within thirty days from the beginning of each academic year. Section 4(1)(b) envisages that every teacher of the school and parent of every student in the school shall be a member of the Parent- D Teachers Association. Section 4(1)(c) provides that on formation of the Parent-Teachers Association, a lottery shall be conducted by drawing a lot of the willing parents to constitute the SLFC. In the context of this provision, it was urged that for choosing the willing parent to become member of the SLFC by draw of lots, no eligibility criteria has been prescribed in the Act of 2016 or the Rules of 2017. Besides, willing parent of the ward, who is admitted in the school against the 25 per cent quota of free education under the RTE Act, may also fit into this category even though he would have no stakes in the fee structure proposed by the school Management. The argument seems to be attractive, but for that reason the provision need not be struck down or declared as violative of any constitutional right of management of the school. This provision can be read down to mean that the draw of lots would be in respect of willing parents whose wards have been admitted against the seats other than the seats reserved for free education under the RTE Act. Further, for ensuring that the willing parent must be well-informed and capable of (meaningful) interacting in the discourse on the proposal of fee structure presented by the school Management, he/she must have some minimum educational qualification and also familiar with the development of school, management of finances and dynamics of quality education. The desirability of such eligibility of the willing parent ought to be specified. H

INDIAN SCHOOL, JODHPUR v. STATE OF RAJASTHAN 43 [A. M. KHANWILKAR, J.]

29Copy pinpoint29. Absence of such provisions in the Act or Rules, however, can A be no basis to suspect the validity of the provision in question. We say so because draw of lots can be one of the ways of identifying the willing parent who could become member of the SLFC. Whether the member should be chosen by election from amongst the willing parents or draw of lots or by nomination including his/her eligibility conditions, is a B legislative policy. They may serve the same purpose for constituting the SLFC to give representation to the parents of the wards who are already admitted in the school and are pursuing education thereat. In any case, this argument of the appellants will not take the matter any further much less to declare the relevant provision ultra vires as being violative of fundamental right of the appellants as such. C

30Copy pinpoint30. The composition of the SLFC has been specified in Section 4(2)(a) of the Act of 2016. It consists of a Chairperson being representative of management of the private school nominated by such management; Secretary — Principal of the private school (Ex officio); three teachers nominated by the management of private school as to be the members of the SLFC; and five parents from Parent-Teachers Association chosen by a lottery conducted by drawing a lot of willing parents. The SLFC consists of ten members — five are, in a way, representatives or nominees of the Management and five parents from the Parent-Teachers Association. The SLFC so constituted would continue to function for one academic year and the member chosen from Parent-Teachers Association is not eligible to participate again for a period of three years thereafter from the date of expiry of his/her term as the member of the SLFC. By this process, the parents representing different wards get opportunity to be part of the SLFC. Suffice it to observe that the constitution of the SLFC and for the nature of its function, no fault can be found with Section 4 of the Act of 2016 much less on the ground that it violates the fundamental right to establish an educational institution.

31Copy pinpoint31. Section 5 of the Act of 2016 deals with fixation of fee in “Government schools” and “aided schools”. However, we are not concerned with the said provision in the cases before us.

32Copy pinpoint32. Section 6 deals with regulation of fees in private schools and the procedure to be followed for finalisation of the fee structure. The same reads thus: H

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A “6. Regulation of fees in private schools. - (1) The management of the private schools shall be competent to propose the fee in such schools. (2) On the formation of the School Level Fee Committee, the management shall submit the details of the proposed fee along B with the relevant record to the School Level Fee Committee for its approval at least six months before the commencement of the next academic year. While giving the approval, the School Level Fee Committee shall have the authority to decide the amount of fee afresh. C (3) After considering all the relevant factors laid down under Section 8, the School Level Fee Committee shall approve the fee within a period of thirty days from the date of receipt of the details of the proposed fee and the record under sub-section (2) and communicate the details of the fee so approved in writing to the management forthwith. The details of the fee so approved by the D School Level Fee committee shall be displayed on the notice board in Hindi, English and in the respective medium of school, and if such school has its own website it shall be displayed on the same and it shall be binding for three academic years. (4) The School Level Fee Committee shall indicate the different E heads under which the fee shall be levied. (5) If the School Level Fee Committee fails to decide the fee within the period specified in sub-section (3), the management shall immediately refer the matter to the Divisional Fee Regulatory Committee for its decision under intimation to the School Level F Fee Committee in such manner as may be prescribed. During the pendency of the reference, the management shall be at liberty to collect the fee of the previous academic year plus ten percent increase in such fee till the final decision of the Divisional Fee Regulatory Committee. G (6) The Divisional Fee Regulatory Committee shall decide the appeal or reference as far as possible within the period of sixty days from the date of its filing after giving the opposite party an opportunity of being heard. (7) The management or the School Level Fee Committee H aggrieved by the decision of the Divisional Fee Regulatory

INDIAN SCHOOL, JODHPUR v. STATE OF RAJASTHAN 45 [A. M. KHANWILKAR, J.]

Committee in appeal or reference may, within thirty days from A the date of such decision, prefer an appeal before the Revision Committee in such manner as may be prescribed.”

33Copy pinpoint33. On bare perusal of this provision, it is noticed that the Management has the prerogative to submit its proposal regarding the fee structure in the given school. That proposal is submitted to the SLFC B set up under Section 4 of the Act of 2016. The mechanism provided in Section 6 onwards would primarily apply to private unaided schools. Indeed, the expression “propose” used in Section 6(1) would mean that the proposal of the school Management is its in-principle decision regarding the fee structure for the relevant period. The usage of expression “propose” in no way undermines the autonomy of the school C Management, in particular to determine its own fee structure for the relevant period. The consequence of proposal not being accepted by the SLFC is a different issue. Notably, the SLFC’s decision under Section 6(2) is not binding on the school Management. For, it is open to the school Management to then refer the matter for adjudication to the DFRC D constituted under Section 7 of the Act of 2016, who in turn is obliged to decide the reference one way or the other. Indeed, that decision would be binding on both — the school Management as well as the parents, unless it is interdicted by the Revision Committee constituted under Section 10 of the Act of 2016 at the instance of the other party. E