Case Title: Indian School, Jodhpur V. State Of Rajasthan
The Rajasthan Schools (Regulation of Fees) Act, 2016, was upheld by the Supreme Court as constitutionally valid.
However, the bench of Justices AM Khanwilkar and Dinesh Maheshwari read down Sections 4, 7, and 10 of the Act.
"The dispensation contemplated by Section 6 of the contested Act of 2016 is not meant to impair the authority of the school management in determining the fee structure itself. It is intended that the school administration will develop its pricing structure but will finalise or implement it after consulting with the SLFC (School Level Fee Committee)," the Court stated.
The private unaided schools in the state of Rajasthan had challenged the constitutionality of the Rajasthan Schools (Regulation of Fee) Act, 20163, in particular, Sections 3, 4, 6 to 11, 15 and 16, and the Rules framed thereunder titled Rajasthan Schools (Regulation of Fee) Rules, 2017, in particular Rules 3, 4, 6 to 8 and 11 thereof, claiming that they are ultra vires the Constitution and abridge the fundamental right guaranteed under Article 19(1)(g) of the Constitution. The Rajasthan High Court had already maintained the Act's constitutionality.
The managements claim that these laws restrict the autonomy of the school management of private unaided schools to the point of simply presenting the school fees to the School Level Fee Committee, in which the management has just one representative in contrast to eight others, including five parents, three teachers, and the principal. They maintained that the State can only regulate the fees set by private unaided schools if it can demonstrate that they involve profiteering or capitation, both of which are illegal under the law.
Referring to constitutional bench judgments in this regard, notably the TMA Pai Foundation case and the P.A. Inamdar case, the court stated that the government has the authority to provide for an external regulatory mechanism for determining school fees, or to fix "just" and "permissible" school fees at the outset.
Regarding Section 4, the claim was made that neither the Act of 2016 nor the Rules of 2017 specified any eligibility criteria for selecting willing parents to become members of the SLFC through a lottery system. Furthermore, a consenting parent of a ward admitted to the school against the 25% quota of free education under the RTE Act may fall into this category, even if he has no stake in the fee structure offered by the school management.
The bench further noted that Section 6 does not impede the school administration's authority in determining the fee structure.
"What it envisages is that the school management may determine its fee structure but may finalise or give effect to the same after interacting with the SLFC. It is a broad-based committee, consisting of representatives of the school management as well as five parents from Parent Teachers Association. This is merely a consultative process and democratisation of the decision making process by taking all the stakeholders on board.”