Exhaustive analysis of a 2-tier mechanism to provide concession in school fees: Unraveling various aspects of Cal HC’s ruling

Calcutta High Court: A Division Bench of Sanjib Banerjee and Moushumi Bhattacharya, JJ., while addressing the issues raised in the present petition observed that,

“From bringing to life the act-of-God clause that was mostly regarded as a redundant appendage in contracts to redefining the rules of human engagement, the pandemic has almost been all-pervasive.”

The present lis is born in its wake: upon a unique situation arising where students have been kept away from academic institutions for months together, prompting their parents or guardians to question why regular fees ought to be paid in such a scenario.

PRIVATE UNAIDED SCHOOLS | Concession in Fees

The point of public interest canvassed in the petitions is that private unaided schools should allow the substantial concession in fees as the physical conduct of classes has not been possible for more than 6 months and normal functioning may not resume in a full-fledged manner for several months more.

Profiteering by Schools

The parents or guardians complain of profiteering by the schools by unjustly enriching themselves even as several of the schools have terminated the services of several of the usual employees or have not paid the teachers in full and not incurred the normal expenses needed to physically operate such schools.

School’s Contention 

Almost all the schools represented contended that they have not removed any regular employee from the payrolls, and some even claim that the contractual staff have also been retained and paid during the lockdown.

Institutions controlled by the Church

The institutions controlled by the Church of North India and another which claims to be a linguistic minority educational institution, have objected to the Court seeking to interfere into their affairs.

They suggest that not only do they enjoy a special status accorded by Article 30(1) of the Constitution but they are also protected under Article 19 of the suprema lex.

No drastic measure

By and large, the schools indicate that they have not taken the ultimate drastic measure of excluding students from the limited online classes now conducted, though no fees may have been tendered on behalf of several students for the period beginning April, 2020.

The general refrain is that schools do not look at making any profit and, to the extent, their financial positions may allow, they are ready to accord concessions to parents or guardians of students in financial distress, but a general reduction of fees across the board should not be permitted.

Analysis and Decision

“…courts must exercise extreme self-restraint and not use the extensive amplitude as a springboard for judicial anarchy.”

In a breakdown scenario as a result of any natural calamity or an act of God or when the subordinate judiciary is not available or a litigant has no access to any other court in an extreme case, the High Court must not forget the width of the authority available to it and its constitutional obligation to discharge its duties governed by the overarching established principles designed by what may be loosely said to be the rule of law.

Two other broadheads of objection have been taken by some of the schools as noticed above: under Article 30(1) of the Constitution and under Article 19 thereof read with the right of privacy as espoused.

Court while analysing the set of contentions with regard t minority institutions stated that,

“…even minority educational institutions need to adhere to certain fundamental norms, the most basic of them being that they cannot be run for the purpose of making profit”.

Bench added that the basic requirement is that the fees charged must have some correlation with the facilities provided.

If the facilities provided over a long stretch of time, as for the best part of a year and probably more, cost less because physical classes have not been held, a substantial part of the money saved has to be returned without, for the moment, going to the question as to whether it should be returned pro rata or on a need-based basis.

Assessment of fees

Hence, Court stated that an assessment of the fees demanded or obtained during the lockdown period and in the absence of physical classes in the schools, may not amount to the breach of any right conferred by Article 30(1) of the Constitution in respect of a school run by a religious or a linguistic minority.

The same rule as above should apply to all private unaided schools since they are governed by private contracts between private individuals.

Bench in view of the unprecedented situation and as a one time measure issued the following directions:

  • No increase in fees during FY 2020-2021.
  • From the month beginning April, 2020 till the month following the one in which the schools reopen in the physical mode will offer a minimum of 20% reduction of fees across the board. Non-essential charges for use of facilities not availed of will not be permissible.
  • 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.
  • 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.
  • For F.Y. 2020-21, a maximum of 5% excess of revenue over expenditure will be permissible. The balance excess should be passed on by way of general concession or special concession in cases of extreme distress.
  • No amount towards the arrears on account of revision of pay to teachers or other employees can be passed on in the fees for the 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.
  • There will be no increase in salaries of teachers or of other employees during the financial year 2020-21. In case any school has given effect to a higher pay scale, the difference must not be realised out of the school fees.
  • 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.
  • 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. Said applications must be supported with financial statements.
  • 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.
  • 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 Rs 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.
  • 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 of Heritage School and Ms Priyanka Agarwal, Advocate for the parents in WPA 5890 of 2020.
  • The deposit obtained by the committee will be retained by the committee and Rs 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, Rs 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.
  • 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.
  • 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.
  • 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.
  • 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.
  • 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.
  • 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.
  • 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.
  • 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.
  • 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.
  • There will be no refund of the fees already paid.
  • 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.
  • 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.
  • No unusual expense should be incurred during financial year 2020-21 and no development or infrastructure expense should be incurred unless absolutely unavoidable.
  • 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 Rs 800. However, such schools may voluntarily take such measures as deemed fit.
  • 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.

Court made it clear that the present order may not be used as a precedent for the regulation of fees in the schools in future.

The instant petitions will appear next on 07-12-2020 to monitor the progress in the implementation of directions issued.

Moushumi Bhattacharya, J. supported the reasons laid down by Sanjib Banerjee, J., leading to the conclusions.

Bhattacharya, J.,  proposed to supplement three issues: Articles 226, 30(1) and 14 of the Constitution of India together with the right to privacy in the foreground of the arguments made.

The endeavour of the Court is that students must not be caught in the crossfire between their parents and the school authorities.

Under Article 226, the power of the High Courts is

“……..to issue to any person or authority, including in appropriate cases, any Government, within those territories directions, orders or writs, including writs in the nature of…….”

The order in which the words have been positioned indicate that the writ courts not only have the power to issue the five writs but also to issue orders and directions having the force and effect of the five writs, separately or together, for enforcing the rights guaranteed under Part III of the Constitution. The wide berth contemplated was recognised in Dwarka Nath v. Income Tax Officer, AIR 1966 SC 81 as an enabler for tailoring the reliefs to fit the shape and peculiarities of the case and stretching the parameters of the power “to reach injustice wherever it is found”.

But does that mean that a court’s authority to issue writs under Article 226 is unfettered?

The court draws its own boundaries within which it decides the lis on a number of factors; including but not limited to whether there is an efficacious remedy or alternative forum which the petitioner should have first exhausted, whether the right can be reasonably restricted, where there is stark absence of a public law element in the discharge of duties of the concerned entity or even where the conduct of the petitioner does not call for the court’s intervention on the facts of the case.

The privacy argument of the CNI and the linguistic minority schools is another aspect which should be briefly dwelt on. K.S. Puttaswamy (Privacy-9 J.) v. Union of India (2017) 10 SCC 1 has been placed to elevate the right to privacy as a ‘travelling right’.

It is a right aimed at preserving the spatial and intellectual integrity of an individual in matters of choice and acts as a springboard for the connected freedoms which are guaranteed under the Constitution.

As noticed in several decisions impacting minority institutions, Article 30(1) was contemplated by the framers to serve as a shield and not as a sword. After all, can these schools bypass the statutory requirement of filing their periodic audited financial numbers to the concerned authorities?

Schools cannot be simplistically categorised according to the financial profile of the guardians and whether as such they need a fee-reduction for their wards.

“…a benefit, like a right, cannot be denied to a greater number merely on the ground that it may be misused by a few.”

Adding to the above, Bench also stated that the teachers who need the schools to remain financially solvent for their job-security may also be parents mired in debts/loss of service who would benefit from a fee-reduction. The mechanism proposed had to as inclusive as possible representing the concerns of guardians across the board, irrespective of privilege and financial bracket.

“We have designed a 2-tier mechanism not only to provide guardians with a window for further concessions but also to make the process as free of coercion/ compulsion and as much transparent as is practicably possible under the circumstances.”

[Biplab Kumar Chowdhury v. Union of India, WPA 5530 of 2020, decided on 13-08-2020]


Counsels

For the State: Kishore Datta, A-G, Senior Advocate & Sayan Sinha, Advocate

For Union of India: Y.J. Dastoor, ASG, Senior Advocate & Siddhartha Lahiri, Advocate.

For the petitioner
In WPA 5890 of 2020: Advocates, Sai Deepak, Rishav Kumar Singh, Anurag Mitra, Priyanka Agarwal and Avinash Kumar Sharma.

For the petitioner (in person) In WPA 5378 of 2020: Advocate Partyush Patwari

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