COVID-19| Schools can’t profit from unutilised facilities; Rajasthan Schools to provide 15% deduction of annual fees for academic year 2020-21: Supreme Court

“The school Management supposedly engaged in doing charitable activity of imparting education, is expected to be responsive and alive to that situation and take necessary remedial measures to mitigate the hardship suffered by the students and their parents. It is for the school Management to reschedule payment of school fee in such a way that not even a single student is left out or denied opportunity of pursuing his/her education, so as to effectuate the adage “live and let live”.”

Supreme Court: The division bench of AM Khanwilkar* and Dinesh Maheshwari, JJ has issued “general uniform direction” of deduction of 15 per cent of the annual school fees for the academic year 2020-2021 in lieu of unutilised facilities/activities and not on the basis of actual data school-wise.

The said direction was issued in order to obviate avoidable litigation by over 36,000 schools and to give finality to the issue of determination and collection of school fees for the academic year 2020¬21, as a one-time measure.

On 09.04.2020, an order was issued by the Director, Secondary Education, in the wake of COVID¬19 pandemic, directing the private schools recognised by the Primary and Secondary Education Departments to defer collection of school fees for a period of three months.

Before expiry of the period noted in the aforementioned order, the Director, Secondary Education issued another order on 07.07.2020 which read as

“The fee chargeable by non¬government schools from the students/guardians after 15th March, the applicable fees at present   and   payment   of   advance   fee   was   deferred   for   3 months, as per the direction of the State Government the said deferment is extended till the reopening of the schools. In case of non-deposition  of fees  during the  said  period, name of such student will not be struck off from the rolls of the school.”

On 07.09.2020, Rajasthan High Court directed the school Authorities to allow the students to continue their studies online and also to deposit only 70 per cent of the tuition fees element from the total fees chargeable for the period from March 2020 in three instalments.

On 28.10.2020, the Director of Secondary Education , Rajasthan issued an order stating that the   schools which were/which are imparting online teaching then capacity building fees can be charged from such students which will be 60% of the tuition fees.

The Supreme Court noticed that the Director, Secondary Education had no authority whatsoever to issue direction in respect of fee structure determined under the Rajasthan Schools (Regulation of Fee) Act, 2016 including to reduce the same for the academic year 2020¬21 in respect of private unaided schools. However, this does not give licence to the School Management to be rigid and not be sensitive about aftermath of pandemic.

“Undeniably, an unprecedented situation has had evolved on account of complete lockdown due to pandemic. It had serious effect on the individuals, entrepreneurs, industries and the nation as a whole including in the matter of economy and purchasing capacity of one and all. A large number of people have lost their jobs and livelihood as aftermath of such economic upheaval. The parents who were under severe stress and even unable to manage their day¬to-day affairs and the basic need of their family made fervent representation to the school Management(s) across the State.” 

The Court explained that, in law, the school Management cannot be heard to collect fees in respect of activities and facilities which are, in fact, not provided to or availed by its students due to circumstances beyond their control. Demanding fees even in respect of overheads on such activities would be nothing short of indulging in profiteering and commercialisation.

Further, due to complete lockdown the schools were not allowed to open for substantially long period during the academic year 2020-21. Resultantly, the school Management must have saved   overheads and recurring cost on various items such as petrol/diesel, electricity, maintenance cost, water charges, stationery charges, etc.

“Indeed, overheads and operational cost so saved would be nothing, but an amount undeservedly earned by the school without offering such facilities to the students during the relevant period.  Being fee, the principle of quid pro quo must come into play.”

However, no accurate (factual) empirical data has been furnished by either side about the extent to which such saving has been or could have been made or benefit derived by the school Management.     The Court, hence, assumed that the school Management(s) must have saved around 15 per cent of the annual school fees fixed by the school/adjudicated by the Statutory Regulatory Authorities for the relevant period.

“… we would assume that at least 15 per cent of the annual school fees would be towards overheads/expenses saved by the school Management. Arguendo, this assumption is on the higher side than the actual savings by the school Management of private unaided schools, yet we are inclined to fix that percentage because the educational institutions are engaged in doing charitable activity of imparting and spreading education and not make money. That they must willingly and proactively do. Hence, collection of commensurate amount (15 per cent of the annual school fees for academic year 2020¬2021), would be a case of profiteering and commercialisation by the school Management.”

DIRECTIONS

(i) The 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.

(iii) Regardless of the above, it will be open to the concerned School Managements 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   installments, 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 the 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 ensuing 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.

[Indian School, Jodhpur v. State of Rajasthan, 2021 SCC OnLine SC 359, decided on 03.05.2021]


*Judgment by: Justice AM Khanwilkar 

Know Thy Judge| Justice AM Khanwilkar

For appellants: Senior Advocate Pallav Shishodia, Shyam Divan,  Puneet Jain and Romy Chacko

For State of Rajasthan: Senior Advocates Dr. Manish Singhvi and Devadatt Kamat

Mr. Sunil Samdaria, in­person

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