Case BriefsSupreme Court

Supreme Court: The Division Bench comprising of L. Nageswara Rao* and Krishna Murari, JJ., addressed the plight of NEET students. The Bench stated,

“Decision of government not to reduce minimum marks for admission was propelled by extraneous considerations like sufficient number of Dentists being available in the country and the reasons for which students were not inclined to get admitted to BDS course which remits in the decision being unreasonable. Consideration of factors other than availability of eligible students would be the result of being influenced by irrelevant or extraneous matters.”

Observing the scarcity of qualified aspirants, Dental Council of India had recommended lowering of qualifying cut off percentile for admission to (Bachelor of Dental Surgery) BDS course for the academic year 2020-2021. Pursuant to which the Petitioners had submitted a representation to government seeking to lower the qualifying cut off percentile. Recommendation of the Council had been rejected by Government which led to filing of the instant petition under Article 32 of the Constitution.

Proviso to Sub-Regulation (ii) of Regulation II of the Regulations is as follows:

“Provided when sufficient number of candidates in the respective categories fail to secure minimum marks as prescribed in National Eligibility-cum-Entrance Test held for any academic year for admission to BDS Course, the Central Government in consultation with Dental Council of India may at its discretion lower the minimum marks required for admission to BDS Course for candidates belonging to respective categories and marks so lowered by the Central Government shall be applicable for the said academic year only”.

Whether demand to reduce qualifying cut off was rightly rejected?

Proviso to Sub-Regulation (ii) of Regulation II had empowered government to exercise its discretion to lower minimum marks only when sufficient numbers of candidates fail to secure minimum marks. Government could not for any purpose other than the one specified in the proviso to Regulation II (5) (ii). There were three reasons given for the decision not to lower minimum marks by the state:

  • Available seats vis-à-vis eligible candidates were 1:7 and therefore there was no dearth of eligible candidates.
  • Sufficient number of Dentists in India. There was one Dentist for every 6080 persons which was better than the WHO norms of 1 : 7500.
  • Lack of keenness of students to join BDS and inability to pay exorbitantly high fees charged by private colleges

On the submission of existence of seven candidates against one seat, the Bench observed that this calculation of the State was without taking into account the fact that admissions for UG AYUSH and other UG medical courses were included in the NEET for the first time from in 2020. Total number of seats available for the academic year 2020-2021 for MBBS were 91,367, BDS were 26,949 and AYUSH were 52,720 making it a total of 1,71,036 seats. Whereas, the NEET qualified candidates were 7,71,500.

It did not appear that while arriving at decision not to lower minimum marks, the State had consulted the Council in accordance with the proviso to Sub-Regulation (ii) of the Regulation II. Hence, ratio of seats available vis-à-vis eligible students was 1 : 4.5 and not 7. Noticing the above, the Bench stated,

“Decision which materially suffers from the blemish of overlooking or ignoring, wilfully or otherwise, vital facts bearing on the decision is bad in law. There is an implicit obligation on the decision maker to apply his mind to pertinent and proximate matters only, eschewing the irrelevant and the remote.”

The Bench concurred with the argument of the petitioners that lowering minimum marks and reducing percentile for admission to the first-year BDS course would not amount to lowering the standards of education Considering the fact that minimum marks had been reduced by the State for super speciality courses for last year and AYUSH courses for the current year, the Bench expressed,

“If reducing minimum marks amounts to lowering standards, the State would not do so for super speciality courses.”

Hence, the Bench directed that vacant seats in first year BDS course for the year 2020-2021 should be filled up from the candidates who had participated in the NEET after lowering the percentile mark by 10 percentile. The petition was disposed of with further directions to Managements of private Dental Colleges to consider reducing fee charged by them to encourage students to join the Colleges.

[Harshit Agarwal v. Union of India, 2021 SCC OnLine SC 64, decided on 08-02-2021]


Kamini Sharma, Editorial Assistant has put this report together 

*Judgment by: Justice L. Nageswara Rao

Appearances before the Court by

For petitioners: Senior Advocate Maninder Singh and advocate Krishna Dev Jagarlamudi

For Union of India: Additional Solicitor General Aishwarya Bhati

Case BriefsSupreme Court

Supreme Court: In a major win for Private Schools in the State of Rajasthan, the bench of AM Khanwilkar and Dinesh Maheshwari, JJ has directed the School Managements to collect fees for the academic year 2019-2020 as well as 2020-2021 from the students, equivalent to fees amount notified for the academic year 2019- 2020, in six monthly installments commencing from 5th March, 2021 and ending on 5th August, 2021.

Noticing that the hearing in the matter is likely to take some more time, the Court passed ‘interim directions which will address the concerns of all parties in some measure’.

In the order that came as a big blow to the parents as most of the classes in the year 2020 have been conducted online due to the outbreak of COVID-19 pandemic, the Court, in order to balance the interest of the Schools and the parents, further passed the following interim directions:

  1. The 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.
  2. Where the parents have difficulty in remitting the fee in terms of this interim order, it will be open to those parents to approach the school concerned by an individual representation and the management of the school will consider such representation on a case-to-case basis sympathetically.
  3. The above arrangement will not affect collection of fees for the academic year 2021-2022, which would be payable by the students as and when it becomes due and payable, and as notified by the management/school.
  4. In respect of the ensuing Board examinations for classes X and XII (to be conducted in 2021) the school management shall not withhold the name of any student/candidate on the ground of non-payment of the fee/arrears, if any, on obtaining undertaking of the concerned parent/student.

The Court, however, clarified that the above arrangements would be subject to the outcome of the matters pending before the Court including the final directions to be given to the parties and without prejudice to the rights and contentions of the parties in these proceedings.

The Court also directed the State of Rajasthan to ensure that all government outstanding dues towards unit cost payable to respective unaided schools are settled within one month from the today and, in any case, before 31st March, 2021.

The matter will now be taken up for hearing on February 15, 2021.

[Gandhi Sewa Sadan Rajsamand v. State of Rajasthan, 2021 SCC OnLine SC 70, order dated 08.02.2021]

Case BriefsCOVID 19High Courts

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

Case BriefsHigh Courts

Rajasthan High Court: Sanjeev Prakash Sharma, J., partly allowed a writ petition filed by the Society of Catholic Education Institutions in Rajasthan and Progressive Schools Association, Nisa Education, School Shiksha Pariwar Sanstha and D.G.J. Educational Society challenging the orders passed by the State Government which had deferred the collection of fees from students indefinitely till the State Government takes any decision for the opening of the schools further, it had directed that the names of students should not be struck off for non-payment of fees.

The counsel for the petitioners contended that there had already been a deferment of fees for a long period of almost six months and the schools required to maintain the infrastructures and also pay salary to its staff, which includes non-teaching and teaching staff and are facing great hardship and therefore, by interim arrangement at least tuition fees be allowed to be collected from students as per the provisions of the Rajasthan Non-Government Educational Institutions Act, 1989 and the Rules framed therein, it is binding for the institution(s) to pay regular salary to its staff even during the lock-down period. Further, as far as the teaching process was concerned, the same was continuing in terms of the directions issued by the Central Board of Secondary Education by adopting entire process and for the purpose of teaching by virtual methods, the members of the petitioner association had to incur additional expenditure in procuring additional gadgets for implementation of virtual classes. It was submitted that all the students were taking benefit out of the online classes being run by the schools and it cannot be said that the students were not being provided education for their classes during this pandemic.

The Court observed that at the interim stage, a balance was required to be struck between the financial difficulty of the school management relating to release of the salary of the staff and minimum upkeep of school on one side and the financial pressure, which has come on the parents due to the pandemic and lock-down as noticed above. The Court while relying on various judgments passed by the High Courts of Gujarat, Punjab & Haryana and Delhi, held that prima facie, members of the petitioner association cannot be deprived of receiving the tuition fees for the students, who continued to remain on their rolls. However, this Court noticed that total infrastructure cost, which the school may incur for the regular studies during normal days, had been definitely reduced day to day schools are not opening thus, directing the school authorities to allow the students to continue their studies online and allow them to deposit 70% of the tuition fees element in three installments from the total fees being charged for the year. It was made clear that on non-payment of the said fees, the student(s) may not be allowed to join online classes, but shall not be expelled from the school.[Society of Catholic Education Institutions in Rajasthan v. State of Rajasthan, 2020 SCC OnLine Raj 1299, decided on 07-09-2020]


*Suchita Shukla, Editorial Assistant has put this story together

Case BriefsHigh Courts

Madras High Court: N. Anand Venkatesh, J., stated that in case the Schools are violating the High Court’s earlier Order with regard to collection of only 40% tuition fees by unaided private institutions during the academic year 2019-2020, Contempt proceedings shall be instituted.

Petition was filed seeking writ of mandamus directing respondents to relax an order passed against the educational institutions precluding from collecting fees from the students to the extent to permit the schools to collect the fees due for academic year 2019-2020 and part fees for the academic year 2020-21 to meet the costs for paying the salaries, purchase and distributions of books, provisioning for online classes, etc.

Government Advocate on behalf of the Education Department submitted that several complaints have been received from parents to the effect that the Education Institutions insisted for the payment of the entire fees in violation of the interim orders passed by the Court on 17-07-2020.

Parents are hesitant to give a written complaint fearing consequences.

Bench taking serious note of the issue stated that education department shall conduct an immediate enquiry and if it would be found that the institutions have been collecting fees in violation of the interim orders passed by this Court, immediate action shall be taken against the schools.

Further, particulars of the Schools shall also be provided to this Court and if this Court finds that there is any violation, this Court will not hesitate to initiate Contempt Proceedings against the persons incharge of the School. The Director of School Education, Chennai, shall file a report on the action taken. [Tamil Nadu Nursery Primary Matriculation Higher Secondary Schools Assn. v. Chief Secy to Govt, 2020 SCC OnLine Mad 1638 , decided on 31-07-2020]


Also Read:

Madras HC | Unaided private institutions in T.N. to collect 40% tuition fees as advance fee; Arrears of tuition fees to  be paid before 30 Sept 2020

Case BriefsHigh Courts

Calcutta High Court: A Division Bench of Sanjib Banerjee and Moushumi Bhattacharya, JJ., while addressing the matter wherein private unaided schools have debarred students from taking online course and examinations due to shortfall in payment of fees directed the schools to not to discontinue the same for the said students unconditionally till 15th August, 2020.

Petitioner represents the parents of over 15,000 students enrolled in more than 110 private unaided schools in and around the city.

Principal Grievance

Private unaided schools in Calcutta and elsewhere in the State continue to demand regular fees though the schools have not functioned for the last four months.

Students barred from participating in online course

Petitioner claimed that online courses and examinations have been started by some of the 112 schools that are involved and students whose fees have not been cleared are barred from participating in the online course or taking online examination only on such ground.

State Government

Advocate General on behalf of the State Government submitted that time to time through several notifications State Government has called upon the private, unaided schools to refrain from increasing the fees and asked them to give concessions to students or parents.

High Court

“…in the absence of the boards or councils to which the 112 schools are affiliated, to ascertain whether such authorities wield any power to regulate the fees of their affiliated schools.”

Councils or Board to which the said 112 schools are affiliated have been asked to file their response before second Monday of August, 2020.

Schools shall also indicate as to whether all the employees of the schools have been paid during the period of lockdown and the extent of discount that such schools are able to afford to the students for the schools not functioning during the relevant period.

Further, State Government was also permitted to use an affidavit to disclose the several notifications that it has issued by way of advisories to the private, unaided schools. 

Bench asked the 112 schools involved not to discontinue making online courses available to any of its students, unconditionally till August 15, 2020.

None of the 112 schools will prohibit any of the students from participating in online examinations if any till August 15, 2020.

Adding the conclusion, Court also stated that by August 15, 2020, the outstanding dues of each student, as at July 31, 2020, have to be cleared to the extent of 80 per cent.

Students who have already been debarred from online courses or online examinations will be restored to their previous status.

Bench hoped that if substantial payments are made on behalf of the students who are in default, the relevant schools will not discontinue the online courses for any meagre shortfall in payment.  [Vineet Ruia v. State of W.B., 2020 SCC OnLine Cal 1230, decided on 21-07-2020]

Case BriefsHigh Courts

Madhya Pradesh High Court: This petition was filed before the Bench of S.C. Sharma and Virender Singh, JJ., stating that the Society of the petitioner was a registered Society under the M.P. Society Registrikaran Adhiniyam, 1973 and was running a College in the style of Shri Dadaji College, Satwas.

It was contended by the petitioner that they were entitled to 50% affiliation fees as the College was located in Sub-District Level. It was brought before Court that earlier also petitioner had filed a petition which was decided by this Court by an order on record whereby the Division Bench had directed the respondent university to pass a speaking order. As a consequence of above respondent had passed a speaking order which is on record reflecting the non-compliance of mandatory conditions as mentioned under Section 27 read with Section 13(3) of the M.P. Vishwavidhyala Adhiniyam, 1973. Respondent submitted that until and unless the deficiencies pointed out in the order are removed the granting of affiliation with 50% fees does not arise.

High Court was of the view that since petitioner had failed to remove the deficiencies as pointed by respondents the admission ought to be declined with the liberty to approach the University for grant of affiliation after the deficiencies are removed. [Dadaji Shashanik Avam Samajik Samiti v. State of M.P., 2019 SCC OnLine MP 717, dated 22-04-2019]

Case BriefsTribunals/Commissions/Regulatory Bodies

Securities Appellate Tribunal (SAT), Mumbai: The Coram of Tarun Agarwala, J., (Presiding Officer), Dr C.K.G. Nair (Member) and M.T. Joshi, J., (Member) disposed an application filed for the calculation of rate of interest on a certain principal amount with the direction to the appellant to pay an additional sum of Rs 10 lakhs.

The facts were that in 2004 SEBI raised the demand of Rs 4,64,17,206 towards principal amount and interest under Securities and Exchange Board of India (Interest Regularization Scheme, 2003) as fees under the Brokers Regulations. The said demand was challenged by the appellant before the Tribunal which was allowed in 2005 and SEBI was directed to refund the aforesaid amount which had already been paid by the appellant. The order of the Tribunal was challenged by SEBI before the Supreme Court of India. During the pendency of the appeal, the Supreme Court permitted the appellant to withdraw the amount deposited with this Tribunal. Consequently, the appellant withdrew a sum of Rs 6,20,12,878 towards principal amount and interest accrued thereon. The demand raised by SEBI in 2004 was affirmed and the amount became payable along with interest. SEBI, accordingly called upon the appellant to pay a sum of Rs 11,59,57,867. The contention was whether the appellant should pay a simple interest or compound interest on the principal sum. The Tribunal by an order had held that SEBI was not entitled to charge compound interest and that the appellant was liable to pay simple interest on the amount withdrawn at relevant bank rate/rates prevailing from time to time.

The Tribunal stated that simple interest was required to be calculated which the parties failed to calculate in the correct perspective. Without going into the mechanics of exact calculation, it found appropriate in the interest of justice to direct the appellant to deposit a further sum of additional Rs 10 lakhs. [Prebon Yamane India Ltd. v. SEBI, 2019 SCC OnLine SAT 17, dated 28-03-2019]

Hot Off The PressNews

As reported by The Indian Express in its news report dated 28.12.2017, a Division Bench comprising of Chief Justice R. Subhash Reddy and Justice Vipul M. Pancholi of the Gujarat High Court upheld the validity of the law regulating the fees of self-financed schools in the state. The Gujarat Self Financed Schools (Regulation of Fees) Act capped the fees of primary, secondary and higher secondary schools at Rs. 15,000, Rs. 25,000 and Rs. 27,000 per annum respectively. The Court held that the Rules under the Act were “reasonable restrictions” within the meaning of Article 19(6) of the Constitution.