MUMBAI: Private unaided schools cannot have it their way entirely when it comes to fixing fees. They have the discretion to fix their own fees without prior state approval, but the state can step in to regulate the fees if the school management recovers from students any "unusual expense, such as exorbitant expenditure on building rent", the Bombay High Court ruled on Friday. The HC rejected a challenge by Vibgyor High School and charitable trust Rustom Kerawalla Foundation to the authority of the state deputy director of education in deciding on its fee hike, and upheld a 2009 order by the officer directing the school to lower its fees to an amount he fixed.
The HC judgment essentially upholds the principles of the Capitation Fee Act, hits out against commercialization by private unaided schools and makes it clear that schools "run the risk of legal action under the Act if they to pass on any of its 'unusual expenses' to students without an approval from the state". The HC held, "Institutions can receive or collect fees to compensate the "usual expenditure" incurred by it as approved by the State Government. No more and no less." It said expenditure on lands and buildings or any other items as the state may notify is plainly excluded from being charged in the form of fees. The school and the Trust had challenged, through separate petitions, two 2009 orders of the Maharashtra deputy director of education against the school's steep fee hike to recover Rs 2.5 crore annual rent it paid for the school building.
Deputy director V K Wankhede had disallowed the school to recover through fees its exorbitant building rent paid to a company whose directors were the same trustees from the Kerawalla family. He directed the Goregaon ICSE school to charge lower fees of Rs 54,598 per year for primary and Rs 61,149 for secondary, from 2008-09. The school argued that a deputy director had no jurisdiction to decide the school's fees unless the state first approves the fee structure of every individual private unaided school. The state cannot delegate or depute to any officer or body its task to approve fees, the school contended. Besides, it said, the deputy director had been asked by the HC, through an earlier order, to look into a July 2007 complaint made by parents against the school, which questioned its education standard and safety aspects but not fee hike issue.
Parents alleged the school trustees wanted to siphon off funds under the guise of rent.
Finding no merit in the school's challenge, the HC disposed both petitions, with costs. The HC held, "The complaint dated July 19, 2007, by parents included an issue regarding excessive fees being charged by the school." And held, "The Deputy Director was competent to examine that grievance to ascertain whether there is or has been contravention of the provisions of the Capitation Fee Act." The court noted the school had also not furnished the education department with any documents on the rent despite being requested to.
The HC bench of Justices Ajay Khanwilkar and Mridula Bhatkar held that in the absence of the state's approval, the school management would now have to produce all details about its rent payment for scrutiny and approval of the state.
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