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2004(4) Supreme 16
SUPREME COURT OF INDIA
(From Delhi High Court)
V.N. Khare, CJI., S.B. Sinha & S.H. Kapadia, JJ.
Modern School -Appellant
versus
Union of India and Ors. -Respondents
Civil Appeal No. 2699 of 2001
With
Civil Appeal Nos. 2700, 2701, 2702, 2703, 2704, 2705-2706, 2707, 2708, 2709, 2710 of 2001
Decided on 27-4-2004
Counsel for the Parties :
For the Appearing Parties : Mukul Rohtagi, Additional Solicitor General, P.P. Mahotra, K.K. Venugopal, T.R. Andhyarujina, Parag P. Tripathi, R.K. Jain, Sr. Advocates, Vinay Sabharwal, Ms. Rekha Pandey, K.K. Rai, Ms. Indra Sawhney, Ms. Smitha Inna, S.W.A. Qadri, Ms. Anil Katiyar, D.S. Mahra, Ashok Agarwal, Ms. Savita Agarwal, R.P. Saxena, Vineet Sinha, T.C. Sharma, Ms. Neelam Sharma, Tarun Sharma, R.C. Verma, Mukesh Verma, Manish Shanker, Sushil Datt Salwan, Pramod Dayal, J.R. Midha, Pranab Kumar Mullick, Ms. Binu Tamta, S.P. Sharma, S.U.K. Sagar, Varinder Kumar Sharma, Gopal Jain, Ms. Nandini Gore, Ms. Pragya Baghel, R.N. Karanjawala, for Ms. M. Karanjawala, Rakesh K.Khanna, Ms. Rashmi Khanna, Shashank Shekhar, Surya Kant, Pramod Gupta, Ms. Monica Verma, Jayant Mehta, Ashok K. Mahajan, A. Mariarputham, Maninder Singh, Ms. Pratibha M. Singh, Ms. Aruna Mathur, Ankur Talwar, Kirtiman Singh, Angad Mirdha, Rajindra Dhawan, Ms. Safali Dhawan, Ms. Minakshi Vij, P.N. Jha, Advocates.
Majority Judgment [V.N. Khare, CJI and S.H. Kapadia, J.]
Held : At the outset, before analyzing the provisions of 1973 Act, we may state that it is now well settled by catena of decisions of this Court that in the matter of determination of the fee structure the unaided educational institutions exercises a great autonomy as, they, like any other citizen carrying on an occupation are entitled to a reasonable surplus for development of education and expansion of the institution. Such institutions, it has been held, have to plan their investment and expenditure so as to generate profit. What is, however, prohibited is commercialization of education. Hence, we have to strike a balance between autonomy of such institutions and measures to be taken to prevent commercialization of education. However, in none of the earlier cases, this Court has defined the concept of reasonable surplus, profit, income and yield, which are the terms used in the various provisions of 1973 Act. (Para 14)
In addition to the directions given by the Director of Education vide order DE. 15/ Act/Duggal.Com/ 203/99/23989-24938 dated 15th December, 1999, we give further directions as mentioned hereinbelow:-
(a) Every recognized unaided school covered by the Act shall maintain the accounts on the principles of accounting applicable to non-business organization/not-for-profit organization;
In this connection, we inter alia direct every such school to prepare their financial statement consisting of Balance-sheet, Profit & Loss Account, and Receipt & Payment Account.
(b) Every school is required to file a statement of fees every year before the ensuing academic session under section 17(3) of the said Act with the Director. Such statement will indicate estimated income of the school derived from fees, estimated current operational expenses towards salaries and allowances payable to employees in terms of rule 177(1). Such estimate will also indicate provision for donation, gratuity, reserve fund and other items under rule 177(2) and savings thereafter, if any, in terms of the proviso to rule 177(1);
(c) It shall be the duty of the Director of Education to ascertain whether terms of allotment of land by the Government to the schools have been complied with. We are shown a sample letter of allotment issued by the Delhi Development Authority issued to some of the schools which are recognized unaided schools. We reproduce herein clauses 16 & 17 of the sample letter of allotment:-
"16. The school shall not increase the rates of tuition fee without the prior sanction of the Directorate of Education, Delhi Admn. and shall follow the provisions of Delhi School Education Act/Rules, 1973 and other instructions issued from time to time.
17. The Delhi Public School Society shall ensure that percentage of freeship from the tuition fee as laid down under rules by the Delhi Administration, from time to time strictly complied. They will ensure admission to the student belonging to weaker sections to the extent of 25 and grant freeship to them."
We are directing the Director of Education to look into letters of allotment issued by the Government and ascertain whether they have been complied-with by the schools. This exercise shall be complied with within a period of three months from the date of communication of this judgment to the Director of Education. If in a given case, the Director finds non-compliance of the above terms, the Director shall take appropriate steps in this regard. (Paras 27 and 28)
Minority Judgment [S.B. Sinha, J.]
Indisputably, the standard of education, the curricular and co-curricular activities available to the students and various other factors are matters which are relevant for determining of the fee structure. The courts of law having no expertise in the manner and/or having regard to its own limitations keeping in view the principles of judicial review always refrain from laying down precise formulae in such matters. Furthermore, while undertaking such exercise the respective cases of each institution, their plans and programmes for the future expansion and several other factors are required to be taken into consideration. The Constitution Bench in Islamic Academy of Education (supra) which as noticed hereinbefore subject to making of an appropriate legislation directed setting up of two committees, one of which would be for determining fee structure. This Court both in T.M.A. Pai Foundation (supra) and Islamic Academy of Education (supra) had upheld the rights of the minorities and unaided private institutions to generate a reasonable surplus for future development of education. (Para 51)
Furthermore, the expression development of education is a broad term. There does not exist any reason as to why the said right would be limited, regulated or curtailed in absence of any provisions contained in the Act or the rules framed thereunder. When the law permits utilisation of surplus fund of an institution for setting up another institution, the Court should not come in their way from doing so. This Court, when such legislations are operating in the field should be loathe to impose any further restrictions. This Court normally does not pass an order even in exercise of its jurisdiction under Article 142 of the Constitution of India which would be contrary to the law. (Paras 65 and 66)
The need of the day, therefore, is strict implementation and enforcement of the statute. The administration, in the event, comes to the conclusion that the rules are required to be amended, they are free to do so; but only because there are a few cases of mismanagement, the same by itself should not be considered to be an indicia that all institutions are being run in an unprofessional or unethical manner. (Para 67)
Once, the legislature has laid down an educational scheme, the jurisdiction of the court is merely to interpret the same. It cannot and should not issue any other or further direction. It would not supplant a statutory provision by issuing any direction except in some exceptional cases. The statutory scheme of the Act must be considered also from the point of view that a Society running several institutions may have to impart education in different areas; slum, semi urban or urban. It may not, therefore, be improper for an institution to generate some surplus fund from an institution which is situated within a metropolitan area for the purpose of starting a school in a slum or a semi urban area. It may also not be necessary to issue direction as to how and in what manner the institutions should maintain their accounts. In absence of any statutory provision governing the field, it is for the administration of the educational institution to determine the same having regard to the prevailing law like Income Tax, 1961. I am, furthermore of the opinion, that as it is permissible in law, the excess income from an institution may be spent by the Society/Trust to establish another school keeping in view the fact that more and more educational institutions are required to be established particularly in rural or semi urban area. So far as allotment of land by the Delhi Development Authority is concerned, suffice it to point out that the same has no bearing with the enforcement of the provisions of the Act and the rules framed thereunder but indisputably the institutions are bound by the terms and conditions of allotment. In the event such terms and conditions of allotment have been violated by the allottees, the appropriate statutory authorities would be at liberty to take appropriate step as is permissible in law. (Paras 68 to 72)
JUDGMENT
Kapadia, J.-In this batch of civil appeals, following three points arise for determination:-
(a) Whether the Director of Education has the authority to regulate the quantum of fees charged by un-aided schools under section 17(3) of Delhi School Education Act, 1973?
(b) Whether the direction issued on 15th December, 1999 by the Director of Education under section 24(3) of the Delhi School Education Act, 1973 stating inter alia that no fees/funds collected from parents/students shall be transferred from the Recognised Un-aided Schools Fund to the society or trust or any other institution, is in conflict with rule 177 of Delhi School Education Rules, 1973?
(c) Whether managements of recognised unaided schools are entitled to set-up a Development Fund Account under the provisions of the Delhi School Education Act, 1973?
2. Since the aforestated three points arise in all the civil appeals the same are taken up together and disposed-of by this common judgment.
INTRODUCTION :
3. In modern times, all over the world, education is big business. On 18th June, 1996, Professor G. Roberts - Chairman of the Committee of Vice-Chancellors and Principals commented:
"The annual turnover of the higher education sector has now passed the £10 billions mark. The massive increase in participation that has led to this figure, and the need to prepare for further increases, now demands that we make revolutionary advances, in the way we structure, manage and fund higher education."
4. In the book titled Higher Education Law (Second Edition) by David Palfreyman and David Warner, it is stated that in modern times, all over the world, education is big business. On account of consumerism, the students all over the world are restless. That schools in private sector which charge fees may be charitable provided they are not run as profit-making ventures. That educational charity must be established for the benefit of the public rather than for the benefit of the individuals. That while individuals may derive benefits from an educational charity, the main purpose of the charity must be for the benefit of the public.
5. At the outset, we hasten to clarify that although we are in agreement with the authors, quoted above, we do not wish to generalize and in the Indian context we may state that there are good schools which even today run keeping in mind laudable charitable objects.
6. The basic question before us has been succinctly put earlier by this Court in Unni Krishnan, J.P. & Ors. v. State of A.P. & Ors. [(1993) 1 SCC 645] in following terms:-
"196. Even so, some questions do arise - whether cost-based education only means running charges or can it take in capital outlay? Who pays or who can be made to pay for establishment, expansion and improvement / diversification of private educational institutions? Can an individual or body of persons first collect amounts (by whatever name called) from the intending students and with those monies establish an institution -an activity similar to builders of apartments in the cities? How much should the students coming in later years pay? Who should work out the economics of each institution? Any solution evolved has to take into account all these variable factors. But one thing is clear: commercialization of education cannot and should not be permitted. The Parliament as well as State Legislatures have expressed this intention in unmistakable terms. Both in the light of our tradition and from the standpoint of interest of general public, commercialization is positively harmful; it is opposed to public policy. As we shall presently point out, this is one of the reasons for holding that imparting education cannot be trade, business or profession. The question is how to encourage private educational institutions without allowing them to commercialize the education? This is the troublesome question facing the society, the Government and the courts today."
FACTS :
7. Delh
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A lockout is justified if it is declared in response to an illegal strike or a strike that is in breach of a settlement or award.
The combination of eyewitness testimonies, recovery of the weapon used, and forensic examination results can establish guilt in criminal cases, even based on circumstantial evidence.
The conviction of an accused person under Section 27(3) of the Arms Act is not permissible in law if the accused is also charged with committing murder under Section 302 of the Indian Penal Code.
The court can enhance compensation based on the deceased's income and family dependency, and adjust the multiplier used by the Tribunal if found unjustified.
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