2010 Supreme(Bom) 1228

High Court of Judicature at Bombay
D.K. DESHMUKH & THE HONOURABLE MR. JUSTICE N.D. DESHPANDE
Association of International Schools & Principals Foundation & Another
Versus
The State of Maharashtra & Another
WRIT PETITION (L) NO. 1876 OF 2010
Decided on: 01-09-2010

Headnote:Maharashtra Educational Institutions (Prohibition of Capitation Fees) Act, 1987 -Sections 2 and 4 - Regulation of fees in unaided schools - Petitioner challenging constitutional validity of Sections 2 and 4 of Act as also validity of Government Resolution dated 15.7.2010 and 22.7.1999 - Held - Both Government resolutions not referable to any provisions of Act - Invalid - As they place restrictions on right of petitioners to charge fees in their Educational Institution - Government Resolutions set aside - Rule made absolute in terms of prayer clause (b) and (c) - Relief claimed by prayer clause (a) left open to be raised at appropriate stage. - So far as validity of the Government Resolutions is concerned, it is common ground that the G.R. of the year 2010 relies on the earlier Government Resolution dated 22.7.1999 for the purpose of indicating as to what are the contents of the tuition fees and what are approved items and it constitutes committee headed by the Divisional Deputy Director of Education for the purpose of approving the fees fixed by the unaided institutions. It provides that the committee headed by the Director of Education shall hear the appeal against the order that may be made by the committee headed by the Divisional Deputy Director of Education. It is clear from the perusal of the G.R. of 1999 and 2010 that the purpose of these G.R. is to regulate and control the fees that are charged by the unaided educational institutions (secondary schools). The case of the State Government is that these Government Resolutions have been issued under Section 13 of the Act. Section 13 of the Act reads as under :

       "13. Savings. - Notwithstanding anything contained in this Act, all orders circulars, resolutions, directions, rules, notifications, ordinances, statutes, schemes or appointments made or issued and all powers which were vested or exercisable by any person or authority in respect of the matters referred to in this Act, whether in accordance with any law for the time being in force or otherwise, and in force immediately before the commencement of this Act shall, so far as they are inconsistent with the provisions of this Act, continue in force or continue to be so vested and be deemed to have been made or issued or vested under the provisions of this Act unless and until superseded by anything done or any action taken under this Act."

       Perusal of the above quoted provision shows that the heading of the provisions is "saving". In other words, it is a saving clause of the enactment and purpose of every saving clause of enactment is to save what is done before the commencement of the Act to the extent it is not inconsistent with the provisions of the Act. The reading of provisions of Section 13 shows that action taken by State Government before the Commencement of the Act to the extent they are not inconsistent and or contrary to the provisions of the Act have been saved. The Act has come into force in the year 1987 and therefore, in Court’s opinion, neither the G.R. of 1999 or G.R. of 2010 can be related to the provisions of Section 13 of the Act. Perusal of the provisions of Section 3 of the Act shows that demand or collection of capitation fee by the educational institutions is prohibited. Term "capitation fee’ is defined by Section 2(a) of the Act which reads as under :

       "Capitation Fee" means any amount, by whatever name called, whether in cash or kind, in excess of the prescribed or, as the case may be approved, rates, of fees regulated under Section 4."

       Perusal of the above provision shows that any amounts which are demanded by the institution in excess of the prescribed fee or approved fee is capitation fee. Section 4 deals with approval of fee which is relevant for our purpose it reads as under :

       "4. Regulation of fees. - 1. It shall be competent for the State Government to regulate the tuition fee or any other fee that may be received or collected by any educational institution for admission to, and prosecution of study in any class or standard or course of study of such institution in respect of any or all classes of students.

       2. The fees to be regulated under sub-section (1) shall -

       (a) In the case of the aided institutions, be such as may be prescribed by a university under the relevant University Law for the time being in force in the State or, as the case may be, by State Government, and

       (b) In the case of the un-aided institutions, having regard to the usual expenditure excluding any expenditure on lands and buildings or on any such other items as the State Government may notify, be such as the State Government may approve;

       Provided that, different fees may be approved under Clause (b) in relation to different institutions or different classes or different standards or different courses of studies or different areas.

       3. The fees, to be prescribed or approved under sub-section (2), shall include the following items, namely;

       (a) tuition fees, whether on term basis or monthly or yearly basis;

       (b) Term fee per academic term;

       (c) Library fee and deposit as security per year or for the entire course;

       (d) Laboratory fee and deposit as security per year or for the entire course;

       (e) Gymkhana fee on yearly basis;

       (f) Caution money for the entire course;

       (g) Examination fee, if any, per year or for the entire course;

       (h) Hostel fee, Messing charges, if these facilities are provided, whether on term basis or on monthly or yearly basis.

       (i) Any such other fee or deposit as security or amount for other item, as the State Government may approve.

       4. The fees regulated under this section shall ordinarily remain in force for a period of three years and the State Government shall appoint a committee, of persons who, in the opinion of the State Government, are experts in educational field, for taking the review of the fee structure and may, after considering the report of the Committee, revise the fees if it considers it expedient to do so.

       5. Every educational institution or, as the case may be, management shall issue an official receipt for the fees or deposits or any other amounts collected for any purpose, which shall be specified in such receipt.’’

       Perusal of sub-section (1) of Section 4 shows that it confers power on the State Government to regulate tuition fees and other fees that can be charged by the Educational Institutions both aided and unaided. Clause (a) of sub-section (2) of Section 4 lays down that the fees to be charged by the aided educational institutions are to be prescribed by the University or by the State Government. The term "prescribed" is defined by Section 2(f) of the Act to mean prescribed by the rules made under the Act. Thus so far as fee that can be charged in aided institution is concerned, it to be fixed by the State Government by framing rules in exercise of its rule making power under the Act which is to be found in Section 12 of the Act. So far as unaided institutions are concerned, the State Government has two kinds of power, one to specify items of expenditure which are to be excluded from usual expenditure which is to be taken into consideration while determining the amount of fees to be charged and secondly the power which is vested in the State Government is to approve the fees that may be fixed by the unaided institutions. The perusal of the G.R shows that it enumerates the items that are to be taken into consideration while fixing the amount of fee. So far as G.R. of 2010 is concerned, it merely reiterates what is stated in 1999 resolution in that regard. None of these resolutions provide for the State Government approving fees fixed by the institutions on the contrary, they contemplate the constitution of committee of which State Government is not part for that purpose. The Act confers power on the State Government to approve the fees fixed and there is no provision in the Act which empower the State Government to delegate its power of approving fees. Therefore, the provisions of 2010 G.R. in so far as it constitutes committee for approving the fees is concerned it is clearly contrary to the provisions of the Act and therefore, the State Government could not have issued G.R. constituting committee for approving the fees. The Supreme Court in the judgment in T.MA. Pai Foundation case has clearly held that the right to establish educational institution is a fundamental right guaranteed by Article 19(1)(g) of the Constitution of India. The observations of the Supreme Court made in Paragraphs 48, 50, 53, 54, 56 and 61 are relevant which reads as under :

       "48. Private education is one of the most dynamic and fastest growing segments of post secondary education at the turn of the twenty-first century. A combination of unprecedented demand for access to higher education and the inability or unwillingness of Government to provide the necessary support has brought private higher education to the forefront. Private institutions, with a long history in many countries, are expanding in scope and number, and are becoming increasingly important in parts of the world that relied almost entirely on the public sector.

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       50. The right to establish and administer broadly comprises of the following rights :

       (a) to admit students;

       (b) to set up a reasonable fee structure;

       (c) to constitute a governing body;

       (d) to appoint staff (teaching and non-teaching); and

       (e) to take action if there is dereliction of duty on the part of any employees.

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       53. With regard to the core components of the rights under Articles 19 and 26(a), it must be held that while the State has the right to prescribe qualifications necessary for admission, private unaided colleges have the right to admit students of their choice, subject to an objective and rational procedure of selection and the compliance of conditions, if any, requiring admission of a small percentage of students belonging to weaker sections of the society by granting them freeships or scholarships, if not granted by the Government. Furthermore, in setting up a reasonable fee structure, the element of profiteering is not as yet accepted in Indian conditions. The fee structure must take into consideration the need to generate funds to be utilized for the betterment and growth of the educational non-regulation of the school administration in the right of appointment, admission of the students and the fee to be charged will ensure that more such institutions are established. The fear that if a private school is allowed to charge fees commensurate with the fees affordable, the degrees would be "purchasable" is an unfounded one since the standards of education can be and are controllable through the regulations relating to recognition, affiliation and common final examinations."

       

       The Supreme Court in the above quoted paragraph has clearly held that reasonable restrictions on the right guaranteed by Article 19(1)(g) can be placed only by law enacted by the Legislature and not by a circular or resolution issued under Article 162 of the Constitution of India. Court has already held that two Government Resolutions are not referable to any provisions of the Act. Then the only provision to which it can probably be referred to is Article 162 of the Constitution.