Private unaided schools have the autonomy to determine their fee structure and maintain a reasonable surplus for the development of the institution. The regulatory authority must ensure transparency and accountability in its actions and can only prevent commercialisation of education, profiteering, and capitation fees.

JUDGMENT

Sanjeev Narula, J.

FACTUAL BACKGROUND

1. On 25th February, 1980, Municipal Corporation of Delhi allotted land to Mahavira Foundation, a society constituted of members of the Jain community.^{1[The allotment letter was signed on 23rd February, 1980 by Assistant Commissioner.]} They established Petitioner No. 1 - Mahavir Sr. Model School as an aided Senior Secondary Private School [hereinafter, "Sr. School"]. Later upon payment of requisite charges, its status was converted to unaided private school. Subsequently, the Delhi Development Authority, vide letter dated 02nd November, 1987, allotted a separate piece of land for establishment of Petitioner No. 2 - Mahavir Jr. Model School, another unaided private school [hereinafter, "Jr. School"]. This school was founded in the year 1991 for nursery to preparatory education. Both the aforenoted educational institutions [collectively, "Schools"] function and administer their affairs entirely from the fees collected by them and are not dependent on any aid from the State. They have been accorded minority status since the year 2011, are recognised under the provisions of the Delhi School Education Act, 1973 ["DSEA"] and function under the regulatory control of Directorate of Education ["DoE"], in accordance with the aforesaid Act and rules framed thereunder.

2. After approving the budget for academic session 2018-19, on 24th March, 2018, the Managing Committee of the Sr. School, submitted a statement of fee to DoE in terms of Section 17(3) of DSEA, setting out class-wise fee structure for said academic year. This fee structure was implemented from 01st April, 2018.

3. On receipt of the statement of fee and on the basis of a complaint/representation received from few parents of the students studying in the Schools, DoE sent an e-mail on 27th April, 2018 alleging that enhancement of fee by Sr. School was without prior sanction from DoE. The explanation given by the Principal of the Sr. School in reply was not accepted, and DoE passed an order dated 01st May, 2018 holding that Sr. School has been arbitrarily increasing fee under the garb of implementation of 7th Central Pay Commission in breach of the condition of prior sanction entailed in the land allotment letter. The school was directed to "roll back the fee hike in the school in light of the directions of the Department and refund the increased fee to the parents/guardians of the students, with immediate effect". Based on the said order, a show-cause notice was also issued on 05th May, 2018. In response, Sr. School clarified that the enhanced fee structure was not motivated by 7th Central Pay Commission, but was fixed keeping in mind the budgetary requirements. It was clarified that land allotment letter dated 02nd November, 1987 pertained only to Jr. School and the Sr. School, which is a separate entity, is not governed by the land clause.

4. Thereafter, DoE issued a notice to the Sr. School on 21st May, 2018, pointing out several discrepancies in the statement of fee and called upon it to furnish its response. In the meantime, Sr. School was directed not to increase its fee till the scrutiny of the statement of fee is completed. In response thereto, on 25th May, 2018, Sr. School provided point-wise clarifications/explanations. Unconvinced thereby, DoE passed order dated 20th July, 2018, directing the Sr. School to not increase fee/charges for the academic year 2017-18 and to refund/adjust the increased fee recovered from students against future fees. The Schools impugned the aforenoted order before this Court [in W.P.(C) 8681/2018] wherein, at the stage of admission itself, leave was granted to Sr. School to approach the DoE seeking clarifications. Sr. School's detailed representation to DoE, pursuant to the above-noted directions, has been decided by order dated 25th January, 2019, impugned in the present proceedings, which rejects the Schools' proposed fee hike [hereinafter, "impugned order"].

INTERIM ORDERS

5. On 10th Jun