IMPORTANT POINT
The main legal point established in the judgment is that the Fee Regulatory Committee (FRC) is required to adhere to the provisions of the Gujarat Self-Financed Schools (Regulation of Fees) Act, 2017 and the Gujarat Self-Financed Schools (Regulation of Fees) Rules, 2017 while determining fees for self-financed schools. The FRC must consider various factors, conduct inquiries, and provide an opportunity for schools to justify their fee proposals, following principles of natural justice and avoiding standardization of fee determination.

JUDGMENT :

SUNITA AGARWAL, J.

1. The delay occurred in filing the Civil Application seeking leave to Appeal, has been explained to the satisfaction of the Court. Hence, Civil Application in the connected matter for condonation of delay is, accordingly, allowed.

2. The Civil Application for leave to appeal in the connected matter is allowed, accordingly.

3. This Court has passed the following common order dated 03.04.2024 in the bunch of appeals with lead matter as Civil Application (for Leave to Appeal) No. 1240 of 2023 in Letters Patent Appeal No. 334 Of 2024 with Letters Patent Appeal No. 334 Of 2024 in Special Civil Application No. 18076 Of 2019:-

“1. The delay occurred in filing the Civil Applications seeking leave to Appeal, has been explained to the satisfaction of the Court. Hence, all Civil Applications in the connected matters for condonation of delay are, accordingly, allowed.

2. The Civil Applications for leave to appeal in all the connected matter are allowed, accordingly.

3. The appeals, in this bunch, have been filed by the State through the Secretary, Education Department, Government of Gujarat challenging the judgement and order dated 22.07.2022 passed by the learned Single Judge in remitting the matter for fresh consideration to the Fee Regulatory Committee (in short as “FRC”) to decide on the fee proposal of self-financed schools in the State of Gujarat as per the Gujarat Self- Financed Schools (Regulation of Fees) Act, 2017 (in short as “the Act’2017) and the Gujarat Self Financed Schools (Regulation of Fees) Rules, 2017(in short as “the Rules’ 2017”).

4. The directions issued by the learned Single Judge are primarily on the quorum of the Fee Regulatory Committee as also the method adopted by the Committee in determination of fee on the proposal submitted by the institutions.

5. The main grounds of challenge agitated by Ms. Manisha Lavkumar Shah, learned Additional Advocate General appearing for the State appellants are that the validity of the Act’2017 is under consideration of the Apex Court in Special Leave to Appeal No.314 of 2018. The intervention by the learned Single Judge on the challenge to the order passed by the Fee Regulatory Committee (in short as “the FRC”) and Fee Revision Committee would cause prejudice to and materially affect the scrutiny into the legality of the provisions of the Act.

6. It was argued that on the lease rent, the learned Single Judge has directed the FRC to consider and verify the transactions of lease rent by conducting an inquiry as per Section 8 of the Act’ 2017 read with Rule 7 of Rule’ 2017 and has set aside the decision of the Committee where the lease rent was determined by calculating the same on the basis of Jantri value. It was urged that no error can be found in the decision of the FRC in determination of the lease rent as per the Jantri value, which is a relevant factor to determine the lease rent. Similarly, on depreciation, the learned Single Judge has committed illegality in holding that the depreciation would form part of the reasonable surplus to be provided in the proposed fee to be charged by the schools from the students and, as such, the depreciation claimed by the schools would not be allowed under separate Head.

7. Similarly, on the aspect of interest on loan, the learned Single Judge has forbidden the disallowance of interest on loan by amortizing the same over the life of an asset for which the loan may have been incurred. Such prohibition by the learned Single Judge would be contrary to the interest sought to be secured under the provisions of the Act for the reason that the school management will be free to determine the terms of loan at its whims and fancies and, accordingly, pass on the burden of exorbitant loan repayment and fasten its liability on the students by charging higher fee, showing such interest payable on loan secured by the management as expenditure. It was vehemently argued that the FRC is a statutory Committee framed under Section 3(4) of t