1 191909
IN THE HIGH COURT OF JUDICTURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICITON
WRIT PETITION NO.1919 OF 2009
Vibgyor High School,
through its Principal, situate at
Motilal Nagar-1, Srirang Sabde
Marg, Goregaon (W), ... Petitioner
Mumbai 400 104
V/s.
through
1. State of Maharashtra,
the Secretary,
Department of Education and
Employment, Mantralaya
Annexe, Mumbai 400 032
2. V.K. Wankhede
Deputy Director of Education,
Mumbai Division, Greater
Mumbai, Jawahar Bhavan,
Churni Road, Mumbai 400 007
3. Avisha Gopalkrishnan,
residing at Shree, 158,
Jain Jainalaya Road, Bangur
Nagar, Goregaon (W),
Mumbai 400 090
4. Prashant Basrur,
residing at C-58, Tarapore
Garden, New Link Road,
Andheri (W), Mumbai 400 053
5. Sanjita Prasad,
residing at 703, Samarkhand,
Prathamesh Complex,
Andheri (W), Mumbai 400 053
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6. Vishal Ruia,
1302, Orchid, Vasant Valley,
Malad (West), Mumbai 400 097
7. Balchandran Unni,
801, Serenity Complex,
Off Link Road, Oshiwara,
Mumbai 400 053 .... Respondents
WITH
WRIT PETITION NO.1925 OF 2009
Rustom Kerawalla Foundation
a Public Charitable Trust
registered under the Bombay
Public Trust Act, 1950 having
its address at Kerawalla
Chambers, Apollo Bunder,
Opposite Radio Club, Colaba,
Mumbai 400 001 ... Petitioner
Versus
1. State of Maharashtra,
through the Secretary,
Department of Education and
Employment, Mantralaya
Annexe, Mumbai 400 032
2. Vithoba K. Wankhede
Deputy Director of Education,
Mumbai Division, Greater
Mumbai, Jawahar Bhavan,
Churni Road, Mumbai 400 007
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3. Avisha Gopalkrishnan,
of Mumbai Indian Inhabitant,
residing at Shree, 158,
Jain Jainalaya Road, Bangur
Nagar, Goregaon (W),
Mumbai 400 090
4. Prashant Basrur,
of Mumbai Indian Inhabitant,
residing at C-58, Tarapore
Garden, New Link Road,
Andheri(W), Mumbai 400 053
5. Sanjita Prasad,
of Mumbai Indian Inhabitant,
residing at 703, Samarkhand,
Prathamesh Complex,
Andheri(W), Mumbai 400 053
6. Vishal Ruia,
of Mumbai Indian Inhabitant,
1302, Orchid, Vasant Valley,
Malad(West), Mumbai 400
097
7. Balchandran Unni,
of Mumbai Indian Inhabitant,
801, Serenity Complex,
Off Link Road, Oshiwara,
Mumbai 400 053
...Respondents
Mr. Aspi Chinoy, Senior Advocate, with Mr.Janak Dwarkadas,
Sr.Advocate, Mr. Sanjay Jain, Mr. Ishwar Nankani and Mr. Huzefa
Khokhawala i/by M/s. Nankani & Associates for the Petitioner in Writ
Petition No. 1919 of 2009
Mr. Navroz Seervai, Senior Advocate, with Mr. Prateek Seksaria i/by
M/s. L.J. Law for the Petitioner in Writ Petition No. 1925 of 2009
Ms. I.K. Calcuttawala, A.G.P., for Respondents No. 1 and 2
Captain B.K. Subbarao for Respondent No. 3 in Writ Petition No. 1919
of 2009
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Respondent No. 3 Writ Petition No. 1925 of 2009, present
Mr. Darius B. Shroff, Senior Advocate, with Mr. Sagar Talekar for
Respondents No. 4 to 7 in Writ Petition No. 1919 of 2009
CORAM : A.M. KHANWILKAR AND
MRS. MRIDULA BHATKAR, JJ.
DATE : 16th September, 2011.
JUDGMENT (Per A.M. Khanwilkar, J.):-
1. This common judgment will dispose of both the petitions
together, as common questions arise for consideration therein. The
former petition is filed by Vibgyor High School. The second petition is
filed by Rustom Kerawalla Foundation for the same reliefs.
2. By the former petition, viz., Writ Petition No.1919 of
2009, under Article 226 of the Constitution of India, the petitioner-
school, which claims to be a minority private unaided school engaged
in running a primary and secondary school under affiliation from
Council for Indian Certificate of Secondary Examination (ICSE),
International General Certificate of Secondary Education, University of
Cambridge, U.K. (IGCSE) and offering National Institute of Open
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Schooling (NIOS) Curriculum, has taken exception to the orders passed
by the Deputy Director of Education, respondent No. 2, dated 3rd July,
2009 and 4th September, 2009. Further, the petitioner-school prays for
consequential relief of restraining respondents No. 1 and 2 by
themselves and/or through their servants, officers, agents or
subordinates from interfering with or preventing the implementation of
the petitioner's circulars, which stipulate the school fees payable by
students of the ICSE Primary and Secondary Divisions of the
petitioner-school in respect of academic year 2009-10.
3. By the impugned decision, respondent No. 2 disallowed
the expenses incurred by the petitioner-school towards school building
rent in the sum of Rs.2.50 crores per annum. The amount towards
other expenses claimed by the petitioner-school, however, was
accepted by respondent No. 2 as usual expenditure to entitle the
petitioner-school to claim as part of the fee amount from its students.
On that finding, respondent No. 2 approved the fees prescribed by the
petitioner-school to the extent of Rs. 54,598/- for Primary Section and
Rs.61,149/- for Secondary Section from the year 2008-09.
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4. By the second petition, viz., Writ Petition No.1925
of 2009, under Article 226 of the Constitution of India, the petitioner -
a public charitable trust - prays for similar reliefs as in the former
petition.
5. The broad relevant facts leading to the filing of the
present petitions, including the events unfolded during the pendency of
these petitions, for examining the challenge to the impugned decision
of respondent No. 2 referred to above are as follows:-
6. Respondents No. 3 to 7, along with other parents of
petitioner-school, vide letter dated 19th July, 2007 complained to the
Education Minister of the State about the unlawful Parents Teachers
Association elections and other issues regarding the maladministration
in the school. The said communication reads thus:-
"From: Aggrieved parents of Vibgyor High
Motilal Nagar, Goregaon (W), Mumbai
19/7/2007
To: Shri Vasant Purkeji,
Education Minister,
Maharashtra State
Respected Shri Purke Saheb,
Sub: Unlawful PTA elections and other issues
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Vibgyor High (Trustee, R. Kerawalla) used to be Billabong
High until Aug 2006 - which was under a franchisee
agreement with Lina Asher - of KKEL (Kangaroo Kids
Education Ltd., who owns and operates the brand-Billabong
High) went thru a very messy public fallout and the two
separated.
Most parents chose to stay with the current school - even
though KKEL was a better brand name, since the
infrastructure belonged to this school and on meeting with
the trustee - most were convinced that this school could go
onto become one of the best schools in Mumbai. Parents
helped the school ride thru court cases and even filed
interventions on behalf of the school to ensure stability.
Until end of 2005 - due to the internal bickering between
the two partners, and their staffs - the school also did not
have a head, no principal lasted more than 3-4 months.
Many of these exits were attributed to Ms. Kavita Sahay -
who has now been appointed ED of the school. Ms. Sahay,
like our current principal, was apparently sacked from two
previous schools - is the extra constitutional authority that
runs this school. Mr. Shim Mathews, the current principal,
was also sacked from his old school Ryan International....
In spite of all this, the school's biggest strength, that of
being one of the most child friendly and of allowing 'open
door' to parents - was followed, all of last year. The PTA
elections for the year 2006-07 were extremely well
organised and completely transparent. On hindsight, that
was due to the school's need to have a strong and well
networked body of parents to stymie the fears and
apprehensions of doubting parents on the issue of
curriculum (till that point in time, curriculum was being
provided by KKEL and was considered to be one of the
biggest selling points for the school).
However, to the dismay of the trustee, and the rest of the
school management, the PTA consistently took up issues of
quality, safety and security, teacher qualification and
training, age appropriateness of curriculum and quality of
curriculum provided (as they were not following any text
books in the junior classes, it was most critical that the
people responsible for developing the curriculum were
qualified and able to deliver the same).
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It was pointed out to the school management repeatedly that
1. Curriculum was faulty, sub-standard and at times even
absurd.
2. People responsible for this sub-standard curriculum were
not qualified and just did not comprehend either the needs of
the students or the eventual objective of tying in with the
boards requirement.
3. Teacher selection and Training were still murky as good
quality teachers kept leaving school and were being replaced
by whatever available.
4. Discipline was very loosely enforced and children of
celebrity or favoured parents got away with everything. In
fact, there have been instances of the teachers being pulled
up for trying to discipline such students.
5. Safety issues not addressed at all. The common area for
emergencies like fire etc., has been grilled and locked.
There is no fire escape, and the staircase is not broad enough
for 2000 students in an emergency situation. A hoarding site
has been erected on the basketball court and the iron girders
are right behind the hoop (basket) can lead to a very severe
injury.
A student came under the wheels of his own school bus and
was badly injured. The parent was not allowed to meet the
principal or the trustee till the PTA insisted and organised a
meeting.
6. The savings from not having to pay franchisee fees should
have revered back to the parents (about 12-15%). The
original fee structure was inclusive of a premium paid for
the KKEL and Billabong brand. The school has coolly
pocketed the savings.
7. Even after these savings, the school has been trying to
further increase the fees, which the earlier PTA had
successfully ensured that the school did not push through.
Due to this constant monitoring of the PTA, the school was
made accountable for lapses of omission and commission.
Apparently, this was not acceptable.
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Out of the blue the PTA elections for the year 2007-08, were
announced this week without any consultation with the
earlier PTA.
Monday evening (9th July'07) - circular comes out -
Tuesday and Wednesday - (both working days) given for
filing nominations, and elections scheduled for Friday
evening (13th July'07)-
There was No announcement of names of candidates and no
interaction permitted between parents to know the new
candidates. The biggest mockery of this whole process was
that the "so called ballot papers" were sent home with
children on Thursday evening - with strict instructions given
to children that all of them were to bring back forms duly
completed the next morning...
Only problem is that these were blank sheets of paper with a
small table with just names of nominees, no name of parent
required - no sealed envelopes, just a small 'tick' mark
needed in front of one of the names ... (find copy attached)
Further more - Friday when parents showed up for the
elections - these 'votes' that were collected by the school in
the morning were not reflected in the lists that the 'elections
officers' were holding in the evening! On questioning the
officers claimed that they knew exactly which parent had
sent their votes in the morning and there was no chance of
duplication, needless to say many parents happily voted
twice for their candidates...
To further this travesty of 'electing' 'the post of CR i.e.
class representatives was dropped - so a PTA that should
have comprised of about 80 parents or so - was shaved
down to 12 in one clean shot. Obviously no parent can hope
to look after the interest of 200-250 parents (depending upon
number of divisions per grade) so the post that does now
exist i.e. GR or grade representative is pretty much
toothless.
Finally all the candidates that won, except for the grade V
candidate, were those who had been asked to file
nominations by the school with a clear commitment that if
they stood they would win. These are parents whom the
school is sure will meekly listen to them do exactly as the
school would want them to do. In fact two of the nominated
grade reps have taken signatures from their classes and are
challenging their loss - since their parents have given them
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10 191909
in writing that most of them voted in their favour - it would
be interesting to see the outcome of this challenge...
The obvious reason for this kind of blatant manipulation is
that the school needs to have a dummy PTA in place so that
- The school can function just as they want without any
interference or monitoring from the parents.
- The school can get away with all dubious activities and
not allow anybody to question them upfront.
- Invariably, the school would now take this opportunity
to successfully push the 'fee hike' which they have been
trying since the last 2 years now.
- The fee hike they know that the current body of parents
would have never approved.... for the simple reason that
the quality delivered today is way below the standard
even for the current level of fees that they are charging.
Sir, herewith we would like to request to look into the
matter and set up a proper enquiry regarding all the issues
mentioned above for the sake of future of our children. We
are sure, Education ministry will not allow any Education
institution to run as a business, profit center.
Thanking you,
Yours truly,
Sd/-
On behalf of Aggrieved parents
Contact persons: Prashant 9820073692 Bala: 9819137575
Avisha 9821524455 "
(Emphasis supplied)
7. The said representation was pending on the file of the
appropriate Authority. Notwithstanding that, the petitioner-school
proceeded to issue circular on 19th March, 2008, increasing school fees
as prescribed therein.
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The said circular issued by the school reads thus:-
"VH/CIR/FEES/0708/240
March 19, 2008.
Dear Parents,
This is to inform you that the Fees for the 1st Quarter of the new
academic year 2008-09 have to be paid between 1st April (Monday)
2008 to 15th April (Tuesday) 2008 for confirmation of
seat/continuity. Fee receipt book will be sent with students on or
before 31st March 2008.
1. Fee Amount : Please refer to the enclosed Fee Structure
details.
2. Mode of Payment : By cheque or DD only (Please note
that payment by cash will not be accepted.
3. Please draw a cross Cheque/DD in favour of :
VIBGYOR High - Pre Primary (for Nursery, Jr.KG, Sr.K.G.)
VIBGYOR High - Primary (for Grade I to IV, all courses)
VIBGYOR High - Secondary (for Grade I to XI, all courses)
4. Please write the Name, Grade, Enrolment Number and the
Course (ICSE, IGCSE, NIOS) on the reverse of the Cheque.
5. Please ensure that all details in your child's Fee Receipt book are
precise and complete.
Important :
* Parents who intend to transfer or apply for a Leaving
Certificate are requested to meet the Front Office Manager
and submit a Leaving Certification Application Form on or
before Friday, 28th March 2008.
We wish to inform you that the school management has increased
the school fees from academic year 2008-09 due to increase in
various administrative and others cost that are beyond our control.
Please be assured that the increase in fees has been undertaken after
giving a careful consideration to all relevant factors.
Thank you for your understanding and support,
sd/-
Shim Mathew
Principal.
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Encl : Fee Structure Details.
FEE STRUCTURE (2008-09)
Type of st
1 Quarter 2nd Quarter 3rd Quarter 4th Quarter
Fees payable in April payable in July payable in Oct payable in
08 08 08 Jan 09
Nursery
Tuition Fee 20,500 7,100 7,100 7,100
Term Fees 1,250 - 1,250 -
Jr.KG & Sr.KG
Tuition Fee 20,500 7,100 7,100 7,100
Term Fees 2,250 - 2,250 -
Grade I to IV (ICSE)
Tuition Fee 22,150 14,400 14,400 14,400
Term Fees 4,000 - 4,000 -
Grade V to X (ICSE)
Tuition Fee 27,500 14,500 14,500 14,500
Term Fees 5,575 - 5,575 -
Grade I to IV (IGCSE)
Fees 32,250 20,600 20,600 20,600
Grade V to VII (IGCSE)
Fees 38,750 23,750 23,750 23,750
Grade VIII (IGCSE)
Fees 40,000 30,000 30,000 30,000
Grade IX & X (IGCSE)
Fees 32,500 32,500 32,500 32,500
Grade VI & VII (NIOS)
Tuition 30,000 23,300 23,300 23,300
Fees
Term Fees 5,000 5,000
Grade VIII to X (NIOS)
Tuition 36,000 27,960 27,960 27,960
Fees
Term Fees 5,000 5,000
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TYPE OF 1ST 2nd Quarter 3rd 4th 5th 6th
FEES Quarter payable in Quarter Quarter Quarter Quarter
payable July 08 payable payable payable payable
in April in Oct. in Jan in Apr in July
08 08 09 09 2009
A Levels (18 month programme)
Fees 70,000 42,000 42,000 42,000 42,000 42,000
8. This has been done on the basis of purported approval granted
by the Accounts Officer (Education), in terms of his letter dated 21st
February, 2008. The same reads thus:-
"Letter No: 34 - AO/Ed/W
Accounts Officer (Education)
Jogeshwari Mumbai - 60
Dated - 21/02/08
To,
The Education Inspector
West Zone, Jogeshwari (E)
Mumbai - 60
Sub: Audit Inspection Report of Vibgyor High School,
Goregaon
Ref: Your letter No. 459-61 dated 04/02/2005
Dear Sir,
In reference to your above mentioned letter we have
conducted an Audit between 6/02/08 and 08/02/08 of the
Vibgyor High School, Goregaon which is fully Non-Aided
school. The report is as per mentioned below:
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Vibgyor High School is affiliated to ICSE, New Delhi for
the Academic year 2007-08, 2008-09 and 2009-10. The
school is Private and fully Un-Aided.
As per the complaint submitted by the PTA, our office has
conducted an audit of receipts and payments for the period
April 07 to Dec 07. It has been observed that during this
period the total expenditure incurred is Rs. 6,96,64,787/-
whereas the total receipt is Rs.6,31,86,300/-.
Though it is impossible to implement the revised fee during
this year, we are furnishing herewith the Recommended
Expenditure for the year 2008-09 as per the GR dated
22/07/1999, 27/05/2005 and also as per the secondary
School Code.
A) Recommended Expenditure for 2008-09 10,75,22,351/-
Non-Accepted Exp 1) Professional Fee 60,91,264/-
2) Building Repairs 6,03,132/-
3) Staff Welfare 5,00,009/- (-)71,94,405/-
------------------
Sanctioned Expenditure by Education 10,03,27,946/-
Inspector
B) Other Income (2007-08) support (-) 25,31,046/-
------------------
9,77,96,900/-
C) 5% increase as per GR dated 27/05/2005 (+) 48,89,845/-
------------------
Approved Salary Exp. + Other Expenses 10,26,86,745/-
Out of the total expenditure during 2007-08, 54.24% is
utilized for primary section and 45.76% for Secondary Section. This
year the Recommended Expenditure is to be divided in the
proportion of 54% for primary and 46% for secondary section. The
revised fee structure has been recommended as shown below .
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Primary Section Secondary Section
54% Expenditure 46% Expenditure
5,54,40,842.50 4,72,35,903.00
No. of students - 746 No. of students - 575
Annual Fee - 73,347/- Annual Fee - 82,149/-
Monthly Fee - 6112.25 Monthly Fee - 6845.75
Approved Monthly Fee - Approved Monthly Fee -
6112.00 6845.00
Yours truly,
sd/-
Accounts Officer
(Education - West Zone)
Mumbai."
9. Soon after the circular, the parents made representation to
the Chief Minister, complaining about the abnormally high rise of
school fees, approximately Rs.55,000/- to Rs. 82,500/- by the school,
that, too, calling upon the parents to deposit the same within 5 working
days. The parents thereafter filed writ petition in this Court, being Writ
Petition No. 722 of 2008. Respondents No. 3 to 7 were the petitioners
therein, who had filed the said petition in representative capacity,
praying for the following substantive reliefs:-
"a. That this Hon'ble Court be pleased to issue a writ of certiorari
or a writ in the nature of certiorari or any other appropriate writ,
order or direction quashing and setting aside the Circular dated 19th
March 2008 (Exhibit B hereto) ;
b. That this Hon'ble Court be pleased to issue a writ of mandamus
or a writ in the nature of mandamus or any other appropriate writ,
order or direction directing the Respondent Nos. 1 and 2 obtain an
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approval from Respondent Nos. 3 and 4 and consult the PTA before
proposing a fee hike ;
c. That this Hon'ble Court be pleased to issue a writ of mandamus
or a writ in the nature of mandamus or any other appropriate writ,
order or direction directing the Respondent Nos. 3 and 4 to inspect
the financial records of the Respondent Nos. 1 and 2 to determine
the actual costs and profits in running the Respondent school;
...... "
10. It is not necessary to refer to interim orders passed in the
said writ petition, including to the order of the Supreme Court at
interlocutory stage. The said writ petition was disposed of by Division
Bench of this Court on 20th April, 2009 along with companion matters.
That order reads thus:-
"1. Both the petitions on motion made by the learned counsel
appearing for the petitioners permitted to be withdraw. Interim
orders, if any, operating stand vacated. The learned counsel
appearing for the Dy. Director states that the Dy. Director will pass
a reasoned order on the complaint dated 19.7.2007 made by the
petitioners, which is marked as Exh. G at page 138 to the reply filed
by the respondent No. 1. Statement accepted. In view of this
statement, following order is made.
ORDER
1. The petitioners shall be at liberty to submit any additional
submissions/ material they want to rely on, in support of their
complaint with a copy to the respondent No.1 within a period of two
weeks from today. The respondent No.1 shall be at liberty to make
further submissions including response of the respondent No.1 to
the additional submissions of the petitioners within a period of two
weeks from the date of receipt of the additional submissions from
the petitioners. The Dy. Director thereafter shall take the entire
material produced before him for consideration and make reasoned
order and communicate the same to the parties within a period of six
weeks from the receipt of the submissions from both the sides. By
consent of the parties, it is directed that, it is not necessary for the
Dy. Director to grant oral hearing to the parties. The parties to the
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petitions shall be at liberty to adopt appropriate remedy against the
order of the Dy. Director that will be made. It is made clear that,
according to the petitioners, the complaint referred to above is the
only complaint made and it is to be decided by the Dy. Director and
till it is decided by the Dy. Director, the petitioners would not
approach to any authority. We make it clear that we have vacated
the interim order which was operating and therefore, fees shall be
paid as per the revised fee structure. However, recovery of the fees
shall be subject to the order of the Dy. Director.
2. Both the petitions stand dismissed as withdrawn.
3. In view of the above order, notice of motions are disposed
off.”
This order is of some significance for examining the matters in
issue. We shall deal with that a little later.
11. Pursuant to the abovesaid order, the matter proceeded before
respondent No. 2 to pass a reasoned order. After the disposal of the
writ petition, however, the school had filed Review Petitions, being
Review Petitions No. 19 and 20 of 2009, respectively, on 8th of May,
2009. With reference to the grievance made by the petitioner-school,
statement of advocate for the respondent-parents was made and was
taken on record. The said order dated 8th May, 2009 reads as follows:-
“1. Shri. Mihir Desai, the learned Counsel appearing for original
petitioners states that all objectionable statements and the statements
inconsistent with the order passed by this Court, made in the
additional written submission filed before the Deputy Director of
Education and all objectionable documents filed before the Deputy
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18 191909communication will be given to the respondents during the course of
the day. Statement accepted. Put up after vacation.”
12. The Review Petitions came to be finally disposed of on 8th
June, 2009 on the following basis:-
“1. The learned counsel appearing for original petitioners states
that the Deputy Director of Education, Mumbai 400 007 can
examine whether any part of the submissions made by the petitioners
before the Deputy Director are contrary to the orders passed by this
Court. He also states that the petitioners undertake not to seek anyadditional reliefs from the Deputy Director and that the enquiry by
the Deputy Director will be restricted to the original complaint dated19th July 2007. The statements are accepted. In view of these
statements and the statements recorded in the order dated 8th May
2009, in our opinion, it is not necessary to keep this review petition
pending. Review Petition is disposed off.”13. As aforesaid, in the earlier order dated 20th April, 2009, as also
while disposing of the Review Petitions on 8th June, 2009, the Division
Bench of this Court made it amply clear that respondent No. 2 shall
restrict the enquiry to the original complaint dated 19th July, 2007.
Obviously, on that understanding, the matter was to proceed before
respondent No. 2. It appears that a task force was assigned the work of
scrutiny of the accounts and audit report of the petitioner-school. It
was noticed that documents necessary to take decision were not
submitted by the petitioner-school. Accordingly, on 15th June, 2009,
respondent No. 2 called upon the principal of the petitioner-school to
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19 191909furnish the necessary information. The said letter — original in Marathi
with translation provided by the petitioner-school – reads thus:-
“No.DY.DIR/SE-1/Under Trial/08-09/15634-35
Office of the Deputy Director
Jawahar Bal Bhavan, Netaji Subhash Marg,
Churni Road (W), Mumbai-400 004.Date : 15 June 2009.
To,
The Principal
Vibgyor High SchoolGoregaon (W)
SUB : Hon.High Court, OOCJ
Writ Petition No. 722/08
Avisha Gopalkrisnan & Others
vsVibgyor High School & Others
Ref : 1. order of the Hon.High Court dtd. 20th April 2009.
With reference to the above mentioned subject and as per the
order passed by the Hon.High Court dated 20th April 2009, he
Deputy Director -Education has to take a decision before 29 Jun2009. After looking into the points related to the complaint dated 19
Jul, 2007 and to take a decision in the current situation after going
through the documents the following details have to be provided to
the office on an urgent basis.1. Income & Expenditure Statement and the Audit Statements
of the Financial year 2008-09.2. Building Rent Certificate provided through a competent
authority and the copy of Property Tax paid.3. List of Teaching & Non-Teaching Staff, & their Salary scale.
Has the PTA permitted in case of salary paid is higher thanthe regular salary structure ?
4. Copy of establishment of the Parent Teacher Association.
Kindly hand deliver the above required documents on an
urgent basis before 19th June 2009 considering the urgency of the
matter and to avoid contempt of Court.Sd/-
For Deputy Director
Mumbai Division, Mumbai.::: Downloaded on – 09/06/2013 17:44:46 :::
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Copy for Information and Proper action :
Education Inspector, West Zone, Jogeshwari (W) – This is to
inform you to give an order to the school authority to submit above
documents in time and follow up for the same..” (emphasis supplied)14. However, as the information was not forthcoming from
the petitioner-school, respondent No.2 issued communication dated 30th
June, 2009 / 3rd July, 2009 and the minutes of his decision — original in
Marathi with translation provided by the petitioner-school – which read
thus:-
“Exhibit “C”
No. DY.DIR/SE-1/Under trial/08-09/17423-28
Office of the Deputy Director
Jawahar Bal Bhavan,Netaji Subhash Marg,Churni Road (W),Mumbai- 400 004
Date: 30 June 2009To,
1. Smt. Avisha Gopalkrishnan,
Shri 157, Jain Jinalay Marg,
Bangur Nagar, Goregaon (W)
Mumbai- 902. Smt. Leena Karia
D-51, Pranik Garden
Mahavir Nagar, Kandivali W Mum-693. Rustomjee Kerawalla Foundation
Keralawalla Chambers, Apollo Bunder,
Opp.Radio Club, Colaba
Mumbai- 400 0014. Principal
Vibagyor High
Goregaon W. Mumbai-1045. Education Inspector
West Zone Mumbai::: Downloaded on – 09/06/2013 17:44:46 :::
21 191909SUB: Writ Petition No. 722/2008 submitted at the
Hon.High Court
As well as Writ Petition (Lodging) No.511/2009
As well as Notice of Motion NO. 2809/2008
As well as notice of Motion no. 286/2009 in
Writ Petition(Lodging) No. 511/ 2009REF: Order of the Hon. High court dated
20/04/2009With regards to the above mentioned subject
and through the referred order it has been ordered to
inform the concerned about the current issue aftertaking proper decision. Enclosed is the joint decision
taken by this office regarding the above matter.Sd/-
(Counterfoil signed by the (Dongre)
Deputy Director-Education) Mumbai Division, for MumbaiCopy for information
1. Govt. Lawyer (Main Branch), High Court,
Mumbai-32SUB: Writ Petition No.722/2008 submitted at the
Hon.High Court
As well as Writ Petition (Lodging) No.
511/2009
As well as Notice of Motion NO. 2809/2008As well as notice of Motion no. 286/2009 in
Writ Petition(Lodging) No. 511/ 2009As per the orders given by the Hon. High Court
on 20/04/09, a joint decision from the Education
Deputy Director regarding Vibgyor High,
Goregaon9W) is expected. As per these orders, a
meeting of the Task force was organized at the office
of the Education Deputy Director, Mumbai on::: Downloaded on – 09/06/2013 17:44:46 :::
22 19190912/06/09. In the meeting, with reference to the
issues raised in the complaint, documents were
checked and the following information was requested
from the school through this office letter dated15/06/09.
1. Income and Expenditure Statement and the
Audit Statements of the Financial Year2008-09(Certified by a Chartered Accountant)
2. Building Rent Certificate provided through a
competent authority and the copy of Property
Tax paid.3. List of Teaching and Non-Teaching Staff, and
their Salary scale. Has the PTA permitted in
case of salary paid is higher than the regularsalary structure?
4. Copy of establishment of the Parent Teacher
association.Since the above information was not submitted
by the school, a meeting of the Task force was held on
30/06/09 under the chairmanship of the Eduction
Deputy Director to take a final decision.In this meeting, as per the documents available
with the office,the Expenses for the year 2008-09 as
certified by the Education Inspector (west Zone), the
Audit Report dated 21/02/08 of the Accounts Officer
(Eduction) West Zone, has been considered. Afterconsidering the same, the following decision has been
taken.1) Formation of the PTA:
As per the GR No. SSN 1099( 27/99) Sec.Edu.-2
dated 22 May, 2000 issued by the School Education
Department, Mantralaya, Mumbai vibgyor High
School should immediately form a PTA as per the
prescribed procedure set out in the GR.2) With regard to expenses of Pre-Primary, Primary and Secondary Sections ::: Downloaded on - 09/06/2013 17:44:46 ::: 23 191909As per the Certificate dated 15/05/2009 of the
Chartered Accountant submitted by VIBGYOR High
School, the common expenses for Pre-Primary,
Primary and Secondary sections have been segregatedsection-wise. Which means the Income and
Expenditure for Pre-primary is separate and
Primary/Secondary sections expenses have been
reflected proportionately.3) Regarding Fees: A. Proposed Expenses for the year 2008-09 Proposed Expenses Rs. 10,75,22,351/-Expenses disallowed by the Education Inspector in his
report as per the GR No. SSN
11197(311/97)/Sec.Edu-3 dated 22 July, 19991.Professional Fees – 60,91,264/-
2.Building Repairs – 6,03,132/-
3.Staff Welfare - 5,00,009/- Total - 71,94,405/- (Less) Rs.71,94,405/- Expenses earlier approved by the Education Inspector Rs. 10,03,27,946/- Building's rent expenses disallowed (Task force) (less) Rs.2,50,00,000/- Permissible Expenses Rs.7,53,27,946/- B. Other Income (Basis: Report of the year 2007-08) (Less)Rs. 25,31,046/- Rs. 7,27,96,900/- C. As per GR dated 27 May 2003 incremental income (Add) Rs.36,39,845/- Permissible Salary and Other Expenses Rs.7,64,36,745/- After considering the use of the building during the year 2007-08 as 46% for Secondary ::: Downloaded on - 09/06/2013 17:44:46 ::: 24 191909Section and 54% for Primary section, the below
mentioned fees is being considered.
Primary Section Secondary Section
Rs. 7,64,36,745/-X 54% Expenses Rs.7,64,36,745/- X 46% Expenses
Rs.4,12,75,842/- Rs.3,51,60,903/-Student Count-756 Student Count-575
Yearly fees Rs. 54,598/- per Yearly fees Rs.61,149/- per
student student
Monthly fees Rs.4,550/- per Monthly fees Rs.5,096/- per
student studentFor the Primary section and the Secondary
section, Rs.4550/- & Rs.5096/- respectively, such
monthly fees seem permissible.Prima facie it appears that the salaries of
the teaching and non-teaching staff is more than the
salary prescribed by the Government. As per the GR
No. SSN 1197( 311/97)/ Sec-ed-3 dated 22 July 1999at Sr. no.2, it is necessary to take approval from the
PTA regarding such high salary.However, vide GR No. Mis-2009/(108/09) Sec.
Ed-3 dated 8th May 2009, order not to increase
Education and other fees without the consent of theFree Control Committee has been passed. As per this
order, every school has been prohibited to increase
their fees without the recommendation of the Fee
Control Committee. Accordingly vide GR.No. Mis-
2009 (108/09) Sec. Ed-3 dated 11th June, 2009, a
committee has been formed to study and makerecommendations for the purposes of fixing the fees.
For taking a final decision in this regard, it will be
appropriate that the further decision is taken in the
Fee Fixation committee formed as per the above GR.Sd/-
(Counterfoil signed by the (Dongre)
Deputy Director-Education) Education Deputy Director
Mumbai Division, for Mumbai::: Downloaded on – 09/06/2013 17:44:46 :::
25 19190915. According to the petitioner-school, this communication
was not received by them for quite some time. Secondly, on plain
wording of the said communication, it was obvious that no final
decision was taken by respondent No. 2 on the issue of justness of the
hike in tuition fees / term fees by the petitioner-school. Thirdly, there
was intrinsic evidence to suggest that the record in the office of
respondent No. 2 was manipulated. Lastly, that respondent No. 2 was
acting under pressure or dictation of parents, which was obvious from
his communication dated 4th September, 2009, calling upon the
petitioners to give effect to his purported decision dated 3rd July, 2009.
The said letter dated 4th September, 2009 — original in Marathi with
translation provided by the petitioner-school – reads thus:-
“No. Dy.DIR/SE-4/Fee/08-09/23241-45
Office of the Deputy Director
Jawahar Bal Bhavan, Netaji Subhash
Marg, Churni Road (W),
Mumbai-400 004Date : 4th Sept. 2009.
To,
1) Rustomjee Kerawalla Foundation
Kerawalla Chambers, Apollo Bunder,
Opp. Radio Club, Colaba,
Mumbai-400 0012) Principal
Vibgyor High School,
Goregaon W. Mumbai.::: Downloaded on – 09/06/2013 17:44:46 :::
26 191909
SUB : Writ Petition No. 722/2008 submitted at the Hon.High Court
As well as Writ petition (Lodging) No. 511/2009As well as Notice of Motion No. 2809/2008
As well as Notice of Motion No. 286/2009 in Writ Petition
(Lodging) No. 511/2009
REF : 1. Order of the Hon.High Court dated 20/04/20092. Letter no.DY.DIR/SE-1 Under Trial/08-09/17423-28
dated 03/07/09 from this office
3. Letter from Nankani & Associates dated 14/08/2009.
With regards to the above mentioned letter no. 1, as per
decision given by the Hon.High Court, orders from our office havealready been issued through our letter 03 Jul. 2009 regarding school
fees. Through the said order Annual fees for the Primary sectionRs. 54,598/- and for secondary section Rs. 61,149/- has been fixed.
We inform as mentioned below regarding the orders dated
03/07/2009 referred in the letter no. 3 from your lawyer.From the year 2008-09, it is ordered that fees for Primary
Section Rs.54,598/- and for secondary section Rs. 61,149/- be
charged.As per the instructions contained in the last paragraph of the
referred letter No.2, because the Fee Control committee has not
been formed, the fee determined in the decision given by this officein the letter dated 03/07/2009 is final. In this regard, immediate
action be taken.Sd/-
Dy.Director-Education
Mumbai Division, Mumbai.
Cc : For information & for appropriate action.
1. Education Inspector, West Division, Mumbai.
2. Smt. Avisha Gopalkrisnan, Shri 157, Jain Jinalay Marg,
Bengur Nagar, Goregaon (W), Mumbai- 60.3. Nankani & Associates, 114 Yusuf Building, 1st Flr.,
V.N.Road, Flora Fountain, Fort, Mumbai-400 001.”16. In this backdrop, the petitioners rushed to this Court by
way of present writ petitions challenging the abovesaid two
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27 191909communications received from the office of respondent No. 2 for the
reliefs already referred to above.
17. Here, we do not think it necessary to advert to several
orders passed in these pending writ petitions from time to time, except
to refer to order dated 3rd August, 2010. On that day, these writ
petitions were heard in part. Considering the grievance of the
petitioners that no reason whatsoever was recorded in the decision of
respondent No. 2 dated 3rd July, 2009, insofar as disallowance of the
petitioner’s claim for buildings rent, it was thought appropriate to first
ask respondent No. 2 to record reasons for the said disallowance, so
that all other issues raised by the respective parties in the present
petitions could be answered together upon receipt of the said reasons.
The Court, therefore, instead of disposing of the petitions, directed
respondent No. 2 to permit the parties to file their response /
submissions / documents, and on the basis of which, he was called
upon to record reasons regarding the permissibility or otherwise of
amount towards school buildings rent to be recovered from the
students. Pursuant to the said direction, respondent No. 2 has passed
order dated 27th October, 2010 — original in Marathi with translation
provided by the petitioner-school – purported to be reasons for
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28 191909disallowance of the amount towards school building rent. The same
reads thus:-
“No. DDE/Sec-4/Fee/2010/25194/96
Office of Dy. Director of Education MumbaiDivision
Jawahar Bal Bhavan,
Netaji Subhash Road,
Charni Road (West),
Mumbai 400 004ig Dt. : 27th October 2010.
To :
1. Rustomjee Kerawalla Foundation
Kerawalla Chambers, Apollo Bunder,
Opp. Radio Club, Colaba,
Mumbai-400 001.2. Principal
Vibgyor High School,
Goregaon (West),Mumbai.
Sub : Fixation of rent of the Bldg. occupied by Vibgyor school.
Ref : 1. Order of the Hon’ble High Court dated 3rd August 2010
and 18th August 2010 passed in Writ Petition
No. 1919/2009- Notice of Motion No. 2/2010 and
Writ Petition No. 1925/2009.2. Representation submitted through Advocate Nankani
& Associates dated 30th August 2010.On the subject noted above you are hereby informed that as per
order of the Hon’ble High Court decision was given on the proposal
for fee fixation submitted by you vide this office letter No.
DDE/Sec-1/SJ/08-09/17423-28 Dt. 3/07/09 and 04/09/2009.You have filed Writ Petition No. 1919/09 in the Hon’ble High
Court against the order passed by this Office. The Petition was
heard alongwith Notice of Motion No. 2 of 2010 and Writ Petition::: Downloaded on – 09/06/2013 17:44:46 :::
29 191909No. 1925 of 2009 and the Hon’ble High Court has passed orders
dated 3rd August 2010 and 18th August 2010.
As per the above order of the Hon’ble High Court you have
submitted a proposal dated 30th August 2010 for fixation of fees
after taking in to account the disallowed expenses of building rent.Government has issued a detailed order vide Government
Resolution dated 22nd July 1999 in respect of fixation of fees ofunaided schools.
While taking into account the expenses at the time of the fixing
the fees the above Government Resolution has been considered.The proposal submitted by you to this office for fixation of fees
in pursuance of the order passed by the Hon’ble High Court in WritPetition No. 722 of 2008 and other Writ Petitions has been received
and such received proposal was scrutinized. As per the criteria laid
down by the Government from time to time and by the Task Force
constituted under GR dated 3rd July 1999 and the final decisiondated 3rd July 2009 was communicated.
Your attention was drawn to schedule “A” of Secondary School
Code in relation to provisions of fixation of building rent and further
the directions given by respected Education Director, MaharashtraState Pune, vide letter dated 19th July 1996 about documents to be
submitted with the proposal for fixation of fees of unaided schools.In your proposal you have not submitted rent certificate,
certified by Executive Engineer PWD, for allowing building rent,
required under above both the provisions. However instead of
submitting certified normal rent certificate you have submitted rentcertificate prepared on the basis of market value prepared by the
valuer (Shrinivas S. Kini & Co.). As per prescribed provisions you
have not submitted reasonable rent certificate of the Competent
Authority. Therefore while fixation of fees the cost of rent of the
building proposed by you cannot be taken into account.Sd/-
Sunil Chowhan
Dy. Dir. of Education
Mumbai Div. Mumbai.Copy of intimation and necessary action.
1. Education Inspector, West Ward, Greater Mumbai.”
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30 191909
18. The reasons so recorded are justification given for the
order issued by respondent No. 2 purportedly on 3rd July, 2009, and the
direction contained in communication dated 4th September, 2009, which
are impugned in these petitions.
19. The first contention of the petitioners is that respondent
No. 2 has exceeded his authority in deciding on question regarding hike
in tuition / term fees introduced by the petitioner-school. In that the
subsequent proceedings in terms of the orders of this Court dated 20th
April, 2009 and 8th June, 2009 were limited to examining the issues
raised in complaint made by respondents No. 3 to 7 and other parents,
dated 19th July, 2007. No other issue could have or ought to have been
examined by respondent No. 2, whereas the decision of the petitioner-
school to increase the tuition / term fees was taken much later, on 19th
March, 2008, which, therefore, could not have been the subject-matter
of challenge in complaint dated 19th July, 2007. According to the
petitioners, the question whether respondent No. 2 was competent to
fix the tuition / term fees specified by the petitioners for their students
in the garb of regulating the fee structure of the school itself was the
core issue. Respondent No. 2 could not have exercised power on the
basis of procedure prescribed in the Government Resolution, even if
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31 191909the same was to be considered as issued in exercise of powers under
Article 162 of the Constitution by the State Government. The next
contention of the petitioners is about the scope of the purported
complaint sent by the parents dated 19th July, 2007. Further,
respondent No. 2 could not have disallowed the expenses incurred by
the petitioners towards building rent paid by the petitioners to the lessor
merely on the ground of non-production of a Building Rent Certificate
from the Executive Engineer and also in disregard of the approved /
recommended expenditure by the Accounts Officer, Education, West
Zone, Mumbai, dated 21st February, 2008 for the year 2008-09.
Moreover, the insistence of respondent No. 2 to produce the certificate
of the Executive Engineer was based on procedure prescribed in
Government Resolution dated 22nd July, 1999, which Resolution has
already been quashed and set aside by this Court in Writ Petition
(Lodging) No. 1876 of 2010 decided on September 1, 2010, being ultra
vires. It is next contended that respondent No. 2 had no power to
review his own order. Besides, the decision of respondent No. 2, by no
standard, can be said to be reasoned order. In spite of the specific
direction by this Court to do so, respondent No. 2 has not analysed the
stand taken by the petitioners before him, including about his authority
to regulate the fees of unaided private minority school. Lastly, the
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32 191909petitioners have also challenged the impugned decisions of respondent
No. 2 on the ground that they suffer from the vice of malafides in fact
and in law, tantamounting to abuse or colourable exercise of power.
20. Respondent No. 1 has resisted the above contentions on
the arguments that the complaint made by the parents dated 19th July,
2007 was also in respect of excessive fees and allegation of profiteering
by the Management. In the context of the said complaint, respondent
No. 2 was obliged to examine the grievance of the parents in that
behalf, and, while doing so, was justified in disallowing the claim of
the petitioners in respect of buildings rent charges, which, according to
him, was unsubstantiated. In the first place, respondent No. 2 referred
to the recommendation of the task force and on the second occasion, in
proceedings for recording reasons, in spite of opportunity given to the
petitioners, no documentary evidence was produced by the petitioners
to accept their stand that the expenses so incurred were justified to the
extent of the said claim of the petitioners, being in the sum of Rs. 2.5
crores per annum. Thus, respondent No. 2 disallowed the claim under
that head. Respondents No. 1 and 2 further contended that respondent
No. 2 was competent to examine the issue in respect of the petitioners’
claim towards school building rent expenses and whether in the facts
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33 191909and circumstances of the case, that claim can be accepted as usual and
permissible expenditure or results in indirectly transferring the
expenditure towards lands and buildings on the students tantamounting
to Capitation Fee. Respondent No. 2 was competent to examine those
matters on the basis of procedure specified in the Government
Resolution dated 22nd July, 1999 and 15th July, 2010, as also
Government Resolution dated 19th July, 1996, and more particularly,
the provisions of the Secondary Schools Code – 2002, including Rules
49.3, 50.6 and 89.1 read with Schedules ‘A’ and ‘B’ thereof.
According to respondents No. 1 and 2, the petitioners did not
co-operate with respondent No. 2. Instead of furnishing the desired
information, untenable issues were raised by the petitioners, as a result
of which, respondent No.2 was driven to decide the issue against the
petitioners as they failed to substantiate the claim towards the building
rent. Respondents No. 1 and 2 have also refuted the allegation of
manipulation of office records of respondent No. 2 or that his decision
was mala fide in fact or in law. These respondents have also relied
upon the Task Force Report. These respondents supported the
conclusion reached in the impugned decisions of respondent No. 2
disallowing the petitioners’ claim towards building rent to the extent of
Rs. 2.5 crores per annum.
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34 191909
21. Respondents No. 3 to 7 have also contested these
petitions. According to respondent No. 3, three core issues would arise
for consideration. The first core issue, which is in three parts, is:
(i) Whether the devise adopted by the petitioners was to profit from
tuition / term fees? Moreover, the petitioners themselves should be
blamed for not furnishing necessary information demanded by
respondents No. 2, and were responsible for preventing respondent
No. 2 from passing a comprehensive, reasoned order to unravel the
maladministration and profiteering by the school management.
(ii) Whether fraud has been committed by the petitioners on the Charity
Commissioner while obtaining sanction for alienation of immovable
property of a public charitable trust (which runs the petitioner-school)
to a private limited company to facilitate the commercialisation of
education to siphon off funds to the private company in which the very
same persons are the only three trustees in control of the affairs of the
Trust and were the only Directors in the private limited company? The
circuitous transaction effected was in violation of law. (iii) The next
shade of the first core issue, according to respondent No. 3, is that, it is
indisputable that the State Government has authority to regulate
tuition / term fees in private unaided schools, including unaided
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35 191909minority schools, if the same were resorting to commercialisation and
profiteering by virtue of provisions of the Maharashtra Educational
Institutions (Prohibition of Capitation Fee) Act, 1987 (hereinafter
referred to as “the Capitation Fee Act”).
22. The second core issue is: Whether the regulations by the
State should be at the stage of admission to the school or at the post-
audit stage? The third issue, according to respondent No. 3, is:
Whether the two Government Resolutions dated 22nd July, 1999 and
15th July, 2010 could be taken into account, and are valid and
mandatory? Further, the opinion expressed by the Division Bench of
this Court in Writ Petition (Lodging) No. 1876 of 2010 decided on
September 1, 2010 is per incuriam, and in any case, whether the
present petitions can be proceeded, irrespective thereof?
23. Besides the above three core issues, respondent No. 3 has
countered the contentions raised by the petitioners. We may add that,
to buttress the allegation that the petitioners were indulging in
profiteering and commercialisation, respondent No. 3 has referred to
the salaries of the school staff, which, according to the petitioners, are
higher than approved norms. As is noticed earlier, none of the parents
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36 191909have chosen to challenge the decision of respondent No. 2, who has
accepted the other expenses claimed by the petitioner-school. It is the
petitioners who have approached this Court to challenge the opinion of
respondent No. 2 disallowing their claim in respect of buildings rent.
In these petitions, the parents cannot be permitted to enlarge the scope
of proceedings relying upon other expenses claimed by the petitioners
which have already received approval of the Authority.
24. Respondent No. 3 has also raised issues about the manner
in which the petitioners have advisedly prevented respondent No.2
from recording reasons regarding the maladministration of the school,
in particular, in the context of the claim of buildings rent. Further, the
petitioners hastened the hearing of Writ Petition (Lodging) No. 1876 of
2010 filed by the Association of International School and Peace
Foundation, an association of private unaided schools, of which the
petitioner-school is also a member, so as to pre-empt the present
proceedings by getting declaration that the Government Resolutions
dated 22nd July, 1999 and 15th July, 2010 were ultra vires; and could
not be made the basis to regulate the fee structure of the petitioner-
school. Respondent No. 3 was represented by her advocate in one
matter, and she appeared in person in the companion petition.
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37 191909
25. Respondents No. 4 to 7 are represented by separate
advocate, who has supported the argument of the other respondents
and, in addition, contends that the main issue in the present cases is:
Whether the petitioner-school has indulged in profiteering by raising
the tuition / term fees to abnormally high level on the pretext of having
incurred expenses towards building rent to the extent of Rs. 2.5 crores
per annum. According to these respondents, respondent No. 2 has
merely disallowed the expenses towards the building rent, and on that
basis, proportionately reduced the fee structure. It is the case of these
respondents that the Trust has indulged in profiteering by fraudulently
leasing the property to a private limited company, whose only Directors
are the trustees of the school Trust, which private limited company,
in turn, has purportedly leased the constructed building to the Trust and
has charged building rent therefor at the market rate. According to
these respondents, although the impugned decision of respondent No. 2
does not specifically advert to this aspect, considering the fact that
respondents No. 4 to 7 had raised that argument before respondent No.
2, it could be inferred that the conclusion of respondent No. 2 is
founded on the said objection. According to this respondent, the
petitioner-school has resorted to such ingenuity, so as to pass off the
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38 191909capital expenditure as a revenue expenditure, by recovering the same in
the name of buildings rent from the students in short time, and to later
on make huge profits at the expense of the school, the children and the
parents, more so contrary to the undertaking given to the local
Authorities, which had allotted the land to the original allottee at
virtually no cost for running an educational institution in the interests
of charity and for the benefit of the public at large. Even these
respondents contend that the State Authorities relied on Government
Resolutions, including G.R. dated 27th May, 2003, which has been
justly introduced after the decision of the Apex Court in T.M.A. Pai’s
case (AIR 2003 SC 355). That G.R. has not been set aside by any
Court of competent jurisdiction nor has been challenged in these
petitions. These respondents further contend that the withdrawal of
earlier Writ Petition by them, being Writ Petition No. 722 of 2008,
cannot come in their way to challenge the action of the petitioners of
fixing high fees on the ground that the petitioner-school is engaging in
profiteering and commercialisation while resisting these petitions. It is
further contended that the petitioner-school is adopting double
standards. In that, the petitioners are relying on audit report to contend
that the expenses referred to therein have been recommended by the
Accounts Officer, Education, West Zone, which recommendation was
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39 191909based on Government Resolutions dated 22nd July, 1999 and 27th May,
2003. On the other hand, the order of respondent No. 2 is criticised by
the petitioners, because it refers to the Guidelines provided in
Government Resolution dated 22nd July, 1999, which has now been set
aside by the Court. It is further contended that the Accounts Officer
was not the competent Authority to grant approval to the fee structure
prescribed by the petitioners. That has to be done by respondent No. 2,
being the statutory Authority in that behalf.
26. These respondents have then highlighted the circuitous
transaction effected between Madhya Pradesh Mitra Charitable Trust
(M.P.M.C.T.), the original allottee of the land in question from
MHADA and the Rustomjee Kerawalla Foundation (R.K.F.) Trust and
the private limited company – Kare Edumin Pvt. Ltd. (K.E.) and
another charitable trust called “Rajasthan Vidhya Nidhi” (R.V.N.). We
shall advert to those details a little later. The sum and substance of the
stand taken by respondents No. 4 to 7 is that the petitioners have
succeeded in playing fraud on the Charity Commissioner as well as
MHADA, the local authority. In the circumstances, this Court must
uphold the conclusion reached by respondent No. 2 of disallowing the
petitioners’ claim towards building rent by lifting the corporate veil and
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40 191909disregard the permission granted by the Charity Commissioner or
MHADA, the local authority, as the case may be, as the said
transactions have been effected only to create subterfuge so as to
siphon off the amount to the extent of Rs.2.5 crores per annum in the
garb of building rent / lease rent, which would eventually be enjoyed
by the same three persons, who are trustees in the Trust as well as the
only Directors in the private limited company. The said Directors
would eventually reap profit, whereas the school will bear the loss
towards building rent and that loss will be passed on to the students to
justify high tuition fees / term fees.
27. Having considered the rival submissions, at the outset, we
will first consider the sweep of order passed by the Division Bench of
this Court dated 20th April, 2009 in Writ Petition No. 722 of 2008 and
connected petitions. The order records the concession of the Deputy
Director that he will pass a reasoned order on the complaint dated 19th
July, 2007 made by the parents. On the basis of the said statement, the
Court proceeded to dispose of the petition as withdrawn, with liberty to
the parents – petitioners in the said petition – to submit additional
submissions / material on which they intended to rely in support of
their complaint dated 19th July, 2007; and the Management of the
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41 191909school was given opportunity to make further submissions, including
response to the additional submissions / material to be relied by the
parents. The Deputy Director was then expected to consider the entire
material produced before him by the respective parties afresh and pass
a reasoned order and communicate the same to the parties within the
specified time. The Court reiterated that the issues raised in the
complaint made by the parents dated 19th July, 2007 alone were to be
decided by the Deputy Director; and, till the said decision, the parents
would not approach any other authority. The Court, further, vacated
the interim order, which was operating in favour of the students /
parents, with clarification that the amount recovered from them as per
the revised fee structure shall be subject to the order of the Deputy
Director. On perusal of the said order dated 20th April, 2009, the stand
taken by the petitioners in these petitions that the Deputy Director was
called upon to only consider the issues raised in the said complaint
dated 19th July, 2007 deserves acceptance. As a matter of fact, that
position is reinforced from the subsequent order passed by the same
Division Bench dated 8th June, 2009 in Review Petition No. 19 of 2009.
28. Having said this, we will now turn to the complaint dated
19th July, 2007. On perusal of the said complaint, it is noticed that,
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42 191909amongst other grievances, the parents of students studying in the
petitioner-school had raised the issue about the unjust enrichment by
the petitioner-school by not reverting back amount from the savings
under the head “Franchisee Fees” to the parents (about 12 – 15%).
Besides, in Point No. 6, specific grievance has been made that the
original fee structure was inclusive of a premium paid for the KKEL
Billabong Brand, which amount has been pocketed by the school. Not
only that, apprehension was placed on record by the parents in the form
of Point No. 7 that the school was likely to further increase the fees,
which the earlier P.T.A. had successfully prevented the school from
introducing the same. In the penultimate paragraph of the
communication, the principal grievance about blatant manipulation
resorted to by the school to install a dummy P.T.A. with purpose is
highlighted. Besides, the apprehension was that, taking advantage of
the situation, the petitioner-school will successfully push the fee hike,
which it has been trying to do for the last two years. It is further noted
that the present body of parents would not have approved any fee hike,
as the quality of education delivered in the school was way below the
standard even for the current level of fees presently charged. In the
summation, it is alleged that the petitioner was running the school as a
business profit centre. In other words, the complaint, amongst others,
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43 191909was also in relation to the excessive fees charged by the school and
allegation against the Management of indulging in commercialisation
and profiteering. It is, therefore, not possible to countenance the
argument of the petitioners / Management that the scope of enquiry
before the Deputy Director in terms of order dated 20th April, 2009
passed in Writ Petition No. 722 of 2008 was not in respect of matters
regarding excessive fees charged or likely to be charged by the school,
resulting in commercialisation and profiteering. It is true that the
petitioners / Management revised the fees on 19th March, 2008 – much
after the complaint was sent by the parents on 19th July, 2007. In that
sense, the justness of the matter specified in the circular dated 19th
March, 2008 issued by the petitioner / Management of the school was
not the subject-matter of complaint dated 19th July, 2007 as such.
However, the complaint dated 19th July, 2007 made by the parents,
indisputably, makes reference to the issue of likelihood of hike in
school fees and illegitimate demand by the School Management in the
form of fees, which was to indulge in commercialisation and
profiteering. For, the said complaint specifically asserts that the parents
/ complainants apprehend that the Management of the school was
likely to enhance the fees to unreasonable and unacceptable level. It
is, therefore, not possible to countenance the stand of the petitioners
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44 191909that the issues raised by the parents in the complaint dated 19.7.2007
were limited to unlawful PTA elections, quality issues, and levy of fees
only for Assessment Year 2007-2008, being not commensurate with
the quality of education being imparted. One cannot be oblivious of the
fact that the said complaint sent by the parents was in the nature of
representation and not a Petition or plaint filed before the Court which
requires articulation of material facts and particulars. Representation of
this nature is bound to be loosely worded and will have to be
understood in its totality and not deciphered with mathematical
exactitude as is sought to be done by the petitioners. The fact that
specific prayer was asked in the Writ Petition filed by the parents to
challenge the circulars issued by the School regarding fee revision
dated 19th March, 2008 and no specific order was passed by the Court
thereon cannot militate against the parents nor can come in the way of
respondent No.2 to exercise his statutory duty. It can be said that
respondent No.2 in the impugned communication not only examined
the matter in the context of the order of this Court dated 20.4.2009, but,
also in discharge of his statutory duty to ascertain whether there has
been any contravention of mandate of the Capitation Fee Act.
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45 191909
29. To put it differently, the complaint dated 19.7.2007
included issue regarding excessive fees being charged by the
school. The Deputy Director of Education was competent to
examine that grievance so as to ascertain whether there is or
has been contravention of the provisions of the Capitation Fee
Act. In this view of the matter, reliance placed by the petitioners
on the decisions of the Apex Court in the case of Direct Recruit
Class II Engineering Officers’ Association Vs. State of
Maharashtra & Ors. [ (1990) 2 SCC 715 para-35 at
page-740], and in the case of M. Nagabhushana Vs. State of
Karnataka [ (2011) 3 SCC 408 paras 12, 13, 17, 18, 20, 21
& 22 thereof ] to contend that the respondents, in particular
respondent No.2, could not have traversed the issue of approval
of the fees fixed by the school, will be of no avail. In other
words, the issue of profiteering and commercialization by the
school was very much open to enquiry by respondent No.2 and
more so the apprehension of the parents that the school was
likely to introduce revision of the fees which would result in
commercialization and profiteering. Assuming for the sake of
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46 191909argument that the opinion of respondent No.2 was in relation to
the fee revision circular issued by the school dated 19th March,
2008, even that would not come in the way of respondent No.2
to ascertain whether the demand made therein contravenes the
mandate of the Capitation Fee Act.
30. Understood thus, merely because the circular regarding
revision of fees was introduced at a subsequent point of time for
academic year 2008-09, vide circular dated 19th March, 2008, that
would not preclude the parents to pursue the grievance regarding
excessive fees, being in the nature of capitation fee, during the enquiry
before the Deputy Director in connection with the grievance made in
the complaint dated 19th July, 2007, nor is it possible to suggest that the
Deputy Director was incompetent to examine the said matter at all.
If the law authorises the Deputy Director to enquire into the question of
justness of the revised fees to be demanded by the school, and whether
it partakes the colour of capitation fee, it may not be possible for the
Court to accept the extreme argument of the petitioners / Management
that the impugned decision of the Deputy Director be completely
disregarded. To say otherwise would mean that the Deputy Director,
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47 191909even though competent to enquire into the fact whether the revised fees
demanded by the school results in capitation fee, could not have done
so because of the order of the Court dated 20th April, 2009. Taking
such a view would be a pedantic approach. On the other hand, what
we need to enquire is: Whether the conclusion reached by the Deputy
Director that the revised fee structure proposed and notified by the
Management of the School, which includes the amount spent by the
Management towards buildings rent, results in comercialisation and
profiteering by the Management? That, however, will be subject to
holding that the Deputy Director is competent to examine the said
matter. We shall refer to that aspect a little later.
31. We shall, therefore, now turn to the question: Whether
the Deputy Director was competent to authoritatively hold that the
revised fee structure unilaterally notified by the school could not be
given effect to in toto, as it results in recovering expenses other than
usual expenditure such as the expenditure on land and buildings in the
name of buildings rent, which are not permissible expenses? We have
no difficulty in accepting the stand taken by the petitioner /
Management that the petitioner, being unaided minority institution, is
free to fix its own fee structure. The said right, however, is
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48 191909circumscribed to the extent that the fee structure so fixed by the private
unaided minority school should not result in profiteering and
commercialisation. The petitioners relying on the decisions in TMA
Pai’s case and in the case of Kochi University of Science and
Technology and another Vs. T.P.J. and others [ (2008) 8 SCC 82
para-16] would contend that an educational institution is entitled to
chalk out its own fees structure year-wise on the basis of the projected
receipts and expenditure, and it is not open to the State Authorities to
interfere with those matters which are purely administrative in nature.
Further, the educational institution must be left with its own devises to
explain the receipts and expenses as before the Chartered Accountant
and to call upon to furnish the basis for fixation of higher fee would be
laying down onus on the educational institution which it cannot
discharge with accuracy. It was argued that the demand by respondent
No.2 Deputy Director of calling upon the petitioner to justify the
reasonableness of the amount of the expenses incurred towards the
lease rent by furnishing building rent certificate was bad in law and
contrary to the decisions of the Apex Court. The broad proposition
canvassed by the petitioners that the private unaided schools can fix
their fees by themselves is not open to debate at all. As aforesaid, that
right is not an absolute right, but, subject to the assessment by the State
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49 191909Authorities of whether the fees so fixed and demanded by the private
unaided schools does or does not result in commercialization or
profiteering. To that extent, it is open to the State Authorities to
regulate the fee structure determined by the school. That regulation
should be at what stage need not detain us, for the time being. The
question will have to be examined in two ways. The first is as to:
Whether the State Authorities have power, under the existing law, to
regulate the school fees fixed by the Management of the unaided
minority school? The second facet of the said issue is: Whether the
revised fee structure proposed or notified by the school would result in
infraction of the provisions of the Act of 1987 and implicitly
tantamount to indulging in commercialisation and profiteering. In a
given case, if adverse finding is to be recorded in that behalf, it matters
not at what stage the State Authorities must intervene to regulate the
revised fee structure determined by the private school.
32. We shall first advert to the provisions contained in the
Secondary Schools Code. Here, we may notice that the question
whether the provisions of the Secondary Schools Code acquire
statutory force or are merely in the nature of administrative instructions
is already referred to the Full Bench of our High Court in the case of
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50 191909Shikshan Mandal & Ors. v. State of Maharashtra & Ors. in Writ
Petition No. 6727 of 2010 and other connected matters vide order dated
26th October, 2010. In the said decision, the Division Bench has noted
that the provisions of the Secondary Schools Code ought to be
construed as having statutory force. Nevertheless, we would proceed
to examine as to whether the provisions of the Secondary Schools Code
can be the basis to hold that the Deputy Director was competent to
examine the question of justness of the fee structure proposed or
notified by the School Management.
33. At the outset, the provisions in the Secondary Schools
Code-2002 can govern only secondary or higher secondary schools.
The grievance regarding fee structure of primary school cannot be the
subject-matter before the Authority under the Secondary Schools Code.
Chapter II of this Code deals with matters of Recognition, Organisation
and Management of schools. Section VI thereof deals with matters
concerning Fees and Free-studentships. Rule 49.1 envisages that
school shall charge only standard rates of “tuition fees”. The standard
rates of tuition fees are prescribed in different stages / areas of the
State, as referred to in Rule 49.2. Rule 49.3, which is relevant for us,
envisages that the unaided schools may be allowed to charge tuition
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51 191909fees at rates higher than the standard rates, with the previous approval
of the Director. Rule 50.6 prescribes items on which term fees can be
expended. None of the items referred to therein provide for expenses
towards buildings rent. The other relevant provisions in the Secondary
Schools Code in respect of school fees and term fees can be found in
Chapter IV, in Section I. This chapter deals with matters pertaining to
Grant-in-aid. In that sense, the provisions contained in this chapter
may not be directly attracted to unaided private minority school. Rule
89.1 contained in Section I of this chapter provides for items of
expenditure held admissible for grant-in-aid as listed in Schedule A,
and those held inadmissible for grant-in-aid as listed in Schedule B.
Insofar as the item of expenses towards rent, taxes and insurance,
which is part of Schedule A framed under Rule 89.1, being expenditure
admissible for grant-in-aid to aided and recognised non-Government
Secondary Schools. Clause 2 of Schedule A provides for the amount
spent towards rent, which can be granted to the aided school as grants.
The said provision reads thus:-
“2. Rent, taxes and Insurance :
(a) Rent :
(i) Reasonable rent for the school building provided the rent is
actually paid and a certificate regarding reasonableness is
obtained from the Executive Engineer.::: Downloaded on – 09/06/2013 17:44:47 :::
52 191909
(ii) In the case of schools accommodated in rent tenements of
the Maharashtra Housing Board the rent charged by the
Board of such tenements should be considered as
reasonable and such school should not be required toproduce in addition any certificate regarding
reasonableness of rent in respect of such tenements from the
concerned, Executive Engineer (Public Works and Housing
Department) of Government.(G.R.E.S. and S.W.D. No. GAC. 1072/11986/E of 8th
February 1972)
(iii) The portion of the school building not covered by the
building grant (already paid) means the portion, the cost of
which, is arrived at after deducting the actual amount ofbuilding grant paid by government from the total cost of the
building.Example : The total cost of a school building is Rupees
one lakh. It is assumed that a building grant of Rs.20,000/-
was paid by Government to the school for construction of
the school building and the remaining amount of Rs.80,000/-was collected from donations and/or their own fund and/or
loans from Government and/or from any other source the
portion worth Rs. 80,000 will thus be not covered by the
building grant and 71/2 percent of this cost (Rs.80,000)
would be admissible as rent for maintenance grant, providedthe Executive Engineer of the area concerned certifies that
the amount of rent so charged is reasonable.(iv) In the case of building owned by a school, a reasonable
nominal rent to be calculated on the following basis namely.(a) 7 ½ of the capital value of the building plus Municipal
taxes :(b) Six percent of the cost of the site on which the building
is constructed; plus ;(c) 10 ½ percent of the cost of sanitary fittings and water
supply fittings of the building.Provided the Executive Engineer, Zilla Parishad/ Executive
Engineer Public Works Department in Greater Bombay
having jurisdiction certifies that the amount of rent charged
is reasonable. Where site of construction of school building
was granted by government to a management free of charge,
that is without any occupancy price, the question of any rent
on the cost of the site would obviously not arise.
(G.R. No. GAC – 1079/425/30-37 Dt. 19/5/1979)(v) Where a school is located in a building owned by the
management and the building was built from donations, its::: Downloaded on – 09/06/2013 17:44:47 :::
53 191909own funds or from loans, whether from Government or
others and Government has not paid any grant towards the
cost of construction, an amount not exceeding 7 ½ percent
of the cost incurred as is certified by the Executive Engineeras reasonable rent.
(vi) Expenditure on account of the rent of school building for
which loan has been advanced by Government according to
the usual rates in that behalf during the repayment of loanand also thereafter.” (emphasis supplied)
34. As per this provision, the school is obliged to furnish
certificate regarding reasonableness of rent for the school building to
be obtained from the Executive Engineer so as to become entitled for
reimbursement by way of grants. To the extent of the certificate so
given by the Executive Engineer, the school would become entitled for
grants, provided the school has actually paid that amount as rent.
Schedule B vide Rule 89.1 regarding list of items of expenditure
inadmissible for grant-in-aid also makes provision in respect of the
amount spent by the school towards building rent of the school. Clause
2(a) thereof reads thus:-
“Rent, taxes and Insurance:
(a) Rent
(i) The rent charged for portion of a school building for
which a building grant was paid by Government.(ii) Charges on account of rent for any part or parts of the
building or buildings used for residential purposes for
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54 191909
35. On perusal of these provisions, there can be no doubt that the
norm prescribed therein is to determine the reasonableness of the
amount towards rent of the school building, so as to reckon the same
for grant or non-grant of Grant to the aided school. There is nothing
wrong in applying the principle underlying the above guidelines for
determining the reasonableness of the fee structure proposed or notified
by private unaided school in larger public interests. If the amount
spent by the private unaided school towards school buildings rent
appears to be exorbitant or unacceptable, to that extent, the State
Authorities would be competent to exclude the excess amount and
approve the fee structure proposed or notified by the private unaided
school by excluding the excess amount towards buildings rent as
unjust. The effect of such finding would be that the excess amount
claimed in cash or kind to recover the expenses incurred under the head
“Buildings Rent” by the school from the students as part of fees, even
if actually incurred by the school, will have to be treated as unusual
expenditure incurred by the school. In that case, the school cannot
recover such unusual expenditure incurred by the school from the
students in the name of fees. Such declaration and direction can be
issued by the State Authorities. The Authority referred to in Rule 49.3,
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55 191909therefore, would be competent to disapprove the fee structure proposed
or notified by the Management of the unaided School on the same
analogy of admissible and inadmissible Building Rent of the aided
School provided for in the Schedules referred to above.
36. The petitioners / Management, however, relying on the
decision in the case of State of Maharashtra v. Lok Shikshan
Sanstha, AIR 1973 SC 588, para 10, would contend that reliance
cannot be placed on the provisions of the Secondary Schools
Code-2002, as the same have no statutory force. Assuming that this
argument is correct, the question under consideration can be
conveniently answered with reference to the provisions of the
Capitation Fee Act of 1987. The provisions of the said Act are not
subject-matter of challenge in the present petitions. As a mater of fact,
the Apex Court in T.M.A. Pai’s case had occasion to consider the
question which arose before it also with reference to the provisions of
the said Act. We would proceed on the assumption that the
Management of the School need not take prior approval of the State
Government or any other Authority of the State before introducing the
fee structure determined by it. But such fee structure must adhere to
the mandate of the Capitation Fee Act of 1987. We say so because the
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56 191909Preamble of the Act expresses the legislative intent behind enactment
of the Act of 1987. It is an Act to prohibit collection of capitation fee
for admission of students to, and their promotion to a higher standard
or class in, the educational institutions in the State of Maharashtra and
to provide for matters connected therewith. This Act was enacted
because of the past experience of undesirable practice followed by the
private educational institutions to large-scale commercialisation of
education which was not conducive to the maintenance of educational
standards. The Act intends to effectively curb the evil practices, and
prohibit collection of capital fee in the public interest. The term
“capitation fee” has been defined in Section 2(a) which reads thus:-
“2. Definitions-
In this Act, unless the context requires otherwise,-
(a) “Capitation fee” means any amount, by whatever name
called, whether in cash or kind, in excess of the prescribedor, as the case may be approved rates, of fees regulated
under section 4;” (emphasis supplied)37. Thus, any amount, by whatever name called, collected by the
unaided institutions in cash or kind in excess of the “approved rates of
fees” regulated under Section 4 is impermissible. We may note that the
legislature has used two expressions in Section 2(a), i.e., “prescribed”
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57 191909
and “approved.” The expression “prescribed” is ascribable to aided
institutions, and, on the other hand, term “approved” governs the unaided
institutions. We shall elaborate this while considering the purport of
Section 4 in particular sub-section (2) thereof. Section 2(aa) defines term
“Deputy Director” and means the Deputy Director of Education or any
officer so designated as such by the State Government working under the
specified Authority. Section 2(b) defines the term “Educational
institution”. There can be no dispute that the petitioner-school will be
covered by this expansive definition. Section 2(c) defines the term
“Local Authority”. Section 2(d) defines the term “Management”. In the
present case, clause (iv) of the said provision will be applicable, as the
petitioner-school is neither managed by the State Government or a local
authority or by a university. The term “Minority education institution” is
defined in Section 2(e). Section 2(f) defines the term “Prescribed” and
means prescribed by rules made under this Act. Section 2(g) defines the
term “Rules” and means the Rules made under this Act. Section 2(h)
defines the term “University”.
38. Section 3 stipulates that demand or collection of capitation
fee is prohibited.
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58 191909
39. The relevant provision to examine the controversy on hand
is Section 4 of the Act. It postulates that the State Government is
competent 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 any standard or course of study of
such institution in respect of any class of students. Thus, there can be no
doubt that the State Government has the power to regulate the fees of
even unaided private minority institution to the extent of the fees
received or collected by educational institution which partakes the
character of capitation fee. Sub-section (2) of Section 4 deals with the
fees to be regulated by the State Government under sub-section (1).
There is a marked distinction between the language used in clauses (a)
and (b) of sub-section (2) of Section 4 of the Act. While dealing with
the case of aided institutions, the expression used is “prescribed” by a
University or State Government, as the case may be. On the other hand,
in the case of unaided institutions, with which we are concerned, the
expression used is “the State Government may approve”. Clause (a)
thereof is not applicable to our case, as it deals with the case of the aided
institutions. Clause (b) of sub-section (2) is of some significance, and
reads thus:-
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59 191909
“(b) in the case of the un-aided institutions, having regard to
the usual expenditure excluding any expenditure of lands
and buildings or on any such other items as the State
Government may notify, be such as the State Governmentmay approve:
Provided that, different fees may be approved under clause
(b) in relation to different institutions or different classes or
different standards or different course of studies or differentareas.” (emphasis supplied)
40. On perusal of this provision, it is evident that the unaided
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. The expenditure on lands and buildings or any
such other items as the State Government may notify is plainly excluded
from being charged in the form of fees – not being usual expenditure.
Further, the expression “on any such other items as the State
Government may notify” will have to be read ejusdem generis with the
expression “excluding any expenditure of lands and buildings”. What is
significant to note is that the State Government has the power and
authority to approve the fees fixed by the private unaided institutions.
The term “approve” will have to be construed as enabling the State
Government to regulate the fees, by disallowing the components of
expenses incurred by the school on items other than usual expenditure.
Proviso below clause (b) in Section 4(2) is an indication that the approval
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60 191909of fees fixed by the school should be accorded on case to case basis by
the State Government.
41. Although the expression “usual expenditure” has not been
defined in the Act of 1987, the purport of the said expression can be
culled out from sub-section (3) of Section 4 of the Act. The said
provision postulates that the fees to be prescribed or approved under
sub-section (2) shall include the items referred to therein. Notably, the
expenditure incurred by the school towards buildings rent is not
mentioned as one of the items in sub-section (3). Sub-section (3) of
Section 4 reads thus:-
“4. Regulation of fees.-
(1) …………….
(2) ……………
(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 ;
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61 191909
(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.”
42. Sub-section (4) stipulates that 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 a 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.
43. Sub-section (5) of Section 4 obligates the educational
institution or management to issue an official receipt for the fees or
deposits or any other amounts collected for any purpose, which shall be
specified in such receipt.
44. On conjoint reading of definition of “capitation fee” in
Section 2(a) read with Section 4 of the Act, it is obvious that the fees to
be fixed by the school must consist of only usual expenditure and of
items referred to in sub-section (3) of Section 4 of the Act. Any other
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62 191909
amount received or collected by the school / Management, by whatever
name called, would tantamount to receiving capitation fee. As
aforesaid, expression “usual expenditure” occurring in Section 4(2)(b) is
not defined in the Act. Term “usual” would mean ordinary or
customary. The term “ordinary” would mean normal and expected, and
“necessary” means appropriate and helpful. Thus, the ordinary and
necessary expenses or operating expenses incurred by an organisation
engaged in “trade or business” would be on items such as rent, wages,
utilities and similar day-to-day expenses as well as taxes, insurance and a
reserve for depreciation. Education, whether for charity or for profit, is
an occupation. It cannot be equated to a trade or business. A priori, the
school management cannot claim whole amount spent by it towards
buildings rent from its students, unless so approved by the State
Government. The State Government, while considering the proposal for
approval of the said expenditure incurred by the school management for
the relevant period, may approve such amount which, in its opinion,
would be “reasonable” and “appropriate” amount to be recovered by the
management from its students. It is one thing to say that the
management may spend amount towards buildings rent as per the
prevailing market rate therefor, if the building in which the school is
situate is not owned by the school. Since the State Government is
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63 191909
competent to approve the amount of usual expenditure, which the school
can be permitted to recover from its students by way of fees, the
concomitant is that the State Government is competent to approve the
entire amount spent by the management / school towards buildings rent
as it is or only portion thereof as reasonable and appropriate amount to
be recovered from the students. While examining the said question, the
State Government would be free to take into account the grievance of the
parents that the devise adopted by the management and the school was to
make profit by paying huge amount of Rs.2.5 Crores in the name of
building rent, even though the Trust, which is running the school, is
managed by the same three persons who are the only directors and
shareholders of the private limited company. In other words, the payer
and the receiver would be the same by using the cloak of the Trust and
the Company. Those are matters which will have to be enquired into by
the State Government. Moreover, the State Government, while
approving the claim of the petitioner-school to allow them to recover the
amount spent by the school towards buildings rent, is free to apply the
principle underlying the guidelines specified in Schedules A and
framed under Rule 89.1 of the Secondary Schools Code to ascertain as to
what could be the reasonable amount allowed to be recovered by the
school from its students. According to the petitioners in view of the
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64 191909
exposition in the case of Modern School Vs. Union of India reported in
(2004) 5 SCC 583 paras – 20 & 21, the school cannot be denuded of its
entitlement to recover the expenditure incurred by it towards the
buildings rent. Moreover, the State of Maharashtra has never exercised
the power nor acted in exercise of the option conferred under Section 4
of the Capitation Fee Act as can be discerned from the dictum of the
Apex Court in the case of Father Thomas Shingare And Ors. vs State
Of Maharashtra And Ors. [ (2002) 1 SCC 758 para – 9, 10, 16 & 20
thereof ]. As aforesaid, whether the petitioners would be entitled to
claim reimbursement of the amount spent by them towards the buildings
rent in toto or only portion thereof is a matter which has to be considered
by the State Government in exercise of power under Section 4 while
granting approval to the petitioner school in that behalf. That power is
bestowed in the State Government by virtue of Section 4 of the said Act.
The validity of the said Section has not been challenged before us. The
fact that the State Government has so far not exercised that power can be
no impediment to do so hereafter. It is too elementary to state that there
can be no estoppel against the law. The decisions pressed into service by
the petitioners therefore will be of no avail.
45. Concededly, going by the plain language of Section 4 of the
Act, the power to approve or regulate fees of unaided institutions vests in
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the State Government alone. That power cannot be exercised by the
Deputy Director, unless the law permits delegation of that authority in
his favour. At the same time, however, by virtue of Section 6 of the Act,
the Deputy Director of Education and officer not below that rank
specially authorised by the State Government in that behalf has the
power to enter upon the premises of the educational institution or any
premises thereof or any premises belonging to the Management of such
institution in relation to such institution, if he has reason to believe that
some contravention of the provision of the Act of 1987 or the Rules
made thereunder has been committed by the institution. To unravel that
position, the said officer is entitled to examine any record, account or
register or documents belonging to such institution or of the
Management. By virtue of Section 10 of the Act of 1987, the provisions
of the Act have been given overriding effect to the provisions contained
in any other law for the time being in force or in any instrument having
effect by virtue of such law. The Deputy Director, in exercise of his
powers under Section 6 of the Act, therefore, would be competent to
enquire into the acts of commission and omission of the educational
institution or its Management, resulting in contravention of the
provisions of the Act. In that process, he is competent to examine the
records of the school and its Management to ascertain whether the fees
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collected by the school from its students were as per the norms
prescribed under the Act of 1987. The Act has come into force. The
powers bestowed on the specified State Authorities by virtue of the
provisions of the Act can be given effect to. To consummate the avowed
intention of the Capitation Fee Act, 1987, the authorities referred to in
the Act are obliged to discharge their duties specified therein.
46.
To put it differently, the directions issued by the Deputy
Director can be upheld on the reasoning that the same could be and
ought to have been issued by the Deputy Director in exercise of powers
under Section 6 of the Act. In the present case, all that the Deputy
Director has done is to call upon the petitioners to produce the certificate
of reasonableness of buildings rent issued by the Executive Engineer, as
is required in terms of guidelines specified in Schedules A and B framed
under Rule 89.1 of the Secondary Schools Code. Indeed, until the
question as to whether the provisions of the Secondary Schools Code has
the statutory force is answered by the Full Bench of this Court, which
issue has been referred by the Division Bench in terms of order dated
26th October, 2010 in Writ Petition No. 6727 of 2010, we may proceed
on the basis that the said provisions are administrative instructions. The
same have not been challenged by the petitioners. For that reason, the
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insistence of the Deputy Director, respondent No.2, to produce the
reasonableness certificate issued by the Executive Engineer cannot be
faulted. Since the petitioners failed to do so, respondent No. 2 proceeded
on the basis that the petitioners have failed to substantiate the claim
towards expenditure incurred on buildings rent during the relevant
period. If the order passed by the Deputy Director is so understood,
there is no reason to overturn the same. Indeed, it would be a different
matter if the petitioners were to obtain certificate of reasonableness of
buildings rent from the Executive Engineer, on the basis of which,
respondent No. 2 could have examined the matter in the context of the
provisions of Capitation Fee Act – that the demand of the school does or
does not result in commercialisation and profiteering. The other option
available to the petitioners was to immediately approach the State
Government for approval of its revised fee structure fixed by it, which
included the entire amount spent by the school towards buildings rent.
That proposal could have been examined by the State Government on its
own merits. None of the above options found favour with the
petitioners. The petitioners, instead, took the extreme position before
respondent No. 2 that the petitioners had complete authority in fixing
their own fee structure, which could include the entire amount spent by
the school towards buildings rent.
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47. In the context of sub-section (4) of Section 4 of the Act, it
was then argued that, once the approval to the fee structure since notified
by the school was already granted by the Accounts Officer, the same
could not be revised by another Authority under the Act. For that, the
State Government is expected to constitute a Committee of persons, who
are experts in educational field, for taking the review of the fee structure.
In the first place, the fact that the Accounts Officer had verified the
accounts of the school and accepted the same as it is or otherwise would
make no difference, nor that would enure to the benefit of the petitioners.
For, as per the provisions of the Capitation Fee Act, the State
Government alone has the power to approve the fee structure of the
private unaided school. Notably, the fee structure prescribed by the
petitioner-school has not been doubted by the Deputy Director in respect
of all other items, except the expenses claimed by the Management
towards buildings rent in the sum of Rs. 2.5 crores.
48. The petitioners have placed strong reliance on the decision
of the Division Bench of this Court in the case of Association of
International Centres and Members Foundation v. State of
Maharashtra, Writ Petition decided on September 1, 2010. In the said
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matter, the Court was called upon to examine the validity of
Government Resolutions dated 16th July, 2010 and 22nd July, 1997,
respectively. The subject-matter of the said Government Resolutions is
regulation of fees that are charged by unaided secondary schools. The
Court upheld the challenge on the sole finding that the said
Government Resolutions were not issued under Article 162 of the
Constitution of India, even though the same were affecting the right
guaranteed under Article 19(1)(g) of the Constitution to the private
educational institutions. The Court held that the said two Government
Resolutions were not issued under any provisions of the Act, nor can
be ascribed to exercise of power under Article 162 of the Constitution
by the State. Indeed, in the said decision, reference is made to Section
4 of the Capitation Fee Act, 1987. With reference to the said
provision, the Court went on to observe as follows:-
“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 un
aided. Clause (a) of sub-section (2) of Section 4 lays down that the
fees to be charged by the aided educational institutions are to beprescribed 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
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70 191909and 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 faras 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 conferspower 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 Actand therefore, in our opinion, the State Government could not have
issued G.R. constituting committee for approving the fees.”
ig (emphasis supplied)
49. Suffice it to observe that the abovesaid decision pressed
into service is of no avail to the controversy raised in the present
petitions. In the present matters, the points in issue are whether the
Deputy Director was competent to dwell upon the question regarding the
fee structure prescribed by the petitioner-Management in terms of
Circular dated 19th March, 2008 and further, whether the provisions of
the Capitation Fee Act of 1987 would be attracted if the private school
was allowed to include the entire expenditure incurred by it towards
buildings rent as component of fees to be recovered from its students
during the relevant period. As a matter of fact even the above quoted
observations in this decision lend support to our finding that the State
Government has power to approve and resultantly regulate the fees fixed
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71 191909by the unaided schools. Similarly, the fact that the two Government
Resolutions dated 22nd July 1999 and 15th July, 2010 have been set aside
and declared as ultra vires also does not take the matter any further for
the petitioners.
50. Notably, the petitioners have neither challenged the
provisions of the Act of 1987 nor the subsequent Government
Resolutions issued by the State Government pursuant to the decision of
the Apex Court in T.M.A. Pai’s case.
51. Be that as it may, even if we are in agreement with the
submission of the petitioners that the Deputy Director has had no
authority to regulate the fees of private unaided institutions, by virtue
of express provision contained in Section 4 of the Capitation Fee Act;
or even going by the provisions of the Secondary Schools Code, viz.,
Rule 49.3, that power could be exercised only by the Director and not
the Deputy Director; coupled with the fact that the Apex Court has
expounded that the private unaided institutions have right to prescribe
their school fees, that does not mean that the fees prescribed by the
private unaided institutions cannot be made subject-matter of scrutiny
by the Deputy Director in exercise of his powers under Section 6 of the
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Act for the limited purpose of finding out as to whether any part of the
fees is in excess of the usual expenditure and of items referred to in
Section 4(3) of the Act and collection of such amount would attract the
mischief of capitation fee, sans approval thereto by the State
Government. In view of the legislative mandate of the Capitation Fee
Act of 1987, any amount received or collected by the school from the
students, by whatever name called, in excess of the expenses on usual
expenditure or permissible items referred to in Section 4(3) and as
approved by the State Government, will be deemed to be resorting to
commercialisation and profiteering and collection of capitation fee by
the school, for the purposes of the said Act. The petitioners, therefore,
cannot succeed on the technicalities that the two G.Rs. dated 22nd July,
1999 and 15th July, 2000 have been set aside or on the contention that
the Deputy Director has had no authority to regulate the fees as such.
The fact that the Deputy Director has adverted to those G.Rs does not
take the matter any further for the petitioners. The petitioners besides
assailing the impugned communications have also assailed the order
recording reasons passed by respondent No.2 dated 3rd August, 2010 on
the ground that the same is merely pretense of having recorded reasons
which are neither cogent nor clear as required by law. Such an order
cannot be countenanced in the light of exposition in Kranti Associates
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Private Ltd., and another vs. Masood Ahmed Khan and others,
[ (2010) 9 SCC 496 ]. This argument overlooks the underlying
principal reason recorded by respondent No.2 Deputy Director to hold
against the petitioners/school. He has observed that the petitioners,
having failed to produce the certificate of reasonableness of buildings
rent issued by the Executive Engineer, were not entitled to claim
reimbursement of the amount paid by them towards the buildings rent
from its students by way of fees. Similarly the argument of the
petitioners that the reasons have been supplemented by fresh reasons in
the shape of affidavits or otherwise cannot be taken into account
considering the dictum of the Apex Court in the case of Commissioner
Of Police, Bombay vs Gordhandas Bhanji [ (1952) SCC 16 para 11],
and in the case of Mohinder Singh Gill v. Chief Election
Commissioner [ (1978) 1 SCC 405 para 8 ]. Even this grievance of the
petitioners will have to be discarded as we are inclined to take the view
that the order of the Deputy Director will have to be understood as one
passed in exercise of powers under Section 6 of the Act to ascertain
whether there has been any contravention of the provisions of the
Capitation Fee Act. The opinion of the Deputy Director can be
ascribed to Section 6 of the Act of 1987 which, for all practical
purposes, has taken the view that the petitioner-educational institution
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cannot claim reimbursement of the expenses incurred by it towards
buildings rent in the sum of Rs. 2.5 cores, having failed to substantiate
that claim by producing certificate of reasonableness of rent issued by
the Executive Engineer. He has, therefore, re-worked the fee structure
by excluding the amount towards buildings rent incurred by the
petitioner-school, as not capable of being recovered from its students –
lest attract the provisions of the Capitation Fee Act. Implicit in the
reason recorded by respondent No.2 for reworking the fee structure of
the petitioner school is that if the petitioner school is likely to or was to
demand and accept the amount from its students to recompensate itself,
the entire buildings rent expenditure incurred by the school and paid to
the private limited company, sans approval in that behalf of the State
Government. That would result in commercialization and profiteering.
As aforesaid, we may not construe the said order of the Deputy
Director as strictly regulating the fees or one of approval thereof. Even
so, the conclusion reached by the Deputy Director, will have to be
upheld for the reasons mentioned hitherto. In that case, the petitioners
cannot recover any amount in excess of the amount reworked by
respondent No. 2, unless approved by the State Government.
52. The petitioners had argued that there is intrinsic material
to suggest that the impugned communication dated 3.7.2009 sent by
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respondent No.2 – Deputy Director was nothing but tentative view
expressed by him subject to finalization. However, the respondent No.
2 Deputy Director unilaterally proceeded on the basis that the said
communication was his final decision due to pressure brought by the
parents. To legitimize the said fallacy, the respondent No.2 issued
another communication dated 4.9.2009 that the fees determined in his
earlier communication dated 3.7.2009 has been treated as final for the
reason stated therein. In this context, it was argued that respondent No.
2 exercised the power of review which he did not have in law. Reliance
has been placed on the decision in the case of Dr. (Smt.) Kuntesh
Gupta Vs. Management of Hindu Kanya Mahavidyalaya, Sitapur
(UP) and others [ (1987) 4 SCC 525 para-11], and in the case of
Kalabharati Advertising Vs. Hemant Vimalnath Narichania and
others [ (2010) 9 SCC 437 paras-12 to 14 ]. In the first place, if the
Court were to accept the former contention of the petitioners that the
impugned communication dated 3.7.2009 was only a tentative opinion
expressed by respondent No.2, the argument that the effect of
communication dated 4.9.2009 issued by him was resorting to review
becomes unavailable. Further, it is not necessary to dwell upon the
disputed factual assertion that the opinion expressed by respondent No.
2 Deputy Director in his impugned communications was issued under
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dictation or influence of the parents. On perusal of the impugned
communication dated 3.7.2009, it is noticed that insofar as respondent
No.2 – Deputy Director is concerned, he has expressed his opinion
regarding the claim of the petitioner’s school in respect of buildings
rent. He further observed that the said opinion was to be given effect
subject to the decision of the committee constituted by the State. In the
communication dated 4.9.2009 respondent No.2 has noted that no
committee has been constituted by the State and for which reason the
views expressed by him in his communication dated 3.7.2009 be given
effect to. Understood thus, the grievance of the petitioners under
consideration is devoid of merits.
53. Going by Section 4 of the Capitation Fee Act, the State
Government alone is competent to approve the amount claimed by the
unaided school as usual expenditure so as to permit the school to
recover commensurate amount from the students by way of fees. If the
petitioners are keen that they should be allowed to recover the entire
amount spent by them towards buildings rent for the relevant period
from their students, they may have to pursue the matter before the State
Government for its approval. As aforesaid, the State Government
would be free to examine all aspects before taking final decision on the
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said proposal, including the grievance of the parents (such as
respondents No. 3 to 7) that the amount spent by the school towards
buildings rent is a subterfuge and devise to siphon off that amount,
which would eventually be received in the hands of three persons, who
are the only directors and shareholders of the private limited company
and also the only trustees of the Trust, which claims to have incurred
such expenditure. In other words, the payer and the receiver of the
stated expenses are the same persons under the facade or cloak of two
juristic persons. All contentions available to the respective parties may
have to be examined by the State Government on its own merits. We
are not expressing any opinion as to whether the petitioners are
entitled to claim recovery of entire amount spent by them towards
buildings rent from their students during the relevant period or
otherwise.
54. The private respondents were at pains to persuade us to
enquire into the validity of the permission granted by MHADA to
transfer the proprietary rights in the plot in favour of a private limited
company on which the building has been constructed, so as to reap
profit by recovering amount towards buildings rent from the petitioner-
school run by a public charitable Trust; as also the decision of the
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Charity Commissioner, which has enabled the public Trust to spend
such exorbitant amount towards school buildings rent in the sum of
Rs. 2.5 crores, on the argument that the said transfer as well as decision
of the Charity Commissioner were the outcome of misrepresentation
and fraud played by the petitioners. It is not necessary for us to
examine that contention in these petitions, for the view that we have
already taken. As and when the petitioner-school applies to the State
Government for approval to recover the actual expenses incurred by it
towards buildings rent from its students during the relevant period, that
plea will be available to the parents / students or otherwise can be gone
into by the State Authorities on their own and answered appropriately
in accordance with law. We, therefore, do not express any opinion in
that regard.
55. The petitioners had assailed the decision of the Deputy
Director on the ground that it is product of mala fide exercise of power
in fact and in law. Even this grievance, in our opinion, need not be
dealt with, considering the view already expressed by us hitherto.
Assuming that the impugned decisions of the Deputy Director were to
be treated as non est on this ground, that, by itself, would not permit the
petitioners to recover the entire amount spent by them towards
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buildings rent from their students during the relevant period, unless
approved by the State Government.
56. For the view that we have taken, the petitioners will have
to refund the portion of fees constituting expenses towards buildings
rent and, if the petitioners continue to receive or collect any amount
towards that head, by whatever name called, so as to recompense
themselves for the expenses incurred towards school buildings rent, it
would clearly attract the provisions of the Capital Fee Act, for which,
the school and its Management my have to face the legal consequences.
57. As a result, the petitioners may have to abide by the
opinion expressed by the Deputy Director in his impugned decision,
which means that the petitioner-school may be well-advised to recover
fees by excluding the expenses towards buildings rent for the relevant
period. Failure to abide by that opinion may invite suitable action
under the Capitation Fee Act of 1987 against the school and its
Management. We, however, express no opinion as to whether in the
fact situation of the present case, the State Government should approve
the expenses claimed by the petitioners towards buildings rent either as
a whole or only part thereof, in the context of the provisions of the
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Capitation Fee Act of 1987. All questions in that behalf are left open.
While parting, we would like to place on record that other incidental
issues were raised by the Counsel appearing for the respective parties
during the course of argument, as also reliance was placed on the
decisions in support of their contentions. However, in our opinion, it is
not necessary to burden this judgment with all those issues. Hence, we
have not elaborated on those issues or other reported decisions.
58. Suffice it to observe that the sum and substance of our
decision is that even though the private unaided school has discretion
to fix its own fee structure, it is open to the State Government to
regulate the same insofar as unusual expenditure within the meaning
of Section 2(a) read with Section 4 of the Capitation of Fee Act. As
and when the issue of recovery of any unusual expenses such as
exorbitant expenditure on buildings rent, is raised either by the parents
or it comes to the notice of the State Authorities and in spite of that, the
school continues to recover the disputed amount without taking
approval of the State Government, the Management of such school
would run the risk of legal action provided for in the Capitation Fee
Act. When such occasion arises, the Management of the school may
have only two options – first is to obtain approval of the State
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Government at the earliest opportunity for allowing it to recover the
disputed amount by way of fees from its students. The second is to
continue to recover the disputed amount stipulated by it as fees from its
students unabated and in which case the Management of the School
may run the risk of facing appropriate legal action under the provisions
of the Capitation Fee Act and other enabling enactments.
59.
In view of the above, we proceed to pass the following
order:-
ORDER
Both the petitions are disposed of on the above terms
with costs to be paid by the petitioners. Resultantly, in
absence of approval of the State Government permitting the
School to recover the expenditure from its students incurred
on buildings rent during the relevant period, the petitioners
are obliged to comply with the Court’s order dated 20th April,
2009. Ordered accordingly.
MRS. MRIDULA BHATKAR, J. A.M. KHANWILKAR, J.
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