Supreme Court PDF

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courtnic.nic.in/supremecourt/temp/rc136804p.txt
REPORTABLE
INTHESUPREMECOURTOFINDIA
CIVILAPPELLATEJURISDICTION
REVIEWPETITION(C)NO.1368OF2004
IN
CIVILAPPEALNO.2700OF2001
ActionCommittee,UnAidedPvt.Schools&Ors....Petitioners
Versus
DirectorofEducation,Delhi&Ors....Respondents
[WITHREVIEWPETITION(C)NO.1420OF2004INCIVILAPPEALNO.
2704OF2001,REVIEWPETITION(C)NO.14211422OF2004INCIVIL
APPEALNOS.270527062004,REVIEWPETITION(C)NO.1423OF2004IN
CIVILAPPEALNO.2703OF2001ANDREVIEWPETITION(C)NO.1774OF
2004INCIVILAPPEALNO.2701OF2001]
JUDGMENT
S.B.SINHA,J:
1.TheParliamentenactedtheDelhiSchoolEducationAct,1973(forshort
"theAct")toprovideforbetterorganizationanddevelopmentofschooleducation
intheNationalCapitalTerritoryofDelhi(NCT)andformattersconnected
therewithorincidentalthereto.TheActdealswitheducationatpreprimarystage,
primarystage,secondarystageandseniorsecondarystage.
2.TheActcontainsaninterpretionclausedefiningalargenumberofwords
mentionedthereinincludingàidedschool',`minorityschool'andùnaided
minorityschool'.
Section3oftheActempowersan"Administrator"toregulateeducationin
schools.Section5providesfortheschemeofmanagementofeveryrecognized
schoolintermsoftherulesframedundertheAct.Itprovidesforthemodeand
mannerinwhichfeesandotherchargestobeleviedandcollectedbytheschools.
Section18providesfora`schoolfund'knownasthe"Recognised
UnaidedSchoolFund";Subsection(4)whereofmandatesthatincomederivedby
unaidedschoolsbywayoffeesshallbeutilizedforsucheducationalpurposesas
maybeprescribed.
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Section24providesforinspectionofschools;subsection(3)whereof
readsasunder:
"(3)TheDirectormaygivedirectionstothemanagertorectifyany
defectordeficiencyfoundatthetimeofinspectionorotherwisein
theworkingoftheschool."
Section27oftheActcontainsapenalprovision.Rulemakingpowerof
theAdministratorisspecifiedinSection28thereof,clauses(r),(s),(u),(v)and
(w)ofSubsection(2)whereofreadasunder:
"(2)Inparticular,andwithoutprejudicetothegeneralityofthe
foregoingpower,suchrulesmayprovideforalloranyofthe
followingmatters,namely:
r)feesandotherchargeswhichmaybecollectedbyanaided
school;
s)themannerofinspectionofrecognisedschools
u)financialandotherreturnstobefiledbythemanaging
committeeofrecognisedprivateschools,andtheauthorityby
whichsuchreturnsshallbeaudited;
v)educationalpurposesforwhichtheincomederivedbywayof
feesbyrecognisedunaidedschoolsshallbespent;
w)mannerofaccountingandoperationofschoolfundsandother
fundsofarecognisedprivateschool;"
3.Inexerciseofthesaidrulemakingpower,theGovernmentofNational
CapitalTerritoryofDelhiframedrulesknownastheDelhiSchoolEducation
Rules,1973(forshort"theRules").
ChapterXIIIoftheRulesisdividedinthreeparts.PartAdealswithfees
andotherchargesinaidedschools,PartBdealswithfeeconcessionsandPartC
providesforpupils'fund.
ChapterXIVdealswith`Schoolfund'.
ImaynoticeRules172,173,177(1),177(2)(b),(c),(d),(e)(3)and(4),
whichreadasunder:
"172.Trustorsocietynottocollectfees,etc.,schools
tograntreceiptsforfees,etc.,collectedbyit.(1)No
fee,contributionorotherchargeshallbecollectedfrom
anystudentbythetrustorsocietyrunningany
Recognizedschool;whetheraidedornot.
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(2)Everyfee,contributionorotherchargecollectedfrom
anystudentbyaRecognizedschool,whetheraidedor
not,shallbecollectedinitsownnameandaproper
receiptshallbegrantedbytheschoolforeverycollection
madebyit.
173.SchoolFundhowtobemaintained.(1)Every
SchoolFundshallbekeptdepositedinanationalized
bankorascheduledbankoranypostofficeinthename
oftheschool.
(2)SuchpartoftheSchoolFundasmaybe
approvedbytheAdministrator,oranyofficerauthorized
byhiminthisbehalf,maybekeptintheformof
Governmentsecurities.
(3)TheAdministratormayallowsuchpartofthe
SchoolFundashemayspecifyinthecaseofeach
school,(dependinguponthesizeandneedsofthe
school)tobekeptascashinhand.
(4)EveryRecognisedUnaidedSchoolFundshallbe
keptdepositedinanationalizedbankorascheduled
bankorinapostofficeinthenameoftheschool,and
suchpartofthesaidFundasmaybespecifiedbythe
Administratororanyofficerauthorizedbyhiminthis
behalfshallbekeptintheformofGovernmentsecurities
andascashinhandrespectively:
Providedthatinthecaseofanunaidedminority
school,theproportionofsuchFundwhichmaybekept
intheformofGovernmentsecuritiesorascashinhand
shallbedeterminedbythemanagingcommitteeofsuch
school."
177.Feesrealizedbyunaidedrecognizedschoolshowto
beutilized
(1)Incomederivedbyanunaidedrecognizedschoolbywayoffeesshallbe
utilisedinthefirstinstance,formeetingthepay,allowancesandother
benefitsadmissibletotheemployeesoftheschool.
Providedthatsavings,ifany,fromthefeescollectedby
suchschoolmaybeutilisedbyitsmanagingcommitteefor
meetingcapitalorcontingentexpenditureoftheschool,or
foroneormoreofthefollowingpurposes,namely:
a)******;
b)******or
c)assistinganyotherschooloreducationalinstitution,notbeingacollege,
underthemanagementofthesamesocietyortrustbywhichthefirst
mentionedschoolisrun.
(2)thesavingsreferredtoinsubrule(1)shallbearrivedatafterprovidingfor
thefollowing,namely:
(a)******
***;
(b)theneededexpansionoftheschoolorany
expenditureofadevelopmentnature;
(c)theexpansionoftheschoolbuildingorforthe
expansionorconstructionofanybuildingor
establishmentofhostelorexpansionofhostel
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accommodation;
(d)cocurricularactivitiesofthestudents;
(e)reasonablereservefundnotbeinglessthantenper
cent,ofsuchsavings;
(3)Fundscollectedforspecificpurposes,likesports,cocurricularactivities,
subscriptionsforexcursionsorsubscriptionsformagazines,andannual
charges,bywhatevernamecalled,shallbespentsolelyfortheexclusive
benefitofthestudentsoftheconcernedschoolandshallnotbeincludedin
thesavingsreferredtoinsubrule(2).
(4)Thecollectionsreferredtoinsubrule(3)shallbeadministeredinthesame
mannerasthemoniesstandingtothecreditofthePupilsFundas
administered."
4.OneDelhiAbibhavakMahasanghfiledaWritPetitionimpleadingtherein
aboutthirtyunaidedrecognisedpublicschools,UnionofIndia,Governmentof
NationalCapitalTerritoryofDelhiandsomeotherGovernmentDepartmentsto
takenecessarystepstoregulateadmissionsintherecognisedunaidedprivate
schoolsinDelhiinordertoavoidandtocheckdemandofillegalmoneyinthe
nameofdonationsbytheschoolsatthetimeofadmissions;toframeapolicyorto
makenecessaryamendmentsinthelawregulatingrecognitionandconditions
thereofstipulatingwithregardtoadmissionandpaymentoffeeetc.ofthe
recognisedunaidedprivateschools.Itwasallegedthattheprivateschoolshad
beenindulginginlargescalecommercializationofeducationwhichhadreached
analarmingsituationonaccountofthefailureofthegovernmenttoperformits
statutoryfunctionsundertheActandtheRulesbesidesfailingtoinsistonschools
tofollowtheaffiliationbyelawsandthebyelawsframedbytheCentralBoardof
SecondaryEducation.
5.Indisputably,theDirectorofEducation,Delhiissuedanorderdated
10.09.1997,directing:
"1.NoRegistrationFeeofmorethanRs.25/(Rupees
TwentyFive)perstudentpriortoadmissionshallbe
realised.
2.NoAdmissionFeeofmorethanRs.200/(Rupees
TwoHundred)perstudentatthetimeofinitialadmission
shallberealised.AdmissionFeeshallnotberealised
againfromanystudentwhoisoncegivenadmission.
TheAdmissionFeerealizedfromanystudentexceeding
Rs.200/(RupeesTwoHundred)intheacademicyear
199798shallberefundedtotheparents/studentswithin
15daysofthedateoftheissueofthedirection.
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3.Nocautionmoney/securityofmorethanRs.500/
(RupeesFiveHundred)perstudentshallberealized.The
cautionmoneythuscollectedshallbekeptdepositedina
scheduledbankinthenameoftheconcernedschoolsand
shallberefundedtotheschoolatthetimeofhis/her
leavingtheschoolalongwithbankinterestthereon.The
cautionmoneycollectedinthesession199798
exceedingRs.500/shallberefundedtothe
parents/studentswithin15daysoftheissueofthe
directions.
4.Noseparatesciencefeeorcomputerfeeshallbe
realizedfromanystudentuptothesecondarystage.
5.Thefeestructureoftheschool(excludingadmission
fee,cautionmoney,sciencefeeandcomputerfee)shall
bereviewedinameetinghavingtheproper
representativesofparentsandthenomineeofthe
DirectorofEducation,toconsiderthefeasibilityof
reducingthefeesandfundskeepinginviewtheactual
financialrequirementoftheschool."
6.SeveralwritpetitionswerefiledbythemanagementsofvariousUnaided
PrivateSchoolsquestioningthesaiddirections.Theprincipalquestionswhichfell
forconsiderationbeforetheHighCourtwere:
"...whetherunaidedrecognisedschoolsareindulgingin
commercialisationofeducation.Arethestudentsand
theirparentsbeingexploited?Ifitisso,hasthe
Governmentpowertoissuetheimpugnedorderto
controlandcheckmenaceofcommercialisationand
exploitation.Thefurtherquestioniswhetherthe
Governmenthasperformeditsstatutoryfunctionsas
envisagedbytheActandtheRules.Ifnot,what
directionsarerequiredtobeissued."
7.TheHighCourttooknoticeoftheprovisionsoftheActandvariousRules
issuedthereunderasalsothebackgroundunderwhichtheimpugnedorderdated
10.09.1997wasissued.
ACommitteeheadedbyMr.J.VeeraRaghvan,formerSecretaryinthe
MinistryofHumanResourceDevelopmenthadbeenconstitutedtostudythefee
structureoftheprivaterecognizedunaidedschoolsalongwithothercharges,
whichinturnnoticedwidevariationsinthetuitionfeeschargedbytheprivate
institutions.Itfileditsreportsuggestingguidelinesinrespectofdisbursementof
thefunds.
TheHighCourtnoticedtherecommendationsoftheCommitteeforthe
year199798andthecircularswhichwereissuedpursuantthereto.
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TheHighCourtalsoreferredtothedecisionofthisCourtinUnni
Krishnan,J.P.v.StateofA.P.[(1993)1SCC645]toopinethatnocitizenhasa
fundamentalrighttodealineducation.Itfurthermorereferredtootherdecisions
ofthisCourtwhereinRule177oftheRulescameupforconsideration.
Itwasheld:
"(i)ItistheobligationoftheAdministratorandor
DirectorofEducationtopreventcommercialisationand
exploitationinprivateunaidedschoolsincludingschools
runbyminorities.
(ii)Thetuitionfeeandotherchargesarerequiredtobe
fixedinavalidlyconstitutedmeetinggivingopportunity
totherepresentativesofParentTeachersAssociationand
NomineeofDirectorofEducationofplacetheir
viewpoints.
(iii)NopermissionfromDirectorofEducationis
necessarybeforeorafterfixingtuitionfee.Incase,
however,suchfixingisfoundtobeirrationaland
arbitrarythereareamplepowersundertheActandRules
toissuedirectionstoschooltorectifyitbeforeresorting
toharshmeasures.Thequestionofcommercialisationof
educationandexploitationofparentsbyindividual
schoolscanbeauthoritativelydeterminedonthorough
examinationofaccountsandotherrecordsofeach
school.
(iv)TheActandtheRulesprohibittransferoffunds
fromtheschooltothesocietyorfromoneschoolto
another.
(v)Thetuitionfeecannotbefixedtorecovercapital
expendituretobeincurredonthepropertiesofthe
society.
(vi)Theinspectionoftheschools,auditoftheaccounts
andcomplianceoftheprovisionsoftheActandthe
Rulesbyprivaterecognisedunaidedschoolscouldhave
preventedthepresentstateofaffiars.
(vii)Theauthorities/DirectorofEducationhasfailedin
itsobligationtogettheaccountsofprivaterecognised
unaidedschoolsauditedfromtimetotime.
(viii)Theschools/societiescantakevoluntarydonations
notconnectedwiththeadmissionoftheward.
(ix)Onthepeculiarfactsofthesepetitionsthereisnoper
seillegalityinissueoftheimpugnedcirculardated10th
September1997.
(x)AnindependentstatutoryCommittee,byamendment
oflaw,ifnecessary,deservestobeconstitutedtogointo
factualmattersandadjudicatedisputeswhichmayarise
infutureinthematteroffixationoftuitionfeeandother
charges.
(xi)TheGovernmentshouldconsiderextendingActand
Ruleswithorwithoutmodificationstoallschoolsfrom
Nurseryonward."
8.TheHighCourtdirectedtheappointmentofaCommitteecomprisingof
Ms.JusticeSantoshDuggal,aretiredJudgeofitsCourtasaChairpersonwith
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powertonominatetwopersons
onewiththeknowledgeofAccountsandother
fromthefieldofeducationinconsultationwiththeChiefSecretaryofNCTof
Delhi.TheDuggalCommitteeintermsofthesaiddirectionsubmitteditsreportto
therespondentNo.1.
9.DuringthependencyofappealbeforethisCourt,pursuanttothereport
submittedbytheDuggalCommittee,theDirectorofEducationissueda
notificationon15.12.1999,thepreamblewhereofreadsasunder:
"Whereasbythejudgmentdated30thOctober,1998,in
C.W.P.No.3723of1997(DelhiAbhibhavak
MagasanghVsUnionofIndia,AIR1999Del124),the
Hon'bleHighCourtofDelhihadconsideredtheorder
No.DE.15/Act/Spl.Incp/150/97/12932093dated10th
September,1997andhadissuedcertaindirections;
Andwhereasinpursuanceoftheaforesaidorders
oftheHon'bleHighCourtofDelhi,acommitteewas
constitutedbytheGovt.ofNCTofDelhivide
notificationNo.323dated7thDecember,1998with
(Ms.)Justice(Retd.)SantoshDuggalasChairpersonto
decidetheclaimsinfeelikeandotherchargesleviedby
individualrecognizedunaidedschoolfortheperiod
coveredbytheordersreferredtoaboveandthereport
submittedbytheCommitteehasbeenconsideredbythe
GovernmentofNCTofDelhi;
Andwhereasthereportsubmittedbythe
Committee,aftergoingthroughtheaccountssubmitted
bytheschools,citesanumberofirregularitiesand
malpractices,relatingtocollectionandutilizationof
funds,indulgedinbytheschools.
Now,therefore,I,S.CPoddar,Directorof
Education,Govt.ofNCTofDelhiherebydirectthe
managingcommittees/managesofallrecognizedunaided
schoolsintheNCTofDelhiundersubsection(3)of
section24readwithsubsection(4)and(5)ofsection
18oftheDelhiSchoolEducationAct,1973readwith
rules50,51,177and180ofDelhiSchoolsEducation
Rules,1973andallotherpowersenablingmeinthis
behalf,asfollows:
DirectionNos.7and8thereof,readasunder:
"7.Developmentfee,notexceedingtenpercent,ofthe
totalannualtuitionfeemaybechargedfor
supplementingtheresourcesforpurchase,upgradation
andreplacementoffurniture,fixturesandequipment.
Developmentfee,ifrequiredtobecharged,shallbe
treatedascapitalreceiptandshallbecollectedonlyifthe
schoolismaintainingaDepreciationReserveFund,
equivalenttothedepreciationchargedintherevenue
accountsandthecollectionunderthisheadalongwith
andincomegeneratedfromtheinvestmentmadeoutof
thisfund,willbekeptinaseparatelymaintained
DevelopmentFundAccount.
8.Fees/fundscollectedfromtheparents/studentsshallbe
utilizedstrictlyinaccordancewithrules176and177of
theDelhiSchoolEducationRules,1973.Noamount
whatsoevershallbetransferredfromtheRecognized
unaidedschoolfundofaschooltothesocietyorthetrust
oranyotherinstitution."
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10.Thesaidappealsweredisposedofbyajudgmentandorderdated
27.04.2004sincereportedin(2004)5SCC583.
ThisCourttookintoconsiderationthecostofinflationbetween
15.12.1999and31.12.2003.Inadditiontothesaiddirectionsgivenbythe
DirectorofEducationinitsorderdated15.12.1999,otherandfurtherdirections
werealsoissued.
11.Indisputably,UnniKrishnan(supra),onthebasiswhereofthejudgmentof
theHighCourtrested,wasoverruledbyanElevenJudgeBenchofthisCourtin
T.M.A.PaiFoundationandOthersv.StateofKarnatakaandOthers[(2002)8
SCC481].
ForclarificationofT.M.A.PaiFoundation(supra),anotherConstitution
BenchwasconstitutedbeingIslamicAcademyofEducation&Anr.v.Stateof
Karnataka&Ors.[(2003)6SCC697].Lateron,alargerbenchcomprisingof
SevenJudgesofthisCourtwasagainconstitutedforclarificationofT.M.A.Pai
Foundation(supra)andIslamicAcademyofEducation(supra)inP.A.Inamdar
andOthersv.StateofMaharashtraandOthers,thedecisionwhereofisreportedin
(2005)6SCC537.
12.Whenjudgmentintheinstantcasewaspronounced,thisCourtdidnot
havethebenefitofthedecisionofthisCourtinP.A.Inamdar(supra).
13.Reviewpetitionswerefiledbythepetitionershereinforreviewofthe
aforementionedjudgmentdated27.04.2004.
14.NoticingthatthecorrectnessorotherwiseofIslamicAcademyof
Education(supra)hadbeenreferredtoalargerbenchandwithaviewtomaintain
consistencyasalsohavingregardtothefactthattheissuesraisedinthereview
applicationshavefarreachingimplications,noticesweredirectedtobeissued.
15.Itisintheaforementionedbackdrop,afterthedecisionofthisCourtin
P.A.Inamdar(supra),thismatterhasbeenplacedbeforeus.
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16.Mr.SoliJ.Sorabjee,Mr.SalmanKhurshid,learnedseniorcounselsand
Mr.RomyChacko,learnedcounselappearingonbehalfofthepetitioners,in
supportoftheReviewPetitions,urged:
(i)InviewofthelargerbenchdecisionofthisCourtinP.A.Inamdar
(supra),thedirectionsissuedbytheDirectorofEducationwhichhave
beenupheldbythisCourtcannotbesustainedastheschoolsandin
particulartheminorityschoolshaveagreaterautonomyinlayingdown
theirownfeestructure.
(ii)Althoughcollectionofanyamountforestablishmentoftheschoolbya
trustorasocietyisforbidden,thetransferoffundbyoneschoolto
anotherschoolunderthesamemanagementbeingpermissibleintermsof
Rule177oftheRules,thedirectionsprohibitingsuchtransferbythe
DirectorofEducationinitsorderdated15.12.1999mustbeheldtobe
illegal.
(iii)ThedecisionofT.M.A.PaiFoundation(supra)withregardto
constructionofArticle19(1)(g)oftheConstitutionofIndiashouldbe
consideredinitscorrectperspectiveasthereexistsadistinctionbetween
`profit'and`profiteering'.
(iv)Thestatusofaminorityinstitutionbeingonahigherpedestal,ashas
beennoticedinT.M.A.PaiFoundation(supra),theimpugneddirections
couldnothavebeenissuedbytheDirectorofEducationwhichwould
affecttheautonomyoftheminorityinstitution.
17.ThebasisforissuingthedirectionsbytheHighCourtwas,asnoticed
hereinbefore,premisedonUnniKrishnan(supra).UnniKrishnan(supra)has
sincebeenoverruledinT.M.A.PaiFoundation(supra)holdingthattherightofa
citizenofIndiatosetupeducationalinstitutionsisafundamentalright.Itwas
furthermoreheldthattherightoftheminoritytosetupeducationalinstitution,
however,isnotabsolutebeingsubjecttoregulations.Sofarasthestatutory
provisionsregulatingthefacetsofadministrationofaneducationalinstitutionare
concerned,incaseofunaidedminorityinstitutions,theregulatorymeasureof
control,however,shouldbeminimum.Theconditionsofrecognitionasalso
conditionsofaffiliationalthougharerequiredtobecompliedwithbutinthe
matterofdaytodaymanagementlikeappointmentofstaff,bothteachingandnon
teaching,andinitsadministrativecontrol,theyshouldhavefreedomfromany
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externalcontrollingagency.Itwasfurthermoreheldthatfeestobechargedby
unaidedinstitutionscannotberegulated;however,noinstitutionshouldcharge
capitationfee.
18.ClarifyingT.M.A.PaiFoundation(supra)andIslamicAcademyof
Education(supra),itwasheldinP.A.Inamdar(supra):
"26.Thesemattershavebeendirectedtobeplacedfor
hearingbeforeaBenchofsevenJudgesunderOrdersof
theChiefJusticeofIndiapursuanttoOrderdatedJuly
15,2004inP.A.InamdarandOrs.v.Stateof
MaharashtraandOrs.,(2004)8SCC139andOrderdated
July29,2004inPushpagiriMedicalSocietyv.Stateof
KeralaandOrs.,(2004)8SCC135.Theaggrieved
personsbeforeusareagainclassifiableinoneclass,that
is,unaidedminorityandnonminorityinstitutions
impartingprofessionaleducation.Theissuesarisingfor
decisionbeforeusareonlythree:
(i)thefixationof'quota'ofadmissions/studentsin
respectofunaidedprofessionalinstitutions;
(ii)theholdingofexaminationsforadmissionstosuch
colleges,thatis,whowillholdtheentrancetests;and
(iii)thefeestructure.
27.Inthelightofthetwoordersofreference,referredto
hereinabove,weproposetoconfineourdiscussiontothe
questionssetouthereunderwhich,accordingtous,arise
fordecision:
(1)******
(2)******
(3)WhetherIslamicAcademycouldhaveissued
guidelinesinthematterofregulatingthefeepayableby
thestudentstotheeducationalinstitutions?
(4)Cantheadmissionprocedureandfeestructurebe
regulatedortakenoverbytheCommitteesorderedtobe
constitutedbyIslamicAcademy?
69.Withregardtotheambitoftheconstitutional
guaranteeofprotectionofeducationalrightsof
minoritiesunderArticle30,learnedcounselsubmitsthat
bothreligiousandlinguisticminority,asheldinPai
Foundation,aretobedeterminedattheStatelevel.On
thisunderstandingoftheconceptof'minority',Article30
hastobeharmoniouslyconstruedwithArticle19(1)(g)
andinthelightoftheDirectivePrinciplesoftheState
PolicycontainedintheArticles38,41and46.Rightsof
minoritiescannotbeplacedhigherthanthegeneral
welfareofthestudentsandtheirrighttotakeup
professionaleducationonthebasisoftheirmerit.
109.Andyet,beforewedoso,letusquoteand
reproduceparagraphs68,69and70fromPaiFoundation
toenableeasyreferencetheretoasthecoreof
controversytouchingthefourquestionswhichweare
dealingwithseemstohaveoriginatedtherefrom..."
Noticinginextensoparagraphs68,69and70ofT.M.A.PaiFoundation
(supra),itwasheld:
"129.InPaiFoundation,ithasbeenveryclearlyheldat
severalplacesthatunaidedprofessionalinstitutions
shouldbegivengreaterautonomyindeterminationof
admissionprocedureandfeestructure.Stateregulation
shouldbeminimalandonlywithaviewtomaintain
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fairnessandtransparencyinadmissionprocedureandto
checkexploitationofthestudentsbychargingexorbitant
moneyorcapitationfees."
Asregards,regulationoffee,itwasopined:
"139.Tosetupareasonablefeestructureisalsoa
componentof"therighttoestablishandadministeran
institution"withinthemeaningofArticle30(1)ofthe
Constitution,asperthelawdeclaredinPaiFoundation.
Everyinstitutionisfreetodeviseitsownfeestructure
subjecttothelimitationthattherecanbenoprofiteering
andnocapitationfeecanbechargeddirectlyor
indirectly,orinanyform(Paras56to58and161
[AnswertoQ.5(c)]ofPaiFoundationarerelevantinthis
regard)."
Itwasconcluded:
"146.Nonminorityunaidedinstitutionscanalsobe
subjectedtosimilarrestrictionswhicharefound
reasonableandintheinterestofthestudentcommunity.
Professionaleducationshouldbemadeaccessibleonthe
criterionofmeritandonnonexploitativetermstoall
eligiblestudentsonauniformbasis.Minoritiesornon
minorities,inexerciseoftheireducationalrightsinthe
fieldofprofessionaleducationhaveanobligationanda
dutytomaintainrequisitestandardsofprofessional
educationbygivingadmissionsbasedonmeritand
makingeducationequallyaccessibletoeligiblestudents
throughafairandtransparentadmissionprocedureand
basedonareasonablefeestructure."
19.Theshortquestionwhicharisesforconsiderationisastowhetherany
directioncontainedinanystatute,statutoryrulesasalsostatutorydirections,
shouldberevisitedintermsoftheSevenBenchdecisionofthisCourtinP.A.
Inamdar(supra).
20.Imay,however,attheoutsetnoticethatbeforetheHighCourtasalso
beforeustheconstitutionalityoftheprovisionsoftheActasalsotheRulesframed
thereunderarenotinquestion.Therecannotfurthermorebeanydoubtwhatsoever
thatacitizen'sfundamentalrightcontainedinArticle19(1)(g)oftheConstitution
ofIndiawouldbesubjectonlytoreasonablerestrictionsasenvisagedunder
Clause(6)thereof.Reasonablerestrictionintermsoftheaforementioned
provisioncanbelaiddowninteraliabyreasonofalegislativeact.
21.InUnniKrishnan(supra),itwasheldthatnocitizenhasanyfundamental
righttosetupaneducationalinstitution.Someguidelineshadbeenissued.Those
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guidelinesindisputablyhavebeenheldtobeunconstitutionalinT.M.A.Pai
Foundation(supra)andinP.A.Inamdar(supra),and,thus,Ihavenohesitationto
holdthatthedirectionscontainedinthesaidorderdated15.12.1999cannotbe
upheld.TheDirectorofEducationmoreoverexerciseditsauthorityillegallyand
withoutjurisdiction.
Thedoctrineofresextracommerciumbeingnotapplicableinrelationto
impartingofeducationbyprivateunaidedinstitutionsorevenprivateaided
institutions,itisdifficulttoconceiveastohowrestrictionsrelyingonoronthe
basisofthedoctrinewhichiswhollyinapplicablecouldbeextendedthereto.I,
therefore,amoftheopinionthattheprinciplelaiddowninUnniKrishnan(supra)
whichhasbeenoverruledinT.M.A.PaiFoundation(supra)cannotbemadeto
applydirectlyorindirectly.ItmaybenoticedthatinUnionofIndia&Ors.v.M/s
MartinLotteryAgenciesLtd.[2009(7)SCALE34],itisstatedasunder:
"Theconceptofresextracommerciummayinfuturebe
requiredtobeconsideredafreshhavingregardtoits
origintoRomanLawasalsotheconceptthereof.
Conceptuallybusinessmaybecarriedoutinrespectofa
propertywhichiscapableofbeingownedascontrasted
tothosewhichcannotbe.Havingregardtothechanging
conceptoftherightofproperty,whichincludesalltypes
ofpropertiescapableofbeingownedincluding
intellectualproperty,itispossibletoholdthatthe
restrictionswhichcanbeimposedincarryingon
businessinrelationtheretomustonlybereasonableone
withinthemeaningofClause(6)ofArticle19ofthe
ConstitutionofIndia."
Itisalsoofsomeinteresttonotethatopinionsintheacademicfieldare
beingexpressedthatresextracommerciumisanexpressionwronglyusedinthe
lastsixtyyearsbythisCourtandotherHighCourts.Noactivitycanbecalled"res
extracommercium".Itiseitherpermittedornot.Havingregardtoitsconceptual
rootstoRomanlaw,itwouldmeanonlythosethingswhicharenotincapableof
beingownershipand,thus,anymatterwhichisresextracommerciumwerethings
incapableofownershipbevestsinresincommercio.[SeeArvindDatar,
"Privilege,PolicePowerandResExtraCommercium
GlaringConceptual
Errors"21(1)NationalLawSchoolofIndiaReview133(2009)]
SubbaRao,J.moreoverinKrishnanNarulav.Jammu&Kashmir[AIR
1967SC1368]stated,"iftheactivityofadealeringheeisbusinessthenhowdoes
itceasetobebusinessifitisinliquor?
22.ThecircularletterissuedbytheDirectorofEducationdated15.12.1999
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maynowbeconsidered.
23.Subsection(3)ofSection24oftheActdoesnotconferanypoweronthe
Directortoissuedirections.
24.Theorderdated15.12.1999isnotastatutoryorder.Suchastatutoryorder
alsocouldnothavebeenissuedunderthedirectionsoftheHighCourtasthevery
premiseonwhichsuchdirectionshavebeenissueddoesnotsurviveanylongerin
viewofthedecisionofthisCourtinT.M.A.PaiFoundation(supra).
25.DirectionNos.7and8issuedbytheDirectorofEducationinitsorder
dated15.12.1999,whichhavebeennoticedbythisCourtinparagraph11ofthe
judgmentreportedin(2004)5SCC583,arecontrarytoClause(c)oftheproviso
appendedtoRule177(1)oftheRules.Whereasanyfee,contributionorother
chargecannotbecollectedfromanystudentbyatrustorasocietyrunninga
recognisedschool,collectionofsuchfeeisnotprohibitedbyaschool.Whatis
restraintedisthatallcollectionsshouldbemadebyaschoolinitsownnameand
receiptthereforshallbegiven.
26.Allregulationsapplicabletoaidedorunaidedrecognisedinstitutions,
therefore,mustbefoundinthestatuteand/ortheRules.TheRules,inmy
opinion,requiretoberevisitedbytheStateinthelightofthedecisionofthis
CourtinP.A.Inamdar(supra),buthereinIamnotconcernedtherewith.
27.Rule177oftheRulesprovidesforutilisationofthefeesrealisedby
unaidedrecognisedschools.Thereisnoregulationasregardsfee.Fee,ofcourse,
shouldnotbesuchwhichwouldamounttoprofiteering.Sofarasutilisationof
savingsfromthefeescollectedbysuchschoolbyitsmanagingcommitteeis
concerned,thesamecanbeutilisedforthepurposeofassistanceofanyother
schooloreducationalinstitutionunderthemanagementofthesamesocietyortrust
bywhichthefirstmentionedschoolisrun.
28.SubmissionofMr.S.WasimA.QadriandMr.AshokAgarwal,learned
counselappearingonbehalfoftherespondentsthathavingregardtothefactthat
theschemeformanagementoftheschool,ascontainedinSection5oftheAct,
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doesnotpermitutilisationofthefeecollectedbyamanagingcommitteeofthe
schoolbyanothermanagingcommitteeofanotherschooland,thus,theword
`management'shouldbegivenarestrictedmeaning,cannotbeaccepted.[See
OfficialTrusteeofW.B.v.StephenCourt2006(14)SCALE285]
Clause(c)oftheprovisoappendedtoRule177(1)oftheRulesitselfraises
adistinction.Itusesboththewords"managingcommittee"and"management".
Theymustbeheldtohavedifferentmeanings.
Clause(c)oftheprovisoappendedtoRule177(1)referstothe
managementofthesamesocietyortrustwhichmeanstheremaybemorethanone
schoolwhichisunderthesamemanagement.Iftheword"management"is
substitutedbythewordthe"managingcommittee",thesamewouldleadtoan
anomaloussituation.Theveryfactthatgrantofassistancetoanyotherschoolor
educationalinstitution,subjectofcoursetothelimitationsprovidedfortherein
beingpermissible,it,inmyopinion,wouldnotbecorrecttocontendthatthe
managingcommitteeofaschoolcanunderanycircumstancesrenderanyfinancial
assistancetothemanagingcommitteeoftheanotherschool.Suchassistancecan
berenderedifboththeschoolsareunderthemanagementofthesamesocietyor
trust.
29.I,inviewofthestatementoflawlaiddowninP.A.Inamdar(supra),amof
theopinionthattheauthoritiesofalltheschools,particularly,unaidedschools,
maylaydownitsownfeecriteria.Impositionofregulation,however,onlyis
permissibleforthepurposeofexercisingofcontroloverprofiteeringandnot
earningofaprofitwhichwouldincludereasonablereturnoftheinvestmentmade.
IsaysobecauseinT.M.A.PaiFoundation(supra),thisCourtitselfheld:
"50.Therighttoestablishandadministerbroadly
comprisesofthefollowingrights:
(a)***
(b)tosetupareasonablefeestructure...
54.Therighttoestablishaneducationalinstitutioncan
beregulated;butsuchregulatorymeasuresmust,in
general,betoensurethemaintenanceofproperacademic
standards,atmosphereandinfrastructure(including
qualifiedstaff)andthepreventionofmaladministration
bythoseinchargeofmanagement.Thefixingofarigid
feestructure,dictatingtheformationandcompositionof
agovernmentbody,compulsorynominationofteachers
andstaffforappointmentornominatingstudentsfor
admissionswouldbeunacceptablerestrictions.
56...Thedecisiononthefeetobechargedmust
necessarilybelefttotheprivateeducationalinstitution
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thatdoesnotseekorisnotdependentuponanyfunds
fromthegovernment.
57...Therecan,however,beareasonablerevenue
surplus,whichmaybegeneratedbytheeducational
institutionforthepurposeofdevelopmentofeducation
andexpansionoftheinstitution."
OnaperusalofT.M.A.PaiFoundation(supra)andP.A.Inamdar(supra),
itcanbeinferredthatprivateunaidedinstitutionsarepermittedtohaveaprofitbut
notpermittedtoprofiteer.Theyhavealsobeengivenautonomysubjectto
reasonablerestrictionsintheinterestofminorityinstitutionspermissibleunder
Article30(1)andintheinterestofgeneralpublicunderArticle19(6)ofthe
ConstitutionofIndia.Itwould,inmyopinion,beincorrecttolaydownany
generalruleandenforcethemonaprivateunaidedinstitutionsbywayofgap
filingexerciseanddisciplineorotherwise,despitethefactthatRule177ofthe
Rulesoccupiesthefield.Suchrestrictionssoughttobeimposed,forallintentand
purport,takeawaytheautonomyregimeoftheunaidedschoolswhichare
applicabletotheseinstitutionsintermsoftheaforementionedConstitutionBench
decisions.
Theinstitutions,inviewoftheaforementioneddecisionsofthelarger
bench,admittedlyareentitledtoearnsomeprofitsandassuchanydirection
contrarytheretoorinconsistenttherewithbydirectingthemtomaintainbooksof
accountontheprinciplesapplicabletononbusinessorganization/notforprofit
organization.Evenotherwisesuchdirectionsruncontrarytotheordinary
accountingprinciplesand/orIncomeTaxLaws.
30.ContentionofMr.Chackosofarasextentofrightoftheminoritiesin
establishingtheirinstitutionshasneverbeenraisedbeforeusinthemainmatter.
Thecontentionwhichdidnotfallforconsiderationinthemainjudgmentcannot
beasubjectmatterofreview.
ItalsogoeswithoutsayingthatthejudicialdisciplinemandatestheBench
comprisingoftwoorthreeJudgestofollowtheConstitutionBenchdecisions
havingregardtoArticle141oftheConstitutionofIndia.(SeeStateofWest
Bengalv.AshishKumarRoy&Ors.[(2005)10SCC110]
31.I,therefore,clarifythejudgmentthatanydirectionissuedbytheHigh
Court,bytherulemakingauthorityoranystatutoryauthoritymustbein
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conformitywiththedecisionofthisCourtinT.M.A.PaiFoundation(supra)as
clarifiedbythedecisionofthisCourtinP.A.Inamdar(supra).
32.Beforeparting,however,ImaynoticethattheGovernmentofNCTof
Delhihasnotamendedthestatutoryrulesonthebasisoftherecommendationsof
theDuggalCommittee.Ihaveonlyconsideredhereinthevalidityofthedirections
issuedbytheDirectorofEducationintermsoftheorderdated15.12.1999.While,
thus,itwillbeopentotheStatetoamenditsrules,itgoeswithoutsaying,the
managementoftheschoolsshallalsobeatlibertytochallengethevaliditythereof
ifandwhensuchaquestionarises.
33.ThedecisionofthisCourttotheaforementionedextentismodified.
Reviewpetitionsaredisposedofaccordingly.Nocosts.
...............................J.
[S.B.Sinha]
NewDelhi;
August07,2009
REVIEWPETITION(C)No.1368/04
In
CIVILAPPEALNo.2700/01
ActionCommittee,UnAidedPvt.Schools&Ors.
.....Petitioners
Versus
DirectorofEducation,Delhi&Ors.
....Respondents
with
R.P.(C)No.1420/04inC.A.No.2704/01,R.P.(C)Nos.14211422/04inC.A.
Nos.27052706/01,R.P.(C)No.1423/04inC.A.No.2703/01and
R.P.(C)No.1774/04inC.A.No.2701/01
JUDGMENT
S.H.KAPADIA,J.
BythesereviewpetitionsunderOrderXLRule2oftheSupremeCourt
Rules1966readwithArticle137oftheConstitutionofIndiathepetitioners
(ActionCommitteeUnAidedPvt.Schools&Ors.)seeksreviewofJudgment
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dated27.4.2004passedinCivilAppealNo.2700/01andothers.
Facts:
2.On8.9.1997aPILwasfiledintheDelhiHighCourtbyDelhiAbibhavak
Mahasangh(Parents'Association)beingwritpetitionno.3723/97challengingthe
feehikeinvariousschoolsinDelhi.Oneofthechargesinthewritpetitionagainst
UnaidedRecognizedSchoolswastransferoffundsbytheSchoolstothesocieties/
trustsand/ortootherschoolsrunbythesamesociety/trust,whichaccordingtothe
MahasanghwasinviolationofDelhiSchoolEducationAct,1973("1973Act")
andRulesframedthereunder.Simultaneously,theActionCommitteeofUnaided
PrivateSchoolsalsofiledcivilwritpetitionno.4021/97inthesameHighCourt
interaliaprayingforsettingasideOrderdated10.9.1997issuedbytheDirectorof
Education(DoE).ItmaybenotedthatvideOrderdated10.9.1997,DoEfoundthat
insomecasessurplusmoneywastransferredtoparentsocietiesandotherschools
inviolationofRule177.Accordingly,DoEdirectedthatfeesandfundscollected
fromtheparentsbeutilizedinaccordancewithrule177.
3.Rules172,175,176and177oftheDelhiSchoolEducationRules,1973
arequotedhereinbelow:
"172.Trustorsocietynottocollectfees,etc.,schooltogrant
receiptsforfees,etc.,collectedbyit.(1)Nofee,
contributionorotherchargeshallbecollectedfromanystudent
bythetrustorsocietyrunninganyrecognisedschool;whether
aidedornot.
(2)Everyfee,contributionorotherchargecollectedfromany
studentbyarecognisedschool,whetheraidedornot,shallbe
collectedinitsownnameandaproperreceiptshallbegranted
bytheschoolforeverycollectionmadebyit.
***
175.Accountsoftheschoolhowtobemaintained.The
accountswithregardtotheSchoolFundortheRecognised
UnaidedSchoolFund,asthecasemaybe,shallbeso
maintainedastoexhibit,clearlytheincomeaccruingtothe
schoolbywayoffees,fines,incomefrombuildingrent,
interest,developmentfees,collectionsforspecificpurposes,
endowments,gifts,donations,contributionstoPupils'Fund
andothermiscellaneousreceipts,andalso,inthecaseofaided
schools,theaidreceivedfromtheAdministrator.
176.Collectionsforspecificpurposestobespentforthat
purpose.Incomederivedfromcollectionsforspecific
purposesshallbespentonlyforsuchpurpose.
177.Feesrealisedbyunaidedrecognisedschoolshowtobe
utilised.(1)Incomederivedbyanunaidedrecognisedschool
bywayoffeesshallbeutilisedinthefirstinstance,formeeting
thepay,allowancesandotherbenefitsadmissibletothe
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employeesoftheschool:
Providedthatsavings,ifany,fromthefeescollectedbysuch
schoolmaybeutilisedbyitsmanagingcommitteeformeeting
capitalorcontingentexpenditureoftheschool,orforoneor
moreofthefollowingeducationalpurposes,namely
(a)awardofscholarshipstostudents;
(b)establishmentofanyotherrecognisedschool;or
(c)assistinganyotherschooloreducationalinstitution,not
beingacollege,underthemanagementofthesamesocietyor
trustbywhichthefirstmentionedschoolisrun.
(2)Thesavingsreferredtoinsubrule(1)shallbearrivedat
afterprovidingforthefollowing,namely
(a)pension,gratuityandotherspecifiedretirementandother
benefitsadmissibletotheemployeesoftheschool;
(b)theneededexpansionoftheschooloranyexpenditureofa
developmentalnature;
(c)theexpansionoftheschoolbuildingorfortheexpansionor
constructionofanybuildingorestablishmentofhostelor
expansionofhostelaccommodation;
(d)cocurricularactivitiesofthestudents;
(e)reasonablereservefund,notbeinglessthantenpercent,of
suchsavings.
(3)Fundscollectedforspecificpurposes,likesports,co
curricularactivities,subscriptionsforexcursionsor
subscriptionsformagazines,andannualcharges,bywhatever
namecalled,shallbespentsolelyfortheexclusivebenefitof
thestudentsoftheschoolconcernedandshallnotbeincluded
inthesavingsreferredtoinsubrule(2).
(4)Thecollectionsreferredtoinsubrule(3)shallbe
administeredinthesamemannerasthemoniesstandingtothe
creditofthePupils'Fundareadministered."
4.Directivedated10.9.1997issuedinthisregardreadsasfollows:
"(f)Feesandfundscollectedfromtheparentsshallbeutilized
strictlyinaccordancewithrule177oftheRules.Noamount
whatsoever,shallbetransferredfromtheRecognisedUnaided
SchoolFundofaschooltotheSocietyortheTrust,asthecase
maybe,runningthatschoolnorshallanyexpenditurebe
incurredwhichisnotbeneficialtothestudentsorthe
employeesofthatschool."
5.On30.10.1998,boththepetitionsreferredtohereinaboveweredisposed
byacommonjudgmentbytheDelhiHighCourtinthecaseofDelhiAbibhawak
Mahasanghv.UnionofIndia&Ors.reportedin76(1998)DLT457.
6.RelevantparagraphsfromthejudgmentoftheDelhiHighCourtreadas
follows:
"20.Thebackgroundunderwhichtheimpugnedorderwere
issuedasdiscernablefromgovernmentfilesmaynowbe
noticed.Itseemsthatthegovernmentreceivedcomplaintsthat
numberofpublicschoolshadarbitrarilyincreasedfeesand
otherchargeswithoutanyjustification.Aspecialcommittee
wasconstitutedtoconductspecialinspectionsmainlyto
examinethejustificationofincreasingthefees.Theinspection
wasrestrictedtofewprominentschools.Tocarryoutthe
inspection5differentteamscomprisingofofficersof
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DirectorateofEducationwereconstitutedtolookintothe
matterofaccountsandtoalsoexaminewhetherfeeschargedis
commensuratewiththefacilitiesprovidedtothestudentsand
teachers.Theinspectionteamswererequiredtoexamine5
yearsaccountsandexamineamountsreceivedfromstudentsas
fees/otherchargesundereachheadincludingdonations,
security,buildingfund,activityfees,laboratoryfees,games
fees,horseridingfeesetc.besidestransportation/buscharges
andtheamountsactuallyspentunderthespecifiedheads.The
committeewasalsorequiredtoexamineiftherewasany
surplusunderanyheadandhowthesurplusmoneywasused.
Thefinancialtransactionsbetweentheschoolmanagementand
thesocietywerealsorequiredtobechecked.Theinspectionof
16schoolswasconducted.Fromaperusaloftheinspection
reports,thegovernmentfoundgrossfinancialmismanagement
andviolationofvariousprovisionsoftheActandtheRulesand
observedthatalmostalltheschoolswerechargingexhorbitant
admissionfee,cautionmoney,tuitionfeeandothercharges
undervariousheadsinviolationofSection18(4)(b)oftheAct
readwithRule176.TheGovernmentalsoobservedthatby
chargingtheexhorbitantamountsschoolshadgeneratedlarge
amountofsurplusfundsandinsomeofthecasesitwasfound
thatsurplusmoneyhadbeentransferredtotheparentSocietyin
violationofRule177.SomeoftheManagingCommitteesof
theSchoolshadtransferredtheschoolfundforestablishingthe
schoolsevenoutsideDelhi.Theutilisationofthefundswasnot
foundtobeinthemannerprescribedunderRule177.Itwas
foundthattheschoolswerespendingmoneyinpurchasingand
maintainingluxurycarsetc.whichwerenotusefuland
necessaryforthebenefitofthestudents.Itwasobservedthat
thefinancialirregularitieshadbeennoticedinalltheschools
whichwereinspectedunderSection24(2)oftheActandthe
possibilityofsuchirregularitiesbyotherunaidedrecognised
schoolscouldnotberuledout.NoticingthattheDirectorateof
Educationdoesnothavesufficientinfrastructuretocarryout
specialinspectionsofabout800suchschools,thegeneral
directionsinpublicinterestweredecidedtobeissued.Thisis
thebackgroundunderwhichtheimpugnedorderdated10th
September1997wasissued.
...
34.ChapterIVoftheRulesdealwithschoolfunds.Rule
172,interalia,prohibitsTrustorSocietyrunningany
recognisedschooltocollectfeecontributionorothercharges
fromanystudent.Amountshavetobecollectedonlybythe
SchoolandkeptinschoolfundasprovidedinRule173.Rule
176providesthatincomederivedfromthecollectionfor
specificpurposesshallbespentonlyforsuchpurpose.Rule
177statesastohowthefeecollectedbyunaidedschoolsisto
beutilised.It,interalia,stipulatesthatfundscollectedfor
specificpurposeshallbespentsolelyfortheexclusivebenefit
ofthestudents.Sinceconsiderableemphasiswaslaidbythe
partiesonRule177itwillbeusefultoreproducethesameas
under:
`177.Feesrealisedbyunaidedrecognisedschoolshowtobe
utilised
(1)Incomederivedbyanunaidedrecognisedschoolsbyway
offeesshallbeutilisedinthefirstinstanceformeeting
thepay,allowancesandotherbenefits,admissibletothe
employeesoftheschool.
Providedthatsavings,ifanyfromthefeescollectedbysuch
schoolmaybeutilised,byitsmanagingcommitteeformeeting
capitalorcontingentexpenditureoftheschool,orforoneor
moreorthefollowingeducationalpurposes,namely:
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(a)awardofscholarshipstostudent;
(b)establishmentofanyotherrecognisedschool,or
(c)assistinganyotherschooloreducationalinstitution,nor
beingacollege,undermanagementofthesamesocietyfortrust
bywhichthefirstmentionedschoolisrun.
(2)Thesavingstoinsubrule(1)shallbearrivedatafter
providingforthefollowing,namely:
(a)pension,gratuityandotherspecifiedretirementandother
benefitsadmissibletotheemployeesoftheschool:
(b)theneededexpansionoftheschooloranyexpenditureofa
developmentnature;
(c)theexpansionoftheschoolbuildingorfortheexpansionor
constructionofanybuildingorestablishmentofhostelor
expansionofhostelaccommodation.
(d)cocurricularactivitiesofthestudents.
(e)reasonablereservefund,notbeinglessthantenpercentof
suchsavings.
(3)Fundscollectedforspecificpurposes,likesports,
cocurricularactivities,subscriptionsforexcursionsor
subscriptionformagazine,andannualcharges,bywhatever
namecalled,shallbespentsolelyfortheexclusivebenefitof
thestudentsoftheconcernedschoolandshallnotbeincluded
inthesavingsreferredtoinsubrule(2).
(4)Thecollectionsreferredtoinsubrule(3)shallbe
administeredinthesamemannerasthemoniesstandingtothe
creditofthePupilsFundareadministered.'
...
36.InM.C.D.Vs.ChildrenBookTrust,1992(3)SCC390the
ApexcourthasheldthatRule177requirestheutilisationofthe
incomeonlyforthepurposementionedinthatRule.TheRules
donotcontemplatetransferoffundfromSchooltoSociety.
SuchtransferoffundsareindisregardoftheRules.Such
transferscannot,byanyprocessofreasoning,beheldas
voluntarycontributionsreceivedbytheSociety.Theschool
beingaseparateentitypremisesoccupiedbytheschoolwill
belongtoitandnottotheSociety.TheSupremeCourthas
noticedwithapprovaltheobservationsmadebythiscourtin
SafdarjungEnclaveEducationalSocietyVs.DelhiMunicipal
Corporation,AIR1989Delhi266,totheeffectthattheSociety
wasbeingrunpurelyoncommerciallinesforpurposesofprofit
anditisthereceiptofincomegeneratedfromtheSocietyinthe
formofbuildingfundanddonationsetc.whichareforcedon
studentsandtheirguardiansandthesamewerenotvoluntary
contributions.Inourview,theseobservationswouldnotbe
dilutedmerelybecausethesameweremadeinthecontextof
exemptionforpaymentofhousetaxunderSection115(4)of
theDelhiMunicipalCorporationAct,1957.TheSafdarjung
EnclaveEducationalSocietywasrunningGreenFieldSchool
recognisedundertheAct.
...
54.Assumingpowertoregulatefeeetc.canbeinferredfrom
Section24,abareperusalofSectionshowsthatitdoesnot
conferanygeneralpoweronDirectorofEducation.Readingof
subsection(3)and(4)ofSection24showsthatonlyspecific
directionsinrespectofaparticularschoolinwhichadefector
deficiencymaybefoundatthetimeofinspectionorotherwise,
canalonebeissued.Onfailuretocomplywithanydirections
givenundersubsection(3),theDirectorofEducation,as
contemplatedbysubsection(4),cantakesuitableaction
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includingwithdrawalofrecognitionetc.Itwascontendedthat
assumingSection24couldbeapplied,the16schoolson
inspectionofwhichallegeddefectsanddeficiencieswerefound
thenactionagainstonlythoseschools,afterfollowingthe
procedurelaiddownintheActandtheRules,couldalonebe
taken.WemayalsonoteanotherRulewhichshowsthatifany
schoolindulgesincommercialisationofeducation,theDirector
ofEducationisnotpowerlesstotakeappropriateaction.Rule
50inChapterIVprovideforconditionforrecognitionof
privateschools.Underthesaidrulearecognisedschoolhasto
continuetofollowtheconditionsspecifiedintheRules.Sub
rule(iv)ofRule50providesthattheschoolisnotrunforprofit
toanyindividual,grouporassociationofindividualsorany
otherperson.IftheDirectorofEducationfindsthattheschool
isbeingrunforprofit,suchaschoolwouldbeviolatinga
conditionofrecognitionandthusitcanbeaskedtorectifyit
failingwhichtofacetheconsequenceswhichmaybe
withdrawalofrecognitionasaresultofnotcontinuingtofulfill
theconditionofrecognition.TheDirectorofEducationwould
bejustifiedinaskingtheschooltoexplainfactswhich
accordingtoDirectorofEducationmayshowthattheschoolis
beingrunforprofit.Theschoolisobligedtoexplainfactsto
thesatisfactionofDirectorofEducation.Ifitisunabletodoso,
theDirectorofEducationcanasktheschooltoreducethefee
andotherchargeswhichaccordingtotheDirectorshowthatthe
schoolisindulgingintheprofitmotives.Inourview,itwould
notbeopentotheschooltosaythattheDirectorofEducation
hasnopowertodirecttheschooltoreducethefeeandother
chargesasnosuchpowervestsinrespectofunaidedschools
becauseSection17(1)&(2)oftheActappliesonlytoaided
schools.Thedirectiontoreducethefeeandchargesistoavoid
straightawaytakingtheextremestepofwithdrawalof
recognitionortakingovertheschool.Itisanopportunitygiven
totheschoolsothattheDirectorofEducationmaynotresortto
withdrawalofrecognitionorstepsfortakingoverofthe
managementarenottaken.Itonlyamountstograntingan
additionalopportunitytotheschoolsothatoncompliancethe
extremeactionofwithdrawalofrecognitionortakingoverof
managementetc.maybeavoided.Butforthefindingsand
recommendationsofRaghvanreportwhichmakesthepresent
caseasquitepeculiarandtowhichwewilladvertalittlelater,
wefindforceinthesubmissionthatSection24andRule50are
applicabletospecificschoolswhichmaybefoundtobe
violatingtheseprovisions.Despitethisconclusion,wefeelthat
theproblemhereispeculiarwhichnecessitatedissueofgeneral
orderwhichpersecannotbeheldtobeillegalinfactsand
circumstancesofthesecases.
...
62.InMrs.Y.TheclammaVs.UnionofIndiaandothers,1987
(2)SCC516,thequestionthatcameupforconsideration
beforetheSupremeCourtwaswhetherSection8(4)ofthe
DelhiSchoolEducationActwhich,interalia,providedthatno
employeeshallbesuspendedwithouttheapprovalofthe
DirectorofEducationwouldbeapplicabletotheminority
institutionsornot.Thecaseoftheminorityinstitutionswasthat
itencroachedupontheirrightunderArticle30(1)ofthe
Constitution.RelyinguponthedecisioninthecaseofFrank
AnthonyPublicSchooltheSupremeCourtheldthatthe
endeavorofthecourtinallcaseshasbeentostrikeabalance
betweentheConstitutionalobligationtoprotectwhatissecured
totheemployeesunderArticle30(1)andthesocialnecessityto
protectthemembersofthestaffagainstarbitrarinessand
victimisation.ItwasaccordinglyheldthatSection8(4)cannot
besaidtohaveencroachedupontherightoftheminorities
underArticle30(1).
66.Inviewoftheaforesaiddiscussionourconclusionsmaybe
summarisedasunder:
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(i)ItistheobligationoftheAdministratorandorDirectorof
Educationtopreventcommercialisationandexploitationin
privateunaidedschoolsincludingschoolsrunbyminorities.
...
(iii)NopermissionfromDirectorofEducationisnecessary
beforeorafterfixingtuitionfee.Incase,however,suchfixing
isfoundtobeirrationalandarbitrarythereareamplepowers
undertheActandRulestoissuedirectionstoschooltorectify
itbeforeresortingtoharshmeasures.Thequestionof
commercialisationofeducationandexploitationofparentsby
individualschoolscanbeauthoritativelydeterminedon
thoroughexaminationofaccountsandotherrecordsofeach
school.
(iv)TheActandtheRulesprohibittransferoffundsfromthe
schooltothesocietyorfromoneschooltoanother.
...
67.Havingbestowedourthoughtfulconsiderationtothe
submissionofcounselforthepartiesandaforenoticeddetail
factsandcircumstances,weareoftheviewthatan
independentCommitteedeservestobeappointedforthe
periodcoveredbyimpugnedorderdated10thSeptember,
1997uptostartofacademicsessionintheyear1999,tolook
intothecasesoftheindividualschoolsanddetermine,on
examinationofrecordandaccountsetc.Whetherincreaseof
tuitionfeeandothercharges,onfactswouldbejustifiedor
not.Eliminatingtheelementofcommercialisationandinlight
ofthisdecisiontheCommitteewoulddeterminefeeandother
chargespayablebystudentsofindividualschools.Wedonot
thinkthatitwouldbedesirableatpresenttopermitany
furtherincreasethanwhathasalreadybeenpermittedbyorder
dated11thDecember,1997.Wewould,therefore,extendthe
aforequotedorderdated11thDecember,1997tilldecisionof
casesofindividualschoolsbyCommitteeappointedbythis
judgment.
68.We,accordingly,appointaCommitteecomprisingof
Ms.JusticeSantoshDuggal,aretiredJudgeofthiscourtas
Chairpersonwithpowertonominatetwopersonsonewith
theknowledgeofAccountsandSecondfromfieldof
educationinconsultationwithChiefSecretaryofNCTof
Delhitodecidemattersoffeeandotherchargesleviableby
individualschoolsintermsofthisdecision.Werequestthe
Committeetodecidetheclaimsofindividualschoolsas
expeditiouslyaspossibleaftergrantinganopportunitytothe
Schools.DirectorofEducationandarepresentativeofthe
ParentTeachersAssociationandsuchotherpersonasthe
Chairpersonmaydeemfit.Thetermsandconditions
includingfees/honorariumpayableandotherfacilitiestobe
providedbytheStateGovernmenttotheChairpersonand
othermembersoftheCommitteewouldbediscussedbythe
ChiefSecretarywiththeChairpersonandfinalizedwithin10
days."
Ascanbeseenfromthesaidjudgment,theHighCourtdirectedthatan
independentCommitteedeservestobeappointedfortheperiodcoveredbythe
impugnedOrderdated10.9.1997issuedbyDoEtolookintothecasesof
individualSchoolsanddecidewhetherincreaseoftuitionfeesandothercharges
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wouldbejustifiedornot.Accordingly,aCommitteecomprisingofJusticeSantosh
Duggal,aretiredJudgeoftheDelhiHighCourtwasappointedasaChairpersonto
lookintothefeestructureleviedbyindividualschools.
7.BeingaggrievedbythedecisionoftheHighCourttoappointDuggal
Committee,theActionCommittee,cametothisCourtbywayofSpecialLeave
PetitionNo.19157/98(CivilAppealNo.2700/01).Inthecivilappeal,theAction
CommitteechallengedthepoweroftheHighCourttoappointaCommittee,
which,accordingtotheappellantwasbeyondthescopeandtheprovisionsof
DelhiSchoolEducationAct,1973.ItwasfurtherpleadedthatOrderdated
10.9.1997issuedbyDoEhadignoredthestatutoryprovisionsofthe1973Actand
theRulesframedthereunder.That,Orderdated10.9.1997waspurportedlyissued
byDoEunderSection24(3).That,fromtheschemeofSection24,itwasclearthat
thedirectionstobeissuedbyDoEhadtobespecifictotheschoolwhichhadbeen
inspected.That,therewasnopowerunderSection24(3)toregulatethefee
structureofanUnaidedRecognisedSchool.AccordingtotheActionCommittee,
theimpugnedOrderdated10.9.1997issuedbyDoEempoweredhimonlytocarry
outSchoolspecificinspectionandnottoregulatethefeestructureofanunaided
recognizedschoolunderSection24(3)ofthe1973Act.AccordingtotheAction
Committee,theDelhiHighCourthaderredinupholdingthesaidOrderdated
10.9.1997.Insofarasthetransferoffundsfromtheschooltothesocietywas
concerned,theActionCommitteesubmittedthatunderthe1973Act,theschool
wasnotaspecificjuristicentityseparatefromthesociety;thatunderRule50,one
oftheconditionsofrecognitionisthattheschoolmustberunbyasociety
registeredundertheSocietiesRegistrationAct,1860andthattheManaging
CommitteeoftheSchoolissubjecttothecontrolandsupervisionofthetrustor
societyrunningtheschooland,therefore,theschoolandthesocietyrunningthe
schoolwereoneandthesameentity.Therefore,accordingtotheAction
Committee,transferoffundsfromschooltothesocietyorviceversawasthe
internalmechanismoftheschoolwhichhadnobearingwiththequestionasto
whetherthefundsweremisused.AccordingtotheActionCommittee,theHigh
Courthaderredinholdingthatfundscannotbetransferredfromtheschooltothe
societyasthereisnoprohibitioninthe1973Actinrelationtosuchtransfersso
longastheutilizationofthefundsisforthebenefitoftheschool(s)inaccordance
withRule177.
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8.Asstatedabove,theActionCommitteefileditsspecialleavepetitionin
thisCourton28.11.1998.
9.On31.7.1999,DuggalCommitteesubmitteditsReport.Someofthe
findingsandconclusionsmentionedinthesaidReportarequotedhereinbelow:
"7.18TheCommitteeobservedthatinadditiontothetuition
fee,schoolswerealsochargingfeesundervariousotherheads
aswell.TheReportoftheJ.VeeraraghvanCommitteeon`Fee
StructureoftheDelhiPrivateSchools'(1997),haslistedas
manyas50headsunderwhichthefeewasbeingcollectedin
theschoolsinDelhi.Furthermore,thereisalsonouniformity,
amongschoolsinregardtothenomenclatureusedfordifferent
typesofleviesunderòthercharges'.Inadditiontothis,items
chargedunderthesameheadalsodifferfromschooltoschool.
Thishasresultedinavoidableambiguitiesanddistortionsinthe
feestructurewhichcouldbecomeavehicleforexploitation
wheretheschoolsweresoinclined.
...
4.Thereisapronouncedtendencysince199697,onthe
partoftheschools,togenerallyunderstatesurplus/overstate
thedeficit.Thiswasoftensoughttobeachievedbyresortingto
overprovisioningundercertainheadsofexpendituresuchas
gratuity,propertytaxetc.;diverting(evenpriortodetermining
thesurplus)apartoftheschoolrevenuereceiptstovarious
fundsusuallycreatedwiththespecificintentionoftemporarily
parkingthemoneyinthem;chargingofdepreciationwithout
simultaneouslysettingupaDepreciationReserveFundfor
replacingtheassets;depreciatingassetsnotownedbythe
schoolandsimultaneouslytransferringequivalentamountsto
theparentsociety;notincludingtheincomeaccruedfrom
certainactivitiesunderthehead`fee'intheIncomeand
ExpenditureAccountandsimultaneouslynotcreditingthese
receiptstothe`RecognisedUnaidedSchoolFund',but
concurrentlychargingtheexpenditureincurredontherelated
activities,totheIncomeandExpenditureAccount;non
capitalizationofexpenditureofcapitalnatureandinstead
chargingittotheIncomeandExpenditureAccount;incurring
expenditureonitemsandforpurposesnotstrictlyfallingwithin
thescopeofDelhiSchoolActandRules,1973(Rule177);
transferringthemoneytotheparentsocietyundervarious
pretextssuchaspaymentofleaserent,contributionto
EducationDevelopmentExpenditure,incurringrecurring
expenditureonthemaintenanceoftheofficeoftheparent
societyandmaintenanceofcarsfortheuseoftheSocietyetc.
Therewasalsoavisiblespurtinexpendituremore
particularlyin199798oncertainitemssuchasprofessional
fees,maintenanceandotheroverheadchargesoftheschool.
[Paras6.2,6.3and6.4]"
10.Tocompletethechronologyoftherelevantevents,itmaybestatedthat
althoughthespecialleavepetitioncametobefiledbytheActionCommitteeinter
aliachallengingorderofDoEdated10.9.1997andthejudgmentoftheDelhiHigh
CourtappointingthatCommittee,bywayofanaffidavitfiledon21.2.2001inthe
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pendingcivilappealinthisCourt,theActionCommitteeinteraliaalsochallenged
theReportoftheDuggalCommitteedated31.7.1999infollowingterms:
"ThataspertheordersoftheHighCourt,thetermsof
referenceofthecommitteewerespecific,however,the
committeehasconverteditselfintoageneralcommitteeto
analysetheproblemofunaidedpublicschoolsinDelhiand
hasgivenavagueunsubstantiatedreportwithoutevenhearing
theschools,intheabsenceofanymaterialagainsttheschools.
Rightfromthefirstparaofthereport,itlooksthatthe
committeehasproceededwiththeclosedandbiasedmind
againstthecultureoftheunaidedprivateschools."
11.Atthisstage,itmaybestatedthatintermsoftheReportoftheDuggal
Committee,theDoEissuedanorderon15.12.1999.Thiswasalsoduringthe
pendencyofthecivilappealfiledbytheActionCommittee.Clause8ofthe
Directionsdated15.12.1999readsasfollows:
"Fees/fundscollectedfromtheparents/studentsshallbeutilized
strictlyinaccordancewithrules176and177oftheDelhi
SchoolEducationRules,1973.Noamountwhatsoevershallbe
transferredfromtherecognizedunaidedschoolfundofa
schooltothesocietyorthetrustoranyotherinstitution."
12.Whenthematterreachedfinalhearing,threepointswereargued.Thesaid
threepointsarequotedhereinbelow:
"(a)WhethertheDirectorofEducationhastheauthorityto
regulatethequantumoffeeschargedbyunaidedschools
underSection17(3)oftheDelhiSchoolEducationAct,
1973?
(b)Whetherthedirectionissuedon15121999bytheDirector
ofEducationunderSection24(3)oftheDelhiSchool
EducationAct,1973statinginteraliathatnofees/funds
collectedfromparents/studentsshallbetransferredfrom
theRecognisedUnaidedSchoolFundtothesocietyor
trustoranyotherinstitution,isinconflictwithRule177
oftheDelhiSchoolEducationRules,1973?
(c)Whethermanagementsofrecognisedunaidedschoolsare
entitledtosetupaDevelopmentFundAccountunderthe
provisionsoftheDelhiSchoolEducationAct,1973?"
13.Inthereviewpetitions,wearemainlyconcernedwiththefirsttwopoints.
ItmaybenotedthatthejudgmentunderreviewwasdeliveredbythisCourton
27.4.2004.Atthattime,thejudgmentsofthisCourtinT.M.A.PaiFoundationv.
StateofKarnatakareportedin(2002)8SCC481andIslamicAcademyof
Educationv.StateofKarnatakareportedin(2003)6SCC697heldthefield.
Therefore,thisCourtwasrequiredtodecidethequestionofreasonablefee
structureandtheautonomyoftheinstitution,transparencyandaccountabilityin
thecontextofthejudgmentsinT.M.A.PaiFoundationcase(supra)andIslamic
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AcademyofEducationcase(supra).Themajorityviewinthepresentcasefinds
placeinparas17,18,21and23.
14.AnalyzingRules172,175,176and177,thisCourtheldthatapplicationof
incomewasnotaccrualofincome.Themajorityviewwasthattherewasa
differencebetweenappropriationofincomeandtransferoffunds.Itwasfurther
heldbythemajoritythatunderclause8oftheOrderofDoEdated15.12.1999the
managementwasrestrainedfromtransferringfundstotheSocietyortheTrust(s)
oranyotherinstitution,whereasrule177(1)referstoappropriationofincomefrom
revenueaccountformeetingcapitalexpenditureoftheschooland,therefore,there
wasnoconflictbetweenrule177andclause8oftheOrderissuedbyDoEon
15.12.1999.Videpara27,thisCourtgavefurtherdirectionstotheDirectorof
Educationinfollowingterms:
"27.InadditiontothedirectionsgivenbytheDirectorof
EducationvideOrderNo.
DE.15/Act/Duggal.Com/203/99/2398924938dated1512
1999,wegivefurtherdirectionsasmentionedhereinbelow:
(a)EveryrecognisedunaidedschoolcoveredbytheActshall
maintaintheaccountsontheprinciplesofaccounting
applicabletononbusinessorganisation/notforprofit
organisation.
Inthisconnection,weinteraliadirecteverysuchschoolto
preparetheirfinancialstatementconsistingofBalanceSheet,
Profit&LossAccount,andReceipt&PaymentAccount.
(b)Everyschoolisrequiredtofileastatementoffeesevery
yearbeforetheensuingacademicsessionunderSection17(3)
ofthesaidActwiththeDirector.Suchstatementwillindicate
estimatedincomeoftheschoolderivedfromfees,estimated
currentoperationalexpensestowardssalariesandallowances
payabletoemployeesintermsofRule177(1).Suchestimate
willalsoindicateprovisionfordonation,gratuity,reservefund
andotheritemsunderRule177(2)andsavingsthereafter,if
any,intermsoftheprovisotoRule177(1).
(c)ItshallbethedutyoftheDirectorofEducationtoascertain
whethertermsofallotmentoflandbytheGovernmenttothe
schoolshavebeencompliedwith.Weareshownasampleletter
ofallotmentissuedbytheDelhiDevelopmentAuthorityissued
tosomeoftheschoolswhicharerecognisedunaidedschools.
Wereproducehereinclauses16and17ofthesampleletterof
allotment:
`16.Theschoolshallnotincreasetheratesoftuitionfee
withoutthepriorsanctionoftheDirectorateof
Education,DelhiAdministrationandshallfollow
theprovisionsoftheDelhiSchoolEducationAct/
Rules,1973andotherinstructionsissuedfrom
timetotime.
17.TheDelhiPublicSchoolSocietyshallensurethat
percentageoffreeshipfromthetuitionfee,aslaid
downundertherulesbytheDelhiAdministration,
isfromtimetotimestrictlycompliedwith.They
willensureadmissiontothestudentbelongingto
weakersectionstotheextentof25%andgrant
freeshiptothem'."
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15.On5.7.2004thepresentreviewpetitionscametobefiledbasically
challengingthemajorityviewholdingtheDoEhasthepowertoregulatethefee
structureofprivateunaidedschoolsincludingutilizationoffeesunderrule177(1)
(b)and(c).Accordingtothereviewpetitioners,inthematteroffeefixationsince
therearestatutoryrulesgoverningthefield,nodirectionscouldhavebeenissued
bythisCourtcontrarythereto.Accordingtothereviewpetitioners,thedirections
issuedbyDoEdated15.12.1999wereneitherthesubjectmatterofthewritpetition
beforetheDelhiHighCourtnorwerethesubjectmatterofthespecialleave
petition.Accordingtothereviewpetitioners,theOrderofDoEdated15.12.1999
wasnotthesubjectmatterofthecivilappeal.
16.NoticewasissuedonthereviewpetitionvideOrderdated10.8.2004.
17.Beforedealingwiththeargumentsadvancedonbehalfofthereview
petitioners,itmaybestatedthatentirelawinteraliaonthequestionoffee
structurecametobedecidedonceagainbytheConstitutionBenchofthisCourtin
thecaseofP.A.InamdarandOrs.v.StateofMaharashtraandOrs.
Reportedin(2005)6SCC537.
18.S/ShriSoliJ.SorabjeeandSalmanKhurshid,learnedseniorcounsel
appearingonbehalfoftheActionCommitteeandotherreviewpetitioners,
submittedthatclause8oftheOrderissuedbyDoEdated15.12.1999iscausing
administrativedifficultieswhichneedstobeclarified.ThisCourtvidemajority
judgmenthasheldthatclause8isinconsonancewithrule177ofDelhiSchool
EducationRules,1973.Rule177hasbeenquotedhereinabove.Underclause8,
DoEhasstipulatedthat"noamountwhatsoevershallbetransferredfromthe
recognizedunaidedschoolfundofaschooltothesocietyorthetrustoranyother
institution."Accordingtothelearnedseniorcounsel,ariderneedstobe
introducedinclause8,namely,"exceptunderthemanagementofthesamesociety
ortrust".Thus,accordingtothelearnedcounsel,ifthesuggestedriderisaddedin
clause8thentheManagementwouldhavenogrievancewiththemajorityview.
Thus,accordingtothelearnedcounsel,clause8shouldbereadasfollows:
"Noamountwhatsoevershallbetransferredfromthe
recognizedunaidedschoolfundofaschooltothesocietyorthe
trustoranyotherinstitutionexceptunderthemanagementof
thesamesocietyortrust"
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19.Accordingtothelearnedcounsel,ifthesuggestedriderisaddedtoclause
8thenitwouldsubservetheobjectunderlyingthe1973Act.
20.ThereismeritintheargumentadvancedonbehalfoftheAction
Committee/Management.The1973ActandtheRulesframedthereundercannot
comeinthewayoftheManagementtoestablishmoreschools.Solongasthereis
areasonablefeestructureinexistenceandsolongasthereistransferoffunds
fromoneinstitutiontotheotherunderthesamemanagement,therecannotbeany
objectionfromtheDepartmentofEducation.
21.IntheReviewPetitionsitisallegedthatclause8oftheOrderofDoE
dated15.12.1999wasneverchallengedandyettheCourthasgoneintothe
validitythereof.Thereisnomeritinthisargument.Itwasarguedonbehalfofthe
Managementbeforeusthatclause8ofOrderofDoEdated15.12.1999goes
beyondRule177and,therefore,thisCourthasdiscussedintheJudgmentunder
Reviewvidepara21thedifferencebetweenaccrualandapplicationofincome.
22.IntheReviewPetitionsitisfurtherpleadedthatwherethe1973Actand
theRulesthereunderoperates,regulationofeducationwouldbegovernedthereby
andthereforetheCourtcannotimposeanyotherorfurtherrestrictionsby
travellingbeyondthescope,objectandpurportthereof.Inthiscontextitmaybe
notedthatinT.M.A.PaiFoundationcase(supra)andinIslamicAcademy
(supra)theprinciplesforfixingfeestructurehavebeenillustrated.However,they
werenotexhaustive.Theydidnotdealwithdeterminationofsurplusand
appropriationofsavings.Infactinthemajorityviewofthepresentmatter,this
Courthasfoundthattheabovetopicsarenotdealtwithbythe1973Rulesand
thereforeclause8wasfoundnottobebeyondRule177orinconflicttheretoas
alleged.TheAdditionalDirectionsgivenintheJudgmentoftheMajorityvidepara
27donotgobeyondRule177buttheyareapartofgapfillingexerciseand
disciplinetobefollowedbythemanagement.Forexample:everyschoolshall
preparebalancesheetandprofitandlossaccount.Suchconditionsdonotsupplant
Rule177.Ifreasonablefeestructureisthetestthentransparencyand
accountabilityareequallyimportant.Infact,ascanbeseenfromReportsof
DuggalCommitteeandtheearlierCommittee,excessivefeesstoodchargedin
somecasesdespitethe1973RulesbecauseproperAccountingDisciplinewasnot
providedforin1973Rules.Therefore,theFurtherDirectionsgivenaremerely
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gapfillers.Ultimately,Rule177seekstransparencyandaccountabilityandthe
FurtherDirections(inpara27)merelybringsaboutthattransparency.Lastly,it
maybenotedthatthematterhascomeuptotheApexCourtfromPIL.Hencethere
isnomeritintheaboveplea.
23.Subjecttotheaboveclarification,reviewpetitionsstanddismissedwith
noorderastocosts.
.................................J.
(S.H.Kapadia)
NewDelhi;
August7,2009.
REVIEWPETITION(CIVIL)NO.1368OF2004
IN
CIVILAPPEALNO.2700OF2001
ActionCommittee,UnAidedPvt.Schools&Ors.....Petitioners
vs.
DirectorofEducation,Delhi&Ors.....Respondents
withRP(C)No.1420of2004inCANo.2704of2001,RP(C)Nos.1421
1422of2004inCANos.27052706of2001,RP(C)No.1423of2004in
CANo.2703of2001andRP(C)No.1774of2004inCANo.2701of2001
JUDGMENT
CYRIACJOSEPH,J.
Ihadthebenefitofreadingtheseparatejudgmentsrenderedby
Hon'bleMr.JusticeS.B.SinhaandHon'bleMr.JusticeS.H.Kapadiainthe
aboveReviewPetitions.
ThoughIagreewiththeviewofS.B.Sinha,J.thatanydirection
issuedbytheHighCourtorbytherulemakingauthorityoranystatutory
authoritymustbeinconformitywiththedecisionofthisCourtinthecaseof
T.M.A.PaiFoundationasclarifiedbythedecisionofthisCourtinthecase
ofP.A.Inamdar,inmyview,thejudgmentofS.H.Kapadia,J.doesnot
questionorcontradictsuchalegalproposition.Onthecontrary,itisin
recognitionoftheabovelegalpropositionthatmodificationsuggestedby
thelearnedcounselforthereviewpetitionersinrespectofClause8ofthe
orderdated15.12.1999issuedbytheDirectorofEducationhasbeen
acceptedbyS.H.Kapadia,J.
Hence,havingregardtothelimitedscopeofareviewpetitionandin
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8/20/2016
viewofthesubmissionsmadebylearnedcounselforthepartiesduring
arguments,IconcurwiththejudgmentrenderedbyS.H.Kapadia,J.
................................J.
(CyriacJoseph)
NewDelhi;
August7,2009.
REVIEWPETITION(C)NO.1368OF2004
IN
CIVILAPEPALNO.2700OF2001
ACTIONCOMMITTEE,UNAID.PVT.SCHOOLS&ORS.Petitioner(s)
VERSUS
DIRECTOROFEDUCATION&ORS.Respondent(s)
WITH
R.P.(C)NO.1420of2004
R.P.(C)NO.14211422of2004
R.P.(C)NO.1423of2004
R.P.(C)NO.1774of2004
ORDER
Inviewofthemajorityjudgment,thereviewpetitions
standdismissed.
..........................J.
[S.B.SINHA]
..........................J.
[S.H.KAPADIA]
..........................J.
[CYRIACJOSEPH]
NewDelhi.
AUGUST7,2009.
ITEMNO.1ACOURTNO.3SECTIONXIV
(ForJudgment)
SUPREMECOURTOFINDIA
RECORDOFPROCEEDINGS
REVIEWPETITION(C)NO.1368OF2004INCIVILAPPEAL
NO.2700/2001
ACTIONCOMMITTEE,UNAID.PVT.SCHOOLS&ORS.Petitioner(s)
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8/20/2016
VERSUS
DIRECTOROFEDUCATION&ORS.Respondent(s)
WITH
R.P.(C)NO.1420of2004
R.P.(C)NO.14211422of2004
R.P.(C)NO.1423of2004
R.P.(C)NO.1774of2004
Date:07/08/2009ThesePetitionswerecalledonforpronouncement
ofjudgmentstoday.
ForPetitioner(s)Mr.SuryaKant,Adv.
Mr.RomyChacko,Adv.
Mr.AshokK.Mahajan,Adv.
ForRespondent(s)Ms.SadhanaSandhu,Adv.
MrsAnilKatiyar,Adv.
Mr.RajenderPd.Saxena,Adv.
Hon'bleMr.JusticeS.B.Sinha,Hon'bleMr.Justice
S.H.KapadiaandHon'bleMr.JusticeCyriacJoseph
pronouncedseparatejudgmentsoftheBench.
AsperthejudgmentofHon'bleMr.JusticeS.B.
Sinha,thedecisionofthisCourtismodifiedtotheextent
mentionedinthesignedjudgmentandthereview
petitionsaredisposedof.Nocosts.
2
AsperthejudgmentofHon'bleMr.JusticeS.H.
Kapadia,whichwasconcurredbyHon'bleMr.Justice
CyriacJoseph,thedecisionofthisCourtisclarifiedin
termsofthesignedjudgmentandthereviewpetitions
standdismissedwithnoorderastocosts.
(A.S.BISHT)(PUSHAPLATA
BHARDWAJ)COURTMASTERCOURT
MASTER
(Threereportablesignedjudgmentsandonesignedorderare
placedonthefile)
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