Delhi High Court Allows Fee Hike Without Prior Approval for Private Schools
The Delhi High Court has ruled that private unaided recognized schools in the capital are permitted to increase their fees at the start of an academic session without needing prior approval from the Directorate of Education (DoE), as long as the fee structure is declared before the session begins. This judgment comes in the case of DPS Vs Government of Delhi, with Justice Anup Jairam Bhambhani presiding over the matter.
According to the court, Section 17(3) of the Delhi School Education Act, 1973 does not necessitate these schools to wait for the DoE’s consent before implementing a fee increase at the beginning of an academic year. Justice Bhambhani stated, “Under section 17(3) of the DSE Act, no prior permission or sanction is required by a private, unaided, recognized school to increase its fee at the commencement of an academic session; and the only statutory obligation upon a school is that it must file its statement of proposed fee with the DoE prior to commencement of an academic session.”
However, the court specified that if a school wishes to increase fees during an ongoing academic session, the DoE’s prior approval would then be necessary. The court emphasized that the DoE’s role is regulatory, ensuring that private schools do not engage in profiteering, commercializing education, or charging capitation fees.
This ruling was delivered in response to a series of petitions, notably led by Delhi Public School, Vasant Kunj, which challenged various DoE orders that rejected fee-hike proposals from private unaided schools. Justice Bhambhani criticized the DoE’s actions, highlighting the persistence in a course of action that ignored legal precedents and the law’s letter.
The court further noted that it is not the DoE’s place to dictate the financial management of schools. The petitioner schools argued that the DoE had been arbitrarily denying their fee increase proposals, undermining their financial autonomy and their right to operate private educational institutions. They maintained that the DoE could only interfere with fee determinations if there was evidence of profiteering or commercialization.
More Read
The court concurred with these arguments, clarifying that the law does not mandate private unaided recognized schools to seek prior approval for fee hikes unless they occur mid-session. Moreover, findings of profiteering or commercialization can only be made following an audit under Section 18(5) of the Act, based on returns filed under Rule 180 of the Delhi School Education Rules.
Justice Bhambhani also found the DoE’s orders alleging profiteering or commercialization unsubstantiated, calling them “gratuitous rhetoric” due to a flawed understanding of applicable accounting norms. The judgment reinforced that private schools enjoy financial autonomy within the Delhi School Education Act and Rules, and the DoE should not interfere with a school’s fiscal management.
The court rejected the DoE’s argument that schools governed by a “land clause” should be treated differently, asserting that such clauses must operate within the Act and Rules’ framework, without expanding the DoE’s statutory powers.
More Read
Additionally, the court ruled that private unaided schools are entitled to maintain a reasonable surplus for legitimate needs, including future development, and such surplus should not automatically be deemed ‘profiteering’ by the DoE. The court stated, “The mere availability of surplus funds with a private, unaided, recognized school, howsoever large, cannot be the sole basis for the DoE to infer that the school is indulging in commercialization or profiteering, and to thereby object to fee-hike by a school. This can only be examined after a thorough financial audit.”
The court quashed all DoE orders that rejected fee-hike proposals at the start of academic sessions and closed pending proposals based on the incorrect premise of needing prior approval. However, it refused to allow schools to recover past session arrears, noting that some proposals dated back to 2016-17, and recovering them now would unfairly burden parents and students.
The court directed that the last proposed fee increase should only apply from the next academic session starting in April 2027, and no school can retroactively demand or recover past session arrears. Senior Advocates JP Sengh, Diya Kapur, HL Tiku, and Puneet Mittal represented the petitioner schools, while Additional Solicitor General Chetan Sharma and Standing Counsel Sameer Vashisht appeared for the respondent authorities.
