Don’t indulge in profiteering, schools must reduce fees as running costs have come down: Supreme Court

NEW DELHI: The Supreme Court on Monday said educational institutions must reduce fees as their running costs have come down considering the COVID lockdown since last year due to which the campus’ have remained closed.

A bench of Justices A M Khanwilkar and Dinesh Maheshwari, according to a report by ToI, said the management of educational institutions should be sensitive to the problems faced by people due to the pandemic and take steps to provide succour to students and their parents in these harsh times.

It said insisting on payment for facilities not provided to students would amount to profiteering which must be avoided by the schools.

The Supreme Court, the report added, held that that a law can be framed to regulate fees in private unaided schools to stop profiteering by the management and parents can also be made a part of the process to decide fees.

“In law, the school management cannot be heard to collect fees in respect of activities and facilities which are, in fact, not provided to or availed of by its students due to circumstances beyond their control. Demanding fees even in respect of overheads on such activities would be nothing short of indulging in profiteering and commercialisation. It is a well-known fact and judicial notice can also be taken that due to complete lockdown, schools were not allowed to open for substantially long period during the academic year 2020-21. Resultantly, the school management must have saved overheads and recurring cost on various items such as petrol/diesel, electricity, maintenance cost, water charges, stationery charges, etc,” the bench said.

While adjudicating a batch of pleas of private unaided schools of Rajasthan against the state government’s direction to them to forgo 30% of tuition fees during the pandemic, the bench held that there is no law giving mandate to the state government to pass such an order but agreed that the schools had to reduce the fees.

Accordingly, the appellants are justified in assailing the order by the director, secondary education and must succeed. However, that does not give licence to the appellants to be rigid and not be sensitive about the aftermath of the pandemic. The school management supposedly engaged in doing charitable activity of imparting education, is expected to be responsive and alive to that situation and take necessary remedial measures to mitigate the hardship suffered by students and their parents. It is for the school management to reschedule payment of school fees in such a way that not even a single student is left out or denied opportunity of pursuing his/her education, so as to effectuate the adage— live and let live,” the bench said.

The parents, who are demanding cut in fees, told the bench that the schools have saved colossal amount of money during the online classes towards electricity charges, water charges, stationery charges and other miscellaneous charges which are required for physical running of the school.

Agreeing with the parents’ contention, the bench said, “Indeed, overheads and operational costs so saved would be nothing, but an amount undeservedly earned by the school without offering such facilities to the students during the relevant period … the principle of quid pro quo must come into play. However, no accurate (factual) empirical data has been furnished by either side about the extent to which such savings have been or could have been made or benefits derived by the school management. Without insisting for mathematical exactitude approach, we would assume that the school management(s) must have saved around 15 per cent of the annual school fees.”

Granting relief to students, the bench said the fees should have been refixed by the regulating authority but decided to pass order for minimum 15 percent cut to settle the issue once and for all.

“The appellants (school management of the private unaided schools) shall collect annual school fees from their students as fixed under the Act of 2016 for the academic year 201920, but by providing deduction of 15 per cent on that amount in lieu of unutilised facilities by students during the relevant period of academic year 2020-21,” it said.

The court also directed the schools to not debar any student from attending either online classes or physical classes on account of nonpayment of fees, arrears/outstanding fees.