The growth and expansion of educational institutions is being demonized. Private institutions are being labelled as ‘profiteering institutions’.


Eighteen years ago, no less than an 11-judge Constitution Bench of the Supreme Court, unanimously recognised the autonomy of private unaided schools as a Fundamental Right. But since that landmark judgement in State of Karnataka Vs TMA Pai Foundation in 2002, the autonomy of private schools has been shred to pieces by populist state governments. Today, private school managements are disheartened and losing the drive and initiative, which is required for running, nurturing and growing an institution.

In the TMA Pai case, the top court declared that not only constitutionally, but also jurisprudentially, private unaided educational institutions must have maximum, almost absolute, autonomy in their own management and administration. This includes the right to admit students, set up a fee structure, appoint its staff and take action against such staff. Even minimal interference by the state was frowned upon and, in fact, proscribed. The high hope was that with freedom and autonomy, more such institutions would be established.

In the case of a private educational institution’s right to set its own fee structure, the Supreme Court understood that the provision of good amenities and infrastructure costs money and therefore, it must be left to such an institution, which does not seek any aid from the government, to determine the scale of fee that it charges from its students. It was also held that the fee is required to be fixed keeping in mind the need to generate funds for betterment and growth of the institution.

Subsequently, in the case of Modern School (2004), the Supreme Court reiterated, that the school fee is required to be fixed keeping in mind the infrastructure and facilities provided, investments made, future plans for growth and expansion, and not merely on the basis of the salaries payable to the staff. It has been further held repeatedly that private school fees cannot be regulated, except for capitation fee (forced/compulsory donation) and profiteering. Surplus or profit is allowed, as this was held to be different from profiteering.Distinguishing profit from profiteering, it has been held that an institution has a right to plan and generate surplus/profit, not only for its own development and expansion, but also for growth of education by establishing other educational institutions.

However, vote bank driven state governments have turned the above two mentioned judgements of the Supreme Court on their head. This is being done in the guise of interpretation and implementation. The most explicit, lucid, clear and erudite expressions of law have been turned into a self-suiting conundrum in the guise of interpretation at the stage of enforcement. The growth and expansion of educational institutions is being demonised. Private institutions are being labelled as “profiteering institutions”. The interference, which is supposed to be minimal, has become omnipresent, even in the most trivial of administrative matters of private educational institutions.

Every facet of the fundamental right to autonomy is questioned by way of executive instructions, ordinances, notifications, directions and guidelines—in the name of feigned notions of equity, propriety and morality. The stark truth is that this is being driven by vote bank politics and appeasement. And one of the most populist state governments in this context is situated in the heart and capital of the country.

It is inculcating an expectation that everything in a society must come without cost and that the government has a right to fix (rather than regulate) the fees of private schools. The said state government, in the garb of “regulation”, has, for the past over six years, paralysed the functioning of private schools by illegally restraining such schools from fixing their fee structure commensurate with the facilities and infrastructure provided and the expenditure incurred. Such erroneous orders shall eventually meet their fate in the courts. But the delay in the adjudication processes of our over-burdened courts is in the meantime providing state governments, like that in the national capital, a free albeit illegal hegemony over private unaided schools.

There is another misconception being floated that private schools have been given land at throwaway prices. This is untrue. The allotments to schools in Delhi were made at rates determined by the Central Government, which were many times more than the cost incurred by the land-owning agencies. The land-owning agencies in fact made many crores of profit in allotting such lands. The governments were the ones who called upon private investment in education. It’s a gross misconception and self-suited belief that lands were allotted to the schools at throwaway prices (except in the case of a few schools, half a century ago, and that too by invitation). Further, a duty was also imposed for providing free and compulsory education to the extent of 25% poor and needy students, adding a recurring cost to the one time allotment price.

However, the Delhi High Court, for one, has been a beacon of hope for private schools in Delhi. In 2014, it upheld the fundamental right to autonomy of private, unaided schools to lay down their own admission criteria, setting aside the one formula fits all criteria sought to be fixed by the state government for all schools. Similarly, 2019 again marked a watershed, when the long-forgotten and diluted beyond recognition judgement in the TMA Pai case and the often misquoted and misinterpreted judgement on Modern School case, came to be resurrected in the form of re-conferring the right upon private schools to fix their own fee structures and not wait endlessly for prior approvals of the politically motivated executive. Both cases were filed by the Action Committee of 450 private unaided schools in Delhi. The court also prohibited the government from questioning or interfering with the incomes and expenses of private schools.

But again the present government in Delhi has chosen to ignore the judgement. On the issue of non-interference in fees, it has in fact issued orders contrary to the court orders knowing fully well that any institution that chooses to file a contempt case against it, shall be cornered and isolated. The quest to control private school fee in Delhi, is despite the fact that their fee is much less than what the government spends from exchequer on purportedly improving and maintaining teaching and infrastructure “standards” in government schools. Bullying private schools into accomplishing the government’s so called welfare objectives, has been counter-productive. The need of the hour is impetus and encouragement to schools, to focus on the quality of and innovation in education rather than coercing and entangling them into Licence Raj.

Kamal Gupta is an advocate practising in Supreme Court and Delhi High Court, specialising in the education sector.