ACTION COMMITTEE,UN-AIDED PVT. SCHOOLS & ORS. versus DIRECTOR OF EDUCATION DELHI & ORS.

Citation: [2009] 12 S.C.R. 631 · Decided: 07-08-2009 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Dismissed
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Judgment (excerpt)

[2009] 12 S.C.R. 631 
-
ACTION COMMITTEE, UN-AIDED PVT. SCHOOLS & 
A 
ORS. 
v. 
· DIRECTOR OF EDUCATION DELHI & ORS. 
Review Petition (Civil) 1368 of 2004 
In 
B 
Civil Appeal No. 2700 of 2001 
AUGUST 7, 2009 
> 
[S.B. SINHA, S.H. KAPADIA AND CYRIAC 
JOSEPH, JJ.] 
c 
Education/Educational Institutions - Unaided recognized 
schools -
Regulation of fees and funds collected from 
students - Transfer of funds by the schools to the Societies/ 
trusts/other schools run by the same society - Direction by D 
Director of Education (DOE) make such transfer in 
accordance with r. 177 of Delhi School Education Rules -
Supreme Court by majority holding that DOE had power to 
regulate fee structure of private unaided schools including 
utilization of fee - Review Petition - Held: Per majority: E 
Direction of DOE does not go beyond r. 177 - The direction 
is only a gap-filling exercise - Transfer of funds from one 
--1 
institution to other under the same management is 
permissible - Per minority: The direction of DOE is not 
maintainable because it runs contra Constitution Bench 
F 
decisions of Supreme Court in TMA Pai, Islamic Academy 
and P.A. lnamdar cases - The order of DOE was also without 
jurisdiction - Delhi School Education Act, 1973 - s.24(3) -
Delhi School Education Rules, 1973 - r. 177. 
Parents' Association had filed a writ petition against G 
unaided recognized Schools interalia alleging that 
transfer of funds by them to the societies/trusts/other 
Schools run by the same society/trust was in violation of 
631 
H 
632 
SUPREME COURT REPORTS [2009] 12 S.C.R. 
A Delhi School Education Act, 1973 and Rules framed 
-
thereunder. Appellant also filed writ petition challenging 
the order of Director of Education (DOE) dated 10.9.1997 
whereby it was directed that fees and funds collected 
from the students be utilized in accordance with Rule 177 
B of Delhi School Education Rules, 1973. High Court 
disposed of the writ petitions. High Court also appointed 
a Committee (Duggal Committee) to look into justification 
of increase in tuition fees etc. by the individual Schools. 
c 
Appellant filed appeal to this court challenging the 
validity of High Court order as· regards order of DOE 
dated 10.9.1997 and also challenging appointment of 
Committee. In the meantime Committee submitted its 
report. The same was also challenged by the appellant. 
D 
During pendency of the appeal, in terms of the report 
of the Committee, DOE issued order dated 15.12.1999. 
Clause 8 thereof directed that fees/funds collected from 
students should be utilized strictly in accordance with 
Rules 176 and 177 of the Rules. No amount should be 
E transferred from the recognized unaided School Fund of 
a school to the society or trust or any other institution. 
This Court by the majority judgment held that DOE 
had power to regulate the fee structure of private unaided 
F 
schools including utilization of fees u/r.177 (1) (b) and (c). 
The Court also held that there was no conflict between 
r. 177 and clause 8 of Order dated 15.12.1999. 
The review petitions were filed on the grounds t!lat 
since the fee fixation is governed by statutory rules, no 
G directions could have been issued by this Court contrary 
thereto; and that this court could not have gone into the 
validity of order dated 15.12.1999 as the same was not 
challenged in the appeal. 
H 
During pendency of the petition, in P.A. lnamdar Case 
ACTION COMMITIEE, UN-AIDED PVT. SCHOOLS & 633 
ORS. v. DIRECTOR OF EDUCATION 
Constitution Bench of this Court clarifying TMA Pai case A 
and Islamic Academy case, laid down the law relating to 
fee structure. 
Dismissing the petitions by majority, the Court 
HELD: 
B 
Per S.H. Kapadia, J. 
) 
1. The Petitioner is correct in suggesting that if a 
rider i.e. 'except under the management of the same c 
society or trust' is added to Clause 8 of the Order dated 
15.12.1999, then it would subserve the object underlying 
Delhi School Education Act, 1973. The Act and Delhi 
· School Education Rules, 1973 cannot come in the way 
of the management to establish more schools. So long D 
as there is a reasonable fee structure in existence and so 
\ 
long as there is transfer of funds from one institution to 
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the other under the same management, there cannot be 
any objection from the Department of Education (DOE). 
[Paras 19 and 20] (879-C-D] 
E 
2. It is not correct to say that Clause 8 of the Order 
of DOE dated 15.12.1999 was never challenged and yet 
' 
the
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