The Delhi High Court has held that private unaided recognised schools in the capital are not required to obtain prior approval from the Directorate of Education (DoE) before increasing fees at the commencement of an academic session, provided the proposed fee structure is disclosed before the start of the academic year.
The single-judge Bench of Justice Anup Jairam Bhambhani interpreted Section 17(3) of the Delhi School Education Act, 1973, stating that prior sanction was not a statutory precondition for implementing a fee revision at the beginning of an academic session. The Court clarified that the only mandatory requirement in such cases was the filing of a statement of proposed fee before the DoE prior to the commencement of the academic year.
However, the Court distinguished between fee revisions at the start of an academic session and those proposed during an ongoing academic year. It held that prior approval of the DoE would be necessary where fee enhancement was sought mid-session.
The Court emphasised that the regulatory jurisdiction of the DoE under the Delhi School Education Act was limited in scope and primarily aimed at preventing profiteering, commercialisation of education and imposition of capitation fee. It held that the DoE could not exercise micro-management over the financial and administrative autonomy of private unaided recognised schools.
The ruling was delivered in a batch of petitions filed by several private schools, including Delhi Public School, Vasant Kunj, challenging DoE orders that had rejected fee increase proposals. The schools had argued that the regulatory authority had been arbitrarily interfering with fee fixation despite the statutory framework permitting financial autonomy.
Accepting the submissions in principle, the Court held that the Act and the Delhi School Education Rules did not require prior approval for fee revision at the commencement of an academic session unless there was evidence of profiteering or commercialisation established through a statutory audit mechanism. The Court referred to the procedure under Section 18(5) of the Act and Rule 180 of the Rules, which govern financial scrutiny of schools.
The Court also observed that findings of profiteering or commercialisation must be based on a structured financial audit and could not be inferred solely from the existence of surplus funds. It held that maintenance of surplus by schools, in itself, could not be treated as illegal or indicative of profiteering, provided it is used for legitimate institutional purposes such as infrastructure development and expansion.
The single-judge Bench also rejected the distinction drawn by the DoE between schools operating under land use conditions and those not governed by such clauses. It held that such land conditions could not override the statutory framework of the Act and could not be used to expand regulatory powers beyond what was legislatively prescribed.
The Court quashed the impugned DoE orders rejecting fee revision proposals for the commencement of academic sessions and clarified that pending proposals based on the erroneous assumption of mandatory prior approval were no longer sustainable in law.
At the same time, the Court declined to permit retrospective recovery of enhanced fees for past academic years, noting that such recovery would impose an undue financial burden on students and parents. It directed that the approved fee revision framework would operate prospectively from the academic session beginning April 2027, and barred recovery of arrears for prior periods.
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