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Wednesday, April 16, 2014

Orissa Education Act, 1969 - whether a fee increase needs to be allowed for the DAV schools in Odisha to meet their liability due to implementation of 6th Central Pay Commission pay scales which had been admittedly introduced in these schools w.e.f. 1.6.2012. - The fee structure revised by the concerned schools was not approved by the State Government and the High Court held against the appellant that revision of the fee structure could not be justified by the appellant that it is commensurate with the facilities provided to the students - Apex court appointed a committee - if a private educational institution has met all the requirements of obtaining No Objection Certificate and affiliation etc. then its claim for revision of fees should be considered expeditiously on permissible parameters.- the State of Odisha has not raised any objection to the recommendations of the Fee Structure Committee, Odisha and, therefore, there is no legal impediment of any substance in allowing this appeal. = D.A.V. College Managing Committee Through Regional Director …..Appellant Versus Laxminarayan Mishra & Ors. …..Respondents = 2014 ( April. Part ) http://judis.nic.in/supremecourt/filename=41417

 Orissa Education Act, 1969 - whether a fee increase needs to be allowed for the  DAV schools in Odisha to meet their liability due to implementation of 6th Central Pay Commission pay scales which had been admittedly introduced in these schools w.e.f.  1.6.2012.   - The fee structure revised by the concerned schools was not approved by the State Government and the High Court  held  against the appellant  that  revision  of  the  fee  structure  could  not  be justified by the appellant that it is commensurate with the facilities provided to the students - Apex court appointed a committee - if a private educational institution has met all  the requirements of obtaining No  Objection  Certificate  and  affiliation etc. then  its  claim  for  revision  of  fees  should  be  considered expeditiously on permissible parameters.-  the  State  of  Odisha  has  not  raised  any objection to the  recommendations  of  the  Fee  Structure  Committee, Odisha and, therefore, there is no legal impediment of  any  substance  in  allowing  this  appeal.   =

The High Court has held that DAV Public
      Schools operating in the State of Odisha, are although private unaided
      educational institutions, but are covered by  the  provisions  of  the
      Orissa Education Act, 1969 [hereinafter referred to  as  ‘the  Act  of
      1969’] and 
hence the fees levied by such schools are subject to policy
      decisions of the State Government and their Managing Committee  should
      conform to the requirements of the Act  of  1969  read  with  relevant
      Rules of 1991.  
The fee structure revised by the concerned schools was
      not approved by the State Government and the High Court  held  against
      the appellant  that  revision  of  the  fee  structure  could  not  be
      justified by the appellant that it is commensurate with the facilities
      provided to the students.=
 whether such private unaided schools, as represented
      by the appellant, are to be governed by the Act of 1969 and Rules made
      thereunder or are required to follow  the  guidelines  issued  by  the
      Central  Board  of  Secondary  Education  (CBSE)  to  which  they  are
      affiliated.  
However, he prays to record that the said issue  is  left
      open to be decided in future, if occasion arises  for  the  same.   We
      record accordingly.  
Therefore, the only surviving issue  as  per  his
      submissions is 
whether a fee increase needs to be allowed for the  DAV
      schools in Odisha to meet their liability due to implementation of 6th
      Central Pay Commission pay scales which had been admittedly introduced
      in these schools w.e.f.  1.6.2012.   
The  corollary  requiring  answer
      would be if the fee is to be increased, what should be the quantum  or
      structure.=
 “4. Fees –


          i) Fees and charges should be  commensurate  with  the  facilities
             provided by the institution.  Fees should normally  be  charged
             under the heads prescribed by the Department of School and Mass
             Education.  No capitation fee or any  voluntary  donations  for
             gaining admission in the school or for any other purpose should
             be charged/collected in the name of the  school.   In  case  of
             such  malpractices  the  Government  may  take  drastic  action
             leading to  withdrawal  of  No  Objection  Certificate  of  the
             school.

         ii) In case a student leaves the  school  for  such  compulsion  as
             transfer of parents or for health reason or in case of death of
             the student before completion of the session prorate return  of
             quarterly / term / annual fees should be made.

        iii)  The   school   should   consult   parents   through   parents’
             representatives before revising the fees.  The fees should  not
             be revised during the midsession.”=


 Hence, it is directed that the appellant and the concerned educational
      institutions represented by it shall be entitled to revise  their  fee
      structure with immediate effect as  per  recommendations  of  the  Fee
      Structure Committee, Odisha dated 2.5.2013.  
We further  clarify  that
      the existing Managing Committee as constituted under the CBSE bye-laws
      shall continue to manage the  concerned  schools.   If  the  competent
      authority feels the necessity, it may proceed to make changes  in  the
      Managing Committee as per law and requirements of CBSE,  after  giving
      due   notice   and   opportunity   of   hearing   to   the    affected
      persons/Committee.
 Before parting with the matter, we would like to caution the concerned
      authorities that if a private educational institution has met all  the
      requirements of obtaining No  Objection  Certificate  and  affiliation
      etc. then  its  claim  for  revision  of  fees  should  be  considered
      expeditiously on permissible parameters.  
Objections, if  any,  should
      be entertained only from the parents’  representatives  and  not  from
      individual parents.  An individual may at times be  reckless  and  may
      harm the educational prospects of all the students of the school.   
If
      a claim for revision of fees is stalled  for  long  due  to  meritless
      objections, it can affect academic standards on account of disgruntled
      staff and teachers who may even  quit  the  institution  for  want  of
      appropriate salary and perks.  
Such state of affairs  with  regard  to
      the concerned schools has been highlighted on behalf of the appellant.
       
The  selected  parents’  representatives,  on  the  other  hand,  are
      expected to be more responsible as a body.  In the present case,  only
      some individual parents have  prevented  the  schools  from  realising
      revised fees since 2009.  
It is not  possible  to  assess  the  injury
      caused to the schools nor is it possible to award any compensation  by
      allowing revised fees to be realised from any  earlier  date  such  as
      1.6.2012 as prayed  on  behalf  of  the  appellant.   
However,  it  is
      satisfying to note that  the  State  of  Odisha  has  not  raised  any
      objection to the  recommendations  of  the  Fee  Structure  Committee,
      Odisha and, therefore, there is no legal impediment of  any  substance
      in  allowing  this  appeal.   
Contempt  petitions  and  other  pending
      petitions shall stand disposed of.  The appeal is allowed as indicated
      above.  No costs.

 2014 ( April. Part ) http://judis.nic.in/supremecourt/filename=41417   
    R.M. LODHA, SHIVA KIRTI SINGH
                                                      REPORTABLE

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                      CIVIL APPEAL NO. 4556    OF 2014
                 [Arising out of S.L.P.(C)No.31659 of 2011]

D.A.V. College Managing Committee
Through Regional Director                          …..Appellant

      Versus

Laxminarayan Mishra & Ors.                         …..Respondents

                                   W I T H

                     Contempt Petition(C)No.232 of 2013
                                     In
                           C.A.No.  4556  of 2014
                 [Arising out of S.L.P.(C)No.31659 of 2011]
                                     AND
                      Contempt Petition(C)No.7 of 2013
                                     In
                           C.A.No.  4556  of 2014
                 [Arising out of S.L.P.(C)No.31659 of 2011]



                               J U D G M E N T



SHIVA KIRTI SINGH, J.

   1. Leave granted.
   2. This Appeal is directed against  judgment  and  order  dated  6.9.2011
      whereby the Orissa High Court dismissed, amongst other  appeals,  Writ
      Appeal No.387 of 2011 preferred by the  appellant  herein  and  upheld
      judgment and order of a learned Single Judge in W.P.(C)No.5326 of 2009
      etc. pronounced on 27.6.2011.  The High Court has held that DAV Public
      Schools operating in the State of Odisha, are although private unaided
      educational institutions, but are covered by  the  provisions  of  the
      Orissa Education Act, 1969 [hereinafter referred to  as  ‘the  Act  of
      1969’] and hence the fees levied by such schools are subject to policy
      decisions of the State Government and their Managing Committee  should
      conform to the requirements of the Act  of  1969  read  with  relevant
      Rules of 1991.  The fee structure revised by the concerned schools was
      not approved by the State Government and the High Court  held  against
      the appellant  that  revision  of  the  fee  structure  could  not  be
      justified by the appellant that it is commensurate with the facilities
      provided to the students.
   3. Apparently, this Court agreed with the  contention  of  the  Appellant
      that existing fee structure required some upward revision in  view  of
      appellant’s case that it had  decided  to  implement  the  higher  pay
      scales as recommended by the 6th  Central  Pay  Commission  and  hence
      after notice upon the respondents, this  Court  passed  the  following
      interim order on 11.5.2012 :
           “…………
           Subject  to  the  petitioner’s  filing  an  undertaking  in  the
      Registry of this Court within one week from today that from the  month
      of June, 2012,  the  petitioner  shall  implement  the  pay-scales  as
      recommended by the 6th  Pay  Commission,  following  pro  tem  ad  hoc
      arrangement is made subject to the final outcome in the Special  Leave
      Petition.


        (i)      The petitioner shall submit its complete account of income
        and expenditure with detailed  figures  to  the  Interim  Committee
        constituted under the  impugned  judgment  within  two  weeks  from
        today.


        (ii) Within three  weeks  of  receipt  of  the  accounts  from  the
        petitioner, the Interim Committee will  examine  and  evaluate  the
        impact on the financial  burden  on  the  petitioner’s  schools  by
        implementation of the recommendations of the  6th  Pay  Commission.
        The Interim Committee shall, accordingly allow the rise in the fee.


           Needless to say that the determination of rise  in  fee  by  the
      Interim Committee shall be uninfluenced by the impugned  judgment  and
      also without prejudice to the contentions of  the  petitioner  in  the
      Special Leave Petition.


           Before taking any decision, the Interim Committee shall hear the
      representatives of the petitioner and parents’ association (respondent
      Nos.1 to 5 herein).


           We also direct that until further orders, the existing  Managing
      Committee, as constituted under the CBSE bye-laws, shall continue.
           ………”


   4. After extending the time granted to the Interim Committee  for  taking
      the required decision, this Court was ultimately informed  by  learned
      counsel for the State of Odisha that the Interim Committee was not  in
      a position to analyse properly  the  financial  implications/financial
      statements and other documents submitted by the DAV  authorities  and,
      therefore, this  Court,  by  order  dated  22.3.2013,  deprecated  the
      changing stand of the State of Odisha but accepted its prayer made  in
      I.A. No.9 of 2013 and issued a fresh direction  to  the  appellant  to
      make an application for fixation of fee structure of the school before
      Fee Structure Committee, Odisha  headed  by  Justice  K.P.  Mohapatra,
      Retired Judge of High Court of Orissa and the Committee was  requested
      to submit its Report to this Court within a time frame.  The Committee
      was allowed further time on 22.4.2013.  The receipt of the Report from
      the Committee was noted by this Court on 8.5.2013 and order was passed
      to make available copy of the said Report to the Advocates  on  Record
      on both the sides.
   5. Before adverting to the submissions of  the  parties  with  regard  to
      Report of the Fee Structure Committee dated 2.5.2013, the  decks  must
      be cleared by noting, at the outset the  submission  of  Mr.  Abhishek
      Manu Singhvi, Sr. Advocate for the appellant that since the  appellant
      is in dire and urgent need of obtaining a judgment at the earliest  in
      respect of revised fee structure which the schools could adopt even as
      per recommendation of the Fee Structure Committee, it was prepared  to
      give up the issue whether such private unaided schools, as represented
      by the appellant, are to be governed by the Act of 1969 and Rules made
      thereunder or are required to follow  the  guidelines  issued  by  the
      Central  Board  of  Secondary  Education  (CBSE)  to  which  they  are
      affiliated.  However, he prays to record that the said issue  is  left
      open to be decided in future, if occasion arises  for  the  same.   We
      record accordingly.  Therefore, the only surviving issue  as  per  his
      submissions is whether a fee increase needs to be allowed for the  DAV
      schools in Odisha to meet their liability due to implementation of 6th
      Central Pay Commission pay scales which had been admittedly introduced
      in these schools w.e.f.  1.6.2012.   The  corollary  requiring  answer
      would be if the fee is to be increased, what should be the quantum  or
      structure.
   6. We have been taken through the No Objection  Certificate  issued  from
      the  Office  of  the  Director   of   Secondary   Education,   Orissa,
      Bhubaneshwar to one of the DAV schools, which is an  annexure  to  the
      Special Leave Petition.  Inter alia, it  provides  that  the  Managing
      Committee should allow scale of pay to the teachers at  par  with  the
      Government school teachers and it should follow the regulation/bye law
      of the CBSE New Delhi prescribed  from  time  to  time.   Three  other
      conditions are not relevant to the issue at hand.  We have  also  been
      taken through a Resolution  of  1996  by  the  Government  of  Odisha,
      Department  of  School  and  Mass  Education  dated  23.9.1996.    The
      Resolution contains guidelines to  be  followed  before  according  No
      Objection  Certificate  /  recommendation   to   private   educational
      institutions.  Paragraph 4 of that  Resolution  relates  to  fees  and
      reads thus :
      “4. Fees –


          i) Fees and charges should be  commensurate  with  the  facilities
             provided by the institution.  Fees should normally  be  charged
             under the heads prescribed by the Department of School and Mass
             Education.  No capitation fee or any  voluntary  donations  for
             gaining admission in the school or for any other purpose should
             be charged/collected in the name of the  school.   In  case  of
             such  malpractices  the  Government  may  take  drastic  action
             leading to  withdrawal  of  No  Objection  Certificate  of  the
             school.

         ii) In case a student leaves the  school  for  such  compulsion  as
             transfer of parents or for health reason or in case of death of
             the student before completion of the session prorate return  of
             quarterly / term / annual fees should be made.

        iii)  The   school   should   consult   parents   through   parents’
             representatives before revising the fees.  The fees should  not
             be revised during the midsession.”

The instructions of CBSE are also to  the  effect  that  the  school  should
consult the parents’ representatives before revising the fees.
   7. Objections have been raised against the said Report dated 2.5.2013  by
      other respondents but not the State of Odisha.  Learned senior counsel
      for the appellant Dr. Singhvi has taken us through the said Report  to
      point out that the Committee has given adequate opportunity of hearing
      to both the sides and on a proper analysis of the relevant facts which
      included academic standards of the schools, quality of performance  of
      the students in the CBSE examination and the financial statistics,  it
      has calculated and recommend average fee per child per month  for  the
      concerned DAV schools in the State of Odisha.  From the Report as well
      as proceedings of the sub-committee headed by a  chartered  accountant
      and annexed as Annexure  I  to  the  Report  it  was  shown  that  the
      Committee took note of  the  principles  governing  fee  structure  of
      private unaided educational institutions as  emerging  from  different
      judgments of this Court including 11-Judge Bench judgment in the  case
      of T.M.A. Pai Foundation & Ors.  V. State of Karnataka & Ors. (2002) 8
      SCC 481, to allow only 10% profit above the actual expenses  over  per
      child as a reasonable return  to  the  institution  and  the  parents’
      representatives  were  also  associated  with  such  exercise  of  fee
      fixation.
   8. On behalf of respondents,  who  are  some  parents  aggrieved  by  the
      proposal to revise the fees, Mr. Pallav Shishodia, Sr. Advocate raised
      various objections to  the  Report  and  recommendations  of  the  Fee
      Structure  Committee.   According  to  him,  such  Committee  had   no
      statutory base and the State of Odisha had constituted  the  Committee
      only  for  recommending  fee  structure   in   technical   educational
      institutions  and,  therefore,  the  Committee  could  not  have   the
      expertise or the competence to suggest fee structure for  DAV  schools
      in the State of Odisha.  He also urged that the objections  raised  on
      behalf of parents before the Committee were not given  due  discussion
      and significance and the recommended fees are much  higher  than  what
      was suggested or claimed by the schools themselves in  the  year  2009
      for the purpose of implementing recommendations of the 6th Central Pay
      Commission.
   9. On a careful perusal of the various objections highlighted before  the
      Fee Structure Committee, we find that the objections were not  at  all
      substantial and  they  have  been  dealt  with  appropriately  by  the
      Committee.  We also find no merit in  the  objection  with  regard  to
      competence or expertise of the Fee Structure Committee, Odisha.   This
      Court entrusted the task in question to the Committee out of necessity
      in the presence of learned counsel for the parties and no  one  raised
      any objection.  The only objection which  required  some  thought  was
      that  in  2009  the  proposed  fee  hike  was  of  50-57%  based  upon
      requirement for payment of salaries  as  per  recommendations  of  6th
      Central Pay Commission whereas on the basis of income and  expenditure
      figures and relevant information for the year 2012-2013, the Committee
      has recommended revised fees which for some schools are alleged to  be
      in the vicinity of increase of about 200%.
  10. In the aforesaid context it was successfully explained  on  behalf  of
      the appellant that in 2009 the fee  increase  was  calculated  on  the
      basis of 22% D.A. prevalent at that time but the average D.A. in 2012-
      13 had increased to 72.25%.  Further, due to lapse of three years, the
      annual increments of 3% would add to a  total  of  9%.   The  combined
      effect would be an increase of more than 200%  of  the  original  2009
      fees.  It was also pointed out that increase in fees,  as  recommended
      by the Committee, ranges only from 46% to 119% for  different  schools
      over and above the present unrevised fee structure.
  11. On carefully going through the facts and figures available  on  record
      and those considered by the Committee, we find no good reason to  take
      exception to the  fee  structure  recommended  by  the  Fee  Structure
      Committee, Odisha through its Report dated 2.5.2013.
  12. Since the larger issue of law has been given up by the  appellant  and
      the same has been left open, we are not required to go into the  same.
      In the facts of the case, we are re-assured by the Committee’s  Report
      that the appellant  and  institutions  represented  by  it  have  been
      allowed only reasonable profit to which they are entitled  under  law.
      Hence, it is directed that the appellant and the concerned educational
      institutions represented by it shall be entitled to revise  their  fee
      structure with immediate effect as  per  recommendations  of  the  Fee
      Structure Committee, Odisha dated 2.5.2013.  We further  clarify  that
      the existing Managing Committee as constituted under the CBSE bye-laws
      shall continue to manage the  concerned  schools.   If  the  competent
      authority feels the necessity, it may proceed to make changes  in  the
      Managing Committee as per law and requirements of CBSE,  after  giving
      due   notice   and   opportunity   of   hearing   to   the    affected
      persons/Committee.
  13. Before parting with the matter, we would like to caution the concerned
      authorities that if a private educational institution has met all  the
      requirements of obtaining No  Objection  Certificate  and  affiliation
      etc. then  its  claim  for  revision  of  fees  should  be  considered
      expeditiously on permissible parameters.  Objections, if  any,  should
      be entertained only from the parents’  representatives  and  not  from
      individual parents.  An individual may at times be  reckless  and  may
      harm the educational prospects of all the students of the school.   If
      a claim for revision of fees is stalled  for  long  due  to  meritless
      objections, it can affect academic standards on account of disgruntled
      staff and teachers who may even  quit  the  institution  for  want  of
      appropriate salary and perks.  Such state of affairs  with  regard  to
      the concerned schools has been highlighted on behalf of the appellant.
       The  selected  parents’  representatives,  on  the  other  hand,  are
      expected to be more responsible as a body.  In the present case,  only
      some individual parents have  prevented  the  schools  from  realising
      revised fees since 2009.  It is not  possible  to  assess  the  injury
      caused to the schools nor is it possible to award any compensation  by
      allowing revised fees to be realised from any  earlier  date  such  as
      1.6.2012 as prayed  on  behalf  of  the  appellant.   However,  it  is
      satisfying to note that  the  State  of  Odisha  has  not  raised  any
      objection to the  recommendations  of  the  Fee  Structure  Committee,
      Odisha and, therefore, there is no legal impediment of  any  substance
      in  allowing  this  appeal.   Contempt  petitions  and  other  pending
      petitions shall stand disposed of.  The appeal is allowed as indicated
      above.  No costs.


                                       ……………………………….J.
                                       [R.M. LODHA]






                                       ………………………………..J.
                                       [SHIVA KIRTI SINGH]

New Delhi.
April  16, 2014.

                           -----------------------
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