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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  

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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  

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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  

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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.

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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.”

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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  

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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 6 th  

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%.

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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.  

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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  

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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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