Delhi High Court limits DoE's control over private school fees

The Delhi High Court has ruled that the Directorate of Education (DoE) can regulate the fee structure of unaided private schools solely to prevent profiteering, commercialisation of education, and the collection of capitation fees, but not to impose blanket restrictions.

A division bench of Chief Justice DK Upadhyaya and Justice Tushar Rao Gedela clarified that the government’s authority is limited to ensuring fairness and transparency, without dictating or freezing fee hikes, according to a report by The New Indian Express.

Scope of government regulation

The court emphasised that government oversight must focus on preventing unethical practices or misuse of funds. “It is not that the fees be charged by the schools cannot be regulated by the Government; however, regulation is permitted only to ensure that such schools do not indulge in profiteering or commercialisation of education or charging capitation fee,” the Court said.

The bench further noted, “The regulatory measures which can be adopted by the Government would also encompass the measures to check that unaided schools do not utilize the profits or surplus for a purpose other than for the benefit of educational institution.”

Consideration of school needs

The court highlighted that a school’s fee structure should account for its infrastructure, staff salaries, facilities, and future development plans.

It dismissed appeals by the DoE and some students challenging a prior single-judge order that struck down government restrictions on fee hikes by Bluebells International School and Lilawati Vidya Mandir for the 2017-18 session.

Conditions for DoE intervention

Upholding the earlier ruling, the bench reiterated that DoE interference in fee decisions is justified only when a school “engages in charging of capitation fee or indulges in profiteering.” The court added, “Accordingly, if on examination of the statement of fees to be filed by the schools, the DoE finds that the spending of the amount collected by the schools is not as per the provisions of DSEA, 1973, appropriate action is permissible,” emphasising that profits must be used solely “for betterment of the school and for purposes related to education.”