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State can regulate fees of unaided schools to an extent: HC - 17-Sep-2011
Mumbai: : The Bombay High Court held that even though private unaided schools have the freedom to fix their fees, the state government can regulate the fees claimed under 'unusual expenditure' head, as defined under the
Capitation Fee Act.
If the issue of recovery of unusual expenses (such as exorbitant expenditure on building's rent) through fees is raised by parents, or if it comes to the notice of state authorities, and the school still continues to recover the disputed amount without approval of the state, the management can face legal action under the Act, the Court said.
"When such occasion arises, the management may have only two options. The first is to obtain approval of the state for allowing it to recover the disputed amount by way of fees ... The second is to continue to recover the disputed amount ... in which case management may run the risk of facing legal action," said a division bench of Justices A M Khanvilkar and Mridula Bhatkar.
The bench dismissed petitions filed by city-based Vibgyor High School and Rustom Kerawalla Foundation, challenging orders of Deputy Director of Education on school fees.
The Deputy Director had disallowed the expenses claimed by the management for school-building's rent (Rs 2.5 crore per annum). The amount claimed for other expenses was accepted by him as usual expenditure, which made it possible for school to recover it through fees.
The judges said, "For the view that we have taken, the petitioners will have to refund the portion of fees constituting expenses towards building's rent."
If management continued to recover this expense through fees, it will face legal consequences, they said. "We, however, express no opinion as to whether the state government should approve the expenses claimed by the petitioners towards building's rent..." the bench added.
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