The power of the state to regulate the profitability of schools does not violate its right under Article 19 (1) (g) SC

The Apex Court ruled that the act of the state regulating the profitable operations of educational institutions does not violate the fundamental right of management enshrined in Article 19 (1) (g) of the Constitution of India, that is, the right to a trade or profession .

The bank gave this judgment in the case of Indian school, Jodhpur versus Rajasthan state confirming the constitutional validity of the Rajasthan Schools Act (Fee Regulations) of 2016.

In the alleged law, lawmakers stipulated that fees for private schools must be set without the assistance of a committee, the school-level fees committee. The law also provides for the members who would form this committee. The law essentially lays down parameters that could check whether the fee structure of such schools contains elements of profit or not.

In the present case, a group of private schools filed a petition contesting the provisions of this law. They alleged that the provisions contained in this law affected the autonomy of private schools.

They also appealed a government order that ordered CBSE schools and State Board schools to collect 70% and 60% of annual tuition fees, respectively, because of pandemic.

The bank rejected the schools’ claim, stating that the formation of a committee and regulatory commissions to oversee the fee structure did not violate the freedom provided for in Article 19 (1) (g).

The Bank also took the view that the provisions of the Act requiring the keeping of business books and giving the Committee the power to examine such business books adequately did not violate the law of Article 19 (1) (g).

The bank noted that the committee’s periodic review would ensure the collection of reasonable fees and profits. The bank stated that making profit is valid unless it turns into commercialization.

The bank also stressed that the committee would ensure whether or not a particular fee structure is applied for an essential service.

However, the bank partially allowed the appeal and allowed schools to collect 85% of the annual tuition fee. The bank instructed schools not to exclude a student from attending online / physical classes for non-payment of fees.

The bank also allowed six monthly installments for the payment of fees.

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