Debriefed: The controversy surrounding payment of school fees amid the COVID-19 pandemic

A study of litigation surrounding payment of school fees amid the pandemic that have cropped up in courts across India and the laws surrounding the issue.
School Fees, Supreme Court
School Fees, Supreme Court

The COVID-19 pandemic has brought with it significant economic ramifications across sectors owing to lockdowns imposed over the past fifteen months. And the education sector is no exception, with students having no option but to make arrangements to attend online classes as schools remain shut.

Amidst all this, educational institutions continue to charge exorbitant school fees without any relaxation. In fact, some schools went on to hike their fees, putting parents across the country in a tough spot. Inevitably, courts in India saw a surge in litigation on the issue of payment of school fees.

The brick and mortar model of schools underwent a complete reform and shifted to digital modes to conduct classes. This consequently led to parents of school children questioning several heads under which fees were charged for unused facilities including meals, travel charges, and a host of others.

Several state governments released circulars, notifications and regulations announcing relaxations in school fees. However, the haphazard manner in which this was done sparked confusion among parents of school-going children.

The story thus far: The stance of state governments and the courts

In the early days after the nationwide lockdown was declared, and after schools began conducting online classes, several state governments including those of Punjab, Haryana, Rajasthan and Uttar Pradesh announced relaxations in school fees.

But parents of students continued to receive fee statements from schools despite such government orders. They also faced many instances of harassment as schools enforced payment of increased fees amid the pandemic.

This encouraged parents from Rajasthan, Orissa, Punjab, Gujarat, Haryana, Uttarakhand, Delhi and Maharashtra to move the Supreme Court for a moratorium or deferment on the payment of school fees till the lockdown persisted. The plea filed by these parents also sought directions from the Central and state governments to aided and unaided private schools to only “charge proportionate fees” based on the actual expenditure incurred by the schools.

This was also at a time when some states like Karnataka and Madhya Pradesh imposed a ban on online mode of classes owing to the harmful effects of screen exposure to children till grade 5. For students from grades 6 to 8, the state governments put a 2-hour cap on classes a day with each class not exceeding 30-45 minutes.

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However, the apex court declined the plea, holding that these matters ought to be dealt with by the respective High Courts as the challenges faced in each State may vary from one another. This in turn led to a plethora of litigation in High Courts across the nation.

In April 2020, the Tamil Nadu government issued a notification barring forcible payment of school fees during COVID-19. The Madras High Court directed that a scheme be formulated for payment of school fees in instalments so as to balance the interests of schools and aggrieved parents amid the pandemic. It reiterated that the notification by the Tamil Nadu government only barred forcible payments and did not stop parents from voluntarily paying the fees. In response to this, the government proposed a scheme for payment of 75% of the tuition fee in three instalments (25% in each instalment) and permitted the remaining to be paid once schools reopen.

In a case filed by private institutions against the government order, the Court allowed private institutions to collect 40% of tuition fees as advance and the remaining to be paid in the following 2 months. All of this must be in accordance with the fee collected in the previous academic year 2019-2020, it was held. The Court warned private institutions that they would be charged for contempt if they insisted on full payment of fee during COVID-19.

In November 2020, the High Court allowed a further 35% fee to be collected in addition to the earlier directed 40% to all private unaided schools in order to meet the expenses of the institutions.

Last year, the Gujarat government released a circular completely barring collection of tuition fees during COVID-19. The Gujarat High Court quashed this circular and ordered the State government to consult with unaided private school representatives to arrive at an amicable solution.

When the negotiations between the parties fell through, the Court refused to intervene and said that the government can take an independent decision under the Disaster Management Act and Epidemic Diseases Act. which are in force owing to the pandemic.

Ultimately, the State Education Department issued a notification allowing a 25% reduction in school fees and barred collection of miscellaneous fees in the name of activity fees, transport charges, etc. The notification also advised parents to pay the pending fees from the previous academic year and 50% of fees for the next two quarters by the end of October 2020.

Calcutta High Court
Calcutta High Court

In West Bengal, despite directing that students need to pay only 80% of the fees, some schools continued to enforce a 100% payment. The Calcutta High Court did not allow any further concessions, but granted an increased time window for parents to pay the fees. It was also emphasized that no coercive action must be taken against students who have not paid the fees.

Additionally, the Court ordered the setting up of a Committee to address grievances and examine the school accounts and the fees charged in each private unaided school. In response to this order, an association of 145 schools filed a plea before the Supreme Court, which stayed the setting up of the Committee.

The Kerala High Court issued a similar direction in a case filed before it, to not expel students due to non-payment of fees. The Kerala government then issued a directive in December 2020 requiring all schools in the State to not charge fees in excess of expenditure. This decision was prompted by a school charging an exorbitant “celebration and miscellaneous fee” amid the pandemic. A full bench of the Kerala State Commission for Protection of Child Rights asked schools to allow 25% reduction in the existing fee. This is to apply to CBSE and ICSE schools as well.

In June 2020, the Punjab and Haryana High Court restrained schools from charging transportation fees and maintenance charges as students were studying online. It ordered that only 50% of maintenance fees were to be paid to ensure the upkeep of school premises during the pandemic. It held that schools can charge fees regardless of whether or not online classes were being conducted.

On October 1, 2020, the Punjab High Court set aside its previous order and ruled that schools can charge tuition fees only if online classes were conducted regularly. It also directed school managements to file their balance sheets for the preceding 7 months.

Online Classes, Karnataka HC
Online Classes, Karnataka HC

In Karnataka, two circulars issued in April 2020 restricted school managements from collecting fees during the pandemic. Though the circulars permitted payment of current academic fees in instalments, due to the absence of a deadline to that effect, only 1%-2% parents paid the fees. The circulars were also silent on the unpaid fees from previous academic years. Due to the lopsided nature of the circulars, the same were challenged before the Karnataka High Court, which issued notice to the State and granted interim relief of paying 50% of the education fee for the upcoming academic year after clearing the dues from previous years.

In similar vein, two circulars were issued by the Rajasthan government, one restricting private schools from collecting fees for 3 months and another extending the duration of the first circular until further orders. As an interim measure, the Rajasthan High Court ordered 70% of tuition fees to be paid, but later stayed this order and directed that no coercive action must be taken against students facing difficulty in paying fees.

Ultimately, the matter found its way to the Supreme Court, which allowed 100% collection of fees through 6 instalments from students of private unaided schools in Rajasthan beginning March 5, 2021 and ending on August 5, 2021. However, in case of any difficulties faced by parents, the Court held that they could “approach the school authorities” who would consider individual cases and deal with them “sympathetically”.

In May 2021, the apex court allowed private schools in Rajasthan to collect 85% of the fees for 2020-21. The 15% deduction was granted in view of the unused facilities by students in 2020-21. It was directed that students have to pay the fees by August 5, 2021.

The Maharashtra government came up with a regulation on May 8, 2020 directing schools to not hike the fees during the academic year 2020-21 on account of the pandemic. After the same came under challenge, the Bombay High Court imposed a stay on the directive in June 2020 by questioning the jurisdiction of the government to interfere in regulation of school fees of private unaided schools.

In March 2021, the Court vacated the stay on the directive and directed that no student should be debarred from attending classes or attempting examinations owing to the difficulties faced in paying “the increased component of fees”. The Court also clarified that the directive cannot be construed for refunding any fees collected during the academic year 2020-21.

In the most recent case before the High Court, a public interest litigation (PIL) was filed for a 50% reduction in school fees on the same lines as the cases discussed above. It was contended that fees demanded for facilities not utilized by students would be considered as profiteering.

Similar cases arose in Allahabad, Orissa, Uttar Pradesh and Delhi. Here’s a quick glimpse of what the courts said in these petitions.

Can schools arbitrarily raise school fees? What recourse do parents have?

The subject of 'Education' falls under the Concurrent List under the Seventh Schedule of the Constitution. This means that both the State and the Centre have the authority to regulate matters that fall within the ambit of education. In view of fee hikes by several private unaided schools, it is germane to question whether schools can arbitrarily hike their fees and what parents of school going children can do in this regard.

The Supreme Court in TMA Pai Foundation v. State of Karnataka considered the issue for regulating fees charged by private unaided schools. It held that states should devise a machinery to ensure that there is no profiteering from the fees collected, but a “reasonable surplus” to further education is allowed. In Islamic Academy of Education v. State of Karnataka, while considering what constitutes “reasonable surplus,” the Court held that every institute can fix its own fee structure to meet the expenditure to run the institution smoothly. This stance was reaffirmed in the case of PA Inamdar v. State of Maharashtra, in which the Court allowed private schools to devise their own fee structure which can be regulated by the State to prevent profiteering.

This led to the introduction of State-specific fee regulating legislation. For example, in Maharashtra, the Maharashtra Education Institutions (Regulation of Fee) Act, 2011 and the Amendment Act of 2018 mandate a Parent-Teacher Association (PTA), Executive Committee and Divisional Fee Regulation Committee (DFRC) to ensure proper management and revision/regulation of school fees. When increasing school fees, the school management must submit the details to the Executive Committee at least 6 months before the next academic year. While giving its approval, the Executive Committee has the authority to decide the fee afresh and convey the same within a period of 30 days from receipt of details of fee proposed by school management.

This must then be displayed on the notice board and school website in English, Marathi and the respective medium of the school. In case of indecisiveness on fixing of school fees, the matter must be referred to the DFRC. Until a decision is reached, the management must collect the fee as that of the previous years, plus 15% or the proposed increased fee.

If parents are aggrieved by the decision of the Executive Committee or the fee increased by the management, they can appeal to the DFRC by duly attesting their signatures on a form within 30 days of receipt of the decision. In case of further grievance, a further appeal may be raised to the Revision Committee within a period of 30 days, but not exceeding 60 days of receipt of the decision.

In February 2021, Maharashtra Minister of State for Education Bacchu Kadu called for action to be taken against schools that are hiking fees and violating State regulations on education. Recently, the State education department sought suggestions to amend the Maharashtra Educational Institutions (Regulation of Fee) (Amendment) Act, 2018. In 2017, the the State government had amended the Act, allowing private schools to hike fees by 15 per cent every two years. Since then, the act has been used by private schools to hike school fees exponentially.

Students' right to education vis–a-vis schools' right to collect fees: Finding equilibrium

At this juncture, it is pertinent to weigh the conflicting yet mutually intertwined interests of students and school managements in order to ensure equilibrium. Especially at a time like this, it is important to find a middle ground between students having to pay exorbitant fees and school administrations being able to function smoothly without disturbing payments to staff and upkeep of premises during the lockdown.

While schools continue to incur costs in the form of staff salaries, etc even as they remain physically shut, there is also a significant expenditure incurred by parents.

This includes ensuring their wards have the requisite electronic devices to , electricity and internet connections to enable them to attend online classes. There is a common plea in the petitions filed by most petitioners before the courts: there should be no collection of fees for facilities that remain unutilized by students during the closure of schools. These may include development fees, annual charges, celebration fee, travel charges, laboratory fees, sports fee, extra curricular fees, etc.

The DFRC, which is a key fee regulating authority across states, has no penal powers and little grievance redressal authority, making it difficult to hold private unaided schools accountable for their arbitrary acts. It is also crucial for an external authority to intermittently overlook the on-ground functioning of the provisions laid out in the State laws. Additionally, just like the Maharashtra government invited suggestions on changes to the law on regulation of school fees, other state governments must follow suit and invite suggestions from affected parents. Only an effective grievance redressal policy coupled with a mechanism to implement the same can enable stakeholders to reap the benefits of the law.

Bar and Bench - Indian Legal news