At least 449 of Delhi’s private schools have been directed to return “excess fees” they had allegedly charged parents using an increase in teachers’ salaries as excuse. But they are not about to hand the money over without a fight. Over 90 of them have moved the Delhi High Court since the Aam Aadmi Party government informed the same court on August 16 that it was preparing to take over administration of the erring schools or withdraw their recognition if they did not pay up.
There is no consensus on how many of the 449 schools have actually returned the excess fees so far. According to The Times of India, over 150 have initiated the refund process, although a lawyer representing some of the schools has disputed this. Some have advertised about the refund in newspapers or deposited the money with the Delhi High Court, where the latest fight over fees began in 2009-10.
In 2009, the Delhi government had announced implementation of the Sixth Pay Commission’s recommendations, raising teachers’ salaries significantly. It permitted private schools to increase fees to meet the added expense on wages as a year’s salaries must come from the same year’s receipts. The court case arose when parents and even some teachers alleged that schools had increased fees without raising salaries – essentially, pocketing the money themselves – or the increase far exceeded what was required.
It is a familiar fight. Parents across states have petitioned governments and moved courts seeking relief from allegedly exorbitant fee hikes by private schools. Cases have been fought in Gujarat, Maharashtra, Karnataka and Haryana. In some states, individual schools have been challenged; in Haryana, parents have sought to get provisions of the state’s Education Act regulating school fees implemented. Taking a cue from the Delhi High Court, the Punjab and Haryana High Court created fee-review committees in those states too, said Khagesh Jha, one of the lawyer-activists representing parents in the court. Some states have tried to enact laws for a more permanent solution. If the Delhi government does get all 449 schools to pay up, it will be the first to do so, and likely influence similar cases in other states.
Traditionally, however, such attempts have been stymied with schools, parents and state governments locked in protracted court battles.
Delhi’s case
In 2011, the Delhi High Court had appointed a fee review committee. According to the High Court’s August 16 order, the committee examined the account books of the state’s private schools and, at last count, recommended that the government get 544 of them to refund excess fees charged from parents. Although the committee had been submitting these lists of schools through interim reports since 2012, and Delhi’s Directorate of Education, tasked with enforcing the recommendations, intermittently issued takeover threats and show-cause notices, little of the estimated Rs 350 crore owed was actually recovered. On August 10, the High Court berated the directorate for this half-hearted effort.
On August 16, the directorate informed the court that of the 544 schools, only 15 had refunded the full amount of Rs 14.5 crore; 136 had made partial refunds amounting to Rs 8.2 crore; five had challenged the recommendations and deposited Rs 35 crore; 17 had not responded to the orders at all and were served show-cause notices; 13 had shut down; and the directorate had taken over one school.
It further said that for 449 schools, the directorate had “processed the proposal to issue show-cause notices for taking over of the management”. The government repeated its stand in press conferences later and set off another round of litigation. However, this time around, the court insisted that schools deposit the money before being heard.
No grievance redress
“We are prepared to refund if the direction is justified,” said SK Bhattacharya, president of the Action Committee for Unaided Recognised Private Schools, an umbrella organisation of private school associations in Delhi. “But we were not allowed to properly represent our case. There were many complaints of wrong calculations, misinterpretation of documents and of the committee going beyond its brief. There was no one to listen to us.”
He added: “If a school does have some reserved funds and it has not been siphoned off and is accounted for, what is wrong with that?”
Ashok Pandey, chairperson of the National Progressive Schools Conference, an association of 160 private schools, a large number of them in Delhi, agreed. “If, along with the committee, they had created an equally robust system for hearing grievances, the exercise would have worked,” he said. “Now, schools have no choice but to move court for every anomaly and clerical error in the paperwork.”
‘Function is over’
The experience of a school in West Delhi is cited as a case in point. The committee’s report alleges that it increased fees by 15% for September 2008-March 2009 period – 10% as tuition fee and 5% as development fee. “But we did not charge any development fee at all,” said the school’s principal. “The committee’s decision is based on some misreading or typographical error but they should have cross-checked with all the other documents, including the chartered accountant’s reports, we furnished. In 2015 and again in 2016 we represented our case before the committee but were told it was not empowered to correct its own mistakes.” The school then moved the High Court.
The legal expression, explained advocate Kamal Gupta who represents many private schools in court, is “functus officio”. Essentially, with the declaration of its findings for a school, the committee’s “function is over”. Gupta argued that with records of over 1,500 schools to study, there were bound to be errors. “You cannot leave us without any remedy,” he said, adding that the directorate refused hearings stating the High Court had already appointed a committee for the job.
Jha, however, argued that the schools had years to go to court. “The interim reports have been filed from 2012,” he said. “Why did they not approach the High Court in all these years? The committee did hold several rounds of hearings with every school. Moreover, it did not investigate independently but studied documents and accounts the schools themselves furnished.”
Different accounts
To a large extent, the case hinges on the question of how a school funds infrastructure development. Schools collect fees under different heads. Tuition is just one component, and that goes toward payment of wages. About 200 schools, said Gupta, are in the net because the funds they collected for “school development” were deposited in the same bank accounts as tuition fee. They were supposed to be placed in Depreciation Reserve Fund accounts. This money now count as “excess funds” that schools are being asked to return.
“Schools did not know they had to place this fund in a separate account,” said Gupta. “The directorate had not clarified this point about separate accounts in 2009. That money has already been spent – furniture and buses have been bought, walls have been repaired. It is not fund diversion and all the money is accounted for.” He further argued that the committee had “no jurisdiction regarding development fee”; its mandate was to examine tuition fee and its utilitsation alone.
Jha countered this argument. “Initially, following the Delhi School Education Act and Rules [1973], schools could charge parents only for recurring expenditure,” he said. “From 1998, they were allowed to charge to the extent of 10% of the tuition fee for development and that was increased to 15% through a 2004 High Court judgement. But the charge can be levied only if the school has a DRF [Depreciation Reserve Fund] account. How can schools cite the rule to charge development fee and say they did not know about the account required by the same rule?”
He added that schools had even moved court against the condition they now claim they did not know existed.