SC nullifies increase in fees of private schools since 2017

ISLAMABAD: The Supreme Court on Friday struck down the fees excessively increased by private educational institutions since 2017 with the ruling that the increase was made in violation of the law.

A three-member bench of the apex court, headed by Chief Justice Asif Saeed Khan Khosa, Justice Faisal Arab and Justice Ijazul Ahsen, released detailed judgment in appeals filed by the managements of private schools against the judgments passed by the Sindh High Court (SHC) and Lahore High Court (LHC) in private schools fees case.

“In view of our finding that schools have excessively increased fee since 2017 in violation of the law, all such increases are struck down,” says the 69-page detailed judgment, authored by Justice Ijazul Ahsen. The court ruled that it will be deemed that there was no increase in fee since 2017 and fees were frozen at the rates prevailing in January, 2017.

The court found that since the beginning of June, 2017 a number of private educational institutions have been increasing their fee exorbitantly in violation of the relevant laws/rules.

The court noted that the regulatory authorities have turned a blind eye to the plight of students and their parents who have been hard pressed to meet the ever increasing demands of private educational institutions being faced with the prospect of either paying the increased fee by hook or by crock or to look for other alternative options, which in the field of education are extremely limited.

The court recalled that it had, through an interim order dated 30.12.2018 directed all educational institutions receiving fee in excess of Rs.5,000/- per month to reduce their fee by 20%. We have reason to believe that the said order was duly complied with, says the detailed judgment.

The court directed that the said amounts equivalent to 20% of fee (reduced under its orders) or any other amount shall not be recovered as arrears for any reason or under any circumstances.

“Schools fee shall be recalculated using the fee prevailing in 2017 as the base fee in accordance with the provisions of Laws of Punjab and Sindh, respectively (adding annual increases permitted by the law/rules/regulations) till 2019 and onwards,” says the detailed judgment with the ruling that the process of recalculation shall be supervised by the regulators and only the fee approved by them shall be treated as the chargeable fee.

The court held that any excess fee found to have been charged shall be adjusted in the future fee. It directed the regulators to closely monitor the fee being charged by private schools to ensure strict compliance with the law and the rules/regulations. Complaint cells shall be set up to deal with complaints arising out of increase in fee in violation of the law/rules/regulations.

“It is unanimously held and declared that Section 7-A of the Punjab Private Educational Institutions (Promotion and Regulation) Ordinance, 1984, as amended by the Punjab Private Educational Institutions (Promotion and Regulation) (Amendment) Act, 2017 is intra vires the Constitution of the Islamic Republic of Pakistan, 1973 (“the Constitution”) and does not violate Articles 18, 23, 24 or 25-A thereof, says the detailed judgment.

The court also unanimously held and declared that Rule 10 of the Rules of 2005 is intra vires the statute, i.e. Sindh Private Education Institutions (Regulation and Control) Ordinance, 2001, and the Constitution.

“With a majority of two against one, we are not persuaded to interfere with Rule 7(3) of the Rules of 2005,” with Faisal Arab, J. expressing the view that the restriction imposed by Rule 7(3) ibid is unreasonable and hence invalid, says the judgment.

The court ruled that upon decision of the main appeals in the terms noted , all

interim orders passed during the pendency of the appeals (including the order dated 13.12.2018 passed in Civil Appeal No. 1095/2018 regarding reduction of fees by 20% as an interim measure) have ceased to be effective, subject to recalculation of fee by using the fee prevailing in 2017 as the base fee, in accordance with the provision(s) of the Punjab Private Educational Institutions (Promotion and Regulation) (Amendment) Act, 2017 and onwards, for the Province of Punjab.

For Sindh, the court held that fees may be recalculated using the fee prevailing on 29.06.2017 as the base fee and onwards, in accordance with the Rules of 2005 (gazetted on 29.06.2017). Provided that the schools shall not recover any arrears on account of the reduction in fee by reason of the interim order of this Court dated 13.12.2018 till the date of this judgment. “Therefore, all the review petitions filed against the said interim order are disposed of in these terms. In view of the fact that these appeals/petitions are being finally decided, all criminal original petitions and civil miscellaneous applications are disposed of, says the judgment.”

The court further directed that all schools shall collect the fee, strictly in accordance with the procedure and timeframe provided by the law, the rules and regulations including, but not limited to the Punjab Private Educational Institutions (Promotion and Regulation) Ordinance, 1984, as amended by the Punjab Private Educational Institutions (Promotion and Regulation) (Amendment) Act, 2017 and the Rules of 2005.

The court also touched the scope of Article 18 of the constitution which relates to freedom of trade, business or profession. The court referred to one of its judgment reported as Government of Pakistan through Secretary, Ministry of Commerce and another v Zamir Ahmad Khan (PLD 1975 SC 667), as cited with approval by this Court in Watan Party’s case wherein it had held that Article 18 of the Constitution, which relates to the freedom of trade, business or profession, which corresponds to Article 15 of the, Interim Constitution, and which incidentally held the field at the relevant time, assures the citizens the right to enter upon any “lawful profession or occupation” and “to conduct any lawful trade or business”. It is important to point out that the word “lawful” qualifies the right of the citizen in the relevant field. This clearly envisages that the State can by 1aw ban a profession, occupation, trade or business by declaring it to be unlawful which in common parlance means anything forbidden by law.

The court in the said judgment had held that prostitution, trafficking in women, gambling, trade in narcotics or dangerous drugs are common place instances of unlawful profession or trade. These are inherently dangerous to public health or welfare. Therefore, on the wording of Article 18 of the Constitution, the right to enter upon a profession or occupation or to conduct trade or business can hardly be described to be a constitutional or fundamental right when such right may be denied by law.

In this respect our Constitution stands in sharp contrast with the corresponding provision of the Indian Constitution which omits the use of word “lawful” in the relevant provision.

Meanwhile, Justice Faisal Arab gave his dissenting note, entirely agreeing with the reasoning contained in the detailed judgment authored by Ijazul Ahsan, except that Rule 7(3) of Sindh Private Educational Institutions (Regulations and Control) Rules, 2005, which allows schools in Sindh to increase tuition fee only to the extent of 5% in an academic year is unreasonable and on that he recorded his own opinion.

Justice Arab stated that the parents of students coming from the whole range of middle class families approached the courts, not because they wanted to challenge the tuition fee which the schools charged at the time of taking admissions but what agitated them was the periodical increases made in the tuition fees which proved to be an enormous burden on their purses.

Hence a substantial raise in fees in comparison to the existing fees stirred agitation amongst the parents who invoked Rule 7(3) of the Sindh Private Educational Institutions (Regulations and Control) Rules, 2005 in Sindh and Section 7A of the Punjab Private Educational Institutions (Promotion and Regulation) Ordinance, 1984 in Punjab in order to seek reduction.

According to him, Section 15 of the Sindh Private Educational Institutions (Regulations and Control) Ordinance, 2001 gives rule making power to the provincial government, which inter alia states that rules shall provide for fixation of tuition fees and other sums to be realized from the students. Pursuant to this rule making power, Justice Faisal Arab said that the Sindh Private Educational Institutions (Regulations and Control) Rules, 2005 were framed. Rule 7 (2) and (3) provides that fee in an academic year can be increased only upto 5% subject to establishing proper justification before the Registering Authority.

“Hence while providing room for periodical increases, a cap of 5% was imposed which was given primacy over any reason that may justify raise in the tuition fees beyond such limit,” he observed, adding that it is because of this primacy that the private schools felt that this rule imposes unreasonable restriction as schools with such limited room for seeking increase in fees would not be able to cope with the corresponding increase in the cost of running of the schools which in turn would eventually put them out of business.

“Thus the case of the schools is that the cap of 5% was arbitrarily determined by the functionaries of the government which militates against the freedom of doing business guaranteed under Article 18 of the Constitution,” Justice Arab said.

“Keeping all these considerations in mind, arbitrary cap of 5% can be raised to the level of 8% which looks much closer to ground reality i.e. having the effect of offsetting the depreciation in the value of Rupee to a greater extent which was also acceptable to the parents of the children of Punjab”, Justice Arab maintained.