Punjab & Haryana High Court Upheld Notification of Ministry of Home Affairs Directing Private Educational Institutions To Publish Balance Sheets To Stop Profiteering

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Case: Independent Schools’ Association Chandigarh and others v. Union of India and others 

Excerpt

The petitioners had filed this writ petition challenging the order of the Ministry of Home Affairs dated 13.4.2018, to declare it unconstitutional. The order extends the Punjab Regulation of Fee of Unaided Educational Institution Act, 2016 to the UT. of Chandigarh. 

Facts of the Case 

The Central Government, while exercising the powers conferred by Section 87 of the Punjab Reorganisation Act, 1966, has extended the 2016 Act to the UT. of Chandigarh with some modifications. The private educational institutions indulge in profiteering and charge capitation fees. The central government in the said notification included the publication of balance sheets. 

Statements of the Counsels

Appellant

The counsel for the petitioner submitted that the 2016 Act is contrary to the law. The private unaided schools can determine their fee structure, make allowance for savings and investment and generate profits. The 2016 Act is unconstitutional and violates fundamental rights under Articles 14, 19, and 21 of the Constitution of India.  

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He further added that the 4th provision to Section 5 and sub-section (4) to (6) of Section 10, the 2016 Act as extended to Union Territory of Chandigarh, is unconstitutional. The modifications are beyond the scope and purview of Section 87 of the 1966 Act.

He further stated that uploading financial information on the website would make them vulnerable. It will result in unwarranted attacks and will affect the smooth functioning of the Institution.

Respondent

The counsel submitted that the Hon’ble High Court has directed the State to impose appropriate checks and balances. It is to ensure that they do not charge capitation fees or indulge in profiteering.

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The counsel making reference to Ramesh Birch versus Union of India”, 1989 suppl (1) SCC 430, stated that Section 87 of the Punjab Re-organisation Act has been upheld and interpreted by the Hon’ble Supreme Court. Thus, the government has appropriate power and authority under the same. 

The counsel further added that the provisions will help to advance transparency and accountability. They are the most essential feature to regulate fees. The majority of schools have already complied with the directions.

Observation of the Court

The Court observed that modifications are to maintain the balance between the interest of the students and the institution. The modifications are the desire of the society and it is important for accessible and quality education. 

The right to privacy is for the individuals but the education field is a charitable occupation. The uploading of the financial statement of the private institutions will not breach the right to privacy. It does not infringe the autonomy or day-to-day functioning of the Institution or prescribe a rigid fee structure. The modifications ensure the goal of transparency. Thus, do not violate the rights of the unaided educational institution. 

Court’s Decision

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The Hon’ble Court upheld the notification of the Ministry of Home Affairs dated 13.4.2018. The Court upheld the modifications and adapted the 2016 Act of State of Punjab to U.T. Chandigarh. The Court also ordered the institutions to publish the balance sheets on their websites. 

Click here to view the judgment.


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