Private Schools have to Upload their Balance Sheet on Website: High Court

On Friday the Punjab and Haryana High Court upheld the Order of Chandigarh Administration directing all Private Unaided Schools to upload their balance sheets on website. 

A Petition was filed by Independent Schools’ Association Chandigarh, and Kabir Education Society, Chandigarh, challenging various provisions of Punjab Regulation of Fee of Unaided Educational Institutions Act, 2016, adopted in 2018.

The UT Administration issued show cause notices to schools asking why action should not be taken against the schools for not uploading the balance sheets on the website of the school.

It was argued by the schools that the direction of uploading balance sheets on websites is violating the rights of Schools under Article 19(1)(g) of the Constitution of India, as well as right to privacy.

The Counsel for the schools submitted that right to privacy is not just restricted to individuals, but also to legal/artificial entities.

A Bench of Justice Jaswant Singh and Justice Sant Parkash, in their 107 pages long Judgment, refused to accept the claim of Private Schools and observed that since education is a charitable work, therefore there cannot be any breach of privacy for uploading the balance sheets on the websites of the schools.

The Court observed:

It is a settled position that educational institutions are vested with right to establish and administer an institution including the right to admit students and to set up a reasonable fee structure. However, occupation of education is not a business but profession involving charitable activities. Therefore it is well permissible to promulgate regulatory measures aimed for protecting the student community as the whole and as well as to ensure maintenance of required standards of education which are non-exploitative. The imposition of reasonable restrictions by the State government aimed to ensure transparency and to curb the menace of profiteering and charging of capitation fees do not violate Article 30 (1) or Article 19 (1) (g) of the Constitution of India.

The Court further observed that a suspicion is raised when schools resist to upload the financial statement on a website, as if the private schools upload their statements on a website, it will bring transparency and accountability, which are mandatory features of a reasonable fee structure and also brings confidence amongst parents.

The Bench held that this provision does not infringe upon the autonomy or day to day functioning of the Institution and as such it cannot be termed as “unreasonable” or “restrictive”.

Another argument put forth by the Schools was that a penal provision has been made for non compliance of the rules, which is arbitrary and illegal. 

The Court ruled that the said penal provision is incorporated only in the case of any violation not otherwise and if no penal provision would have been incorporated  then the purpose of the enactment would have been lost and as such no prejudice caused by this penal provision.

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