In a significant development, the Supreme Court of India, on March 18, established a specialized two-member committee to scrutinize the financial situations of private schools in Uttar Pradesh that have challenged an earlier directive from the Allahabad High Court. This directive mandated the schools to either adjust or refund 15% of the fees collected during the 2020-2021 academic year, a period significantly impacted by the COVID-19 pandemic.
The committee, led by Justice (Retired) GP Mittal, a former judge of the Delhi High Court, along with Chartered Accountant Adhish Mehra, is tasked with conducting a thorough assessment of each school’s financial records to determine the legitimacy of the fees charged during the pandemic. This move comes as a response to the private schools’ contention that the Allahabad High Court’s decision was overly generalized and did not consider the individual financial hardships faced by each institution during the pandemic.
Chief Justice Sanjiv Khanna, accompanied by Justices Sanjay Kumar and KV Viswanathan, emphasized the necessity of a detailed examination, noting that the High Court’s broad approach did not account for the varied circumstances of each school. “We need to look into each case. If there was overcharging, schools must refund; however, if a school was financially strained, that needs to be considered,” remarked Chief Justice Khanna during the proceedings.
The Supreme Court’s intervention highlights the ongoing debate over the financial operations of private schools during the pandemic, where many schools reported decreased revenues due to lower fee collection and additional expenses incurred in adapting to online teaching methodologies.
In 2023, the Supreme Court had already signaled its intention to delve deeper into this issue by ordering the schools involved in the litigation to provide detailed financial statements and evidence of any salary reductions or operational cost adjustments made during the specified period.
The High Court’s original ruling was part of a broader initiative to regulate school fees across Uttar Pradesh, prompted by complaints from parents about paying full fees while schools operated remotely and did not incur regular operational costs. The High Court had relied on precedent set by the Supreme Court in a similar case involving a private school in Rajasthan, which set forth principles against profiteering and unnecessary commercialization of education.
The committee is expected to complete its investigation and report its findings within four months. During this time, the schools are required to submit all necessary financial documentation to assist in the assessment. This ongoing legal and financial scrutiny underscores the broader challenges and complexities in balancing educational costs and financial fairness in the wake of the global pandemic.
Advocate Shashwat Anand and Talha Abdul Rehman AOR, appeared for aggrieved parents and Parents’ Associations, including Anuj Gupta (President, Moradabad Parents of All Schools) & Ors., who are the caveators and respondents in the matter.
