Private Unaided Schools Need Not Obtain Prior Approval for Fee Hike at Start of Academic Session: Delhi High Court

The Delhi High Court has held that under Section 17(3) of the Delhi School Education Act, 1973, a private unaided recognised school is only required to file its statement of proposed fee before the Directorate of Education (“DoE”) prior to commencement of an academic session and does not require prior permission or sanction for increasing fee at the beginning of such session.

A Bench of Justice Anup Jairam Bhambhani clarified that prior approval from the DoE becomes necessary only where a school seeks to increase fees during an ongoing academic session.

“…under section 17(3) of the DSE Act no prior permission or sanction is required by a private, un-aided, recognised school to increase its fee at the commencement of an academic session; and the only statutory obligation upon a school is that it must file its statement of proposed fee with the DoE prior to commencement of an academic session,” the Court observed.

The Court further held,“…under section 17(3) of the DSE Act, however, a private, un-aided, recognised school does require prior approval of the DoE if the school proposes to implement a fee-hike during an ongoing academic session.”

The Court was hearing a batch of writ petitions filed by several private unaided recognised schools challenging orders, circulars and directions issued by the Directorate of Education regulating fee hikes and rejecting proposals for enhancement of school fees.

The schools argued that the DoE had unlawfully compelled them to seek prior permission before increasing fees for academic sessions and had adopted an administrative process involving empanelled chartered accountants, Project Management Units and internal scrutiny committees to evaluate and reject fee hike proposals.

They contended that such a mechanism violated their right under Article 19(1)(g) of the Constitution and ignored settled law laid down in cases such as T.M.A. Pai Foundation v. State of Karnataka, Islamic Academy of Education v. State of Karnataka, Modern School v. Union of India and P.A. Inamdar v. State of Maharashtra.

On the other hand, the DoE argued that schools situated on government-allotted land and governed by “land clauses” requiring prior approval before fee hikes were subject to greater regulatory scrutiny to prevent profiteering and protect students and parents.

At the outset, the Court made strong observations against the Directorate of Education, noting that the litigation arose because of the DoE’s refusal to follow settled legal principles and binding precedents.

“The present batch of cases illustrates with uncomfortable clarity, how a public authority can persist in a course of action that betrays studied indifference to both the letter of the law and binding precedent,” the Court said.

It further observed,“The DoE has precipitated a huge round of litigation only by reason of its plain refusal to obey the law as comprised in the statute, and as authoritatively interpreted by the constitutional courts.”

The Court reiterated that private unaided schools enjoy substantial autonomy in administration and fee fixation, subject only to restrictions against profiteering, capitation fee and commercialisation of education.

“The DoE’s regulatory power over a private, un-aided, recognised school in relation to fixation of fees is strictly ring-fenced,” the Bench observed.

The Court also examined various accounting heads including contingency reserve funds, development funds, depreciation reserve funds and gratuity liabilities, holding that the DoE could not arbitrarily treat these as “available surplus” to deny fee hikes.

The Bench clarified, “…mere availability of surplus funds with a private, un-aided, recognised school, howsoever large, cannot be the sole basis for the DoE to infer that the school is indulging in commercialisation or profiteering…”

The Court noted that profiteering can only be determined after a full-fledged financial audit under Section 18(5) of the DSE Act.

It further held that schools are entitled to maintain reserve and development funds for infrastructure, statutory liabilities and future expansion.

The High Court also found that many rejection orders violated principles of natural justice because schools were not given show-cause notices, hearing opportunities or access to chartered accountant reports relied upon by the DoE.

Accordingly, the Court quashed all impugned orders rejecting fee hike proposals at the commencement of academic sessions.

However, balancing the interests of schools and parents, the Court directed that the last fee increase proposed by each school would become applicable only from the next academic session commencing in April 2027.

The Court also clarified that no school would be permitted to recover retrospective arrears for previous academic sessions.

Case Title: Delhi Public School Vasant Kunj & Anr. v. Government of NCT of Delhi & Anr. and Connected Matters

Bench: Justice Anup Jairam Bhambhani

Date of Judgement: 22-05-2026