The Delhi High Court, in a significant judgment delivered on October 9, 2025, dismissed a clutch of appeals filed by the Directorate of Education (DoE) and parents challenging the fee hike by two unaided private schools - Bluebells International School, Kailash, and Lilawati Vidya Mandir, Shakti Nagar. The Division Bench, led by Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela, ruled that while the government has limited powers to regulate school fees, such power cannot extend to blanket interference in fee fixation.
Background
The case stemmed from orders passed by the Directorate of Education in 2018 and 2019, which restrained private unaided schools from increasing fees under the pretext of implementing the 7th Central Pay Commission. The DoE had also directed refund or adjustment of any increased amount collected from parents.
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Aggrieved by these directives, Bluebells International and Lilawati Vidya Mandir approached the High Court, arguing that as unaided schools not built on government land or grants, they were entitled to autonomy in managing their finances. A Single Judge had agreed with them earlier this year, prompting appeals from the DoE and a group of parents represented through Rumana, a student.
Court's Observations
The Division Bench heard the three connected appeals together, noting that they raised common legal questions. Chief Justice Upadhyaya, reading out portions of the 41-page verdict, made it clear that the government’s role is supervisory, not controlling.
"The authority of the Directorate under Section 17(3) of the Delhi School Education Act, 1973, is to ensure that schools do not indulge in profiteering, commercialisation, or collection of capitation fees," the bench observed.
Citing the Supreme Court's landmark decision in Modern School v. Union of India (2004), the Court noted that regulation of school fees is permissible only to prevent misuse, not to micro-manage every fee structure. It reiterated that educational institutions are entitled to generate a reasonable surplus, provided it is reinvested for educational purposes.
The judgment drew extensively from earlier Supreme Court rulings - T.M.A. Pai Foundation, Islamic Academy of Education, and Modern Dental College - to underline that education is an occupation protected under Article 19(1)(g) of the Constitution. Hence, private schools cannot be treated as commercial ventures, but neither can the State assume full control over them.
"The Government cannot be given unbridled authority to dictate the fee structure of unaided private schools. Regulation is justified only to check profiteering and exploitation," the Court clarified.
At the same time, the bench emphasized that the Directorate retains the right to inspect school accounts under Sections 17, 18, and 24 of the Act. If misuse of funds is found, the DoE can initiate proceedings and even withdraw recognition.
Decision
After considering submissions from all sides - including detailed arguments by Standing Counsel Sameer Vashisht for the GNCTD and advocates Kamal Gupta and Khagesh Jha for the respondents - the Bench refused to interfere with the Single Judge’s earlier ruling. The appeals by both the Directorate and the parents were dismissed.
However, the Court left a small window open for the government. It said the DoE could "proceed afresh in accordance with law" if it discovers violations such as profiteering or misuse of student funds - but only after granting schools a fair hearing.
"If the Directorate finds that spending of school fees is not as per law, it may act against the institution. But the power cannot extend to fixing or freezing fees altogether," the judgment concluded.
The bench thus upheld the autonomy of unaided private schools while reinforcing the State's limited but crucial regulatory role. No costs were imposed on any party.
Case Title:- Rumana through Father Mr. Hemant and Others v. Bluebells International School, Kailash and Another
