Constitution Bench in T.M.A. Pai Foundation, (2002) 8 SCC 481 has expounded, private unaided school management must have absolute autonomy to determine school fees. The consistent view has been restated and enunciated by Constitution Bench in Modern Dental College and Research Centre, (2016) 7 SCC 353 in Paragraph 75. Though fee can be fixed by educational institutions and it may vary from institution to institution depending upon quality of education provided by each of such institutions, commercialization is not permissible; and in order to ensure educational institutions are not indulging in commercialization and exploitation, Government is equipped with necessary powers to take regulatory measures and to ensure private unaided schools keep playing vital and pivotal role to spread education and not to make money. When it comes to notice of Government, an institution was charging fee or other charges which are excessive, it has complete authority coupled with its duty to issue directions to such an institution to reduce the same so as to avoid profiteering and commercialization. Paragraph 76 proceeded to consider how a regulatory framework, for ensuring no excessive fee is charged by educational institutions, can be put in place. Court adverted to T.M.A. Pai Foundation, Islamic Academy of Education, (2003) 6 SCC 697, Modern School, (2004) 5 SCC 583 and P.A. Inamdar, (2005) 6 SCC 537 and noted, private schools cannot be allowed to receive capitation fee or indulge in profiteering in the guise of autonomy to determine school fees. Court plainly noted, every school management of private unaided schools is free to devise its own fee structure, but the same can be regulated by Government in interests of general public for preventing profiteering and/or charging of capitation fee. Constitution Bench noted with approval Association of Private Dental and Medical Colleges vs. State of MP, 2009 SCC Online MP 760. Court then proceeded to examine the need for a regulatory mechanism. It noted, regulatory measures are felt necessary to promote basic wellbeing for individuals in need. It is not open to argue, Government cannot provide for external regulatory mechanism for determination of school fees or so to say fixation of ‘just’ and ‘permissible’ school fees at the initial stage itself.
– Hon’ble Justice A.M. Khanwilkar, Indian School, Jodhpur v. State of Rajasthan, [Civil Appeal No. 1724 of 2021].