The Delhi High Court has long held that private unaided recognized schools do not have unfettered freedom to fix fees, if those fees amount to profiteering or commercialization of education. Under Section 17(3) of the Delhi School Education Act, 1973, the Directorate of Education (DoE) has supervisory powers to intervene when fee hikes are excessive or unfair. In one major judgment, the Court upheld DoE’s power “to interfere if hike in fee by a particular school is found to be excessive and perceived as indulging in profiteering.”
Furthermore, cases have established that while schools may generate surplus funds—for example, for infrastructure development or quality enhancement—mere surplus does not automatically mean commercialization. The Court has said that planning and maintaining surplus is permissible, provided the school is not misusing its autonomy to extract capitation-like fees or otherwise exploit parents.
During the COVID-19 pandemic, Delhi government issued orders postponing or forbidding collection of certain fees (such as annual charges or development fees) by private unaided schools. The High Court struck down those orders, reasoning that indefinite restrictions on fee collection without evidence of profiteering caused “grave financial prejudice” to the schools which rely entirely on fees collected for operations, salaries, maintenance, etc.
More recently, there has been legislative movement. The Delhi Assembly passed a Bill titled Delhi School Education (Transparency in Fixation and Regulation of Fees) Bill, 2025. Key provisions of this Bill include:
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Mandatory submission of a proposed three-year fee structure by private unaided recognized schools.
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Establishment of a three-tier grievance redressal mechanism (at school, district, and state levels).
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Stringent criteria for determining fee hikes, factoring in infrastructure, staff salaries, annual cost increases and other reasonable expenses.
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Prohibition of profiteering.
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Penalties up to ₹1 lakh to ₹10 lakh for schools violating fee norms, and possibility of revoking recognition or even takeover of management in persistent non-compliance.
Thus, both judicial rulings and legislation recognize the necessity to balance two competing interests: the autonomy of private schools to fix fees, and the need to protect parents and students from unjustified or exploitative fee hikes.
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