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Private unaided schools occupy a peculiar position in Indian education law, they are private enterprises delivering a public good, subject to both the Right of Children to Free and Compulsory Education Act, 2009 (RTE Act) and state-specific education laws.
Historically, Delhi relied on a patchwork regime: the Delhi School Education Act, 1973 and periodic government orders. However, judicial interventions from time to time, most notably in Modern School v. Union of India (2004) have exposed the regulatory gaps, particularly in fee oversight.
In light of this background, on 8 August 2025, the Delhi Legislative Assembly passed the much-anticipated Delhi School Education (Transparency in Fixation and Regulation of Fees) Bill, 2025 (“Bill”). The legislation intends to introduce stringent regulations and penalties to curb arbitrary fee hikes by schools, while also empowering parents to challenge unilateral decisions made by school managements. The Statement of Objects and Reasons under the Bill clarifies that the existing provisions under the Delhi School Education Act, 1973 has proven insufficient in preventing the free reign of private unaided school managements pertaining to arbitrary fee hikes and lack of financial transparency. Citing persistent complaints from parents and judicial limitations on the Directorate of Education’s (DoE) power, the Bill seeks to establish a robust mechanism for fairness and accountability in school fee structures in Delhi. The Bill is applicable to all categories of private unaided educational institutions within the National Capital Territory of Delhi, from pre-primary to senior secondary level, whether recognised or unrecognised by the Government.
Through the Bill, the legislature aims to:
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- Establish independent committees to regulate school fee increases;
- Mandate prior approval of the committee for any fee revision based on financial statements;
- Promote transparency through mandatory audits and disclosures;
- Provide a grievance redressal mechanism for parents; and
- Impose strict penalties for profiteering and collecting capitation fees by the schools.
At the core of the Bill sits a new three-level committee structure that shall manage the proposal, approval, and appeal of school fees in Delhi. The “School Level Fee Regulation Committee” or “SLFRC” forms the foundational body at individual school level which is responsible for the initial review and approval of fees.
The Bill mandates every school to form an SLFRC by July 15th of every academic year. The SLFRC is designed to be an inclusive body, consisting of a chairperson, a secretary (which shall be the school’s principal), a member body consisting of three teachers and five parents from the school’s parent-teacher associated (selected at random through a draw of lots), and an observer (which shall be a nominee from the Department of Education). The school management must submit its proposed fee structure to the SLFRC by July 31st. The Bill mandates that the fee approvals by the SLFRC must be based on a unanimous agreement of all members, and once approved shall be the binding fee structure for the next three academic years. The approved fee details must also be displayed on the school’s notice board and website. The timeline for SLFRC to decide on the amount of fee to be fixed has been fixed at 15th September of the relevant academic year and the management of the school can approach the District Fee Appellate Committee (DFAC) (formed under the Bill) before the 30th September.
The Bill accords a statutory right to an aggrieved parents’ group—constituting no less than 15% of the total parents of students in the affected class or school—to prefer an appeal against a determination of the School Level Fee Regulation Committee (SLFRC) before the District Fee Appellate Committee. Such appeal must be instituted within thirty days from the date on which the SLFRC finalises the fee structure. The DFAC is mandated to communicate its decision on the fixation of fees to the concerned parties within thirty days of receiving the appeal, and in any case not later than forty-five days within the same academic year. Should it fail to do so, the matter shall stand automatically referred to the Revision Committee as provided under the Act. Furthermore, the Aggrieved Parents’ Group, the school management, or the Parents-Teachers’ Association, if dissatisfied with the decision of the District Fee Appellate Committee, may prefer a further appeal before the Revision Committee within thirty days from the date of such decision, in the manner prescribed.
It further delineates a set of determinative parameters for fixing the fees leviable by a school, including: the geographical location of the institution; the quality, scale, and extent of its infrastructure and facilities; prevailing academic standards; expenditure on administration and maintenance etc..
Notably, the DFAC has been vested with the powers of a civil court for the purposes of conducting any inquiry under the Act, akin to the powers exercisable while trying a suit. In parallel, the Directorate of Education is conferred with civil court like authority for the imposition of penalties under the Bill. Importantly, the Bill contains an express bar on the jurisdiction of ordinary civil courts in respect of matters governed by its provisions, thereby channelling disputes exclusively through the statutory committees and authorities established under the legislation.
Non-observance of the mandated procedure for fee approval vests in the Director of Education along with the authority to order the immediate rescission of the revised fees and to compel the refund of any excess amounts collected, within a maximum of twenty working days. The Director is further empowered to levy pecuniary penalties ranging from ₹1–5 lakhs for a first contravention and ₹2–10 lakhs for each subsequent contravention. Persistent defiance of such directives may expose the institution to a penalty equivalent to twice the originally prescribed amount and/or may result in cancellation of recognition of the school itself.
The Bill’s introduction of a participatory committee system to govern the approval and appeal of school fees is laudable as an important intervention by the authorities, bringing uniformity and transparency to fee structures, and directly addressing long-standing parental concerns. For the first time, parents have been involved in the decision making process and the penalties prescribed have been high and serious enough to have a material impact on the violators.
However, while the goals are valiant, the Bill also poses considerable challenges in implementation, particularly for schools, as the multi-layered approval processes, especially in relation to the need for unanimous approvals, may lead to frequent deadlocks and pushing most decisions to an appellate system. Requiring 15% of parents to initiate a DFAC complaint may also be onerous in large schools, effectively stifling individual grievances. Further, without statutory financial audits, committees may lack robust evidence to determine whether fee hikes are justified. Possible administrative delays and bureaucratic hurdles may also affect the ability of schools to meet dynamic financial requirements and unforeseen expenses. The Bill will also test the ability of the Government of Delhi to effectively execute it over roughly 1700 schools.
From a legal standpoint, the Bill is well-intentioned but susceptible to legal and administrative law challenges. The Bill’s success therefore rests on a delicate balance; one which meets its intended fairness for parents while not imposing overly cumbersome administrative load on schools that may compromise their operational flexibility and financial health.
Co-authored by Neeraj Vyas, Partner ([email protected]) and Abhishek Malhotra, Associate ([email protected])
