Summary
By a notification of 13.04.2018 under Section 87 of the Punjab Reorganisation Act, 1966 the Central Government extended the Punjab (Regulation of Fees of Unaided Educational Institutions) Act, 2016 to Chandigarh with modifications: a proviso requiring unaided institutions to upload their accounts on their websites and not to charge any cost from parents, and a doubling of the penalties in Section 14. The Punjab and Haryana High Court dismissed the schools' writ petitions. The Supreme Court, applying Lachmi Narain, partly allowed the appeals: the website-disclosure clause and the enhanced penalties are substantive changes outside the power to extend an enactment with 'restrictions or modifications', which permits only peripheral or insubstantial adaptations, and were struck down; the clause barring any cost from parents merely restates the policy of the 2016 Act and was upheld.
Issues
- Whether, in extending a State enactment to the Union Territory of Chandigarh under Section 87 of the Punjab Reorganisation Act, 1966, the Central Government may insert a new obligation on unaided schools to upload their accounts and balance sheet on their websites, or enhance the penalties prescribed by the enactment.
- Whether a modification prohibiting unaided institutions from charging any cost from parents beyond the disclosed fee structure is within the power of extension.
Provisions considered
- Section 87 (power to extend enactments to Chandigarh with restrictions or modifications), Punjab Reorganisation Act, 1966Following the three-Judge Bench in Lachmi Narain, 'restrictions and modifications' must be confined to alterations that keep the inbuilt policy, essence and substance of the extended enactment intact and introduce only peripheral or insubstantial changes needed to adapt it to local conditions, lest the provision suffer from excessive delegation; new substantive obligations and changes to penal policy fall outside it. (¶¶ 8, 9, 10, 11, 12, 13, 16, 17)
- Section 5, third proviso, clauses (a) and (b) (para 6 of the notification); Section 14 penalties (para 8), Punjab (Regulation of Fees of Unaided Educational Institutions) Act, 2016 (as extended to Chandigarh)The 2016 Act makes no provision for disclosure of accounts on a website, so clause (a) is a substantive addition; clause (b), read with the unchallenged clause (c) requiring disclosure of the complete fee structure at the start of the academic year, only confines institutions to the disclosed fees and is consistent with the Act's mandate; the quantum of penalty under Section 14 is legislative policy that cannot be altered by executive order. (¶¶ 5, 6, 12, 14, 16)
Held
- Clause (a) of the third proviso to Section 5, obliging every unaided institution to upload its income and expenditure account and balance sheet on its website, is not a peripheral or insubstantial change but a substantive matter on which the 2016 Act is silent; it is outside the authority conferred by Section 87 and is struck down as ultra vires, without prejudice to the legislature's power to enact such a condition, which could then be tested under Part III. (¶¶ 11, 12, 13)
- Clause (b), prohibiting unaided institutions from charging any kind of cost from parents, restates the inbuilt policy, essence and substance of the 2016 Act: read with clause (c) it means institutions may charge only the disclosed fee structure and no more, an adaptation appropriate and necessary for better administration of the Act in the Union Territory; the challenge to it is rejected. (¶¶ 14, 15)
- Paragraph 8 of the notification, enhancing the penalty amounts in Section 14, is not a peripheral alteration: the quantum of penalty or punishment is legislative policy to be left to the legislature and cannot be provided by executive order, including under Section 87; it is struck down as unconstitutional and ultra vires. No opinion is expressed on the pending challenge to the 2016 Act itself, and the observations against the writ petitioner in paragraph 34 of the High Court's judgment are expunged. (¶¶ 16, 17, 18, 19, 20)
Result
Appeals partly allowed: clause (a) of the third proviso to Section 5 inserted by paragraph 6, and paragraph 8 enhancing the penalties under Section 14, of the notification dated 13.04.2018 extending the Punjab (Regulation of Fees of Unaided Educational Institutions) Act, 2016 to Chandigarh struck down as ultra vires Section 87 of the Punjab Reorganisation Act, 1966; the challenge to clause (b) rejected; observations against the writ petitioner in paragraph 34 of the High Court's judgment of 28.05.2021 expunged. No order as to costs.