The Delhi High Court on Friday (May 22, 2026) quashed a series of orders passed by the Directorate of Education (DoE) rejecting fee-hike proposals of private unaided schools, holding that such schools do not require prior approval from the DoE to increase fees at the commencement of an academic session.

In a 120-page judgment, Justice Anup Jairam Bhambhani held that the DoE had acted on a “misconceived exercise” by insisting that schools seek prior approval even before the start of an academic session. The court further held that fee-hike proposals still pending with the DoE would stand closed as they too were based on the “misconceived notion” that prior approval was necessary.

The court noted that since the DoE has sat on fee-hike proposals for several years, the schools have been “unable to legitimately increase their fee over several academic sessions, placing some of them in serious financial disarray”.

“If however, the pending fee-hike proposals, some of which relate back to the year 2016-17, are allowed to be implemented at this stage after lapse of several years, it would put an inordinate and unacceptable burden on the parents/students, who would have to pay arrears of fee for the past several years,” the court said.

In the circumstances, the court directed that the “fee increase last proposed by various schools in their respective statements of fee filed with the DoE would apply but only from the next academic session beginning April 2027”. It also forbid schools from demanding or recovering from any parent or student any arrears of fee o rother charges retrospectively for the past academic sessions.

Over 100 private schools had approached the court contending that their proposals for increasing fee from time to time have been “arbitrarily and unlawfully rejected by the DoE”, thereby impinging on their right to run private, un-aided, recognised schools with requisite financial autonomy. The schools contended that the DoE’s actions have resulted in serious deleterious consequences, leading to stagnation of development and growth of their institutions.

The DoE has argued that as per the extant position of law, schools are required to seek prior permission of the DoE before increasing their fee at any point in time.

The court reaffirmed that under Section 17(3) of the Delhi School Education Act (DSE Act), private unaided recognised schools are only required to file a statement of proposed fees with the DoE before the commencement of an academic session and are not required to obtain prior sanction for fee increases at that stage.

However, the court clarified that prior approval of the DoE would be necessary if a school sought to increase fees during an ongoing academic session. In such cases, the court directed that the school must submit its proposal at least two months in advance and the DoE must decide the proposal within two months, failing which the proposal would be deemed approved.

“Mere availability of surplus funds with a private, un-aided, recognised school, howsoever large, cannot be the sole basis for the DoE to infer that the school is indulging in commercialisation or profiteering, and to thereby object to fee-hike by a school,” the court said.

It said aspect of commercialisation or profiteering can only be examined and determined by the DoE after conducting a full-dressed financial audit of a school by the prescribed authority in terms of section 18(5) of the DSE Act, based on duly audited financial and other returns that a school files before the DoE.

Rejecting the DoE’s interpretation of its powers, the court said private unaided schools enjoy financial autonomy within the framework of the DSE Act and Rules and that “it is not for the DoE to dictate or micro-manage how the fiscal affairs of a school are to be conducted”.