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Petitioner: City School Private Limited VS Respondent: Government of the Punjab etc
Court Name: Lahore High Court Judge(s): Abid Aziz Sheikh, Shams Mehmood Mirza, Shahid Karim Title: City School Private Limited vs Government of the Punjab etc Case No.: Case No. W.P.No.29724/2015 Date of Judgment:2018-04-05 Reported As: PLD 2018 Lahore 509, PLJ 2018 Lahore 646, 2018 LHC 495 Result: petiton allowed
Judgment Abid Aziz Sheikh, J.- This judgment will decide instant writ petition as well as writ petitions detail of which is given in appendix-A and appendix-B. In all these writ petitions, there is communality of issue relating to school fee being charged by unaided private educational institutions in Province of Punjab. The issue involved is right of private educational institutions to increase school fee from time to time and nature of control which government can exercise in regulating such fee structure. In some of the writ petitions, (petitions in appendix A), petitioners are private schools and have challenged the vires of certain sub-clauses of section 7-A of the Punjab Private Educational Institutions (Promotion and Regulation) Ordinance, 1984 (Ordinance 1984) inserted on 19.09.2015 through section 4 of Punjab Private Educational Institutions (Promotion and Regulation) Amendment Ordinance, 2015 (Ordinance of 2015). Subsequently on 04.03.2016, the Ordinance 2015 was converted into Act through the Punjab Private Educational Institutions (Promotion and Regulations) (Amendment) Act, 2016 (Act of 2016). Section 7-A of the Ordinance 1984 was further amended through Punjab Private Educational Institutions (Promotion and Regulations) (Amendment) Act, 2017 (Act of 2017) . Accordingly these petitions were amended from time to time, also to challenge the amendments made in section 7-A of the Ordinance 1984 through Act of 2016 and Act of 2017. 2. Brief facts are that in Province of Punjab, Private educational institutions are regulated through Ordinance 1984 and Punjab Private Educational Institutions (Promotion and Regulation) Rules, 1984 (Rules of 1984) . The said Ordinance 1984 was amended and section 7-A was inserted. Under section 7-A of the Ordinance 1984, certain restrictions are imposed on private educational institutions including capping of increase in fee for any academic year for not more than 5% (under Ordinan ce 2015 and Act of 2016) and finally 8% (under Act of 2017), charged in preceding academic year. Some of the private schools being aggrieved of section 7-A of the Ordinance 1984 have filed these constitutional petitions, whereas some of the students through their parents also filed petitions for
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directing the private schools to charge the fee in terms of section 7-A of the Ordinance 1984 (detail of petitions by students/parents are appendix B ). 3. Ms. Asma Jahangir , Advocate for private schools argued Constitution of Islamic Republic of Pakistan, 1973 (Constitution). Submits that the petitioners have right to carry out their business of private schools and the State at best in order to promote free competition could regulate business through licence in a reasonable manner. She submits that section 7-A of the Ordinance 1984 has gone beyond the licensing system and is actually controlling the business of the petitioner in arbitrary manner. Submits that under article 18 of the Constitution, only reasonable restrictions can be imposed but impugned legislation is not only unreasonable but also amounts to deprive the petitioners of their business. She placed reliance on Arshad Mahmood v. Government of Punjab (PLD 2005 SC 193), Pakcom v. Federation of Pakistan (PLD 2011 SC 44), Khawaja Imran Ahmed vs. Noor Ahmed (1992 SCMR 1152), Messrs Murree Brewerey Company Limited D.G (Excise and Taxation) (1991 MLD 267), Landirenozo vs. Federation of Pakistan (2013 PTD 658), Al Raham Travels and Tours v. Ministry of Religious Affairs (2011 SCMR 1621), Elahi Cotton Mills vs. Federation of Pakistan (PLD 1997 SC 582), Administrator, Market Committee vs Muhammad Sharif etc (1994 SCMR 1048), Northern Bottling vs. Federation of Pakistan (2015 PTD 231), K.B. Threads vs. Zila Nazim Lahore (PLD 2004 Lah. 376), Shahabuddin vs. Pakistan etc (PLD 1957 Kar. 854). Further submitted that through impugned amendment, private business of the petitioner schools have virtually been nationalized, as now the regulator will make policy and business decisions regarding educational institutions of the petitioners. She submitted that impugned legislation has also been given retrospective effect which is not permissible under law. Learned counsel submitted that provision of section 7-A of the Ordinance particularly its subsection 1, 5, 6, 7 and 8 being ultra vires of the constitution and violation of fundamental rights of petitioners are liable to be declared unconstitutional. Learned counsel further argued that under Article 25-A of the Constitution, it is the duty of State to provide free and compulsory education to all children of age 5 to 16 and unaided private educational institutions are not obliged to provide free education. Submits that imparting quality education is like trade and business which is not only protected under article 18 of the Constitution but private institutions also have right to give excellent education to children between age of 5 to 16 year against reasonable fee. Reliance is placed on Petition regarding miserable conditions of schools (2014 SCMR 396), Human Rights Case No.19360- P/2012 (2013 SCMR 54), Fiaquat Hussain vs. Federation of Pakistan (PLD 2012 SC 224), Syed Nazeer Agha vs. Government of Balochistan (PLD 2014 Bal. 86). She further submitted that private schools have raised fee in proportionate to inflation and increase of salaries and there is no exploitation or forming of cartel. Submitted that parents of students have no locus standi against increase of fee because providing quality education against reasonable fee does not violates fundamental rights, if there is no profiteering or exploitation on part of the petitioners. Submitted that in any other case, the respondents have remedy before Competition Commission of Pakistan or Consumer Courts. She furthe r submitted that parents have also right to seek free education for their children from Government schools if so desired. 4. Mrs. Asma Jahangir Advocate unfortunately passed away during course of these proceedings. Her above arguments are adopted by her co-counsel Mr. Shezad Atta Elahi Advocate who in addition submitted that under Article 18 of the Constitution, the condition can be imposed only in the interest of free competition or through licensing system and finally it must be reasonable. He submits that through impugned legislation, the discretion of the regulatory authority has been fettered to allow increase in fee more than 8%, even if educational institution duly justify such increase. He, therefore, concluded that impugned legislation is not sustainable and further it is also violative of Article 3 of the Constitution, as it exploits the educational institutions. 5. Mr. Shahid Hamid Advocate for private schools argued that the impugned provisions of section 7-A of Ordinance 1984, are prima facie violative of fundamental rights guaranteed to the petitioners under Article 23 and 24 of the Constitution as the petitioners are being compulsorily restrained/deprived of their right to income/property through charging fees for services provided by them, without any compensation on account of such compulsory restraint/deprivation. Submitted that the parents who place their children in schools operated by petitioners, do so knowing fully well two things: first, the level of fees at the time of entry and second, that these fees will, on average increase by 12 to 14% each year based on the historical pattern of the previous years. Further submitted that they
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willingly entered into this contractual relationship and respondents cannot lawfully interfere in this contractual relationship. Argued that under section 7A(1) of the Ordinance, all private schools charging fees of less than Rs.4,000/- per month per student have been exempted from the maximum cap on fees. Submits that these schools are almost 96-98% of all private schools. Argued that the petitioners do not grudg e the exemption given to these schools but it bears mention that the parents of students studying in such schools are self-evidently much less well- off than parents of students studying in petitioners? schools. Submits that in other words the well-to-do parents are sought to be protected as against those much less well-of f parents. Argued that this is not only discriminatory in violation of Article 25 of the Constitution, as there is no perceivable logic to the cut-of f of Rs.4,000/- but it also reflects social priorities. Argued that why protection for the well-to-do and not for the less well-of f when the Secretary Schools (respondent), in written statement describe them, as teaching shops?. Added that petitioners had already collected fees for the months of August and September 2015, before the respondents notified/enacted Ordinance of 2015, which prescribed that for academic year 2015-16, the petitioners could not charge any fee higher than the fees charged for that class during the academic year 2014-15. Argued that neither the Ordinance 2015 nor the Act 2016 had any provision giving them retrospective effect. Argued that consequently the petitioners are entitled to retain the fees already realized by them prior to the notification/enactment of the aforesaid Ordinance of 2015 and Act of 2016. Reliance is placed on Zila Council Jhang vs. Daewoo Corporation (2001 SCMR 1012) and Chief Land Commissioner vs. Ghulam Hyder Shah (1988 SCMR 715). 6. Mr. Faisal Hussain Naqvi, Advocate for the petitioner schools argued that impugned provisions of section 7-A of the Ordinance are unreasonable, unconstitutional and against the fundamental rights of the petitioner . He stressed four grounds to assail the impugned provision. Firstly that the provision is violative of Article 18 of the Constitution, secondly the provision amounts to legislative judgment and also violative of separation of power and right of fair trial under Article 10-A of the Constitution, thirdly the provision is violative of Article 25 of the Constitution, not because it is discriminatory but because the legislature has failed to discriminate the petitioner and fourthly , that it is violative of Articles 23 and 24 of the Constitution, which is not only confined to right of property but where by imposing conditions, the value and utility of property is reduced, it also amounts to violation of right of property . Regarding first ground, he submits that the word "lawful trade" used in Article 18 has been discussed in various judgments of Indian Supreme Court, in State of Bombay vs. RMD Chamarbaugw ala (AIR 1957 SC 699), it was held that gambling is not a lawful trade. Similarly in Khoday Distilleries Ltd. vs. State of Karnataka (1995) 1 SC 574, it was held that the right to practice a profession or trade does not mean a practice of profession or carrying out trade which is inherently vicious, perniciou s and is condemned by all civil societies, however , in Action Committee, Un-Aided Private Schools vs. Director of Education, Delhi and others (2009) 10 SCC 1), it was held that education is a lawful trade. He submits that once it is established that education is a lawful trade, the next question is whether any capping can be done on the fee structure as was done in the impugned provision. He referred the various judgments of Indian Supreme Court including Monini Jai vs. State of Karnataka (1992) 3 SCC 666, Unni Krishnan, J.P. vs. State of A.P. (1993) 1 SCC 645, TMA Pai Foundation vs. State of Karnataka (2002) 8 SCC 481, Islamic Academy of Education vs. State of Karnataka (2003) 6 SCC 697, Modern School vs. Union of Indian (AIR 2004 SC 2236) and P.A. Inamdar vs. State of Maharashtra (2005) 6 SCC 537, to argue that the question whether school fee can be regulated by Government institutions was subject matter of various petitions before Supreme Court in India and after chequered history of judgments, the final consensus reached in P.A. Inamdar vs. State of Maharashtra supra that there can be no profiteering and capitation of fee but reasonable fee can be charged and there will be minimal regulatory control and autonomy be given to unaided schools. He submits that applying the same principle, the capping of fee amounts to violative of fundamental rights of the petitioner under Article 18 of the Constitution. On the issue of legislative judgment, he referred the reply filed by the respondents where it was stated that impugned legislation was passed because petitioners were engaged in profiteering and capitation. He submits that the profiteering as defined in various dictionaries is a crime and without giving any opportunity to the petitioners to explain their position, the legislature could not issue the impugned provision, which amounts to legislative judgment against the petitioners. He submits that even the opportunity of ex post-facto hearing is not
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brought in the impugned provision. He placed reliance on judgments Dr. Mubshar Hassan vs. Federation of Pakistan (PLD 2010 SC 265, 370), Naseer Ahmed Khan vs. Government of Punjab (PLD 1980 Lahore 684, 694), Government of Punjab vs. Naseer Ahmed Khan (2001 CLC 1422, 1426), Government of Punjab vs. Naseer Ahmed Khan (2010 SCMR 431), National Industrial Co-operative Credit Corporation vs. Province of Punjab (PLD 1992 Lah. 462, 491-92) and Province of Punjab vs. National Industri al Co-operation Credit Corporation (2000 SCMR 567, 598) to argue that judicial functions are to be performed by judiciary and not by the legislation and therefore, the impugned provision being legislative judgment is not sustainable under law. Finally be concluded that impugned legislation is discriminatory and also violate right of property . 7. Khawaja Ahmad Hosain, Advocate for private schools argued that impugned provisions are ultra vires of the Constitution as Government has no jurisdiction to interfere in the business of the petitioner in a free market. Submits that Government can only interfere if schools have created monopoly or there are allegations of collusion or cartel. Submits that in absence of any such allegation, provisions are not sustainable being violative of Article 18 and 25 of the Constitution. He adds that impugned provision of section 7-A of the Ordinance 1984 is only regarding increase of fee of existing schools but there is no restriction of fixation of fee by a new school, therefore, this provision being irrational is not sustainable. 8. Khawaja Haris Advocate for private schools argued that education is an occupation, therefore, no doubt it is subject to qualification under Article 18 of the Constitution. He however submits that such qualification or restrictions can only be reasonable.Submits that restriction of capping the increase in fee through impugned legislation is un-reasonable restriction, therefore, violative of Article 18 of the Constitution. He submits that in imposing restriction on increase of fee, the balance must be drawn between right of the educational institution on increase of fee and right of the students and their parents against exploitation or profiteering of fee. He placed reliance on judgment passed by the Islamabad High Court in Educational Services (Pvt.) Limited and 4 others vs. Federation of Pakistan and another (PLD 2016 Islamabad 141 ). 9. Dr. Khalid Ranjha Advocate argued that impugned section 7-A of Ordinance of 1984 was inserted through Ordinance of 2015 which is not a valid legislation and amendment could only be made through Act of the Parliament. 10. Mr. Asad Ullah Saddiqui, Advocate for the petitioner schools argued that impugned legislation amounts to exercise the delegation of power by authority without giving procedure, yard stick and parameters for such delegated power . Submits that such un explained and un-structural powers are not sustainable. Reliance is placed on Khawaja Muhammad Safdar , M.P.A, Lahore vs. Province of West Pakistan etc. (PLD 1964 (W.P.) Lahore 718). He further submits that main purpose of impugned legislation is to put the petitioners out of business, hence violation of article 18 of the Constitution. Adds that impugned legislation has not only denied livelihood of the petitioner but also its employees beca use their salaries and other benefits cannot be increased due to unreasonable restrictions, therefore, impugned legislation is violation of article 9 of the Constitution. He submits that legislation is discriminatory because in none of the other private professions including hospitals, private tuition centers etc., such restriction has not been imposed. He submits that under Article 4 of the Constitution, every citizen has the right to be dealt in accordance with law whereas impugned legislation is clearly discriminatory which is against the fundamental rights of the petitioners. 11. Mr. Muhammad Haroon Mumtaz, Advocate for schools argued that no doubt the provincial legislation can regulate the fee structure, however , it cannot impose maximum limit on the increase of fee as said power falls within the exclusive jurisdiction of the Parliament under Article 253(1-A) of the Constitution. He submits that increase of fee falls within the definition of property which is not confined to immovable property but also the right to enjoy the benefit of said property . In this regard he also referred to the definition of property in Article 260 of the Constitution and also "property" definition in Black?s Law Dictionary . Argued that impugned section 7-A infringes right of property of petitioners. He placed reliance on Messrs X.E.N. Shahpur Division (LJC) Quarry Sub-Division Sargodha vs. The Collector Sales Tax (Appeals) Collectorate of Customs Federal Excise and Sales Tax Faisalabad and others (2016 SCMR 1030 ), Malik Gul Hassan and Co. vs. Federation of Pakistan through the Secretary , Ministry of Health, Islamabad and 9 others (1995 CLC 1662 ), Federation of Pakistan and others vs. Shaukat Ali
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Mian and others (PLD 1999 SC 1026 ) and Tilla Muhammad and another vs. Government of North-W est Frontier Province through Secretary , Law Department and another (1986 CLC 1429 ). 12. Mr. Hassan Makhdoom, Advocate for private schools argued that the impugned levy is discriminatory and violative of Article 25 of the Constitution because schools who are charging fee less than Rs.4,000/- have been totally excluded from the purview of the impugned legislation. He adds that impugned legislation is violative of Article 18 of the Constitution and placed reliance on Arshad Mehmood and others v. Government of Punjab through Secretary Transport Civil Secretariat, Lahore and others (PLD 2005 SC 193). 13. Mr. Tafazzul Rizvi Advocate argued that impugned section 7-A of the Ordinance of 1984 amounts to unreasonable restriction on fundamental rights of the private schools, therefore, not sustainable under Article 18 of the Constitution. Mr. Zubair Ahmad Chaudhry, Advocate adopted the aforesaid arguments of the petitioner schools. 14. Mr. A. K. Dogar , Advocate (in C.M. No.10/2015 in W.P. No.29724/2015) argued that under Article 25-A of the Constitution, all children in age of 5-15 years have fundamental right to get free education. Submits that this fundamental right is not only enforceable against Government Institutions but also against Private Parties and Institutions. Reliance is placed on Human Rights Commission of Pakistan and 2 others vs. Government of Pakistan and others (PLD 2009 SC 507). He further submits that education in Islam is a religious duty, therefore enforceable against all Muslims including the private schools. Reliance is placed on Fiaqat Hussain and others vs. Federation of Pakistan through Secretary, Planning and Development Division, Islamabad and others (PLD 2012 SC 224). He next argued that afore-noted judgments of august Supreme Court are binding on all Courts and institutions and must be complied with in letter and spirit. Reliance is placed on Al-Jehad Trust through Raees ul Mujahidin Habib Al-Wahabul Khairi, Advocate Supreme Court and another vs. Federation of Pakistan and others (PLD 1997 SC 84). Based on above submission, he concluded that all constitutional petitions are liable to be dismissed and no fee whatsoever can be charged by any Private or Government Institution. 15. Syed Shahab Qutab, Advocate appearing on behalf of respondent parents (in W.P. No.830822/2015), defended the impugned legislation. He submits that running of educational institution being a "trade" can be regulated by the State through a licensing system under Article 18 of the Constitution. He referred to the definition of "trade" explained in K.G. Old, Principal, Christian Technical Training Centre Gujranwala vs. Presiding Officer, Punjab Labour Court, Northern Zone and 6 others (PLD 1976 Lahore 1097) and also referred to various clauses of Ordinance 1984, where conditions for registration have been prescribed. He argued that the requirement of registration of school under the Ordinance amounts to issuance of licence, therefore, the State could regulate the private institutions as well as their registration. He submits that the impugned legislation is not a legislative judgment as it does not interfere in the quasi-judicial power of the executive who will determine whether increase in fee is justified or not. He further argued that the impugned legislation is neither discriminatory nor it amounts to deprive the petitioner from their right of property. Submits that Article 25-A of the Constitution regarding State obligation does not entitle the petitioner?s to charge the excess fee for failure on part of State to perform its obligations. He argued that impugned legislation is permissible under Article 18 of the Constitution. He elaborates that under first part of Article 18, qualification can be prescribed for occupation and profession whereas under second part of Article 18, regulation can be framed under licensing system. He submits that running of education institution being an occupation, conditions for registration under the Ordinance 1984 and Rules of 1984 are qualifications as held by august Supreme Court in Arshad Mahmood case supra. He submits that the running of education institution being also a trade and business and requirements u/s 3, 7, 8 and 9 of the Ordinance for the registration of schools and their monitoring amounts to licensing system, therefore, regulations in form of impugned legislation is also permissible under second part of Article 18 of the Constitution. In this regard reliance is placed on Messrs D.S. Textile Mills Limited vs. Federation of Pakistan and others (PLD 2016 Lahore 355), Messrs East West Steam Shipping Company vs. Pakistan etc. (PLD 1958 SC 41) and Judgment passed by Sindh High Court in case titled ?Beacons House School System vs. Province of Sindh? , C.P. D. No.5812/2015. He finally concluded that these conditions/restrictions being reasonable are valid and legal. 16. Mr. Waqas Meer , Advocate while appearing on behalf of respondents/parent s argued that fundamental right under Article 18 of the Constitution is not an absolute right but subject to qualifications and regulations being
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relating to economics of the State. He submits that heavy burden lies on part of the petitioner to establish that regulations under Article 18 destroy their other fundamental rights including right of property . He submits that there are many laws which provide controlling of prices including prices of commodities but same were never declared unconstitutional merely because it regulates the right of occupation or trade. He submits that law can only be struck down if it is unconstitutional and not merely because it regulates profession and trade which amount to imposing certain restrictions on the business. He placed reliance on Pakcom Limited and others vs. Federation of Pakistan and others (PLD 2011 SC 44) and All Pakistan Newspapers Society and others vs. Federation of Pakistan and others (PLD 2012 SC 1 ). 17. Mr. Muhammad Javed Arshad, Advocate also appearing for parents (in W.P. No.29724/2015) argued that the regulation can be prescribed to control working of private schools including their fee structure. He placed reliance on International College of Commerce vs. University of Punjab (PLD 2004 Lahore 335) and Rahim Yar Khan College of Education through Principal and another vs. Islamia University of Bahawalpur through Vice-Chancellor and 3 others (1996 SCMR 341 ). 18. Mr. Azhar Siddique Advocate on behalf of respondent parents argued that maximum fee was lawfully capped to restrain private schools from profiteering and exploiting the parents. He further argued that in order to declare the impugned provision confiscatory , the…
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