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Petitioner: Educational Services Pvt. Limited (ESL) & three others VS Respondent: Federation of Pakistan through its Secretary, Capital Administration & Development Division, Cabinet Secretariat, Islamabad
Court Name: Islamabad High Court Judge(s): Aamer Farooq Title:Educational Services Pvt. Limited (ESL) & three others vs Federation of
Pakistan through its Secretary, Capital Administration & Development Division, Cabinet Secretariat, Islamabad Case No.: Writ Petition No. 2777 of 2016 Date of Judgment:2018-01-19 Reported As: 2018 MLD 624, 2018 IHC 9 Result: Petition Allowed Judgment JUDGEMENT AAMER FAROOQ J : This judgment shall decide the instant petition as well as petitions mentioned in the list attached herewith as Schedule-A, as common questions of law and facts are involved. 2. The petitioners, in all petitions, are Private Educational Institutions, inter alia, operating in Islamabad Capital Territory having different branches. The petitioners are aggrieved of Private Educational Institutions (Registration and Fee Determination) Rules, 2016 (herein after referred as 'the Rules'). The petitioners have challenged the vires/illegality of the referred Rules on various grounds including the same being in violation of Islamabad Capital Territory Private Educational Institutions (Registration and Regulation) Act, 2013 (herein after referred as the Act), the Constitution of Islamic Republic of Pakistan, 1973 and being unreasonable. 3. Learned counsels for the petitioners, inter alia, contended that earlier , a petition under Article 199 of the Constitution was filed before this Court wherein, inter alia, Notification dated 23-09-2015, issued by Respondent No. 2, was challenged alongwith vires of the Act and the said petition was partly allowed by this Court in case reported as (PLD 2016 Islamabad 141), wherein directions were issued to Respondent No. 2 to frame Rules in consonance with provisions of the Act by taking on board account all the stakeholders including the petitioners, however , same has not been done; hence Rules are in violation of said judgment of this Court. It was further contended that the Rules are arbitrary/unreasonable and ultra vires the fundamental rights of the petitioners, in particular , Article 18 of the Constitution of Islamic Republic of Pakistan, 1973; that the Rules are also in violation of Articles 4, 10-A, 23, 24 and 25 of the Constitution. In this behalf, the learned counsels took the Court through various rules and pointed out the defect/illegalities in the same. It was contended that impugned Rule 36 read with Schedule V Table 1 prescribes that average fee shall not exceed Rs.8,350/- per month per student, in case of
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institutions having classes from Montessori to A-Level, Rs. 8,850/- per month per student in case of institutions having classes from grade Six to A-Level, meaning thereby that, the petitioners shall have to slash their fee which already was frozen in 2014-15; that the Rule is unreasonable perverse, obtuse and unworkable and in disregard with the guidelines given in paras 29/n and 30/n of this Court' s order in the above mentioned case. It was further contended that Rules 3 and 4 read with Schedule II require the petitioners to obtain annual registration on payment of fee ranging from Rs. 2,00,000/- (two lac) to Rs. 5,00,000/- (five lac) per school i.e. branch. Likewise, it was contended that fee prescribed for initial registration is Rs.10,00,000/- (ten lac). It was stated that in comparison with the previous renewal fee in the Private Educational Institutions (Registration, Regulation and Promotion) Rules, 2006, was Rs.10,000/- (ten thousand) and was for period of two years; that initial registration fee is Rs. 20,000/- (twenty thousand). It was contended that the raise in the fee is exorbitant/unreasonable and is without any justification or basis. It was contended that the principle, underlining the fee, is the element of quid pro quo, however , no extra services are being offered in the instant case. There is no proportionality , whatsoever , in the case of impugned Rules 3 and 4 of Schedule II. The prescribed renewal rate for initial registration and renewal fee, amounts to progressive extortionate tax, which is evident from Rule 4 (6) of the Rules which imposes a fine equal to registration fee viz Rs. 10,00,000/- (ten lac) for each month and delay in seeking renewal. It was further contended that the rate of renewal fee, by comparison with other areas of Pakistan, is much less inasmuch as in Punjab, it is Rs. 7,500/-, in Sindh Rs. 15,000/-, in KPK Rs. 5,000/- and in Balochistan, it is Rs.10,000/-. 4. Learned counsel further contended that under Rules 36 (3) (4), in case, the petitioners intend to increase their fee, they shall submit a proposal with justification and supporting documents including audited accounts of 180 days before start of new academic year and for the processing of that application for fixation of fee, sum of Rs. 20,00,000/- per school shall be payable for hiring professional services. It was contended that the referred Rule is totally perverse and extortionate, hence is unworkable. It was further submitted that under Rule 38, the factors which Respondent No. 2 have to take into account in determining the fee of school, does not take into consideration the expenditures and property tax, repair and maintenance, utility and other expenses appreciation etc., which is in violation of the judgement of this Court mentioned herein above. It was contended that according to Government of Pakistan Statistics Division, education related expenditures increased by 1 1.10 % in 2016-17. 5. It was further contended that challenge to the vires of Rule 27 was also made on the ground that it prescribes that each school should have a Parent Teacher Syndicate empowered to take disciplinary action against students, examine and review several service contracts of teaching staff, redress grievance of students and parents, perform evaluation of teaching staff and formulate the admission policy for the school; under the said Rule, referred Body is to be elected and chaired by a parent. Under Rule 28, it is provided that the Parent Teacher Syndicate shall be arbitrator of disputes between a teacher and the petitioners/employers. It was contended that both the said Rules are in violation of Article 23 and 24 of the Constitution and provides remedies to the teachers, which otherwise, are not available in the labour laws and is beyond the scope of provisions of the Act. It was further submitted that Rule 29 prescribes for levy of fine. In case of violation of Rules, fine in the sum of rupees upto Rs. 20,00,000/- (twenty lac) and not less than Rs. 6,00,000/- (six lac) plus Rs.20,000/- (twenty thousand) per day for continuous violations, whereas under Section 19, the limitation is Rs. 5,000/- (five thousand) per day . 6. Learned counsel also submitted that Rule 31 provides complaint redressal system to cater all grievances of teaching and non-teaching employees as well as parents and guardians and students and in case of receipt of any complaint against a school by Chairman PEIRA, the matter shall be referred to the said redressal committee; the same is unreasonable and unlawful inasm uch as it infringes the rights of the petitioners under the laws relating to employment. Under Rules 4(8)(9)(10)(1 1) and 5, Respondent No. 2 has empowered itself to constitute an inspection committee which has powers including compelling production of any document and taking down statements and/or procuring compulsory appearances; it was contended that the same is in violation of fundamental rights enshrined in the Constitution as well as under the Act. It was further contended that Rule 6 provides as many as 26 conditions for registration of a school and in addition, almost 11 conditions in Rule 11 ibid have been laid down, which are totally unworkable and exceeds the mandate given to Respondent No.2 under the Act. It was contended that the requirement, regarding three thousand books in library etc., is totally arbitrary . It was
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further submitted that under Rule 2A of the Rules, it is provided that the academic year shall commence from 15th of April and shall end on 31st of March. The same does not take into account the O and A Levels System commencing in August and ending in July . 7. It was contended that under Rule 12 of the Rules, Respondent No. 2 can evaluate each school on the basis of various criteria which are 17 in number . It was submitted that no provision of the Act empowers Respondent No. 2 to make such performance evaluation; that under Rule 14, in case the petitioners open a new class, it will be treated as fresh registration which is completely unreasonable. Moreover , under Rule 17(3), a student without giving advance notice under Rule 17(3), cannot be penalized and the fee is to be refunded; Rule 18(2) prescribes that a student' s admission upto class 8 shall be examined by the Head of the Institution. It was contended that the said Rule has no logic or basis inasmuc h as there are competent teachers and designated staff available in the school for carrying out the admission process. Finally , it was submitted that under the impugned Rule 22(2), the school shall not designate any shop for purchase of uniform, books, etc., which is again in violation of rights of the petitioners and is baseless. Learned coun sels, in support of their submissions, placed reliance on cases reported as 'Arshad Mehmood & others versus Government of Punjab through Secretary , Transport Civil Secretariat, Lahore & others' (PLD 2005 SC 193), 'Elahi Cotton Mills Ltd. Versus Federation of Pakistan' (PLD 1957 SC 582) Khwaja Imran Ahmed versus Noor Ahmed (1992 SCMR 1152), 'NEPRA versus Faisalabad Electric Supply Company' (2016 SCMR 50), 'Salahuddin and another versus Pakistan' (PLD 57 WP Karachi 854), 'M/s Murree Brewery Company Limited versus Director General, Excise & Taxation' (1991 MLD 267), 'K B. Threads (Pvt.) Limited Versus Zila Nazim, Lahore' (PLD 2004 Lahore 376), (AIR 1996 SC 448), (AIR 1992 SC 115). Reliance was also placed on cases reported as 'Collector of Customs versus' (1992 SCMR 1402) as well as Judgement dated 13.04.2006, passed in Appeal (Civil) No.3453 of 2002 titled as 'Jandal Stainless versus State of Haryana and others'. 8. During the course of hearing, various applications were filed by individual parents and/or their bodies including C.Ms. No.4229/2016 and 4233/2016 in Writ Petition No.2777/2016, C.Ms. No. 4736/2016 and 3308/2016 in Writ Petition No. 2756/2016, C.M. No. 4735/2 016 in Writ Petition No. 2824/2016, C. M. No. 2016/2016 in Writ Petition No. 2850/2016, C.M. No. 4738/2016 in Writ Petition No. 2823/2016 and C.Ms. No.3305/2016, 3309/2016 and 4740/2016, in Writ Petition No. 2846/2016, to be impleaded as respondents. Notices were issued on the said applications to the parties and in response thereto, learned counsels for the petitioners contended that they have no objection if said applicants are heard on merits. Learned counsels, appearing on behalf of the applicants, inter alia, contended that this Court, in case reported as (PLD 2016 Islamabad 141), has already held that the provisions of the Act are not ultra vires the Constitution hence no attack can be made on the same. It was further contended that the Rules have been challenged on the basis that they are in violation of fundamental rights as well as provisions of Articles 4 and 10-A of the Constitution. It was contended that at the time of drafting of Rules, the petitioners and their bodies were involve d in the process. It was further contended that the Rules are neither in violation of the Act nor the Constitution, as they do not defeat the purpose of this Act rather promote the same. It was contended that there is a difference between fee, regulatory fee and tax which has been highlighted by the Honourable Lahore High Court in cases reported as (PLD 2016 Lahore 355) & (PLD 2017 Lahore 563). It was further contended that laid down criteria, for regulations of the petitioners, does not infringe their freedom of trade inasmuch as in Article 18 and other Articles of the Constitution, fundamental rights are not absolute but subject to law. Reliance was placed on case reported as (2015 SCMR 1739), it was further contended that the legal concept of the regulation is in the public interest and is used to remove undue or unreasonable advantage, preferences or prejudice or discrimination and/or inequalities. It was further contended that in a case from United States jurisdiction titled "Nebbia versus New York' (291 US 502), it has been observed that a state is free to adopt any economic policy that it may deem necessary to promote a public welfare. Reliance was placed on various cases from the Indian jurisdiction including (Civil Appeal No. 4060/2009) titled 'Model Dental College and Research Center versus State of Madhya Pradesh'. Learned counsel took the Court through various provisions of the Rules to justify their rational and reasonableness. 9. Learned counsel for Respondent No. 2, inter alia, contended that the Rules are in conformity with the provisions of the Act and do not suffer from any illegality, unreasonableness or arbitrariness. It was further
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contended that the same are not in violation of fundamental rights of the petitioners rather provide a comprehensive system for streamlining the Parent Teacher Syndicate in Islamabad Capital Territory . It was further contended that the Act provides for the registration of the Private Educational Institutions and the provisions of the same have already been held to be intra vires the Constitution by this Court in case reported as (PLD 2016 Islamabad 141). Likewise, it was contended that Article 18 and other provisions of the Constitution do not prohibit the regulations of a private enterprise/trade and framing of Rules. Learned counsel took the Court through the Rules which have been assailed in the petitions to justify their reasonableness, rationality in the facts and circumstances. It was vehemently contended that Respondent No. 2 is an Autonomous Body and is independent of any Ministry or any organ of the Federal Government. In this background, it was contended that PEIRA has to arrange funds/sources for carrying out the purposes of its regulatory role. It was submitted that in accordance with the present requirements of PEIRA, the system of registration fee and renewal has been revised so that there is no shortage of funds and the affairs of the regulator can be managed smoothly . Likewise, it was contended that in case of schools, which want their fee to be fixed in accordance with their requirem ents, services of professionals including Chartered Accountants, have to be hired so that a proper assessment of the finances can be made. It was contended that the requirement of formation of grievance redressal system and Parent Teacher Syndicate is only to enforce the provisions of device of free and compulsory Education Act, 2012, and does not suffer from any illegality . Likewise, it was submitted that the formation of the redressal committee is to ensure that schools adhere to the provisions of the Rules and there is no violation of the same. Reliance was placed on cases reported as 'Trade Service International (Pvt.) Limited versus PEMRA ' (PLD 2017 Lahore 563), 'M/s D.S. Textile Mills Ltd. versus Federation of Pakistan' (PLD 2016 Lahore 355),' LDA versus M/s Imrana Tiwana' (2015 SCMR 1739 ), Civil Appeals No. 4061 of 2009, 'Bushra Jabeen versus Province of Punjab, Province of Sindh' (C.P. No. 6274 of 2017), 'Shahrukh Shakeel versus Province of Sindh' (Constitution Petition No. 5812 of 2015) and 'All Pakistan Cement Manufactures Association' (2010 CLD 1586 ). Comparison was also drawn to the powers exercised by other regulatory bodies which are provided to them under the law including NEPRA Tariff Standard & Procedures. Reliance was also placed on case reported as ( 2014 SCMR 396 ). 10. Since vires of the Rules have been challenged, therefore, notice under Order 27-A, CPC was issued to the learned Attorney General for Pakistan and in response thereto, learned Deputy Attorney General addressed arguments by way of supporting and adopting the arguments addressed by learned counsel for Respondent No.2. 11. Since the petitioners have challenged the vires of the Rules hence, it is just and proper that relevant Rules, for the ease of convenience, be reproduced below: 3. Application for registration. - Every institution shall be required to be registered with the Authority under these rules and for that purpose shall make application to the Authority on prescribed form as set out in Schedule- I in accordance with the laid down procedure. 4. Procedure for registration. - (1) Application for registration under rule 3 shall be made by the institution to the Authority at least two months before commencement of the academic year . (2) Any institution functioning but not registered shall make application for registration within sixty days of commencement of these rules and may continue to function till the disposal of registration application and decision of the Authority . The Authority shall acknowledge, upon receiving, the applicatio n for registration or renewal of registration, as the case may be, filed by an institution. (4) Any institution for contravention of the Act and these rules shall be prosecuted against in accordance with relevant provisions of the Act. (6) For contravention of sub-rules (3) and (4), the defaulting institution shall be liable to fine at the rate of registration fees prescribed in Schedule-II, multiplied by the number of months from the date of default and date of submission of application for registration with the Authority , in addition to registration fees prescribed in Schedule-II. (7) An institution shall not be registered by the Authority unless the registration fee prescribed in Schedule-II and fine, if applicable under sub-rule (6) is deposited alongwith completion of other registration requirements under these rules.
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(8) The Authority shall depute an Inspection Committee to inspect the institution, give directions to the institution to comply with these rules and submit report to this effect to the Authority . (10) The Inspection Committee may, from time to time, enter and inspect the premises under the possession or control of any institution for the purpose of ascertaining whether these rules have been or are being complied with. (11) In carrying out an inspection under sub-rule (10), the Inspection Committee may-- (a) examine any book, document, materia l or article as it may consider necessary and remove or make copies of it for further examination; (b) require any person, whether a manager , teacher or student of the institution or otherwise, to be present before the Inspection Committee or any officer of the Authority and to produce for inspection any book, document, material or article which is in the possession or under the custody of that person, which the Inspection Committee or an officer of the Authority may remove or make copies thereof for further examination; or to furnish any information which is within the power of the person to furnish relating to the control or management of the institution, to the teaching carried on in the institution, to the student activities of the institution or to such other matter as the Inspection Committee may specify; or (c) do anything that is necessary or expedient for the carrying out of the inspection. 5. Enforcement powers of Inspection Committee. - (1) In addition to the powers conferred under these rules, an Inspection Committee may-- (a) at reasonable hours, enter any premises or part thereof (whether or not in the possession or control of a private education institution) when it has reasona ble cause to believe that evidence of the commission of an offence under these rules or the Act can be found therein, and search for and seize and remove any book, document, material or article or make copies thereof as it may consider necessary; (b) require any person whom it reasonably believes to have committed the offence to furnish evidence of his identity; (c) require, by order in writing, the attendance before it of any person within the limits of ICT who, from any information given or otherwise obtained by the Inspection Committee, appears to be acquainted with the facts or circumstances of the case; (d) examine orally any person reasonably believed to be acquainted with the facts or circumstances of the case or with such other matter as the Inspection Committee may specify , and reduce into writing the answer given or statement made by that person; (e) require any person to furnish any information or produce any book, document or copy thereof in the possession of that person, and inspect, copy , make extracts from such book or document; and (f) take such photographs or video recording, as the Inspection Committee thinks necessary , of the premises and persons reasonably believed to be acqua inted with the facts or circumstances of the case or with such other matter as the Inspection Committee may specify . (2) The person referred to in clause (b) of sub-rule (11) of rule 4 shall be bound to state truly the facts or circumstances with which he is acquainted. A statement made by that person shall be read over to him and shall, after correction, if necessary , be signed by him. All statements, answers, information and documents procured in the course of investigation shall be admissible in evidence in any proceedings under these rules and the Act against the person making or producing the same. 6. Conditions for registration of an institution. - An institution shall be registered by the Authority provided the following requirements are abided by the institution, - (a) in general terms it is suitably located , staffed and equipped with proper learning facilities and with minimum requirements as follows:- (i) institutions seeking registration with the Authority at Primary level shall have infrastructure capacity of minimum of 160 students, at Middle level minimum of 220 students, at Secondary or O' level minimum of 260 students and at Higher Secondary or A' level minimum of 300 students. Further details of infrastructure shall be as set out in Schedule-III. An institution, that does not fulfill these requirements, shall be registered only as a tuition centre or day care centre under these rules and these requirements shall not apply to tuition centers and day care centers;? ?
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(ii) submission of attested copies of land ownership papers and if applicable the agreement of lease; (iii) maintenance of a maximum teacher to student ratio of 1:30; (iv) each institution shall have adequate provision of clean drinking water for students and may have a cafeteria or canteen; (v) no objection certificate from Capital Development Authority or municipal authority or district government, whichever is applicable, on the suitability of the location and correct use of the building, as per building bye-laws; (vi) certificate from authorized structural engineer on the soundness of building structure; (vii) teaching staff shall have the minimum qualifications for Primary , Middle, Secondary or O' level and Higher Secondary or A' level institutions as set out in Schedule-IV ; (b) it has constituted a managing committee or board of directors; (c) the curricula, courses of studies and books being used or to be used for preparing students for examination conducted by a foreign educational agency shall contain nothing repugnant to the Islam or Ideology of Pakistan or discriminatory or prejudicial against minority communities; (d) the teaching staff shall, in no manner , either by sign or word of mouth or writing or any other means propagate anything repugnant to the Islam and Ideology of Pakistan; (e) in conformity with relevant laws, the principal and teaching staff shall be employed by the institution, on terms and conditions, through a written agreement between the management and the employee. The pay scales of teaching and non-teaching staff including allowances, leave facilities and other benefits shall be subject to approval of the Authority . The institutions shall furnish to the Authority annual teaching and non-teaching staff promotion and salary raise policy , data on promotions, trainings and annual salary raise for renewal of registration; (f) a foreign national shall be employed by the institution only with the approval of the Government; (g) tuition fees and other charges of an institution shall be in line with the fee and other charges determined by the Authority , from time to time, in accordance with these rules; (h) the institution premises, accommodation, furniture, equipment and sports facilities are sufficient and of required standard to meet the educational needs; (i) the institution shall abide by the Act, the rules and regulations made thereunder and the Right to Free and Compulsory Education Act, 2012 (XXIV…
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