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Petitioner: Shahrukh Shakeel KHan & ors VS Respondent: Province of Sindh & ors
Court Name: Sindh High Court Judge(s): Arshad Hussain Khan, Munib Akhtar Title: Shahrukh Shakeel KHan & ors vs Province of Sindh & ors Case No.: CP D-5812 of 2015 Date of Judgment:2018-03-05 Reported As: 2018 SHC 466 Result: Petition Disposed of
Judgment Munib Akhtar , J.: At the heart of this litigation, at the very center of the controversy , lies simply this question: how much is too much? The disputants are schools on the one hand and on the other the students at these institutions, represented in the main by their parents and guardians. The essential point in issue is increase in school fees. The schools contend that this ought to be a matter left essentially to them and they stron gly deny all allegations of unfair and unreasonable increases in fees. They claim that they are required to increase the school fees from time to time on account of various factors including capital outlays and increases in overheads and expenses and yes, also to earn a proper return on their investments as is only to be expected of any business. Even the parents and guardians do not deny that the schools are entitled to increase the school fees from time to time. However , it is the frequency and magnitude of the increase s that incenses them. Their grievance is that not merely do the schools charge exorbitant fees to begin with they also seek, unendingly , wholly unjustif ied, arbitrary and indeed illegal increases. This rapidly intensifies the burden on parents and guardians who feel that if anything at all is inevitable other than taxes and death, it is an increase in the school fees. Indeed, they accuse the schools of price gouging, if not in so many words then certainly in terms that leave little to the imagination. The schools strongly deny any such conduct, strongly refuting the contentions of the parents and the guardians. In particular , they stoutly defend themselves against all charges of profiteering. 2. In legal terms, the parents and guardians seek strict enforcement of the Sindh Private Educational Institutions (Regulation and Control) Ordinance 2001 ("2001 Ordinance"), and the Sindh Private Educational Institutions (Regulation & Control) Rules 2005 ("2005 Rules") framed under s. 15. In terms of the core dispute, they pray for enforcement of those provisions that regulate and control the school fees that can be charged and their enhancement. The Rules, inter alia, impose a specific ceiling and periodicity in respect of the school fees. The Provincial Government acts simply as the regulator and enforcer of the law, and since the vires and applicability of the Ordinance and the Rules are challenged, defends the same. The schools mount a multi-front challenge to the
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2001 Ordinance and the 2005 Rules. At the core of their case lies an attack on the vires and constitutionality of the provisions that seek to regulate school fees and their increase. This they do by invoking Article 18 of the Constitution, their case being that the fixation of ceilings and periods denies the schools, as lawful businesses, their right to conduct their affairs as guaranteed under this Article. They also attack the 2001 Ordinance and the 2005 Rules on other grounds, but the core dispute is as outlined above. 3. Before proceeding further, two points may be noted. Some of these petitions had an earlier round of litigation. They were heard and decided against the schools by a learned Division Bench by judgment dated 07.10.2016, which is reported as Shahrukh Shakeel v. Province of Sindh and others PLD 2017 Sindh 198. Appeals were preferred against this decision, which were disposed off by consent by order dated 04.04.2017. The judgment appealed against was set aside and the matter remanded for decision afresh "without in any manner being influenced by the impugned judgment". It was in such terms that these petitions, along with some newly filed, came up before us and were heard. Secondly, during the course of their submissions learned counsel referred to a very large number of decisions, the case law being not only from our own but a number of other jurisdictions. It will unduly burden and certainly increase manifold the length of this judgment if each of those cases were to be referred and considered individually. We intend no disrespect to the assistance provided by learned counsel in not doing so. We have certainly considered the case law cited but will only refer to those select cases which, in our respectful view, are particularly germane to a resolution of the issues before us. 4. Dr. Farogh Nasim, learned counsel who appeared for some of the schools said that they challenged the 2001 Ordinance and the 2005 Rules including in particular Rules 7(3) and 10(2). Referring to s. 6 of the 2001 Ordinance, learned counsel submitted that the cap imposed by Rule 7(3) was ultra vires the parent statute but that if such cap were removed, then the said sub-rule would be intra vires . Rule 10, to the extent challenged, was in any case beyond the parent statute. Learned counsel submitted that the cap imposed on any increase in school fees, and the very fixation of such fees, could only be done by statute and not otherwise since this was but a particular instance of price fixation and prices could only be fixed by legislation. Learned counsel submitted that all policy had to be properly translated into law and while it was sometimes permissible for the policy to be reflected in subordinate legislation (i.e. rules or regulations) this was not always so and price fixation was an example of the latter category . Learned counsel submitted, referring to various provisions of both the 2001 Ordinance and the 2005 Rules that they were, to the extent challenged, either ultra vires the Constitution or the parent statute (as the case may be) but the focus of attention was very much on the fixation of school fees and in particular the limitation imposed on the increase thereof. Learned counsel submitted that the 5% cap was artificial and unreasonable and would force schools into either making a loss or being unable to make the investments and capital outlays that were necessary to provide the sort of facilities that would be commensurate with quality education. Learned counsel submitted that some schools may even have to close down. Furthermore, learned counsel contended that even if a power could be conferred to regulate school fees and any increase therein, proper guidelines had to be provided in the parent statute. Absent such guidelines the relevant provisions would have to be struck down as ultra vires . Learned counsel submitted that there were no such guidelines provided and that cap had been simply imposed without any factual basis or support or any inquiry as to whether it was appropriate or not. It was submitted that in such circumstances it was entirely unreasonable. Referring to Article 18 of the Constitution learned counsel submitted that the fixatio n of fees and the cap imposed on the increase therein was an ultra vires restriction on the right of the schools to conduct their affairs. Learned counsel also provided a list of the cases that had considered the fundamental right of freedom of trade, starting with cases decided under the 1956 Constitution (where Article 12 was the relevant provision) and proceeding to Article 18 of the present Constitution. Learned counsel submitted that Rule 7(3) also violated Article 25 inasmuch as it placed all schools in the same category whereas the schools could not be regarded in such manner . In constitutional terms they had to be properly divided into appropriate classes and if at all fees could be regulated, each class so established had to be dealt with on its own. In particular , it was contended that proviso (ii) of s. 6(1) of the 2001 Ordinance as well as s. 15(2)(c) were violative of Articles 18 and 25 of the Constitution. Insofar as price fixation was concerned it was also submitted that the schools did not come within the scope of the legislation relating to essential commodities.
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Learned counsel submitted in the alternative that even if school fees could at all be regulated, such regulation and any restriction imposed in terms thereof had to be reasonable which, according to learned counsel, in the present context meant it had to be fair. Howeve r, the cap imposed was patently unfair and hence unreasonable and, therefore, ought to be struck down. Learned counsel submitted that schools were treated as commercial establishments and they had to pay utilities and other such charges at commercial rates. There was also no income tax exemption with regard to their operations. Thus, they came squarely within the four corners of Article 18 and hence there was an illegal restraint on their right to do business in terms of the capping of increase in school fees. In support of his submissions learned counsel referred to several cases including those from the Indian jurisdiction. As regards the Indian Constitution, learned counsel submitted that the relevant provision was Article 19(1)(g) read with clause (6) of the said Article. Learned counsel submitted that the Indian case law (which included several decisions of the Indian Supreme Court) established that the autonomy of the schools had to be respected but there could be no profiteering by the schools nor could any capitation fee be charged. It was only to this extent that schools could be regulated, as held by the Indian case law. It was submitted that Article 18 of our Constitution differed in certain respects from the Indian equivalent. It was, therefore, prayed that the relevant provisions regarding school fees and the imposition of the cap in respect thereof should be struck down as ultra vires . 5. Mr. Kamal Azfar , learned counsel who appeared for some of the schools, drew attention to the legislative history and explained that the 2001 Ordinance was the successor to (and in fact repealed) an earlier Ordinance of 1962. Referring to the 2001 Ordinance as originally promulgated and the rules framed thereunder in 2002, learned counsel submitted that at that time there had been no provision with regard to determining the school fees or any increase therein. It was only when the parent statute was amended in 2003 and the 2005 Rules framed that for the first time such a power was granted and sought to be exercised. Referring to the registration authority to be appointed under the 2001 Ordinance, learned counsel submitted that the regime currently set up, especially with reference to the 2005 Rules, was such that the powers of the Provincial Government had effectively been usurped by the said authority . Referring to s. 6 on the one hand and Rule 7 on the other learned counsel submitted that the former entrusted the matter of the fee structure to the Provincial Government whereas the latter purported to confer it upon the registration authority , which was a patent contradiction. Learned counsel submitted that the Provincial Government acted on the recommendations made by the registration authority and by placing the power of increase in the hands of the latter , the role of the Provincial Government had been effectively curtailed. Insofar as the power to regulate school fees was concerned, learned counsel submitted that this could be done but only if regulated in a proper manner , with functions being conferred upon a duly constituted authority acting under a properly prescribed procedure. Nothing of that sort was to be found in terms of the present regime. Effectively , learned counsel submitted, an unfettered discretion had purportedly been conferred with regard to school fees and it was submitted that the law did not recognize any such thing. It was submitted that the restrictions imposed were patently unreasonable, vague and unconstitutional and ought to be struck down. It was prayed accordingly . 6. Mr. Faisal Naqvi, learned counsel who appeared for some of the schools, submit ted that he would make his case in terms of six grounds. Firstly , it was contended that the 2001 Ordinance stood impliedly repealed by reason of the Sindh Right of Children to Free and Compulsory Education Act, 2013 ("2013 Act"). Secondly , learned counsel submitted that Rule 7(3) was ultra vires the parent statute. Thirdly , it was contended that Rule 7(3) was not consistent with Article 18 of the Constitution since: (i) teaching was a trade protected by the said Article and the Government could not fix an upper limit and could only act to counter profiteering; (ii) there was an illegal fettering of the discretion that had to vest in the schools and this was especially so with regard to the cap imposed on increase in fees; and (iii) the limitations imposed were unreasonable because they would force the schools to operate only at loss. Fourthly , it was submitted that Rule 7(3) was in violation of Article 25. Fifthly , it was submitted that Rule 7(3) was in violation of Article 10A of the Constitution. Finally , it was submitted that Rule 13 of the 2005 Rules required that 10% of the total stude nt body should comprise of needy and deserving students from whom no fee could be charged. It was submitted that this was a violation of Articles 23 and 24 of the Constitution. Learned counsel submitted that schools set fees keeping in mind a number of factors (which included capital outlays and running expenses) and this was centra l to any understanding and proper resolution of the issues involved.
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Expanding on the grounds set out above, insofar as the submission of implied repeal was concerned, learned counsel closely compared the 2001 Ordinance and the 2013 Act and submitted that the entire subject matter of the former stood subsumed in the latter. It was submitted that the laws provided for separate and incompatible regulatory frameworks including, inter alia, providing different punishment for the same acts. Learned counsel referred to various cases in support of his submission that there had been an implied repeal. As regards the second ground taken, learned counsel submitted, referring to proviso (ii) of s. 6(1) of the 2001 Ordinance, that this provided for the Provincial Government to establish the fee structure, whereas Rule 7(3) entrusted this power to the registration authority insofar as the increase in school fees was concerned. In this context reference was also made to the seminal judgment of the Supreme Court in Mustafa Impex and others v. Government ofPakistan and others PLD 2016 SC 808. 7. Continuing with his submissions, as regards the third ground learned counsel referred to the Indian jurisdiction and several cases from there showing how the matter had been dealt with by the Indian Supreme Court. The relevant cases from our own jurisdiction was also cited and relied upon. Learned counsel submitted that there could be no doubt that the schools were carrying on a lawful trade within the meaning of Article 18. It was submitted that the restriction imposed in terms of Rules 7(1) and 7(3) were patently contrary to Article 18 and unreasonable. Learned counsel submitted that the proper procedure and approach would be for the fee structure to be prepared by the school itself and it was only if the relevant authority found it to be unreasonable on any material basis that it could be rejected and something else substituted. However , the present regulatory regime placed the matter entirely in the hands of the authority and this was contrary to Article 18. It was further submitted that school fees had to be fixed on a case to case basis and a proper right of hearing had to be provided. By imposing an artificial cap in terms of Rule 7(3) the present regulatory regime was in violation of Article 18. As regards the fourth ground, learned counsel submitted that by lumping all schools together there had been discrimination since the schools could not be treated on a "one size fits all" approach. It was emphasized that schools had to be treated on an individualized and case to case basis. That which was unequal could not be treated as equal, which was, practically , the result of the present regime. As regards the fifth ground, learned counsel submitted that the schools had been denied the right of due process . There had to be some evidence or factual inquiry or material to justify the cap of 5% whereas there was nothing of this sort insofar as Rule 7(3) was conferred. Learned counsel strongly denied that there had been any profiteering by schools. It was contended that while regulations could be reasonably imposed to prevent such conduct, the imposition of a cap in the shape of Rule 7(3) could not be used or treated as a proxy for controlling profiteering. Making reasonable profits and profiteering was not at all the same thing and learned counsel submitted there had been a fundamental failure to recognize this distinction. As already noted, learned counsel placed reliance on a large number of decisions, both from our own jurisdiction as well as others. 8. Mr. Kazim Hasan, learned counsel, submitted that the school for which he appeared operated on a non-profit basis. He otherwise adopted the submissions made by Mr. Faisal Naqvi, emphasizing the point that there had been a violation of Article 25 inasmuch as that which was unequal was being treated as equal. 9. Ms. Asma Jahangir , learned counsel who appeared for the schools in some of the petitions presented her case in terms of the following propositions. Firstly , it was submitted that the 2005 Rules were excessive and arbitrary and purported to confer a discretion that had not been properly structured as required by law. Secondly , that the regulatory regime set up by the impugned provisions was discriminatory . Thirdly , that there was a clear violation of Article 18. Learned counsel submitted that education was both a business and an occupation. It could be subjected to proper qualifications as to its latter aspect and regulated in a lawful manner as regards the former . Learned counsel submitted that in India education was essentially regarded as an occupation. It was, according to learned counsel, the business aspect of education that came within the scope of Article 18 insofar as presently relevant, and the rights of the schools in this regard had been clearly violated. Learned counsel submitted that there was a distinction that had always to be maintained between on the one hand properly lawful regulation and on the other a purportedly regulatory regime that was so intrusive that it essentially amounted to a takeover . It was contended that the latter situation prevailed on account of the impugned provisions and thus there was a violation of Article 18.
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Expanding on these points learned coun sel also drew attention to the history of the legislation as regards school regulation, referring to the predecessor laws including the period in which the schools stood nationalized. Learned counsel took issue with several provisions of the 2001 Ordinance especially as amended in 2003. It was submitted that there was no objection to the proper exercise of the power conferred by proviso (ii) to s. 6(1) but that the cap placed on the increase in school fees was in violation of constitutional rights. Various other provisions were also challenged. With specific reference to the cap of 5% learned counsel submitted that this figure had been put in place in a manner and for reasons that had never been revealed and were certainly not apparent on the face of the record. It was submitted that this was not commensurate with the rate at which the cost of operating the schools was rising and this clearly affected their right to be operated as profit-making institutions. Learned counsel submitted that while it was part of the corporate responsibility of any school to ensure that a certain part of the student body was enrolled on free or concessional basis, the fixation of a rigid quota in this regard was objectionable. (We may note that during the course of her submissions later, learned counsel appeared to withdraw this objection.) With regard to the 2005 Rules, the provisions of sub-rules (1) and (3) of Rule 7 were challenged as being unreasonable and in violation of Article 18. The provisions contained in Rule 10 with regard to salary of staff was also challenged although learned counsel took a nuanced approach and submitted that in general the fixation of a minimum wage was acceptable. It was simply that the manner in which Rule 10 was structured that was objectionable as it could not work in pract ice. It was submitted that schools ought to be allowed proper autonomy in this regard. Rule 13 and certain other aspects of the 2005 Rules were also challenged. Learned counsel, in support of her contentions, referred to the case law, including several decisions of the Indian Supreme Court. It was submitted on the basis of the Indian case law that the autonomy of the educational institutions had to be respected and could not be affected. Yet this was precisely the effect of fixation of school fees and imposition of caps with regard to the increase therein. This was clearly unconstitutional and illegal. Learned counsel prayed accordingly . 10. Mr. Abdur Rahman, learned counsel who appeared for the parents/guardians, submitted that their grievance was that the 2001 Ordinance was not being properly complied with and enforced. In particular the cap placed on the increase of school fees was not being regulated and enforced by either the Provincial Government or the Registration Authority which, according to learned counsel, meant that in practice the schools were being able to get away with essentially whatever incre ase they deemed appropriate. Learned counsel strongly contested the submission that there had been any implied repealed of the 2001 Ordinance or any provision thereof as presently relevant. Referring to the statutory provisions of both the 2001 Ordinance and the 2013 Act and relying on several cases learned counsel submitted that the well-established conditions that had to be found for there to be an implied repeal certainly did not exist in the present circumstances. With regard to the fixation of school fees, learned counsel drew a distinction between the "fee structure" on the one hand and the fixation of the "fee schedule" on the other . It was submitted that it was only in respect of the former that power vested in the Provincial Government and other than that the power could be exerc ised by the Registration Authority where it had been properly conferred. Learned counsel submitted that the provis ions of the 2001 Ordinance and the 2005 Rules regarding fixation of fees and the imposition of a cap on the increase therein was reasonable and did not at all violate any constitutional rights including in particular those conferred by Article 18. It was submitted that the "base rate" was set when the fee structure was initially approved at the time of registration of the school. Thereafter the school had to obtain re- registration every three years and if at all any increase was warranted within the prescribed maximum limit, the school could apply accordingly. If a proper justification was given the Registration Authority would increase the school fees by an adequate amount. According to learned counsel this would in effect become the "base rate" for the next time that an application could be made for increase in the fees. That would be after the three year period, when the registration had to be renewed. Thus, according to learned counsel, the system set up under the 2001 Ordinance and 2005 Rules, when properly understood, did envisage a periodic increase in the school fees in a systematic and structured manner. It was strongly contested that the discretion conferred upon the Registration Authority was in any manner defective or in violation of the law. Learned counsel submitted that the cap that had been imposed was proportionate and could not be regarded as being in violation of law. Learned counsel also
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referred to various cases, both from our own jurisdiction as also the Indian jurisdiction with regard to the fundamental right of freedom of trade. 11. Mr. Muhammad Noman Jamali, learned counsel who appeared for paren ts and guardians adopted the submissions made by Mr. Abdur Rahman and also expanded on the same. Reference was made to the past history of the legislation in respect of school regulation. It was submitted that the present regulatory regime set up a proper structure for the due determination of fees and any increase therein subject to the maximum limitation and there could be no cavil with the same. In particular it was denied that any of the provisions challenged were ultra vires , either with regard to any constitutional provision or with reference to the parent statute, as the case may be. Learned counsel also placed reliance on various decisions.…
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