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Private schools want SC to review fee cut verdict

Updated February 03, 2019

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The Beacon House School System and City Schools file fresh petitions against the Dec 2018 verdict.— AFP/File
The Beacon House School System and City Schools file fresh petitions against the Dec 2018 verdict.— AFP/File

ISLAMABAD: A number of upscale private schools have challenged before the Supreme Court its Dec 13, 2018 decision of slashing school fees in excess of Rs5,000 by 20 per cent and pleaded before the court to recall the same.

The fresh petitions seeking review of the earlier order were filed separately by the Beacon House School System and City Schools (Pvt) Ltd through their legal counsel Hamid Khan and Ayesha Hamid. A number of other private schools have also moved similar petitions before the apex court.

In a detailed Dec 13 verdict the Supreme Court had emphasised the need of developing a mechanism to counter resistance on the part of the private schools to undermine regulatory steps explaining that such resistance shown by the private schools include reduction of facilities in schools, increase in number of students in classes, reduction of teaching staff, reduction in their salaries and other related matters.

The judgement had also noticed that the audit conducted by the Federal Bureau Revenue (FBR) has revealed that the private schools were being run like businesses where directors and chief executives were drawing high salaries, but they complained before the apex court that they were earning negligible profits and that a 20pc reduction in fees would lead to closure of their schools.

The verdict had also issued a clarification that the order would apply to all private sector schools charging fees in excess of Rs5,000 per month throughout Pakistan without exception.

The review petition by the Beacon House School System contended that none of the laws and rules enacted/notified by the Sindh and Punjab provinces, including the Sindh Private Educational Institutions (Regulation and Control) Rules, 2005 and the Punjab Private Educational Institu­tions (Promotion and Regulation) Rules, 1984, provided for the reduction of fees, whether 20pc or any lesser amount.

The petition recalled that through its earlier direction of Oct 16, 2018 the apex court had ordered the Auditor-General of Pakistan to examine the accounts and tax returns of the private schools for the last five years and to submit a detailed school-wise report on aggregate investment, various costs incurred, deductions claimed and after tax net profits on which the department filed the required report. Nothing in that report provided any basis for direction to reduce fees by 20pc, the petition argued.

Under the same order the apex court set up a committee under the Federal Ombudsman to come up with solutions, but the committee did not make any recommendation for 20pc cent reduction in fees.

It is evident from the report of the auditor-general, the petition contended, that even after adding back finance costs, directors’ remunerations and depreciation costs, the profit margins of the petitioner and other schools cannot sustain a 20pc reduction in fees.

Thus, the petitioner and owners of other schools cannot be compelled to run their schools at a loss. This is, and would be, a violation of their vested fundamental rights under Articles 18, 23 and 24 of the constitution, the petition stated.

Referring to the court direction to refund 50pc of the fee charged during the last summer vacations, the petition argued that this order has the effect of increasing the directed fee reduction for the current academic year by another 8.33pc. The summer vacation fee (July and August 2018) has already been paid by all parents and is thus a matter of past and closed transaction. There does not appear to be any lawful basis for directing its refund to the extent of 50pc, the petition stated.

The petition regretted that the apex court orders of taking into custody of Beacon House School System’s ledger books and computerised accounts was mis-used/mis-interpreted to defame the schools through circular instructions, leaked to the media that the Federal Board of Revenue (FIA) was investigating corruption/corrupt practices of owners/CEOs of private schools who were embezzling huge amounts under the garb of fees.

The petition asked the apex court to order the FIA to explain under what authority of law they issued the letters on Dec 13-14, 2018 to schools which should also be withdrawn with suitable apologies for the reputational damage caused.

Likewise, the City School argued that the figure of 20pc reduction in fees and refund/adjustment of 50pc of fees charged in previous summer vacations was not supported by any reasoning or justification or the record.

Even otherwise, the fees for the previous summer vacations is the matter of past and closed transaction and could not be reopened at this stage, the petition stated, adding the Dec 13 order was based on the mistaken assumption that all private schools were over-charging and making exorbitant profits.

This assumption is not borne out by the record, and in fact, all available evidence is to the contrary, the petition contended.

All private schools operate with different costs, expenses, facilities, quality and cannot be equally treated as has been done through Dec 13 order. Thus, equal treatment of un-equals would constitute discrimination, which is contrary to the fundamental rights of the school under Article 25 of the constitution, the petitioner highlighted.

The petition emphasised that the involvement of FBR or FIA was not justified or merited under any circumstances, moreover the Dec 13 order was also being misinterpreted by the two government departments resulting in harassment and inconvenience for the school.

Published in Dawn, February 3rd, 2019