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Independent Schools' Association Chandigarh (Regd.) & Ors. vs. Union of India & Ors.

Civil Appeal · 2022 INSC 1303Decided 11 May 2022
Civil Appeal No. 3877 of 2022
A.M. Khanwilkar · Abhay S. Oka · J.B. Pardiwala

Background

Private unaided schools in Chandigarh challenged a 2018 government notification that extended Punjab's fee-regulation law (the Punjab Regulations of Fees of Unaided Educational Institutions Act, 2016) to the Union Territory of Chandigarh under Section 87 of the Punjab Reorganisation Act, 1966, while also inserting extra conditions and raising penalty amounts. The Punjab & Haryana High Court dismissed their writ petitions, holding the authorities had the power to issue such a notification. The schools appealed to the Supreme Court, narrowing their challenge to specific inserted clauses requiring schools to publish their income/expenditure/balance sheet online (clause (a)), barring extra charges beyond disclosed fees (clause (b)), and enhanced monetary penalties (paragraph 8).

Decision Breakdown

Applying the principle from Lachmi Narain vs. Union of India that Section 87's power to extend laws with "restrictions or modifications" only permits peripheral or insubstantial changes (not substantive new obligations), the Court struck down clause (a), the requirement to publish financial statements online, as a substantial addition beyond what Section 87 permitted, since the parent 2016 Act contained no such disclosure mandate. It upheld clause (b) as merely restating the 2016 Act's existing policy against charging undisclosed fees. It also struck down paragraph 8's enhanced penalty amounts, holding that fixing quantum of penalties is a legislative policy choice that cannot be introduced through an executive notification. The Court also directed that certain adverse observations against one of the writ petitioners in the High Court's judgment be expunged. The appeals were accordingly partly allowed.

Lesson Learnt

When the executive is empowered by statute to extend a law to a territory with only "restrictions or modifications," it cannot use that power to smuggle in substantively new obligations or harsher penalties that were never part of the original legislation, only genuinely peripheral, non-substantive adaptations are permissible; anything more requires actual legislative action.

Official source (sci.gov.in)View Judgment (PDF)

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