Administrative action disqualifying schools from grant-in-aid without a hearing violates the principles of natural justice.

The Petitioners, representing various educational institutions running primary and secondary schools in rural Maharashtra, challenged Government Resolutions (GRs) dated 01.04.2026 and 02.04.2026.

These GRs disqualified 433 primary and 324 secondary schools permanently from receiving grant-in-aid on the grounds that they repeatedly failed to satisfy assessment norms prescribed in GR dated 15.11.2011.

The impugned GRs directed these schools to apply for "Self-Financed" status by 30.04.2026, failing which their recognition would be automatically cancelled and students absorbed into other schools.

The Petitioners contended they were never given a hearing, some had already been declared eligible for grants in 2023, while others had proposals pending without communication of rejection.

The Court applied the principles of Natural Justice, specifically the right to a fair hearing before adverse action.

It relied on the doctrine of Rule of Law as articulated in S.G. Jaysinghani Vs. Union of India (AIR 1967 SC 1427), which establishes that executive discretion must be confined within defined limits and decisions must be based on known principles rather than caprice.

It further referenced the procedural requirements of the Secondary School Code regarding the withdrawal of recognition and the assessment mechanism established by the Government Resolution dated 15.11.2011.

The Court reasoned that the impugned action was "drastic" as it affected students, staff, and the management’s right to provide education in rural areas.

The Court found no evidence that the State followed the three-year failure rule or the assessment procedure before disqualification.

It noted a contradiction in the State’s policy: while promoting the Marathi language, the action effectively closed Marathi medium schools.

Legally, the Court held that the State cannot use an executive order to override the statutory prerogative of management to choose whether to apply for self-financed status under the 2012 Act.

Since the schools held valid recognition under the Secondary School Code, the State could not bypass the specific mechanism for withdrawal of recognition without individual hearings and reasoned orders.

The Court dismissed the State's claim of a 2022 notice as it predated later GRs that had declared the same schools eligible for grants.

The Court directed the State to delete the names of the Petitioner institutions from the disqualification lists published with the said GRs.

It ordered that the Petitioners be allowed to continue their respective schools and prohibited any further action against them based on the challenged resolutions.