A bench of Acting Chief Justice B D Ahmed and Justice V Kameswar Rao sent the matter back, saying various aspects raised before it were not "considered" by the single judge.
The court's order came on the plea of Action Committee of Unaided Recognised Private Schools which had challenged the single judge's April 10, 2013, order.
The schools had contended before the division bench that the power under the Delhi School Education Act, 1973, which allows the government administration to make rules with respect to fees and other charges, is confined to aided institutions and not unaided ones.
"We find these aspects were not considered by the single judge perhaps because affidavit by Directorate of Education clearly stated that rules 164-166 (regarding fee payment) refer to government-aided schools. However, despite this statement, the single judge came to the contrary view that said rules would apply to unaided schools also.
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"For these reasons we feel impugned order be set aside and matter be remitted back to single judge for afresh consideration of all aspects," the bench said.
The court passed the direction after senior advocate Maninder Singh, appearing on behalf of the unaided schools, said that the wards of the parents who are unable to pay fees on quarterly basis, will not be thrown out and they will be allowed to make payment on monthly basis.