Terming the criteria as "arbitrary and discriminatory", Justice Manmohan said it benefits only those parents who live close to good private schools.
There was a "potential of abuse" of the condition as many rich parents would either shift to areas close to the school they want their children to study in or would get "sham" rent receipts or documents from owners or relatives and friends to show they reside in such areas when they do not, he said.
It said that under the Constitution and Universal Declaration of Human Rights, parents have a right to choose the kind of education that shall be given to their children, but this notification makes such a right "an empty formality" as neighbourhood is virtually the sole admission criteria.
"Under the impugned notification, the affluent persons living close to good schools stand to benefit... Reservation for a section of the society that is neither socially nor economically or educationally backward or Scheduled Castes / Scheduled Tribes/Minorities is prima facie unconstitutional," the court said.
It said the primary cause of the nursery admission chaos is the "lack of adequate number of good quality public schools and uneven distribution of good private unaided schools" in Delhi, and this coupled with the high population density of the city, results in seats being "exhausted" on the immediate distance criteria of zero to three kilometer where private schools on DDA land are concerned.
Act, the schools were responsible for admitting students from the neighbourhood only with regard to the 25 per cent seats reserved for the economically weaker section (EWS) and disadvantaged group (DG) categories to address the issue of dropouts of such children if they are made to travel long distances for schooling.
However, the issue of dropouts is not applicable to the general category fee-paying students in private unaided schools, it said.
"Thus, the concept of neighbourhood, meant primarily for lowering dropout rates of EWS children, cannot prima facie be made applicable, that too as a sole criteria, for admission of general category students," it said in its 58-page order.
"Further, the prima facie view that neighbourhood intake is limited to twenty-five per cent of the students is in consonance with the Government of India, the Ministry of Human Resource Development, the Department of School Education and Literacy's guidelines dated 25th July, 2011," it said.
The court said that while the government can regulate the private educational institutions, the notification under challenge completely takes away the private unaided schools' right to admit students and lay down a fair, reasonable, transparent and non-exploitative procedure/criteria for admissions, leaving them with no say in their admission whatsoever.
"Consequently, this court is of the prima facie view that any attempt to regulate the admission in the remaining 75 per cent general category seats, would be an unreasonable restriction and a violation of Article 19(1)(g) of the Constitution," it added.
The Delhi government and DoE had defended its decision by saying it was taken in the larger public interest, but the court disagreed with the contention and said "children are uniformly affected by alleged factors of public interest and it cannot be said that public interest is to be served only in the case of children going to 298 schools and not to the other 1400-odd schools".
The court's interim order came on the plea of two school groups, Action Committee Unaided Recognised Private Schools and Forum for Promotion of Quality Education for All, which had challenged the notification as well as the clause in the DDA allotment letter which made it mandatory to admit students only from the neighbourhood.
Several parents too have moved the court against the notification but have not challenged the clause in the DDA allotment letter.
The court was of the view that restricting admissions to the immediate neighbourhood of a school may result in restricting the growth and vision of the students and on the other hand, if children from all faiths, communities and different parts of Delhi are admitted in a school, it would promote diversity, openness, liberalism and greater understanding of the city and its culture.
On the challenge to the clause in the DDA allotment letter, the court was of the prima facie view that since the schools continue to occupy and operate on the allotted land, they cannot seek interim stay of the terms and conditions in in the lease deed or allotment letter and that too after so many years.
It said that the challenged condition in the allotment letter or lease deed is only a "source of power" as there is no definition of 'neighbourhood' or 'locality' in either of the two documents.
"Further, the concept of locality/zone under the Delhi School Education (DSE) Rules prima facie has no connection or link with neighbourhood admission. As pointed out by the petitioners, the number of localities/zones under DSE Rules upto 1992 was much less and accordingly, the area of each locality/zone was much larger than what it is now," it said.
The court said that what DoE and the office of the Lieutenant Governor could not do under the DSE Act and Rules, "they cannot do indirectly by way of definition of a term in a letter of allotment".
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