A bench of Chief Justice G Rohini and Justice Sangita Dhingra Sehgal directed the single judge to decide the petitions expeditiously.
"We have dismissed the appeal (of Delhi government).We, however, have directed the single judge to decide the petitions (challenging the Delhi government's decision) as expeditiously as possible," the bench said.
It also said that the single judge should not go by its observation made in the interim order.
The division bench was hearing an appeal filed by the AAP government against a single judge's February 14 interim order.
Terming the criterion as "arbitrary and discriminatory", Justice Manmohan had said it benefited only those parents wholive close to good private schools.
Challenging the interim order, the Delhi government had said that in the absence of the neighbourhood criterion, schools will accept admission in an arbitrary and opaque manner, and even justify charging exorbitant fees.
Maintaining that the order passed by the single judge was "totally wrong", "erroneous" and "against the law", they had urged the division bench to stay on the operation of the order.
The single judge had ordered an interim stay of the January 7 notification till the final disposal of the pleas challenging the Delhi government's order.
The two associations, representing the schools and the parents, had alleged that the Delhi government has "discriminated" as the neighbourhood criteria had been applied against only 298 schools and not been mademandatory for 1,400 other schools in the city.
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