(1) An application, for establishing a new school or for up-gradation of a school anywhere in the State by private management of [registered company or a registered trust] or a registered society or a local authority shall, and shall only, be on the condition that such school shall be established, maintained and administered or up-graded on self-financed basis. Subject to the provisions of sub-section (2) of section 12 of the Right of Children to Free and Compulsory Education Act, 2009 (35 of 2009), all expenses in a school for any purpose whatsoever shall be met with by the management itself ; and neither any grant-in-aid or financial assistance shall be sought from the State Government or from a local authority, nor shall the State Government or the local authority be liable to meet any liability in the form of legal dues whatsoever incurred by such management of the school.
(2) On withdrawal of a permission to run or up-grade a school granted under the provisions of this Act, or where a school is established or up-graded without obtaining such permission, or any school established or up-graded after obtaining a permission under the provisions of this Act, or an existing school is closed, or any reason whatsoever, the liabilities in the form of legal dues of a management establishing or up-grading or closing a school, as aforesaid, shall first be met with from the endowment fund created under section 4.
(3) If the endowment fund falls short of the total liability in the form of legal dues incurred by the management, which has obtained a permission to establish or up-grade a school on self-financed basis, the office bearers and the members holding office for the time being in force of the management of a school, shall be jointly and severally liable to meet such liability in equal proportion:
Provided that, nothing contained in this sub-section shall render any such person liable as aforesaid, if he proves that such liability was incurred without his knowledge or that he exercised all due diligence to prevent incurring such liability.
(4) Notwithstanding anything contained in sub-section (3), where a liability in the form of legal dues has been incurred by the management and it is proved that the liability has been incurred with the consent or connivance of, or is attributable to any neglect on the part of any secretary, manager, or any staff, then such secretary, manager, or staff, shall also be deemed to be liable to meet such liability.