Knowledge
Landmark judgement proclaims student can seek refund even if fees are non-refundable.
Due to collective amnesia and the passage of time, it was held that a student could not file a consumer complaint for deficiency in services by educational institutions. A landmark ruling by the Maharashtra state commission has differentiated between services rendered by educational institutions
Unwittingly, a wrong precedent was set in the legal corridors of India. Due to collective amnesia and the passage of time, it was held that a student could not file a consumer complaint for deficiency in services by educational institutions.
The decision by the Supreme Court, in the Bihar School Examination Board v/s Suresh Prasad Sinha case, held that a student was not a consumer in respect of conduct of exams by boards and universities. This decision through distortion came to limit the ability of a student to fight against the deficiency in services by educational institutions.
However, better sense has prevailed and a landmark ruling by the Maharashtra state commission has differentiated between services rendered by educational institutions and conducting of exams by boards and universities.
The case that changed it all
Chitralekha Bendke’s 2 children secured admission to Seven Square Academy by paying the requisite fees of ₹7,800 per child. Unfortunately, due to medical reasons she wanted to cancel the admission and apply for refund of fees. When the school refused to refund the fees, she filed a complaint before the Thane District Forum, which ordered the fees to be refunded.
The school appealed against this order on 2 grounds. Firstly, it contended that the consumer complaint was simply not maintainable since imparting of education could not be termed a service and a student could not be considered a consumer. Secondly, the school also challenged the maintainability of the complaint against it instead of against the Trust which ran the school.
The state commission rightly differentiated between imparting of education by educational institutions and conducting of exams by the applicable board. It pointed out to the school that the complaint was in respect of non-refund of fees, and not about conducting examinations.
The commission shared several precedents, including a 5-member bench judgment of the National Commission in the case of Bhupesh Khurana &Ors. V/s Vishwa Buddha Parishad, where it was held that imparting of education by educational institutions for consideration falls within the ambit of service. Hence, complaints about deficiency in service in respect of non-refund of fees, running of courses without recognition or affiliation, etc. would be maintainable before consumer fora.
On the school’s second contention, the commission observed that the receipt for fees paid by Bendke was issued by the school and not by the Trust. Hence the complaint against the school was held to be maintainable.
Further, the commission observed that the fees were paid in January, and request for refund was made within a few days, well before commencement of the academic year in June. The school had ample time to fill up the seats which had fallen vacant. When demanded, the school also failed to produce any documentary evidence to show that the cancelled admission had resulted in the seats remaining vacant for the academic year.
The commission admonished the school while pointing out that it is well known that the number of candidates far outnumber the available seats. Yet, educational institutions make a false plea that the cancelled seat remained vacant throughout the year. The schools are doubly enriching themselves by admitting another candidate without refunding the fees of a student who has withdrawn. Such institutes have become commercial shops, and there cannot be any worse form of unscrupulous and unfair trade practice in the field of education. The objective of the Consumer Protection Act is to curb such practices where students and their parents are exploited.
Accordingly, by its judgment of July 1, delivered by judicial member Ushal Thakare for the bench along with Dhanraj Khamatkar, the Maharashtra state commission concluded that a clause stating that fees once paid shall not be refunded is unconscionable and void, as a service provider cannot retain the money when no service has been rendered. The school's appeal was rejected.
The judgement has far reaching implications as students can now seek a refund even if the fee receipt of schools state that the fees are non-refundable.
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