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Education is a Service

If Education is a service, can Students Sue Education Institutes at Consumer Forums?

Yes, law is on the side of students as long as their complaints are genuine and they are justified in their demands. So, if a student wants to leave an institute or course midway and is seeking refund of fees paid in advance for the full course, she is legally eligible to get the same.

Dr Prem Lata, Consumer Awakening, Former Member, CDRF-Delhi

The fee receipt that you get at the time of your child’s admission in a new institute is one of the longest receipts wherein you see you have paid for about a dozen elements. The fee includes tuition fee, registration fee, annual charges, admission fee, development fee, caution money, library, I-card… Basically, in most cases you get an unjustifiable break-up of the lump-sum amount with a note reading ‘the fee paid is not refundable’.

In most cases, students continue to be in the institute till the completion of the course even if the institute fails to keep its promises and does not deliver as per expectation, all because of the fear of losing the mammoth fee paid. Such students and their guardians must realize that if they are paying to an education institution for certain services and the institute fails to deliver those as promised, they have the right to withdraw from the institute and also demand the fee refund. Even if the institute has a clause in its rulebook saying that the fee cannot be refunded, you must know that such rules are not bigger than that of the country’s law and you can easily challenge them in the court of law.

Although the admission of your complaint in the consumer forum solely depends on its nature, there is no confusion over the fact that colleges and universities can be challenged in consumer forums. As education falls in the ambit of ‘service’ under Consumer Protection Act, all education institutes become provider of this service and become answerable under the law.

Point to Be Noted 1: Students can file a petition against educational institutes

It was brought to the notice of Consumer VOICE that some forums in Delhi were not accepting complaints against educational institutes. These forums were referring to a rare judgement in the matter of Maharishi Dayanand University versus Surjeet Kaur. In the referred case, it was held that the university was not giving services under Consumer Protection Act.

Consumers must note that this order was given in just about six lines and did not discuss the facts or merit of the particular case. Hence, it cannot really become the basis of rejection of your petition in the forum. Also note that till date the Supreme Court has not issued any order wherein it bars forums from accepting petitions against educational institutes. Moreover, other than a few random rejections at district forums, there has been no such rejection at National Forum.

In case your petition against an educational institute is not accepted, you must move to a higher forum, especially if the rejection is made on the bass of the above-mentioned case.

Cases to Know

Bhupesh Khurana and Others versus Vishwa Budha Parishad (2001 JRC 240).

The most cited case is that of Bhupesh Khurana and Others versus Vishwa Budha Parishad (2001 JRC 240).

After thorough understanding of the complaint, the State Commission held that the ‘complainant’ was a ‘consumer’ as she had hired the services of the university for consideration. For this, the State Commission relied upon the decision of the National Commission in a case wherein it was held that imparting of education by an educational institution for consideration fell within the ambit of ‘service’ as defined in the Consumer Protection Act. Fees are paid for services to be rendered by way of imparting education by the educational institution. If there is no rendering of service, question of payment of fee will not arise. The complainant had hired the services of the respondents for consideration, so she was a consumer as defined in the Consumer Protection Act.

The court concluded: “In the case of the university or an educational institution, their nature of activity is ex hypothesi education, which is a service to the community. Ergo, the university is an industry.” Before arriving at this judgement, the court had here referred to the decision of the Supreme Court in Bangalore Water Supply and Sewerage Board versus A Rajappa and Others case (AIR 1978 SC 548).

In 2003, in the matter of Usmania Islamic Academy versus State of Karnataka being argued in the Supreme Court, a three-judge bench comprising Chief Justice KG Balakrishnan, Justice VN Khare and Justice SN Variyavaha pronounced a detailed order holding educational institutes answerable before consumer forums by discussing every aspect covered by educational institutes in providing education to students.

This powerful bench also directed Universities Grant Commission (UGC) to frame rules on the basis of this order. UGC accordingly framed guidelines for universities that read:

  • They cannot retain more than Rs 1,000 as proportionate fee in case student leaves the institute.
  • They cannot retain the original certificates.
  • They cannot demand fee for the entire course, can only ask fee for one term.

Point to Be Noted 2 : What all is included under Consumer Protection Law in case of a student?

Before filing the complaint, be sure about who your servicer provider is – the institute, the college or the university it is affiliated to. In recent times, a few complaints filed against the universities were rejected by the forums stating that the university was more into administration – issuing admit cards, conducting examinations and awarding degrees. On the other hand, colleges affiliated to such universities did get penalized for deficiency in service or for other reasons.

There are rulings stating that universities while conducting examinations, giving admission to particular subjects and deciding fee structure are doing their statutory functions that are not services under Consumer Protection Act. Accordingly, a student cannot claim to be a consumer and say he should be admitted into the university to pursue a particular degree in a particular subject – it is only for the university to decide. Apart from the admission criteria, other aspects like the course duration, the fee structure and the availability of seats are to be decided by the university and its autonomy in this regard may not be challenged in the consumer forum.

Consumers must note that each case is different from the other and there cannot be a common yardstick to measure or make a common statement about the admissibility of case under Consumer Protection Act.

How Liable Are Education Institutes?

Education institutes have been, through various judgements, reprimanded by the consumer forums for various reasons including withholding scheduled exams, delayed declarations of results and discriminating in issuance of roll numbers. All these and many such activities are services under the Act and can be looked into by consumer forums. Forums have also held that it is not within their jurisdiction to determine whether particular rules in an institution’s prospectus are illegal or not, but if they defy the promised service they can certainly be questioned. In many such cases that have come before the National Commission, the apex consumer court has clearly held that providing education is a service and has compensated the aggrieved consumer.

Judgements for Reference

  • Withdrawing from a Course

Complainant: Swapnil Kadam
Defendant: SIG Engineering College, Pune (SIGCE)
Ruling by: Maharashtra State Consumer Forum

In a recent case, the Maharashtra State Consumer Forum ordered the refund of full fee with costs to a student who took admission in one college and moved to another. Even if the college puts out a notice that they will not refund the fee, or make you sign an agreement about non-refundability of fee, it is bad in law. Many consumer courts have held such an opinion and ruled in favour of the student.

  • Offering Unapproved Programme

Complainant: Vaibhav Saxena
Defendant: Indian Institute of Aeronautics
Ruling by: Delhi District Consumer Forum

While the institute claimed it had approval from Distance Education Council (DEC), the students proved it wrong. So the forum ordered complete refund of fee and came down heavily on the institute. “It is beyond imagination how much trauma must have been caused to the students who lost two precious years apart from the loss of money,” said the order of the forum.

  • Deficiency in Service

1. Complainant: Karishma Kanuga
Defendant: WLC College of India
Ruling by: Pune District Consumer Forum

The student Karishma successfully sued WLC to get a refund after taking admission in their media course. Her main contention was that the course was unapproved and no classes took place for 41 days. The district forum ruled in her favour.

2. Complainant: Devjit Singh & Others
Defendant: IITT College of Engineering, Manimajra, Chandigarh
Ruling by: State Consumer Disputes Forum, Chandigarh

In 2002, Devjit Singh and five other students approached the forum and alleged deficiency in service in terms of non-disclosure, lack of approval, unauthorized admission and lack of facilities. They got the full refund while IITT also paid the fine.

  • Unfair Trade Practices

Complainant: Kanishk Sharma
Defendant: Brilliant Tutorials
Ruling by: East Delhi District Consumer Forum

Even if you leave midway through the course, there is the possibility of a partial refund. In a case against a coaching institute, the forum observed thus: “A student may leave in the midstream if he finds the service deficient, and to tell him that fee once paid is not refundable is uncalled for and an unfair trade practice.”

Divya Patwal


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