Delhi District Court
Fiitjee Ltd vs Smt. Sudha Sharma on 8 May, 2023
IN THE COURT OF ANURAG SAIN, DISTRICT JUDGE
(COMMERCIAL COURT01) PATIALA HOUSE COURTS, NEW
DELHI
OMP (COMM.) No.116/19
FIITJEE LTD.
29A, Kalu Sarai, Sarvapriya Vihar,
New Delhi110016
Through its AR
......Petitioner
Versus
1. Smt. Sudha Sharma
W/o Sh. Dushyant Singh,
R/o D701, Rajasthan Apartment,
Sector4, Dwarka
New Delhi110078
2. Sh. Dushyant Singh,
S/o Late Sh. J.S. Khokhar
R/o D701, Rajasthan Apartment,
Sector4, Dwarka
New Delhi110078
3. Sh. S.K. Tandon,
Ld. Arbitrator
DIAC, Delhi High Court,
New Delhi
................Respondents
Date of institution : 01.07.2019
Date of reserving judgment : 26.04.2023
Date of pronouncement : 08.05.2023
OMP (COMM.) No. 116/2019 Page 1 of 26
JUDGMENT
1. The petitioner has filed the present petition under Section 34 of the Arbitration & Conciliation Act, 1996 against the Arbitral Award dated 23.03.2019. The petitioner is a company duly registered under the Companies Act and is an Education Institution imparting Coaching to the aspirants of IITJEE and other highly competitive exams. Petitioner is a selffinancing institution and is not receiving any grant from any governmental organization etc. in any other form or manner.
2. As per the pleadings, respondents no.1 and 2 approached the petitioner for getting admission of their son Saransh Bharat, who cleared admission test conducted on 25.05.2014. After going through all the terms and conditions of the contract, respondents no.1 and 2 signed the enrollment form/contract dated 06.06.2014 and made the payment of fee of Rs.2,00,827/ towards the entire course fee. It is the case of the petitioner that son of respondents no.1 and 2 had left the course in midway for the reason not attributable to petitioner and vide letter dated 07.07.2014, respondents no.1 and 2 sought refund on the ground of unsuitability of the time and distance between the house of respondents no.1 and 2 and centre of the petitioner and the refund was sought solely on the personal reasons and there was no fault on the part of the petitioner. It is pleaded that the enrollment form/contract contains a clause that fees once paid will not be OMP (COMM.) No. 116/2019 Page 2 of 26 refundable under any circumstance. The relevant clause reads as under: '8. I undertake that if I leave the Institute midway before completing the full course for any reason whatsoever, including but not limited to transfer of my father/mother/legal guardian/ill health of myself or any other member of the family or my admission in any institute/course/engineering college etc. or my studentship if cancelled because of misconduct etc. I or my father/mother/legal guardian shall not be entitled for refund of fees.
10. In addition to the above, I understand without ambiguity that the fee once paid is not refundable at all whatever the reasons be, nor is it adjustable towards any other exiting courses at FIITJEE or any yet to be launched nor towards the fee of any other existing or prospective student.'
3. It is the case of the petitioner that once the class is started no new student admitted against the vacancy created because of leaving of the classes midway by any student. Thus, the seat vacated by the son of respondents no.1 and 2 are left open and is never filled by any new student.
4. It is claimed that respondents no.1 and 2 approached the Hon'ble High Court of Delhi under Section 11 (6) of the Act and Hon'ble High Court referred the parties to the Arbitration under Aegis of DIAC and then respondents no.1 and 2 filed their claim on 18.04.2017 before the Ld. Arbitrator, pursuant to which arbitration proceedings were commenced and were completed. The claim of respondents no.1 and 2 was allowed by the the arbitral tribunal vide Award dated 23.03.2019.
OMP (COMM.) No. 116/2019 Page 3 of 265. The petitioner has challenged the award on the following grounds:
(a) That the award is bad in law and perverse.
(b) That Ld. Arbitrator failed to appreciate that claim filed by respondents no.1 and 2 is without cause of action as the enrollment form/contract dated 06.06.2014, which was signed by respondent no.1, containing a clause that if any student leaves the above said course in between/midway for any reason then fees once paid will not be refundable under any circumstances.
(c) That Ld. Arbitrator failed to appreciate that once the classes have started, no new student is enrolled against the vacancy created because of leaving of the classes midway by any student.
(d) That Ld. Arbitrator has returned the finding which are not borne out of the petition and documents brought on record as Ld. Arbitrator passed the award by observing that RW1 failed to produce the record to show that the seat left by the son of respondents no.1 and 2 remained vacant and was not filled up.
(e) Ld. Arbitrator allowed the respondents' claim by neglecting the terms and conditions of the contract.
(f) Impugned award is in conflict with the public policy of India and the same is bad in law.
6. In terms of aforesaid pleadings, it has been prayed that Arbitral Award dated 23.03.2019 be set aside.
7. The matter has been contested on behalf of respondents no.1 and OMP (COMM.) No. 116/2019 Page 4 of 26 2 by filing reply to the present petition. It is asserted therein that petition filed by the petitioner under Section 34 of Arbitration and Conciliation Act, 1996 is not maintainable and deserves to be dismissed as the grounds taken in the petition do not fall within the ambit of Section 34 of the Act. It is claimed that the award passed by Ld. Arbitrator is based on considering all the materials available on record. It is claimed that the grounds taken by the petitioner in this petition had already taken by the petitioner in similar cases, which had already been rejected by Delhi High court, National Consumer Redressal Commission and even up to Supreme Court. It is pleaded that petitioner, since beginning, has adopted delay tactics, which is very much evidencing from arbitral proceedings. The arbitral tribunal has given detailed reasons for the award and same is neither arbitrary nor irrational. On these premise, it has been prayed that the petitioner is not entitled to any relief.
8. I have heard Sh. Mukesh M. Goel, Ld. Counsel for the petitioner and Sh. A.K. Pandey and Sh. Vikas Kumar Sharma, Ld. Counsels for respondents no.1 and 2.
9. I have examined the Award dated 23.03.2019 in question, documents and pleadings of the parties and gone through written submissions placed on record on behalf of the petitioner as well as respondents no.1 and 2.
10.The scope of enquiry in Section 34 proceedings is restricted to consideration whether any one of the grounds mentioned in OMP (COMM.) No. 116/2019 Page 5 of 26 Section 34(2) of the Arbitration and Conciliation Act, 1996 exists for settingaside the award.
11.Section 34(2) of the Arbitration and Conciliation Act, 1996 reads as under: "34.Application for setting aside arbitral award(1)Recourse to a court against an arbitral award may be made only by an application for setting aside such award in accordance with subsection (2) and sub section (3).
(2)An arbitral award may be set aside by the court only if
(a) the party making the application furnishes proof that
(i) a party was under some incapacity, or
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration; Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in OMP (COMM.) No. 116/2019 Page 6 of 26 accordance with this Part; or
(b) the court finds that
(i) the subjectmatter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or
(ii) the arbitral award is in conflict with the public policy of India. ExplanationWithout prejudice to the generality of subclause (ii), it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption or was in violation of Section 75 or Section 81."
For our purpose, it is not necessary to refer to the scope of self explanatory Clauses (i) to (iv) of subsection (2)(a) of Section 34 of the Act and it does not require elaborate discussion. However, clause (v) of subsection 2(a) and clause (ii) of subsection 2(b) require consideration. For proper adjudication of the question of jurisdiction, we shall first consider what meaning could be assigned to the term 'Arbitral Procedure'.
12.Normally, the general principles are that Arbitrator is a Judge of the choice of the parties and his decision unless there is an error apparent on the face of the award which makes it unsustainable, is not to be set aside even if the court as a court of law would come to a different conclusion on the same facts. The court cannot reappraise the evidence and it is not open to the court to sit in appeal over the conclusion of the arbitrator. It is not open to the court to set aside a finding of fact arrived at by the arbitrator and only grounds on which the award can be cancelled are those mentioned in the Arbitration Act. Where the arbitrator assigns OMP (COMM.) No. 116/2019 Page 7 of 26 cogent grounds and sufficient reasons and no error of law or misconduct is cited, the award will not call for interference by the court in exercise of the power vested in it. Where the arbitrator is a qualified technical person and expert, who is competent to make assessment by taking into consideration the technical aspects of the matter, the court would generally not interfere with the award passed by the arbitrator.
13.The Hon'ble Supreme Court of India in a case titled as Associate Builders Vs. Delhi Development Authority, (2015) 3 SCC 49 has held that the interference with an arbitral award is permissible only when the findings of the arbitrator are arbitrary, capricious or perverse or when conscience of the Court is shocked or when illegality is not trivial but goes to the root of the matter. It is held that once it is found that the arbitrator's approach is neither arbitrary nor capricious, no interference is called for on facts. The arbitrator is ultimately a master of the quantity and quality of evidence while drawing the arbitral award. Patent illegality must go to the root of the matter and cannot be of trivial nature.
14.The Hon'ble Supreme Court of India in a case titled as Ssangyong Engineering & Construction Co. Ltd. vs. National Highways Authority of India, 2019 SCC OnLine SC 677 has held that under Section 34 (2A) of The Act, a decision which is perverse while no longer being a ground for challenge under "public policy of India", would certainly amount to a patent illegality appearing on the face of the award. A finding based on OMP (COMM.) No. 116/2019 Page 8 of 26 the documents taken behind the back of the parties by the arbitrator would also qualify as a decision based on no evidence inasmuch as such decision is not based on evidence led by the parties and therefore would also have to be characterized as perverse. It is held that a finding based on no evidence at all or an award which ignores vital evidence in arriving at its decision would be perverse and liable to be set aside on the ground of patent illegality.
15.The Hon'ble Supreme Court of India in a case titled as Delhi Airport Metro Express Pvt. Ltd. Vs. Delhi Metro Rail Corporation Ltd., Civil Appeal No. 5628 of 2021 has held that:-
'Patent illegality should be illegality which goes to the root of the matter. In other words, every error of law committed by the Arbitral Tribunal would not fall within the expression 'patent illegality'. Likewise, erroneous application of law cannot be categorized as patent illegality. In addition, contravention of law not linked to public policy or public interest is beyond the cop of the expression 'patent illegality'. What is prohibited is for courts to re-appreciate evidence to conclude that the award suffers from patent illegality appearing on the face of the award, as courts do not sit in appeal against the arbitral award. The permissible grounds for interference with a domestic award under Section 34 (2-A) on the ground of patent illegality is when the arbitrator takes a view which is not even a possible one, or interprets a clause in the contract in such a manner which not fair- minded or reasonable person would, or if the arbitrator commits an error of jurisdiction by wandering outside the contract and dealing with matters not alloted to them. An arbitral award stating no reasons OMP (COMM.) No. 116/2019 Page 9 of 26 for its findings would make itself susceptible to challenge on this account. The conclusions of the arbitrator which are based on no evidence or have been arrived at by ignoring vital evidence are perverse and can be set aside on the ground of patent illegality. Also, consideration of documents which are not supplied to the other party is a facet of perversity falling within the expression 'patent illegality'.'
16.In the judgment titled as G. Ramchandra Reddy v. Union of India (2009) 6 SCC 414, the Hon'ble Apex Court asserted that courts should not normally interfere with the award of an arbitrator, unless there was a gross error apparent on the face of the record.
17.In Sudarsan Trading Co. v. Government of Kerela & Anr., 1989 AIR 890, the observations of the Hon'ble Supreme Court of India have been that Court cannot substitute its own evaluation of the conclusion of law or fact to come to the conclusion that the arbitrator had acted contrary to the bargain between the parties. Whether a particular amount was liable to be paid or damages liable to be sustained, was a decision within the competency of the arbitrator in this case. By purporting to construe the contract the court could not take upon itself the burden of saying that this was contrary to the contract and, as such, beyond jurisdiction.
18.In the case Oil & Natural Gas Corporation Ltd v. Saw Pipes Ltd. dated 17.04.2003 in Appeal (Civil) 7419/2001, the Hon'ble Supreme Court of India considered the ambit and OMP (COMM.) No. 116/2019 Page 10 of 26 scope of Court's jurisdiction under Section 34 of the Arbitration and Conciliation Act, 1996. The court discussed the matter of arbitral procedure in terms of section 24, section 28 and section 31 of the Arbitration and Conciliation Act and held: "In our view, reading Section 34 conjointly with other provisions of the Act, it appears that the legislative intent could not be that if the award is in contravention of the provisions of the Act, still however, it couldn't be set aside by the Court. If it is held that such award could not be interfered, it would be contrary to basic concept of justice. If the arbitral tribunal has not followed the mandatory procedure prescribed under the Act, it would mean that it has acted beyond its jurisdiction and thereby the award would be patently illegal which could be set aside under Section 34".
19.The ground of public policy has also been discussed in detail and the lordships held as follows: "Therefore, in our view, the phrase 'Public Policy of India' used in Section 34 in context is required to be given a wider meaning. It can be stated that the concept of public policy connotes some matter which concerns public good and the public interest. What is for public good or in public interest or what would be injurious or harmful to the public good or public interest has varied from time to time. However, the award which is, on the face of it, patently in violation of statutory provisions cannot be said to be in public interest. Such award/judgment/decision is likely to adversely affect the administration of justice. Hence, in our view in addition to narrower meaning given to the term 'public policy' in Renusagar's case (supra), it is required to be held that the award could be set aside if it is patently illegal. Result would be award could be set OMP (COMM.) No. 116/2019 Page 11 of 26 aside if it is contrary to:
(a) fundamental policy of Indian law; or
(b) the interest of India; or
(c) justice or morality, or
(d) in addition, if it is patently illegal.
Illegality must go to the root of the matter and if the illegality is of trivial nature it cannot be held that award is against the public policy. Award could also be set aside if it is so unfair and unreasonable that it shocks the conscience of the Court. Such award is opposed to public policy and is required to be adjudged void."
The conclusion has been drawn in the following manner:
"CONCLUSIONS: In the result, it is held that: A. (1) The Court can set aside the arbitral award under Section 34(2) of the Act if the party making the application furnishes proof that:
i) a party was under some incapacity, or
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration;
2) The Court may set aside the award: OMP (COMM.) No. 116/2019 Page 12 of 26
(i) (a) if the composition of the arbitral tribunal was not in accordance with the agreement of the parties,
(b) failing such agreement, the composition of the arbitral tribunal was not in accordance with PartI of the Act.
(ii) if the arbitral procedure was not in accordance with:
(a) the agreement of the parties, or
(b) failing such agreement, the arbitral procedure was not in accordance with PartI of the Act.
However, exception for setting aside the award on the ground of composition of arbitral tribunal or illegality of arbitral procedure is that the agreement should not be in conflict with the provisions of PartI of the Act from which parties cannot derogate.
(c) If the award passed by the arbitral tribunal is in contravention of provisions of the Act or any other substantive law governing the parties or is against the terms of the contract (3) The award could be set aside if it is against the public policy of India, that is to say, if it is contrary to:
(a) fundamental policy of Indian law;
(b) the interest of India; or
(c) justice or morality, or
(d) if it is patently illegal.
(4) It could be challenged:
(a) as provided under Section 13(5); and
(b) Section 16(6) of the Act."
20.Coming to the case in hand, I have duly examined the grounds pleaded in the objection petition in the light of the facts and circumstances of the case, legal position and submissions of both the sides.
OMP (COMM.) No. 116/2019 Page 13 of 2621.In the instant case, admittedly, the son of respondents no.1 and 2 got admission in two years classroom programme for JEE (Main), Regular Week Contact Class at West Punjabi Bagh Centre, New Delhi26 with the petitioner by executing Enrollment Form/Contract and Declaration/Undertaking dated 06.06.2014. Admittedly, a sum of Rs. 2,00,827/ as fees was deposited by respondents no.1 and 2 with the petitioner towards the entire course. Admittedly, son of respondents no.1 and 2 namely Saransh Bharat attended the classes from 10.06.2014 to 19.06.2014 i.e. only for 10 days however, as per respondents no.1 and 2, the son of respondents no.1 and 2 found that the faculties were not capable to clear the queries and as such he was not satisfied with the teaching pattern of the petitioner. Admittedly, respondent no.1 wrote a letter dated 07.07.2014 to the petitioner stating therein that due to timings schedule of the class, her son is unable to further attend the classes and in the said letter, requested for the refund/reimbursement of the fees due. Admittedly, the refund was refused by the petitioner citing relevant clause forming part of the Enrollment Form, Declaration/Undertaking that there was a binding contract between the parties containing a covenant that fees once paid will not be refundable under any circumstance and further the seat vacated by the son of respondents no.1 and 2 remained vacate throughout the course duration.
OMP (COMM.) No. 116/2019 Page 14 of 2622.The question to be looked into by the court is whether the refund of fees as ordered by the Ld. Arbitrator vide impugned award dated 23.03.2019 suffers from patent illegality or against the fundamental policy of India.
23.This issue is no more resintegra as there are many judgments passed by various Ld. Consumer Forums as well as Ld. NDRC and of Hon'ble High Courts and the Hon'ble Supreme Court of India which have held the clause 'the fees once paid is non refundable' to be unconscionable.
24.The Hon'ble Supreme Court of India in a case titled as Central Inland Water Transport Corporation. Ltd. Vs. Brojo Nath Ganguly, AIR 1986 SC 1571 held that an unfair or an unreasonable contract entered into between parties of unequal bargaining power was void as unconscionable, under Section 23 of the Act. It has been held that the courts would relieve the weaker party to a contract from unconscionable, oppressive, unfair, unjust and unconstitutional obligations in a standard form contract. The Hon'ble Supreme Court of India has also held that standard form contracts drawn up even by the Government must be fair, and that these contracts are open to judicial review on grounds of unreasonableness or unfairness. The Hon'ble Supreme Court of India has upheld a plea that a printed form contract was void on grounds of coercion, where the parties had OMP (COMM.) No. 116/2019 Page 15 of 26 unequal bargaining power. A printed form in a drycleaning contract, exempting the drycleaner from any liability in the event of loss or damage to the clothes concerned has been held to be contrary to public policy and therefore void. To quote, the Hon'ble Supreme Court of India observed as : "Should then our courts not advance with the times? Should they still continue to cling to outmoded concepts and outworn ideologies? Should we not adjust our thinking caps to match the fashion of the day? Should all jurisprudential development pass us by, leaving us floundering in the sloughs of nineteenth century theories? Should the strong be permitted to push the weak to the wall? Should they be allowed to ride roughshod over the weak? Should the courts sit back and watch supinely while the strong trample under 5 foot the rights of the weak? We have a Constitution for our country. Our judges are bound by their oath to "uphold the Constitution and the laws". The Constitution was enacted to secure to all the citizens of this country social and economic justice. Article 14 of the Constitution guarantees to all people equality before the law and the equal protection of the laws. The principle deducible from the above discussions on this part of the case is in consonance with right and reason, intended to secure social and economic justice and conforms to the mandate of the great equality clause in Article 14. This principle is that the courts will not enforce and will, when called upon to do so, strike an unfair and unreasonable contract, or an unfair and unreasonable clause in a contract, entered into between parties who are not equal in bargaining power. It is difficult to give an exhaustive list of all bargains of this type. No court can visualize the different situations OMP (COMM.) No. 116/2019 Page 16 of 26 which can arise in the affairs of men. One can only attempt to give some illustrations.
For instance, the above principle will apply where the inequality of bargaining power is the result of the great disparity in the economic strength of the contracting parties. It will apply where the inequality is the result of circumstances, whether of the creation of the parties or not. It will apply to situations in which the speaker party is in a position in which he can obtain goods or services or means of livelihood only upon the terms imposed by the stronger party or go without them. It will also apply where a man has no choice, or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form or to accept a set of rules as part of the contract, however unfair, unreasonable and unconscionable a clause in that contract or form or rules may be. ...there can be myriad situations which result in unfair and unreasonable bargains between parties possessing wholly disproportionate and unequal bargaining power. These cases can neither be enumerated nor fully illustrated. The court must judge each case on its own facts and circumstances."
25.The facts of this case also demonstrate the unfairness of an unconscionable contract executed between the parties inasmuch as while executing and signing the Enrollment Form/Contract and Declaration/Undertaking dated 06.06.2014, respondents no.1 and 2 have no meaningful choice but to give assents to a contract or to sign on the dotted line in a prescribed or standard form i.e. Enrollment Form/Contract and Declaration/Undertaking dated OMP (COMM.) No. 116/2019 Page 17 of 26 06.06.2014. In as case titled as D.T.C. v. D.T.C. Mazdoor Congress, 1990 (1) Supp. SCR 142, the Hon'ble Supreme Court of India held that the freedom of contract must be founded on equality of bargaining power between contracting parties. Though ad idem is assumed, the standard form contract is the rule. The consent or consensus ad idem of a weaker party be totally absent. He must assent to it in terms of the dotted line contract or to forgo the goods or services. The freedom of equal bargaining power is largely an illusion.
26.At the time of signing the Enrollment Form/Contract, Declaration/Undertaking dated 06.06.2014 son of respondents no.1 and 2 did not know about the deficiencies in the teaching programme of the petitioner or of the competence of the faculty members. Withdrawal of their son from Two Years Classroom Programme for JEE (Main), Regular Week Contact Classes of the petitioner by respondents no.1 and 2 cannot be held to be a voluntary act when it was actuated by the reasons mentioned by respondents no.1 and 2.
27.There are many other decisions wherein it has been held that the term that "a fee once paid is not refundable" is unconscionable and therefore, unenforceable. National Consumer Disputes Redressal Commission in III (2009) CPJ 33 NC], dismissed the revision Petition no. 813 of 2009 against Order dated OMP (COMM.) No. 116/2019 Page 18 of 26 10.12.2008 in Appeal No. 08/1043 of State Commission, Delhi, decided on 30.04.2009 in a case titled as Sehgal School of Competition Vs. Dalbir Singh. In that matter, the complainant had deposited the fees for two years but discontinued the studies after one year on the ground that coaching was not up to the mark and sought proportionate refund of the fees from the Institute. District forum allowed that complaint. In appeal, State Commission held fees once paid shall not be refunded clause to be unconscionable and unfair and therefore, not enforceable and the appeal was dismissed. In revision, Public Notice issued by the UGC was upheld and it was held that the institute was unfair and unjust in retaining the tuition fee even after the student withdraw from their institute. Public notice issued by UGC directing all the institutions to refund the money of the students for the period they have not attended the college/Institution was upheld and Revision Petition was dismissed.
28.On 24.03.2011, State Commission of Chandigarh in the matter titled M/s FIIT JEE Limited Vs. Manmeet Singh, through his father and natural guardian while deciding First Appeal no. 314 of 2010 and First Appeal no. 379 of 2010, negated the following contentions of Ld. counsel for FIITJEE worded as "The learned counsel for the appellant/OP No.2 has referred to Paragraphs No.6 and 7 of the Declaration Form (Annexure OP−III) vide which the complainant agreed not to OMP (COMM.) No. 116/2019 Page 19 of 26 claim refund of the fee deposited by him if he left the institute for any reason whatsoever. The learned counsel also referred to Paragraphs No.17 and 18 of Annexure OPIII and argued that this undertaking was given after reading and understanding the said clauses contained in the Declaration and Enrollment Form and was voluntarily given by him. He also referred to Para No.12 of Annexure OPIII and argued that the complainant had promised to abide by the rules and regulations, referred to above and therefore, the complainant was not entitled to the refund of the fee as he left the institute midway." State Commission of Chandigarh after referring to copious case law, where the fees was ordered to be refunded to the students despite the nonrefundable clause about the fees in the contract and it was specifically held that any clause saying that fees once paid will not be refunded is unconscionable and unfair and therefore, not enforceable, ordered for refund of proportionate amount to the respondent. It was observed as: "In the case Sehgal School of Competition Vs. Dalbir Singh, 2009 (3) CPC 187, there existed such a condition in the brochure issued by the petitioner from whose side, an argument was advanced that the fee was non refundable or non−transferable under any circumstances. His contention was not accepted by the learned District Forum which held that any clause saying that fees once paid will not be refunded is unconscionable and unfair and therefore not enforceable. The appeal filed by the petitioner was dismissed and the revision petition was OMP (COMM.) No. 116/2019 Page 20 of 26 also dismissed by the Hon'ble National Consumer Disputes Redressal Commission, New Delhi (hereinafter to be referred as National Commission). Again this question arose in the case Brilliant Tutorials Pvt. Ltd. Vs. Ashwani Verma, 2011 CTJ 288 (CP) (NCDRC) where a complaint was opposed, interalia, on the ground that the fees paid were non refundable and the respondent was bound by its terms and conditions. Their contention was neither accepted by the learned District Forum nor by the State Commission. The revision petition filed by the Institute was also dismissed by the Hon'ble National Commission. In the case GGS College of Modern Technology Vs. Mrs. Kusum Arora, 2011 CTJ 346 (CP) (SCDRC), Rule 8 of the prospectus of Appellant provided that no refund was admissible after the cut off date. However, in that case also, refund was allowed and the appeal filed by the appellant was dismissed by this Commission. In another case Principal, S.D. College Vs. Reetika Manhas & Anr., IV (2008) CPJ 502, again such a question arose before this Commission wherein the appellant refused to refund the fee on the ground that she had given declaration that she would not claim refund in case she left the college. This contention was not accepted by the learned District Forum and the appeal filed by the Institution was dismissed. In view of these authorities, it becomes clear that mere declaration obtained by the Coaching Institute from the complainant that the fee deposited by him/her would not be refunded in any circumstances, is unconscionable and cannot be enforced against the complainant."
29.In the case titled as Atam Parkash Khattar Vs. Commissioner & Secretary to Govt. of Haryana, Civil Writ Petition OMP (COMM.) No. 116/2019 Page 21 of 26 No.13308 of 2009 decided on 21.7.2010 by the Hon'ble High Court of Punjab and Haryana, it was observed that educational institutions cannot be permitted to behave like a business establishment who work with profit motive. It was held that there was no justification on their part in retaining the substantial fee paid by a student who decides not to pursue his/her studies in the said institution. In that case, fee was ordered to be refunded by the petitioner.
30.In a case titled as Sehgal School of Competition Vs. Dalbir Singh, 2009 (3) CPC 187, the Ld. National Commission, in Paragraph No.7, held that it was unjust to collect the fees for the total period of the course. In another case titled as Nipur Nagar Vs. Symbiosis Institute of International Business, I (2009) CPJ 3 (NC), the Hon'ble National Commission after quoting the public notice issued by the University Grants Commission, held that the Institute was unfair and unjust in retaining the tuition fee even after the student withdrew from their institute.
31.In a case titled as Islamic Academy of Education and another Vs. State of Karnataka and others, 2003 (6) SCC 697, the Hon'ble Supreme Court of the India held that an educational institution could only charge the prescribed fee for one semester/year and not for the entire course. On its basis, the Hon'ble National Commission in the case of Brilliant Tutorials OMP (COMM.) No. 116/2019 Page 22 of 26 Pvt. Ltd. Vs. Ashwani Verma (Supra) held as that " ...The principles laid down by the Apex Court would apply with equal force to the training institutes who collect fees in advance, though not due, in order to prepare the students for various examinations. Charging fees in advance beyond the current semester/year would certainly amount to unfair trade practice and the same cannot be countenanced..."
32.The next plea of challenge of the impugned award is that Ld. Arbitrator while relying upon the evidence of RW1 Sh. Ashish Kumar Aggarwal recorded before the Ld. Arbitrator has observed that this witness has failed to produce on record any documentary proof to the effect that the seat left by the son of respondents no.1 and 2 remained vacant and was not filled up throughout the course. In this regard, the petitioner has pleaded that there was a declaration to this effect in the Enrollment Form that seat vacated midway is not filled up and this aspect was not even challenged by respondents no.1 and 2 and further it was never the case of respondents no.1 and 2 that the seat left vacant by the son of respondents no.1 and 2 is filled up by another student or not.
33.The burden was on the petitioner to prove that seat was left vacant due to the leaving of the course after attending ten days by the son of respondents no.1 and 2, the record shows that the petitioner has not led any evidence in this regard. The burden of proof had shifted upon the petitioner as per the pleading led by the petitioner before the arbitrator which was not discharged.
OMP (COMM.) No. 116/2019 Page 23 of 26Merely stating that the seat cannot be filled due to the vacancy created by the student does not ipso facto prove the version of the petitioner. The petitioner has to prove the same by some cogent evidence which the petitioner has miserably failed before Arbitrator. Accordingly, no interference is required to interfere the findings given by the Ld. Arbitrator.
34.In the opinion of the court, the declaration to this effect that seat vacated midway is not filled up and this aspect was not even challenged by respondents no.1 and 2, cannot be read against respondents no.1 and 2. The petitioner cannot be allowed to be on an advantageous position, keeping in mind the interest of poor consumer. The petitioner cannot gulp whole of the fee paid, being the hard earned money. When a student or his/her parents signs the admission form, they have no bargaining power to negotiate, or refuse to sign any particular clause in the admission form. Hence, such clauses should not be held against the student.
35.In a case titled as FIITJEE Ltd. Vs. Shinjini Tewari, the State Consumer Disputes Redressal Commission, U.T., Chandigarh in Appeal No. 109 of 2019 dated 11.07.2019 has observed in para 16 that: "...............In case, the student leaves in between or midsession or after attending for few days or months, in our opinion, he/she should not be denied refund of the fee for the remaining period, which he/she OMP (COMM.) No. 116/2019 Page 24 of 26 did not attend. If the student is given refund, he/she can pay the said amount to some other educational institute, where he/she wants to pursue coaching or education. The student is not supposed to pay another hefty amount to other coaching institute after leaving the appellant institute. Parents may not be in a position to afford another heavy fee of another coaching institute and the student will be deprived of precious opportunity and formative years of career building. In case, the fee is refunded, the student can further move on with that amount to explore much better avenues of education, as per his/her desire. We may also add here that Consumer Protection Act, 1986, which is Consumer Oriental Legislation, is meant to protect the interest of consumers who show their courage to come forward and put forth their grievance against the unfair trade practices adopted by such like educational institutions. Future of an aspiring student, who will certainly contribute towards the development of our nation at some stage of his/her life, is of paramount importance and cannot be put at stake like this. Educational Institutions like the appellant must bear in mind the feelings and sentiments of an aspiring student who took admission with such like institutions with an aim and hope to achieve some better prospects and positions in their future. In our opinion, educational institutes should be prudent, desist from charging upfront fees for the entire course, and if they do, should not refuse a refund. A student or a trainee may leave midstream if he finds the service deficient, substandard and nonyielding, and to tell him that fees once paid are not refundable was an unfair trade practice, as no service provider can take or charge the consideration of the service which it has either not given or has not been availed. The existing practice in many institutions of collecting advance payment and not refunding this should be done away with. Such blatant act of the OMP (COMM.) No. 116/2019 Page 25 of 26 appellant(s) is a clear example of unfair trade practice, which has to be stopped by exercising a moral responsibility especially when seen in the light of the above facts and circumstances of this case."
36. In view of the aforesaid discussion, the court does not find any error apparent in the impugned award. The court does not find any contradiction in the observations and findings given by the Ld. Arbitrator. The award is supported by sound reasons. The award is not against any public policy of there is any patent illegality in the impugned award. Hence, no ground for interference is made out.
37.In the light of aforesaid observations, I conclude that award is based on logical reasons and there is no justification to interfere with the same. None of the grounds raised by the petitioner attracts Section 34 of the Arbitration and Conciliation Act,1996.
38.The petition deserves to be dismissed. Hence, the same is dismissed. The parties are left to bear their own costs.
39.File be consigned to record room.
Announced in the open court on 08.05.2023 (Anurag Sain) District Judge (Commercial Court01), Patiala House Courts, New Delhi OMP (COMM.) No. 116/2019 Page 26 of 26