National Consumer Disputes Redressal
Fiit Jee Ltd./P.T.Education & Training ... vs Dr.(Mrs.) Minathi Rath & Ors/B.B. ... on 14 November, 2011
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 3365 of 2006 (Against order dated 04.10.2006 in Appeal No.A-830/2006 of the State Commission, Delhi) FIIT JEE Ltd. ........Petitioner Vs. Dr. (Mrs.) Minathi Rath ........ Respondent REVISION PETITION NO.1805 of 2007 (Against order dated 23.04.2007 in Appeal No. 18/2007 of the State Commission, Delhi) FIIT JEE Ltd. ........Petitioner Vs. B.B. Popli ........ Respondent REVISION PETITION NO.2660 of 2007 (Against order dated 09.01.2007 in Appeal No. 509/2006 of the State Commission, Delhi) Brilliant Tutorials ........Petitioner Vs. Rahul Dass ........ Respondent REVISION PETITION NO. 3496 of 2006 (Against order dated 04.10.2006 in Appeal No.830/2006 of the State Commission, Delhi) P.T. Education & Training Services Ltd. ........Petitioner Vs. Dr. Minathi Rath & Ors. ........ Respondents REVISION PETITION NO. 3497 of 2006 (Against order dated 04.10.2006 in Appeal No.830/2006 of the State Commission, Delhi) Career Launcher India Ltd. ........Petitioner Vs. Dr. (Mrs.) Minathi Rath & Ors. ........ Respondents BEFORE: HON'BLE MR. JUSTICE ASHOK BHAN, PRESIDENT HONBLE MRS. VINEETA RAI, MEMBER For the Petitioner : Mr. Kailash Vasudev, Sr. Advocate in R.P.3365/06 & Mr.V.D.Costa, Mr.Anubhav Bhasin, R.P. 1805/07) Advocates For the Petitioner : Mr.K.K. Rohatgi, Advocate (in R.P.2660/07) Mr.Sarvesh Singh, Advocate For the Petitioner : Mr. S. K. Vashishta, Advocate (in RPs 3496 & 3497/076) For the Respondents : In person (in all the RPs) Pronounced on 14th November, 2011 ORDER
PER VINEETA RAI, MEMBER R.P.Nos.3365/2006 and 1805/2007 have been filed by FIIT JEE Ltd., R.P.No.2660/2007 by Brilliant Tutorials, R.P.No.3496/2006 by P.T. Education & Training Services Ltd. and R.P.No.3497/2006 by Career Launcher India Ltd. against the orders of the State Consumer Disputes Redressal Commission, Delhi (hereinafter referred to as the State Commission) in Appeal Nos.A-830/2006, 18/2007, 509/2007, 830/2006 and 830/2006 in which Dr.(Mrs.) Minathi Rath, B.B.Popli, Rahul Dass and others were Respondents.
Although, the points involved in these revision petitions are similar, there are however differences in the facts of each case. For example, in R.P.No.3365/2006, the student took admission in the Petitioners coaching course and paid an advance fee of two years and left the course after one year. In R.P.No.1805/2007, the student attended only for two days and left the course reportedly on medical grounds and in R.P.No.2660/2007, the student left the course after six months because he was finding it too strenuous to pursue the courses.
However, since as mentioned earlier, the main points involved in these revision petitions being the same(i.e. payment of two years fees in advance and a subsequent request by Respondents for refund of the fees for the unattended period of the course), we propose to dispose of these revision petitions by one single order by essentially taking the facts of R.P.No.3365/2006.
According to the Respondent/complainant, Dr.Minathi Rath in this case, got her daughter, Smita Pati(hereinafter referred to as the student), enrolled in the two year regular classroom programme of the Petitioner for which a full advance fee of Rs.61,020/- was paid on 20.04.2004 for services of coaching to be completed in March, 2006. The student attended regular classes upto January, 2005 but found that she was not benefitting from the Petitioners teaching pattern because of apathy and lack of communication between teachers and students and the generally poor environment and lack of proper infrastructural and classroom facilities. The Petitioner also did not respond to Respondents queries/clarifications regarding the programme and therefore, Respondent decided to withdraw her daughter from the Petitioner/Institute and requested that the advance for the unattended period i.e. from February, 2005 to March, 2006 amounting to Rs.30,500/- be refunded to her with interest. Petitioner, however, refused to return this amount, aggrieved by which Respondent filed a complaint before the District Forum on grounds of unfair trade practice and deficiency in service and requested that the Petitioner/Institute be directed to refund to the Respondent, the advance fee paid for the unattended period from February, 2005 to March, 2006.
Petitioner however, denied that the course programme was not satisfactory and contended that the reason for the Respondents daughter wanting to leave the course prematurely in January, 2005 was not because of any lacunae or deficiency in the course provided by the Petitioner/Institute but because she was not able to cope with the study and hard work involved. In fact, the Petitioner which is a registered Private Limited Company enjoys a good reputation for successfully running private coaching classes for training eligible students to prepare them for common entrance tests to the Indian Institute of Technology etc. and only a limited number of students are selected after a written test held by the Petitioner/Institute. Successful candidates are admitted on the basis of terms and conditions set out in a written contract executed between the Petitioner/Institute.
All prospective candidates are provided full details regarding the classroom programmes and once a candidate is admitted to the course, as per the terms of the contract, he/she has to pay an advance fee of Rs.61,020/- which also includes Rs.4,520/-as service tax for the course period of two years. There is no provision for refunding the same.
Therefore, it was unreasonable for the Respondent to seek a refund of fees for the unutilized period since she had agreed to all the terms and conditions of her daughters admission into the Petitioner/Institution.
The District Forum after hearing both parties allowed the complaint by observing as follows:
In the case in hand, the OP institute runs coaching classes for preparing the students for IIT and other such entrance examinations. Admissions to such institutes are not regulated by any law or rules or regulations.
Such institutes lure the parents to admit their wards to these institutes by giving full page advertisements in the newspapers claiming success of their coaching programmes. It is common knowledge that more than one coaching schools claim the same rankers in the IIT or such other entrance examinations as their own students. It clearly amounts to unfair trade practice. These coaching schools provide mostly printed material which may help and guide the students to some extent in preparing for a particular entrance examination. However, so far as the classroom teaching is concerned, much is left to be desired. On the basis of misleading advertisements these coaching schools attract and enrol more students than they can cater to. As a result of this number of students per class reach as high as 40.
The student-teacher ratio is too low.
As result of this personal attention is not given and cannot be given to every student.
The District Forum further cited the judgment of the State Consumer Disputes Redressal Commission, Delhi in Appeal No.FA-569/2005 in Registrar, Guru Gobind Singh Indraprastha University Vs. Ms.Prem Deep Kaur decided on 31.01.2006, wherein the State Commission had also commented adversely on the practice of taking advance admission fees and not providing adequate services. The District Forum, therefore, directed the Petitioner to retain fees only for one year (including service tax) for which the Respondents daughter attended the classes and directed the Petitioner to refund Rs.28,000/- to the Respondent along with compensation of Rs.5,000/- and litigation cost of Rs.2,000/-.
Aggrieved by this order, Petitioner preferred an appeal before the State Commission which dismissed the same by observing as follows:
Respondents daughter had attended the classes for one year and having been not satisfied with the quality of the training being imparted particularly lack of personalized attention and the schedule of the course being completed in a hurried manner, she was entitled for the refund of the fee for the remaining period on the premise that respondent had at least availed the services for one year.
Any term of the contract which is unconscionable or voidable is not enforceable.
No service provider like training institutes or Coaching Centers or educational Centers can be allowed to forfeit the fees or consideration received in advance in case the student has not availed the service. Thus the terms that fees once paid is not refundable is unconscionable as well as voidable and therefore, not actionable. A student or a trainee may leave in the midstream if he finds the service deficient and sub-standard and non-yielding and to tell him that fees once paid is not refundable is uncalled for and 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 State Commission also directed the Petitioner to deposit Rs.25,000/- in the State Consumer Welfare Legal Aid within 15 days for filing a misconceived and misdirected appeal. It further directed that all training imparting institutes which prepare a student for entrance examinations should, at the most charge tuition fee for three months in advance in a course or training for one year and six months for a course/training for over one year and that any violation should be visited with heavy punitive damages and sentence of imprisonment or fine as provided under Section 27 of the Consumer Protection Act, 1986.
Hence, the present revision petition.
Parties were represented by their respective Counsels who made oral submissions. Respondent appearing in-person reiterated that the Respondents daughter had no option but to leave the course midway because of bonafide and genuine reasons particularly the unsatisfactory services provided by the Petitioner/Institute. Under the circumstances it was not fair on the part of the Petitioner/Institute to decline the request for refund of the advance amount paid for the course. Counsel for Respondent pointed out that the matter pertaining to advance payment of fees and its consequences have been squarely covered by the Honble Supreme Court in its judgment in Islamic Academy of Education Vs. State of Karnataka (2003) 6 SCC 696 wherein the Apex Court inter alia observed as follows:
It must be mentioned that during arguments it was pointed out to us that some educational institutions are collecting, in advance, the fees for the entire course i.e. for all the years. It was submitted that this was done because the institute was not sure whether the student would leave the institute midstream. It was submitted that if the student left the course in midstream then for the remaining years the seat would lie vacant and the institute would suffer. In our view an educational institution can only charge prescribed fees for one semester/year, if an institution feels that any particular student may leave in midstream then, at the highest, it may require that student to give a bond/bank guarantee that the balance fees for the whole course would be received by the institute even if the student left in midstream. If any educational institution has collected fees in advance, only the fees of that semester/year can be used by the institution. The balance fees must be kept invested in fixed deposits in a nationalised bank(emphasis supplied). As and when fees fall due for a semester/year only the fees falling due for that semester/year can be withdrawn by the institution. The rest must continue to remain deposited till such time that they fall due. At the end of the course the interest earned on these deposits must be paid to the student from whom the fees were collected in advance.
This ruling of the Supreme Court is very much relevant in the instant case and, therefore, following the principles laid down in this case, the Petitioners are obliged to return the advance fees for the period when the student did not attend the course.
Learned Sr.Counsel for Petitioner, Mr.Kailash Vasudev, on the other hand in his detailed oral submissions contended that the judgment of the Apex Court in Islamic(supra) is not applicable in this case because the Petitioner/Institute is not an educational institution since it imparts only coaching services which services have been separately defined under Section 65, Clause (26) and (27) of the Finance Act, 1994 clearly indicating that these institutes are not regular educational institutions and unlike educational institutions they are not regulated by statutes like the All India Council of Technical Education(AICTE), Secondary School Board etc. nor do these institutions issue certificate of proficiency/diploma etc. These coaching centres unlike educational institutions also do not receive grants or aid of any nature from either the Government or other authorities and are privately funded institutions running strictly on commercial basis. Counsel for Petitioner further contended that in the present case, Respondent had accepted the terms and conditions of admission including payment of advance fees and it thus, becomes a contractual agreement between the parties which cannot be violated in a whimsical manner. In this connection, Counsel for Petitioner cited orders of the Honble Supreme Court in Tamil Nadu Housing Board & Anr. Vs. Sea Shore Apartment Welfare Association AIR 2008 SC 1151 wherein it has been ruled that it is not for the Fora under the Act to enter into the price fixation or to reopen a concluded contract with a view to getting back a part of the price paid and of which benefit was taken. Similarly, in T.V. Sundaram Iyengar II (2003) CPJ 176(NC), the National Commission had held that the consumer forum have no jurisdiction to strike down a condition in a contract or to rewrite the same. Counsel for Petitioner further averred that Supreme Court in Polymat India(P) Ltd. & Ors. Vs. National Insurance Co. Ltd. & Ors. (2005) 9 SCC 174 has held that it is the duty of the court to interpret the document of contract as was understood between the parties strictly without altering the nature of the contract. Learned Sr.Counsel for Petitioner also stated that the State Commission was both unfair and unjustified in making sweeping adverse comments about the training and coaching imparted by all coaching institutions. Apart from being unfair to the reputation and dedicated work of many of these institutions in the instant case, it did not take into account the fact that the Petitioner/Institution is well reputed for having successfully coached a large number of prospective students for entrance tests to higher educational institutions and also that in the present set of revision petitions, no allegations per se regarding unfair trade practice or deficiency in service has been made against Petitioner/Institutes. Learned Sr.Counsel quoted the judgment of the Apex Court in S.R.Batra & Anr. Vs. Smt.Taruna Batra (2007) 3 SCC 169 wherein it has been observed that court do not legislate and whatever may be the personal view of a Judge, he cannot create or amend the law and must maintain judicial restraint. Keeping in view the spirit of the above ruling, Counsel for Petitioner requested that the unfair obiter dictum contained in the State Commissions order may be set aside as also damages of Rs.25,000/- imposed on account of the appeal that Petitioner filed before that Commission.
We have carefully heard the submissions made at length by the learned Counsels representing the parties and have also considered the entire evidence on record. The facts pertaining to the admission of the Respondents wards to the Petitioner/Institutes, their leaving these institutions before completing the courses on various grounds and the request of Respondents seeking refund of the part of the fees which was not agreed to by the Petitioner/Institute are not in dispute. The issues for decision before us are whether the Petitioner/Institute in view of the judgment of the Honble Supreme Court in Islamic(supra) were justified in demanding advance payment of fees for the entire course period and refusing to pay the same by citing contractual agreement and because they were not educational institutions and, therefore, the above judgment of the Honble Supreme Court was not applicable to them. The other issue raised by the Counsel for Petitioner is whether this case comes within the ambit and scope of the Consumer Protection Act, 1986.
So far as the first issue is concerned, even though in a very narrow technical sense, for reasons pointed out by the Counsel for Petitioner in his oral submissions, coaching institutions may not be conventional educational institutions but since they provide coaching and training to students of an educational nature to equip them for higher studies in specialized educational institutions, the same principles that apply to educational institutions would also apply to these institutions in respect of the fees charged by them including advance fees. In any case, Respondents are consumers and the Petitioners are the service providers.
Petitioners are rendering service for consideration and fall within the purview of Consumer Protection Act, 1986.
The judgment of the Supreme Court would, thus, override any bilateral agreement between the parties. We are, therefore, of the considered view that respectfully following the judgment of the Honble Supreme Court, the Petitioner/Institute could not have charged full advance fees for two years and could have charged prescribed fees for one semester/year.
In the instant cases, since Petitioner/Institutes do not follow the semester system, they could only have charged advance fees for one year. In view of these facts, the Respondents are entitled to get refund of the fees after deducting the non-refundable service tax for the unattended second year of the course.
Regarding the contention of the Petitioners that these cases do not fall within the ambit and scope of the Consumer Protection Act, 1986 because these complaints have not been made on grounds of deficiency in service before the District Forum, we find that this contention is not sustainable. In the first place, the complaints were made on specific grounds of deficiency in service before the District Forum and secondly as stated in the above para, as per Section 2(d)(ii) of the Consumer Protection Act, 1986, the Respondents are consumers who sought to avail of services for a consideration and the Petitioner/Institute is very much a provider of these services and thus these cases are consumer disputes within the meaning of the Consumer Protection Act, 1986.
The State Commission, as pointed by the learned senior Counsel for Petitioner has made sweeping and adverse comments against all coaching institutes by terming them as commercial shops and stating that they indulge in highly unethical, unscrupulous and unfair trade practice to earn undue profits by exploiting students and has thus directed that any violation of its order would be visited with heavy punitive damages and sentence of imprisonment or fine as provided under Section 27 of the Consumer Protection Act. Further, the State Commission has imposed damages of Rs.25,000/- on Petitioner/Institutes for having filed misconceived and misdirected appeal.
While some of these institutions may be indulging in unethical, unscrupulous practices and exploiting students, there are also many others which render very useful service by counseling, training and successfully equipping students for admission to higher educational institutions. It is perhaps because of this reason that there is such a large demand for admission into good coaching institutes. So far as the present Petitioners are concerned, we note that only in one case has the Respondent made allegations about the somewhat unsatisfactory service provided by the Petitioner/Institute but no evidence per se was produced to corroborate this allegation and the Respondents main request had been confined to refund of advance fees. Therefore, without credible evidence to back these allegations, we are of the view that the State Commission should have desisted from making adverse comments of such a general and sweeping nature about all coaching institutions and also imposing damages of Rs.25,000/- for filing misconceived and misdirected appeal on the Petitioner/Institute. The Petitioners were very much within their rights to seek legal remedy provided to them under the Consumer Protection Act, against orders by which they were aggrieved and we are unable to comprehend how the State Commission concluded that the appeal of the Petitioner/Institute was misconceived and misdirected. We, therefore, set aside the adverse obiter dictum of the State Commission against coaching institutions including against the Petitioner/Institutes as also the punitive damages of Rs.25,000/-.
To sum-up, the revision petitions are dismissed and the orders of the State Commission are upheld with the following modifications:-
(i) The Petitioners/Institutes are directed to refund the fees (excluding the service tax) for the unutilized period i.e. the second year to all the Respondents with interest @ 6% per annum, Rs.5,000/- as compensation towards mental agony and Rs.3,000/- as litigation costs in each case.
(ii) The State Commissions obiter dictum as well as damages of Rs.25,000/- imposed on the Petitioners/Institutes, is set aside.
Sd/-
...
(ASHOK BHAN J.) PRESIDENT Sd/-
..
(VINEETA RAI) MEMBER /sks/