State Consumer Disputes Redressal Commission
Fiitjee Limited vs Dr. Minathi Rath on 4 October, 2006
IN THE STATE COMMISSION : DELHI IN THE STATE COMMISSION : DELHI (Constituted under Section 9 clause (b) of the Consumer Protection Act, 1986 ) Date of Decision : 04.10.2006 Appeal No.A-830/2006 (Arising from impugned order date 27.08.2006 passed by District Forum-II, Udyog Sadan, Mehrauli, New Delhi in complaint Case No. 387/2005) M/s FIITJEE LIMITED Appellant 29-a, Kalu Sarai, ICES House, through Mr. Kumar Kartikeya Sarvapriya Vihar, New Del advocate Versus Dr, Minathi Rath Respondent D-11/48, Ansari Nagar, New Delhi-29 CORAM: Justice J.D.Kapoor President Ms. Rumnita Mittal Member
1. Whether reporters of local newspapers be allowed to see the judgment?
2. To be referred to the Reporter or not?
Justice J.D.Kapoor (Oral)
1. Appellant claims to be an Institute of repute. It prepares the students for entrance examination for IIT-JEE etc. The appellant charged a fees of Rs.61,020/- in lump sum for training course for two years and that too in advance for the Session April, 2004 to March, 2006 for preparation for IIT entrance examination. It is alleged that the appellant gave assurance at the time of admission that a personalized attention will be paid to each and every student. After having attended the session for one year in a class consisting of 40 students, respondents daughter found it like ordinary schools and teachers rushing to finish the course before the scheduled time without any personal attention to the students. This was the betrayal of the expectations of the respondent and she decided to leave the course in the mid-stream and demanded refund of the balance fees. On refusal by the appellant to refund the fees, the respondent filed the instant complaint before the District Forum.
2. While allowing the complaint of the respondent, the District Forum only directed the appellant to refund the balance fee of Rs.28,000/- for the period for which the respondents daughter did not attend the classes and also to pay Rs.5,000/- as compensation for mental agony and harassment and Rs.2,000/- towards cost of litigation. 3. Through this appeal, the appellant has assailed the impugned order firstly on the ground that as per terms and conditions of the course, the fee once paid was not refundable and secondly, respondent left the course in mid-way as she was not able to cope up with the rigors of studies and curriculum, being conducted at the appellants classes and had voluntarily withdrawn herself from the classes and thirdly that the students aspiring for admission in I.I.T. join the Institute because of its high reputation and no student or candidate leaves the course in between may be for any reason whatsoever.
4. At the outset we are constrained to observe that such type of Institutes have become commercial shops. The very fact of charging the lump sum fee for the entire duration of two years in advance and that too for the period for which they are yet to provide the service of tuition is highly unethical, unscrupulous and unfair trade practice and this is an indirect way to earn large amount of money and to earn undue profit by exploiting the poor students as for few seats there are thousands of aspirants and in the process, such Institutes become unjustly rich by way of collecting the fees for two or three years in advance in lump sum. No service provider can charge a fee/consideration for a period for which the service has yet to be provided. By charging fee in lumpsum as in this case was charged for two years course in advance such Institutes not only exploit the student community but also bind the students not to leave the Institute whatever quality of education or training there may be.
5. It is only after attending the classes that students or the aspirants come to know about the quality of training being imparted by the Institute. In the instant case, when the respondents daughter came to know may be after one year of training that the course was being taught in such a manner where teachers were rushing to finish the course before the scheduled time without any personal attention, she was justified to leave such an Institute as further delay of one year of training would have served no useful purpose and at least not the desired purpose.
6. It was in order to arrest such kinds of activities on the part of service providers that the Legislature brought the Consumer Protection Act,1986 on the Statute Book by providing high standard of service by defining deficiency in service as under:
deficiency means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service.(Section 2(1)(g)
7. Unfair trade practice has also been defined in such a manner that brings every kind of activity in its fold where false representation is made that services are of a particular standard, quality or grade and gives warranty or guarantee as to its performance, efficacy or adequacy.
8. Respondents daughter had attended the classes for one year and having been not satisfied with the quality of the training being imparted particularly lack or 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.
9. 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 term 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.
10. In our view the District Forum has shown leniency towards the appellant. The appellant should have been visited with punitive damages firstly for indulging in unfair trade practice for charging a lumpsum amount of Rs.61,020/- for two years course in advance including the period for which the training was yet to be imparted and secondly for deficiency in service causing mental agony and harassment as well as loss to the future career of the respondents daughter.
11. Aforesaid reasons persuade us to dismiss the appeal being highly mis-conceived, mis-directed with a cost of Rs.25,000/- which shall be deposited in favour of State Consumer Welfare Fund (Legal Aid) within 15 days.
11. By this order, we are giving following directions to the educational Institutes, coaching centres who are imparting any kind of training and coaching and charge lumpsum fee in advance for the whole duration of the course and thereby bind the candidates for the whole duration even if they are not satisfied with the quality or standard of service or training.
All the training imparting Institutes, educational centres preparing the students for Entrance Examination or imparting any other kind of training including the computer training or any other kind of coaching etc. are hereby directed not to charge the fee for the whole duration of the course in advance by way of lump sum payment. They may at the most charge tuition fees of three months in advance in case of a course/training for one year and six months period for a course/training of more than one year as no service provider can be allowed to charge the consideration for such a long period say one to three years for which service is yet to be provided. Such a practice is adopted only to collect huge amount of money and thereby making themselves unjustly enriched and binding a candidate for the whole duration even if service is later on found to be highly deficient and sub-standard. Such a practice has also an abominable ingredient of exploitation of student community as for few seats thousands apply.
12. Any violation of this order shall be visited with heavy punitive damages and sentence of imprisonment or fine as provided by Section 27 o the Consumer Protection Act, 1986.
13. A copy of this order be sent to all National Dailies of the City for giving wide publicity for the knowledge of aspirants as well as such like Institutes imparting training or coaching for any purpose whatsoever.
14. FDR, if any, deposited by the appellant be returned to the appellant forthwith under proper receipt.
15. A copy of this order, as per the statutory requirements be forwarded to the parties, free of charge and also to the concerned District Forum and thereafter the file be consigned to the Record Room.
16. Copy of this order be sent to Presidents of all the District Fora.
(Justice J.D.Kapoor) President (Rumnita Mittal) Member slc