Professional Documents
Culture Documents
NEWDELHI
REVISIONPETITIONNO.3365of2006
(Againstorderdated04.10.2006inAppealNo.A830/2006
oftheStateCommission,Delhi)
FIITJEE
Ltd.........Pe oner
Vs.
Dr.(Mrs.)MinathiRath........
Respondent
REVISIONPETITIONNO.1805of2007
(Againstorderdated23.04.2007inAppealNo.18/2007
oftheStateCommission,Delhi)
FIITJEE
Ltd.........Pe oner
Vs.
B.B.Popli........
Respondent
REVISIONPETITIONNO.2660of2007
(Againstorderdated09.01.2007inAppealNo.509/2006
oftheStateCommission,Delhi)
Brilliant
Tutorials........Pe oner
Vs.
RahulDass........
Respondent
REVISIONPETITIONNO.3496of2006
(Againstorderdated04.10.2006inAppealNo.830/2006
oftheStateCommission,Delhi)
P.T.Educa on&TrainingServices
Ltd.........Pe oner
Vs.
Dr.MinathiRath&Ors.........
Respondents
REVISIONPETITIONNO.3497of2006
(Againstorderdated04.10.2006inAppealNo.830/2006
oftheStateCommission,Delhi)
CareerLauncherIndia
Ltd.........Pe oner
Vs.
Dr.(Mrs.)MinathiRath&Ors.........
Respondents
BEFORE:
HON'BLEMR.JUSTICEASHOKBHAN,PRESIDENT
HONBLEMRS.VINEETARAI,MEMBER
ForthePe oner:Mr.KailashVasudev,Sr.Advocate
inR.P.3365/06&Mr.V.D.Costa,Mr.AnubhavBhasin,
R.P.1805/07)Advocates
ForthePe oner:Mr.K.K.Rohatgi,Advocate
(inR.P.2660/07)Mr.SarveshSingh,Advocate
ForthePe oner:Mr.S.K.Vashishta,Advocate
(inRPs3496&3497/076)
FortheRespondents:Inperson
(inalltheRPs)
Pronouncedon14thNovember,2011
ORDER
PERVINEETARAI,MEMBER
R.P.Nos.3365/2006and1805/2007havebeenledbyFIITJEELtd.,R.P.No.2660/2007byBrilliantTutorials,
R.P.No.3496/2006byP.T.Educa on&TrainingServicesLtd.andR.P.No.3497/2006byCareerLauncherIndiaLtd.
against the orders of the State Consumer Disputes RedressalCommission, Delhi (hereina er referred to as the
State Commission) in Appeal Nos.A830/2006, 18/2007, 509/2007, 830/2006 and 830/2006 in which Dr.
(Mrs.)MinathiRath,B.B.Popli,RahulDassandotherswereRespondents.
Although,thepointsinvolvedintheserevisionpe onsaresimilar,therearehoweverdierencesinthe
facts of each case.For example, in R.P.No.3365/2006, the student took admission in the Pe oners coaching
courseandpaidanadvancefeeoftwoyearsandle thecoursea eroneyear.InR.P.No.1805/2007,thestudent
a ended only for two days and le the course reportedly on medical grounds and in R.P.No.2660/2007, the
studentle thecoursea ersixmonthsbecausehewasndingittoostrenuoustopursuethecourses.However,
sinceasmen onedearlier,themainpointsinvolvedintheserevisionpe onsbeingthesame(i.e.paymentof
twoyearsfeesinadvanceandasubsequentrequestbyRespondentsforrefundofthefeesfortheuna ended
periodofthecourse),weproposetodisposeoftheserevisionpe onsbyonesingleorderbyessen allytaking
thefactsofR.P.No.3365/2006.
According to the Respondent/complainant, Dr.MinathiRath in this case, got her
daughter, Smita Pa (hereina er referred to as the student), enrolled in the two year regular
classroomprogrammeof the Pe oner for which a full advance fee of Rs.61,020/ was paid on 20.04.2004 for
servicesofcoachingtobecompletedinMarch,2006.Thestudenta endedregularclassesuptoJanuary,2005
but found that she was not bene ng from the Pe oners teaching pa ern because of apathy and lack of
communica on between teachers and students and the generally poor environment and lack of proper
infrastructuralandclassroomfacili es.ThePe oneralsodidnotrespondtoRespondentsqueries/clarica ons
regarding the programme and therefore, Respondent decided to withdraw her daughter from the
Pe oner/Ins tuteandrequestedthattheadvancefortheuna endedperiodi.e.fromFebruary,2005toMarch,
2006 amoun ng to Rs.30,500/ be refunded to her with interest. Pe oner, however, refused to return this
amount,aggrievedbywhichRespondentledacomplaintbeforetheDistrictForumongroundsofunfairtrade
prac ce and deciency in service and requested that the Pe oner/Ins tute be directed to refund to the
Respondent,theadvancefeepaidfortheuna endedperiodfromFebruary,2005toMarch,2006.
Pe onerhowever,deniedthatthecourseprogrammewasnotsa sfactoryandcontendedthatthereason
fortheRespondentsdaughterwan ngtoleavethecourseprematurelyinJanuary,2005wasnotbecauseofany
lacunaeordeciencyinthecourseprovidedbythePe oner/Ins tutebutbecauseshewasnotabletocopewith
thestudyandhardworkinvolved.Infact,thePe onerwhichisaregisteredPrivateLimitedCompanyenjoysa
goodreputa onforsuccessfullyrunningprivatecoachingclassesfortrainingeligiblestudentstopreparethemfor
common entrance tests to the Indian Ins tute of Technology etc. and only a limited number of students are
selecteda erawri entestheldbythePe oner/Ins tute.Successfulcandidatesareadmi edonthebasisof
terms and condi ons set out in a wri en contract executed between the Pe oner/Ins tute. All prospec ve
candidatesareprovidedfulldetailsregardingtheclassroomprogrammesandonceacandidateisadmi edtothe
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,itwasunreasonablefortheRespondenttoseekarefundoffeesfortheunu lizedperiodsince
shehadagreedtoallthetermsandcondi onsofherdaughtersadmissionintothePe oner/Ins tu on.
TheDistrictForuma erhearingbothpar esallowedthecomplaintbyobservingasfollows:
Inthecaseinhand,theOPins tuterunscoachingclassesforpreparingthestudentsforIITandother
such entrance examina ons. Admissions to such ins tutes are not regulated by any law or rules or
regula ons. Such ins tutes lure the parents to admit their wards to these ins tutes by giving full page
adver sementsinthenewspapersclaimingsuccessoftheircoachingprogrammes.Itiscommonknowledge
thatmorethanonecoachingschoolsclaimthesamerankersintheIITorsuchotherentranceexamina ons
astheirownstudents.Itclearlyamountstounfairtradeprac ce.These coaching schools provide mostly
printed material which may help and guide the students to some extent in preparing for a par cular
entrance examina on. However, so far as the classroom teaching is concerned, much is le to be
desired.Onthebasisofmisleadingadver sementsthesecoachingschoolsa ractandenrolmorestudents
thantheycancaterto.Asaresultofthisnumberofstudentsperclassreachashighas40.Thestudent
teacher ra o is too low. As result of this personal a en on is not given and cannot be given to every
student.
TheDistrictForumfurthercitedthejudgmentoftheStateConsumerDisputesRedressalCommission,Delhi
in
Appeal
No.FA569/2005
in
Registrar,
The State Commission also directed the Pe oner to deposit Rs.25,000/ in the State Consumer Welfare
LegalAidwithin15daysforlingamisconceivedandmisdirectedappeal.Itfurtherdirectedthatalltraining
impar ngins tuteswhichprepareastudentforentranceexamina onsshould,atthemostchargetui onfeefor
threemonthsinadvanceinacourseortrainingforoneyearandsixmonthsforacourse/trainingforoverone
yearandthatanyviola onshouldbevisitedwithheavypuni vedamagesandsentenceofimprisonmentorne
asprovidedunderSec on27oftheConsumerProtec onAct,1986.
Hence,thepresentrevisionpe on.
Par eswererepresentedbytheirrespec veCounselswhomadeoralsubmissions.Respondentappearing
inperson reiterated that the Respondents daughter had no op on but to leave the course midway because
of
bonadeand
genuine
reasons
par cularly
the
unsa sfactory
services
provided
by
the
Pe oner/Ins tute.UnderthecircumstancesitwasnotfaironthepartofthePe oner/Ins tutetodeclinethe
request for refund of the advance amount paid for the course. Counsel for Respondent pointed out that the
ma er pertaining to advance payment of fees and its consequences have been squarely covered by
theHonbleSupremeCourtinitsjudgmentinIslamicAcademyofEduca onVs.StateofKarnataka(2003)6
SCC696whereintheApexCourtinteraliaobservedasfollows:
It must be men oned that during arguments it was pointed out to us that some educa onal
ins tu onsarecollec ng,inadvance,thefeesfortheen recoursei.e.foralltheyears.Itwassubmi ed
that this was done because the ins tute was not sure whether the student would leave the ins tute
midstream.Itwassubmi edthatifthestudentle thecourseinmidstreamthenfortheremainingyears
the seat would lie vacant and the ins tute would suer.In our view an educa onal ins tu on can only
chargeprescribedfeesforonesemester/year,ifanins tu onfeelsthatanypar cularstudentmayleave
in midstream then, at the highest, it may require that student to give a bond/bank guarantee that the
balancefeesforthewholecoursewouldbereceivedbytheins tuteevenifthestudentle inmidstream.
If any educa onal ins tu on has collected fees in advance, only the fees of that semester/year can be
used by the ins tu on. The balance fees must be kept invested in xed deposits in
ana onalisedbank(emphasissupplied).Asandwhenfeesfalldueforasemester/yearonlythefeesfalling
due for that semester/year can be withdrawn by the ins tu on.The rest must con nue to remain
deposited llsuch methattheyfalldue.Attheendofthecoursetheinterestearnedonthesedeposits
mustbepaidtothestudentfromwhomthefeeswerecollectedinadvance.
This ruling of the Supreme Court is very much relevant in the instant case and, therefore, following the
principleslaiddowninthiscase,thePe onersareobligedtoreturntheadvancefeesfortheperiodwhenthe
studentdidnota endthecourse.
LearnedSr.CounselforPe oner, Mr.Kailash Vasudev, on the other hand in his detailed oral submissions
contended that the judgment of the Apex Court inIslamic(supra) is not applicable in this case because the
Pe oner/Ins tute is not an educa onal ins tu on since it imparts only coaching services which services have
been separately dened under Sec on 65, Clause (26) and (27) of the Finance Act, 1994 clearly indica ng that
theseins tutesarenotregulareduca onalins tu onsandunlikeeduca onalins tu onstheyarenotregulated
by statutes like the All India Council of Technical Educa on(AICTE), Secondary School Board etc. nor do these
ins tu onsissuecer cateofprociency/diplomaetc.Thesecoachingcentresunlikeeduca onalins tu onsalso
do not receive grants or aid of any nature from either the Government or other authori es and are privately
funded ins tu ons running strictly on commercial basis. Counsel for Pe oner further contended that in the
presentcase,Respondenthadacceptedthetermsandcondi onsofadmissionincludingpaymentofadvancefees
and it thus, becomes a contractual agreement between the par es which cannot be violated in a whimsical
manner. In this connec on, Counsel for Pe oner cited orders of the Honble Supreme Court inTamil Nadu
HousingBoard&Anr. Vs. Sea Shore Apartment Welfare Associa on AIR 2008 SC 1151wherein it has been
ruledthatitisnotfortheForaundertheActtoenterintothepricexa onortoreopenaconcludedcontract
with a view to ge ng back a part of the price paid and of which benet was taken. Similarly,
inT.V.SundaramIyengarII(2003)CPJ176(NC),theNa onalCommissionhadheldthattheconsumerforumhave
no jurisdic on to strike down a condi on in a contract or to rewrite the same. Counsel for Pe oner further
averredthatSupremeCourtinPolymatIndia(P)Ltd.&Ors.Vs.Na onalInsuranceCo.Ltd.&Ors.(2005)9SCC
174hasheldthatitisthedutyofthecourttointerpretthedocumentofcontractaswasunderstoodbetweenthe
par esstrictlywithoutalteringthenatureofthecontract.LearnedSr.CounselforPe oneralsostatedthatthe
StateCommissionwasbothunfairandunjus edinmakingsweepingadversecommentsaboutthetrainingand
coachingimpartedbyallcoachingins tu ons.Apartfrombeingunfairtothereputa onanddedicatedworkof
manyoftheseins tu onsintheinstantcase,itdidnottakeintoaccountthefactthatthePe oner/Ins tu onis
wellreputedforhavingsuccessfullycoachedalargenumberofprospec vestudentsforentranceteststohigher
educa onalins tu onsandalsothatinthepresentsetofrevisionpe ons,noallega onsperseregardingunfair
tradeprac ceordeciencyinservicehasbeenmadeagainstPe oner/Ins tutes.LearnedSr.Counselquotedthe
judgment of the Apex Court inS.R.Batra&Anr.Vs.Smt.TarunaBatra (2007) 3 SCC 169wherein it has been
observed that court do not legislate and whatever may be the personal view of a Judge, he cannot create or
amendthelawandmustmaintainjudicialrestraint.Keepinginviewthespiritoftheaboveruling,Counselfor
Pe onerrequestedthattheunfairobiterdictumcontainedintheStateCommissionsordermaybesetasideas
alsodamagesofRs.25,000/imposedonaccountoftheappealthatPe onerledbeforethatCommission.
WehavecarefullyheardthesubmissionsmadeatlengthbythelearnedCounselsrepresen ngthepar es
and have also considered the en re evidence on record. The facts pertaining to the admission of the
RespondentswardstothePe oner/Ins tutes,theirleavingtheseins tu onsbeforecomple ngthecourseson
variousgroundsandtherequestofRespondentsseekingrefundofthepartofthefeeswhichwasnotagreedto
by the Pe oner/Ins tute are not in dispute. The issues for decision before us are whether the
Pe oner/Ins tute in view of the judgment of the Honble Supreme Court in Islamic(supra) were jus ed in
demanding advance payment of fees for the en re course period and refusing to pay the same by ci ng
contractualagreementandbecausetheywerenoteduca onalins tu onsand,therefore,theabovejudgmentof
theHonbleSupreme Court was not applicable to them.The other issue raised by the Counsel for Pe oner is
whetherthiscasecomeswithintheambitandscopeoftheConsumerProtec onAct,1986.
Sofarastherstissueisconcerned,eventhoughinaverynarrowtechnicalsense,forreasonspointedout
bytheCounselforPe onerinhisoralsubmissions,coachingins tu onsmaynotbeconven onaleduca onal
ins tu onsbutsincetheyprovidecoachingandtrainingtostudentsofaneduca onalnaturetoequipthemfor
higher studies in specialized educa onal ins tu ons, the same principles that apply to educa onal ins tu ons
wouldalsoapplytotheseins tu onsinrespectofthefeeschargedbythemincludingadvancefees.Inanycase,
Respondents are consumers and the Pe oners are the service providers.Pe oners are rendering service for
considera onandfallwithinthepurviewofConsumerProtec onAct,1986.ThejudgmentoftheSupremeCourt
would,thus,overrideanybilateralagreementbetweenthepar es.Weare,therefore,oftheconsideredview
that respec ully following the judgment of theHonbleSupreme Court, the Pe oner/Ins tute could not have
charged full advance fees for two years and could have charged prescribed fees for one semester/year.In the
instantcases,sincePe oner/Ins tutesdonotfollowthesemestersystem,theycouldonlyhavechargedadvance
feesforoneyear.Inviewofthesefacts,theRespondentsareen tledtogetrefundofthefeesa erdeduc ng
thenonrefundableservicetaxfortheuna endedsecondyearofthecourse.
Regardingtheconten onofthePe onersthatthesecasesdonotfallwithintheambitandscopeofthe
ConsumerProtec onAct,1986becausethesecomplaintshavenotbeenmadeongroundsofdeciencyinservice
beforetheDistrictForum,wendthatthisconten onisnotsustainable.Intherstplace,thecomplaintswere
made on specic grounds of deciency in service before the District Forum and secondly as stated in the
abovepara,asperSec on2(d)(ii) of the Consumer Protec on Act, 1986, the Respondents are consumers who
sought to avail of services for a considera on and the Pe oner/Ins tute is very much a provider of these
servicesandthusthesecasesareconsumerdisputeswithinthemeaningoftheConsumerProtec onAct,1986.
The State Commission, as pointed by the learned senior Counsel for Pe oner has made sweeping and
adverse comments against all coaching ins tutes by terming them as commercial shops and sta ng that they
indulge in highly unethical, unscrupulous and unfair trade prac ce to earn undue prots by exploi ng students
andhasthusdirectedthatanyviola onofitsorderwouldbevisitedwithheavypuni vedamagesandsentence
of imprisonment or ne as provided under Sec on 27 of the Consumer Protec on Act. Further, the State
Commission has imposed damages of Rs.25,000/ on Pe oner/Ins tutes for having led misconceived and
misdirectedappeal.
While some of these ins tu ons may be indulging in unethical, unscrupulous prac ces and exploi ng
students, there are also many others which render very useful service by counseling, training and successfully
equipping students for admission to higher educa onal ins tu ons. It is perhaps because of this reason that
thereissuchalargedemandforadmissionintogoodcoachingins tutes.So far as the present Pe oners are
concerned, we note that only in one case has the Respondent made allega ons about the somewhat
unsa sfactoryserviceprovidedbythePe oner/Ins tutebutnoevidencepersewasproducedtocorroborate
this allega on and the Respondents main request had been conned to refund of advance fees. Therefore,
withoutcredibleevidencetobacktheseallega ons,weareoftheviewthattheStateCommissionshouldhave
desistedfrommakingadversecommentsofsuchageneralandsweepingnatureaboutallcoachingins tu ons
and also imposing damages of Rs.25,000/ for ling misconceived and misdirected appeal on the
Pe oner/Ins tute.ThePe onerswereverymuchwithintheirrightstoseeklegalremedyprovidedtothem
under the Consumer Protec on Act, against orders by which they were aggrieved and we are unable to
comprehendhowtheStateCommissionconcludedthattheappealofthePe oner/Ins tutewasmisconceived
andmisdirected.We,therefore,setasidetheadverseobiterdictumoftheStateCommissionagainstcoaching
ins tu onsincludingagainstthePe oner/Ins tutesasalsothepuni vedamagesofRs.25,000/.
Tosumup,therevisionpe onsaredismissedandtheordersoftheStateCommissionareupheldwiththe
followingmodica ons:
(i)ThePe oners/Ins tutesaredirectedtorefundthefees(excludingtheservicetax)fortheunu lized
period i.e. the second year to all the Respondents with interest @ 6% per annum, Rs.5,000/ as
compensa ontowardsmentalagonyandRs.3,000/asli ga oncostsineachcase.
(ii) The State Commissions obiter dictum as well as damages of Rs.25,000/ imposed on the
Pe oners/Ins tutes,issetaside.
Sd/
...
(ASHOKBHANJ.)
PRESIDENT
Sd/
..
/sks/
(VINEETARAI)
MEMBER