Date of Filing: .15.12.2018

                                                                                             Date of order :   04 .06.2020

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM – I,        

                                                           HYDERABAD

                                                            P r e s e n t­

                      HON’BLE  Sri  P.VIJENDER, B.Sc. L.L.B., PRESIDENT

                 HON’BLE Sri  K.RAM MOHAN, B.Sc. M.A L.L.B.,   MEMBER

         HON’BLE Smt. CH. LAKSHMI PRASANNA, B.Sc. LLM.  (PGD (ADR)  MEMBER

                          On this the  Thursday, the  4^th      day of June , 2020

                                                       C C No.482/2018

Between:

Mr. Veunath Chigullapalli

S/o. Sri Hanmantha Rao Chigulllapalli

Age 47 Years, R/o. 24 Orion Villas,

Raidurgam,  Hyderabad – 500 032.                                         Complanant 

And

Sudhakar YN/Current  Branch Manager,

Representative of FIIT – JEE Junior College

located at  5-9-14/B, Saifabad,

Hydwerabad, Telangana – 500 063.                                          Opposite party.

Counsel for the Complainant        :  Party in person

Counsel for the opposite parties   : Mr.  Rupendra Mahendra

                                                      O R D E R

(By  Smt. CH. Lakshmi Prasanna,B.Sc. LLM (PGD ( ADR)., Member on behalf

                                                     of  Bench

1. The complainant has filed this complaint Under Section 12 of the Consumer Protection Act, 1986 against the opposite parties with prayer to direct the opposite party to refund the advance fees amount of Rs.2,05,209/- to the complainant and to pay compensation of Rs.2,00,000/- towards mental agony suffered by the complainant.
2. As per the averments of the complainant,

The complainant paid an amount of Rs.2,05,209/- ( through seven Demand Drafts)in the month of January 2017, towards his son's admission into the Pinnacle 2 Year Integrated programme offered by FIITJEE, the opposite Party. However, due to personal reasons and possible relocation, the complainant's son could not join the course-classes scheduled to commence from 1/6/2017 and intimated the same to the Opposite Party through a Letter dt.31/5/2017 ( an e-mail of the same and a registered post being sent to the Opposite Party)  seeking refund of the advance admission fees of Rs.2,05,209/- paid by the complainant.   On receiving a reply Ref.No.R/CRP/2017-18/04 dt.8/6/2017 stating that the fees is non-refundable as per the terms and conditions of the Declaration/Enrolment Form, the present complaint is filed seeking appropriate relief after pursuing through several representations to the Opposite Party.

3. The Opposite parties in their written version, while admitting the factual aspects of the case that the complainant's son was given admission to the Pinnacle 2 Year integrated Course based on entrance test and on payment of Rs.2,05,209/- towards admission fees, denied the allegations of deficiency of service and unfair trade practice on their part and stated that the complainant is not entitled for refund of fees as per the Declaration /enrolment form signed by the complainant consenting to the terms and conditions therein.
4. In the enquiry, the complainant filed his evidence affidavit reiterating the averments in the complaint supporting his claim with 4 documents-the correspondence with the Opposite Party regarding withdrawal of his son from the course and requesting refund of fees.

For the Opposite party, Evidence Affidavit of the General Manager, Authorized Representative of the Opposite Party was filed along with 2 documents including the Enrolment Form and Resolution of the Governing Body of the Society.

Both the parties filed various judgments of the National Commission and Supreme Court supporting their oral and written arguments.

5. Based on the facts and material brought on record, and oral and written arguments submitted by both the parties, the following points have emerged for consideration:

• Whether the complaint is maintainable under the Consumer Protection Act?
• Whether the complainant could make out the case of deficiency of service/unfair trade practice on the part of the Opposite party?
• Whether the complainant is entitled for the claim/compensation made in the complaint?
• To what relief?

6. Point No.1:-Relying on a catena of judgments including, FIITJEE vs K.Udaya Geetha . FIITJEE vs Lanka Sadanand applying the ratio laid down in Maharshi Dayanand University vs Surjith Kaur (2010 (11) SCC P.159, P.T. Koshy v. Ellen Charitable Trust, (2012) 3 CPC 615 (SC), the Opposite Party raised the preliminary objection of maintainability holding that ‘education is not a commodity and the complainant-student is not a consumer and hence educational institutions do not come under the purview of the Consumer Protection Act.

Whereas, the complainant pleaded his case relying on the decision R.P. No.1976 of 2010 of National Commission in FIITJEE vs Mr. Rohit Binjarika rep.by his father Sri Naresh Binjarika and Fiitjee Ltd. vs Vikram Seth (Minor)  decided by Chandigarh CDRC on 5 April, 2019 upholding the rights of the student as a consumer and the entitlement of compensation to them in the event of deficient services or unfair trade practices.

There are two streams of opinion in case law on the question whether student is a ‘consumer’ and education a ‘service’ under the Consumer Protection Act, 1986. One- As relied by the Opposite Party on the view of the Hon'ble Supreme court’s  in P.T. Koshy & Anr. v. Ellen Charitable Trust & Ors. & Maharshi (Dayanand University v. Surjeet Kaur, : 2010 (11) SCC 159 Special Leave to Appeal (Civil) No. 22532 of 2012, “….education is not a commodity. Educational institutions are not providing any kind of service, therefore, in matter of admission, fees, etc., there cannot be a question of deficiency of service. Such matters cannot be entertained by the Consumer Forum under the Consumer Protection Act, 1986". However, there are case law on the contra showing  that imparting of education by an educational institution for a consideration falls within the ambit of ‘service’ under the Consumer Protection Act and if there is a deficiency in service or an unfair trade practice, the institution shall be liable to compensate loss to the consumer.{ M. Ravindranath and other v. The Principal, Mercy College, Plakkad, 1986- 2002 Consumer 5818 (NS). Sonal Matapurkar v. Sri S. Nijalingappa Institue of Dental Service and another, 1997 (2) CPR 12; K.S. Satheesan v. A. Shanmuga Sundaram, 1998 (1) CPR 470. N. Sreedharan Nair v. Registrar, University of Kerala, 2002 NCJ 28}. While Clarification, however, in this field by a Supreme Court judgment in an appropriate case will be of  immense help  to  the students consumer community and legal fraternity because of the apparent conflict regarding statutory and non-statutory functions of the educational institutions, considering  a student to be a ‘consumer’ and education also ‘service’ when educational institutions are performing administrative functions of issuing marks sheets, certificates etc., this forum is of the view that the case on hand comes under the purview of The Consumer protection Act for three reasons viz,

a) remedy available under the CP Act, 1986 is in addition to the remedies available under the other statute and the availability of alternative remedies is not a bar to the entertaining of a complaint filed under Consumer Protection Act  as categorically stated by the Supreme Court in the case of Virendar Jain v. Alaknanda Cooperative Group Housing Society Limited and Others (2013) 9 SCC 383).

b) that the Institutions rendering Education including Vocational courses and activities undertaken during the process of pre-admission as well as post-admission and also imparting excursion tours, picnics, extra co-curricular activities, swimming, sport, etc. except Coaching Institutions, will, therefore, not be covered under the provisions of the Consumer Protection Act, 1986, as opined by NCDRC in Manu Solanki & Ors. v. Vinayaka Mission University (2020 SCC Online NCDRC 7, decided on 20-01-2020],It may also not be out of place to mention that the Opposite Party has no statutory regulations/backing. It is a private Institute, not discharging any social obligation.

c) The Opposite Party is not an Educational Institution as per Section 65(27) of the Finance Act, 1994, "Commercial Training or Coaching Centre" means any institute or establishment providing commercial training or coaching for imparting skill or knowledge or lessons on any subject or field other than the sports, with or without issuance of a certificate and includes coaching or tutorial classes but does not include preschool coaching and training center or any institute or establishment which issues any certificate or diploma or degree or any educational qualification recognized by law for the time being in force. The provisions of the Service Tax as contained in Chapter V of the and 65 are immensely germane to the issue involved in the present complaint. The Services given in the Negative List under are not chargeable to Service Tax. Category 12 of the said section is with regard to Services relating to Education. Under the said category the following services are covered in the Negative List a. Pre- school education and education upto higher secondary school or equivalent; b. Education as a part of the prescribed curriculum for obtaining a qualification recognized by law for the time being in force; c. Education as a part of an approved vocational education course. On interpretation of the meaning of Education as a part of the prescribed curriculum for obtaining a qualification recognized by law it refers to educational services as are related to delivery of education as a part of the curriculum that has been prescribed for obtaining a qualification prescribed by law. It is important to understand that to be in the Negative List the service should be delivered as part of the curriculum. Conduct of Degree Courses by colleges, universities or institutions which lead to the grant of qualifications recognized by law would be covered. Training given by private coaching institutes are not covered in the negative list, as training does not lead to grant of a recognized qualification. Further, Clauses 26 and 27 of Section 65 of Chapter V of the Finance Act, 1994 relating to SERVICE TAX containing the Definitions reads as under In this Chapter, unless the context otherwise requires, commercial training or coaching means any training or coaching provided by a commercial training or coaching Centre; (27) commercial training or coaching center means any institute or establishment providing commercial training or coaching for imparting skill or knowledge or lessons on any subject or field other than the sports, with or without issuance of a certificate and includes coaching or tutorial classes; From the above it is clear that the educational institutions other than the Private Training/Coaching Institutions are different from the Private Training/Coaching Institutions preparing the students for cracking various competitive examinations. The latter are not educational institutions since they provide only training & coaching services which have been separately defined under thereby 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. The intent of the Legislature to exclude the training and coaching institutions from the regular educational institutions that are related to delivery of education as a part of the curriculum that has been prescribed for obtaining a qualification prescribed by lawis explicitly brought out on comprehensive analysis of the term general term Educational Institutions. Further, on bare perusal of the documents filed on record by the parties to the present list viz., copy of the Enrolment Contract, copy of the Fee Payment Plan, Copy of the Enrolment Report it is evident that the respondent institute is registered with the Service Tax Department of the Government and has charged Service tax at the prescribed rate on the fee it received from the complainant for the course undertaken. In Dr.(Mrs.) Minathi Raths Case (Supra) it is also contended by the Ld.Cl. for the FIIT JEE Institute that these training & 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. The aforementioned admission of the respondent and its contention in the Minathi Raths Case (Supra) and Vikram Seth Case that the ruling of Islamic Academy was not applicable to it since it is not an educational institute but a private coaching institute leaves no room for doubt that it is a corporate entity running its business of providing training & coaching programs wholly on commercial basis for earning profit in contrast to the regular educational institutions that are related to the delivery of education as a part of the curriculum that has been prescribed for obtaining a qualification prescribed by law. If the Opposite Party institute cannot be placed at parity by any stretch of imagination to regular educational institutions in order to apply the judgment of Islamic Academy Education case (Supra) to decide matters relating to advance payment of fees the Opposite Party cannot be allowed to take different and totally contradictory stand about its status in different cases against a similarly placed consumer qua the same issue to escape liability in either circumstance. The training & coaching services provided by the respondent, since being chargeable to Service Tax undoubtedly fall within the definition of the term Service as contained in Section 2(o) of the  and are thus, squarely covered by the said Act of 1986.

d) Further on the objection raised by the Opposite Party regarding the arbitration  clause, Supreme Court has expounded that, “Arbitration clause cannot oust jurisdiction of consumer courts notwithstanding the amendments made to Section 8 of the Arbitration Act" while agreeing with NCDRC’s holding in M/S. EMAAR MGF LAND LIMITED vs AFTAB SINGH (I (2019) CPJ 5 (SC)

7)         Point No.2:-The core issue for determination is whether the clause in the Enrolment Form/Undertaking regarding non-refund ability of advance fees is an unfair practice on the part of the Opposite Party.

in Brilliant Tutorials Pvt. Ltd. Vs. Ashwani Verma, 2010 (4) CPJ 396, the Hon'ble National Commission while placing reliance on the judgment of Hon'ble Apex Court in Islamic Academy of Education and Another Vs. State of Karnataka and others, (2003) 6 SCC 697, held that charging fees in advance beyond the current semester/year would certainly amount to unfair trade practice and the same cannot be countenanced. In Islamic Academy of Education and Another's case (supra), the Hon'ble Apex Court had expressed unhappiness with educational institutes charging the entire fees upfront and had said that students should only be asked to pay fees for a semester/year to begin with. The argument of FIIT-JEE that the ruling of Islamic Academy was not applicable to it since it is not an educational institute but only a coaching institute was not negated by the Hon'ble National Commission and order of the State Commission was upheld, directing FIIT-JEE to refund the fees. We may add here that Hon'ble Supreme Court of India condemned the practice of the educational institutes of collecting fee in advance for the entire course i.e. for all the years and also debarred them to claim any interest on the fee deposited. Further the Hon'ble National Commission in  FIIT JEE Ltd. Vs. Dr.Minathi Rath, 2012(1) CPJ 194 while considering the revision petition on identical facts, as involved in the present complaint, has categorically held that FIIT JEE Ltd. could not charge full advance fee for Two years and held the complainant entitled for receipt of refund of fee taken in advance from him by FIIT JEE.

Further, it is worth mentioning the opinion of Hon'ble Supreme Court of India in Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, Civil Appeal No.12238 of 2018 decided on 02.04.2019 wherein it was held that incorporation of one-sided clauses in a builder-buyer agreement constitutes an unfair trade practice as per Section 2(r) of the Consumer Protection Act, 1986. The Bench was considering an appeal against the order of Hon'ble National Consumer Disputes Redressal Commission, New Delhi wherein it was held that the clause relied upon by the builder to resist the refund claims made by the co0mplainant buyer, were wholly one sided, unfair and unreasonable and could not be relied upon. The Hon'ble Apex court held in Paras 6.7 and 7 of the judgment as under:-

"6.7  A term of a contract will not be final and binding, if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder. The contractual terms of the Agreement dated 08.05.2012 are ex-facie one sided, unfair and unreasonable. The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2(r) of the Consumer Protection Act, 186 since it adopts unfair methods or practices for the purpose of selling the flats by the Builder"

The administrative Law by Wade, 5th Ed. at p. 513 in Chapter 16, Part IV dealing with remedies and liabilities, stated thus:

Freedom of contract is of little value when one party has no alternative, but, accepting a set of terms proposed by the other or doing without the goods or services offered, his option would be either to accept the unreasonable or unfair terms or forgo the service for ever. With a view to have the services of the goods, the party enters into the contract with unreasonable or unfair terms contained therein and would be left with no option but to sign the contract. An unfair and irrational clause in a contract is unjust and amenable to judicial review.

Therefore, on the issue qua non-refund of fee by the opposite party - Institute on withdrawing from the Course even before the course commenced; irrespective of the fact of consent and declaration/undertaking given by the student/his or her parents (which are abinitio void in view of law settled by Hon'ble Supreme Court of India in Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan), forfeiture of the entire fee paid by the complainant and not refunding a single penny, on withdrawing from the Course even before the course commenced, is not only unjustified but amounts to unjust enrichment. Accordingly, this point is answered in favour of the complainant,

7. Point No.3:- Apparently, the complainant's son could not join the course-classes scheduled to commence from 1/6/2017 due to personal reasons and possible relocation, and the same was intimated to the Opposite Party through a Letter dt.31/5/2017 ( an e-mail of the same and a registered post being sent to the Opposite Party). The argument of the Opposite Party that the vacancy created by the complainant was never filled up and remained vacant, cannot be read against the complainant and the Opposite Party cannot be allowed to be on an undue advantageous position, for the simple reason that the Enrolment Form, even if considered as a deemed contract which has not been individually negotiated shall be regarded as unfair if one of the parties to such contract is placed at an unreasonable disadvantage contrary to principles of good faith , causing significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer/the complainant herein. Also, in the absence of any evidence on record to show that the seat given to the complainant's son had gone vacant due to withdrawal of his son before the course commenced, and that the complainant's seat in said course remained vacant throughout the course duration, it is settled law that unless there is proof as to entitlement to forfeit the amount on account of loss being caused there cannot be a forfeiture, Hence the forfeiture of the entire fee  by the Opposite Party and not refunding the same, on the  complainant's son withdrawing from the said course before it commenced, is not only unjustified but amounts to unjust enrichment. Accordingly the complainant is entitled for the fees of Rs.2,05,209/- paid in advance for the course owing to his withdrawal from the programme before it commenced. However, in the absence of any malafides attributable to the Opposite Parties, the consumer is not entitled to seek compensation for mental agony.

In view of the above discussions, the complaint is partially allowed directing the  Opposite Party to refund the advance fees amount of Rs.2,05,209/- to the complainant within 45 days from the date of receipt of the order, failing which the above mentioned amount shall carry interest @9% per annum from the date of this order till actual payment.

9.       Point No.4:-    In the result,  the complaint is partially allowed directing the            Opposite Party to refund the advance fees amount of Rs.2,05,209/- to the complainant within 45 days from the date of receipt of the order, failing which the above mentioned amount shall carry interest @9% per annum from the date of this order till actual payment.

            Dictated to steno, transcribed and typed by her, pronounced  by us on this the  4^th      day of June, 2020.

MEMBER                                   MEMBER                                        PRESIDENT                                             

APPENDIX OF EVIDENCE

WITNESS EXAMIND

                                                               Nil

EXHIBITS  MARKED

For the Complainant:

Ex.A1 –  Letter to the opposite parties  from the complainant dt.31.5.2017.  

Ex.A2 –WhatsApp Message seeking status, dt.8.6.2017

Ex.A3 – Response received from the opposite dparty7 on 8.6.2017

Ex.A4 – Email serving 30 days of notification, dt.4.11.2018

For  the Opposite parties: 

Ex.B1 – Copy of enrolment  Form

Ex.B2 – Copy of resolution passed by the Governing Body dt.1512.2018

MEMBER                                   MEMBER                                        PRESIDENT