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Fiitjee Ltd. v. Harish Soni
Factual and Procedural Background
The complainant's daughter enrolled in a two-year integrated coaching programme offered by the petitioner company, FIITJEE Ltd., aimed at students preparing for IIT and other entrance examinations. The complainant paid an advance fee of Rs. 1,23,464/- for the entire course. After one year, dissatisfied with the coaching, the daughter discontinued the programme. The complainant sought a refund of the proportionate fee for the remaining one year, along with interest and compensation. The petitioner company refused the refund, relying on a term in the enrollment form stating the fee was non-refundable if the student left mid-course.
The complainant filed a complaint with the District Forum, which directed the petitioner to refund 50% of the fee, pay Rs. 2,000/- as compensation, and Rs. 1,000/- as litigation cost. The petitioner appealed to the State Commission, which modified the order to refund the proportionate fee after deducting service tax, with 7.5% interest per annum and Rs. 10,000/- litigation cost. The petitioner then filed a revision petition before the National Consumer Disputes Redressal Commission (NCDRC).
The revision petition was heard by a two-member Bench of the NCDRC. Honble Mr. Justice K.S. Chaudhari allowed the revision petition, dismissing the complaint, while Honble Dr. B.C. Gupta dissented. The matter was referred to Honble Mr. Justice V.K. Jain as per directions under Section 20(i)(iii) of the Consumer Protection Act to resolve the difference.
Legal Issues Presented
- Whether the complainant is entitled to a refund of the fee for the remaining one year of the two-year integrated coaching course after discontinuation.
- Whether a term in the enrollment form stipulating non-refund of fees upon mid-course withdrawal constitutes an unfair trade practice.
Arguments of the Parties
Complainant's Arguments
- The complainant sought refund of the proportionate fee for the unutilized period after discontinuation due to dissatisfaction with the coaching.
- Claimed entitlement to interest and compensation for deficiency in service.
Petitioner Company's Arguments
- Denied any deficiency in service provided.
- Relied on the enrollment form clause that the coaching fee is non-refundable even if the student leaves mid-way.
- Argued that no other student was admitted in place of the complainant’s daughter, thus refunding would cause financial loss.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| FIITJEE Ltd. Vs. S. Bala Vignesh (Revision Petition No. 2684/2014) | Enforcement of fee refund policy based on enrollment form terms and conditions; refusal to refund fee if no replacement student admitted. | The court relied on this precedent to hold that the complainant is bound by the non-refundable fee clause and is not entitled to refund if the seat vacated is not filled, as refund would cause financial loss to the institute. |
Court's Reasoning and Analysis
The court examined the terms and conditions in the enrollment form, which clearly stated that the fee was payable in full under all circumstances and non-refundable even if the student discontinued. The rationale was that the coaching institute incurs fixed costs for infrastructure and faculty based on the total number of admitted students and does not fill vacancies created mid-course.
The court noted that the complainant did not dispute that no replacement student was admitted in the vacated seat. Refund in such circumstances would cause financial loss to the petitioner, as it would receive fees from fewer students than planned but still bear the full cost of infrastructure and faculty.
The court distinguished cases where a replacement student is admitted, in which case refund might be justified since the institute suffers no financial loss. The court also addressed the allegation of unfair trade practice, holding that refusal to refund under these circumstances does not constitute an unfair trade practice.
After considering the dissenting opinion, the majority upheld the view that the complainant is not entitled to refund for the remaining period.
Holding and Implications
The revision petition filed by the petitioner company is allowed and the complaint is dismissed with no order as to costs.
The direct effect of this decision is that students who discontinue a coaching programme mid-way are not entitled to a refund of fees for the unutilized period if the institute does not admit a replacement student. The ruling emphasizes the binding nature of contractual terms regarding fee payment and the financial planning of coaching institutes. No broader precedent on unfair trade practices beyond these facts was established.
Honble Mr. Justice K.S. Chaudhari, Presiding Member. Honble Mr. Justice K.S. Chaudhari, Presiding Member sent dissenting judgment. As Members of the Bench differ in their opinion, the matter may be placed before Honble President, NCDRC under Section 20(i)(iii) of the C.P. Act for appropriate directions. The legal question is: Whether complainant is entitled to refund of fee for a period remaining one year from two years integrated course. (K.S. CHAUDHARI) PRESIDING MEMBER DATED : 15.09.2015 JUSTICE V.K. JAIN, PRESIDING MEMBER The daughter of the complainant/respondent took admission in a two years integrated coaching programme of the petitioner company, meant for the students seeking to take admission in IITs and other institutions holding entrance examinations for admission thereto. The complainant paid advance fee of Rs. 1,23,464/- which was the fee prescribed for the entire two years integrated programme. She however, left after one year of coaching allegedly on the ground that she was not satisfied with the coaching provided to her. The complainant then sent a notice to the petitioner company seeking refund of the proportionate fee with interest and compensation. Since no such refund was forthcoming, he approached the concerned District Forum by way of a complaint. -10-
2. The complaint was resisted by the petitioner company primarily on the ground that there was no deficiency in rendering service by it and it had been agreed, at the time of granting admission to the daughter of the complainant, that the coaching fee would be non-refundable in the event of the student leaving the course mid-way.
3. The District Forum directed the petitioner company to refund 50% of the coaching fee to the complainant. The petitioner company was also directed to pay compensation of Rs. 2000/- and the cost of litigation quantified at Rs. 1000/- to the complainant. Being aggrieved, the petitioner company approached the concerned State Commission by way of an appeal. The State Commission modified the order passed by the District Forum to the extent that the petitioner company was directed to refund proportionate fee after deducting the service tax for the unutilized period alongwith interest @ 7.5% per annum and the cost of litigation quantified at Rs. 10,000/-. Being aggrieved from the order passed by the State Commission, the petitioner company approached this Commission by way of this revision petition.
4. The revision petition was heard by a Bench of Honble Mr. Justice K.S. Chaudhary and Honble Dr. B.C. Gupta. Vide order dated 17.07.2015, Honble Mr. Justice K.S. Chaudhary allowed the revision petition and dismissed the complaint, whereas Honble Dr. B.C. Gupta ordered dismissal of the revision petition, with no order as to cost. The legal question on which the Honble members differed was formulated as under: Whether complainant is entitled to refund of fee for a period remaining one year from two years integrated course. The point of difference has been referred to me in terms of the order of the Honble President.
5. A similar issue came up for consideration of this Commission in revision petition no. , decided on 09.01.2015. In the above referred2684/2014, FIITJEE Ltd. Vs. S. Bala Vignesh case, the complainant deposited a sum of Rs. 91,875/- towards part fee of the coaching course on 15.04.2008. He however, discontinued the coaching on 31.05.2008, on account of his illness. Therefore, he sought refund of the coaching fee deposited by him. The petitioner company having failed to do so, a complaint before the District Forum was filed by him seeking refund of the fee deposited by him alongwith compensation and cost of litigation. The District Forum allowed the complaint and directed proportionate refund with compensation and the cost of litigation. Being aggrieved from the order of the District Forum, the petitioner company approached the concerned State Commission by way of an appeal. The State Commission reduced -11- the compensation but maintained the rest of the order passed by the District Forum. Being still dissatisfied, the petitioner company approached this Commission by way of a revision petition. Allowing the revision petition, this Commission inter-alia observed and held as under:
5. The important information contained in the enrollment form signed by the complainant as well as his father, at the time the complainant took admission in the coaching course, to the extent it is relevant, reads as under: FIITJEE starts making arrangements of infrastructure, faculty & other resources about six months before commencement of financial year. FIITJEE admits students as per its capacity plans (subject to unforeseen circumstances & usual organizational risks) therefore each student taking admission has to pay complete fee under all circumstances
i.e. ever if he/she discontinues for any reason whatsoever or parents/guardians be transferred. Not all students who sit in our admission test are offered admission, therefore, you & parents have to be very sure before taking admission as you have to pay complete fee under all circumstances. Once a class starts FIIT JEE does not admit any students. Therefore, any vacancy created by a student leaving cannot be filled up. Since FIIT JEE has to source infrastructure, faculty, etc., in advance, loss of fess of students leaving after taking admission will compel the institute to enhance fees for next batch of students which is unfair to them. Therefore, students/parents must clearly understand this important aspect and take admission only if they are fully satisfied. The declaration signed by them when the complainant took admission to the coaching course to the extent it is relevant reads as under: I/We the father/mother/legal guardian and/or the student hereby severally and jointly declare that I/We have read and understood all the clauses contained in the Declaration on the Enrollment Form together with the above amendment and agree to abide by them without any reservation or ambiguity.
6. It is, thus, evident that as per the terms and conditions contained in the enrollment form, the student taking admission with the petitioner is not entitled to refund of any part of the fee paid by him, irrespective of the ground on which he withdraws from the said -12- coaching course. Having taken admission on the basis of the aforesaid terms, the complainant is bound by the said terms and consequently he cannot claim any refund or proportionate refund of the coaching fee deposited by him.
8. This is not the case of the complainant that after his withdrawing from the coaching class, the petitioner had admitted another student in his place. Thus, it is evident that in case the fee deposited by the complainant is refunded to him, the petitioner would suffer financial loss since it would get fee from 43 students as against a batch of 44 students, though it had planned its infrastructure including faculty members, class rooms, etc. and incurred expenditure on the premise that all the students taking admission in a particular batch would pay the requisite fee. Had the petitioner admitted another student in place of the complainant, there could have been justification for proportionate refund of the fee which the complainant had deposited with it. But, directing refund of fee paid by the complainant when the petitioner had only 43 students left in the batch as against admitted strength of 44 students, it would be unfair to the petitioner to direct it to refund the said fee. The learned counsel for the petitioner states that no student in place of the complainant was admitted at any point of time during the duration of the course in which admission was taken by him. We direct the petitioner to file an affidavit of its Managing Director in terms of the aforesaid statement within two weeks from today.
10. As regards the term stipulating that the student withdrawing from the coaching class midway will not be entitled to seek any refund of the fee deposited by him being an unfair trade practice, we are of the view that in a case where the seat vacated on account of withdrawal by a student during the currency of the course remains vacant and no other student is admitted against the vacant seat, the refusal of the coaching institute to refund the fee cannot be said to be an unfair trade practice, though, such a term may constitute an unfair trade practice in a case where the coaching institute admits a student in place of the student who withdraws midway from the coaching course and thereby suffers no financial loss.
6. The complainant has placed on record the affidavit of its Managing Director Shri Dinesh Kumar Goel, stating therein that no student was enrolled against the seat vacated by the daughter of the respondent during the tenure of the entire course, at any point of time. He has further stated that to ensure quantity education and uniform teaching standard and keeping in mind the interest of students, the petitioner company does not fulfill the vacancy created by a student who leaves the course in midway.
7. For the reasons stated hereinabove, I am of the opinion that the complainant is not entitled to refund of the fee for the remaining period of one year. -13- ( V.K. JAIN, J.) PRESIDING MEMBER DATED :- 8.10.2015 PER JUSTICE K.S. CHAUDHARI, PRESIDING MEMBER In R.P. No. 2054 of 2013 FIITJEE Ltd. Vs. Harish Soni arguments were heard on 14.5.2015 by our Bench. Judgment was dictated by Honble Dr. B.C. Gupta, Member and sent for approval of Honble Mr. Justice K.S. Chaudhari, Presiding Member. Honble Mr. Justice K.S. Chaudhari, Presiding Member sent dissenting judgment. As Members of the Bench differed in their opinion, the matter was placed before Honble President, NCDRC under Section 20(i)(iii) of the C.P. Act for appropriate directions. Honble President referred the matter to Honble Mr. Justice V.K. Jain, Member. Honble Mr. Justice V.K. Jain, Member (3 Bench) vide order dated 15.9.2015 opinedrd that the complainant is not entitled to refund of the fee for the remaining period of one year and agreed with the judgment delivered by Honble Mr. Justice K.S. Chaudhari, Member. In the light of majority judgment, revision petition filed by the petitioner is allowed and complaint stands dismissed with no order as to costs. ......................J K.S. CHAUDHARI PRESIDING MEMBER ......................J
V.K. JAIN MEMBER ...................... DR. B.C. GUPTA MEMBER -14-
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