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DIT University v. Deepak Chaudhary

State Consumer Disputes Redressal Commission

Jul 12, 2022

Judgment

Subsequent
References

CaseIQ

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Structured Summary of Opinion: First Appeal No. 126 / 2019

Factual and Procedural Background

The respondent (complainant) took admission in DIT University (the appellant/opposite party) for B.Tech. for the academic year 2013-14 and deposited Rs. 2,77,000/- towards first-year fees. After attending classes for a few days, the complainant's health deteriorated and he underwent treatment at Medanta Hospital, Gurugram, continuing thereafter, which prevented him from continuing studies. The complainant's father sent multiple applications/letters to the University (dated 30.01.2013; 07.11.2013; 07.12.2013; 09.01.2014; 07.06.2014) requesting refund of fees. On 01.02.2014 University employees had a form filled regarding withdrawal of admission and refund, but the fees were not refunded. The complainant sent a legal notice dated 28.07.2014 and then instituted a consumer complaint (No. 237 of 2014) before the District Consumer Disputes Redressal Commission, Dehradun.

The District Commission allowed the consumer complaint by order dated 05.03.2019 and directed the University to pay Rs. 1,30,000/- to the complainant together with Rs. 15,000/- towards mental agony and Rs. 3,000/- towards litigation expenses within 30 days (with interest @9% p.a. from date of institution if delayed). The University filed this first appeal under Section 15 of the Consumer Protection Act, 1986 challenging the District Commission's judgment and order.

Legal Issues Presented

Whether there exists a relationship of "consumer" and "service provider" between the respondent-complainant (student) and the appellant-University such that the Consumer Fora have jurisdiction to entertain the complaint.
Whether the complaint before the District Commission was legally maintainable and whether there was deficiency of service by the University in respect of admission/fee/refund matters.

Arguments of the Parties

Appellant's Arguments

The University does not render any "service" within the meaning of the Consumer Protection Act; therefore the consumer complaint was not maintainable.
Reliance on Bihar School Examination Board Vs. Suresh Prasad Sinha (IV (2009) CPJ 34 (SC)) — that an examination board does not offer "service" to candidates and students do not hire or avail any service from the board for a consideration.
The University acts according to University Grants Commission norms; admissions close once the academic session starts; no mid-course admissions are taken; the seat vacated by the complainant remained vacant and the complainant failed to prove the seat was filled.
As per rules the University had offered a refund of Rs. 5,000/-, which the complainant declined; the complaint is not legally maintainable and the Consumer Fora lack jurisdiction; there was no deficiency in service.

Respondent's Arguments

The respondent contended that a relationship of "consumer" and "service provider" did exist and therefore the complaint was maintainable before the District Commission.
The respondent relied upon authorities such as Khaja Educational Society and others Vs. E. Veesha Yadav and another ((2013) 1 CPC 495) where the National Commission held a student to be a "consumer" and upheld an order directing refund of fees.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Bihar School Examination Board Vs. Suresh Prasad Sinha, IV (2009) CPJ 34 (SC)	The Board is a statutory authority performing examination functions; when conducting examinations it does not offer "services" to candidates and a student does not hire or avail any service from the Board for a consideration. The examination fee is a charge for the privilege of participation, not consideration for a service.	The court relied on this principle to support the conclusion that educational/admission-related activities by the University are not "services" attracting the Consumer Protection Act; this decision formed part of the basis for holding the University not to be a "service provider".
Maharshi Dayanand University Vs. Surjeet Kaur, (2010) 11 SCC 159	Held that a student is neither a "consumer" nor is the University rendering any "service" (placing reliance on Bihar School Examination Board).	The court cited and relied upon this Apex Court decision to conclude that the appellant-University is not a "service provider" and the respondent-student is not a "consumer" for purposes of the Consumer Protection Act.
Krishan Mohan Goyal Vs. St. Mary's Academy and another, Revision Petition No. 3144 of 2016 (National Commission judgment dated 17.12.2017)	Discussed the decision in Maharshi Dayanand University Vs. Surjeet Kaur and related principles concerning whether a student is a consumer and whether an educational institution renders a service.	The court referenced this National Commission judgment as having discussed Maharshi Dayanand University; it formed part of the jurisprudential context considered by the court.
Khaja Educational Society & others Vs. E. Veesha Yadav & another, (2013) 1 CPC 495	The National Commission held that the respondent was a "consumer" within Section 2(d) of the Act and upheld an order directing refund of fees (direction to refund Rs. 8,50,000/- with interest).	The respondent relied on this authority to support the maintainability of the complaint; the court recorded this as the opposing precedent but ultimately did not adopt its conclusion for this case.
Anupama College of Engineering Vs. Gulshan Kumar and others, Civil Appeal No. 17802 of 2017 (decided 30.10.2017)	In view of Maharshi Dayanand University, educational institutions are not providing any kind of "service"; therefore matters of admission and fees cannot be regarded as deficiency in service under the Consumer Protection Act and cannot be entertained by Consumer Fora.	The court relied on this Apex Court authority (which places reliance on Maharshi Dayanand University) to support the proposition that educational matters like admission and fees do not amount to consumer grievances under the Act, and hence the District Commission lacked jurisdiction.

Court's Reasoning and Analysis

The court proceeded by first recording the admitted facts: the complainant took admission; paid Rs. 2,77,000/- for the first year; attended classes only for a few days and thereafter withdrew due to ill health; refund was sought but declined by the University. The University had asserted that admissions close after the session starts and that the seat vacated by the complainant remained vacant. The court observed that the complainant bore the burden of proving that the vacated seat was subsequently filled by the University, which the complainant failed to discharge; nothing on record showed the seat was later filled.

The core legal analysis centered on whether the relationship between a student and a University falls within the Consumer Protection Act as that of "consumer" and "service provider." The court reviewed and relied on a line of authorities from the Hon'ble Apex Court (notably Bihar School Examination Board and Maharshi Dayanand University) which hold that examination bodies and universities, when performing statutory/educational functions, do not render a "service" in the sense contemplated by the Consumer Protection Act and that students are not "consumers" in that context. The court also referred to Anupama College of Engineering which applied the Maharshi Dayanand principle to hold that admission/fee disputes are not entertainable by Consumer Fora.

The court noted that the respondent relied on a contrary decision (Khaja Educational Society Vs. E. Veesha Yadav) where the National Commission had held a student to be a consumer and ordered a refund; the court recorded this position but, after considering the higher court authorities, determined that the weight of the law supports the view that educational institutions are not "service providers" for these purposes.

Combining the established legal principle (that educational activities of a university do not constitute a "service" attracting the Consumer Protection Act) with the factual finding that the complainant did not prove the seat was filled (and thus could not invoke UGC guidelines for refund entitlement), the court concluded that the District Commission's exercise of jurisdiction was in error and that the complaint was not maintainable before the Consumer Fora.

Holding and Implications

Holding: The appeal is allowed. The impugned judgment and order dated 05.03.2019 passed by the District Consumer Disputes Redressal Commission, Dehradun is set aside and consumer complaint No. 237 of 2014 is dismissed. No order as to costs. The amount deposited by the appellant with this Commission is to be released in its favour.

Implications: The direct effect is that the District Commission's award in favour of the complainant (refund and damages) is vacated and the complaint is dismissed. The court applied existing higher-court authority to hold that the relationship between the student and the University in respect of admission/fee matters did not amount to "consumer" and "service provider" for the purpose of the Consumer Protection Act; the opinion does not purport to create new precedent beyond its application of those authorities.

Coram: Hon'ble Mr. Justice D.S. Tripathi (President) and Mr. Udai Singh Tolia (Member-II). Date of pronouncement: 12/07/2022.

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STATE CONSUMER DISPUTES REDRESSAL COMMISSION UTTARAKHAND

DEHRADUN

FIRST APPEAL NO. 126 / 2019

DIT University Makkawala Greens, Mussoorie Diversion Road Dehradun through its Liaison Officer Sh. Adesh Yadav …… Appellant / Opposite Party

Versus

Sh. Deepak Chaudhary S/o Sh. Surendra Singh R/o Ruhalki Dayalpur

P.O. Bhagwanpur, Haridwar

…… Respondent / Complainant

Sh. Vaibhav Jain, Learned Counsel for the Appellant Sh. Shailendra Pundir, Learned Counsel for Respondent

Coram: Hon'ble Mr. Justice D.S. Tripathi, President Mr. Udai Singh Tolia, Member-II

Dated: 12/07/2022

ORDER

(Per: Justice D.S. Tripathi, President):

This appeal under Section 15 of the Consumer Protection Act, 1986 has been preferred against the impugned judgment and order dated 05.03.2019 passed by the District Consumer Disputes Redressal Commission, Dehradun (in short "The District Commission") in consumer complaint No. 237 of 2014; Sh. Deepak Chaudhary Vs. DIT University, by which the consumer complaint was allowed and the appellant was directed to pay sum of Rs. 1,30,000/- to the respondent - complainant together with Rs. 15,000/- towards mental agony and Rs. 3,000/- towards litigation expenses within a period of 30 days', failing which the above amount was directed to carry interest @9% p.a. from the date of institution of the consumer complaint till payment.

2. Facts giving rise to this appeal, in brief, are that according to the consumer complaint, on 18.07.2013, the respondent - complainant had taken admission in appellant - University (opposite party before the District Commission) in B. Tech. for the academic year 2013-14 and deposited the fee of first semester amounting to Rs. 2,77,000/- on 28.07.2013. After a period of 15 days' of taking admission in the University, the complainant's health got deteriorated and he was treated at Medanta Hospital, Gurugram, Haryana and his treatment is still continuing. On account of the said reason, the complainant could not study in the University. On several occasions, the complainant's father applied with the University for refund of the fees, bringing to their notice the fact regarding ill health of the complainant. The complainant's father submitted application / letter dated 30.01.2013; 07.11.2013; 07.12.2013; 09.01.2014 and 07.06.2014 with the University, thereby seeking refund of the deposited fees. On 01.02.2014, the employees of the University got the form filled regarding withdrawal of admission and refund of the fees, but the fees was not refunded. The University had taken fees for whole one year at once, whereas the fees was to be charged for each semester. The complainant sent a legal notice dated 28.07.2014 to the University, but still the fees was not refunded. Thus, a consumer complaint was instituted before the District Commission.

3. The appellant filed written statement before the District Commission, wherein it was averred that after taking admission, the complainant appeared in the class for few days' and thereafter without any intimation, remained absent from the class. The appellant being a University, acts in accordance with the norms of University Grants Commission. The complainant and his father demanded refund of the fees without following the due procedure. The complainant deposited fees of first year only and thereafter did not deposit any fees, on

account whereof the University has suffered financial loss. The seat left by the complainant, remained vacant. As per the rules, refund of Rs. 5,000/- was offered to the complainant, which was declined by him. The consumer complaint is not legally maintainable. The Consumer Fora has no jurisdiction to hear. There has not been any deficiency in service on their part.

4. After giving opportunity of hearing to the parties, the consumer complaint has been decided by learned District Commission vide impugned judgment and order dated 05.03.2019, thereby allowing the consumer complaint in the above terms. Feeling aggrieved, the appellant has preferred the instant appeal.

5. We have heard rival arguments advanced by learned counsel for the parties and perused the record.

6. It is admitted fact that the complainant took admission in the appellant - University in B. Tech. course for the academic year 2013-14. It is also admitted that sum of Rs. 2,77,000/- was deposited by the complainant with the University towards fees for the first year. It is further admitted that after attending the class for a period of few days', the complainant did not attend the class and withdrew himself from the University on account of his ill health, whereupon the refund of the deposited fees was demanded by the complainant, which was declined by the University.

7. The appellant has categorically averred in paragraph No. 29 of the written statement filed before the District Commission that once the academic session is started, the admissions are closed in the appellant - University and no fresh admissions are taken in mid-course. Since the complainant withdrew himself from the course,

the seat left by him, remained vacant. The burden to prove that the seat left by the complainant, was filled by the University, by admitting some other student, was upon the complainant, which he had failed to discharge by adducing cogent and reliable evidence in that regard and there is nothing on record to show that the seat vacated by the complainant, was later on filled by the University, by granting admission to some other student. Hence the complainant is not at all entitled to the benefit of guideline issued by University Grants Commission, New Delhi vide Public Notice bearing F.No.1-3/2007 (CPP-II) dated 23.04.2007.

8. The foremost issue to be determined in the present appeal is as to whether there exists a relationship of "consumer" and "service provider" between the respondent - complainant and the appellant - University. Learned counsel for both the sides have very exhaustively addressed the Bar on the said issue and cited certain case laws in support of their respective submissions, which we shall discuss hereinafter.

9. Learned counsel for the appellant submitted that since the University does not render any "service", the consumer complaint filed by the complainant before the District Commission was not at all maintainable. Learned counsel for the appellant has relied upon the law laid down by Hon'ble Apex Court in the case of Bihar School Examination Board Vs. Suresh Prasad Sinha reported in IV (2009) CPJ 34 (SC), in which it has been laid down that Bihar School Examination Board does not offer "service" to any candidate, nor does any student hires or avails of any "service" from the Board for a consideration. Paragraph No. 10 of the said decision is reproduced below:

"10. The Board is a statutory authority established under the Bihar School Examination Board Act, 1952. The function of the Board is to conduct school examinations. This statutory function involves holding periodical examinations, evaluating the answer scripts, declaring the results and issuing certificates. The process of holding examinations, evaluating answer scripts, declaring results and issuing certificates are different stages of a single statutory non-commercial function. It is not possible to divide this function as partly statutory and partly administrative. When the Examination Board conducts an examination in discharge of its statutory function, it does not offer its

"services" to any candidate. Nor does a student who participates in the examination conducted by the Board, hires or avails of any service from the Board for a consideration. On the other hand, a candidate who participates in the examination conducted by the Board, is a person who has undergone a course of study and who requests the Board to test him as to whether he has imbibed sufficient knowledge to be fit to be declared as having competence vis-vis other examinees. The process is not therefore availment of a service by a student, but participation in a general examination conducted by the Board to ascertain whether he is eligible and fit to be considered as having successfully completed the secondary education course. The examination fee paid by the student is not the consideration for availment of any service, but the charge paid for the privilege of participation in the examination."

10. Hon'ble National Commission in its judgment dated 17.12.2017 rendered in Revision Petition No. 3144 of 2016; Krishan Mohan Goyal Vs. St. Mary's Academy and another, has discussed the law laid down by Hon'ble Apex Court in Maharshi Dayanand University Vs. Surjeet Kaur reported in (2010) 11 SCC 159, in which it has been laid down by Hon'ble Apex Court that a student is neither a consumer, nor the University is rendering any service, relying on the decision given in the case of Bihar School Examination Board (supra). Relevant portion of the said decision is reproduced below:

"The respondent as a student is neither a consumer nor is the appellant rendering any service. The claim of the respondent to award B.Ed. degree was almost in the nature of a relief praying for a direction to the appellant to act contrary to its own rules. The National Commission, in our opinion, with the utmost respect to the reasoning given therein did not take into consideration the aforesaid aspect of the matter and thus, arrived at a wrong conclusion. The case decided by this Court in Bihar School Examination Board (supra) clearly lays down the law in this regard with which we find ourselves in full agreement with. Accordingly, the entire exercise of entertaining the complaint by the District Forum and the award of relief which has been approved by the National Commission do not conform to law and we, therefore, set aside the same."

11. Per contra, learned counsel for respondent submitted that there exists relationship of "consumer" and "service provider" between the parties. He has relied upon the law laid down by Hon'ble Apex Court in the case of Khaja Educational Society and others Vs. E. Veesha

Yadav and another reported in (2013) 1 CPC 495. Relevant portion of paragraph No. 8 of the said decision is reproduced below:

"..... We are further of the view that the National Commission rightly held that respondent No. 1 was a 'consumer' within the meaning of Section 2(d) of the Act and the complaint filed by him was maintainable. The direction given by the State Commission to the petitioners to refund Rs. 8,50,000/- to respondent No. 1 with interest, which was substantially upheld by the National Commission was legally correct and the National Commission did not commit any error by dismissing the appeal filed by the petitioners."

12. Learned counsel for the appellant further relied upon the law laid down by Hon'ble Apex Court in Civil Appeal No. 17802 of 2017; Anupama College of Engineering Vs. Gulshan Kumar and others, decided on 30.10.2017, wherein Hon'ble Apex Court has held that in view of the judgment of this Court in Maharshi Dayanand University (supra), wherein this Court placing reliance on all earlier judgments, has categorically held that educational institutions are not providing any kind of service, therefore, in matter of admission, fees etc., there can not be a question of deficiency in service and such matter can not be entertained by the Consumer Forum under the Consumer Protection Act, 1986.

13. Considering the aforesaid facts and circumstances of this case as well as the law laid down by Hon'ble Apex Court in the case of

Bihar School Examination Board (supra); Maharshi Dayanand University (supra) and Anupama College of Engineering (supra), it is crystal clear that the appellant - University is neither "service provider", nor the respondent - complainant being a student is a

"consumer". Accordingly, we are of the view that the matter in question can not be brought before the Consumer Fora.

14. For the foregoing reasons, we are of the considered opinion that impugned judgment and order passed by learned District Commission suffers from material illegality and the same is erroneous. The appeal deserves to be allowed and impugned judgment and order passed by learned District Commission is liable to be set aside.

15. Consequently, the appeal is allowed. Impugned judgment and order dated 05.03.2019 passed by the District Commission is set aside and consumer complaint No. 237 of 2014 is dismissed. No order as to costs. The amount deposited by the appellant with this Commission, be released in its favour.

(U.S. TOLIA) (JUSTICE D.S. TRIPATHI)

Member-II President