Login
  • Bookmark
  • PDF
  • Share
  • CaseIQ

THE DIRECTOR OF XAVI... v. SUJAY GHOSE

National Consumer Disputes Redressal Commission
May 24, 2022
Smart Summary (Beta)

Factual and Procedural Background

The present Revision Petition was filed by the Director of Xavier Institute of Management & Entrepreneurship Kinfra Hi-Tech Park and two others (Petitioner Institute) against the Order dated 04.06.2021 passed by the Orissa State Consumer Disputes Redressal Commission (State Commission) in Appeal No. 373 of 2018. The State Commission dismissed the Appeal preferred by the Petitioner Institute and affirmed the Order dated 27.03.2018 passed by the District Consumer Disputes Redressal Commission, Puri (District Commission), which had allowed the Complaint filed by the Complainant/Respondent ex-parte and directed the Petitioners to refund Rs.1,54,000/- with interest, and pay compensation and litigation costs.

The Complainant/Respondent had taken admission in the Petitioner Institute on 15.06.2015 for a PGDM Programme and paid fees of Rs.3,10,200/-. The Complainant was compelled to stay in the Institute's hostel and take meals from the hostel mess. After consuming the food and water, he suffered ailments including severe stomach pain and gastric problems diagnosed as Colitis by a doctor at AIIMS, Bhubaneswar. Unable to continue the course or stay in the hostel, he requested a refund. The Petitioner Institute sent a cheque for Rs.31,000/- which was dishonoured due to expiry of validity. Consequently, the Complainant filed the Consumer Complaint before the District Commission seeking reliefs.

The District Commission allowed the Complaint ex-parte and issued directions against the Petitioners. The Petitioners appealed before the State Commission, which dismissed the Appeal. Hence, the present Revision Petition.

Legal Issues Presented

  1. Whether educational institutions providing education and other incidental activities fall within the purview of the Consumer Protection Act, 1986.
  2. Whether defects, deficiencies, or unfair trade practices by educational institutions post-admission, including services such as hostel facilities, food, extracurricular activities, transportation, and vocational training, constitute "services" under the Consumer Protection Act.
  3. Whether coaching institutions fall within the definition of "educational institutions" for the purposes of the Consumer Protection Act, 1986.
  4. Whether vocational courses and institutions imparting such courses fall within the jurisdiction of Consumer Fora under the Consumer Protection Act.

Arguments of the Parties

Petitioner’s Arguments

  • The Petitioner Institute contended that as an educational institution imparting education, it does not render any service under the Consumer Protection Act, 1986, and thus the Complaint is not maintainable.
  • Learned Counsel argued that once an institution is declared a "Deemed University" and governed by the University Grants Commission Act, it falls under the jurisdiction of the High Court and not Consumer Fora.
  • It was submitted that even if the institution lacks proper affiliation, it is not rendering a "service" as defined under the Consumer Protection Act.
  • Regarding vocational courses, it was contended that recognized vocational training programs do not fall under the Consumer Protection Act’s jurisdiction.

Respondent’s Arguments

  • The Respondent contended that defects or deficiencies in services such as hostel facilities, food, and other incidental activities should attract the Consumer Protection Act.
  • It was argued that coaching institutions operate commercially without regulatory oversight and thus fall within the ambit of the Consumer Protection Act.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Manu Solanki and Others Vs. Vinayak Mission University and other connected cases, 1(2020) CPJ, 2010 Educational matters do not fall within the purview of the Consumer Protection Act, 1986; educational institutions do not render "services" under the Act. The Court relied on this Larger Bench decision to hold that the Petitioner Institute is not covered under the Consumer Protection Act, thus the Complaint is not maintainable.
Fitjee Limited Vs. Minathi Rath, (2012) CPJ 194 NC Coaching centres providing coaching and training are consumer service providers and fall within the Consumer Protection Act. The Court distinguished coaching institutions from educational institutions, holding coaching centres are subject to Consumer Fora jurisdiction.
State of Punjab & Ors. Vs. Senior Vocational Staff Masters Association & Ors., 2017 (9) SCC 379 Definition and role of vocational courses as job-oriented education and specialized skill training. The Court used this precedent to explain the nature of vocational training and to clarify when such courses fall outside Consumer Protection Act jurisdiction.
P.A. Inamdar (Supra) Coaching centres do not fall within the definition of "Educational Institutions". The Court applied this principle to exclude coaching centres from the definition of educational institutions exempt from Consumer Protection Act jurisdiction.

Court's Reasoning and Analysis

The Court examined whether the Petitioner Institute, engaged in imparting education including incidental activities such as hostel accommodation and meals, falls within the definition of a "service provider" under the Consumer Protection Act, 1986. It relied on the Larger Bench decision in Manu Solanki, which held that educational institutions providing education do not render "services" under the Act, and thus consumer complaints against them are not maintainable.

The Court considered various facets including pre-admission and post-admission services, extracurricular activities, excursions, and vocational training. It noted that while coaching centres are commercial service providers subject to the Consumer Protection Act, educational institutions imparting formal education are not.

The Court also clarified that vocational courses recognized by regulatory authorities do not fall under Consumer Fora jurisdiction, whereas unregulated coaching centers do.

Applying these principles, the Court concluded that the Petitioner Institute is not rendering any service under the Consumer Protection Act and therefore the Complaint lacks maintainability.

Holding and Implications

The Revision Petition is allowed and the Orders passed by the District Commission and the State Commission are set aside.

The Complaint filed by the Complainant/Respondent is dismissed on the ground that the Petitioner Institute, being an educational institution imparting education and incidental activities, does not fall within the purview of the Consumer Protection Act, 1986. This decision directly affects the parties by negating the consumer complaint but does not establish any new precedent beyond reaffirming the binding Larger Bench ruling.

Show all summary ...

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION

NEW DELHI

REVISION PETITION NO. 632 OF 2021

(Against the Order dated 04/06/2021 in Appeal No. 373/2018 of the State Commission Orissa)

1. THE DIRECTOR OF XAVIER INSTITUTE OF

MANAGEMENT & ENTREPRENEURSHIP KINFRA HI- TECH PARK & ORS

OFFICE HMT ROAD KALAMASSERY, KOCHI

ERNAKULAM

KERALA ...........Petitioner(s) Versus

1. SUJAY GHOSE

PRASAD KUTIR, OPP TO TOWN POLICE STATION

,GRAND ROAD ,PURI

PURI

ODISHA ...........Respondent(s)

BEFORE:

HON'BLE MR. JUSTICE R.K. AGRAWAL,PRESIDENT For the Petitioner : Mr. C.N. Sreekumar, Sr. Advocate Mr. Amit Sharma, Advocate

For the Respondent : Mr. Sujay Ghose, Respondent, in person Dated : 24 May 2022

ORDER

1. The present Revision Petition has been filed by Director of Xavier Institute of Management & Entrepreneurship Kinfra Hi-Tech Park (hereinafter referred to as the Petitioner Institute) and two others, the Opposite Parties in the Complaint, against the Order dated 04.06.2021 passed by the Orissa State Consumer Disputes Redressal Commission at Cuttack (hereinafter referred to as the State Commission) in Appeal No. 373 of 2018, by which the State Commission has dismissed the Appeal, preferred by the Petitioner Institute, and affirmed the Order dated 27.03.2018, passed by the District Consumer Disputes Redressal Commission, Puri (hereinafter referred to as the District Commission) in Consumer Complaint No.126 of 2017, preferred by the Complainant/Respondent herein. By the said Order, the District Commission had allowed the Complaint ex-parte against the Opposite Parties/Petitioners herein and directed them to jointly and severally refund a sum of Rs.1,54,000/- to the Complainant/Respondent with interest @ 9% per annum from 01.05.2017 till the date of actual payment as also pay Rs.5,000/- as compensation and Rs.2000/- as litigation costs.

2. The facts in brief are that on 15.06.2015 the Complainant/Respondent had taken admission in the Petitioner Institute to pursue PGDM Programme Course and had deposited fees of Rs.3,10,200/- against proper receipt. It is stated in the Complaint that the Complainant/Respondent was compelled to stay in the Hostel of the Petitioner Institute and take meals from the Hostel mess, as the students were not allowed to take food from outside or

1

use the same in the Hostel room. After consuming spicy food and contaminated water, the Complainant/Respondent suffered a number of ailments, including severe stomach pain and gastric problems. The Doctor at AIIMS, Bhubaneswar opined that he was suffering with Colitis due to taking of spicy food and contaminated water. The Complainant/Respondent was unable to stay in the Hostel and continue the course in the Petitioner Institute at Kochi, Kerala and requested the Opposite Parties/Petitioners herein to return back the money paid by him. A cheque dated 12.02.2016 amounting to Rs.31,000/- was sent by the Opposite Parties/Petitioners herein to the Complainant/Respondent by speed post on 25.04.2016, without explaining the manner of calculation. As the validity period of three months was over, the Bank did not honour the said cheque. In this view of the matter, the Complainant/Respondent filed the afore-noted Complaint before the District Commission, praying for certain reliefs.

3. As noted above, the District Commission, while allowing the Complaint ex-parte against the Opposite Parties/Petitioners herein, had issued the aforesaid directions to them.

4. Feeling aggrieved with the Order passed by the District Commission, the Opposite Parties/Petitioners herein filed the Appeal before the State Commission. The State Commission by the Impugned Order has dismissed the Appeal and affirmed the Order passed by the District Commission. Hence, the present Revision Petition.

5. From a perusal of the Order passed by the District Commission, I find that the Preliminary Issue as to whether Educational Institutions providing Education and other Incidental Activities to the students come within the purview of the Consumer Protection Act, 1986 or not arises in this Case and the said issue is squarely covered by the decision of a Larger Bench of three Members of this Commission in the case of Manu Solanki and Others Vs. Vinayak Mission University and other connected cases, 1(2020) CPJ, 2010, wherein the Larger Bench has held that Educational matters do not come within the purview of the Consumer Protection Act, 1986 and, therefore, the Complaint is not maintainable. Relevant portion of the Order is reproduced below for ready reference :-

"37. The following legal issues arise from the submissions made by the rival parties and the aforenoted decisions of the Hon'ble Supreme Court:

Would any defects/ deficiency/ unfair trade practice indulged by the Educational Institutions post admission, which does not fall within the 'course of imparting knowledge' till the degree is conferred, falls within the ambit of the definition of Education?

• If we apply the definition of Education, imparting knowledge for full potential, will that criterion apply to the admission stage, when the foundation for admission itself is deficient?

• Would preferential activities for extracurricular activities, which do not have a direct •

2

nexus with admission fees, syllabus etc. be defined as Core Education? For Example if students go for a picnic and a mishap happens, does it fall within the definition of deficiency of service and is it part of Core Education? Do educational tours fall within the ambit of the definition of 'Education'.

Another example, if a school has a swimming pool and students of that institution drown on account of some deficiency or negligence of the authorities, would swimming in the school campus fall within the ambit of Core Education? Does maintaining a swimming pool and teaching swimming be considered as a part of Core Education?

• Does defect/ deficiency in service of any boarding/ hostel facilities rendered fall within the umbrella of 'Education'?

• Do coaching centers/ institutions fall within the ambit of the Definitionof 'Educational Institutions'.

• Do institutions involved in vocational training like, nursing, designing etc. strictly fall within the definition of 'Educational Institutions'.

•

38. Learned Counsel appearing for the Petitioners in Revision Petition Nos. 2955 to 2963 of 2018 submitted that once the University is declared as 'Deemed University' all functions and activities governed by the University Grants Commission Act (UGC Act), fall within the definition of 'Authority' within the meaning of Article 12 of the Constitution and would be amenable only to the jurisdiction of the High Court. It is contended that even if the Education Institutions do not have a proper affiliation, Consumer Fora do not have jurisdiction to entertain the same. In our view even if an Institution imparting education does not have a proper affiliation in imparting education, it is not rendering any service and, therefore, will be out of the purview of the Consumer Protection Act, 1986.

39. Learned Counsel appearing for the Petitioner in Revision Petition No. 222 of 2015 vehemently contended that the Complainant had taken admission in B. Ed. course of the Opposite Party on the assurance that the said college was recognized by National Council of Technical Education (NCTE) and affiliated with the Opposite Party No. 2, Uttrakhand Technical University, who subsequently came to know that the Institute was not recognized by NCTE and therefore sought for refund of the fees. Whether such an unfair trade practice post admission would fall within the ambit of the Act needs to be seen. As the Institution is imparting education though it has been not recognized by the

3

National Council of Technical Education, it would not make any difference because it will be covered under the education. Thus, the said Institute would not be rendering any service as defined in the provisions of the Consumer Protection Act, 1986.

40. There may be instances where there may be defect/deficiency of service in pre-admission stages by an educational Institution but as the educational Institutions are not rendering any service by imparting education, these instances will also not give any right for a person to approach the Consumer Fora under the provisions of the Consumer Protection Act, 1986.

41. Learned Counsel for the Educational Institution in Revision Petition No. 1731 to 1733 of 2017 argued that imparting education in a school is not limited to teaching in a class room and involves within its ambit other co-curricular activities including taking out the students for educational trips etc., for their overall growth and development and improvement of their faculties. In that matter, the children were taken by the Respondents for an "educational excursion trip" to a place of historical importance, and it was contended that, any shortcoming or negligence during the course of such an act falls within the definition of imparting education and therefore shall not fall within the domain of the Consumer Protection Act. 1986. Another issue which was raised is with respect to any defect or deficiency which may arise on account of a student drowning in a swimming pool maintained by the Educational Institution. We are of the considered opinion that such incidental activities of an Educational Institution while imparting education would also not amount to rendering any service under the provisions of the Consumer Protection Act, 1986.

42. Another relevant issue which was raised during the course of arguments was with respect to any defect or deficiency in the transportation which is provided by the schools/colleges. School buses are vehicles hired by the Institutions and in most schools is made compulsory with, the prescribed fees including the cost of transportation. Children come in their own vehicles also and we are of the view that any defect or deficiency in transporting the children to the school does fall within the definition of 'imparting knowledge' and, therefore, the Consumer Fora has no jurisdiction to entertain such Complaints arising out of these issues.

43. Now we address ourselves to the submissions made by the Learned Counsels in Revision Petition No. 462 of 2013 with respect to Coaching Institutions. The question which arises here is whether the Coaching Institutions fall within the definition of "Educational Institution". Learned Counsel appearing for the Coaching Centres vehemently contended that though

4

the Coaching Centres are not conventional Educational Institutions, since they are providing Coaching and training to students of an Educational nature same principles that apply to the Educational Institutions would also apply to these Institutions and that this view had been taken by this Commission in Fitjee Limited Vs. Minathi Rath I (2012) CPJ 194 NC. In this case it has been held that Complainants were consumers who sought to avail services for consideration and that Fitjee is the provider of the services and that they are Consumer Disputes. The issue that has been raised is that if the Coaching Centres were treated at par, as observed in this order, to be providing Coaching and training, to students of an Educational nature, then they too fall within the definition of 'Education' and, therefore, the services rendered by Coaching Centres cannot be construed to be 'Service' as defined under Section 2(1)(o) of the Act.

44. Learned Counsel appearing for the Complainants submitted that there is no Regulatory Mechanism applicable to the Coaching Institutes. He contended that Coaching Centres are promoting rote learning and not imparting actual knowledge. He vehemently contended that they are running for a commercial purpose with a single aim of making profit and are expanding using the franchise route.

45. We are of the considered view that conduction of Coaching Classes does not fall within the ambit of definition of 'Education' as defined by the Hon'ble Seven Judge Bench of the Supreme Court in P.A. Inamdar (Supra). Coaching Centres cannot be equated to regular schools or colleges which are regulated by a Regulatory Authority and also confer a Degree/Diploma on the student who has passed in the examinations conducted as per the Rules and norms specified in the statute and also by the concerned Universities. Therefore, strictly speaking Coaching Centres cannot fall within the definition of 'Educational Institutions'. We refrain from making any comments on the submissions of the learned Counsel for the Complainants with respect of Coaching Institutions indulging only in 'rote learning'.

46. For all the afore-noted reasons, we are of the opinion that any defect or deficiency or unfair trade practice pertaining to a service provider like 'Coaching Centres' does fall within the jurisdiction of the Consumer Fora.

47. Learned Counsel appearing for the Petitioner in Revision Petition Nos. 3383 and 3384 of 2018 submitted that student, who took admission in Multimedia Diploma and Certificate Courses in 3D Animation, Visual Effects, Video, Editing, Graphic Designing and Web Designing, though fall within the definition of

5

Vocational training, the programs are recognized by Karnataka State Open University and withdrawal of any such program cannot fall within the jurisdiction of the Consumer Fora.

48. At the outset, a broad definition of all that comprises 'Vocational Courses' needs to be seen. Generally speaking, there is a three tier system in HR Vocational Training program in India, which involve Certification level for 10+2 students, Diploma level Graduation program and Post-Graduation programs. For example vocational program include courses in areas of agriculture, automobiles, information technology, air conditioning, lab technician, live stock management, films and television, tourism etc. The Hon'ble Supreme Court in

State of Punjab & Ors. Vs. Senior Vocational Staff Masters Association & Ors., 2017 (9) SCC 379, in para 22 observed that Vocational Courses are those Courses in which teaching is not on regular basis, though they play an important role in the grooming of students in the different fields. Vocational education can also be termed as job oriented education and trains young people for various jobs and helps them acquire specialize skills.

49. The Union Cabinet has approved a merger of the existing Regulatory Institutions in the skills space — National Council for Vocational Training (NCVT) and the National Skill Development Agency (NSDA) into the National Council for Vocational Education and Training (NCVET).

50. The main purpose and objective of NCVET is to recognize and regulate and assess the skill related service regulators. It is clarified that even if there is any defect/deficiency/unfair trade practice in the services offered by private bodies in offering these courses and are not regulated and do not confer any Degree or Diploma recognized by any Approved Authority do fall within the ambit of definition of 'Educational Institutions' and hence the Consumer Fora have no jurisdiction to entertain the same.

51. In view of the foregoing discussion, we are of the considered opinion 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."

6. Admittedly, the Petitioner Institute is rendering Education to all the persons, including

6

the Complainant/Respondent, and is not running a Coaching Institute. Therefore, the law laid down by the Larger Bench of this Commission in the case of Manu Solanki (Supra), which I am bound to follow, is fully applicable and the Institute does not fall within the purview of the Consumer Protection Act, 1986 as it is not rendering any services.

7. In view of the foregoing discussion, the Orders passed by the District Commission and the State Commission are set aside. The Complaint filed by the Complainant/Respondent is dismissed and the Revision Petition is allowed.

......................J

R.K. AGRAWAL

PRESIDENT

7