Educational Institutions cannot forfeit the fees or advance - India Consumer Forum

Educational Institutions cannot forfeit the fees or advance

It has been found that District Consumer Forum in Delhi and the State Commission, Delhi has been taking consistent view that tutorials are bound to refund the fees when their services have not been availed. To illustrate the point, in Case No.292/09, DISTRICT CONSUMER REDRESSAL FORUM (EAST) reproduced in its Order the extract from Judgement dtd. 9.1.2007 of State Commission, Delhi in Appeal No. A-6-9/2006 of Brilliant Tutorials (Appellant) Vs. Mr. Rahul Dass (Respondent):-

Further any such terms of contract between the parties which allows the provider of service to forfeit the amount of service which he has not provided is against the public policy and good conscious unjust and unconscionable as the provider of service has the right to charge consideration only if it provides the service. The school or institutes can at least deduct the amount of expenses incurred in the process of admission and refund the entire remaining fees received by it.”

As term of the contract which is unconscionable or voidable is not enforceable, nor service provider like the training institutes, educational institutes/schools or the coaching centres can be allowed to forfeit the fees or consideration received in advance in case the student has not availed the service. Thus, the terms that ‘fees once paid is not refundable’ is unconscionable and unfair trade practice as well as voidable and therefore not actionable. A student or a trainee may leave in the midstream if he finds the service deficient and substandard and non yielding and to tell him that fees once paid is not refundable is uncalled for and unfair trade practice as no service provider can take or charge the consideration of the service which it has either not given or has not been availed. Proceeding on the aforesaid premise, we do not find any merit in the appeal and the same is dismissed.”

There is no reason for this Forum to deviate from the ratio decidendi of case Supra.

Keeping in view the above, in the instant case the Forum found that stand taken by Brilliant Tutorials that fees once paid shall not be refundable is not tenable and they are liable to refund the fees on pro-rata basis for the period the complainant has not attended their coaching services. The Tutorials wre therefore ordered to refund to the complainant Rs.36,250/- ie. 50% of the course fee of Rs.72500/- along with compensation of Rs.5000/- (Rs. Five Thousand only) for the harassment caused to the complainant besides Rs.2000/- (Rs. Two Thousand only) as litigation cost.

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