Sehgal School of Competition vs Dalbir Singh
Background: The Consumer Protection Act: Established in 1986, it aims to provide better protection to the rights and interests of consumers. The Act empowers consumers to redress their grievances or disputes through consumer councils and various authorities for settlement of disputes. This act is regarded as ‘Magna Carta in the field of consumer protection to keep a check on unfair trade practices, defects in goods, and deficiencies in services.  Introduction: This case further emphasized the Consumer Protection Act, 1986 when it comes to seeking redress by the consumer. The given case revolved around a student (respondent) who was denied a refund of his fee by his medical coaching institute (appellant). The court in its judgment has further highlighted that denying refund of fee under the guise of a condition imposed by an institution was against the principles of equity, natural justice, and fair trade. Constitution and Statutory provisions discussed: Consumer Protection Act, 1986 Facts: The respondent had taken admission at the appellant’s institute for coaching for the medical entrance examination for a period of 2 years. The respondent had deposited the lump sum fees of Rs. 18,734 in two installments within six months. After a year, the respondent left the institute mid-way on the ground that it wasn’t up to the mark as the faculty members of the institute taught mostly engineering subjects and higher preference was given to engineering students. As the situation was not improving the respondent decided it would be futile to waste another year in such a situation and withdrew from the institute. He had asked for a refund of the balance fees which was declined. Aggrieved by this the respondent filed a complaint before the district forum for relief. The district forum directed the appellant to refund part of the fees of Rs. 18,734 without any compensation for mental agony, etc.  Issues: Judgment: The court in the given case was of the same view as that which had been upheld by the National Commission and the Supreme Court which states that ‘no institute or coaching center shall charge lump sum fees for the whole duration or should refund the fees if there is a deficiency in service in the quality of coaching etc. or for which period the student does not attend coaching as any clause saying that fees once paid shall not be refunded are unconscionable and unfair and therefore not enforceable. The court while applying the above principle found no merit in the appeal and dismissed it. Thus, the court disposed of the appeal and stated that the payment should be made within one month. Aggrieved by the decision of the State Commission the appellant filed a revision petition before the National Consumer Disputes Redressal Commission (NCDRC). Revision Petition No. 813 of 2009 in Appeal No. 1043 of 08 Equivalent citations: 2009 (3) CPR 363 (NC): III (2009) CPJ 33 (NC): 2009 (3) CPC 187. Decided on: 30th April 2009. Bench: Hon’ble Justice B.N.P. Singh (Presiding Member).             Hon’ble Dr. P.D. Shenoy, Member. Arguments: Contentions put forth by petitioner:  Judgment: The court stated that the appellant’s condition about non-refundability was biased and in favor of the petitioner and against the principle of equity and natural justice. It further stated that it was not a fair-trade practice. It stated that the case law referred by the petitioner was 13 years old and in the subsequent judgments it has been held that it is unjust to collect the fees for the total duration of the course.  The court relied on the judgment of Nipun Nagar vs. Symbiosis Institute of International Business, where it was held that the Institute was unfair and unjust in retaining the tuition fee of Rs. 1 lakh even after the student withdrew from their institute. Thus, the court in the present case stated that the collection of total fees by the institute was an unjust and unfair trade practice and on the above grounds stated that, “Therefore, we do not see any material irregularity or jurisdictional error in the order passed by the State Commission. Accordingly, this Revision Petition is dismissed. There shall be no order as to cost.” Thus, the petition was dismissed and the court pronounced its judgment in favor of the respondent. The additional compensation for mental agony due to approaching legal forum was not granted as the same was not mentioned in the petition. The court held that there shall be no order relating to cost and the school was required to refund the amount to the respondent. Conclusion: Thus, the court through its judgment upheld that non-refundability of fees by an institution would amount to unfair trade practice and held that it would be unjust to collect lump sum fees for the total duration of the course.  
Sehgal School Of Competition vs Dalbir Singh on 10 December 2008 State Consumer Disputes Redressal Commission Sehgal School Of Competition vs Dalbir Singh on 10 December 2008 IN THE STATE COMMISSION: DELHI IN THE STATE COMMISSION: DELHI under Section 9 Clauseof the Consumer Protection Act 1986) Date of Decision: 10 12 2008 Appeal No FA 08 1043 Indian Kanoon Sehgal School Of Competition vs Dalbir Singh on 10 December 2008 out of Order dated 10 10 2008 passed by District Forum Janakpuri New Delhi in Complaint No. 161 2007) Sehgal School of Competition 30 Central Market 2nd floor Punjabi Bagh New Delhi. Appellant Versus Indian Kanoon Sehgal School Of Competition vs Dalbir Singh on 10 December 2008 Shri Dalbir Singh C 18 Guru Gobind Singh Government Hospital Complex Raghubir Nagar New Delhi. . Respondent CORAM JUSTICE J.D KAPOOR PRESIDENT MS. RUMNITA MITTAL MEMBER Whether Reporters of local newspapers be allowed to see the judgment 2. To be referred to the Reporter or not Indian Kanoon Sehgal School Of Competition vs Dalbir Singh on 10 December 2008 KAPOOR1. Admittedly the respondent took admission in the Institute of the appellant for coaching for Medical Entrance Examination which was for duration of two years. Lump sum fees of Rs. 18 734 was deposited on 1 5 2005 and the remaining amount of Rs. 18734 was deposited in two instalments on 7 7 2005 and 7 10 2005 i.e. the entire fee was deposited within six months However the respondent student left midway after a year or so on the ground that after attending coaching he found that it was not up to the mark as he had taken admission for coaching in Medical Entrance Test whereas Institute faculty members were mostly teaching Engineering subjects and giving preference to engineering students. He thought that things would improve but they did not and therefore he preferred not to waste one year more and withdrew from the Institute and asked for refund of the balance fees which was declined and consequently he filed the instant complaint before the District Forum for relief 2. The District Forum vide impugned Order dated 10 10 2008 has only directed the appellant to refund part of fees Rs. 18 734 without any compensation for mental agony harassment having been forced to approach the legal forum i.e. the Consumer Forum for redressal of his grievances as well as cost of litigation 3. We have already taken a view which has been upheld by the National Commission and the same view was also taken by the Supreme court that no institute or coaching center shall charge lump sum fees for the whole duration or should refund the fees if there is deficiency in service in the quality or coaching etc. or for which period the student does not attend coaching as any clause saying that fees once paid shall not be refunded are unconscionable and unfair and therefore not enforceable Applying this principle we do not find any merit in the appeal and dismiss the same as we apprehend the respondent may even file an appeal seeking higher compensation or damages However since there is no such appeal before us as yet therefore we are not passing any such 4. Appeal is disposed of in aforesaid terms. Payment shall be made within one month from the date of receipt of a copy of this Order Indian Kanoon Sehgal School Of Competition vs Dalbir Singh on 10 December 2008 5. Copy of Order as per statutory requirement be forwarded to the parties and to the concerned District Forum and thereafter the file be consigned to record 6. FDR Bank Guarantee if any be released under proper receipt JUSTICE J.D. KAPOOR) PRESIDENT MEMBER HK Indian Kanoon 