Tamil Nadu

South Chennai

CC/156/2015

A.Radhakrishnan - Complainant(s)

Versus

Thiru Rakesh, Director FIITJEE, K.K.Nagar Branch - Opp.Party(s)

K.Justin Selvakumar

12 Nov 2019

ORDER

                                                                             Date of filing      : 16.04.2015

                                                                               Date of Disposal : 12.11.2019

                                                                                  

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, CHENNAI (SOUTH)

@ 2^ND Floor, T.N.P.S.C. Road, V.O.C. Nagar, Park Town, Chennai – 3.

 

PRESENT: THIRU. M. MONY, B.Sc., L.L.B, M.L.                    : PRESIDENT

TR. R. BASKARKUMARAVEL, B.Sc., L.L.M., BPT., PGDCLP.  : MEMBER

 

C.C. No.156/2015

DATED THIS TUESDAY THE 12^TH DAY OF NOVEMBER 2019

                                 

A. Radhakrishnan,

Having Office at:-

No.218, New Addl. Law Chambers,

High Court,

Chennai – 600 104.                                                        .. Complainant.

                                                                                                    ..Versus..

 

1. Thiru. Rakesh,

Director,

FIITJEE,

K.K. Nagar Branch,

No.51, Dr. Ramasamy Salai,

K.K. Nagar,

Chennai – 600 078.

 

2. Thiru. V.M. Chakkaravarthy,

Manager,

FIITJEE,

K.K. Nagar Branch,

No.51, Dr. Ramasamy Salai,

K.K. Nagar,

Chennai – 600 078.                                                 ..  Opposite parties.

 

Counsel for the complainant                 : Mr. K. Justin Selvakumar

Counsel for the opposite parties 1 & 2 : Mr. A. Palaniappan

 

ORDER

THIRU. M. MONY, PRESIDENT

       This complaint has been filed by the complainant against the opposite parties under section 12 of the Consumer Protection Act, 1986 prays to return of a sum of Rs.41,000/- being 2^nd year fees and to pay a sum of Rs.3,00,000/- towards compensation for mental agony and deficiency in service with cost to the complainant.

1.    The averments of the complaint in brief are as follows:-

The complainant submits that his Minor son R. Karthik admitted in the opposite parties I.I.T. coaching center in the year April 2013 for Four Year classroom program. His Register No.9061046373103130016. The complainant paid a sum of Rs.82,019/- towards two year coaching fees by way of cheques and drafts as per the details below:

Cheque No.116287 for Rs.3,300/- dated:28.04.2013

Cheque No.116281 for Rs.2,900/- dated:08.11.2013

Cheque No.116280 for Rs.7,418/- dated:08.11.2013

Cheque No.116288 for Rs.23,708/- dated:08.05.2013

Cheque No.116282 for Rs.15,730/- dated:08.03.2014

D.D. No.694168 for Rs.1,100/- dated:26.04.2013

D.D. No.694167 for Rs.27,865/- dated:26.04.2013. 

The complainant submits that his minor son R. Karthik attended the class from June to April 2014.  From June 2014, the complainant’s son minor R. Karthik stopped the coaching from June 2014 and not attended the classes.  Hence, the complainant sent a letter dated:19.06.2014 to the opposite parties 1 & 2 requested to refund the 2^nd year fees Rs.41,000/- from total fees Rs.82,019/- for which, the opposite parties has not sent any reply.  Hence the complainant issued legal notice dated:30.01.2015 for which, the opposite parties has not sent any reply.   The act of the opposite parties 1 & 2 amounts to deficiency in service and unfair trade practice which caused great mental agony.   Hence, the complaint is filed.

2.      The brief averments in the written version filed by opposite parties 1 & 2 is as follows:

The opposite parties 1 & 2 specifically deny each and every allegations made in the complaint and put the complainant to strict proof of the same.   It is submitted that the opposite parties is a private self financed and self managed coaching institution which provides coaching / training and guidance for IIT-JEE and other competitive examination. It is further submitted that the complainant had given his consent and entered into an agreement for taking services of the opposite parties and as such the terms and conditions of the said agreement are binding upon him.   The opposite parties state that the complainant after understanding the terms and condition of the opposite parties admitted / enrolled his son R. Karthik in the Four Year Integrated Programme of the opposite parties on 17.06.2013.  the classes of the said program were to be commenced from 17.06.2013.   The opposite parties only after completion of all the mandatory requirements by the complainant his son, admitted/ enrolled R. Karthik vide enrolment No.9061691370026.  The total course fees for the two year course including service tax and cost of books and study material was Rs.82,019/-.  The opposite parties believe in the quality education.   To ensure quality it takes students who qualify in the admission test on one hand and faculty members at FIITJEE are recruited through one of the most strict selection process on the other hand.  

3.     The opposite parties state that the selection process of faculty members includes Written test, Group Discussion, Model Lecture and Personal Interview.  Only those who qualify all the tests are recruited.  Selection process is designed is such manner that only one who has depth in knowledge of subject, good communication skills and class management skills are recruited.  After recruitment each faculty members has to undergo compulsory training irrespective of their teaching experience to maintain uniform standard of teaching.   That the opposite party to ensure quality education and uniform teaching standard and also keeping in mind the students interest does not fill the vacancy created against any student who leaves the course midway.  It is submitted that seat vacated by the complainant remained unfilled, which caused financial loss to the opposite parties.   The opposite parties is self financed and self managed institute and runs from the fees collected from the students.  Most of the expenditure is incurred in advance and also is of fixed nature.  The opposite parties have to bear the expenditures like lease rent of the premises, salary of faculty members and non faculty staff, electricity and other allied expenditures, preparation and printing of study materials etc irrespective of number of students and batches.   Further total fee includes taxes as applicable and cost of study materials supplied to students.  The complainant has not made the payment of entire course fees as such the opposite parties are entitled to claim the remaining balance fee through invocation of Arbitration as per the terms of agreement.  There is no deficiency in service on the part of the opposite parties and hence, the complaint is liable to be dismissed.

4.     To prove the averments in the complaint, the complainant has filed proof affidavit as his evidence and documents Ex.A1 to Ex.A4 are marked.  The opposite parties 1 & 2 after filing of written version has not come forward to file proof affidavit to prove the contentions raised in the written version.  Hence, proof affidavit of the opposite parties 1 & 2 is ‘Closed’.

5.      The points for consideration is:-

1. Whether the complainant is entitled to get return of a sum of Rs.41,000/- towards the 2^nd year fees paid as prayed for?
2. Whether the complainant is entitled to a sum of Rs.3,00,000/- towards compensation for mental agony and deficiency in service with cost as prayed for?

6.      On point:-

The opposite parties 1 & 2 after filing of written version has not come forward to file proof affidavit to prove the contentions raised in the written version.  Hence, proof affidavit of the opposite parties 1 & 2 is closed.  The complainant filed his written arguments.  Perused the records namely; the complaint, written version, proof affidavit of the complainant and documents.  The complainant pleaded and contended that his Minor son R. Karthik admitted in the opposite parties I.I.T. coaching center in the year April 2013 for Four Year classroom program. His Register No.9061046373103130016.  The complainant paid a sum of Rs.82,019/- towards two year coaching fees by way of cheques and drafts as per the details below:

Cheque No.116287 for Rs.3,300/- dated:28.04.2013

Cheque No.116281 for Rs.2,900/- dated:08.11.2013

Cheque No.116280 for Rs.7,418/- dated:08.11.2013

Cheque No.116288 for Rs.23,708/- dated:08.05.2013

Cheque No.116282 for Rs.15,730/- dated:08.03.2014

D.D. No.694168 for Rs.1,100/- dated:26.04.2013

D.D. No.694167 for Rs.27,865/- dated:26.04.2013 as per Ex.A1 &

Ex.A4. 

7.     Further the contention of the complainant is that his minor son R. Karthik attended the class from June to April 2014.  From June 2014, the complainant’s son minor R. Karthik stopped the coaching from June 2014 and not attended the classes.  Hence, the complainant sent a letter dated:19.06.2014 to the opposite parties 1 & 2 requested to refund the 2^nd year fees Rs.41,000/- as per Ex.A1 for which, the opposite parties has not sent any reply.  Hence the complainant was constrained to issue legal notice dated:30.01.2015 as per Ex.A2 for which, the opposite parties has not sent any reply.  Hence, the complainant was constrained to file this case for the refund of a sum of Rs.41,000/- with compensation and cost.  The opposite parties even after filed their written version has not come forward to file the proof affidavit to prove their contentions raised in the written version.  No document also filed to show that the un-availed portion of the fees shall be refunded. 

8.     But this Forum relied on the judgement/ Order cited below:

IN THE HIGH COURT OF DELHI AT NEW DELHI

FAO 490/2011

Between

FIITJEE LTD.

-Versus-

DN KOCHHAR

Held that

          “Fees refund: Should students sue education institutes and can they do so? Yes!

Law is on the side of students who want to leave an institute or course midway and are seeking refund of fees.   This also means, education institutes should not be charging upfront fees for the entire course and refuse refund, in case the student wants it.

Consider a typical scenario: A student takes admission to a coaching institute for a two year course, broken into four semesters.   The student signs the enrolment / admission form containing various conditions.   The institute collects upfront fees for the entire course.   After attending classes for a few days/weeks, the student is dissatisfied and wants to opt out, but the institute refuses to refund the fees.  It cites a clause in the admissions form that says, “Fees once paid shall not be refunded under any circumstances”.

When the student persists with the demand, the institute cites another clause in the form:  “In case of any dispute, matter shall be referred to arbitration and institute shall appoint the Arbitrator.  The decision of the arbitrator shall be final and binding on the parties”.

What is the solution? Here are two real life resolutions.

In one case, Mr. Minathi Rath, a student’s father, dragged the coaching institute to the Consumer Forum.   The State Commission held in 2006, that the clause “fees once paid is not refundable” was unconscionable and voidable”.   It further directed all educational institutes not to charge fees for the whole duration of the course in advance by way of lumpsum payment.   In another case, a student paid an upfront fee of Rs.1.8 lakh for a two-year coaching programme for the IIT-JEE entrance test.  After a few classes, he wanted to opt out and sought a refund.  As expected, FIIT-JEE (the coaching institute) refused, citing the non-refund clause which he had signed.

When the student’s father persisted with the request to refund the fee (after deducting a portion for the duration he attended the classes) FIIT-JEE initiated arbitration proceedings.   The Arbitrator declined to grant the refund and agreed with FIIT-JEE’s submission that once the student signed the admission form, he was bound by its clauses.

I entered the scene after the arbitration proceedings and filed an objection in the District Court against the order of the Arbitrator.   The District Judge reversed the order of the Arbitrator with detailed reasons.   The judge specifically noted that when a student signs the admission form, he has no bargaining power to negotiate, or refuse to sign any particular clause in the admission form.  Hence, these clauses should not be held against the student.  The District Judge also directed Arbitrator to refund the proportionate fee to the student.

The matter did not end there.  FIIT-JEE hired a big law firm and challenged the order in the High court, although the amount involved was only Rs.2 Lakh.   The matter came up before the High Court on 21 November 2011.

At the hearing, FIIT-JEE conceded that the non-refundable fee clause can be challenged as unconscionable under Section 23 of the Indian Contract Act, 1872, besides being in violation of the principles of public policy.   The High Court agreed with the District Judge’s view and remanded the matter to the Arbitrator for a decision after taking into account all the recent precedents on the point of law.  The order is available here.  Settled the fee issue in the case of Islamic Academy of Education Vs. State of Karnataka (2003) 6 SCC 696.  The Apex Court had expressed unhappiness with educational institutes charging the entire fees upfront and had said that students should only be asked to pay fees for a semester/year to begin with.

But FIIT-JEE argued before the NCDRC that the ruling of Islamic Academy was not applicable to it since it is not an educational institute but only a coaching institute.   The NCDRC was not impressed and upheld the order of the State Commission, directing FIIT-JEE to refund the fees.  The order is available here.

We now began a second round of arbitration in the second FIIT-JEE case as directed by the High Court, by providing all the rulings on the dispute.   This time the Arbitrator awarded the refund of fees for one year after deduction of statutory fees like Service Tax, etc.

In situations like these, students who want to leave an institute or course mid-way, usually hesitate to appoint a lawyer to argue their case.  On the other hand, institutes have the resources for good legal representation.  My advice to students is that the law is on your side if you want to fight.  And educational institutes should be prudent, desist from charge upfront fees for the entire course, and if they do, should not refuse a refund.

(Dushyant K Mahant, is Founding Partner of Mahant & Mahant and Intellectual Property Lawyer.  He did his Masters in IP Law from Brisbane.  Does pro bone work as well.  Mr. Mahant is active on social media to exchange views and news about politics, law and common sense).

9.     Considering the facts and circumstances of the case this Forum is of the considered view that the opposite parties 1 & 2 shall jointly and severally liable to refund a sum of Rs.41,000/- being the 2^nd year fees and to pay a sum of Rs.10,000/- towards compensation for mental agony with cost of Rs.5,000/- to the complainant.

In the result, this complaint is allowed in part.   The opposite parties 1 & 2 are jointly and severally directed to refund a sum of Rs.41,000/- (Rupees Forty one thousand only) being the 2^nd year fees and to pay a sum of Rs.10,000/- (Rupees Ten thousand only) towards compensation for mental agony with cost of Rs.5,000/- (Rupees Five thousand only) to the complainant.

The above said amounts shall be payable within six weeks from the date of receipt of the copy of this order, failing which, the said amounts shall carry interest at the rate of 9% to till the date of payment.

Dictated  by the President to the Steno-typist, taken down, transcribed and computerized by her, corrected by the President and pronounced by us in the open Forum on this the 12^th day of November 2019. 

 

MEMBER                                                                                PRESIDENT

 

COMPLAINANT SIDE DOCUMENTS:-

Ex.A1	19.06.2014	Copy of the letter of complainant to opposite parties
Ex.A2	30.01.2015	Copy of legal notice of the complainant’s Counsel to the opposite parties 1 & 2
Ex.A3	31.01.2015	Copy of the acknowledgment card from the opposite parties 1 & 2 for the receipt of the complainant’s legal notice
Ex.A4		Copy of receipts for the payment of fees

 

OPPOSITE PARTIES SIDE DOCUMENTS:-  ‘Closed’

 

 

MEMBER                                                                                                                                                                      PRESIDENT