Consumer Forums Do Not Have Jurisdiction Over Educational Institutions As They Do Not Impart 'Services', Holds NCDRC [Read Judgment]

With this ruling, the bench comprising Justice RK Agrawal (President), Justice VK Jain (Member) and M. Shreesha (Member) has broken the deadlock created by two conflicting judgments of the Supreme Court.

In 2010, a division bench of the Supreme Court had in Maharshi Dayanand University v. Surjeet Kaur, 2010 (11) SCC 159, examined in detail the jurisdiction of the Consumer Fora to entertain a Complaint with respect to deficiency of service by Educational Institutions and held that they are not `service providers' and a student who takes an examination is not a `consumer', under the Consumer Protection Act, 1986.

This was decision was followed in PT Koshy & Anr. v. Ellen Charitable Trust & Ors., 2012 (3) CPC 615 (SC), whereby it was held that, "education is not a commodity. Educational institutions are not providing any kind of service, therefore, in matter of admission, fees etc., there cannot be a question of deficiency of service. Such matters cannot be entertained by the Consumer Forum under the Consumer Protection Act, 1986."

Oblivious of these judgments however, another division bench of the Supreme Court in P. Sreenivasulu & Anr. v. P. J. Alexander & Anr., Civil Appeal Nos. 7003-7004, in 2015, held that Educational Institutions would come within the purview of the Consumer Protection Act, 1986 and that Education is a Service.

Resolving this legal quandary, the NCDRC decided to follow the law laid down in the Maharshi Dayanand University's case. The bench held that the ruling therein was given on merits and appeared to be more elaborate and accurate.

To this end, the court relied on Amar Singh Yadav & Ors. v. Shanta Devi & Ors., AIR 1987 Patna 191, in which the Supreme Court while deciding the Law of Precedence observed that when there is a direct conflict between two decisions of the Supreme Court of coequal Bench, the subordinate Court must follow the judgment which states the law more elaborately and accurately and that the question whether the decision is earlier or later is not material.

Therefore, the Commission held,

"In the instant case in Maharishi Dayanand University Case (Supra) the Hon'ble Supreme Court had discussed the law elaborately. Keeping in view Maharshi Dayanand University (supra) has addressed on merits and the question of law in detail and the same has been consistently followed by the Hon'ble Supreme Court in P.T. Koshy & Anr. (Supra), Prof. K. K. Ramachandran (Supra) and the latest decision of Anupama College of Engineering (Supra), we are of the considered view that the ratio laid down by the Hon'ble Supreme Court in the last judgement that is Anupama College of Engineering (Supra) has to be followed."

Nevertheless, the court noted that none of the above mentioned judgments had answered what comprises 'Core Education' and whether all activities related to Education/ Educational institutions would be excluded from the purview of the Act.

Clarifying the position on this aspect, the Commission has held that 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 not be covered under the provisions of the Consumer Protection Act.

The observations have been made in a complaint filed against alleged deficiency of service by a Dental College for admitting students, when it was neither affiliated with the university nor recognized by Dental Council of India.

Case Details:
Case Title: Manu Solanki & Ors. v. Vinayaka Mission  University (with other connected matters)
Case No.: CC No. 261/2012
Quorum: Justice RK Agrawal (President), Justice VK Jain (Member) and  M. Shreesha (Member)

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