Delhi State Commission Holds FIITJEE Liable For Deficiency In Service

Brief Facts of the Case

The Complainant enrolled her daughter in a two-year program with FIITJEE while she was preparing for her Class X board exams. The entire fee was paid upfront through a demand draft and post-dated cheques. FIITJEE also required the Complainant to sign a pre-printed declaration form, leaving no room for negotiation. After her daughter decided to pursue commerce instead of science post-results, the Complainant requested a fee refund. FIITJEE initially assured them that the matter would be considered if a certificate from the school confirming the change in stream was provided. Despite submitting the required certificate and a refund request, FIITJEE did not process the refund or respond favorably. The complainant filed a complaint before the District Commission, which allowed the complaint. It directed FIITJEE to refund Rs.56,000 at 6% interest rate and Rs 5,000 as litigation costs. However FIITJEE was allowed to retain the balance amount towards service tax, cost of books,etc. Dissatisfied with the District Commission's order, FIITJEE filed an appeal before the State Commission of Delhi.

Contentions of FIITJEE

FIITJEE argued that the Consumer Commission does not have the jurisdiction to entertain the complaint, as the enrollment form required all disputes to be referred to arbitration. It was argued that the complainant's daughter left the course midway and their policy does not allow admitting a new student as per vacancy. Hence, it was argued that refunding the fee would cause them grave financial loss. It was emphasised that FIITJEE is a self- financed model, where expenses like salary, rent and study materials are fixed in advance, regardless of the number of students. In light of these arguments, FIITJEE urged the State Commission to overturn the District Commission's order.

Observations by the State Commission

The State Commission observed that FIITJEE failed to provide evidence that no student was admitted to replace the complainant's daughter after her withdrawal from the coaching program. The complainant's daughter withdrew after one month and ten days, yet FIITJEE did not substantiate its claim that the vacancy remained unfilled during the two-year program. The Commission referred to the Supreme Court's judgment in Islamic Academy of Education v. State of Karnataka (2003), which mandates that fees collected in advance should only be used for the current semester or year, with the remaining amount invested in fixed deposits. The interest earned must be returned to the student at the end of the course. FIITJEE failed to demonstrate compliance with these directives and instead collected the full two-year fee without making the required deposit or returning the interest. The appeal argued that the District Commission erred in its decision, but the Commission found that all contentions had been thoroughly considered and addressed. After reviewing the case and the District Commission's judgment, the Commission found no irregularities in the findings. The appeal was dismissed, and the District Commission's order was upheld.

Case Title: FIITJEE Ltd. Vs. Smt. Sangeeta Goyal

Case Number: F.A. No. 141/2022

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