Educational Institutes Excluded From Consumer Protection Act, Uttarakhand Commission Clears Indian Maritime University Of Refund Liability

Brief Facts:

Smt. Nimmi enrolled her son Vaanchit Kundlia in the Indian Maritime University, Kolkata Campus (“University”) in the Marine Engineering Program for the academic year 2013-14. She paid Rs. 37,500 during counseling and an additional Rs. 1,17,000 at admission, totaling Rs. 1,54,500. Despite assurances of top-notch facilities, Vaanchit faced ragging and endured mental stress upon arriving at the University. He decided to withdraw from the course due to worsening conditions and informed his mother about the situation. Smt. Nimmi contacted the University, and after being assured that the fee would be refunded within 30 days, she withdrew her son and demanded a refund on August 14, 2013. Despite multiple letters, the refund was not processed. As a result, Smt. Nimmi filed a consumer complaint against the University and its director, Sh. M.K. Ghosh (“Director”) for deficiency in service and unfair trade practices, which was submitted to the District Consumer Disputes Redressal Commission, Dehradun (“District Commission”).

The University and its director contended that the District Commission lacks jurisdiction to entertain the dispute. Further, this issue does not fall under the definition of a “consumer dispute” under the Consumer Protection Act, 1986 as the demand for refund of fee does not fall within the ambit of “deficiency in service”. Moreover, the joining rules and instructions provided to Vaanchit Kundlia at the time of admission, clearly mentioned that once a student is enrolled, fee shall not be refunded on leaving the course midway.

However, the District Commission rejected the University’s contentions and allowed the complaint on the basis that it had the jurisdiction as the demand draft was partly created in Dehradun. Aggrieved by the District Commission’s order, the University filed an appeal in the State Consumer Disputes Redressal Commission, Uttarakhand (“State Commission”).

Observations of the Commission:

Addressing the issue of jurisdiction of the District Commission, the State Commission determined that the mere occurrence of certain actions, such as the creation of a demand draft for the fee in Dehradun, does not automatically establish the jurisdiction of the District Commission in Dehradun. Even though the demand draft was initiated and the entrance test took place in Dehradun, it cannot be concluded that a substantial portion of the cause of action emerged in Dehradun, especially when both parties involved in the consumer complaint are based in Kolkata.

The State Commission further relied on several judgments like Anupama College of Engineering vs Gulshan Kumar and others Civil Appeal No. 17802 of 2017 and Director of Xavier Institute of Management & Entrepreneurship Kinfra Hi-Tech Park and others vs Sujay Ghose III (2022) CPJ 6 (NC), wherein it was held that educational institutes do not fall within the purview of Consumer Protection Act, 1986 as they are not rendering any services. Therefore, in matters of fee and admission, the question of deficiency in service cannot be entertained by the Consumer Fora.

In light of the aforementioned observations, the order of the District Commission was set aside. The appeal filed by the University was allowed.

Case: Indian Maritime University vs Smt. Nimmi Kundlia and anr.

Case No.: First Appeal No. 359/2019

Advocate for the Appellant: Sh. Deepak Ahluwalia

Advocate for the Respondent: Sh. Prateek Handa (For Respondent 1)

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