Jun 14, 2018
Updated by anita@vanshika07 Kindly go through the judgement made by honorable court on the issue relating to your instituion the contents of which are as under:-
IN THE HIGH COURT OF DELHI AT NEW DELHI
FAO 490/2011
FIITJEE LTD ... Appellant
Through: Mr. V.D. Costa, Adv.
versus
DN KOCHHAR ... Respondent
Through: Mr. Dushyant K. Mahant, Adv.
CORAM:
HON'BLE MR. JUSTICE KAILASH GAMBHIR
O R D E R
21.11.2011
CM No.20951/2011
Allowed, subject to all just exceptions.
Caveat 1034/2011
Since there is due representation on behalf of the Caveator, notice of caveat stands discharged.
FAO No.490/2011
By way of this appeal filed under Section 37 of the Arbitration and
Conciliation Act, 1996, the appellant seeks to challenge the order dated
26.8.2011, whereby the learned Additional District Judge has remitted the
Award to the learned Arbitrator to decide the proportionate amount of fee
to be refunded to the petitioner, respondent herein, in the light of the
law laid down in the decisions referred in the said order. Feeling
aggrieved with the said order, the appellant has preferred the present
appeal. While arguing the present appeal, Mr. V.D. Costa, leaned counsel
appearing for the appellant, submits that after the passing of the said
judgment, the National Commission, in the matter of FIIT JEE Ltd. ?vs-
Minathi Rath (Dr.), 2007(1) CPC 113 and certain other cases, has taken a
view that the fee for the First Year will not be refunded and it is only
for the remaining part of the duration of the course fee can be refunded.
Learned counsel further submits that the National Commission, while
applying the said decision, has placed reliance on the decision of the
Apex court in the case of Islamic Academy of Education ?vs- State of
Karnataka, 2003(6) SCC 697. Mr.Dushyant K. Mahant, learned counsel
representing the respondent on Caveat, has strongly opposed the present
appeal. Learned counsel submits that the appellant is a coaching
institute and the ratio of the decision, on which learned counsel for the
appellant has placed reliance, will not be attracted to the facts of the
present case and the respondent would be entitled to the refund of the
proportionate fee, as held by the learned Trial Court.
I have heard learned counsel for the parties.
Having considered the arguments on behalf of learned counsel for
the appellant, one position that clearly emerges is that the appellant is
no more disputing the fact that any condition in an agreement or
declaration form can be challenged on the ground that such a condition in
the agreement is unconscionable and is hit by Section 23 of the Indian
Contract Act, 1872 besides being in violation of the principles of public
policy, as envisaged in Section 28 of the Arbitration and Conciliation Act,
1996. However, the controversy, which has been mainly canvassed before
this Court, is that the appellant has no liability to pay proportionate
fee amount to the student, as for no reason, he has voluntarily withdrawn
from the coaching course. Learned counsel has also taken a position that
in view of certain recent decisions, the student would not be entitled to
the refund of the proportionate fee. This position taken by learned
counsel for the appellant is strongly refuted by learned counsel for the
respondent who states that the legal position is otherwise, at least in
respect of the institutes who are only giving coaching classes and are
not governed by any centralized institutes of education. Be that as it
may, this Court feels that the matter deserves to be remanded back to the
learned Arbitrator, as already directed by the learned Additional
District Judge. However, the learned Arbitrator will be free to take an
independent view to direct refund of the fee amount, based on the latest
legal position. Parties, through their counsel, shall render effective assistance to the learned Arbitrator. The learned Arbitrator, in his
Award, shall discuss the latest legal position in his order.
With the above directions, the appeal is disposed of.
KAILASH GAMBHIR, J
NOVEMBER 21, 2011
Jun 14, 2018
Updated by anita@vanshika07 Fees refund: Should students sue education institutes and can they do so? Yes!
Dushyant Mahant
18 June 2014 48
Law is on the side of students who want to leave an institute or course mid-way 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 enrollment /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, Dr 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. The judgement was reported in the media as well. FIIT-JEE challenged this in the National Consumer Disputes Redressal Commission (NCDRC), but more about that later.
In another case, a student paid an upfront fee of Rs1.8 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 submisison 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 the 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 Rs2 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.
Now, in another development just a week prior to the High Court hearing, the NCDRC decided on FIIT-JEE’s appeal in Dr Minathi Rath’s case that we mentioned earlier. It is pertinent to mention here that the Supreme Court had 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.
with reference to your letter vide No: R/CRP/07/06/88, dated;07/06/2018, in response to my communication dated; 19/09/2017, I salute your patience that at last your conscious has awaken you and compelled you to pen down a few lines in my favour. You have referred Para No: 8, 10, 22, 23 and 26, where-under till to date I am not in receipt of the declaration made by me for which I had made my submission earlier. besides this which constitution has allowed you to outrightly ask for fee for two years or four years in lump sump. The failure was on the part of Fiitjee where my ward was not made to understand the "structure of Atom" even after repeatedly requesting for it. Whatever you have communicated and given reference of the above said paras can be challenged in the court of law and be prepared for that. I have searched and made a group of such 27 students who have deposited their fees with the institution but could not continue due to administrative failure and have not been refunded so far. Don' be afraid I will fight till my last breath and will try to wipe the name of so prestigious institution and make it history "once upon a time there was Fiitjee". Now as I am free and have no work I will search more and more such families who have been betrayed by the institution and that will be sufficient to defame this institution.
Be prepared and get consulted by your lawyers as soon we will be meeting in the court of law.
Regards,
Ashok Kar.