Delhi State Consumer Commission Upholds Refund Order Against FIITJEE for Deficient Coaching Services
Pranav B Prem
The Delhi State Consumer Disputes Redressal Commission has upheld the District Consumer Commission’s finding that FIITJEE Ltd. was liable for deficiency in service after it refused to refund the course fee of a student who withdrew from its programme due to unsatisfactory coaching despite attending only two classes. The State Commission bench comprised Justice Sangita Dhingra Sehgal (President) and Ms. Bimla Kumari (Member).
The case arose when the respondent, Manas Mehra, enrolled in a two-year weekend coaching programme for JEE (Advanced) 2021 and paid a total fee of ₹4,01,493 on 29 October 2018. After attending only two weekend classes, he found the quality of teaching inadequate and requested withdrawal on 21 May 2019, through his father, along with a proportionate refund effective from 25 May 2019. FIITJEE rejected the request citing a no-refund clause contained in its enrolment form. A legal notice was subsequently issued, following which FIITJEE refunded only ₹24,780 without providing any explanation, compelling the student to approach the District Commission alleging deficiency in service and unfair trade practice.
The District Commission held that the complainant was a ‘consumer’ under the Consumer Protection Act and found the no-refund clause to be arbitrary, one-sided and unconscionable. It ruled that FIITJEE had unjustly retained fees for services never rendered. Accordingly, FIITJEE was directed to refund ₹3,20,000 with interest and pay ₹25,000 towards compensation and litigation costs.
Aggrieved, FIITJEE challenged the order before the State Commission, arguing that the District Commission failed to give proper weight to the contractual no-refund clause, which the student accepted at the time of enrolment. FIITJEE further claimed that no deficiency in coaching had been proven and that the consumer fora could not override a valid contractual term. It relied on judicial precedents, including Islamic Academy of Education, to argue that the refund was contrary to law.
The respondent supported the original order, stating that he attended only two classes and withdrew promptly due to poor coaching quality. He submitted that the no-refund clause was patently unfair and that FIITJEE’s refund of only ₹24,780, without justification, amounted to unfair trade practice. He also argued that FIITJEE failed to follow the Supreme Court’s directions in Islamic Academy of Education, which mandate that institutions collecting advance fees must retain unutilized amounts in fixed deposits and use only the portion relating to the current semester.
The State Commission noted that FIITJEE failed to produce any evidence demonstrating compliance with the Supreme Court’s directions on advance fee handling. It further observed that FIITJEE was unable to show any actual financial loss or that the student’s seat remained vacant because of his withdrawal. The Commission held that FIITJEE’s reliance on the no-refund clause was misplaced, as such clauses cannot be enforced when they are arbitrary and allow retention of money for services not provided.
Upholding the District Commission’s reasoning, the State Commission affirmed that the no-refund clause was unfair and unenforceable and that FIITJEE could not retain almost the entire two-year fee when the student attended only two classes. Finding no infirmity in the District Commission’s conclusions, it dismissed FIITJEE’s appeal and confirmed the direction to refund ₹3,20,000 with interest along with ₹25,000 towards compensation and litigation expenses.
Cause Title: FITJEE Ltd. Vs. Mr. Manas Mehra
Case No: FA NO./129/2023
Coram: Justice Sangita Dhingra Sehgal (President), Ms. Bimla Kumari (Member)
