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Can You Sue An Educational Institution Under Consumer Protection Act?

May 03, 2018
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Consumer

Image Courtesy: https://maharashtratimes.indiatimes.com/editorial/column/time-to-time/consumer-protection-act/articleshow/56128914.cms

In this article, Chowdhury pursuing Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata discusses on whether a University comes under the ambit of Consumer Protection Law.

Introduction

It is a tremendous job to give protection to the right and interest of every citizen as a consumer in a country like India where the current population is almost 1.35 billion. In this regard, to safeguard the interest of consumers many laws have been enacted such as Drug Control Act, 1950, Agricultural Products (Grading and Marketing) Act, 1937, Industries (Development and Regulation) Act, 1951, Monopolies and Restrictive Trade Practices Act, 1969, etc. However, these aforementioned Acts are not effective enough to protect the interests of consumers from unethical business practices.

Consumer Protection Act, 1986

The Consumer Protection Act, 1986 in this respect was sufficient to fulfill the requirement of every consumer by providing various reliefs available in the Act. In India diverse groups of consumers are available. The consumer protection law protects the interest of every consumer irrespective of age, sex, caste, place etc., with respect to all kinds of goods defined under “Sale of Goods Act, 1930” and every kind of services possible to be contemplated as service under the Act 1986.

This Act extends protection against Government body, statutory institutions as well as corporate sectors. The most pragmatic feature of this Act is the recognition of consumers’ right to be informed about the quality, purity, standard and price of goods and services, which is a potential device to prevent exploitation.

Concept of Service and Consumer under the Act, 1986

Service

The term ‘service’ is defined in Section 2(1)(o) of the 1986 Act:

service of any description, which is made available to potential users, including the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service”.

Therefore, it is clear from the preamble of the definition that service of any kind or nature that is rendered in exchange of consideration to direct or potential user comes within the definition of service. Some types of services even enumerated in an explicit manner within the definition but the definition of service is not limited to only those mentioned explicitly. As for example, medical service is not included directly in the definition. However, a series of judgments are available that identify medical treatment and the facility associated therewith is classifiable as service under the Consumer Protection Act.

Consumer

The term “consumer” as per Section 2(1)(d) of the 1986 Act:

includes any person who buys any goods for consideration or hires/avails any services for consideration”.

Therefore, the term consumer is really broad and includes any beneficiary of service without differentiation with respect to the type of beneficiary or nature of goods or service he/she purchases. Interestingly, the scope of service in this definition also has no limit because of the term “any service”. Therefore, there is no bar in accommodating students into the definition of the consumer because “any person” connected as the purchaser to “any goods” or “any service” is the consumer as per the Act. It is, still, important to find a support, outside the consumer protection Act, in favour of the term consumer when it applies to the student in the affair of university-students relationship.

Do Educational Institutions Fall Under the Purview of the Act?

A considerable number of decisions delivered by State and National level Consumer Forums are available as of now which protects the right of students with regard to fees, wrong allotment of roll numbers, delay in declaration of results, admission in excess of the allotted quota, misrepresentation about affiliation by the educational institute to various universities etc. The judgments related to the above-mentioned cases clearly indicate that student is a consumer as per the Act and the universities or educational institutes fall within the category of service providers.

But the Supreme Court of India had a differing view. In the case of Maharshi Dayanand University v. Surjeet Kaur[1], relying upon all earlier judgments, the Supreme Court held that education is not a commodity. Educational institutions are not providing any kind of service, therefore, in the 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.

Further Hon’ble Supreme Court in Bihar School Examination Board v. Suresh Prasad Sinha[2], Supreme Court observed that the Education Boards & Universities are not ‘Service Providers’ and the complaints against them are not maintainable.

The Hon’ble Apex Court in its latest judgment in P.T. Koshy & Anr. v. Ellen Charitable Trust & Ors.[3], has followed the above views.

Therefore, now the situation is complex and ambiguous. At this juncture, it is of vital importance to analyse the various functions of university/educational institutes to determine that whether the activities of university/educational institutes are classifiable under the conventional definition of service as per section 2(1)(o) of the Consumer Protection Act, 1986.

On the other hand, it is also necessary to assess the definition of the consumer under Section 2(1)(d) of the Act so as to check that the relationship between university and student fits with the conventional relationship of trader/service provider and consumer? If these two criteria are satisfied then it can be said that universities/educational institute come within the ambit of consumer protection law.

Assessment of Activities of University/Educational Institute

The functions of university/educational institutes can be divided into two main categories:

The Hon’ble Supreme Court, in Bangalore Water Supply & Sewerage Board v. A. Rajappa[5] (Bangalore Water Supply), had considered among other things, that educational institutes are classifiable as ‘Industry’ as defined in Section 2(j) of the Industrial Disputes Act, 1947, while determining the import of the aforementioned term.

Reference of words like service, business, profit, industry-partnership is available within the Central University Act, 2009, itself which clearly proves that university is not a non-profit body rather it has some business characteristics inherent in the Statutes and Acts which govern the functions of the university.

Critical Analysis of University-Student Relationship in the Context of Consumer Protection

The students enjoy all kinds of facilities i.e. both core and ancillary services rendered by the university or educational institutes after paying the requisite fees. Therefore, the students are direct beneficiaries and consumer of the services rendered by the university. A student after paying the requisite tuition fees deserves a good quality education and facilities related thereto. Similarly, after accepting remuneration it should be the moral duty and obligation for a teacher and university to provide the adequate service in terms of good quality education.

If the teacher or university fails to comply with this requirement then it amounts to deficiency in service because universities/institutes are imparting education in exchange for consideration. But, it is also necessary to understand that the relationship between student and university is not an ordinary relation of buyer and seller in the true sense. The statutory duty of the university is fixed by certain Acts, rules and regulations. A student only after complying the requirements fixed by the university in terms of its rules and guidelines can claim his/her entitlement as a consumer of service rendered by the university under the Act, 1986.

In my opinion, the teacher-student relationship should not be the only deciding factor to decide whether the various facilities provided by the university/educational institute should fall under the term “service” as per the Act 1986 because the teacher-student relationship is totally subjective which will vary depends upon the character of an individual teacher.

In this respect three court decisions are available and those contradicting to each other. In Taneja v. Calcutta District Forum[6] it is held by Calcutta High Court that the relationship between teacher and student in an educational institute is not one of service-provider and consumer.

The same principle was almost followed in Central Academy Educational Society v. Gorav Kumar[7] where it was held by the court that teaching is not capable of marketization as opposed to the sale of books or provision of accommodation is marketable and can be considered as service as per the Act, 1986.

Whereas, in Oza Nirav Kanubhai v. Centre Head Apple Industries Ltd.[8], the National Commission held that private educational institutes (i.e. institutes that are not statutorily established) to be classifiable as service providers, and students enrolled therein, or their sponsors, as consumers.

Therefore, the student-university relationship although not equivalent to a relation of consumer & service-provider in the strict sense but complaints against the university/educational institutes are maintainable in consumer court on the ground that student is nothing but a consumer as long as the complaint is genuine. The student is a direct beneficiary or in other words, consumer of the service rendered by university is supported by the fact the provision for student’s engagement in the academic activity of university including evaluation of teacher is available in Central University Act, 2009 which implies that student is nothing but a direct consumer of education service.

Rights of the Student and Responsibility of University/Educational Institute

It is imperative to understand the various rights or entitlement of the students under university/educational institutes in absence of which the noble mission and objects of the university get defeated. The important rights of the students which are very essential to protect the interest of every student in the field of education are mentioned below:

  1. Right to receive a good quality education.
  2. Right to receive all benefits and services related to study like laboratory, library, good quality study materials etc.
  3. Right to get proper and correct information related to terms and conditions of the university, disclosure of fees, affiliation, quality standard and facilities available in the university/institute etc.
  4. Right against exploitation of any kind in the university/educational institute.
  5. Right to care regarding the safety of students.
  6. Protection from injury on campus.
  7. Right to a grievance filing process.

It is the responsibility of the university/educational institutes to safeguard the rights of the student in order to fulfill its noble objects as enshrined in the statutes and Acts of the university. There are various provisions available in Central University Act, 2009 which empower university to frame rules, guidelines, ordinances with respect to:

However, there are lacunae in the Act with respect to two factors. An absence of redressal mechanism at the individual student level and no direct remedy is available for the university if found deficient in providing service or accused of unfair trade practice.

Support Available in Case Laws in Favour of Students as Consumer

The following court decisions have been quoted to substantiate the argument that student as consumer and university as the service provider.

Jai Kumar Mittal v. Brilliant Tutorials[9]

In this case, it was held that the supply of defective study materials by an institute can sustain a valid claim against it for deficiency of service.

In Bhupesh Khurana v. Vishwa Budha Parishad[10]

Due to misrepresentation about affiliation, the National Commission held, in respect of the recovery of the fees paid to the institute that the institute was liable to refund the fees, having lured the students to enroll in it through deceitful tactics.

Birla Institute of Technology & Science v. Abhishek Mengi[11]

The National Commission observed that forfeiture of fees by the educational institute without imparting education amounts to unfair trade practice.

Sonal Matapurkar v. S. Niglingappa Institute[12]

In this case, admissions were made by the dental institute over and above the sanctioned seats as a result of which the students were not allowed to appear in the examination by the university. Since the students had paid huge donations and had also made an investment of time and energy, the National Commission held that there was the deficiency in service and the complainants were entitled to refund of the donation and compensation with interest and cost of the proceedings.

Secretary, Board of School Education Haryana, Bhiwani v. Mukesh Chand of Palwal[13]

In this case, the respondents declared the results after a period of one year and eight months of the scheduled time. The Haryana State Commission held that there was erratic functioning on the part of the opposite party and it had a callous attitude towards its students, which is the deficiency in service on its part.

Therefore, the court decisions cited above clearly accepts that student is a consumer of the service provided by the university. Although, many judgments are also available where this consumer and service provider relationship is vehemently denied.

Critical Analysis of Three Decisions Delivered by Hon’ble Supreme Court to Restrict the Scope of Consumer Protection Act, 1986 with respect to Educational Activity

Bihar School Examination Board v. Suresh Prasad Sinha

The issue was raised regarding the issuance of the same roll number to three different candidates by the Bihar Board of Secondary Education and failure to declare the result of one of the candidates. In this case, it is held by the Hon’ble Supreme Court that, the Consumer Protection Act, 1986 is not applicable with respect to statutory functions statutory bodies. Here, the Board is a statutory body and conducting examination is in the exercise of discharging its statutory function.

Therefore, in this case, Bihar Board of Secondary Education is not providing any service. The examination fee paid by the candidates is also not considered as consideration. It is true that conducting examination is not a marketable service.

However, the findings in case of functions performed by statutory bodies outside the scope of service under the Act, 1986 is not supported by the earlier Supreme Court decision in the Lucknow Development Authority v. M.K. Gupta[14] where the Supreme Court held that the activity of statutory body is not exempted from the definition of service as per the Act, 1986.

Again, the Hon’ble Supreme Court, in Bangalore Water Supply & Sewerage Board v. A. Rajappa had considered among other things, that educational institutes are classifiable as ‘industry’ as defined in Section 2(j) of the Industrial Disputes Act, 1947 while determining the import of the aforementioned term.

Therefore, when there is negligence in performing the statutory duty it should not be exempted from the purview of the consumer law. When students pay the examination fee then he/she is entitled to get correct roll number, admit card, question paper, paper for writing the answer, the chance of scrutiny or review of the answer sheet being a candidate of examination and other facility provided by the examination board to every student. If there is any deficiency in the processing of the registration number, roll number, admit card, allotment of examination centre etc. it amounts to deficiency in service on the part of examination board because equal opportunity is the right of every candidate appearing in the examination.

Maharshi Dayanand University v. Surjeet Kaur

In this case, a student had enrolled in two courses simultaneously, one full-time course and one correspondence course. Such enrolment being in contravention of the rules, the university directed her to unenroll from one of the courses, pursuant to which she unenrolled from the correspondence course. However, she participated in the supplementary exam in respect of the correspondence course, despite having cancelled her enrolment therein, and passed it. However, her having taken the exam for the correspondence being in contravention of the university rules, the university refused to confer the degree on her.

University has the statutory power to enact laws, make ordinances in respect of functioning of the university. If any action taken by the student in contravention to the existing rules and regulation of the university enforced at the time of the action then the student is liable to face the consequences as per the existing rules. In that circumstances, the student cannot claim relief available in the Act 1986 as a consumer of service. It should be borne in mind that the statutory laws of the university and the rights provided in the consumer law should not contradict each other. Statutory laws of the university and consumer protection law both are enacted in order to make the functional activity of the university effective and at the same time to protect the right and interest of the student safe so these two laws should reinforce each other to protect the interest of both student and university.

P.T. Koshy & Anr. v. Ellen Charitable Trust & Ors.

Supreme Court held, in a brief order that educational institutes do not, through the performance of educational activities, render any service, in respect of which a complaint of deficiency could be maintained, and that consumer forums did not have the jurisdiction to adjudicate them. In view of the above discussions and explanations, it is found that the order in the matter of P.T. Koshy does not have support on legal and logical grounds.

Conclusion

In view of the above discussions, it is proved that with regard to application of Consumer Protection Act, 1986 is justified in case of educational activity or service rendered by the University/educational institutes. It is supported equally well on legal and logical grounds. Students are direct consumer or beneficiary of the service or facility provided by University/educational institutes. All kinds of activities performed by University/educational institutes may not be classifiable as marketable service because of the nature of those particular services but it does not support the complete exclusion of the University/educational institutes from the scope of Consumer Protection Laws.

In a country like India where scarcity of jobs and privatization of University/educational institutes is unavoidable so complete exemption of educational activity from the purview of the consumer protection law is not justified as long as the interest of students is concerned. The exemption of the University/educational institutes from the scope of the Act, 1986 will convert the educational into a business sector. The consumer protection law is a really good checkpoint to balance the business activity of University/educational institutes and make this sector more accountable for serving the interest of students and country at large. An activity explicitly mentioned in the statute of the university does not automatically exempt it from the purview of the Act, 1986.

At the same time, a student should not get the opportunity to get any undue privilege in contravention of the existing rules and regulations specifically mentioned in the statute and Acts of the university with illegitimate demands as a consumer of service. Therefore, in conclusion, University/educational institutes comes within the ambit of consumer protection law as long as the complaint is genuine on the ground that a legal right or interest of the student is prejudiced due to inefficient and deficient service or unethical trade practice by the University/educational institutes.

References

[1] Maharshi Dayanand University v. Surjeet Kaur, (2010) 11 SCC 159

[2] Bihar School Examination Board versus Suresh Prasad Sinha”, (2009) 8 SCC 483

[3] P.T. Koshy v. Ellen Charitable Trust, (2012) 3 CPC 615 (SC)

[4] Central University Act, 2009

[5] Bangalore Water Supply & Sewerage Board v. A. Rajappa

[6] N. Taneja v. Calcutta District Forum, 1991 SCC OnLine Cal 241: AIR 1992 Cal 95

[7] Central Academy Educational Society v. Gorav Kumar, (1996) 3 CPJ 230

[8] Oza Nirav Kanubhai v. Centre Head Apple Industries Ltd., (1992) 1 CPR 736.

[9] Jai Kumar Mittal v. Brilliant Tutorials, 2005 SCC OnLine NCDRC 23 : (2005) 4 CPJ 156 (NC): (2006) 1 UC 43.

[10] Bhupesh Khurana v. Vishwa Budha Parishad, (2001) 2 CPJ 74 (NC).

[11] Birla Institute of Technology & Science v. Abhishek Mengi, 2013 SCC OnLine NCDRC 394: (2013) 2 CPJ 681 (NC)

[12] Sonal Matapurkar v. S. Niglingappa Institute, 1997(2) CPJ 5 (NC)

[13] Secretary, Board of School Education Haryana, Bhiwani v. Mukesh Chand of Palwal, 1994 (1) CPR 269 (Har)

[14] Lucknow Development Authority v. M.K. Gupta, (1994) 1 SCC 243

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