Abstract

The susceptibility of activities of educational institutions to the provisions of the Consumer Protection Act, 1986 is one of the intensive areas of Indian consumer law. Through a series of three decisions, the Supreme Court of India has gradually reduced the susceptibility of educational institutions performed thereby from the purview of the provisions of the 1986 Act– seemingly excluded them altogether from the purview of the Act. In light of these happenings, this article shall assess the plausibility of the Supreme Court’s position, by managing to undertake a critical analysis of the legal aspect of the exclusion of educational institutions from the purview of the provisions of the 1986 Act, and therefore determining the practical effects and implications that are bound to come forward thereof. Further, this article aims to rebut the multifarious ways of reasoning been put forward, in support of the said exclusion, and thus conclusively establish, why educational institutions should, to the extent that they shall be classifiable as ‘services’ as defined under Section 2(1) (o) of the 1986 Act, not to be excluded from the provisions of the said Act’s purview thereof, and thus demonstrate the delusion of the Supreme Court’s position in this respect.

1. INTRODUCTION

Buying and selling is a process that takes place all over the world and something that can never be replaced. We pay consideration for only those things that we consider valuable enough. The consideration given can be for a service or for a product to fulfill our needs. It has always been a universal fact that when we pay consideration in return for a particular thing, we expect it to hold some kind of quality and to adhere to our personal needs.

If such a factor is not followed then the entire purpose of indulging into such a transaction would be defeated in layman terms. And to protect such expectations, needs and obligations of both the parties to the transaction, the Consumer Protection Act 1986 was formed.

Before making an opinion upon whether educational institutions deserve to come under the domain of the 1986 Act, it is imperative to understand what is a service and to whom is it provided which takes us to the next question i.e. who is a consumer.

However, while indulging into such an evaluation, it is required that certain inquiries be made for that matter, namely, first, whether the classification of marketable services can be used as an umbrella for the activities done in relation to education or performed by educational entities for that matter in a consumerist economy; second, whether such educational institutions can be classified as service providers for performing such educational activities; and third, whether the person who is on the receiving end of such educational activities from such educational institutions such as a student or his parents or anyone related as the case may be, be regarded as a consumer of such services.

To this end, this article shall be divided into seven parts. Part II shall address the functional definition of who is a consumer and for that matter; this part shall first try to cover the definition of a service to make interpretation only easier. Part III shall further broaden the understanding addressing what exactly comes within the purview of an educational service. Part IV shall then move on to explain the concept of deficiency in service. Part V shall address the concept of how statutory and consumer laws shall always compliment each other instead of being contradictory. Part VI shall help in making clear who is it that can be complained against when such grievance arises and finally Part VII shall focus upon briefly summing up the entire evaluation, thereby offering concluding remarks.

1. WHO IS A CONSUMER?

The term ‘Service’ has been defined under 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”[1].

Therefore, from the preamble of the definition stated above, it can easily be interpreted that any service given in exchange for consideration for rendering that service comes under the purview of the said term.

The term ‘Consumer’ has been defined under Section 2(1)(d) of the 1986 Act:

“Includes any person who buys any goods for consideration or hires/avails services for consideration[2]”

Therefore, according to the said definition, the term consumer is really broad and thus includes any person who avails services of another for a consideration and there is no bar to the scope of the said term because it doesn’t explicitly define any type of person or the nature of services that he/she avail.

After understanding the interpretation of both the terms i.e. ‘service’ and ‘consumer’, it can easily be said that when a student pays fees in the form of consideration for availing quality education from an educational institution, such a student becomes a consumer. Here, it cannot be denied that providing education is a service because of the statement in the last line of the definition of ‘service’ under section 2(1)(o) which says “but does not include the rendering of any service free of charge or under a contract of personal service[3]”.

National Commission expanded the scope of Consumer Protection Act, 1986 through its judgment in the following case-

BHUPESH KHURANA AND OTHERS vs. VISHWA BUDHA PARISHAD AND OTHERS [4]

The National Commission held that in respect of fees paid to the institute and for its recovery, the institute was liable to; therefore, refund the fees, having lured the students to enroll in it through deceitful means, and further imposed punitive damages. It was further held that imparting education came within the ambit of services as defined under the 1986 Act.

Students can be said to be the direct beneficiaries of the educational services provided by any University or college because they enjoy all kinds of facilities provided by the institutions after paying the required fees. And it is a general fact that when you pay for something then you automatically expect a quality return and thus a student paying fees to an educational institution has the right to expect quality education from such institute or college.

RAM KUMAR ASWANI vs. M/S A.K. STRUCTURAL FOAM LTD.[5]

The Hon’ble court, in this case, held that a student would come under the definition of a consumer under the 1986 Act if he was applying for revaluation of his result.

• WHAT IS INCLUDED IN EDUCATIONAL SERVICES?

Now what needs to be understood here is that educational services don’t just include a teacher-student relationship or the methods used by teachers to teach and interact with their students or the marking schemes used in the checking of examinations. When fees is paid to an institution it also includes various other factors such as accommodation services, timely allotment of roll numbers for examinations, relief available to students in case of any discrimination done with them, providing of quality study material, or refund of fees in case of withdrawal of admission to name a few.

Further, it is necessary and imperative to keep in mind that there is no such order passed by the Supreme Court to bar a student from filing a complaint or petition against an educational institution. If the claim is genuine and there, in fact, has been a deficiency in service, then students have the right to approach forums to seek appropriate remedy. It’s true that a few times complaints have been turned down at district forums just for the reason that they were against educational institutions but there have been no such rejections at National Forums. One should always seek remedy to violation of their rights even if it means facing rejection at one level and therefore approaching a higher forum.

BHUPESH KHURANA vs. VISHWA BUDHA PARISHAD[6]

The National Commission held that in respect of fees paid to the institute and for its recovery, the institute was liable to; therefore, refund the fees, having lured the students to enroll in it through deceitful means, and further imposed punitive damages. It was further held that imparting education came within the ambit of services as defined under the 1986 Act.

After going through and understanding the complaint, the State Commission, in this case, held that the ‘complainant’ would be a ‘consumer’ as she had by way of consideration hired the services of the said university.

In this regard, the Hon’ble Supreme Court rightly observed in a case[7] that “imparting of education by an educational institution for consideration fell within the ambit of ‘service’ as defined in the Consumer Protection Act. Fees are paid for services to be rendered by way of imparting education by the educational institution. If there is no rendering of service, the question of payment of fee will not arise. The complainant had hired the services of the respondents for consideration, so she was a consumer as defined in the Consumer Protection Act”. The court concluded: In the case of the university or an educational institution, their nature of the activity is ex hypothesis education, which is a service to the community.

BIRLA INSTITUTE OF TECHNOLOGY & SCIENCE vs. ABHISHEK MENGI[8]

The National Commission, in this case, observed that it would amount to unfair trade practice if a university forfeited the fees of a student without actually imparting education.

1. DEFICIENCY IN SERVICE

It is also imperative to understand one more term under the Consumer Protection Act 1986 i.e. ‘deficiency of service’.

Section 2 (1) (g) of the 1986 act defines deficiency as follows-

“Any fault, shortcomings, inadequacy, and imperfection in the quality, nature or manner of performance of the service is a deficiency. This standard has to be maintained by or under any law for the time being in force[9]”.

Through the above-stated definition, it can be understood that when consideration is paid for a service keeping certain reasonable quality in mind and that service falls short of it, then it would amount to deficiency in that service.

JAI KUMAR MITTAL vs. BRILLIANT TUTORIALS[10]

In this case, it was held that if an educational institute supplied defective study material to its students then it would be enough to sustain a claim against the said institution for deficiency in service.

SONAL MATAPURKAR vs. S. NIGLINGAPPA INSTITUTE[11]

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

BANGALORE WATER SUPPLY AND SEWAGE BOARD, ETC vs. RAJAPPA AND OTHERS[12]

In this case, Education Institutions were recognized as an Industry by the Hon’ble Supreme Court. It was held that-

“Educational Institutions are industry in terms of Section 2(j) of the Industrial Dispute Act, 1947, in the manner industrial and customer disputes are redressed under consumer laws. The consumer protection law is a 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. It does not make sense to force a customer to resort to the highly protracted and tedious, and not to mention, expensive conventional litigation for a matter like fees payment or correction of a mistake in such case cost of litigation will exceed the claim itself[13].”

In such cases, consumer laws can sufficiently provide a speedy remedy on individual level and can make institutions liable for deficiencies in their services.

A clear reading of all the above-mentioned case laws shows that courts accept the students being consumers and the universities being service providers under the purview of the 1986 act. However, there have been many judgments of the Supreme Court which denied the same. But what we first need to understand is that there are certain implications which cannot cover a student under the term ‘consumer’ such as a student claiming to be admitted into a college as a matter of right even though he/she doesn’t qualify the prescribed criteria to get the admission. Apart from that, even the course structure, the acceptance fee and the availability of seats in the college can only be decided by the colleges themselves.

1. CONSUMER LAWS AND STATUTORY LAWS OF UNIVERSITIES COMPLEMENT EACH OTHER

It is imperative to understand that the rights provided in the consumer law and the statutory laws of the universities cannot contradict each other. If a student fails to follow the rules and regulations laid down by a university or contradicts such regulations, then he/she is liable to be reprimanded for the same and in such a case the student cannot invoke his rights as a consumer.

There are judgments in which the Supreme Court has vehemently denied the involvement of educational institutions as a service provider or the students as a consumer.

BIHAR SCHOOL EXAMINATION BOARD vs. SURESH PRASAD SINHA[14]

The issue in this case was that same roll number had been issued by the Bihar Board of Secondary Education (BBSE) to three different candidates which lead to the failure of declaring the result of one of the said candidates. In this case, it was held by the Hon’ble Supreme Court that-

“The Consumer Protection Act, 1986 is not applicable to statutory functions of 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, the Bihar Board of Secondary Education is not providing any service. The examination fee paid by the candidates is also not considered as consideration. Indeed, conducting an examination is not a marketable service[15].”

MAHARSHI DAYANAND UNIVERSITY vs. SURJEET KAUR[16]

In this case, two courses were enrolled in simultaneously by the same student, one full-time course and the other being a correspondence course. The university directed the student to un-enroll from one of the courses, such enrolment being in contravention to the rules of the university, obeying which the student un-enrolled from the said correspondence course. Despite that, the student took a supplementary exam in respect of the said correspondence course to which the university denied a degree because it was in contravention to the rules.

Relying upon all the 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[17].”

P.T. KOSHY AND ANOTHER vs. ALLEN CHARITABLE TRUST AND OTHERS[18]

In this case, the Hon’ble Supreme Court held 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[19].”

Even though such judgments have been made, it is not an established law whether colleges come under the domain of Consumer Protection Act, 1986 or not. It solely depends upon the nature of the complaint and the relief that is being sought.

1. SERVICE PROVIDER TO BE KEPT IN MIND

One needs to be clear while filing a complaint that who the service provider is. Because in certain cases, if the complaint is against a University and not the college which is affiliated to that university, then it has been held it is the college that is at fault and the universities are more into administration such as issuing conducting examinations or awarding degrees. On the other hand, it might be so that the colleges affiliated to such universities might get penalized for the same or other reasons whatsoever.

There have been many rulings which specifically state that Universities come within the ambit of performing their statutory functions at the time of admissions to particular subjects, conducting examinations and deciding fee structure under the provision of the 1986 Act. It needs to be understood that it is up to the Universities only to decide admissions and no student can demand them thereof. Notably, there is no straitjacket formula to measure the admissibility of a case under the Consumer Protection Act, 1986. It will always vary from case to case depending on their facts and circumstances.

• CONCLUSION

Indeed, legislative amendment is often a prolonged and time-consuming procedure; thus, if the legislature at all decides to read deeper into the discussed issue then during such protraction it is up to the judiciary to step in and provide the state with a remedy to the law in this respect. What needs to be done here, in my recommendation would be that the judiciary must formulate a proper and clearer definition of educational activities and not necessarily subjected to consumer protection law but in any subject as long as it benefits the society at large. This step, if not at large, would definitely add a precedential value to the cases of educational institutions while respecting educational activities that come within the ambit of such institutions. Such progress would only lead to the elimination of one of the main problems i.e. the actual status of the educational institutions in the society.

It is vehemently hoped that the Hon’ble Supreme Court finally realizes the direness of this situation and thus reverse the trend of not considering educational institutions and the activities provided thereof from the purview of the Consumer Protection Act, 1986.

Country like India is a hub of job scarcity and therefore, it is difficult to avoid the privatization of educational institutions. If such institutions were to be completely removed from the purview of consumer protection law then educational institutes would become a business sector and there would be no stopping it. Thus, as long as there is no established law in this regard, it can be said that if the complaints are genuine and the relief asked for is essential, then colleges can always be questioned under the purview of the Consumer Protection Act, 1986.

[1] Consumer Protection Act, 1986 (68 of 1986) (India).

[2] Ibid.

[3] Supra note 1.

[4] (2001) 2 CPJ 74 (NC) (India).

[5] 1993 CPC 383 (India).

[6] Supra note 4.

[7] Buddhist Mission Dental College and Hospital  v. Bhupesh Khurana, (2009) 4 S.C.C. 484 (India).

[8]  2013 SCC Online NCDRC 394: (2013) 2 CPJ 681 (NC) (India).

[9] Supra note 1.

[10] 2005 SCC Online NCDRC 23: (2005) 4 CPJ 156 (NC): (2006) 1 UC 43 (India).

[11] 1997(2) CPJ 5 (NC) (India).

[12] (1978) 2 S.C.C. 213 (India).

[13] Bangalore Water Supply and Sewage Board, etc vs. Rajappa and Others, (1978) 2 S.C.C. 213 (India).

[14] (2009) 8 SCC 483 (India).

[15] Bihar School Examination Board vs. Suresh Prasad Sinha, (2009) 8 SCC 483 (India).

[16] (2010) 11 S.C.C. 159 (India).

[17] Maharshi Dayanand University vs. Surjeet Kaur, (2010) 11 S.C.C. 159 (India).

[18] (2012) 3 CPC 615 (SC) (India).

[19] P.T. Koshy and Another vs. Allen Charitable Trust and Others, (2012) 3 CPC 615 (SC) (India).