Many schools and colleges are emerging day by day. There are many fake universities or claim of false affiliation with well-known Universities in India as well as abroad. UGC on April 2018 made a state wise list of 24 fake Universities. Most of such Colleges& Schools are being run by fly- by-night operators with only commercial motives. In the last decade imparting education has become just another business rather than service to the society. Depending on the cause of action there are cases where the Educational Institution has been fined under Consumer Protection Act 1986.
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 judgements 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.
The Supreme Court of India earlier had a differing view. In the case of Maharshi Dayanand University Vs Surjeet Kaur(2010) 11 SCC 159, relying upon all earlier judgements, 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.
The Hon’ble Apex Court in its latest judgment in P.T. Koshy & Anr. v. Ellen Charitable Trust & Ors2012(3) CPC 615., Changed the views and held that: “Therefore, now the situation is complex and ambiguous. At this juncture, it is of vital importance to analyze 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.”
Reference of words like service, business, profit, and 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.
While expanding the scope of Consumer Law, National Commission opened new doors in Bhupesh Khurana and others vs. Vishwa Budha Parishad and other,29 September, 2000, National Consumer Dispute Redressalthat imparting education falls within the ambit of service as defined under Consumer Protection Act. 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”.
In Bhupesh Khurana caseit was held by the court that “Imparting of education by an educational institution for consideration falls 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 institutions. If there is no rendering of service, question of payment of fee would not arise. The Complainants had hired the services of the Respondent for consideration so they are consumers as defined in the Consumer Protection Act”.
An educational Institution can also be held liable under the Consumer Protection Act, 1986. Holding of exams, declarations of results are all services under the Act & can be looked into by the consumer courts. Consumer courts have also held that it is not within their jurisdiction to look into whether particular rules in an institutions prospectus are illegal or not. Educational Institutions are covered by the provisions of the Consumer Protection Act, 1986 and if there is any deficiency in the services provided by the educational institutions, then they are liable for deficiency in the services under the Act. In this case, court held that there was deficiency in service on the part of the institute and students are entitled to claim the relief in the form of monetary compensation.
In view of the above discussions, is supported equally well on legal and logical grounds that education falls within ambit of services. Students are 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. The exemption of the University/educational institutes from the scope of the Act, will convert the educational into a business sector.
In Bangalore Water Supply Case the Apex Court among its many other observations recognized Educational Institutions as an industry. It was held that educational institutions are Industry in terms of sec 2(j) of Industrial Dispute Act,1947. In the manner industrial and customers disputes are redressed under consumer laws. 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. It does not make sense to force 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 mistake in such case cost of litigation will exceed the claim itself. In such cases consumer laws can sufficiently provide speedy remedy on individual level and can make institutions liable for deficiencies in their services.
Author, Pratiksha Bhandari.