Court orders full fee refund as student leaves seat for IIT, says educational bodies aren’t profit ventures
Directing institute to pay Rs 10,000 as compensation for mental agony, harassment, and Rs 15,000 for litigation expenses, consumer court said that higher educational institutions are not commercial or profit-maximising ventures.
Kangra Consumer Court was dealing with plea of a MBA student seeking refund of fee from MANIT, Jaipur. (AI-generated Image) Underscoring that higher educational institutes are centres of learning, not commercial or profit-maximising ventures, the Kangra district consumer commission has ordered the Malaviya National Institute of Technology (MANIT), Jaipur, to refund the fee of Rs 94,315 to an MBA student who later got admission into IIT Mandi.
A bench of president Hemanshu Mishra and members Arti Sood and Narayan Thakur noted that students cannot be penalised or financially chained to an institution under the guise of rigid internal timelines when they secure admission to higher institutes of premier repute, such as the Indian Institute of Technology Mandi.
“Higher educational institutes are centres of learning, not commercial or profit-maximising ventures, and they cannot be permitted to enrich themselves unjustly by capitalising on a student’s choice to pursue a better academic opportunity,” the bench said on May 25.
The order noted that students are the true foundational bedrock of our nation, and their academic aspirations and legal rights must always prevail over the commercial interests of educational institutions.
‘She got into higher national repute institute’
- The act of withholding Rs 79,315 out of the deposited Rs 94,315, and refunding merely the Rs 15,000 caution money, constitutes a gross deficiency in service and an unfair trade practice.
- For an institute of such repute, a vast waiting list of meritorious students is invariably available, yet the Opposite Party failed to place any evidence on record to prove that they made active attempts to operate their waiting list to fill the seat.
- According to the complaint, a student who hails from Rajasthan sought admission to the MBA program (2023-25) at the Malaviya National Institute of Technology (MNIT), Jaipur.
- Financial constraints or arbitrary forfeitures should never act as a barrier or a punishment for a student migrating to an institution of higher national repute like the IIT Mandi.
- The right of a student to choose their academic path freely, without being financially penalised by rigid, unconscionable internal timelines, is paramount and fully protected under the national regulatory frameworks.
- The Institute is held liable for deficiency in service and unfair trade practice and is hereby directed to refund the entire withheld amount of Rs 94,315 to the complainant.
- The Institute is directed to pay a sum of Rs 10,000 as compensation to the complainant for the mental agony, harassment, and unnecessary delay caused by the high-handed approach of the Institute, along with Rs 15,000 towards the litigation expenses incurred by her.
She got into MANIT first, later in IIT Mandi
According to the complaint, a student who hails from Rajasthan sought admission to the MBA program (2023-25) at the Malaviya National Institute of Technology (MNIT), Jaipur.
Upon confirmation of provisional admission, she deposited a total sum of Rs 94,315 on June 26, 2023. Subsequently, having secured admission at IIT Mandi, the student requested withdrawal of her admission and a refund of the deposited fee on August 1, 2023, which was well before the commencement of the academic session/registration process.
Allegation of non-refund of fee from MANIT
She alleged that despite requests, the MANIT, Jaipur, failed to refund the full amount, retaining a significant portion in violation of its own prospectus (Clause 4.7.2) and the mandatory guidelines issued by the University Grants Commission (UGC) regarding fee refunds.
According to the complaint, the institute only refunded Rs 15,000, withholding Rs 79,315. Following this, she filed a complaint before the Knagra district consumer commission.
MANIT’s stand
Appearing for the MANIT, advocate Adhar Gupta asserted that as an Institute of National Importance under the NIT Act, 2007, it is under the direct control of the Government of India and is not governed by UGC or AICTE guidelines.
He submitted that the complainant does not fall under the definition of a “consumer,” and the Institute does not fall under the definition of a “service provider” as per the Consumer Protection Act, 2019. He stated that she was admitted to the MBA program and deposited a total of Rs 94,315.
He argued that the Institute suffered a financial loss due to the seat remaining vacant and requested that the complaint be dismissed as frivolous.
Institute’s brochure can’t override UGC regulations: Order
- We conclude that when an institution acts as a mere custodian of money for a seat that was never occupied, and where no educational service was ever availed, total forfeiture of fees amounts to an unfair trade practice and an administrative deficiency falling squarely within the jurisdiction of this commission.
- The institute further contends that because it is an Institute of National Importance under the NIT Act, 2007, and controlled directly by the Ministry of Education, it is exempt from the guidelines issued by regulatory bodies like the UGC.
- We find this contention to be fundamentally flawed and legally untenable.
- The UGC is the apex statutory regulatory body for higher education in India, and its public welfare mandates regarding student migration and fee refunds apply uniformly across all technical, agricultural, and higher educational institutions nationwide.
- For the academic year 2023-24, the UGC issued a mandatory notice on the fee refund policy, categorically directing all higher educational institutions to grant a full refund of fees upon any cancellation or withdrawal of admission up to September, 30, 2023.
- The complainant formally requested a withdrawal on August 1, 2023; her request was made well within the absolute statutory deadline prescribed by the national regulatory authority.
- An institution’s internal information brochure or prospectus cannot override national statutory regulations designed to protect students from financial exploitation.
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