SC: Universities And Colleges Should Refund Fee To Students Withdrawing From The Courses

The Supreme Court on 8 December upheld that a University is bound to refund fees if a student withdraws admission. In Bihar School Examination v/s Suresh Prasad Sinha, the court held that examination fee paid by a student is not for availing any service. It is the charge paid for the participation in the test. The students are not a consumer, and nor is the board a ‘service provider,’.

A few months ago, the Maharashtra State Commission passed an amendment that categorised services rendered by educational institutions and exams that are conducted by Boards and universities, separately. This change was confirmed by the National Commission in Revised Petition 3288 of 2016 on 8 December.

The issue surfaced again when Megha Gupta who had taken admission for a BTech Course at Mody University of Science and Technology at Sikar, Rajasthan filed a complaint against the University. She lodged a complaint when the university did not refund the fee of Rs 1,44,000 and forfeited the entire amount when she decided not to join the course and requested a withdrawal, as reported by The Times of India.

The dispute reached National Commission, and the University said that the complaint was not affirmative before the consumer forum stating Bihar School Examination v/s Suresh Prasad Sinha case.

The National Commission observed the Supreme Court’s decision and said that it was in the context of Statutory Board or University as a service provider for conducting academic examinations.

It also stressed that SC judgement did not lay down any abstract proposition of law that a student seeking admission in an educational institution can never be a consumer of that particular institution. Emphasising the same point, the commission rejected the University’s argument that the complaint of the customer is not maintainable. It stated that since Medha’s grievance was about unfair trade practice of non-refund of fees, she was entitled to approach consumer fora for redressal of her grievance, as reported by The Times of India.

The Bench headed by Justice DK Jain, M Shreesha upheld that the University has to refund her fees amounting to Rs 1,44,000 within four weeks and if delayed it will have to pay interest at 9% p.a.

Colleges and educational institutions are now bound to refund the fees as per the University Grants Commission guidelines.