Is Education not a Service under the Consumer Protection Act?

In our country, it is a well settled law that as per Article 141 of our Constitution, the judgments made by the Supreme Court are binding on all lower courts of the country. Hence the laws laid down by the Supreme Court are binding on all High courts & on all lower courts/tribunals of the country. However, in spite of strong views taken by the apex court about judicial discipline, violation of basics by the lower courts/tribunals is yet in substantial increase. Lower courts and tribunals refuse to follow and accept the verdict of law by the larger benches giving reason of some minor differences in the facts. This amounts to disrespect to constitutional ethos and indiscipline of this kind can have grave impact on the judicial institutes- SC while adjudicating the case of Official liquidator vs Dayanand.  

Dr Prem Lata, Head Legal VOICE

“Judicial Discipline is a paramount feature for a Judicial Institution’- said three judges bench of the Apex court while adjudicating the matter of Official liquidator vs Dayanand and raised its concern on several such judgments namely U.P. SEB vs Pooran Chandra Pandey and criticized this kind of disobedience and also directed that such judgments not to be treated as obiter dictum. 

What is Obiter Dictum?

A judge’s expression of opinion uttered in court or in a written judgement, but not essential to the decision and therefore not legally binding as a precedent. In England an ‘obiter dictum’ has no binding effect either upon a coordinate Court or upon a subordinate Court.  In our country, it is a well settled law as per Article 141 of our constitution that judgments made by the Supreme Court are binding on all lower courts of the country. Hence the laws laid down by the Supreme Court are binding on all High courts & on all lower courts/tribunals of the country. But in spite of strong view taken by the apex court about judicial discipline, violation of basics by the lower courts/tribunals is yet in substantial increase. Lower courts and tribunals refuse to follow and accept the verdict of law by the larger benches giving reason of some minor differences in the facts .This amounts to disrespect of the constitutional ethos, and indiscipline of this kind can have a grave impact on the judicial institutes. The above observation of the Supreme Court three judges bench was in this context.  

Now, coming to the real question, whether Supreme Court of India has really declared anywhere that education is not service under Consumer Protection Act in the light of thunderous judgment given by National commission in Manu Solanki vs Vinayak University case which stands contrary to many judgments pronounced by the Supreme Court? Can the order passed by the National Commission be considered obiter dicta and not the precedent for lower commissions when Supreme Court judgments are contrary to the Manu Solanki judgment?

Having regard to the pendency of Civil Appeal No 3504 of 2020 (Manu Solanki and Others vs Vinayaka Mission University), the issue as to whether education is a service within the Consumer Protection Act, is pending before this Court. A bench of Justices D Y Chandrachud, Indu Malhotra and Indira Banerjee, (Manu Solanki and Others vs Vinayaka Mission University), has admitted an appeal filed by Manu Solanki and other students of a medical course against Vinayaka Mission University at Salem in Tamil Nadu, alleging deficiency in services. 

Since there are divergent views of this Court bearing on the subject as to whether an educational institution or University would be subject to the provisions of the Consumer Protection Act 1986, the appeal would require admission.  The Supreme Court has agreed to examine the question as to whether an educational institution or University can be sued under the consumer protection law for deficiency in services

SC asked lawyer Soumyajit, appearing on behalf of university, to file the response within six weeks to the appeal filed against a decision of the National Consumer Disputes Redressal Commission (NCDRC). Again while granting leave in a special leave petition filed by Rajendra Kumar on October 29, 2021, the Supreme Court observed that an appeal pertaining to the issue of whether education is a service within the CP Act was already pending before the court (Civil Appeal of Manu Solanki was admitted in 2020) and that this should be tagged with that. Now both the appeals are pending before the Hon’ble SC for its final verdict.

The students in the above appeal cited judgments in which it has been held that educational institutions would come within the purview of the Consumer Protection Act, 1986.
Facts leading to above appeal before the Apex court emerge from the judgment by NCDRC in above cited Manu Solanki case Hon’ble National commission which has opened a plethora of issues on Education as service. As many as 25 bunches of cases having number of petitioners and respondents have come to the National Commission from all over the country either in appeals or in Revision petitions for explanations to education as service.

In the present case in hand, namely, Consumer Case No. 261 Of 2012 Manu Solanki & 8 Ors  vs Vinayaka Mission University, Tamil Nadu with 24 more cases, issue is not limited to whether education is a service or not. These cases raise a number of issues related to education.

  1. Whether a student is a consumer for rendering services?
  2. What is the definition of education?
  3. What can be called an educational institute?
  4. Do coaching centre render education?
  5. Are skill development courses/vocational studies covered under education?
  6. Whether post education after completion, or pre admission, institute renders services?  
  7. Are incidental activities associated with educational institutes such as swimming, sports, etc. covered under education? 

The above issues had never been raised so far when services of education under consumer protection act are discussed by the apex court or apex commission.

Reviewing the Points Raised Above 

Point no 1

Student is a consumer as per Supreme court three judges Bench in the case of Usmania Islamia Academy vs State of Karnataka, three judges bench comprising Justice V N Khare, Justice S N Variyavaha and Chief Justice K G Balakrishnan pronounced a detailed order on 14.8.2003, which held that education is a service by discussing every aspect covered by the educational institute in providing education to the students. Number of guidelines were issued through this three judge’s bench order and UGC was directed to frame rules on the basis of this order. UGC then circulated certain guidelines for the institutes that –

  • They cannot retain more than Rs 1000/- as proportionate fee in case student leaves the institute
  • They cannot retain the original certificates also.
  • They cannot demand fee for the entire course, can only ask fee for one term.

Following this order, again there was Supreme Court ruling in the year 2004 in the matter of Bhupesh Khurana vs Buddha Dental College & hospital holding college unfair for their misleading information about the college. This theory is being followed by the National Commission till date.

No case against this judgment has been passed by SC. This judgment is further followed by Bhupesh Khurana vs Buddha Dental College Hospital in the year 2009 by Supreme Court two judges bench considering the grievance of students after entire course is finished and they found institute neither recognised nor affiliated contrary to their promise and advertisement. This was a case post rendering services by the institute and this case is not reverted back by the Supreme Court in any other case. Hence on first point, established law is that student is a consumer. 

Point no 2

Definition of education is of no relevance when we talk of services Service is defined under the act not only for education but for all possible services not limited to any particular discipline. Section 2 (42) of act 2019 and section 2(O) of act 1986 define as hereunder-

Section 2(1) (o) in the Consumer Protection Act, 1986

(o) “service” means service of any description which is made available to potential users and includes, but not limited to, 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. 

There is no word education or educational institute in this act which needs defining it for the purpose of any clarification of service.

Point No 3

What can be called an educational institute is the issue is not even remotely connected when we talk of services? It really does not matter whether service provider is educational institute, health care institute, financial services provider, housing board constructing houses or hotels boarding lodging service provider. 

The case cited for defining any institute whether educational institute or not is absolutely of no relevance rendering services under Consumer Protection Act does not need it to be necessarily labelled as educational institute. 

National commission referred to the following case-The Hon’ble Supreme Court in State of Punjab & Ors. Vs Senior Vocational Staff Masters Association & Ors. observed that vocational courses are those courses in which teaching is not on regular basis, though they play an important role in the grooming of students in different fields. Vocational education can also be termed as job oriented education and trains young people for various jobs and helps them acquire specialize skills.

Further reference is made to the fact that The Union Cabinet has approved a merger of the existing Regulatory Institutions in the skills space — National Council for Vocational Training (NCVT) and the National Skill Development Agency (NSDA) into the National Council for Vocational Education and Training(NCVET). The main purpose and objective of NCVET is to recognize and regulate and assess the skill related service regulators. It is clarified that even if there is any defect/deficiency/unfair trade practice in the services offered by private bodies in offering these courses and are not regulated and do not confer any degree or diploma recognized by any approved authority do fall within the ambit of definition of ‘Educational Institutions’

Further Hon’ble Seven Judge Bench of the Supreme Court in P.A. Inamdar vs State of Maharashtra, coaching centres cannot be equated to regular schools or colleges which are regulated by a Regulatory Authority and also confer a Degree/Diploma on the student who has passed in the examinations conducted as per the Rules and norms specified in the statute, hence coaching centres are promoting rote learning and not imparting actual knowledge

Let it be so if in view of the above discussion some institutes are not fit to be called educational institute under UGC guidelines or any other education ministry rules. Consumer Protection Act is only concerned that the students pay fee and avails services whether it is educational institute or not, it is service provider. 

Point no 4 & 5

On these two points again, discussion is about the character of an institute and interestingly student is considered a consumer against coaching institute, so no issue on that.

Point no 6

Post education grievance has already been taken up by Supreme Court in Bhupesh Khurana vs Buddha Dental College Hospital case in the year 2009 in detail, and there is no question of any contrary view unless the Supreme Court rules out or makes contrary judgment.

Point no 7

Regarding observation of NC in Manu Solanki case, incidental activities are not a part of education hence the institute is not responsible. National Consumer Disputes Redressal Commission took to task educational institutions on a number of issues, one of the most notable being the award of damages to the parent of a three year old girl child who drowned in a septic tank left open on the school premises. The Commission here made it clear that safety of students was an integral part of the service provided by educational institutions (S. Somasundaram Vs Sri Chakravarty International Matriculation Academy, 2001). The same NC now gives different version. 

Let all institutes be barred to earn profit by facilitating parents to get transport, sports, extra curriculum activities and stop charging fee under these heads. Parents can separately file case against swimming coach or transporter or hostel management for rendering deficient services. However, the matter is before the Supreme court now and it seems from the remarks by apex court, they may consider Universities also as service provider which as on date are not covered as per Supreme court 2009 judgment on  Bihar Examination Board  vs  Suresh Prasad Sinha, and Maharishi Dayanand University vs Surjeet Kaur.

All eyes are on Supreme Court to set all controversies at rest on the very crucial issue of education as service under CP Act.

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