Delhi State Commission Upholds Order Against FIITJEE; Student Gets Refund

Brief facts of the Case:.

The respondent, Manas Mehra, enrolled in a two-year weekend coaching programme for JEE (Advanced) 2021 offered by FIITJEE Ltd., for which he paid a total fee of ₹4,01,493 on 29.10.2018.

After attending only two weekend classes, he found the quality of teaching unsatisfactory and, on 21.05.2019, submitted a withdrawal request through his father seeking discontinuation from 25.05.2019 along with a refund after proportionate deductions.

FIITJEE rejected the request, relying on a no-refund clause contained in the enrollment form. Despite a legal notice, FIITJEE refunded only ₹24,780 without offering any explanation and failed to respond to subsequent communication, leading the complainant to approach the District Consumer Commission alleging deficiency in service and unfair trade practice.

The District Commission held the complainant to be a consumer, declared the no-refund clause arbitrary, one-sided, and unconscionable, and concluded that FIITJEE had unjustly retained fees for services not rendered. Consequently, FIITJEE was directed to refund ₹3,20,000 with applicable interest and to pay ₹25,000 towards compensation and litigation costs.

Aggrieved by this decision, FIITJEE filed an appeal before the State Commission, contending that the District Commission failed to properly consider the terms of the enrollment form and erred in holding that FIITJEE was deficient in providing its services.

Contentions of the Appellant (FIITJEE Ltd.):

FIITJEE argued that the refund order was erroneous because the complainant had voluntarily agreed to a clear no-refund clause, which barred any refund if a student left mid-course. It contended that the Consumer Commission could not override a valid contractual term and that the complainant failed to prove any deficiency in coaching. FIITJEE relied on several precedents, including Islamic Academy of Education, asserting that the District Commission misapplied the law and that the refund and compensation should therefore be set aside

Contentions of the Respondent:

The respondent supported the District Commission's order, stating he attended only two classes, found the coaching unsatisfactory, and withdrew promptly, making it unjust for FIITJEE to retain the entire two-year fee. He argued that the no-refund clause was arbitrary and one-sided, and FIITJEE's partial refund of only ₹24,780 without explanation amounted to unfair trade practice. He further submitted that FIITJEE failed to comply with the Supreme Court's directions regarding handling of advance fees, and therefore the refund and compensation were rightly ordered.

Observation and Decision of the State Commission:

The State Commission observed that the respondent had paid the entire two-year fee in advance but had attended only two weekend classes before seeking withdrawal due to dissatisfaction with the quality of coaching. FIITJEE relied solely on the no-refund clause to justify retaining almost the entire amount and failed to produce any evidence showing compliance with the Supreme Court's directions in Islamic Academy of Education, which require institutions collecting advance fees to keep unutilized amounts in fixed deposits and use only the portion relating to the current semester or year.

The Commission further noted that FIITJEE did not prove any actual financial loss or show that the student's seat remained vacant. It agreed with the District Commission that the no-refund clause was arbitrary, unreasonable, and one-sided, and therefore could not be enforced to permit retention of fees for services not rendered.

Accordingly, the Commission upheld the direction to refund ₹3,20,000 with interest and ₹25,000 as compensation, and dismissed FIITJEE's appeal.

Case Title: FITJEE LTD. VS. MR. MANAS MEHRA

Case No.: FA NO./129/2023