In a significant ruling, the District Consumer Dispute Redressal Commission (Central District), Delhi, ordered IAS Gurukul to refund a substantial portion of the fees paid by a student, Ms. Satyata, citing misleading advertisements and deficiencies in services. The decision, issued on September 30, 2024, was delivered by Inder Jeet Singh (President) and Rashmi Bansal (Member) in Complaint Case No. CC/248/2018.
Background of the Case
Ms. Satyata enrolled in IAS Gurukul’s “Full IAS Preparation Program” in November 2017, attracted by advertisements that promised comprehensive coaching, qualified faculty, and various support services for IAS exam preparation. She paid a lump-sum fee of ₹98,000 for an 11-month weekend batch program, based on assurances that the advertised facilities would be provided.
However, after attending classes for four months, Ms. Satyata discovered several discrepancies: irregular class schedules, lack of experienced faculty for certain subjects, and unavailability of the promised test series and guidance. Despite raising her concerns, the coaching center failed to resolve the issues, leading her to seek a refund and compensation for the impact on her studies.
Legal Issues Involved
The case addressed key legal questions:
1. Deficiency in Services: Whether IAS Gurukul’s failure to deliver the advertised services constituted a deficiency under the Consumer Protection Act, 1986.
2. Misleading Advertisements: Whether the promotional materials used by the coaching center amounted to unfair trade practices by making false claims.
3. Unethical Fee Practices: The legitimacy of charging advance lump-sum fees without providing a refund for unutilized services.
Court’s Key Findings
The Commission ruled in favour of Ms. Satyata, citing IAS Gurukul’s failure to provide evidence that it had fulfilled its promises. The coaching center did not produce attendance records to substantiate its claim that the complainant attended classes for nine months, nor did it prove that any of the advertised mentors or specialized faculty conducted sessions with the students.
The judgment criticized the practice of collecting full advance fees without a refund policy, aligning with precedents such as the FIIT JEE Limited vs. Minathi Rath case. The Commission stated:
“The practice of requiring fee payment in lump-sum, offering discounts for services yet to be rendered, is unethical and unfair, as students are left with no recourse once fees are paid.”
The Decision
The court directed IAS Gurukul to refund ₹62,363 to Ms. Satyata, calculated on a pro-rata basis for the seven months of unutilized services. Additionally, it awarded ₹10,000 for mental harassment and ₹5,000 for litigation costs. The punitive damages sought by the complainant were not granted, consistent with the guidance from higher courts.
Ms. Satyata represented herself in the case, while IAS Gurukul was represented by its director, Mr. Pranay Agarwal. The judgment highlighted the necessity for coaching centers to maintain proper documentation and uphold the promises made in their advertisements.
