A consumer court in Hyderabad has directed a private school in Secunderabad to pay Rs 36,000 to a father after it refused to reimburse his daughter’s admission fee following a prompt withdrawal before classes commenced.
Ruling that schools cannot retain advance payments under blanket “non-refundable” policies without delivering any educational instruction, the Hyderabad District Consumer Disputes Redressal Commission determined that the refusal constituted an unfair trade practice. The commission ordered the school management to refund the Rs 21,000 admission fee, pay Rs 10,000 as compensation for mental agony and physical trauma, and cover Rs 5,000 in litigation costs within 45 days.
No Services Rendered, No Right To Retain Fees
The bench, comprising President Vakkanti Narasimha Rao and members P V T R Jawahar Babu and Suma Vala, stated in an August 19 order that educational fees represent compensation for services rendered through academic instruction. The panel held that because the parent submitted the cancellation request within days of payment and months before the academic session began in June, the school had ample opportunity to fill the vacant seat.
Addressing institutional practices across the education sector, the commission observed that schools must cease the routine retention of advance fees when students do not attend. The bench noted that enrolling a replacement candidate while holding on to a previous applicant’s payment results in double enrichment, likening such commercial practices to retail shops and identifying them as an unscrupulous trade practice. The commission made a distinction between this scenario and mid-session departures, clarifying that institutions remain justified in withholding fee balances from students who attend for days or months before leaving.
Relocation Delay Led To Dispute
The dispute traces back to February 9, 2019, when a 49-year-old father approached the Secunderabad institution to register his daughter in anticipation of an upcoming relocation. After the school offered an incentive discount for fees settled by February 10, the father paid Rs 21,000 toward the annual charge and finalized the admission paperwork.
Five days later, on February 14, the father notified the administration that his transfer to Secunderabad had been postponed and sought to cancel the admission and recover the funds. The school refused, stating that payments were non-refundable, non-transferable, and non-adjustable.
Represented by advocate G M Mohiuddin, the father approached the consumer forum requesting the return of the Rs 21,000 fee and Rs 20,000 in damages. The school did not submit a written response before the commission during the proceedings.
