Whether Educational Institutions are covered under the Consumer Protection Act 1986?

Recently, the Supreme Court has issued notices in an appeal challenging a Judgment of National Consumer Dispute Redressal Commission. The appeal is with regard to jurisdiction of consumer forum over Educational Institutions.

Question Before the Court is:

Whether a University or Educational Institution is covered under the Consumer Protection Act 1986?

A Three Judges Bench of Supreme Court, comprising Hon’ble Justice DY Chandrachud, Hon’ble Justice Indu Malhotra and Hon’ble Justice Indira Banerjee, has admitted the Appeal. 

The Court observed that there are divergent views of the Supreme Court, so this issue, needs to be settled.

What the NCDRC held?

In this case, the students were complainant before the commission.

They alleged that the University has indulged in unfair trade practice and deficiency in service as the University has induced the Students to get admitted in the offshore program of dental course.

Further, the course comprised of two-year study in Thailand and two and half years study in the University campus. But, such course was not recognized by Dental Council of India and affiliated with University.

Opposition of University

The University opposed the case on the ground that the Complaint is not maintainable.

It was pleaded that the Students are not Consumers and Educational Institutions are not Service Provider. Also, Education is not a commodity under the Act.

Counsel for the University placed reliance upon following two Supreme Court Judgments:

On the strength of these two Judgments, it was submitted that Educational Institutions are not covered under the Consumer Protection Act.

But the Students relied upon the Judgment of the Supreme Court in the case of P. Sreenivasulu & Anr. Vs P.J. Alexander & Anr.

In this case, the Supreme Court held that Educational Institutions are covered under the Consumer Protection Act. Meaning thereby, Education is a Service.

Decision of Commission:

After hearing parties, NCDRC held that Educational Institutions are not covered under the Consumer Protection Act 1986 as they do not impart services. So the Consumer Forum has no jurisdiction in such matters.

The commission relied upon the Judgment of Supreme Court in the case of Anupama College of Engineering vs Gulshan Kumar.

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