Educating students on fee refunds

Can an educational institution refuse to refund the fee to a student withdrawing from a course, saying that the seat vacated by the student was not filled up and therefore it would suffer a loss if it refunded the money?

Can a college use an undertaking taken from the student at the time of admission saying that he or she will not ask for a refund, to retain the fee paid by the student?

Can an educational institution deny a student his claim for a refund by pointing to its terms and conditions saying that refund is not permissible under any circumstances? Can the rules and regulations framed by colleges and universities override the instructions of the regulators the All India Council for Technical Education (AICTE) and the University Grants Commission (UGC) on the issue?

The answers to all these questions can be found in the decisions of the apex consumer court. In fact, I must mention that the consumer courts have gone beyond the instructions of AICTE and the UGC on the issue of refund to help students get back their money. But before I begin, let me briefly quote the instructions issued by the AICTE to all technical institutions as well as universities and deemed to be universities imparting technical education on the subject: It says that if a student withdraws before the starting of the course, then the entire fee collected from the student should be returned. The college can only retain a maximum of Rs 1000 towards processing/ administrative charges. It also says that if a student, after joining the course, wishes to leave, and the seat so left vacant is filled by another candidate by the last date of admission, then the institution should return the fee with proportionate deductions of monthly fee and hostel rent, where applicable.

Now in a recent case decided by the apex consumer court, the educational institution came up with two arguments. One was that the students (four of them had filed separate petitions) had given an undertaking forfeiting the fee in case they quit the course. Two, as per the guidelines issued by the Director, Technical Education, Haryana and the Haryana State Counselling Society, a student would be entitled to a refund only if a new student filled up the vacancy caused by the withdrawal of the first student. In this case, it had not happened. So on both these counts, the students were not entitled to any refund of the fee paid, the college argued.

The District Forum dismissed the first contention on the ground that such an undertaking was not legally binding. As far as the second argument was concerned, the forum pointed out that here, out of a total of 300 seats sanctioned to the college for different courses in the academic session 2008-09, the institution could forward a list of only 69 candidates for taking the university examination. Due to such large vacancies the institution had no waiting list of admission seekers.

Therefore, the question of filling up the vacancy caused by the exit of the four students did not arise at all and the students could not be blamed for the vacancies. So, it directed the college to refund the amount after deducting Rs 1000 towards administrative charges and pay 9 per cent interest on the amount. This was upheld by the National Consumer Disputes Redressal Commission (Ganapati college of Engineering for Girls Vs Vijeta, RP No 347 of 2012). In 2008, the apex consumer court had given a similar verdict in a case where the institute had retained Rs 1 lakh and returned only Rs 10,000 on the ground that a seat rendered vacant by such withdrawal after the commencement of the course remained vacant for the complete academic course of two years.

The National Commission here had pointed out that the institute had not suffered any loss as it had admitted in the general category more students than the sanctioned strength. It had therefore directed the college to refund Rs 1 lakh along with 6 per cent interest (Nipun Nagar vs Symbiosis Institute of International Business RP No 1336 of 2008).

In Shri Saravpreet Singh vs the Principal, Lala Lajpat Rai Institute of Engineering and Technology, Moga,( RP No 343 of 2009) too, the apex consumer court had made it clear that students are not bound by unfair terms and conditions drawn up by colleges to defeat their claim for refund . And if these terms and conditions are not in harmony with those drawn up by the AICTE, then those of the AICTE will prevail.

So if you have a problem with regard to getting your fee back, the first option is to complain to AICTE. If for any reason, that fails, then take your complaint to the consumer court.