REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELATE JURISDICTION
CIVIL APPEAL NO.1135 of 2001
Buddhist Mission Dental
College & Hospital ..... Appellant
Versus
Bhupesh Khurana & Others ..... Respondents
JUDGMENT
Dalveer Bhandari, J.
1. This appeal is directed against the judgment dated
29.9.2000 passed by the National Consumer Disputes
Redressal Commission, New Delhi (for short `the Commission’)
in Original Petition No. 168 of 1994.
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2. Eleven complaints were filed before the Commission
against the appellant herein, viz. Buddhist Mission Dental
College and Hospital through its Secretary Shri R.A.
Vatsayayan.
3. The appellant published an advertisement in the
Hindustan Times, an English national daily, on 25.7.1993
inviting applications for admission in the Degree Course of
Bachelor of Dental Surgery (for short, BDS). In the said
advertisement, it was specifically highlighted that the
appellant college is a premier dental college of Bihar
established and managed by the Vishwa Buddha Parishad
under Article 30 of the Constitution of India. It was also
mentioned right under the name of the appellant’s college that
the said institution is “The Buddhist Mission Dental College
and Hospital” under Magadh University, Bodh Gaya and
Dental Council of India, New Delhi, Siddharth Nagar, New
Bailey Road, Patna. The said advertisement is reproduced as
under:
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“THE BUDDHIST MISSION DENTAL COLLEGE &
HOSPITAL”
(Under Magadh University, Bodh Gaya, and Dental
Council of India, New Delhi, Siddharth Nagar, New
Bailey Road, Patna-801305)
A premier Dental College of Bihar, established
and managed by VISHWA BUDDHA PARISHAD,
under Article 30(1) of the Constitution of India,
fulfilling all the criterion and conditions of Dental
Council of India.
ADMISSION NOTICE FOR BDS COURSE 1993-94
Applications are invited for admission in 1st year
(B.D.S.) Course.
Eligibility:- S.S.C. Or Equivalent degree with a
minimum 50% marks (40% in case of reserved
candidates) in Physics, Chemistry, Biology Group.
Application form and prospectus can be had
from the office on payment of Rs.100/- (or Rs.110/-
by DD in the name of the college if requested by
post).
Last date for submission of application is
30.08.1993. Separate hostel facility for boys and
girls in the campus, preference to Buddhist and
other minority candidates.
NO CAPITATION FEE
(R.S. Vatsyayan)
Secretary”
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4. The complainants, respondents herein, who have all
passed 12th standard examination with Physics, Chemistry
and Biology and have secured good marks and were in search
of brighter career prospects, believing the facts incorporated in
the advertisement of the appellant to be true, applied for
admission to the appellant’s college in the academic session
1992-93. In the complaint, it was stated that in the
advertisement it was specifically mentioned “No Capitation
Fee”. This obviously gave the impression that no capitation
fee would be charged from the students. But in fact, at the
time of admission, Rs.1,00,000/- was taken in cash from each
of the respondents and despite repeated requests made by the
respondents, no receipt for the amount paid by them was
given. When the respondents insisted upon the receipts of the
said amount paid, they were threatened that if they persisted
on the demand of getting the receipts, their admission would
be cancelled. It is further alleged in the complaint that the
respondents had paid a substantial amount under various
heads viz., admission fee, tuition fee, development charges,
charges of consumables, house-in-practicals, sports,
magazines, library etc.
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5. The respondents also started attending classes after
joining the appellant college. The respondents after several
months came to know that the claim made by the appellant to
the respondents in the advertisement as well as in the
prospectus was false, because the appellant college was
neither affiliated to the Magadh University nor it was
recognized by the Dental Council of India.
6. In the complaint, the respondents also mentioned that
they were informed by the appellant that the college is well
equipped with library, laboratories, anatomy museum,
medical appliances and instruments, hostel accommodation
duly furnished and well qualified teaching staff. But, in fact,
there was no regular qualified staff, no anatomy museum,
library had hardly any relevant books, laboratory was ill-
equipped, as most of the necessary instruments/equipments
were either not available and those which were available were
very few in number and were grossly inadequate for the
students who were admitted in each session.
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7. The respondents had spent a huge amount for admission
and, moreover, they were also given all sorts of assurances
that soon everything would be made available to the students
and all facilities would be provided immediately after getting
the affiliation by the Magadh University and recognition by the
Dental Council of India. The respondents also alleged that
usually in the aforesaid course of four years, at the end of
each year, the examination is supposed to be conducted, but
the appellant did not conduct any examination at all by the
end of 1994 and there was no hope of examination being
conducted in the near future.
8. It was also alleged that no efforts had been made. There
was no development in connection with the affiliation or
recognition of the appellant college and no efforts were being
made to improve the standard of the said institution by
appointing regular teaching staff with proper qualification,
providing sufficient number of relevant books in the library
and for providing other facilities to the students for which all
sort of assurances were made to them.
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9. The respondents were deeply frustrated because their
entire academic career was ruined. Therefore, they preferred
claim petitions before the Commission. The Commission by its
order dated 29.9.2000 found merit and substance in the
complaints filed by the respondents and categorically held
that there was insufficiency of services on the part of the
appellant and that the respondents were legitimately entitled
to the claims made in the petition.
10. The Commission directed the appellant to refund the
admission expenses paid at the time of admission along with
interest at the rate of 12% per annum from the date of receipt
of the amount till the date of payment and also Rs.20,000/- to
each of the respondents by way of compensation for the
expenses defrayed on purchase of books, mess expenses,
hostel expenses for two years and for the loss of two valuable
academic years. Since there was no receipt of capitation
fee/donation paid by the respondents, the Commission inter
alia did not grant any relief to the respondents in that regard.
However, the Commission directed that the appellant shall
pay Rs.10,000/- by way of costs of the petition.
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11. The appellant, aggrieved by the impugned order of the
Commission dated 29.9.2000, preferred this appeal under
Section 33 of the Consumer Protection Act, 1986 read with
Order XX-F of the Supreme Court Rules, 1966.
12. This Court admitted the appeal and issued notice and
directed vide order dated 23.2.2001 that “there shall be
interim stay of the operation of the judgment/order under
challenge subject to the condition that the appellant deposits
the sum as directed therein with the National Commission
within four weeks”.
13. The respondents filed cross objection and prayed that
the appellant be directed to – (a) allow this cross objection and
direct the appellant to pay Rs.1,00,000/- which was charged
as capitation fee, with interest, at the rate of 15% from the
date of admission till the date of payment; (b) direct the
appellant to pay Rs.1,25,000/- as compensation instead of
Rs.20,000/- only; and (c) direct the appellant to pay cost for
the present proceedings.
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14. We have heard the learned counsel for the parties at
length. The learned counsel appearing for the respondents
brought to our notice that the appellant had not complied with
the order passed by this Court on 23.2.2001. After hearing
learned counsel for the parties, this Court passed the
following order dated 26.11.2008:
“The National Consumer Disputes Redressal
Commission, New Delhi in the impugned order,
directed respondent Nos. 1 to 4 to refund the
admission expenses paid by the complainants at
the time of admission with interest calculated at the
rate of 12% p.a. from the date of receipt of the
amount till date of payment and also Rs.20,000/- to
each of the complainants by way of compensation
for the expenses defrayed on purchase of books,
mess expenses, hostel expenses for two years and
for the loss of two valuable academic years.
This Court while admitting appeal on
23.2.2001 directed that there shall be interim stay
of the operation of the judgment/order under
challenge subject to the condition that the appellant
deposits the sum as directed therein with the
National Commission within four weeks.
It is not disputed by learned counsel
appearing for the appellant that neither the interest
nor the payment of Rs.20,000/- each has been
deposited or paid to the complainants despite clear
orders of the Commission.
According to the complainants, the appellant
is clearly in breach of the order of this Court.
Learned counsel appearing for the appellant fairly
submitted that the interest amount and the
payment of Rs.20,000/- each to the complainants
10by way of compensation would be deposited before
the National Commission within one week from
today.
In view of this undertaking, we are not taking
any action against the appellants (who were
respondent nos. 1 to 4 before the National
Commission). Let this amount be deposited within
one week from today before the National
Commission. It is made clear that the interest
amount would be paid from the date of receipt of
the amount till the date of payment (as directed by
the Commission).
List this matter again on 3.12.2008 as part-
heard.
The parties are permitted to file written
submissions by Monday, i.e. 1st December, 2008.”
15. When the matter again came up on 3.12.2008, learned
counsel appearing for the appellant fairly submitted that
despite his clear advice to the appellant to comply with the
order passed by this Court on 26.11.2008, the same has not
been complied with. The respondents prayed that the
contempt notices be issued to the appellant. At that stage, we
deemed it appropriate to hear the appeal and pass the final
order.
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16. It was submitted that the appellant started this college
and wanted to impart high quality education in right earnest
and immediately after establishing the college wrote a letter on
23.6.1989 to the Dental Council of India informing it about
the establishment of the appellant’s college and sought
approval for it. It was also mentioned that the Union Ministry
of Health and Family Welfare also wrote to the Dental Council
of India vide its letter dated 5.9.1991 recommending
inspection of the college as a part of process of seeking
approval. It was also mentioned that the Officer on Special
Duty, Governor Secretariat, Bihar wrote to the Vice Chancellor
of Magadh University for taking immediate action in respect of
grant of affiliation. It was also mentioned that the appellant
had made efforts to get approval from the Dental Council of
India and affiliation from the Magadh University, but the
desired affiliation and approval were not received.
17. The learned counsel for the appellant argued that in
unmistakable terms it was mentioned that “the academic
syllabus of the college meets the standard as per the Dental
Council of India Rules and as prescribed by the faculty of
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Dental Science, Magadh University, Bodh Gaya, Bihar to
which this institution seeks affiliation for award of Bachelor of
Dental Science (BDS) degree.” It was submitted that if the
prospectus is read as a whole it conveyed the information in
no uncertain terms that the infrastructure available with the
appellant institution and the integral reading of the
prospectus did not even remotely indicate that the information
concerning the approval of the Dental Council of India and
affiliation with the Magadh University was tried to be
conveyed.
18. It was submitted that the appellant’s Institute was
anxious to hold the examination. The management of the
appellant institute was deeply concerned about their
handicapped in respect of holding examination as the
students including respondent nos.1 to 12 were being
deprived from appearing in the examination even after
receiving high quality education. It is also mentioned by the
appellant that they made all efforts to get the recognition and
affiliation.
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19. The appellant again tried to canvass that the appellant’s
institute is an industry and the service rendered by the
appellant institute amounts to deficiency in service within the
meaning of section 2(1)(g) of the Consumer Protection Act.
Apart from this, the allegation of unfair trade practice within
the meaning of section 2(1)(r) of the Act against the appellant
are without any merit.
20. The respondents also filed cross objections in this court
stating that the respondents had paid donation/capitation fee
of Rs.1 lakh in cash at the time of admission. The appellant
institute did not issue any receipt of donation/capitation fee
despite repeated requests.
21. Mr. Bhupesh Khurana, respondent no.1, filed an affidavit
before the National Commission in which it was clearly
mentioned that on the demand of the appellant institute, the
parents of the complaintants/respondents paid capitation
fee/donation of Rs.1 lakh per student to the institute for
which no receipt was issued despite insistence.
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22. The appellant also mentioned that it has made huge
investment and they have legitimate expectation that
affiliation and recognition would be granted to them by the
Magadh University and the Dental Council of India.
23. The respondent in the cross objections denied the claim
of the appellant and submitted that there was no regular
qualified teaching staff. There was no anatomy museum,
library had no relevant book, laboratory was ill-equipped as
most of he necessary instruments/equipments were either not
available and those which were available were very few in
numbers and were not sufficient for the students who were
admitted in each session.
24. The respondents also submitted that they had spent
huge amount for admissions and were given all sorts of
assurances that soon everything would be made available to
the students and all facilities would be provided immediately
after getting the affiliation by the Magadh University and
recognition by the Dental Council of India.
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25. The respondents also complained that in the course of
four years, at the end of each year the examination must be
held but no examination was held till the end of 1994 and
there was no hope of examination being held in the near
future because the appellant did not get either affiliation or
recognition. The respondents also mentioned in the cross
objection that charges of hostel/private accommodation were
nearly Rs.15000/-, mess charges more than Rs.500/- per
month and miscellaneous expenses including pocket money
for two years were around Rs.10000/- to Rs.15000/-. Apart
from that, each student had spent more than Rs.6000/- to
Rs.7000/- as traveling expenses and around Rs.8000/- to
Rs.10000/- on books. Thus, it is obvious that actual
expenses of each student were more than Rs.60000/- to
70000/-.
26. The respondents claimed that the Commission failed to
appreciate that at the time of admission, each student had
paid a sum of Rs.1,00,000/- as donation/capitation fee. Each
student has lost two academic years by taking admission in
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this institute which was neither recognized nor affiliated. The
entire educational career of the respondents has been ruined.
27. The learned counsel for the appellant reiterated the
submissions made before the Commission. The appellant
submitted that it was its earnest desire to impart high quality
education and it has spent enormous amount on
infrastructure and despite their best efforts they have not
been able to get affiliation from the Magadh University or the
recognition from the Dental Council of India. The appellant
also submitted that looking to the infrastructure available, the
Magadh University must grant affiliation and the Dental
Council of India must grant recognition.
28. The appellant submitted that imparting education
cannot amount to trade and, therefore, the Consumer Forum
lacks jurisdiction to deal with the complaint filed by the
respondent and the reliance placed in the case of Bangalore
Water Supply and Sewerage Board v. A. Rajappa &
Others AIR 1978 SC 548 was not correct.
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29. The respondents alleged that they have been misled by
the advertisement published in “The Hindustan Times” dated
25.07.1993 inviting application for admission in the four years
degree course of BDS. In the said advertisement, it was
clearly mentioned that Buddhist Mission Dental College and
Hospital is a premier Dental College of Bihar established and
managed by Vishwa Buddha Parishad under Article 30 of the
Constitution of India. It was also mentioned right under the
name of the College that the said institution is “The Buddhist
Mission Dental College and Hospital” under Magadh
University, Bodh Gaya and Dental Council of India. Because
of this misleading advertisement, the students were misled
and after paying huge capitation fee took admission in the
appellant institute. The said advertisement was repeated in
the next academic year. The respondents made serious
grievance that because of misleading advertisement, their
academic career has been totally ruined. They have lost their
two valuable academic years and huge amount of money
which their parents had paid with great difficult.
30. We have considered the rival contentions of the parties.
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31. This is an admitted position that the appellant institute
is neither affiliated with the Magadh University nor recognized
by the Dental Council of India. In absence of affiliation by the
Magadh University and recognized by the Dental Council of
India, the appellant institute could not have started
admissions in the four years degree course of BDS. The
Commission after hearing the learned counsel for the parties
rightly came to the conclusion as under:
“To our mind, the contention is unfounded.
Reading the advertisement and prospectus as a whole,
there is no manner of doubt that the impression given
was that the College was affiliated with the Magadh
University and was recognized by the Dental Council of
India. If the College has not been affiliated and
recognized, there was no occasion in admitting the
students and wasting their valuable academic years.
Moreover, the opposite parties have been admitting the
students right from the year 1991-92 upto the year 1995
on this representation that the College was affiliated and
recognized by the Dental Council of India. It cannot be
denied that without affiliation to the Magadh University
and recognition granted by the V, the so-called dental
degree of BDS is just a useless piece of paper. The
representation given in the advertisement that the
College was under Magadh University and by the Dental
Council of India could be taken by a common person to
mean that the college had been given recognition by the
Dental Council of India and was affiliated to the Magadh
University.”
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32. The Commission also held that this Court in Bangalore
Water Supply and Sewerage Board (supra) held as under:
[para 118 at page 583]:-
“…In the case of the University or an
educational institution, the nature of the activity is,
ex hypothesi, education which is a service to the
community. Ergo, the University is an industry…”
The Commission further held as under:
“Imparting of education by an educational
institution for consideration falls within the ambit of
`service’ as defined in the Consumer Protection Act.
Fees are paid for services to be rendered by way of
imparting education by the educational institutions.
If there is no rendering of service, question of
payment of fee would not arise. The complainants
had hired the services of the respondent for
consideration so they are consumers as defined in
the Consumer Protection Act.”
33. The Commission rightly came to the conclusion that this
was a case of total misrepresentation on behalf of the institute
which tantamounts to unfair trade practice. The respondents
were admitted to the BDS Course for receiving education for
consideration by the appellant college which was neither
affiliated nor recognized for imparting education. This clearly
falls within the purview of deficiency as defined in the
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Consumer Protection Act, which defines the `deficiency’ as
under:
“`Deficiency’ means any fault, imperfection,
shortcoming or inadequacy in the quality, nature
and manner of performance which is required to be
maintained by or under any law for the time being
in force or has been undertaken to be performed by
a person in pursuance of a contract or otherwise in
relation to any service.”
34. Therefore, the Commission rightly held that there was
deficiency in service on the part of the institute and the
claimants respondents are entitled to claim the relief as
prayed in the plaint. The appeal filed by the appellant is
devoid of any merit and deserves to be dismissed.
35. As far as the cross objections filed by the respondents
are concerned, we are of the opinion that the appellant
institute by giving totally misleading and false advertisement
clearly misled the respondents that the institute is affiliated by
the Magadh University and recognized by the Dental Council
of India. The respondents have lost their two valuable
academic years which would have tremendous impact on their
future career. Though the respondents have clearly stated in
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the affidavit that they had paid capitation fee/donation of Rs.
one lakh each and despite repeated requests, receipts were
not given, which fact has been denied by the appellant. In
view of the disputed question of fact, it is difficult for us to give
any specific finding allowing the contention of the respondents
and to give direction to refund this amount with interest to
them. However, we strongly feel that the appellant institute
has played with the career of the students and virtually ruined
their career and the respondents have lost two valuable
academic years.
36. In our considered view, on consideration of the totality of
the facts and circumstances of the case and in the interest of
justice, we deem it appropriate to pass the following
directions:
(i) The respondents (complainants) would be entitled
to the compensation as directed by the National Consumer
Disputes Redressal Commission. In case the amount has
been deposited, the respondents would be entitled to withdraw
the same.
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(ii) We further direct the appellant institute to
additionally pay compensation of Rs. one lakh to each of the
respondents (complainants).
(iii) We also direct the appellant institute to pay cost of
litigation which is quantified at Rs. one lakh to each of the
respondents (complainants).
(iv) The appellant institute is directed to pay the amount
of compensation and costs within a period of two months.
37. The appeal filed by the appellant is accordingly
dismissed with costs and the cross-objections filed by the
respondents are allowed with costs in terms indicated in the
preceding paragraphs.
38. Consequently, the appeal and cross objections stand
disposed of.
……………………………J.
(Dalveer Bhandari)
……………………………J.
(Harjit Singh Bedi)
New Delhi;
February 13, 2009.
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