In a significant ruling, the Kangra District Consumer Commission in Himachal Pradesh has directed a Jaipur-based institute to refund the full fee to a student who withdrew her admission after securing a seat at IIT Mandi.
The commission also ordered compensation for mental harassment and litigation costs.
The bench of Commission President Hemanshu Mishra, along with members Aarti Sood and Narayan Thakur, ordered the institute to refund the entire amount of Rs 94,315. In addition, the institute has been directed to pay Rs 10,000 as compensation for mental harassment and Rs 15,000 towards legal expenses.
The commission emphasised in its order that higher educational institutions are centres of learning and should not function as commercial profit-making entities.
On February 25, 2025, the complainant, Anidhya, filed a complaint before the Kangra District Consumer Commission. She had applied for admission to the MBA programme (2023-25) at Malaviya National Institute of Technology (MNIT), Jaipur. After receiving provisional admission, she deposited a total fee of Rs 94,315 on June 26, 2023.
Later, after securing admission at IIT Mandi, she requested cancellation of her admission and refund of the fee on August 1, 2023, which was before the start of the academic session and completion of registration.
Despite the request, the institute refunded only Rs 15,000 and retained Rs 79,315. The complainant alleged that this violated both the institute’s own prospectus (Clause 4.7.2) and the mandatory guidelines issued by the University Grants Commission (UGC) regarding fee refunds. She accused the institute of deficiency in service.
However, the institute argued that as an ‘Institute of National Importance’ under the NIT Act, 2007, it operates under the control of the Government of India and is not bound by UGC or AICTE guidelines. It also claimed that the complainant does not fall under the definition of a “consumer” and that the institute is not a “service provider” under the Consumer Protection Act, 2019.
It further stated that the complainant applied for withdrawal on August 1, 2023, which was after the deadline of July 21, 2023. As per its admission brochure (Rules 4.6 and 4.7), fees are not refundable after the deadline, except for Rs 15,000 caution money. The institute claimed it suffered financial loss as the seat remained vacant.
The commission first examined whether the complaint was maintainable under the Consumer Protection Act, 2019, especially since the institute had questioned its jurisdiction.
It noted that the complainant had not attended any classes, had not completed physical registration, and withdrew admission before the start of the academic session.
The commission clarified that the dispute was not related to academic standards but to the unjust retention of money under administrative rules.
It held that when no educational service has been provided and the student has not occupied the seat, retaining the full fee amounts to an unfair trade practice and administrative deficiency.
The commission rejected the institute’s claim that it is exempt from UGC guidelines. It stated that the University Grants Commission is the apex regulatory authority for higher education in India and its directives apply uniformly to all institutions.
For the academic year 2023-24, UGC had issued a mandatory public notice directing all higher educational institutions to provide full refunds for cancellations made by September 30, 2023.
Since the complainant applied for withdrawal on August 1, 2023, her request was well within the stipulated period.
The commission further stated that internal rules or prospectus conditions cannot override national regulatory guidelines designed to protect students from financial exploitation.
The commission also rejected the institute’s argument of financial loss due to the vacant seat. It noted that physical reporting and registration were scheduled for August 1, 2023, and academic classes were to begin from August 7, 2023.
This meant there was sufficient time to fill the vacant seat. The commission observed that reputed institutions generally have long waiting lists and the institute failed to show any efforts to fill the seat.
The commission held the institute guilty of deficiency in service and unfair trade practice. It ordered the institute to refund the full amount of Rs 94,315 within 60 days of receiving the order. If the institute fails to comply, it will have to pay interest at 9% per annum from the date of filing the complaint until full repayment.
In addition, the institute must pay Rs 10,000 as compensation for mental harassment and Rs 15,000 towards litigation costs.
