No exit clause in contract unconscionable, Consumer Court directs refund for student who discontinued FITJEE Coaching

A District Consumer Court in Delhi recently directed entrance coaching institute, FITJEE to proportionately refund the fees paid by a student who chose to discontinue attending classes..A Bench of President RS Bagri and Members Naina Bakshi and Kiran Kaushal passed the order after finding, inter alia, that the absence of an exit clause in FITJEE’s enrolment form rendered it unconscionable, as it was one-sided..“On perusal of the agreement it is observed that no exit clause has been provided in the agreement in case the student finds the service of the OP [FITJEE] unsatisfactory and wishes to withdraw from the institute. Therefore absence of exit clause makes the agreement unconscionable as it is one sided..Similar views are taken in Brilliant Tutorials V/s Rahul Das, Appeal No.509/2006, decided on 09.01.17 wherein the view of State Commission was that ‘any such term of contract between the parties which allows the provider of service to forfeit the amount of service which he has not provided is against the public policy and good conscious, unjust and unconscionable as the provider of service has the right to charge consideration only if it provides the services.'”.After paying a total fee amount of Rs 87,000, the student had attended about 17 days of classes at the FITJEE institute. However, on finding the coaching unsatisfactory, he chose to withdraw from the institute. In view of the same, FITJEE was also asked to refund the fee, after deducting the proportionate amount payable for the classes already attended..The student, through his father, was constrained to approach the consumer court when FITJEE did not respond to the repeated requests for the fee refund..In its defence, FITJEE raised a preliminary objection to the consumer court’s jurisdiction on the ground that there was an arbitration clause in the declaration form attached to its enrolment form. Therefore, it was contended, the consumer court was barred from entertaining the complaint. However, this objection was dismissed, after noting that the consumer protection law remedies were in addition to other remedies. As noted in the order,