Overcharging beyond Govt stipulated MBBS fee: Tamil Nadu Medical College slapped compensation of Rs 25 lakh for unfair trade practice

In 2016, B Pavan Sai, a resident of Edapalayam in Chennai, secured admission to the MBBS program at Ponnaiyah Ramajayam Institute of Medical Sciences (PRIMS) in Chengalpet through government counseling. However, in July 2022, he pursued a case with the Commission to reclaim his tuition fees as he discovered that PRIMS had gathered Rs 10 lakh as fees for the initial year (2016), greatly exceeding the Rs 3.25 lakh annual fee mandated by the Tamil Nadu State Government.

The petitioner and his fellow classmates were further astounded to find that PRIMS's hospital was devoid of adequate infrastructure, medical practitioners, and patients for hands-on clinical training.

The situation intensified as PRIMS insisted that these students pay an additional 9 lakh as advance tuition fees for the following year (2017).

Owing to the situation, the Madras High Court stepped in, ordering the relocation of 150 MBBS students to accredited medical colleges due to PRIMS's significant failures in delivering a suitable educational setting. As a result, the petitioner, alongside fellow students, was moved to Tagore Medical College and Hospital in Vandalur, Chennai.

During this process, the petitioner's educational progression was hindered, as he missed the chance to study from September 2018 to May 2019. He attributed this setback to the college's unwavering stance, which forced students to navigate a complex and frustrating situation. As a result, he sought compensation for the emotional distress he endured and the evident deficiency in the service provided by the institute that eventually resulted in losing one year. In addition to compensation, the petitioner also said that he is entitled to refund of fee paid by him.

The Institute's Response:

PRIMS refuted the accusations of insufficient infrastructure and amenities, maintaining that the petitioner had successfully completed two years of education at their establishment, which, they argued, disqualified him from pursuing compensation.

The institute further referred to the apex court judgement in the matter of Anupama College of Engineering – Vs. Gulshan Kumar, relying upon the decision rendered in of Maharshi Dayanand University – Vs. – Surjeet Kaur, had held that, “…education is not a commodity.” The institute argued;

"In view of the aforesaid judgments, which clearly and categorically states that Educational Institutions are not providing any kind of service and there cannot be any question of deficiency of service in admission fees etc."

In response to the issue of excessive fee collected, the institute asserted that the Rs 3.25 lakh fee fixed by the government only covered tuition fees, and the supplementary fees collected were designated for other services such as caution deposit, library fees, lab fees, record, internet, sports, Recreation fees and other fees and there is no bar on the institution to collection the fee on other aforesaid heads.

Observations:

The Commission rejected the argument that education was not a commodity, distinguishing the case at hand from previous judgments. It observed;

"In the present case, the opposite party claiming itself as a medical college obtained recognition. Subsequently, students including the complainant were transferred to various other Medical Colleges. Such transfer was effected after considering lake of infrastructure. Therefore, the opposite party herein cannot be considered as is not an educational institution as far as the MBBS course is concerned."

"The opposite party had admitted receipt of excess fee towards infrastructure, without providing infrastructure. Therefore the opposite party cannot claim itself as an Educational Institution."

The Commission underscored that PRIMS had collected fees for services it had not delivered, leading to a breach of trust and obligations. It held;

"In the present case, the opposite party not only admitted students in MBBS Degree, but also, admittedly collected fees for two years without providing any infrastructure including a proper hospital or patients. Such act of the opposite party not only amounts to deficiency in service but also amounts to unfair trade practice."

Subsequently, the Commission directed PRIMS to reimburse the tuition fees amounting to 19 lakh, along with 9% interest starting from May 2019. The institute was further instructed to provide 6.25 lakh as compensation for causing a year's worth of academic loss to the complainant. An additional compensation of INR 25,000 was awarded to account for the mental agony and physical distress endured by the complainant. Furthermore, a sum of 10,000 was deemed to cover litigation expenses, as stated by the commission.

To view the order, click on the link below: