Student gets admission elsewhere and withdraws from IIHMCA before classes begin, but institute cites ‘non refundable’ fee clause and refuses refund; Hyderabad consumer commission orders Rs 39,500 in relief

NEW DELHI: A consumer commission in Telangana has held the Indian Institute of Hotel Management and Culinary Arts (IIHMCA) guilty for refusing to refund a student’s admission fee after he withdrew before the academic session began.The commission directed the institute to refund Rs 29,500 after deducting Rs 1,000 as processing charges, besides paying Rs 5,000 as compensation and Rs 5,000 towards litigation expenses.

Student withdrew admission after securing a seat elsewhere

According to the commission order, Nikhil Sai, an 18-year-old student, had been provisionally admitted to IIHMCA in Hyderabad in May 2025. His mother, M Bhargavi, an advocate, represented him in the consumer complaint.The student paid Rs 30,500 towards the provisional admission fee on May 3, 2025. The amount included Rs 500 towards the application fee and Rs 9,000 and Rs 21,000 towards provisional admission, the order said.The complainant said the institute had assured them that the fee would be refunded if the student withdrew before classes began. Subsequently, he secured admission to another institution under the National Council for Hotel Management and Catering Technology (NCHMCT).His mother sought withdrawal and a refund on July 1, 2025, before the commencement of the academic session. However, the institute refused to return the fee, citing a condition printed on the receipts stating that the amount was non-refundable.The complainant approached the commission seeking a refund of Rs 29,500 after deducting Rs 1,000 as processing charges. She also sought 12% annual interest on the amount, Rs 50,000 as compensation for mental agony and harassment, and Rs 10,000 towards litigation costs.The commission noted that the institute did not appear despite service of notice and was proceeded against ex parte. The complainant’s evidence and documents, including payment receipts, email correspondence and WhatsApp messages, remained unchallenged.

Why did the commission hold the institute liable?

The bench comprising president Chitneni Latha Kumari and members D Madhavi Latha and Kathyayani Khandavilli examined the payment receipts, the student’s withdrawal request and the applicable University Grants Commission (UGC) fee-refund guidelines.The commission noted that the student had sought withdrawal before the academic session began and had not attended any classes or received study material or other educational services from the institute.It said the institution could not justify retaining the entire fee merely by relying on a printed non-refundable condition when the admission was provisional and withdrawal was sought before classes began.“The material placed on record, including the UGC refund guidelines forming part of Ex.A2, supports the Complainant’s contention that where withdrawal takes place before commencement of the academic session, the institution cannot retain the entire fee merely by relying upon a general non-refundable clause,” the commission said.The commission referred to the UGC’s fee-refund guidelines, which provide for refunds subject to the applicable timelines and permit a processing charge of no more than Rs 1,000 in the circumstances covered by the rules.It also noted that the institute had not produced evidence to justify retaining the balance amount. The complainant’s evidence that the student had withdrawn before the academic session and had not availed of educational services remained unrebutted.“Accordingly, this Commission holds that the Opposite Party was deficient in service in refusing to refund the amount due to the Complainant. The act of retaining the entire amount by relying upon the printed non-refundable condition, in the circumstances of this case, also amounts to an unfair trade practice under the Consumer Protection Act, 2019,” it added.The commission said the complainant was entitled to a refund after the permissible processing deduction, along with reasonable compensation and litigation costs. However, it considered the demand for Rs 50,000 as compensation excessive.“The Complainant has claimed refund of Rs.29,500/- after deducting Rs.1,000/- towards processing charges. The said claim is reasonable in the facts of the case. The Complainant is also entitled to reasonable compensation for the inconvenience and harassment caused and to litigation costs,” the bench further added.

Final order

Partly allowing the complaint, the District Consumer Disputes Redressal Commission, Ranga Reddy, directed IIHMCA to:

The total amount ordered to be paid to the complainant is Rs 39,500. The institute must comply within 45 days of receiving the order.The commission did not grant the 12 percent annual interest sought by the complainant.