Unfair Trade Practices in Education Sector

By- Shreyansh Rathi, Rajiv Gandhi National University of Law, Patiala

Introduction

The concept of Unfair Trade Practices (UTP) refers to any form of fraudulent, deceptive or dishonest form of practices by way of misrepresentation of goods and services, that are being dealt with in the ordinary course of business, which is prohibited or recognized under the law to be actionable by the judgements of the court.

Broadly, UTPs involves fraudulent practices like misrepresentation, deceptive practices which are prohibited by laws. These unfair practices in turn adversely impact the business and economy as a whole and create such a market environment in which customers are deceived, little organization dealt with unjustifiably and the general welfare of the common public and society as a whole suffers[1].

What are Unfair Trade Practices?

Unfair trade practices are such trade practices that, to promote the sale, use and supply of goods and services, adopt some unfair methods or unfair and deceptive tactics[2]. Some of the major unfair trade practices prevailing in the market include:

1. False Representation: Falsely suggesting that the goods or services are of certain standard and quality, quantity, grade, composition and style.
2. False offers relating to Bargain Price: Advertisements published in newspapers or other places showing that certain goods and services are published at bargain prices where there is no intention that the same are offered at that bargain price.
3. Free Gifts and Prize Schemes: Offers of gift and prize giving schemes when the real intention is not the same and the prices of those products already increased by the cost of that scheme.
4. Photo Retouching and False Claims: Many a times, the cosmetics and weight loss commercial portray and claims false and non-attainable results to the consumers thereby giving false impressions about tru capabilities of products[3].
5. Omission of Information: The advertisement of the products or services omits or skims fastly over important information. The ads claim to be technically true but omit information that is reasonably relevant and important for a reasonable customer.
6. Hidden Fees and Surcharges: Many products and services charge hidden fees and charges to trick non-cautious consumers into paying excess fees on product than that mentioned in advertisements so as to increase their profits without raising its price[4].

Unfair Trade Practices and Indian Laws      

In the context of India, till 2002 the Monopolies and Restrictive Trade Practices Act were leading legislation dealing with unfair trade practices in the country. The MRTP Act, being repealed in 2002, gave way to Competition Act, 2002thereby transferring all cases to the Competition Commission of India for adjudication. However, the cases relating to unfair trade practices came under the purview of the Consumer Protection Act of 1986 (COPRA) which was already dealing with such cases[5].

Section 2 (r) of Consumer Protection Act of 1986 and subsequently Section 2 (47) of Consumer Protection Act, 2019 defines Unfair Trade Practices as:

“A trade practice which, to promote the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice“

Unfair Trade Practices in Education Sector

Education is one of the most vital ingredients in the economic and intellectual growth and development of a nation as it plays an important role in overcoming income inequalities and increasing the skills of the workforce. However, despite its importance, it has faced great neglect in terms of legislative and administrative measures to check corrupt and unfair practices involved in it[6].

With the rise of Private educational institutions in the form of Private Schools, Private Colleges and Universities and Private Coaching Center and Tutorial Institutions, the Education Sector has emerged as a large business industry and like another field of business, Unfair Trade Practices have been found their home in Education Sector as well[7].

The various kinds of Unfair Trade Practices in the Education Sector are as follows:

1. Charging capitation fee and demanding donations for admissions.
2. Admitting students without specified merit criteria
3. Not issuing receipt forany fee charged by the institution
4. Admissions through non- transparent and questionable admission processes
5. Engagement of unqualified and ineligible teachers
6. Publishing advertisement misleading students
7. Forceful withholding degree to compel a student to pay a fee.
8. College is admitting students to its programs long before the actual starting of an academic session
9. Time-limit for students to join the courses in colleges are advanced unrealistically so as to pre-empt students from exercising other options of joining other institutions of their choice
10. Institutions are confiscating the fee paid if a student fails to join by such date

Important Cases of Unfair Trade Practices in the Education Sector

Below mentioned are the cases and their major observations about Unfair Trade Practices:

1. Shaheed Bhagat Singh Public School v. Anoop Singh[8]: False Claims regarding the affiliation or any other amenities or qualification amounts to being engaged in unfair  trade practice as such false claim deceives the innocent consumers and unfairly enrich those engaged in it.
2. Seven Square Academy v. Chitra Lekha Nitin Bendke[9]: Arbitrary clause regarding non- refundability of fees deposited once used by educational institutions amount to unfair trade practice on the part of such institutions · The aggrieved party is entitled to receive proportionate amount of fees deposited for the services which have not been availed by the aggrieved.
3. Allen Career Institute v. Anil Kumar Sharma[10]: Similar to above case of Seven Square, it can be observed by the decision of commission that denying the refund of the fees for the remaining duration for which the aggrieved has availed no services need to refunded after charging the proportionate amount and any clause of non-refundability of fees once deposited is arbitrary, void and amounts to unfair trade practice.
4. Ebenezer Higher Secondary School v. Ashwini Kumar Sharma[11]: Falsely misrepresenting that the school or university is affiliated with particular body in order to lure parents to admit their children on suchfalse pretext amounts to unfair trade practice and the aggrieved are entitled to receive the refund of their fees deposited and appropriate compensation
5. Buddhist Mission Dental College and Hospital v. Bhupesh Khurrana and Others[12]: Charging of Capitation Fee or Donations along with original fees and further denying receipts is an unfair trade practice. Along with this making false claims regarding facilities provided by the institution and charging for such facilities when they are not there also amounts to unfair trade practice and thus the aggrieved is entitled refund along with compensation.
6. FIITJEE Ltd. and Another v. Kulwinder Singh Sohi[13]: Deficient Services provided by the educational institutions and arbitrary clauses regarding non refundability if  not satisfied with such deficient services is an unfair trade practice and the aggrieved has the right to receive such proportionate return.
7. Sehgal School of Competition v. Dalbir Singh[14]: Charging the fees for more than one year together and using arbitrary clause of non refundability of such amount of the aggrieved find the services deficient is an unfair trade practice and the aggrieved is entitled to receive the proportionate amount whenever he seeks to cancel the admission for the rest duration when he do not avail such services.

The Way Ahead: Remedies and Suggestions

The Consumer Protection Act, 2019 is the leading legislation dealing with Unfair Trade Practices. Section 2 (47) defines Unfair Trade Practices and the victim can file a complaint as per Section 35 in the District commission or State or National Commission as the jurisdiction lies. The various remedies that they can get through these Consumer Dispute Redressal Commission:

Removal of Deficiency: One of the remedies that a consumer has against the institution engaged in unfair trade practices by way of deficiency in services is to make it remove the defect in that service through the order passed by the appropriate authority.

Refund of Fees and other amounts: An order for a refund of fees and other amounts deposited in the institution despite the clause of non-refundability is one of the most used remedies in cases of Unfair Trade practices by bringing order of authorities through suits.

Award of Compensation: Another remedy for Unfair Trade Practices is awarding of compensation for the loss whether physical, mental or other because of such engagement of the concerned institution.

Discontinuance of Such Unfair Practice: An order for discontinuance of such unfair trade practices by the alleged institute through the order of appropriate authority and the subsequent discontinuance is another remedy for Unfair Trade Practice.

Conclusion

With the growth of trade and commerce around the country due to rapid globalization and modernization, Unfair Trade Practices have also found their place in such growth. It can be concluded from the above research and case study regarding the prevalence of Unfair Trade Practices in the Education Industry is just similar to that of other sectors like Food Supply, Medical and E-Commerce sectors.

     There is a pressing need to combat these unfair trade practices by way of appropriate legislation and awareness measures as the current provisions and laws have not been able to keep a complete check on such practices. Also, there is a need to widen the scope of Unfair Trade Practices so that even the smallest of such practices can be scrutinized by the appropriate authority. There is a need for the common consumers also to be vigilant and bring to the notice of Consumer Commissions and Courts, those who engage in such practices so that this problem can be nipped off in the bud.

      The Consumer Protection Act 2019, with the widening of its ambit and inclusion of E-Commerce within its scrutiny has enlarged the scope of control over such activities. The District Consumer Forums, State Consumer Dispute Redressal Commissions and National Consumer Dispute Redressal Commission have from time to time came up with their decisions and observation defining what activities form a part of unfair trade practices and what are the remedies for them. The case study was an attempt to bring forward the intricacies and the prevalence of Unfair Trade Practices even in the Education Sector and bring forward the remedies present.

[1] Vidhi Agarwal, Unfair Trade Practices Explained,  Law Insider, https://www.lawinsider.in/unfair-trade-practices-unfair-contracts-explained/

[2] Lydia Kerkatta, Unfair Trade Practices in India, Legal Services India,  http://www.legalservicesindia.com/article/1861/Unfair-Trade-Practice-in-India.html

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[3] Balamurugan, Unfair Trade Practices,  Slide Share,  https://www.slideshare.net/DrJBalamuruganPhD/unfair-trade-practices-157727204

[4] Andrew Cove, “Kinds of Unfair Trade Practices,  Covelaw,  https://covelaw.com/5-examples-unfair-trade-practices-avoid/

[5] Will Kenton, Unfair Trade Practice,  Investopedia,  https://www.investopedia.com/terms/u/unfair-trade-practice.asp# Accessed: 16 April 2021

[6] Alo Dutt, Unfair Trade Practices in Present Education System,  Academia.edu,  https://www.academia.edu/12824659/UNFAIR_TRADE_PRACTICES_IN_PRESENT_EDUCATION_SYSTEM

[7] “What is Unfair Trade Practices in Education”  Law Corner. https://lawcorner.in/what-is-unfair-trade-practices-laws-relating-to-unfair-trade-practices/

[8] 2012 SCC OnLine NCDRC 519

[9] A/ 14/ 543 of State Consumer Dispute Redressal Commission

[10] Appeal No. 357 of 2018

[11] Case No. FA/ 13/ 1975 of State Consumer Dispute Redressal Commission of Madhya Pradesh

[12] Civil Appeal No. 1135 of 2001

[13] First Appeal No. 584 of 2018

[14] III (2009) CPJ 33

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