REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELATE JURISDICTION

CIVIL APPEAL NO.1135 of 2001

Buddhist Mission Dental

College & Hospital     ….. Appellant

Versus

Bhupesh Khurana & Others    ….. Respondents

J U D G M E N T

Dalveer Bhandari, J.

1. This  appeal  is  directed  against  the  judgment  dated

29.9.2000  passed  by  the  National  Consumer  Disputes

Redressal Commission, New Delhi (for short ‘the Commission’)

in Original Petition No. 168 of 1994.   

2. Eleven  complaints  were  filed  before  the  Commission

against  the  appellant  herein,  viz.  Buddhist  Mission  Dental

College  and  Hospital  through  its  Secretary  Shri  R.A.

Vatsayayan.

3. The  appellant  published  an  advertisement  in  the

Hindustan  Times,  an  English  national  daily,  on  25.7.1993

inviting applications  for  admission  in  the  Degree  Course  of

Bachelor  of  Dental  Surgery  (for  short,  BDS).    In  the  said

advertisement,  it  was  specifically  highlighted  that  the

appellant  college  is  a  premier  dental  college  of  Bihar

established  and  managed  by  the  Vishwa  Buddha  Parishad

under  Article  30  of  the  Constitution  of  India.   It  was  also

mentioned right under the name of the appellant’s college that

the said institution is “The Buddhist Mission Dental College

and  Hospital”  under  Magadh  University,  Bodh  Gaya  and

Dental  Council  of  India,  New  Delhi,  Siddharth  Nagar,  New

Bailey Road, Patna.   The said advertisement is reproduced as

under:

2

“THE  BUDDHIST  MISSION  DENTAL  COLLEGE  & HOSPITAL”

(Under Magadh University, Bodh Gaya, and Dental Council of India, New Delhi, Siddharth Nagar, New Bailey  Road, Patna-801305)

A premier Dental College of Bihar, established and  managed  by  VISHWA  BUDDHA  PARISHAD, under  Article  30(1)  of  the  Constitution  of  India, fulfilling all  the criterion and conditions of Dental Council of India.

ADMISSION NOTICE FOR BDS COURSE 1993-94

Applications  are  invited  for  admission  in  1st year (B.D.S.) Course.

Eligibility:-  S.S.C.  Or  Equivalent  degree  with  a minimum  50%  marks  (40%  in  case  of  reserved candidates) in Physics, Chemistry, Biology Group.

Application form and prospectus  can be had from the office on payment of Rs.100/- (or Rs.110/- by DD in the name of  the college  if  requested by post).

Last  date  for  submission  of  application  is 30.08.1993.   Separate hostel facility for boys and girls  in  the  campus,  preference  to  Buddhist  and other minority candidates.

NO CAPITATION FEE

(R.S. Vatsyayan) Secretary”

3

4. The  complainants,  respondents  herein,  who  have  all

passed  12th standard  examination  with  Physics,  Chemistry

and Biology and have secured good marks and were in search

of brighter career prospects, believing the facts incorporated in

the  advertisement  of  the  appellant  to  be  true,  applied  for

admission to the appellant’s college in the academic session

1992-93.    In  the  complaint,  it  was  stated  that  in  the

advertisement  it  was  specifically  mentioned  “No  Capitation

Fee”.   This obviously gave the impression that no capitation

fee would be charged from the students.   But in fact, at the

time of admission, Rs.1,00,000/- was taken in cash from each

of the respondents and despite repeated requests made by the

respondents,  no  receipt  for  the  amount  paid  by  them  was

given.  When the respondents insisted upon the receipts of the

said amount paid, they were threatened that if they persisted

on the demand of getting the receipts, their admission would

be cancelled.  It is further alleged in the complaint that the

respondents  had  paid  a  substantial  amount  under  various

heads viz.,  admission  fee,  tuition  fee,  development  charges,

charges  of  consumables,  house-in-practicals,  sports,

magazines, library etc.    

4

5. The  respondents  also  started  attending  classes  after

joining the appellant college.   The respondents after several

months came to know that the claim made by the appellant to

the  respondents  in  the  advertisement  as  well  as  in  the

prospectus  was  false,  because  the  appellant  college  was

neither  affiliated  to  the  Magadh  University  nor  it  was

recognized by the Dental Council of India.   

6. In  the complaint,  the respondents also mentioned that

they were informed by the appellant that the college is well

equipped  with  library,  laboratories,  anatomy  museum,

medical  appliances  and instruments,  hostel  accommodation

duly furnished and well qualified teaching staff.  But, in fact,

there  was  no  regular  qualified  staff,  no  anatomy  museum,

library  had  hardly  any  relevant  books,  laboratory  was  ill-

equipped, as most of the necessary instruments/equipments

were either not available and those which were available were

very  few  in  number  and  were  grossly  inadequate  for  the

students who were admitted in each session.

5

7. The respondents had spent a huge amount for admission

and, moreover,  they were  also given all  sorts of assurances

that soon everything would be made available to the students

and all facilities would be provided immediately after getting

the affiliation by the Magadh University and recognition by the

Dental Council of India.   The respondents also alleged that

usually  in the aforesaid course  of four years,  at  the end of

each year, the examination is supposed to be conducted, but

the appellant did not conduct any examination at all by the

end  of  1994  and  there  was  no  hope  of  examination  being

conducted in the near future.    

8. It was also alleged that no efforts had been made.  There

was  no  development  in  connection  with  the  affiliation  or

recognition of the appellant college and no efforts were being

made  to  improve  the  standard  of  the  said  institution  by

appointing  regular  teaching  staff  with  proper  qualification,

providing sufficient  number  of  relevant  books in the library

and for providing other facilities to the students for which all

sort of assurances were made to them.

6

9. The  respondents  were  deeply  frustrated  because  their

entire academic career was ruined.  Therefore, they preferred

claim petitions before the Commission. The Commission by its

order  dated  29.9.2000  found  merit  and  substance  in  the

complaints  filed  by  the  respondents  and  categorically  held

that  there  was  insufficiency  of  services  on  the  part  of  the

appellant and that the respondents were legitimately entitled

to the claims made in the petition.    

10. The  Commission  directed  the  appellant  to  refund  the

admission expenses paid at the time of admission along with

interest at the rate of 12% per annum from the date of receipt

of the amount till the date of payment and also Rs.20,000/- to

each  of  the  respondents  by  way  of  compensation  for  the

expenses  defrayed  on  purchase  of  books,  mess  expenses,

hostel expenses for two years and for the loss of two valuable

academic  years.   Since  there  was  no  receipt  of  capitation

fee/donation paid by the respondents, the Commission inter

alia did not grant any relief to the respondents in that regard.

However,  the  Commission  directed  that  the  appellant  shall

pay Rs.10,000/- by way of costs of the petition.

7

11. The appellant, aggrieved by the impugned order  of  the

Commission  dated  29.9.2000,  preferred  this  appeal  under

Section 33 of the Consumer Protection Act, 1986 read with

Order XX-F of the Supreme Court Rules, 1966.    

12. This Court  admitted the appeal  and issued notice  and

directed  vide  order  dated  23.2.2001  that  “there  shall  be

interim  stay  of  the  operation  of  the  judgment/order  under

challenge subject to the condition that the appellant deposits

the  sum as  directed  therein  with  the  National  Commission

within four weeks”.     

13. The  respondents  filed  cross  objection  and prayed  that

the appellant be directed to - (a) allow this cross objection and

direct the appellant to pay Rs.1,00,000/- which was charged

as capitation fee,  with interest,  at the rate of 15% from the

date  of  admission  till  the  date  of  payment;  (b)  direct  the

appellant  to  pay  Rs.1,25,000/-  as  compensation  instead  of

Rs.20,000/- only;  and (c) direct the appellant to pay cost for

the present proceedings.  

8

14. We  have  heard  the  learned  counsel  for  the  parties  at

length.  The  learned counsel  appearing for the respondents

brought to our notice that the appellant had not complied with

the order passed by this Court on 23.2.2001.  After hearing

learned  counsel  for  the  parties,  this  Court  passed  the

following order dated 26.11.2008:

“The National Consumer Disputes Redressal Commission,  New  Delhi  in  the  impugned  order, directed  respondent  Nos.  1  to  4  to  refund  the admission  expenses  paid  by  the  complainants  at the time of admission with interest calculated at the rate  of  12%  p.a.  from  the  date  of  receipt  of  the amount till date of payment and also Rs.20,000/- to each of the complainants by way of compensation for  the  expenses  defrayed  on  purchase  of  books, mess expenses, hostel expenses for two years and for the loss of two valuable academic years.

This  Court  while  admitting  appeal  on 23.2.2001 directed that there shall be interim stay of  the  operation  of  the  judgment/order  under challenge subject to the condition that the appellant deposits  the  sum  as  directed  therein  with  the National Commission within four weeks.

It  is  not  disputed  by  learned  counsel appearing for the appellant that neither the interest nor  the  payment  of  Rs.20,000/-  each  has  been deposited or paid to the complainants despite clear orders of the Commission.

According to the complainants,  the appellant is  clearly  in  breach  of  the  order  of  this  Court. Learned counsel  appearing for the appellant fairly submitted  that  the  interest  amount  and  the payment of Rs.20,000/- each to the complainants

9

by way of compensation would be deposited before the  National  Commission  within  one  week  from today.

In view of this undertaking, we are not taking any  action  against  the  appellants  (who  were respondent  nos.  1  to  4  before  the  National Commission).  Let this amount be deposited within one  week  from  today  before  the  National Commission.   It  is  made  clear  that  the  interest amount would be paid from the date of receipt  of the amount till the date of payment (as directed by the Commission).

List  this matter again on 3.12.2008 as part- heard.

The  parties  are  permitted  to  file  written submissions by Monday, i.e. 1st December, 2008.”

15. When the matter again came up on 3.12.2008, learned

counsel  appearing  for  the  appellant  fairly  submitted  that

despite  his clear advice to the appellant to comply with the

order passed by this Court on 26.11.2008, the same has not

been  complied  with.    The  respondents  prayed  that  the

contempt notices be issued to the appellant.  At that stage, we

deemed it appropriate to hear the appeal and pass the final

order.    

10

16. It was submitted that the appellant started this college

and wanted to impart high quality education in right earnest

and immediately after establishing the college wrote a letter on

23.6.1989 to the Dental Council  of India informing it about

the  establishment  of  the  appellant’s  college  and  sought

approval for it.   It was also mentioned that the Union Ministry

of Health and Family Welfare also wrote to the Dental Council

of  India  vide  its  letter  dated  5.9.1991  recommending

inspection  of  the  college  as  a  part  of  process  of  seeking

approval.    It was also mentioned that the Officer on Special

Duty, Governor Secretariat, Bihar wrote to the Vice Chancellor

of Magadh University for taking immediate action in respect of

grant of affiliation.   It was also mentioned that the appellant

had made efforts to get approval from the Dental Council of

India  and  affiliation  from  the  Magadh  University,  but  the

desired affiliation and approval were not received.     

17. The  learned  counsel  for  the  appellant  argued  that  in

unmistakable  terms  it  was  mentioned  that  “the  academic

syllabus of the college meets the standard as per the Dental

Council  of  India  Rules  and  as  prescribed  by  the  faculty  of

11

Dental  Science,  Magadh  University,  Bodh  Gaya,  Bihar  to

which this institution seeks affiliation for award of Bachelor of

Dental Science (BDS) degree.”   It was submitted that if the

prospectus is read as a whole it conveyed the information in

no uncertain terms that the infrastructure available with the

appellant  institution  and  the  integral  reading  of  the

prospectus did not even remotely indicate that the information

concerning the  approval  of  the Dental  Council  of  India  and

affiliation  with  the  Magadh  University  was  tried  to  be

conveyed.   

18. It  was  submitted  that  the  appellant’s  Institute  was

anxious  to  hold  the  examination.   The  management  of  the

appellant  institute  was  deeply  concerned  about  their

handicapped  in  respect  of  holding  examination  as  the

students  including  respondent  nos.1  to  12  were  being

deprived  from  appearing  in  the  examination  even  after

receiving high quality education.  It is also mentioned by the

appellant that they made all efforts to get the recognition and

affiliation.   

12

19. The appellant again tried to canvass that the appellant’s

institute  is  an  industry  and  the  service  rendered  by  the

appellant institute amounts to deficiency in service within the

meaning  of  section  2(1)(g)  of  the  Consumer  Protection  Act.

Apart from this, the allegation of unfair trade practice within

the meaning of section 2(1)(r) of the Act against the appellant

are without any merit.  

20. The respondents also filed cross objections in this court

stating that the respondents had paid donation/capitation fee

of Rs.1 lakh in cash at the time of admission.  The appellant

institute did not issue any receipt of donation/capitation fee

despite repeated requests.   

21. Mr. Bhupesh Khurana, respondent no.1, filed an affidavit

before  the  National  Commission  in  which  it  was  clearly

mentioned that on the demand of the appellant institute, the

parents  of  the  complaintants/respondents  paid  capitation

fee/donation  of  Rs.1  lakh  per  student  to  the  institute  for

which no receipt was issued despite insistence.   

13

22. The  appellant  also  mentioned  that  it  has  made  huge

investment  and  they  have  legitimate  expectation  that

affiliation and recognition would be  granted to them by the

Magadh University and the Dental Council of India.   

23. The respondent in the cross objections denied the claim

of  the  appellant  and  submitted  that  there  was  no  regular

qualified  teaching  staff.  There  was  no  anatomy  museum,

library had no relevant book, laboratory was ill-equipped as

most of he necessary instruments/equipments were either not

available  and  those  which  were  available  were  very  few  in

numbers and were not sufficient for the students who were

admitted in each session.   

24. The  respondents  also  submitted  that  they  had  spent

huge  amount  for  admissions  and  were  given  all  sorts  of

assurances that soon everything would be made available to

the students and all facilities would be provided immediately

after  getting  the  affiliation  by  the  Magadh  University  and

recognition by the Dental Council of India.   

14

25. The respondents also complained that in the course of

four years, at the end of each year the examination must be

held but no examination was held till  the end of 1994 and

there  was  no  hope  of  examination  being  held  in  the  near

future because the appellant did not get either affiliation or

recognition.   The  respondents  also  mentioned  in  the  cross

objection that charges of hostel/private accommodation were

nearly  Rs.15000/-,  mess  charges  more  than  Rs.500/-  per

month and miscellaneous expenses  including pocket  money

for two years were around Rs.10000/- to Rs.15000/-.  Apart

from that,  each student had spent more than Rs.6000/-  to

Rs.7000/-  as  traveling  expenses  and  around  Rs.8000/-  to

Rs.10000/-  on  books.   Thus,  it  is  obvious  that  actual

expenses  of  each  student  were  more  than  Rs.60000/-  to

70000/-.   

26. The respondents claimed that the Commission failed to

appreciate  that at  the time of  admission, each student had

paid a sum of Rs.1,00,000/- as donation/capitation fee.  Each

student has lost two academic years by taking admission in

15

this institute which was neither recognized nor affiliated.  The

entire educational career of the respondents has been ruined.

27. The  learned  counsel  for  the  appellant  reiterated  the

submissions  made  before  the  Commission.   The  appellant

submitted that it was its earnest desire to impart high quality

education  and  it  has  spent  enormous  amount  on

infrastructure  and  despite  their  best  efforts  they  have  not

been able to get affiliation from the Magadh University or the

recognition from the Dental Council of India.  The appellant

also submitted that looking to the infrastructure available, the

Magadh  University  must  grant  affiliation  and  the  Dental

Council of India must grant recognition.

28. The  appellant  submitted  that  imparting  education

cannot amount to trade and, therefore, the Consumer Forum

lacks  jurisdiction  to  deal  with  the  complaint  filed  by  the

respondent and the reliance placed in the case of Bangalore

Water  Supply  and  Sewerage  Board  v.  A.  Rajappa  &

Others AIR 1978 SC 548 was not correct.

16

29. The respondents alleged that they have been misled by

the advertisement published in “The Hindustan Times” dated

25.07.1993 inviting application for admission in the four years

degree  course  of  BDS.   In  the  said  advertisement,  it  was

clearly mentioned that Buddhist Mission Dental College and

Hospital is a premier Dental College of Bihar established and

managed by Vishwa Buddha Parishad under Article 30 of the

Constitution of India.  It was also mentioned right under the

name of the College that the said institution is “The Buddhist

Mission  Dental  College  and  Hospital”  under  Magadh

University, Bodh Gaya and Dental Council of India.  Because

of  this  misleading  advertisement,  the  students  were  misled

and after  paying  huge  capitation  fee  took  admission  in  the

appellant institute.  The said advertisement was repeated in

the  next  academic  year.   The  respondents  made  serious

grievance  that  because  of  misleading  advertisement,  their

academic career has been totally ruined.  They have lost their

two  valuable  academic  years  and  huge  amount  of  money

which their parents had paid with great difficult.       

30. We have considered the rival contentions of the parties.

17

31. This is an admitted position that the appellant institute

is neither affiliated with the Magadh University nor recognized

by the Dental Council of India.  In absence of affiliation by the

Magadh University and recognized by the Dental  Council  of

India,  the  appellant  institute  could  not  have  started

admissions  in  the  four  years  degree  course  of  BDS.   The

Commission after hearing the learned counsel for the parties

rightly came to the conclusion as under:

“To  our  mind,  the  contention  is  unfounded. Reading the advertisement and prospectus as a whole, there is no manner of doubt that the impression given was  that  the  College  was  affiliated  with  the  Magadh University and was recognized by the Dental Council of India.   If  the  College  has  not  been  affiliated  and recognized,  there  was  no  occasion  in  admitting  the students  and  wasting  their  valuable  academic  years. Moreover, the opposite parties have been admitting the students right from the year 1991-92 upto the year 1995 on this representation that the College was affiliated and recognized by the Dental Council of India. It cannot be denied that without affiliation to the Magadh University and recognition granted by  the  V,  the so-called  dental degree  of  BDS  is  just  a  useless  piece  of  paper.   The representation  given  in  the  advertisement  that  the College was under Magadh University and by the Dental Council of India could be taken by a common person to mean that the college had been given recognition by the Dental Council of India and was affiliated to the Magadh University.”

18

32. The Commission also held that this Court in Bangalore

Water Supply and Sewerage Board (supra) held as under:

[para 118 at page 583]:-

“…In  the  case  of  the  University  or  an educational institution, the nature of the activity is, ex  hypothesi,  education which is  a service  to the community.  Ergo, the University is an industry...”

The Commission further held as under:

“Imparting  of  education  by  an  educational institution for consideration falls within the ambit of ‘service’ as defined in the Consumer Protection Act. Fees are paid for services to be rendered by way of imparting education by the educational institutions. If  there  is  no  rendering  of  service,  question  of payment of fee would not arise.  The complainants had  hired  the  services  of  the  respondent  for consideration so they are consumers as defined in the Consumer Protection Act.”

33. The Commission rightly came to the conclusion that this

was a case of total misrepresentation on behalf of the institute

which tantamounts to unfair trade practice.  The respondents

were admitted to the BDS Course for receiving education for

consideration  by  the  appellant  college  which  was  neither

affiliated nor recognized for imparting education.  This clearly

falls  within  the  purview  of  deficiency  as  defined  in  the

19

Consumer  Protection  Act,  which  defines  the  ‘deficiency’  as

under:

“‘Deficiency’  means  any  fault,  imperfection, shortcoming  or  inadequacy  in  the  quality,  nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service.”

34. Therefore,  the  Commission  rightly  held  that  there  was

deficiency  in  service  on  the  part  of  the  institute  and  the

claimants  respondents  are  entitled  to  claim  the  relief  as

prayed  in  the  plaint.   The  appeal  filed  by  the  appellant  is

devoid of any merit and deserves to be dismissed.

35. As far as the cross objections filed by the respondents

are  concerned,  we  are  of  the  opinion  that  the  appellant

institute by giving totally misleading and false advertisement

clearly misled the respondents that the institute is affiliated by

the Magadh University and recognized by the Dental Council

of  India.   The  respondents  have  lost  their  two  valuable

academic years which would have tremendous impact on their

future career. Though the respondents have clearly stated in

20

the affidavit that they had paid capitation fee/donation of Rs.

one lakh each and despite  repeated  requests,  receipts  were

not given, which fact has been denied by the appellant.   In

view of the disputed question of fact, it is difficult for us to give

any specific finding allowing the contention of the respondents

and to give direction to refund this amount with interest to

them.  However, we strongly feel that the appellant institute

has played with the career of the students and virtually ruined

their  career  and  the  respondents  have  lost  two  valuable

academic years.

36. In our considered view, on consideration of the totality of

the facts and circumstances of the case and in the interest of

justice,  we  deem  it  appropriate  to  pass  the  following

directions:

(i) The  respondents (complainants)  would  be  entitled

to  the  compensation as directed  by  the  National  Consumer

Disputes  Redressal  Commission.   In  case  the  amount  has

been deposited, the respondents would be entitled to withdraw

the same.  

21

(ii)  We  further  direct  the  appellant  institute  to

additionally pay compensation of Rs. one lakh to each of the

respondents (complainants).   

(iii) We also direct the appellant institute to pay cost of

litigation which is quantified at Rs. one lakh to each of the

respondents (complainants).   

(iv) The appellant institute is directed to pay the amount

of compensation and costs within a period of two months.  

37. The  appeal  filed  by  the  appellant  is  accordingly

dismissed  with  costs  and  the  cross-objections  filed  by  the

respondents are allowed with costs in terms indicated in the

preceding paragraphs.

38. Consequently,  the  appeal  and  cross  objections  stand

disposed of.

…….……………………..J.   (Dalveer Bhandari)

…….……………………..J.   (Harjit Singh Bedi)

New Delhi; February 13, 2009.

22

23