No classes started, yet institute ‘denies’ fee refund, student gets Rs 39,500 payout

A Telangana consumer commission has directed a private hospitality institute to pay a total of Rs 39,500 to an 18-year-old student who was denied a refund after withdrawing his provisional admission before classes began. The student was allegedly denied a refund after withdrawing his provisional admission before the academic session began, with the institute citing a non-refundable policy.

President Chitneni Latha Kumari, along with members D Madhavi Latha and Kathyayani Khandav of the Ranga Reddy District Consumer Commission, were hearing a complaint filed by the student’s 39-year-old mother, an advocate, who had provisionally enrolled her son at the institute in May 2025.

“The act of retaining the entire amount by relying upon the printed nonrefundable condition, in the circumstances of this case, also amounts to an unfair trade practice under the Consumer Protection Act, 2019,” the October 5 order read. 

Admission withdrawn before sessions started

The mother claimed that she is the mother of the student, who was provisionally admitted into the said institution in 2025 upon payment of Rs 30,500 as “provisional admission fee”. At the time of admission, the institute allegedly assured that the fee would be refunded in case of withdrawal before commencement of classes. 

However, later, the complainant’s son secured admission in another institute. Accordingly, the mother applied for withdrawal and refund in July 2025, which was before commencement of the academic session, but the institute refused refund and retained the full amount, citing a “non-refundable” clause. She added that no academic service, classes, or orientation commenced at the time of withdrawal. 

Aggrieved, she moved the commission seeking refund of the amount paid towards provisional admission fee, along with interest, compensation and costs. She appeared in person to pursue the complaint on her son’s behalf.

‘Non-refundable’ clause rejected

The commission highlighted that the University Grants Commission (UGC) rules mandate clear refund slabs and state that a processing fee of no more than Rs 1,000 can be deducted if cancelled within stipulated timelines. It also mentioned that the internal college prospectuses or “no refund” clauses cannot override these mandatory regulations. 

Story continues below this ad

The commission noted that the admission was withdrawn in May 2025, before commencement of the academic session itself, then the institute cannot be permitted to retain the entire provisional admission fee. 

The commission noted that the institute has not appeared to establish any reason for retaining the balance amount. It found that the evidence of the complainant remained unrebutted and unchallenged. “Therefore, retention of the amount, despite timely withdrawal and absence of any service availed by the student, is not justified. Accordingly, this commission holds that the opposite party (institute) was deficient in service,” it added. 

The commission mentioned that the refusal to refund the amount amounts to deficiency in service under the Consumer Protection Act, 2019. “The conduct of retaining the entire amount by relying upon the non-refundable condition, despite withdrawal before commencement of the course, also amounts to unfair trade practice,” it added.

The commission directed the institute to refund Rs 29,500 to the mother. The commission also directed the institute to pay Rs 5,000 towards compensation and Rs 5,000 towards litigation costs, pointing out that she is entitled to reasonable compensation for the inconvenience and harassment caused and to litigation costs. 

Story continues below this ad

Takeaway

This ruling highlights that an institution cannot automatically retain the entire provisional admission fee by relying on a non-refundable clause when a student withdraws before the academic session begins. 

Aggrieved consumers may contact the consumer helpline in their respective states (Telangana: 0771-2582902) or call the National Consumer Helpline at 1915 for assistance.

Don’t miss out on these stories:

E-commerce site charges Rs 34 above MRP, consumer commission slaps Rs 57,000 penalty

Family trip marred by ‘5-hour airport delay, poor hotels, extra bill’, man wins Rs 38,000

Story continues below this ad

Central Bank ‘failed’ to release housing subsidy, told to pay woman Rs 2.09 lakh