January 23, 2026 : In a significant ruling, the Uttarakhand State Consumer Disputes Redressal Commission at Dehradun has held that educational institutions do not fall within the definition of “service providers” and students are not “consumers” under the Consumer Protection Act. On this ground, it set aside an order directing refund of a security deposit to a parent and dismissed the consumer complaint as not maintainable.
The decision came in Manager, Kasiga School vs Arvind Soni (SC/5/A/295/2022), pronounced on January 22, 2026. The Bench comprising Ms. Kumkum Rani (President) and Mr. B.S. Manral (Member) allowed the appeal filed by Kasiga School and overturned the order dated November 26, 2022 passed by the District Consumer Disputes Redressal Commission, Haridwar.
Background of the Dispute
Arvind Soni had admitted his son to Class XI at Kasiga School in April 2018 and deposited ₹1,50,000 as a security amount. According to the complaint, the school had assured that the security deposit would be refunded upon issuance of the transfer certificate and no-dues certificate.
The student completed Class XII in the academic session 2019–2020. The transfer certificate recorded that all dues had been cleared. However, the security deposit was not refunded despite repeated requests and a legal notice. Alleging deficiency in service and unfair trade practice, Soni approached the District Commission.
The District Commission allowed the complaint and directed the school to refund ₹1,49,000 with 6% interest from the date of filing of the complaint, along with ₹5,000 each towards compensation and litigation expenses.
School’s Stand
Before the District Commission, the school relied on an agreement dated April 3, 2018 executed between the parties. Clause 4 of the agreement permitted adjustment of any arrears from the security deposit. The school claimed that ₹1,29,949.33 was outstanding in the student’s imprest account at the time of leaving. After adjustment, ₹20,050.67 remained payable, which it stated it was willing to refund.
The school also invoked the arbitration clause in the agreement, contending that the Consumer Fora lacked jurisdiction.
Findings of the State Commission
The State Commission first rejected the complainant’s submission that the alleged outstanding amount had already been paid. It noted that there was no pleading in the complaint to that effect and no documentary evidence to substantiate such payment.
On the arbitration clause, the Commission observed that the existence of an arbitration agreement does not automatically bar consumer jurisdiction. However, this was not decisive in the case.
The core issue, according to the Commission, was whether the dispute could be entertained at all under consumer law. Relying on settled precedents, it held that educational institutions do not render “services” within the meaning of the Act.
The Commission referred to the Supreme Court’s ruling in Bihar School Examination Board v. Suresh Prasad Sinha, which clarified that conducting examinations is a statutory function and not a commercial service, and that examination fees are not consideration for a service.
It also relied on Maharshi Dayanand University v. Surjeet Kaur, where the Supreme Court held that a student is neither a consumer nor is a university rendering any service. Further reliance was placed on Anupama College of Engineering v. Gulshan Kumar, which reaffirmed that disputes relating to admission and fees in educational institutions cannot be adjudicated by Consumer Fora.
The Commission also cited the National Commission’s decision in Director of Xavier Institute of Management & Entrepreneurship v. Sujay Ghose, which, following a Larger Bench ruling in Manu Solanki v. Vinayak Mission University, held that educational matters are outside the purview of the Consumer Protection Act.
Final Order
Holding that the student was not a “consumer” and the school could not be termed a “service provider,” the State Commission concluded that the complaint itself was not maintainable. It found the District Commission’s order legally unsustainable, allowed the appeal, and dismissed Consumer Complaint No. 41 of 2022. The amount deposited by the school before the State Commission was directed to be released in its favour.
Cause Title: Manager, Kasiga School vs Arvind Soni
Case No.: SC/5/A/295/2022
Coram: Ms. Kumkum Rani (President) and Mr. B.S. Manral (Member)
Decision Date: January 22, 2026
