unfair trade practices in the education sector

Unfair Trade Practices In The Education Sector

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 Unfair Trade Practices In  The Education Sector –

The education sector has become one of the most prominent sectors of every economy. This sector has witnessed an unprecedented growth. With this growth, unfair trade practices in the education sector have also increased. Like every other sector, this sector has also been subject to malign intents of greedy eyes. Cases of unfair trade practices in the education sector by private institutes like demands of capitation fee, corruption in the admission of students, publishing misleading advertisement are making the headline of the newspaper every now and then.

Meaning of Unfair Trade Practices

The term unfair trade practices can’t be contained in one single definition. Broadly speaking it includes any fraudulent or dishonest practice which intents to deceive the customer of his rightful enjoyment of goods or services. Numerous unfair methods have been provided in  Section 2(r) of Consumer protection act, 1986 which includes false representation, false offers, free gifts offers, non- compliance of prescribed standards, hoarding, destruction etc.

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Instances of unfair trade practices

There have been numerous cases of unfair trade practices in the education sector. In case of FIITJEE LTD vs Balavignesh S/o Shanmugam, the complainant took admission in one of the coaching institutes of FIITJEE Ltd. He paid complete two-year fees. He had to withdraw in the 1st month on account of medical reasons. The institute refused to return the remaining fees. They were directed to pay the fees along with Rs. 20,000/- as compensation and Rs. 5,000/- as the cost of litigation by district forums.

There also have been instances where parents have been forced to buy overpriced uniform and stationaries. There have been cases of demand for donation fees and the fake university is not a new term for us.

Legal framework

Earlier, Monopolies and Restrictive Trade Practices Act (MRTP),1969 dealt with unfair trade practices in the education sector. After the recommendation of Raghavan Committee,  Competition Act, 2002 replaced Monopolies and Restrictive Trade Act. However, Raghavan Committee recommended Competition Act should not be burdened with unfair trade practices. This was given effect under Consumer Protection Act,1986.

However, for unfair trade practices in the education sector, there has been a lack of national legislation. Though some state legislatures like Maharashtra Educational Institutions (Prohibition of Capitation Fee) Act, 1987, the Karnataka Educational Institutions (Prohibition of Capitation Fee) Act, 1984 and A.P. Educational Institutions (Regulation of Admission and Prohibition of Capitation Fee) Act, 1983 has tried to fill the void.

The most recent development in this area is the Prohibition of Unfair Practices in Technical Educational Institutions, Medical Educational Institutions and Universities Bill, 2010. The proposed bill seeks to prevent, prohibit and punish unfair practices in institutions, especially in medical institutes. Human Resource Development(HRD) ministry has drafted this bill to prohibit donation fees or capitation fees in any way possible.

Reasons for Unfair Trade Practices

There are many reasons for unfair trade practices in the education sector. One of the main reasons is the lack of consumer awareness. As per CUTS report, only 20 percent consumers know about COPRA and only 42 percent heard about consumer rights. However, it is still better than 18 and 34 percent in previous years.

One other reason is inordinate delays in delivery of justice. Although 90 days is the stipulated time, the proceedings take forever and justice is delayed. Reason for this delay could be lack of infrastructure, lack of human resources in district and state forums.

Sometimes parents also don’t say anything in order to avoid any unreasonable behaviour with the students in the school. That’s why legislation, as well as administration, needs to step in to prevent the rights of parents as well as students.


The education sector is vital for any economy’s progress. While deciding one such case in Chandigarh Forum the court said “It is unfortunate that in the name of education, the commercial teaching ‘shops’ have emerged to trap innocent, unsuspecting students to make easy money. They fleece students through flashy advertisements of providing a bright future. This is a slur on the fair and noble profession of teaching and such acts need to be condemned.

To curb the practice of unfair trade practices in the education sector, government, as well as consumer, needs to take stand together and fight together. Schools and other institutes are the temples of learning because there is no place for evil in God’s place.


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