Can an Organiser Refuse to Refund Event Fees When a Participant Is Medically Unable to Attend?

A member of a members' organisation pays a substantial registration fee for an overseas retreat. Weeks before departure, a serious injury puts him in hospital, and his doctors prohibit travel and physical movement. He notifies the organiser immediately and asks for his money back. The organiser refuses, pointing to a blanket "fees once paid are non-refundable" policy, a unanimous board decision, and past practice of never refunding. Is that refusal legally defensible in India? On the law as it stands, a blanket no-refund policy is not automatically enforceable, and a documented medical impossibility gives the participant three converging grounds to demand restitution.

Frustration: When Attending Becomes Impossible

Section 56 of the Indian Contract Act, 1872 provides that a contract "to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful." The Supreme Court gave the provision its modern shape in Satyabrata Ghose v. Mugneeram Bangur & Co. (AIR 1954 SC 44):

"The word 'impossible' has not been used in the sense of physical or literal impossibility. The performance of an act may not be literally impossible, but it may be impracticable and useless from the point of view of the object and purpose of the parties. If an untoward event or change of circumstances totally upsets the very foundation upon which the parties entered their agreement, it can be said that the promisor finds it impossible to do the act which he had promised to do."

The statute itself anticipates precisely the medical scenario. Illustration (e) to Section 56 reads:

"A contracts to act at a theatre for six months in consideration of a sum paid in advance by B. On several occasions A is too ill to act. The contract to act on those occasions becomes void."

If illness excuses an actor who was paid in advance, the same principle excuses a participant whose injury and medical prohibition make attendance at a retreat impossible. The entire purpose of the fee was attendance and participation; a medical bar on travel destroys that foundation.

One doctrinal refinement matters. In Energy Watchdog v. Central Electricity Regulatory Commission ((2017) 14 SCC 80), the Supreme Court explained that where the contract itself contains a force majeure or discharge clause, the matter is governed by Section 32 (contingent contracts); where the supervening event occurs outside the contract's terms, Section 56 applies as a rule of positive law. Where the organiser's terms contain no force majeure clause covering medical incapacity, Section 56 operates independently of, and despite, the contract, and the participant's obligation is discharged by the supervening impossibility.

Medical Emergency Is Not a Change of Mind

Section 56 has limits, and they are what make the medical documentation decisive. Frustration is available only where the impossibility arises from events beyond the promisor's control; self-induced frustration, where a party's own breach or negligence causes the impossibility, does not discharge the contract. The distinction the case law draws is between two categories:

• Medical emergency: the participant becomes incapacitated by an accident or illness, the condition is contemporaneously documented, doctors prohibit travel, and the organiser is notified promptly. Section 56 applies and the contract is discharged.
• Change of mind: the participant simply decides not to attend or regrets registering. Section 56 offers no relief, and a non-refundable clause may well be enforceable.

A blanket no-refund policy conflates the two. Courts applying Section 56 principles to event cancellations have not. In Redefine Online Express OPC Pvt Ltd v. Trinity Consultants (Delhi District Court, 27 September 2023), decided in the line of COVID-era disputes, the court restated that "impossibility of the performance of contract takes place if the untoward event totally disrupts the foundation upon which the agreement was entered into." A sudden injury and a medical bar on travel are exactly such an untoward event.

Are Blanket No-Refund Clauses Even Enforceable?

Independently of frustration, Indian courts have repeatedly refused to enforce absolute non-refundability clauses against consumers. The foundation is Section 23 of the Contract Act, which voids agreements whose consideration or object is opposed to public policy, combined with the Supreme Court's unequal-bargaining-power doctrine in Central Inland Water Transport Corporation Ltd v. Brojo Nath Ganguly (AIR 1986 SC 1571):

"The court will not enforce and will, when called upon to do so, strike an unfair and unreasonable contract, or an unfair and unreasonable clause in a contract, entered into between parties who are not equal in bargaining power."

That doctrine has been applied specifically to "fees once paid are non-refundable" clauses. In D.N. Kochhar v. FIIT JEE Ltd. (2011), the court surveyed the post-2008 decisions of consumer forums, the National Commission, High Courts and the Supreme Court and recorded that such clauses have been held unconscionable. In Sehgal School of Competition v. Dalbir Singh (2009 (3) CPC 187), where the brochure said fees were non-refundable "under any circumstances", the State Commission held that "any clause saying that fees once paid will not be refunded is unconscionable and unfair and therefore not enforceable." In Brilliant Tutorials Pvt. Ltd. v. Ashwani Verma (2011 CTJ 288, NCDRC), the non-refundability defence failed before both the District Forum and the State Commission, and a refund was ordered.

The Supreme Court generalised the principle for consumer contracts in Pioneer Urban Land & Infrastructure Ltd v. Govindan Raghavan ((2019) 5 SCC 725), holding that a one-sided, unfair and unreasonable agreement between parties of unequal bargaining power cannot be enforced, and treating the imposition of such terms as an unfair trade practice. A registration fee collected on take-it-or-leave-it terms, with the participant given no opportunity to negotiate non-refundability, sits squarely within this line of authority. Enforcing a no-refund clause against a participant who was medically incapable of attending is the paradigm of the unconscionable application these cases condemn.

The Consumer Protection Act 2019 Dimension

The participant is also a consumer. Section 2(7) of the Consumer Protection Act, 2019 covers any person who "purchases goods or avails any services for consideration", and courts have treated fee-paying members of clubs and associations as consumers. Characterising the relationship as a "membership" rather than a service contract changes nothing: the fee bought defined services, namely accommodation, hospitality, meals, transport and participation in the retreat.

Three statutory concepts then come into play:

• Unfair contract (Section 2(46)): contracts causing significant change in consumer rights, including disproportionate penalties or forfeitures unrelated to actual loss and unreasonable obligations that disadvantage the consumer. A blanket forfeiture of the full fee, regardless of actual loss and regardless of medical impossibility, fits the definition.
• Deficiency in service (Section 2(11)): the retreat services were never provided to the participant, yet the full fee was retained. The medical incapacity itself is nobody's breach; the deficiency lies in retaining payment for a service that was not, and could not be, delivered.
• Unfair trade practice (Section 2(47)): applying an unreasonable, unconscionable no-refund term to a documented medical emergency, to the consumer's detriment.

On a complaint, a consumer commission may order the refund itself, compensation for the loss and for mental agony, and costs. The consumer route is faster and cheaper than a civil suit, and legal representation is not required.

Unjust Enrichment: Keeping the Fee Needs a Legal Basis

Finally, the Contract Act's restitution provisions apply of their own force. Section 65 provides that when an agreement is discovered to be void, or a contract becomes void, "the party who has received any advantage under such agreement is bound to restore it, or to make compensation for it". If the contract to attend is discharged under Section 56, Section 65 obliges the organiser to restore the fee. Section 70 supplies a parallel route: where a person lawfully does or delivers something for another, not gratuitously, and the other enjoys the benefit, restitution is owed. The principle was applied as early as Kanhaya Lal v. National Bank of India (1913): a party who enjoys a benefit conferred non-gratuitously and without legal justification must make restitution. An organiser that has received a fee, delivered no services, and points only to a clause that the law treats as unconscionable, is retaining money without legal justification.

What Each Side Must Show

The participant's case is only as strong as its documentation. Three things must be established: the medical incapacity (hospital records and a doctor's certification of the travel prohibition, dated close to the event); prompt written notification to the organiser; and that the incapacity was beyond the participant's control, an accident rather than a choice. Once those are shown, the burden effectively shifts to the organiser to justify retaining the fee against the statutory protections.

The organiser's usual defences fare poorly. A unanimous board decision adopting the policy does not insulate it: board resolutions cannot override Sections 23 and 56 or the Consumer Protection Act. Reliance on precedent, that fees have never been refunded before, is not legally binding; each case is fact-specific, and a documented medical emergency is distinguishable from cancellations of convenience. One caveat runs the other way: if the organiser's terms do contain an express force majeure clause, the analysis shifts to Section 32 and the clause's wording, though where the clause does not cover medical incapacity, Section 56 still operates outside it.

Practical Takeaways

• A blanket "non-refundable under any circumstances" clause is vulnerable in India: courts have repeatedly held such clauses unconscionable and unenforceable, particularly against consumers with no bargaining power.
• Medical impossibility engages Section 56 directly; Illustration (e) to the section expressly recognises personal illness as discharging a contract paid for in advance.
• Discharge under Section 56 triggers restitution under Section 65, reinforced by Section 70's bar on unjust enrichment.
• A demand letter should assemble all four grounds: frustration (Section 56), unconscionability (Section 23 and the Brojo Nath/Pioneer Urban line), deficiency in service and unfair trade practice under the CPA 2019, and unjust enrichment (Sections 65 and 70), supported by medical records, proof of prompt notice, and a deadline (for example 21 days) before escalation.
• If the demand fails, a consumer commission complaint seeking refund, compensation and costs is the efficient forum; a civil suit remains available.
• Participants should preserve contemporaneous evidence: discharge summaries, the doctor's travel prohibition, and dated written cancellation notices.

Key Authorities

1. Indian Contract Act, 1872, Sections 23, 32, 56 (with Illustration (e)), 65 and 70 — public policy, contingent contracts, frustration, restitution and unjust enrichment. Source
2. Satyabrata Ghose v. Mugneeram Bangur & Co., AIR 1954 SC 44 — "impossible" under Section 56 includes practical impossibility that upsets the contract's foundation.
3. Energy Watchdog v. Central Electricity Regulatory Commission, (2017) 14 SCC 80 — force majeure within the contract is governed by Section 32; events outside the contract engage Section 56 as positive law.
4. Central Inland Water Transport Corporation Ltd v. Brojo Nath Ganguly, AIR 1986 SC 1571 — courts will strike down unfair, unreasonable clauses between parties of unequal bargaining power.
5. D.N. Kochhar v. FIIT JEE Ltd., 2011 — surveying authority holding "fees once paid are non-refundable" clauses unconscionable. Source
6. Sehgal School of Competition v. Dalbir Singh, 2009 (3) CPC 187 — a clause that fees will not be refunded "under any circumstances" is unconscionable, unfair and unenforceable.
7. Brilliant Tutorials Pvt. Ltd. v. Ashwani Verma, 2011 CTJ 288 (NCDRC) — refund ordered despite a non-refundability defence.
8. Pioneer Urban Land & Infrastructure Ltd v. Govindan Raghavan, (2019) 5 SCC 725 — one-sided consumer contract terms are unenforceable and their imposition an unfair trade practice.
9. Kanhaya Lal v. National Bank of India, 1913 — restitution required where a benefit is enjoyed without legal justification (Section 70 principle).
10. Consumer Protection Act, 2019, Sections 2(7), 2(11), 2(46), 2(47) — consumer, deficiency in service, unfair contract and unfair trade practice. Source
11. Redefine Online Express OPC Pvt Ltd v. Trinity Consultants, Delhi District Court, 27 September 2023 — impossibility arises where an untoward event disrupts the contract's foundation. Source

This analysis reflects the law as at May 2026. It is published for general information and does not constitute legal advice.