State Consumer Disputes Redressal Commission
M/S. R.C.I. India Pvt. Ltd., Bangalore vs Suresh Raj R. And Another Hyderabad on 3 October, 2008
BEFORE THE A BEFORE THE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD. F.A. No. 1177/2008 against C.C. 79/2007, Dist. Forum-II, Hyderabad Between: M/s. R.C.I. India Pvt. Ltd., Pine Valley, First Level Embassy Golf Links Business Parks Off Intermediate Ring Road Bangalore-560 001. *** Appellant/ O.P. No. 2 And 1. Suresh Raj R. S/o. Lae Raj Pershad Age: 63 years 2. Smt. Hriday Mohini W/o. R. Suresh Raj Age: 63 years Both are Residents of Flat No. E/G-1, Baser Apartments 6-3-628/5, Ravindra Nagar Khairatabad Hyderabad-500 004. *** Respondents/ Complainants 3. M/s. Gemawat Resorts Ltd. Rep. by its Managing Director At 164-Y, 13 Main Road 3rd Block, Rajaji Nagar Bangalore-560 010. *** Respondent/ O.P. No. 1. Counsel for the Appellant: Smt. Tara Sharma Counsel for the Respondents: Mr. Shyam Agarwal (R1&R2) QUORUM: HONBLE SRI JUSTICE D.APPA RAO, PRESIDENT. SMT.M.SHREESHA, LADY MEMBER.
& SRI G.BHOOPATHI REDDY, MEMBER FRIDAY, THIS THE THIRD DAY OF OCTOBER TWO THOUSAND EIGHT ORAL ORDER: (Per Honble Sri Justice D.Appa Rao, President) *** This is an appeal preferred by Opposite Party No. 2 against the order of the Dist. Forum in directing it to refund Rs. 1,61,272/- along with Opposite Party No. 1 together with interest, compensation and costs.
The parties are described as arrayed before the Dist. Forum for felicity of expression.
The case of the complainants in brief is that they have purchased Time Shares in Opposite Party No.1 resorts by name The Village, for an amount of Rs. 1,70,000/- under an agreement Dt.
6.1.1999. They were informed that they were enrolled as members of the appellant. The appellant sent RCI kit and Membership Card wherein it was mentioned that membership would be for a period of 30 years. They have paid Annual Maintenance Charges (AMC). When they had visited the resorts in the year 1999 they were shocked to see that there were no facilities, and when questioned the appellant as well as opposite party No. 1, raised a plea that they did not pay the total membership amount. When they showed the receipts evidencing payments, they promised to look into the matter. Contrarily, they issued a notice for which they gave a reply. The appellant informed that opposite party No. 1 stood disaffiliated, and therefore they have nothing to do with them (complainants). As per the agreement, they are entitled to the benefits of membership and the exchange programme for a period of 33 years. On that they gave a registered lawyer notice on 6.10.2006 calling upon the opposite parties to refund the amount with interest etc. The appellant and opposite party No. 1 have induced them with a false promise of membership for 33 years and provide service. Non-compliance of this amounts to deficiency in service, and therefore they prayed for refund of Rs. 1,61,700/- with interest @ 24% p.a., besides damages of Rs. 1 lakh and legal expenses of Rs. 10,000/-.
Opposite Party No. 1 did not choose to contest the matter.
The appellant/opposite party No. 2resisted the case by filing counter denying its liability. It alleged that it has disaffiliated opposite party No. 1 from RCI exchange programme. Clause 15.3 of the RCI terms of membership, subject to which RCI membership was granted to the complainants, it was mentioned that the resorts and their sale personnel are independent of RCI. It is not its agents. The complainants were enrolled as members of RCI initially for a period of three years. There was no deficiency in service on its part, in view of the fact that it has informed about the disaffiliation of opposite party No. 1. Refund of principal amount cannot be claimed against them as it was not paid to them. There is no relationship of principal and agent between it and opposite party No. 1. The Forum has no territorial jurisdiction. Any mis-representation made by opposite party No. 1 would not bind it. Therefore, it prayed for dismissal of the complaint with exemplary costs.
The complainants in proof of their case filed affidavit evidence and Exs. A1 to A19 while the appellant filed Exs. B1 to B6. The Dist. Forum after considering the evidence placed on record opined that the appellant along with opposite party No. 1 jointly and severally liable to refund Rs. 1,61,272/- with interest @ 9% p.a., from 17.1.2007 till the date of payment together with compensation of Rs. 25,000/- and costs of Rs. 1,000/-.
Aggrieved by the said decision, the appellant preferred this appeal contending that the Dist. Forum did not appreciate the facts or law in correct perspective. The appellant is engaged in providing facility of time share weekends to its members only in affiliated resorts as per the terms and conditions laid down in the agreement. It was not a party to the agreement entered in between complainants and opposite party No.
1. No payment was made to it.
There was no Principal and Agent relationship between them.
The availing of the service and continuing to be members was their own discretion. In the light of the fact that they disaffiliated with opposite party No. 1 they were not liable to pay any compensation. Therefore, it prayed for dismissal of the complaint.
It is an undisputed fact that the complainants entered into The Village Time Share Purchase Agreement for a period of 66 years with the company M/s. Gemawat Resorts Ltd., (Opposite Party No. 1) wherein they agreed to purchase membership on timeshare basis in the resort promoted by the company on payment of Rs. 1,70,000/- towards membership fee and Rs. 8,000/- towards legal and administration fee. The agreement stipulates that the resort is affiliated to appellant and the company upon receipt of all payments due to them, enroll the purchasers as members of the appellant. It was made clear that the purchasers shall be liable to pay to RCI from time to time.
The purchasers upon completion of the project shall be entitled to participate in the appellant reciprocal exchange programme. They had to pay annual maintenance charges in respect of time share unit allotted to them. One Crown Concept Marketing signed the agreement on behalf of the company. Clause 9 of the agreement makes it clear that neither Crown Concept Marketing nor Gemewat Resorts Ltd. arranges for holiday exchange or facilities, the use of the RCI travel club on behalf of its members. Exchange requests are to be made directly by the member to RCI.
Admittedly when complainants paid the fee and other amounts the payment were acknowledged by the appellant under Ex. A3. It has allotted the membership No. 391600256. It has given the membership card Ex. A6. It has directly addressed Ex. A5 letter to the complainant mentioning that Enclosed is your membership card, renewed up to 31 October, 2010. Mr. Raj, do make sure to renew it before it expires on 31 October, 2010. Once again thank you for renewing your RCI membership. We hope you will use it to enjoy the full power of your RCI Vacation Week. We look forward to hearing from you soon.
The appellant having received the amount issued RCI kit and RCI Membership card to the complainants vide Ex. A16 receipt. The appellant itself addressed a letter to the complainant Ex. A17 Dt. 25.2.2005 alleging that it has been experiencing difficulties as the resort was not completed. It was unable to receive any exchange of guests. Therefore, it intends to disaffiliate from the exchange programme. This was with regard to The Village at Bangalore. Further it alleged that Whilst you will not be able to avail of regular one to one exchanges through RCI, since, you will be unable to Bank your week with us. I am happy to inform you that you will continue to be able to take Bonus weeks through the RCI network. Kindly continue to contact our Membership services department at any of the numbers given for your holiday requirements. It has even sent Greetings on the complainants birthday extending a special offer event.
The dispute arose when the complainant went to The Village at Bangalore he found to his surprise that there was no facility whatsoever. Then he protested and addressed letters to opposite party No. 1 as well as to the appellant under Ex. A8, followed by registered lawyer notice Ex. A12. When the opposite party No. 3 sent a letter Dt. 15.12.2003 the complainant gave reply under Ex. A14 stating that he has completed his part of agreement by duly paying the purchase price and the company on its part by admitting him as member of RCI and there is nothing which remains to be performed by either party.
The appellant contended that it has disaffiliated with opposite party No. 3 and therefore it was not liable to pay anything. We may mention that disaffiliation pertains to The Village at Bangalore only. Under Ex. A17 Dt. 25.2.2005 the appellant informed the complainant in regard to disaffiliation of The Village at Bangalore from the exchange programme. The exact words used were We have therefore decided that The Village is being disaffiliated from our exchange programme.
While responding to the letter of the complainant in Ex. A17 the appellant has categorically stated that This is with reference to your membership at The Village Bangalore.
As you are aware the Village has been experiencing difficulties recently and the resort is not yet completed. Due to these difficulties, the resort is not able to receive any exchange guests for the foreseeable future. We have therefore decided that The Village is being disaffiliated from our exchange programme. At no time the appellant informed that it disaffiliated from opposite party No. 1.
Learned counsel for the appellant contend that the appellant was not a party to the agreement between them and opposite party No. 1. Moreover there was disaffiliation as such it was not liable. Finally he contended that there is no relationship of Principal and Agent between the appellant and Opposite Party No. 1. They did not receive any purchase price from the complainants. It was opposite party No. 1 who received the amount. They have every right to terminate the membership pursuant to Clause 15(3). This was informed to the complainant.
Learned counsel for the appellant further contended that since the complainants and opposite party No. 1 are the parties to the agreement, no cause of action would accrue against the appellant. In support of his contention he relied the decision in Citi Bank N.A. Vs. Standard Chartered Bank & Others reported in AIR 2003 S.C. 4630.
It is a case where a suit was filed for delayed payment of cheques.
Admittedly the bank is not a party to the agreement. In that context their Lordships opined that there is no privity of contract between them. The claim does not fall u/s 73 of Contract Act.
However, in the present case the appellant dare not file agreement entered into it with opposite party No. 1.
Without knowing the terms of agreement it cannot be said that there was no privity of contract between the complainant and appellant, more so, when the appellant received the amounts from the complainant, and evidenced under receipts which we have already mentioned.
Ex. B1 is the application of the complainant addressed to RCI. It was accepted by the appellant and gave membership. The fact that it had received the amount is evidenced under Ex. A3 receipt. The exchange confirmation was sent by it under Ex. B5 when the complainants intend to occupy two bed room in one of the resorts at Spain by receiving the cash promptly from the complainant.
In the light of Ex. B1 together with other documents, we are of the opinion that the appellant had to provide the facilities. The contention that it has nothing to do with the complainants cannot be subscribed more so having received the amount. No notice was issued at any time terminating the membership of the complainant. The contention that it was disaffiliated is incorrect. It pertains to a particular resort. By virtue of receipt of amount, it cannot deny its role. Importantly, the appellant did not file the agreement executed between it and opposite party No. 1 to know whether there was any principal and agent relationship between them. When the appellant had received the amount straight from the complainant, and issued receipts, and in turn gave membership and also renewed it, and it is too late a day to contend that they were not liable to pay any amount. Evidently, it could not provide the facilities in The Village. Having received the amounts, it amount to deficiency in service. Both the appellant as well as Opposite Party No. 1 are liable to refund the amount. The complainants were undoubtedly entitled to compensation for deficiency in service on the part of appellant and opposite party No. 1. The compensation at Rs. 25,000/- could not be said to be high. It was reasonable and modest. We do not see any mis-appreciation of facts or law in this regard.
In the result the appeal is dismissed with costs computed at Rs. 2,000/-. Time for compliance four weeks.
PRESIDENT LADY MEMBER MALE MEMBER Dt. 03.10.2008.