State Consumer Disputes Redressal Commission
Pradeep K Mahajan vs The Managing Director Sterling Holiday ... on 16 October, 2024
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH
First Appeal No.711 of 2023
Date of institution : 08.11.2023
Date of Reserve : 27.09.2024
Date of Decision : 16.10.2024
Pradeep K.Mahajan, resident of 494, Basant Nagar, Majitha Road,
near Gopal Mandir, Amritsar-143001. Mob No.9464108700.
.......Appellant/Complainant
Versus
1. The Managing Director, Sterling Holiday Resorts (India) Limited,
236, 4th Floor, Purva Primus, Okkiyampettai, Old Mahabalipuram
Road, Thoraipakkam, Chennai, Tamil Nadu-600097.
2. Sterling Holiday Resorts (India) Limited, SCF 63-64, 1st Floor,
Madhaya Magar, Sector 64, Phase 10, Chandigarh.
3. The Manager, Sterling Holiday Resorts (India) Limited BO, 1st Floor,
Hotel Airlines, Cooper Road, near Bhandari Bridge, Amritsar-
143001.
.......Respondents/Opposite Parties
First Appeal under Section 41 of the
Consumer Protection Act, 2019
against the Order dated 12.10.2023
passed by the District Consumer
Disputes Redressal Commission
Amritsar in CC No.169 of 2020.
Quorum:-
Hon'ble Mrs. Justice Daya Chaudhary, President
Ms. Simarjot Kaur, Member
1) Whether Reporters of the Newspapers may be allowed to see the Judgment? Yes/No
2) To be referred to the Reporters or not? Yes/No
3) Whether judgment should be reported in the Digest? Yes/No Present :-
For the appellant : Sh.U.K.Kanwar, Advocate
For the respondents : Sh.Gautam Goyal, Advocate for
Sh.Ashim Aggarwal, Advocate
F.A.No.711 of 2023
2
SIMARJOT KAUR, MEMBER
This Appeal has been filed by the Appellant/Complainant under Section 41 of the Consumer Protection Act, 2019 (in short 'The Act') being aggrieved by the impugned Order dated 12.10.2023 passed by the District Consumer Disputes Redressal Commission Amritsar (in short 'the District Commission') whereby the Complaint of the Complainant had been allowed.
2. It would be apposite to mention that hereinafter the parties will be referred, as had been arrayed before the District Commission.
3. Briefly, the facts of the case as made out by the Complainant before the District Commission are that the OPs were dealing in the business of Timeshare Resorts for vacations. OP No.1 had its head office was situated in Chennai, Tamil Nadu i.e. OP No.1. OP No.2 had its Regional office at Chandigarh. OP No.3 was the service provider of the above said services. The Manager of the OPs had approached the Complainant for marketing of the Scheme offered by Sterling Peermadu residential accommodation facility. The Complainant was informed by the said Manager that the construction of the said accommodation would be completed by the end of the year 1998. The Complainant had agreed to avail the facility for vacation for a sum of Rs.66,000/- commencing w.e.f. 01.01.1998. The OPs had issued "Timeshare customer ID" 94773 in 1996. Therefore, the Complainant was time share holder of the OPs since 19.10.1996. However, Sterling Peermadu resort was not made operational till 1998 as per their commitment. The OPs instead of getting the Peermadu Resort Operational had forced the Complainant to pay further escalated utility charges which was increased Rs.120/- to Rs.1500/- F.A.No.711 of 2023 3 per day for one Bed room apartment. They had also illegally started charging AAC (Annual Amenity Charges) every year to the tune of Rs.4000/- to Rs.8000/- as per the size of apartment, inspite of the fact that the resort was non-operational. Since 2013, the OPs had raised demand on account of AAC of non-operational resort to the tune of Rs.3343/- per year which was enhanced to Rs.3677/- in 2014. They further made a demand of Rs.4069/- in 2015, Rs.4926/- in 2016, Rs.5175/- in 2017, Rs.5488/- in 2018 and Rs.5730/- in 2019 for one bed room apartment. It was further enhanced to Rs.5910/- in 2020 from Rs.5730. The Complainant had paid AAC for the period 2014 to 2019. The receipts to this effect had been tendered as Ex.C-2. The OPs had also oversold the time shares beyond the capacity of a particular resort. Consequently most of the time shares were blocked due to non- payment of AACs of non-operational resorts. They lured and befooled the consumers/gullible Investors with new concept of holiday units. Since the resort was not operational, the Complainant was to get exchange from RCI (Resorts Condominiums International, a timeshare vacation exchange company) for which he had to pay additional charges for that as per terms and conditions for regular membership/exchange fee. This had become an unfeasible proposition as the OPs were charging an extra amount of Rs.10157/- for booking of notional week accrued with SHIRL i.e. OPs, apart from RCI regular membership (Rs.6719/- PA) and exchange fee (Rs.9800/- PA). The amount charged for the entire package was more than Rs.32500/-. This issue was taken up with the OPs many times through emails i.e. Ex.C-3 to Ex.C-6. Written requests in this regard were also sent to OP No.1. They had not responded to the same. F.A.No.711 of 2023 4
4. The Complainant had sent letter dated 18.03.2015 but no response had been received. He had also served legal notice dated 28.6.2016 upon OPs but no reply was given. The OPs were again served with a legal notice dated 22.2.2019, the reply of which was received. Said reply was not tenable. The OPs had admitted in the reply to the legal notice dated 04.03.2019 that they had received an amount of Rs.66,000/- in the year 1996. The Complainant had earlier filed a Complaint i.e. CC No.643 of 2019 and it was withdrawn with the permission to file fresh Complaint. It was stated to be a case of 'deficiency in service' and 'unfair trade practice' on the part of OPs which caused harassment, mental agony and financial loss to the Complainant. The Complainant had filed the Complaint and sought the following directions to OPs :-
(a) to refund the entire amount of Rs.66,000/- along with interest @ 18% p.a. from 1996 till date as they have failed to fulfill the commitment ;
(b) to pay compensation of Rs.1,50,000/-; and
(c) to pay Rs.50,000/- as cost of litigation
5. Upon issuance of notice, OPs had appeared and filed written reply by raising certain preliminary objections that the Complaint was not maintainable. The District Commission did not have a territorial jurisdiction as no cause of action had arisen within the jurisdiction of the District Commission. Further, the Complainant had relied upon the telephonic conversation and notice sent from his residential address of Amritsar. The Complainant had given wrong address which he claimed was the branch of the OP. In fact OP No.1 was not having any branch office at Amritsar. Therefore, it could not be the basis of jurisdiction. It F.A.No.711 of 2023 5 was denied that OP No.2 was having any branch office in Chandigarh as the Chandigarh office was closed in the year 2015. Similarly, OP No.3 was not having any office in Amritsar. It was further submitted that OP No.1 was having its corporate office in Chennai.
6. The Complainant himself had contacted the OPs for purchase of membership of their scheme. At that time, the OP was organizing customer awareness programme in the city of Amritsar to explain the details of said scheme. The Complainant was advised to visit the venue where the said customer awareness programme was organized. He got interested in the scheme of OP No.1 and purchased the membership plan. OP No.1 was still having land in Peermadu.
However the same could not be constructed due to financial constraints. Taking into consideration the said fact, the OP No.1 purchased a property in Thekkady which was in the same location. As per clause No. 4.1 of the Membership Certificate submitted by the Complainant as Ex.C-1, it was clearly stated that "In case the company does not provide allotted holidays week due to the non-completion of the construction of the holiday resort and if the company does not provide holiday week and/or days/week mentioned in the confirmation voucher due to any reasons whatsoever the company shall provide equivalent stay facility." It was important to mention that OP No.1 had provided equivalent facility within the vicinity of Peermadu i.e. Sterling Thekkady Resort. The OP had neither diverted nor utilized any funds for their personal use. The Annual Amenity Charges were calculated as per the inflation rate and prevailing economic situation of the country. The charges on account of AAC was for the Membership certification. The said Membership was duly accepted by the F.A.No.711 of 2023 6 Complainant. Complainant himself had agreed to pay the AAC as per clause No. 3.3(c) which says that "The timeshare holder shall pay the requisite charges/fees/prices decided by the company from time to time for using and enjoyment of the amenities." The OP had raised a resort in same vicinity. Therefore, it was charging AAC for upkeep and maintenance of the said resort. This was duly agreed by the Complainant. The OPs had neither oversold the time shares beyond their capacity nor the amount deposited towards Membership of Peermadu resort was forfeited by the OP Company. All the active members of Peermadu resorts were paying the AAC as raised by the OP Company. The RCI was another entity, the OP had nothing to do with it. However just to facilitate the member, the RCI membership was offered as an additional benefit. The Complainant on various occasions had utilized the RCI facility. The Complainant was not satisfied with any of the facilities provided by the OPs. He was habitual in sending emails without any reasons rather he had enjoyed various holidays with the OP. There was no 'deficiency in service' on the part of OPs. All other allegations had been denied and they had prayed for dismissal of the Complaint.
7. By considering the averments made in the Complaint as well as in the reply thereof, the Complaint filed by the Complainant was allowed vide order dated 12.10.2023 passed by the District Commission. The relevant part of said order is reproduced as under:-
"12. In view of the above discussion, we allow the complaint with costs and the opposite parties are directed to refund Rs. 66000/- alongwith interest @ 9% p.a. from the date of filing of the F.A.No.711 of 2023 7 complaint till its realization. As the opposite parties have not provided the services for which they have charged such a hefty amount of Rs.66000/- in the year 1996 , as such the complainant was deprived from using his hard earned money, as such the opposite parties are also directed to pay compensation of Rs. 10000/- and litigation expenses of Rs. 5000/- to the complainant. CC. 169 of 2020 19 Compliance of this order be made within 45 days from the date of receipt of copy of this order ; failing which complainant shall be entitled to get the order executed through the indulgence of this commission. Copies of the orders be furnished to the parties free of costs. File is ordered to be consigned to the record room. Case could not be disposed of within the stipulated period due to heavy pendency of the cases in this commission."
8. The Appellant/Complainant has filed the present Appeal being aggrieved by the order dated 12.10.2023 passed by the District Commission by raising a number of arguments.
9. Mr.U.K.Kanwar, Advocate, learned Counsel for the Appellant/Complainant has submitted that the District Commission had not awarded reasonable compensation as well as interest on the amount which was deposited by the Appellant/Complainant way back in the year 1996 with respondents. As per the terms and conditions of the Respondents/OPs, Condition No.4, the Company had failed to complete the construction of the resort as promised by them therefore the Company was liable to refund the amount deposited by the Appellant with interest @ 18% per annum as agreed between the parties. Whereas the District Commission had awarded interest only @ 9% per annum. The District Commission had also not ordered to refund the double AAC charges to the tune of Rs.17,902/- for the year F.A.No.711 of 2023 8 2014 to 2017 and document regarding the payment was duly exhibited as Ex.C-2 and same is liable to be refund to the Appellant along with interest @ 18%.
10. The amount so awarded by the District Commission is on the lower side and the same is liable to be enhanced to the tune of Rs.1,50,000/- as compensation for harassment and Rs.50,000/- on account of deficiency in service and Rs.50,000/- as cost of litigation.
11. Mr.Gautam Goyal, Advocate learned proxy Counsel for the Respondents/OPs has argued on the similar line as per the written reply filed before the District Commission. Learned Counsel has submitted that the Appellant/Complainant got interested in the scheme of the Respondents/OPs and therefore had purchased membership plan. It was further submitted that the Respondents are still having land in Peermadu however, the same could not be constructed due to financial constraints. Taking this fact into consideration, the OP No.1 purchased a property in Thekkady which was in the same location. The Respondents/OPs had strictly acted as per agreement. The question of paying damages does not arise as clause 4.2 of the Membership Certificate inter alia stated that in case equivalent stay facilities could not be provided by the Company, then damages @18% p.a. were liable to be paid.. The Complainant himself had agreed to pay the AAC as per Clause No.3.3 (c). Learned Counsel has prayed for dismissal of the Appeal.
12. We have heard the oral arguments raised by learned Counsel for the parties. We have also perused the order dated 12.10.2023 as well as all the relevant documents available on the file. F.A.No.711 of 2023 9
13. Facts relating to the filing of the Complaint by the Complainant before the District Commission, reply thereof, the oral arguments raised by learned counsel for the parties and passing of impugned order dated 12.10.2023 by the District Commission, thereafter filing of present appeal before this Commission by the Appellant/Complainant are not in dispute.
14. Admittedly, in the present case, the Appellant/Complainant had purchased timeshare vacation resort from Respondents/OPs. He had paid an amount of Rs.66,000/- and was issued Membership of Sterling Holidays vide timeshare ID No 94773 in the year 1996. The construction of Holiday Resort at Peermadu was to be completed by 1998. However, the OPs were unable to construct the said holiday facility by 1998 as promised by them. The OPs have been raising charges on account of Annual Amenity Charges (AAC) from the year 2014-2019. The total amount paid by him was Rs.66,000/- for obtaining membership for the said facility. He had paid AACs to the tune of Rs.17,902/-. During this period the OPs had offered him stay at other facilities to compensate for non-operation resort at Peermadu.
15. The main issue for adjudication before us is as to whether the award passed by the District Commission for a refund of Rs.66,000/- with interest @ 9% per annum, compensation of Rs.10,000/- and litigation cost of Rs.5,000/- is to be enhanced or not?
16. Before we discuss the case on merits, it is imperative to go through the Concept of Timeshare. Accordingly, we have researched on google search engine wherein it is defined as "A Timeshare is a F.A.No.711 of 2023 10 shared ownership model of vacation for a property in which multiple buyers own the rights to use the same property at different times".
17. To deal with the aforesaid issue we have perused the following documents tendered by the parties by way of evidence:
i. Membership Certificate along with terms and conditions issued on 27.11.2015 (Ex.C-1) ii. AAC Statement (Ex.C-2) iii. Emails (Ex.C-3 to Ex.C-6) iv. Letter dated 08.11.2006 reg. status of our resort & Banking of our weeks accrued for the year 2004 & 2005 with RCI (Ex.C-7) v. Letter dated 18.0.2015 sent by the Complainant to the Chairman of the OP reg. deficiency in services in respect of Timeshare IDs 9473 & 94774 (Ex.C-8) vi. Legal Notice dated 28.06.2016 (Ex.C-10) vii. Legal notice dated 22.02.2019 (Ex.C-12), postal receipt of notice (Ex.C-13) viii. Reply to the legal notice dated 22.02.2019 (Ex.C-14) ix. Complainant on various occasion had used and utilized the RCI facility (Ex.OP-1) x. AAC Statement Annexure B
18. We have also gone through the impugned order passed by the District Commission. The relevant part of the order is reproduced below:
10. The moot question involved in this case is whether the opposite parties have provided the facility for which the opposite F.A.No.711 of 2023 11 parties have charged an amount of Rs.66000/- in the year 1996 and assured that Peermadu Resort would be operational in the year 1998. However the said resort was remained non-
operational for which the complainant has placed on record letter dated 8.11.2006 Ex.C-7 in which it was clearly written that the resort has not been operational. In this regard the complainant has placed on record sufficient evidence as Ex.C-3 to Ex.C13 vide which the complainant requested the opposite parties for not completing the resort till 2019 which was promised to complete in the year 1998. So once the opposite parties at the time of taking the charges of Rs.66000/- assured to provide the resort in operational condition in the year 1998 and by not providing the services as assured the opposite parties and further by not refunding the amount as taken for providing the abovesaid services, the opposite parties indulged in unfair trade practice as well as guilty of deficiency in service. To discuss deficiency in service or unfair trade practice on the part of the opposite parties, definition of consumer is well explained in 2(i)(d)(ii) of Consumer Protection Act, 1986 and now in clause 2(7)(ii) of the Consumer Protection Act, 2019 that "Consumer" means any person who hires or avails of any service for a consideration which has been paid or promised or partly paid and partly promises, or under any system of deferred payment and includes any beneficiary of such service other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person, but does not include a person who avails of such service for any commercial purpose. Similarly definition of deficiency in service is explained in clause 2(g) of Consumer Protection Act 1986 now 2(11)) of the Consumer Protection Act, 2019 "deficiency" means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been F.A.No.711 of 2023 12 undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service. Definition of unfair trading is given in section 2(1)(r) of the Act 1986 corresponding section 2(47) of the Act 2019 which is reproduced as under:-
"The aberrations, in such facts and manner, arbitrarily and highhandedly, are unquestionably „unfair trade practice‟ under Section 2(1)(r) of the Act 1986 [corresponding Section 2(47) of the Act 2019]. Section 2(1)(r) of the Act says of "a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice including any of the following practices, namely:-
"The list provided in Section 2(1)(r) is illustrative and not comprehensive. That is to say, an unfair method or unfair or deceptive practice, as is judiciously determined, on facts and reasons, on fair and objective appraisal of the evidence and material on record, would qualify as „unfair trade practice‟. That is to say, an unfair method or unfair or deceptive practice, as is judiciously determined, on facts and reasons, on fair and objective appraisal of the evidence and material on record, would qualify as 'unfair trade practice'.
11. After very carefully evaluating the facts of the case and the evidence brought on record, we are of the view that opposite parties were deficient in providing services and if the opposite parties failed to provide the service as assured, they are supposed to refund the amount so deposited by the complainant.
19. The aforesaid reproduced part of the order clearly shows that the District Commission has explicitly dealt with the 'deficiency in service' and 'unfair trade' practice on the part of the OPs. Accordingly, F.A.No.711 of 2023 13 it had directed the OPs to refund an amount of Rs.66,000/- along with interest @ 9% p.a. from the date of filing of the Complaint.
20. A thorough perusal of the documents annexed by the parties clearly show that the Appellant/Complainant had signed Membership Certificate (Ex.C-1), on the backside of the said document the terms and conditions have clearly been mentioned. The relevant Clause under the caption of Obligations of Company is Clause 4, as per Clause 4.2, wherein it has been mentioned "In case of the Company not providing Apartment in the allotted Holiday Resort due to non-completion of construction and if the equivalent stay facilities is not provided by the Company, then the company shall pay damages calculated at the rate 18% per annum on the amount paid by the Timeshare Holder for period of delay."
21. In the case in hand, the Respondents/OPs had provided a studio apartment to the Appellant/Complainant in Sterling Thekkady- Woods n Spice in the year 2017 w.e.f. 20.11.2017 to 23.11.2017 (Ex.OP-1), in exchange of Resort at Peermadu. Furthermore, the Appellant/Complainant had been using different facilities at Munnar, Yercaud, Ooty Fernhill, Manali, Kodai Lakeview, and Mussorie on various occasions from the year 1997-2019. This fact has not been disputed by the Appellant/Complainant. In addition to this, the Membership Certificate had been signed by the Appellant/Complainant himself which goes on to prove that he had agreed to all the terms and conditions of the said Membership. Meaning thereby the Clause 4.2 of the terms and conditions with regard to refund of amount deposited by the Complainant along with @ 18% per annum is not F.A.No.711 of 2023 14 applicable in the case of the Appellant/Complainant as he had enjoyed his various vacations at the aforesaid facilities under his Membership No.94773.
22. Keeping in view the aforesaid observations, facts and reasons, we find no ground to enhance the award passed by the District Commission. Accordingly, the Appeal filed by the Appellant/Complainant is hereby dismissed being devoid of any merit. The order dated 12.10.2023 passed by the District Commission is upheld.
23. Since the main case has been disposed off, so all the pending miscellaneous applications, if any, are accordingly, disposed off.
24. The Appeal could not be decided within the statutory period due to heavy pendency of court cases.
(JUSTICE DAYA CHAUDHARY) PRESIDENT (SIMARJOT KAUR) MEMBER October 16, 2024 (Rupinder 2)