State Consumer Disputes Redressal Commission
Sanwarmal Agarwal vs The Lalit Golf & Spa Resort & Another on 28 September, 2017
1
BEFORE THE GOA STATE CONSUMER DISPUTES
REDRESSAL COMMISSION,
PANAJI - GOA
C.C. No. 18/2016
Sanwarmal Agarwal
Aged 55 yrs.
S/o Shri. Mohan Lal Agarwal,
R/o F-396, II Phase,
Mia Basni, Jodhpur, Rajasthan. ... Complainant
v/s
1. The Lalit Golf & Spa Resort, Goa,
Rajbaga, Canacona, Goa.
2. Bharat Hotels Ltd.,
having its registered office
at Barakhamba Lane,
New Delhi. ... Opposite Parties
Ms. S. Manerkar, Lr. Counsel for the Complainant.
Sr. Adv. Mr. J. E. Coelho Pereira along with Adv. Mr. V. Korgaonkar
for the OPs.
Coram: Shri. Justice U. V. Bakre, President
Smt. Vidhya R. Gurav, Member
Dated: 28/09/2017
ORDER
[Per Justice Shri. U. V. Bakre, President]
1. The Complainant has filed the above Complaint, inter alia, seeking refund of an amount of Rs. 22,00,000/- advanced to the Opposite Parties (OPs, for short) along with interest at the rate of 18% per annum from the date of communication of cancellation till date and for direction to the OPs to produce their occupancy details from 29/11/2015 to 03/12/2015 and for compensation of Rs. 10,00,000/- for harassment and mental agony.
2. Case of the Complainant is as follows:-
2The Complainant had finalized the wedding of his son which was scheduled to be held in the first week of December 2015 at Lalit Golf & Spa Resorts, Goa and he desired to book the hotel of the OP No. 1 as venue for the wedding of his son from 29/11/2015 to 03/12/2015 and had approached the OP No. 1 for the same. After mutual discussions and negotiations, the OP No. 1 agreed to book the required rooms and other amenities as per the requirement of the Complainant for a total amount of Rs. 90,00,000/-. However, the booking was to be confirmed and the rooms were to be issued only after the complete payment of the total consideration which was to be governed by the Banquet and room reservation entered upon by the Complainant and the Respondent No. 1 on 07/08/2015. The Complainant in pursuance of the said agreement paid to the OP No. 1 a sum of Rs. 22,00,000/- in two installments. However, due to some unfortunate and unforeseen circumstances, doubts started hovering over the scheduled event of the wedding of Complainant's son which forced him to defer the payment of next two installments as mandated by the agreement. The Complainant however assured the OPs to make the payment as soon as possible. The wedding had to be postponed from 03/12/2015 and this fact was conveyed to the OP No. 3 vide email dated 28/10/2015 wherein the Complainant further requested the OP No. 1 to issue the rooms which were supposed to be booked in the name of the Complainant to its other customers. The Complainant further informed the OP No. 3 that as soon as the new dates are finalized the same shall be conveyed to the OP No. 1. However, the OP No. 1 sent an email dated 29/10/2015 informing the Complainant about release of the 141 rooms proposed to be booked for the Complainant to the other customers due to non-
payment of the two installments by the Complainant as per the said agreement. The OP No. 1 nowhere stated that the booking of the Complainant has been cancelled. The OP No. 1 thereafter sent an email dated 17/11/2017 informing the Complainant about his alleged liability to pay 100% of the total consideration as per the 3 cancellation policy provided in the said agreement. The Complainant received an invoice for the payment of Rs. 90,00,000/-. The OP No. 1 thereafter sent repeated reminders to the Complainant for making payment of the amount mentioned in the said invoice and even threatened the Complainant for initiating legal action. The Complainant sent a legal notice dated 27/11/2015 to the OPs to refund the advanced amount deposited by him but he in turn received a legal notice dated 01/12/2015 from OP No. 1 demanding payment of the balance amount. By further reply dated 02/12/2015, the OP No. 1 stated that their legal notice dated 01/12/2015 be treated as reply to the legal notice of the Complainant and further asked the Complainant to deposit the amount of Rs. 68,00,000/-. Vide reply dated 08/12/2015, the Complainant reiterated his stand to the OP No. 1. The Complainant is a consumer as defined by Section 2 (1) (d) of the Consumer Protection Act, 1986 (the "Act", for short). There is deficiency in service on the part of the OPs. The OPs have indulged in unfair trade practices. Hence the Complaint.
3. By way of written version, the OPs denied that there was any deficiency of service on their part. They further denied the allegations made by the Complainant against them. The OPs alleged that after mutual discussions and negotiations, the Complainant entered into an agreement with the OP No. 1 and booked the hotel for three days i.e. 29/11/2015 to 03/12/2015 for celebrating the event of his son's wedding on terms and conditions contained in the said agreement which was a concluded agreement. The payment of Rs. 22,00,000/- made by the Complainant was in terms of clause 16 item (a) and item (b) of the schedule of payment contained in clause
16. The OPs stated that in terms of clause 16 of the agreement, inter alia, the payments for the event inclusive of taxes was to be made as per the schedule contained in the said clause. The said clause further stipulates that the rooms would not be issued till the entire amount mentioned in clause 16 was paid. Clause 18 provides for 4 contingencies of no show and/or cancellation. It stipulates that if the OPs are advised that the booking is partially or entirely cancelled, the following retention charges in the form of cancellation fee would be applicable and that the retention charges would be a percentage of the total estimated room rental and the food and beverages expenses would be on the sliding scale. If the notification of Cancellation is made before 90 days within a period prior to the expected arrival, the retention charges would be 50% of the cancelled part, if it is made between 90 days and 60 days, the retention charges would be 80% of the cancelled part, it is between 30 days and arrival, the said retention charges would be 100% of the cancelled part.
4. The OPs further alleged that by an email communication dated 28/10/2015, within a period of less than 30 days from the date of event, the Complainant cancelled the event and therefore the question of the Complainant requesting the OPs to issue the rooms to be booked in the name of the Complainant to its other customers is not in contemplation of the contract. The OP No. 1 considered the email dated 28/10/2015 of the Complainant as a termination of the contract and by email dated 29/10/2015 informed the Complainant that the rooms would be released to other customers. According to the OPs, there was no question of mentioning that the booking had been cancelled since the email dated 28/10/2015 was taken as cancellation of the show. The invoice for payment of whole amount payable under the contract and calling upon the Complainant to pay the balance amount of Rs. 68,00,000/- was in terms of clause 18 of the contract. The OPs through notice and/or correspondence pointed out to the Complainant that if he does not pay the said amount the OPs will have to seek redressal for recovery of the said amount in the Court of Law. The OPs denied the statements made in all the paragraphs of the Complaint which were inconsistent to their case.
55. The Complainant relied upon letter dated 07/08/2015 received by him from the OP No. 1, the agreement dated 07/08/2015, invoice dated 07/08/2015, invoice dated 16/11/2015, correspondence via emails, legal notice dated 27/11/2015 sent by Complainant to the OPs, legal notice dated 01/12/2015 sent by the OP No. 1 to the Complainant, reply dated 02/12/2015 sent by the OP No. 1 to the Advocate of the Complainant and reply dated 08/12/2015 of the Complainant to the legal notice of the OPs. The OPs filed the delegation of power of attorney dated 01/07/2015 to Mr. Joaquim Guilherme Proferro Martins and extracts of the resolutions dated 29/05/2012 and 26/09/2014 passed in the meetings of the board of directors of the OP No. 2.
6. The Complainant filed his own affidavit-in-evidence, whereas the OPs filed affidavit-in-evidence of Shri. Joaquim G. P. Martins, the authorized signatory of the OP.
7. Thereafter, the parties filed their written arguments. This Commission has also heard oral arguments. Ms. S. Manerkar, Lr. Counsel argued on behalf of the Complainant and Sr. Adv. Mr. Coelho Pereira argued on behalf of the OPs. We have gone through the entire material on record.
8. The Complainant has nowhere stated that the OP No. 1 is an entity in law. However, admittedly, the OP No. 1 is the Five Star Hotel of the OP No. 2, which is a Company duly registered under the Companies Act, 1956. Admittedly an agreement named as Banquet & Rooms Reservation Agreement dated 07/08/2014 has been entered into and signed by the Complainant and the Sales Manager of the OP No. 1, on behalf of the OP No. 2. Hence nothing serious comes out of the averment of the OPs in the written version to the effect that the OP No.1 is not an entity in law.
9. As per clause 15 of the said agreement, the total estimated/minimum guaranteed billing for the rooms and banquet 6 space booked by the Complainant and listed in the said agreement was Rs. 90,00,000/-. The Complainant, in terms of clause 16 item (a) and item (b) of the schedule of payment contained in the said agreement paid Rs. 22,00,000/- to the OPs in two installments. This part payment of consideration, as stated in the said agreement, was towards confirmed booking of rooms and banquet space for the Complainant. The OPs have urged that the Complainant is not a consumer since the booking of the venue was for his son's wedding and the said son has not filed the Complaint and booking of the rooms was for the guests of the Complainant, who have not availed of any services of the OPs and lastly that the disputes relate to commercial transaction. What is relevant is the agreement which in clear terms reveals that the part consideration is paid by the Complainant who had promised to pay the balance consideration and the rooms as well as banquet space as listed in the agreement were booked for the Complainant. Again the said booking was not for any commercial purpose but for personal use i.e. the wedding of his son. Hence there is no substance in the objections of the OPs with regard to the status of the Complainant. The Complainant is consumer as defined by Section 2(1)(d) of the Act. Considering the definition of 'service' as given in Section 2(1)(o) of the Act, the OPs are the service providers.
10. According to the Complainant, in terms of the agreement, the booking had to be confirmed and the rooms were to be issued only after the complete payment of the total consideration and clause 18 would be applicable only in case there are confirmed bookings. The Complainant says that there are no confirmed bookings in view of Section 16 of the agreement which, inter alia, states that the rooms will not be issued till the entire amount mentioned in the schedule is paid to the hotel. The above, in our view, cannot mean that there is no confirmation of booking till the date of issuance of the rooms. As per the agreement dated 07/08/2015, the OP No.1 had agreed to 7 make confirm booking of rooms and banquet space as listed in that agreement, for the Complainant to arrive on 29/11/2015 and depart on 03/12/2015, for which the Complainant had paid Rs. 3,00,000/- on execution of the agreement and had paid further amount of Rs. 19,00,000/- through R.T.G.S. in the name of OP No. 1 on 20/08/2015. It cannot be expected that the OPs would wait till 29/11/2015 for payment of the entire amount and keep the rooms and banquet space vacant till that date or till 03/12/2015 and suffer loss. As per the said clause 16 of the agreement, the last installment of Rs. 22,50,000/- had to be paid by the Complainant on or before 15/11/2015 i.e. before 15 days of arrival. The learned Counsel for the Complainant submitted that for the arrangements to be in place, confirmation had to be sent fifteen days prior to the event and hence it can be said that the booking was not confirmed. As per clause 7 of the agreement, the hotel required the final rooming list provided to it 15 days prior to the guests estimated arrival date with complete billing instructions for each room. In terms of clause 9 of the agreement, the allocation of the venue was to be in accordance with the minimum numbers expected which should be confirmed 14 or more days prior to the event. This was because if the minimum expected numbers fall below the initially advised numbers, the allocation of the venue can be changed according to the capacity of each function room at the discretion of the hotel subject to halls availability. Lastly, in terms of clause 11 of the agreement, reconfirmation on the number of guests attending, along with all final details of the event should be notified to the banquet department of the OP No. 1 fifteen days prior to the event. All the above requirements within a period of about 15 days are for the convenience of the OPs for making appropriate arrangements regarding each item and have nothing to do with the confirmation of booking of rooms and banquet space.
811. The clause No. 16 of the agreement has to be read along with clause 18 of the said agreement. The date of arrival was 29/11/2015. If the Complainant had cancelled the booking before 90 days prior to the expected arrival i.e. on or before 31/08/2015, he would have got refund of 50% i.e. Rs. 11,00,000/-. If the Complainant had cancelled the booking after 31/08/2015 but before 29/09/2015, the Complainant would have got the refund of 40 % i.e. Rs. 8,80,000/-. If the Complainant had cancelled the booking after 29/09/2015 but before 29/10/2015, he would have got the refund of 20% i.e. Rs. 4,40,000/-. If the Complainant had cancelled the booking after 29/10/2015, he gets nothing, since the entire amount paid by the Complainant would be retained by the OPs. By e-mail dated 28/10/2015, the Complainant informed one of the executives of the OP No. 2 namely Kameshwar Rao that the wedding has been postponed due to unforeseen circumstances and requested the OP No. 1 to release the booked rooms so that the hotel does not bear loss. The date 28/10/2015 falls between 30 days and arrival since 30th day from 28/10/2015 falls on 27/11/2015. In view of the clause No. 18 of the agreement, the OP No. 1 was entitled to retain 100% of the amount paid by the Complainant and hence the Complainant cannot claim refund of any amount from the OPs. As per clause 18 of the agreement, the cancelled rooms could be released by the OP No. 1 for resale and the retention charges for cancellation of rooms would still be charged irrespective of the re-sellable value of the rooms. Hence the Complainant, in terms of the said clause 18 of the admitted agreement cannot claim the refund of the total or even any part of the amount paid to the OPs, on the ground that he had requested the representative of OP No. 2 to release the booked rooms since the wedding was postponed. By e-mail dated 29/10/2015, the OP No. 1 informed the Complainant that he has not paid the two installments for the dates 15/09/2015 and 15/10/2015 which makes the total of dues as Rs. 45,00,000/- The OPs informed the Complainant that since he did not adhere to the guidelines of the 9 contract, they are releasing the 141 rooms from his block for parallel queries and that the advance amount paid is being forfeited. By further email dated 17/11/2015, Shri Kameshwar Rao informed the Complainant about the cancellation terms as per clause 18 of the agreement and further informed him that since they have received the cancellation mail on 28/10/2015 and since as per the contract, rooms were required from 29/11/2015, 100% retention is applicable. The above is in terms of the agreement between the Complainant and the OPs. As rightly submitted by the Lr. Sr. Counsel, the Complainant wants refund of the amount paid by him without seeing whether forfeiture was proper or not. This commission cannot declare certain clauses of the agreement as null and void. When the OPs have acted as per the agreement, there cannot be any deficiency in service or unfair trade practice on the part of the OPs.
12. It is the contention of the Complainant that the term "retention charges" as used in clause 18 of the agreement means "withholding some percentage of money until unsuccessful completion of task"
and therefore clause 18 of the agreement can be applied only when complete payment of estimated billing amount is made and the booking is confirmed, since until the complete payment is made, retaining 100% estimated billing amount as cancellation fee is not possible. No doubt, clause 18 of the agreement dated 07/08/2015 says that the retention charges will be a percentage of the total estimated room rental and food and beverage expenses and will be on a sliding scale as mentioned in that clause. But the said clause 18 does not say that it is applicable only if entire estimated billing amount is actually paid. Hence there is no force in the contention of the Complainant that there was no confirmed booking and that for application of clause 18, entire estimated billing amount had to be paid.
13(a). According to the Complainant the retention of the advance amount deposited by the Complainant is in contravention of Section 10 56 and Section 70 of the Indian Contract Act, 1872('Contract Act', for short). Section 56 of the Contract Act provides as under:
"56. Agreement to do impossible act.- An agreement to do an act impossible in itself is void.
Contract to do act afterwards becoming impossible or unlawful.- 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.
Compensation for loss through non-performance of aact known to be impossible or unlawful.- Where one person has promised to do something which he knew, or, with reasonable diligence, might have known, and which the promisee did not know, to be impossible or unlawful, such promisor must make compensation to such promisee for any loss which such promisee sustains through the non-performance of the promise."
13(b). Section 70 of the Contract Act provides as under:-
70. Obligation of person enjoying benefit of non-
gratuitous act.- Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered.
13(c). Section 56 of the Contract contains the doctrine of frustration which comes into play when a contract becomes impossible of performance after it is made on account of circumstances beyond the control of the parties. It is a special 11 case of discharge of the contract. Illustration (a) to Section 56 of the Contract is as under:
'A agrees with B to discover treasure by magic. The agreement is void'.
13(d). In the present case, the agreement dated 07/08/2015 did not require to do any act which was unlawful. According to the Complainant, due to some unfortunate and unforeseen circumstances which were beyond the control of the Complainant, the wedding had to be postponed. Neither in the Complaint nor in the affidavit-in-evidence, the Complainant has stated the reason for postponing the wedding and as to how it was beyond his control. The pleading is vague in this regard and there is no evidence to prove that the contract had become impossible of performance after it was made. The performance of the contract was not at all impossible for the OPs. What should be done and what would happen if the Complainant did not want the rooms and banquet space was specifically stated in the express agreement between the parties. Since the OPs had lawfully received the advance money from the Complainant and there was an express agreement dated 07/08/2015 between the parties, Section 70 of the Contract Act, in our view will not be applicable. The learned Counsel for the Complainant, however, could not substantiate the above contention. Neither in the written submissions nor during the oral arguments, learned Counsel for the Complainant urged anything which could satisfy this commission as to how Sections 56 and 70 of the Indian Contract Act are applicable to the facts of the present case.
14. The question whether the OP No. 1 has wrongly demanded an amount of Rs. 68,00,000/- or whether the said demand is lawful need not be decided by this Commission since the OPs are not consumers before this Commission but are service providers. The learned Sr. Counsel for the OPs has informed this Commission that 12 the OP No. 2 has filed a Special Civil Suit against the Complainant for recovery of the amount due. The learned Sr. Counsel has also produced a copy of the plaint before this Commission. Thus, the Civil Court is seized of the demands of the OP No. 2 and will decide the same.
15. It is evident from the discussion supra that the Complainant has failed to prove deficiency in service on the part of the OPs or that the OPs are involved in unfair trade practice. The Complaint therefore deserves to be dismissed.
16. In the result, the Complaint is dismissed with no order as to costs.
[Smt. Vidhya R. Gurav] [Justice Shri. U. V. Bakre] Member President