State Consumer Disputes Redressal Commission
Tome A. Fernandes vs Royal Goan Beach Resort Pvt. Ltd., on 23 February, 2012
BEFORE GOA STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PANAJI GOA Appeal No. 15/09 1.Tome A. Fernandes 2.Mrs.Elizabeth V. Fernandes, both of House No.757, Khoiruth, Aldona, Bardez, Goa 403 508 ..Appellants/ Complainants V/s. 1.Royal Goan Beach Resort Pvt. Ltd., Prestige Holiday Resort Pvt. Ltd., Haathi Mahal, Cavelossim, Mobor, Salcete, Goa 403 731 2.Prestige Holdiay Resorts Pvt. Ltd., Haathi Mahal, Cavelossim, Mobor, Salcete, Goa 403 731 Respondents/ O.Ps. Appellants present in person Adv. Shri. A. DSouza is present for the Respondents. Coram: Shri. Justice N.A. Britto, President Smt. Vidhya R. Gurav, Member Dated: 23/02/2012 ORDER
[Per Shri. Justice N. A. Britto, President] This appeal is filed by the Complainants, who are husband and wife, against the order dated 29/12/2008, by which the North Goa District Forum has dismissed the complaint, filed by the Complainants. The complaint was filed to recover a sum of Rs. 6,00,000/- , by way of refund of fees paid towards membership and management charges with interest, and compensation for harassment, postage, time loss, etc.
2. The complaint was transferred from the South Goa District Forum by order dated 22/03/2009 authored by Shri Justice C. K. Mahajan, the then President of this Commission but that is another story.
3. The complaint was filed initially against Opposite Party No. 1 on 02/01/04. Opposite Party No.2 was impleaded by application dated 07/04/04. Opposite Party 1 is the Management Company which runs the resorts. Opposite Party -2 is a Developer and owns the resorts and at relevant time had 4 resorts and these resorts are affiliated to RCI (Resorts Condominiums International) which operates a computerized holiday ownership exchange programme and has over 3,300 affiliated resorts in over 90 countries.
4. The Complainants had gone to Calangute beach with their children on 16/01/1995. The Opposite Parties had put up a stall there advertising their holiday products. The Complainants attended a presentation and after that entered into a purchase agreement and paid Rs.20,000/- as deposit. The balance of Rs.1,06,000/- was paid 40 days later on 25/02/1995.
5. By virtue of the said agreement dated 16/01/1995 the Complainant/s purchased a time share which entitled them to enjoy a holiday in the 16th week of every year for 6 persons in 2 bedroom apartment of about 85 sq.m. of any luxury resort, for 7 days in a year, for 80 years. The concept of time share is that the accommodation is free every year but the expenses have to be paid for. The management charges are paid for upkeep and maintenance of facilities of the said resorts.
6. In terms of clause 5 of the said purchase agreement, the Complainants were required to pay the management charges meant for the upkeep and maintenance of the resort. The charges were to be paid in advance on 01/11 of each year. The Complainants in terms of clause 4 were also required to pay the enrolment fees. The Complainants paid variable management charges without any murmur or demur, for six long years, as follows:
For the year ending 31/12/1996 - Rs.3,350.00 31/12/1997 -
Rs.3,535.00 31/12/1998 - Rs.5,556.00 31/12/1999 - Rs.5,910.00 31/12/2000 - Rs.7,263.00 31/12/2001 - Rs.7,977.00 The Complainants also paid Rs.10,570/- towards R.C.I. charges, though a receipt for Rs.5,520/- dated 08/11/2002 is produced on record. Thus it can be seen that Complainant/s had paid to the Opposite Parties a sum of Rs.1,70,161/- The Complainants paid Rs.1,26,000/- after availing discount of Rs.6,000/- towards the agreement/membership and not Rs.1,32,000/- as falsely claimed by them in the complaint as well as in their affidavits in evidence.
7. Admittedly, the said time share could be utilized by the Complainants, or banked or gifted, exchanged or rented out. . In case the time share was not utilized, (and infact the Complainants never utilized for themselves the time share) for any year, or was not banked it would lapse and it would not be revalidated. Complainants say that in case the week was not utilized, that it would lapse, was not mentioned in the agreement. Was it mentioned in the agreement that could be accumulated for 80 years? The Complainant/s were to enjoy the time share for the first year in the year 1986 but the Complainant/s did not enjoy the time share in that year. It is also not the case of the Complainant/s that they had either booked or banked the time share for that year or had requested the Opposite Parties to carry it forward or rent it out for them. There is no letter to that effect produced by the Complainants.
Nevertheless, it can be seen that the week of that year was extended upto Sept. 2002.
8. The procedure for CRS booking or RCI banking were explained to the prospective consumers at the time of presentation and this is evident from the letter dated 02/06/2001 (copy at Page 243) addressed by the Opposite Parties to the Complainant No.1 and which procedure the Complainants were also aware, as can be seen from letter dated 06/04/1999 (at page 39) addressed by the Complainant No.1 to the Opposite Parties. Complainants rented out the time share for the years 1997, 1998, 1999 and 2000 and 2001 to different persons for different weeks but in the same year 2001 which can be seen from the said letter dated 02/06/2001 (at page 59) as well as para 5 of the written version filed by the Respondent No.2. This shows that the Opposite Parties were quite flexible towards the Complainants. Complainants say that they rented the weeks because they could not be accumulated.
If that be so, how did the Complainants rent out five weeks in one year? And the 1996 week was carried forward upto 2002? The Complainants rented the said time shares for the said years to different persons mentioned therein and earned about Rs.3,000/- to Rs.4,000/- per week. The Complainants must have earned atleast Rs.15,000/- if not Rs.20,000/- from the investment made by them. Was it not the duty of the Complainants to have mentioned as to how much they earned from the investment made by them from renting out the time share for those years to different persons so that it could be adjusted from the compensation, if any, payable to the Complainants? The claim cannot be one sided affair. Although the Complainants produced documents at 2 stages, second time before this Commission by virtue of Order dated 22/02/2010, what we find from the record is that there are only 2 letters signed by the Complainant/s while the remaining correspondence is that which is written by the Opposite Parties.
9. The case of the Complainants was that the Opposite Parties had promised them that they would rent out the weeks for them at 15% commission and that too within a years time and after 5 years if they were not too interested in the holiday club they would always resell their time share and for this reason only, they became members of the club. According to them, by renting out the time share to the agents of the Opposite Parties for a sum of Rs.3,000/- Rs. 4,000/- they suffered heavy losses.
10. On the other hand, it was the defence of the Opposite Parties, that the Complainants thought that they had bought an investment but had only purchased a holiday product. The Opposite Parties, denied that they assured the Complainants that they would rent the weeks at 15% commission or that they would resell the Complainants time share as alleged or a tall. The Opposite Parties stated that the Complainants were free to exchange, lend, rent or sell the weeks without any restrictions at any time. According to them the Complainants had contracted to pay the management charges but did not pay the management charges for the years 2002 and 2003 and this amounted to breach of the terms of the agreement entered into by them. By letter dated 05/07/2003 the Opposite Parties sent a final reminder to pay the management charges failing which their membership would be suspended and when Complainant/s received the said letter they failed and neglected to pay the said charges and therefore their rights have been suspended in accordance with the rules. It is their case that the Complainants had no right to demand any particular week, much less week 52 as a matter of right after suspension of their membership under the RGBC (Royal Goan Beach Club). The Opposite Parties stated that by letter dated 5/10/2003 (copy at page 47) the Complainant/s were told that they did not engage in any rental or resale services, and, interalia had requested them to pay reinstatement charges and by the same letter a list of rental and resale brokers was sent for reference. The Opposite Parties reiterated that the Complainants had admitted renting out their weeks; that purchase agreement does not refer to financial investment and financial returns. The product purchased by the Complainants is a holiday ownership which was purchased for holiday needs and their membership has been suspended for non-payment of the management charges for the year 2002 and 2003 and the reinstatement charges are Rs.27,800/- for 2 years default and on making the payment the membership will be reinstated. The Opposite Parties denied specifically that they harassed the Complainants as alleged or at all and that it is the Complainant/s who have to be blamed for their default and therefore sought for dismissal of their complaint.
10A. The Lr. District Forum summarised the grievances of the Complainants in para 2 of the Order and came to the conclusion that there was nothing on record to show that the Opposite Parties had promised to rent out the week or to buy back the future weeks. As regards maintenance charges, the Lr. Forum observed that it was agreed to be paid by virtue of clause 5 of the Agreement and it was but reasonable to assume that the maintenance expenses would increase due to the annual inflation over a period of years. As regards the execution of the agreement, the Lr. District Forum observed that the agreement was signed on 16/01/1995 and Rs.20,000/- was paid towards the deposit and by the time the balance of Rs.1,06,000/- was paid on 25/02/1995 the Complainant/s had ample time to reflect and review their decision and seek written confirmation of verbal commitment allegedly made. The Lr. District Forum therefore felt that they could not offer any relief to the Complainant and as such dismissed the complaint.
10.B. We have heard both the Complainants in person as well as Shri A. DSouza the Lr. Advocate appearing on behalf of the Opposite Parties. Infact the Complainant/s have not made any effort to demonstrate that any of the conclusions arrived at by the Lr. District Forum are wrong either in the memo of appeal or arguments. We want our money back or else we will take the case upto the President, seems to be their common refrain.
10.C. Be that as it may, can the Complainants succeed in this appeal?
11. Our answer is in the negative. The conclusions arrived by the Lr. District Forum in our view cannot be faulted.
11. (a) Opposite Parties had taken the plea of limitation in their affidavit in reply which has not been answered by the Lr. District Forum. When a plea is taken it is expected of the District Forum to answer it one way or other.
The Consumer Protection Act, 1986 was meant to provide summary and simple, more expeditious and less expensive remedies for the settlement of consumer grievances. The Fora were not meant to sweep the law under the carpet. Ours is a country governed by rule of law and when points of law were urged by one of the parties it was expected of the Lr. District Forum to answer the same. The words of Thomas Fuller Be you ever so high, the law is above you have now become our judicial dictum. By way of illustration, we may refer to Marine Contract Services South Pvt. Ltd. (AIR 1999 SC 80) wherein the Apex Court showed a little surprise when the National Commission held that the provisions of Contract Act were not applicable to complaints filed under the Consumer Protection Act and held that the Contract Act applied to all. The decisions of a Forum cannot be opposed to reason, as well, and this has been held by the Apex Court in Vishwabarathi House Bldg. Society (2003 (2) ALL MR 1091
(b) Section 24-A prescribes limitation period for filing of complaints and provides that no complaint shall be admitted unless it is filed within 2 years from the date on which the cause of action has arisen. Sub-section (2) provides for condonation of delay in cases where sufficient cause for not filing the complaint within the stipulated time, is shown. According to the Opposite Parties the agreement was executed on 16/01/1995 and the last payment was made on 25/02/1995 and since the Complainants seek to recover the amount paid, the complaint is clearly time barred. The Complainants have tried to contend in one of the several written arguments filed by them, that it is the case of continuous cause of action. However, in our opinion cause of action for filing of the complaint has got to be computed either after one year or 5 years of the execution of the contract as according to the Complainants, the Opposite Parties were to resell their time share after five years got completed. That would take us to 16/01/2000 or thereabout and the complaint is filed on 02/01/04. Viewed from section 24-A the complaint was not filed within 2 years from 16/01/2000 and therefore it has got to be considered as clearly time barred.
(c) There is yet another formidable aspect from which the limitation can be looked at, as provided by section 24 A of the Consumer Protection Act. Limitation relates to failure to avail a remedy within the prescribed time. Limitation cannot be overlooked if it stares on the face of it. It is well settled that representations made after the period has lapsed do not extend the period of limitation. The Opposite Parties clearly and unequivocally informed the Complainants by letter dated 15/02/1999 that their request for getting refund plus interest could not be granted. The relevant portion of the said letter could be reproduced:
In regards to your request for full refund plus interest, I am sorry to say that I will have to decline this.
The complainants therefore ought to have filed the complaint within 2 years from 15/02/1999 atleast after their request for refund was refused and the complaint having not been filed, within 2 years, the same was liable to be dismissed. There was no question of admitting the complaint beyond the period of limitation unless sufficient cause was shown as to why the complaint could not be filed within the time prescribed.
(d) The Complainants entered into an irrevocable agreement and further agreed to irrevocably purchase the membership of the said club. They also irrevocably agreed to be bound by the purchase agreement and the conditions stated therein. By virtue of clause 10 of the said agreement both the parties agreed that they entered into it of their free will and the agreement was not reversible or rescindable or cancellable at the option of either Purchaser or the Company. In other words by virtue of the said irrevocable agreement both the parties by themselves have bound by hand and by feet, if we may use that expression .
The expression irrevocable means that which cannot be recalled or revoked, unalterable or irreversible.
The word irrevocable simply closes the door on any option or locus penitentiae and makes the agreement definite and binding. Such a contract is either to be performed or broken. (See Pg.988 of Shri Ramanath Iyers, The Law Lexicon, reprint 2002). The management charges have been paid pursuant to the said agreement and what has been paid under said agreement therefore cannot be recovered by Complainants. It is spent on facilities which have been used. In this view of the matter also the complaint was bound to fail.
(e) The Complainants were invited for the presentation on the holiday club to be started by Opposite Party -2. The Complainants say that they were not too keen but went to please the boy, who came to call them. Was he known or related to them? Why did they sign the agreement by making deposit of Rs.20,000/-? To please whom? If they were getting late to reach home, and this explanation dawned upon them years later, they ought to have walked away from the said presentation and gone home and in any event, 40 days later should not have paid the balance of Rs.1,06,000/-. The Lr. District Forum was entirely right in holding that the said irrevocable agreement was executed by the Complainant/s and the Opposite Party of their own free will and, this they expressed in the agreement itself. Infact the Complainants did not plead any force or coercion at the time of execution on the part of the Opposite Parties or their Officers who were not even otherwise known to the Complainants. As rightly pointed out on behalf of the Opposite Parties, the Complainants thought that the purchase of time share was a business proposition when infact it was only a holiday product more designed for leisure of affluent people and not to make money by renting it out to go for a holiday abroad, as stated by one of the Complainants in their letter dated 06/04/1999(at page 39). This is what they stated in the said letter Sir, we could not collect some money from our weeks and make a trip to Europe with my family.
So far we have not used a single week in our holiday.
(f) As already stated, the Complainants not only paid deposit of Rs.20,000/- on 16/01/1995, and balance of Rs.1,06,000/- on 25/02/1995 and thereafter the management charges from year to year until year 2001 and the RCI charges on or about 08/11/2002 and it appears that there was no problem between the Complainants on one hand, and the Opposite Parties on the other hand, till then, except for the letter dated 22/12/1998 which came demanding payment of management charges for the year 1998 when infact the Complainants had paid Rs.5,556/- for that year on 10/06/1998. If at all the said letter that could be considered as deficiency in service, then, for that lapse the Opposite Parties apologized more than once. First, by letter dated 15/02/1999 (page 96) for the administrative error with a promise to adjust Rs.100/- paid extra; then by letter dated 6/3/1999 (at page 14) with a promise that the mistake will not happen again and enclosing a cheque for Rs.100/- In letter dated 15/02/1999 the Opposite Parties even stated that in case the management charges were not paid for 1999, they would waive the same as a small token of apology. What more did a Consumer want? It may be that the Complainant/s had to make some correspondence and waste some time and money to bring the error to the notice of Opposite Parties. Apology, was again extended by letter dated 19/08/06 but we need not go into this letter as it pertains to the period after filing of the complaint. The Complainant/s appear to have accepted the apologies as can be seen from the tone of the letter dated 06/04/1999 (at page
39) written by Complainant/s complimenting the Opposite Parties about their beautiful resorts. Could any one insist for any compensation after the said apologies? In any event any claim in this regard would also be clearly barred by Section 24 A of the Consumer Protection Act.
(g) The Complainant/s in terms of the Agreement dated 16/01/1995 particularly in terms of clause 9 thereof specifically agreed that the agreement in question read together with the Owners Declaration and Charter Membership Package constitutes the entire Agreement between the parties and no further matters not contained therein may be relied upon as form part of the Agreement. The case of the Complainant/s to get out of the said Agreement, as stated in the complaint, is that a gentleman there assured them that if they did not use the weeks, they could rent out the weeks for them at 15% commission and that too within a years time and after 5 years they could resell their time share in case they were not too interested. We do not know who that gentleman is but such a vague allegation can never be accepted.
In case anything like that happened the Complainant/s would have ensured that the said assurance was made part and parcel of the Agreement. The purchase Agreement does not at all mention anything about renting out the weeks or resale by Opposite Parties. Oral evidence cannot be allowed to run counter to a written document. It is well settled principle of law that when terms of a contract are reduced in the form of a document, no evidence is to be given in proof of the terms of such contract except the document itself or secondary evidence of its contents when the document is not available. When the terms of such contract have been proved by production of such document no evidence of any oral agreement can be admitted between the parties to vary its terms. Otherwise there can be no sanctity at all to written agreements or contracts. The gentleman there, might have promised the moon to the Complainants, but the written agreement does not contain any such stipulation and therefore the Complainants story that they were ever assured about renting out the weeks or resale of the time share cannot be accepted. If the gentleman there had promised renting out and or resale, the Complainants as reasonable and prudent consumers would have incorporated that promise in the written agreement and on the contrary would not agree or accept clause 9 of the agreement as it stands. Moreover, in case the gentleman there had made the said promise, the Complainants would have insisted that the Opposite Party rent out their time share week and would not have rented it out through agents. Similarly, in case the Opposite Party had agreed to sell after 5 years then the Complainants would have insisted that the Opposite Parties resell the same and would not engage the services of etoo (European time share association) to resell the timeshare by paying them Rs.11,760/-. Witness may lie, they say, but documents do not. The Complainants then relied on some correspondence to prove the said promise and the earliest letter on that aspect is a letter dated 05/07/1996 (at page
92) addressed to the Complainants. All that the said letter states is that the Opposite Parties were proposing an added facility of selling the time share week and when it would become operational the members would be informed about it. There are miles of difference between a proposal and a promise. The next letter is dated 16/12/1997 informing the Complainants that they are still working out on certain rental programme whereby they may be able to assist their members in renting out their weeks, at the same time stating that they could not guarantee successful renting because that would depend on supply and demand. In other words, the said letters do not help the Complainants to show that there was a later agreement between the parties, in addition to what they had agreed upon on 16/01/1995 in as much as they also do not help the Complainants to prove that there was such agreement or understanding at the time of execution of agreement dated 16/01/1995. The complainant/s allegation on the said promise of renting out and resale is nothing but a ruse to get out of the said agreement, which has become uneconomical to them.
(h) Admittedly, the Complainants did not pay the management charges of Rs.8,657/- due on 1st November for the year 2001. The complainants ought to have known about the consequences of non-payment of the management charges earlier when they had received letter dated 22/12/1998 as final notice sent by mistake. By letter dated 03/05/2002 (at page 9) Complainant/s were informed that management charges for the year 2002 were still outstanding and the consequences were explained. The deadline was given upto 12/06/2002 to make the payment. By another letter dated 05/05/2003 (copy at page 11) a final deadline was given to make the payment by 14/06/2003. One does not know as to how the Complainants reacted to the said letters but the fact remains that by another letter dated 05/07/2003 (page 120) the Complainant/s were told that their management charges were Rs.8,657/- for the year 2002 and Rs.9,332/- for the year 2003 and they should pay the same on or before 15/07/2003. This was also done by waiving of the penalty. Inspite of the said letters the Complainant/s did not pay the amount by 15/07/2003 and as a result the Complainant/s membership was suspended as informed to the Complainants by letter dated 15/10/2003 (at page 105). This time the Complainant/s were called upon to pay reinstatement charges of Rs.27,800/-.
It is therefore obvious that it is the Complainant/s who have breached the agreement and invited the consequence of suspension by not paying the management charges for the year 2002 and 2003 which were subsequently even reduced to only Rs.9,332/-. Complainants say that they did not pay management charges of Rs.8,657/- for the year 2002 because they were not approved at the Annual General Body Meeting. Firstly, this was not stipulated in clause 5 of the Agreement dated 16/01/1995. Secondly, it is not the case of the Complainants that earlier management charges for the years 1996 to 2001 were approved at the general body meeting. Thirdly, this pleas was never put by the Complainants before the Opposite Parties. The letter dated 10/10/2003 (at Page 19) only shows that Complainants did not pay the same because they could not afford and not because they were not approved at the Annual General Meeting. This is clearly an afterthought.
12. Reverting to the story of transfer, it appears that the Complainant No.1 made some serious allegations against the then President of the South Goa District Forum to her Excellency the President of India and to the Prime Minister on or about 11/10/06 and 20/08/2007. As a result whereof, the Opposite Parties filed an application dated 08/03/2007. By order dated 15/03/2007 all the 3 members of the Lr. District Forum recused themselves from hearing the complaint of the Complainants.
The Opposite Parties thereafter moved this Commission for transfer and this Commission then headed by Justice Shri C. K. Mahajan transferred the Complaint No.1/2004 to the North Goa District Forum and it came to be decided by the impugned order. One fails to understand as to why the Complainants approached the South Goa District Forum when the agreement was executed within the jurisdiction of North Goa District Forum. The said allegations made against the President of South Goa District Forum are repeated in the Memorandum of Appeal and at one stage on 12/01/2012, we have referred to them by mistake as complaint dated 16/03/09. The Complainants on 08/04/2010 agreed before this Commission to file an affidavit and withdraw the allegations tendering his (of Complainant No.1) unconditional apology.
This Commission then headed by Justice Shri D. G. Deshpande noted that incase no unconditional apology was given the matter would be referred to the National Commission with request to transfer the complaint to any other State. The then President of South Goa District Forum became a member of this Commission with effect from 07/02/2011 and when this appeal came before us on 12/01/2012 it was decided that the appeal would be heard by this Bench. Details are recorded in the order/ roznama sheet dated 12/01/2012. However, this decision was taken without Order dated 08/04/2010 being brought to our notice by the Lr. Advocate of the Opposite Parties. Otherwise the decision of 12/01/2012 might have been different.
Although the Complainants undertook to withdraw the allegations and to give unconditional apology, by 20/07/2010 the Complainant/s changed their mind and we are told they refused to withdraw the allegations.
12. (a) On 12/01/2012 the Opposite Parties put a proposal for settling the matter amicably. The Complainants were ready to accept the offer but knowing the nature of Complainant No.1, we deferred the acceptance of the offer to give them time to think and sign the terms.
On 09/02/2012 the Complainants changed their mind and did not even accept another offer placed before them by the Opposite Parties. Yet another offer for settlement was made by the Opposite Parties on 21/02/2012 which was not accepted by them. The details of the offers made are recorded on the roznamas/ order sheets.
13. In our view, it is the Complainant/s who have committed the breach of the irrevocable agreement executed by them by not paying the maintenance charges of Rs.8,657/- for the year 2002 and invoking the consequences of suspension of their membership. Therefore they are not entitled to any reliefs.
14. The Complainants have realized rather too late in the day that becoming a member of RGBC and buying a time share week was not a business proposition. It looks they were not interested in a holiday product but only were interested to earn some money out of it and when they found that they could not get much from renting their weeks to others, as the management charges were more than the rent they would get, they decided to walk out from the contract. This they have done at their own peril.
For reasons stated hereinabove, the appeal is hereby dismissed.
[Smt. Vidhya R. Gurav ] [Justice Shri. N. A. Britto] Member President