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Case Summary: Appeal No. 259 of 2019 (State Consumer Disputes Redressal Commission, U.T., Chandigarh)

Factual and Procedural Background

This appeal was filed by M/s Country Club, Hospitality & Holidays Limited (opposite parties / appellants) against the order dated 24.06.2019 of District Consumer Disputes Redressal Forum-II, U.T., Chandigarh (the Forum). The Forum had allowed Consumer Complaint No.602 of 2018 filed by the complainant/respondent, Mohini Kapoor, directing the appellants to refund Rs.2,30,000 to the complainant with interest at 12% per annum from 17.02.2018 (the date of the complainant's withdrawal request) until realization and awarding Rs.10,000 and Rs.7,000 towards litigation costs, to be paid within 30 days of receipt of the order.

The appeal (Institution Date: 30.10.2019; Decision Date: 05.03.2020) was initially delayed. A Miscellaneous Application No.832 of 2019 seeking condonation of delay of 86 days in filing the appeal was contested by the respondent. The Commission considered and allowed the condonation application, taking the appeal on board for hearing. The merits of the appeal were then decided and the appeal was dismissed, upholding the Forum's order. Miscellaneous Application No.833 of 2019 for stay of execution was later disposed of as infructuous.

Legal Issues Presented

  1. Whether the Commission should condone the delay of 86 days in filing the appeal and permit the appeal to be heard despite the delay.
  2. Whether the Forum erred in directing the appellants to refund the entire amount of Rs.2,30,000 to the complainant with interest, given that the complainant had requested cancellation of membership three days after signing the agreement.
  3. Whether an express contractual clause making "vacation charges" non-refundable (forfeiture of the entire amount) is unconscionable or unreasonable in the circumstances of this case.
  4. Whether withholding the amount despite the complainant's option to withdraw amounted to an unfair trade practice by the appellants.

Arguments of the Parties

Appellants' Arguments

  • The Forum failed to appreciate that there was no denial on the part of the appellants for cancellation of the membership.
  • The complainant wilfully continued the membership and, being fully satisfied, signed the agreement and purchased the membership by paying Rs.2,30,000.
  • The complainant failed to establish any shortcomings as alleged and failed to prove that she stayed in any other hotel/property at Goa.
  • The appellants relied on precedents from the National Consumer Disputes Redressal Commission (Western Agri Seeds Limited v. Ramesh Shyamraoji Dhote & Anr. and M/s Wipro Ltd. v. Surendra Singh Chana & Ors.) to support their position.

Respondent's Arguments

  • The Forum rightly held that withholding the amount despite the complainant's option to withdraw from the membership amounted to an unfair trade practice by the appellants.
  • The grounds raised in the appeal had already been addressed by the Forum and therefore the Forum's order ought to be upheld; the appeal should be dismissed.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Esha Bhattacharjee v. Raghunathpur Nafar Academy, (2013) 12 SCC 649 (Civil Appeal No.8183-8184 of 2013) The need for a liberal, pragmatic, justice-oriented and non-pedantic approach while dealing with applications for condonation of delay; courts should remove injustice rather than legalise it. The Commission relied on this authority to support a liberal approach and to allow the condonation of delay application (Misc. App. No.832 of 2019).
National Insurance Company Ltd. v. Hindustan Safety Glass Works Ltd., Civil Appeal No.3883 of 2007 (decided 07.04.2017 as cited) The provision of limitation should not be strictly construed to disadvantage a consumer where the supplier of goods/services is instrumental in causing delay; courts may refuse to apply limitation harshly in such circumstances. The Commission cited this authority to justify condoning the delay, noting that limitation provisions should not be applied strictly when it would disadvantage the consumer or where the supplier contributed to the delay.
Western Agri Seeds Limited v. Ramesh Shyamraoji Dhote & Anr., Revision Petition No.1478 of 2016 (Decided 19.09.2016) Cited by appellants (as a precedent they relied upon) — the opinion does not state the exact rule the appellants sought to derive from it. The Commission noted that this judgment was relied upon by the appellants but held it to be distinguishable on facts and of no help to the appellants in this case.
M/s Wipro Ltd. v. Surendra Singh Chana & Ors., 2015 (4) C.P.R. 144 Cited by appellants (the opinion does not detail the principle relied upon by them from this authority). The Commission observed that this judgment, as relied upon by the appellants, was distinguishable on facts and did not assist the appellants' case.

Court's Reasoning and Analysis

The Commission's analysis proceeded in two stages: first addressing the condonation application and then the merits of the appeal.

Condonation of Delay:

  • The appellants claimed they received the copy of the impugned order only when the respondent filed execution proceedings and that various administrative and courier errors delayed filing of the appeal.
  • The respondent contested the explanation, alleging non-disclosure of initiatives taken between 19.07.2019 and 09.09.2019.
  • The Commission found the explanations sufficient, observed that the application was supported by a sworn affidavit, and applied a liberal, justice-oriented approach (citing Esha Bhattacharjee) and the principle that limitation should not be strictly construed to disadvantage a consumer where delay is caused by the supplier (citing National Insurance Co.).
  • Accordingly, the Commission allowed Misc. App. No.832 of 2019 and condoned the delay, admitting the appeal for hearing.

On Merits:

  • The Commission accepted the admitted factual matrix: the complainant paid Rs.2,30,000 on 14.02.2018 for membership, emailed a cancellation request on 17.02.2018 (three days later), and later went on a test vacation to Goa (arriving 19.04.2018).
  • The Commission found the grounds raised by the appellants in the appeal to be "flimsy and devoid of any merit." It rejected the appellants' reliance on a contractual clause asserting non-refundability of vacation charges, calling such a clause "clearly unconscionable and unreasonable" in the circumstances.
  • The Commission emphasized that the complainant requested cancellation within a reasonable time (three days) after executing the agreement and that the entire payment's forfeiture was too harsh and unreasonable, particularly because the payment related to a "test vacation" rather than a committed vacation rightfully forfeitable in full.
  • Even if the Commission set aside complaints about the quality of accommodation, it held that the appellants had no right to forfeit the entire sum; withholding the entire amount displayed indulgence in an unfair trade practice.
  • The Commission held that the precedents cited by the appellants were distinguishable on facts and did not aid their case.
  • On this basis, the Commission concluded that the Forum's order directing refund with interest and awarding litigation costs was based on correct appreciation of evidence and law and did not suffer from illegality or perversity.

Holding and Implications

Holding: The appeal filed by the appellants (M/s Country Club, Hospitality & Holidays Limited) is DISMISSED. The impugned order dated 24.06.2019 passed by District Forum-II, U.T., Chandigarh in Consumer Complaint No.602 of 2018 is upheld.

Implications / Consequences:

  • The appellants are required to refund Rs.2,30,000 to the complainant with interest at 12% per annum from 17.02.2018 until realization (as directed by the Forum and upheld by the Commission).
  • The Forum's awards of Rs.10,000 and Rs.7,000 towards litigation cost stand as affirmed by the Commission.
  • The appeal was dismissed with no order as to costs.
  • Miscellaneous Application No.833 of 2019 (for stay of execution) was disposed of as having become infructuous.
  • The Commission indicated that the Forum's order was a correct appreciation of evidence and law and did not purport to lay down any new legal precedent; the decision resolves the dispute between the parties without creating a novel legal principle.

Administrative Directions: Certified copies of this order were to be sent to the parties free of charge and the file consigned to the Record Room after completion. The order was pronounced on 05.03.2020.

    M/s Country Club, Hospitality & Holidays Limited v. Mohini Kapoor

    STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

    U.T., CHANDIGARH

    Appeal No. : 259 of 2019
    Date of Institution : 30.10.2019
    Date of Decision : 05.03.2020

    1. M/s Country Club, Hospitality & Holidays Limited, SCO No.44-45, Sector 9-D, Madhya Marg, Chandigarh through its Branch Manager.

    2. M/s Country Club, Hospitality & Holidays Limited, Regd. Office Amrutha Castle, 5-9-16, Saifabad, Opp. Secretariat, Hyderabad 500063 through its Managing Director.

    …..Appellants/Opposite Parties.

    Versus

    Mohini Kapoor wife of Sh. B. K. Kapur, aged 65 years R/o H.No.1351, Sector 21, Panchkula. …Respondent/Complainant.

    Appeal under Section 15 of the Consumer Protection Act, 1986.

    BEFORE: JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT.

    MRS. PADMA PANDEY, MEMBER.

    MR. RAJESH K. ARYA, MEMBER.

    Argued by:

    Sh. Pradeep Sharma, Advocate for the appellants. Sh. Devinder Kumar, Advocate for the respondent.

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    PER RAJESH K. ARYA, MEMBER

    This appeal has been filed by the opposite parties (appellants herein) against order dated 24.06.2019 passed by District Consumer Disputes Redressal Forum-II, U.T., Chandigarh (in short 'the Forum'), vide which, consumer complaint bearing No.602 of 2018 filed by the complainant (respondent herein) was allowed directing the opposite parties to pay back an amount of Rs.2,30,000/-, to the complainant with interest @12% p.a. w.e.f. 17.02.2018 (date of withdrawal request) till realization besides awarding Rs.10,000/- and Rs.7,000/- towards litigation cost within a period of 30 days from the date of receipt of the order..

    2. Before dwelling on the merits of the case, we would first like to decide Miscellaneous Application bearing No.832 of 2019 for condonation of delay of 86 days in filing this appeal. The respondent contested the application by filing reply.

    3. It has been stated in the application that the appellants received the copy of impugned order dated 24.06.2019 at their Hyderabad Office on 10.09.2019 only when the respondent filed execution proceedings before the Forum. It has further been stated that prior to that, no copy of the impugned order was received by the appellants. On receipt of summons in execution, the same were sent to Legal Department of the appellants situated at Faridabad on 12.10.2019 and the said Legal Department upon receipt of complete file on 16.10.2019 verified the contents of the case and discussions were held with the Counsel and on 16.09.2019 (in fact, it should be 16.10.2019), a decision was made to file an appeal. It was further stated that the Counsel also took two weeks' time to draft the instant appeal. However, by mistake, the courier was sent to the wrong address of the appellant situated at Delhi and again the appellants and the Counsel restarted the process. The Counsel sent the entire set of appeal on 10.10.2019, which was received by the appellants on 14.10.2019, signature and attestation was made by the appellants on 22.10.2019 and the present appeal was filed on 30.10.2019. It was further stated that the delay was unintentional and due to bonafide reasons mentioned above. In reply to the application, it has been stated by the respondent that the appellants did not disclose the initiative taken during the period from 19.07.2019 to 09.09.2019. It has been prayed that the application be dismissed and the appeal be also dismissed being time barred. However, in our opinion, there are sufficient grounds explained in the application to condone the delay. Further, the application is supported by a duly sworn affidavit.

    4. Moreover, in Esha Bhattacharjee v. Raghunathpur Nafar Academy, (2013) 12 SCC 649, Civil Appeal No.8183-8184 of 2013 decided 13.09.2013, it has been held that there should be a liberal, pragmatic, justice-oriented, non-pedantic approach while dealing with an application for condonation of delay, for the courts are not supposed to legalise injustice but are obliged to remove injustice.

    5. Further in another judgment in the case of National Insurance Company Ltd. Vs. Hindustan Safety Glass Works Ltd., Civil Appeal No. 3883 of 2007 decided on 07.04.2017, the Hon'ble Supreme Court of India held in Para 18 of the judgment, interalia, that "…. The provision of limitation in the Act cannot be strictly construed to disadvantage a consumer in a case where a supplier of goods or services itself is instrumental in causing a delay in the settlement of the consumer's claim. That being so, we have no hesitation in coming to the conclusion that the National Commission was quite right in rejecting the contention of National Insurance in this regard."

    6. For the reasons explained in the application and in view of law settled by the Hon'ble Apex Court, the application is allowed and the delay in filing the appeal is condoned and the appeal is taken on board for hearing.

    7. The miscellaneous application bearing No.832 of 2019 stands disposed of accordingly.

    8. Now coming to the merits of the case, it may be stated here that the order dated 24.06.2019 passed by the Forum has been impugned by the appellants on the ground that the Forum failed to appreciate that there was no denial on the part of the appellants for cancellation of the membership; that the appellant wilfully continued the membership; that the respondent being fully satisfied signed the agreement and

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    purchased the membership of the appellant by paying an amount of Rs.2,30,000/-; that the respondent failed to establish any shortcomings, as alleged and further, the respondent failed to prove that they stayed in any other hotel/property at Goa. He cited judgments of Hon'ble National Consumer Disputes Redressal Commission, New Delhi in the case of Western Agri Seeds Limited Vs. Ramesh Shyamraoji Dhote & Anr., Revision Petition No.1478 of 2016, decided on 19.09.2016 and M/s Wipro Ltd. Vs. Surendra Singh Chana & Ors., 2015 (4) C.P.R 144.

    9. On the other hand, Counsel for the respondent has submitted that the Forum vide the impugned order rightly held that withholding of the amount despite option of complainant to withdraw from the Membership, amounted to an unfair trade practice on the part of appellants and rightly allowed the complaint. He has submitted that the grounds mentioned in the appeal to lay challenge to the impugned order have already been addressed by the Forum in its order, which needs to be upheld and the appeal is liable to be dismissed.

    10. It is not in dispute and rather admitted case of the parties that the respondent (complainant) just after 3 days of obtaining the Membership of the appellants on 14.2.2018, opted for cancellation of her Membership and requested them to refund the amount vide email letter dated 17.02.2018 (Annexure C-3). The respondent paid an amount of Rs.2,30,000/- to the appellants on 14.02.2018 for the said membership. It is also not in dispute that as a test, the respondent booked accommodation in Gao at Royal Assagao, next to Dattatreya Temple Assagao, Bardezna Goa, where she arrived with her family on 19.4.2018 for stay.

    11. To the mind of this Commission, the grounds taken by the appellants in their appeal to assail the order of the Forum, are totally flimsy and devoid of any merit and deserves rejection. In their reply filed before the Forum, the appellants had stated that as per express clause under the agreement, the vacation charges are not refundable under any circumstances and the vacation fee is also not refundable deposit. It may be stated here that such a clause in the agreement is clearly unconscionable and unreasonable. In the instant case, the respondent vide email dated 17.02.2018 (Annexure C-3) immediately 3 days after executing sale agreement, within a reasonable time expressed his intention not to continue with the agreement and requested for cancellation of the same. Whatever may be the reason expressed by the respondent in the said email for discontinuing with the agreement, the fact is that he had paid an hefty amount of Rs.2,30,000/- to the appellants for the said vacation facility. Apparently, by offering a test vacation, the appellants made the respondent to sign the agreement and she (respondent) apparently did so in good faith believing the version of the appellants to be correct. We endorse the view held by the Forum that the appellants prevailed upon the respondent to continue with the Membership giving all promissory assurances for providing world-class facility in their resorts and she fell prey to their gimmicks. No doubt, the respondent found the accommodation provided by opposite party in a very poor & miserable condition and not worth living. Even if we ignore the averment that the accommodation was not worth living, even then, the appellant had no right to forfeit the entire amount of Rs.2,30,000/- paid by the respondent. In our considered opinion, forfeiture of entire amount in the sum of Rs.2,30,000/- was too harsh and unreasonable. It was a test vacation and not any committed or promised vacation against the consideration paid by the respondent. The respondent had the full previledge to avail it or not. She availed it and being dissatisfied, she opted for refund of the entire amount paid by her immediately after three days of entering into the sale agreement. It is not important where the respondent stayed in any other hotel/property at Goa, however, the important thing is that just within three days of her request for cancellation of the agreement, the entire amount was forfeited by the appellants. They were so greedy for the money that they even did not think for a while that it is the hard earned money of the respondent. In our considered opinion, the appellants were required to refund the entire amount to the respondent, which they did not and by doing so, they exhibited a clear example of indulgence into unfair trade practice on their part. However, the judgments relied upon by the Counsel for the appellants in the cases of Western Agri Seeds Limited (supra) and M/s Wipro Ltd. (supra) are of no help to the appellants being totally distinguishable on facts.

    12. In our considered opinion, the Forum rightly allowed the complaint of the respondent by directing the appellants/opposite parties to refund the entire amount of Rs.2,30,000/-, to the respondent/complainant with interest @12% p.a. w.e.f. 17.02.2018 (date of withdrawal request) till

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    realization besides awarding Rs.10,000/- and Rs.7,000/- towards litigation cost. As such, no case is made out to interfere with the well-reasoned order of the Forum and as such, the present appeal deserves to be dismissed.

    13. For the reasons recorded above, we concur with the findings given by the Forum in its judgment and are of the opinion that the order passed by the Forum, being based on the correct appreciation of evidence and law, on the point, does not suffer from any illegality or perversity.

    14. For the reasons recorded above, the appeal filed by the appellants/opposite parties is dismissed with no order as to costs. The impugned order dated 24.06.2019 passed by District Forum-II, U.T., Chandigarh in Consumer Complaint bearing No.602 of 2018 is upheld. Miscellaneous application bearing No.833 of 2019 for staying the execution proceedings before the Forum stands disposed having become infructuous.

    15. Certified copies of this order, be sent to the parties, free of charge.

    16. The file be consigned to Record Room, after completion. Pronounced.

    05.03.2020.

    [RAJ SHEKHAR ATTRI]

    PRESIDENT

    (PADMA PANDEY)

    MEMBER

    (RAJESH K. ARYA)

    MEMBER

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    M/s Country Club, Hospitality & Holidays Limited v. Mohini Kapoor
    (Mar 5, 2020)