Country Club's 'No Refund' Clause For Holiday Membership Is One-Sided & Unfair, NCDRC Upholds ₹90,000 Refund

Dismissing a revision petition filed by Country Vacations and Country Club (India) Ltd., the Commission upheld the Karnataka State Consumer Disputes Redressal Commission's order directing the companies to refund the membership fee.

Facts

The matter arose from a consumer complaint filed by Sangeeth Bhadran, who received a promotional call from Country Vacations on December 2, 2013, offering holiday and vacation facilities and inviting him to visit its office.

On December 7, 2013, he visited the company's office in Bengaluru and entered into a Membership Purchase Agreement after being offered various holiday benefits, accommodation facilities and discounts. He paid ₹90,000 towards the membership.

According to the complainant, the benefits represented to him during the promotional interaction were inconsistent with the actual terms and conditions of the agreement. He also alleged that he had been assured that maintenance charges would not be payable for facilities that he did not utilise.

Upon examining the agreement, he sought cancellation of the membership and a refund of ₹90,000. Despite repeated emails, telephone calls and personal visits, the companies allegedly failed to cancel the membership or refund the amount.

He subsequently approached the III Additional Bangalore Urban District Forum, which dismissed the complaint on the ground that the complainant had failed to establish any deficiency in service or unfair trade practice.

However, the Karnataka State Consumer Commission allowed his appeal and directed the companies to refund ₹90,000 with 6% annual interest from the date of filing the complaint until payment, besides ₹5,000 towards litigation costs.

Aggrieved, Country Vacations and Country Club approached the NCDRC.

Contentions of the Parties

The companies contended that the complainant had voluntarily entered into the membership agreement after understanding its terms, including the non-refundable nature of the membership fee. They submitted that membership cards and gift vouchers had been issued and that the complainant had neither attempted to avail the holiday facilities nor paid the mandatory annual maintenance charges. They denied any deficiency in service or misrepresentation and argued that the complainant had failed to produce supporting evidence.

Observations & Decision

The Commission observed that the complainant's failure to avail the membership facilities could not, by itself, absolve the companies of their unfair conduct or validate the one-sided contractual terms.

It noted that the complainant was invited to the company's office, where the membership benefits were presented and the agreement was executed on the same day. Within approximately one-and-a-half months, without availing any benefits, he sought to withdraw from the long-term agreement.

The Commission held that refusing the refund by relying on the 'no-refund' clause, despite the recurring annual maintenance liability under the agreement, was 'patently unfair and unjust'. It observed that a proportionate deduction for the period of one-and-a-half months, along with reasonable administrative charges or an earnest amount, could perhaps have been made while refunding the amount.

Holding the clause to be one-sided and unfair, the Commission observed that retaining the entire membership fee despite the consumer having availed no benefits would result in unjust and disproportionate enrichment of the companies.

Finding no jurisdictional or other error in the Karnataka State Commission's order, the NCDRC dismissed the revision petition filed by Country Vacations and Country Club.

Consequently, the direction to refund ₹90,000 with 6% annual interest from the date of filing of the complaint until payment, along with ₹5,000 towards litigation costs, was upheld.

Counsel for the Petitioners: Vijay Sharma

Counsel for the Respondent: P. Harold and Jaimon Andrews