Date of Filing: 30-01-2018

Date of Order: 19-12-2019

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM – I, HYDERABAD

                                                       P r e s e n t­                                                                                     

   HON’BLE  Sri  P.VIJENDER, B.Sc. L.L.B., PRESIDENT

HON’BLE Sri  K.RAM MOHAN, B.Sc. M.A L.L.B   MEMBER

HON’BLE Smt. CH. LAKSHMI PRASANNA, B.Sc. LLM. (PGD (ADR),  MEMBER   

ON THIS THE THURSDAY   THE  19^th     DAY OF DECEMBER, 2019

C.C.No.60/2018

Between

Mr.Praveen Reddy Nimmalas,

S/o. Shiva Reddy, Aged 36 years,

Occ: Employee. R/o. Plot No. 7,

SRK Green Park, Bowrampet,

Hyderabad.                                                          ,,,,,Complainant

And               

1. The Managing Director,
2.  

C/o. Country Club, # 6-3-1219/8,

Cellar Office, Country Club Kool Building,

Begumpet, Hyderabad – 500 016,

2. Mr.Vamshi Krishna, Sales Manager,
3.  

C/o. Country Club, # 6-3-1219/8,

Cellar Office, Country Club Kool Building,

Begumpet, Hyderabad – 500 016,

3. Country Club India  Private Limited

Rep.by its Managing Director,

# 6-3-1219/8,Cellar Office, Country Club Kool Building,

Begumpet, Hyderabad – 500 016,

Counsel for the complainants                :  Sri K.Ramanjaneyulu

Counsel for the opposite Parties            : Mr. V.Sreenivasa Rao

                                           O R D E R

(By.  Smt. CH. Lakshmi Prasanna,B.Sc. LLM (PGD ( ADR)., Member on behalf of  

                                                   Bench)

1. The complaint is filed u/sec.12 of The Consumer Protection Act, 1986 seeking this Forum to grant the following reliefs:

1. To direct the opposite party to refund an amount of Rs.1,20,000/-  along with interest @ 24% PA from the date of incident i.e.1/10/2016 till the date of realization..
2. To pay compensation of Rs.5,00,000/-towards harassment and mental agony.
3. To award cost of the complaint  of Rs.5000/-

2. Brief facts of the complaint are as follows:

The complainant is one of those customers who was induced by a solicitation call on 1/2/2016 from one of the personnel of the Opposite Party stating that the complainantis one of the lucky winners of gift worth Rs.25,000/- through a coupon filled in PVR Cinema, offering various complimentary benefits of free transport, club facilitiesand weekend dinners etc. shown in their advertisement-brochure. The complainant was also informed that on the occasion of 25^th annual celebrations of the opposite party, thereis a special offer of a plot admeasuring 150 sq.yds near Yadagirigutta at a discount price of Rs.1,65,000/- actually worth Rs.2,89,000/- Apparently, lured, confused, hurried and forced by the officials/managers of the Opposite Party, the complainant paid Rs.1,20,000/- through his credit card towards subscription of the club-membership with O.P and purchase of plot and signed on the Agreement of Purchase of Membership on 1/2/2016 (Ex A1). On going through the contents of the agreement and verifying the details of the property offered by the O.P., the complainant realized that there is misrepresentation of facts and false description of the property in the unregistered and agreements on non-judicial stamp papers by the Opposite Parties and hence decided to call off and withdraw from the membership and approached the Opposite parties immediately on 4/2/2016 and 5/2/2016 for cancellation of the agreement and refund of the amount of Rs.1,20,000/- that was paid by the complainant to the Opposite parties. The Complainant pursued with the Opposite Parties to refund his money of Rs.1,20,000/- as but in vain. Hence the present complaint seeking appropriate relief.

3. In their written version, Opposite Parties denied all allegations contending that the complainant has signed on the sale agreement and membership form, with full knowledge of the terms and conditions therein and out of his own volition. And that it is clearly mentioned in the Membership Agreement, duly signed by the complainant, that amount paid towards membership fees is non-refundable under any circumstances.
4. In the enquiry, the complainant reiterated the averments of the complaint in his evidence affidavit and Exhibits A1 to A4 are marked in support of his complaint. Ex B1 & B9 are documents marked on behalf of the Opposite Parties.
5. Based on the facts and material brought on record, and written arguments submitted by both the parties, the following points have emerged or consideration:

1. Whether the complainant could make out the case of deficiency of service/unfair trade practice on the part of the Opposite parties?
2. Whether the complainant is entitled for the claim/compensation made in the complaint?
3. To what relief?

6. Point No.1:- The first question, that arises for determination, is, as to whether, the complainant was induced by the Opposite Party and the Agreement, came into existence by the alleged inducement, was voidable at the option of complainant. The complainant, being an educated person is presumed to have full understanding and knowledge of the contents of the agreement before accepting and signing the same. In the absence of any evidence to show that the complainant was induced by the opposite party to enter into the sale agreement and membership subscription, the argument to this effect is devoid of merit. However, it needs to be seen if the complainant paid the amount  under misrepresentation.

 Before discussing the issues on hand, it is worth referring to the Guidelines in judging unfair contracts given in the 199th Report of the Law Commission of India on 'Unfair (Procedural & Substantive) Terms in Contract". 

“ What we mean by ‘procedural unfairness’ is whether there is unfairness in the manner in which the terms of the contract are arrived at or are actually entered into by the parties, or in the circumstances relating to the events immediately before the entering into the contract, or in the conduct of the parties, their relative position, or literary knowledge, or whether one party had imposed standard terms on the other or whether the terms were not negotiated.

A contract or a term thereof is procedurally unfair if it has resulted in an unjust advantage or unjust disadvantage to one party on account of the conduct of the other party or the manner in which or the circumstances under which the contract has been entered into or the term thereof has been arrived at by the parties

What we mean by ‘substantive unfairness’ is when a term by itself may be either one-sided, harsh or oppressive or unconscionable and therefore unfair. One party may have excluded liability for negligence or for breach of contract or might have imposed terms on the other which are strictly not necessary or might have given to himself power to vary the terms of the contract unilaterally etc. Such terms could be unfair by themselves.”

In the instant case   the transaction involves typically a standard form of contract, the complaint herein invariably had to sign on the dotted line, with no opportunity for him/her to negotiate over the terms at all. Second, the complainant may be relatively unfamiliar with the terms or language employed by the Opposite Party. Thus the characteristics, usually and traditionally associated with a contract, such as freedom of contract and consensus ad idem are significantly absent in the Membership Agreement and Agreement for Purchase of the Proposed Plot. The standard terms and conditions unilaterally prepared by the Opposite Parties are offered to the other on a take it or leave it basis, rather, the terms are forced on the Complainant. The individual participation consists of a mere adherence to the document drafted unilaterally and insisted upon by the Opposite Parties, without any discussion of the terms and conditions therein. Thus there is apparent procedural unfairness suggesting ‘absence of meaningful choice’ to the complainant before accepting the same.

The test of unfairness requires that contrary to the requirement of good faith, there should be significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer. A bare perusal of the averments of the complainant and the material on record shows he was compelled to pay the membership fees, stating that it is non refundable and failing to give enough time to the complainant to contemplate the cause of their action amounts to unfair trade practice. Section 2(1) (r) of Consumer Protection Act of 1986 defines Unfair trade practice as follows:- Unfair Trade Practice : Means a trade practice which for the purpose of promoting the sale, use or supply of any goods or for the provisions of any service, adopts any unfair method or unfair or deceptive practice namely: (1) Makes a false or misleading representation concerning the need for, or the usefulness of any goods or services. (2) The conduct of any contest, lottery, game of chance and skill for the purpose of promoting, directly or indirectly, the sale, use or supply of any product or business interest. The offering of gifts, prizes or their items with the intention of not providing them as offered or creating impression that something is being given or offered free of charge when it is fully or partly covered by the amount charged in the transaction as a whole.

The following clauses of the Membership Agreement and the Agreement of Purchase  of Plot are not only unfair and unreasonable but deceptively  drafted for wrongful  gain rendering  the transaction void ab initio

1. Clause 20 of the membership agreement says, “ In an event that the second party makes any payment to the First Party under any agreement, payment will be first adjusted towards club membership amount and then any other outstanding liability” very vague, unlike contracts that  are generally negotiated, formed and performed fairly and in good Faith.
2. (excluding or limiting liability)

1. The opposite parties have stated that oral commitments made by any sales staff cannot be honoured by the company and the affidavits of the authorized  signatories of both  the agreements on record are not filed for enquiry

2.  Any amendment or enactment of a legislation resulting in additional obligations on First Party or changing the nature of any activity undertaken by First Party to the detriment of the First Party then the provisions in this agreement to the extent of the additional obligations are imposed on the First Party and the provisions in this agreement to the extent the law applicable is changing the nature of the activity undertaken by the First Party would be considered as extinguished before the amendment or enactment of the legislation coming into force and the Company would not be held responsible for consequences of such changes.

3. Adjudication of any dispute by way of sole arbitration and the sole arbitrator shall be nominated by the First Party and /or the authorized person of the First Party alone.
4. Membership is valid for Life time and the same is renewable on payment of Annual Maintenance Charges (AMC) and any other dues payable to the Company without any default.
5. Clause 4 of Membership Agreement- ….the Complainant has to pay the Annual Maintenance charges of Rs.5,000/- irrespective of usage of the club facilities.
6. There is discrepancy in the description of the property and also consideration mentioned in the Agreement for sale of Proposed plot. As per the averments of the complainant, the Opposite Parties promised a plot near Yadagirigutta but the Agreement for sale was showing the plot in a different location. Ex.A1 shows the amounts collected from the complainant as Rs.55,000/- + Rs.65,000/- total amount as Rs.1,20,000/- whereas the membership agreement ( Ex B3) shows Rs.40,000/- as purchase price and part payment of Rs.80,000/- in the Agreement for sale of plot (Ex B4), while there is another document Ex B6 showing the membership amount as Rs.1,65,000/-  'Non videntur qui errant consentire'  Basically any act performed out of misrepresentation should be held to have got vitiated.

In view of the above findings, this forum considers that the Opposite Parties not only indulged in false and misleading representations and deceptive marketing practices but also has been grossly deficient in rendering their services and hence Opposite parties No. 1,2 & 3 are jointly and severally liable for the same.

7. Point No. 2 & 3 :- As there was no contract and the alleged contract was void as there was no consensus ad idem, the complainant is entitled to the refund of amount of Rs.1,20,000/-  paid by the complainant towards membership.

In view of the above discussion we are of the opinion that the present complaint deserves to be allowed. The same is accordingly allowed.

Accordingly, the opposite party is hereby directed as under:-

1. to pay the said amount of Rs.1,20,000/- to the complainant.
2. to pay Rs.1,00,000/- towards mental agony and
3. to pay exemplary costs of Rs.5000/- towards litigation

This order be complied with by the opposite party, within 45 days from the date of receipt of its certified copy, failing which the amounts at Sr.No.(i)&(ii) above shall carry interest @18% per annum from the date of this order till actual payment.

Dictated to steno transcribed and typed by her and pronounced by us on this the   19^th     day of   December, 2019.

  MEMBER                                              MEMBER                                      PRESIDENT

APPENDIX OF EVIDENCE

WITNESS EXAMINED

                                                                      NIL

Exhibits  filed on behalf of the Complainant:

Ex.A1 -  Copy of  Purchase Agreement  for Country Club Gymkhana Membership

Ex.A2 – Copy of  Legal notice  dt.24.3.206

Ex.B3 – Copy of postal receipts

Ex.A4 –  Copy of acknowledgement

Exhibits  filed on behalf of the Opposite parties:

Ex.B1 –  Welcome call  C D -R

Ex.B2 –  Procedural format of holidays booking

Ex.B3 -  Membership  Agreement

Ex.B4 – Agreement  for sale of plot

Ex.B5 -  A few facts of the concept

Ex.B6 -  Button up form                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

Ex.B7 – Conversion order dated 4.6.2015

Ex.B8 – Conversion order dated 15.7.2015

Ex.B9 – Layout.

MEMBER                                      MEMBER                                         PRESIDENT