KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION

VAZHUTHACAUD, THIRUVANANTHAPURAM

APPEAL No.300/2021

JUDGEMENT DATED: 19.04.2023

(Against the Order in C.C.No.429/2017 of CDRF, Ernakulam)

PRESENT:

APPELLANTS:

(by Adv. Sinu G. Nath)

Vs.

RESPONDENT:

JUDGEMENT

HON’BLE JUSTICE SRI. K. SURENDRA MOHAN : PRESIDENT

          The appellants are the opposite parties in C.C.No.429/2017 of the Consumer Disputes Redressal Forum, Ernakulam (hereinafter referred to as the District Forum for short).  The respondent herein is the complainant before the District Forum.  For the sake of convenience parties shall be referred to herein according to their status before the District Forum. 

          2.       According to the complainant, the opposite parties are an association of three groups viz., Country Club, Country Vacations and Country Corridor, all of which are primarily dealing in Hospitality Services, Vacations, Tour Packages and Real Estate.  The opposite parties have their Head Office at Hyderabad with branches at various places including Ernakulam.  They also have hotels and resorts in Kerala.  The complainant is a former officer of the Indian Navy.  He had shifted to Visakhapatnam in connection with his relocation. 

          3.       On 13.03.2017, the complainant received a call from the 2^nd opposite party informing him that he had been selected through a lucky draw held as part of the silver jubilee celebrations of the 2^nd opposite party and had won free holidays and other gifts.  He was asked to visit the branch office of the opposite party at Visakhapatnam to collect the gifts.  When the complainant and his wife reached the Visakhapatnam branch office of the opposite parties, their officers extended unbelievable offers to the complainant as part of their silver jubilee celebrations.  Complainant was informed that the offers were available for that day only and that if they wanted to avail the offers, they would have to take membership and make payment at the same time.  The complainant told the opposite parties that he was preparing to shift from Visakhapatnam to Kerala and therefore he could not avail the offers from the opposite parties.  The staff of the opposite parties convinced the complainant that they were having branches at various places in Kerala as well as many resorts and clubs so that the complainant could avail all the benefits and offers from Kerala itself.   The staff of the opposite party forced and persuaded the complainant with their alluring promises to make a payment of Rs.75,000/-(Rupees Seventy Five Thousand) towards lifetime membership of the opposite party.  The complainant and his family were offered a package for availing their offers and associated products free, which also included a free holiday anywhere in India for a period of thirty years.

          4.       The complainant was also offered residential plots at cheap price by the opposite parties.   He went to the office of the opposite party at Visakhapatnam on 15.03.2017 where they showed pictures of fully developed residential plots, enclosed with gates, with all amenities like park, swimming pool, club, spa etc. located 30km away from Hyderabad airport.  According to the complainant, he was tricked and made to believe that he would get an additional discount as he was an ex-service man.  He was further told that the offer was only for ten selected couple and therefore he booked three plots, paying an amount of Rs.5,40,000/-(Rupees Five Lakh Forty Thousand).  He was also made to pay an amount of Rs.3,000/-(Rupees Three Thousand) as taxi fare to visit the plot which was more than 100km away from Hyderabad.  On reaching the site the complainant was shocked to see a rocky and rugged terrain located more than 5km away from the main road.  The complainant therefore wanted return of the amount paid by him.  But the opposite party refused to accede to the request of the complainant.  The opposite parties were also not ready to resolve his grievances.  The complainant felt cheated and was mentally shattered.

          5.       On 17.04.2017 the staff of the opposite parties called the complainant to the Visakhapatnam Head Office on the pretext of holding negotiations.  The complainant was threatened with harmful consequences, if he decided to proceed against them.  According the complainant, at present he is an unemployed person facing acute financial crisis.  He was cheated by the opposite parties offering products that had no quality.  Therefore he alleged unfair trade practice against the opposite parties.  As a result of their acts he had suffered financial loss, mental agony and hardships.  He therefore approached the District Forum claiming an amount of Rs.6,18,172/- being the amount paid by him to the opposite parties and for a compensation of Rs.2,00,000/-(Rupees Two Lakhs) and litigation expenses.

          6.       On receipt of notice the opposite parties appeared and filed their version, disputing the contentions of the complainant.  According to them, the complainant was not a person coming within the definition of “consumer” under the Consumer Protection Act, 1986 (hereinafter referred to as the Act for short).  The opposite parties had introduced various schemes for the exclusive benefit of their members.  Once a person becomes a member, he would be entitled to such benefits, in strict compliance with the terms and conditions of the membership.  The amount paid towards the membership charges was not refundable under any circumstances, as specifically provided in the Membership Agreement.  It was only after understanding the scheme and terms and conditions of the membership that the complainant had signed the Purchase Agreement for the club and vacation, a product of the Country Club Hospitality and Holidays Ltd.  Accordingly he paid Rs.75,000/-(Rupees Seventy Five Thousand) towards vacation accepting the personal details as well as the terms and conditions.  The opposite parties have a standard procedure for generating the membership.  A verification call will be made for confirmation of the membership.  All facilities and benefits of the membership including AMC had been admitted in the verification call.  It was only on accepting the terms and conditions that a person who wants to take membership signs the membership application form.  The complainant accepted and signed all the documents.  The membership agreement very clearly states that the membership fee once paid would not be refunded.  It was accordingly that the complainant had enrolled for the product of CCHHL for Master Life Membership and paid Rs.75,000/-(Rupees Seventy Five Thousand) and purchased clubbing facilities and holidays on 13.03.2016.  All the facilities are mentioned in the agreement.  Therefore the complainant’s claim for refund of membership fee was only to be rejected.  The opposite parties also contended that it was open to the complainant to avail all the benefits provided for him, complying with the terms and conditions.  The complainant had suppressed the facts for the purpose of contending that the opposite parties had duped him. 

          7.       The opposite parties further contended that they had not offered any additional discount price to the complainant for the reason that he was an ex-serviceman.  The complainant had paid an amount of Rs.5,40,000/-(Rupees Five Lakh Forty Thousand) for the purchase of three plots which were allotted to him at Harithavanam situated at Pothepally Village of Telangana State.  The plots offered were near Hyderabad and the allegations that they were far away are not correct.  The location of the plots is clearly mentioned in the Harithavanam Premium Vacations Agreement dated 15.03.2017.  The allegation in the complaint that the complainant was forced to pay an amount of Rs.3,000/-(Rupees Three Thousand) towards the taxi fare for plot visit was denied.  Thus, according to them all the amounts claimed by the complainant were non-refundable.  The opposite party also contended that the District Forum had no jurisdiction to entertain the complaint since the Purchase Agreement was executed at Visakhapatnam.  Since no part of the cause of action has arisen within the jurisdiction of the District Forum, they sought for dismissal of the complaint on the said ground also.

          8.       The District Forum tried the complaint on the above pleadings.  The complainant filed proof affidavit and marked Exhibits A1 to A5 documents.  The complainant was later on cross examined on behalf of the opposite parties, on being permitted to do so as per an order passed by the District Forum in a separate petition filed by the opposite parties for the said purpose.  The opposite parties did not adduce any evidence either oral or documentary on their side.

          9.       The District Forum considered the contentions of the parties and the evidence on record.  The District Forum found that there was deficiency in service on the part of opposite parties and therefore ordered that the amount of Rs.75,000/-(Rupees Seventy Five Thousand) charged as membership fee by the opposite parties shall be returned to the complainant with interest thereon @ 9% per annum from the date of receipt, till the date of realisation.  The amount of Rs.5,40,000/-(Rupees Five Lakh Forty Thousand) paid by the complainant for the purchase of three plots, together with an amount of Rs.10,000/-(Rupees Ten Thousand) as the costs of litigation have also been ordered to be paid.

          10.     According to the counsel for the appellants, the judgement under appeal is wrong and liable to be set aside.  It is pointed out that, even according to the complainant, the entire transaction took place at Visakhapatnam.  The money had been paid and the agreement had been executed at Visakhapatnam.  Since the entire cause of action had arisen at Visakhapatnam, the District Forum lacked jurisdiction to entertain the complaint.  A specific contention to the said effect had been taken in the written version filed by the opposite parties.  The District Forum had not considered the said aspect at all.  Therefore, according to the learned counsel, the order appealed against suffers from a total lack of jurisdiction and is liable to be set aside for the said reason alone. 

          11.     The respondent/complainant who appeared in person disputed the contentions of the counsel for the opposite parties.  According to the respondent, he was enticed and persuaded to purchase the membership of the opposite parties with offers of all the modern facilities of similar gated residential complexes.  The brochures shown to him and pictures of swimming pool, shopping complex etc. gave the impression of a fully developed township.  The complainant had parted with his money under the impression that he was purchasing plots in a fully developed residential complex.  The membership was taken as part of the said composite deal.  It was only when he saw the complex that he realised the folly.  Though he had demanded return of the money paid by him the opposite parties had refused to do so.  The District Forum has approached the issues correctly and has granted relief, which does not call for any interference by this Forum.  He therefore sought for dismissal of the appeal. 

          12.     Heard.  The main contention that was vigorously pressed by the counsel for the appellants was that the order of the District Forum appealed against was vitiated by an absolute lack of territorial jurisdiction.  It is pointed out by the learned counsel that since the entire transaction had taken place at Visakhapatnam as admitted in the complaint itself, the complaint ought to have been filed at the said place.  Just because the appellants have branches in Kerala and also at Cochin, the said fact would not confer jurisdiction on the District Forum at Cochin to try this case.  In support of this contention, the counsel places reliance on the decision of the Apex Court in M/s Sonic Surgical Vs. National Insurance Co. Ltd. (Civil Appeal No.1560 of 2004) where a similar situation is alleged to have arisen for consideration.  That was a case in which a fire had occurred during the night of 13-14 February 1999 at 10p.m. in a godown at Ambala that belonged to the appellant therein.  A petition claiming compensation for the damage caused by the fire was filed before the Consumer Redressal Commission of the Union Territory, Chandigarh.  Considering the question as to whether the complaint was maintainable at Chandigarh, the Apex Court has held as follows:

“ If the contention of the learned counsel for the appellant is accepted, it will mean that even if a cause of action has arisen in Ambala, then too the complainant can file a claim petition even in Tamil Nadu or Gauhati or anywhere in India where a branch office of the insurance company is situated. We cannot agree with this contention. It will lead to absurd consequences and lead to bench hunting. In our opinion, the expression 'branch office' in the amended Section 17(2) would mean the branch office where the cause of action has arisen. No doubt this would be departing from the plain and literal words of Section 17(2)(b) of the Act but such departure is sometimes necessary (as it is in this case) to avoid absurdity”.

Since the entire transaction has taken place at Visakhapatnam it is contended that the appeal is only to be allowed, setting aside the order appealed against and dismissing the complaint.

          13.     In the above context, it is necessary to examine Section 11 of the Act which deals with the jurisdiction of a District Forum.

11.     Jurisdiction of the District Forum.— 

(1)      Subject to the other provisions of this Act, the District Forum shall have jurisdiction to entertain complaints where the value of the goods or services and the compensation, if any, claimed [does not exceed rupees twenty lakhs].

(2)      A complaint shall be instituted in a District Forum within the local limits of whose jurisdiction, — 

(a)      the opposite party or each of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or  [carries on business or has a branch office or] personally works for gain; or

(b)      any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides, or [carries on business or has a branch office], or personally works for gain, provided that in such case either the permission of the District Forum is given, or the opposite parties who do not reside, or [carry on business or have a branch office], or personally work for gain, as the case may be, acquiesce in such institution; or

(c)      the cause of action, wholly or in part, arises.  

[Emphasis supplied]

It is clear from the above provision that the jurisdiction of a District Forum is not confined only to the place where the cause of action arises.  Territorial jurisdiction is conferred also on the place where the opposite party or each of the opposite parties, where there are more than one, actually and voluntarily resides or carries on business or has a branch office or personally works for gain.  Therefore the place where any of the opposite parties, where there are more than one, at the time of institution of the complaint, actually and voluntarily resides or carries on business or has a branch office or personally works for gain also has territorial jurisdiction.  The above clause is qualified by a proviso which stipulates that in such a case either the permission of the District Forum has to be given to such institution or the opposite parties who do not reside or cary on business or have a branch office or personally works for gain as the case may be, acquiesce in such institution.  Therefore, in a case where the opposite parties or any one of them do not reside within the jurisdiction of the District Forum, acquiesce of the said person would become subject to the jurisdiction on the District Forum.

          14.     In the present case, the transaction admittedly took place at the office of the appellants at Visakhapatnam.  However, the opposite parties have their branch office at Cochin.  The complainant has instituted the complaint before the District Forum at Ernakulam.  In response to the notice issued by the District Forum, the opposite parties who are the appellants appeared and filed their written version.  It is true that, they have raised the question of territorial jurisdiction in their written version.  However, they did not seriously pursue the said contention. Instead, they submitted themselves to the jurisdiction of the District Forum.  Therefore, the District Forum went on to consider the complaint on the merits.  They cross examined the complainant and actively participated in the trial up to its final disposal.   Thus, the appellants acquiesced to the jurisdiction of the District Forum, in this case.  In view of the above, the contention regarding territorial jurisdiction which is required to be raised and determined at the earliest point of time cannot affect the validity of the order under appeal.  Therefore, we are not satisfied that an interference with the order appealed against on the said ground is called for.

          15.     On the merits, we notice that in this case there is evidence only on one side.  No evidence, either oral or documentary has been adduced by the opposite parties.  The documents Exhibits A1 to A5 prove that the opposite parties had received the amounts stated to have been paid by the complainant.  The contention of the appellants that the amounts are not refundable cannot be accepted since the respondent/complainant was unwilling to trust the opposite parties or to continue to have dealings with them.   He has sought for the return of the money paid by him.  Refusal to return the money paid by him is without any justification.  This is a clear case where the respondent/complainant was compelled to part with his money on the basis of promises made by the appellants, which were found to be untrue by the complainant.  Therefore we do not find any infirmity in the order of the District Forum holding that there was deficiency in service on the part of the appellants.  The reliefs granted are only reasonable and are fully justified in the facts and circumstances of this case.

          For the above reasons, this appeal fails and is accordingly dismissed confirming the order of the District Forum. 

The amount of statutory deposit made at the time of filing this appeal shall be disbursed to the respondent on proper acknowledgement, to be adjusted towards the amounts ordered to be paid by the District Forum.

SL