Delhi

North

CC/343/2014

AMITABH NARAYAN - Complainant(s)

Versus

STERLING HOLIDAY RESORT - Opp.Party(s)

22 Sep 2023

ORDER

District Consumer Disputes Redressal Commission-I (North District)

[Govt. of NCT of Delhi]

Ground Floor, Court Annexe -2 Building, Tis Hazari Court Complex, Delhi- 110054

 

Consumer Complaint No.: 343/2014

 

Sh. Amitabh Narayan

S/o late Sh. Kanwal Narayan

Aged 55 years

R/o 44, Daryaganj, Ground Floor

New Delhi-110002                                                                                                         …                            Complainant

 

                                                          Vs

 

Sterling Holiday Resorts (India) Ltd.

M-28, First Floor

M-Block Market

Greater Kailash Part-II

New Delhi-110048                                                                                                        …                        Opposite Party No.1

 

Thomas Cook India Pvt. Ltd.

508, Merchantile House

15, Kasturba Gandhi Marg

Connaught Place

New Delhi-110001                                                                                                        …                        Opposite Party No.2

 

ORDER/

22/09/2023

 

Ashwani Kumar Mehta, Member:

 

1.       The present complaint has been filed under Section 12 of the Consumer Protection Act, 1986. The brief details of facts, as alleged by the Complainant in the Complaint in hand, are that the Complainant has purchased a time-share of a Regular Apartment for Week No. 23 of a resort which was to come up at Bhimtal in venture Happy Vistas Holiday time-share from the OP-1 who assured the complainant  one-week holiday for a period of 99 years commencing from 9^th June 1998 in peak/ premium season week for Rs.81,500/-. A customer code No. 91805 was issued to the Complainant for one week holiday every year for the 99 years commencing from 9^th June, 1998 at Bhimtal with option to exchange the resort with other operational resorts held by them.

 

2.       At the time of purchase of the time-share by the Complainant, it was represented by OP No.1 that the sale of time-share in each resort would be limited to 60% of the number of weeks as also of the number of rooms available in each resort. In other words if a resort had 100 rooms, there would be 5200 weeks (100 rooms x 52 weeks) available out of which the sale of time shares would be limited only to 60% of 5200 weeks and 40% shall be reserved for exchange by members. No resort in Bhimtal was constructed by the Respondent OP No.1. No construction has been commenced for construction of resort at Bhimtal ever by OP No. 1 even till the date of filing the complaint. Consequently, the complainant is a member of non-existent and non-operational resort at Bhimtal. The OP No.1 recognizing the fact that the Complainant was a member of a non-operational and non-existent resort never levied “Annual Subscription towards Customer facilities” (hereinafter called ASCF charges). As per the terms and conditions of the time-share,  ASCF charges are levied only in respect of resort which is operational & existent and which is allotted to a time share customer. This is obvious as upkeep of only an operational and existing resort is possible. A copy of the terms and conditions have been filed with complaint. It is stated that ASCF charges is imposed for upkeep of the resort allotted to the time-share member. Since the Complainant never had an operational of existent resort, no ASCF charges were ever levied by OP No.1.

 

3.       In May, 2014, the Complainant sought to make a booking for resort at Manali. The booking was denied on the facile reasoning by OP No.1 that first the Complainant has to pay ASCF charges before any booking could be made. It has been alleged that this precondition was illegal and unfair as the demand for ASCF charges is illegal in view of the fact that the denial of the holiday to the Complainant on account of non-payment of ASCF charges amounts to arm twisting tactics. The Complainant has further stated that right from 1998 till 2013, no ASCF charges were imposed upon the Complainant as the Op No.1 recognized the fact that the Complainant held a non-operational and non-existent resort. In other words, no resort was actually allotted to the Complainant so as to warrant to imposition of ASCF Charges. Firstly the OP No.1, under the terms and conditions of the contract, has no right to levy ASCF Charges upon the Complainant as the Complainant is holding a non-existent resort. The Complainant also submitted that in any case, OP No.1 by non-levying of ASCF Charges upon the Complainant right from 1998 onwards for more than 12 continuous years, has waived its rights to levy ASCF Charges upon the Complainant.

 

4.       The Complainant has further submitted that the OP No.1 has allotted all its operational resorts to its members. In other words, 100% allotment has been made as opposed to the representation of Respondent No.1 made previously that resorts would be allotted only upto 60% and 40% would kept reserved for facilitating exchange of timeshare resort. The Complainant submits that since 100% of allotment made in all resorts, the Respondent No.1 is already recovering ASCF Charges from all those resorts holders who have been allotted the operational resorts and who have an operational resort in their name. The imposition of ASCF Charges upon the complainant for those very resorts which have already been allotted and  ASCF charges have already been collected for one resort, amounts to unjust enrichment by OP No.1 and carrying on of an unfair trade practice. OP No.1 is liable to be restrained by an interim injunction from recovery of ASCF Charges from the Complainant and other non-operational and non-existent resort members.

 

5.       The Complainant had served a legal notice dated 14.08.2014 upon OP No.1 to withdraw the ASCF Charges but no reply to the said legal notice was received. It has been alleged that the OP is guilty of carrying on unfair trade practice. In fact, the OP No.1 after making 100% allotment of all the resorts, has again sold all resorts as units to various persons. It is like a classic case of a man selling the same land over and over again to various persons. The Respondent No.1 by throwing to the winds, the representation that 40% resorts would be kept reserved for exchange has resorted to overbooking and on account of overbooking its timeshare resort; it is very difficult for the Complainant to obtain a resort of his choice despite trying to book the resort well in advance. It is further alleged that even now OP No.1 is enrolling new members in respect of the same resorts. This results in further overbooking by OP No.1. The Complainant seeks a restraint order against OP No.1 restraining the OP No.1 in perpetually from enrolling new members.

 

6.       The overbooking is further being compounded and aggravated by OP No.1 seeking a merger with OP No.2. If such merger takes place even the members, shareholders and persons connected with the OP No.2 would be utilizing the resorts of OP No.1, thereby further aggravating the problem of overbooking. The Complainant alleges that the solemn representation of OP No.1 that 40% of the accommodation would be kept for facilitation of exchange would further be whittled down if the persons connected with OP No.2 has access and booking to the resorts of OP No.1. Consequently an interim injunction is liable to be passed against OP No.1 retraining it from merging itself with OP No.2. The Complainant further apprehended that it is possible by the time the present consumer complaint is listed, OP No.1 may have already merged with OP No.2. In such circumstances, the Complainant in the alternative submits that if the merger has already taken place, damages to the extent of Rs.90,000/- be awarded against the OP No.1 on account of whittling down of the exchange facility with regard to the resorts.

 

7.       Further, the denial of accommodation at Manali caused considerable harassment and stress to the Complainant and his family members. The Complainant became a timeshare resort member only for the purposes of enjoying the holidays in resorts of OP No.1. The conduct of OP No.1 warrants grant of exemplary damages. Therefore, the Complainant has prayed that the following Orders may be passed in favour of the Complainant and against the Respondents:-

 

1. Restrain Respondent No.1 from imposing ASCF Charges upon the Complainant and other non-existent and non-operational resort members;
2. Restrain OP No.1 and OP No.2 from any merger between the two of them.
3. In the event of any merger, if already taken place between Respondent No.1 and OP No.2, a sum of Rs.90,000/- be awarded against Respondent No.1 for the unfair trade practice on account of whittling down the exchange facility with regard to the resorts between one member and another.
4. Grant damages of Rs.90,000/- for denial of booking of holiday at Manali Resort of OP No.1;
5. Declare enrolling of new members by OP No.1 to be an unfair trade practice and restrain OP No.1 from enrolling new members in respect of its resorts.

 

8.       Accordingly, notices were issued to the OPs and in response to the Notice issued, the OP-2 did not appear despite service and as such, was treated Ex-parte. The OP-1 has filed its reply stating that the resort in Bhimtal, could not be constructed due to lack of certain environmental clearances which cropped up after the purchase of land by the answering respondent. However the opposite party has developed another resort in the same vicinity and the Complainant being an esteemed member can avail the services of the same after paying AFSC Charges. The OP has contended that the AFSC Charges are levied as a whole for the upkeep of all the resorts maintained and offered by the Opposite Party in the time share system. Time share may be purchased by the customer in one resort but facilities could be enjoyed in various resorts which the present complainant has been availing in various resorts maintained by the Opposite parties and the ASFC charges are being levied for the upkeep of those properties. AFSC charges were raised by the Opposite Party as per the Clause 3.2 of the terms and condition annexed alongwith the complaint. The OP has further placed reliance upon clauses of the Terms and conditions governing the allocation of the ASCF Charges, denying that any arm twisting Technique was ever used by the opposite party against the Complainant. The OP-1 has further contended that non levying of ASCF charges for certain period does not absolves the Complainant from abiding by the terms and conditions agreed by him to pay the ASCF charges whenever raised. Since opposite party-1 has not raised the ASCF Charges from the Complainant from some time so they are not under some kind of estopple from doing so.

9.       The Opposite party is constantly adding more resorts and the ASCF charges recovered are being used for the upkeep of all the resorts. It is not out of place to mention that the Complainant himself is regularly availing the facilities of different resorts operated by the Opposite party. It is denied that all the resorts of the opposite party are sold out and the complainant is levying false allegations to shy out of his legal obligation of having to pay the ASCF Charges. It is denied that the opposite party is indulging in unjust enrichment or is recovering double or triple ASCF Charges. The OP-1 has further added to rebut the complaint that Complainant has not purchased any of the properties of the opposite party and has availed only time share scheme floated by the Opposite Party and is legally under a contractual obligation to pay the ASCF Charges raised by the Opposite Party to the upkeep of the resorts maintained by the Opposite Party, the services of which the Complainant has enjoyed in the past.

10.     The OP-1 has also denied that there is any overbooking in the resorts and that Complainant had not been able to get a booking of his choice and the allegations to the contrary should be put to strict standards of proof. Regarding merger of OP-1 and OP-2, it has been stated that that the merger between the opposite parties will increase the number of resorts being offered to the existing members and the same shall be for the benefits of the clients like the Complainant. The Complainant has filed the present complainant solely with the intention of shedding his contractual obligation of paying the ASCF Charges and the same is frivolous in nature. The merger between the Opposite parties has no effects upon the membership of the Complainant and he has to show some actual loss for asking of damages from the opposite parties. The Complainant is a habitual litigant and has filed the present consumer complaint solely with the intention to harass the opposite parties.

11.     The OP-1 has also stated that the request made by the Complainant was never denied but as per the terms and conditions of the Opposite party the Complainant was required to clear the ASCF charges before being allotted a booking and the same was informed well in advance to the Complainant but it was the Complainant who had intentionally not paid the ASCF Charges and chose not to avail the booking. The Complainant has further miserably failed to compute the damages of Rs.90,000/- and trying to use the present forum to extort money from the opposite party.

12.     The complainant has not filed any rejoinder to the reply of the OP-1. The arguments were also heard and during arguments, the issue emerged as to whether the OP-1 can recover the ASCF charges from the members of non-existent resorts?

13.     After hearing the arguments, the matter was kept for orders but in the meanwhile, the OP-1 issued a notice of cancellation of the membership of the Complainant through SMS dated 30.05.2023 and 31.05.2023 and therefore the Complainant had filed an interim application on 02.06.2023 which was listed as MA No.15/2023 in CC No.343/2014 and notices were issued to the OPs.  In this regard, the OP-1 has contended that the said messages were system generated and sent automatically to the Complainant and has undertaken that the OP-1 shall not take any coercive action or send such messages to the Complainant for recovery of the charges till the disposal of this complaint.

14.     Accordingly, the complaint has been examined in view of the facts of the case and averments/documents/Evidence/arguments put forth by the parties and it has been observed that :-

1. It is undisputed that as per terms and conditions of allotment of time share apartments to the complainant, the following provisions/clauses are binding upon both the parties:-

 

1.18)       ADVANCE SUBSCRIPTION TOWARDS CUSTOMER FACILITIES (ASCF)”means the amount payable as an advance subscription to the Company for meeting the expenditure towards Facilities which all the Time share holders in the allotted Holiday Resort are liable to pay for.

 

3.2)         The Timeshare holder shall pay the Cost of Timeshare and ASCF to the Company as per the price structure and schedule of payments fixed by the Company from time to time. In case the Timeshare holder commits default in the payment of any of the instalments to the Company, the Company shall have the right to cancel the allotment of Timeshare.

 

4.1)         In case the Company does not provide allotted Holiday Week due to the non-completion of the construction of Holiday Resort and if the Company does not provide Holiday week and/or days/ week mentioned in the confirmation voucher due to any reasons whatsoever, the Company shall provide equivalent stay facilities.

 

4.2)         In case of the Company not providing Apartment in the allotted Holiday Resort due to  non-completion of construction and if the equivalent stay facilities is not provided by the Company, then the Company shall pay damages calculated at the rate of 18% per annum on the amount paid by the Timeshare holder for the period of delay.

 

4.3)         In case the Holiday Resort is ready and if the Company does not provide apartment during the Holiday Week and/or days/ week mentioned in the Confirmation Voucher and if the Company does not provide equivalent stay facilities, the Company shall pay liquidated damages equivalent to 100% of the rent/ tariff that may be charged by the Company to other persons for staying in the Apartment during such holiday week and/or days/week. The liquidated damages shall be paid by the Company to the Timeshare holder within 15 days on receipt of notice from the Timeshare holder in this regard.

 

5.4)         The amount towards Advance Subscription Towards Customer Facilities constitutes 55% of the total amount paid by the Timeshareholder for meeting the expenditure towards facilities like Split, accumulation and advancing facilities and the same shall be apportioned equally every year during the TIMESHAREPERIOD.

 

2. The complainant has not furnished any proof to prove his allegations that hundred percent allotment of resorts have been made and the OP-1 is already recovering ASCF charges from all those resorts holder who have been allotted the operational resorts.

 

3. The complainant has also not furnished any proof to prove his allegations that the representation that 40% resorts would be kept reserved for exchange has resorted to overbooking and on account of over booking its timeshare resort, it has been very difficult for the Complainant to obtain a resort of his choice despite trying to book a resort well in advance.

 

4. The Complainant has alleged that OP-1 seeking merger with OP-2 which will further aggravate the problem of overbooking and therefore, has prayed that the interim injunction be passed against OP-1 restraining it from merging itself with OP-2 but this issue does not fall within the jurisdiction of this Commission and the Complainant may prefer other suitable remedies in this regard.

 

5. The Hon’ble Monopolies & Restrictive Trade Practices Commission, New Delhi has already decided on 14.09.2001 in UTPE No.63/2000 in the matter of Amitabh Narain Vs. Sterling Holidays Resorts observing that “the respondent/OP would allow the Complainant to use his holidays (own week) in other functional Resorts of the respondents including in the month of June & December. The Resorts are Ooty, Manali, Mussoorie, Kodiakanal, Munnar, Puri, Darjeeling and Yercad. It was also decided that the OP shall endeavor to accommodate the complainant at a place of his choice as far as possible and the complainant shall be allowed to use his earlier accumulated holidays Resorts since 1998”.

 

6.  It is also relevant to note that the Complainant is well aware about the fact that the Bhimtal resort will never be constructed by OP-1 due to lack of certain environmental clearances but he has preferred to continue with the membership instead of seeking refund of membership fee or allotment in other Resort in Bhimtal or any other existent resort from the OP-1. 

 

7. The OP-1 has rightly contended that that non levying of ASCF charges for certain period does not absolves the Complainant from abiding by the terms and conditions agreed by him to pay the ASCF charges whenever raised. Since opposite party-1 has not raised the ASCF Charges from the Complainant from some time so they are not under some kind of estoppel from doing so.

 

8. The OP-1 has also communicated to the Complainant that the proceeds of the ASCF charges go towards costs of maintaining, upgrading, refurbishing and renovating of resorts. The ASCF Charges are revised in line with the inflation which has impact the cost of every item. Naturally the cost incurred by OP-1 for various refurbishments too impacted similarly by inflation. In order to maintain and sustain the quality of experience throughout the membership, OP-1 need to ensure that the ASCF charges collected is sufficient to meet the maintenance requirements. The OP-1 claims to have most transparent mechanism for calculating the rate of increase periodically.

 

15.     In view of the above observations, the prayers made by the Complainant have been examined and it has been concluded that :-

 

1. Regarding prayer (a), It is undisputed that the Complainant is a Allottee of non-existent timeshare apartment since 1998 and  enjoying holidays with other operational resorts till 2013 with the option to exchange without paying any ASCF charges in view of the MRTP commission decision though he was liable to pay ASCF charges as per terms and conditions clause 1.18 read with clause 4.1. As such, the OP-1 was right in demanding ASCF charges from the complainant but regarding amount of ASCF charges to be demanded from Complainant/Timeshare holder, we are of the opinion that ASCF charges should be calculated and communicated to the Timeshareholders/Members in a transparent way. While demanding the ASCF charges every year, the Timeshareholders/Members should be provided (i) List of expenditure permissible from the funds collected towards ASCF charges and (ii) Income & Expenditure statement of ASCF charges. These details should also be available yearwise on the website of the OP-1 for the information of all Timeshareholders/Members.

 

b)       Regarding prayer (b) & (c), this issue does not fall within the jurisdiction of this Commission and the Complainant may prefer other suitable remedies in this regard.

 

c)       Regarding prayer (d) & (e), no relief can be granted as the complainant has not filed any evidence to substantiate the claim.

 

16.     The complaint is disposed off accordingly. Interim order ,if any, stands vacated.

 

17      Order be given dasti to the parties in accordance with rules. Order be also uploaded on the website. Thereafter, file be consigned to the record room.

 

 

 

ASHWANI KUMAR MEHTA                                              HARPREET KAUR CHARYA       

                 Member                                                                                 Member

         DCDRC-1 (North)                                                                   DCDRC-1 (North)

               

                                              DIVYA JYOTI JAIPURIAR

                                                               President       

                                                       DCDRC-1 (North)