MERCANTILE CREDIT vs Dinesh Gupta

FACTS necessary for the disposal of this appeal are that Mr. Dinesh Gupta, Company Secretary, U.P. Minerals Ltd., hereinafter called the complainant, held a credit card issued by Mercantile Credit Corporation Ltd, to be referred to as the opposite party No. 1, since August 90. The card entitled the complainant to various facilities at places specified by the OP including stay etc. at Hotel Regency at Pune. The case of the complainant was that he, alongwith his wife, went on a honeymoon trip and stayed at Hotel Regency, Pune on 2.4.91. They checked out on the following day. The complainant gave the aforesaid credit card but the hotel declined to accept the same, which created a very embarrassing situation. The complainant was forced to sell some of the articles including his wedding ring to meet the hotel expenses. He, accordingly, served a legal notice on the opposite party No. 1 and filed the present complaint on 5.5.93 impleading Hotel Regency as OP-2. Reply was filed on behalf of OP-1, only. On learning about the incident through complainant''s letter dated 13.4.1991, OP-1 took up the matter with OP-2 without any delay vide letter-dated 24.4.1991. They received a reply from OP-2 that K. Bhatia Associates and Holding Pvt. Ltd. was no longer operating the said hotel and the same had been taken over by Moledina Investment & Crediting Co. Pvt. Ltd. who did not accept the Mercard issued by OP-1. The Hotel also requested OP-1 to sign a fresh contract with the new Management. The complainant was informed accordingly. In reply to the legal notice OP-1 had tendered apology for the inconvenience caused to the complainant but stated that the said inconvenience was caused solely on account of change in the Management of the Hotel and not on account of any deficiency on the part of OP-1, On a consideration of the matter, the District Forum held both the OPs to be deficient in service and, accordingly, allowed Rs. 20.000/- as compensation to be jointly and severally paid by the OPs. Aggrieved by the order, the OP-1 has preferred this appeal.

NONE appeared on either side when the appeal came up for hearing. We have, accordingly, carefully gone through the records. In the grounds of appeal reference has been made to condition No. 16 of the terms and conditions printed on the application form for obtaining the credit card. Part of the said condition has been re-produced in the grounds. The whole needs to be read. It is reproduced in extenso as under: "16. The company shall not be liable in any way if the Mercard is not honoured by any establishment. The Member is also advised that establishment(s) may not honour the Mercard when such establishment(s) are conducting a reduction sale"

Reading the whole of the above condition leads one to the impression that it is by way of caution that Mercard may not be honoured when the establishment is conducting a reduction sale. In the facts of the present case this term cannot be construed to mean that the Mercantile Credit Corporation Ltd. would not be liable if any of the establishment(s) which were a party to the arrangement failed to honour the card. If the condition aforesaid were to be construed in this manner, the very purpose of credit card would be defeated.

THE next ground stressed is that there was no cogent evidence that the complainant had, in fact, to part with his personal effects including the wedding ring to pay for the hotel charges. In other words the argument appears to be that there was no reliable evidence of the actual monetary loss suffered by the complainant. The broad facts setout above are not in dispute. One can easily imagine the embarrassment faced by a newly wedded couple. It is wellknown that apart from the facility, which the credit card offers, it is taken as some sort of a status symbol. That purpose is completely defeated if the card is not honoured and the cardholder is required to pay for the goods or services already purchased or availed of. In a situation like this one does not know where to turn for immediate help. After carefully going through the order recorded by the District Forum we find ourselves in agreement with the reasoning and conclusion and, therefore, affirm the order. The time allowed by the District Forum having expired the last direction to pay the amount in terms of the order within 30 days failing which the OPs were to pay interest @ 24%, is set aside. The OPs 1 and 2 including the appellant herein, which was arrayed as OP-1 before the District Forum, are allowed four weeks'' time to comply with the order failing which the complainant would be entitled to invoke jurisdiction of the Forum under Section 27 of the Consumer Protection Act. The parties shall bear their own costs in the appeal. A copy of this order be communicated to the parties as well as District Forum-II Order affirmed.