RCI India Pvt. Ltd. vs Suresh Raj R.

THIS revision petition has been filed under Section 21(b) of the Consumer Protection Act, 1986 against the impugned order dated 3.10.2008, passed by the Andhra Pradesh State Consumer Disputes Redressal Commission (for short ''the State Commission'') in FA No. 1177/2008, RCI India Pvt. Ltd. v. Suresh Raj R. & Ors., vide which, while dismissing appeal, the order dated 14.7.2008, passed by the District Consumer Disputes Redressal Forum -II, Hyderabad, allowing the consumer complaint No. 79/2007, was upheld. Briefly stated, the facts of the case are that the complainants/respondent Nos. 1 and 2 filed the consumer complaint in question, saying that they purchased Time -Share Membership from OP -1/respondent -3, M/s. Gemawat Resorts Ltd. for their Project, "The Village" through their authorised marketing agent M/s. Crown Concept Marketing, Hyderabad under an agreement dated 6.1.1999. The total purchase price was Rs. 1,70,000 with Rs. 8,000 as legal and administration fee. A sum of Rs. 52,000 was paid through cheque on the date of agreement and the balance amount was paid in six monthly installments of Rs. 16,750 each. The OP -1 informed them through letter dated 23.10.1999 that complainants were admitted as their members and they had also been enrolled as members of the petitioner/OP -2, M/s. RCI India Pvt. Limited vide membership No. 391600256. The complainants received RCI Kit and Membership Card from petitioner/OP -2 and were made to understand that the membership of the RCI would be for a period of 33 years. The complainants paid the Annual Maintenance Charges to OP -1 as demanded by them from year to year. The complainants have further stated that they visited the said Resort in the year 1999, but they were shocked to see that there were no facilities at all and they had to return back. When questioned, OP -1 informed them that they had not paid the total amount for the membership. OP -1 issued them a notice dated 15.12.2003 saying that their membership would be terminated, but they replied explaining that no dues were payable by them. Further, when the office of OP -2 was contacted the complainants were informed that OP -1 stood disaffiliated by OP -2. The complainants gave a legal notice to the OPs through Advocate on 6.10.2006, calling upon them to return the amount of Rs. 1,61,700 paid by them along with interest @ 24% p.a., damages of Rs. 1,000 and Rs. 500 as charges for the notice. On their failure to refund the amount, the consumer complaint in question was filed before the District Forum. The petitioner/OP -2 in their reply before the District Forum stated that no cause of action had ever arisen against OP -2 because OP -2 had informed the complainant vide their letter dated 25.2.2005 that the Resort ''The Village'' of OP -1 had been disaffiliated from the RCI from their exchange programme. The OP -2 had a right to terminate or suspend the Membership under Clause 15.3 of the RCI terms of membership if the Resort ceases to be an affiliated resort. There was, therefore, no deficiency in service on the part of the petitioner/OP -2.

THE District Forum after taking into account the evidence of the parties allowed the complaint vide their order dated 14.7.2008 and directed OP -1 and OP -2 to pay the amount of Rs. 1,61,272, jointly and severally, along with interest @ 9% p.a. from 17.1.2007 till the date of payment. The OPs were also directed to pay an amount of Rs. 25,000 as compensation of Rs. 1000 as cost of complaint. An appeal was made against this order by OP -2/the present petitioner before the State Commission and the State Commission vide impugned order dated 3.10.2008 upheld the order of the District Forum. It is against this order that the present petition has been made. At the time of arguments before us, the learned Counsel for the petitioner stated that the complainant had purchased time -share membership from OP -1 for the Resort ''The Village'' and also entered into an agreement with them. There was no privity of contract with the petitioner/OP -2. The Fora below had, therefore, taken an erroneous view in imposing the liability for payment of the amount in question on both the OPs including the petitioner. The learned Counsel has drawn our attention to the agreement dated 6.1.1999 in which it has been stated as follows: "The Purchaser(s) hereby agree(s) irrevocably to purchase and "The Company'' hereby agrees to sell membership of ''The Village'' on time -share basis in a Resort promoted by the Company, situated at Sy. No. 14, Belallu Village, Bangalore -560060, Bangalore South District, India (The Resort) as time -share in accordance with the particulars of Time -share Ownership as follows:

All payment should be made in favour of Crown Concept Marketing the authorised marketers for The Village and payment to anyone other than the payee cited above does not discharge the purchaser(s) from the obligations outlined herein."

FURTHER , under the purchase agreement conditions, it has been stated in condition -IV concerning the RCI enrolment as follows: "The Resort is affiliated to RCI (Resort Condominiums India (P) Ltd) under affiliation number 3916 and the company shall upon receipt of all payments due to them enroll the Purchaser(s) as a Member of RCI and shall pay the enrolment Membership Fee for 5 years only. However, the purchaser(s) shall be liable to pay to RCI from time -to -time. The Purchaser(s) upon completion of the project shall be entitled to participate in the RCI reciprocal Exchange Programme."

THE learned Counsel stated that since the petitioner had disaffiliated OP -1, they were under no liability to provide any service to the complainant and were not liable to refund the amount in question. The learned Counsel also referred to a copy of the RCI terms of membership and letter dated 5.7.2001 addressed by M/s. Gemawat Resorts Ltd., OP -1 to the complainant. He has also drawn attention to letters dated 24.11.2004 sent by the petitioner to OP -1 and letter dated 25.2.2005 sent by the petitioner to the complainant in which it had been stated that since the Resort had not been completed, it was being disaffiliated from their exchange programme. The petitioners had, therefore, not shown any deficiency in service towards the complainant and, hence, the orders passed by the Fora below should be set aside and the petitioner should be discharged from liability to make any payment.

IN reply, respondent No. 1, who was present in person stated that in another similar matter, the Hon''ble Apex Court had dismissed the special leave petition filed by the petitioner, RCI India Pvt. Ltd. against order dated 11.1.2012, passed by the National Commission in RP No. 443/2007. In the present case also, the petitioner had provided their membership to the complainants and they could not back out at the stage from providing facilities to the complainants under the Resort Exchange Programme. The orders passed by the Consumer Fora below were, therefore, in accordance with law and should be upheld.

WE have examined the entire material on record and given a thoughtful consideration to the arguments advanced before us. From the facts on record, it is made out that the complainants entered into the time -share purchase agreement in question with OP -1 M/s. Gemawat Resorts Ltd. who were developing the Resort ''The Village''. The said agreement was made on 6.1.1999 and the membership admission fees of Rs. 1,70,000 and legal and administration fee of Rs. 8,000 were paid to OP -1 only. The petitioner/OP -2 are not signatories to the said agreement. However, the petitioner/OP -2 were supposed to provide exchange facilities to the complainants at various other resorts, as per their arrangement with OP -1. The petitioners provided membership cards to the complainants and were also charging the annual maintenance fees, etc. However, after finding that OP -1 had not been able to develop their Project The Village'' and the said Project was on ''freeze status'' since 21.9.2004, they wrote a letter to OP -1 on 24.11.2004, saying that they will be left with no alternative, but to officially disaffiliate "The Village'' from the RCI Network of Resorts with effect from 21.12.2004. The petitioner also informed the complainants to this fact vide their letter dated 25.2.2005, stating that "The Village'' was being disaffiliated from their exchange programme and hence, the complainants shall not be able to avail of regular one -to -one exchanges through RCI, but they shall continue to be able to take ''bonus weeks'' through the RCI Networks. As per letter dated 16.11.2004, the RCI weeks membership has been renewed till 31.10.2010. The complainants have, however, stated that they were entitled to the benefit of membership and facilities under the RCI exchange programme for a period of 33 years, once they had made payment for the purpose. The complainant also stated that the benefit of ''bonus weeks'' is of no use to them.

FROM the above facts and circumstances, it is clear that the complainant entered into basic agreement with OP -1, as a result of which, they were entitled to the facilities of exchange programme, offered by the petitioner. Since the Project being developed by OP -1 stood disaffiliated by OP -2, the petitioner have rightly stated that they shall not provide the exchange facilities to the complainants as OP -1 failed to develop their Project. We tend to agree with the contention of the petitioner that there was no privity of contract between the complainant and petitioner/OP -2 since the agreement in question was signed between the complainant and OP -1 only. Nothing has been placed on record to explain the kind of arrangement/understanding between the OP -1 and petitioner -OP -2, which could explain the kind and extent of facilities to be provided by petitioner -OP -2 to the time -share members of OP -1. It can be presumed therefore, that since OP -1 failed to develop their project, they were disaffiliated by petitioner -OP -2 from their programme and hence they were not liable to provide facilities to the members of OP -1. In the light of the facts stated above, this revision petition is allowed and the orders passed by the Consumer Fora below are modified to the extent that the petitioner/OP -2 shall not be liable to pay the refund amount or compensation to the complainant. The entire liability to pay these amounts, as stated in the order of the District Forum, shall be on OP -1 only. Moreover, the said orders have not been challenged by OP -1 anywhere and hence, these have become absolute in so far as OP -1 is concerned. There shall be no order as to costs.