Court of last resort

CAVEAT EMPTOR

When Ashok Kaicker and his wife became members of Ambles Holiday Resorts they had great hopes for the future.

They paid Rs 155,789 to Amblee Hotels which was building a holiday resort in Arirangapatnam, Karnataka that was scheduled to open in 1995.

Also, the company promised that members would be able to use any one of the 2,600 RCI resorts in over 76 countries with which it claimed affiliation.

The Kaickers were issued a membership certificate on December 13, 1994. However, the promised apartment was not made available to them and it was also revealed that the claim made by the sponsors that they had an affiliation with RCI India was not correct.

The Kaickers filed a complaint with the MRTP Commission and were eventually able to get an order for a refund of Rs 153,789 with interest at 12 per cent per annum.

Consumer courts have extended a helping hand to aggrieved consumers of services of holiday resorts for a number of years.

However, in 1997, the apex National Consumer Disputes Redressal Commission held that no relief can be provided to consumers in such cases because the transactions in question related to the purchase of 'property time share' and the Consumer Protection Act could not deal with disputes relating to sale-purchase of immovable property.

These rulings were followed for nearly six years and all consumer complaints filed against different holiday resorts were dismissed.

Happily, there has been a sea change in the position now, with the helpful recent intervention of the Supreme Court of India.

In K N Sharma vs Toshali Resorts International, the Supreme Court by its order dated January 10, 2003 ruled that "even in respect of matters where immovable property is involved, the question to be examined was whether there was any service to be rendered in relation thereto and whether the complaint made was in respect of the same or not. That aspect seems to have been lost sight of by the National Commission."

With this the Supreme Court set aside the order made by the National Consumer Disputes Redressal Forum and remitted the matter to it for fresh consideration in accordance with law.

Following the Supreme Court's ruling, the National Commission, in a recent order handed down on May 8, 2003 in T V Sunderason vs Sterling Holiday Resorts, changed its earlier stance.

It held that consumer courts can now onwards deal with consumers' complaints against the promotors of holiday resorts against their faulty services.

In the above case, the complainant had entered into an agreement with the holiday resort to buy a cottage on a time share basis promoted by it in Ooty.

As per the agreement the complainant was entitled to stay for one week in a year in the said cottage and if the complainant did not use the 'property time share', he could inform the holiday resort and have it rented out for the period.

If that happened the resort was to reimburse the complainant with a sum equivalent to 20 per cent of the investment as rental value.

In actual practice, however, the complainant could neither stay in the holiday resort nor could it rent it out because the cottages were not ready for occupation.

The district forums and state commissions had declined to interfere on the grounds that the complaints related to the transactions of immovable property and as per the earlier decisions of the National Commission, the jurisdiction of the consumer courts could not be invoked.

However, by reversing its own earlier orders, the National Commission has directed the concerned state commissions and district forums to decide all the cases on merits and pass suitable orders.

The net result of these verdicts is that consumers of holiday resort services who were earlier denied the redressal of their grievances through the media of inexpensive and speedy action of the consumer disputes redressal agencies will now again be able to file their complaints before consumer courts.