The Pancard Clubs case in Vadodara

 1] In nutshell, the facts of the complainants case are as under:- The complainants are residing at above stated address.

While the opponent PancardClubs Ltd., company is incorporated under Central Government Registration No.11/105363. The opponent No.1 to 5 are Chairman and Directors of the said company. The complainant invested money in the above company by way of booking room night. 

The main office of the company is at KalidasUdyog Mumbai Bhavan,Near Century Bazaar, Prabhadevi, Mumbai-400 025 and one of its branch office located at Alankar Tower,Sayajigunj, Vadodara, Gujarat. 

The complainant invested money in the opponent company as per certificate issued by the company. 

After expiry of date of certificate, the complainant surrendered his original certificate to Vadodara branch office of the company but opponent company did not make the payment till date, therefore, the complainants are suffering badly from economic crisis and felt that his hard earned money have been drown. 

The complainant invested his money for his livelihood but suffering of non payment of surrender value of investment. 

The opponent company has adopted deficiency in service and unfair trade practice hence the complainant has filed this complaint against the opponents and asked relief that :- (1) the opponent be ordered to pay Rs.2,01,600/- with 12% interest till realization to the complainant. (2) the opponent be ordered to pay Rs.20,000/- towards mental torture and Rs.5000/- towards the costs of litigation and miscellaneous expenses to the complainant.

[2] Notice duly served to the opponents and opponent company appointed Mr. KetanJadav to represent and act for and on behalf of the company in all consumer matters filed against the company and company has hired an advocate and through him filed written statement dt.15.2.2017 with the affidavit. The opponents have mainly contended that in the written statement that allegations made in the complaint are false and contrary to the actual facts. The complainant has to prove each of the contentions and allegations. The opponent company is engaged in the business of hospitality industry and selling of room nightsin advance (Times ShareBusiness) under its various schemes for stay at its various Hotels,Clubs and Resorts. The complainant desired to purchase and utilize the room night in the Hotels of the opposite parties under the Holiday optionof PancardClubs - New Relax Holiday Membership. Further, the opponents and their agent explained terms and conditions written on the Pancard Club Membership Application and after understood terms and conditions, the complainant signed on the application Form and complainant accepted the same. After the payment, company issued certificate to the complainant. The complainant never utilized the room nights. Therefore, no service offered by the opposite party hence there raised no question of the deficiency on the part of the opposite party. 

The complaint has been filed before the maturity of the Membership Scheme. Therefore, the complaint may be dismissed only on this grounds. The complainant filed this complaint with malafide intention as there is neither any deficiency in-service nor any consumer dispute. Moreover, the opponent has taken contention that this Forum has no territorial jurisdiction to entertain and try the present complaint as the contract between the complainant and opponent company that in the event of any dispute between the parties, parties shall be subjected to the exclusive jurisdiction of the Mumbai Court only. The complainant has not come with clean hands before this Forum hence complaint may be dismissed with costs.

[3] In support of written statement, authorized person Mr. KetanJadav has filed his affidavit.

[4] Perused the complaint, written statement, evidence on record, arguments and citations, it appears that the complainant invested his hard earned money in the opponentcompany by way of booking room nights and this investment has been invested through opponent company branch at Sayajigunj,Vadodara Gujarat. The company has also offered through their agent for getting high gain profit, in such circumstances, the complainant is consumer under section 2(1)(d) of the Consumer Protection Act, 1986. In support of this issue, the complainant advocate has cited judgment:- 1999 (0) GLHEL-SC 24126 Regional Provident Fund Commissioner Vs. Shiv Kumar Joshi. In this judgment, the Honble Supreme Court has held that the Act is aimed to protect interest of the consumersunderstood in its commercial sense as purchased of goods and in larger sense user of service -when delay is caused in release of PF action for deficiency in service against the RPF Commissioner was maintainable. There can be sufficient consideration if there is benefitto the purchaser consumer includes beneficiary for whose benefit the services is used - when statutory authority provides service, it would be liable under Consumer Protection Act for deficiency in service.

[5] In this case, the opponent company has not made payment which invested by the complainant as a consumer though it may be premature surrendered. Company is liable to pay the money to the complainant. But in this case, the company has not made payment though notice issued by the complainant for making payment. Hence company has shown deficiency in service.

[6] So far as the question of jurisdiction in terms and condition No.23 of the contract only Mumbai Court has territorial jurisdiction but one of the branch of theopponentcompany at Sayajigunj,Vadodara and complainant has invested money through Vadodara branch hence this Forum has territorial jurisdiction to try and adjudicate matter. In support of this L.A. for the complainant has produced the textbook of ConsumerAct, 1986 in section 11.3 where there is branch officeofregistered company at that location complaint can be filed hence this Forum is having territorial jurisdiction.

[7] The L.A. of the opponent company has argued that as per Clause 22 of the agreement settlement of any dispute between the parties shall be by arbitration of a solearbitrator to be appointed by the Company under the provision of the Arbitration & Conciliation Act, 1986. We have already decided that the complainant is a Consumer and for the Consumer Special Act, the Consumer Protection Act, 1986 has been constituted by the Parliament hence Consumer can select where he has to go. Clause 22 of the agreement is not binding to the complainant. We would like to draw attention towards the judgment of NCDRC New Delhi 2009 NCJ 260 (NC) National Seeds Corporation Ltd., Vs. P.V. Krishna Reddy. In this judgment the Honble National Commission has held that Adjudication of complaint by fora is not barred by existence of the arbitration clause hence this Forum hasjurisdiction for adjudication.Further, the complainant has invested his hard earned money for his livelihood not for business with intention that complainant can get more gain than invested in the bank.

[8] The opponent company has denied to make payment which invested by complainant in various schemes of the company. Therefore, the complainant entitled to get interest from denial,In support of this issue,the L.A. for the complainant has cited the judgment of Honble Himachal Pradesh State Commission Shimla III(2016) CPJ 16 (HP) SudkhDev Singh Gill Vs. Punjab National Bank Nahan. In this judgment, the Honble Himachal Pradesh State Commission has held that denial of maturity amount it shows deficiency in service therefore, the complainant is entitled to benefit of interest on the investment.

[9] The L.A. Mr. R.R. Parekh for the complainant has argued that the opponent company collected investment under the guise of room nights (Time Share Business) but actually,Collective Investment Scheme (CIS) hence the opponent company is liable to be returned the gain as per their promise. While the L.A. for the opponent company SonaliChitre has argued that there is no banking or financial business of the company but company is doingbusiness room nights (Time Share Business). The complainant hasnot utilized the hotel hence there is no question of deficiency in service . Further, she has argued that company is not liable to pay premature value and complainant is not a Consumer. In support of her arguments, she has cited judgment of Honble Supreme Court Civil Appeal No.944/2016 Bunga Daniel Babu Vs. M/s. ShriVasudeva Constructions and Others. In this judgment, the complainant is declared as a Consumer under the C.P. Act. hence this judgment is contrary to the argument of opponent advocate. [10] In their above judgment, the Honble Supreme Court has discussed the judgment of Laxmi Engineering Works but in the LaxmiEngineering Works, the machinery was installed for the commercial business and not for earning livelihood hence the complainant is not covered under the definition of Consumer therefore, this judgment is also not helpful to the arguments of the opponents advocate. [11] The L.A. for the opponent has cited Original petition No.97/2004 Punjab University Vs. Unit Trust of India. In this judgment, National Commission has held that the employee of the University invested in the Unit Trust of India in 1993 and UTI gave guarantee of assure returns of 16% p.a. In this judgment, the employee of the university were declared to be Consumer under the Consumer Protection Act 1986 against the UTI. [12] The L.A. for the opponent SonaliChitre has vehemently argued that the complainant advanced money as room nights business (Time Share Business) and complainant never utilized the room nights, therefore, there is no deficiency in service hence complaint is not maintainable. [13] The L.A. for the complainant has produced literature of the opponent company. In this literature, the opponent company has disbursed the payment through cheque to their various members but in this case, the opponent company denied to disburse the amount to the present complainant therefore, the principle of estoppel under Section 115 of Indian Evidence Act is applicable. In support of this issue, the L.A. for the complainant has cited judgment of Honble Supreme Court 2009 (()) GLHEL-SC 47824 H.B. BASAVARAJ (Dead) by L.Rs. Vs. Canara Bank. In this judgment, the Honble Supreme Court has held that on the principle of continuing guarantee the position was cleared by decision of this Court in Sita Ram Gupta Vs. Punjab National Bank and Others (2008) (5) SCC711. Where it was held that it was not open to a party to revoke a guarantee when he had agreed to it being a continuing one and thus it would be bound by the terms and conditions of the agreement executed at the time of entering into the contract. In the above cited judgment, in the absence of specific written documents by Basavaraj(since deceased) revoking the guarantee, the guarantee stands and legal representatives of the deceased are liable to pay the loan. In the case on hand, the opponent company has made payment to the various complainants hence the principle of estoppelis applicable to the opponent companyhence they cannot return back from their act or conduct. [14] Further, it appearsfrom the record on evidence that company has given insurance to their customers and Insurance Company has given the award to the insured. In support of this issue, the L.A. advocate for the complainant has cited literature. We found that the rickshaw driver who put the membership of the PancardClubs by paying a sum of Rs.1000/- and through which he also got an insurance policy for Rs.50,000/-. She lodged the claim on his death which was refused by the clubs. The Forum ordered that compensation of Rs.50,000/- to the widow towards the policy and additional payment of Rs.10,000/- towards her physical and mental sufferings. [15] Here the core question arised that complainants are the members of the PancardClubs or investors of the opposite company. The L.A. for the complainant Mr. R.R. Parekh has submitted the judgment of the Securities and Exchange Board of India (WTM/PS/170/EFD/FEB 2016) In this judgment of SEBI has held that it is not time share business but it is collective investment scheme(CIS). The opponent company has collected money under the guise of time share business but actually, it is collective investment scheme. SEBI has collected the books of account of the opponent company and found that most of the members who have not utilized single room nights and many of them have surrendered room nights and estimated surrendered value was opted. Their details figures and calculations have been mentioned in SEBIs order. Further PancardClubs Ltd. is not registered before the SEBI and CIS activities have been done by the opponent company. Further SEBI has passed order that opponent company or their directors are restrained from accessing securities market and would further be prohibited from buying, selling or otherwise dealing in securities market for the period of 4 years . Against the order of Securities and Exchange Board of India, the opponent company has filed Appeal No.53/2016 before the Securities Appellate Tribunal Mumbai. The Honble Appellate Tribunal has decided the appeal on 12.5.2017 and the appeal has been dismissed by upholding the order of SEBI. From both the judgments, it is crystal clear that the opponent companycollected the money under (CIS) Collective Investment Scheme. Further, the terms and conditions is totally one sided therefore, it is bias and not binding to the complainant. [16] Facts, circumstances and evidence on record, we come to the conclusion that opponent company by denial of payment, has shown deficiency in service and unfair trade practice, they are liable to make payment to their investors. Hence we pass following order:- ::ORDER::

[1] The Complaint is partly allowed.

[2] The opponentsare hereby ordered that they shall pay the amount Rs.2,01,600/--(Rupees Two lakhs onethousand sixhundred only) with 9% interest P.A. from the date of application till realisation.

[3]The opponentsare ordered that they shall pay Rs.5000/- (Rupees five thousand only) towards mental torture and Rs.2000/-(Rupees two thousand only) towards cost of litigation and miscellaneous expenses.

[4] This award be complied with within two months from the date of order.

[5] Copy of this order be provided to both the parties free of costs. Pronounced today on this 15th day of December, 2017 in the open court of Vadodara under the Seal and Signature of this Forum. (NeelamBhavsar) (K.K.Patel) (ManjulaNirmal) Member President Member Addl. Consumer Disputes Redressal Forum, Vadodara