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Karnataka High Court · body

2019 DIGILAW 1217 (KAR)

Sheridan Resorts (P) Ltd. v. Reginald Jesudasan

2019-06-12

H.B.PRABHAKARA SASTRY

body2019
JUDGMENT : H.B. Prabhakara Sastry, J. 1. The defendant No. 1-Company in the Court of the VI Addl. City Civil Judge, Bengaluru (CCH-11), (hereinafter for brevity referred to as ‘trial Court’) has filed this appeal against the judgment and decree dated 26.2.2007, passed by the trial Court in O.S. No. 1592/1998, wherein it had decreed the suit filed by the present respondent No. 1/plaintiff for recovery of money. The present respondent No. 2, with respect to whom, the notice has been dispensed with in this appeal, was defendant No. 2 in the trial Court. 2. The summary of the case of the plaintiff in the trial Court was that defendant No. 1/ appellant-Company, through its employees, had contacted the wife of the plaintiff intimating her that she had won a gift and the same would be handed over to her in a presentation to be held at "THE PROMENADE" an establishment at Nandi Durga Road, Bengaluru. However, when the plaintiff and his wife went there, one Mr. Vivek and one Mr. Sajji, representing the defendant-Company, persuaded them to become member of defendant No. 1. Though the plaintiff was reluctant, however, the said Mr. Vivek and Mr. Sajji succeeded in making the plaintiff to part away a cheque for a sum of Rs. 15,527/-. On behalf of the defendant-Company, its officials had also promised the plaintiff of two days free stay at Orange County Resort in Coorg and various other benefits, including the stay at Holiday Resorts. Subsequently, on 26.11.1997, when the plaintiff visited the Corporate Office of defendant No. 1, he was made to meet one Ms. Nancy Joseph, an employee of the 1st defendant- Company, who further persuaded him to part with another sum of Rs. 9,000/- as a part of the membership with 1st defendant-Company, for purchasing Vacation Time Share. Later, the defendant claimed some more charges like utility charges, RCI annual membership fee, to and fro pick-up and drop charges to the Resort, Guest fees etc. which were supposed to be free or inclusive. This made the plaintiff to cancel the transaction and seek refund of the amount. As such, he wrote a letter to defendant No. 1 on 8.12.1997, demanding refund of the amount. This made the plaintiff to issue a legal notice on 20.12.1997, which invoked an untenable reply from the 1st defendant-Company. However, the 1st defendant-Company offered to refund a sum of Rs. As such, he wrote a letter to defendant No. 1 on 8.12.1997, demanding refund of the amount. This made the plaintiff to issue a legal notice on 20.12.1997, which invoked an untenable reply from the 1st defendant-Company. However, the 1st defendant-Company offered to refund a sum of Rs. 20,027/- only in full and final settlement against the actual payment made by the plaintiff. Since the plaintiff has paid more amount than what refund that was offered by the 1st defendant-Company and had incurred more expenses in the process, was not agreeable for the offer made by the 1st defendant-Company. This made him to institute a suit against the defendants claiming a total sum of a Rs. 1,50,000/- towards refund of the payment made and the expenses incurred by him, including loss of his salary for one and half months, interest on the amount paid by him and to and fro expenses along with legal charges. 3. In response to the summons served upon them, the defendants appeared through their counsel and filed their written statement. In their written statement, the defendants did not dispute the alleged transaction entered into between the plaintiff and the defendants. However, they contended that the 1st defendant-Company has entered into an agreement with the plaintiff with respect to purchase of Vacation Time Share and it is strictly in accordance with the agreement they are acting. They denied that they have ever made any false promise to the plaintiff and have ever offered any free gifts which are not the part and parcel of the terms of the agreement they had entered into. They also denied that the defendants were in any manner entitled to refund of the amount, much less, the suit claim. 4. Based on the pleadings of the parties, the trial Court framed the following issues: 1. Whether the plaintiff proves the suit transaction as referred to in the plaint? 2. Whether the plaintiff is entitled to recover the interest at 24% per annum as claimed? 3. Whether the suit is not maintainable as contended? 4. Whether the plaintiff is entitled to recover the suit claim? In order to prove his case, the plaintiff got himself examined as PW-1 and got marked documents at Exs.P-1 to P-13. On behalf of the defendants, one Sri Murali was examined as DW-1 and documents from Exs.D-1 to D-6(a) were marked. Whether the suit is not maintainable as contended? 4. Whether the plaintiff is entitled to recover the suit claim? In order to prove his case, the plaintiff got himself examined as PW-1 and got marked documents at Exs.P-1 to P-13. On behalf of the defendants, one Sri Murali was examined as DW-1 and documents from Exs.D-1 to D-6(a) were marked. After hearing both side, the trial Court by its judgment and decree dated 26.2.2007, partly decreed the suit of the plaintiff, holding him entitled to recover a sum of Rs. 51,000/- from the defendants with interest at 12% p.a. from the date of filing the suit till the date of judgment on the said sum of Rs. 51,000/-. It was further ordered that defendants were liable to pay future interest at the rate of 6% p.a. on the said sum from the date of decree till actual payment. It is against the said judgment and decree, the 1st defendant has preferred this appeal. 5. Lower Court records were called for and the same are placed before this Court. 6. Inspite of service of notice, the respondent No. 1 neither appeared himself nor engaged any counsel to defend his case. 7. Heard the arguments of the learned counsel for the appellant. 8. The learned counsel for the appellant in her arguments submitted that the documents at Exs.P-1 and P-6 prove that the suit of the plaintiff is false. The plaintiff has agreed to the terms of the agreement as per Ex.P-1 and it is as per the agreement only, the defendants were transacting with the plaintiff. She also submitted that the plaintiff has failed to prove as to what was that violation or breach alleged to have been committed by the defendants. Since there was no coercion for the plaintiff to sign Ex.P-1, now he cannot claim that he was misled or misrepresented. Learned counsel also submitted that it is only because the 1st defendant-Company had volunteered to refund a sum of Rs. 20,027/- only as a matter of goodwill, the trial Court held that the defendants are liable to pay the suit claim in part. 9. Perused the materials placed before this Court, including the memorandum of appeal and the impugned judgment and decree. 10. 20,027/- only as a matter of goodwill, the trial Court held that the defendants are liable to pay the suit claim in part. 9. Perused the materials placed before this Court, including the memorandum of appeal and the impugned judgment and decree. 10. The only point that arises for my consideration is: "Whether the plaintiff has failed to prove his case in the trial Court which warrants the interference at the hands of this Court?" The plaintiff who got himself examined as PW-1 has reiterated the plaint averments even in his examination-in-chief also. He got produced an Agreement at Ex.P-1 stating the same to be a Vacation Time Share Agreement entered between them. To show that he has paid a sum of Rs. 15,527/- on 18.10.1997, he has produced a receipt at Ex.P-2. He has also produced a receipt dated 26.11.1997, for a sum of Rs. 6,507/- at Ex.P-3 and to show that he has paid another sum of Rs. 9,000/- on 26.11.1997, he has produced a document at Ex.P-4. The Enrolment application said to have been submitted by him to avail membership of Resort is marked at Ex.P-5 and the acknowledgement by the defendant is at Ex.P-6. 11. The defendants both in their written statement, as well in the cross-examination of DW-1 have not denied the receipt of a total sum of Rs. 24,527/- from the plaintiff in two installments, including at Rs. 15,527/- as the first installment and Rs. 9,000/- as the second installment. The statement of PW-1 that he had paid a total sum of Rs. 24,527/- has not been denied in his cross-examination. However, it was suggested to PW-1 in his cross- examination that, except the terms of the agreement at Ex.P-1, which is dated 18.10.1997, there were no other terms agreed to between the parties and no false presentation with respect to any gifts or other facilities were ever made to the plaintiff. However, the plaintiff has denied all those suggestions. But, reiterated that, apart from various other facilities, he was also promised by the defendant-Company that he would be given two days free stay in a single bedroom apartment in a Resort at Coorg, however, he was denied the same and was offered only Studio premises instead of single bedroom apartment. However, the plaintiff has denied all those suggestions. But, reiterated that, apart from various other facilities, he was also promised by the defendant-Company that he would be given two days free stay in a single bedroom apartment in a Resort at Coorg, however, he was denied the same and was offered only Studio premises instead of single bedroom apartment. He has relied upon a document at Ex.P-6 which is nomenclated as "Acknowledgements and Representations" wherein it is shown that the plaintiff has stated that he has purchased one week per year at Orange County Resort located at Siddapur, Coorg and the right to use granted to him in the said Resort will have a duration of thirty-five years commencing from 1997 and also that, he can use the unit type one bedroom, with occupancy of four in Blue season as per the Time Classification of the 1st defendant-Company. 12. In view of the said Ex.P-6, it is clear that the plaintiff was entitled for one bedroom apartment, with four members occupancy in Orange County Resort said to have been located at Siddapur, Coorg. However, the defendants are said to have refused to give him any such accommodation, but, are said to have offered a Studio accommodation, which according to the plaintiff, was inferior in its standard and amenities than one bedroom apartment. It is also his evidence that, apart from the defendants denying him the appropriate accommodation in the Resort, have also claimed several other overhead and extra charges which were all represented to him as would be free of cost at the time of obtaining his membership and making him to sign the document at Ex.P-1. 13. DW-1 Murali, has claimed himself to be a representative of the defendants. In his affidavit evidence, he has reiterated the contentions taken up by the defendants in their written statement. He has denied all the plaint averments, except admitting that the plaintiff was entered into an agreement with the defendants-Company for Vacation Time Share Agreement and had paid the defendants in total a sum of Rs. 24,527/-. However, he categorically denied that any promises or any free gifts what was not part of the agreement was ever made to the plaintiff. 24,527/-. However, he categorically denied that any promises or any free gifts what was not part of the agreement was ever made to the plaintiff. DW-1 in his cross-examination as at more than one place admitted that he had no personal knowledge as to what has transpired in the matter, however he was giving his evidence only based upon the documents maintained by the defendant-Company. He has also stated that, at the time of suit transaction between the plaintiff and the defendants, he was not working with the defendants. On the other hand, he has stated that one Ms. Nancy Joseph was earlier working as a Manager with the defendant-Company and that the defendant- Company are not going to examine her as a witness. He denied the suggestions made to him from the plaintiff's side that several promises were made and free offers were offered on behalf of the defendant-Company from its employees i.e. Mr. Vivek and Mr. Sajji. However, DW-1 in his cross-examination has admitted a suggestion as true that one of their representor will met each client when they come to a place called "THE PROMENADE" and explain them about their products. The witness has volunteered to state that plaintiff had attended one such presentation. It is in the said presentation, the plaintiff has stated that several offers were made to him, including free stay, free gifts, free pick-up and drop etc. DW-1 in his cross-examination has also admitted a suggestion as true that the 1st defendant-Company circulated brochures relating to the business of the 2nd defendant and in those brochures, they have mentioned what all facilities that were available at particular Resort. The same witness has further stated that the liability, cess or tax payable by the customers will not be mentioned in those brochures, but, they will be explained to the customers at the time of presentation and they will be explained about the payments to be made by them relating to tax and other expenses. The witness has further stated that at the time of presentation, the draft of the agreement will not be given as it will be given only after the party agrees for the proposal. 14. From these statements of DW-1, it is very clear that the brochure issued by the 1st defendant-Company to the customers would not be complete and exhaustive. The witness has further stated that at the time of presentation, the draft of the agreement will not be given as it will be given only after the party agrees for the proposal. 14. From these statements of DW-1, it is very clear that the brochure issued by the 1st defendant-Company to the customers would not be complete and exhaustive. Many important points and more particularly about the liabilities on the side of the customers and tax payable by them etc., would not be mentioned in the brochure and it would be revealed to them only during the presentation. According to the plaintiff, even in the presentation also, the liability aspects were not revealed to him. Further, even according to DW-1, the draft agreement would not be given to the party until the party agrees for the proposal. 15. Therefore, it is clear from the evidence of DW-1 himself that plaintiff had no prior opportunity to go through the terms of the agreement at Ex.P-1, but, it is only after he agreed for the proposals of the defendant-Company and when he signed it, he was given a copy of the agreement. 16. Thus, from the evidence of PW-1 and DW-1 and more particularly, from the cross-examination of DW-1 - Murali, it is clear that, mentioning of important and relevant aspects regarding the liability of the customer or proposed assurances of the Vacation time Share would not be revealed to him till he agrees to the proposal and it is only after the customer or the purchaser executes the document, a copy would be given to him. Therefore, the main, important and necessary representations to be made to the customer before obtaining his consent to the alleged proposals have not been made by the defendant at the appropriate time. 17. Even according to DW-1, as it has come out in his cross-examination, he was not working under the defendants at the time of the suit transaction between the plaintiff and the defendants. As already observed, the witness has clearly stated that personally he has no knowledge about what interaction has taken place between the plaintiff and the 1st defendant. That being the case, when the plaintiff, both in his plaint, as well in his evidence as PW-1, has clearly and specifically stated as to what representations were made to him, including by Mr. Girish, Mr. Vivek, Mr. Sajji and Ms. That being the case, when the plaintiff, both in his plaint, as well in his evidence as PW-1, has clearly and specifically stated as to what representations were made to him, including by Mr. Girish, Mr. Vivek, Mr. Sajji and Ms. Nancy Joseph, were all not known to DW-1 Murali. Admittedly, those representators were representing the defendant- Company at the relevant point of time and they were authorised to make representations before the proposed customer about the offers of the defendant-Company. 18. Thus, when those Mr. Vivek, Mr. Sajji, Mr. Girish and Ms. Nancy Joseph are said to have made several representations and offered several offerings before the plaintiff, DW-1 Murali who admittedly was not working at the relevant point of time with the defendant-Company and who admittedly had no personal knowledge about those interactions, has no basis to say that no such presentations were made on behalf of the defendant-Company to the plaintiff. Even if he makes any such statement, they would in no way carry any weightage in favour of the defendant-Company. Therefore, it was for those representatives who should have specifically denied that no such representation was made to plaintiff or others etc., The defendant-Company should have led evidence either oral or documentary to the effect that the representatives were authorised to make only certain representations to the proposed customers, but, not beyond those certain and specified representations. 19. Admittedly, no such evidence either oral or documentary has been placed from the defendants' side before the trial Court. Therefore, the trial Court has rightly held that there was misrepresentation made by the defendant-Company while persuading the plaintiff to give his consent to purchase Vacation Time Share from the defendant-Company and while executing the agreement at Ex.P-1 and undertaking letter at Ex.P-6. Thus, when the consent was not a free consent, the contract would be voidable at the option of that person whose consent was not a free consent. Therefore, the plaintiff exercising his option to avoid the said contract, has by sending legal notice to the defendant as per Ex.P-7, claimed for refund of the amount of Rs. 24,527/- paid by him, along with interest thereupon. It is in those exchange of notices between the parties, the defendant has come up offering for refund of a sum of Rs. 20,027/- vide their reply dated 9.2.1998, which is at Ex.P-10. 24,527/- paid by him, along with interest thereupon. It is in those exchange of notices between the parties, the defendant has come up offering for refund of a sum of Rs. 20,027/- vide their reply dated 9.2.1998, which is at Ex.P-10. Otherwise, being a Company, it would not have volunteered to refund certain sum though it calls it as only as a good faith. 20. Thus, the plaintiff has been able to establish that there was misrepresentation from the defendant-Company which made him to enter into an agreement with them and since those representations were found to be misrepresentations, he has opted to come out of the agreement and sought the refund of the amount. The defendants since have obtained the consent of the plaintiff by misrepresenting several aspects to him which are analysed above, the defendants are liable to refund the entire amount of Rs. 24,527/- received by it from the plaintiff. 21. The next aspect is the claim of the plaintiff towards the damages in the form of loss of his salary and his claim towards interest on the amount paid by him. The plaintiff in the trial Court has also claimed a sum of Rs. 1,20,000/- towards his alleged loss of one and half months salary. He has also contended that working as Chief Engineer, he was earning US $2000 per month, equivalent to a sum of Indian Rs. 80,000/- per month. It is also his contention that in view of the inconvenience caused to him by the defendants, he could not able to leave Bengaluru for his work and has made hectic effort in the direction of claiming refund from the defendants, as such, he has to abstain from his work for a period of one and half months. Though denial suggestions were made to him in his cross-examination, but, he has not admitted the same as true. 22. Admittedly, except his oral evidence to the effect that his alleged loss of salary for one and half months, the plaintiff has not produced any documents either to show his income or the loss of alleged income. There are no materials to show that he had applied for extension of the leave in order to sort out the dispute between himself and the defendant-Company and during the said period of leave, he was denied salary by his employer. There are no materials to show that he had applied for extension of the leave in order to sort out the dispute between himself and the defendant-Company and during the said period of leave, he was denied salary by his employer. Therefore, his contention that he incurred a loss of Rs. 1,20,000/- as loss of salary cannot be accepted. However, the fact remains that after entering into an agreement on 18.10.1997 as per Ex.P-1 with the defendants, he could not reap the benefits under the said agreement since he was denied with one bedroom apartment accommodation in the Resort at Siddapur, Coorg, and was asked to pay additional sums to the defendant-Company under different heads which were brought to their notice at the earliest. 23. Therefore, even if it is taken that he was on leave from his employment for the said period, still, he could not able to spend the said leave period as per his desire, because of the present dispute in which he was made to involve by the defendants. As such, at least from the date of entering into agreement with them till the legal notices were sent to the defendants and he instructing his counsel to institute the suit, he was otherwise disturbed from attending to his other works. As such, for the said duration, he is required to be reasonably compensated. Though the trial Court has awarded a sum of Rs. 25,000/- towards loss of his alleged salary, I am of the view that the said amount requires to be reduced and confined to a sum of Rs. 10,000/- considering the facts and circumstances of the case. 24. The plaintiff has also claimed a sum of Rs. 1,473/- towards the interest on the sum of Rs. 24,527/- paid by him to the defendant-Company. The said interest is said to be for three months. However, he has not stated as to what is the percentage of interest, but, considering the circumstances of the case and of the fact that the defendants in their agreement at Ex.P-1 have mentioned that their administration fee was Rs. 9,080/- and annual maintenance charges for the first year was at Rs. 1,800/- I am of the view that the claim of the said interest at Rs. 1,473/- for the said period is not exorbitant. Accordingly, the same does not warrant any interference at the hands of this Court. 25. 9,080/- and annual maintenance charges for the first year was at Rs. 1,800/- I am of the view that the claim of the said interest at Rs. 1,473/- for the said period is not exorbitant. Accordingly, the same does not warrant any interference at the hands of this Court. 25. Thus, the total decreetal amount, which is Rs. 51,000/-, now stands modified and reduced to a sum of Rs. 36,000/-. The remaining terms of the impugned judgment and decree with respect to awarding the interest at two different rates for two different periods being reasonable, the same does not warrant any interference at the hands of this Court. 26. Accordingly, I proceed to pass the following order: ORDER: The Appeal is allowed-in-part. The judgment and decree passed by the learned VI Addl. City Civil Judge, Bengaluru (CCH-11), passed in O.S. No. 1592/1998, dated 26.2.2007, is modified to the extent that the decreetal amount which was Rs. 51,000/- is reduced to Rs. 36,000/-. The remaining part of the judgment of the trial Court with respect to the interest awarded and its two rates for two different periods remains unaltered. There is no order as to costs. Draw modified decree accordingly. The refund of the Court fee would be in accordance with law. The Registry is directed to transmit a copy of this judgment along with lower Court records to the trial Court immediately.