A Delhi consumer commission directed a holiday membership company to refund Rs 80,000 to a customer after it failed to return the money within the promised 90-day period following cancellation of the membership. The Indian Express reported that the commission also awarded Rs 15,000 as compensation and Rs 10,000 for litigation costs, bringing the total relief to Rs 1.05 lakh, plus interest on the refund.
According to The Indian Express report, the district consumer commission, comprising president Divya Jyoti Jaipuriar and member Rashmi Bansal, held that retaining the consumer’s money beyond the contractual refund period amounted to deficiency in service.
“The opposite party accepted/processed the cancellation request but failed to complete the consequential refund within the stipulated period,” The Indian Express quoted the commission as saying in its September 24 order.
Hotel booking fails, consumer seeks cancellation
The complainant purchased a 10-year holiday membership for Rs 1.30 lakh from a travel and vacation membership club.
While the consumer produced a receipt showing a payment of Rs 65,000, the company acknowledged receiving Rs 80,000 towards the membership.
The dispute arose when the consumer attempted to book hotel accommodation at his chosen destination in February 2023.
According to The Indian Express, the company allegedly informed him that rooms were unavailable at the destination. Disappointed with the service, he sought cancellation of his membership on March 1, 2023, and asked for his money back.
The company accepted the cancellation request and informed him in writing that the refund would be processed within 90 days, after making deductions permitted under the membership terms.
Refund not made even after 90 days
The 90-day period expired without the consumer receiving the refund, The Indian Express reported. He subsequently sent a legal notice to the company seeking repayment. When the money was still not returned, he approached the consumer commission.
The holiday company did not appear before the commission to contest the complaint, following which the matter proceeded in its absence.
Commission distinguishes booking issue from refund obligation
The commission noted that the mere inability to provide hotel accommodation on a particular date does not automatically amount to deficiency in service, particularly where a membership agreement contains conditions relating to room availability.
However, it found that the situation changed once the company accepted the consumer’s cancellation request and committed itself to a specific refund timeline.
The commission held that the company was bound by its own contractual commitment to process the refund within 90 days.
It said that a stipulated processing period could not give a service provider an unlimited right to retain a consumer’s money.
“The opposite party is accordingly liable to refund the amount of Rs 80,000 acknowledged by it as having been received towards the membership,” The Indian Express quoted the commission as saying.
Rs 1.05 lakh relief ordered
The commission directed the holiday company to refund Rs 80,000 received towards the membership and pay Rs 15,000 as compensation along with Rs 10,000 towards litigation costs.
The total compensation and costs ordered by the commission amount to Rs 25,000, bringing the relief to Rs 1.05 lakh, apart from the applicable interest on the refund.
Takeaway
The order draws a distinction between a service provider’s inability to fulfil a particular booking and its obligation to honour a refund after cancellation.
For consumers, the key point is that once a company accepts a cancellation and commits to a definite refund timeline, that promise cannot be left open-ended. Keeping the money beyond the agreed period without completing the refund can amount to deficiency in service.