Time-share schemes fall under CPA, rules Forum

MUMBAI, JAN 1: In a landmark judgement passed recently, the Consumer Disputes Redressal Forum (Mumbai suburban) held that disputes over t...

MUMBAI, JAN 1: In a landmark judgement passed recently, the Consumer Disputes Redressal Forum (Mumbai suburban) held that disputes over timeshare schemes comes under the purview of the Consumer Protection Act (CPA) and awarded relief to a couple who withdrew from such a scheme.

The forum ordered Continental Timeshare Marketing (CTM) to refund money to Pheroze and Zarine Irani, who had chosen to withdraw from their membership to the timeshare scheme after CTM failed to satisfactorily reply to their queries. Under such schemes members can buy shares’ of time they can spend in holiday resorts.

The Iranis had entered into an agreement about timeshares promoted by CTM who claimed to run Royal Goan Beach Club at Royal Palm, Benaulim, Salcete, Goa which cost the couple Rs 1.26 lakh – six monthly instalments of Rs 15,000, plus a down payment of Rs 36,000. Iranis paid Rs 36,000 and two monthly instalments (total Rs 66,000).

In the meantime, the Iranis sought some clarifications about the scheme. When the CTMfailed to reply the couple refused to pay the balance amount and moved the consumer court.

Pointing out the inconsistencies in their deal with CTM, the couple stated that while clause 10 of “Owner’s Declaration” in the agreement mentioned the member’s perpetual entitlement to a timeshare, clause (f) in the club’s constitution issued later stated that the club will be wound up after 80 years. The complainants claimed that CTM had suppressed the latter clause in their agreement.

Advocate Jehangir Gai, representing the Iranis, contended that share under Sales of Goods Act 1930 is a movable property because the buyers of timeshare do not own the flat or resort. They only own shares for some time. According to the termination provisions of the club, after 80 years the trustee is required to sell the club’s properties and divide the sale proceeds among individual members. Hence, the complainants are consumers under the CPA, Gai argued.

CTM’s advocate Sanjay Sinha had cited earlier National Consumer DisputesRedressal Commission’s orders that timeshare is immovable property and consumer forum has no jurisdiction to entertain any dispute on it. However, additional president G N Chaudhari rejected these arguments and maintained that the timeshare agreement was not registered and hence not acceptable as evidence before the forum. He ordered CTM to refund Rs 66,000 with 18 per cent interest to the Iranis within two months.