Case at a Glance
A Bengaluru resident was called in to collect gifts, heard a pitch for holiday membership and signed a Membership Purchase Agreement the same day, paying ₹90,000. About six weeks later, without using any benefit, he asked to cancel and get his money back, but the company refused, citing a non-refundable clause. The NCDRC held that the ‘no refund’ clause was one-sided and unfair and that retaining the entire fee was “patently unfair and unjust.” It dismissed the company’s revision and upheld the Karnataka State Commission’s order for a refund of ₹90,000 with 6% interest and ₹5,000 costs.
On 2 December 2013 the complainant received a call offering holiday and vacation facilities and was asked to visit the office. On 7 December 2013 he went to collect gifts and signed a Membership Purchase Agreement with Country Vacations and Country Club (India) Ltd. the same day, paying ₹90,000. On 28 January 2014 and 7 February 2014 he emailed requests to cancel and for a refund, followed by several more reminders through July 2014 and a legal notice on 21 August 2014. The companies relied on the agreement’s non-refundable clause.
His complaint before the III Additional Bangalore Urban District Forum was dismissed on 2 August 2016 for lack of cogent evidence of inducement or deficiency. On appeal, the Karnataka State Consumer Commission on 16 April 2021 set that aside and directed a refund of ₹90,000 with 6% annual interest from the date of the complaint, plus ₹5,000 as litigation costs. The companies filed a revision before the NCDRC, arguing that the fee was expressly non-refundable, that the complainant never tried to use the services and did not pay annual maintenance charges, and that courts cannot rewrite contracts, relying on Vikram Greentech (I) Ltd. & Anr. v. New India Assurance Co. Ltd. among other decisions.
The Key Question Before the Court
Can a holiday membership company keep the entire fee under a ‘no refund’ clause when the member cancels within weeks without using any benefit?
Why the ‘No Refund’ Clause Failed
The NCDRC accepted that the complainant had not used any benefit and that there was no evidence that the promised facilities were unavailable. But that, it held, did not mean the companies’ conduct was fair. The complainant was invited in, pitched benefits and signed on the same day, and he sought to opt out within about one and a half months without availing anything. Obtaining the fee and then refusing any refund was “patently unfair and unjust.”
The Commission held that “the very ‘no refund’ clause in the agreement has to be held to be one-sided and unfair,” particularly as the membership tied the consumer to long-term recurring maintenance obligations. It observed that the company could have refunded the amount after deducting pro-rata charges for the period of about one and a half months and reasonable administrative charges, rather than retaining the whole fee. Finding “no jurisdictional or other error” in the State Commission’s order, it declined to interfere in revision.
What the Court Actually Held
- A ‘no refund’ clause in a holiday membership agreement that lets the company keep the entire fee after an early cancellation is one-sided and unfair.
- Refusing any refund to a member who cancelled within about six weeks without using any benefit was patently unfair and unjust, even though no failure to provide facilities was proved.
- The company could at most have deducted pro-rata charges and reasonable administrative charges.
- No jurisdictional or other error was found in the State Commission’s order for refund of ₹90,000 with 6% interest and ₹5,000 costs; the revision petition was dismissed.
Why This Judgment Matters
- Holiday and timeshare memberships are often sold at same-day presentations. The ruling tells consumers that a signed ‘non-refundable’ clause does not end the matter.
- It shows consumer fora will look at fairness of contract terms, not just whether the services were technically available.
- Companies are on notice that keeping the full fee after a prompt cancellation can amount to unfair conduct; a proportionate deduction is the fair course.
What Should Advocates Take Away From the Judgment?
For Consumers
- If you regret a membership signed at a sales event, ask to cancel quickly and in writing, and keep copies of every email.
- A ‘non-refundable’ clause may still be challenged as one-sided and unfair.
- Follow up with a legal notice before filing a consumer complaint, as the complainant did here.
For Counsel
- Frame the case around the fairness of the clause and the prompt cancellation, not only deficiency in providing facilities.
- Contract-is-contract arguments relying on Vikram Greentech (I) Ltd. v. New India Assurance Co. Ltd. did not persuade the NCDRC here.
- In revision, the NCDRC interferes only for jurisdictional or other material error in the lower order.
Key Takeaways
- The member signed on the day of the pitch and asked to cancel within about six weeks.
- The NCDRC held the ‘no refund’ clause one-sided and unfair.
- At most, pro-rata and reasonable administrative charges could have been deducted.
- The refund of ₹90,000 with 6% interest and ₹5,000 costs was upheld.
Frequently Asked Questions
Can I get a refund of a holiday club membership marked non-refundable?
In this case, yes. The NCDRC held that a ‘no refund’ clause was one-sided and unfair where the member cancelled within about six weeks without using any benefit, and upheld a refund of ₹90,000 with interest.
Does the company get to deduct anything?
The NCDRC observed that the company could have deducted pro-rata charges for the period of about one and a half months and reasonable administrative charges, rather than keeping the full fee.
What had the lower fora decided?
The District Forum dismissed the complaint in 2016. The Karnataka State Commission allowed the appeal in 2021 and ordered a refund with 6% interest and ₹5,000 costs, which the NCDRC upheld on 30 October 2026.
Conclusion
The NCDRC looked past the signed clause to the way the membership was sold and how quickly the consumer asked out. Keeping the entire fee from someone who had used nothing was, in its view, unfair enrichment, and the clause that allowed it could not be enforced as written.
Practical takeaway: Consumers who sign up for memberships at sales events should cancel promptly and in writing; a ‘non-refundable’ label may not stand before a consumer commission.
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