Vacation Resorts International, (Hills) Pvt. Ltd. and Others vs Dharmendra Narayan Senapati and Others

Valmiki J Mehta, J.—No one has appeared in this case despite the matter having been called out twice on 21.1.2011. Even today, no one appears for the Appellant, although it is 12.35 PM. This case has been on the ''regular board'' of this Court since 6.1.2011 and today is effective item No. 2. I have therefore perused the record and am proceeding to dispose of the appeal.

The challenge by means of the present appeal by Vacation Resort Companies is to the impugned judgment and decree dated 28.2.2000 whereby the suit of the Respondents/plaintiffs was decreed for an amount of Rs. 65,000/- along with interest, being the amount which was paid by the Respondents/plaintiffs for purchasing a timeshare for a period of one week.

The facts of the case are that the Respondents /plaintiffs entered into an agreement with the Appellants/Defendants whereby the Appellants/Defendants had to provide a holiday resort of one bedroom unit for a period of one week every year for 99 years for which the Respondents/plaintiffs paid a consideration of Rs. 65,000/-. The Respondents/ plaintiffs thereafter asked the Appellants to give it the contracted one week in the year 1996, however, the Appellants failed to do so. The Appellants in fact vide their letter dated 27.12.1996 apologized for the inconvenience and assured for their future best service. The Appellants further failed to provide the accommodation and the Respondents/plaintiffs thereafter learnt that the Appellants had closed their office and fled from Bhubneshwar. Since the Respondents/plaintiffs lost their faith in the Appellants, it filed the subject suit for recovery of the amount paid to the Appellants along with interest under Order XXXVII of the CPC (CPC).

In this suit under Order XXXVII CPC, the Appellants filed an application for leave to defend and which was dismissed by the impugned judgment and by which the suit has also decreed.

The relevant discussion and findings of the trial court are contained in paras 4 to 6 of the impugned order and which reads as under:

The above Article shows that where cancellation of agreement takes place, the rights of the Company/DRI have been specifically defined but the rights of the Vacation owner have not been defined. While it is specifically provided that the Defendant company shall be entitled to recover from vacation owner all the amounts spent by the company on maintenance of the resort as falling in the share of the vacation owner and the company shall also be entitled to dispose of the unit but it is nowhere provided what amount would be recoverable by the vacation owner. However, a perusal of other terms and conditions shows that the rights of vacation owner are also similar in nature, whenever the vacation owner is not provided the unit week or the unit week accumulate. The vacation owner has also been given liberty to exchange the unit week and to let it on hire.

I, therefore, consider that the vacation owner has equal rights as the Defendant has and where the Defendant had absolutely failed to honour the agreement and had not provided the unit week despite having the entire amount in advance, the vacation owner has got a right to terminate the agreement and recall the amount.

The counsel for the Defendant has also argued that there was an arbitration clause provided in the agreement and the plaintiff should have resorted to arbitration proceeding clause. The arbitration clause provides for arbitration where there is a dispute or difference between the parties concerning the agreement or its meaning or effect but here in this case after agreeing to provide unit week every year in resort, the Defendant failed to provide the unit week for the year 1996-97, 98 and 99 resulting into the cancellation of agreement on the part of the plaintiff. It could not be envisaged that after assuring one unit week every year, for 99 years, the Defendant would resort to such things. This amount, in fact, to non-start of the agreement at all and a breach of trust which plaintiff had reposed in the Defendant and under which the plaintiff paid Rs. 65,000/- to the Defendant. I consider that this is not a case where there is any dispute about non-providing the resort-hotel. It is admitted by the Defendant that resort was not provided. The only question is whether the Defendant was liable to pay this amount of Rs. 65,000/- back or not. The plea of the Defendant that it was a creation of an interest in immovable property, cannot be considered because wherever an interest in immovable property worth more than Rs. 100/- is created the document creating such interest, whether it is lease deed or sale deed or document of any other nature, is bound to be compulsorily registered. The agreement of vacation ownership is an unregistered document. It only bears an adhesive stamp of Rs. 2/- leviable on agreement as per Stamp Act.

I do not find any illegality or perversity in the impugned judgment calling for interference by this Court in appeal. In fact, grave prejudice will be caused to the Respondents/plaintiffs if the appeal is allowed. A vacation resort owner which denied the contractual benefits and failed to perform its part of the contract is surely not entitled to any relief from the Court. The appeal therefore being devoid of merit is dismissed leaving the parties to bear their own costs. Trial court record be sent back.