In a notable decision, the District Consumer Disputes Redressal Commission [Central District], New Delhi, has ruled in favour of a consumer, asserting that retaining payment without rendering services is “unjust and unconscionable.” The Commission ordered a full refund of ₹1 lakh, along with interest, from the banquet hall Wedding Opera to the complainant, Sunil Kumar Khurana. The judgment, issued on October 15, 2024, highlights the rights of consumers to recover payments when services are not provided, especially in exceptional circumstances like the COVID-19 pandemic.
Case Background
The complaint (Case No. CC/19/2023) was initiated by Sunil Kumar Khurana, who had booked Wedding Opera, operated by M/s S.G. Hospitality, for his daughter’s wedding on June 29, 2020. An advance payment of ₹1 lakh was made on March 12, 2020. However, due to the nationwide lockdown imposed on March 24, 2020, by the Government of India to control the spread of COVID-19, public gatherings were restricted. As a result, the complainant had to reschedule the wedding to December 11, 2020.
Despite repeated requests, Wedding Opera refused to shift the booking to the new date or refund the advance payment, citing prior bookings. The complainant’s legal notices, dated between September and December 2021, demanding a refund were disregarded, prompting him to file a complaint for deficiency in service and unfair trade practices.
Legal Issues Involved
The core issues addressed by the Commission were:
1. Deficiency in Service: The failure of Wedding Opera to provide services as contracted, along with its refusal to refund the advance payment, was considered a breach of service obligations.
2. Unfair Trade Practices: The retention of the booking amount without delivering any services was challenged as an unfair trade practice, violating consumer rights and public policy.
Court’s Observations and Judgment
The bench, comprising Mr. Inder Jeet Singh (President) and Ms. Rashmi Bansal (Member), emphasized that retaining consumer money for services not rendered is against public policy. Quoting a prior judgment, the court noted, “Any such terms of contract between the parties, which allows the provider of service to forfeit the amount of service, which he has not provided is against public policy and good conscience.”
The court ruled that the complainant was compelled to reschedule the wedding due to unavoidable government restrictions. Given that no services were provided by the banquet hall, the retention of the advance was deemed unconscionable and amounted to a deficiency in service. Consequently, the court directed the banquet hall to:
– Refund the advance payment of ₹1 lakh to the complainant.
– Pay an interest of 6% per annum from the date of payment (March 12, 2020) until the refund is made. In case of failure to comply within 45 days, the interest rate will increase to 9% per annum until the realization of the amount.
– Pay ₹10,000 as compensation for mental harassment and ₹5,000 towards litigation costs.
Despite multiple opportunities, Wedding Opera did not file a response or participate in the proceedings, making the complainant’s claims unopposed. The court based its decision on the evidence and arguments presented by the complainant.
