• Is non-refundability before receiving a product legal in India

Sir,
I have a signed an agreement with Country Vacations International on Rs. non judicial bond paper by paying Rs. 1,70,000 for a membership. They have even promised a complimentary plot of 1350 sft as part of this membership. In that agreement it is mentioned that the amount is nonrefundable once paid and the agreement cannot be cancelled. I have paid the money just yesterday. I have not received membership card or other complimentary things promised by them yet. I wanted to cancel the agreement and have sent an email to their customer care address requesting for refund. I have heard from several sources on internet that nonrefundability before receiving the product is unfair trade practice and Supreme Court has reported in AIR1986 (SC) 1571. Am I entitled for a refund?

Thank you.
Asked 2 years ago in Business Law from Hyderabad, Andhra Pradesh
1. To better appreciate your question the relevant clauses of the said agreement needs to be seen.
2. Since you have paid the money yesterday, your decision to go for cancellation after one day is incomprehensible.
3. You should better wait for few more days to check whether they honour the relevant clause of the agreement or not.
4. It is true that in spite of non refundability of clause the court/forum in certain circumstances has power to term it invalid more so in the context of unfair trade practice.
5. I would advise you to wait for reasonable tie , then ask for honouring the terms of the contract and then and then only to file case in the consumer forum.
Best of luck.
Devajyoti Barman
Advocate, Kolkata
5244 Answers
54 Consultations
4.9 on 5.0
1.wait for a week for member ship card and other complimentary things and if they fail to send them even after 1 week then u can cancel the agreement.

2.yes, ur entitled for refund.

3. after 1 week send legal notice to them to refund ur full amount.
R.K. Nanda
Advocate, New Delhi
457 Answers
0 Consultations
3.8 on 5.0
AIR 1986 (SC) 1571 is not applicable in ur case.
R.K. Nanda
Advocate, New Delhi
457 Answers
0 Consultations
3.8 on 5.0
1) why after one day of making payment you want to cancel the membership? 

2) how was payment made by cash or cheque? 

3) you can issue stop payment instructions to bank if cheque is not cleared .inform company that you want membership . 

4) the provisions of agreement entered into by you with company has to be seen . 

5) if agreement contains a clause that no refund would be granted under any circumstances you can move consumer forum against company for un fair trade practice .
Ajay Sethi
Advocate, Mumbai
23339 Answers
1220 Consultations
5.0 on 5.0
in AIR 1986 SC 1571 number of judgements were cited .it was held that An unconscionable bargain	would, therefore, be one which is irreconcilable with what is right or reasonable. If a contract or term thereof is unconscionable at the time the contract is made, the	Court may refuse to	enforce	the contract. An unconscionable bargain could be brought about by economic duress even between parties who	may not in economic terms be situate differently. 

2) Another theory which	has made its emergence in recent years in the sphere of	the law of contracts in the test of reasonableness or fairness of a clause in a contract where there is inequality of bargaining power. In such cases it isrecognised that the freedom of contract is absent. In such A cases, judicial review is permitted and consequential relief allowed

3) This principle is that the Courts will not enforce and will, when called	upon to do so, strike down an unfair and unreasonable contract, or	an unfair and	unreasonable clause in a contract entered into between parties who are not equal in bargaining power.

4) in your case policy of no refund on cancellation is unfair and un reasonable . you had no choice, or rather no meaningful choice, but to give  assent to a contract or to sign on the dotted line in a prescribed or standard form or to accept a	set of	rules	as part of the contract, however, unfair	unreasonable or unconsionable a clause in that contract or form	or rules may be. 

5) contact a local lawyer and issue legal notice and move consumer forum against the company
Ajay Sethi
Advocate, Mumbai
23339 Answers
1220 Consultations
5.0 on 5.0
1. The contract you have entered into with the vacation club/company needs to be seen before advising,

2. Why did you want to cancel the agreement just one day after you made the payment?

3. Have you paid by sending cheque? If yes, issue stop payment notice to the Bank,

4. You shall have to construct reason for cancellintg the contract just  one day after making payment,

5. The decision cited by you is not applicable in your case apparently,

6. You shall have to establish that there has been an unreasonable and/or unfair clause in the agreement and that you had no other option but to sign the said agreement,

7. The Apex Court has not stated that any body under any circumstances can cancel an agreement after making payment & before receiving the goods and ask for refund of the payment even against a clear clause of non-refundability mentioned in the said agreement.
Krishna Kishore Ganguly
Advocate, Kolkata
12131 Answers
233 Consultations
5.0 on 5.0
1. Without making a thread bare perusal of the agreement you entered into it is not possible to opine with exactitude.

2. Please note that once an agreement has been entered into between two persons or more the clauses contained in the agreement become sacrosanct in as much as they bind both the parties thereto. If either party deviates from performing its promise as articulated in the agreement the other party may initiate legal proceedings for breach of contract. The only exception to  this supremacy of the agreement is the unreasonability of the clause or incorporating a clause which violates any specific provision of the law.

3. Has any time frame been mentioned in the agreement with respect to the time within which the membership card is to be issued and other complimentary things delivered? If yes, it has to carry out the promise within the time mentioned by it. If it fails to do so then you can issue a lawyer's notice to it for cancellation of agreement and to claim the refund of money paid by you. In spite of lawyer's notice if it refuses to accede to your demand then you may move to court and file a case for recovery of the amount paid, with interest.

4. The embargo placed on your right to claim a refund of the amount paid by you and also cancel the agreement, is illegal.

5. At this stage, refrain from issuing stop bank instructions to the bank as stop bank instructions will dilute your remedy before the court in the event the agreement is subsequently dishonoured by the opposite side. It has been just a day since you remitted the amount to Country Vacations International. Any move at this juncture towards cancellation of the agreement and/or claiming the refund of money paid by you, will be premature and fail the test of law. Give some time to them to carry out their promise, and then initiate the legal process if it is not carried out.
Ashish Davessar
Advocate, Jaipur
18183 Answers
449 Consultations
5.0 on 5.0
1) i have gone through the newspaper articles mentioned by you in deccan herald . 

2) a perusal of said article mentions that number of complaints have been lodged against company for cheating as company failed to allot the plots mentioned to investors . cops have directed company to refund money paid by depositors . 

3) terms of contract signed by you with company are sacrosanct . oral assurances made by company have no value . 

4) wait for receipt of copy of contract . if it contains clause regarding allotment of plot and resale to company after 1 year it would be as per commitment made by company .but the problem is inspite of clauses in agreement company does not offer complementary plot 
5)  you can  immediatedly send a letter by regd post AD asking for refund of money paid of Rs 1, 70,000 with interest as you dont want to accept the membership offer . 

6)if company fails to do so move consumer forum for necessary reliefs 

7) audio/video recordings are admissible in evidence
Ajay Sethi
Advocate, Mumbai
23339 Answers
1220 Consultations
5.0 on 5.0
1. First of all file a police complaint for cheating you and getting your signature on the agreement witout giving anytime to you to read leisurely and also for collecting money by giving false promises orally which the agreement does not accept,

2. After this file a consumer complaint case before the local district Consumer Dispute redressal forum alleging deficiency in service and unfair business practice claiming refund of the paid amount, damage and cost,

3. Your audio/video recording will be treated as a very good evidence in this regard.
Krishna Kishore Ganguly
Advocate, Kolkata
12131 Answers
233 Consultations
5.0 on 5.0
1. Oral promises should never be relied on as they cannot be proved in the court. You should have resisted the temptation to accept the seemingly attractive offer without making a thread bare perusal of the terms and conditions. 

2. Anything not written in the agreement is not capable of being enforced in the court. If the welcome kit does not have a mention of the clause regarding the sale of complimentary plot to the company then it is not possible to prove that such a promise was ever made to you. On the contrary, if this clause is incorporated therein you can make the company liable for it in the court.

3. The clause regarding not cancelling the agreement is illegal. You can issue a lawyer's notice to it for cancellation of membership and refund of amount paid. If company does not 
refund the amount then move to court for recovery of amount with compensation.

4. Audio/video recording constitutes valid evidence,
Ashish Davessar
Advocate, Jaipur
18183 Answers
449 Consultations
5.0 on 5.0
1.lodge police complaint in PS against them under section 420 of IPC for cheating you.

2.then file consumer complaint in CF and claim refund of amount with interest and damages.

3.audio and video recordings are good evidence and admissible in evidence in courts.
R.K. Nanda
Advocate, New Delhi
457 Answers
0 Consultations
3.8 on 5.0
Dear Querist
file a police complaint under section 406/420 of IPC for Fraud and breach of trust against the company's head and sales Manager with against who told you all these oral things.
you may file a civil suit for recovery, suit for damages and claim compensation after sending a legal notice to them.
You may file a complaint before consumer court for deficiency of service and un-trade practice adopted by the company. Audio and video will be accepted as an evidence and very useful for you to prove your case.
Contact a lawyer personally with all the documents, communication, it will be better to get best advice.
Nadeem Qureshi
Advocate, New Delhi
3537 Answers
130 Consultations
4.9 on 5.0

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