Time-share sch-emes have seen some aggressive marketing in recent times. The scheme allows the beneficiary (an individual and his/her family of four) a weeks free stay a year at a holiday resort on a one-time payment. But though time-share schemes have worked extremely well abroad, applicants here have rued their decision in joining such a scheme.
In the first instance, members entering into time-share schem-es here are not given a cooling period to confirm their plans or cancel their membership, as is the practice abroad. To make matters worse, there have been cases where the time-share beneficiary discovered there was no promi-sed resort. And where resorts did exist, the cramped living conditions and abominable services offered to members have left them tearing at their hair.
Beneficiaries of the scheme have later discovered, much to their horror, that they can receive little solace from consumer law. Consider, for instance, the recent decision delivered by the National Commission, the highest consumer court, on Jan-uary 6, 1997.
The Punjab Tourism Develop-ment Corporation Ltd had offer-ed a time-share holiday scheme which promised to set up 10 holiday homes at popular tourist spots within two years from the date of proposal (in 1986). At the end of six years, only four holiday homes had been set up. And the conditions in these holiday ho-mes left much to be desired.
Complaints were pouring in various consumer forums agai-nst the Corporation. Some even awarded compensation to the time-share members who had been feeling cheated.
But the National Commission put paid to all hopes of compensation thereafter, arguing that the services of the Corporation were not being hired for a consideration. Therefore, such disputes fell outside the purview of the Consumer Protection Act as they could not be described as consumer disputes.
The National Commission held that the scheme of the Corporation conferred certain rights, benefits and privileges on its members. A person became a member of the Club after paying the required money in lumpsum or in instalments. This entitled him a time-share in the immovable property of the Club for seven days in a year, entailing exclusive use of the apartment for that period. The bye-laws gave the members a right and complete freedom to sell, lend, exchange or alienate the asset as t hey pleased.
An instrument of transfer en-abled a transfer or transmission of membership. A person could become entitled to membership in the event of the death of the holder, the same advantages accruing to the successor.
The clauses thus establish that the member purchased a vacation ownership in immovable property for a week. Membership also earned him/her the right to sell, lend, exchange, alienate or even bequeath the same. Thus, there was no hiring of the services of the opposite party for a consideration. It was the mere creation of interest in immovable property for a week. And since the transaction between the parties was one of purchase of a time-share in immovable property, the question of a consumer dispute did not arise, argued the National Commission. Instead, it offered the alternative of going to the civil court.
Where the six remaining reso-rts that never came up were concerned, the National Commi-ssion took the view that this was because of force majeure, that is circumstances beyond control of the Corporation. As no negligence of the Corporation could be established on record, one of the pre-conditions for the grant of compensation laid down in Section 14 (1) (d) of the CPA, was not satisfied.
By virtue of this ruling, all time-sharing companies have be-en granted a virtual holiday from consumer law while those who invested money in them have been left wringing their hands.
There is no safety device, except that potential buyers of the scheme check the credentials of the developer and what the rights of the time-share owner will be if the company gets into financial problems. It might also be worthwhile to explore the existing facilities. And most importantly, it would be a good idea to check out with a solicitor before signing the contract.
