Misrepresentation by a party can lead to a lack of free consent and voidability of a contract under the Indian Contract Act.

JUDGMENT :

H.B. Prabhakara Sastry, J.

1. The defendant No. 1-Company in the Court of the VI Addl. City Civil Judge, Bengaluru (CCH-11), (hereinafter for brevity referred to as ‘trial Court’) has filed this appeal against the judgment and decree dated 26.2.2007, passed by the trial Court in O.S. No. 1592/1998, wherein it had decreed the suit filed by the present respondent No. 1/plaintiff for recovery of money. The present respondent No. 2, with respect to whom, the notice has been dispensed with in this appeal, was defendant No. 2 in the trial Court.

2. The summary of the case of the plaintiff in the trial Court was that defendant No. 1/ appellant-Company, through its employees, had contacted the wife of the plaintiff intimating her that she had won a gift and the same would be handed over to her in a presentation to be held at "THE PROMENADE" an establishment at Nandi Durga Road, Bengaluru. However, when the plaintiff and his wife went there, one Mr. Vivek and one Mr. Sajji, representing the defendant-Company, persuaded them to become member of defendant No. 1. Though the plaintiff was reluctant, however, the said Mr. Vivek and Mr. Sajji succeeded in making the plaintiff to part away a cheque for a sum of Rs. 15,527/-. On behalf of the defendant-Company, its officials had also promised the plaintiff of two days free stay at Orange County Resort in Coorg and various other benefits, including the stay at Holiday Resorts.

Subsequently, on 26.11.1997, when the plaintiff visited the Corporate Office of defendant No. 1, he was made to meet one Ms. Nancy Joseph, an employee of the 1st defendant- Company, who further persuaded him to part with another sum of Rs. 9,000/- as a part of the membership with 1st defendant-Company, for purchasing Vacation Time Share. Later, the defendant claimed some more charges like utility charges, RCI annual membership fee, to and fro pick-up and drop charges to the Resort, Guest fees etc. which were supposed to be free or inclusive. This made the plaintiff to cancel the transaction and seek refund of the amount. As such, he wrote a letter to defendant No. 1 on 8.12.1997, demanding refund of the amount. This made the plaintiff to issue a legal notice on 20.12.1997, which invoked an untenable reply from the 1st defendant-Company. However, the 1st defendant-Company offered to refund a sum of Rs. 20,027/- only in full and final settlement against the actual payment made by the plaintiff. Since the plaintiff has paid more amount than what refund that was offered by the 1st defendant-Company and had incurred more expenses in the process, was not agreeable for the offer made by the 1st defendant-Company. This made him to institute a suit against the defendants claiming a total sum of a Rs. 1,50,000/- towards refund of the payment made and the expenses incurred by him, including loss of his salary for one and half months, interest on the amount paid by him and to and fro expenses along with legal charges.

3. In response to the summons served upon them, the defendants appeared through their counsel and filed their written statement. In their written statement, the defendants did not dispute the alleged transaction entered into between the plaintiff and the defendants. However, they contended that the 1st defendant-Company has entered into an agreement with the plaintiff with respect to purchase of Vacation Time Share and it is strictly in accordance with the agreement they are acting. They denied that they have ever made any false promise to the plaintiff and have ever offered any free gifts which are not the part and parcel of the terms of the agreement they had entered into. They also denied that the defendants were in any manner entitled to refund of the amount, much less, the suit claim.

4. Based on the pleadings of the parties, the trial Court framed the following issues:

1. Whether the plaintiff proves the suit transaction as referred to in the plaint?

2. Whether the plaintiff is entitled to recover the interest