The Delhi State Consumer Disputes Redressal Commission affirmed the District Commission’s order directing a hotel to refund the advance paid for a wedding, award interest and compensation, and held that an explicit assurance of postponement defeats a contractual cancellation clause.
Background & Facts
The Dispute
The complainant, Mr. F.S. Chauhan, entered into a contract with M/s Bharat Hotels Ltd. (operating "The Lalit" New Delhi) for hosting his daughter’s wedding. The agreement dated 23.07.2020 required a minimum guarantee of guests and stipulated an advance of Rs 27,49,400 payable in three instalments. The parties exchanged emails promising that, if government COVID-19 restrictions forced postponement, the advance would be adjusted against a rescheduled date.
Key Facts
- Agreement date: 23.07.2020
- Advance payment schedule:
- On signing: Rs 5,00,000
- 01.10.2020: Rs 5,56,100
- 01.12.2020: Rs 16,93,300
- Total: Rs 27,49,400
- COVID-19 restriction: Government limited wedding guests to 50 persons from 18.11.2020.
- Assurance email: 29.07.2020, OP-3 (hotel) confirmed that any postponement due to government regulations would allow the complainant to select alternate dates and that the advance would be fully adjusted.
- Contract signing: 31.07.2020; complainant handed a cheque of Rs 5,00,000.
- Further payment: 01.10.2020, complainant handed a cheque of Rs 5,56,100.
- Alleged breach: Hotel sold the booked Crystal Ballroom to another party, denied postponement on 08.12.2020, and threatened to retain the entire advance of Rs 16,12,200.
- Communications: Multiple emails (03.12.2020, 04.12.2020, 05.12.2020, 07.12.2020) and WhatsApp chats show the complainant’s attempts to secure a new date; the hotel’s responses were evasive or hostile.
- Medical evidence: RT-PCR report dated 03.12.2020 submitted by complainant.
Procedural History
- 10.11.2025: Complaint filed before Delhi State Consumer Disputes Redressal Commission (Case No. CC-01/2021).
- 06.10.2025: District Commission ordered refund of Rs 16,12,200 with 9% interest, compensation of Rs 1,00,000 and litigation expenses of Rs 50,000.
- 27.08.2026: Order of the District Commission reserved.
- 31.08.2026: Appeal dismissed; District Commission’s order upheld.
The Parties' Positions
- Appellants (Bharat Hotels Ltd. & others): Asserted that the cancellation clause in the agreement permitted forfeiture of the advance; claimed the venue was blocked and that the complainant’s request for postponement was effectively a cancellation.
- Respondent (F.S. Chauhan): Contended that the hotel’s assurance of postponement created an election in favour of adjustment; argued that services were not rendered and the venue was sold to third parties, entitling him to a refund, interest and compensation.
Relief Sought
- Appellants: Set aside the District Commission’s order and dismiss the complaint.
- Respondent: Enforce the District Commission’s order for refund, interest, compensation and costs.
Frequently Asked Questions
The Court held that the assurance given by the hotel to adjust the advance in case of postponement formed part of the agreement and could not be ignored in favour of a unilateral cancellation clause. The principle of election prevents a party from both accepting and rejecting the same instrument.
The District Commission directed interest at 9% per annum from the date of each payment until realization, with a higher rate of 12% per annum if the refund is not made within the stipulated period.
