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Club Mahindra Gets Penalized for Giving Rooms to Non-Members, Denying Members

Club Mahindra has offered rooms to non-members while members were refused, it turns out, as a State Consumer Forum orders them to pay back all money received plus 12% per annum, totally 3.5 lakh rupees, to a couple in Mumbai. (HT Manoj Nagpal)

Ritu and Navdeep Uppal bought a Red membership to Club Mahindra for Rs. 1.92 lakh in 2006, the highest membership level at the time. This should have, in their opinion, given them access to any Club Mahindra resort at any time, if it was available.

They soon found out that it was never available for them. They tried from 2006 to 2009, to book rooms – remember, they get a week a year – but nothing was available for them when they wanted it. They paid the Annual Maintenance Charges of about Rs. 7K a year for four years, taking their total payment to Rs. 2.21 lakh.

In October 2009, they wanted to book the Goa Varca resort and were told that the hotel, for their dates – for December 2009 – wasn’t available. And that they could go to a new resort called “Goa Jasmine” instead.

So the Uppals decided to test this “not available” theory, and requested a booking for the Varca resort as a non-member, via the internet. Apparently, the resort WAS available for a fee.

Then the Uppals went to consumer court. After getting rejected at the district level, they went to the State Commission to appeal. (See District Level rejection – in Marathi only )

Club Mahindra tried evasive tactics to defend their action, but did not provide a list of bookings for those dates so they could prove the resort was booked before the Uppals tried.

The State Commission thus found Club Mahindra guilty for having breached the contract, and have told them to pay :

  • Rs. 2.21 lakh plus 12% p.a. from 12/10/2009. That, as of August 2014, adds up to about Rs. 3.5 lakh.
  • Rs. 30,000 as costs.

Our view: We’ve maintained that Club Mahindra has never had enough rooms to satisfy all its members, even if they wanted holidays spread proportionately during the year. It was obvious from the IPO itself. It still is the case.

Club Mahindra Gets Penalized for Giving Rooms to Non-Members, Denying Members

We would encourage more such dissatisfied members to go to consumer courts and demand full compensation if they unable to get a resort; importantly, please ask for a list of current bookings in case you are refused, and even attempt booking through an internet site (directly or through an agent) so you can prove deficiency in service.

In their Q1 2015 presentation, their “room” revenue (as against subscriptions) has gone up 62% from last year and they have again started marketing rooms to non-members. So we’re likely to see many more such cases going forward, I think.

  • Bhupesh says:

    Actually these cases have become part of their business plan. Unless there is heavy penalty they will keep doing business in same way.

  • Sanjay Singhaniya says:

    You are publishing Club Mahindra so much.
    Do you have some personal problems with Club Mahindra? 🙂

    • Ashwin says:

      Lets not blame him. Don’t think its personal since he does it to host of others also like Infosys, Reliance, Gold, etc. I would say a critical perspective, which sometimes the great companies miss or don’t want to look at.

    • Shashi says:

      Deepak has published a story about a customer who was fleeced, fighting effectively and eventually getting justice. Why do you think Deepak may have personal problems with Club Mahindra. On the contrary I am surprised why you are so agitated to read about crimes (convicted in consumer courts) of Club Mahindra and how customers fought back being published here. Any personal interests 🙂

  • d k dhingra says:

    it is very painful to go through the process of litigation.
    who has been rewarded: the club Mahindra or the uppals
    by paying back money back @12% per annum and getting back the property which may be having market value escalation many times
    you build up resources at public cost give away peanuts and enjoy the every thing- capital appreciation, cheap resources and in case of litigation give away some peanuts and get legal rights thereafter
    India ia doing very well for these persons such as club mahindra

  • IsItPossible says:

    Glad to hear, someone stood the ground and tried to make a small (may be insignificant) change in the behavior in this “hopeless” state of affairs.
    Hopefully more and more folks will try to do the right thing and be aware/exercise their rights.
    Every drop counts…

  • Sanjeev B says:

    Thanks for publishing this – I’m sure many members are affected by this situation. This is just another version of a financing scheme with even less clarity one what an investor gets in return.

  • ajay jain says:

    thanks for publishing this. these things never get published in mainstream media so your initiative is highly welcome. the problem in India is that all the large groups create a holy picture of themselves through aggressive PR. Including tata’s, birlas and mahindras. but the reality is horrible. and press does not have the balls to publish anything against them. well done and please keep it up!

  • Krish says:

    These days every resort fellow in TN and Kerala are planning to implement similar business model. One can get a membership fee and does not have to book rooms for the members. What a great model of earning free money without giving any product or service. Wow, charging annual maintenance fee on top of it is quite mouthwatering and am tempted to start this business even without owning anything.

  • mintdesai says:

    I think it is fundamental sucidal to give money before service in India. Be it your plumber, club mahindra or anybody else. In few cases we don’t have a choice. e.g. railway tickets, flight tickets etc.
    However , my philosophy is that avoid paying in advance as much as possible(ideally never). I have learnt it the hard way in last year or two. I even ran into idiotic travel agents of vacation exotica. They took 50k advance for my travel. And they did not know which documents are required for Visa applicaitons.

  • Jai says:

    Why penalty from oct 2009? Club mahindra lawyers took care of the state commission well… IMO – The penalty should be from 2006 and at 18 % for this atrocity….

    • Prabu says:

      I know what you’re talking about. But the penalty awarded is from the date you have a solid evidence of cheating – I guess this is the date he tried to book a reservation as a non-member and succeeded. This is the reason you should try and get the evidence as soon as possible once you find out about cheating. Remember the opposition side also got better and more powerful lawyers.

  • Kapil says:

    We too faced the same problem repeatedly. Not only that, we’ve also caught them lying through their teeth on a commitment given by an executive and then vehemently denied by even a senior stating they had heard the call log. It was only post our persistence to have a copy of the call recording that they accepted their fault and apologised. Getting rooms via an agent when as members you do not get them is now an “Accepted” fact and frustrating to the core but as Mr. D.K. Dhingra said, who has the time for litigations and eventually who was actually rewarded?

  • Mahesh kamath says:

    Dear Friends Think Twice before becoming CLUB MAHINDRA MEMBERS
    I am a Club Mahindra Purple Season member ( the highest season as per them ). Paid a bomb to become a member, which I feel is hard earned money down the drain.
    Yesterday evening I was trying to book a room for two nights check in on 30/10/2014 & check out on 01/11/2014 at Club Mahindra Kumarakom resort. I wasn’t able to book the same as their website was showing no rooms available. To my surprise I found the same rooms being sold on make my trip at a hefty price.
    Today morning when I called Club Mahindra Call Centre asking them why my booking wasn’t processed when rooms are available at the resort. The lady coolly replies saying saarrr its a Time share property we do not give all rooms only to members, we also keep some for selling. This is never told when they are selling their membership packages.
    This means a member who has paid through his nose is denied a room and its available for anyone & everyone.If this is the case why does one need to spend lakhs for membership???? Just log on to any travel portal and book it whenever u want.
    I have attached two snapshots one of make my trip website showing availability & the other of club mahindra website where rooms are not available.
    Friends request you all to share this post, so that everyone is aware and can think twice before falling in