Key findings

• The complainant was not provided any opportunity to hear before the club concerned, and his senior citizen benefits were withdrawn “unilaterally”.
• The withdrawal of membership benefits without issuing any individual notice, seeking consent, or granting an opportunity to represent his case adversely affected the rights of the complainant and violated settled principles of natural justice.
• Since the club concerned is a registered company, the principle of audi alteram partem (hear the other side) applies to its actions.
• The club concerned adopted a mechanical and arbitrary approach by justifying its action solely based on internal resolutions passed by its executive committee and terming the decision a policy matter.
• A policy decision, to be legally sustainable, must be “fair, reasonable and supported by cogent material”, which is conspicuously absent in the present case.
• Merely describing an action as a “policy decision” does not place it beyond the scope of judicial scrutiny.
• Public-facing policies of service-providing bodies must satisfy the test of fairness, non-arbitrariness and reasonableness.
• The district commission was in error for holding that the complainant should have sought a remedy under the Societies Act.
• The public policies must operate in the interest of consumers and not against them, particularly when they affect a “vulnerable class” such as “senior citizens”.
• The “arbitrary withdrawal” of benefits without justification or due process cannot be sustained.
• Club to pay Rs 25,000 as compensation to the complainant for causing him “mental agony and physical harassment”, as well as for deficiency in service, including litigation expenses.

• The grievance raised by the complainant pertains to a deficiency in service and unfair trade practice, arising out of unilateral alteration of terms affecting the services provided to him as a “consumer”, which squarely falls within the jurisdiction of the consumer commission.

‘Natural justice, audi altrem partem’

• The principles of natural justice constitute the backbone of the Indian legal system and form an integral part of fair adjudication. Any order passed in violation of the principles of natural justice is inherently flawed and cannot be sustained in the eyes of the law.
• It is a settled proposition that every person, against whom an adverse decision is proposed to be taken, has an “indefeasible right” to a “fair and reasonable opportunity” of being heard.
• Denial of such an opportunity not only vitiates the decision-making process but also renders the resultant order arbitrary, unjust and legally unsustainable.
• Observance of the rule of “audi alteram partem” is not a mere formality but a substantive safeguard against the arbitrary exercise of power, and its breach strikes at the very root of the validity of the authority’s action.

Background

• Gupta enrolled himself as a regular member of the club concerned in 1999 after paying the prescribed entrance fee and was conferred voting rights in the club’s annual general meetings upon payment of monthly subscription charges.
• After turning 60, his membership was converted into a senior citizen membership, which exempted him from payment of monthly subscription charges in exchange for non-voting status.
• However, in April 2024, the club issued a circular withdrawing the earlier exemption granted to senior citizens between 60 and 80 years, restricting the benefit only to members above 80 years.
• The circular further stated that all existing senior citizen members would be required to pay 50 per cent of the monthly subscription charges, with an option to convert to permanent voting membership.
• The complainant received bills and arrears of monthly charges of the club and alleged that the withdrawal of facilities and enhancement of subscription charges were arbitrary and amounted to a deficiency in service and unfair trade practice.
• The district commission dismissed the complaint, holding that decisions relating to membership, fee structure, or internal club policy did not constitute consumer disputes unless a clear deficiency in service was established.