Money taken for a service that was never going to be delivered is about as straightforward a consumer case as exists. The difficulty is entirely on the recovery side, which is why the decision that matters most is taken before you file, when you decide whom to sue.
The characterisation
Section 2(42) covers service of any description made available to potential users, which takes in a gym, a club, a salon package or a coaching course. Taking an annual fee and then ceasing to provide the service is deficiency under Section 2(11). If the operator was collecting fresh annual memberships while he already knew he was closing, that is a separate and stronger allegation, because Section 2(47) catches a trade practice which adopts an unfair method or a deceptive practice for the purpose of promoting the supply of a service, and taking money for a service you have decided not to provide fits it. On those facts there may also be a criminal complaint for cheating under Section 318 of the Bharatiya Nyaya Sanhita, though that is a decision to take deliberately rather than a reflex.
Whom to name, which is the whole case
A complaint against a signboard is worth nothing. Find out what legal form the business took, because it decides who has to pay.
| How the business is constituted | Whom you name | Where you find out |
|---|---|---|
| Sole proprietorship | The proprietor by name, trading as the brand, and he is personally liable | The GST registration certificate, the shops and establishments registration, the receipt footer |
| Partnership firm | The firm and each partner, since partners are liable for the firm's acts | The registration with the Registrar of Firms, the GST record, the rent agreement |
| Private limited company | The company at its registered office, and directors only where you can plead their personal role in taking the money | The MCA master data against the CIN, which also gives you the registered office for service |
| Franchise outlet | The franchisee, and the franchisor too where the brand held itself out as the provider and took the booking | The receipt, the app or website through which you paid, the terms you accepted |
The CIN or GST number is usually printed on the receipt or the tax invoice, and it takes a few minutes to pull the registered office and directors from the public record. Do that before you draft, because an address that does not work means a notice that is never served, and a complaint that stalls at service is a complaint that goes nowhere.
Identify when the claim arose
Section 69(1) gives two years from the date on which the cause of action arose. People assume that means two years from payment, panic, and sometimes do not file at all. The cause of action may arise on closure or another actionable failure, depending on the facts. A later refusal or repeated correspondence does not automatically restart limitation. Record every relevant date and explain the legal starting point. The answer on limitation works through how the period is measured and what to do if you really are late.
The teeth in the Act
Sections 71 and 72 provide enforcement and non-compliance procedures, but they do not automatically make every director or owner personally responsible for a company's order. Identify the actual judgment debtor and the legal basis for any action against an individual.
What to file with the complaint
- The receipt or tax invoice for the fee, and the bank or card statement showing the payment
- The membership terms, including anything that says the fee is non refundable, so the commission sees it from you rather than from them
- Proof of the closure with a date: the notice on the door photographed with a timestamp, the message on the group, the app going dead
- Your written demand for a refund and every reply, including the ones promising to pay
- The arithmetic of the unused period, worked out month by month rather than claimed as a round figure
- The public record extract identifying the proprietor, partners or directors and the registered address for service
On the non refundable clause, do not be put off by it. A term that lets an operator keep an annual fee for a service it has stopped providing is a term imposing an unreasonable obligation which puts the consumer at a disadvantage, which is the language of Section 2(46). Keep the closure evidence and identify the contracting business accurately. A request to invalidate an unfair contract term also requires the correct jurisdiction under Sections 47 and 49.