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Better Safe Than Sorry

Better Safe Than Sorry

Is it a myth, reality or just lip service that the customer is king?

Remember the  video that recently went viral in which actor Rahul Bose is seen complaining about a five-star hotel, JW Marriott, Chandigarh. He was billed a whopping Rs 442/- towards ordering just two bananas, which were classified as “fruit platter”. Following Rahul Bose was Kartik Dhar, a Delhi-based photographer, who took to social media and tweeted about Mumbai’s Four Seasons Hotel charging him Rs 1700/- for two boiled eggs plus GST!  

While Chandigarh’s Excise and Taxation Department initiated an enquiry and fined JW Marriott for Rs 25,000/- in violation of GST Rules – illegal collection of tax on an exempted item – defending the hotel over the banana pricing issue, the Federation of Hotel & Restaurant Association of India has been quick to point out that the hotel did the right thing to charge GST on food and beverages served in the hotel premises because it offered service, quality, ambience and luxury and not just the commodity alone.

Not long ago, a consumer court in Chandigarh slapped a penalty of Rs 9000/- to Bata India Limited for charging Rs 3/- from Dinesh Raturi for a paper bag to carry his shoebox. Raturi contested that by charging him for the bag, Bata also endorsed its brand on the bag which was not justified. Ruling it was the responsibility of the Bata store to provide a free bag to every customer who purchased their product, the order establishes that even if the bag is environment-friendly, the retailer cannot charge an additional amount for the bag with their logo as it becomes part of their advertising.

Overcharging for items like carry bags, bananas and eggs is just the tip of an ice-berg.  Surely, each one of us, almost on a daily basis has an experience to remember as a customer, pleasant or otherwise. Many are at the receiving end of being charged more than the maximum retail price, duped over non-standard weights, cheated due to missing mandatory information on the label and use of altered weights. These are some of the ways in which many consumers get cheated daily.  But how many of us suffer silently even when there is a law to aid consumers?

In 1986, the Customer Protection Act was enacted to protect  the interests of consumers. However, over the years the number of cases pending at Consumer Courts seems to be on the increase. As on date, over 20,304 cases at national, 1,18,319 cases at state level and 3,23,163 cases at the district level are pending for disposal. The grim reality is that in 118 districts out of 596 districts the posts of president of consumer courts are yet to be appointed and as many 362 posts of members are lying vacant.

A new legislation, the Consumer Protection Act, 2019, notified this August 9 replacing the earlier law enacted nearly three decades ago, aims  to provide for protection of the interests of consumers. Among others, it will have a Central Consumer Protection Authority that would be empowered to make interventions to prevent consumer detriment arising out of unfair trade practices and initiate action to enforce recall, refund and return of products. Also a manufacturer or product service provider or product seller will now be responsible to compensate for injury or damage caused by defective product or deficiency in services. While first offence of misleading claims will cost the manufacturer or service provider Rs 20 lakh, subsequent offences will attract a penalty of Rs 50 lakh. A provision for penalising celebrities who endorse misleading claims, upon proving complicity, will cost them Rs 10 lakh at first instance and Rs 20 lakh subsequently. Besides, they may also be barred from endorsing products and services for up to three years. Besides e-filing of cases and mediation, the new Rules, which is expected to be in place within three months, has strict penalties, including jail term for adulteration and misleading advertisements by firms.

Many vulnerable consumers get carried away by clever advertisements which at times are misleading and unless one reads the fine print, carefully, the loss is ours. There are instances where the customer is rather helpless when coerced to one sided contractual terms.

Thanks to the Supreme Court’s intervention that recently ruled “one-sided and unfair agreement would not be binding”. It has come as a relief to lakhs of home-buyers who had no option but to sign on the dotted lines of agreement clauses framed by builders that they would pay higher rate of interest (18% per annum) in case of delay of 30 days to pay instalment and terminate the contract only after a period of 12 months over the grace period while the builders had the right to cancel allotment in case of default of payment. Further, the builder will be liable to pay interest as low as 9% for delay in handing over possession of flats to the buyers. The Apex Court struck down the contractual terms of the agreement which was ex-facie one-sided, unfair, and unreasonable. It noted that the incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2 (r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the Builder.

Finally, there’s caveat emptor – the principle that the buyer alone is responsible for checking the quality and suitability of goods before a purchase is made – or buyer, beware. It would be worthwhile, as consumers, we are clear about the terms and conditions of any purchase. We must surely and necessarily ask for its price before ordering.

This equally applies to e-shopping smart phone applications, where in many cases the wallet is required to be topped up with money in advance but when it comes to seeking clarifications there is no working phone number.  Impressive advertisements may at times be misleading. Better safe than sorry.

  (Published on 19th August 2019, Volume XXXI, Issue 34)