Consumer Commissions Hold Sun Pharma and SBI Liable for Unfair Practices and Service Deficiencies

New Delhi/Chandigarh – In a significant affirmation of consumer rights, separate consumer disputes redressal commissions have delivered robust rulings against two of India's corporate giants, Sun Pharmaceutical Industries Ltd. and the State Bank of India (SBI). The decisions underscore the judiciary's commitment to holding corporations accountable for unfair trade practices and deficiencies in service, reinforcing the protective mechanisms enshrined in consumer protection law.

The Delhi State Consumer Disputes Redressal Commission upheld an order against Sun Pharma for its failure to declare the results of a promotional contest, labeling it an "unfair trade practice." Concurrently, the District Consumer Disputes Redressal Commission in Chandigarh held SBI liable for "deficiency in service" for its failure to address and reverse unauthorized UPI transactions from a customer's account, citing a clear breach of Reserve Bank of India (RBI) guidelines.

These cases, though factually distinct, highlight a common theme: the critical importance of transparency, procedural fairness, and adherence to regulatory mandates in corporate dealings with consumers.

---

Sun Pharma Penalized for "Unfair Trade Practice" Over Opaque Revital Contest

The Delhi State Commission, led by President Sangita Dhingra Sehgal and Member Bimla Kumari, has dismissed an appeal filed by Sun Pharmaceutical Industries Ltd., thereby confirming a District Commission order that found the company guilty of indulging in an unfair trade practice. The case, Sun Pharmaceutical Industries Ltd. vs Zamiruddin & Anr. , revolved around a "Gold silver coin scheme" linked to its popular Revital brand.

Background of the Dispute

The complainant was enticed by an advertisement for a scheme where purchasing a packet of Revital capsules offered a chance to win a 25-gram gold or silver coin. The process involved sending a unique code found inside the box via SMS. After purchasing the product for ₹100 and sending the code, the complainant was assured he would win a coin. However, he never received any prize or information about the contest's outcome. When he inquired with the medical store, he was informed he had not won, prompting him to file a complaint against both the retailer (Nidhi Medicose) and Sun Pharma, alleging he was cheated.

In the initial proceedings, the medical store was absolved of liability, with the District Commission accepting its argument that its role was limited to selling the product. Sun Pharma, however, failed to appear before the District Commission despite being served a notice and was proceeded against ex-parte.

Findings and Rulings

The District Commission astutely noted that while the complainant could not definitively prove he was a winner, the core issue was the company's conduct. It found that Sun Pharma had launched the scheme without transparently disclosing that the prize was subject to a draw and, critically, without ever publishing the final results. This failure to declare the winners was deemed an unfair trade practice under the Consumer Protection Act, 2019. The Commission observed that this opacity caused the complainant prolonged mental agony and suffering, keeping him in a state of hopeful uncertainty for years. Consequently, Sun Pharma was directed to pay ₹40,000 in compensation and ₹5,000 for litigation costs.

Challenging this order, Sun Pharma appealed to the State Commission, arguing that the initial notice was served to an incorrect address. The company further contended that the scheme was not for sales promotion but a gesture to reward customers on Revital H's 25th anniversary and that prizes were distributed fairly.

The State Commission, however, was unpersuaded. It affirmed the lower commission's reasoning, stating, "...the District Commission had rightly noted that Sun Pharmaceutical Industries Ltd. failed to disclose or publish the results of the scheme, which kept the complainant waiting for years and caused him mental agony and suffering."

Crucially, the Commission highlighted that Sun Pharma had failed to produce any evidence, either at the district level or during the appeal, to substantiate its claims. There was no proof that the contest results were ever announced or that any winners were declared. This complete lack of transparency, the Commission concluded, squarely fell within the definition of an unfair trade practice under Section 2(47) of the Consumer Protection Act, 2019. The appeal was dismissed, and the compensation order was upheld.

---

SBI Found Deficient in Service for Failing to Protect Customer from UPI Fraud

In a parallel development reinforcing corporate accountability, the District Consumer Disputes Redressal Commission, Chandigarh, has held the State Bank of India liable for deficiency in service. The bank was penalized for its failure to act upon a customer's complaint regarding a series of unauthorized UPI transactions that drained nearly ₹1 lakh from his account.

The Complainant's Ordeal

The case, Sanjeev Kumar Sharma Vs. SBI and Others , involved a customer who received alerts for five unauthorized UPI transactions totaling ₹99,940 on July 21, 2021. The complainant acted swiftly, immediately blocking his account and reporting the fraud to the Cyber Crime Investigation Cell and SBI on the same day. Despite initial assurances from the bank that the matter was being processed, no refund was ever issued, even after repeated follow-ups and a complaint to the RBI.

The complainant argued that the transactions occurred without any negligence on his part, as he had not shared his PIN or any sensitive information. He contended that SBI had a duty to protect his funds and adhere to RBI's zero-liability guidelines for customers in cases of unauthorized electronic transactions.

SBI, in its defense, claimed the transactions were authenticated using the customer's secret UPI PIN and linked mobile number. The bank posited that the complainant must have either executed the transactions himself or compromised his PIN, thereby absolving the bank of any responsibility.

Commission's Verdict and Legal Rationale

The Chandigarh Commission, presided over by Amrinder Singh Sidhu and Member B.M. Sharma, sided firmly with the consumer. A pivotal point in the Commission's observation was that the burden of proof lay with the bank. Citing the RBI Circular on Customer Protection and Limiting Liability in Unauthorized Electronic Banking Transactions , the Commission noted that once a customer reports fraud within the stipulated time, it is the bank's responsibility to prove customer liability or negligence.

The Commission found that "SBI, however, failed to produce any evidence to show that the complainant had shared his UPI PIN or had authorized the disputed transactions." Furthermore, SBI had violated the mandatory RBI directive requiring banks to credit the disputed amount back to the customer's account within ten working days of being notified of the fraud.

By failing to reverse the unauthorized debits, failing to conduct a proper investigation, and failing to adhere to RBI's guidelines, SBI was found to have committed a clear "deficiency in service." The Commission partly allowed the complaint and directed SBI to: 1. Refund the full amount of ₹99,940 with 9% annual interest from the date of the fraud. 2. Pay ₹10,000 as compensation for mental harassment and litigation costs.

Broader Implications for Corporate Governance and Legal Practice

These two rulings, issued from different commissions against leaders in their respective sectors, send a unified and powerful message. For corporations, they serve as a stark reminder that promotional activities and digital services must be managed with utmost transparency and accountability. The "fine print" or opaque operational procedures will not shield them from liability when consumer rights are infringed.

For legal practitioners specializing in consumer law, these decisions reaffirm established principles and highlight litigation strategies. In the Sun Pharma case, the focus on the process of the contest (or lack thereof) rather than the outcome was key. It demonstrates that causing mental agony through procedural ambiguity is a compensable grievance. In the SBI case, the ruling reinforces the critical importance of the RBI's circular on customer liability, firmly placing the onus on banks to disprove customer negligence in fraud cases—a vital tool for consumer advocates.

Ultimately, these judgments fortify the role of consumer commissions as accessible and effective forums for justice, empowering individuals to challenge corporate negligence and unfair practices, thereby fostering a more equitable and transparent marketplace.