Back
DELHI STATE CONSUMER DISPUTES REDRESSAL COMMISSION
J.D. Kapoor, President and Rumnita Mittal, Member
SOCIETY OF CATALYSTS - Appellant
Versus
VODAPHONE ESSAR MOBILE SERVICES LIMITED - Respondent
Complaint Case No. C-153 of 2007
Decided on : 16-05-2008
Mr. Omesh Saigal, Representative with Mr. Yatindra Vidyarthi, Advocate, for the Appellant; Mr. Navin Chawla, Advocate, for the Respondent
Headnote:
UNFAIR TRADE PRACTICE - TELECOM SERVICE PROVIDER - CONTEST/LOTTERY - SCHEME TO PROMOTE BUSINESS INTERESTS - CONSUMER PROTECTION ACT, 1986 - SECTION 2(1)(R)(3)(A) AND (B) - HELD, SCHEME LAUNCHED BY OP WAS UNFAIR TRADE PRACTICE AS IT WAS INTENDED TO PROMOTE BUSINESS INTERESTS DIRECTLY AS WELL AS INDIRECTLY BY ADOPTING UNFAIR AND DECEPTIVE METHOD.
Fact of the Case:
OP, A TELECOM COMPANY, LAUNCHED A SCHEME OFFERING PRIZES TO SUBSCRIBERS WHO MADE CALLS FOR MORE THAN 20 MINUTES A DAY. THE COMPLAINANT-SOCIETY ALLEGED THAT THE SCHEME WAS AN UNFAIR TRADE PRACTICE AS IT WAS INTENDED TO PROMOTE THE OP'S BUSINESS INTERESTS AND NOT FOR THE BENEFIT OF CONSUMERS.
Finding of the Court:
THE COURT HELD THAT THE SCHEME LAUNCHED BY OP WAS AN UNFAIR TRADE PRACTICE AS IT WAS INTENDED TO PROMOTE BUSINESS INTERESTS DIRECTLY AS WELL AS INDIRECTLY BY ADOPTING UNFAIR AND DECEPTIVE METHOD. THE COURT OBSERVED THAT THE SCHEME WAS NOT IN THE INTEREST OF SUBSCRIBERS AS A WHOLE AS ONLY A MINISCULE PORTION OF THE PARTICIPANTS WERE GIVEN PRIZES WHEREAS LACS AND CRORES WERE TEMPTED OR ALLURED TO MAKE UNNECESSARY CALLS EVERYDAY TO BECOME ELIGIBLE TO PARTICIPATE IN THE LOTTERY OR CONTEST.
Issues: WHETHER THE SCHEME LAUNCHED BY OP WAS AN UNFAIR TRADE PRACTICE.
Ratio Decidendi: THE COURT RELIED ON THE DEFINITION OF UNFAIR TRADE PRACTICE UNDER SECTION 2(1)(R)(3)(A) AND (B) OF THE CONSUMER PROTECTION ACT, 1986, WHICH INCLUDES THE OFFERING OF GIFTS, PRIZES OR OTHER ITEMS WITH THE INTENTION OF NOT PROVIDING THEM AS OFFERED OR CREATING THE IMPRESSION THAT SOMETHING IS BEING GIVEN OR OFFERED FREE OF CHARGE WHEN IT IS FULLY OR PARTLY COVERED BY THE AMOUNT CHARGED IN THE TRANSACTION AS A WHOLE, AND THE CONDUCT OF ANY CONTEST, LOTTERY, GAME OF CHANCE OR SKILL, FOR THE PURPOSE OF PROMOTING, DIRECTLY OR INDIRECTLY, THE SALE, USE OR SUPPLY OF ANY PRODUCT OR ANY BUSINESS INTEREST.
Final Decision: THE COURT IMPOSED PUNITIVE DAMAGES OF RS. 50 LACS ON THE OP, OUT OF WHICH RS. 1 LAC WAS TO BE PAID TO THE COMPLAINANT-SOCIETY AS COMPENSATION AND COST, AND THE BALANCE WAS TO BE DEPOSITED IN FAVOUR OF THE "STATE CONSUMER WELFARE FUND (LEGAL AID)". THE OP AND ALL OTHER CELLULAR OPERATORS WERE ALSO DIRECTED TO DISCONTINUE SUCH A PRACTICE FORTHWITH AND NOT TO REPEAT IT.
ORDER
J.D. Kapoor, President (Oral)- This case demonstrates corporate greed.
2. Vodaphone Essar Mobile Services Limited arraigned as opposite party (in short OP ) is a telecom company providing cellular connections to the consumers residing in different parts of India, including Delhi. In its cellular service, apart from voice, it has various value added services which include SMS (Short message service). It charges for all these services either on the basis of per call/per SMS or on the basis of various schemes. It also provides interconnectivity to cellular users of other telecom service providers. This is also a commercial company with shares being regularly quoted on the stock exchange. There are about 200 lacs Hutch users in the country.
3. OP which is even otherwise having very roaring business indulged in highly unethical, unfair and deceptive trade practice to promote its business interests directly as well as indirectly by launching a scheme or contest through which it has garnered crores of rupees by offering prizes of few lacs in the form of gold coins and only one bumper prize of Maruti SX4. Condition to participate in the scheme was that only those subscribers shall be eligible whose talk-time on their cellphone is for more than 20 minutes in a day.
4. To become eligible people resorted to making unnecessary calls and data shows that every day large number of subscribers had gone out of the lower category and there was increase in even 23 minutes and above category.
5. According to OP, object or purpose of launching such a Scheme or a contest or lottery was three-fold. Firstly the scheme was for the benefit of its high-end users and secondly it also benefited the subscribers as a whole and thirdly to pay for their loyalty and usage and none of these purposes promotes the business interest, directly or indirectly.
6. Can by any stretch of imagination such a scheme or contest or a lottery be deemed for the benefit of high-end users or paying for their loyalty and in the general interest of subscribers as a whole Certainly not. It smacks of deceptive and unfair method of promoting business interests both directly and indirectly. Had it been for the benefit of high end users then every subscriber who had in the past called for more than 20 minutes a day or more would have been given prizes or gifts. If it was for general benefit of all the subscribers it should have been opened to all and not restricted to those who have talk time of more than 20 minutes a day. It was by way of draw of lots that very few and miniscule of subscribers were given prizes whereas lacs and crores were allured to make unnecessary calls to become eligible to participate in the scheme.
7. Thus it is beyond comprehension as to how such contest or scheme was either for the benefit of the subscribers as a whole or for the benefit of high-end users.
8. Scheme floated by OP was as under:
* "Baaton se banaiye sona, bees minute mein.
* Har din jeetiye dus sone ke sikke.
* Bumper inaam ek Maruti SX4.
* Bhaag lene ke liye din mein apne hutch phone se karein bees minutes se adhik call.
* Offer pre-paid aur post-paid par uplabdh."
When translated into English it reads as under:
* Earn gold through talk time of 20 minutes.
* Win 10 gold coins every day
* Bumper prize one Maruti SX4
* To participate make calls for more than twenty minutes a day on your hutch phone.
* Offer is available both on pre-paid and post-paid.
9. Allegations of complainant-Society are a report was published in issue of 15.7.2007 of Hindustan Times that the Average Revenue Per User (ARPU) is going down, so every company is focussed on value added services (VAS), estimated to be worth Rs. 4,950 crore in March 2007 and is set to grow by 65% and generate business worth Rs. 8,200 crore by the end of this financial year, according to estimates made by the Assocham. In order to generate profit, OP announced a contest/lottery in July 2007 to its users and promised rewards of gold coins and a Maruti ZX4 car t
