Overcharging is common, particularly at cinemas, airport lounges and other places where traders have captive consumers, who have to take it or leave it.
In one such case, Delhi's D K Chopra filed a case against Snack Bar, run by Saptagiri Restaurant, at Chennai airport's Kamaraj Domestic Terminal. Snack Bar is a stall that sells food items; it doesn't have any sitting accommodation. When Chopra purchased two cans of energy drink Red Bull, he was charged Rs 300 (Rs 150 a can). The printed maximum retail price (MRP) was only Rs 75. He bought a third can for Rs 140.
On returning to Delhi, he had a legal notice issued to Snack Bar but there was no response. In his complaint before the Chennai District Forum, Chopra claimed Rs 2 lakh as compensation for harassment and mental agony and Rs 11,000 as legal expenses.
Snack Bar did not respond and the district forum dismissed the complaint. Chopra's appeal before the Tamil Nadu State Commission, too, was dismissed. The commission said Chopra had failed to prove the MRP on the bottle, adding the bills produced by him weren't signed.
Finally, Chopra approached the National Consumer Disputes Redressal Commission. To prove the MRP, he produced a can of the drink. The shop claimed the deputy general manager (commercial), Airports Authority of India (AAI), Chennai International Airport, had approved the amount charged for the drink. The commission observed this was the shop's own letter listing the prices; it didn't bear any approval of AAI. It added even if it was assumed AAI had given its approval, it would be illegal.
The commission distinguished between restaurants and shops/stalls. Restaurants could charge more than the MRP, as they rendered service but a stall or shop was bound to sell at the MRP, it said.
To protect consumers, the law provides for the MRP to be declared on the package, which includes the trader's profit. Therefore, a consumer cannot be charged more than the MRP. The commission, therefore, held Snack Bar guilty of double charging and earning through unfair trade practices. It also said AAI appeared to be colluding with traders by letting them overcharge consumers so that the authorities could charge a higher licence fee, which would otherwise be unaffordable.
The commission directed Snack Bar to pay a compensation of Rs 10,000. It noted Snack Bar had exploited the public for unjustifiably enriching itself and so, the money collected should go back to the public. As such, Snack Bar was further ordered to pay Rs 50 lakh to the Consumer Welfare Fund.
Earlier, in another case, the Maharashtra State Commission had held Kamat Hotels and Dhariwal Industries guilty of overcharging. The case was filed by Prahlad Padalikar, who had purchased a one-litre bottle of Oxyrich water, labelled 'specially packed for Kamat Hotels', with an MRP of Rs 25. In the market, the same bottle had an MRP of Rs 15. The differential pricing resulted in the consumer being overcharged. The Raigad District Forum ruled in favour of the consumer. Both Kamat Hotels and Dhariwal Industries appealed against the order.
The state commission noted there was no difference in terms of the quality, purity, quantity, etc, between the packed drinking water sold at Kamat Hotels and at other places; the only difference was it was packed specially for Kamat Hotels. Thus, there was no qualitative or quantitative difference which would justify the differential pricing. The labelling of the price was merely according to an agreement between the hotel and the manufacturer. The commission said overcharging in this manner was unconscionable. Though there was no offence under the Packaged Commodities Rules, discriminatory pricing to exploit consumers was an unfair trade practice.
In one such case, Delhi's D K Chopra filed a case against Snack Bar, run by Saptagiri Restaurant, at Chennai airport's Kamaraj Domestic Terminal. Snack Bar is a stall that sells food items; it doesn't have any sitting accommodation. When Chopra purchased two cans of energy drink Red Bull, he was charged Rs 300 (Rs 150 a can). The printed maximum retail price (MRP) was only Rs 75. He bought a third can for Rs 140.
On returning to Delhi, he had a legal notice issued to Snack Bar but there was no response. In his complaint before the Chennai District Forum, Chopra claimed Rs 2 lakh as compensation for harassment and mental agony and Rs 11,000 as legal expenses.
Snack Bar did not respond and the district forum dismissed the complaint. Chopra's appeal before the Tamil Nadu State Commission, too, was dismissed. The commission said Chopra had failed to prove the MRP on the bottle, adding the bills produced by him weren't signed.
Finally, Chopra approached the National Consumer Disputes Redressal Commission. To prove the MRP, he produced a can of the drink. The shop claimed the deputy general manager (commercial), Airports Authority of India (AAI), Chennai International Airport, had approved the amount charged for the drink. The commission observed this was the shop's own letter listing the prices; it didn't bear any approval of AAI. It added even if it was assumed AAI had given its approval, it would be illegal.
The commission distinguished between restaurants and shops/stalls. Restaurants could charge more than the MRP, as they rendered service but a stall or shop was bound to sell at the MRP, it said.
To protect consumers, the law provides for the MRP to be declared on the package, which includes the trader's profit. Therefore, a consumer cannot be charged more than the MRP. The commission, therefore, held Snack Bar guilty of double charging and earning through unfair trade practices. It also said AAI appeared to be colluding with traders by letting them overcharge consumers so that the authorities could charge a higher licence fee, which would otherwise be unaffordable.
The commission directed Snack Bar to pay a compensation of Rs 10,000. It noted Snack Bar had exploited the public for unjustifiably enriching itself and so, the money collected should go back to the public. As such, Snack Bar was further ordered to pay Rs 50 lakh to the Consumer Welfare Fund.
Earlier, in another case, the Maharashtra State Commission had held Kamat Hotels and Dhariwal Industries guilty of overcharging. The case was filed by Prahlad Padalikar, who had purchased a one-litre bottle of Oxyrich water, labelled 'specially packed for Kamat Hotels', with an MRP of Rs 25. In the market, the same bottle had an MRP of Rs 15. The differential pricing resulted in the consumer being overcharged. The Raigad District Forum ruled in favour of the consumer. Both Kamat Hotels and Dhariwal Industries appealed against the order.
The state commission noted there was no difference in terms of the quality, purity, quantity, etc, between the packed drinking water sold at Kamat Hotels and at other places; the only difference was it was packed specially for Kamat Hotels. Thus, there was no qualitative or quantitative difference which would justify the differential pricing. The labelling of the price was merely according to an agreement between the hotel and the manufacturer. The commission said overcharging in this manner was unconscionable. Though there was no offence under the Packaged Commodities Rules, discriminatory pricing to exploit consumers was an unfair trade practice.
The author is a consumer activist