National Consumer Disputes Redressal
Britannia Industries Ltd. vs State Of West Bengal on 9 September, 2015
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 2001 OF 2011 (Against the Order dated 04/03/2011 in Appeal No. 405/2010 of the State Commission West Bengal) 1. BRITANNIA INDUSTRIES LTD. 5/1A HUNGER FORD STREET, P.STREET KOLKATA WEST BENGAL ...........Petitioner(s) Versus 1. STATE OF WEST BENGAL 8-B NELIE SEN GUIPTA SARANI, 6TH FLOOR KOLKATA WEST BENGAL ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE V.K. JAIN, PRESIDING MEMBER HON'BLE DR. B.C. GUPTA, MEMBER For the Petitioner : Mr. Siddharth Bawa, Advocate Mr. Shyamal Anand, Advocate For the Respondent : Mr. Anip Sachthey, Advocate Mr. Saakaar Sardana, Advocate Dated : 09 Sep 2015 ORDER HON'BLE MR. JUSTICE V.K.JAIN, PRESIDING MEMBER
1. The petitioner company advertised a Scheme captioned "50-50 Jodi Banao Offer" whereunder a person buying a pack of 50-50 Biscuit, 50-50 Maska Chaska or 50-50 Pepper Chakkar, all manufactured by the petitioner company, was to match the half picture found inside the pack with the other half of the said picture, which could be found only in some other pack of any of the above referred three products. If a person was able to match the two halfs of the same picture, he was entitled to participate in a draw of lot in which several prizes such as laptops, watches and mobile phones were included. For instance, the first half of Eiffel Tower could be matched only by the picture of the second half of Eiffel Tower, to participate in the lucky draw for a trip to Paris, the first and second half of the laptop were to be matched for participating in the lucky draw for winning a laptop, the first and second half of the mobile phone were to be matched for participating in the lucky draw to win a mobile phone, the second half of the wrist watch was to be matched with its first half to participate in a lucky draw for winning a wrist watch and two halfs of the sunglasses were to be matched to participate in the lucky draw for winning sunglasses. The wrappers of the products were required to be submitted to the petitioner company alongwith the matching pictures. Though the offer closed on 15.04.2007, the date of closure of the offer was not indicated on the pack of the products sold by the petitioner company.
2. Based upon the information contained in a letter dated 10.04.2007 written to it by one Sh. Atanu Koomer, Government of West Bengal filed a complaint U/s 12(1)(d) of the Consumer Protection Act, before the District Forum. It was alleged in the complaint that the petitioner company had tried to keep the consumer unaware of the details of the terms and conditions of the offer by depicting a deceptive trade practice. It was further stated that the promotional packets of the product of the petitioner company were available in the market even after the offer had closed. It was further alleged that the petitioner company had conducted a game of chance for the purpose of promoting the sale of its products. It was also claimed that interests of numerous consumers who were not conveniently identifiable had been adversely affected and the same were required to be protected. The complainant State Government sought punitive damages quantified at Rs. 20 lacs from the petitioner company alongwith directions to produce their accounts and not to repeat such unfair trade practice in future.
3. The complaint was resisted by the petitioner company inter-alia on the ground that :
(i) The promotional Scheme was for the benefit of the consumers and all the terms and conditions were publicized and placed on the website of the company and
(ii) There was complete transparency on the part of the petitioner company which had also written "conditions apply" on the wrapper of the product.
It was also stated that the company could not have possibly printed all the terms and conditions on the wrapper itself. It was further stated that the terms and conditions attached to the promotional Scheme were available with the dealer of the company who would have shown the same to the consumer, if so required by him.
4. The District Forum, vide its order dated 15.06.2010, directed the petitioner company to deposit compensation quantified at Rs. 15 lacs in the State Consumer Welfare Fund of the Government of West Bengal. The petitioner company was also directed to pay Rs. 10,000/- as the cost of litigation. It was also directed that if the petitioner company was to float any kind of offer or gift on the purchase of any particular commodity or article in future, the words "conditions apply" must be written in bold conspicuous letters in a legible manner.
Being aggrieved from the order passed by the District Forum, the petitioner company approached the concerned State Commission by way of an appeal. The said appeal, having been dismissed vide order dated 04.03.2011, the petitioner is before us by way of this revision petition.
5. Section 2(r) of the Consumer Protection Act, which defines unfair trade practice, to the extent it is relevant, reads as under:-
"unfair trade practice" means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice including any of the following practices, namely:-
(b) 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;
The use of the word "including" clearly shows that the unfair methods and unfair or deceptive practices enumerated in the Act are inclusive and not exhaustive. Thus, there can be unfair trade practices other than those specifically enumerated in the Act.
6. It is evident from a careful analysis of the Scheme floated by the petitioner company that a person had necessarily to buy multiple packs of the products sold by the petitioner company in order to match the two halfs of the picture, be it the picture of the Eiffel Tower, laptop, mobile phone, wrist watch or sunglass. For instance, if a consumer found first of Eiffel Tower in a pack of 50-50 Biscuit, Maska-Chaska or Pepper Chakkar, it was not necessary that the second half of the Eiffel Tower will be found in the next pack purchased by him. The second pack might as well contain either the first or the second half of the laptop, mobile phone, wrist watch or sunglass, which would not serve his purpose, since he is looking for the second half of the Eiffel Tower. Even if he finds one half of Eiffel Tower in the second pack purchased by him, that may not necessarily be the picture of the second half and can turn out to be the picture of the first half. Since the desired purpose of the consumer will not be achieved, he will be tempted to buy more and more packets till he gets the second half of the Eiffel Tower. In the process, he will end up buying many more packs, without actually needing them. It is also not known how many pictures of the first half and how many pictures of the second half of the Eiffel Tower, laptop, mobile phone, wrist watch or sunglass were inserted by the petitioner company in the promotional packs sold by it. It is also quite possible that a consumer who got either the first or second half of the Eiffel Tower in the first pack purchased by him, will not be able to get the half picture he is looking for even on making multiple purchases of the promotional packs sold by the petitioner company. The same could be the position of the consumer who gets first half of the laptop, mobile phone, wrist watch or sunglass. Since he will find first half of the Eiffel Tower, laptop, mobile phone, wrist watch or sunglass in the very first pack purchased by him, he may be tempted to keep on purchasing additional packs of the products sold under the promotional Scheme till the time he was able to get the second half picture he is looking for. The frustration of the consumer can only be imagined if despite making multiple purchases, he is not able to find the half he is looking for. However, the petitioner company would certainly be benefitted on account of such multiple purchases made by the consumer. It has to be kept in mind that such multiple purchases are made not with a view to buy the product, but only with a view to find the second half which the consumer in possession of first half of the picture is looking for. Such a practice, in our opinion would be an unfair trade practice since it entices the consumer to make multiple purchases of the product, which he is otherwise not seeking to buy but ends up buying only in his quest for the second half of the picture he is looking for. There is a lot of chance element in such a practice since the consumer may find the second half he is looking for in the next very pack purchased by him, or he may get it in the hundredth pack purchased by him. It is also quite possible that he may not get the desired half even in hundred packs purchased by him.
7. The case of the petitioner company is that since they had printed the words "conditions apply" on the wrapper of the product, the consumer could ask the dealer to show to him the conditions which were applicable to the offer and therefore, there was no concealment as such from the consumer. We however, are not impressed with the contention. The words "conditions apply" are written in such tiny letters that no one is likely to even notice them unless he is expressly told that the wrapper contains the aforesaid words. The practice of writing the words "conditions apply" in such tiny letters was not approved by this Commission in revision petition no. 831 of 2001, M.R. Ramesh Vs. Prakash Moped House & Ors., decided on 02.05.2003. Moreover, there was nothing on the wrapper to indicate that the conditions applicable to the Scheme were available with the dealer of the product. Therefore, even if one was to notice the words "conditions apply" he would not be in a position to know what precisely those conditions were and where they could be perused.
8. It is petitioner company's own case that not all the persons who were able to find out both the halfs of the Eiffel Tower, laptop, mobile phone, wrist watch or sunglass, were given the prize they were looking for. For instance, the petitioner company gave only one prize for travelling to Paris, though, 468 persons were able to lay their hands on both the parts of the Eiffel Tower. Only ten persons were given laptops, though, 1009 persons were able to match both the parts of the laptop. The conduct of a draw of lots to select the winners of the aforesaid prizes amounts to conducting lottery which is defined as an unfair trade practice in section 2(r)(3)(b) of the Consumer Protection Act, as it was done for promoting the sale of the products of the petitioner company. The lottery involves the drawing of lots for a prize. It is defined in Oxford Advanced Learners' Dictionary (New 8TH Edition). Therefore, holding a draw of lots to identify the lucky winners was nothing but conducting a lottery.
Still more importantly, most of the consumers purchasing products such as 50-50, Maska-Chaska and Pepper Chakkar, who come mostly from the lower strata of the society, are not expected to be well-versed in English and therefore, would be unable to understand the meaning of the words "conditions apply". Even those who are English literate will not be able to comprehend the import of the aforesaid words and therefore, will not take the trouble of asking the company or its dealers as to what were the conditions attached to the Scheme. A lay consumer, on being enticed from the publicity given to the Scheme in print and electronic media as well as on the wrappers of the product, would presume that if he is able to lay his hands on both the halfs of the picture, he will be entitled to the prize from the petitioner company and that is why he would keep on purchasing one pack after the other, till he is able to find both the parts of the product or he gives up under sheer frustration. The petitioner company, by not disclosing all the terms and conditions of the Scheme including that the prize was not guaranteed even on matching the two halfs of the picture, and the prizes would be given to a limited number of persons to be selected by way of a draw, indulged into an unfair trade practice. It is quite probable that had a full disclosure been made, at least some consumers would not have pursued this game of chance.
9. Admittedly, the Scheme floated by the petitioner company lapsed on 15.04.2007. However, there was no indication on the wrappers of 50-50 Biscuit, Maska-Chaska and Pepper Chakkar that the Scheme was open only till that date. Consequently, a large number of consumers would have kept on purchasing these packs even after 15.04.2007 under a belief that the Scheme was still open and therefore, they could win prizes such as trip to Paris, laptop, mobile phones, wrist watch, sunglass etc. if they were able to complete the picture of the prize they were looking for. In our view, it was a deliberate omission since the petitioner company wanted the consumers to keep on buying multiple packs of its products without the consumers knowing that the Scheme had closed. Had the petitioner company printed the date of closure of the Scheme on the wrapper, the consumer particularly, well informed consumers would not have purchased multiple packs of the products after the Scheme had closed. This was yet another unfair trade fair practice adopted by the petitioner company.
10. The following essentials of an unfair trade practice as defined in MRTP Act, 1969 were declared by the Hon'ble Supreme Court in Ludhiana Improvement Trust Vs. Shakti Coop. House Building Society Ltd. 4 (2009) 12 SCC 369:
19. The basic ingredients of 'unfair trade practice' are:
(i) it must be a trade practice;
(ii) the trade practice must be employed for the purpose of promoting the sale, use or supply of any goods or for the provision of any service; and
(iii) the trade practice adopts any unfair method or unfair or deceptive practice including any of the practices enumerated in sub-clauses (1) to (6) of Section 2(1)(r) of the Act.
In Colgate Palmolive (India) Ltd. Vs. MRTP Commission 5 (2003) 1 SCC 129, the following additional requirements were laid down:
(3) The trade practice should fall within the ambit of one or more of the categories enumerated in clauses (1) to (5) of Section 36-A. (4) The trade practice should cause loss or injury to the consumers of goods or services.
(5) The trade practice under clause (1) should involve making a 'statement' whether orally or in writing or by visible representation.
11. In terms of Section 2(r) of the Consumer Protection Act, deceptive practice adopted for the purpose of promoting the sale of goods, amounts to an unfair trade practice. The petitioner, adopted a deceptive practice, for the purpose of selling more packs of 50-50 Biscuits, Masala Chaska and Pepper Chakkar, by not disclosing a material condition attached to the 50-50 Jodi Banao Offer, that even if the consumer was able to match the picture of the product to be given as prize, he will not be entitled to the prize, but will only get a chance to participate in a draw of lots, to select the winner(s) of the prize. It is also indulged into a deceptive practice for achieving higher sales of its above referred products, even after 15/04/2007, by not printing the date of closure of the offer, on the wrappers of the product. The petitioner therefore is clearly guilty of indulging in unfair trade practices, for promoting the sale of its products.
12. For the reasons stated hereinabove, we have no hesitation in holding that the petitioner company indulged into unfair trade practice by (1) alluring the consumers to purchase multiple packs of its product by inducing them to believe that the second half of the picture might be available in the subsequent pack purchased by them, (2) by not disclosing the terms and conditions attached to the Scheme to the consumers, (3) by holding a draw for selecting the winner of the prizes and (4) by not printing the date of closure of the Scheme on the wrapper of the product.
13. Relying upon the decision of the Hon'ble Supreme Court in General Motors (India) Pvt. Ltd. Vs. Ashok Ramnik Lal Tolat & Anr. (2015) 1 SCC 429, it was contended by the learned counsel for the petitioner company that damages having not been pleaded and established, the fora below were not justified in directing deposit of punitive damages by the petitioner company. In General Motors (supra), the complainant/respondent, alleging practice of unfair trade practice by the petitioner company, approached the District Forum seeking refund of the amount paid by him for purchase of a vehicle from the petitioner company alongwith interest, compensation quantified at Rs. 50,000/- and the cost of litigation quantified at Rs. 25,000/-. The District Forum directed refund of Rs. 14 lacs + Rs.1,91,295/- towards cost of accessories with interest, compensation quantified at Rs. 5000/- and cost of litigation quantified at Rs. 2000/-. In an appeal filed by the petitioner company, the State Commission held that the complainant was entitled to Rs. 50,000/- as compensation including cost of litigation, but was also required to pay Rs. 5000/- towards costs for undeserving claim. Being still dissatisfied, the appellant company approached this Commission by way of a revision petition. This Commission, while restoring the relief given by the District Forum, with slight modifications, directed refund of Rs. 12,50,000/- subject to the condition that the vehicle without accessories, was returned to the appellant company. This Commission also proceeded to consider the issue of punitive damages for the unfair trade practice in selling the vehicle to about 260 consumers and directed the appellant to pay punitive damages of Rs. 25 lacs out of which Rs. 5 lacs were to be paid to the complainant while remaining amount was to be deposited in the Consumer Welfare Fund. Being aggrieved from the direction given by this Commission, the appellant company filed an appeal by Special Leave before the Hon'ble Supreme Court. Allowing the appeal and setting aside the order of this Commission to the extent of award of punitive damages, the Hon'ble Supreme Court observed and held as under:
15. What survives for consideration is the submission of the learned senior counsel for the appellant that there was no claim before the National Commission for the punitive damages nor had the appellant an opportunity to meet such claim and that part of the order needs to be set aside. We find merit in this submission.
17. We are conscious that having regard to the laudable object of the social legislation to protect the interest of consumers, liberal and purposive interpretation has to be placed on the scheme of the Act avoiding hypertechnical approach. At the same time, fair procedure is the hallmark of every legal proceeding and an affected party is entitled to be put to notice of the claim which such affected party has to meet.
19. Thus, mere proof of "unfair trade practice" is not enough for claim or award or relief unless causing of loss is also established which in the present case has not been established.
20. Neither there is any averment in the complaint about the suffering of punitive damages by the other consumers nor was the appellant aware that any such claim is to be met by it. Normally, punitive damages are awarded against a conscious wrong doing unrelated to the actual loss suffered. Such a claim has to be specially pleaded. The respondent complainant was satisfied with the order of the District Forum and did not approach the State Commission. He only approached the National Commission after the State Commission set aside the relief granted by the District Forum. The National Commission in exercise of revisional jurisdiction was only concerned about the correctness or otherwise of the order of the State Commission setting aside the relief given by the District Forum and to pass such order as the State Commission ought to have passed. However, the National Commission has gone much beyond its jurisdiction in awarding the relief which was neither sought in the complaint or before the State Commission. We are thus, of the view that to this extent the order of the National Commission cannot be sustained.
14. However, in the case before us, the complaint, State of West Bengal, specifically pleaded and prayed as under:
Whereas the interests of numerous consumers, who are not identifiable conveniently have been adversely affected in the instant matter and their interests are required to be protected.
In the facts and circumstances of the case, the complainant prayed for the following reliefs.
(c) The O.P. be directed to pay a sum of Rs. 20,00,000/- (Rupeses Twenty Lakh) including cost of proceedings to the complainant on behalf of the consumers at large as punitive damages as provided in Sec. 14(1)(d) of the Act. The complainant shall put the sum in the State Consumer Welfare Fund and utilize the same for the purpose of promotion and protection of consumers' rights as per statutory norms.
It would thus be seen that not only did the complainant specifically plead adverse impact of the unfair trade practice adopted by the petitioner company on numerous customers, it also made an express prayer for awarding Rs. 20 lacs as punitive damages. Therefore, it cannot be said that the petitioner company was taken by surprise as far as the claim for punitive damages is concerned. The petitioner company knew it very well from the prayer made in para 18(c) of the complaint that the State of West Bengal was seeking grant of punitive damages against it in terms of Sec. 14(1)(d) of the Consumer Protection Act. The petitioner company also knew that the complainant had expressly pleaded in the complaint that the interests of numerous consumers had been adversely affected on account of the practice adopted by the complainant company. The causing of loss to the consumes also stands duly established in this case since, they were allured to purchase multiple packs of 50-50 Biscuits, Maska Chaska and Pepper Chakkar by inducing them to believe that the second half of the picture could be available in one or the other of the subsequent packs purchased by them. As noted earlier by us, the terms and conditions of the offer particularly that even those who were able to complete the picture will not be entitled to receive the prize on such complaint, but will only be able to participate in a draw of lots, to select the winner(s), was not disclosed to them. Had such a disclosure been made, at least some of them would not have gone for purchase of multiple packs of the products suffered monetary loss in the form of the cost of the subsequent packs purchased by them since the subsequent purchases were made only with a view to complete the picture and not to buy the product in which the pictures had been inserted. We have also noted that the date of closure of the Scheme was not printed on the wrappers, as a result of which, a number of persons kept on purchasing the product even after the closure of the aforesaid offer, in the hope that they will be able to receive the prize if they were able to complete the picture of the prize item. It would be pertinent to note here that the petitioner company has admitted before the District Forum that the promotional packs of its products were available in the market even after the offer had closed. Had the date of closure of the offer been printed on the wrappers, the persons who were not seeking to buy the product, but were only looking for completing the picture of the prize item, would not have purchased the product, after the Scheme had closed. The monetary loss to the consumers need not necessarily be established by summoning them before the Consumer Forum or filing their affidavits. It can also be inferred from the facts and circumstances of a given case. In fact it would be impractical and unrealistic to prove the monetary loss to the consumers by calling them as witnesses or filing their affidavits by way of evidence, in a complaint of this nature where even the names of the Purchasers are not known.
15. Section 14 of the Consumer Protection Act envisages grant of compensation for loss or injury which may not necessarily be monetary in nature. The compensation by a Consumer Forum can also be awarded for the physical, mental or emotional suffering. The provision of Consumer Protection Act enable a consumer to complain and empower a Consumer Forum to redress any injustice to the consumer, irrespective of whether his suffering be monetary or otherwise. The compensation is awarded to recompense for the loss or injury which need not necessarily be pecuniary in nature. The persons who purchased multiple packs believing that on completing the picture, they will be entitled to receive the advertised prize item from the petitioner company, must necessarily have felt disappointed on coming to know that the completion of the picture did not ipso facto entitle them to receive the prize and they only had a remote chance to win the prize if the lady luck was to favour them in the draw of lots. The dejection and frustration would be more acute in the case of the consumers who purchased the promotional packs after closure of the offer without knowing about the said closure. Such persons are necessarily entitled to be compensated by a Consumer Forum once it is established that their plight is attributable to the unfair trade practices adopted by the petitioner company. Since it is not practically possible to identify such persons and grant individual reliefs to them, payment of compensation to be deposited in the Consumer Welfare Fund maintained by the State of West Bengal would be the only appropriate relief to be granted in such a case. Though compensatory damages and punitive damages may be awarded at the same time, they serve distinct purposes. The compensatory damages intended to redress the loss which the petitioner has suffered and is able to establish on account of wrongful conduct of the respondent. The punitive damages, on the other hand, are intended to punish the respondent and deter future wrong doing by the respondents as well as potential wrong doers. Punitive damages or exemplary damages are intended to deter the defendant and others from engaging in a conduct which forms the basis of the complaint. Such damages are mainly awarded where compensatory damages are deemed to be inadequate.
16. For the reasons stated hereinabove, we find no merit in this revision petition and the same is dismissed with cost assessed at Rs.10,000/-.
......................J V.K. JAIN PRESIDING MEMBER ...................... DR. B.C. GUPTA MEMBER