CA – MAR 16 : SETTLED IN COURT
Housewife gets refund after KidZee franchise flopsÂ
A representative of Zee Interactive Learning Systems Ltd., Mumbai, met Kiran Yadav in July 2007. He persuaded her to open a KidZee centre at her Ahmedabad bungalow to earn some income. She entered into a franchise agreement paying Rs. 3.4 lakh. However, residents of Kiranâ€™s society objected to the commercial activity. She asked for a refund and the company responded that the refund process would begin in January 2008. In spite of several reminders, this did not happen. Distressed, she approached CERS and a complaint was filed in the District Forum, Mumbai. The case was fought on behalf of CERS by advocate Dr. Binoy Gupta.
The company (now called ETC Networks Ltd.) contended that most of the amount paidÂ consisted of franchisee fee which was non-refundable as per the agreement. CERS insisted that the agreement was void as Kiranâ€™s society did not permit the centre to be set up. The Forum directed the company to refund Rs. 3.4 lakh to the complainant with interest at 9% and pay Rs. 25,000 towards litigation costs.
Aggrieved, the company appealed to the Maharashtra State Commission which suggested that the matter be settled. The two parties arrived at an agreement as per which ETC Networks would pay Kiran Rs. 2 lakh.
Point of law
A franchise contract is void if it cannot be enforced because it is illegal to carry out commercial activity in a residential area
PepsiCo penalised for lucky draw goof-up
When Santosh bought a bottle of Pepsi, the Â label advertised a scheme where the buyer was entitled to a â€˜khufiya cardâ€™. With that card he could participate in a lucky draw and if the number on his card was picked he would get a prize. However, the shopkeeper did not give Santosh a card saying PepsiCo had not sent any cards.Â Disappointed and aggrieved, Santosh filed a complaint in the District Forum against the company, distributor and shopkeeper.
The Forum held the company and distributor liable to refund the cost of Rs. 43 paid for the bottle and to pay a compensation of Rs. 1 lakh along with interest of 12% from the date of filing the complaint till realisation. PepsiCo appealed to the Karnataka State Commission but it dismissed the appeal observing that not giving the card amounted to misleading the public and was unfair trade practice. PepsiCo approached the National Commission contending that Santosh could have returned the bottle and sought a refund.
In its judgement of 30 September 2015, the National Commission observed that Santosh had acted as an enlightened consumer. It found PepsiCo guilty but reduced the compensation amount to Rs 8,000.
Point of law
If a person is deprived of participating in a lucky draw advertised on a product, it is an unfair trade practice.