LANDMARK JUDGEMENT CA – OCT 2014
- Posted by CERC India
- Posted in monthly
Charging entry fee not unfair trade practice
Does the imposition of an entry fee amount to imposing unjustified costs on a consumer? Is it an unfair or restrictive trade practice? This interesting issue has been decided by the National Commission in a case filed by the Gujarat government against department store Big Bazaar.
In 2006, Big Bazaar declared Republic Day as Mega Savings Day offering discounts which led to a rush of consumers. To control the crowds, the store issued entry coupons of Rs 50. The value of the coupons could be adjusted against purchases made, and if a coupon was partially utilised, the balance amount would be refunded.
The government of Gujarat, through the weights and measures and consumer affairs department, filed a complaint before the District Forum alleging that Big Bazaar had adopted unfair and restrictive trade practices by charging entry fee.
The Forum ruled in favour of the Government and said the store had no right to charge entry fee and restrict entry. It directed Big Bazaar to pay Rs 1,95,000 (collected from the sale of 3,900 coupons) along with 9% interest and Rs 10,000 towards mental agony and costs.
Big Bazaar appeals
Big Bazaar challenged the order before the Gujarat State Commission, which dismissed the appeal and confirmed the order. The store then approached the National Commission. It contended that levying an entry fee is legally permissible and practised across the world. The Gujarat government argued that levying entry fee compels a consumer to buy the entry coupon if he wants to make any purchase. This is a restrictive trade practice and is prohibited under the Consumer Protection Act.
The National Commission concluded that since a provision had been made for the encashment of coupons Big Bazar had not indulged in unfair or restrictive trade practice. On the contrary, the scheme was beneficial to consumers. It observed that an entry fee is levied even at railway platforms and airports. Accordingly, the orders of the District Forum and the State Commission were set aside, and the Gujarat government’s complaint was dismissed.