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State Consumer Disputes Redressal Commission (SCDRC), Chandigarh: While deciding the instant appeal filed by VLCC Health Care Ltd. against the order of the District Consumer Court whereby they were directed to refund and compensate the respondent for the mental agony caused due to the failure of VLCC's weight loss program; the Bench of Raj Shekhar Attri, J. (President) and Rajesh K. Arya (Member) observed that VLCC's act of giving false assurances on one hand by way of misleading advertisements, and on the other hand obtaining a declaration from the consumers qua no guarantee/assurance regarding the result and outcome of the program, is a clear example of unfair trade practices adopted by them, and for which the consumers cannot be made to suffer at their hands. “The appellants are very much held liable to refund the amount paid by the respondent purely on the basis of their own advertisement, ‘Lose 4 Kgs in 30 days or take your money back!'.

Facts of the case: In March 2015, the respondent took VLCC's weight loss program (A)+(B) for reduction of 5 kg weight and 4-inch loss of tummy circumference within one month, and paid advance for the program amounting to Rs. 50,000. The respondent visited VLCC for the sittings as detailed by them but there was no visible result. The respondent even discussed the matter with VLCC stating that he had undertaken 30 sessions but there has been no progress on weight loss, and he could manage to lose 1Kg by diet control only, and thus sought refund.

In order to allure the respondent, VLCC showed him an imported costly machine through which the treatment would be done. Thus, the respondent was induced to take up the program and money back guarantee and pay another amount of Rs.28,000 again on 31-03-2017. However, upon observing no improvement in weight loss and inch reduction, the respondent took the matter to the concerned Court.

Contentions: VLCC argued that the respondent was satisfied with his first weight loss program which is why he chose to purchase the new treatment; if there was any sort of dissatisfaction, the respondent would not have gone ahead to buy the second program. It was further argued that the respondent did not remain regular for the treatment nor followed his diet as per the terms of the treatment despite several suggestions by VLCC's representatives. The futility of the weight loss program was due to the respondent's own unhealthy dietary habits and not due VLCC's alleged deficient service.

It was submitted that the respondent had given a specific undertaking duly signed by him that he understands that no guarantee could be given to him regarding the result and outcome of the program and in circumstances of unsatisfactory results due to factors beyond the control of the staff of VLCC, he shall not be entitled to claim/damages or to hold VLCC or its staff liable.

Per contra, the respondent contended that the plea of VLCC with regard to disclaimer cannot be accepted in view of the fact that they specifically mentioned that “Lose 4 kgs in a month or your money will be refunded”, which clearly shows that VLCC were misguiding the consumer by a misleading advertisement and in case they don't lose weight then puzzle them in disclaimer clause which is a clear case of deficiency in service.

Observations and Decision

  • Perusing the facts, contentions and reasoning behind the District Commission's Order, the Bench pointed out that the contention raised by VLCC vis-a-vis the disclaimer is not sustainable in the eyes of the law because VLCC's own advertisement loudly and proudly claimed- “Lose 4 Kgs in 30 days or take your money back!”

  • The State Commission relied on its precedent in Shipra Sachdeva v. VLCC Health Care Ltd., [First Appeal No.93 of 2008], which dealt with similar issues as raised in the instant appeal. The State Commission also relied on NCDRC's decision in Divya Sood v. Gurdeep Kaur Bhuhi, 2006 SCC OnLine NCDRC 76, which raised the concerns surrounding “tempting advertisements, giving misleading statements (…) persons lured to pay large amount to such bodies in a hope that they can reduce their weight by undergoing the so-called treatment”. It was observed that the acts of allurement and unfair trade practice via misleading emails and advertisements, wasted the respondent's precious time, energy and money over a weight loss program that was not fruitful eventually.

  • With the afore-stated observations, the State Commission held that VLCC's advertisements claiming, “Lose 4 Kgs in 30 days or take your money back”, squarely falls under the definition of ‘misleading advertisement' as defined in Section 2(28) of the Consumer Protection Act, 2019. Therefore, the appeal was dismissed.

[VLCC Health Care Ltd. v. Vijay Aggarwal, Appeal No. 14 0f 2022, decided on 10-08-2022]

Advocates who appeared in this case :

Atul Goyal, Advocate, for the appellants;

Harsh Nagra, Advocate, for the respondent.

*Sucheta Sarkar, Editorial Assistant has prepared this brief.

Case BriefsTribunals/Commissions/Regulatory Bodies

District Consumer Disputes Redressal Commission (DCDRC), Gondia: In the instant ‘unique’ complaint, relief in the nature of directions to Facebook were sought vis-a-vis discontinuation of unfair/ restrictive trade practices; not putting up misleading advertisements and neutralization of the effect of misleading advertisements on their platform. The coram of Bhaskar B. Yogi (President) and Sarita B. Raipure (Member) directed Facebook and Meta Inc. to run scam related awareness advertisement on various media, social sites, TV and OTT platforms to create awareness regarding various scam on regular basis to neutralize the impact of misleading advertisements. The Commission also stated that Facebook has a legal and social duty and obligation to provide funding to a step-by-step service to aid and advise the public regarding online frauds and scams.

Facts of the case: The complainant who hails from Maharashtra, is a daily wager coming from Below Poverty Line Family and currently remains unemployed due to Covid19 pandemic. Facebook (opposite party) is a major social networking site.

The complainant is an active Facebook user. On 16-09-2020, the complainant noticed on his Facebook-wall an advertisement of Marya Studio, offering shoes of Nike Company for Rs. 599. As the advertisement was on Facebook, the complainant did not doubt its authenticity and immediately placed the order for shoes and paid Rs. 599 through his debit card. The Complainant waited for a long time but he did not receive any text or call from the Marya Studio regarding shipping of the shoes booked by him, and since Facebook did not contain any contact details of Marya Studio, therefore the complainant googled Marya Studio’s customer care number and in result he came to the website which showed 4-5 numbers of Marya Studio Customer Care. The Complainant called on one of the numbers and the person receiving the call introduced themselves as Marya Studio’s Customer Care Executive. The person sent a link to the Complainant and asked him to fill debit card details in that link for the purposes of refund. The Complainant was further asked to download AnyDesk App in order to receive the refund amount. The Complainant did as he was instructed and also the provided the OTP number as required by the Customer Care Executive. However, the complainant was duped for Rs. 7568.

Thereafter the complainant tried to bring this fraud to the notice of Facebook (via Twitter and then e-mail) and sought compensation of Rs. 7568, but Facebook never replied. Therefore the complainant was compelled to knock the doors of the District Commission, Gondia, against Facebook.

Contentions: The counsels of the complainant put forth the following contentions-

  • It was argued that Facebook voluntarily and intentionally runs a false, frivolous, misleading and fraudulent advertisement and causes loss to the public at large. The complainant pointed out the names of the many fake pages advertised on Facebook like- Marya Studio, Yaryastudio, Crunchkart, G9fashionnn etc. The complainant also cited the names of other persons who were victims of such fake advertisements.
  • It was argued that the complainant is unemployed has suffered a lot due to the loss of the afore-stated amount. It was stated that he has no money to buy groceries and vegetables and that him and his family members are suffering from starvation. Such circumstances have caused a great deal of mental and physical pain to the Complainant and his family.

Per-contra, the opposite parties (Facebook/ Meta) argued on the following points-

  • It was contended that Complaint is not maintainable since the Complainant is not a ‘consumer‘ of Facebook India.
  • It was submitted that Facebook India is a wrong entity for adjudicating this Complaint since it does not operate/control the Facebook service- as Facebook would be considered as an intermediary, and therefore, immune from liability under the provisions of the Information Technology Act, 2000. Furthermore Facebook would be under no obligation to proactively monitor the Facebook Service under the IT Act and as per the decision of the Supreme Court in Shreya Singhal v. Union of India, (2015) 5 SCC 1.
  • Meta submitted that it has taken reasonable steps to enforce policies to protect its users and offers several user friendly tools to enable users to report violations of these policies.

Observations: Based on the facts and contentions presented in the case, the Commission framed certain important issues and made the following observations-

  • The Commission pointed out that to establish the consumer-service provider relationship, the complainant has to prove whether he has paid any consideration for service while buying online product from third party. Perusing the details provided by the complainant, the Commission observed that complainant paid Rs 599 for purchase of the shoe, whose advertisement was hosted on Facebook. The revenue of opposite parties mainly comes by selling the space for advertising which is clear from their Memorandum of Association. The Commission thus noted that the complainant falls under the category of ‘consumer’.
  • The Commission noted that the complainant suffered from financial loss due to misleading advertisement. However, the Commission deliberated on the extent to which the opposite party was bound to compensate. The Commission perused the “Help Centre” details provided on Facebook titled “Privacy, safety and security- Shopping safety”. It was noted that transaction of buying shoes Rs. 599 was due to a misleading advertisement; but, the second transaction of sharing OTP and personal bank details by the complainant was due to his own unawareness regarding online scams, therefore can be termed as ‘contributory negligence’ for which the opposite parties are not liable.
  • It was observed that the Government of India has taken various measure to curb the menace of online fraud from time to time by inserting concerned provisions in the Consumer Protection Act and Consumer Protection (E-commerce) Rules, 2020. It was noted that the law provides a clear mandate of compliance for social media websites. The Commission pointed out that complainant was lured to purchase the product by looking to the rate of the shoes, and it is mandatory obligations of e-commerce websites to provide complete name, address, contact numbers, email address of the seller so that in case of any consumer grievance it can be redressed immediately. The e-commerce websites, as prescribed by RBI have a Corporate Social Responsibility to educate the masses regarding various online frauds. It was stated that opposite parties failed to sufficiently safeguard and protect the Indian consumers from unscrupulous exploitation.

Decision/Directions: Perusing the facts and contentions presented by the parties and making the afore-stated observations, the Commission partly allowed the complaint and made the following directions-

  • The opposite parties are to pay to the complainant the price of product (Nike shoes) not delivered i.e. Rs. 599. The opposite parties were directed to pay Rs. 25,000 for mental agony and legal costs suffered by the complainant.
  • Facebook/ Meta directed to comply the Consumer Protection (e-commerce) Rules, 2020 in letter and spirit and submit report of compliance within a period of 45 days to this Commission.
  • Facebook was directed to issue corrective advertisement in order to neutralize the effect of misleading advertisement that came to question in the instant complaint.

[Tribhuvan v. Facebook India Online Services Pvt. Ltd., Complaint No. : CC/117/2020, decided on 30-06-2022]

Advocates who appeared in this case :

Sagar J. Chavhan, Advocate, for the Complainant;

M. B. Ramteke, Advocate, for Opposite Parties.

*Sucheta Sarkar, Editorial Assistant has prepared this brief

National Consumer Disputes Redressal Commission
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National Consumer Disputes Redressal Commission (NCDRC): Discussing a matter wherein allegedly a defective mobile phone was received From Amazon sellers, Bench of Dr Justice R.K. Agarwal (President) and Dr S.M. Kantikar (Member) emphasized the concept of punitive damages.

Present Consumer complaint under Section 2(1)(d)(i) read with Section 12(1)(c) of the Consumer Protection Act had been filed against Amazon Seller Service Private Limited seeking refund of the amount of Rs 9,119 paid towards purchase of Mobile Phone along with litigation and transportation cost of Rs 1 lakh and Punitive Damages to the tune of Rs 7,43,00,00,000 for causing legal injury and financial loss to the complainant and other innumerable consumers.

Complainant purchased a mobile phone from OP. It was contended that after using the Mobile Phone for a couple of days, it started heating up which compelled him to return the same as per the Easy Return Policy of the OP advertised on T.V. Serial, Media and Print Media.

Since, the Complainant was not able to click the option of Return/Exchange on their website, he called the Customer Support of the Opposite Party and was informed that they had changed its Return Policy on the items purchased.

Complainant sent an email to the OP stating that they had always advertised about Easy Returns and that at the time of purchase, it had not been mentioned that the Refund/Return Policy of the Opposite Party has been changed which amounted to Unfair Trade Practice on their part. Vide an email the OP apprised to the Complainant that if he had received a defective/damaged Phone, he would be eligible only for free replacement and not for a refund.

Further, in the invoice bill of the phone along with the order list, the option of returning the phone was given.

Hence, he stated that the action/inaction of the OP was in violation of the Right of Consumers to be informed about the product and to decide as to whether to purchase the same or not.

Complainant alleged that the OP was involved in Unfair Trade Practice by making a false promise and running misleading advertisement about Easy Refund of the Product. The OP was bound to disclose all the necessary information about its Product enabling the Consumers to take a decision as to whether buy the said product or not.

Analysis, Law and Decision

Commission while referring to the decision of Supreme Court in Magma Fincorp Ltd. v. Rajesh Kumar Tiwari, (2020) 10 SCC 399, answered the question as to whether the punitive damages claimed by the complainant can be treated as part of the compensation for determining the pecuniary jurisdiction of the commission.

In the said decision it was held that the Punitive damages cannot be treated as a form of compensation.

Punitive damages under Section 14(1)(d) of the Act cannot be granted by the Consumer Fora in cases of breach of contract unless the act is so reprehensible that it calls for punishment of the party in breach, by imposition of punitive or exemplary damages.

In the instant matter, Bench stated that some of the purchasers are purchasing the products on the online website and after using the said product for a few days, seek a refund of the amount paid by them.

The above was the reason why OP changed its policy of Easy Return.

Commission added that, in case the Complainant had received the defective mobile phone, the remedy was still available with him to get it replaced despite the change in Return/Refund Policy”.

OP had published in the newspaper, namely the Indian Express about the change in its Return Policy with the Heading “Amazon no longer has a return and get refund policy for mobiles” along with this, the said information was also published in NDTV Gadget 360 with the heading that “Mobile Purchased from Amazon India No longer Eligible for Return”

In so far as the option appearing in the Invoice Bill of the Mobile Phone regarding the refund, was concerned, Commission opined that since there was a gap of only 16 days from the date of change of policy, i.e. 07-02-2017 and purchasing of mobile phone, i.e. 23-02-2017, it was not possible to rectify the said mistake or reprint the Invoice Bill.

Therefore, present matter was not a fit case for awarding exemplary punitive damages and action/inaction of the OP did not warrant any punishment. [Paras Jain v. Amazon Seller Services (P) Ltd., 2021 SCC OnLine NCDRC 312, decided on 22-09-2021]

Advocates before the Commission:

For the Complainant: Mr Paras Jain, In-person

For the Opposite Party: Mr Joy Basu, Sr. Advocate with Mr Amit Kr. Mishra, Mr. Mohit Singh, Mr. Turab Ali Kazmi, Ms. Samridhi Hota and Mr. Kank B, Advocates