Before the District Consumer Dispute Redressal Commission [Central District] - VIII, 5th Floor Maharana Pratap ISBT Building, Kashmere Gate, Delhi
Complaint Case No. 130/11.09.2023
Raminder Kaur d/o Mr. Davender Singh
G-3, 8/149, Sector 3 Rajendra Nagar,
Sahibabad Ghaziabad, UP - 201005
Email: advocateraminderkaur@gmail.com ...Complainant
Versus
McDonald's Block No.5, Plot No.4
Desh Bandhu Gupta Road, Near Sheila Cinema
New Delhi. ...Opposite Party
Date of filing: 11.09.2023
Coram: Date of Order: 04.11.2024
Shri Inder Jeet Singh, President
Ms Rashmi Bansal, Member -Female
FINAL ORDER
Inder Jeet Singh , President
It is scheduled today for order (item no.2)
1.1. (Introduction to dispute ) – the complainant has grievances of illegal and unfair trade practice of charging extra packing charges by the OP, who is in the world’s leading food service retailer spreading across 119 countries. The complainant was additionally charged Rs.37/- as packing charges against norms, rules in respect of food article delivered against bill. That is why the complainant is seeking appropriate directions to OP to (i) stop their illegal and unfair trade practice of charging extra as packing charges with immediate effect; (ii) to refund Rs.37/- along-with interest @ of 24% p.a. till date which was wrongly charged; (iii) to pay costs of Rs.21,000/-; (iv) impose punitive damages on the for deficiency in their services and wrongful gain of money and impose exemplary costs on the OP as a deterrent against such unfair trading activities in future besides (v) other appropriate relief.
1.2 The OP was served with notice on complaint, however, it failed to file written statement within time, consequently the opportunity was treated as availed and closed. Then complainant led evidence vis-à-vis the OP had joined the proceedings, while assailing the complaint on the facts and circumstances on record that there was no over-charging of any amount or of Rs. 37/-, rather the complainant paid the packing charges of her own willing and consent. There is nothing to infer unfair trade practice against the OP.
1.3. It is relevant to mention that the present complaint is blend of facts, figures, reference of documentary records, notifications by Central Consumer Protection Authority, legal provisions and case law in support that packing charges levied by OP were wrong and to press that there is unfair trade practice of packing charging.
2.1. (Case of complainant) - On 6.09.2023 at about 12:30 pm the complainant placed an online order at Mcdonald’s (Paharganj) through Swiggy platform. After, the food was delivered to the complainant and she glanced at the bill attached with the delivered food item, she was surprised to see that an additional amount of Rs. 37/- was charged as packing charges. The complainant realized that she was wrongly charged for packing charges (of food items) by the OP. The OP is indulging in unfair trade practice by charging extra amount as packing charges, in comparison to what one would normally pays for the food items at a restaurant counter, the consumer is being compelled to pay extra charges under different heads for the same orders online. The complainant believes that by additionally including operating expenses to the bill is unfair trade practice. [The complainant also refers the legal provision of the Consumer Protection Act. 2019 and also rules as a ready reference to highlight the norms to be followed vis-à-vis breached by the OP].
2.2. (It is further averred that) That the Consumer Affairs Department, Government of India, has directed and clarified that the price of the product or the service must include all operating costs involved in the making and the delivery of the product/services. Despite it, online traders and many others continue to resort to unfair trade practices {UTP}, adding illegal and operating costs to the bill separately over and above the price of the product displayed online. Moreover, in notification of 21st April 2017 (No. J-24/9/2014-CPU), the Ministry of Consumer Affairs, Food and Public Distribution-Department of Consumer Affairs (https://consumeraffairs.nic.in/) clearly mandates (i) A component of service is inherent in provision of the food and beverages ordered by a customer. Pricing of the product, therefore, is expected to cover both the good and service components. (ii) Placing an order by a customer amounts to his/her agreement to pay the prices displayed on the menu card along with the applicable taxes. Charging anything other than the afore-mentioned, without express consent of the customers, would amount to unfair trade practice as defined under the Act." Therefore, this notification has put every argument of overhead charges to a rest, whether for an aggregator, delivery agent, restaurant or hotel.
If one were to avail 'take away' option of the same food, the order will be packed in the same manner just as it was deemed to have been ordered through online sources. The restaurant does not charge a single dime over and above the actual amount in take away options when one goes in person and collects the food parcel. The customers are not to be burdened with any extra packing charges vis a vis the packing standards are same in both scenarios. Further, sub-section (5) of section 36 of the Sale of Goods Act, 1930 is abundantly clear that unless otherwise agreed, the expenses of and incidental to putting the goods into a deliverable state shall be borne by the seller. Thus, under this provision of law, all the expenses with regard to packing etc. shall be borne by the vendor in order to putting the goods into deliverable state.
If a restaurant charges a packing fee, then it should also offer a discount since
(a)
man-hours are saved in attending to the customer if he were physically present at the restaurant, (b)
direct expenses are saved like detergent for washing the utensils besides tissue paper, cutlery usage, table occupancy etc.
All these expenses are saved which the restaurant can spend on another customer and
(c) saving of indirect expense of electricity cost, rental charges, etc.
The customer does not use any of these while ordering food using online mode. Further, packing is a necessity in order to make delivery of food. But by charging packing fee is like charging for a plate and glass rental when restaurant has an in-store customer.
2.3. It is further stated that the concept of such packing charges has always been unfair and illegal. The notification by the Consumer Affairs Department in April 2017 has already confirmed that the price of the product/service is expected to have all operating expenses and the profit margins included in it. The containers used for packaging the items cost next to nothing to the restaurants, who buy them in bulk but they are fleecing customers by charging 30-40 times more than what it costs them. It is extremely unfair to impose more burden on consumers in a clear departure from the well-settled principles of consumer protection; the consumers form an integral part of a market driven economy, therefore, the consumers deserve to be treated with honesty and sincerity by the sellers. Usually, consumers end up paying more money than warranted because of want of understanding the legal rationale and logic behind these unfair practices. It is creating an environment of unfair trade practices for consumers by adding unnecessary heads to the bill over and above the price of the product, including legally allowed taxes; this is exploitation of consumer. The Consumer Courts have passed a number of orders against such unfair and illegal practices carried by the restaurants/food chains, wherein they charged extra from the consumers as packing charges, some of them are -
(i) Vijay Gopal v KFC Restaurant (CC/412/2019), Hyderabad Consumer Dispute Redressal Commission held that the collection of any other charges than the price of the product/service as illegal and unfair trade practice and ordered KFC to pay Rs.50,000/- as punitive damages and Rs 10,000/- as compensation to the consumer for charging Rs.33/- as packing fee.
(ii) Pankaj Chandgothia vs Dominos (CC/204/2018) - District Commission, Chandigarh, held that "the opposite party has no right to recover the expenses borne by it on the packing of the goods or putting the goods in a deliverable state," and ordered the OP to refund the packing charges and pay Rs.2,500/- to the Complainant as compensation for mental agony.
(iii) The decision (ii) above was upheld in Appeal No.160 of 2019 by Chandigarh State Commission while holding , "the Commission is of the view that each seller is obliged to deliver the goods in the complete state of delivery. (para 13) -The delivery of goods means physically handing over the goods from buyer to seller in a complete deliverable state. The goods can be delivered straight when these are fully packed as per the nature and environment affecting the goods. (para 14) - The packing of goods is also a state in putting the goods in the deliverable state. If you want to buy biscuits or bread, those should not be given in open and rather should be packed in such a manner, to save them from external atmosphere. (para 15) All kinds of expenses incurred in order to putting goods into a deliverable state shall be suffered by the seller. If not out of place to refer here the provisions of sub-section (5) of section 36 of the Sale of Goods Act, 1930 which makes it absolutely clear that unless otherwise agreed, the expenses of and incidental to putting the goods into a deliverable state shall be borne by the seller. Thus, under this provision of law, all the expenses with regard to packing etc. shall be borne by the vendor in order to putting the goods into a deliverable state."
(iv) Heman Aggarwal v Hot Millions Restaurants (CC/76/2019)- Chandigarh State Commission directed Panchkula's Hot Millions to pay Rs.2,500/ to the complainant Heman Aggarwal and also refund of Rs.5/- along-with interest at 9% per annum from the date of filing of complaint till realisation against charging packing charges on food delivery.
(v) Pancy Singh v Hardyz Burger (2022), DCDR Commission Mohali , it penalised an eatery restaurant Hardyz Burger and asked them to pay Rs.15,500 for collecting Rs. 10/- extra as packing charges. The Commission also held that OP definitely falls within the purview of "deficiency in service" and that by demanding packaging charges, it has been collecting a huge amount from thousands of customers, and must have collected lakhs..
(vi) Rishabh Wadera v M/s McDonald's Restaurant
(FA/132/2022), the Hon'ble State Consumer Dispute Redressal Commission, Chandigarh reaffirmed the order passed by District Commission that "all the expenses with regard to packing, providing carry bags etc. shall be borne by the vendor in order to put the goods into a deliverable state. The Ld. Lower Commission while placing reliance on the judgment of this Commission in FA No.238 of 2019 Big Bazaar (Future Retail Ltd.) Vs Ashok Kumar (supra) held that the respondents committed unfair trade practice by charging Rs.35/- towards packing charges. The Ld. Lower Commission rightly ordered refund of Rs.35/- on account of packing charges, besides compensation of Rs. 500/- and litigation costs to the tune of Rs. 1100/-, which appears to be justified and adequate".
2.4. The OP has violated those principles in the present case and it is liable to pay compensation to the complainant. In fact the OP is taking advantage of lack of awareness of the consumer and the complainant being one of the aggrieved persons filed the present complaint, also as social responsibility. The OP is a leading international brand and claims to generate a huge revenue but despite it, it has indulged in unfair trade practice as charging high rate as packing charges, there is violation of law, guidelines, norms etc. for which they are accountable including for compensation. That is why the present complaint for the reliefs being sought.
2.5. The complaint is accompanied with documents/copies of – bill dated 06.09.2023, notification dated 21.04.2017 and identity proof of the complaint.
3 (Evidence)- In order to prove the complaint, the complainant Ms. Raminder Kaur led her evidence by filing detailed affidavit of evidence fortified with documents filed with the complaint.
4.1 (Final hearing)- At this stage, the complainant filed written arguments and the OP also filed written arguments. They were also given opportunity to make oral submissions, then Ms Priti Agarwal Advocate with complainant and Shri Rajeev Jaipal, Advocate for complainant presented the submissions. It is reiteration of case of complainant, it is further supplemented with one more case law:-
(vi) Nitin Mittal Vs Pnd Balluchi Restaurant RP No.1999/2012 dod 01.08.2012 (NC) (para 5) held that it must be borne in mind that there has to be some difference in price in respect of food served in the restaurant itself and packed food. For the food which is served in the restaurant itself, the owner of restaurant has to incur money for furniture, carpets, Air conditioners, fans, waiters, cleaning, moping and dusting the restaurant, maintenance of reception etc.; for packed food, there is no need to give such like services. The complainant has made a vain attempt to make the bricks without straw. Foras below have nowhere missed the wood for tree. We add our voice to theirs and dismiss the revision petition.
4.2. As already stated, the OP had joined the proceedings and also filed the written arguments to the limited extent (because of want of defense version and without putting defense evidence), Shri Gautam Harshwal Advocate also presented the oral submission that even on the face of record and evidence, it does not make out case of unfair trade practice against the OP.
The OP contends that it was complainant herself chosen and made the payment of said order and packing charges were clearly showing in the cost breakup of the said order, which is evident from the bill proved by the complainant. Since, the complainant herself proceeded with the payment of her own choice and willingness vis-à-vis if she did not want to pay the packing charges, the same could have been rejected by the complainant. This clearly concludes that payment was out of her own will and consent, therefore, the complainant is baseless and it is liable to be dismissed. Moreover, the onus lies on the complainant to prove the allegation of the complaint but muchless it has not been proved by the complainant. The OP also derives reasons from the following cases.
(a) SGS India Ltd. v Dolphin International Ltd Civil Appeal No. 5759/2009 dod 06.10.2021, The onus of proof of deficiency of services lies on the complainant and without such proof, the complainant could not be held responsible.
(b) Ravneet Singh Bagga v KLM Royal Dutch Airlines and Anr. Manu/SC/0707/1999: (2000) 1 SCC 66, it was held that additional burden of proof of deficiency of services is upon the person who alleges so. In case complainant is able to discharge its initial onus, than burden will shift to other side in the complaint. (Ld. Counsel for OP supplements that complainant could not discharge its own onus to proof the allegation).
(c) Ganga Retreat and Towers Limited & Ors. v State of Rajasthan & Ors., Civil Appeal No. 5188, 5189 and 5189/2001 dod 19.12.2003 held (para 28), however, his election to stand by the contract once exercised would have the effect of ratification of the contract with the knowledge of misrepresentation on the part of the other party and that would extinguish its power of avoidance. In the very nature of the right conferred on the party affected, the law expects it to exercise its option promptly and communicate the same to the opposite party; for until the right of avoidance is exercised, the contract is valid, and things done there-under may not thereafter be undone.
4.3. Now, Ld. Counsel for complainant with complainant requests, even to the counsel for OP, to open online platform, it would not show the breakup of items of bill but glimpses total amount and in the absence showing breakup of items and its cost, how consent could be given for cost of packing charges?, it is not feasible consent for but under the garb of showing total amount but hiding the details, the OP could not charge packing charges. The OP was required to show completely all the breakup of the bill, thereafter only the complainant or other customer will be able to decide to go or not for order.
5.1 (Findings)- The case of complainant along-with counter plea of OP is considered, analyzed and assessed keeping in view the material on record, the provision of Consumer Protection Act, 2019, the Rules framed there-under, the notification dated 21.04.2017 (guidelines No. 1 & 2) and also further notification F.No. J-25/57/2022-CCPA dated 04.07.2022- Central Consumer Protection Authority, (its regulation No. 4 particularly) and the case law presented.
5.2 After taking into account stock of all, as mentioned in paragraph 5.1 above, the following conclusions are drawn :
(i) The complainant has proved subject bill (Exh.CW 1/1) delivered with food article, it shows order packing charges Rs. 37/- were charged from the complainant in online order. It is not disputed by OP.
(ii) As per submissions of OP, the narrow dispute is that complainant had consented for payment of the packing charges since the bill detail was showing the chargeable amounts vis-à-vis in case the same was not acceptable, the complainant could have denied the option to pay packing charges.
However the contentions of OP is not acceptable since the packing charges of Rs. 37/- does not show that the same was optional but in fact the contention of OP inherent as if one does not opt for order, the entire order is to be denied. Moreover, why physical bill delivered mentions that optional packing charges were paid by the complainant.
In fact, the circumstances are establishing that in online order, the customer has to either to go for entire or not to opt, since total bill amount is shown instead of break-up of bill.
(iii) The guidance no. 1 & 2 of notification dated 21.04.2017 mentions that the price of goods covers both the goods and service component and charging any other amount without express consent, it would amount to unfair trade practice as defined under the Act. Further, the notification dated 04.07.2022 also regulates that the hotel and restaurant have option to offer food or beverages to the consumer at the prices and placing an order involves consent to pay the prices of food items displayed in the menu alongwith the payable taxes, charging anything other than the said amount would tantamount to unfair trade practice under the Act.
In the present situation in hand, as demonstrated, after online order, the bill just shows total amount of bill payable for the order placed without showing breakup detail or of order packing charges of Rs. 37/-, such detail was hidden, however after the food article alongwith the bill is delivered, than it discloses the breakup of the bill inclusive of order packing charges. When the online order was placed and there was no breakup of bill detail was given, how complainant would give consent for the order packing charges of Rs. 37/-? ( in other word if the consent was given for total of Rs. 232/- as the amount was showing online at the time of order, it would not construe consent for order packing charges, which were hidden at the time of online order nor it would be subsequent consent when the detail of bill is disclosed at the time of delivery of food article with the bill breakup).
(iv) By reading the conclusion in sub clause (i) to (iii) above, it is crystal that when complainant had placed online order, the total bill was of Rs.232/- without other details or breakup, it was hidden. However, when the food article with the bill was delivered, the breakup of bill was mentioned inclusive of order packing charges.
(v) Order packing charging has not been shown optional and as appearing, there was no option with the complainant to exercise for choice of any breakup in the bill since total bill amount was shown without breakup. The packing charges of Rs. 37/- charged from the OP is unfair trade practice as well as violation of guidelines mentioned in the notification or Regulation in the subsequent notification.
(vi) The Ld. Counsel for OP has also given a passing reference that the packing material provided for food items to a customer present physically at the restaurant is different from the packing material provided on online orders like carrying bag, however this contention is defensive in nature and there is no defence put by the OP for want of pleading and evidence vis-à-vis the complainant has also reservation that packing material are same which are served to the customer physically or in online orders.
The OP's stand appears to be of two different standard of packing materials are used for serving customers present physically and others, who are delivered food articles on line. Although, it is not so proved but in either way, packing charges cannot be charged in violation of rules, norms vis a vis without showing in break-up of bills either to inform the online customer and/or for its consent. The OP charged Rs.37/- from complainant.
In view of the above, it is held that complainant has succeeded to establish the complaint against OP that there is unfair trade practice. Therefore, the complainant is held entitled for refund of amount Rs.37/- which was charged by the OP as order packing charges, the same were levied by the OP in the bill without disclosing in advance to the complainant and also in breach of rules, norms etc.
5.3.1 The complainant requests to impose of punitive damages since OP has indulged in wrongful gain and also to impose exemplary cost besides to award cost of litigation of Rs. 21,000/- but all of them have been opposed by the OP for want of proof of allegations as well as no such amount is payable. It needs to assess the record.
5.3.2 Since, the complainant claims punitive damages against OP, Is it a fit case to award punitive damages?.
Firstly, what is punitive damages? What is its purpose? The Punitive damages (exemplary damages) are assessed and awarded in order to pinch respondent for outrageous/intolerant behaviour and/or to refrain it or to deter others from engaging in conduct similar to that which formed basis of law suit. Punitive damages are also imposed to reform defaulting party as well as to deter other from indulging in such wrongs. Punitive damages are generally given in civil action, however, there is also law in proviso to section 39(1)(d) the Consumer Protection Act, 2019 for punitive damages. The punitive damages are not fine or penalty as fine is imposed in criminal trials.
It requires appraisal of evidence on record as well as the contention of the parties. As per their records the OP is leading global quick service restaurant with over 37,000 locations in over 100 countries and it is serving more than billions of customers. To say it is undisputed that the OP is a professional organisation in the field of restaurant. It would be knowing the norms and it is also knowing as to how platform has been arranged to deal with the variety of orders, billings including packing charges. The circumstance are also showing that total bill amount is demonstrated to the customers but its detail consisting of packing charges etc are kept hidden. Thus it cannot be pressed that there was consent for such packing charges. It needs to be dealt in a manner so that it proves to be a deterrent and OP may not repeat again and again. Therefore by deriving the reasons from the record, it is held, it is fit case to award punitive damages.
Now, the another allied question is quantification of damages. The damages should be to the extent that it may actually pinch the defaulter, therefore, by deriving reasons for case law mentioned on behalf of complainant, the punitive damages are quantified as Rs.50,000/-, out of which Rs.40,000/- shall be deposited with State Consumer Welfare Funds Delhi (no. 00000010310544717, IFSC Code SBIN0001187, MICR Code 110002049) within 45 days of this final order and remaining Rs.10,000/- shall be payable to the complainant..
5.3.2. The complainant has also requested for exemplary cost, however in view of findings given in paragraph 5.3.1 above, it does not need separate direction for exemplary cost.
5.3.3 The complainant also seeks litigation cost of Rs. 21,000/-. Although the situation for filing the present complaint emerges on the eve of charging Rs.37/- by the OP as packing charges contrary to norms and rules besides without disclosing to the complainant, the complainant was constraint to file the present complaint. In order to file the present complaint under the Consumer Protection Act, the procedure prescribed is to be followed irrespective of amount involved. The complainant deserves the cost, the same is determined as Rs. 5,000/- and costs of Rs.5,000/- is allowed in favour of complainant against OP. The interest is also allowed of 9% per annum on amount of Rs. 37/- from the date of complaint till realization of the amount.
6. Accordingly, the complaint is allowed in favour of complainant and against the OP while directing OP (i) to immediately discontinue unfair trade practice of levying packing charging under any nomenclature and not to repeat them, (ii) to refund packing charges of Rs.37/- along-with simple interest of 9% p.a. from date of payment till realization of amount to the complainant, (iii) punitive damages Rs.10,000/- to the complainant & (iv) costs of Rs.5,000/- to the complainant and (v) apart from depositing punitive damages of Rs.40,000/- in the Delhi State Consumer Welfare Fund (its receipt will be furnished to this Commission in time), which are payable (and to be deposited) within 45 days from the date of this order
In case the amount is not paid within 45 days of receipt of this Order, then interest rate will be 10%pa on the amount of Rs.37/- (instead of 9%pa). The OP is at liberty to deposit the amount (which is payable to the complainant), with the Registry of this Commission by way of valid instrument in the name of the complainant. In order to clarify, it needs to add, that Principal officer of OP, by whatever designation, will be responsible for compliances of directions/order or other directions on day to day basis as well as for legal consequences of non-compliances of such directions.
7. Announced on this 4th day of November 2024 [कार्तिक 13, साका 1946]. Copy of this Order be sent/provided forthwith to the parties free of cost as per rules for compliances, besides to upload on the website of this Commission. A copy be also sent to Delhi State Consumer Welfare Fund for appropriate information and action as per rules.
[Rashmi Bansal]
Member (Female)
[Inder Jeet Singh]
President
[ijs-130]
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