Consumers not bound by hidden terms of service providers

COLUMNS Updated: Oct 21, 2017 23:36 IST
Pushpa Girimaji
 So remember,
So remember, no manufacturer or service provider can take refuge under terms and conditions that are not made known to you.(AFP)
Are you aware that service providers cannot bind you to terms and conditions that are not made known to you? Or that they can no longer use the small print to get away with unfair terms and conditions? Or that failure to give consumers the most crucial information pertaining to a product or a service constitutes violation of the consumer’s right to information? The apex consumer court has emphasized these points in a number of landmark judgements and here I am putting together a few of them.

In Lufthansa German Airlines Vs Dr R.Bhaskaran, when a couple’s request for refund of their unused tickets was rejected by the airline on the ground sthat the terms and conditions governing the ‘excursion fare’ did not allow it, the National Consumer Disputes Redressal Commission considered whether the couple was made aware of the conditions governing their ticketing at the time of sale. On learning that the consumers were neither informed of the nature of the special discounted tickets nor the terms and conditions governing them, the Commission said the airline cannot bind them to terms and conditions that were not made known to them. “The air ticket is the document of contract between the passenger and the Airlines and it has to contain the specific terms and conditions governing the ticket”, the commission said. . ( ( , RP NO 3617 of 2007)

In Tip Top Drycleaners vs Sunil Kumar (RP NO 1328 of 2003), the Commission made it clear that the terms and conditions printed on the back of the receipt did not amount to a binding contract. These were not pointed to the customer, nor had he seen them or signed his acceptance of those. “As a matter of fact, nobody reads the conditions on the back of the receipt,” the Commission observed.

Similarly, in National Insurance Company Vs Shri D.P.Jain, ( RP No 186 of 2007), the National Commission made it clear that an insurance company cannot repudiate a claim on the basis of an exclusion clause that was not made known to the consumer

In Blue Dart Express Vs Stephen Livera (RP No 393 of 1997) too, the Commission held that the consumer was not bound by the terms and conditions of the courier company, as first and foremost, they were in fine print and on the back of the courier’s receipt.. And the courier had not drawn the attention of the consumer to it. The receipt also did not clearly show that the sender had signed his acceptance of the conditions.

In Vodafone Essar South Ltd Vs Arvind Reddy ( RP No 2775 of 2007), the apex consumer court held that a telecom service provider cannot compel a subscriber to pay at rates not specified in the tariff card. In this case, the central point of the dispute was whether the service provider can charge the subscriber, at the rate of Rs 500 per minute for an ISD call made to a satellite phone, without giving this crucial information in the tariff card?

The banking sector too got a similar message in The State Bank of Patiala Vs Gopal Krishan Singla, (RP No 1063 of 2010). . The bank in this case had failed to inform the depositor that as per government rules, any deposit beyond Rs 60,000 in a financial year in his PPF account did not fetch any interest. So the bank was asked to pay 6 per cent interest on the excess amount of Rs 4,80,000 deposited by the consumer.

So remember, no manufacturer or service provider can take refuge under terms and conditions that are not made known to you. Of course even here, if the terms are patently one sided and unfair, the courts can strike them down.


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