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Important judgements passed by the Consumer Courts

Telephone calls made from a Hotel Room cannot be compared with calls made from a PCO and hence the charges.

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI

CONSUMER CASE NO. 148 OF 2003

1. C.E.R.S. & ANR.
BAISHARAN, OPP. ACACIA APARTMENTS
NAVRANGPURA
AHMEDABAD
2. PROFF. MANUBHAI SHAH
BAISHARAN, OPP. ACACIA APARTMENTS
NAVRANGPURA
AHMEDABAD ...........Complainant(s)
Versus
1. TAJ MAHAL HOTEL & ORS.
BHARAT SANCHAR NIGAM LTD.,
AHMEDABAD TELECOM DISTRICT
GULBAI TEKRA TELE EXCHANGE BUILDING ,
GULBAI TEK
AHMEDABAD
2. The Principal General Manager
Bharat Sanchar Nigam Ltd. Ahmedabad Telecom Dist.
Gulbai Tekra Tele Exchange Building,
Gulbai Tekra,
Ahmedabad - 380 006.
3. THE PRINCIPAL GENERAL MANAGER
BHARAT SANCHAR NIGAM LTD.,
AHMEDABAD TELECOM DISTRICT
GULBAI TEKRA TELE EXCHANGE BUILDING ,
GULBAI TEK
AHMEDABAD
4. THE PRINCIPAL GENERAL MANAGER
BHARAT SANCHAR NIGAM LTD.,
AHMEDABAD TELECOM DISTRICT
GULBAI TEKRA TELE EXCHANGE BUILDING ,
GULBAI TEK
AHMEDABAD ...........Opp.Party(s)

BEFORE:
    HON'BLE MR. JUSTICE AJIT BHARIHOKE, PRESIDING MEMBER
    HON'BLE MRS. REKHA GUPTA, MEMBER

Dated : 02 Jul 2015

ORDER

PER JUSTICE AJIT BHARIHOKE, PRESIDING MEMBER

          The complainant No.1 is a society registered under the Societies Registration Act, which is mainly engaged in promotion and protection of consumer rights. Complainant No.2 at the relevant time was Chairman of Consumer Education & Research Centre, Ahmedabad, a parent body of complainant No.1.

2.      The complainant No.2 stayed in room No.607 of Taj Hotel, New Delhi (OP No.1) from 9.4.2002 to 12.4.2002. During stay complainant No.2 made some local telephonic calls from his room. Opposite party No.1 Hotel charged a sum of Rs.168/- for the said telephonic calls. The complainant No.2 on scrutiny of the bill and the call details found that opposite party No.1 had charged Rs.8/- per call instead of the usual applicable rates Rs.1.20 per call for 3 minutes or less. The complainant No.2, thus, vide letter dated 18.4.2002 drew attention of opposite party No.1 to Rule 429-A of Indian Telegraph Rule, 1951 and made a request for refund of Rs.168 after deducting the charges as per the said Rule. The opposite party No.1, however, failed to accede to the request of complainant No.2 for refund and instead stated in its reply dated 8.5.2012 that for providing facility of telephone in a hotel room the hotel incurs huge expenses in the form of state of art electronic exchange and employees trained manpower to handle the guest calls. It was stated in the reply that extra charges are levied in order to cover the cost of the exchange its maintenance and administrative overheads. Opposite party No.1 also took the plea that Rule 429-A of Indian Telegraph Rules is not attracted and the calls made from room of a five star hotel cannot be compared with a casual call made by an outsider from any shop or store.

3.      Opposite party No.2 vide its letter dated 9.7.2002 informed the complainant No.2 that the Telegraph authority may allow such use and advised that the affected person/consumer may take action against the concerned person for violation of Rules.

4.      It is also the case of the complainant that opposite party No.1 is having around 300 rooms and 27 suits to accommodate their guests. The average occupancy in the hotel is 80%. On a conservative estimate if 10 calls per day are made from the room by the guest, the wrongful earns approximately a sum of Rs.63, 64,800/- per annum by overcharging. Thus, the wrongful amount earned by opposite party No.1 during last three years is around 1,90,94,400/-.

5.      According to the complainants, the above noted overcharge for local telephonic calls made from the hotel room amounts to unfair trade practice as also the deficiency in service. Thus, the complainants have filed the instant consumer complaint with following prayer: -

“(a)    To refund excess amount of Rs.142.80 local telephone calls of 3 minutes or less to the complainant No.2.

(b)     To pay Rs.10,000/- as compensation to complainant No.2 for the inconvenience, discomfort and monetary loss suffered by him.

(c)     This Hon’ble Commission may be pleased to direct the opposite party No. 1 to deposit the amount of unjust enrichment of approximate Rs. 1,90,94,400/- which accrued to the opposite party No. 1 since number of years, in a Public Charitable Trust which may be managed for the welfare of the narrow class of users of hotels, guest houses etc.          by representative of complainant No. 1 i.e. CERS as co-trustees, jointly with such other trustees as may be appointed by this Hon’ble Commission.

(d)     To direct opposite party No. 2 to initiate legal proceedings against opposite party No. 1 for violation of Rule 429-A of The Indian Telegraph Rules 1951.

(e)     To direct opposite party No. 3 to evolve a uniform system of charging for providing such facilities throughout India and to ensure strict compliance of Rule 429-A of Indian Telegraph Rule 1951, so far           outsiders using these facilities are concerned.

(f)      To pay Rs. 10000 to complainant No. 1 as cost of filing of this complaint.

(g)     To pay Rs. 10000 as cost of the complaint to the complainant No. 2.

(h)     Any other relief where this Hon’ble Commission may consider just and fair in the interest of justice may kindly be granted.

6.      Opposite party No.1 in its written reply has denied the allegations of unfair trade practice or deficiency in service. The allegation of overcharge is denied. It is contended that the guest in the room is not under compulsion to use the telephone provided in the room for making outside calls. The guest has an option to use the local PCO installed in the hotel lobby for the casual use. It is contended that the customers are charged over and above the MTNL rates because of additional costs of the following services exclusively made available to the hotel guests: -

“(i)     The incoming calls for the resident guests are handled with parallel extension facility in attached bathrooms.

(ii)      The incoming messages/telephone calls for the resident guests when not present in their rooms are received by the department and communicated or forwarded as per the guests previous oral/written instructions.

(iii)     The general information or any specific service required is made available to the resident guests on telephone as stated in the hotel service directory.

(iv)    ‘Reminder calls’; ‘conference calls’; ‘wake calls’; and ‘do not disturb calls’ are handled with or without the help of the telephone operator. The various other features available on the exchange given in the booklet, to which leave is craved.

(v)     The outgoing calls materialize to the entire satisfaction of the resident guests from the privacy of his room whether it be room to room dialing; local calls; inland trunks calls or overseas international calls or for paging any hotel staff the guest may wish to speak to with our without the help of the Hotel Telephone Operator. It will, therefore, be observed that the outgoing calls function in just one of the features of the total communication package available to guests and cannot be isolated from the rest of the telephone department’s functions. In the absence of a metering device to record and quantify different types of communication services rendered as stated above, except keeping an accurate electronic count over the function of outgoing calls from each guest rooms extension, the entire revenue expenses of the communications department consisting of-

Telephonic call charges plus telephonic rental plus all direct operating expenses of the department such as printing, stationery, directory, recording statements etc. plus indirect operating expenses such as energy cost, repairs and maintenance cost of the EPABX board, computers, printers and telephonic instruments, administration expenses plus overhead expenses such as insurance, interest and depreciation, costly sophisticated equipment running into crores of rupees are naturally spread over the estimated traffic of outgoing calls from guest room, extensions, per annum and which alone can form the logical basis to arrive at the unit call recovery charges to be levied on hotel guests by the telephone department to breakeven with a reasonable contribution margin as per the uniform system of accounts practiced worldwide in the hospitality industry.”

7.      It is further alleged that on above basis the unit package price works out to Rs.8/- per local call. Opposite party No.1 has alleged that it may be appreciated that a resident guest continues to enjoy all services offered in package as listed above. It is only when the guest makes an outside call from the privacy of his room the hotel is obliged to recover the package call price. Opposite party No.1 has, thus, pressed for dismissal of the complaint.

8.      Opposite party No.2 in its reply has taken a preliminary objection that the complaint so far as opposite party No.2 is concerned is not maintainable because no cause of action for filing the complaint has arisen at Ahmedabad or in part of Ahmedabad. It is alleged that complainant No.1 has sought view of opposite party No.2 for a general query vide its letter dated 22.4.2002 which was replied to. Otherwise there is no relationship of consumer or service provider between the complainant and opposite party No.2.

9.      During the pendency of the complaint Federation of Hotel and Restaurant Association of India as also TRAI were impleaded as opposite parties No. 4 & 5. They have also resisted the complaint. Opposite party No.4 in its written statement has taken a plea that its member hotels are charging in excess of PCO rates for local telephonic calls made by the guests from the rooms because the telephone facility in the room is offered along with number of facilities which come at a price. According to opposite party No.4 the user of a telephone installed in the room by a guest is not a casual user as defined under Rule 429-A of the Indian Telegraph Act and as such there is no question of any unfair trade practice or deficiency in service on the part of the member hotels.

10.    Opposite party No.5, TRAI in its short affidavit has pleaded that TRAI in the past has examined the matters relating to high call charges taken by the hotels from the guests and took the view that such charges need not be regulated as the hotel has to incur extra expenditure for providing telephone facility in the hotel room like installation of PABX, its maintenance, free intercom facility etc. It is further pleaded by TRAI that implementation of Rule 429-A of the Indian Telegraph Rules is not the function of TRAI.

11.    In support of their contentions, complainants, opposite party No.1, opposite party No.4 and opposite party No.5 have filed affidavit evidence. No affidavit evidence has been filed on behalf of opposite parties No.2 & 3.

12.    Learned counsel for the complainants has contended that there is no dispute between the parties on the facts. It is admitted that complainant No.2 stayed as a guest in room No.607 of opposite party No.1 hotel from 9.4.2002 to 12.4.2002 and during his stay he made some local telephone calls from the telephone instrument provided in the room. It is also not disputed that at the relevant time PCO call charges for a local call of three minutes was Rs.1.20 P. against which complainant No.2 was charged by opposite party No.1 hotel @ Rs.8/- per call. The learned counsel has argued that act of the opposite party No.1 in charging Rs.8/- per call i.e. at the rate of much above than P.C.O. call rates is violative of Rule 429-A of the Indian Telegraph Rules, 1951 and as such it amounts to unfair trade practice/deficiency in service. It is argued that admittedly opposite party No.1 hotel has been charging the higher rate for local telephone calls made from the room by other guests also. Therefore, it is evident that during past three years the hotel has overcharged its guests for making telephone calls from the room running into crores of rupees, which amounts to unfair trade practice/deficiency in service. Learned counsel has thus urged us to allow the complaint and grant the prayer.

13.    Learned counsel for opposite party No. 1 on the contrary, has contended that Rule 429-A of Indian Telegraph Rules 1951 is not applicable to the facts of this case. Admittedly, the phone in the hotel room is provided for exclusive use of the guest who is not under any compulsion to use telephone. It is the discretion of the customer whether to use the services provided in the room or use the local PCO installed in the lobby of the hotel on which PCO charges are applicable. Learned counsel has contended that hotel incurs a huge expense for providing telephone facility in the room in the form of state of art PABX, its maintenance, employing trained manpower to handle the guests calls and the cost of the telephone instruments, and in order to cover the said cost, the guest is billed at a higher rate which by no standard can be termed as overcharging or deficiency in service. It is further contended by learned counsel for opposite party No. 1 that even the TRAI in its affidavit has stated that at no point of time, it specified or fixed the call charges applicable for hotel room occupancy. Instead TRAI in its affidavit has justified high call charges taken by the hotels in view of the extra expenditure incurred by the hotels for providing exclusive telephone facility to the guest in the hotel room. Thus, opposite party No.1 has not indulged in unfair trade practice and deficiency in service. Opposite party No. 4 has also argued on the same line.

14.    From the submissions made on behalf of the complainants, it is clear that the entire case of the complainants is based upon the applicability of Rule 429-A of Indian Telegraph Rules 1951 to the facts of this case. In order to appreciate the contention of the parties, it would be useful to have a look on Rule 429-A of Indian Telegraph Rules 1951 which is reproduced as under:

429-A. Casual use of a telephone by an outsider.- Casual use of a telephone may be allowed by a subscriber to outsider, subject to the condition that for such casual use, the subscriber shall not charge more than the charges leviable for such use as if it is from a public call office.

          On reading of the above, it is clear that this rule prohibits a telephone subscriber from charging more than the PCO rates for allowing an outsider casual use of the telephone subscribed in his name. Thus, in order to succeed on his allegation of overcharging, the complainant has to show that during the relevant period, he was an outsider who was permitted casual use of telephone. In our opinion, given the facts of the case, complainant No. 2 was not an outsider or a casual user of a telephone. Admittedly, complainant No. 2 stayed in room no. 607 from 09.04.2002 till 12.04.2002 on payment of the hotel charges. In our considered opinion, during the aforesaid period, complainant No. 2 was the licensee authorized to use the room and the facilities provided therein to the exclusion of others. Therefore, during the period of stay in the hotel for the purpose of Rule 429-A, complainant No. 2 cannot be termed as an outsider who was permitted the use of telephone. Even the use of telephone during the said period of stay by the complainant cannot be termed as casual use because during said period, complainant was in complete control of the telephone instrument installed in his room and he could have made as many calls as he wished during said period. Not only this, during said period, no one else except of the complainant No. 2, could have used the said telephone instrument without the permission of complainant No. 2. This means that the complainant No. 2, during said period of three days, was in complete control of the telephone and as such, he cannot be termed as an outsider who was allowed casual use of telephone. Thus, in our view, opposite party No. 1 by charging at a rate excess of the PCO rates has not violated Rule 429-A of the Indian Telegraph Rules 1951.

15.    Coming to the question whether opposite party No. 1 has committed any deficiency in service by charging the complainant no. 2 for local calls made from the telephone connection provided in the room at a rate higher than the PCO rates. In this regard case of the opposite party No. 1 is that in order to provide telephone facility in the room, opposite party No. 1 had to incur expenses on multi-line telephone exchange in the hotel, its annual maintenance, the state of art, telephone equipment in the guest room as also the salary of the manpower to maintain and operate the telephone exchange and to cover the said administrative cost, the local calls from the room are charged at the excess rate. It is contended that there is no compulsion on the guest to use telephone instrument for making outside calls. It is the option of the guest whether to use the facility provided by the hotel in the room or to take pains and make his outside calls from a PCO installed in the lobby of the hotel. It is argued that the excess charges are for the added facility provided to the guest for making outside call in the privacy of the room and therefore, it cannot be termed as unfair trade practice or deficiency in service.

16.    We fully agree with the above contention of learned counsel for opposite party No. 1 and are of the view that opposite party No. 1 hotel has charged for the extra facility provided in the room for which it cannot be held guilty of deficiency in service. In our aforesaid view, we find support from the judgment of High Court of Delhi in Writ Petition (C) 6517 of 2003 and 14691-16927 of 2005 titled ‘Federation of Hotels and Restaurants Association of India & Ors. Vs. Union of India & Ors.’ (alongwith Writ Petition (C) Nos. 9528 of 2003 and 13775-14072 of 2005 decided on 05.03.2007) wherein it was observed as under:

“This   discussion   would   not   be   complete   without   some reference to the decisions of   the State Commission: Delhi under the Consumer Protection Act,   1986 ('CP Act'   in brief)   where the charging of prices beyond the MRP have been held to violate the statute.   I   had   renotified   these   petitions   for   arguments   on 2.3.2007. Mr. Bhasin, Mr. Sachtey and Mr. Midha have, however, CW 6517/2003 Page 24 of 26 stated that   for   the decision in   these   petitions   the   CP Act   would not have to be considered. Prima facie, however, it appears to me that learned counsel for the parties had obviously not brought to the notice of the Commission the decisions of the Supreme Court in Associated Hotels and Northern India Caterers which leave no room for argument that supply or service of eatables and drinks in hotels and restaurants does not partake of the nature of a 'sale' in common legal parlance. Hence, when a person goes to a hotel or restaurant and while he is there orders and consumes such   commodities   this   does   not   fall   within   the   definition   of consumption as contained in Section 2(d) of   the CP Act. Forcing the provisions of CP Act in such circumstances would run counter to the law lay down in Associated Hotels and Northern India Caterers. These observations are obviously made en passant.

          In the above analysis I hold that charging prices for mineral water   in   excess   of   MRP   printed   on   the   packaging,   during   the service   of   customers   in   hotels   and   restaurants   does   not   violate any of the provisions of the SWM Act as this does not constitute a sale   or   transfer   of   these   commodities   by   the   hotelier or Restaurateur   to   its   customers.     The   customer   does   not   enter   a hotel   or   a   restaurant   to   make   a   simple   purchase   of these CW 6517/2003 Page 25 of 26 commodities.   It   may   well   be   that   a   client   would   order   nothing beyond a bottle of water or a beverage, but his direct purpose in doing so would clearly travel   to enjoying the ambience available therein   and   incidentally   to   the   ordering   of   any   article   for consumption. Can there by any justifiable reason for the Court or Commission to interdict the   sale   of   bottled mineral   water   other than   at   a   certain   price,   and   ignore   the   relatively   exorbitant charge for a cup of tea or coffee.   The response to this rhetorical query cannot but be in the negative. Although the vires of   Rule 23 have been assailed,   I   do not   find it   necessary to answer that challenge   since   the   provision   relates   to   sales   between   dealers and   neither   the   hotels   and   restaurants   of   the   one   part   and customers of the other falls within this categorization.”

17.    In view of the discussion above, we are of the opinion that the complainants have failed to establish unfair trade practice or deficiency in service on the part of the opposite parties. The complaint is therefore, dismissed.

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Consumer Protection Council, Rourkela