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High cancellation charges by airlines – and it keeps increasing

Over a period of time, the regulator DGCA (who controls the airline business in India) has allowed airlines to increase rates for their different services; so for example, there is the ability to charge extra for carrying luggage (or rather Spicejet has a fare without baggage, but this could become the normal fare, which means those who are carrying luggage might be forced to pay extra for that benefit). In addition, charges for seat selection, window seat, aisle seat, for the ability to have members of a family sitting together, all of these are extra charges. These are called unbundling, which means that airlines are allowed to charge for many different kinds of services that were uncharged in the past.
One of the one that pinches the most is about cancellation charges. There was a time just a few years back when the charge for cancellation for a domestic ticket was Rs. 750 (and this is not someone playing with a trip, there can be valid reasons why someone has to cancel – for example, for a previous trip, I had to cancel when my kid fell ill and the doctor recommended against going on the trip). Then all of a sudden, the cost of cancellation increased to Rs. 1500 for the ticket, which was a big increase – and all airlines did the same (who wants to not get money?). Then the cancellation charges kept on increasing, and now Indigo has sent a proposal for increasing this cancellation charge to Rs. 2,250. In the past, the regulator has studiously ignored any calls by customers to look at these increasing cancellation charges, but as of now, it seems that the recent proposal has actually managed to get the attention of the regulator who has promised to look into these increasing charges (link to article):

The regulatory move comes as a leading low cost carrier last week hiked cancellation charges to a flat Rs 2,250 for all passengers cancelling up to 2 hours before the flight departs. Before this, passengers cancelling were charged Rs 1,900 if they cancelled tickets more than a week prior to scheduled departure. This was the fourth upward revision in a year. Other airlines are also expected to follow suit.
“As the safety regulator, we ideally should not interfere in the commercial decisions of airlines. But in this case we are getting complaints from the public. Based on the Lalit Gupta report, we will act if the cancellation/rebooking charges are found to be unreasonable,” said a senior DGCA official.

Of course, for the past some time, the regulator has not been getting into this matter because of their claims that these are commercial decisions that are between airlines and their consumers; however, in that case, they are defying their own mandate, since the regulator is also meant to protect the interests of the consumer against unfair moves by the airlines.

Snapdeal has to honor low cost phone sale

It happens once in a while. So many times, there has been the story that airline tickets were suddenly available for $1 or so, technical glitches and so on. Prospective travelers immediately snap up such tickets as soon as they are available; the airline may whine and scream about this being a mistake, but they have to honor the deal. The buyer has bought this legally and apparently in good faith; even if there are conditions on the site about the airline having the final say in the ticket, it would be a horrible Public Relations move to deny the ticket; the loss of goodwill would be far worse than the amount saved by denying the ticket. This is true for other providers as well, such as when a shop may come out with a bargain and later realise that there was a problem with the price listing.
In this case however, Snapdeal came out with an obviously faulty listing that showed the iPhone gold version of iPhone 5S for an amount of Rs. 68. A consumer came across this price, and it was a superb bargain, and hence quickly snapped this up. When Snapdeal would have come across this, they would have realized that something was wrong, but it does not matter. They had an item for sale which was bought by the customer in an obviously above board transaction. When they declined to go ahead with the transaction, the consumer went to the consumer forum which ruled against Snapdeal (link to article):

Online shopping portal Snapdeal has been asked to pay Rs.10,000 in fine by the State Consumer Dispute Redressal Commission for refusing to deliver a gold version of Apple’s iPhone 5S (16GB) to one Nikhil Bansal for Rs.68. Bansal had allegedly ordered the iPhone from Snapdeal last February when it had appeared for buy for Rs.68 on its website.
Snapdeal in its defense said that the ‘iPhone 5S available for Rs.68’ incident was a technical glitch. The forum – in its order dated February 12 – has dismissed the argument. Snapdeal has also been directed to deliver the iPhone to Bansal at the same price that it was ordered, that is, Rs.68.

E-commerce chains need to be more careful of such cases. Mistakes will happen from time to time, but if the merchant refuses to go ahead with the transaction, it would not be good for their public image, and hence they need to reconsider their approach in such cases.

Builders cannot demand hidden charges – Delhi Court

In the recent past, there has been a lot of complaints from house buyers about the tendency of many builders to charge additional amounts that were not specified in the original contract. For example, when somebody bought a piece of land for a certain consideration to be paid in installments, the expectation is that they would get the land at the designated time. So when the property developer comes up with a new demand, for whatever reason, it can be a shock to the buyer and lead to a tremendous feeling of frustration. Earlier, such cases would be grudgingly accepted, but in the past decade or so, the intervention by consumer forums and courts has led to more and more buyers challenging the developers if they feel that they have been wronged.
There have been so many cases where buyers have been wronged in some way or the other, and people have their own experiences. For example, somebody bought a flat in society with a promise that the bottom level would be stilt parking, but was later converted to shops at the bottom level; or the concept that suddenly the developer decided that the super area was not rightly corrected, and recalculation led to new charges, and so on. There can be many such experiences of people, where the developer feels that he is in a position to dictate terms, but the trends have changed to some extent; now if you feel aggrieved over some action of the developer, challenge it (link to article):

Builders cannot demand hidden charges which are not part of their contract with buyers and are liable to pay compensation for delaying delivery of property, a Delhi court has said, observing that they are “not holy cows” who cannot be questioned by their customers.
Holding that builders cannot levy any additional charges without any justification, the court said they were adopting tactics to achieve their illegal purposes and arm-twist the buyers to extort more money by raising the cost price or levying additional charges which do not form part of the original contract.
Additional District Judge Kamini Lau made the observations while directing real-estate major TDI Infrastructure Ltd to withdraw its demands for overdue and other charges and hand over a plot’s possession booked by two brothers in the firm’s project in Sonepat within two months.
“Unless these hidden/extra charges form an essential part of the contract within the knowledge of customer, the builder cannot charge the same without offering any justification..

Parsvnath Developers to pay penalty for late delivery

Around a decade ago, and lasting till the past couple of years, the housing sector in India was going great guns. Residential values were rising, and rising fast, people were rushing to buy flats and houses, and investors were pumping money into the sector hoping to make back quick returns. Many people did make a lot of money, but for the past few years, the sector has seen a lot of distress – flats and houses booked many years ago still have not been delivered. In the sector currently, buyers face a lot of stress. A large section has taken bank loans for buying flats or apartments, EMI’s are still ongoing, they still have to pay their rental, and so on. For example, somebody could have taken a loan for a flat to be ready by 2012, but these flats are not ready as yet. The buyer is not sure about when the delivery will happen, their faith in the builder has also gone, and they are worried about whether they have lost their money. And the builder was supposed to pay a penalty for late delivery of flats, but they use some technicality or other to not pay the penalty, or just outright refuse to pay. Consumers are now approaching consumer forums or courts for getting their rights, and there has been a spate of decisions in the recent past that are making builders think about their approach again (link to article):

he National Consumer Disputes Redressal Commission has ordered Parsvnath Developers to pay a monthly penalty to buyers for delay in handing over flats in Parsvnath Planet, a residential project in the city’s Gomtinagar locality.
The builder will have to pay Rs 15,000 per month to complainants who had applied for flats up to 175 sq metres, while those who went for bigger flats will get Rs 20,000 every month, the commission ruled.
In the Parsvnath case, the NCDRC observed that according to the agreement executed in 2006, the developer was to give possession of flats to allottees within 42 months, that is, in 2009-10. However, flats have not been handed over till now.

In many cases, builders are also under distress. However, in some cases, these builders have extended themselves, trying to grow too fast or otherwise found themselves in other problems. However, the stress of consumers, who are incredibly much smaller than these large developers and really cannot afford the pain that these developers are putting them through, has to be paramount.

Spicejet to pay compensation for losing baggage

This happens infrequently when one is traveling. There are numerous reports of passenger bags lost while traveling, and even though the percentages of these bag losses against the total number of trips and baggage that make it to their destination is very low, it is very painful for the people who lose their baggage. Nobody double packs while traveling, and if one or more pieces of baggage are lost, it can be painful. People have been known to reach their destination with almost no packed clothes, or have lost important pieces of documentation, or lost medicines, or other important stuff. And this when they may be in a different location, away from their home and away from their comfort zone and no support.
There are standard protocols to handle the situation of loss of baggage, with international agreements about the compensation that airlines have to offer, but in a number of cases, the airlines are reluctant to settle with the affected passengers. There are a number of complaints where people have to fight with the airline, such as in this case where the case went to a consumer court (and to a higher consumer court) (link to article):

The apex consumer court has asked SpiceJet airline to pay compensation and penalty of Rs 60,000 to a Tripura resident for losing his luggage in one of its flights.
Justice J M Malik asked the air carrier to pay the compensation amount to Agartala resident Dr Atanu Ghosh whose one out of five registered ‘check-in’ baggages was lost during his flight and could not be found.
Both the lower fora had granted compensation of Rs 50,000 in favour of Ghosh. Thereafter, the airline approached the National Consumer Disputes Redressal Commission (NCDRC) against the orders of the fora and claimed that the amount awarded to Ghosh was on the higher side.

This has been the case in many complaints earlier as well, when airlines have been forced to pay compensation for losing luggage, but have fought this every step of the way; with the cases going to consumer courts and in most cases, they have been forced to pay up.