Travel contracts should be fair

Several countries around the globe have put a stop to unfair terms in consumer contracts through specific laws aimed at protecting people, but not India. As a result, customers continue to be victims of`A0one-sided, highly exploitative contractual terms drawn up by manufacturers and service providers.

If you look at the travel industry for example, you will find many such contracts drawn up by tour operators and travel agencies that are patently unfair to clients. Most of them, for example, collect the entire amount at the time of booking a holiday package and get the client to sign a contract that says that the he will not be entitled to any refund in case he or she cancels the trip. Given the huge amounts involved in these package tours, particularly to foreign locales, this is patently unfair and many a consumer who has had to cancel a trip on account of certain unavoidable circumstances has either lost the entire amount paid to a travel agency, or fought against such terms in a court of law.

A recent case decided by the national consumer disputes redressal commission illustrates this point best. The case also underscores the urgent need for the government to take immediate steps to prevent this kind of exploitation of consumers through appropriate laws.

In this case, the complainant and her sister planned a visit to the US and sought the services of a travel agency to help them with the tour. Accordingly, at the rate of Rs 1,97,000 per person, they paid Rs 3,94,000. They were promised that the interview with the American Consulate at Chennai would be arranged for both of them on the same day. However, this did not happen. The interviews came up on different days, and while one sister got her visa, the other’s application was rejected. Following this development, the sisters requested the travel agency to either arrange a tour to some other foreign country or refund the entire amount.

This was not agreed to by the travel agency and eventually, it refunded only Rs 2,62,000, forcing one of the sisters to file a complaint with the court for recovering the rest of the money — Rs 1,32,000.

Since the travel agency did not appear before the district forum, the forum decided the case ex-parte and directed the travel agency to return Rs 1,12,000, after deducting Rs 20,000 for the services rendered by it. It also directed the agency to pay 10 per cent interest on the amount and pay Rs 1000 as costs. The state consumer disputes dedressal commission, too, upheld this order.

In its revision petition before the national commission, the travel agency argued that first and foremost there was no assurance from its side that the visa interviews would be organised for both the sisters on the same day. Second, the contract signed by the consumers clearly stated that once the visa was obtained, cancellation of the tour for any reason whatsoever would attract cancellation charges to the extent of 100 per cent of the amount paid. This had been accepted and signed by the complainant. Therefore, the sister who had got the visa was not entitled to any refund on cancellation of the trip; yet they had retained only Rs 1,22,000 and returned Rs 75,000 .

Having accepted the amount as full and final settlement, the complainant cannot now argue that the amount was accepted under protest. Dismissing the revision petition, the national commission said it saw no reason to interfere with the orders of the district forum and the state commission and directed the agency to refund Rs 1,12,000 along with 10 per cent interest per annum calculated from June 2006 till the date of payment and also pay costs of Rs 1000 ( M/s Cox and Kings (I) Pvt Ltd vs Jagadambika T.G., RP No 1979 of 2007, decided on May 18, 2011).

In the United Kingdom, for example, the Unfair Terms in Consumer Contracts Regulations ensure that terms that are unfair to customers are not included in contracts. The regulations also provide for clients to complain against any such unfair terms to the office of fair trading, which enforces the regulations. Why can’t we have such regulations?

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