BookMyShow, PVR fined by Hyderabad court for ‘unfair’ internet handling fees

The consumer court in Hyderabad has directed BookMyShow and PVR Cinemas to pay a penalty of Rs 5,000 each.
A theatre being sanitised
A theatre being sanitised

The Hyderabad District Consumer Disputes Redressal Commission on Friday penalised online aggregator BookMyShow and theatre chain PVR Cinemas for levying ‘internet handling charges’ on consumers. The consumer court has termed the charges, which are almost one-third of the ticket price, as “unfair.” 

The court was hearing a complaint filed by Forum Against Corruption, headed by its president and activist Vijay Gopal who had moved the forum against ‘internet handling charges’ levied on the ticket price by online ticket booking platforms. A penalty of Rs 5,000 has been levied on both BookMyShow and PVR Cinemas, to be paid towards the Consumer Legal Aid Account of the court. They also have to pay an amount of Rs 25,000 as compensation and an additional Rs 1,000 towards litigation costs to the complainant Vijay Gopal. 

Terming the ‘internet handling charges’ as “unfair”, the Hyderabad District Consumer Disputes Redressal Commission ordered them to restrain from collecting a fee of more than Rs 6. This cap of Rs 6, the Commission said, was because this is the cap for Andhra and Telangana, plus and other applicable facilitation charges based on Section 6A of The IT Act, 2000, which pertains to delivery of services by a service provider.

“...this Forum is constrained to hold that the additional amount of Rs.41.78/- per two tickets under the head "Internet Handling Charges"...amounts to unfair trade practice as defined under Sec.2(1)of the Consumer Protection Act,” the order said. 

The Commission in its order said, “It is unfair and illegal to indiscriminately pass on the costs to the customers in the form of “internet handling charges” without unbundling the charges imposed on the customers, especially when the fact that the merchants cannot pass on MDR (Merchant Discount Rate) to its customers...”

To the Commission, BookMyShow denied the allegations of being “unfair” and told the Commission that since a case relating to the issue is pending in the Bombay High Court, asked for the proceedings be adjourned. To this, the Commission said there was no legal embargo from the court on it carrying it forward. Similarly, PVR had also sought the Commission to dismiss the case against it as “there is no cause of action”, which was dismissed by the court. 

"BookMyShow is examining the order from the Consumer Forum and will follow the due process of law. BookMyShow has always and will continue to abide by the law of the land and will respond at the appropriate forum, wherever required,” a BookMyShow spokesperson told TNM. 

In 2019, Vijay Gopal, an Right to Information (RTI) activist and president of ‘Forum Against Corruption,’ had filed a case against the online ticket booking portals alleging that these portals were exploiting the consumers by levying an extra gateway fee in the form of “internet handling charges.” In this regard, Vijay had also approached the Reserve Bank of India and the Department of Information Technology under the Ministry of Electronics and Information Technology through RTIs.  

Reacting to the court’s decision, Vijay Gopal said that while he appreciated the order, he termed it “unfortunate” that the court has levied a penalty of Rs 5,000 for what he termed as BookMyShow’s “20 years of wrongful gains.” He added that the collection of internet handling charges is in itself against the law.

“Also, the court seemed to have allowed BookMyShow to collect Rs 6, which is strange as the BookMyShow had not claimed any government authorisation from Telangana or Government of India during the court proceedings. Their supporting documents, affidavits, etc. did not have any such information, allowing of collection of any Internet Handling fee, which has been established as Unfair Trade Practice and has been illegal as per section 6A of the IT Act, 2000 of India,” he said. 

He added that he was relooking at the facts, and if the Telangana government had not authorised any fee to be levied as internet handling charges, then he would take the matter to the High Court. 

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