Swiggy ‘cost for two’ misleading? What Delhi consumer court’s ₹1 lakh order means for diners
Are you relying on online dining apps for food prices? Be aware because it’s not always what you see on these apps that you might have to pay at the restaurants. In one such case, a Delhi consumer court has held Swiggy and a Delhi-based eatery responsible for unfair trade practices, reported LiveLaw.
The issue erupted after a customer said that he was charged significantly higher buffet rates than the “cost for two” listed on the app.
The Commission held both Bundl Technologies Pvt. Ltd., which operates Swiggy, and Themis Barbeque House responsible for the misleading pricing. According to LiveLaw, it observed that the restaurant was the service provider that put up the advertisement, while Swiggy was the platform on which the representation was displayed.
The order was passed by a three-member bench including President Divya Jyoti Jaipuriar and members Ashwani Kumar Mehta and Harpreet Kaur Charya.
What was the complaint
As per LiveLaw, complainant Praveen Kumar Singh said that he booked a table at the eatery through the “Dineout” section of the popular food app on April 7, 2024.
The booking was said to be made for 10 people through Singh’s account, while another booking for four people was made using his wife’s account. At the time of booking, Swiggy Dineout displayed the “cost for two” as ₹1,500, which translated to a rate of ₹750 per person.
However, he said that the restaurant subsequently charged ₹1,050 per person for a vegetarian buffet and ₹1,100 for a non-vegetarian buffet.
As per the complaint, customers were charged ₹300 and ₹350 extra per person than the “cost for two” pricing.
He also alleged that the restaurant charged a 10% service fee on beverages. Although he said that he raised a complaint through Swiggy’s virtual chat, the issue remained unresolved.
Swiggy claims
Swiggy reportedly argued that its service merely acted as an intermediary between customers and restaurants, claiming that it was not responsible for information about products or services listed by restaurants.
The company also contended that the ₹1,500 “cost for two” figure was an average or estimated amount rather than an exact price. It justified that customers are provided with the option of a detailed menu and actual prices before making their bookings.
Swiggy reportedly invoked the intermediary protection available under Section 79 of the Information Technology Act, 2000.
On the other hand, Themis Barbeque House, despite being served notice, did not appear before the Commission. As a result, the eatery was proceeded against ex parte.
Why court called estimated cost misleading
The Commission noted that the Swiggy Dineout listing did not state that the “cost for two” figure was only an estimate.
The difference between the displayed and actual prices amounted to roughly 40–47%. The Commission held that this was a material difference, amounting to misleading advertising and an unfair trade practice.
The Commission referred to the Consumer Protection (E-commerce) Rules, 2020, and the 2022 Guidelines on Misleading Advertisements in this case.
It rejected Swiggy’s reliance on Section 79 of the IT Act and observed that intermediary protection is subject to compliance with due diligence requirements.
Commission pointed out that Swiggy had not demonstrated any mechanism to reconcile the “cost for two” displayed on its platform with the final amount charged by the restaurant.
Service charge
The Commission also noted the restaurant’s levy of a 10% service charge on beverages.
It noted that the menu did not disclose the charge or use the prescribed term “Staff Contribution” instead of “Service Charge” in the invoice.
Verdict
Referring to the Delhi High Court’s judgment in National Restaurant Association of India v. Union of India, the Commission ruled in favour of the complaint.
Compensation amount
The Commission directed Themis Barbeque House to refund ₹3,988 towards the excess amount charged over the price represented on Swiggy Dineout.
The amount will carry 9% annual interest from April 7, 2024. The full amount, including interest, is to be paid within four weeks of receipt of the order.
The restaurant was also directed to refund ₹254 towards the service charge levied on the beverage bill, along with another 9% annual interest from the same date of the dining.
The dining app and the restaurant were jointly directed to pay ₹1 lakh as compensation to the complainant for mental agony, harassment, inconvenience and litigation costs.
“The Commission further directed that if the awarded amount was not paid within the stipulated four weeks, the opposite parties would be liable to pay 12% annual interest on the entire awarded amount from the expiry of the four-week period,” added the LiveLaw report.
