Consumer Rights and False Promises: Today Merchandise Pvt. Ltd. vs. Anil Kumar Luthra

The case of Today Merchandise Pvt. Ltd. vs. Anil Kumar Luthra revolves around a dispute concerning consumer rights and false promotional schemes. The primary legal question before the Supreme Court was whether a consumer is entitled to claim free gifts under a promotional scheme when the scheme’s terms explicitly condition such rewards on referrals.

Background of the Case

Today Merchandise Pvt. Ltd., the appellant, had advertised a holiday voucher scheme through its website. Under this scheme, customers purchasing vouchers were offered “free gifts” based on the number of referrals they made. Anil Kumar Luthra, the respondent, purchased three vouchers worth ₹5,998 each, totaling ₹17,994. Based on verbal assurances, he expected to receive three free gifts—a laptop, a mobile phone, and a 42-inch LED television—even though he had not made the required referrals.

When the company refused to provide these gifts, Luthra filed a consumer complaint before the District Consumer Disputes Redressal Forum, Sikar. The District Forum ruled in favor of the respondent, directing the company to provide the free gifts and awarding monetary compensation of ₹5,000 for mental distress along with ₹2,000 in costs. This decision was later upheld by both the State Consumer Disputes Redressal Commission (SCDRC) and the National Consumer Disputes Redressal Commission (NCDRC). The company then appealed to the Supreme Court.

Arguments of the Appellant (Today Merchandise Pvt. Ltd.)

The company challenged the lower court’s orders based on the following arguments:

• The promotional scheme clearly stated that free gifts were conditional on referrals.
• The respondent had not made any referrals, making him ineligible for the gifts.
• Allowing the claim would create an absurd situation where any consumer could receive high-value gifts without fulfilling the required conditions.
• The District Forum lacked jurisdiction over such disputes.

Arguments of the Respondent (Anil Kumar Luthra)

The respondent, in his defense, presented the following points:

• The company’s employee had assured him of receiving free gifts irrespective of referrals.
• The company’s refusal to provide the gifts amounted to a deceptive trade practice.
• The termination of the employee who made the promise supported the claim that such a representation was made.
• The company had engaged in unfair trade practices by misleading customers into purchasing the vouchers.

Key Observations of the Supreme Court

The Supreme Court examined the case based on the following legal questions:

• Were the free gifts an unconditional offer, or were they subject to referrals?
• Did the respondent fulfill the eligibility criteria under the scheme?
• Was the company guilty of unfair trade practices?

The Court made the following findings:

• The terms of the promotional scheme, as advertised, clearly linked the free gifts to referrals.
• The respondent failed to provide evidence that the company had explicitly assured him gifts without referrals.
• The employee’s alleged misrepresentation did not bind the company unless explicitly authorized.
• The order of the District Forum, as upheld by the SCDRC and NCDRC, was contrary to the terms of the agreement.

Verbatim Court Findings

The Supreme Court, while allowing the appeal, held:

“A subscriber was not entitled, as a matter of right, to the ‘free gifts’ merely on purchasing the holiday vouchers. The free gifts were contingent upon making referrals which, admittedly, were not made by the respondent.”

Additionally, the Court observed:

“The directions of the District Forum, which were affirmed by the SCDRC and NCDRC, will result in a manifestly absurd outcome. The order of the District Forum was manifestly contrary to the terms of the agreement between the parties.”

Final Judgment

The Supreme Court ruled in favor of Today Merchandise Pvt. Ltd., overturning the orders of the consumer forums. The key takeaways from the judgment are:

• The free gifts were not an unconditional offer and required referrals.
• The respondent had no enforceable right to claim the gifts.
• The order of the NCDRC was set aside, and the consumer complaint was dismissed.

Final Verdict: Appeal allowed, consumer complaint dismissed.

Petitioner Name: Today Merchandise Pvt. Ltd..
Respondent Name: Anil Kumar Luthra.
Judgment By: Justice D.Y. Chandrachud, Justice Hrishikesh Roy.
Place Of Incident: Sikar, Rajasthan.
Judgment Date: 08-01-2020.

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