Hotels can fix own charges

Calls made from a five-star hotel cannot be compared to a casual call made from any shop or PCO

The Consumer Education & Research Centre (CERC) had filed a complaint before the National Commission in respect of hotels overcharging for telephone calls made by guests. The complaint says, its former chairman stayed at Taj Hotel in Delhi from April 9 to April 12, 2002. He made some local calls from his room. He was billed Rs 168 at Rs 8 per call instead of the usual rate of Rs 1.20 for a call for three minutes duration. He sent a representation for a refund, contending the excess charge was in contravention of Rule 429 A of the Indian Telegraph.

 
The hotel responded the charge was justified as it had to incur huge expense for installation and maintenance of a state of the art electronic exchange to provide connections in each room, with a parallel connection in the bathroom. It had to also appoint trained employees to handle calls. The hotel contended there was no violation of the rules, as calls made from a room in a five-star hotel cannot be compared with a casual call made by an outsider from any shop or store.
 
CERC, along with its chairman, filed a complaint before the National Commission against Taj Hotels and against Bharat Sanchar Nigam Limited (BSNL) and its officials, alleging overcharging for calls constituted an unfair trade practice. The hotel reiterating its stand. Additionally, it argued a guest was not compelled to use the phone in his room and could have made calls from the public phone (PCO) in the lobby. The Federation of Hotel and Restaurant Associations of India as well as the Telecom Regulatory Authority of India were also impleaded, so that the complaint could be properly adjudicated. Both supported the stand taken by Taj Hotels.

 

The National Commission observed the entire case revolved around the interpretation of Rule 429A which stipulates a subscriber cannot charge an outsider for casual calls beyond the rate prescribed for calls from PCOs. So the crux of the dispute would be whether a guest occupying a hotel room could be considered to be an outsider who was permitted casual use of the telephone. The Commission observed that a guest staying in a hotel on payment of room charges would be in exclusive occupation of the room, and it was up to him to choose whether or not to make calls from his room. Such a guest would not be an outsider but a licensee. Hence, the provision of Rule 429A applicable to casual use of the phone by outsiders would not apply to hotel guests.

 
While deciding the issue, the National Commission also observed that the Delhi high court, in Federation of Hotels and Restaurants Association of India v/s Union of India, had held that the maximum retail price was not applicable to food and beverages served in restaurants.
 
Accordingly, by its order of July 7, 2015 delivered by the Justice Ajit Bharihoke for the Bench along with Rekha Gupta, the National Commission concluded Taj Hotels had not indulged in an unfair trade practice, and dismissed the complaint.
  (The author is a consumer activist)