Telco Rapped For Bookings' Interest Rate
An application has been filed with the MRTPC to initiate further investigation into the case, besides giving immediate orders to cease and desist the existing practices to the automobile giant.
The DGIR's report says that Telco collected over Rs 21.287 crore as booking money for its various vehicle models like the Tata Sierra, Tata Estate and Tata Sumo.
However, the company pays only 10 per cent rate of interest on the money collected. Besides, no interest will be paid by Telco if the booking for the vehicle is cancelled before 12 months. These clauses are restrictive in nature, says DGIR.
Telco had charged Rs 25,000 for Tata Sierra and Tata estate and Rs 20,000 for Tata Sumo. The aggregate money collected was Rs 21.287 crore.
In its reply to the DGIR, Telco has said that nearly 50 per cent of the total booking amount was invested with the Unit Trust of India, on which it earned over 26 per cent dividend and the rest was used as working capital.
The DGIR report says that the payment of 10 per cent interest on the booking amount, on which the company has earned dividend to the extent of 26 per cent, also amounts to unfair trade practice under Section 36A of the MRTP Act. The booking scheme also reserves the company rights to sell over 25 per cent of the production at its own discretion.
Moreover, the company charges Rs 3,000 in case there is a transfer of booking to any other person, which is an unjustified cost on the customer, allege DGIR officials.
The case against Telco comes close on the heels of similar charges being levelled by the DGIR on other high-profile automobile companies, including PAL-Peugeot, Hindustan Motors, Premier Automobiles and Maruti Udyog.
A study had been conducted by the investigative arm of the MRTPC to analyse the booking schemes for the vehicles of various automobile companies in the country. /table>