PVR INOX refuses cash payment? Lawyer sends legal notice, expert explains what law says

An Ahmedabad-based lawyer has reportedly sent a legal notice to PVR INOX Ltd, questioning the multiplex chain’s alleged refusal to accept cash payments at its cinema hall in city's Palladium Mall, seeking clarity on the legality of the “cashless-only policy”.

According to a report by The Times of India, advocate Utkarsh Dave issued the notice after visiting the multiplex on September 13 to watch a film. He alleged that staff members refused to accept cash for his movie ticket and food and beverages, leaving him with no option but to pay through UPI.

Lawyer seeks answers

Dave’s notice, according to the ToI report, refers to Section 26(1) of the Reserve Bank of India Act, 1934, which recognises RBI-issued banknotes as legal tender. He argued that a blanket refusal to accept cash at a consumer-facing business raises questions about transparency and asked whether customers were adequately informed.

The notice also invokes provisions of the Consumer Protection Act and asks PVR INOX to clarify whether it has formally adopted a cashless-only policy.

“If PVR INOX has consciously adopted such a restrictive policy, the same ought to be prominently displayed at the relevant points of sale and communicated to consumers in advance. A customer cannot reasonably be expected to discover the existence of such a policy only after reaching the counter and tendering cash,” the notice stated, according to The Times of India.

The lawyer’s objection, however, was not to the availability of digital payment options but to what he described as the compulsory denial of cash payments, the report added.

Dave has also sought copies of any written instructions or internal policies directing employees not to accept cash payments. He has sought a response within seven days.

What the law says in India

While RBI-issued banknotes are legal tender in India, that does not automatically mean every private business is required to accept cash for every transaction, according to legal expert Dinkar Sharma, partner at Jotwani Associates, as quoted by Mint.

Sharma explained that private businesses can generally determine the terms on which they offer goods and services, subject to applicable laws and regulatory requirements.

“In such cases, insisting on digital payments may simply be part of the way the business operates,” he said, referring to businesses such as online platforms, e-commerce services, digital services and automated systems, Mint reported.

Even physical businesses may generally adopt a cashless policy and accept only UPI, cards or other digital payment methods, provided there is no specific legal or regulatory requirement requiring them to accept cash, the expert said.

According to Sharma, businesses that adopt cashless payment policies should clearly communicate those restrictions to customers in advance.

What about customers without digital payment options?

The lawyer’s notice further asks the multiplex to explain what arrangements are available for customers who do not have a smartphone, UPI access, internet connectivity or other digital payment facilities.

“In particular, PVR INOX is required to explain whether such consumers would simply be denied the opportunity to purchase the service despite being ready and willing to make payment in lawful currency,” the reported notice said.