Delhi consumer court orders Swiggy, restaurant to pay ₹1 lakh over misleading buffet price

A Delhi consumer court has directed Swiggy and a Delhi restaurant to jointly pay ₹1 lakh to a customer after finding them liable for displaying misleading buffet price information on the food delivery platform.

The District Consumer Disputes Redressal Commission (North District) said an online platform cannot escape responsibility by calling itself a “mere intermediary”.

In an order passed on September 21, a bench headed by president Divya Jyoti Jaipuriar observed that “Swiggy had a responsibility to ensure that prices displayed on its platform were accurate and matched the services actually offered by restaurants”.

It also rejected the company’s reliance on intermediary protection under Section 79 of the Information Technology Act, which exempts an intermediary from liability in certain cases, observing that such protection is conditional on the platform exercising due diligence.

“OP-1 (Swiggy) cannot escape from its responsibility merely by quoting Section 79 of the Information Technology (IT) Act,” the commission said.

The order was passed on a complaint by lawyer Praveen Kumar Singh, who said that he had booked a table at Themis Barbeque House in Keshav Puram through Swiggy Dineout for April 7, 2024.

The complaint claimed that at the time of booking, Swiggy displayed the “cost for two” as ₹1,500, indicating a price of ₹750 per person. “But the restaurant charged ₹1,050 per person for the vegetarian buffet and ₹1,100 for the non-vegetarian buffet,” the complainant said.

The commission noted that “the actual price was 40-47% higher than the amount represented on the platform”.

Swiggy had argued during the proceedings that the ₹1,500 figure was only an average or estimated amount and that customers could see the detailed menu and exact prices before booking.

However, the commission rejected this explanation, noting that there was “no indication whatsoever” on the Dineout listing that the figure was merely an estimate. “Swiggy’s own terms also contained no disclaimer describing the amount as approximate or non-binding,” the commission noted.

“A representation of price made to a consumer at the pre-booking stage... creates a reasonable expectation that the actual billing will not differ materially from that representation,” the commission said, adding that the difference in this case was “a material difference”.

The commission found the platform’s role particularly significant, noting that Swiggy had access to the restaurant’s accurate, itemised weekend buffet prices when the booking was made.

Despite this, the court said, the “lower cost for two” figure continued to be displayed without any prominent disclaimer that weekend prices were different.

“The restaurant was responsible as the service provider that supplied the advertisement,” the commission said, adding that “Swiggy was also responsible as the platform on which the misleading information was displayed”.

It held, “Continued display of an incorrect price amounted to deficiency in service and unfair trade practice on the part of both companies”.

The court also relied on the Consumer Protection (E-commerce) Rules, 2020, which require e-commerce platforms to ensure that information displayed by sellers is accurate and corresponds with the goods or services actually offered.

“Swiggy had produced no material showing that it had a mechanism to reconcile the cost for two figure with the actual billing,” it said.

The commission said that Section 79 does not give an e-commerce platform blanket immunity. The court held that the provision’s protection is conditional on the intermediary satisfying the requirements of the law, including exercising due diligence.

“Swiggy had failed to demonstrate that it was doing so in relation to the prices displayed on its platform,” the commission held.

“It has to show conclusively that the OP-1 (Swiggy) was performing due diligence in all respects,” the commission emphasised.

The commission also held that the displayed price fell within the definition of a misleading advertisement under the Consumer Protection Act, saying the figure was “clearly displayed mischievously to mislead the complainant as to the true price of the buffet”.

The customer in his complaint also objected to a 10% service charge imposed on his beverage bill, even as the restaurant refused to remove it.

On this aspect, the commission found that the restaurant’s own menu “did not disclose any service charge or staff contribution”, while the bill described the levy as “Service Charge”.

It noted that the Delhi High Court’s September 5, 2023 interim directions required participating establishments to use the term “Staff Contribution” instead of “Service Charge”, subject to other conditions.

The commission found that the restaurant had not complied with the said directions. It consequently held that the levy constituted “deficiency in service and unfair trade practice”.

The commission directed Swiggy and the restaurant to jointly pay ₹1 lakh towards mental agony, harassment, inconvenience and litigation costs to the complainant.

The commission said that the amount has to be paid within four weeks, failing which 12% annual interest would be payable on the entire awarded amount from the expiry of the deadline.