CCPA orders probe into Veena World’s cancelled tours during pandemic

The Central Consumer Protection Authority (CCPA) has ordered an investigation into leading travel company Veena World’s cancellation of packaged tours during the pandemic. The CCPA has held that prima facie it appeared that Veena World had indulged in “unfair trade practice” as per the provisions of the Consumer Protection Act, 2019.

The order dated September 26 came on a complaint filed by consumer rights body Mumbai Grahak Panchayat (MGP) last year against Veena Patil Hospitality Pvt Ltd which operates under the brand name Veena World. It has asked the Mumbai District Collector to probe within the next one month the number of cancelled domestic and international tours, the amounts the passengers paid and were refunded, the exact number of FTVs issued, the expenditure by Veena World to airlines, hotel bookings, visa charges etc.

During the peak of the Covid-19 pandemic in 2020 when air travel in India and abroad was suspended, travel companies, airlines and hotels had to cancel their services, and many companies had opted for instruments like credit shells, future travel or tour vouchers, assuring their patrons that they could use the services at a later period instead of opting for a cash refund.

The MGP had carried out an online survey of consumers which showed that 1,821 passengers had complained against Veena World pertaining to non-refund of ₹28.53 crore. The survey also showed that more than half of the consumers were senior citizens who said that it was not feasible for them to utilize the credit voucher unilaterally offered by the company for travel in the near future.

The MGP complaint alleged that Veena World had refused to refund the amounts paid by the consumers towards their packaged tours, and instead it offered a “non-refundable, and non-encashable Future Tour Voucher (FTV)” after deducting substantial amounts under heads such as cancellation charges or tour transfer charges.

The MGP contended that this was in violation of the right to full refund to the consumers as per the October, 2021 Supreme Court judgment in Pravasi Legal Cell vs Union of India case. It alleged that the company had violated the right to refund to an entire class of consumers, compelled consumers to accept credit shells/FTV against their will, wrongfully deducted exorbitant charges, and asked them to travel despite travel and health guidelines issued by the government.

Based on the complaint, the CCPA issued a show cause notice on March 17, 2021. In its response, the company challenged the jurisdiction of the Delhi-based CCPA on the ground that as per its terms and conditions, any claims were subject to jurisdictions of courts in Mumbai only. It then filed a writ petition in the Bombay High Court, but the court disposed it off in July 2022, asking Veena World to respond to the show cause notice, and directed CCPA to give a ruling on merits.

In August 2022, the company filed its response to the notice contending that the list of consumers on whose behalf the MGP had filed the complaint did not constitute a “class” of consumers as per the law. Stating that it had refunded an amount of ₹43 crore to consumers who opted for refunds, it contended that out of 100 per cent of cancelled tours due to Covid-19 pandemic, 88 per cent had agreed to rescheduling through FTV, 7 per cent had opted for refunds, 4.95 per cent had approached various consumer forums in their individual capacities, and 0.05 per cent were misled by consumer organisations which gave them false promises and hopes.

However, CCPA Chief Commissioner Nidhi Khare, and Commissioner Anupam Misra said since 1,821 consumers were involved, it represented a class of consumers and it had the requisite powers as the central authority. “It is further emphasized that the opposite party had failed to substantiate with proof as to how many consumers/travellers/guests of theirs were affected due to the cancellation of tours due to Covid-19,” they observed, calling for an investigation by the Collector.

When contacted, Veena Patil, Managing Director, Veena World, said the company had received a copy of the order, and its legal department was looking into it. “We have nothing to hide and we will comply with the requirements. The Covid-19 pandemic was a difficult time not just for our company, but the entire world. There is a lot of difference in the scenario when this complaint was filed and today, and the cost of travel abroad has gone up manifold since then. Thousands of our customers have used the FTVs and saved on their expenses. They were happy that there were no extra charges. We have not done anything wrong, and we are satisfied that our customers have continued to use our services,” she said.