Consumer Eligible for Compensation: NCDRC Validates Coca-Cola’s Honda City Promotion as Legitimate Marketing Strategy

In a recent ruling by the National Consumer Disputes Redressal Commission, Mr. Subhash
Chandra, the Presiding Member of the bench, upheld the validity of Coca-Cola’s promotional
scheme, which offered 5 Honda City cars as prizes for lucky coupon bottles. The commission
concluded that the scheme couldn’t be deemed fraudulent. However, compensation was granted
to a consumer who filed a complaint in good faith, genuinely believing they would win a Honda
City car after purchasing a lucky bottle. This ruling underscores the importance of consumer
protection even in the context of promotional campaigns.

Brief Facts

In September 1998, Coca-Cola launched a promotional scheme offering prizes, including 5
Honda City cars, for bottles with crowns featuring a yellow band. The scheme outlined specific
conditions for participation. The complainant purchased a bottle meeting the criteria outlined in
Condition 6 of the scheme, believing it entitled them to win one of the cars. They sent the
required liner via postal mail to Coca-Cola. Despite Condition 9 specifying that entries must be
submitted by ordinary post before October 28, 1998, the complainant alleged that Coca-Cola accepted entries via alternative postal methods through its appointed agency, M/s Bansal & Co.,
Chartered Accountants.

After receiving no satisfactory response, the complainant took legal action by issuing a legal
notice, which also went unanswered. Feeling aggrieved, they filed a consumer complaint with
the State Consumer Disputes Redressal Commission, Delhi (“State Commission”). The State
Commission found Coca-Cola guilty of unfair trade practices, noting that the chances of winning
prizes were extremely low compared to the millions of bottles sold. This disparity was deemed
deceptive, as it encouraged people to purchase Coca-Cola even if they didn’t regularly consume
it. As a result, the State Commission ordered Coca-Cola to deposit Rs. 1 lakh in the State
Consumer Welfare Fund (Legal Aid) and pay Rs. 25,000 as compensation to the complainant.

Seeking further redress, the complainant filed a review petition with the National Consumer
Disputes Redressal Commission (NCDRC). Their petition aimed to increase the compensation
awarded and requested an order for Coca-Cola to provide a Honda City car to the complainant as
initially promised in the promotional scheme.

Observations of the NCDRC

The NCDRC noted that the State Commission had found Coca-Cola’s promotional scheme to be
an unfair trade practice. This was because it attracted customers with promises of prizes but
ended up awarding them to only a select few. As a consequence of this determination, the State
Commission granted compensation to the complainant.

The NCDRC also observed that the Delhi High Court, in Writ Petition (Civil) 6771/2207, had
previously ruled that Coca-Cola’s scheme was genuine, thus settling any doubts regarding its
legality. With the scheme’s legality no longer in question, the focus shifted to whether the
complainant qualified as a ‘consumer’ under the Consumer Protection Act. It was affirmed that
the complainant did indeed meet the criteria of a consumer and was therefore entitled to the
protections provided by the Consumer Protection Act.

As a result, the NCDRC overturned the State Commission’s decision, determining that Coca-
Cola’s scheme was not fraudulent but rather a legitimate marketing tactic. Despite this,
acknowledging the complainant’s genuine expectation of winning the prize and the distress
caused by not receiving it, the NCDRC instructed Coca-Cola to cover the complainant’s
litigation expenses, amounting to Rs. 25,000/-

Posted and reproduced in Public Interest by

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