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Consumer court fines US travel company Cosmos for making Indian pay tip,not other nationals

An Indian lawyer and his wife were having a meal while on a holiday in Germany.

Written by D K RITURAJ | New Delhi | Published: August 26, 2013 1:32:37 am

An Indian lawyer and his wife were having a meal while on a holiday in Germany. After the meal,he asked the waiter for a glass of water. The waiter,after serving him,charged him two euros. None of the other guests,hailing from other nationalities,were charged.

The man then learned that his travel plan had made tipping compulsory for Indian customers alone and,what was more,had pre-determined tip rates. A lawsuit and three years later,the man on Thursday shouted “fantastic” on receiving the order from a city consumer court directing the erring travel agency to cough up an apology and Rs 25,000 for the intentional racial discrimination.

The US-based travel agency,Cosmos,had introduced compulsory tipping for its group tours offered to Indians. However,the tips were neither compulsory nor these amounts pre-determined for customers of other nationalities.

When pulled up by the consumer court,Cosmos defended its action by stating that without compulsory tips it was difficult to attract and retain talented staff.

Their response was “condemned” by a three-member panel of the consumer forum,headed by judge C K Chaturvedi.

It held that tour operators could not transfer the cost of hiring talent to consumers of a certain nationality alone.

“The commercial considerations should remain secular commercial considerations and not morph into a nationality issue,” the order read.

The court on August 8 held that the practice of the travel agency was an act of “racial discrimination” against Indians,which in turn amounted to “deficiency of services” under Section 2(g) of the Consumer Protection Act,1986.

It directed Thomas Cook,the connecting travel agency,to record an apology on behalf of Cosmos and deposit punitive damages of Rs 25,000. Upon the prayer of Ajit Bhasme,the complainant in this case,the amount is to be deposited with the Delhi State Consumer Welfare Fund.

The order took into account that the act of tipping was voluntary and discretionary and making it compulsory introduced an element of “unconscionable bargain”,which is specifically void under contract law in India.

Judge Chaturvedi also drew parallels of the practice of compulsory tipping to the discrimination faced by Mahatma Gandhi in South Africa. He labelled the practice “as a subtle insult to human dignity and maltreatment to the lawyer for being an Indian”.

Bhasme,a lawyer practising in the Supreme Court,termed the verdict a “moral victory”. Bhasme has been blacklisted from the group tours offered by Cosmos after he filed the legal suit. However,the real victory,according to Bhasme,lies in the fact that Cosmos has discontinued the practice of compulsory tipping for Indian customers after the suit.

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