Kochi: The Ernakulam District Consumer Disputes Redressal Commission has recently delivered a significant ruling, ordering OYO Rooms to pay a compensation of Rs 1.10 lakh. This decision came in response to a complaint filed by Kochi-based lawyer K S Arun Das, who alleged that OYO Rooms failed to provide rooms that were pre-booked through its online platform. The commission’s ruling, which reflects how a consumer court fines OYO for its failure to deliver on its promises, represents a notable instance of consumer justice in the realm of online booking services, highlighting the legal obligations of such platforms.
The complaint, lodged against the CEO and Manager of OYO Rooms, as well as the proprietor and manager of Mangalath Hotel in Kollam, details an unfortunate incident involving a group booking that went awry. According to the grievance, Arun had paid Rs 2,933 to secure rooms at Mangalath Hotel in Chadayamangalam, Kollam, for a group of ten, including his wife, children, and parents. The reservation was for the night of October 6-7, 2019. However, upon arriving at the hotel around 10 pm, the group was met with an unexpected refusal to honor the booking. The hotel owner demanded an additional Rs 2,500 per room, which was in stark contrast to the original booking agreement.
This refusal to honor the pre-paid booking forced the group to seek alternative accommodation late into the night, causing considerable inconvenience. In response to this unfair trade practice, mental anguish, and physical strain, Arun sought redress from the commission, demanding Rs 10 lakh in compensation in addition to Rs 25,000 for litigation expenses.
The hotel owner’s defense claimed that there was no current agreement with OYO Rooms, a statement that adds another layer of complexity to the case. The commission, led by D B Binu with members V Ramachandran and Sreevidhia T N, scrutinized the situation and issued its ruling. The decision underscores the accountability of online booking platforms like OYO Rooms, which are expected to ensure that bookings are honored as per the terms agreed upon with consumers.
Consumer Court Fines OYO: Allegations and Impact on MakeMyTrip and GoIbibo
The ruling has broader implications beyond the immediate case against OYO Rooms. The commission’s findings suggest a pattern of profit-driven motives impacting consumer experiences across multiple platforms. Notably, the ruling also touches upon similar issues faced by other online travel service providers, such as MakeMyTrip and its subsidiary GoIbibo. On August 1, MakeMyTrip reported a net profit of $18.6 million for the first quarter ending June 30, 2023, a significant turnaround from a net loss of $10 million in the same quarter the previous year. This financial success, however, comes amidst ongoing scrutiny over the company’s handling of customer complaints and booking issues.
A related case involved Vineet Marwaha, who booked a five-day stay at The Essence Retreat in December 2021 through GoIbibo. The reservation, made in October 2021, was canceled just three days before the check-in date due to the hotel’s “un-operational” status and room unavailability, with a refund of ₹10,432 provided. Despite this, Marwaha discovered that the same rooms were available at a significantly higher rate of ₹27,207. This discrepancy led Marwaha to file a complaint with the Consumer Commission, further complicating the legal landscape for online booking services.
MakeMyTrip and Oyo Rooms contended that their roles were limited to acting as intermediaries between the complainant and the hotel. MakeMyTrip claimed to facilitate the booking process, while Oyo maintained that it was responsible only for the booking arrangement through its platform, with the hotel owner handling operational aspects. The Commission’s findings, however, highlighted that the escalating room prices due to high demand indicated a pattern of exploitative pricing practices.
The commission’s ruling against OYO Rooms, as well as the scrutiny faced by MakeMyTrip, signals a growing need for accountability and transparency in the online booking industry. The increased focus on consumer protection and fair trade practices reflects a broader trend of holding companies accountable for their commitments and operational practices.
In summary, the consumer court’s decision to fine OYO Rooms not only addresses the immediate grievance of the complainant but also serves as a reminder of the responsibilities that online booking platforms have towards their customers. The case underscores the importance of ensuring that agreements are honored and that consumers are protected from unfair practices in the evolving landscape of online services.
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