Unfair commercial practice

2015 SCMR 338 SUPREME-COURT Judicial Precedent

Regln. 8(1), (2) & (4)Pakistan Telecommunication (Re-Organization) Act (XVII of 1996), S. 21Penal Code (XLV of 1860), Ss. 294-A & 294-BConstitution of Pakistan, Art. 185(3)Prize Schemes offered by cellular mobile operators to its customersLegalityUnfair commercial practicePrize Schemes operating as lotteries

Pakistan Telecommunication Authority (PTA) issued a directive to all cellular mobile operators to stop all prize schemes with immediate effect because the same were being exploited by unscrupulous elements for luring customers towards fake prizes, and the same were also giving rise to misleading/fraudulent activities

Validity

Almost all the prize schemes offered by the cellular mobile operators enticed consumers into using their respective networks by sending message/s and or by telephoning the operators to enable them to enter into a lucky draw, and the winners of the draw would win different prizes

Lure of the prizes was used to induce customers to send message/s and make telephone calls at considerably higher rates, and the extra revenue, after deduction of the additional costs incurred and the cost of prizes, added to the profits of the cellular mobile operators

Sections 294-A & 294-B of the Pakistan Penal Code, 1860, restricted/prohibited lotteries and offering of prizes

Prize schemes in question appeared to be operating as lotteries in contravention of S.294-A, P.P.C. and offering of prizes was an apparent violation of S.294-B, P.P.C., thus Pakistan Telecommunication Authority would be within its rights to direct the cellular mobile operators to stop the said prize schemes

None of the prize schemes disclosed the odds of winning the advertised prizes, nor the number of prizes offered within a particular period

Prize schemes therefore omitted and/or hid the "material information" for a consumer to take and form a "transactional decision" and as such constituted a "misleading omission" in terms of Regln. 8(4) of Telecom Consumer Protection Regulations, 2009, which was defined to be an "unfair practice" and one that the cellular mobile operators could not use as per the provisions of Reglns. 8(1) & 8(2) of the said Regulations

Prize schemes in question could also be categorized as "unclear", "unintelligible" and/or "ambiguous" which were categorized as "misleading" in terms of Regln. 8(4) of the Telecom Consumer Protection Regulations, 2009, and were also prohibited by Reglns. 8(1) & 8(2)(iii) of the said Regulations

Telecom Consumer Protection Regulations, 2009, were enacted to protect consumers from unfair commercial practices and to ensure that, the interests of users of telecommunication services were duly safeguarded and protected and if the cellular mobile operators were resorting to unfair commercial practices or the interest of consumers were being undermined, then Pakistan Telecommunication Authority was within its right to issue directives to stop them

Petition for leave to appeal was dismissed accordingly.