PVR INOX Legal Notice: Controversy Erupts Over No Cash Only UPI Policy

A significant legal controversy has erupted surrounding the payment policies of the prominent multiplex chain PVR INOX Limited. The issue came to light after a customer in Ahmedabad faced difficulties while trying to make payments using physical currency at one of the company's outlets. This incident has led to a formal legal notice being served to the multiplex giant, questioning the legality of refusing Indian banknotes, which are recognized as legal tender in the country.

The Incident at Palladium Mall

The matter involves Utkarsh Dave, a lawyer based in Ahmedabad, who visited the cinema complex located in Palladium Mall on 13 September. According to reports, the dispute began when Dave attempted to watch a movie and purchase refreshments at the theater. While he was initially asked to pay for his movie tickets, the situation escalated at the food and beverage counter. When he tried to pay for his food items using cash, the staff members at the counter reportedly refused to accept the banknotes. Instead, they insisted that the payment must be made exclusively through UPI (Unified Payments Interface). This left the customer with no choice but to use digital payment methods, despite having valid Indian currency in hand.

Legal Grounds and RBI Act Citations

Following the incident, Utkarsh Dave sent a legal notice to PVR INOX Limited, raising several critical questions about the company's 'cashless only' policy, while in his notice, Dave cited Section 26(1) of the Reserve Bank of India Act, 1934. This specific section of the law mandates that banknotes issued by the Reserve Bank of India are considered legal tender throughout the country. The lawyer argued that by completely refusing to accept cash, a business that interacts directly with the public is challenging the very definition of legal tender and raising serious concerns regarding transparency and fairness in commercial transactions.

Transparency and Consumer Protection

The legal notice further questions whether PVR INOX had clearly displayed its cashless policy at the point of sale or informed customers in advance. As per the report by Times of India, the notice emphasizes that a customer can't be expected to discover such a restrictive policy only after reaching the counter and attempting to pay. Dave has demanded a copy of the written instructions provided to the staff that direct them to refuse cash payments. Also, the notice invokes provisions of the Consumer Protection Act to investigate whether the multiplex chain has formally adopted a cashless-only policy at this specific outlet and if such a policy is legally sustainable under consumer rights frameworks.

The Digital Divide and Accessibility

' Dave pointed out the plight of customers who may not own a smartphone, lack access to UPI, or don't have a reliable internet connection at the time of purchase, while the notice asks PVR INOX to clarify what arrangements are in place for such individuals. It specifically questions whether a customer, who is ready and willing to pay in legal currency, would be denied the opportunity to avail of services simply because they can't or don't wish to use digital payment methods.

Expert Opinion on Business Autonomy

The debate also brings into focus the rights of private businesses to set their own terms of service. Dinkar Sharma, a partner at Jotwani Associates, noted in a report by Mint that while RBI banknotes are legal tender, private businesses generally have the freedom to set terms for their goods and services within the framework of applicable laws. This distinction is particularly relevant for businesses where cash payments might be impractical, such as online platforms, e-commerce, or automated systems. Sharma suggested that even physical businesses could theoretically adopt a cashless policy, provided there is no specific legal or regulatory requirement forcing them to accept cash. However, he stressed that any such policy must be clearly communicated to customers beforehand to ensure they can make an informed decision.

Seven Day Ultimatum

The legal notice served by Utkarsh Dave has set a strict timeline for PVR INOX to respond. The company has been given 7 days to provide a detailed explanation and legal justification for its refusal to accept cash. The notice warns that if a satisfactory response isn't received within this period, the matter will be escalated to the Consumer Commission and other relevant authorities. It's important to note that the notice doesn't object to the provision of digital payment options; rather, it challenges the absolute exclusion of cash as a valid form of payment without prior notification to the public.