Business Ethics and Corporate Governance

C1_1_ Assignment

Name
Roll Number Section

Identify a product liability or a negligence case and describe It as per the sections
below:

Complainant Krishnan Kumar Bajaj

Business Name PepsiCo

1. Krishnan Kumar Bajaj, a resident of Vastrapur, Ahmedabad, had

purchased the disputed packet from a shop in Thaltej area on 28 June
2010 and had immediately sensed its being underweight.

2.His doubt was confirmed when he actually weighed the pack. The
manufacturing date on the pack was 19 April 2010 and the production
batch no. was N-207 C.

3.He wrote twice to the manufacturer. While the first letter got no
response, in reply to the record, the company accepted that the packet
was underweight but didn’t take the complaint seriously. It offered
Bajaj a gift hamper from PepsiCo which he refused.
Complaint
description 4. Eventually, CERS took the issue to the Consumer Disputes Redressal
Forum, Ahmedabad (Rural), alleging unfair trade practice.

5.The forum also gave a favourable ruling dismissing all the arguments
made by PepsiCo. On PepsiCo’s request, the Forum got the pack
weighed at a government laboratory and the report from the lab
revealed that the weight of the pack was 8.42 gm.

6.The company argued that the complaint should not be entertained, as

Bajaj could not produce the bill for the purchase. For a product
of Rs.10/- very often consumers may not have a bill. To address this
issue, Bajaj submitted on affidavit that he had bought the “Lay’s”
packet from Brahmani Provision Stores, Thaltej, Ahmedabad.
 7. A simple calculation indicates that the company can earn an extra
profit worth around Rs. 2.75 lakh, if the entire production of 36,700
packets under the batch mentioned on the packet is sold underweight.
This holds significance since, on CERS’ query, the company could not
totally rule out this possibility. CERS resorted to legal action in its
attempt to compel PepsiCo to pay compensation and punitive damages,
and uphold consumer rights.

The Forum ordered PepsiCo India Holdings Ltd. to deposit Rs. 50,000
in the Consumer Welfare Fund of India within 90 days of receipt of the
order in a landmark judgment issued on 7 September 2012. PepsiCo
was also asked to pay the complainant Rs. 5,000/- for mental agony and
Resolution Rs. 2,000 for the cost of litigation. Now a day, people are using social
media to show their outrage at different brands.

Today, for the unfair treatment, people are using social media to express
their anger at different brands. Social media influence has always made
the brands conform to ethical behavior.

Your Such cases hamper an individual's confidence and loyalty towards a

viewpoint brand like Lay's.

Ethical behavior toward consumers is the primary responsibility of

businesses and must remain in effect even when a consumer is unable to
assess their conduct – e.g. in the manufacturing or development process.
Companies enlist integrity, honesty and openness as their values but
these must extend to customers as well.