Consumer Protection Act : An Unequal Fight

image_pdfimage_print

Twenty-five years after the Consumer Protection Act was put in place as a uniquely beneficial social legislation offering “simple, speedy and inexpensive” redressal, all three characteristics seem to have disappeared. Amendments to the Act now being proposed will further erode consumers’ rights instead of addressing existing lacunae.
Sakuntala Narasimhan (sakunara@gmail.com) is a national award winning journalist and consumer activist.
Complaint no 1809/2012 before the Consumer Disputes Redressal Forum, Bangalore Urban District (Karnataka) typifies the multitude of problems that citizens face today, in seeking redress under the Consumer Protection Act. The complainant, aged 70, acquired a Sony digital camera costing Rs 5,417, in March 2012, and took it to Europe in May, to take pictures at a special international conference organised to mark her scientist husband’s 80th birthday. However, she

found that the narrow plastic strip cover of the battery compartment had got warped and would not close, so she could not use the camera. The chance to add photos to the family archives, of an international honour abroad, was lost. On her return to India in July, she asked Sony to replace the camera or refund the money. Sony refused, citing its “No refund, no replacement” warranty clause, and merely pressed the strip back to straighten it. She filed a complaint under the Consumer Protection Act, seeking replacement or refund, plus Rs 5,000 token compensation for loss and distress caused by being unable to use the camera at an important event. The district forum (popularly known as consumer court) dismissed her complaint in February 2013, on grounds that Sony’s warranty clause said “no replacement, no refund”, and that it would be “unfair to a manufacturer to claim replacement, if the defective part has been replaced.”

This was a manifestly flawed order, on several counts – first, the defective part (warped strip) had not been replaced, it had only been pressed down and straightened; and a thin 4 mm wide plastic strip that has to be opened repeatedly for charging the battery is bound to break at the point where it had got warped – the complainant had even produced a similar broken plastic strip from another gadget of the same brand bought by a friend. Secondly, the rulings of the National Consumer Disputes Redressal Commission (NCDRC), the apex body for consumer complaints are binding on all district fora around the country, and a list of 12 relevant NCDRC orders in similar cases was submitted by the complainant to the forum, which ignored them. The National Commission had ruled in December 1992 that, “If a complainant was denied the use of a product at a time when he needed it most it would amount to deficiency of service.”1The NCDRC has also clearly declared in several judgments that a manufacturer cannot draw up arbitrary warranty clauses that are unfair to the buyer. Section 14(1) of the Act gives powers to a consumer forum to order replacement of goods saying, “In spite of exclusionary clauses in the warranty aimed at restricting or excluding the liability of the seller”.2National award winning consumer activist Jehangir Gai says, “No manufacturer can formulate a warranty in a manner overriding the statutory provisions of the Act which entertain claims for replacement of faulty goods”. The forum ignored these guidelines. Thirdly, the law says a copy of the complaint should be sent to the opposite party within 21 days; in this case the Bangalore forum took two months to send a copy to Sony. The stipulations of the law got thrown out of the window. There was also the curious issue of the court demanding stamps worth Rs 45 and envelopes, for forwarding the complaint to Sony – the statute authorises no such collection towards postage (as confirmed by the legal cell of Consumer Education and Research Centre, Ahmedabad).3 Besides, only some complainants were asked to bring stamps (in complaint Nos 1735/2011, and 2118/2012 no stamps were demanded). Walter Vieira, chairman of Consumer Education and Research Society of Ahmedabad and M S Kamath of the Consumer Guidance Society of India at Mumbai both concede that “things have gone from bad to worse in the implementation of the Act”.
In Shambles
Passed in 1986, the Consumer Protection Act (CPA) was hailed worldwide as a very comprehensive legislation for ensuring justice to the common man. However, as the law completes a quarter century of functioning in 2014, activists around the country are wondering if the spirit of the Act lies in shambles. Before 1986, aggrieved citizens had to approach civil courts, where cases took years, and the procedures were intimidating, with lawyers, court fees, stamp paper, etc. The new law sought to provide, through a three-tier mechanism of quasi-judicial consumer courts at the district, state and national levels, speedy resolution of grievance (within 90 days) with no court fees, no need for lawyers, no stamp paper; just a simple complaint on plain paper listing the facts of the grievance was enough. Over the years, the 90-day limit got tossed aside. Cases now drag on for years (complaint No 498 of 2009 was still being heard at the end of 2012 at Bangalore, as was one from 2007; at Mumbai a complaint filed in 1992 went on for 14 years). Instead of being free, a fee (ranging from a minimum of Rs 100, plus bank charges for demand drafts) has to be paid now, following an amendment in 2003. Affidavits, “legal paper” and mandatory notarised submissions have complicated the procedures, where once, just three documents (the complaint, opposite party’s reply, and rejoinder) sufficed, since justice was to be “according to fairness and principles of natural justice, not according to the letter of the law”.4
Where once lawyers were not required (even barred unless the complainant opted to employ one; the Bar Council contested this rule, citing their “right to earn a living”) today consumer courts are overrun by lawyers in black coats who appropriate all the front seats introducing all the time-consuming technicalities that these fora were specifically meant to avoid. (Under the Act, “technicalities are not to be encouraged, and the only procedure to be followed is the principle of natural justice”.)5 This results in endless adjournments (which the court can refuse, but invariably grants). A case against the Maruti Company filed by a 76-year-old complainant went to 26 adjournments over 38 months. He died before getting redress. Under an amendment of 2003, the courts can award costs to the complainant for each adjournment, but most complainants are unaware of this provision, and the court does not advise them either. The amendment requires the reasons for each adjournment to be recorded. This rule is flouted too. Backlogs accumulate. Over 3.5 lakh complaints were pending at the last count. This is hardly “simple or speedy” or consumer friendly. Multinational companies can afford to employ lawyers to use legal jargon and protect the interests of the manufacturer, rather than ensure justice to aggrieved customers. Most complainants, on the other hand, cannot afford to employ a lawyer to fight for refund of a few thousand rupees after getting saddled with a malfunctioning appliance. It becomes an unequal fight between a professional lawyer and a lay consumer, even in a “consumer court” meant to offer justice without intimidation or expense.
The Sony case provides a typical example of how lawyers hijack proceedings with long-winded rejoinders. In response to the complaint, the lawyer’s submission to the court said, “The complaint is vexatious, baseless, and an abuse of the process of law, made to injure the interests and reputation of the opposite party (Sony) and should be dismissed… All the allegations and statements in the complaint are denied”, except that the battery compartment would not close (which Sony did not deny) so pictures could not be taken! Also, curiously, in spite of being a multinational Sony says in its warranty, “Not valid outside India”. In theory, this 70-year-old complainant could have gone on appeal at the state level, but one visit to the State Commission, where she could not even get into the courtroom because of the number of lawyers crowding into it, plus the prospect of another 10 or more visits, after spending more money on submitting five sets of photocopies of all documents adding up to 41 pages, including the 11-page order from the district forum, had her deciding to cut her losses and save her energy.
The Bengaluru forum cites a “funds crunch” for demanding stamps and envelopes. In that case why not display clear instructions on the board at the entrance, along with other instructions? “Because it is not compulsory”, says the staff. Seeking explanations from the State Commission is pointless as the instructions for collecting stamps came reportedly from the commission itself. A query sent to the NCDRC seeking clarification, in April 2013 brought neither a response nor even an acknowledgement.
Government’s Apathy
Having passed the law in 1986, the government did nothing thereafter. There were no appointments, no budget allocation, no infrastructure, until Common Cause, a non-governmental organisation (NGO) founded by H D Shourie, filed a public interest litigation before the Supreme Court in 1989. The apex court ordered the law to be activated within six weeks. Fearing contempt of court charges, the government set up consumer courts hurriedly, but with scant interest. For example, the district forum at Mumbai’s Nariman Point was housed in decrepit barracks next to a stinking toilet; some others had no proper clerical staff, no stenographer to dictate orders to (so orders reached the parties after four weeks whereas the limit for filing an appeal is 30 days). The district forum at Mysore was set up 10 km from the nearest bus stop. Consumers’ convenience was, apparently, not a priority.
Many of the 629 consumer courts around the country have positions vacant and cannot function as intended with a full bench of three adjudicators. The one at Goa had no president for a long time, so the president of the forum at Mumbai went over twice a month. In April 2013, the Karnataka High Court had to direct the state government to fill all 18 vacant posts (including presidents) in consumer courts at Kolar, Bidar, Hassan, Kodagu, Bengaluru, Shimoga and Yadgir, within two months. In Maharashtra, vacancies at consumer courts at Nagpur and Mumbai were not filled till a judicial petition was filed. One reason for posts remaining vacant is that the remuneration offered is not attractive enough for magistrates to agree to serve on the fora. Curiously enough, the proposed amendments of 2014 specify a salary for the commissioner to be appointed under the new Consumer Protection Authority on par with secretaries to the government (with five deputy commissioners drawing joint secretaries’ salaries). If raising the pay is an option, why create a fresh Consumer Protection Commission (as the amendment proposes) instead of making salaries more attractive for those serving on the existing three-tier mechanism? The amendment also suggests clubbing of adjacent district fora,6 and activists wonder how this could facilitate “speedy resolution” of complaints. The existing three-tier mechanism was well intentioned, but official apathy, not its design, has reduced its effectiveness.
Focus on Justice Lost
In the enthusiasm of the earlier years, some important landmark orders were handed out under the CPA. For example, courier companies used to restrict their liability in case of delay or loss, to just Rs 100, by printing a small declaration to this effect on the receipt. This was overruled by precedent setting orders awarding higher compensation in cases where the complainant was able to prove loss and deficiency of service. In complaint No 2302/96,7 the Bangalore forum awarded compensation for delay in delivering a packet, ruling that the “arbitrary clause (regarding liability) imposed on the buyer was unacceptable”. The then president of the Bangalore forum, Justice Ananthamurthy, even asked the lawyer representing a company, “Can you write anything you want, on your receipt?” That kind of focus on fair play and justice to the common man seems to have got lost over the years, despite periodic amendments to the Act to widen its ambit (to cover builders and lawyers, government services, and even Right to Information queries.)
Educational institutions mention on their receipts that fees once paid will not be refunded under any circumstances but the NCDRC has struck this down and students who withdraw without attending a single class have received refund orders under the CPA in several instances.
Dry cleaners’ receipts used to say their liability for any loss or damage was restricted to Rs 100, but this too has been challenged and adequate compensation ordered to be paid. In revision petition No 1328 (Tip Top Drycleaners vs Sunil Kumar) the NCDRC said in its order of 2003 that “conditions printed on a receipt do not constitute a binding contract”.
There was also the celebrated case of Ranganathan vs Standard Chartered Bank in which the bank hired thugs to recover arrears from the complainant despite his standing instructions for adjusting dues on his credit card, from the deposits maintained by him. The bank in its defence cited “computer problems”, but the Tamil Nadu State Commission not only ordered hefty compensation of Rs 20 lakh plus Rs 5,000 costs, but also condemned such “mafia mentality” in a multinational bank.8 These are, however, rare examples of recent orders that have strengthened consumers’ rights. Today, the degeneration in the functioning of most fora has sabotaged the spirit and promises of the Act.
Multiple Degeneration
Earlier, complainants used to receive intimation through postcards about dates fixed for a hearing. No such intimation is now sent. Even self-addressed reply cards sent with complaints are not mailed back. The registrar of each forum used to be authorised to sign as notary for affidavits required to be submitted, at no cost to the complainant. During the hearing of the complaint against Sony, the Bangalore forum did not even have a registrar. Finding a notary involved additional expense. Such steady degeneration of facilities and entitlements marks the working of most of the fora around the country. In spite of having computer facilities (unlike in the early years) the fora do not seem to keep abreast of precedent setting orders from around the country. Complainants are expected to cite orders to support their claims, which the average complainant cannot. Lawyers, with access to legal journals, have an unfair advantage, when they are engaged by manufacturers against complainants with grievances about faulty gadgets or deficiency in service which the consumer courts ignore. Justice Patnaik of the Orissa State Commission observed in a complaint by Arati Mohanty and Pramodnath Das that “the trader….cannot put a condition at the time of selling that under no circumstances will the money be refunded”.9 And yet, this gets disregarded as in the case of the ruling in favour of Sony’s restrictive warranty clause.
The union minister for consumer affairs had sent out a circular to all state chief secretaries in 1999, saying that the clause “goods once sold cannot be returned or exchanged” is unethical and to be forbidden (DO no II (II) 99-CPU/1647). Neither the states’ chief secretaries nor the union government have bothered to enforce this far-reaching order, and consumers continue to be at the receiving end of an exploitative relationship as buyers of goods and services, 15 years after such a directive from the highest authority. As one columnist put it, the slogan “Jago grahak, jago” (wake up, consumer, wake up), coined by the Ministry of Consumer Affairs, needs to be reworded, to awaken the department itself, if the gap between the intentions of the Act and its implementation is to be bridged.
Please follow and like us: