Fighting the Consumer Cause

Sucheta Dalal profiles India’s best known consumer advocacy organisation

After decades of debilitating socialism and a license-permit-raj, Indian consumers have finally stopped feeling grateful and obliged at receiving goods or services that they have paid and queued up for. A sense of consumer "rights" is dawning on people only in the last decade after economic liberalisation was initiated and several monopoly businesses were opened up to competition. 'Consumer activism' as an idea is now showing signs of gaining momentum in the country. Consumers are willing to post grievances on blogs and e-groups and even file cases against errant providers.

But in an environment where everything from a telephone to a gas connection or even a Bajaj Scooter, Ambassador car or buying a truck meant a long waiting period, who dared to think about rights, let alone fight for them? Ahmedabad-based Manubhai Shah did, and he gave up a comfortable job as General Manager at Arvind Mills to start the Consumer Education and Research Centre (CERC) at the age of 52 with support from the Lalbhai Group and just Rs 250.

The story goes that when the Gujarat State Road Transport Corporation decided to raise bus fares in 1978, Manubhai Shah and three academics opposed the hike and forced a rollback of tariffs. This battle later led to the formation of the Consumer Education and Research Centre (CERC).

With donations and endowment funds from Indian and foreign institutions, CERC expanded rapidly to handle consumer complaints, advocacy, create research and library facilities and a strong legal cell that has handled path breaking public interest litigation against monopolies in electricity, telephones, airlines and insurance. Over the last 26 years, Manubhai Shah has become the leading voice for consumers in the country.

One of CERC's landmark cases was against the Life Insurance Corporation of India (LIC), which went all the way to the Supreme Court. The issue was LIC's unilateral decision over eligibility criteria for individual term insurance plans. The judgment in CERC's favour set out the following proposition of law: "Any contract or condition of contract between two  parties  of  unequal  bargaining  capacity which is one sided,  unilateral  or  unfair, offends the conscience of the Constitution of India, viz.  citizens' fundamental  right to equality before  law  and  equal  protection  of  law and therefore unconstitutional,  illegal  and  unenforceable." CERC now handles 10,000 cases every year, of which nearly 80% are resolved out of court.

Along with the Consumer Protection Act of 1986, one of major strengths is its in-house laboratory setup in 1994. The first in India it has the capacity to test foods, pharmaceuticals and domestic electrical appliances. It operates by buying products directly from the market with strict sample specifications and checks their content or efficacy against norms of the Bureau of Indian Standards (BIS), the Prevention of Food Adulteration (PFA) Act and claims made by the producers. The test findings are published in Insight - a bi-monthly consumer magazine.

The tests often expose unsafe products and shoddy production. Some interesting findings pertain to ice-cream, edible oil, turmeric, coffee, bottled water and electric appliances. For instance, the tests revealed that the 50-gm sachets of Nestle actually contain two grams less coffee. CERC took this dispute right up to the National Consumer forum. The laboratory also tests medicines such as paracetamol, aspirin, intravenous fluids and ampicillin. Preeti Shah, Editor of Insight says, "Empowerment of the consumer alone can weed out substandard, spurious and unsafe products from the market." CERC gives companies full opportunity to react to its findings; some have even insisted on visiting the testing facilities to verify the process and dropped their aggressive posturing after checking the unbiased and objective testing procedures. Others such as Bisleri actually took measures to improve product quality.

The explosion of products and services, including financial services has only increased the scope of CERC's work in fighting for consumer rights and advocacy for creating appropriate legislation for grievance redressal and consumer protection. CERC can be contacted at: 079-7489945-46 or you can visit to subscribe to Insight.

Disclosure: The writer is on CERC's board of trustees.

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