In your interest.
Online Personal Finance Magazine
No beating about the bush.
If Supreme Court, which everyone normally looks upon as the saviour of the common man, has not done justice to the consumers or the consumer movement, where will the consumers go?
Voluntary consumer movement got a fillip in 1986 after the promulgation of the Consumer Protection Act. Consumer activists were born overnight due to extraordinary initiatives taken by the then government in translating the Act into time-bound quasi-judicial redressal machinery and consultative bodies, which held out enormous hope for the uncared consumers. One of the important aspects of the growth of the consumer movement in this country was the much-touted time bound consumer disputes redressal bodies, known as the District Forum, State Commission and the National Commission. But, the time limits were rather adhered by exception. Thanks to lack of interest to safeguard the consumer interests in a structured manner, the present central government, in 2005, practically decimated the central consultative body, known as the Central Consumer Protection Council, by simply amending the Consumer Protection Rules, in a hushed manner, as there is no need for such amendments to be ratified by the parliament.
Alas, even the Supreme Court which everyone normally look upon as the saviour of the common man, has not done justice to the consumers or the consumer movement or the impoverished voluntary consumer organisations. The case in point is the under-weighment of LPG refills (cooking gas). Consumer Protection Council, Rourkela accidentally stumbled upon this fact, through random sample surveys conducted in July 2000. Indian Oil Corporation as well as the ministry of consumer affairs, Government of India, including the Director (Legal Metrology) were informed and requested to act. As a consequence/s IOC offered to conduct a joint survey. Since the outcome was worse than even our own independent findings, they excused themselves mid-way through the survey and did not even sign the papers. IOC kept assuring that their LPG bottling plants were fine and wanted the undersigned to visit their plant for a firsthand knowledge. The undersigned being a qualified engineer, on his visit in 2000, in no time assessed that the bottling plant consisting of its semi-automated carousel machine was the root cause of the problem. The information was shared with the plant manager then and there. But he said that all IOC’s bottling plants, numbering 120, were having similar machinery. The company was not willing to accept the fault nor was willing to discuss about a solution. After giving sufficient time and even highlighting this problem in the Central Consumer Protection Council, a case was filed in July 2001, before the National Consumer Disputes Redressal Commission (NCDRC).
The NCDRC concluded in October 2005 that in the prevailing LPG bottling system, consumers could get less than the stipulated weight of 14.2 kg and hence as an interim measure directed IOC to adopt pre-delivery weight checking of the LPG refill at the consumer’s premises and also to publicise through advertisements as was being done, in a prominent manner, by Hindustan Petroleum Corporation. During the pendency of this case, the Consumer Protection Act was amended from 15th March 2003. Several important provisions which were relevant to this case, especially for awarding punitive damages, payment of penalty when the defective good or deficient service affects large number of consumers, providing adequate cost to the litigant, etc were introduced and the Council in January 2004, itself sought the invocation of those provisions in this case.
IOC did not comply with the 2005 directives and NCDRC took on record such behaviour, in 2006 as well as in 2007, at the instance of the Complainant Council. But the final order of the NCDRC passed in July 2007 glossed over all that and also the prayers of the Council for making the awards as per the amended Act and did not even discuss about that in the final order. The Council’s review before the NCDRC evoked the following admissions by the NCDRC in 2010:
“Applying this ratio to the facts of present case, we are of the view that the review application for consideration/grant of said prayer(s), which will be deemed to have been declined, is not maintainable under Section 22(2) of the Act. Otherwise also this would require detailed examination of the case which is impermissible under Section 22(2) of the Act. Application is dismissed as such. It will be open to the complainant to have redressal of its grievance as may be permissible under the law.”
Hence, the Council appealed to the Supreme Court in 2010 against the final order of the NCDRC made in July 2007, after a delay of 1,071 days. While the Supreme Court condoned the delay of 1,071 days, obviously because of the review proceedings in the NCDRC contributing to the delay, failed to address the issues raised in the appeal, which were hitherto not addressed by the NCDRC. The judgment of the Supreme Court said that the appeal was ‘infructuous’ as both the government and IOC had complied with the order of the NCDRC. When an individual is dissatisfied with the order of the National Commission, he appeals to the Supreme Court, under Section 23 of the Consumer Protection Act. The Supreme Court has to conclude only whether the NCDRC order is defective in law or not, based on the facts placed before it. No appeal can become infructuous unless it is filed under Section 27A, where the implementation part is involved. The Supreme Court dismissed the review sought by the Council. If the judiciary has to fail the consumers, where will he go? The apex court was probably finding the issues raised were too big and the issues relating to “punitive damages” had to be addressed for the first time, under Consumer Protection Act and that too against a state undertaking. A cumulative value of Rs65,000 crore of short-weighed cooking gas refills had been sold by IOC till 2005, the time when an interim order was passed, warranting it to pay at least Rs3,250 crore to the Consumer Welfare Fund.
This year's theme of the Consumer’s Day is Consumer Justice Now. Our experience aptly describes the predicament of the consumers and consumer organisations in this country.
Seldom a voluntary consumer organisation could take up such a major issue, prove it technically correct and provide tangible relief to crores of unsuspecting housewives across the country. Of the 184 bottling plants, of the three oil marketing companies (IOC, BPCL and HPCL), 180 have been automated and the balance will be done within the next financial year. The government (P&NG ministry) was supposed to have spent around Rs300 crore for this modernisation. Unfortunately, the apex court of the country does not provide relief as mandated by the law.
(BVaidyanathan is the chief mentor of the Consumer Protection Council, Rourkela.)
The New Delhi District Consumer Disputes Redressal Forum observed that LIC had “misdirected itself” by not showing any evidence that the deceased was suffering from asthma prior to availing the policy and had not “applied its mind” while denying his claim
Life Insurance Corporation of India (LIC) has been directed by a Delhi based consumer forum to pay Rs1 lakh to the husband of a policyholder for ‘arbitrarily’ rejecting his claim for the assured amount on his wife’s death.
The New Delhi District Consumer Disputes Redressal Forum observed that LIC had “misdirected itself” by not showing any evidence that the deceased was suffering from asthma prior to availing the policy and had not “applied its mind” while denying his claim. LIC had denied the claim saying the woman was an asthma patient and had not disclosed her illness while taking the policy.
It had relied on a discharge summary of 2004 to reject the claim.
“We have considered the material on record and submission made. It is patent that the opposite party (LIC) has misdirected itself. It has not brought any evidence of deceased suffering from asthma before taking of policy in 2003 or any record of taking treatment.
“The discharge summary of 2004 is of no use. It shows trouble for 4-5 days in 2004 and not before taking policy in 2003. Opposite party has not applied its mind. We hold it guilty of deficiency in service by arbitrarily repudiating the claim,” a bench presided by CK Chaturvedi said.
It directed LIC to pay the sum insured of Rs50,000 along with “punitive damages” of Rs50,000 to Delhi resident Dev Raj whose wife had died in December 2005. The forum also directed LIC to obtain half of the damages from salary of the officer concerned “who gave no attention to the appeal and agreed for repudiating the claim”.
Raj, in his complaint, had said that his wife had obtained the policy for Rs50,000 from LIC in 2003 and under it she was covered till 2005, but the insurance firm had rejected his claim on the ground that she was an asthma patient.
Why the consumers are taken for a ride, while buying goods and services from the public, private and government institutions? Why the Consumer Protection Act has failed to usher in the much expected consumer revolution? What we can do to bring about real reforms
Celebrating World Consumer Day (WCD) on 15th March has become a ritual like celebrating most other such days like environmental, cancer, safety, mothers, children days, etc. Instead can we celebrate this WCD differently? Can each of us reflect on how consumers suffer, irrespective of their being rich or poor, urban or rural, literate or illiterate? Why are consumers taken for a ride, while buying goods and services from public, private and government institutions? Why has the Consumer Protection Act failed to usher in the much expected consumer revolution? Finally, what can we do to bring about real reform?
Instead of consumer activists organizing WCD celebrations, government agencies should organize them in a ritualistic way. They are the real cause of much of the woes of consumers. This year, like in previous years, deputy commissioners have been ordered to organize WCD to highlight problems that consumers face as a result of rampant food adulteration and various ways of fraudulent weighing of goods. No doubt food adulteration is a serious problem. But are these the issues to be taken up to usher in consumer revolution or promote consumer protection?
It is always easy to blame the government. But in a democracy where we, the people are ultimate rulers, we need to introspect on what has been our role? Why have we abdicated our responsibilities? Have we put pressure on the government not to squander taxpayers’ money by organizing ritualistic functions which do not produce results? Why are consumer activists not organizing WCD? Often, they gladly participate in such celebrations with government officials in order to curry favour.
WCD is a time for serious thinking to bring about much needed reforms to make “Consumer the King”. We need “out of the box” thinking. All our earlier efforts have failed to get results. Despite the adoption of new laws and new initiatives by the government, consumers’ woes are increasing by the day. Before we discuss a new paradigm it may be useful to list some major consumer problems.
Even before the LPG quota to limit the number of cylinders one can buy at a subsidized price, it has never been an easy to replenish the LPG supply. Now securing LPG has become a nightmare. Should consumers suffer to procure simple daily cooking needs? Why can we not develop a more streamlined approach of distributing LPG, while meeting the urgent need of supplying LPG at a subsidized price to those, who are below the poverty line? In order to reduce diversion of subsidized LPG, the government has made the system even worse and more prone to corruption. Despite hundreds of studies, woes of consumers in securing rationed items under PDS are ever present.
Energy regulatory commissions were established to improve power supply by streamlining the tariff setting process. The underlying principle was to reduce political interference and improve efficiency. This was done by appointing an independent regulatory body and by monitoring the operations of monopolies. However, we have not seen the expected results and the power crisis is only worsening.
The water supply problem is getting worse by the day even in places where people live close to water sources. There is not a single city in India where water is available on a 24x7 basis every day. Why? Politicians make long promises to improve water supply. Since water is a basic need, they promise to give water free or at highly subsidized price. But the reality is much different. Not only does the public not get adequate water supply, but also, in some places, they have to pay an exorbitant price. When will we start agitating for proper water supply? What can be more important than water?
A recent report by Pratham (a Mumbai-based NGO providing primary education to underprivileged children) has showed how our children are getting poor education in both the government and private schools. In fact our education sector from pre-schooling to university has collapsed. Less than 15% to 20% of the graduates produced by our education system are employable. On paper our literacy rate is climbing. But it is climbing at a rate based on a simple criterion of being able to sign. Do we need any more statistics to prove that we, the public, are short-changed by our educational institutions?
Health delivery system especially to the poor is also deteriorating, as some Indian cities are trying to promote health tourism to attract foreign patients. When we have the ultra-modern hospitals to meet the needs of the rich, government hospitals and even most of the private hospitals are failing in their duty to take care of the patients. Regularly the government is coming up with new schemes to help the poor with improved health delivery system. Unfortunately, their impact is minimal. Even some of the poor African countries have better child and maternal mortality statistics.
Citizen’s charter complemented by Right to Information was supposed to help the public when seeking services at government offices. Have they? Has it reduced corruption? While we talk of strengthening laws concerning Lok Ayukta and adapting a Lokpal Bill, the ground realities are that without bribing it is impossible to get any timely service at government offices. It looks as though our society has given up the effort to fight corruption, though at the national level it has been on the front burner for some time.
Since, it is a well known and accepted fact that the consumer is at the receiving end, while buying goods and services from the private companies, the above list deals only with the services provided by the government. Where should the consumer movement start to help the consumers?
We do not need any more laws and regulations. What we need is better governance at every level and heightened awareness among the public that in a democracy we are the rulers. How many of us will relate the need to elect honest and competent candidates with the consumer movement? It is only by electing the right candidates can we improve governance. Only when governance improves can we hope for a beginning of the end of consumer woes and the possibility of a real consumer movement.