Finish the consumer movement?
B Vaidyanathan 18 March 2013

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.)

Comments
CA PRADEEP AGARWAL
9 years ago
TO BE FRANK ENOUGH CONSUMER IS BEEN TAKEN FOR RIDE THESE DAYS WITH WEIGHTS AND CONTROLS NOT BEING FOLLOWED AND our generation is also to be blamed, because whatever asked is paid, whatever given is accepted leaving disgrunted elements to be tackled afterwards which gives rise to dissension for future and when more manufacturers/traders follow suit
Vaidyanathan
9 years ago
The CP Act presently provides for awarding 'punitive damages', under sec. 14(1)(d) and for adequate costs to the litigant, under sec. 14(1)(i).

Even before the said amendments were incorporated in the Act, in this particular case, we prayed for the award of 1% of the quantified loss of Rs. 750 crores (per year, actual loss and not the value of short-weighed refills sold), because IOC was indifferent to our complaints, the loss inflicted was huge and was construed as practically non-refundable to the consumers; and the consumer organisation also needed funds to pursue consumer protection activities including the public interest class action petitions. In a big boost to our claim (prayer), the Act got amended from 15th March 2003 with a provision for awarding a minimum of 5% of the value of defective goods sold/deficient services rendered (much higher than the actual loss).

Interestingly, the relevant amendment to the Consumer Protection Rules for diverting such funds to the Consumer Welfare Fund came about after an year or so (notified from 5th March 2004). Even this amendment is questionable.

Why at all the entire amount should go the CWF, when an individual organisation is taking up the issue? Why not give a part of the penalty thus collected to the concerned organisation/litigant, so that it will enthuse more and more to take up such issues affecting the consumers. But the government wants to control all the funds so that it can make the consumer organisations dance as per its tunes.

Anyhow, in respect of 14(1)(d) and 14(1)(i), there are no enabling provisions (guidelines) in the Rules and hence I expected the Supreme Court to lay down the broad principles for the award under these provisions of the Act.

Hence, in my opinion, a rational decision of the Supreme Court would have literally paved the way for the elimination of Unfair Trade Practices (UTPs). A golden opportunity was missed, at least for the time being, thanks to the indifference of the Supreme Court.
Vinay Joshi
Replied to Vaidyanathan comment 9 years ago
Hello Mr.B Vaidynathan,

It's pertinent enough to strengthen the consumer movement.

MRTP, MRTPC, DG[I] now substituted by CCI & segregated CPA.

Certain extracts of my mail to Sucheta, i'll forward it to you to your mail ID.

Anyway as of now in SC, no review or curative being off the ambit can be filed.

I'll fwd my mail, pl scan the petition & the order to me in the instant matter.

The petition in SC, negated should not be a wrong precedent.
But if justifiable, SC right in its own right as per the order.

Regards,
Vaidyanathan
Replied to Vinay Joshi comment 9 years ago
Appeal for Review was filed in the Supreme Court, within the period of limitation and the same was dismissed on 12th Feb. 2012 and hence I started utilising the media including Moneylife, to inform one and all about this case and the shoddy treatment meted out by the apex court.

The Grounds for Review can be accessed at http://www.advantageconsumer.com/Grounds....

Since, I am fully convinced that justice has been denied to the consumers and the consumer movement, I have also written about this matter to the Chief Justice of India, on 20th Feb. This communication is available at http://www.advantageconsumer.com/Appeal-....

As a matter of fact since we believe that 'Knowledge is Strength', we have been making available all relevant information pertaining to this case as well as other material in the public domain through our website http://www.advantageconsumer.com.

I am in full agreement with what you have mentioned that the order of the SC should not set a wrong precedent and hence all this effort to reach out.

We are contemplating to file a Curative Petiton as well. But for that I am on the look out for a designated 'Senior Advocate' of standing and who is willing to do the certification, on honorary basis.

Regards,
-Vaidya
Vaidyanathan
Replied to Vaidyanathan comment 9 years ago
A minor correction in the above reply. 12th Feb. 2012 may please be read as 12th Feb. 2013.
drsharmilaraopn
9 years ago
We create a public hearing like france did during the revolution.
Vinay Joshi
9 years ago
Dear Mr. B.Vaidyanathan,

I'll write again to you, for want of time, i would only emphasize on pressure control valves.

What was the make? If determined by you?

Regards,
Vaidyanathan
Replied to Vinay Joshi comment 9 years ago
I am unable to understand your query or the suggestion. If you will elaborate, may be I will be able to answer. - Vaidya
Vinay Joshi
Replied to Vaidyanathan comment 9 years ago
Dear Mr. B.Vaidyanathan,

In the first place kindly excuse my belated reply that too not answering you in detail.

About pressure control valves of the carousel, if not of standard quality it will throw back the gas filled, thereby less quantity.

It happens in volumetric filling systems.

I'll come back to you in detail on the tech aspects which were overlooked by the OMC's.
You've rightly highlighted it.

Regards,
Vaidyanathan
Replied to Vinay Joshi comment 9 years ago
Mr. Joshi,

What you have pointed out could be the main issue in automated filling units wherein the human interface with filling the refill is almost eliminated.

But the major issue in the outdated semi-automated process depnds too much on the operator. As you are aware when 24 refills in the cirular machine are to be filled in a minute or so, the operator hardly gets 2.5 sec. for reading the tare weight from the empty refill (by looking down), which at times may not be legible,then look up and adjust the knob for tare weight neutralisation. This cumbersome process will bring in fatigue to the operator within a very short time. You can refer to Report of the Committe set up by the Ministry of Consumer Affairs, which is available at http://www.advantageconsumer.com/gnlcr.h....

So during my visit to the Balasore LPG Bottling Plant, I could understand this stark reality in no time. I only wonder how the IOC people, many of whom are from elite institutions like the IIT could not understand this. May be, they were not keen to address the issue.

Regards,
-Vaidya
Vaidyanathan
Replied to Vaidyanathan comment 9 years ago
I expected that at least some readers would voice their concern about the less than mediocre role played by the highest judiciary of this country.

May be, the readers are not so much concerned about the intagible losses.

- Vaidya
Vinay Joshi
Replied to Vaidyanathan comment 9 years ago
Dear Mr.B Vaidyanathan,

I, appreciate the councils work.
[irrespective of this LPG.]

The apex court ruling is well justified to dismiss the appellant case as 'infructuous'.

Aggrieved, no review or a caveat.

The question does not arise to voice any concern,& if so introspect the petition. Let me explain it to you.

NCRDC commissioned two Prof’s. of IIT, Kharagpur, Dr.Saha & Prof. Ray undertook study at the said plant, possibly you may have accompanied them, - THE FINDINGS - 42% OVER -filled against **11%* under-filled.

It means as per specs limit – lower 14.05, higher 14.35.RIGHT!

Conclusions : [of the study team]

Based on the typical operation of the plant observed and analysis of the results of the samples drawn the following conclusions are made:

1] While the filling machine and the system are found to be the ones commonly used for LPG bottling all over the world, the carousel and its accessories were found to be showing large 'variability' with respect to the quantity of LPG filled in each cylinder.

2] At this variability observed the carousel and its accessories is not capable of delivering the correct filled weight of LPG (14.2 +/- 0.15 kg) in the cylinders while the plant runs at normal filling/production rate....end of the conclusion...

In my considered an opinion, no way can substantiate facts u/s 22[2], 42% got excess, 47% correct, **11% deficient*

If your contention is right that 65KCR, AMOUNTING to **ONLY 11%* OF THE SALE, TILL 2005, [accrued till decree passed] ‘SHOULD BE PUNITIVE DAMAGES’ EXTRAPOLATED MEANS, that TILL 2005, IOC, LPG, SALE SHOULD NET 65+ TRILLION RUPPES! Show the REVENUE figures!

Justify to me 65KCR compensation sought.

The appeal in SC in the instant case never stated 'compliance' of OMC's.

WHAT was the point in law? Please can you JUSTIFY invoking, 22,23,27A?

The commission had directed IOC to pay 50K to the council.

The interim order warranted IOC to deposit 3.25KCR.

I do agree with you that the apex court determines the application of law & LAW[S] ONLY, but when the 'statement of facts' & 'grounds of appeal' ARE in contravention of the said provisions of the law, the apex court is well justified in summarily dismissing a frivolous an appeal 'as infructuous'!

Luckily the apex court has not awarded costs & 'FINED' the council.

In WB, state consumer court awarded compensation to the aggrieved, IOC cylinder leakage, causing death to his wife.

Even if for past ten days i've to put forth CC judgement's, they are exemplary, no leeway to the PSU's! or even other service/utility providers.

Yes, the fact remains delayed punitive damages are awarded.

This does not undermine the consumer movement, [appreciate yours,] or the consumer courts or the 'APEX' court.

Regards,


































































































Vaidyanathan
Replied to Vinay Joshi comment 9 years ago
Mr. Joshi,

The issues have been mixed up. I do appreciate you taking time and reading the Report of the IIT Professors.

Firstly, the study of the IIT Professors was commissioned to get their opinion as to the suitability of the then existing carousel machines and to judge their ability. I hope this much is clear.

The IIT Professors did a study of the "Process Capability". That is all. That is why they did not bother about the number of workemen/operators engagaged during the particular time of study. As a matter of fact, during the study, IOC engaged about 15 to 20 employees as against the normal strength of 2 to 3, many of them from Kolkata, to supervise the bottling process. I pointed out this anamoly to those professors. They said that I need not bother, as they were there to assess the process capability/process variation. The experienced and knowledgeable professors outwitted the IOC team. They totally went by Statistical analysis and Standard Deviation, rather than the normal average which many of the untrained people may depend upon. An excellent analysis by the professors, which can be a lesson to many of the students of statistics.

Thus, during the hearing in the National Commission, when the counsel for IOC were arguing that the average bottled weight during the study was more than 14.2 kg, I explained to the Commission, the fallacy in their argument. In this context the nice story of a person who did not know swimming crossing a river and drowing in it, based on the information that the river of 100 mtr. width, the average depth of the water is 1 Mtr.

In addition, the Report of the Committee set up by the Ministry of Consumer Affairs, unequivocally supported the allegations of the complainant Council.

Hence, the National Commission understood the issues on hand and directed IOC to do pre-delivery checking at the households. Further, the Ministry of Petroleum has already modernised 180 of the 184 LPG Bottling Plants of the 3 Oil Marketing Companies, at a cost of nearly Rs. 300 crores, as per the directions of the National Commission, issued in July 2007.

We feel proud of whatever we did. Crores of unsuspecting housewives have got relief. But IOC, as per statistics available in the website of Ministry of Petroleum & Natural Gas, and when collated with our percentage short-filled LPG refills (which was never challenged - as already stated, during the joint survey, since IOC representative could not digest the huge short-weighed refills, much above even our own study, ran away from the scene, without even signing the papers) as of 2005, had sold short-weighed refills worth Rs. 65,764 crores.

As per sec. 14(1)(hb), IOC must have been directed to pay at least Rs. 3,288 crores. This issue was never addressed by NCDRC. Hence the appeal and the Supreme court also miserably failed the consumers. It never went into the issues raised in the appeal.

Finally, I do not know whether you are familiar with the Consumer Protection Act. As per sec. 23, "Any person aggrieved by an order made by the National Commission, as per sec. 21(1)(a), may prefer an appeal against such order to the Supreme Court, within a period of thirty days, from the date of the order".

When an individual is dissatisfied with the order of the National Commission, he appeals to the Supreme Court, under sec. 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 sec. 27A. of the Act (sec. 27 provides for levying penalties for non compliance of the order of the Forum/Commission), where the implementation part is involved. The order of the Supreme Court is totally contrary to the facts of the case.

The apex court can use its discretion and decide on quantum of compensation, punitive damages and adequate cost. But it cannot skirt the issues and say the appeal had become "infructuous"

- Vaidya
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