Consume and be damned

The Consumer Protection Act of 1986 has enough teeth, but courts lack bite and the system inflicts endless delays. Seema Kamdar investigates

 

Anandrao Pandurang  Salunkhe has spent eight years and journeyed more than 7,000 kilometres in search of justice, but when - or even if - he will ever get to the promised land is far from clear.

Salunkhe, who has been fighting for a piece of land since 1997, is just another statistic in the tottering justice-delivery system that goes by the name of the consumer court.

Every time a hearing is called, Salunkhe, a former mill-hand whose dreams of farming were dashed after a land deal turned sour,  sets off from Dutarwadi hamlet near Nune village in Maharashtra's Satara district for Mumbai, eight hours and 300 km away, in the hope that this time his case will be settled.

Rendered jobless in 1996, Salunkhe decided to go back to his village and become a farmer. He paid Rs9,000 for about half-an-acre of land, but the man he had bought it from refused to part with it. Salunkhe took the matter to the Satara district consumer commission and got a ruling in his favour, but the landowner still refused to budge. Instead, he appealed against the district forum's ruling in the state consumer forum.

"I was first called by the state commission on March 27, 2001," says Salunkhe. "Since then, I have not missed a single hearing, but what's the point?" The landowner, for his part, plays truant by not showing up for the hearing. "After every trip, I take back one more date," says a dejected Salunkhe.

The trips to Mumbai are not easy on Salunkhe's wallet. "Each trip costs me Rs300. I must have spent more than the value of the land on my trips," he says.

His September 6 hearing couldn't be held because the president of the commission had been called away for a meeting. Salunkhe will now have to be in Mumbai on October 24.
 
Consumer as pauper

In India, the consumer still plays second fiddle to the system. In theory, the Consumer Protection Act of 1986 is a landmark piece of legislation. But Salunkhe's case is testimony to how a watershed law can fail to deliver when it matters most: it's virtually impossible to get a ruling on time.

Though the Act stipulates three months - plus two more months if the case involves expert opinion or laboratory tests - the courts rarely follow this timeline. Worse, rulings are often not obeyed, hearings are delayed, and cops look the other way when the law is flouted.

Consumer activists say the devil is in the implementation. "How does the consumer court's order asking hundreds of timeshare companies to return the deposits help when these companies have declared themselves insolvent by the time the courts gave their ruling," asks AR Shenoy, chairperson of the Consumer Guidance Society of India, one of the oldest consumer NGOs in India.

The typical consumer case takes three to four years to reach resolution. PC Singhi, a retired IAS officer from Rajasthan, understands better than most how debilitating such delays are. The veteran activist, who has filed several consumer cases, including 17 against Indian Railways alone, says he has never got a single judgment in less than three years. A case filed by him against an airline took seven years to be judged and settled.

The delays are the reason why the number complaints received by consumer courts has gone down in recent years. "It has fallen by 50-60 per cent since 2001," says Dr MS Kamath of the Forum for Medical Ethics.

In August 2002, the Supreme Court took a serious view of the backlog of consumer disputes and the tendency to seek repeated adjournments. Commenting during the Dr JJ Merchant & Ors vs Shrinath Chaturvedi case, the apex court directed district forums to "evolve a procedure of levying heavy cost where adjournment is sought by a party on one or the other ground". It also asked consumer forums to follow the time limit and the prescribed procedures more strictly.
 
None of this, though, has helped matters much.

Consumer issues have always been low on the priority list of central and state governments. This explains why consumer affairs have been grouped with the food and civil supplies department even at the national level. Consequently, most consumer commissions, such as Maharashtra's, complain of poor funding by state governments. A year ago, the Uttar Pradesh state consumer commission declared a lockout in protest against the government's refusal to provide adequate infrastructure facilities.

Armed but harmless

Manubhai Shah, founder of the Ahmedabad-based Consumer Education and Research Centre, says the Indian consumer could do with a leg up. "We don't really have the concept of class action. What this means is that if I go to court and many other similarly affected people don't, they should also get the benefit of any order the court passes in my favour."

Investors, a key consumer group, are still labouring to stay within sighting distance of the Securities and Exchange Board of India (SEBI) while its US counterpart, the US Securities and Exchange Commission (SEC), pursues a policy of investor protection, backed up by law.

The Sarbanes-Oxley Act of the US ensures that fines collected by the SEC from a defaulting company go to investors who have suffered a loss on account of the latter's violations. "In India, each time SEBI imposes a fine it is diluted by the Securities Appellate Tribunal," says Shah. "The consumer disputes redressal forums are habitually tolerant of delays."

The Consumer Protection Act has armed consumer commissions at different levels with teeth, but these are rarely used to bite. For instance, in Salunkhe's case it is possible for the state commission to crack the whip by issuing a summons to the absent party and an ex parte order (an order where presence of the other party is not required).

Non-compliance is another stumbling block. "Three out of 10 orders are not complied with," says consumer activist Shirish Deshpande. To counter this, the forums are armed with adequate powers, which are rarely used effectively, because of their leniency and because of poor executive support. In cases of non-compliance, the law empowers district and state commissions to seize property and even arrest violators.

For some reason, though, consumer forums have decided that the imprisonment option will be exercised only after attempting the first. And that isn't easy.

For one, the onus of getting the details of the property to be attached is on the complainant. Second, the commission has to execute the first option through the collector's office and the the police. Officials say neither is cooperative.

Where does all this leave people like Salunkhe? Hapless for the most part, but, as with most matters involving the Indian judicial system, with hope enough to keep fighting.

Some ups and many downs

The Indian consumer movement has many mountains to climb

How many of us know that we shouldn't be paying extra for that soft drink at the multiplex? More importantly, how many of those who are aware take the trouble to do anything if they are breached?

Given the circumstances, is the consumer movement robust enough? Maybe not, but consumer activists believe it is headed the right way.

"One cannot have a flourishing consumer movement when half the people struggle to put food on the table," says PC Singhi, a retired IAS officer from Rajasthan.

There are other problems. "Though there are express instructions in the Consumer Act regulations to avoid courtroom conduct, consumer courts are dominated by lawyers," says Dr MS Kamath of the Forum for Medical Ethics. Consumers are also deterred by the wait involved in fighting a case. The backlog in consumer courts in Maharashtra, which has a better record than most states, dates back to 1992.

"The consumer movement is weak because of the lack of initiative on the part of consumer organisations," says activist Shirish Deshpande. There are only a handful of organisations in the country, among them the Consumer Guidance Society of India, the Mumbai Grahak Panchayat, the Consumer Unity and Trust Society, Jaipur, the Centre for Consumer Education and Research Centre, Ahmedabad, and the Delhi-based Voluntary Organisation in the Interest of Consumer Education (Voice).

But it has not been all bad news.

After intense lobbying by several consumer groups, the Reserve Bank of India formed a working committee to regulate credit card companies. The power sector has become more consumer-sensitive. The Electricity Act 2003 has made it compulsory for every electricity distribution circle to have a consumer forum comprising a utility representative, a consumer representative and a retired judge or bureaucrat.

Maharashtra has 14 such electricity grievances forums. Recognising the need for a grassroots presence, the 2002 amendment to the Consumer Protection Act makes it mandatory for all states to have a consumer protection council in each district. The process, however, is still not complete in most states.

Activists offer a four-point formula to set the system right: upgrade infrastructure of consumer courts, curtail adjournments, appoint special benches to clear the backlog, and dispose of small pecuniary complaints through lok adalats.

Justice chokes on red tape

What a consumer faces when he has to take a company to task?

Two brown benches guard the narrow passage. The public relations officer is framed on three sides by racks of files piled 10 feet high. Cupboards bear down on the way to the courtroom and behind them are still more racks bulging with files.

Welcome to the Maharashtra State Consumer Disputes Redressal Commission - the apex body in the state for consumers, where appeals from district commissions and original complaints for compensation between Rs20 lakh to Rs1 crore land up.

Located in a non-descript four-room office next to the more visible State Institute for Administrative Careers on Hazarimal Somani Marg, the condition of this institution stands testimony to the importance given to the consumer in the government's scheme of things. The commission has over 14,000 pending cases and the number can only grow as only around 720 cases can be disposed of in a year. Compounding the problem is the fact that the men handling this work are neither intended to handle it nor trained for it.  For some reason, the around-24-strong administrative staff are drawn from the weights and measures department, whose first job is to certify weights used by shops and establishments.

Registrar of the state consumer forum DJ Khairnar says the department faces an acute staff shortage. "The fact that 157 additional posts have been sanctioned recently for the 34 district commissions and the state commission tells the story of a starved consumer redressal machinery".

After the hearings, the courtroom doubles as a place where dates are set for hearings. Litigants keep up steady pressure for early dates. At the forum, printouts of elementary data are not possible because the computer holding that information has stopped working since May. 

Forum members, without whom a bench can't be formed, often don't turn up on time, say litigants. Since February, for instance, the commission has had no judicial member. Each forum comprises a president, a judicial member and a non-judicial member. According to the act, rulings are given by the president along with one of the members.

The state government, apparently, is waking up to the problems. Recently, it has approved the proposal for six additional benches of the state forum and has given the go-ahead to create 157 posts for these benches. But as usual, in a classic dance of one step forward and two steps back, funds and space have still not been allocated.

Landmark judgments

Lohia Machine Ltd had collected deposits for booking scooters, but defaulted in delivering the vehicles. The Mumbai Grahak Panchayat (MGP) filed a case against the company in 1989, and this went up to the National Consumer Disputes Redressal Commission, which provided relief to the 931 complainants. But MGP asked for "general relief'", on the grounds that, apart from the complainants it had represented, there may be many more who had not received the promised scooter. It turned out that 4.22 lakh consumers had applied for a refund but were not party to the case. These people also, eventually, got compensation. Following this, the president of the commission recommended to the Centre to frame a law permitting even a single consumer to espouse the cause of "other similarly circumstanced" consumers. An amendment in 1993 accordingly incorporated this point.

MK Gupta had booked a flat with the Lucknow Development Authority (LDA) but did not get it. LDA said it was not under the jurisdiction of the Consumer Protection Act as it was a state-controlled body. But the Supreme Court ruled, in 1993, that public-sector units did come under the purview of the Act, and went further to establish the principle of individual accountability. The Court directed that costs be recovered from the official responsible for the lapse, observing that nothing much would change if the erring official went scot free and the compensation was paid by the public-sector company.

A district forum awarded Rs5,000 to a consumer, Chandrakant Kadam, whose electricity connection had been cut off for 65 days by the Maharashtra State Electricity Board (MSEB). The state forum confirmed the compensation when MSEB went in appeal. But in a ruling of September 23, 2003, the national commission, chaired by Justice (retired) DP Wadhwa raised the compensation to Rs33,500 and, in a stern ruling, stated that if members of the forum had been put to the same trouble they would realise the predicament of the consumer.

Laxman T Kotgiri, a Central Railway employee, lost his wife after she was admitted to the Central Railway hospital in Byculla, Mumbai, for treatment and care. The district and state consumer forums dismissed Kotgiri's plea for compensation on the grounds that he had not paid for the medical procedure (the hospital offers free treatment for Central Railway employees). But in early 2005 the Supreme Court upheld Kotgiri's claim that the hospital was meant for railway employees and therefore was a perk or a sort of pre-payment for services to be rendered. The case has now been remanded to the national commission.

 

Know your rights

What can you as a consumer sue for?

Anything for which you have paid or paid partly (even a public hospital where you have paid Rs5 for an outpatient entry qualifies as liability cover).

What are the fees to be paid by a complainant?

The fees (as per a February 2005 notification) vary according to the strata from which a complainant comes from and the compensation demanded. The following is the fee structure:

None for those with below-poverty-line cards.

Rs100 for a compensation claim of up to Rs1 lakh.

Rs200 for claims between Rs1 lakh and Rs5 lakh.

Rs400 for claims between Rs5 lakh and Rs10 lakh.

Rs500 for claims between Rs10 lakh and Rs20 lakh.

Rs2,000 for claims between Rs20 lakh and Rs50 lakh.

Rs4,000 for claims between Rs50 lakh and Rs1 crore.

Rs5,000 for claims above Rs1 crore.

What are the areas covered by the Consumer Protection Act?

Ordinarily, complaints concern three areas: defective goods, deficiency in paid services, and unfair trade practice.

What is the jurisdiction of consumer forums?

District consumer disputes redressal commissions can entertain complaints up to Rs20 lakh; state commissions can hear appeals of any amount from the district forums and original complaints above Rs20 lakh and up to Rs1 crore. The national commission hears appeals from the state commissions and original complaints above Rs1 crore. Appeals against the national commission's verdicts have to be taken to the Supreme Court.