Who Will Defend the Consumer?

Effective Laws are Key to Grievance Redressal

Swapna Jha

In liberalised economies across the world consumerism has seen an exponential growth. Unfettered trade across nations has also given Indian citizens a dynamic consumer profile. However, the question remains whether the unfair commercial practices in the buyer-retailer relationship is addressed by the law. No other time in the history of trade has consumer rights been more relevant, given the explosion of e-commerce and mobile platforms, a burgeoning fin-tech sector and a dramatic expansion of choice.

In this complex and rapidly-evolving marketplace, issues such as the consumer’s access to information about goods, products and services, as well as the regulatory framework around consumer rights have become increasingly relevant.

Common Cause had launched initiatives to protect the common consumer against blatant exploitation, cheating and other assorted unfair practices even before our economy was liberalised in 1991. Even at a time when state monopolies ruled the roost, Mr. H.D. Shourie, the founder-director of Common Cause, realised how the average citizen was at the mercy of these public sector enterprises and were devoid of access to redressal mechanisms. He wrote a series of letters to the powers that be bringing out the problems of poor consumers, seeking redressal and suggesting solutions. His letters and representations are documented in the earlier issues of the Common Cause journal.

India’s consumer-security legislation, Consumer Protection Act, was introduced and enacted as a pathbreaking jurisprudence, intended to safeguard the consumer from rampant exploitation by unscrupulous manufacturers and traders of goods.

The object of the legislation, as the Preamble of the Act proclaims, is ‘for better protection of the interests of consumers.”

Its foundation is the three-tier fora --- the district forum, state commission and national commission. They are designed for redressal of consumer grievances and to protect citizens’ basic rights (to safety, choice, information and most importantly, redress in matters of defective goods and deficient services).

Under the Act, a simple written submission is enough to kick-start the redressal process. The aim is to provide speedy and inexpensive justice to the common man, as opposed to the cumbersome and expensive law courts where judicial delays are legendary.

The Consumer Protection Act, 1986 received the assent of the President on December 24, 1986.

Despite enacting the legislation, the central government was not in a tearing hurry to make it effective till 1989. There was no allocation of funds, provision for infrastructure (accommodation, staff etc.) or judicial appointments, as required by the Act.

Common Cause intervened at this juncture to prevent the consumer protection law from becoming a victim of neglect and apathy. We approached the Supreme Court with a PIL, underling that the Act’s implementation was sluggish and the grievance redressal machinery at the district forums had not been set up in most of the districts. This Writ Petition was moved under Article 32, for a direction to the appropriate government for the Act’s urgent implementation.

Notices were issued to the Union and state governments as well as Union Territories, requiring them to file counters indicating the action taken for setting up a district forum in each district. After the counters were filed by most states, the Court passed its order on January 17, 1990. It directed that district forums be set up in every district with the District Judge as its President, as a stop-gap arrangement. It also asked concerned governments to appoint two more members as part of each district forum.

The National Commission President was asked to obtain first-hand information from every state/U.T. about full compliance of the statute requirements. The High Courts were also requested to accord appropriate sanction/consent to District Judges functioning as district forum Presidents.

The petition was finally disposed of on January 7, 1993. The SC gave a number of noteworthy directions. It said that whenever the workload of the sitting District Judge, functioning as a District Forum President exceeded the minimum monthly load of 150 cases for six months, the High Court will convey the same to the state government/U.T. administration. The latter will then set up a regular independent district forum. The court order ensured, among other things, that the onus will be on the concerned state government /U.T. administration to implement the provisions of the Act.

The impact of the Common Cause intervention was phenomenal. An article published in the aftermath of the judgment goes like this: “Ironically, the pioneering pro-consumer legislation itself had become a victim of sloth and neglect until Shourie filed a writ petition in the Supreme Court against non-implementation of the Act. In August last year, the court ordered state governments to set up consumer courts within two months. From barely 30 district forums before Shourie’s petition, the number has now zoomed to 361, covering a major chunk of the country’s 450 districts.”1

Before setting up the infrastructure with judicial intervention, Common Cause rallied behind assorted issues of consumer protection that established the bonafides of the society as pioneer in consumer activism.

In the early days it made detailed submissions before the National Consumers Disputes Redressal Commission on various aspects of the functioning of the Indian Airlines, as it caused dissatisfaction and inconvenience to the consumers. An older journal article elaborates on the motivation behind the submission: “The Airlines has been operating as a typical monopolistic enterprise functioning on lines which cannot be termed efficient...”

Another issue of the Common Cause journal describes the scale and scope of the problem. “A petition was filed against the Indian Airlines highlighting the various problems encountered by the passengers including flight delays, flight cancellations, inadequate standard of inflight catering, delays in baggage clearance, inadequacy of supply of information about flights, and certain important aspects of safety of the flights.”

The Commission ruled in favour of Common Cause, offering redressal for genuine difficulties faced by passengers of the public sector domestic carrier.

Details of other petitions filed before the National Commission to protect consumer interests have also been listed in the journal. “A petition was filed against Delhi Electric Supply Undertaking highlighting various problems encountered by the consumers, including billing delays, billing defects, voltage fluctuations, load shedding, theft of electricity etc.”

Another case in this space highlighted why the founder-director of Common Cause is still regarded “as the father of the consumer-protection movement in the country.” The Society’s case against contaminated pharmaceuticals, in response to a growing scandal over the quality of intravenous fluids and blood products (tainted dextrose and saline solutions) supplied to hospitals shone the spotlight on the lifethreatening fluids patients are administered intravenously.

Common Cause filed a complaint before the National Commission established under the Consumer Protection Act, pointing out how pharmaceutical companies were supplying contaminated products to hospitals. It underscored the serious danger involved in inadequate quality control of the Intra-Venous Fluids extensively used in hospitals and administered into the blood stream of patients. In the complaint, Union of India, Drug Controller of India as well as Drug Controllers of all the states were impleaded.

Notices were issued by the National Commission to all the respondents, and reports were submitted by the Union of India, Drug Controller of India and by some of the state Drug Controllers. The deficiencies in the administrative setup of the Drug Controller of India as well as of the Drug Controllers of the states were brought to the notice of the National Commission during the hearing of the case. Eventually, the Union government assured that effective measures would be taken to obviate the chances of contamination of IV Fluids. It also said that rigorous inspection of the production units as well as production processes would be undertaken.

It was also decided that no manufacture of IV Fluids should be permitted on “loan license” basis, and should be allowed only after inspection by a group of experts. On October 22, 1989, on the basis of the government’s assurances and decisions taken in the meeting, the Common Cause complaint was allowed to be disposed of and a major battle was won against the drug enforcement agencies.

These legal battles by the “messiah of the masses” received widespread global attention. An article in The New York Times lauded the victory of the hapless consumer: “…in one of three important victories for the quiet consumer revolution taking place in India, the group, Common Cause, which monitors Governmentrun services as well as private commerce and industry, got the backing of India’s new National Consumer Disputes Redressal Commission. The panel ordered local authorities to enforce laws governing the safety of medical products, and will monitor their compliance,” it wrote.2

In the subsequent years Common Cause waged many battles under the new legislation to provide succor to the common people, not only against private entities but also public sector enterprises failing to deliver adequate services.

The woes of telephone subscribers stirred Common Cause into action time and again. In a petition filed by the Society against the Delhi area telephone company, the Commission ruled in favour of Common Cause.

This state monopoly had been receiving hundreds of thousands of consumer complaints for poor service, frequent breakdowns and rude or corrupt treatment by employees.

Responding to Common Cause’s submission, the commission dismissed the telephone company’s argument that it belonged to a government department outside of the Act’s purview.

Mr Shourie regularly took up the issue of mandatory printing of Maximum Retail Price (MRP) in the case of India Photographic Co. Ltd vs H.D. Shourie. He underlined that Hindustan Photo Film Manufacturing Co., a public sector enterprise was in serious violation of the statutory provisions of packaged Commodities rules, promulgated under the Standards of Weights & Measures Act by not printing the product MRP on the film packages. This allowed enough room to traders to manipulate prices.

On August 3, 1999 the sellers of photography materials were appellants before the Apex Court challenging the order of the District Consumer Disputes Redressal Forum, which was affirmed by the National Consumer Forum. The appellant contented that neither any rule nor any statute mandated it to exhibit / publish or print the price on the film rolls being imported and sold in India by its distributor.

The petitioner also contended before the Supreme Court was that it was the manufacturer alone, and not the distributor, who was liable for not printing the price. This contention was rejected by the Apex Court, which noted that the stress was upon the package and not the person manufacturing or selling the package. It became a landmark case for determining the liability of the distributor regarding product packaging.

In order to make this legislation more effective, the Union government had introduced the Consumer Protection (Amendment) Bill, 2011, in Lok Sabha on December 16, 2011, to facilitate quicker disposal of cases and to widen and amplify the scope of some of the provisions of the Act. Common Cause had offered its detailed comments on it to the Lok Sabha Secretariat.

The Society also submitted detailed comments in response to suggestions invited for the Consumer Protection Bill, 2015. The new bill sought to replace the 29-year-old Consumer Protection Act, 1986, and proposed setting up a regulatory authority to curb unfair trade practices and expedite redressal of consumer grievances. It also sought to create a Consumer Protection Authority, modelled on the lines of the US and European countries for fast- tracking redressal of consumer grievances.

The Consumer Protection Act of 1986, offering easy access to justice, had brought a legal revolution in India. It provided cost-effective mechanisms and empowered citizens in their fight against trader malpractices. However, with advancements in technology and the economy turning a page, the age-old 1986 Act needed an update. Thus, the old Act was substituted with the Consumer Protection Act, 2019 to keep pace with the modern marketplace. It ushered in much-required changes that favour consumers of a digitised world. The new legislation arms them with clearly defined rights and a fast-track dispute resolution process.

Conclusion

The 36-year-old Consumer Protection Act was a social welfare legislation, designed to be a bulwark against exploitation by business practices. The gigantic size of India’s consumer base and its inherent vulnerabilities had exposed to it unscrupulous practices of deep-pocket product manufactures and service delivery entities. Many multinational brands keen to profit from the Indian market were giving short shrift to Indian consumers. Many others were accused of indulging in unfair trade practices and dumping substandard products (and even drugs that are banned in developed countries) in India. Given this context, the Consumer Protection Act is a much-needed weapon in the consumer’s arsenal to fight for his rights against big businesses.

Endnotes

  • Rahman, M. (2012, December 21) Consumers finally get quick redressal, but major problems remain. India Today. Retrieved on March 13, 2022 from https://bit.ly/3tBSXmg
  • Crossette, B. (1989, October 22) Indian Consumer Group Wins Fight on Medicine. The New York Times. Retrieved on March 13, 2022 from https://nyti.ms/36nTJur

January-March, 2022