In order to protect the consumers from exploitation and to safeguard their rights, primarily from adulterated and substandard goods and deficient services and to provide relief to such consumers, the Consumer Protection Act came into force on 15th April, 1986 and it applies to the whole of India except the State of Jammu and Kashmir.
District Forums were set up by the Government with a noble intent
Basic rights of consumers that are deemed protected, include:
- Right to be protected against marketing of goods and services which are hazardous to life and property.
- Right to be informed about the quality, quantity, standard and price of goods or services so as to protect the consumer against unfair trade practices.
- Right to be assured, wherever possible, access to variety of goods and services at competitive prices.
- Right to be heard and to be assured that consumers interests will receive due consideration at appropriate forums.
- Right to seek redressal against unfair trade practices.
- Right to consumer education.
About Consumer Redressal Forums:
Under the Consumer Protection Act, every district has to have at least one consumer redressal forum also called a consumer court. Here, consumers can get their grievances heard. Above the district forums are the state commissions. At the top is the National Consumer Disputes Redressal Commission in New Delhi.
While Consumers Misuse The Act and Redressal Forums Turn Supererogatory, It’s The Businesses That Are Bearing The Brunt
Claims of less than Rs. 5 lakh are filed with district forum, claims of Rs. 5 lacs to 20 lakh directly with the state commission, and claims of more than Rs. 20 lakh with the National Commission.
The benefits of these Consumer Disputes Redressal Forums/Commissions that successfully addressed the consumer grievances have now become multifold. These not only benefit the consumers but also act as Rehabilitation Centres for the retired and the connected amongst the Judiciary and the Civil Services.
As time passed, consumers benefiting from these Forums found it not only an easy route to get relief (right or wrong) but also compensated for. This could be possible more due to partisan benevolence and lifetimes of grudges held against businesses, by some of those manning these forums.
Coupled with the above, the infamous Indian ingenuity of fabricating evidence and falling to abysmally lows and unethical levels to get a benefit or two, the Consumer Forums became a hit with many a tainted beneficiaries.
The word thus spread and a beeline of consumers started coming for an easy kill, as genuine businesses took a hit.
Consumer Protection is Perfectly Fine, But Who Will Protect Businesses & Entrepreneurs Against Its Misuse?
As a result, small companies and entrepreneurs were the first to show signs of desperation as they got overwhelmed with notices and cases, most of them on false and flimsy grounds. Though these should have been filtered at the initial stages, but barely any human filter could be found upright to keep the fraudulent cases at bay.
The problem of people taking services and then trying to get back their payments either first by bullying the service provider or else by filing cases in Consumer Forums on grounds of false claims of deficiency in services. Thus Consumer Forums, some manned by comparatively lesser Gods started acting as agents propagating the nefarious designs of unethical individuals and groups.
To highlight the gross misuse, this utterance by a lady from Haryana is revealing. Fairly educated and mature, she told the owner of an Aesthetics Centre “Do you know I took services at your centre”. Since the owner had a manager to look after the operations, he said “Ok, but why do you ask”. To this she smiled cynically and said. “Well, for your information, I am a Gujjar woman. I always take services by paying, but at the end of the day, I also get full refunds.” The owner was zapped. Little did he know that this lady had threatened and subdued his Centre Manager and managed to forcibly take back cash as Refund from the daily collections, after having availed all the services in her package. Well that’s what businesses at times have to put up with.
In most cases, normally threats work, but if not then many a consumers take the matter to Consumer Courts and get refunds with penalties. Any business would go bust, if clients take services and get back refunds too. In other words No business can sustain itself by providing Services FREE of Cost.
The lawyers too, act as catalysts, luring clients with claims to get back 10 to 50 times compensations from the companies, thus fueling the greed.
All sorts of tricks and corrupt, arm twisting practices are resorted to with impunity by many a consumers to fleece the businesses, big or small. Some of these consumers, being unemployed, utilize their full time and energy, making it their full time job to represent their cases, hiring best of counsels and demanding exorbitant compensations to, in a way, extort and fleece the businesses.
The cases thus have swelled in the past decade or so, against the unsuspecting and hard working entrepreneurs and businesses. With most small businesses and first time entrepreneurs living on edge with their capitals invariably in rotation, the hiring of lawyers on case to case basis or to engage a few on full time employment becomes a dilemma that drains money, resources and energy.
On the contrary, the Judges and members of such forums, despite having worked for ages in the judiciary or administrative set ups, often lack the sensitivities towards a business, thereby compounding the problems for such companies and their owners.
This being more predominantly seen amongst retired re-employed judges and non judicial members heading such forums and commissions with an arrogant air of “Known All, Seen All’ attitude, even though they do not fully understand the nuances of present day businesses and business environs.
Such attitude and its consequences, extend to the woes of Indian businesses presently being faced by many a top corporate houses in India. This in turn, at the end of the day, is one of the reasons, what programs like #StartUpIndia and #MakeInIndia face despite best efforts of the govt to accelerate them.
Highlights Of Consumer Forum’s Insensitivity Towards Businesses
Cases of high handedness and judicial over reach by Consumer Forums abound in plenty. Some get highlighted, some don’t. In one case, plight of helpless company directors at the receiving end of a retired judge, grossly misusing his powers of issuing warrants of arrest, allegedly to extract money, in collusion with the claimant was brought to notice. It was claimed that a chance for a fair trial after issuing an ex-parte order was not given to the aggrieved company despite having provided all doc’s to prove their innocence. It’s also alleged that the directors were constantly harassed in the form of threats to get them arrested against non-bailable warrants and as a result, the company had to shut down a couple of its branches, laying off it employees and staff.
The case pertains to a franchise partner branch of a company Numero XYZ Pvt Ltd (Name changed on request) that used to run a chain of centres across North India.
As has often been seen some clients (like the gujjar lady mentioned earlier) after availing their services, start complaining with a preconceived intent to extract a refund. So this company, countered it with a policy of ‘No Refund’ that clients used to sign beforehand. However as a fair measure and to satisfy the client, branch level heads were given authority to repeat the procedure, in part or full, if required. Even package conversion and transfer were given as options to offer the client, till satisfaction.
Now this client, named Sania Marwah, was booked by the company’s franchise partner Annupma (name changed) at their Chandigarh branch. An Assistant Manager named Dr Kavita was also involved in providing services during the course of the clients treatment. Another two visiting doctors, were also involved in providing the treatment to the client.
It so happened that Annupma, was removed by the company after allegations of cheating, forgery (in bills) and breach of faith surfaced against her. It is claimed that this Franchisee Partner cheated the parent company and its owners, to the tune of 22 lakhs of rupees, opened up a replica centre nearby and took all the company’s clients, data and staff to her clinic.
It is learnt that the client Sania Marwaha citing some deficiency of services, filed a case against Annupma, the Franchise Partner. Assistant Manager Dr Kavita and the two doctors were also named as co-accused.
While both the doctors and Kavita had already left the company on the closure of the Chandigarh branch, it was Annupma who continued to remain in the know of things. However she preferred to remain silent and did not inform any of her colleagues and co-accused with her in the case.
With the notices going unserviced, the District Forum decided the case ex-parte. However since the Order went unserviced, the Court went ahead and issued NBW’s against all the 4 persons mentioned. Though these too also went unserviced.
So at the behest of the complainant Sania Marwaha’s counsel, and just to rope in, the District Forum this time, got the parent company’s directors names retrieved from the net and made them a party too.
All this while, the main accused Annupama remained locally available, running her centre at Chandigarh, but deliberately not attending the proceedings. Though when the police finally caught up with her, she took bail against the NBW’s, cooking up and fooling the Forum, claiming innocence and suggesting the Court to go after the Company directors, against whom she was already nursing a grudge for having been thrown out of the Partnership, due breach of faith.
As soon as this came to the knowledge of the two Directors, they represented their case with the State Commission after duly submitting the prescribed fees of INR 25K and hiring a lawyer in Chandigarh.
However, the high handedness of the State Commission and the arm twisting of the companies by an organisation that was originally meant to play fair with both the parties could be gauged in the manner the Company’s counsel was barely lent an ear to and instead open threats to get the Company directors arrested without bail were conveyed.
Infact the President of the State Commission, somehow seeming to be acting on some grudge, did not listen to the Company’s genuine and documented pleas of non-service of correspondence due to closure of the Chandigarh branch. Overlooking the Company directors pleas of getting a hearing to at least put their case proving their innocence, the judge instead ordered to make an arbitrary payment. All this despite the govt notified fees having been deposited and the Company insisting to fight the case for being given due justice as per law of the land.
It is not understood as to why the Consumer Forum did not take into consideration even the fact that it was an ex-parte order. In all fairness and to be in synch with the principles of natural justice, the Company directors who were dragged into the case at a later stage, should have been given an opportunity to hear their side of the story.
As one of the company’s representative put it, “The Consumer Forum’s Order seems to be biased and reflects some kind of grudge against businesses in general. They didn’t even know the case, scooped out the Directors names from the MCA portal after the parties proceeded against could not be traced and simply at the last moment issued non-bailable warrants against them.”
When contacted, one of the aggrieved directors of the company said, “The order of the Forum lacks application of mind and flouts the basic principles of natural justice.” He further added, “The irony is that it amounts to catching hold of the company directors coz they are easily traceable and asking them to cough up Lakhs, or else go to jail.”
He went on to add, “This kind of attitude, wherein an ex-parte order was given and the judge is not ready to listen to the Company’s representation spells doom for the industry and the businesses in general. Rather is more interested in getting money deposited over and above the govt. prescribe fees for such purpose, without even listening to what the defendent had to plead. Worth noting is the fact that the claimant having taken all services due to her, was insisting for a refund, could be as a habit and the Judge insisting to pay an arbitrary amount, that too without trial, surely smacks of some kind of fishy dealings.”
This incident and alleged claims of the company getting an unfair deal does corroborate what has been said about the District Forums both in hushed tones as well as vocally.
In the words of a Lawyer at Delhi, who after hearing the story remarked, “District Forums and Commissions have been reduced to village Akharas where Pahelwans impart justice in their own whimsical ways”.
No Wonder “Consumer Forums transcend justice, only to become business disruptors at the end of the day”.
With Narendra Modi government trying to revive businesses, the judiciary, apparently is working at cross roads. Meanwhile the cumulative effects of businesses and firms getting unfair deals, ultimately is reflecting in the numerical bottom lines of the nation. All this, as the Consumer Disputes Redressal Forums, go supererogatory, forcing many a businesses to shut shop.
PN: This is a part of a series of articles, highlighting the insensitivity of judiciary towards businesses in India.