‘Law is not giving consumer speedy redress’

Civil Society News, Gurugram

Companies eye the Indian market with great anticipation. It has been growing, for sure, but there is much more to come on the  cards as incomes rise and the middle class expands.

It is time then to seriously empower Indian consumers to make choices, protect their interests and hold producers to account. So far, efforts in this direction have been mostly on paper or languidly taken up by do-gooders. Real action is needed on the ground — both by government and activists with true grit.

A consumer protection law was first passed in 1986. Then in 2019 a new law was passed to address contemporary realities brought on by technology and globalization.

The law seeks to set up an accessible mechanism for consumers to be heard in central, state and district consumer protection bodies. It relies on mediation and consultation. However, the institutions that were to be available to consumers across states right down to the district level either lack the staff needed to make them operational or don’t exist at all.

Recently, a study on the working of the consumer protection machinery was published under the India Justice Report. As could be expected, it paints a sorry picture.

Civil Society spoke to Maja Daruwala and Valay Singh, editor and lead researcher of the study.

 

Q: Has the Consumer Protection Act, 2019 and the dispute resolution structure that was put in place succeeded in protecting consumers?

Maja Daruwala: It’s hard to quantify and say to you with great certainty whether it has or hasn’t done what it was intended to do. But I think it would be safe to say that its potential has not been realized.

 

Q: It’s a simple question. Are consumers better off today in terms of their rights with this law and its framework than they were earlier?

MD: In some instances, it works. But, overall, can you say that it works to the expectation of an individual consumer? I would say that it’s far from what it could be.

 

Q: Have the Act and the framework put in place reduced consumer grievance cases clogging the civil courts?

MD: The data shows that less than 200,000 cases have come to these very carefully set up specialized local institutions. Yet the market is growing hugely. Consuming is happening much more. Money is being spent on goods and services much more in rural areas and small towns too. So that in itself tells a tale of how much it is being used.

 

Q: This was supposed to be a pathway parallel to the civil courts. The objective was that it would assist in at least taking some areas of redress away from them.

Valay Singh: The short answer is no. I think we can safely say that the existence of these commissions is not as well known as it should be. There is poor awareness. The data doesn’t back the claim that these commissions are helping consumers in seeking redressal.

In 1986, when the consumer protection law was first enacted, it took four years and PILs (Public Interest Litigations) for the commissions to start getting formed in different districts and so on.

In 2019, more than five years after the Act was revised, there are vacancies across state and district commissions. There is a huge gap in the availability of executive and non-executive staff. All this adds up. These are simply existing more on paper or as low- level sinecures at the district level. I wonder how much confidence they are giving the consumer.

In one sense, the e-commerce companies have a self-correcting model. You can file complaints, a bot will respond and most likely your complaint will be addressed in 80 percent of cases. Around 20 percent of cases may not be addressed.

But if you leave companies like Zomato and Amazon aside, there is still a huge chunk of Indian companies and other companies which are playing with the health, safety and lives of consumers on a daily basis as reported in newspapers whether it is cough syrup, milk or cheap and dangerous plastic products.

 

Q: Has legislation led to more lawyers looking at consumer rights? You’ve pointed out in your report that the role of mediation has not worked at all, for example.

MD: Yes, I think mediation is a sad story. And mediation really must up its game. Much needs to be done to have good mediators by training them and making sure that they are attached to consumer courts so that they are available when they should be.

As far as lawyers are concerned, certainly there are more lawyers, at least in Delhi and the main cities, who would specialize in consumer courts. If it’s a big law firm, they may have one partner or a couple of juniors who do specialize in consumer courts. And it’s a gentler path.  So, there should be more lawyers.

But the original idea of having consumer courts was not to have any lawyers at all. And instead have a really simplified procedure where any individual can come forward with a complaint against a large or small entity.

It was supposed to be at the level of quick redress. Instead, this framework is showing all the pathologies of the mainstream justice system. So, the question is — are lawyers helping or hindering the process.

 

Q: But surely a consumer needs specialized support for bringing a company with vast resources to book?

VS: The picture we are seeing is of just another court with the same kind of problems as the mainstream justice system. It was especially supposed to be designed to assist a person. You are making the point that this is an individual who’s pitched against an entity. Surely, he needs a lawyer to help him. But the idea was to have adjudicators who would be of assistance to consumers while acting fairly in relation to the other side. They were meant to be adjudicators, not neutral umpires.

 

Q: You have flagged in your report serious staff shortages. How should, say, a state commission or a district commission be staffed?

VS:  For simple matters, if you have all the facts, you should be able to file a complaint online and then go to the commission’s office and be able to present your own case. That is what the vision and spirit of the Act was.

But when a district commission does not have a president, and has two members, it cannot function. So, you need a president. You need the staff to serve the president and members of the commission. I think these are very important structural gaps.

 

Q: Can you tell us more about the state commissions or the district commissions? How many people do they need?

VS: There is one norm, dating back to 2000, which says that for every 250 cases there should be a lower division clerk as secretarial staff. You divide Maharashtra’s caseload of 70,000 cases by 250 and you’ll get the number of lower division clerks there should be.

Our finding is that only Rajasthan and one more, smaller, state have met the 2000 norms of the Bagla Committee. Take the example of Assam, going into elections. Consumer protection will certainly not be an issue. The state commission’s sanctioned strength is six. They have hired 14. So, in percentage terms, they’re overstaffed. They have no vacancy. They’ve sanctioned themselves 14. It’s a joke that for a whole state, you have only six staff in your state commission.

Most states have double-digit sanctioned strengths, whereas their caseload would be in tens of thousands. The real needs of a commission are not being met. It’s just not a political priority or a governance priority for any state.

 

Q:  So, the district commissions must be even worse off. You have flagged the need for more benches as well in your report.

MD: Some districts don’t even have a commission. One in every five is what our report says. The problem is at so many stages. Of the process being difficult. Access being difficult. The bench not sitting. Quorum not happening.  We also found the money that is given to these institutions is very, very modest.

 

Q: You mean they’re underfunded?

MD: Well, you know, in a country like ours, everything is underfunded, and justice is not particularly overfunded. Therefore, you must have much better utilization and better accountability. Target the money where it should be.

 

Q: What can be done to nudge the states into staffing the commissions by providing finances and ensuring that they function?

MD: The Supreme Court has been trying to nudge the states. But when you have these endemic shortages, and they are not addressed year after year after year, then there comes a point of exhaustion.

The voice of the people needs to be audible and louder for more action to take place.
Take milk contamination. This is a class action matter. You need a vibrant Central Consumer Protection Authority which takes up such matters.

 

Q: Politicians don’t see it as an issue. We might have had a consumer movement but perhaps it wasn’t strong enough to bring real change?

VS: We want to be seen as a $ 4 trillion economy but we are still a roti, kapada, makaan and toilet economy. I think it would be fair to surmise that we are not concerned about consumer protection outside the metros.

Even in the metro cities, what we find is a growing pendency of cases pending for more than three years. We find that, on average, in the state commissions, the pendency of cases is over 35 percent. In several metros and individual district commissions, it varies, but the average would be 25 to 30 percent. In Delhi, in one or two commissions it is over 40 to 60 percent. That is the range.

There is a national consumer helpline run by the Central government, which is more responsive. One has anecdotal evidence of that. But then again, you’ll have to have that doggedness to go to these commissions and seek justice.

The other issue is that many of the orders of these commissions get overruled by the high court or the district court, sometimes by the Supreme Court. If this happens a lot then people will lose trust in the effectiveness of the commissions.

 

Q: But then the powers of the commission have to be defined more clearly by the judicial system itself?

VS: And the executive in terms of giving the commission due capacity.

 

Q: Do you think the answer lies in far more consumer activism? Jurisprudence in consumer affairs like you have in environmental affairs?

MD: Yes, absolutely. You can witness that on social media. Conversations on consumer rights are happening at a subterranean level. There are people complaining, talking, taking samples of products, sharing their findings. And the food and drug agency is approached.

It is the executive’s duty to provide fora that actually work. That is what the Central Consumer Commission is supposed to be doing, raising awareness as well as intervening, taking class action.

 

Q: As per your report, sectors especially being taken to the consumer courts are banking, insurance and housing. Why?

VS: These sectors interchange at various levels and in different commissions. I think the impact of RERA [Real Estate (Regulation and Development) Authority] is yet to be felt. Our data set ends in 2024. Maybe a lot of cases are going to RERA.

We know a lot of housing matters went to the National Consumer Disputes Redressal Commission (NCDRC) because that is the jurisdiction of cases valued at `2 crore and above. A lot of cases, between `50 lakh and `2 crore went to the state commission.

However, insurance is a cross-cutting sector — whether it is a motor vehicle case, or a housing case. The data labelling of these cases is not very precise so there is some overlap.

A lot of cases are marked as insurance, even though they may primarily be medical cases from hospitals. We just wanted to bring this to public notice — the kinds of cases in our system.

My point is, do orders in these cases have any weight? Do they carry that power which mainstream judiciary carries?

Secondly, lawyers will advise you to file in the consumer court as well as in the civil court just to make your case stronger. You’re basically trying to get justice in any way possible and end up filing everywhere.

 

Q: What is it that made some states successful?

V.S.: Andhra Pradesh has done exceptionally well, according to their RTI (Right to Information) reply on the cases pending over three years, which is less than 5 percent. That is perhaps the only large state to have such a low share of cases pending over three years. They have a low number of vacancies except for the post of president.

That would be the case for Madhya Pradesh also. West Bengal has fulfilled the gender norms for hiring. But performance based only on numbers will perhaps be misleading because we don’t know the nature of disposals or how many were appealed against. We don’t know the quality of disposal either. Was it fair?

We have restricted ourselves to finding out the number of cases that have been cleared. And efficiency.

 

Q: Which state is the worst performer?

VS: Telangana is right at the bottom. One of the main reasons is because they did not answer several RTI questions. States that do not respond get a lower score. Incidentally, they called and wanted to know how come they’d been ranked so low. We’ve given them all the evidence.

MD:  My point is if you don’t give data to an RTI request, then what does it mean? Are you not collecting it? Or are you collecting it sporadically? Dashboards of how many cases are pending in the commissions have to be in the public sphere. We have created an interactive website you can go to as a consumer.

 

Q: Were there states which responded positively to the RTIs you filed?

VS: At least half of them responded well, around 19 states. The other half did not and then it becomes a challenge for us.