The National Consumer Disputes Redressal Commission (NCDRC) is the apex body responsible for protecting the rights of consumers and dispensing justice in consumer cases. Assistant Editor Rakesh Rai spoke to NCDRC President Justice MB Shah about the issues faced by consumers and how well the redressal mechanism is geared to handle complaints.
Has the number of consumer complaints against financial services and products gone up recently?
It has definitely gone up. Most of the cases relate to loans given by banks. A few days ago, the NCDRC received a complaint about a bank trying to take possession of a vehicle by force. The commission ruled that use of force was not allowed. Imagine a situation where consumers hire musclemen to counter the musclemen appointed by banks — it will lead to chaos. This kind of thing cannot be permitted in a civilised society.
If banks use force to take possession of a vehicle, punitive damages can be imposed on them. We also get a lot of cases about companies that issued bonds but did not repay on maturity. Then, there are many chit fund companies that have vanished after taking deposits. The directors, who have since vanished, cannot be booked because of a loophole in the Companies Act that says only a “company” can be held responsible, not individual directors.
Which recent judgements by consumer courts can be termed as landmarks for consumer rights?
There have been several important judgements by consumer courts. In one case, a gold ring was purchased by an NGO in Bhopal. The stated purity level was 22 carat, but when it was tested, it was found to be 18 carat. The manufacturer claimed that the variation was because of moulding. When the case came to NCDRC, we issued notices to the Central Government and the Bureau of Indian Standards (BIS).
The BIS investigated and found that of 120 gold items purchased, only 10% conformed to the standard. Initially, the Central Government argued that it was difficult to hallmark every gold item, but now it is contemplating making hallmarking mandatory by 2008.
I consider this one of the achievements by the consumer courts. Insurance companies have been exploiting consumers on the basis of exclusion clauses that are never explained. There has been a string of judgements in favour of consumers. Now, a firm has to be careful when it denies a claim on the basis of its exclusion clauses.
Are consumers now more aware about the avenues for redressal?
There is awareness among urban people about the redressal process through consumer courts but in rural areas it is still very low. If you look at it statewise, Maharashtra has the highest awareness level. That’s why the work load on the district forums and the state commission is the highest in Maharashtra. Then come Delhi, Punjab and Haryana, where many cases relating to builders and developers not handing over possession within the statutory time are pending.
An individual can fight his own case in a consumer court. What if the case falls apart because the consumer didn’t prepare it well?
People who approach the consumer courts do their homework up to an extent but the problem arises when they become sticky and don’t see the other side of the picture, for instance, in insurance matters. Some insurance companies are also at fault for not giving proper information to consumers. Similarly, in medical negligence or health insurance cases, consumers do not have much idea because of the medical technicalities involved. But consumer courts act as a forum for even those who know nothing of the law.
Has the three-tier system of complaints in consumer courts made the process cumbersome?
Given the workload of the National Commission, we sometimes think that we should restrain ourselves from interfering in every small case. But if there is a complaint, we have to look into it. At the same time, all cases cannot come to the National Commission. It is only through the district courts and state commissions that people can access the redressal system.
It is felt that the compensation awarded by consumer courts is very meagre and does not act as a deterrent. Do you agree?
Consumer courts award “reasonable” compensation and not “deterrent” compensation. We can’t just copy the systems prevalent in other countries; the process will gradually evolve and will have to be based on circumstances in the country.
Even the compensation that is awarded takes a lot of time to reach the consumer...
The delay in paying compensation is usually procedural. Nationalised insurance companies have to deal with so many departments that there is sometimes a delay. But by and large the consumer court orders are being complied with. Anyway, once we pass an order and make an officer responsible for its implementation, companies are bound to follow the order. In 90% of the cases where summons are issued, the cases are resolved.
What hurdles do you see in the functioning of consumer courts?
The state governments ought to realise that consumer courts are vital forums for justice—after all, every citizen of the country today is a consumer. The problem is that the power to make appointments in district and state commissions vests with the state government. Sometimes, extra employees in a government department are deputed to these consumer courts. Some of them may not be willing workers and work suffers. Also, these appointments take a lot of time.
What is your advice to consumers of financial services and products?
My advice would be more to organisations than individuals. The Consumer Protection Act says that consumers should be protected against marketing of goods that are hazardous to life and property, but who is there to implement this right? Another right of consumers is to be informed about the quality, quantity and standard price of goods and services. But there is not enough awareness about these. Take, for instance, bottled water. How many of us get to know what it contains as ingredients, the amount of impurities, etc?
Most food stalls claim that the food is made in “pure ghee” — show me one shop that uses pure ghee. Similarly, there’s still no control over spurious drugs. A consumer can’t take up these matters alone. It has to be done by an organisation or the government. However, if a consumer’s complaint has wider ramifications, we do take up the case.