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Spend smart, act smart

Rakesh Rai & Sushmita Choudhury     November 4, 2009
Itish Arora, 29, New Delhi
Grievance: Bought a Blackberry 8310 for Rs 11,500 in August 2009, and ended up with a locked AT&T phone. So he could not use any data feature. On complaining, he was asked to send back the phone at his own expense without a promise of a solution.
Redressal route: Public forums
He has put up his problem on an online consumer complaints forum.
Current status: Since the problem has not yet been sorted, he plans to take the retailer to court.
Other options: Arora has the option of not waiting for the online forum to decide. He can pressurise the retailer through the consumer court, or approach the prominent trade associations in Chandigarh, where the dealer is based.
"As I have all the purchase-related documents in place, I am told that I have a strong case if I go to the consumer court."

Sale. Discount. Special offer. Buzzwords that all of us recognise, and words that almost always have us reaching for our wallets. From now till around May, your wallet will have more demands made on it than at any other time of the year. The festive season is spending season, which gives way to investing season as the tax deadline draws near. But it’s not all spend, spend, spend. This is also the time when unscrupulous manufacturers and dealers try to pass off shoddy goods to unwary customers. It’s also the period when brokers and agents scramble to meet sales targets and sell grossly unsuitable financial products. What can you, the consumer, do to ensure that you get what you pay for? And, if you have been conned, what can you do to get redressal?

The good news is that with consumers becoming more vocal, providers of goods and services have become more responsible and responsive. Many of them offer round-the-clock call centres, service technicians on call, complaint cells and more. But do these mechanisms really work? If they don’t, what can a buyer do to ensure that he hasn’t wasted his money? The good news is that with the setting up of the National Consumer Disputes Redressal Commission and the state and district consumer forums, it has become easy and cheap for a consumer to take legal action against a company. No longer does one have to be rich enough to afford a lawyer. The consumer courts are user-friendly and almost always on the side of the buyer. We spoke to people across the country who have taken on companies, retailers, manufacturers, retailers, even hospitals and universities, to fight for their rights.

While there are several legal, formal and non-formal ways of being heard and defending your rights, there’s also the other side of the coin. The buyer must be aware of what he is buying. He should take informed decisions instead of pointing an accusing finger at companies. This is particularly true of services; an insurance cover or a tax-saving plan is not good or bad in itself. But if you don’t need it and buy it, the fault is yours more than the agent’s. After all, you are the one spending the money. Which is why, over the next several pages, we look at consumer rights in conjunction with the responsibilities of a spender.

We hope that some day soon, manufacturers and retailers will stop the practice of printing E&OE (errors and omissions excepted, a phrase used to reduce legal liability for incorrect or incomplete information supplied in a price list or quotation) on bills, or even “Goods once sold will never be taken back”. With more buyers becoming aware of and being vocal about their rights, we too might soon move to the day when, like in developed nations, sellers declare: “In case you are not fully satisfied with our product, you can bring the same to us within a month for either replacement or return of your money.”

Ajay Kaila, 50, New Delhi
Grievance: On 2 January 2007, his Air-India flight from Dubai to New Delhi was delayed by over seven hours and was diverted to Mumbai due to fog. Passengers were not informed about the delay and had to wait for nearly 12 hours without hotel accommodation before boarding a flight to Delhi.
Redressal route: Consumer court
Kaila and some other passengers moved the National Consumer Disputes Redressal Commission against the airline.
Current status: The commission asked the airline to publicise its internal service rules, which state that in case of a delay of more than 10 hours, passengers must be accommodated. The airline moved the Supreme Court, which has stayed the NCDRC order.
"We should all fight for our rights, but some people don’t do so. I contacted 50 passengers on board, but got affidavits from only six people."

Goods and Services
In the early part of the 17th century, a goldsmith named Chandelor sold what he claimed was a magical healing stone to a buyer named Lopus. Lopus, who paid 100 pounds for the stone, found later that it was bogus. He took Chandelor to court, which ruled that “everyone in selling his wares will affirm that his wares are good, or the horse which he sells is sound; yet if he does not warrant them to be so, it is no cause of action”. Chandelor was let off, and Lopus was given some good advice: caveat emptor, or, let the buyer beware.

A lot has changed in 400 years, especially with the introduction of laws favouring buyers in the early 20th century. Today, although we can take sellers of spurious goods to court, how many of us take this route? The law is very clear on the subject. It deems that goods must be safe, fit the description that’s given, be of ‘satisfactory’ quality and suit the purpose for which they are intended. If they have to be installed or assembled, there should be adequate instructions. Also, if you are shown a sample of the product first, what you are sold must match it.

A smart spender is one who doesn’t just look at getting the best price, but the best value for his money. So, how can you be a smart spender? By not sitting back and saying, “This is how things are.” Did you know that under the law, you are allowed a ‘reasonable’ amount of time to check that the goods are satisfactory? It’s another matter that ‘reasonable’ is not defined, and means different things in different situations. Your best bet is to check the product immediately. If you take it home and find that it’s faulty, you can return it and either get your money back or opt for another product. Or, at least, that’s what the law says. Retailers and manufacturers often prefer to ignore this aspect of the law. Where does this leave you?

First, try the threat of the law. Make sure to complain in writing, including all the details and any transaction reference numbers. Give the reason for your complaint and how you want it to be resolved. Keep copies of letters and record any phone calls. If this doesn’t work, try contacting the local trade association, which might be able to pressurise the retailer. If it doesn’t work, there’s always the consumer court, where the cost of litigation is minimal.

Even as you fight for your rights, make sure that you are in the right. When Amit Sinha moved from Coimbatore to Delhi, he decided to save on the insurance offered by the movers and packers. His goods reached in a badly damaged condition, but Sinha could not take any action against the company as he had refused insurance.

Mangesh Utturkar, 46, Mumbai
Grievance: Before booking a package tour with a local operator, Utturkar asked if it included a pickand- drop facility from his residence. However, the driver dropped them 16 km away from their residence and they were forced to arrange their own conveyance.
Redressal route: Consumer court
He first asked the tour operator for a refund, but was refused. He has now approached the district consumer commission.
Current status: Pending
Other options: Utturkar could have taken the online route and posted his complaint on a travel forum. Unfavourable public opinion can make things difficult for a small operator.
"One travels not only to visit a new place but also for peace of mind. My whole trip was rendered worthless because of the travel agent’s fault."

If you, unlike Sinha, have a legal leg to stand on, take heart from the fact that most services have some sort of regulator in place. Telecom grievances, for instance, can be taken to the Telecom Regulatory Authority or Trai. Complaints about monopolistic trade practice, unfair trade or restrictive trade practices can be made to the MRTP Commission.

Government agencies have grievance redressal cells. However, if the complaint is not addressed or there is a delay in response, one can approach the Directorate of Public Grievances, Delhi. In case of malpractices, misconduct or corruption in public services relating to government officials, one can write to the Central Vigilance Commission, Delhi, or lodge a complaint at www.cvc.nic.in. Finally, there’s the Consumer Protection Act, which lives up to its name. For instance, ruling in a case in which the complainant got thrown off a swing at a fair organised by a government agency, the National Consumer Disputes Redressal Commission (NCRDC) held that the service provider and the organisers of the fair were liable for deficiency in service. Similarly, the Delhi state commission asked Indian Airlines to pay Rs 50,000 as compensation to a passenger who found an eggshell in his food despite specifying that he was a vegetarian.

Education
One of the biggest areas of spending is education, especially professional courses. Given the hefty fees charged by even little-known institutions, it’s not surprising that consumers are becoming increasingly vocal about being shortchanged or not being given what is promised in the glossy brochures. Thankfully, educational institutions fall under the purview of the Consumer Protection Act.

No refund: The NCRDC recently ruled that an institute has to refund the fee if a student has not studied there. “With such a judgement in place, refund policies no longer remain significant,” says U.B. Wavikar, a Mumbaibased advocate. If an institute refuses to refund the fee, a student can file a complaint with the Human Resource Development Ministry. You can also file a writ petition in the high court, although if you want compensation, you will need to file a case.

Advance payment: Institutes cannot demand the entire course fee in advance as it binds the student for the full term even if he finds it to be difficult or substandard. The Supreme Court has ruled that an educational institution can only charge the prescribed fee for one semester/year. In case it feels that a student may leave mid-way, the most it can do is to ask the student to give a bond/bank guarantee that the balance fee for the full course would be paid even if the student quits.

Joseph Fernandes, 82, Bengaluru
Grievance: Booked a Cox & Kings package, which included a ‘two-night, three-day cruise’ that was actually two nights and one-and-a-half days.
Redressal route: Consumer court
He took the case to the district forum, then to the state commission, and finally, to the National Commission
He first asked the tour operator for a refund, but was refused. He has now approached the district consumer commission.
Verdict: The district forum ordered the tour operator to pay a compensation of Rs 50,000. The company’s appeal was dismissed by the state commission, which reduced the compensation to Rs 25,000, with 25% interest. The National Commission upheld the verdict, observing, “The company deliberately timed the departure of the cruise at 11.59 p.m., that is, one minute short of midnight, and counted that one minute as one full day. This is nothing short of outright cheating.”
"Only a rare consumer is conscious of his rights and is prepared to take the route of legal proceedings. This is one of them."

False affiliation: In a recent judgement, the National Consumer Commission awarded 13 students Rs 20,000 as compensation, besides the entire fee refund at 12% interest. The students had enrolled in a dental college, which made a false representation of affiliation in an advertisement. The commission held the institute guilty of deficiency of service. The Delhi consumer court also ruled that seeking approval for a course from a body like the All India Council for Technical Education does not make it a recognised course. “Such representation is an unfair trade practice,” says the ruling. To avoid getting duped, check the claim with the concerned university or council online or in person.

Promise of a job: Some institutes promise ‘guaranteed’ placements, others play safe by offering just placement ‘assistance’. “If an institute is offering 100% placement assistance, it means that the companies will come to its campus for recruitment and hire the best of the lot, unlike the placement guaranteed programme, where you are hired but can be thrown out later if you are not up to the mark,” says Prerna Aryan, a counsellor with an animation training institute. Even when an institute claims to guarantee placements, it can get away with landing a student a low-paying job. Consumer courts have increasingly taken note of such claims, but ultimately, it is up to the students to vet the institute’s claims.

Travel
The travel industry seems to be one of the few that has managed to grow without trampling over the rights of its customers. Not too long ago, a flight would be cancelled without any intimation and you’d be lucky to land a future travel voucher; rogue, fly-bynight travel operators held sway, and booking a budget hotel online meant that you would check into a seedy place in a back alley. However, things have improved with authorities such as the Directorate General of Civil Aviation (DGCA) and consumer forums taking up cudgels on behalf of the common man. Even individual service providers boast their own consumer grievance redressal mechanisms. This, however, is proving to be a doubleedged sword. While it goes a long way in facilitating fair and transparent dealings and ensuring adequate compensation, the lack of a single authority for handling all travel-related complaints creates a lot of confusion when it comes to claiming compensation. It also allows many a valid grievance to slip through the cracks. The bottom line? The surest way to safeguard your rights as a traveller is to be aware. Here are some common travel grievances and how you can avoid them.

Overbooking and delayed flights: According to the Civil Aviation Requirements (CAR) issued by the DGCA, airlines have to compensate passengers for both these eventualities. If a flight is overbooked, the airline must first ask for volunteers to give up their seats in return for some benefits. If the passenger is not a volunteer, he is eligible for a compensation of Rs 5,000 for short-haul flights, Rs 8,000 for longer flights and Rs 12,000 for flights over 3,500 km outside India. However, if the passenger is accommodated in a flight in the next two, three or four hours, respectively, these compensations may be halved. The same benefits and compensation have to be extended to passengers of a cancelled flight, unless the operating airline gives them at least one hour’s notice. In both the cases, the airline must provide meals and refreshments during the wait as well as hotel accommodation with transfers, when necessary.

Bhupesh Khurana, 37, New Delhi
Grievance: The dental college he entered claimed in its advertisement that it was affiliated to Magadha University and Dental Council of India. However, he found that the claim was false.
Redressal route: Consumer court
He approached student bodies and politicians, and finally, as a group, took the case to the consumer court. The case was then taken to the Supreme Court.
The verdict: After six years, the consumer court asked the institute to pay Rs 20,000 as compensation and refund the entire fee at an annual interest of 12% from the date of admission to the date of ruling, to all 13 students. When the case was appealed in the Supreme Court, it upheld the order and asked the institute to comply with the commission’s ruling.
"We won because we believed in our case and wanted the college to be held accountable. One should be patient while seeking justice."

In case of flight delays of over five hours, the stranded passengers are entitled to a full refund if they don’t want to wait. The DGCA has ruled that airlines cannot swap refunds for a future flight voucher. This means that you can demand a cash refund of the tax and fee components of the fare even if you choose to cancel your flight.

Says Arun Saxena, president, International Consumer Rights Protection Council (ICRPC), a nongovernmental organisation working for consumer rights: “Airlines are free to have their own consumer grievance cells. But since these are manned by their own staff, the results generally seem to favour the airlines rather than the complainant. Hence, the consumer has to finally go to the consumer court.” The ICRPC helps consumers prepare the complaint in the right format and guides them through the entire procedure.

Lost or damaged baggage. You are entitled to claim compensation for damage, loss or delay of your baggage on a flight operated by an Indian airline anywhere in the world. International passengers are entitled to a higher compensation under the recently ratified Montreal Convention. From a miserable $20 (about Rs 900) per kg for damaged baggage, you are now entitled to $1,400 (around Rs 63,000) per passenger. This is also the compensation ceiling for delayed checked-in baggage. In addition, if the delivery of baggage takes over 12 hours in a foreign country, you are entitled to an interim expense.

These claims must be reported to the airline immediately. While damaged baggage claims have to be submitted within seven days, the window for delayed baggage is 21 days. If the airline doesn’t fulfil its obligations, the passenger may complain to the concerned consumer redressal cell or approach a consumer forum.

If you want to file a complaint with ICRPC, contact procedure @consumergrievance.com and follow it up with a written complaint supported by relevant documents. For details, visit www.consumergrievance. com.

Tour cancelled due to geo-political tensions: While you cannot insist on a refund in such cases, you are entitled to adequate compensation. Says Rajesh Gupta, vice-president, TUI India: “In 99.9% of the cases, where a part of the booked journey has to be cancelled due to unforeseen circumstances, customers are offered a compensation that is valid on the next holiday/flight.”

Industry insiders maintain that though a monetary refund is not typically offered, consumers are satisfied with future travel vouchers. Adds Gupta: “If we fight on the customer’s behalf, future travel will be limited to the same destination/hotel and airline. However, depending on the circumstances, internal adjustments can be made to change the service provider.”

Pushpa Bandu Lata Kadam, 51, Mumbai
Grievance: Her son withdrew his admission from a college, but the fee was not refunded. He decided to take admission if the fee was not returned, but the college said it had cancelled the admission and refused a refund even after that.
Redressal route: Consumer court
She approached the HRD Ministry, which forwarded the case to the technical education department. When nothing came of it, she went to the district consumer court.
The verdict: The district forum dismissed the case, but she filed an appeal in the state commission. The court ruled that the institute’s refusal to refund the fee was erroneous and asked it to refund the entire fee at 9% interest till the time of judgement and Rs 5,000 as legal charges.
"I am happy that my efforts have paid off and I have got my money back. Everyone should fight for their rights and should not give up."

The best way to cover against all eventualities is to ask your travel facilitator upfront, and before paying up, exactly what you will be getting for your money and the recourse available if things go wrong. At the very least, you should ask for a number you can call 24x7 during the trip.

Extra costs on all-inclusive tours: According to a Ministry of Tourism official, “A passenger is legally entitled to claim damages from a tour operator if he fails to provide the services booked, be it failure to offer any flight included in the tour package or being accommodated in a lower hotel category than was promised.” Moreover, the facilitator is obliged to assist the customer in making alternative arrangements without any extra cost. But given the lack of specific ministry guidelines on what a package tour must include, rogue travel agents manage to dupe many customers.

There are ways to safeguard yourself, starting with choosing a reputed travel facilitator approved by the Ministry of Tourism. At the time of booking, ensure that you are given a copy of the terms and conditions. Says Gupta: “Tempting advertisements may often be used as a lure, but at the time of booking, authentic travel agents will ask cus-tomers to sign a copy of the terms and conditions, which clearly highlight all the inclusions and caveats.”

Unresolved complaints: As a last resort, you can turn to the Directorate of Public Grievances (DPG), a body that helps to obtain responses to unresolved grievances on matters relating to select central government departments and organisations. The good news is that the DPG does not charge a fee. The bad news is that you have to be prepared for plenty of paperwork. While sending a written complaint to the DPG, make sure you include copies of supporting documents, including proof of your earlier attempts to have the complaint resolved through the grievance redressal mechanism of the department concerned. If you have filed an appeal in any court, tribunal or consumer forum, the fact has to be clearly mentioned. The postal address of DPG and the procedure for lodging your grievance online are available at http://dpg.gov.in.

If the DPG is satisfied with the gravity of the complaint, it will seek comments from the concerned organisation and revert within 15 working days of receiving the grievance. A letter will be sent informing you of the action taken. The defaulting organisation is then expected to examine the matter and give a reply within six weeks, and not later than three months.

Real Estate
Buying a house is one of the biggest financial decisions for an individual. Most people nearly wipe out their savings to make a down payment and then take on a substantial financial liability in the form of a loan. This is why problems with a house or a developer assume greater importance.

Amit Pradhan, 31, Ghaziabad
Grievance: The day he shifted to his flat, he noticed cracks in the walls and other flaws like broken and uneven tiles, protruding iron rods in the living room, and seepage.
Redressal route: Internet
After the builder failed to rectify his problem despite repeated reminders, Pradhan posted his problem on an online consumer forum.
Current status: Within days of posting it, several people in the same project and some other projects by the same builder came together to pressurise the builder.
Other options: Pradhan could also approach real estate organisations like CREDAI and NAREDCO if his builder is a member; these bodies have strict rules for members. He can also approach the consumer court
"After waiting for three years, my house is not fit to live in. The only option is to fight. I cannot get out of the investment so easily."

Delayed project: According to lawyer Mantosh Sarkar, “In case of a delay, the buyer’s right has surely been infringed and he has every right to claim compensation or come out of this agreement irrespective of any adverse clause.” If the contract specifies a penalty in case of delay beyond the stipulated time frame, investors have the option of invoking the contract. The developer has to pay an interest on the deposit or refund the deposit, he adds. Also, in case of projects where the payment is linked to the completion of stages, the builder can be made liable for each delay.

While hearing a case in 2007 (Kamal Sood versus DLF Universal), the NCDRC observed that “it is an unfair trade practice on the part of the builder to collect money from prospective buyers without obtaining the required permissions. In such a case, if there is any express promise that the premises would be delivered within a stipulated time, and is not, the escalation in the cost is required to be borne by the builder.”

Scrapped project: This used to be a problem with only smaller developers. Now, however, even national-level players are scrapping projects, leaving investors in the lurch. While some offer ‘alternative’ options like other projects, others just go into liquidation, leaving the investors without an exit option.

When Delhi-based Rahul Dhanuka booked an apartment, the builder not only failed to start construction even after four years of booking, he changed the name of the company and applied for restructuring, forcing buyers to wait till the court approved the scheme. However, Dhanuka took the company to the consumer court. The verdict said, “It is a simple agreement to hand over possession after construction. It is not the concern of the buyer as to what happens to the company. If the company goes for liquidation, it is because of mismanagement, for which consumers cannot be punished.”

Shoddy construction: In September this year, residents of a project called Green Valley in Faridabad lodged an FIR against the developer, RPS Associates, on charges including cheating and breach of trust. The developer had promised to deliver the project in 2006. However, delays in obtaining sanctions and other issues pushed the project beyond the stipulated time. Since the developer would have had to pay penalty for the delay, it simply handed over the incomplete project.

If precedent is anything to go by, the residents will get a favourable verdict; consumer courts have ruled in favour of consumers in many cases where the builder has failed to rectify problems despite reminders. In February 2006, Delhi-based Subir Kisan Datta took Ansal Housing to court regarding poor quality of construction. The state commission directed the builder to pay Datta Rs 1 lakh as compensation, as well as Rs 10,000 for delivering poor facilities.

Commercial units in residential projects: If the building plan does not specify any commercial construction and such units (shops or office space) are included later, the matter can be taken up with the local authorities. When residents of a housing society in Ghaziabad found that the builder was planning to use the area earmarked for a community hall as office space, they reported the plan violation and also filed a case in a civil court. The builder was forced to put his plans on hold. Buyers can also take builders to court for rude behaviour or for harassment. The Consumer Protection Act has clauses for compensation for mental agony, harassment, physical discomfort and insult. The NCDRC has also held that bad behaviour by an employee of a service provider is deficiency of service.

Hari Dang, 74, New Delhi
Grievance: He had paid excess capital gains tax in 1993-94. While the excess amount paid was refunded seven years ago following a ruling of the apellate tribunal, the interest of Rs 10.3 lakh that accrued on it remained unpaid.
Redressal route: Ombudsman
The retired educationist made several representations to the Income Tax Department, but without any success. He finally approached the income tax ombudsman for Delhi in 2008.
Current status: His grievance was resolved following the intervention of the income tax ombudsman. The interest amounting to Rs 10.3 lakh was refunded in July this year.
"The concept of an ombudsman is very helpful, especially in a liberal, bureaucratic, political democracy like India."

Apart from taking advantage of the ‘formal’ grievance redressal mechanism, consumers can avail of several other ways to deal with errant builders and developers.

Informal groups: When buyers use the Internet as a forum to form groups and air their grievances, even big developers like DLF are forced to not only offer discounts but also increase the compensation offered for delays. “The trick is to be aware and visit the project frequently to oversee the progress of construction. If it is behind schedule and you post a comment on the Net, you will have a group by the time the project is delayed and this will offer a good bargain opportunity,” says a member of an Internet group fighting for its rights against Parsvnath, another prominent developer.

Local authorities: Approaching the local authorities can sometimes drive a developer to be more forthcoming. For instance, when DLF came out with full-page advertisements announcing the opening of bookings for its Westend Heights project in Bengaluru, potential buyers approached the municipal corporation to check if the developer had relevant permissions. When a notice was sent by the authorities to DLF, it accepted that it was only “in the process of taking sanctions”.

When these options fail and you have to go to court, make sure that you have copies of the entire correspondence. “If you have a grievance against a builder, send a notice to him in writing. Do not worry if he refuses to accept your notice. The proof of sending is valid in the consumer court and will be declared as being duly served,” says consumer court lawyer Rahul Bhatia. Adds Sriram Khanna of Consumer VOICE: “Always make sure that the promise to deliver goods or services is in writing. It can be a brochure or even a printout of a Web page. This should be preserved because it will be your only proof to show what the company had promised.”

The onus is once again on the buyer, who stands to lose a lot more than the developer, so make sure that you are a smart shopper.

Insurance
While most of us have insurance, few understand it. In fact, the reason most people buy insurance policies is that they want tax breaks. Regardless of the reason for buying insurance, policyholders are content in the knowledge that they can file a claim when the need arises. However, this is where most of the problems arise. The insurance industry is reviled for being rigidly bureaucratic when it comes to the claims process. However, the fact is that awareness and knowledge of the product on the part of the policyholder can ease much of the strain of filing a claim. This is not the only irritant in insurance. We take a look at three of the most common problem areas and see how policyholders can seek redressal or avoid the difficulties.

Renewal: An insurance policy is in force as long as the policyholder pays premiums on time or within the grace period. Most policyholders either do not receive renewal notices on time, or are left with very short turnaround period to keep the policy in force. While the problem can be solved by the insurance company sending out notices in advance, the policyholder can work around this by opting for an ECS mandate on policy renewal for the tenure of the policy.

Claim rejection: In general, claims are cleared depending on the documents and facts that are needed to process them before paying the policyholder or his beneficiaries. It is up to the policyholder to understand what the policy covers. Make a list of the documents mentioned by the insurer in the claim process and furnish them for an easy and smooth settlement.

Cover refusal: If an insurance company refuses to sell policies to certain segments or individuals, this has most often to do with the potential policyholder being considered a ‘bad’ risk. However, as a rule, insurers cannot deny cover without furnishing the grounds on which a proposal is rejected. At the same time, the insurance company has the right to offer the cover at a price higher than the base price owing to poor risk indicated by the prospect.

All insurance companies have set up consumer grievance cells in almost all branch offices and a senior officer is stationed at each nodal office to take care of consumer issues. If a policyholder fails to get redressal here regarding failure by the insurer to process his claim, he can approach the insurance ombudsman. Finally, the policyholder can approach the consumer and civil courts in case of no adequate response.

The consumer courts have consistently upheld the rights of the policyholder. For instance, in a recent judgement, the NCDRC held that reviving a policy without a medical check-up was the fault of the insurance company. It added that “an insurance company cannot deny claim to a policyholder on the ground of concealment of facts regarding health if it failed to conduct a medical check-up of the patient before reviving the policy”.

Ultimately, however, it is up to the consumer to be aware and to make the effort to understand the product he is buying. A criminally negligent driver might take a Jaguar out for a spin and crash it in the parking lot. But this is not the car’s fault, is it? Similarly, an insurance policy is an inanimate object. It’s up to the policyholder to choose one that works for him.

This is not to say that the policyholder has no rights. Make sure that the insurance company ensures the following. The cover note and receipts of payments against a policy should reach you within a week of having paid for a policy. Likewise, the 15-day free-look period should be extended to you. You should not be sent a policy document five days before the end of the free-look period. In case of claims, the settlement should take place within two weeks of document submission. In case of general insurance policies (except health), a surveyor must reach you within 72 hours.

Lastly, in case of any regulatory changes impacting the insurance policy that you have bought, the insurer must inform you once the new rules come into force.

Taxation
Here’s an interesting statistic: only a minuscule 0.06% of taxpayers in Delhi face a problem while dealing with the tax authorities. Of the estimated 20 lakh taxpayers in Delhi, only about 1,200 complain to the tax ombudsman in a year. Before you start cheering the tax department for the good work, here’s the dampener. Very few people complain because they dare to. The fear of reprisal by the department prevents most taxpayers from airing their grievances. “Taxpayers face all kinds of problems, but no one is ready to file a complaint because they are afraid of antagonising the tax authorities,” admits former Central Board of Direct Taxes (CBDT) chairman T.N. Pandey.

Tax ombudsmen were appointed in 2005 to resolve the grievances of taxpayers. There are 10 tax ombudsmen in major cities across India (see page 61). However, most of these offices wear a deserted look. The Delhi office, for instance, gets on an average less than four complaints a day. Even here, an overwhelming 85% of the complaints relate to delay in tax refunds. “There are 15 grounds of complaint on which a taxpayer can write to the ombudsman. Delay in refunds is just one of these,” says tax ombudsman Baljeet Matiyani (see interview on page 52).

Indeed, taxpayers face a wide range of problems while dealing with the Income Tax Department. Officials don’t adhere to the prescribed timings, tax refunds take several years to come through, clerks are rude. This is just the tip of the iceberg. Harassment by corrupt officials and violation of procedural guidelines are also routine. The tax ombudsman lends an ear to 15 such grievances and pulls up errant officials. However, very few taxpayers are aware of this.

The lack of awareness about the tax ombudsman is also because the Department of Revenue has done precious little to make this redressal forum popular among taxpayers. Except for a few random ads, there has been no major initiative. “I didn’t know about the tax ombudsman till someone who had filed a complaint told me about it. I got three years worth of refund after I complained,” says V.S. Dewan, a Delhibased senior citizen.

A major hurdle for the ombudsman’s office is that it has to depend on the Department of Revenue for everything—staff, expenses and office space. Since the ombudsman looks into complaints against the department, he gets very little cooperation from tax officials. “There is general apathy towards the ombudsman’s office in the department,” says Pandey.

His views are echoed by N.K. Shukla, who has recently taken charge of the ombudsman’s office in Bhopal. “The tax department does not want to spend any money in spreading awareness about the ombudsman scheme,” he says.

The lack of resources is apalling. Each ombudsman has a staff of three—a personal assistant, an upper divisional clerk and a peon—to assist him.

Despite the odds stacked against them, ombudsmen are going about their work with remarkable efficiency. In Delhi, almost 80% of the cases are resolved to the taxpayers’ satisfaction. Surely, more resources need to be allocated to this people-friendly section of the Department of Revenue. “My tax refunds for the past several years were stuck. I approached the ombudsman in April this year and within weeks I got the refund voucher,” says Komal Mahajan, a government employee.

Approaching the tax ombudsman is fairly simple. You can send your complaint by post or submit it to the office in person. Complaints are accepted even on e-mail, but you will still have to visit the office to sign the copy. So the next time you come across a rude tax official or get an envelope without the refund voucher, you know how to fight for your financial right. As Mahajan says, “The tax refund is my hard earned money and I have every right to demand it.”

A taxpayer can approach the ombudsman if there is a delay in the issuance of tax refund beyond the prescribed time limit, or if there is no refund cheque in the envelope received from the IT Department. While sending refunds, if there’s a violation of the ‘first come, first served’ principle, the taxpayer can approach the ombudsman. Other issues that can be taken up include no acknowledgement of letters or documents sent to the tax department and no updating of demand registers and other records, leading to harassment.

A taxpayer can also seek redressal in case of a delay in effecting rectification applications or in giving effect to appellate orders. Other issues that can be taken up include delay in releasing seized assets, delayed allotment of PAN, no credit of TDS, non-adherence to prescribed working hours or unwarranted rudeness by tax officials, and other violations of rules issued by CBDT.

Misleading Advertising
In February this year, Videocon launched advertisements for its washing machines, claiming that the machines were ‘eco-friendly’ and ‘designed to not just care for your clothes, but also conserve water, save energy’. In April, the company was forced to withdraw the ad after it could not substantiate its claims, following a complaint to the Advertising Standards Council of India (ASCI).

While misrepresentation in ads can also be taken up by civil or consumer courts, ASCI should be the first approach point for a consumer because of the time that courts tend to take. The Consumer Complaints Council of ASCI takes about four to six weeks to decide on a case after giving two weeks for the advertiser to respond.

The council has a detailed set of guidelines for advertisers to protect the interest of consumers. For instance, companies cannot describe products as ‘free’ where there is any direct cost to the consumer. Where a claim states that if one product is purchased another product will be provided ‘free’, the advertiser is required to show, when called by ASCI, that the price paid by the consumer is no more than the prevalent price of the product without the advertised incentive. Similarly, claims that use expressions like ‘up to five years’ guarantee’ or ‘prices from as low as Rs Y’ go against the guidelines if there is a likelihood of the consumer being misled. Even in case of financial products, advertisements inviting the public to invest money should not contain statements that can mislead the consumer in terms of security offered, rates of return or terms of amortisation.

However, the primary refrain against ASCI till some time ago was that it lacked the force of legal recognition. However, after a government notification (amending the Cable Television Networks Rules, 1994) in 2006, all TV commercials have to abide by the ASCI code.

Medical Negligence
On August 7 this year, most of the media was awaiting a Supreme Court judgement on medical negligence. The amount claimed in compensation was Rs 77.7 crore, the highest in India’s medico-legal history. The petitioner Dr Kunal Saha, an NRI, was fighting the case for his wife, who had died in 1998 while being treated at a Kolkata hospital. The apex court held four doctors and the hospital guilty of medical negligence and transferred the case to the National Consumer Commission to decide the quantum of compensation. It was one of the rare cases on medical negligence that made it to the headlines. Though this was because of the hefty compensation claimed, it has not been the only case in recent times. According to the World Health Organisation, healthcare errors impact one in 10 patients around the world. The staggering statistics: 44,000-98,000 preventable deaths occur annually due to medical errors, with 7,000 preventable deaths related to medication errors alone.

Patients are supposed to have unquestioning trust in their doctors. Most do and most doctors also deserve it. But in some cases, medical negligence has resulted in severe harm—physical, mental as well as financial—to patients. While doctors have been liable for prosecution in civil courts too, it was after the Supreme Court decreed in 1995 that the medical profession is a ‘service’ under the Consumer Protection Act, 1986, that the term ‘medical negligence’ came into prominence. An aggrieved patient who believes that he is a victim of medical negligence can now approach the consumer courts for compensation.

The law on medical negligence has evolved through a series of Supreme Court judgements. Currently, the law covers practically all aspects of this complex profession and its practice. In the case of Jacob Mathew versus State of Punjab (2005), the apex court held, “A professional may be held liable for negligence on one of the two findings: either he was not possessed of the requisite skill which he professed to have possessed, or, he did not exercise, with reasonable competence in the given case, the skill which he did possess. The standard to be applied for judging, whether the person charged has been negligent or not, would be that of an ordinary competent person exercising ordinary skill in that profession.”

When it comes to the liability of hospital, the courts have taken the view that the hospital is responsible for the acts of their permanent staffers as well as those whose services are temporarily requisitioned for the treatment of patients. The NCDRC has held in several cases of medical negligence that, “A doctor has to seek and secure the consent of the patient before commencing a ‘treatment’ (including surgery). The consent so obtained should be real and valid, which means that: the patient should have the capacity and competence to consent; his consent should be voluntary; and his consent should be on the basis of adequate information concerning the nature of the treatment procedure, so that he knows what he is consenting to.”

Not informing adequately about the potential risks of treatment constitutes negligence. A doctor should inform about the patient’s medical condition in a comprehensible language. The doctor is required to disclose (a) nature and procedure of the treatment and its purpose, benefits and effect; (b) alternatives, if any, available; (c) an outline of the substantial risks; and (d) adverse consequences of refusing treatment.

Since proving medical negligence requires a lot of specialist information, it is not easy for an aggrieved consumer to prove the case himself unless he understands what each stage of treatment means. There is a significant amount of paperwork involved in terms of reports, medical history, discharge slips, medicines, etc. If you do plan to take on the healers, make sure you are adequately prepared.

– With Priya Kapoor, Babar Zaidi and Narayan Krishnamurthy


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