CONSUMER RIGHTS AND
ITS EXPANSION
RIGHTS AND RESPONSIBILITIES
India has been observing 15 March since 1989 as the National Consumers’
Day. This day has a historic importance as it was on this day in 1962,
when the Bill for Consumer Rights was moved in the US Congress. During
his speech President John F. Kennedy had remarked:
“If a consumer is offered inferior products, if prices are exorbitant,
if drugs are unsafe or worthless, if the consumer is unable to choose on
an informed basis, then his dollar is wasted, his health and safety may
be threatened, and national interest suffers.”
John F. Kennedy had equated the rights of the ordinary American consumer
with national interest. He gave the American consumer four basic rights:
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The Right to Safety - to be protected against the marketing of goods which
are hazardous to health or life.
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The Right to Choose - to be assured, wherever possible, access to a variety
of products and services at competitive prices: and in those industries
where competition is not workable and Government regulation is substituted,
an assurance of satisfactory quality and service at fair prices.
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The Right to Information - to be protected against fraudulent, deceitful
or grossly misleading information, advertising, labeling, or other practices,
and to be given the facts s/he needs to make an informed choice.
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The Right to be Heard - to be assured that consumer interests will receive
full and sympathetic consideration in the formulation of Government policy,
and fair and expeditious treatment in its administrative tribunals.
Kennedy recognised that consumers are the largest economic group in the
country’s economy, affecting and affected by almost every public and private
economic decision. But they were also the only important group who were
not effectively organised, whose views were not heard.
Therefore, the Federal Government, by nature the highest spokesman for
all people, had a special obligation to the consumer’s needs. Thirteen
years later President Gerald Ford felt that the four rights constituted
in Kennedy’s Bill of Rights were inadequate for a situation where most
consumers are not educated enough to make the right choices. So he added
the Right to Consumer Education, as an informed consumer cannot be exploited
easily.
While these rights served the interest of the American consumer well
enough, they did not cover the whole gamut, because a global consumer did
need, apart from them, other well-defined rights like basic needs, a healthy
environment and redress.
The Consumers International (CI), former International Organisation
of Consumer Unions (IOCU), the umbrella body, for 240 organisations in
over 100 countries, expanded the charter of consumers rights contained
in the US Bill to eight, which in a logical order reads:
1. Basic Needs
2. Safety
3. Information
4. Choice
5. Representation
6. Redress
7. Consumer Education and
8. Healthy Environment.
This charter had a universal significance as they symbolised the aspirations
of the poor and disadvantaged. On this basis, the United Nations, in April
1985, adopted its Guidelines for Consumer Protection.
BIRTH OF CONSUMERS’ DAY
Considering the importance of Kennedy’s speech to the US Congress on
this day, and the resultant law, the CI took a decision in 1982 to observe
15 March as the World Consumer Rights Day from 1983. Peculiar though it
may sound, 15 March is not observed as a special day in the world’s largest
and most pulsating consumer society - the US. But at home in India the
Government, adopted 15 March as the National Consumer’s Day.
India is a country, which never fell behind in introducing progressive
legislation - we were among the first in the world to introduce universal
adult franchise for women.
Gandhi had rightly said:
“A customer is the most important visitor on our premises. He is not
dependent on us. We are dependent on him. He is not an interruption in
our work - he is the purpose of it. We are not doing him a favour by serving
him. He is doing us a favour by giving us the opportunity to serve him.”
The right to redress lead to the passing of the Consumer Protection
Act (COPRA) in 1986 in India which has been defined as the Magna Carta
of consumers but, it recognises only six of these eight rights:
1. Safety;
2. Information;
3. Choice;
4. Representation;
5. Redress and
6. Consumer Education.
Besides this statutory recognition, COPRA has succeeded in bringing about
revolutionary judicial reforms by providing juristic quasi-judicial courts
solely for redressal of consumer grievances (where a price has been paid),
for adjudication within a limited time frame of 90 to 150 days.
The rights of basic needs and healthy environment could not be provided
in COPRA as these symbolised the aspiration of the poor and the disadvantaged,
and were not the subject matter of priced commodities and services available
in the market place. However, these are the backbone of peoples’ movements
in both the developing and the developed worlds.
Yet, inspite of pulsating movements, the rights of consumers could and
were trampled on and often. There existed a vacuum in the definition of
rights. It was often seen that boycotts would be spontaneous or organised
in an adversarial situation, examples of, which are numerous. On an occasion
in Calcutta a boycott of fish was successfully organised and the marketing
cartel had to bow down, by cutting the inflated prices, rather than store
rotting fish.
Taking a leaf out of India’s freedom movement, when Mahatma Gandhi had
successfully organised various boycotts of foreign cloth, salt etc. we
at CUTS, declared and adopted the 9th Consumer Right on India’s Independence
Day - 15 August 1990: “The right to resist and boycott any person, goods
or services in the event of conflict with consumer’s interest”.
This right was the ultimate one, to be used when all methods fail. And
many a times they do: the seller does not heed, the administration does
not listen, and the judiciary fails. This right inherently signifies consumer
unity as an individual consumer can be helpless or even apathetic, and
it is a collective action that succeeds.
While the right to boycott epitomises the enability of consumer rights,
the right to basic needs remained abstract. It only defined a consumer’s
necessities required to survive and live a dignified life but it did not
demand the means to obtain them - the right to work.
However, the right to work is also vague, as this colloquially meant
easy jobs, and did not feature in the existing charter of Consumer’s Rights.
In the interlude, a new Union Government in India raised a debate to recognise
the right to work, as a fundamental right on the one hand, and advocating
self employment schemes for everyone, including the poor, on the other.
Observing the societal disarray created by government job and dole schemes,
whether permanent or temporary, and how they maim the spirit of enterprise
which prevails in the mass humanity of India, ‘CUTS’ was inspired to declare
and adopt the 10th (enabling) Consumer Right on 26 January 1991: “The right
to opportunities to acquire basic needs which will enable one to work and
to earn a living, without exploitation.”
This inherently demands execution of the state’s singular responsibility
to provide productive infrastructure, work ethos, job opportunities, social
justice and economic equity. Both these rights were adopted at the
Third National Convention of Consumer Activists at Calcutta during 1-3
November 1991, calling and urging the now (CI) IOCU to recognise and take
suitable steps in expansion of the Consumer Rights internationally.
INDIA’S GLOBAL REPUTATION
Laws, rules, regulations and orders (for which India has unparalleled
distinction in the Guinness book of records) alone do not protect consumers,
but it is the rights’ movement of people which produce results in a democracy.
One of the greatest achievements of the Indian consumer movement is
the enactment of the dynamic consumer law: COPRA. Coming 39 years after
Independence, it has acknowledged the rampant consumer abuses, including
those of the government owned public utilities like telephones, transport,
power etc. These utilities, in the first place, were created as state monopolies
ostensibly to protect consumers!
Critics of COPRA rightly conclude that it can’t do anything about rising
prices, but it has succeeded in bringing about fairplay in the supply of
goods and services available in the market place, giving substance to the
adage: Customer is King. Also, COPRA has encouraged active consumer bodies
to demand, and perhaps see in the near future, independent Public Utility
Regulatory Commissions to debate costing, pricing and promote competition.
This confidence emanates from the empowerment of voluntary organisations
in COPRA and other consumer laws. While right to information is enshrined
in COPRA, addition of the enlarged Right to Know in the fundamental rights
chapter of the Indian Constitution would only result in meaningful empowerment
- no more tight rope walking, but total glasnost.
In fact the Central Consumer Protection Council has recommended to the
Government to enact a Freedom of Information Act on the pattern of a similar
law in the US. Another major achievement of the Indian consumer movement
in the context of the world scenario, was to get the government in 1989,
to adopt 15 March, the World Consumer Rights Day, as the National Consumers’
Day. Unlike the Labour Day on 1 May, which has roots in the US, the Consumer
Rights Day, which also has roots in the US, is not even observed there.
Today India is the only country in the world, which has exclusive courts
for consumer redressal. At the IOCU’s 13th World Congress held in Hong
Kong during 7-13 July 1991 it came in for praise and developed countries
were called upon to emulate. In the same year, these developments inspired
Jim Sugarman, a noted US consumer activist and a close associate of Ralph
Nader, to candidly observe: “India is getting a global reputation for the
rapid development of its consumer movement.”
BUREAUCRAT’S REVENGE
COPRA, which was amended by an ordinance in June 1993, is a mixture
of sad and happy tidings. And tragic because of one surprise which our
bureaucrats sprung onto the bill, a matter which was not even discussed
in the high power working group of the Central Consumer Protection Council.
The law then proposed a limitation of one year to file complaints, where
none existed. An utter nonsense, which goes beyond the principles of our
well established Limitations Act of 1963, wherein courts cannot be approached
after the expiry of three years of the last cause of action.
Since there was no limitation period prescribed under COPRA, in one
matter, the apex consumer court, the National Commission had pronounced
that the principles of the Limitations Act do not apply but can be relied
upon, though not religiously.
This proposal would not only have put consumers at a terrible disadvantage
but also annoy them badly. Most warranties and guarantees on goods expire
in one year, and manufacturers often drag on many consumers during this
period by attending to complaints, instead of setting it right or replacing
or refunding the price of the defective goods. They will thus be deprived
of the easy redressal avenue by this one-year ‘deadline’.
Consumers will be angry because the rule on the time limit of 90/150
days provided in COPRA for disposal of cases are practiced more in the
breach, and cases drag on for years. Under this situation, expecting consumers
to meet a deadline will be very irritating. Granted that delayed complaints
can be entertained, but that would mean a set of lengthy arguments on just
the admissibility of the case.
Fourthly, the law also enables consumers to file class action complaints,
which incidentally always existed, but there can be no basis to determine
the deadline in such matters. For instance, if the Motor Vehicles Act,
1988 provides for certain mandatory safety features which have been ignored
by manufacturers; after research, we decide to file a complaint what would
be the limitation period?
Due to these arguments and lobbing the time limit was revised to two
years, when the ordinance was put on the table of the parliament.
BELYING EXPECTATIONS
The law belied the consumer affairs Minister, A K Antony’s note in the
statement of objects and reasons, wherein he says the working of the redressal
agencies has helped to arouse the expectations of the people on several
other grounds as well.
Housing by way of plots or flats or houses has been covered under the
definition of ‘services’ under COPRA. Rather than adopt the words: ‘real
estate’, as defined under the MRTP Act, 1969 from which the whole definition
clause of services was borrowed in the first instance, a new jargon: ‘housing
construction’ is added. This would mean that the consumer courts will only
entertain complaints relating to: flats, land, houses purchased or to be
purchased.
In a beacon case involving a plot: Garima Shukla vs. UP Avas evam Vikas
Nigam, the National Commission had held that the dispute is covered as
a deficiency in the service of housing. The Supreme Court upheld the orders
of the National Commission.
Among several other recommendations of the Central Council, another
major one has also been diluted. In view of several protests by consumers,
the council had agreed to recommend incorporation of an open, democratic
and a transparent process of selection of the non-official members of consumer
courts.
The recommendation was that a selection committee headed by the minister
and consisting of the secretary in charge of the department, a nominee
of the chief justice of the state high court and two consumer activists
(one a woman) would be the right form. The bill now proposes a committee
headed by the President of the state commission and the consumer affairs
secretary and the state law secretary.
It is thus heavily loaded against transparency. I have seen many a president
of the State Commission sitting in the chamber of the secretary, especially
when s/he is a retired high court judge. By and large the secretary has
to follow the minister’s orders, therefore the transparency sought in the
selection process will be doubtful. Presence of two activists would have
perhaps changed the odds.
However the president of the State Commission can only be appointed
after consultation with the Chief Justice of the concerned high court,
but those who know, consultation does not mean consent or concurrence.
On several occasions, in spite of opposition, people have been appointed,
after the so-called consultation.
THE BROOM STICK
The Council had made several other vital recommendations after long
deliberations and critical debates, but they have been given the broomstick.
These were:
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Consumer rights were to be put in a separate chapter so that violations
of the same could be an additional ground, if not the basis of a complaint.
These will now continue as decorations in COPRA, for the central council
to ‘talk, about - only once in a year, as against twice as recommended’.
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Services rendered by public health care system and civic bodies were to
be covered, as they are not charities but are run from the taxpayer money.
So that consumer could get value for money and these white elephants are
brought to heel. The union health ministry prevailed.
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Lawyers were to be debarred except when the complainant had engaged one,
or with his consent or if the consumer court directed the parties to engage
lawyers, when questions of law were involved. This was recommended because
lawyers often delay the settlement of cases by court craft etc. Apparently
the belligerent lawyers lobby proved stronger.
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Writ jurisdiction of high courts has to be excluded by bringing COPRA under
Article 323B of the constitution as their interference, particularly the
Calcutta High Court, delays the proceedings especially when an hierarchy
of appeals is provided under COPRA where the Supreme Court is the ultimate
arbiter.
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Empowering Consumer Courts by giving them the authority to order cease
and desist, or interim injunction or take suo motu action (of its own accord
and on its own information) like the MRTP Commission, so as to meet the
ends of justice have not been incorporated. For, bureaucrats felt that
it would give unbridled power to over 450 district fora and 30 state commissions
and that would have created havoc.
Some readers might remember the case of ITC LTD’s Wills brand being injuncted
by a Gangtok district judge, which cost ITC a large sum of money to get
it vacated from the Supreme Court under its extraordinary jurisdiction.
This type of case is a freak but without such power our consumer courts
will be hamstrung in protecting the consumers interest, as it were.
Section 1(4) of COPRA says this Act will apply to all goods and services,
therefore under the definition of services, where illustrations are given,
it was understood that it was an all inclusive definition and exclusions
had to be specified.
To correct the anomaly, especially in view of the hectic lobbying by
the medical fraternity and other professional groups, it was proposed to
put a semi-colon, and add, “not limited to” before the illustrations. But
this has also not been inserted in the amendment bill.
RECALLING UNSAFE GOODS
So much so for the bureaucratic revenge and/or sabotage. However there
are many welcome steps, though confused as well, which will take the consumer
movement considerably forward. These are:
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Enhancement in the scope of relief under COPRA to stop the sale of and/or
order withdrawing the marketing of hazardous goods. This will entitle consumers
and consumer groups to challenge harmful goods, provided a law says so,
like the BVO case when this toxic chemical was banned but continued to
be used in soft drinks like Limca, Gold Spot etc.
But the clause does not empower consumers to challenge hazards in services.
For instance the Electricity Act provides for certain safety measures to
be adopted by the suppliers, but consumers may not be able to challenge
it.
This is more so surprising when in all the consumer rights in COPRA
‘services’ have been added along with ‘goods’, and under the relief section
power has also been given to consumer courts to remove defects and deficiencies
in services.
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A major beneficial change has been added to cover agreements for purchase,
as against the earlier provision for only goods or services actually purchased.
This would cover disputes relating to booking of flats, cars, scooters
and similar contracts, where delivery has not been made.
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Restrictive trade practices have been added, also enabling the courts to
stop these, as well as unfair trade practices. This means that there would
be a mini-MRTP Commission in every district.
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Monetary jurisdiction of a district forum has been raised to Rs 5 lakh,
while that of a state commission to Rs 20 lakh. Beyond this, the National
Commission. Age limit of the members of the state commissions has been
fixed at 67, while that of the national commission at 70. No mention of
the age limits of members of the district forums.
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Complaints against goods purchased for commercial purpose will ordinarily
not be adjudicable under COPRA save and except where such goods in dispute
have been purchased by a self-employed businessperson like a taxi owner-driver.
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Costs would be awardable to consumers or their organisations that win cases.
Simultaneously consumers who file frivolous or vexatious complaints could
be penalised with a fine of upto Rs 10,000. And if they don’t pay up, they
could face a worse fate of paying a further fine of upto Rs 10,000 and/or
undergo imprisonment of upto three years like other offenders.
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Following the Supreme Court order, in the Common Cause Vs Union of India
case, administrative control of district fora will now be under the state
commissions, who will in turn report to the National Commission. A proper
reporting system and procedures will also be incorporated.
Lastly, a quiet change has been incorporated to redefine the department
of civil supplies as consumer affairs, which is what we in the consumer
movement have been shouting for a long time.
In the
1980s, CI's then president, .jpg)
