Consumer protection: India’s redressal mechanisms being destroyed by apathy

Policy Circle, July 13, 2022

By Pradeep S. Mehta

Instead of making too much noise on service charges, the department of consumer affairs should focus on how the redressal machinery is functioning. Not that the levy of involuntary service charges at eating joints is fair, there are bigger elephants in the room which act against consumer sovereignty.

Through the Consumer Protection Act, 1986 (COPRA) was amended many a time before and even replaced in 2019 to make it more effective, consumer friendly and to further deal with the newer challenges, significant obstacles remain to be addressed. Powerful institutions that benefit from the status quo resist any effort to bring in reforms.

Counterfeits get boost from pandemic

Consumer issues were sidelined and got a low priority during the pandemic. Counterfeit products existed in our markets since a long time. However, the spread of Covid-19 saw an increased circulation of fake products in every nook and corner of the country, putting consumers’ health and safety at risk. In fact, the crisis acted as a convenient shield to flood the market with counterfeit products and enforcement officials failed to foresee and act on time.

According to various news reports, India has seen a spike by 24% in counterfeit cases, wherein incidents in fast-moving consumer goods (FMCG) sector has seen a spike by 63%. The food and beverage sector saw an increase in fake and counterfeit products, and incidents of sub-standard and falsified medical products increased by almost 47% from 2020 to 2021.

Failing to take effective action nationwide against such fraudulent market practices makes one wonder if the consumer affairs and related departments at the Union and state governments even considered consumers as rightful citizens, if not as King. From the beginning, consumer protection is often seen as secondary and less important.

In the aftermath of the Covid crisis, government bodies are focused into reviving the economy and appeasing business interests than looking into the larger interest of consumers. They fail to recognise that consumers are the raison d’etre of an economy and by failing to ensure adequate consumer protection, they fail to buttress the economy any further.

Redressal mechanisms being destroyed by apathy

In spite of the long 36 years since COPRA was put in place as a uniquely benevolent social legislation offering ‘simple, speedy and inexpensive’ consumer protection, all the three characteristics seem to have disappeared today. This was earlier proved by a 2016 verdict of the Supreme Court wherein it constituted a committee presided by Justice Arijit Pasayat to examine the working of consumer fora in India. The findings of the committee painted a dismal picture and showed how the redressal systems at the district, state and national levels have been losing sheen over the years.

In its report, the committee observed that the fora do not function as effectively as expected due to a poor organisational set-up, grossly inadequate infrastructure, absence of adequate and trained manpower and lack of qualified members in the adjudicating bodies.

The committee had also pointed to red-tapism and corruption in the system that lead to increasing inefficiency in the timely disposal of cases. Though it has been a while since the report came out, nothing much appears to have changed. In August last year, the Supreme Court was compelled to impose fines on erring states over vacant posts in consumer fora despite giving them couple of months’ time for making appointments of presidents, members, nodal officers and other support staff of the consumer court. The court got so furious during one of the hearings that it lambasted the government to abolish the Consumer Protection Act if it does not want consumer fora to function.

Unmanned consumer protection bodies

As per the response given by the Minister of Consumer Affairs in Lok Sabha in March 2022, there are still six vacant posts of president and 44 vacant posts of members in different state commissions and 164 vacant post of presidents and 361 vacant posts of members in different district commissions in the country. Further, as per the National Consumer Disputes Redressal Commission statistics, currently there are 6,36,555 cases pending across national, state and district commissions out of which 4,43,277 cases are pending in district commissions alone.

Getting frequent adjournments even on flimsy grounds have ruined the very purpose of setting up such quasi-judicial forums. Even a random search of cases listed in the NCDRC portal shows that few of the original complaints that were filed in NCDRC more than a decade before still await final hearing after 22 plus adjournments. Similar is the situation in case of first appeal and revision petitions.

For instance, in an appeal filed at NCDRC in 1997, on medical negligence death case, 25 adjournments happened within six years before an order was delivered. That means justice was delivered after 25 long years of delay. Likewise, a revision petition about a defective tractor is pending in NCDRC for past 13 years with 20 adjournments, wherein the original complaint was filed in 2004. A long wait of 18 years and still counting, to decide the case.

While there are alternatives for expeditious resolution of grievances, like Lok Adalats, Mediation Cells within the premises of Consumer Commissions, yet majority of complaining consumers do not know whom to approach in case of a dispute. Similar is the case with regards to national consumer helpline and banking ombudsman. Though the total number of complaints registered keeps increasing each year, the overall awareness is much lower across most states. Such lack of consumer awareness of mediation and other means of redressal is a major barrier towards effective consumer protection and such basic but important issues need to be addressed.

Ineffective utilisation of Funds

The Consumer Welfare Fund (CWF) was set up in 1992 to provide financial assistance to voluntary consumer organisations (VCOs) to create consumer awareness and strengthen the consumer movement in the country, particularly in rural areas. This is also in a dismal state. Financial assistance from CWF is being given to Central/State Governments/Government Bodies, Institutions including Universities, PSUs, autonomous bodies, but not to VCOs, thus defeating the purpose it was established for. Even the utilisation is inadequate.

As per the annual report of the Ministry, out of budget provision of Rs.261.00 crore, only a merge amount of Rs. 36.81 lakh has been utilised during the financial year 2020-21, especially when consumer issues were at its peak due to ongoing pandemic. Also, for the past few years VCOs in India are completely ignored or side lined from financial assistance through the CWF, in spite of the critical role they play for the protection of consumer rights. Hundreds of VCOs are working and educating rural consumers with almost nil support or financial resources. Most of the CWF funds are often largely allocated to selected few educational institutions or institutions.

As per a recent statement made by the Department, with respect to CWF, only 17 Sates have established CWF (Corpus) in their respective States and remaining states and union territories like Chhattisgarh, Maharashtra, Punjab, Uttar Pradesh, Delhi, etc., are yet to establish one. So, one can easily assume how much of activities and awareness programmes would have happened in these states, especially during the ongoing highly stressful situations.

Its high time for the officials to wake up to these realities and focus more on addressing the root problems to strike a balance between protecting the economy and protecting health and wellbeing of the consumers. No government can afford to be high-handed one way or the other for too long.

(Pradeep S. Mehta is Secretary General, CUTS International, a global public policy research and consumer advocacy organisation. Inputs from George Cheriyan, Director and Simi TB, Policy Analyst at CUTS International.)

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