Law On Consumer Services (2003 Ed.)

BOOK: Law On Consumer Services (2003 Ed.)

By Mushtaq Ahmad Dar & Farooq Ahmad 

Pages: 363

Published by:  Valley Book House - Srinagar, J&K (India)

ISBN:  81-86592-14-8

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ABOUT THIS BOOK

Consumerism in India is the by-product of the industrial development on the one hand, and the constitutional mandate of social justice, on the other hand. Although a number of legislations were passed for the protection of consumers but it has been found over a period of time that they had not been effective to protect the interest of consumers. The reason being that they were dealing with only one particular aspect of the consumer concern i.e., the goods. Like goods, services were also sold to the consumers. But in the absence of a comprehensive statute dealing with services, the consumers were subjected to unscrupulous exploitation by traders and also by organisations providing various forms of services for payment of consideration. In order to protect the consumers, Indian courts were applying the principles of Common Law of Contract and Torts. But the concept of consumer, as it is understood in modern times, was unknown till recent past. Legal process was often used by the rich to exploit weak and helpless. The Indian market was ruled by the dictum of Caveat Emptor. With the adoption of the Constitution in Nov., 1949, the aspirations of the people of India found an explicit expression in the Preamble coupled with Fundamental Rights and Directive Principles of  State policy. In its march towards achieving the avowed goals enshrined in the Directive Principles of  State policy, the legislators had enacted the MRTP Act, 1969 and the term service was defined. The MRTP Commission being situated only in the capital of the country and the consumers seeking redressal being spread all over the country, to bring justice to the door steps of the consumers, the C.P. Act, 1986 was added to the statute Book. To give inexpensive and speedy justice to the consumers, the C.P. Act provides for setting up of a hierarchy of quasi-judicial forums at the District, State and National levels. The C.P. Act has been hailed as a Magna Carta on consumer protection and a leap in the history of the socio-economic legislation in the country. Although, the C.P. Act is applicable to both ‘goods’ as well as ‘services’, the present study titled, “Law on Consumer Services”, deals only with the services expressly or otherwise to be read implied in the C.P. Act. For the purposes of C.P. Act, the term service under section 2(1)(0) has been defined to mean service of any description which is made available to potential users and makes it clear that it takes in its sweep any service rendered by public sector, private sector and professionals. At the initial stages, these organisations were claiming complete immunity from their governance by the C.P. Act. The Consumer Forums, however, have appreciably stood the test of time and have brought all these organisations within the ambit of the C.P.Act. In a landmark judgment in Lucknow Development Authority v. M.K. Gupta [AIR 1994 SC 787], the Supreme Court held that the entire purpose of widening the definition is to include in it not only the day-to-day buying and selling activity undertaken by a common man but even to such activities not commercial but professional or service oriented in nature. Thus it can be inferred that the C.P.Act is not only applicable to the categories of services enumerated in the definition but it extends to those services which can fairly and reasonably be read as implied in the definition whether rendered by public sector, private sector or professional persons. No doubt the Supreme Court lend its helping hand to protect the users of consumer service and gave the consumer movement a new direction but the improper, inadequate and faulty services rendered by these organisations have failed to meet the aspirations of the people. There are still many short-comings in the C.P.Act which need to be rectified. Keeping this in view, the present study has been designed on the same lines.

Today consumer is in need of adequate protection against not only undertakings run under the auspices of a department of the State or by corporation owned and controlled by the State but also against private supplier of services. The C.P. Act is the most important piece of legislation which has introduced the notion of deficiency of service and made it an actionable wrong. The term service under section 2(1)(0) not only covers public sector services but also services rendered by the private sector as well e.g. housing construction, financing, courier, education etc. The definition of the term service had already been kept very wide and now with the inclusion of the term housing construction by the C.P. (Amendment) Act, 1993, it has been further widened. Even before the amendment the expression service had been interpreted by the apex Commission to include housing. The performance of State Housing Boards has been highly unsatisfactory. There have been allegations of sub-standard constructions, arbitrary raising of price and inordinate delay in allotment of flats or plots. Since the housing services are being rendered not only by Statutory Boards but also by the private builders or contractors, consumer forums have awarded not only the value of services but also compensation for the injustices suffered by the consumers. However, it has been observed that the Commission has refused to entertain complaints of class action suits (which contain the same questions of law and fact) relating to housing on the ground that issues raised were complicated questions of law and fact. Consequently, what has been given by legislature as a facility to the consumer has been taken away by the apex Commission. The State Commissions, on the other hand, have entertained complaints filed by several consumers in a representative capacity. However, directions have been issued under the C.P. Act for removal of latent defects which could not have been known at the time of taking possession of the house or land. The fact that the house allotted had signed a declaration at the time of taking over possession that ‘the house was complete in all respects’ was held not to constitute any estoppel against recipient and the complainant has been entitled to all the expenditure incurred for removing such defects. By this ruling of apex Commission consumer of housing service are likely to be greatly benefited. Those rendering housing services have been allowed to increase charges equal to the amount of cost escalation provided there has been no inordinate delay on their own part in which case escalation during the period of delay may not be allowed. The demand of a reasonably moderate escalation is not a deficiency in service, it would be so if it has been in the nature of an unscrupulous exploitation of the consumers. This approach seems to be justified because of the fact that inordinate delay, arbitrary and exorbitant increase in costs are all consumer wrongs and therefore, jurisdiction of Consumer Forums cannot be denied on these matters.

The C.P. Act does not expressly include education in the definition of service. The question that arose for consideration vis-a-vis application of the C.P. Act was whether educational institutions render service to the students and whether the conduct of examinations, re-evaluation and rechecking of answer papers, delay in declaration of results etc. for a prescribed fee can be a service? In view of the apex court’s observation in Lucknow Development Authority v M. K. Gupta, it can be safely said that education is a service offered by the Government or the private institutions for consideration. The National Commission did not delve on the larger issue as to whether education constitutes service, but conflicting opinions were expressed by the State Commissions on this point. From these discussions two points emerge. First, majority of the CDRAs augmented by the apex court’s opinion are of the view that education is a service and complaint against any deficiency can be entertained by the Redressal Agencies. Second, examination process, re-checking, re-evaluation cannot qualify for the service and any infirmity in such process cannot be looked into by the Consumer Forums. However, it has also been observed by some State Commissions that education in the modern world is a complex service, consisting of several distinct operations starting from the admission and ending in public examination. The time has gone when education was treated as a mission and vocation rather than profession, trade or business. There is a mushroom growth of institutions who make lofty but false claims about the affiliation, recognition, facilities and job prospects with a view to allure the unemployed youth and thus mint money. Thus placing educational systems outside the purview of the C.P. Act will do more harm than good to the society as a whole. A large number of cases decided by the Consumer Forums against schools, colleges, universities and other institutions imparting education sufficiently points out that these institutions shall have to be accountable towards the students in the future. The whole discussion leads us to the conclusion that the applicability of the C.P. Act to various services (whether expressly mentioned in the definition of service or not) has proved boon for the consumers in India. There is a greater demand for accountability not only to the private and public sectors but also to professional persons. Unscrupulous businesses, unethical professionals and non-responsive governmental undertakings have started facing wrath of the consumers and their organisations who are now demanding much better treatment for the ordinary citizen.