Error by National Commission becomes problem for consumers

Citing a decision of the National Consumer Commission, many consumer fora are ruling that complaints concerning allotment of sites by bodies such as Mysore Urban Development Authority do not fall within the purview of the Consumer Protection Act. This is causing problems for the consumers. 

In the case decided by the National Commission, a person J.C. Verma of Ropar had applied to Haryana Urban Development Authority for a site. When he did not succeed in getting a site, he asked for a refund of his deposit. But HUDA sent the refund cheque to a person who had the same name but who lived in Mohali. Since his letters to HUDA saying that he had not received the refund produced no results, J.C. Verma of Ropar filed a complaint before the Panchkula district consumer forum. Both the district forum and the Haryana State consumer commission agreed with his arguments and ordered HUDA to return his deposit with interest. HUDA then appealed to the National Commission against these decisions.

The National Commission reversed the decisions of the lower consumer courts. Relying on a decision of the Supreme Court ((1994) 4 SCC 225) which said that the right of a consumer in the matter of share allotment arises only after the shares are allotted, it ruled that Verma was not a consumer since he had not been allotted a site. It said that the allotment of sites is similar to allotment of shares and so the the right of a consumer in the matter of site allotment also arises only after the sites are allotted.

It is this judgment of the National Forum which is causing problems to consumers in various consumer courts. But the above interpretation of the Supreme Court judgment by the National Commission is wrong, because there is no analogy between shares and sites. Shares do not exist until they are allotted. They come into real existence only after allotment. This was one of the main reasons behind the Supreme Court judgment. Shares before allotment can only be considered "future goods". The Supreme Court ruling says that a prospective investor in future goods can not be termed a consumer.

Unlike shares, sites do exist even before they are allotted. So the above argument of the Supreme Court does not apply for the allotment of sites.

What is surprising is that the National Commission held that a person applying for sites is not a consumer based on a Supreme Court decision on shares and a perceived analogy between shares and sites, it ignored a landmark decision of the Supreme Court (Lucknow Development Authority v. M.K. Gupta III (1993) CPJ 7 (SC)) which explicitly states that site allotment by bodies such as Urban Development Authorities comes within the purview of the Consumer Protection Act. In this judgment, the Supreme Court held that when UDAs develop land or allot a site or construct a house for the benefit of the common man, it is rendering service as defined in the Consumer Protection Act.. If the service is defective or it is not what was represented (which would constitute unfair trade practice), consumer courts can take up the matter. The Supreme Court also said that a person who applies for allotment of a building/site/flat constructed by the UDA is a "potential user" and the transaction is covered in the expression 'service of any description' of the Consumer Protection Act. 

So it is very clear that the moment a person applies for the allotment of a site from an Urban Development Authority, he becomes a consumer of its service and any irregularity in the process of allotment or any problem connected with the site or the payment comes under the purview of consumer courts.

The National Commission makes a reference to this decision of the Supreme Court, but unfortunately does not notice these observations of the Supreme Court. As a result, it has issued an order which contradicts the order of the Supreme Court and creates confusion among the lower consumer courts.

So anyone who is filing a case against MUDA on any allotment issue should bring the order of the Supreme Court in the Lucknow Development Authority v. M.K. Gupta case to the attention of the District Consumer Forum. Any argument by the opposite party that a person is not a consumer before allotment is refuted by this order.

Dr. T.N. Manjunath, Mysore Grahakara Parishat 

MGP conducts lecture-demo on food adulteration

Mysore Grahakara Parishat recently conducted a lecture-demonstration on food adulteration detection at the following places: Depaul International School and College, Belagola, Tharalabalu Samagama, Tilak Nagar, NSS camp of JSS University and Pharmacy College, Jeemaranahalli, Gen. Kariappa College, Madikeri, Government Junior College, Madikeri, Government Higher Primary School, Sampaje, Government Higher Primary School, Virajpet, Government Higher Primary School, Gonikoppa and Vidya Vikas High School and College, Periapatna. 

Under the direction of C.V. Nagaraj (formerly Senior Chemist, Regional Agmark Laboratory, Bangalore), students themselves conducted simple tests to detect adulteration in various food items. C.V. Nagaraj also spoke about the harmful effects of various types of adulteration and on the laws that exist in India against food adulteration. Associations interested in arranging such lecture-demos can contact C.V.Nagaraj (Ph: 2521640).

District consumer forum is not consumer friendly

MGP has been receiving several complaints about the delays in getting decisions from the Mysore District Consumer Forum (DCF). To check these complaints, MGP filed an RTI application with the registrar of the Mysore DCF asking for details about the cases decided by the Forum in the eighteen month period between 1-1-10 and 30-6-11. Based on the information provided, we notice several violations of the laws, rules and regulations which has caused avoidable harassment to the consumers.

Sec. 3A of the Consumer Protection Act mandates that every effort must be made by the DCF to decide a complaint within three months. But it appears that the Mysore DCF is not following this direction. Of the 1202 cases decided, only 650 (54%) were decided within 3 months. 482 cases (40%) of the cases took between 3 months and 6 months to decide while 70 cases (6%) took more than 6 months to decide. These delays are causing needless inconvenience and expenditure to the public causing them to lose faith in the consumer courts.

Sec. 3A of the Consumer Protection Act also mandates that adjournments are not ordinarily given. It again appears that the Mysore DCF is violating this direction. Of the 1202 cases decided, NONE were decided without adjournments (which is definitely against the intention of the law). 116 cases (10%) took 1-3 adjournments, 526 cases (44%) took 3-10 adjournments and 560 cases (46%) took more than 10 adjournments. So 90% of the cases before the Mysore DCF take more than 3 hearings and nearly half the cases take more than 10 hearings to be decided. One case against MUDA has taken 30 hearings. Such delays defeat the whole reason for enacting the CP Act, namely, speedy justice.

Sec. 11 of the Consumer Protection Regulations, 2005 makes it clear that if a party asks for adjournments, the DCF  should levy a fine of not less than 500 Rs., except in very rare cases in which it can be reduced to 100 Rs. But in no case, can the cost of an adjournment be less than 100 Rs. It again appears that the Mysore DCF is violating these directions. Of the 1202 cases (i.e., all the cases that were before the DCF) which had at least one adjournment, costs were levied only in 318 cases (29%). Even in these cases, the directions given by the Consumer Protection Regulations were not followed. The cost was Rs. 500 or more only in 40 cases (13%). In 250 cases (79%), it was Rs. 50 which is clearly forbidden by the Regulations. What is surprising is that the party asking adjournments in all the 250 cases in which Rs. 50 was levied as the cost of adjournment was the same defendant, namely, Chanakya Finance Corporation.

It is the intention of the Consumer Protection Regulations that a portion of the cost imposed for asking an adjournments should go to the DCF (to be deposited in the deposited in the Consumer Legal Aid Account) and the remaining portion given to the other party to defray his expenses. But in Mysore DCF, this is rarely done.

We have also received complaints that some parties against whom the DCF has passed orders are not obeying these orders, but the DCF is not exercising powers given under Secs. 25 and 27 of the Consumer Protection Act to punish them. Such lenience will encourage more people to violate the orders of the DCF and make real consumer protection a mirage.

Let us give some specific anti-consumer actions by the Mysore DCF given recently  based on certified copies of order sheets obtained from the DCF.
1. Case No. Ex.Cr. 79/2010 (Original Case CC 79/2009)

The DCF took nearly 30 hearings to give a decision. Adjournments were given to the defendant  regularly, but after the 3rd hearing, the DCF stopped giving costs to the complainant. So the complainant had to appear for more than 25 hearings at his own cost. The defendant disobeyed the DCF's order and also did not attend the hearings of the execution (criminal) proceedings in spite of being served 3 non-bailable warrants. Instead of holding the defendant personally responsible and imposing a jail sentence for this gross contempt, the DCF imposed a fine of just Rs. 2500. The defendant has again ignored this order. The fine is yet to be paid.

2. Case No. CC 1070/2010

After holding nearly 30 hearings, the DCF declared that the complainant (who was an old illiterate widow who had complained that she had not obtained an Ashraya house 8 years after her late husband had paid the deposit) was not a consumer since she was getting the house at a concessional rate. It is not clear why it took the DCF 20 hearings to even decide if the complainant was a consumer. Further the reason given by it to declare her a non-consumer is wrong since, the Consumer Protection Act bars only free goods and services from the purview of the Act and not goods and services given at a concessional rate. An appeal against this decision of the DCF is pending before the State Commission for the last 5 months.     

3. Case No. Ex.Cr. 131/2010 (Original Case CC 601/2010)

The opposite party did not appear in spite of several non-bailable warrants. The DCF concluded the hearings several times by recording the last hearing as "final", yet no decision was given at the next hearing.  After nearly 20 hearings, the case was closed on 18-1-2012 by compromise between the parties.

4. Case No. Ex.Cr. 126/2010 (Original Case CC 231/2010)

The DCF ordered the opposite party to pay Rs. 47,000 and he paid Rs. 7,500 after 12 hearings. The case dragged on and the he paid another installment of Rs. 10,000 after 20 hearings. A warrant was issued for his arrest, but the opposite party escaped arrest by posting bail. The money due from the opposite party is increasing. The DCF does not give costs for execution proceedings and so the cost of attending the hearings is also increasing for the complainant. The case is still going on and there are no signs that the opposite party will ever fully obey the order of the DCF. The case is now posted for 21-2-2012.

Sreemathi Hariprasad, President, Mysore Grahakara Parishat 

Railways take action

MGP had recently issued a press statement that Mysore City Corporation is levelling the land in Yadavagiri next to the Arasikere Railway line to construct some buildings supposedly under the JNNURM project. But contrary to law, the work was going on without getting an NOC from the Railways. This was brought to the notice of the Railways and they have issued a clarification on 3-2-12. In the clarification, they say that at this location, the railway boundary on the western side varies from 30 feet to 63 feet from the centre of the railway track. Any construction within 30 meters (98 feet) of the railway property needs a "No Objection" certificate from the railways. So nothing can be built within 128 feet (this could be as high as 161 feet) from the centre of the railway track without an NOC from the railways.

The railways have also said that they have alrady taken action against the illegal construction that was going on. Levelling of the ground and uprooting of the trees have been stopped. Painted stones has been placed to clearly demarcate the railway boundary. Frequent inspection is being carried out to prevent encroachment. 

We thank the railways for taking prompt action on the matter.

B.V. Shenoy, Mysore Grahakara Parishat 

Photos from the January 2012 edition of Grahaka Patrike

(Vishwas Krishna) 

The dais at the National Consumer Day (24-12-11) celebrated by MGP and the Institute of Engineers, Mysore Local Chapter. MGP members Sreemathi Hariprasad (1st from left), H.R. Bapu Satyanarayana (4th from left), Prof. R. Chandra Prakash (5th from left) and Dr. T.N. Manjunath (6th from left). 

(B.V.Shenoy) 

More than 100 persons participated in the World Consumer Day celebrations on 

Vasanthkumar Mysoremath of MGP was the main speaker at the environment awareness programme held recently at Madapura. 

A prestigious builder promised a swimming pool at an apartment building in J.P.Nagar. What was actually built was a kids playpool. The tenants are now suing the builder for misleading advertisement.