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Poor drafting has defeated the purpose of keeping out businesses and commercial establishments from using the consumer courts for the resolution of their disputes with service providers. When the Consumer Protection Act of 1986 was drafted, its objective was that it would provide better protection of consumers through a parallel system of consumer justice that was affordable and quick. However, while providing for the settlement of consumer-to-business disputes, the law has failed to keep out business-to-business disputes in respect of services. As commercial enterprises made a beeline to the consumer courts for the resolution of their disputes with various service providers, particularly insurers, the demand for limiting the role of the consumer courts to settling individual consumer complaints grew. With an increasing number of industries and business houses utilising the consumer courts for the redress of their disputes with banks, insurance companies, transporters and electricity boards, even the presidents of the apex consumer court began to express concern over this trend. Dismissing a petition filed by the Bombay Dyeing and Manufacturing Company, Justice Suhas C. Sen, the then president of the apex body, commented on how cases filed by commercial organisations were adversely affecting the very purpose of the law — to provide quick, easy and affordable justice to common people who could not otherwise enforce their rights before a court of law. Soon after, Justice D. P. Wadhwa, who took over as the president of the commission, expressed similar sentiments while speaking at an "Open House" organised to celebrate the 14th anniversary of the apex consumer court. He said the cases filed by business houses and commercial establishments involved high stakes and took away a great deal of time of the commission. Subsequently in 2003, the government brought in an amendment to restrict the use of these courts to only consumers. But ironically, a recent order of the apex consumer court has thrown open the doors of the consumer courts to commercial establishments to settle down their disputes with insurance companies. The order has also exposed the weaknesses in the amendment. Defining a "consumer" as one who purchases goods and hires or avails of services, the amendment says it does not include a person who avails of such service for any commercial purpose. Consequently, the Gujarat commission dismissed three complaints filed by commercial establishments against insurance companies. The apex consumer court, however, disagreed and set aside the orders of the commission. Justice M. B. Shah, president of the National Consumer Disputes Redressal Commission, in his order, pointed out that for any service to attract the exclusion clause, it should be directly connected with profit, which is the main aim of any "commercial purpose". However, since an insurance policy is taken only to cover losses and not to generate profits, it would not come under the definition of services hired for commercial purpose. The amendment, therefore,
did not prevent companies from filing their complaints against the
insurers. (FA Nos 159, 160 and 181 of 2004). Now the Union Ministry of
Consumer Affairs has to step in and file an appeal against this order
before the Supreme Court. Or better still, it should immediately plug
the loophole in the law through an amendment. |
