Misled? File class action suit

Pushpa Girimaji

IN 1990, a Mumbai-based consumer group, Mumbai Grahak Panchayat, filed a class action suit against Lohia Machines on behalf of 934 persons who had not got back the advance deposit of Rs 500 each paid towards booking scooters. The complaint was later expanded to include all those who had not got back the money following cancellation of the booking, and the company was asked to refund the money with interest to all of them. This was a landmark case in the history of the consumer movement in this country.

However, this case revealed that the Consumer Protection Act did not provide for such class action complaints at all. Considering that the law was meant to "better protect" the interests of customers, this was a major lacuna. This was, however, set right in 1993 through an amendment. But till today, the provision is barely understood or used by consumers in India.

Now, for the uninitiated, I must explain that a class action suit allows a large number of complainants with a similar grievance to seek relief through one common petition. The only group that seems to have taken advantage of this provision is farmers. In several states, a large number of farmers have come together and filed class action suits against seed companies for selling substandard seeds and got compensation for the low yield or damage caused to the standing crop.

Now slowly, students seem to be understanding the advantage of such class action suits. In the case Buddhist Mission Dental College and Hospital vs Bhupesh Khurana and Ors (Civil Appeal No 1135 of 2001) decided by the Supreme Court in February 2009, 11 students of the college had filed a case seeking compensation for the academic years lost on account of an unfair trade practice by the college. When the students joined the college in 1993, the college had claimed that it was affiliated to Magadh University, and the bachelor of dental surgery course was recognised by the Dental Council of India.

Both turned out to be untrue. Here, the national commission awarded a compensation of Rs 20,000 to each student, besides refund of all the fees paid to the college. While the college wanted this order to be set aside, the students wanted a higher compensation. Both filed appeals before the Supreme Court. The Supreme Court held that this was a clear case of misrepresentation and, therefore, an unfair trade practice, and the students deserved a higher compensation for their loss. It, therefore, asked the college to pay an additional compensation Rs 1 lakh to each of the complainants, and also pay the cost of litigation quantified at Rs 1 lakh to each of them.

Now, more recently, 16 students of Vandana Higher Secondary School in Gujaini, Kanpur. sought similar relief for an academic year that they lost. Here, the school had claimed that it was recognised, but the students came to know the truth only when they were not issued hall tickets for the 12^th board examination. In their complaint before the district consumer forum, the students sought a compensation of Rs 60,000 to each of them, besides refund of all the money paid towards tuition fee and examination fee.

The district forum directed the refund of all money collected from the students, but awarded only Rs 10,000 as compensation. Unfortunately, the students did not appeal against this order, seeking enhancement of the compensation, while the school challenged the order. While dismissing the school’s petition, the state commission increased the compensation amount to Rs 60,000 to each of the students, but this was again challenged by the school. This time, the national commission agreed with the school that the state commission had exceeded its jurisdiction in awarding a higher compensation without the complainants asking for it. So it brought it down to Rs 10,000 (Vijay Bahadur Singh Solank vs Ankit and others, RP No 4174 of 2009, decided on April 22, 2010).

I quote this case to emphasise two points: (a) The need for students to do a thorough checkout before joining any educational institution; and (b) the need to recognise the advantages of class action suits. If, at any stage, students realise that they have been misled by an educational institution, they should file a class action complaint on behalf of all. Remember, there is strength in unity and there is strength in numbers.

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