When Arun Shourie as disinvestment minister was selling off Government assets, there was a lot of protest as to why the Government is selling off its assets. But the fact of the matter is, the Government is not the best person to run things such as hotels, airlines, mills, and other such manufacturing and service sectors. Overall, the PSU’s are in a bad state, and it is quite clear that the Government is not exactly very responsive to needs of customer care. For example, when MTNL was the only telecom in Delhi, service levels were real bad; it is only when other telecom companies came on board that service levels improved. Here is another example of a sector that the Government is into, and is doing a pretty bad job in taking care of passengers:

NEW DELHI: At least five Air India flights were delayed by several hours at the Indira Gandhi International airport here on Sunday due to technical problems, causing hardships to about a thousand passengers.
Earlier, peeved over the long delay, the passengers protested at the airport and demanded explanations from the authorities. However, no senior Air India official was present at the airport to pacify the agitating passengers.

The Government really has no business running an airline; airlines run by professionals are sometimes unable to cope with the industry dynamics, and when the company is being run by a Government official or the Minister, then the only thing that saves the airline is when the Government pumps in tax-payer money to save the airline. And yet the level of customer service that they provide is abysmal. In the current case, consumers were not provided information of when the planes will be leaving, they were tired, hungry and not getting the required information and relief. In fact, in this case, a Mizoram Minister also got late for his meetings abroad.
Typically, in the case of such delays, customers are always acquainted with the latest information, are taken care of, and sent to their destination by any alternative as soon as possible. But, when the Airline is being run by the Government, there is really no incentive to be customer friendly.

AIIMS is the premier medical institute of India, and although many private hospitals have great doctors and excellent facilities, AIIMS is still seen as the best medical institution of the country. But just as a measure of how even the great ones have to pay for their mistakes, the Delhi State Consumer Court has ordered it to pay Rs. 1 lakh as compensation to the heirs of a man who lost his voice during an operation six years ago. It was alleged that the doctors at AIIMS botched up and cut a major nerve that resulted in speech loss during surgery to remove a tumour.

NEW DELHI: Holding All India Institute of Medical Sciences (AIIMS) guilty of ‘‘gross medical negligence’’, the State Consumer Commission has asked it to pay Rs 1-lakh compensation to legal heirs of a patient who lost his voice after undergoing an operation there.
Presiding over the commission, Justice J D Kapoor said the medical reports had established slackness of AIIMS’ doctor. Bedi was operated at AIIMS on August 22, 2001 for removal of a tumor, but after the surgery, he was rendered unable to speak, alleged the complaint. Terming the symptom usual, the doctor who conducted the surgery assured Bedi that he would regain his voice after a few days. But in a subsequent test, he found that a nerve was cut during the surgery and a post-operative negligence in treating the same had led to paralysis of diaphragm, Bedi had claimed during the proceedings.

Slowly but steadily, the medical profession is coming under the coverage of consumer rights; and that is how it should be. Medicine is a very skilled area, and a patient literally places his or her life in the hands of the doctor. If the doctor does not behave in a skilled way or botches up an operation (literally being negligent), then the patient has his full rights to claim compensation for the same. The only shortcoming in this case is that the decision took a long time coming, and came after the patient had already died.

Not in India. Due to not much movement in the past towards revamping its laws to add more teeth (enabling punishment of manufacturers for making sub-standard items), Indian customers are frequently short-charged. So, for example, you read about manufacturers in the Western countries and Japan recalling products when there are safety issues or health issues, you will find it hard to find similar examples in India. If the intentions of the Government are any guide, such a situation will not last for much longer. The Government is planning steps to modify laws such that consumers get a higher degree of protection against sub-standard goods, including a critical measure called as ‘product liability clause’, making manufacturers liable to pay punitive damages (punitive damages are fines that are meant to punish, and typically of such a level that they hurt the manufacturer). Read the article:

The Indian government is keen to similarly empower consumers against sub-standard goods. In the works are a set of tough laws which will include the critical product liability clause, making erring manufacturers and suppliers liable to pay punitive damages. The proposals, expected to substantially overhaul existing consumer laws, are part of recommendations made by the Planning Commission in the 11th five-year Plan, which is to be placed before the National Development Council next month.
The commission has recommended mandatory standards for products which impact health and safety of the consumer as well as harm the environment. These include electrical appliances, electronic, IT and telecom products, medical devices, industrial and fire safety equipment, helmets and material used for food packaging. While making these recommendations, the government for the first time has admitted that there are serious shortfalls in achieving consumer welfare because of lack of laws regulating many products and services that impact health, environment and safety in general.

If the Government is able to bring in these measures, they will add more protection to consumers and rein in manufacturers who do not care about the health or well-being of the consumer. This will also give rights to the consumer that are enjoyed in more advanced countries. And given the ambition of the country to be a big manufacturing base, it will also help in creating a much greater force for achieving a much higher level of quality. Now it is a question of whether the Government can actually take the required steps.

In a continuing chain of consumer redressal forums ordering payment of compensation where banks have used coercive means to distress loan defaulters, a Pune Consumer Redressal Forum ordered the payment of Rs. 1 lakh compensation to a lady whose car was seized by agents of ICICI Bank. The interesting part in this case is that the lady had given instructions to the bank to recover the loan installments from her savings account. However, her allegation is that the bank did not follow these instructions and got its recovery agents to seize her car. She had to go to court to get her car back, and it was returned in a damaged condition. The Pune Consumer Court ordered the Bank to pay Rs. 1 lakh compensation to her for the mental distress caused.

PUNE: A consumer disputes redressal forum here has ordered a private bank to pay a compensation of Rs one lakh to a woman whose car was seized by its recovery agents for an alleged default in repayment of Rs 4 lakh loan.
Passing its order on Bhandwalkar’s complaint, filed in September last year, the forum said the bank should pay the amount as a compensation for the “mental harassment” caused to the borrower who had claimed that ICICI bank did not follow her instructions regarding recovery of loan installments from her savings account even though she had given post-dated cheques and had substantial deposits in the bank.

Such cases seem to be coming to more media attention nowadays, which is very beneficial since customers who have suffered at the hands of recovery agents who use force or cause humiliation or mental distress are more aware of what their rights are. The bank is entitled to get its money back, but as has been pointed out frequently, such recoveries have to be made as per legal processes and not through force.

If you had invested your hard earned money in the Fixed Deposits of a company, and then the company declared itself bankrupt, you would be a in for a rude shock. The company would be declared sick, and you have very little chance of getting your money back. Not a good situation to be at all. In some cases, the company would be deliberately declared sick so as to defraud the investors of their money. Once the company is granted protection by the BIFR (Board of Industrial & Financial Reconstruction), the company has immunity to claims made against it by its investors. Even to initiate legal action against the company so as to get your money back, you would have to get the permission of the board.
This has changed; there was a judgment by the Karnataka High Court that deposits to the company were not in the nature of money lent, but money held in trust; as a result, the company could not use the legal protection for claims for recovery of this money. In a recent case, a litigant made the National Consumer Commission aware of this ruling by the Karnataka High Court and the precedent was adopted by the National Consumer Commission.

If you’re one of those people who had invested in fixed deposits (FD) offered by a company — and discovered much later that the company has gone down under and that it has no intention of making good on its promise because it has been declared sick — breathe easy. A 2001 judgement made by the Karnataka high court came to the fore earlier this month in a case filed against Modern Threads (India).
A divisional bench held that a deposit in a sick company is not a sum lent to the company, but a sum held in trust by the company till the time of maturity. Hence, a claim made for the return of a deposit cannot be termed as a suit for recovery of money, and so, the protection under SICA would not be available to the company.

Now that there is awareness of this past ruling and that too at the level of the National Consumer Commission, this will be a godsend to a number of people who have taken Fixed Deposits issued by companies and then left holding onto their emotions as their money has seemingly been mis-appropriated by the company and with almost zero chance of getting their money back. Now, they can use this case as a precedent and approach the Consumer Courts to get their money back. Sometimes, legal decisions have the potential to positively impact a large number of consumers all at once.