Two ancient government monopolies, the telecommunications and postal services, have enjoyed undeserved immunity from consumer laws ever since their inception in the 19th century. The Consumer Protection Act 1986 had made a dent in their protective armour. However, the Supreme Court last week took a huge step backward by taking out the telecom sector from the consumer law.
The reason given is that the Indian Telegraph Act 1885 provides for arbitration and therefore those who have complaints like wrong billing should pursue that route. In the case, GM, Telecom vs M Krishnan, the phone was disconnected because of non-payment of bills. The consumer forum found that the action was wrong and awarded compensation to the phone user. On appeal by the department, the full bench of the Kerala High Court upheld the award. The department appealed to the Supreme Court. In a terse order — not even called a judgment — the court reversed the law which stood the field for two decades.
The consumer did not appear before the Supreme Court to defend his case or to oppose the department’s contention that it was exempt from the consumer law. Therefore, the court did not hear arguments on the jurisdiction of the consumer forum before making such drastic change in the law.
The court declared that Section 7-B of the Telegraph Act provided for arbitration by a person chosen by the central government and his opinion shall be binding. Since the Telegraph Act is a special law, it would take precedence over a general law like the Consumer Protection Act.
However, it is well settled that the Consumer Protection Act provides an additional remedy. Section 3 says that its provisions shall be “in addition and not in derogation of the provisions of other laws”. This was why several consumer cases were being heard by the forums though there were special laws.
The present order goes against the precedents set by the Supreme Court itself. In Skypak Couriers vs Tata Chemicals (2000), it asserted that even if there existed an arbitration clause in a contract, a complaint can be made before the consumer forum if there was deficiency in service. The three-judge bench stated that this was because the consumer law was an additional remedy open to the aggrieved person. The present telecom order was made by a two-judge bench, which was bound to follow the ruling of the larger bench.
In Fair Air Engineers vs NK Modi (1997), the court stated that the consumer forums should not relegate the complaining party to “cumbersome arbitration proceedings”. Parliament was aware of the provisions of the Arbitration Act, the Contract Act and the Civil Procedure Code remedies. Nonetheless the Consumer Protection Act provides an additional remedy, the court said.
It upheld the consumer’s right to move a forum even when the law provides for arbitration, in Thirumurgan Coop Credit Society vs M Lalitha. The Tamil Nadu co-operative law has a provision for arbitration in case of disputes. Even then the court emphasised that the consumer forum can hear disputes among the members of the co-op. In Sumatidevi vs Union of India (2004), an old woman travelling in an AC coach was robbed by an unruly mob at Nagpur. She moved the consumer forum, not the railway tribunal, for damages. The Supreme Court upheld the award of the consumer forum.
How difficult it is for a common man to fight giant monopolies can be understood from a recent case, Telecom vs Ajaib Singh. The phone connection of a 76-year-old man was cut on alleged non-payment of a huge bill. Though normally his bill was only Rs 160 a month, it jumped to Rs 20,000 for two months. He was complaining about ghost ringing on the phone, but it was not rectified; instead he got an inflated bill.
“It is a sordid saga of state monopoly,” the Punjab state consumer commission said in its judgment while awarding him Rs 15,000. The senior citizen had to go without a phone for ten years when his complaint was before the consumer forum. If he had asked the department to go for arbitration by a government nominee, it would have taken an extended life time to get a verdict, most likely against him.
“We cannot term this anything less than cruelty perpetrated against a common man,” the judgment said. There are numerous judgments in which wrong billings and disconnections were the staple theme and the consumer forums had come to the aid of the subscribers.
Apart from the deep and wide-ranging implication of this order, the question whether a two-judge bench can upset the law laid down by coordinate benches, and even a larger bench in this case, is open to debate.
