On 1 September, 2009, the Supreme Court of India , in CIVIL APPEAL NO. 7687 of 2004, passed an order stating that " there is a special remedy provided in Section 7-B of the Indian Telegraph Act regarding disputes in respect of telephone bills, then the remedy under the Consumer Protection Act is by implication barred".
Thousands of case filed by consumers in Consumer Foras have been dismissed citing this judgement.
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 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.