All paid services come under consumer protection law

Pushpa Girimaji

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I have a complaint pertaining to overbilling against a cellphone service provider. He is not resolving my grievance. I want to go to the consumer court but sometime ago I came to know that consumer courts are not taking up complaints against telecom companies. What is the correct position and can I get relief?

Yes, consumer courts have the jurisdiction to resolve consumer disputes with telecom service providers. Unfortunately, an order of the Supreme Court had resulted in consumer courts dismissing such complaints, but a change in the definition of ‘service’ made in the Consumer Protection Act of 2019 and a recent Supreme Court judgment have restored the rights of consumers to sue telecom companies before the consumer courts.

In 2009, in General Manager, BSNL, vs M. Krishnan, the Supreme Court held that “when there is a special remedy (arbitration) provided in Section 7B of the Indian Telegraph Act regarding disputes in respect of telephone bills, then the remedy under the Consumer Protection Act is by implication barred”. This was a classic case of an erroneous interpretation of the statute by the judiciary, but this order tied the hands of consumer courts and forced thousands of consumers whose complaints were pending before the consumer courts to seek arbitration.

The order was erroneous for another reason too. Section 7B provided for arbitration of disputes between the “telegraph authority” and the consumer. But neither BSNL nor private telecom companies came under the definition of “telegraph authority”. However, telecom companies made use of this order to stay out of the purview of consumer courts.

Subsequently, as the number of consumers seeking arbitration went up, the Union Ministry of Communication and Information Technology issued a clarification and said consumer courts could adjudicate over consumer complaints against telecom service providers, but confusion persisted with consumer courts giving contradictory orders.

So, when the government replaced the Consumer Protection Act of 1986 with the CP Act of 2019, it included in the definition of ‘service’, telecom, too, thereby completely eliminating any confusion caused by the Supreme Court order of 2009 about the jurisdiction of the consumer courts to hear complaints pertaining to telecom companies.

Meanwhile, the Supreme Court admitted a bunch of petitions challenging the orders of the National Consumer Disputes Redressal Commission on the issue and in February this year, declared the earlier order of 2009 as erroneous and upheld the right of the consumer to sue telecom companies before the consumer courts (Vodafone Idea Cellular vs Ajay Kumar Agarwal, CA No. 923 of 2017)). So you need not have any doubts on the issue.

Can you briefly quote the Supreme Court judgment and specify the Section in the CP Act of 2019 that brings clarity?

Under Chapter 1, Section 2 and Sub-Section 42, you will find the definition of ‘service’. It clarifies that ‘service’ includes all services, except services rendered free of charge or under a contract of personal service. Here, the definition gives examples of services and here, telecom has been specified just to overcome the problem encountered by the 2009 Supreme Court order. Coming to the February judgment of the Supreme Court, it clearly pinpoints why the order of the apex court in General Manager, BSNL, vs M Krishnan, was erroneous. “First, it failed to recognise that the Act of 1986 is not a general law but a special law that has been enacted by Parliament specifically to protect the interest of consumers. Second, even if it is assumed that the Act of 1986 is a general law, it is a settled position of law that if there is any inconsistency between two legislations, the later law, even if general in nature, would override an earlier special law.”

Said the court further, “Crucially, M. Krishnan fails to notice that Section 3 of the Act of 1986 clearly provides that the remedies available under the Act are in addition to the remedies available in other statutes and the availability of additional remedies would not bar a consumer from filing a complaint under the Act of 1986. Section 100 of the Act of 2019 corresponds to Section 3 of the Act of 1986.”

The Supreme Court also made it clear that barring services rendered free and under a contract of personal service, all other services or services of every description would come within the ambit of the consumer protection law.