Supreme Court Single Stroke of Pen on “Deficiency of Service” has Empowered Consumers and Consumer Courts of India Over Colonial Ancient Consumer Laws of 1986

Analysis by Editor in Chief Dr. Bhupendra Bhandari

Supreme Court passed a verdict that an individual facing deficiency in service from a company can approach a consumer court and can not be forced into arbitration. A consumer complainant against Voda Phone for deficiency of service comes under consumer court jurisdiction . Consumer has a right to access to the court. Voda phone had referred to section 7b of the Act of 1885 that consumer can not access to the court.

The bench of Justices DY Chandrachud, Surya Kant and Vikram Nath verdict of “deficiency in Service” against corporations will have wide ramifications in many areas of judiciary. Insurance companies will be widely hit by this deficiency in service” principle.

Most of consumer laws of Congress regime in Consumer Act of 1986 were still helping Corporations against consumer, based on Colonial Insurance Act of 1939, helping Lloyds of London, the biggest insurer in India in Colonial times. These laws were enriching Indian Insurance companies after Colonial Raj ended in 1947. Consumer Act of 1986 and subsequent amendments were still full of problem when compared with advanced economies of the West.

Not much was changed during subsequent congress governments.

“Deficiency in Service” verdict is close to a California insurance law called “Lack of Good Faith”. Any act of negligence or delay in response comes under “Lack of Good Faith” clause in California and judgement goes against service provider regardless of other issues if good faith clause is established.

Consumer Act of 2019 was NOT amendment of 1986 Consumer Act. It was a totally fresh and new start under Prime Minister Narendra Modi. There were no ambiguities.

 Narendra Modi and his ministers deserve the credit for starting fresh on consumer rights in light of many economic and other developments and e commerce.

“Deficiency in service” verdict by Supreme court will further add to empower and awaken consumer right and consumer activism. Such verdict also brings faith in justice and trust in judiciary itself.