PSUs, insurance firms face tough time in consumer fora in 2012

Dec 25 2012, 11:36 IST
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PSUs, insurance firms face tough time in consumer fora in 2012. (Reuters) PSUs, insurance firms face tough time in consumer fora in 2012. (Reuters)
SummaryThe apex consumer commission pulled up PSUs spending more money in fighting cases.

Insurance firms and PSUs had to face some tough time in 2012 from the consumer fora which pulled up these entities for causing a rise in frivolous litigation.

The apex consumer commission pulled up PSUs for behaving 'penny-wise, pound-foolish' and spending more money in fighting cases than they might have to pay to the claimants.

The National Consumer Disputes Redressal Commission (NCDRC) made the observation while pulling up Haryana Urban Development Authority (HUDA) for "gross negligence, deliberate inaction and lack of bonafides" in delaying by 204 days filing of a plea against a state consumer commission's order.

The NCDRC also imposed a fine of Rs 50,000 on HUDA while blaming the legal staff of the PSUs for not examining cases properly and forcing litigants to approach courts, resulting in a rise in frivolous litigation.

Apart from PSUs, the consumer fora made clear its displeasure with insurance firms -- private or state-run for denying rightful claims of consumers by asking the Centre

to examine the issue and take action against the erring firms.

The fora had also asked the Union finance ministry to deal strictly with private insurance firms and consider cancelling their licences for harassing customers and

illegally rejecting their claims.

State-run insurance company LIC was also not spared, with the Delhi State Consumer Commission saying that it has become the "richest" organisation in the country by rejecting rightful claims of insured under mediclaim policies on

"flimsy" grounds.

Airlines, banks, auto majors, insurance firms, hospitals, food joints, manufacturers of electronic gadgets, government wings like Railways and postal department, none escaped the stringent scrutiny of consumer fora on complaints of their indulgence in unfair and deceptive trade practices.

While the telecom sector managed to avoid scrutiny of the consumer fora in cases of billing disputes due to a 2009 Supreme Court ruling, matters related to value added services -- like caller tunes, number portability, SIM activation offered by the telecom majors were taken up by the fora. The apex court had ruled that as per section 7B of the Indian Telegraph Act of 1885, a dispute between a consumer and

a telephone service provider can be resolved only through arbitration and the consumer is barred from moving a consumer forum for redressal of grievances against a telephone company.

Despite the ruling, Bharti Airtel was ordered by a consumer forum here to pay Rs 25,000 to a post-paid subscriber as compensation for harassing him by demanding fresh documents to

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