Consumer Courts Can Rule on Telco-Customer Disputes: DOT

1 Comment » Written on February 4th, 2014 by
Categories: Telecom
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If you’ve been stiffed by your telecom company by high bills or unexplained debits, you are now in luck. The Telecom Regulator has announced that you can approach a consumer forum with your complaint, an avenue closed to you since 2009.

The History

Since 2009, telecom consumers have been unable to approach consumer forums - where small complaints of a consumer-producer nature, such as defective merchandise or overbilling, have been quickly and assertively decided. Consumer forums are courts, and exist at a district and state level all the way to the National Consumer Disputes Redressal Commission.(NCDRC)

Before 2009, if you were overbilled, you could approach the consumer forum, which would decide on the case and award compensation. Penalties given were of the order of Rs. 5,000 which, as you can imagine, are huge in relation to the average complaint, and had telcos in jitters because they just couldn’t get their systems to not harass customers.

However, in one such case, in 2001, when M. Krishnan had his BSNL telephone disconnected due to non-payment of a bill of Rs. 17,000+, the consumer forum ruled in Krishnan’s favour and told BSNL to pay Rs. 5,000 as a fine and restore the connection.

BSNL appealed in the high court, lost, appealed some more, and eventually got a Supreme Court bench to listen to the issue: does the consumer forum have jurisdiction?

The bench, consisting of Markandey Katju (the infamous outspoken one) and A.K. Ganguly (who delivered the 2G Scam judgement and was recently indicted of sexual harassment) had ruled that the consumer forum cannot rule over telco disputes. (See judgement) They quoted the 1885 Telegraph Act, Section 7B, that provided for arbitration to solve disputes.

So What Was The Problem?

There was no clarity about the arbitration process, and the government never appointed an arbitrator as mentioned in the Telegraph act. So, nowhere to go!

See a detailed reading of the situation by Akosha.

Which meant that if you were overbilled, or your phone disconnected, you just had to chin up and bear it. No consumer forum (bar a few odd ones) were taking cases relating to telecom disputes because of the SC judgement, and the NCDRC (the apex consumer disputes body) also affirmed that the judgement stood sacrosanct. (Example: Ghaziabad consumer forum refuses to take a telco-overbilling case quoting the SC judgement)

What’s Now?

With people obviously miffed, it was left to the government to appoint an arbitrator or resolve the deadlock.

The DOT has finally addressed the issue. In a Memorandum, it says:

  • The SC judgement relates to a time when the Department of Telecom (DOT) and BSNL were in one entity. Since then, DOT has turned regulator and BSNL is a separate entity as are all mobile companies. The only “telegraph authority” that gets protection from consumer courts is the DOT.
  • Therefore while the SC judgement is all right, it doesn’t apply to private service providers or to BSNL as it is today.
  • “The district consumer forums are competent to deal with disputes between individual telecom consumers and telecom service providers”. Which means: Yes, go on, use the consumer courts to settle issues. Yay.

Impact

We don’t yet know if the district consumer forums will buy this argument. It comes from the DOT. The Department of Consumer Affairs has been notified, who will have to push this line to the consumer courts (remember, the courts are handled by the judiciary, and they don’t have to accept this reasoning)

If the consumer forums do open up, it’s a huge win for the consumer and probably quite negative for the telcos, such as Airtel, Idea, Vodafone and Reliance Communications.

Not because the fine is this high, but because none of them seem to be able to avoid overbilling or random charges that mar a customer experience. Hopefully the threat of having to pay hefty compensation will make them fix their systems.

If you know anyone with an overbilling problem who approaches the consumer forum, do tell them to take a copy of this memorandum. And let me know how it goes!

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The man behind Capital Mind. Deepak is a co-founder at MarketVision, a financial knowledge company. Deepak also provides data research and consulting services, and now lives in Bangalore. Connect with him at deepakshenoy@gmail.com.

One Response to “Consumer Courts Can Rule on Telco-Customer Disputes: DOT”

Thanks for informing us of this development.