Every year, without fail, the government pays lip service to the cause of consumers — once on March 15, on World Consumer Rights Day and again on National Consumer Day on December 24. And then the poor consumer is completely forgotten. How else can one explain the absence of consumer protection laws in India?

Just take one area of financial activity where the consumer is particularly vulnerable — hire purchase transactions. In the absence of a law to protect consumer interest, financial institutions often exploit the vulnerability of the consumer — first they come up with agreements that are often one-sided and unfair to the consumer. Then they resort to illegal practices to re-possess the financed product — mostly vehicles — forcing the hapless consumer to knock at the doors of consumer or law courts for justice.

A recent case decided by the apex consumer court illustrates this best. Here, in response to a complaint filed by the Orissa Voluntary Association for Rural Social Development, the consumer court found that there was no justification for the financier to forcibly re-possess the vehicle from the association and sell it. Pointing out that no amount was overdue from the association, the consumer court directed the financier to pay Rs 4 lakh to the complainant. (Magma Leasing vs Prasan Mohapatra, FA No. 64 of 2007)

Now if only we had a law such as the hire purchase act to protect consumer interest, the consumer in this case would not have faced such arbitrary and illegal action. Ironically, we did have one such law, but thanks to pressure from the financial institutions, the law was never enforced. In fact, the Hire Purchase Act of 1972 was to come into effect from September 1, 1973, but a month prior to that the government issued a notification rescinding the operation of the act.

And then several attempts were made to bring in the law in a modified form, but eventually, it was abandoned. In fact, an amendment bill was introduced in the Rajya Sabha on May 8, 1989, but this was again referred to the Law Commission as it was felt that the bill was too complicated to be understood by consumers. The Law Commission even submitted its report in March 1999, but the government preferred to accept the argument of the financial sector that such a law was unnecessary in the post-economic liberalisation scenario.

It’s time we demanded a comprehensive law to protect consumers from unfair practices in the hire purchase sector.