Desicritics Category: Politics: Consumer Rights

Delhi Development Authority Bureaucracy Sadistic, Says High Court

Ashish — Sat, 14 Jun 2008 10:22:44 EDT

Citizens of the country have mostly bad thoughts about interacting with Government bodies; a lot of them come across officialdom who are not responsive and caring about their needs (as an example, making them come repeatedly even for small errors in the red tape process), and so on. There are babus (officials), who are friendly, but most are like hard faced officials, unwilling to come across as caring people. It would be nice for people to live in a gated community (and self-sufficient place) where one would not have to interact with the Government bureaucracy, but that is living in an ideal world.

However, there are cases when official responses are such that you would be horrified to read about such cases, and wonder as to how the official structure of the country could be so insensitive to the problems faced by citizens, that too when the situation is due to a fault of the agency themselves. The Delhi Development Authority however has been roundly criticized from time to time over its openness, caring nature (lack of it), and inability to care about what citizens go through. Read this article for more information:

Wondering if DDA derives "some kind of sadistic pleasure" in harassing citizens, Delhi High Court has slammed the civic agency in a case of double allotment of a flat in 1991 due to which the rightful owner was deprived of its possession and had to wage a 17 year legal battle in court.

"Ignoring dictum of law the officials of DDA keep perpetuating their illegal acts giving an impression as if they derive some kind of sadistic pleasure to harass the citizens," HC observed while castigating the civic body for having the nerve to demand double the price of a flat which wasn't handed over to Gandhi in 1991 because of DDA's double allotment mistake.

This case really highlights as to how uncaring an agency can be. DDA double-allotted a flat in 1991, and when the lady in question tried to get the mistake corrected, the DDA did a fresh allotment to her after 10 years and charged her new prices, at double the original cost. In such cases, the Court should also assign individual responsibility and fine officials responsible (including fining officials of the rank of Chairman and Vice-Chairman if they had made such recommendations).

The New Jahanpanahs

Shantanu Dutta — Fri, 16 May 2008 12:03:18 EDT

When India got independence from the British in 1947, the hard line communists made a derisive comment yeh azadi jhoothi hai and were derided for it. The communist thought that power had merely changed hands from one set of imperialists to another- that the white rulers had been exchanged for rulers of another color – brown.

Looking at the Supreme Court’s disdainful dismissal of a PIL brought by the Peoples’ Union for Civil Liberties that sought to bring judges of the apex court and high courts under the purview of Right to Information Act, it looks in hind sight that the communists were right after all. The Supreme Court armed to the teeth with the Contempt of Court, at least under the current Chief Justice at least seems to keep a scornful and arrogance distance from commoners as an elite group.

The reluctance of the Chief Justice to subject the court and its justices to scrutiny under the Right to Information Act, especially in the matter of declaration of assets is otherwise beyond comprehension. Even more incomprehensive is the Chief Justice’s smug assertion that Judges declare their assets to him. If that were enough than every departmental head could be authorized to handle their subordinate’s affairs and there would be no need to maintain vigilance departments any where !

The modern Indian judicial system has its origins in the Calcutta High Court.

The High Court at Calcutta, formerly known as the High Court of Judicature at Fort William, was brought into existence by the Letters Patent dated 14th May, 1862, issued under the High Court's Act, 1861, which provided that the jurisdiction and powers of the High Court were to be defined by Letters Patent. The High Court of Judicature at Fort William was formally opened on 1st July, 1862, with Sir Barnes Peacock as its first Chief Justice.Appointed on 2nd February, 1863”

Like most institutions the British left behind , be it the civil service or the military or the judiciary or even the Government of India Act 1935 which to a large extent forms the backbone of the constitution, Jawaharlal Nehru who reportedly once described himself as the last Englishman to rule India; he left them unchanged. And because the changes in these institutions were not intentionally made, they remained frozen in time or actually degenerated into grotesque caricatures like when you see those turbaned and liveried waiters serving in the Rashtrapati Bhavan and Raj Bhavan functions, with the viceroy’s crest replaced by the Ashoka Chakra. To see Brown Sahebs and Babus soaking it all in after being sworn to uphold the Constitution of India which still describes India as a Socialist Republic among other things, positively reeks.

The interesting thing is that in that very fountain had of imperialism, the United Kingdom, things are changing as public pressure builds up. By agreeing to pay income taxes, giving up the royal yacht, changing some royal rules, and limiting the number of royals receiving government money, the Queen has sought to placate growing public criticism of the monarchy. Closer home, in Bhutan voluntarily and in Nepal involuntarily , monarchies and feudal cultures are being dismantled. But in India, “their lordships” that sit in judgment over affairs pertaining to a billion plus people and determine their fate in some small measure at least will bear no scrutiny on their actions and conduct through the common man’s scrutiny conducted through lawful means permitted through the law of the land. They are the new jahanpanahs and will not tolerate any lese majeste!

New Delhi's Bus Rapid Transit System - Democracy Rides a Bus

Shantanu Dutta — Thu, 15 May 2008 09:26:33 EDT

For close to a month now, the newspapers in Delhi have been busy covering the fracas caused by the decision of the government to introduce the Bus Rapid System on a fast track. The intent of the government might have been good; but the experience from the phenomenon proves one thing that of course should have been obvious long ago - that technology is a great too but no panacea. Ultimately technological solutions have to operate in society and society is inhabited by human beings, not robots who will dance to a piper’s tune.

I missing link in the government’s high powered group, the Delhi Integrated Multi-modal Transit System (DIMTS) Delhi Integrated Multi-modal Transit System (DIMTS) has got experience in several fields and has obviously got strong political backing but it does not appear to have thought of including a behavioral psychologist or an anthropologist in its technical team who could have assessed and evaluated the traffic usage pattern in Delhi and offered some recommendations as to whether the BRT would or would not work.

If one looks at the history of the BRT, one finds that it was

“first invented in Curitiba, Brazil in 1974. Other cities that are now using BRT are Bagota Quito, Perreira, Guayaquil, Guatemala City, Los Angeles, Ottawa, Miami, Leeds and Adelaide. Cities like Tokyo, Taipei, Seoul and Lagos have taken up the BRT system now. In India, the system has been partly taken up in Indore, Pune and Ahmedabad, other than Delhi.”

Although the success stories over all seem to be quite a few, and Delhi definitely needs some urgent solution to its traffic woes, simply because a committee containing some scientists of the IIT generate an idea and a group chaired by the Chief Secretary endorses it, it does not mean that it will work. Besides Delhi could have learnt from the experiences of Pune. Pune got the country’s first BRT system, which was implemented one-and-a-half years ago. What was presented as a panacea for Pune’s continuously worsening traffic condition has only worsened the traffic situation there. The much-publicized new traffic mode created major controversy in the first few months of its implementation when the city saw five casualties on the BRT stretch. Lack of awareness about the new system and inadequate traffic sense were the main culprits.

This is not the first time that a traffic project has been handled in such a ham fisted manner. A couple of years ago, the government introduced cycle tracks in many parts of the city, to keep cyclists off the main road. A patch of the road was converted without any fanfare into a cycle track meant exclusively for them. All well except that the cyclists never knew, since no publicity was ever provided. So the cyclists continued cycling where they always had – on the main roads; dodging trucks and buses and cars like always.

After a while, with the tracks remaining unused by the cyclists, as was inevitable, the tracks became the haunt of road side motor mechanics who would park their vehicles in the track as they awaited repair. With heavy vehicles routinely using the tracks, soon the tracks were developing potholes and with in less than a year they were no more recognizable as cycle tracks. The scheme was then given a quiet burial but it is understood that with the Commonwealth Games coming up and the government wanting to spruce up the city as best as it can, the cycle tracks are being introduced again. One has to wait and watch if the planning is any better this time round.

The lesson for us in democracy is that sadly the common man who is the most important stakeholder is seldom consulted or his ideas sought for. A bunch of experts sprout up – and it does not matter who is in power for each regime has its favorites; these experts practically lay claim to messianic wisdom and come up with “solutions” which the Áam Aadmi” is not expected to understand and over night it is implemented at a huge cost to the tax payer. Ultimately the issues like the BRT reveal only one thing – that democracy is for us Indians only one thing- land up elector’s ID in hand once in five years at the polling booth and then go home and get doped. The benign leaders we elect will look down beatifically and take care of us with the wisdom they alone have.

The Elderly - Between The Devil and the Deep Sea

Shantanu Dutta — Sat, 10 May 2008 10:53:41 EDT

India’s elderly population are literally caught between the devil and the deep sea. The government might have provided adequate incentives in the budget for children to buy medical insurance for their ageing parents; but it is not working well. For in the entirely money-driven economy that we live in today, the elderly are not insurable and pose a business risk where the claims will be possibly higher than the premiums realized.

Strangely speaking, the public sector insurers – who are supposedly meant to have a conscience against the private ones, are not better in dealing with our senior citizens. According to the Business Standard,

A senior public sector general insurance company executive admitted that certain senior citizens may not be readily ‘insurable’ by industry standards, thanks to medical conditions; for example, people above 70 years of age. Most insurance companies are today reluctant to allot policies to senior citizens on grounds of ‘unprofitable businesses.

In a business and incentive driven business, even agents who typically are meant to have a long lasting and personalized relationship with their clients, have begun to start to look the other way. The insurance companies who are otherwise chasing business by drumming up clients by offering commissions to agents are not interested in securing the business of the senior citizens or for that matter any one above the age of 55 as they are the ones more likely to raise claims.

They are more likely to tom tom to all who care to hear about their reduced premiums for 20 year olds who are least likely in the prime of health hardly likely to fall sick and prefer claims. While no one of course disputes the need of insurance companies to make profits and survive in the market, the current stance of health insurers is akin to the man who lends you his umbrella when the sun is shining and then takes it back when it is running. This way of functioning defeats the very purpose of insurance.

Studies of household expenditure have shown that health care can use up to 40 per cent of a poor family's budget.

Narratives track the trajectories of households over the years: Illness leads to health care expense; usually this means a progressively higher level of care that becomes less and less affordable; this leads to debt, and it also means death, surprisingly often. It is easy to assume that death translates into change in the economic base of the family and has intergenerational impact only when it is of an able and earning male member of the household.

Although the government has announced schemes like the Varishtha Mediclaim, the schemes often come with fine print riders that put them out of reach of many. In many instances, the premium rates have been such that the schemes would be out of reach of many and the insurance regulator has had to step in to warn the companies. To sum it up,

The non-availability of enough products for older people, particularly senior citizens, who need medical insurance the most, and the lack of willingness among the insurance companies to sell such products to them mean that even if you want to buy a health cover for your aged parents, you may be unable to get them adequately covered.

Meanwhile, until we sort all this out, our parents and grand parents continue to swim in the choppy waters of uncertainty.

Student Suspended For University Criticism on YouTube

Dr Bhaskar Dasgupta — Fri, 11 Apr 2008 08:54:15 EDT

A student was suspended after criticizing an Anglia Ruskin University Course on YouTube. Is this going to be related to a freedom of speech case or a defamation case? Well, this step by the university is frankly silly. Here's the video. Take a look at the comments, what defamatory comments?

On the other hand, students demanding to be like consumers? Absolutely, why ever not? They have paid good money for it and if the offering does not match what was given, then they have a perfectly good right to complain. I would complain as well. If a student has not learnt, a teacher has not taught. And after having had an MBA, having taught in business schools across the world, recruited from several across the world and having been on advisory boards, I firmly believe that business schools should practice what they preach. And Universities should realise that they are running a business.

But why on earth is the university not listening? I will tell you why, because business schools are almost always looked upon as cash cows by the university. They take the money from the business school and use it to pay for the salaries of people who are investigating the Mongolian cultural significance of the Argentinean blue bean. I am joking, of course, but this is fairly typical of what I have seen.

But again, if you are a business (and lets get this very clear, universities are businesses now), this is your customer complaining. What are you doing about it? Threatening your customer with legal action is NOT a great way to improve reputation or getting additional customers.

Also, what the university has forgotten (or is perhaps stuck in the 18th century) that removal of comments does not mean that comments are removed. This episode has now created an internet electronic footprint which will be available every time anybody searches for Anglia Ruskin University. Not good, their internet, student and media management leaves much to be desired (even if their education and teaching management is perfect).

Technorati Tags: Universities,United Kingdom,Freedom of Speech

Save India Family Foundation Merges With National Commission for Women

Aaman Lamba — Tue, 1 Apr 2008 10:51:36 EDT

The Save India Family Foundation (SIFF), an organization dedicated to the upliftment of families and human comfort announced today that it would merge with the National Commission for Women (NCW). The news, announced in a packed press conference held at the Family Courts, came as a surprise, since the public has all along believed that the NCW were out to destroy families and corrupt the character of good Indian women.

The decision of the SIFF could be with the intention of destroying from within, but the spokespersons insisted that it was part of their masterplan to unite families everywhere, and encouraged husbands to look up to the example of stalwarts who had laid down their lives to demonstrate the selfless nature of the Indian male. They handed out a booklet listing the achievements of the SIFF, including the elimination of child support as a means of enabling children from 'broken' homes to lead normal lives, and the impact of family-first laws like Section 498A of the Indian Penal Code and the Domestic Violence Act in increasing the giving of gifts to wives for no reason whatsoever.

They announced the setting up of helplines and gift registries for husbands at a loss to figure out what to buy to placate angry wives, and also a special nationwide toll-free number 1-800-HUS-BANDS where husbands could share tips on keeping the peace through constructive dialogue.

In keeping with the above-board nature of the NCW, the SIFF has said they would be using real names and contact information in all communication henceforth, especially online on blog comments, Orkut profiles, etc. This approach, they felt, would enable everyone to know they had nothing to hide. They did mention, however, that they would be investing in a multi-layer Tor-based cloaking scheme for IP address spoofing to avoid any recalcitrant feminists taking the law into their own hands.

The proposed name of the combined NCW-SIFF is apparently SNIFF-WC, the intention being to take the best of both organizations. The agenda of the SNIFF-WC has not yet been announced, but an early draft copy reveals that it will include measures for the enablement of humanist rights, gender-neutral taxation, and the elimination of dowry as a noun from the dictionary, replacing it instead with the verb form, as in, "He dowried me, so I filed a 498A case against him."

When questioned about the infamous and patently unfair 498A law, the SIFF spokespersons said that in the spirit of their new partnership, they welcomed husbands to rat out their greedy parents and other husbands who dowried women. It was a heinous crime, and those who did it, should do the time.

Access To Credit Should Be Recognised As Human Right

Dr Bhaskar Dasgupta — Fri, 14 Mar 2008 02:46:49 EDT

This post made me think. Nobel laureate Dr Muhammad Yunus of microcredit fame has said that access to credit should be recognised as a human right. Now, there are two aspects to this argument

1. That the state has a right or a duty to provide credit to its citizens which is something that I do not agree with. This habit of looking to the Government for everything and handouts is wrong. This is at par with the argument that there is a fundamental human right to employment. No, there is no human right to employment. Nobody owes you anything for employment, that is your own responsibility. That is not to say that people who are clearly unable to work should not be helped (such as physically disabled...) but generally, there is no right to work. Similarly, there is no right to credit or even access to credit. But the flip side is true and more on that at the bottom

2. That credit is the only thing which is stopping people from leading economically productive lives which is again debatable. Just having the credit available does not mean that people will take the credit and suddenly become entrepreneurs. That is not necessary, to be economically active, you can rely on somebody else having credit, or loaning out credit or relying on your own energy and being self sufficient.

But overall, it does make sense not because of the call for the right but because what I know that poor people are poor because of governments and not despite them. Governments actively connive in removing access to credit to their citizens. That is actually true. Let us look at the ways it is done. First by giving subsidies and deficit financing, they soak up funds in the market which can be given as credit to needy people.

Second by having inefficient means (such as corruption, bureaucracy, etc. ) even well meaning ways of passing on credit are bad (such as rural work schemes or forcing state owned banks to make loans cheaply such as in Iran). Third is by not having good land and other asset registries (like patent systems) or good land based infrastructure (such as rural markets, good deep secondary patent and land markets, good legal systems where land and asset rights can be protected, exchange and markets where these can be traded..... (see for example, work done by Hernando de Soto)

But, food for thought indeed! Giving people credit is a laudable aim and Governments can do worse than do that. Specially for countries like Iran, Bangladesh and India, the dead hand of the state has to be removed or at least made efficient in asset discovery and credit generation.

But then, remember that you CAN go too far. For example, see this. Well, you have a very simple way of getting credit, just send a text message and in 15 minutes, about $500 will land in your account. And when credit is that easy, it creates problems on the other side. I quote, "Swedish authorities, who are so concerned about the out-of-control debt build-up among some young and low-income Swedes that they in January banned interest payments superior to the cost of the initial loan.The main danger of the new lending system is that it gives people "the possibility to get money very, very quickly, which is stimulating impulsive actions without thinking," Also lets not forget the sub prime crisis where funds were lent to people who were clearly unable to repay the loans

So yes, credit should be available but not too easily.

Technorati Tags: India,Iran,Bangladesh,Financial Markets,Financial Products

Indian Judiciary Concedes Defeat?

Abhinandan Mishra — Thu, 13 Dec 2007 16:01:39 EST

The Supreme court on Monday in a far reaching observation said that the judiciary has crossed the thin yet important line that separates the judiciary from the other two branches of governance; the executive and legislature and the time has come for the courts to refrain from indulging in what it called 'judicial over-reach'.

A two-judge Bench of Justices A K Mathur and Markandey Katju slammed the judiciary for over-reaching its limit and stepping into the shoes of legislature and executive.

The effects of Monday's observations were immediately felt as a citing criticism of judicial over-reach, a two-judge bench of the Supreme Court today refused to hear a PIL (public interest litigation) seeking relief for ''sex workers''.

The two- bench observation humbly conceded that judicial activism has reached the fifth gear and it should be pulled back. They reiterated the same point which the legislative and the executives have been saying time and again, "Courts should be limited to overseeing that the existing laws are upheld and it shouldn't take to creating laws.

The observations shocked the legal fraternity and the immediate effect was felt even on the Apex Court the following day as Justice S B Sinha and Justice H S Bedi, literally set the agenda for debate on judicial activism as their Lordships observed " Parameters for hearing the PIL now needed to be fixed by a larger bench ." They declined to hear the PIL which they had been hearing for the past four years and referred the matter to the Chief Justice for guidance. The petition was filed in the form of a PIL by an NGO Prajwala seeking rehabilitation of victims of flesh trade.

Same day, the Delhi High Court bench presided by Justice Mukul Mudgal, declined to hear the matter relating to ban on Begging in view of the forthcoming Commonwealth games and observed the court would proceed in the matter only after reading the observations of the Supreme Court.

The judiciary, particularly the High Courts and the Supreme Court were charged with governing the executives. Probably the statement holds an iota of truth. In many cases the courts intervened only when the executive failed to deliver goods to the common man, be it the ban on diesel run buses in New Delhi or commercialization of residential flats in the capital.

However, the Supreme Court had to face criticism when it issued guidelines for vote of confidence proceedings in Uttar Pradesh and then in Jharkhand state assembly and there were accusations that the judiciary encroached upon the functioning of the legislature.

Although it was the judiciary it-self that introspectively came out with the observation but for the present it seems that the executive and the legislature have had the last laugh. The humble self-judged comment by the two judge bench may push back the judiciary into a shell giving executive ample opportunity to deteriorate further.

Maybe the judiciary has erred while passing the above observations. Although it shows the level of maturity the judiciary possesses and the sanctity it has attained all through these years but the message that will go out would not be too good for the system in the larger context.

In a constitutional setup like ours none of the three branches of governance can be at the same footing, albeit this is what constitution calls for. Though the constitution talks about an ideal setup where each of the three branches of governance will work in its own distinct sphere still it can be reasonably expected that the either of the three will transcend its boundaries and unconsciously and for a good cause will dishonor the separation of power structure.

And if this tilt in balance occurs, as it is happening now then it should be in the favour of judiciary and the it's the judiciary that should be on a higher pedestal.

Judicial activism traces it roots back to 1980s when the concept of PILs (public interest litigation) came into focus under the learned guidance of Justice P N bhagwati and Justice V.R.Krishna Iyer. It was these PILs that highlighted the environmental pollutions, the sorry state of river Ganga under a series of case filed by MC Mehta.

According to a study by Hans Dembowski, a German scholar, PIL has been successful in the sense of making official authorities accountable to civil society organizations in India. The executive in our country is in a sorry state and there needs to be an accountability that would push them to work efficiently. The courts are one such accountability tool.

Agreed, that as stated by the Supreme Court bench the judiciary has sometimes crossed the "Lakshman rekha" but as said earlier this things are expected. In Shakespearian language it's about forgoing the lesser evil for a greater cause. And it should not be forgotten that we are not residing in a perfectly-built-ideally constructed world.The Lok Sabha speaker, Somnath Chatterjee, has repeatedly advised the judiciary and even the legislatures not to cross "Lakshman Rekha" and particularly suggested the courts not to impose their warnings with threats of Contempt proceedings.

The court may have been forced into making these observations in view of the recent vociferous demands by the legislature for bringing judges accountability bill and this was evident when mincing no words the bench cautioned the judiciary to exercise restraint as the reactions from politicians may result in the curtailment of power and dent in independence of judiciary.

If a civil society faces problem and the executive thinks that problem doesn't warrant attention then is it right to say that even the judiciary should tow the same line? Or the judiciary should portray a picture of blindfolded idol and say that since there is no law to deal with the problem hence there can be no enforcement or wait for a law to be enacted, violated and then decide to look into it.

The three arms of governance in a democracy are independent and yet dependent on each other. If any one of them is given even a subtle hint of having a free run then there will chaos and anarchy and perhaps the executive has just received that message.

Bhopal, Union Carbide, and Dow Chemicals - The Forgotten Holocaust

Abhinandan Mishra — Sat, 1 Dec 2007 09:22:14 EST

On a chilly night on 3rd December, 1984 a gas leak took place and 22000 people died in Bhopal. It was as simple as this.

24 years have passed and those who lost their loved ones still fruitlessly yet religiously take out processions demanding action against Dow, the new owner of UCC, the company which was responsible for the leak. Warren Anderson, the then head of Union Carbide, is in the United States and his extradition is constantly refused.

More than 1.5 lakh people were affected by the methyl isocyanate (MIC) gas leak and now they are living their lives in complete oblivion. The same does not hold true for Dow. The US giant has been allowed to continue providing its service in India and in 2006 the Industrialist and Investment Commission headed by Ratan Tata requested the Planning Commission to absolve Dow of any liability so as to increase and strengthen the trade between the two countries. Reliance is also now working with Dow in the chemical production industry.

Another not so important fact that should be noted here is that under the Indian legal system, Union Carbide and its directors are still considered absconders. Maybe the law will acquit UCC because it has managed to achieve what no one could do: put Bhopal on the world map.

Dow is represented by Abhishek Manu Singhvi in India and just for the records the PMOs file on Bhopal gas tragedy contains legal opinions that have given by Singhvi. During my law-student days I frequently used to hear the saying " I am the jury and I am the judge". At that time these lines were too complicated for my nascent mind and it would have been more helpful if we were taught the same principle by illustrating the above example. Now I know what this 'Jury-judge' connotes.

Five years ago while waiting for my train at the Bhopal station I met a crippled man and in the course of having tea on the platform we struck a conversation. He told me that he was an unfortunate survivor of the 3rd December holocaust and he lost his wife, mother and 2 daughters on that fateful night. With moist eyes he told me that was able to survive because he was sleeping on the floor, one on which her wife had recently applied a fresh coat of dung to keep the place warm and insect -free. According to him the gas released from the dung neutralized the MIC gas. His family was not so fortunate as they were sleeping on the bed above the ground when the gas leaked.

The dung saved him, at-least that's what he believes.. He also had one more belief : America used Bhopal as a testing ground for its chemical weapon - the MIC.

In the year 1999 on the 25th anniversary of the tragedy the city of Bhopal observed a two minutes silence in respect of the departed souls. December comes every year. And every year rallies are taken out, speeches made and victims are remembered.

For many it is enough. What else do you expect for a bunch of unknown toddlers, aged-old infirm, men and women who died many years ago?

Maybe some justice, not much, but still a small token as to convey the message that those who lost their lives were not worthless and expendable.

22000 people may not be enough to bring people out on the streets of Delhi for a candle-lit protest at the India Gate. Maybe the number is not just enough to warrant a two minutes slot on the news channels.

The survivors have now accepted their fate. The Bhopal victims don't shy away from their helplessness, they have learned to love with that. Probably we all have.

But at-least we can try to delay the inevitable by 10 years. Can't we resist ourselves from inviting Dow and the UCC to India for some more years? Till the last of the remaining survivors go to a never ending sleep and never awakes to see the ignominy.

"We are not expendable. We are not flowers offered at the altar of profit and power. We are dancing flames committed to conquering darkness and to challenging those who threaten the planet and the magic and mystery of life."-- Rashida Bee, Bhopal gas

ICICI Bank Penalized For Violence By Collection Agents

Ashish — Wed, 7 Nov 2007 11:03:34 EST

In a significant judgment that attempts to penalize banks for the patronage of recovery agents who use force to get back the loan or the bought item, a Delhi Consumer Commission has fined ICICI Corp the sum of Rs. 50 lakhs for employing a recovery agent who used goondas to physically injure a person in the process of forcibly recovering the item.

There have been many cases in the recent past when consumer commissions and courts have deplored the practice of using force to recover loans, and in fact, the Supreme Court has given strictures against such a tendency by finance companies. There is a process in law to recover assets, and it may be seemingly slow, but that is the same pace of justice as for other parts of the law. There is no provision in the law to forcibly recover the car or other asset that is bought using the loan amount, and certainly not at all to actually injure or otherwise harm the person. Refer the judgment:

NEW DELHI: The Delhi Consumer Commission fined ICICI bank a whopping fine of Rs 50 lakh for employing "goons" to recover loan and deplored the practice of the banks intimidating consumers to pay the installments.
In the significant judgment, the Commission deprecated the "audacity and impunity" with which the banks have been effecting forcible possession of vehicles and ordered ICICI also to pay Rs 5 lakh to a consumer, who was mercilessly beaten by the recovery agents while they snatched a loaned car from him. While taking to task the leading bank, it vented its anger on ICICI for flouting the apex court's direction that restrained all the financial institutions from employing musclemen to recover a loan amount or possession of a vehicle.

In such cases, it is also important to also have a police case as all such forcible snatches are illegal. Such police cases have in the past become embarrassing for the finance company in question, and have moved them to become more careful.

The finance companies and banks use the argument that doing the legal process is cumbersome, and encourages people to willingly default on their loans. The companies may be right in this regard, but they have themselves got into the business of providing loans where there is greater risk of default. They need to get away from the concept of free-for-all loans that they seemed to indulge in, and give loans after far more investigation to avoid default risk.

It is also a very puzzling reflection on the state of law in the country that a company can actually hire recovery agencies who they know use force to recover loans, including using actual violence where necessary; and that they have no worry about the police intervening to enforce the law.