Why Noida CEO’s Arrest Threat Underlines Need To Review Consumer Protection Act

In a forward-looking legislation, small consumers can achieve little on own, often pitted against corporate lawyers.

This is about the recent news that a consumer court had issued warrants for imprisoning the CEO of the Greater Noida Industrial Development Authority (GNIDA) leading to one month’s imprisonment.

The CEO is Ritu Maheshwari—an IAS officer of 2003 batch. She comes with formidable administrative experience of having worked as a District Magistrate in Uttar Pradesh , four times over—indeed a rare achievement for any woman officer and more so in UP.

She has been the CEO of NOIDA for some years and was given additional of GNIDA three months ago. I found the sensational headlines about her arrest and imprisonment bizarre. The consumer courts are not known to ordinarily use the powers of contempt. Something must have gone horribly wrong. Intrigued, I decided to check the website where fortunately all documents are available.

What Unfolded in the 18-Year-Old Case?

The ongoing case has had a chequered history from 2005 until 2023 and is a veritable case study of how protracted litigation (in this case for over 18 years – and still continuing,) takes place. Without touching on the merits of the case, the basic facts bear repetition- because on these rest my concerns and conclusions.

In 2001 an applicant was denied an industrial plot by GNIDA. He approached the district consumer forum in 2005 and got relief in 2006. This order was contested by GNIDA before the State Commission and in 2007 the commission ordered that the applicant be refunded his application money of Rs 20,000 along with interest. This was done.

Four years later the complainant went in appeal to the National Commission. The most important operational part of the National Commission’s order of 2014 was to direct that “a plot of 500 m² to 2500 m² be allotted to the applicant after giving due consideration to the project report and other documents for the purpose of examining and coming to a decision on the allotment of an industrial plot."

While GNIDA had promptly made a provisional allotment as directed by the National Commission, the Authority kept requesting the complainant to deposit 10% advance along with a Detailed Project Report (DPR)-an essential requirement for allotment of an industrial plot. The then CEO reported that thereby, he had complied with the National Forum’s order by making provisional allotment, but also lamented inability to proceed further in the absence of any response from the applicant.

The district forum then directed the complainant to file the DPR; only thereafter some documents were filed which GNIDA found deficient on several aspects.This too was reported to the district consumer forum. But meanwhile the applicant filed for execution of the decree. This litigation went on for another five years from 2017-2022 with some 40 hearings and no outcomes .

On 7 January 2023 however, the executing court threatened to issue warrants against the CEO leading to imprisonment to come into effect in 15 days if the orders were not complied with. There the matter rests.

Consumer Court Process Should Be Consumer-Friendly

There are three things which I found worrisome about the case. First, the consumer courts were set up by an Act of Parliament in 1986, intended to check unfair practices in trading goods and deficiencies in service.

Unlike the judicial process, consumer courts can accept a direct application from a consumer, can hear the applicants without the assistance of a lawyer and the fees are nominal. The cases are expected to be disposed of in a “consumer-friendly” manner. Some say like summary proceedings.

The unfortunate reality is that the beneficiaries of a forward-looking legislation—the small consumers can achieve very little on their own, often pitted against corporate lawyers who have no brief or stake in concluding any consumer case.

This calls into question whether not just the consumer, but even the responding managements should not both be required to argue their own cases under the Consumer Act? Since consumers are generally individuals, the disposal of their complaints ought to be as consumer- friendly and uncomplicated as possible.

What Media Sensationalism Does to the Credibility of Authorities

The second worry is that the NOIDA CEO Ritu Maheshwari reportedly assumed additional charge of GNIDA only in October 2022. Was it fair for her name to be flashed with the headline, “Greater Noida Authority CEO Ritu Maheshwari sentenced to one month in jail,” when no warrants and much less a sentence has been pronounced ? Was it professional to brandish the officer’s name in the local media without checking the actual wording of the order ?

I do not worry about Ms Maheshwari’s personal reputation as fortunately, even today, an officer’s professional stature is decided by proficiency and commitment. The civil service’s grapevine never gets the reputations of officers wrong— (whatever decision-makers may decide to do with this feedback.) But without question, the sensational media reportage would have shaken the reputation of GNIDA and NOIDA Authority too, where Ms Maheshwari continues to be CEO.

Together, the two organisations must be dealing with tens of thousands of applications for residential, commercial, and industrial allotments. Can the public repose faith in an organisation where the CEO is reported to have been imprisoned for defiance of court orders? Such headlines create doubts not just on the organisation’s bona fides but on the state government’s trustworthiness.

Power of Contempt Is a Potent Weapon

The third worry is that the power of contempt remains a threat which officers fear far more than adverse observations made by auditors or vigilance watchdogs. Contempt of court can indeed land any contemner into jail. That is why when the danger of committing contempt is shared with political bosses, they invariably respect the sense of fear conveyed by officers.

To give an example, it was the threat of officers being jailed that forced the then CM of Delhi, the late Ms Sheila Dikshit to agree to implement the phasing out of diesel buses and hasten the switchover to CNG— a direction from the Apex court which had been parried for four years. But the power of contempt should normally not be used without first questioning whether the defiance was deliberate or was aimed at undermining the authority and dignity of the Court.

As things stand today, GNIDA has gone in appeal praying that the coercive portion of the order dated 7 January 2023 may be set aside and its compliance may be taken on record. No one can say how long the next part of this litigation might take.

As the French say: “plus, ça change, plus c'est la même chose “the more things change, the more they stay the same…”

(Shailaja Chandra (IAS retd) has over 45 years of experience in public administration focusing on governance, health management, population stabilisation and women’s empowerment. She was Secretary in the Ministry of Health and later Chief Secretary, Delhi. She tweets at @over2shailaja. This is an opinion piece and the views expressed are the author’s own. The Quint neither endorses nor is responsible for them.)