Consumer courts’ scope to be widened
Small investors, who often suffer on account of delays in getting their grievances redressed, may cheer.
By Souvik Sanyal, ET Bureau |
NEW DELHI: Small investors, who often suffer on account of delays in getting their grievances redressed, may cheer. The scope of consumer courts, that are known for providing faster justice on issues touching the life of normal citizens, are set to be expanded to provide small investors easier redressal to their grievances.
The new Companies Bill, which is likely to be placed before Parliament this monsoon session, will call for strengthening consumer courts towards that end. The idea is to provide investors faster justice without spending much on legal expenses, which is quite unlikely if one approaches the courts. Investor protection in India is overseen by market regulator Sebi and the ministry of corporate affairs.
Officials in the ministry of corporate affairs say that consumer courts are legally eligible to look into investment-related cases, but they need to have a specialised set up for such technical matters.
The government also proposes to bring more clarity on the jurisdiction of such courts in matters of investors��� grievances. The steps under consideration include capacity-building and giving specialised training to officers handling such cases, the officials say. It will also bring more clarity in certain grey areas in the Consumer Protection Act.
Earlier this year, the National Consumer Disputes Redressal Commission had made it clear that bourses were "service providers" and would have to compensate investors if brokers default.
The officials feel that legislative changes would ensure that investors could seek redressal at the lowest tier of consumer-justice delivery system, rather than approaching the highest fora. Consumer courts in the country work in three strata���at the district level, state level and at the national level.
With the increasing number of investors��� grievances, one of the objectives of the new company law bill is to provide timely and simplified institutional structure for dispute resolution so that investors are not compelled to resort to costly legal proceedings.
The new Companies Bill, which is likely to be placed before Parliament this monsoon session, will call for strengthening consumer courts towards that end. The idea is to provide investors faster justice without spending much on legal expenses, which is quite unlikely if one approaches the courts. Investor protection in India is overseen by market regulator Sebi and the ministry of corporate affairs.
Officials in the ministry of corporate affairs say that consumer courts are legally eligible to look into investment-related cases, but they need to have a specialised set up for such technical matters.
The government also proposes to bring more clarity on the jurisdiction of such courts in matters of investors��� grievances. The steps under consideration include capacity-building and giving specialised training to officers handling such cases, the officials say. It will also bring more clarity in certain grey areas in the Consumer Protection Act.
Earlier this year, the National Consumer Disputes Redressal Commission had made it clear that bourses were "service providers" and would have to compensate investors if brokers default.
The officials feel that legislative changes would ensure that investors could seek redressal at the lowest tier of consumer-justice delivery system, rather than approaching the highest fora. Consumer courts in the country work in three strata���at the district level, state level and at the national level.
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With the increasing number of investors��� grievances, one of the objectives of the new company law bill is to provide timely and simplified institutional structure for dispute resolution so that investors are not compelled to resort to costly legal proceedings.
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