Why has Nepal failed to establish consumer courts as mandated by law?As buyers don’t want to get into complex court cases, unscrupulous traders are emboldened, observers say.
In February last year, Nepal’s Supreme Court ordered the government to establish consumer courts in all seven provinces, to protect buyers' interests amid repeated cases of unfair market practices.
A division bench of justices Bam Kumar Shrestha and Nahakul Subedi issued the order after the Forum for Protection of Consumer Rights Nepal moved the court. But there isn’t any indication yet of a consumer court being established in any of the country's seven provinces.
Here is what you need to know about consumer courts.
What is a consumer court?
Consumer court is a special purpose court which primarily deals with consumer-related disputes, conflicts and grievances. The court holds hearings to adjudicate these disputes.
The public has long been demanding a consumer court to bring unscrupulous traders under a legal framework in a fast track system.
As consumers don’t want to get involved in complex court cases, particularly at the Supreme Court, unscrupulous traders have been emboldened, observers say. Once consumer courts are established, it will be easier to file complaints and there will be fewer hassles, according to them.
When was the court envisioned?
The consumer court was envisioned decades ago. But six years ago, the amended Consumer Protection Act 2018, was passed, containing a provision requiring the government to establish a consumer court.
In 2018, the government made the first amendment to the law in two decades in a bid to better protect the rights and interests of Nepali consumers.
The amended Act provisioned the establishment of a consumer court to bring unscrupulous traders under a legal framework through fast track procedures. The Consumer Protection Act 1997 had similar provisions to deal with cases related to consumer disputes and grievances, but they have never been implemented since the law was enacted.
What do consumer rights activists say?
“Many businesspeople are active in politics and influence policy. As a result of their strong lobbying, protecting consumer rights is seldom a government priority,” said Bishnu Prasad Timilsina, general secretary of the Forum for Protection of Consumer Rights Nepal.
He sees no other reason to delay establishing a consumer court. Consumer rights activists say the delay shows how careless the government is about ensuring consumers’ rights.
Why is the court important for Nepal?
Gauri Pradhan, the former commissioner of the National Human Rights Commission, said the delay in establishing consumer courts shows a lack of accountability on the part of the government. “The government has disobeyed the Supreme Court and denied justice to consumers.”
The constitution guarantees consumer protection as a fundamental right. Under this provision, the new Act outlines the creation of consumer courts under a district judge with two government officials as members, to arbitrate in cases related to consumer rights.
In the absence of such courts, cases are currently filed at the district court or the District Administration Offices, leading to lengthy procedures and bureaucratic hassles. It usually takes three to six months for the district court to give a verdict, while in many cases the guilty firm does not face any real action as the evidence is often lost over a period of time.
Are incidents of market frauds rising?
Consumer rights activists say cases of market fraud are quickly rising, mainly due to the government's indifference.
Food adulteration, sale and distribution of expired goods, cheating in prices and quantity and sale of counterfeit products are widespread in Nepal and their trend is rising.
Food adulteration is widespread in Nepal, with a long list of food items ranging from milk, dairy products, spices and water to tea, edible oils and lentils often found contaminated with unhealthy ingredients.
There is also relabelling of expired packaged food products and even cosmetic items. The harmful toxins in expired food items affects human health in many ways.
The Department of Food Technology and Quality Control said they filed 115 cases against firms for producing and selling adulterated foods in the last fiscal year that ended mid-July.
In the previous fiscal year, the Department of Food Technology and Quality Control had filed 55 cases against business malpractices.
In the last fiscal year, they received 91 complaints about trademark infringement, compared to 75 complaints in the previous fiscal year.
The biggest fraud was detected in the sale of “duplicate” honey. In January 2022, the Metropolitan Crime Division arrested Naresh Shrestha of Sindhupalchok for producing and selling fake honey.
Police also confiscated 600 kg of the bogus product which he had made by mixing glucose and sugar.
In February of the same year, police raided Sparsh Food Products and Packaging Company at Sunakothi in Lalitpur, which makes bread and cookies. According to police, the factory was using expired bakery products which could cause serious health issues.
Likewise, in August 2022, police seized a large quantity of liquor of different brands like Double Black Label, Black Label and Jack Daniels, in Kathmandu.
Then, in January 2023, police stumbled upon duplicate liquors of various domestic and foreign brands. Police recovered six bottles of duplicate Golden Oak, 48 bottles of 8848 Vodka, 420 bottles of Mughlan, 30 bottles of 2020 Aphal, 92 bottles of Khukuri Rum and 132 bottles of Ruslan vodka.
What is the progress on consumer court?
Despite the Supreme Court order on formation of consumer courts in all seven provinces, the government has been dragging its feet.
“The process has taken a long time,” admitted Phanindra Gautam, joint secretary at the law ministry.
“We have forwarded the process to the Judicial Council,” said Gautam. "The Law Minister has been recently appointed and hopefully, the meeting of the Judicial Council will soon be held. We have already briefed the minister that it has been a long-pending issue and that we needed to fast track the process.”
In September 2019, the Ministry of Industry, Commerce and Supplies submitted a draft piece of legislation to establish a consumer court, to the law ministry.
“In Nepal, one of the world’s poorest countries with a low human development index and perpetual political instability, ordinary people yearn for justice for months and years, even in clear-cut fraud cases,” said Timilsina, who is also an advocate.