Karnataka High Court refuses relief to Ola Electric in CCPA probe into scooter complaints

The Karnataka High Court on Tuesday refused to quash a communication issued to two-wheeler manufacturer Ola Electric asking it to furnish additional documents as part of a Central Consumer Protection Authority (CCPA) investigation against the company following complaints made by thousands of consumers..Justice R Devdas held that the communication directing Ola Electric to furnish additional documents had been issued by a competent investigating officer in the interest of consumers, and that Ola was obligated to provide the documents..The Court further dismissed the apprehension expressed by Senior Advocate Udaya Holla, who appeared for Ola, that if the company submitted the requisite documents to the investigating officer, news that a probe was being conducted against the company would spread and cause it much disrepute.“At this juncture, it is well within the Investigating Officer’s power to issue such communication and the petitioner is obliged to furnish the additional documents and records asked for. If the provisions (of the Consumer Protection Act, 2019) require a personal hearing then accordingly, the Authority is obligated to afford a personal hearing or opportunity to the petitioner (Ola Electric). At this juncture, documents have been asked for verification purposes and the petitioner is obliged to furnish them. No prejudice will be caused to the petitioner in doing so,” the High Court said..Holla had told the Court that while Ola Electric was willing to submit all documents to the CCPA, it was against submitting those before the investigating officer, since such officer did not have any authority to conduct the probe.The Court, however, noted that Section 19(1) of the Consumer Protection Act authorised the CCPA to direct the Director General of Investigations under the Act to conduct a probe against a company that is in prima facie breach of the Act.It further held that the CCPA can merely arrive at the prima facie finding and not conduct the probe itself. In the present case, the investigating officer had been authorised by the CCPA's Director General of Investigations to conduct the probe. Therefore, the latter was well within his powers to direct Ola to submit the additional documents..The Court also accepted the submission made by CCPA’s counsel and Additional Solicitor General Arvind Kamath that no one from the CCPA or the investigating authority’s office will make any public statements on the said probe.“The apprehension expressed by the petitioner counsel that the name of the petitioner will be tarnished if any statement is given by the investigating officer or central authority that an investigation has been directed has been allayed by the ASGI who has said no such statements will be made by the IO or others,” the High Court said..On October 12, 2024, the CCPA issued a show cause notice to Ola Electric after 10,466 consumer complaints related to its electric two-wheelers were made before the National Consumer Helpline between July 2023 and August 2024..The Court recorded in its order on Tuesday that the CCPA had conducted a preliminary inquiry before issuing such notice and had found violations on Ola’s part pertaining to violation of consumer rights, deficiencies in service, misleading advertisements etc.Following procedure, CCPA had then directed the DG to conduct a probe. Such probe, the ASG told the Court, will look into agreement terms and conditions, will contact every complainant, examine standards of every existing service center and infrastructure, and Ola Electric’s grievance redressal mechanisms.The DG in turn appointed an officer of the rank of senior director from the “scientific cadre” to lead the probe, the ASG told the Court.This officer had sent a communication to Ola Electric on December 14 asking it to furnish additional documents and records within 15 days..Ola challenged this communication, claiming that the said officer was not a Director or Additional Director as defined under the Act and was thus not competent to issue notices asking for documents.The High Court, however, noted that the officer was of the rank of a Senior Director and even though he belonged to a different cadre, he had been authorised by the CCPA in accordance with law to conduct the probe.“As per the provision, if it is in the interest of consumers and if prima facie case exists, the central authority is empowered to direct a probe. It doesn't contemplate an order to be passed by the central authority stating there exists a prima facie case. Since a finding has been recorded on prima facie and an officer has been entrusted to probe. Said officer has called for documents to consider the grievances against the petitioner, it cannot be faulted,” the High Court said..The Court accordingly directed Ola Electric to submit all documents and records asked for by the investigating officer within the next six weeks.