The Karnataka High Court upheld a directive for Ola Electric to submit additional documents for a CCPA investigation, prompted by over 10,000 consumer complaints about potential violations. The Court confirmed the investigating officer’s authority and dismissed concerns of reputational harm, emphasizing the investigation’s consumer protection focus and the validity of the officer’s request.
Karnataka: The Karnataka High Court on Tuesday (Jan 7th) declined to quash a communication issued to two-wheeler manufacturer Ola Electric, directing the company to submit additional documents as part of an ongoing investigation by the Central Consumer Protection Authority (CCPA). The investigation follows complaints lodged by thousands of consumers.
Justice R. Devdas ruled that the directive, issued by a competent investigating officer, was in the interest of consumers.
“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,”
the court stated.
The Court dismissed concerns raised by Senior Advocate Udaya Holla, representing Ola, about potential reputational harm if news of the investigation became public. Holla argued that while Ola Electric was ready to submit documents to the CCPA, it opposed furnishing them to the investigating officer, who, according to him, lacked the authority to conduct the probe.
“No prejudice will be caused to the petitioner in doing so,”
the Court remarked, adding that if a personal hearing was required under the Consumer Protection Act, 2019, the CCPA would provide it. However, the current request for documents was solely for verification purposes.
The Court further clarified that Section 19(1) of the Consumer Protection Act empowers the CCPA to instruct the Director General of Investigations to investigate companies allegedly violating the Act. In this case, the CCPA’s Director General had authorized the investigating officer to conduct the probe, making the officer’s actions valid and within the scope of law.
The Court also acknowledged a submission by Additional Solicitor General Arvind Kamath, representing the CCPA, assuring that neither the investigating officer nor the CCPA would make public statements about the ongoing investigation.
“The apprehension expressed by the petitioner’s counsel…has been allayed by the ASGI, who has said no such statements will be made by the IO or others,”
the Court noted.
The investigation stems from a show-cause notice issued by the CCPA to Ola Electric on October 12, 2024, following 10,466 consumer complaints received between July 2023 and August 2024. The complaints alleged violations of consumer rights, service deficiencies, and misleading advertisements. A preliminary inquiry by the CCPA revealed prima facie violations, leading to the probe directive.
As part of the investigation, the CCPA directed the Director General to examine various aspects, including Ola’s service agreements, terms and conditions, service center standards, and grievance redressal mechanisms. The Director General subsequently appointed a Senior Director from the scientific cadre to lead the investigation. This officer, on December 14, requested Ola Electric to furnish additional documents and records within 15 days.
Ola Electric challenged the directive, arguing that the officer was not a Director or Additional Director as defined under the Act and therefore lacked the authority to issue such notices. However, the Court found that the officer, though from a different cadre, had been lawfully authorized by the CCPA to conduct the investigation.
“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,”
the Court ruled. It concluded that the investigating officer’s request for documents was justified and directed Ola Electric to comply within six weeks.
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