The HC observed that notice was issued by a competent authority in the interest of consumers, adding that the company was obligated to provide the documents
The CCPA had directed Ola Electric to furnish additional documents as part of a probe against the company in connection with user complaints
Markets regulator SEBI also issued a “warning” to the EV maker for announcing material information related to the expansion of its dealer network on social media before exchanges
In a major blow to Ola Electric, the Karnataka High Court has reportedly rejected the electric vehicle (EV) maker’s petition to quash a notice issued by the Central Consumer Protection Authority (CCPA).
The consumer protection watchdog had directed the EV maker to furnish additional documents as part of a probe against the company in connection with thousands of complaints filed by consumers.
As per Bar and Bench, the single-judge bench of Justice R Devdas observed that directions to Ola Electric were issued by a competent investigating officer in the interest of consumers, adding that the company is obligated to provide the documents.
Arguing for Ola Electric, senior counsel Udaya Holla contended that asking the EV manufacturer to submit the requisite documents would lead to news that a probe is being conducted and bring much disrepute to the company.
Rejecting the contention, Justice Devdas said that no prejudice would be caused to the petitioner by furnishing the information.
“… 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,” the HC reportedly observed.
Noting that it is willing to submit all the documents to the CCPA, Ola Electric’s advocate said that it is against furnishing the information to an investigating officer as such an officer does not have any authority to conduct the probe.
In response, the HC noted that the Consumer Protection Act empowers the CCPA to direct the Director General of Investigations to probe a company which is prima facie in violation of consumer protection rules.
The HC also observed that the CCPA cannot conduct the probe itself but has the powers to direct the Director General of Investigations to investigate a company. As a result, the HC said that the investigating officer (IO) was well within its rights to direct Ola Electric to submit the additional documents.
The HC also accepted the submission made by the CCPA’s counsel and additional solicitor general (ASG) Arvind Kamath that no one from the consumer protection body or the investigating authority’s office will make any public statements regarding the 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 ASG who has said no such statements will be made by the IO or others,” the HC reportedly added.
However, in some respite, the HC granted the EV maker a six-week extension to furnish all the documents and records sought by the CCPA.
The legal battle comes a month after the CCPA sought further information from the Bhavish Aggarwal-led company.
In October this year, the consumer protection watchdog had issued a show-cause notice to the listed EV giant over allegations of delays in providing service and deliveries, improper customer services, misbehaviour, defective vehicle sales, and a host of other customer complaints.
Meanwhile, amid piling consumer complaints, Ola Electric last year said that it would offer a one-day service guarantee and provide a backup scooter if the issues are not resolved in a day. Last month, founder and chairman and managing director Bhavish Aggarwal also announced the opening of 3,200 new stores, expanding its existing network of showrooms and service centres to 4,000.
On Tuesday, markets regulator SEBI also issued an “administrative warning” to the EV maker for announcing material information related to the expansion of its dealer network on social media before filing the same with the exchanges.
