CP Project
CP Project
CP Project
INTERESTS: AN APPRAISAL
Submitted by:
Jyotiringa Puzari
UID- SM0117025
BA.,LLB (Hons.) 1st Year
Semester – 2
Faculty In-Charge
1
TABLE OF CONTENTS
1. Introduction 3-5
1.1 Literature Review
1.2 Objectives and Scopes
1.3 Research Questions
1.4 Research Methodology
5. Conclusion 15-16
Bibliography
2
1. INTRODUCTION
Consumer Protection has its roots in the rich soil of our civilization. Human values and ethical practices were
given great importance in ancient India. The need for consumer protection is recognized by law makers in India
in ancient times. It was a very well realized that a consumer is prone to exploitation on the part of providers of
goods and services. It is the duty of very organisation to satisfy consumer by providing quality goods and
services at right place, time and in right quantity at a fair price. For fifty-five years, the Sale of Goods Act of
1930 (SGA) was the main source of consumer protection in India. The SGA was the exclusive consumer
legislation until 1986, with the passage of the Consumer Protection Act of 1986, designed to supplement the
remedies already provided under the SGA. The consumer movement in India is as old as trade and commerce.
In Kautilya‟s ‘Arthashastra’, there are references to the concept of consumer protection against exploitation by
the trade and industry, short weighment and measures, adulteration and punishment for these offences.
However, there was no organized and systematic movement actually safeguarding the interests of the
consumers. With the advent of the 20th century due to rapid industrialization and multifaceted development in
India after the Independence, there appeared a flood of consumer goods and services in the Indian Market,
which almost changed the relationship between the consumer and the trader. Technological advancements in the
field of media led to flooding of advertisements of goods and services further worsening the otherwise grim
situation. Lack of consumer awareness, illiteracy, poverty, etc. further led to the exploitation of consumers
Awareness of consumer rights varies in different regions in the country. It is very poor especially among the
population in rural and far-flung areas of the country. Compared to the developed countries, the levels of
consumer awareness in such a vast country with a large population like India is much lower. This is rooted in
economic inequality, low levels of literacy and ignorance. Because of this, consumers are not able to assert their
rights and on many occasions are exploited by the trade and industry and service providers. Protecting and
promoting the welfare of consumers has thus become one of the major concerns. Globalisation and
liberalisation of trade and business has resulted in many products and services being available to the consumers.
Growth in economy has resulted in increase in the purchasing power of the middle class section, which is the
largest segment of the population. This has necessitated giving high priority for the protection of the consumers
and promotion of responsible consumer movement in the country. Modern technological growth and
complexities of the sellers‟ techniques, existence of a vast army of middlemen and unethical and untruthful
advertisements have aggravated the situation of consumer exploitation The consumer has to be aware of his
rights and play a key role. The success of consumerism is a strong function of consumer awareness and to avoid
exploitation consumer must become knowledgeable.1
1 th
(https://www.lawctopus.com/academike/consumer-dispute-redrsal-agencies/), last accessed on 15 April, 2018
3
This project thus aims on the study of the protection of consumer interests, by legally enforced consumer
protection councils at each jurisdiction levels.
To study about the provisions laid down in the Consumer Protection Act.
To study about the concepts of Consumer Protection Councils, as laid down in Chapter 2 of the Act.
To study about how the ‘consumer protection councils’ play an active role in promoting and
protecting consumer interests.
4
The scope of the project is limited to the area of research on Consumer Protection Councils and their related
provisions. The paper is an attempt to understand the concept of ‘consumer protection’ and working of
Consumer Protection Councils.
5
2. CONSUMER PROTECTION ACT, 1986: OVERVIEW
The Consumer Protection Act 1986 was passed by the Indian Parliament to protect consumer rights and to
redress consumer complaints and resolve consumer disputes. Every individual is a consumer of goods and
services and expects a fair deal against unfair exploitation. This Consumer Protection Act applies to the whole
of India except the State of Jammu and Kashmir and covers all goods and services purchased by the consumers
and to all sectors — private, public and cooperative. The objective of the Act is “to provide for better protection
of the interests of consumers and for that purpose to make provisions for the establishment of Consumer
Councils and other authorities for the settlement of consumer disputes and for matters connected therewith”. It
protects the consumers from unfair trading or unfair trade practices. It is important to note that the Indian
Consumer Protection Act is social welfare legislation and has been designed to avoid technicalities, procedural
delays, procedural requirement, court fees and costs.
The Consumer Protection Act, 1986 provides for the following rights to the consumers:
(a) Right to be heard and to be assured that consumers’ interests will receive due consideration at appropriate
forum;
(b) Right to seek redressal against unfair trade practices or unscrupulous exploitation of consumers; and
(c) Right to consumer education.
The Consumer Protection (Amendment) Act 1993 adds the following consumer rights:
(d) The right to be assured wherever possible, access to a variety of goods and services at competitive prices;
(e) The right to be informed about the quality, potency, purity, standard and price of goods (or services as the
case may be) so as to protect the consumers against unfair trade practices; and
(f) The right to be protected against the marketing of goods (and services) which are hazardous to life and
property.2
The Consumers Protection Act seeks, “to provide for better protection of the interests of consumers and for that
purpose to make provision for the establishment of consumer councils and other authorities for the settlement of
consumer’s disputes and for matters corrected therewith” (Preamble). This act is enacted to strengthen the
already present legislations in order to protect the interest of consumers in a better way. It was hailed as a very
important legislation for protecting the consumers against exploitation by traders. For the first time the
2
Subho Mekher, ‘Highlights on the Consumer Protection Act, 1986’,
(http://www.economicsdiscussion.net/acts/consumer-protection-act-1986/highlights-on-the-consumer-
protection-act-1986/11053)
6
Government brought within the purview of such legislation even the public sector enterprises enabling
consumers to complain against both the private and public sectors in respect of any defect in a product or
deficiency in service,. Areas of the public sector including banking, insurance, transport, information
dissemination etc., were opened up for consumer’s complaints. It was for these reasons that the enactment of
this Act was hailed by the consumers.3
After liberalization of economic policy, consumer goods have flooded the market as never before. Both foreign
and India companies are introducing new products and brands with glossy and fancy packing as the middle and
lower income groups are taking loans to-Companies still do not pay attention to the quality of their products and
also do not value customer satisfaction. Very often a customer may get taken in by a misleading advertisement
making tall claim as to the high quality and after-sales service. The consumer may discover later that the goods
purchased by him are not up to the claims made by the manufacturer. Companies are not willing to invest in
efficient after-sales service so long as their sales keep increasing. Newspaper columns can be seen to be full of
complaints and many companies do not care to rectify the complaints.
To enable the consumer to have his right to a deal, the consumer protection Act was passed in 1986. The Act
promises to rectify all that and make accountant both the manufacture; s and providers of service.
It provides for toe setting up of quasi-judicial bodies at district, state and national label for quick and
inexpensive redressal of consumer grievances. Three groups-the consumer, registered voluntary consumer
associations and the central and state government is covered by this facility.Under the Act, a consumer has been
defined as a person who buys any good or hires or avails of any service for a consideration. Hospital which
offer free service and doctors in hospitals which do not charge their patients are exempt from the Act Goods
purchased for commercial purpose are also not covered in the Act except if a person buys the goods to be used;
exclusively for the purpose of earning livelihood by means of self-employment. A consumer can complain
against unfair trade practices, defective goods and overcharging. An unfair trade practice means any deceptive
or unfair practice, false claims regarding quality of goods and services and bargain sales without reduction of
prices, false and misleading advertising, all come in the ambit of this Act. Other examples of unfair practices
are hoarding of goods to extract higher price, conduct of lottery, contest, game of skill or chance for sale
promotion, and selling goods which are substandard. Giving of guarantee that is not based on adequate tests,
falsely representing any second hand goods or that the seller has a sponsorship which he does not have, are all
unfair practices. Under this Act:
3
(http://www.publishyourarticles.net/knowledge-hub/essay/an-essay-on-consumer-protection/5149/), last
th
accessed on 15 April, 2018
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Defects have been defined as any fault, imperfection, shortcoming in quality, quantity, purity, potency or
standard which is required to be maintained by or under any law for the time being in force, or as is claimed by
the trader in any manner whatsoever in reaction to any goods.
Defects in service include the provisions of facilities in connection with banking, finance, insurance, transport,
electric supply, hotels, entertainment, and so on. All services provided by professionals such as lawyers, doctors
and architects are included, except contracts of personal service between master and servant.
A restrictive trade practice is defined as any trade practice that requires a customer to buy, hire or avail any
goods or services as a condition precedent for buying any other goods or services. Thus a dealer who forces
someone to buy a gas stove with a gas connection is said to be indulging in a restrictive trade practice.
A time limit of two years has been prescribed in the Act within which a complaint must be filed. A delay in
flaring a case can, however, be condoned by the court in exceptional cases. The jurisdiction of the courts has
been fixed according to the value of the compensation claimed or the cost of the goods and service in question.
If the cost of goods or services or the compensation being sought is less than Rs. 5 lakh, the complaint has to be
field with the District Consumer Redressal Forum, which has been set up in each district in the country.
It must be filed with a forum within the local limits of whose jurisdiction the opposite party resides or carries on
business or has a branch office. If the amount in question is over Rs. 5 lakh but within Rs. 20 lakh, the case
must be filed before the State Consumer Disputes Redressal Commission which has established in each state
capital.
If it exceeds Rs. 20 lakh, it has to be filed before the National Commission in New Delhi. If a person is not
satisfied with the order of the District Forum he can appeal to the State Commission and thereafter, if necessary,
to the National Commission. The appeal must be filed within 30 days of the order.
A consumer can simply write down the complaint and attach photocopies of the receipts, bills and other
documents and send it to the court. A copy is sent to the opposite party who must reply within 30 days and give
their version. A date is fixed for the hearing and to settle the dispute. In case companies do not respond to the
summons then the case is decided exporter.
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In case the complaint is found to be valid, the opposite party can be directed to: (a) remove the defects or
replace the defective goods with new goods, or refund the amount paid for the goods, (b) remove the
deficiencies in services, and (c) pay compensation for loss or suffering caused on account of defective goods
and services and also pay costs.
If the goods are found to be hazardous, the court can order their withdrawal from the market. It may order the
party to discontinue the unfair or restrictive practice. In case the order of the court is not complied with it can
award punishment with a minimum imprisonment of one month but which may extend to 3 years.
Fines may also be levied between Rs. 2000 to Rs. 10,000 or both. Frivolouscomplaints are discouraged. In case
of such complaints, the complaint may be asked to pay costs not exceeding Rs. 10,000.
Like ordinary civil courts, the consumer courts are also flooded with complaints. The delay in consumer courts
has weakened the redressal process and the consumers still have to wait for justice. However, a start has been
made and it can be hoped that these courts can be suitably strengthened in the future.4
4
Aliva Manjari, ‘Short essay on Consumer and Consumer Protection Act’,
(http://www.shareyouressays.com/sample-essays/short-essay-on-consumer-and-consumer-protection-act/3826)
9
The right to seek redressal against unfair trade practices or restrictive trade practices or unscrupulous
exploitation of consumers and
The right to consumer education.5
Central Consumer Protection Council (as per Section 4 and 5 of the Act)
The Consumer Protection Act empowers the Central Government to establish a Central Consumer Protection
Council consisting of the Minister in charge of consumer affairs in the Central Government as its Chairman and
such number of other official and non-official members representing such interests as may be prescribed. Under
the Consumer Protection Council Rules 1987, the membership of the Council is restricted to 150 members
including the Central Minister in charge of Consumer Affairs as the Chairman. The term of the Council is three
years. To monitor the implementation of the recommendations of the Council, the Central Government may
constitute a standing working group from amongst the members of the council under the Chairmanship of the
Member Secretary of the Council. The Council shall meet as and when necessary, but at least one meeting of
the Council shall be held at such time and place as the Chairman may think fit.
State Consumer Protection Council (as per Section 7 and 8 of the Act)
The Consumer Protection Act provides for the establishment of State Consumer Protection Councils by the
State Governments. The State Council shall consist of a Minister in charge of consumer affairs in the State
Government as its Chairman and such number of other official or non-official members representing such
interests as may be prescribed by the State Government and ten nominees of the Central Government. The State
Council shall meet as and when necessary but not less than two meetings shall be held every year at such time
and place as the Chairman may think fit.r
District Consumer Protection Council (as per Section 8A(1), Section 8A(2), Section 8A (3) ,Section 8A (4) of
and Section 8B of the Act )
In order to promote and protect the rights of consumers, within the district, the Consumer Protection Act,
provides for the establishment of a District Consumer Protection Council in every district. It shall consist of the
Collector of the district as its Chairman and such number of other official and non-official members
representing such interests as may be prescribed by the State Government. It shall meet as and when necessary
but not less than two meetings shall be held every year. The District Council shall meet as such time and place
within the district as the Chairman thinks fit and shall observe such procedure in regard to the transaction of its
business as prescreibed.6
5
H.K Saharay, ‘Textbook on Consumer Protection Law’; Universal Law Publication Co, (2010 edition), New Delhi.
P.48-49
6
Business Portal of India, ‘Consumer Protection Councils’
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4. ROLE OF CONSUMER PROTECTION COUNCILS IN PROMOTING CONSUMER
INTERESTS
Consumer laws were created so that products and services provided by competitors were made fairly to
consumer. Consumers are normally seen to be ‘acting in the course of a business’ or are ‘dealing as customer’.
Consumer laws are also known as consumer protection laws, are incorporated into the law to prevent deceitful
activities, or unfair business practices. These laws to an extent serve as protection for weaker parties, often not
able to handle these matters themselves. The legislation regarding consumer protection, comes from the
governments in order to function as a safeguard to protect consumers. In this regard, the laws may require a
specific business to provide information regarding their products or services, especially in industries, where
public and personal safety or health is concerned, like the food industry.
The concept of consumer protection comes from the belief in another concept; that of consumer a right, which
is the belief that consumers have a wide variety of rights, regarding the products and services they consume. To
this end a variety of organizations have been founded, in order to assist consumers in getting informed, and be
able to make intelligent choices based on this information.7
Consumers are largely denied their due rights, especially in developing countries such as India. The consumers
are spread widely all over a country and are poor, illiterate and are generally not aware of their rights, though
their awareness has recently increased. The manufacturers and suppliers of goods or services often exploit
consumers by adopting a number of unfair and restrictive trade practices. They often merge and also form tacit
cartels to raise prices for maximising their profits at the expense of consumers.
For instance, in case of drugs manufacturers generally charge high prices which are much above their cost of
production. Some pharmaceutical companies misuse their patent rights to exploit consumers. They therefore
need protection from unfair and restrictive trade practices of producers and suppliers of goods or services.
7
(https://www.lawteacher.net/free-law-essays/commercial-law/consumer-law-protects-the-interests-of-
consumers-commercial-law-essay.php)
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Misleading advertising is another means by which the producers deceive the consumers. Advertisement is of
two types. One is informative advertisement which informs the consumers about the availability of certain
products at certain prices. This is not objectionable as it provides information to the consumers.
However, more often the purpose of advertisement by the manufacturers and suppliers is to mislead the ill-
informed consumers about the quality and contents of their products and services. They indulge in what is
called persuasive advertisement to compete away customers from their rivals. Such persuasive advertisements
serve no useful social purpose and lead to deception of consumers.
The cost of advertisement is added to the cost of production and this leads to very high prices being charged
from the consumers. The Indian readers will be knowing well that crores of rupees are spent on film actors and
cricket players as brand ambassadors and on advertisements on print and electronic media to promote the sale of
their products.
From whom such heavy costs incurred on advertising are recovered? Such heavy advertising expenditures just
enable the manufacturers at the most to maintain their market shares of the product without adding much to its
total output. The consumers need protection from such deception of persuasive advertisements. The government
should not allow such heavy advertising cost to be incurred as valid cost for calculation of taxable profits of the
firms.
The other and highly injurious practice by the suppliers, especially in India, is widespread practice of
adulteration of commodities. The adulteration by private sector can take place right from the manufacturing
point to the ultimate supplier of the products to the consumers.It has been found that small pebbles and dust are
mixed with wheat, maize, jawar and bajra to increase weight, sand is mixed with cement, leaves and barks of
some trees are mixed with tea leaves. Again Vanaspati is often mixed with Desi ghee and butter, etc. All these
practices of adulteration are hazardous to health and life of the consumers and they need protection from them.
But the most injurious is the widespread practice in India by manufacturers and dealers of spurious drugs which
do immense harm to the health and life of the people.
It is due to the above practices of the manufacturers and suppliers which have resulted in consumer protection
movement and have forced the governments to enact legislation to protect the consumers.8
8
(http://www.economicsdiscussion.net/india/consumer-protection/consumer-protection-in-india-needs-and-
th
methods/11055), LAST ACCESSED ON 15 APRIL, 2018.
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WAYS OF PROMOTION OF CONSUMER INTERESTS AND CONSUMER RIGHTS
Consumers expect products and services to meet their needs. It has been observed very often that a consumer
does not get right goods and services. He is charged a very high price or adulterated or low quality goods are
sold to him. Therefore it is necessary to make him aware. Following facts classify the need of making
consumers aware:
1. To achieve maximum satisfaction: The income of every individual is limited. He wants to buy maximum
goods and services with his income. He gets full satisfaction only by this limited adjustment. Therefore it is
necessary that he should get the goods which are measured appropriately and he should not be cheated in any
way. For this he should be made aware.
2. Protection against exploitation: Producers and sellers exploit the consumers in many ways as
underweighting, taking more price than the market price, selling duplicate goods etc. Big companies through
their advertisement also mislead the consumers. Consumer awareness shields them from the exploitation by
producers and sellers.
3. Control over consumption of harmful goods: There are several such goods available in market which cause
harm to some consumers. For example we can take goods like cigarette, tobacco, liquor etc. The consumer
education and awareness motivate people not to purchase such goods which are very harmful for them.
4. Motivation for saving: The awareness controls people from wastage of money and extravagancy and inspire
them to take right decision. Such consumers are not attracted by sale, concession, free gifts, attractive packing
etc due to which people can use their income in a right way and can save money.
5. Knowledge regarding solution of problems: The consumers are cheated due to illiteracy, innocence and
lack of information. Therefore it becomes necessary that the information about their rights should be provided
to them so that they cannot be cheated by producers and sellers. Through consumer awareness they are also
made known to the proceedings of laws so that they can solve their problems.
6. Construction of healthy society : Every member of the society is a consumer. So, if the consumer is aware
and rationale, then complete society becomes healthy and alert towards their rights.9
(1) To Organize Consumers: Indian consumers are scattered over a wide geographical area. They are not well
organized. They have a low power and businessmen exploit consumers. Here we need consumer protection.
9
https://brainly.in/question/3035316
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(2) Provide Market Information: Majority of the consumers have no information about quality, type, price and
other marketing facilities. Many customers buy without product knowledge and this make them suffer losses.
(3) Importance of Physical Safety: Indian markets are over flooded with products. The products may be
adulterated and may be health hazardous. This may endanger their life and due to this a consumer needs to be
protected.
(4) Avoiding Monopoly: Consumer Protection is very important in terms of avoiding monopoly. Monopoly is
the crown of modern market. Most of the organizations, irrespective of various restrictions follow monopoly
practice. Due to this consumers get affected and needs to be protected.
(5) Prevention from Malpractices: Business malpractices are rapidly growing in modern market. Businessmen
follow unfair trade practices, restrictive trade practices and monopolistic trade practice and consumer protection
plays a vital role.
(6) Avoiding Pollution: Pollution is very serious issue taken by every country. Pollution affects the mind and
health of not only consumers but also citizens. It is important to avoid pollution to save society at large from
pollution.
(7) Misleading Advertisements: Many organizations deliberately cheat consumers through wrong or misleading
advertisements. This will protect consumers from getting exploited.
(8) Informing Consumers about their Basic Rights: Majority of the consumers are ignorant. They do not know
about consumer rights. Consumer movements inform consumers about their rights and protect their interest and
rights.10
10
http://www.indiastudychannel.com/resources/128900-Importance-Consumer-Protection.aspx
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CONSUMER PROTECTION COUNCILS (CPC) IN PROMOTION OF CONSUMER INTERESTS
The functions of the Consumer Protection Councils help in the promotion of consumer interests as well as
consumer protection. It can do the same in such ways: Providing speedy redress to consumers complaints
through negotiation, mediation and conciliation; Seeking ways and means of removing from the markets
hazardous products and causing offenders to replace such products with safer and more appropriate alternatives;
Publishing from time to time list of products whose consumption and sale have been banned, withdrawn,
severally restricted or not approved by the Federal Government; Causing an offending company, firm, trade
association or individual to protect, compensate, provide relief and safeguards to injured consumers or
communities from adverse effects of technologies that are inherently harmful, injurious, violent or highly
hazardous; organizing and undertaking campaigns and other forms of activities that will lead to increased public
consumer awareness Encouraging trade, industry and professional associations to develop and enforce in their
various fields, quality standards designed to safeguard the interest of consumers; Issuing guidelines to
manufacturers, importers, dealers and wholesalers in relation to their obligation under the CPC enabling law;
Encouraging the formation of voluntary consumer groups or associations for consumers’ well-being; Ensuring
that consumers’ interest receive due consideration at appropriate fora and providing redress to obnoxious
practices or the unscrupulous exploitation of consumers by companies, firms, trade associations or individuals;
Registering and monitoring products, services and sales promotions in the market place.
5. CONCLUSION
Consumer exploitation in India can be brought down only with proper awareness of the consumers about their
rights. There are many platforms which they can approach to put in their complaints and escalate it to achieve
justice. The Government understood the need to protect consumers from unscrupulous suppliers, and several
laws have been made for this purpose. We have the Indian Contract Act, the Sale of Goods Act, the Dangerous
Drugs Act, the Agricultural Produce (Grading and Marketing) Act, the Indian Standards Institution
(Certification Marks) Act, the Prevention of Food Adulteration Act, the Stand-ards of Weights and Measures
Act, etc. which to some extent protect consumer interests. The Consumer Protection Act, 1986 was enacted to
provide a sim-pler and quicker access to redressal of consumer grievances. However, from the analysis of
performance with regards to the disposal rate of cases of various Consumer Disputes Redressal Agencies in
India, it has been found that the agencies at the district level are working more efficiently than those at the
national level and state level. Therefore, there is still need of agencies functioning at state and national level to
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dispose of the pending cases as early as possible by creating supplementary benches as per the provisions of
Consumer Protection Act, 1986.
Consumer protection is always a matter of great concern. From the analysis of performance with regard to the
disposal rate of cases of various Consumer Disputes Redressal Agencies in India, it is found that the agencies at
the district level are on the top followed by national level and state level it is observed that district level
agencies are working efficiently than the national and state level agencies[v]. There is still need of agencies
functioning at state and national level to dispose of the pending cases as early as possible by creating
supplementary benches as per the provisions of Consumer Protection Act, 1986.
BIBLIOGRAPHY
Books:
Saharay, H.K; ‘Textbook on Consumer Protection Law’; Universal Law Publication Co, (2010 edition),
New Delhi
Dr. B.K. Das and S.S. Rao, “A Commentary on Consumer Protection Act, 1986”, Allahabad, Sodhi
Publications
Bare Acts:
Articles:
Websites references:
http://www.indiastudychannel.com/resources/128900-Importance-Consumer-Protection.aspx
http://www.publishyourarticles.net/knowledge-hub/essay/an-essay-on-consumer-protection/5149/
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