A study on Analysis of Consumer Protection Act.

Assignment by
Dr. Shreedhar Sherigar

Name – Monica Kurapati

Roll No- 2021110
Div. – B
Definition

Consumer
A person who purchases goods and services.

Consumer Rights
Consumer rights are generally a refer laws that give powers to consumers against exploitations and
misconduct, misinformation &misguide by producers and sellers and force them of goods to protect
interests of consumers. These laws have come into existence through a series of legal disputes in India ,
and have been shaped by the result of those cases.

Consumer Protection

The Consumer Protection Act, 1986 is that the most vital legislative enacted to supply for effective
safeguards to customers against varied kinds of exploitations and unfair dealings by seller.

Its theme
 JOURNEY OF CONSUMER PROTECTION 1986 TO 2019.

Consumer protection in India has been a part of its culture and civilization. The Consumer protection in
India can be studied with reference to the four main historical periods viz. Ancient, Medieval, during the
British time and post-Independence.

➢ Consumer Protection in Ancient India

The concept of consumer protection against unscrupulous, unfair and unethical malfunction practices
and safeguarding the interest of consumers was a part of Indian culture, business and administration for
centuries in the ancient times. References to it can be seen in Ancient Indian Dharmas like Manu Smriti
(800 BC- 600 BC), TheYajnavalkyaSmriti (300 B.C. - 100 B.C), The NaradaSmriti (100 A.D.- 200
A.D.), The Brihaspatismriti (200A.D.- 400 A.D.) In the KatyayanaSmriti (300 A.D.- 600 A.D) were
explained the living conditions of the people of that time and were basis on the Dharma to be followed
at that time. They were even the premise for the system that is being followed currently. In India, Manu
Smriti was one of the most influential texts that dealt with various consumer matters. Arthashastra of
Kautilya is considered as one of the oldest and a very effective book on trade and commerce in ancient
India. Kautilya (Chanakya) has mentioned different punishments to be given to sellers who involve
themselves in different kinds of exploitations, and wrong measures. The consumer protection was a
common part of the ancient laws. (Shamasastri, 1951)

➢ Medieval period and Pre-independence

During the medieval period Muslim kings who ruled India, like AlauddinKhilji, Sher Shah Suri, and
Akbar etc., thought about protecting the shoppers and consumers and they enacted strict laws for the
same. They introduced weights, measures standardization process.

➢ The modern and British times

British rulers combined the previous customs and culture (dharma) with a unified nationwide system
that had similarities with the laws already enacted in Britain. (Prasad, 2008).

They introduced Acts like:

• The Indian Penal Code, 1860
• Carriers Act, 1865 Law of Tort
• The Indian Contract Act, 1872
• Sale of Goods act 1930
 • The Agricultural Product (Grading & Marking) Act, 1937
• The Drugs and Cosmetics Act, 1940

➢ Post Independence
After independence, many laws were enacted in India for safeguarding innocent customers from unfair
and restrictive trade practices sort of a false and dishonorable description regarding the character and
quality of the goods exaggerated statements concerning their power and efficiency, false weights and
measurements and obstruction of capital and resources into the stream of production. The Acts that
were enacted and covered the whole of the Republic of India are given below-
• The Drugs Control act, 1950
• The industries (Development and Regulations) Act, 1951
• The Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954
• The Prevention of Food Adulteration Act, 1954
• The Essential Commodities Act, 1955
• The Trade and Merchandise Marks Act, 1958
• The Monopolies and Restrictive Trade Practices Act, 1969, Compition Act 2002
• The Cigarettes (Regulation of Production, Distribution, and Supply) Act, 1975
• The Standards of Weights and Measures Act, 1976
• The Prevention of Black Marketing and Maintenance of Supplies of Essential
• Commodities Act, 1980
• The Standards of Weights and Measures (Enforcement) Act, 1985
• The Bureau of Indian Standards Act, 1986

But of these Acts weren't as effective, focused and did not cater to needs all sections of the population.
There was a need for a focused and strong law to ensure for better protection of the interests of shoppers
and consumers and to save them from the evils of unfair trade practices and for this the Protection Act
-1986 was enacted by Indian Government. The various amendments in this Act unto 2019 give it more
teeth and power to consumers but do not tamper with the basic spirit of the Act of 1986.

THE CONSUMER PROTECTION BILL, 2015 and 2019

HIGHLIGHTS OF THE BILL.
• This Bill replaces the CPA, 1986. The Bill enforces consumer rights, and provides a system for
redressal of complaints regarding defect & fraud in goods and deficiency in services.
• Consumer Dispute Redressal Commissions will be set up at the district level, state level and
national level for adjudicating consumer complaints easily.
• This Bill maintains a Consumer Protection system to investigate consumer complaints, issue a
safety notice for goods, Products& services, and pass orders for recall of goods and against
misleading advertisements in society.
• If a consumer suffers an injury from a defect in a goods, they may file a claim of product liability
against the manufacturer. The consumer must establish 7 conditions in order to prove such a
claim.
• The Bill classifies six contract terms as ‘unfair’.
These cover terms such as
(i) Payment of excessive security deposits;
(ii) Disproportionate penalty for a breach;
(iii) Unilateral termination without cause;
(iv) One which puts the consumer at a disadvantage.

JUSTICE SYSTEM FOR CONSUMER

• Setting up of a separate Department of Consumer Affairs in Central and State Governments.

Setting up of a three tier consumer courts for deciding the consumer disputes,

Namely
o National Commission at national level complaints.
o State Commission at State level complaints.
o District Forums at district level complaint

KEY ISSUES AND ANALYSIS.

 • The Bill empowers the central government to supervise the functioning of, and issue binding
directions to the district, state and national consumer redressal commissions. This could have
an effect on the independence of those quasi-judicial bodies.
• The National Commission of consumer protection act headed by a judicial member and
comprising at least 15 technical or judicial members, who will examine complaints on questions
of law. This could contradict a Supreme Court judgment that questioned the ability of such
technical members.
• In order to claim products or goods liability, a claimant must establish four kinds of defects in
the product, the injury caused from it, and that it belonged to the manufacturer. The applicant
should additionally establish that the manufacturer had information of such a defect. It may be
argued that the conditions to ascertain a product liability claim area unit unreasonable.
• The Bill defines goods liability to include defects in goods and deficiency in services.

In India the movement was initiated as a ‘social force’ to safeguard and encourage the interests and rights
of the consumers. But the Consumer Protection Act in 1986 gave it a legal authority with the declaration
of six consumer rights that time. Separate government departments of consumer affairs for consumer
were set up and three tier system of consumer courts at national, state and district levels. The movement
has already progressed a lot in spreading consumer awareness but is still facing some of the problems
such as:

➢ The consumer redressal system is becoming difficult, expensive and time-consuming.

➢ Evidence is not easy to gather as cash memos are not issued for most of the purchases.
➢ The existing laws are not very clear about the issue of compensation to consumers injured by
defective products

As codified under the Indian Laws the Consumers have the following Rights:

➢ Right to Safety
➢ Right to be Informed
➢ Right to choose
➢ Right to be Heard
➢ Right to seek Redress
➢ Right to Consumer Education

MAJOR PROVISION IN CONSUMER PROTECTION ACT

The first Bill to protect the consumers rights, passed after Independence India was Drug Control Act
1950. It was implemented by Industries & manufacturing sector (Development and Regulation)
act, 1951, The Indian Standards Institution (Certificate Marks) Act 1952 and Drugs and Magic
Remedies (Objectionable Advertisements) act 1954. Though these acts were intended to protect
consumers, these acts did not achieve the desired results and its was not too effective.

• Prevention of Food and Adulteration Act, 1954

It was the Prevention of Food and food products Adulteration act 1954, that was made every attempt
to protect the consumers. There were detailed provisions for analysis of food, Quality, Quantity, giving
warranty by manufacturers, distributors and dealers, the disclosure of names by the vendors, food
poisoning, the summary trial of cases, forfeiture of property, etc. The Act was enacted to eradicate the
anti-social people & food processor of food adulteration and ensure purity. The central government of
India and all state governments framed rules with regard to Central Food Laboratory, Standard of
quality, public analysts and inspectors, ceiling, fattening and dispatch of samples, manufacturing
process, coloring matter, packing and labeling of foods, prohibition and regulating sales, conditions
for sale and license, preservative, poisonous metals, and solvent-extracted oils and edible flour etc.
After implementation of this Act, Essential Commodities Act was enabled to extend to control the
production, supply, and distribution of certain essential commodities.
• MRTP Act, 1969
Another important measure taken by Indian government to protect the consumers was Monopoly in
market and Restrictive Trade Practices Act (MRTP Act) 1969. It was passed by Parliament ( Lower&
Upper House ) on the recommendations of Mahala Nobis Committee Report, 1954, Justice K C Gupta
Commission Report, 1965. It came into enforcement on 1st June 1970. The Act was enacted in order
that there wouldn't be any concentration of economic power as a results of financial system operations,
and prohibition of Monopoly and restrictive trade practices. To accomplish the aims and objectives,
there were provisions for the establishment of MRTP commission to enquire into monopolistic and
restrictive trade practices and to grant a temporary injunction and compensation. The Act was amended
in 1982, 1984, 1985 and 1986. (Pathak A, 2007)

• Other Acts
The legal relationship and disabilities between the buyer (Consumer) and seller were by and large
regulated by Law of Contract (1872) and Sale of Goods Act (1930). Consumers were unable to avail
these acts when they had some grievances related to product. Law of Torts and Provisions of IPC 1980
were also applied to protect consumers rights. After Independence, there were around 40 legislations
were enacted or strengthen to protect the consumers interests, which included some of the British laws.
But because of inadequacy in their implementation and improper coverage of consumer’s rights and
redressal through the prevailing civil court system was cumbersome, lethargic and defendant, none of
them could able to protect the consumers against exploitation.

THE FACTORS THAT CONTRIBUTED AND INFLUENCED THE

 CONSUMER PROTECTION ACT

Though there were a series of legislative measures undertaken after Independence in India, the
consumers had not been protected to the extent desired. A Private Bill for consumer protection law was
introduced but failed in the Parliament house in the year 1977 (CUTS report, 2001). Lokpal and
Lokayukta were set up, after the suggestions of Administrative Reforms Commission headed by Morarji
Desai Former Prime Minister, to resolve the grievances of Indian citizens .The law Commission of
India, in its 105th Report on Quality Control and Inspection of Consumer goods, October 1984 (Law
Commission Report 1984), under the Chairmanship of KK Mathew, suggested that we need to establish
a much better system to safeguard the patron interests while not the patron being driven to initiate pricey
and presumably long drawn out judicial proceeding. During the same period, Madhya Pradesh State
Government had introduced “Madhya Pradesh Consumer Protection Bill 1984” which was the outcome
of an intensive and analytical study by Consumer Protection Sub-Committee of Madhya Pradesh Law
Commission. The Bill had a provision to establish State Institute of Consumer Education Research and
Training, State Fair Trade Practices Forum and Consumer Prices Review Commission. It additionally
projected a state action beneath Unified Comprehensive shopper Code. The bill proposed legal
protection to community activists and award punitive damages to those who were the victims of unfair
trade practices.

The bill was intended to make inroads to achieve social and economic goals where it could not act
directly (Nayak, 1985). The bill also proposed to establish councils at District, City and Village and
ward levels to collect information and a Consumer Ombudsman, who could recommend on policy and
research, and additionally to recommend on Laws and publications on Safety and Standards. The Prime
Minister’s 20-point formula was one of the significant aspects in Consumer Protection, which was the
brainchild of then Prime Minister Shri. Rajiv Gandhi. Initially, 20-point program was structured by
Mrs. Indira Gandhi in 1975, restructured in 1982. The same was upgraded by Shri Rajiv Gandhi to
enhance the productivity of Indian Economy and to accelerate the upliftment of weaker sections.
Consumer Protection was the eighteenth purpose among the socio- economic aspects represented
therein program (Madan, 1998).

• Consumer Protection bill and CPA1986

Based on the guidelines of United Nations, a 28-member National Consumer Protection Council,
consisting of various ministry representatives, conducted two meetings and decided to organize a
National Workshop on Consumer Protection on March 11-12, 1985 with consumer representatives.
Based on the guidelines, suggestions and recommendations made by representatives of State
Governments, Voluntary Consumer Organizations, Central Ministers and Officials of various
Government departments, at the national seminar, a draft bill was formulated. The Laws of uk, United
States of America, Australia, and New Zealand were closely studied, analyzed and were considered
while drafting the Bill (Viswanathan, 2008). After a number of inter-ministerial meetings, a final draft
was prepared and submitted to the Lok Sabha by then Minister of Parliamentary Affairs, and Food and
Civil Supplies, HKL Bhagat on 9th December 1986 (Rao M, 1999). There were some verbal and minor
amendments suggested by Shri C. Madhava Reddy, ShriMool Chand Daga, Prof N.G. Ranga,
ShriJainulAbedin, ShriSharadDhige, and Shri Thompson Thomas, but were withdrawn and passed on
the same day (Rao M, 1999). Simultaneously six different shopper protection laws were amended to
allow shoppers and their organizations the correct to prosecute offenders.

These laws are

• Standards of Weights and Measures Act, 1976;
• Prevention of Food Adulteration Act, 1954;
• Bureau of Indian Standards Act, 1986;
• Agricultural Produce (Grading and Marking) Act, 1937;
• Monopolies & Restrictive Trade Practices Act, 1969; and
• Essential Commodities Act, 1955 (CUTS Report, 2001)).

The parliament enacted Consumer Protection Act 1986, which received the assent of Indian president on
24th December 1986. The Act is supposed to produce single, speedy and inexpensive redressal for
consumer grievances under a three-level quasi-judicial redressal agency. According to Shri H K L
Bhagat, this legislation was intended to provide a prompt and meaningful remedy for consumer
grievances. He realized that the success of the Act depends upon its effective implementation of Central
and State governments and also the development of broad-based voluntary shopper movement at the
grassroots level.
 CONSUMER PROTECTION ACT1986

The preamble of the Act says, “An act 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 consumers' disputes and for matters connected therewith.”

➢ Objectives of the act:

The Act seeks to provide for better protection of the consumers. There are provisions in the Act for
the establishment of Councils and Authorities to settle the consumer disputes.
1. The Act seeks inter alia to promote and protect the rights of consumers.
2. The protection of consumers’ interests and their rights are sought to be promoted and protected
through consumer protection councils established at national and State level.
3. The Act seeks to provide speedy and simple redressal mechanism through quasi-judicial
machinery at the District, State and Central level. These quasi-judicial bodies are supposed to
observe the principles of Natural Justice. They are empowered
4. To give reliefs of a specific nature and
a. To award appropriate compensation to the consumer.
b. Penalties for non-compliance of the orders given by the quasi-judicial bodies have
 also been provided. (Kapoor N D,2002)

An Act 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
consumers' disputes and for matters connected therewith.
The Act came into effect from April 15th, 1987. And Chapter3 of the Act, which deals with Consumer
Redressal Agencies, came into effect from 1st July 1987 (Maheswari, 2008).

➢ Amendments
The Consumer Protection Act 1986 was amended in 1991, 1993, 2002, 2010 and another amendment
is due. The 2002 amendment was passed by RajyaSabhaon 11th April 2002 and by LokSabha (Lower
House) on 30th July 2002 with some amendments and again by RajyaSabha (Upper House) on
22ndNovember 2002, Assent of the President of India was given on 17th December 2002. The
provisions of the Act are being brought into force with effect from 15th March 2003. Though CPA
1986 has remedies for the consumers in the market place, they are not sufficient and consumer finds
himself/herself as helpless due to ineffective legal machinery (Chatterjee and Sahoo, 2011). The Act
needs further amendments to provide better protection to consumers in the country. (Singh and
Chadah, 2008). One amendment bill was put forward, in the year 2011, before Parliament which was
lapsed and Amendments were proposed in the year 2015, for which the bill has been in pending for
approval (http://www.prsindia.org/).

In the recent past Government has initiated a series of steps to strengthen the mechanism of consumer
protection, in the era of E-Commerce (“Major Proposed Changes in Consumer Protection Act”, 2016).
The amendments to the bill were drafted after due consultation with different stakeholders, with more
emphasis to ensure simplicity, speed, access, affordability and timely delivery of justice (“New
Consumer Protection Bill to Ensure Timely Justice”, 2016). To handle complaints related to
misleading advertisements, issuances of guidelines, online case monitoring system in the Consumer
Forum, a portal – Grievance Against Misleading Advertisements (GAMA) – has been launched. The
government is even planning for e-filing complaints in Consumer Forum.

LEGAL PROCEDURE OF CONSUMER PROTECTION ACT IN

 INDIA.

As stated, few years earlier, Consumer Protection act was enacted so as to have a single comprehensive
law for the protection of the interest of consumers and consumer rights and for the creation of special
courts to solve the consumer disputes speedily, effectively and inexpensive manner.

• Salient features of the Act are as follows:

DECLARATION OF CONSUMER RIGHTS

SUGGESTIONS FOR CONSUMER

 • The consumers should collect an original bill and the warranty card for every important
purchase.
• Consumers should check ISI mark or A-Mark printed on the goods or their labels.
• Consumers should unite together and form consumer welfare groups or any association.
• Consumers should come forward to make a complaint on genuine grievances on time.
• Consumers should be aware and should try to enforce their rights.
• Consumers should check for proper sealing, labeling, full information about product,
health warnings, handling information, operational instructions, expiration date, etc.
• Consumers should not pay above the MRP in any circumstance.

PROBLEMS OF THE CPA 1986

• The consumer redressal system or forum is becoming difficult, expensive, complicated and time-
consuming.
• Evidence and proof of misconduct is not easy to gather as cash memos are not issued for most of
the purchases.
• The existing laws are not very clear about the issue of compensation to consumers injured by
defective products of service
 SUGGESTIONS FOR IMPROVEMENTS IN THE CPA 1986

Section 2(1)(d) and 2(1)(0) of the Act should be suitably amended to modify the definition of the
term’s consumer and ‘services’ to make it clear that consideration shall not be a condition
precedent in case of availing medical and municipal services provided by the government. A
victim of medical negligence or health negligence in a government hospital or by doctor should
be entitled to compensation by enlarging the definition of consumer and bringing free services
provided to the public by the government.

• The Consumer redressal Forum should be vested with powers to issue interim injunctions
restraining an undertaking or person from carrying on any unfair trade and service practice
as defined in act.
• The Consumer Redressal Forum should be empowered to take up the cases by authority.
• It is absolutely essential to ensure the quality of product and services and competence of
non-judicial members who are selected to work on the Benches of Consumer redressal
agencies.
• The consumer redressal agencies should be equipped with the personnel for effective and
immediate execution of their orders, and in this way the necessity of depending on Civil
or Criminal Courts would be obviated.
• There is a need to prescribe the essential infrastructure& facility to the District Forums
and State Commissions so that they are not hamstrung functioning effectively.
• The presence of lawyers should be permitted only where the complainant engages or
unavailable for physical presents, a lawyer who will justify the engagement of the lawyer
by the respondent. Otherwise. an attorney ought to be allowed solely wherever the court
specifically permits or considers it necessary. Further, it should be provided that in no
case more than two adjournments will be allowed. Furthermore, a procedure should be
established that makes it obligatory the court to right away provides a copy of the order
to the parties so no excuse is given for the delay in submission of appeals.
• The Act should be amended to empower Consumer Courts or authority to publish the
names of manufacturers, traders and dealers whose goods are found to be hazardous to
public safety. This empowerment would work as a deterrent to the erring business
community.
• The Act should be amended as to streamline the fast and fair procedure that would
facilitate expeditious disposal of consumer cases.