CHAPTER – 12

CONSUMER PROTECTION
 INTRODUCTION
• A Consumer is said to be a king in a free market economy. The earlier approach of “caveat emptor”,
which means “LET THE BUYER BEWARE”, has now been changed to “caveat venditor” (Let the seller
beware).
• However, with growing competition and in an attempt to increase their sales and market share,
manufacturers and service providers may be tempted to engage in unscrupulous, exploitative and
unfair trade practices like defective and unsafe products, adulteration etc.
• This means that a consumer might be exposed to risks due to unsafe products, might suffer from bad
health due to adulterated food products, might be cheated because of misleading advertisements or
sale of spurious products, overpricing etc.
• Thus, there is a need for providing adequate protection to consumers against such practices of the
sellers.
 MEANING OF CONSUMER PROTECTION
Providing adequate legal protection to consumers against unscrupulous , exploitative and unfair trade practices like
adulteration, hoarding, black marketing etc. by sellers is called consumer protection. It helps the consumers to
protect their physical and economic interests.
Importance of Consumer Protection
From the consumer’s point of view:
➢Consumer ignorance: in the light of widespread ignorance of consumers about their rights and reliefs available to
them, it becomes necessary to educate them about the same so as to achieve consumer awareness.
➢Unorganized consumers: consumers need to be organized in the form of consumer organizations which would take
care of their interests. Though, in India, we do have consumer organizations which are working in this direction,
adequate protection is required to be given to consumers till these organizations become powerful enough to
protect and promote the interests of consumers.
➢Widespread exploitation of consumers: Consumers might be exploited by unscrupulous, exploitative and unfair
trade practices like defective and unsafe products, adulteration, false and misleading advertising, hoarding, black-
marketing etc. consumers need protection against such malpractices of the sellers.
From the point of view of business:
➢ long-term interest of business: Enlightened businesses realize that it is in their long-term interest to satisfy their
customers. Satisfied customers not only lead to repeat sales but also provide good feedback to prospective customers and
thus, help in increasing the customer-base of business.
➢ Business uses society’s resources: Business organizations use resources which belong to the society. They, thus, have a
responsibility to supply such products and render such services which are in public interest and would not impair public
confidence in them.
➢ Social responsibility: A business has social responsibilities towards various interest groups. Business organizations make
money by selling goods and providing services to consumers. Thus, consumers form an important group among the many
stakeholders of business and like other stakeholders, their interest has to be well taken care of.
➢ Moral justification: it is the moral duty of any business to take care of consumer’s interest and avoid any form of their
exploitation. Thus, a business must avoid unscrupulous, exploitative and unfair trade practices like defective and unsafe
products, adulteration, hoarding, black marketing etc.
➢ Government Intervention: A business engaging in any form of exploitative trade practices would invite government
intervention or action. This can impair and tarnish the image of the company. Thus, it is advisable that business
organizations voluntarily resort to such practices where the customers needs and interests will be taken care of.
 LEGAL PROTECTION TO CONSUMERS
The Indian legal framework consists of a number of regulations which provide protection to consumers.
1. The consumer protection act, 1986: This act provides safeguards to consumers against defective goods,
deficient services, unfair trade practices, and other forms of their exploitation.
2. The Indian Contract Act,1872: The Act lays down the conditions in which the promises made by
parties to a contract will be binding on each other.
3. The sale of goods Act, 1930: The act provides some safe guards and reliefs to the buyers of the goods
in case the goods purchased do not comply with express or implied conditions or warranties.
4. The Essential Commodities Act, 1955: The act aims at controlling production, supply and distribution
of essential commodities, checking inflationary trend in their prices and ensuring equal distribution of
essential commodities. The Act also provides for action against anti-social activities of profiteers,
hoarders and black-marketers.
5.The Agricultural Produce (Grading and Marking) Act, 1937: The act prescribes grade standards for agricultural
commodities and live-stock products. The act stipulates the conditions which govern the use of standards and lays down the
procedure for grading, marking and packing of agricultural produce. The quality mark provided under the act is known as
AGMARK, an acronym for Agricultural Marketing.
6. The Prevention of Food Adulteration Act,1954 : The act aims to check adulteration of food articles and ensure their purity
so as to maintain public health.
7. The Standards of Weights and Measures Act, 1976: The provisions of this Act are applicable in case of those goods which
are sold or distributed by weight, measure or number. It provides protection to consumers against the malpractice of under –
weight or under – measure.
8. The Trade Marks Act, 1999: This act has repealed and replaced the Trade and Merchandise Marks Act, 1958. The act
prevents the use of fraudulent marks on products and thus, provides protection to the consumers against such products.
9. The Competition Act, 2002: This act has repealed and replaced the Monopolies and Restrictive Trade Practices Act, 1969.
The Act provides protection to the consumers in case of practices adopted by business firms which hamper competition in
the market.
10. The Bureau of Indian Standards Act, 1986; The Bureau of Indian standards has been set up under the Act. The Bureau
has two major activities: formulation of quality standards for goods and their certification through the BIS certification
scheme. The Bureau has also setup a grievance cell where consumers can make a complaint about the quality of products
carrying the ISI mark.
The Consumer Protection Act, 1986
▪ The Consumer Protection Act (CPA) seeks to protect and promote the consumers interest through speedy and inexpensive redressal of
their grievances.
▪ The scope of this Act is very wide. It is applicable to all types of undertakings.
▪ The Act confers certain rights to consumers with a view to empowering them and to protect their interests.
Consumer Rights
The various Rights of consumers are as follows:
1. Right to Safety : The consumer has a right to be protected against goods and services which are hazardous to life health. For instance,
electrical appliances which are manufactured with substandard products or do not conform to the safety norms might cause serious
injury. Thus consumers are educated that they should use electrical appliances which are ISI marked as this would be an assurance of
such products meeting quality specifications.
2. Right to be Informed: The consumer has a right to have complete information about the product which intends to buy including its
ingredients, date of manufacture, price, quantity, directions for use, etc.
3. Right to choose: The consumer has the freedom to choose from a variety of products at competitive prices. This implies that the
marketers should offer a wide variety of products in terms of quality, brand, prices, size,etc. and allow the consumer to make a choice
from amongst these.
4. Right to be Heard: The consumer has a right to file a complaint and to be heard in case of dissatisfaction with a good or a service. It
is because of this reason that many enlightened business firms have set up their own consumer service and grievance cells.
5. Right to seek Redressal: The consumer has a right to get relief in case the product or service falls short of his
expectations. The consumer protection act provides a number of reliefs to the consumers including replacement of the
product, removal of defect in the product, compensation paid for any loss or injury suffered by the consumer,etc.
6. Right to Consumer Education: The consumer has a right to acquire knowledge and to be well informed consumer
throughout life. He should be aware about his rights and the reliefs available to him in case of a product or service falling
short of his expectations.
Consumer Responsibilities
❖ Be aware about various goods and services available in the market so that an intelligent and wise choice can be made.
❖Buy only standardized goods as they provide quality assurance.
❖Learn about the risks associated with products and services, follow manufacturer’s instructions and use the products
safely.
❖Read labels carefully so as to have information about prices, net weight, manufacturing and expiry dates etc.
❖Assert yourself to ensure that you get a fair deal.
❖Be honest in your dealings. Choose only from legal goods and services and discourage unscrupulous practices like black-
marketing, hoarding etc.
❖Ask for a cash memo on purchase of goods or services. This would serve as a proof of the purchase made.
❖File a complaint in an appropriate consumer forum in case of a short coming in the quality of goods purchased or services
availed. Do not fail to take an action even when the amount involved is small.
❖Forum consumer societies which would play an active part in educating consumers and safeguarding their interests.
❖Respect the environment. Avoid waste, littering and contributing to pollution.
Other ways and means of consumer protection
1. Self Regulation by business: enlightened business firms realize that it is in their long term interest to serve the
customers well. Socially responsible firms follow ethical standards and practices in dealing with their customers.
2. Business Associations: the associations of trade, commerce and business like federation of Indian chambers of
commerce of India (FICCI) and confederation of Indian Industries (CII) have laid down their code of conduct which
lay down for their members the guidelines in their dealings with the customers.
3. Consumer Awareness: A consumer, who is well-informed about his rights and the reliefs available to him, would be in
a position to raise his voice against any unfair trade practices or unscrupulous exploitation. In addition to this, an
understanding of his responsibilities would also enable a consumer to safeguard his interests.
4. Consumer Organizations: Consumer organizations play an important role in educating consumers about their rights and
providing protection to them. These organizations can force business firms to avoid malpractices and exploitation of
consumers.
5. Government: The government can protect the interests of the consumers by enacting various measures. For example,
the GOI has set up a toll –free national consumer helpline number 1800114000 (9.30 am – 5.30 pm) for this purpose.
The legal framework in India encompasses various legislations which provide protection to consumers.
Redressal Agencies Under the Consumer Protection Act
▪ For the redressal of consumer grievances, the consumer protection act provides for setting up of a three – tier enforcement machinery at the
district, state, and the National levels, known as the district consumer dispute redressal forum, state consumer disputes redressal commission,
and the national consumer disputes redressal commission.
▪ They are briefly referred to as the ‘District Forum’, ‘State Commission’ and the ‘National commission’, respectively.
▪ While the National Commission is set up by the Central Government, the State Commissions and the district forums are set up, in each state and
district, respectively, by the state concerned

SUPREME COURT

NATIONAL COMMISSION

STATE
COMMISSION

DISTRICT FORUM

Redressal Agencies Under the Consumer Protection Act

CONSUMER: A ‘consumer’ is generally understood as a person who uses or consumes goods or avails of any service.
Under the consumer protection act, a consumer is defined as:
a. Any person who buys any goods for a consideration, which has been paid or promised, or partly paid and partly
promised, or under any scheme of deferred payment. It includes any user of such goods, when such use is made with
the approval of the buyer, but does not include a person who obtains goods for re-sale or any commercial purpose.
b. Any person who hires or avails of any service, for a consideration which has been paid or promised, or partly paid and
partly promised, or under any system of deferred payment. It includes any beneficiary of services when such services
are availed of with the approval of the person concerned, but does not include a person who avails of such services for
any commercial purpose.
Who can file a complaint?:
A complaint before the appropriate consumer forum can be made by:
• Any consumer can file a complaint on his/ her own and does not need the services of advocate/ professionals
• Any registered consumers’s association
• The central government or any state government
• One or more consumers, on behalf of numerous consumers having the same interest
• A legal heir or representative of a deceased consumer.
• A complaint under section 2(b) of the consumer protection act 1986.
Let us now see how the consumer grievances are redressed by the three-tire machinery under the consumer protection
act.
1. District Forum: There are 644 district commissions in India. It consists of a President and two other members,
one of whom should be a woman. They all are appointed by the state government concerned. A complaint can be
made to the appropriate District Forum when the value of the goods or services in question, along with the
compensation claimed, does not exceed Rs. 20 lakhs.
2. State Commission: There are 365 state commission of India. Each state commission consists of a president and
not less than two other members, one of whom should be a woman. They are appointed by the state government
concerned. A complaint can be made to the appropriate state commission when the value of the goods or services
in question, along with the compensation claimed, exceeds Rs.20 lakhs but does not exceed Rs. 1 crore.
3. National Commission: The National Commission has territorial jurisdiction over the whole country, expect the
state of Jammu and Kashmir. The National Commission consists of a President and at least four other members,
one of whom should be a woman. They are appointed by the central government. A complaint can be made to
the National Commission when the value of the goods or services in question, along with the compensation
claimed, Exceeds Rs. 1 crore. The appeals against the orders of a state commission can also be filed before the
National commission.
Relief Available
✓ To remove the defect in goods or deficiency in service.
✓ To replace the defective product with a new one, free from any defect.
✓ To refund the price paid for the product, or the charges paid for the service.
✓ To pay a reasonable amount of compensation for any loss or injury suffered by the consumer due to the negligence of the
opposite party.
✓ To pay punitive damages in appropriate circumstances.
✓ To discontinue the unfair/ restrictive trade practice and not to repeat it in the future.
✓ Not to offer hazardous goods for sale.
✓ To withdraw the hazardous goods from sale.
✓ To cease manufacture of hazardous goods and to desist from offering hazardous services.
✓ To pay any amount (not less than 5% of the value of the defective goods or deficient services provided), to be credited to
the consumer welfare fund or any other organization / person, to be utilized in the prescribed manner.
✓ To issue corrective advertisement to neutralize the effect of a misleading advertisement.
✓ To pay adequate costs to the appropriate party.
 ROLE OF CONSUMER ORGANISATIONS AND NGOS
Consumer organizations and NGOs perform several functions for the protection and promotion of interest of
consumers. These includes:
1. Educating the general public about consumer rights by organizing training programs, seminars and workshops.
2. Publishing periodicals and other publications to impart knowledge about consumer problems, legal reporting,
reliefs available and other matters of interest.
3. Carrying out comparative testing of consumer products in accredited laboratories to test relative qualities of
competing brands and publishing the test results for the benefit of consumers.
4. Encouraging consumers to strongly protest and take an action against unscrupulous, exploitative of sellers.
5. Providing legal assistance to consumers by way of providing aid, legal advice etc., in seeking legal remedy.
6. Filing complaints in appropriate consumer courts on behalf of the consumers.
7. Taking an initiative in filing cases in consumer courts in the interest of the general public, not for any individual.
Some of the important Consumer Organizations and NGOs engaged in protecting and promoting consumers interests
include the following:
1. Consumer Co-ordination Council, Delhi.
2. Common Cause, Delhi
3. Voluntary Organisation in Interest of Consumer Education (VOICE), Delhi
4. Consumer Education and Research Centre (CERC), Ahmedabad
5. Consumer Protection Council (CPC), Ahmedabad
6. Consumer Guidance Society of India (CGSI), Mumbai
7. Mumbai Grahak Panchayat, Mumbai
8. Karnataka Consumer Service Society, Bangalore
9. Consumers Association, Kolkata
10. Consumer Unity and Trust Society (CUTS), Jaipur.
 PRACTICAL ORIENTED QUESTION (5M)

As an exploited consumer, write a complaint letter to your

nearest District Consumer Forum Claiming reasonable
redressal.
From
Hari Kumar
#1234, 3rd main, 5th cross,
C V Ramanagar, Bangalore – 560010
To
The president
District consumer disputes redressal agency
Bangalore North District,
Bangalore – 560001.
Respected Sir,
Sub: Request for compensation in respect of defective Washing Machine supplied to me by Messrs. ABC Electronics, Bangalore.
With reference to the above subject, I would like to bring to your kind notice that I have purchased a fully automatic washing machine of reputed brand from
ABC Electronics, shop situated at #24, M.G.Road, Bangalore for Rs. 24,000 on 5th August,2018.
While I am using the washing machine, one day it suddenly stopped functioning. I restarted it, still it wouldn’t function. I informed the trader about
malfunctioning of my washing machine. He in turn reported the matter to the company, asking them to look into the malfunctioning and set it right. He also gave
me the telephone no. of the manufacturing company’s service department. I have called them several times. Later I have sent a letter explaining the situation and
informing that it is newly bought item with full warranty. Neither the shop which supplied the machine nor the company which manufactured the washing
machine bother to look into my complaint.
Finally I decided to approach consumer Forum for Redressal of my grievances and against arrogant behavior of the shop as well as the manufacturer. Please find
enclosed:
1.Copy of the bill
2. Copy of the warranty
3. Copies of my letter to the shop and the company