CHAPTER 7

CONSUMER PROTECTION

MEANING
The word 'Consumer' is derived from the Latin word 'Consumere' which
means, to eat or to drink. The consumer is the one who consumes or uses any
commodity or service available from natural resources or through a market.
A Consumer means any person who buys any goods, hires any
service or services for a consideration which has been paid or promised or
partly paid or partly promised or under any system of deferred payments.
We are all consumers when we use any commodity like foodgrains, milk etc.
or service like bank, railway, post office, hospital etc.

NEED AND IMPORTANCE OF CONSUMERPROTECTION

Generally, safeguarding the rights and interests of consumers is known as

consumer protection. It includes all the measures aimed at protecting the rights
and interests of consumers. In modem competitive market, consumer is
regarded as the 'King of Market' hence consumer protection is required due to
the following reasons:
1. Need of participation of consumers: It is noted that business organizations
take decisions which affect the consumers' interest without consulting the
consumer or their organizations. Only a strong consumer organisation can
pressurize business organizations to allow consumer participation in the decision
making process.
2. Lack of information: It is very difficult to establish direct contact between
consumer and manufacturer because consumers live in a dynamic and complex
world and they are widely scattered. Today's markets are full of domestic as well
as imported products therefore it is very difficult to get correct and reliable
information about product before they purchase.
3. Ignorance: Ignorance of consumers is the main cause of exploitation by
business. Consumers in India are mostly ignorant about their rights, market
conditions, price levels and product details. A system is required to protect them
from business malpractices.
4. Unorganized Consumers: Consumers are widely scattered and are not
organized, On the other hand sellers are in better position than consumers and
they are powerful. Consumers are under the influence of businessman. An
individual consumer cannot fight against these powerful sellers.
5. Spurious Goods: There is increasing supply of duplicate products. It is not
possible for an ordinary consumer to distinguish between a genuine product and
its imitation. It is necessary to protect consumers from such exploitation by
ensuring compliance with prescribed norms of quality and safety standards.
6. Misleading Advertising: Some businessmen give misleading information
about quality, safe- ty and utility of products. Consumers are misled by misleading
advertisement and do not know the real quality of advertised goods. A mechanism
is needed to prevent misleading advertisements.
7. Malpractices of Businessmen: Fraudulent, unethical and monopolistic trade
practices by businessmen lead to exploitation of consumers. Many times
consumers get defective, inferior and substandard goods and services. Certain
measures are required to protect the consumers against such malpractices.
8. Trusteeship: According to Gandhian philosophy businessmen are trustees of
the society's wealth. Therefore, they should use this wealth for the benefit of
people.

CONSUMER PROTECTION ACT

1. Set up to protect and promote consumer interests through a speedy and

inexpensive redressal of grievances.
2. Recognizes consumer rights
3. Redressal agencies– set up a three-tier agency to address consumer
grievances.

Scope of the act-It is applicable to all types of undertaking:

 Large and small scale

 Private, public and co-operative sector
 Manufacturer or trader
 Firms supplying goods as well as services

Meaning of Consumer

1. Any person who buys any goods for a consideration. It includes any user of such
goods with the approval of the buyer. But it does not include a person who obtains
goods for resale or any commercial purpose.

2. Any person who avails any services for a consideration. It includes any
beneficiary of such services but it does not include a person who avails such service
for any commercial purpose.
Consumer Rights As Per Consumer Protection Act 1986

Consumer Protection Act, 1986 has provided six rights to the consumers, which are
as follows:

1. Right to Safety: Consumer has the right to be protected against products, &
services which are hazardous to health & life (should use ISI marked electronic
device.

2. Right to be Informed: Consumer has right to have complete information about

the product before buying it.

3. Right to choose: Consumer has a right to choose any product out of the
available products as per his own decision making.

4. Right to be heard: Consumer has the right to file a complaint to be heard in

case of dissatisfaction with goods or services (use of grievance cell)

5. Right to Seek Redressal: Consumer has the right to get relief in case the
product or service falls short of his expectations or is dangerous. He may be
provided with replacement/removal of defect or compensation for any loss. Various
redressal forums are set up by the Govt. at National and State level.
6. Right to consumer education: Consumer has the right to acquire knowledge
and to be well informed throughout life. He should be made aware of his rights and
reliefs available to him in case of the product or service falls short of his exceptions.
The Govt. of India has included consumer education in the school curriculum & is
making use of media to make consumers aware of their rights.

7. Right to Represent: The act provides an opportunity to individuals and

consumer groups to represent consumer’s interest before consumer forum. The act
allows the consumer to be rep- resented by a person who is not a professional
advocate. This provision is in recognition of consumer's right to represent.

8. Right to Healthy Environment: All consumers have a right to healthy and

clean environment. According to this right, consumer can demand actions against
the pollution causing business organisations. All consumers have the right to
healthy and clean environment in present and future.

9. Right to Protect from unfair business practices: As per this right all
consumers are protected against unfair business practices such as black
marketing, profiteering, faulty weights and measures, exorbitant prices,
adulteration etc.
10. Right against spurious goods: This right is against the marketing of goods
which are hazardous to health, spurious and pose a danger to life itself.

Consumer Responsibilities:

1. Ask for a cash memo

On purchase of goods or services. This would serve as a proof of the purchase
made.

2. Be aware
About various goods and services available in the market so that an intelligent and
wise choice can be made.

3. Buy only standardized goods

As they provide quality assurance. Thus, look for ISI mark on electrical goods, FPO
mark on food products, Hallmark on jewellery etc.

4. Follow manufacturer‘s instructions

Learn about the risks associated with products and services, and use the products
safely.

5. Read labels carefully

So as to have information about prices, net weight, manufacturing and expiry dates,
etc.

6. Assert yourself
To ensure that you get a fair deal.
7. Be honest in your dealings.
Choose only from legal goods and services and discourage unscrupulous practices
like blackmarketing, hoarding etc.

8. File a complaint in an appropriate consumer forum

In case of a shortcoming in the quality of goods purchased or services availed. Do
not fail to take an action even when the amount involved is small.

9. Form consumer societies

Which would play an active part in educating consumers and safeguarding their
interests.

10. Respect the environment.

Avoid waste, littering and contributing to pollution.

THE SALIENT FEATURES

Who Can File A Complaint

A complaint before the appropriate consumer forum can be made by:

1. Any consumer.

2. Any registered consumer association.

3. The central or state government.

4. One or more consumers on behalf of numerous consumers having same interest.

5. A legal heir or representative of a deceased consumer.

Complaints can be filed and compensation claimed

• Fraudulent practices by traders and manufacture

• Defective goods
• Deficiency in services in connection with 9 services such as banking,
transportation, insurance, supply of electricity and gas, house construction, medical
service.

WAYS AND MEANS OF CONSUMER PROTECTION

The following are the various ways and means of consumer protection followed in
India

Lok Adalat
Lok Adalats are the effective and economical system for quick redressal of the
public grievances. The aggrieved party can directly approach the adalats with his
grievance and his problems are discussed on the spot and decisions are taken
quickly.

Public Interest Litigation (PIL)

Public Interest Litigation (PIL) is a scheme under which any person can move to the
court of law in the interest of the society. It includes efforts to provide legal remedy
to unrepresented groups and interests. Such groups may consist of consumers,
minorities, poor persons, environmentalists and others. Any person or organisation,
though not a party to the grievances, can approach the court for remedial action in
case of any social atrocities.

Redressal Forums and Consumer Protection Councils

A judicial system has been set up to deal with the consumer grievances and
disputes at district level, state level and national level, Under the Consumer
Protection Act, 1986. These are known as district forum, state consumer disputes
redressal commission (state commission) and national consumer disputes redressal
commission (national commission). Any individual consumer or association of
consumers can lodge a complaint with the district, state or national level forum,
depending on the value of goods and claim for compensation.

The Act as amended in 2002, also provides or setting up of consumer protection

council at district, state and national level for promotion and protection of the rights
of the consumers as laid down in Section 6 of the Act.

Awareness Programme
To improve the level of awareness among the consumers the government of India
has initiated various publicity measures. It regularly brings out journals, brochures,
booklets and various posters depicting the rights and responsibilities of consumers,
redressal machineries etc. It observes World Consumer Right Day on 15 March and
National Consumer Day on 24 December.

Legislative Measures
A number of laws have been enacted in India to safeguard the interest of
consumers and protect them from unscrupulous and unethical practices of the
businessmen. Some of these acts are as follows:

1. Drug Control Act, 1950

2. Agricultural Products (grading and marketing) Act, 1937
3. Industries (development and regulation) Act, 1951
 4.
Prevention of Food Adulteration Act, 1954
5.
Essential Commodities Act, 1955
6.
The Standards of Weights and Measures Act, 1956
7.
Monopolies and Restrictive Trade Practices Act, 1969
8.
Prevention of Black Marketing and Maintenance of Essential Supplies Act,
1980
9. Bureau of Indian Standard Act, 1986
Consumer Protection Act, 1986
The Consumer Protection Act was passed in 1986 and it came into force from I July,
1987. The main objectives of the Act are to provide better and all round protection
to consumers and effective safeguards against different types of exploitation such
as defective goods, deficient services and unfair trade practices. It also makes
provisions for a simple, speedy and inexpensive machinery for redressal of
consumer's grievances.

The salient features of Consumer Protection Act (CPA), 1986 are as follows

1. It applies to all goods, services and unfair trade practices unless specifically
exempted by the Central Government.
2. It covers all sectors-private, public or co-operative.
3. It provides for establishment of consumer protection councils at the central,
state and district levels to promote and protect the rights of consumers and a
three-tier quasi-judicial machinery to deal with consumer's grievances and
disputes.
4. It provides a statutory recognition to the six rights of consumers.

REDRESSAL AGENCIES

1. District Commission:
Meaning - A consumer dispute redressal commission at each district
established by the State Government is known as District Commission.
Composition - Each District commission shall consist of the following.
a) President: A person who is sitting or retired or qualified to be a District Judge.
b) Member: not less than two and not more than such number of members as
may be prescribed, in consultation with the Central Government.
c) Tenure: Any person appointed as President or a member of the District
Commission shall hold office as such as President or as a member till the
completion of his term for which he has been appointed. The members will
hold office for a term of five years or upto the age of sixty five years,
whichever is earlier.
Qualification -The members of District Commission shall have the following
qualifications
a) Age - Members should not be less than 35 years of age.
b) Education - They should possess a Bachelors Degree from a recognised
University.
c) Experience - They should have adequate knowledge and at least ten years
 experience in dealing with problems related to economics, law, commerce,
accountancy, industries and public affairs or administration.
Territorial Jurisdiction - Territorial Jurisdiction of district commission is entire
district in which it is established.

Monetary Jurisdiction - District Commission shall have jurisdiction to entertain

complaints where the value of the goods or services paid as consideration does
not exceed Rs. one crore.
Appeal - Any person aggrieved by an order made by the District Commission may
prefer an appeal against such order to the State Commission within a period of
forty-five· days from the date of the order, in such form and manner, as may be
prescribed.
The State Government, by notification may make rules about qualifications,
method of recruitment, term of office, resignation and removal of president and
members of district commission.
However, any person already appointed as a President or member of district
commission im- mediately before the commencement of this Act, will remain on
the same post till the completion of his term for which he has been appointed.
2. State Commission:
Meaning - A consumer dispute redressal commission at the state level
established by the State Government is known as State Commission. It is
also called as State Consumer Disputes
Redressal Commission.
Composition - Each State Commission shall consist of

a) President: A person who is sitting or retired Judge of High Court, shall be

appointed by the State Government as the president of State Commission
in consultation with Chief Justice of High Court.
b) Member: Not less than four or not more than such number of members as
may be prescribed in consultation with the Central Government.
c) Tenure: The members will hold office for a term of five years or up to the
age of sixty seven years, whichever is earlier.
Qualification - The members of state commission shall have the following
qualifications
a) Age - Members should not be less than 35 years of age.
b) Education - They should possess a Bachelors Degree from a recognised
University.
c) Experience - They should have adequate knowledge and at least ten years
experience in dealing with problems related to economics, law, commerce,
accountancy, industries and public affairs or administration.
Territorial Jurisdiction - It can entertain original cases as well as appeals against
the order of District Commission which are within the geographical limits of the
state.
Monetary Jurisdiction - to entertain complaints where the value of the goods or
 services paid as consideration, exceeds Rs. one crore, but does not exceed Rs.
ten crore.
Appeal - Any person aggrieved by an order made by the State Commission may
prefer an appeal against such order to the National Commission within a period
of thirty days from the date of the order in such form and manner as may be
prescribed.
The Central Government, by notification may make rules about qualifications,
method of recruitment, term of office, resignation and removal of President and
Members of State Commission.
However, any person already appointed as a President or member of State
Commission immediately before the commencement of this Act, will remain on
the same post till the completion of his term for which he has been appointed.
3. National Commission
Meaning - A consumer dispute redressal forum at the National level
established by the Central Government by notification is known as National
Commission. It is also called as the National Consumer Disputes Redressal
Commission.

Composition - National Commission shall consist of -

a) President: A person, who is or has been a Judge of the Supreme Court, shall
be appointed by the Central Government as the president of National
Commission in consultation with Chief Justice of India.
b) Member: Not less than four and not more than such number of members as
may be prescribed.
c) Tenure: The members will hold office for a term of five years or up to the
age prescribed, whichever is earlier.
Qualification - The members of national commission shall have the following
qualifications
a) Age - Members should not be less than 35 years of age.
b) Education - They should possess a Bachelors Degree from a recognised
University.
c) Experience - They should have adequate knowledge and at least ten years
experience in dealing with problems related to economics, law, commerce,
accountancy, industries and public affairs or administration.
Territorial Jurisdiction- It can entertain original cases as well as appeals against
the order of State Commission which are within the geographical limits of the
state.
Monetary Jurisdiction - to entertain complaints where the value of the goods or
services paid as consideration exceeds Rs. ten crore.
Appeal- Any person, aggrieved by an order made by the National Commission may
prefer an appeal against such order to the Supreme Court within a period of thirty
days from the date of the order.
The Central Government, may by notification make rules about the
qualification, appointment, term of office, salaries, resignation and removal
 of the President and Members of the National Commission. However, the
President and the members shall hold the office for maximum five years, but are
eligible for reappointment. The Act further provides that the President can work
upto the age of seventy years and members can work upto the age of sixty
seven years.

Penalty for non-compliance of Order:

If any party failed to comply with any order made by the District
Commission, State Commission or National Commission, it shall be punishable
with an imprisonment for term not less than one month but may extend to three
years or with a fine, which shall not be less than Rs. twenty- five thousand, but
may extend to Rs. one lac or with both.

Role of Consumer organizations and NGO’s

1. Educating the general public about consumer rights by organizing training

programmes, seminars and workshops.

2. Publishing periodical & other publications to educate consumers.

3. Providing legal assistance to consumers by providing legal advice etc.

4. Producing films or cassettes on food adulteration, misuse of drugs etc.

5. Filing complaints in appropriate consumer courts on behalf of consumers.

6. Encouraging consumers to take on action against unfair trade practices.

7. Taking an initiative in filing cases in consumer courts on behalf of consumers.

 QUESTION BANK

Explain the following terms/ concepts.

1) District Commission.
2) National Commission.
3) State Commission.
4) Lok Adalat.
5) Janhit Yachika

Justify the following statements.

1) The Consumer Protection Act was passed in the interest of consumers.
2) Consumers have many responsibilities.
3) Aim of consumer organization is to protect the rights of the consumer.
Attempt the following.
1) State rights of the consumer.
2) State the role of NGOs and consumer protection.
3) State the composition and monetary jurisdiction of district Forum.
4) State the composition and monetary jurisdiction of state commission.
5) State the composition and monetary jurisdiction of national commission.

Answer the following.

1) Who is consumer? Explain the rights of the consumers.
2) Explain the ways and means of Consumer Protection.
3) Explain the three tier quasi judicial machinery under the Act.

Difference between:
1) National commission and district commission.
2) District and State commission
3) State and National commission