Is the consumer king?
A positive relationship between producers and consumers is necessary for the economy. A person who utilizes a good or service offered by a producer or provider of services is referred to as a consumer. If a product or service needs to survive in the market, the consumer must like it. Its shelf life in the market is too brief if it does not meet consumer expectations. Therefore, the customer is king.
But many a time, consumers are fooled by following practices that are derogatory towards them. Such practices need to be checked and removed from the market so that the economy can flourish.
To ensure this protection, Parliament enacted the Consumer Protection Act of 1986. After a lot of amendments to the Act of 1986, it was observed to be necessary to enact a new Act for the protection of consumers as per the present conditions prevailing in the market. The Consumer Protection Act of 2019 became the official name of this legislation, and it became effective on August 9. A repeal of the Act of 1986 was made by Section 107 of the Act of 2019.
The preamble to the Act itself is enough to know the objective of the Act which states that the Act is enacted for the protection of the consumers and to provide for the establishment of the authorities under the Act for its better execution.
Who is a consumer?
The term “consumer” shall have the meaning given in sub-section (7) of section 2 of the Consumer Protection Act of 2019.
- If someone purchases any goods for consideration,
- Promised to be paid
- Partial payment and partial promise.
It also covers anyone using such products with the buyer’s consent. It excludes anyone who bought the goods with the intention of reselling them or using them for business.
- any service is hired or made available for payment.
- Promised to be paid
- Partly paid
- Partially paid and partially promised to pay.
Additionally, it covers anyone who makes use of the aforementioned services with the consent of the person who hired the service.
It excludes anyone who makes use of such a service for profit.
- “Commercial purpose” as provided in the explanation to the above section not to include any use of such goods or services exclusively used by him for livelihood, employing self-employment.
- The terms “buys any goods” and “hires or avails any services” refer to both offline and online business dealings involving teleshopping, direct selling, and multi-level marketing.
In Dinesh Bhagat v. Bajaj Auto Ltd1, the scooter purchased was under the possession of the buyer’s friend right from the time of purchasing with the approval of the original buyer. The court rejected the respondent’s contention that the appellant is not a consumer since the scooter was not booked in his name, and held that the appellant had the approval of the original buyer to use the good and hence included in the definition of consumer.
In Smt. Pushpa Meena v. Shah Enterprises (Rajasthan) Ltd2, the appellant purchased a jeep to use as a taxi. The use of a jeep as a taxi was included under the expression “commercial purpose” by the Rajasthan State commission.
So it is eminently clear that the legislators wanted to exclude big business from the definition of the consumer. This is because the goods are used by the business entities as the raw material or asset for producing other goods or services. Hence they are not to be considered consumers even though they purchase goods.
If the goods are used by the purchaser for his self-employment even if he employs two or three people for such self-employment, he is to be considered a consumer. This is because the legislature intended to save the small consumers from being betrayed and it also helps in the promotion of the trade.
Rampion Pharmaceuticals v. Dr. Preetam Shah3 is a case where the National Commission rejected the argument by the appellant that respondent is a professional and has used the machine for commercial purposes and held that the respondent, a medical professional is not running a huge hospital and only working as a professional for self-employment, therefore he is to be included in the definition of the consumer.
There is a plethora of cases in which the dispute was made on the buyer being included in the definition of the consumer or not. This point of law is so much important because if the purchaser of the goods succeeds in maintaining its status as a consumer, all the rights provided under the Act come to the rescue of such person. Similarly, the seller argues against holding a such status of the consumer to the purchaser to avoid liability under the Act.
What are the rights given to the consumer under the Act?
Sub-section (9) of Section 2 of the Consumer Act, 2019 provides for consumer rights.
1. Right to safety: The consumer is protected against marketing goods and services hazardous to life and property. The consumer has the right to know the ill effects of using such goods. A clear warning or instruction as to how to use such hazardous goods or services. Not only this, but if the manufacturer becomes aware of the ill effects of the goods after they are sold to the consumer, the seller has to inform the consumers about such hazards. The consumer is protected against such hazards. If the goods are hazardous even if they are used with precautions, the sellers or manufacturers must recall such goods and replace them, or provide compensation to the consumer.
a. Section 90 provides the punishment if the manufacturer, seller, distributor, storekeeper, or importer deals with any product containing adulterants and
i. If The consumer is injured, then imprisonment extends to 6 months, and a fine extends to 1 lacs.
ii. Injury is not grievous, then imprisonment extending to 1 year and fine extending to 3 lacs.
iii. Injury is grievous, then imprisonment extending to 7 years and fine extending to 5 lacs. This offence is cognizable and non-bailable.
iv. Death of the consumer will fetch imprisonment which shall not be less than 7 years but which may extend to life imprisonment and also to a fine which shall not be less than 10 lacs. This offence is cognizable and non-bailable.
b. Similarly, under section 91, different punishments are provided for spurious goods.
i. Injury is not grievous, then imprisonment extending to 1 year and fine extending to 3 lacs
ii. Injury is grievous, then imprisonment extending to 7 years and fine extending to 5 lacs. This offence is cognizable and non-bailable
iii. Death of the consumer will fetch imprisonment which shall not be less than 7 years but which may extend to life imprisonment and also to a fine which shall not be less than 10 lacs. This offence is cognizable and non-bailable.
c. Suspension of license up to 2 years is also a punishment on first conviction and cancellation of the license on second or subsequent conviction besides the above-mentioned punishments either under section 90 or section 91.
2. Right to information: The quality, quantity, potency, purity, standard, and price of goods or services is to be informed to the consumers to curb unfair trade practices. Information is wealth in this world. When the consumer is informed about the products or goods provided by the manufacturer, the consumer will have more autonomy in making the decisions regarding choices of purchasing different goods provided by a different manufacturer in a segment. This right also ensures competition in the market.
a. If any service provider or manufacturer misleads or gives false information as an advertisement that is prejudicial to the interests of the consumers is liable to be punished with imprisonment extending to 2 years and a fine extending to 10 lacs under section 89.
b. Subsequent offence under section 89 will lead to imprisonment extending to 5 years and a fine extending to 50 lacs.
3. Right to choose: the consumer is provided with the right to choose from a variety of goods as per his/ her requirements. The consumer is not to be forced to use a particular good. This can be ensured by fair competition in the market.
4. Right to statutory remedies: The consumer Protection Act, 2019 has provided for the statutory forums to look into the redressal of the consumers. Different authorities have been made under the Act to recognize the grievance of the consumer, These authorities are:
- National Consumer Dispute Resolution Commission (NCDRC) at the national level
- State Consumer Dispute Resolution Commission at the state level
- District Consumer Commission at the district level
These authorities are quasi-judicial. Rule of evidence does not apply in the proceedings under these authorities in a strict sense and principles of natural justice are observed in these bodies. Hence there is no need to consult legal counsel for such matters. No fee is required up to the limit of Rs. 5 lacs for filing the complaint under the Act. Acknowledgement of the complaint is mandatory within 48 hours of receipt of the complaint. The only requirement is for being a consumer in the strict sense of the Act.
5. Right to awareness: The statutory bodies are duty-bound to disseminate the information and practices of the market to the consumers through a public forum. Section 5, section 7, and section 9 under chapter II of the Act ask the central council, the state council, and the district council respectively for advice on the protection and promotion of consumer rights within their jurisdictions.
6. Right to sue: The consumer is eligible to sue the seller who sold him the goods. If there is a manufacturing defect in the goods sold by the seller, the consumer has the right to sue the seller as well as the manufacturer.
To protect these rights, the Consumer Protection Act provided under section 17, that the consumer may register a complaint
- whose rights are violated;
- against the unfair trade practices
- false or misleading advertisements prejudicial to their interests as a class;
in writing or electronic mode to
- District Collector or
- Regional commissioner’s office
- Central authority’s office.
In Section 83 under chapter VI, the complainant is entitled to bring a product liability action against the product manufacturer and product seller for any harm caused due to the defect in the goods sold to the consumer, provided the product is not misused, altered, or modified as provided under section 87
The object of the Consumer Protection Act, 2019 has been established through statutory authorities and tribunals under the Act. The rights of the consumer are protected under the Act and the consumer is also not to be involved in the long process of litigation in the courts. This Act has in fact established the market as it is in its current form.
- Dinesh Bhagat v. Bajaj Auto Ltd. (1992) III CPJ 272
- Smt. Pushpa Meena v. Shah Enterprises (Rajasthan) Ltd. (1991) 1 CPR 229
- Rampion Pharmaceuticals v. Dr. Preetam Shah (1997) I CPJ 23 (NCDRC)
This article is written by Somnath Sharma, a law graduate.