Tag: #consumer

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.

1. If someone purchases any goods for consideration,
   • Paid
   • 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.

OR

2. any service is hired or made available for payment.
   • Paid
   • 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.

1. “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.
2. 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:

1. National Consumer Dispute Resolution Commission  (NCDRC) at the national level
2. State Consumer Dispute Resolution Commission at the state level
3. 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

Conclusion

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.

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References:

1. Dinesh Bhagat v.  Bajaj Auto Ltd. (1992) III CPJ 272
2. Smt. Pushpa Meena v. Shah Enterprises (Rajasthan) Ltd. (1991) 1 CPR 229
3. Rampion Pharmaceuticals v. Dr. Preetam Shah (1997) I CPJ 23 (NCDRC)

This article is written by Somnath Sharma, a law graduate.

Every individual irrespective of occupation, age, community, gender, caste, race, or religion, is a consumer. Consumer rights and protection are the structural part of the life of every person and we all have made use of them at some point in our day-to-day life. The consumer is the genuine deciding agent for all economic activities. It is now globally accepted that the expanse of consumer protection is the true measure of the level of progress in a nation. This article is an attempt to examine, analyse and review consumer protection in India.

Introduction

The concept of consumer protection is as old as human civilisation. Protecting the buyers’ interests is among the prime considerations of the business. Mahatma Gandhi’s political ethics said that the consumer is allowing the entrepreneurs to serve him and he is the subsequent purpose of the business; we can even go to the extent of saying that according to certain studies of some Indian traditions, consumer/customer is equivalent to God but the profit motive of the marketers and dealers is resulting in consumer exploitation through deceitful and immoral market practices. Consumer protection is a socio-economic day-to-day activity that is to be carried out by government and businesses with the prime objective of protecting the interest of consumers and their fair satisfaction. The duty to protect the consumer interests and rights is the responsibility of the government through constructing policies and laws. Consumer Protection Act 1986 is considered a turning point in the history of India for consumer rights. This Act inspects the background and evaluation of the Consumer Protection Act over a while.

Who are consumers?

A person who purchases goods and services is called a consumer. Consumer rights generally refer to laws that give power to consumers against exploitation and misconduct, misinformation, and misguiding by producers and sellers and force them of goods; to protect the interests of consumers.

The Rights of consumers

The essential rights of consumers that are striving to be upgraded and protected are:

1. The protection against the marketing of goods and services which are hazardous to life and property.

2. To notify the customers about the quality, quantity, potency, purity, standard, and price of goods, or services against unfair practices.

3. The right to be guaranteed and retrieve a variety of goods and services at competitive prices.

4. The right to be informed and to be assured that consumers’ welfare will receive due deliberation at relevant forums.

5. The right to pursue amends against biased trade practices or prohibited trade practices or unethical exploitation of consumers.

6. Consumer education rights.

Changing Phase of consumer protection since ancient India

The theory of consumer protection against prejudiced and biased malfunction practices safeguarding the interests of consumers was a part of Indian tradition and management for centuries in ancient times. It can be seen in ancient Indian Dharmasastras like Manu Smriti, the Yajnavalkya Smriti, the Brihaspati Smriti etc., illustrated the living standards of the people of that period and were grounds on the dharma to be abided at that period. Manu Smriti was one of the persuasive and authoritative scripts that treated various consumer affairs. During the Mughal period (Mediaeval period) who ruled India, like Alauddin Khilji, Sher Shah Suri and Akbar, etc., thought about protecting consumer rights and they enacted strict laws for the same. They introduced weights and measured the standardisation process. The British Rule, also called modern India, combine the previous customs and cultures with a unified nationwide system that had similarities with the laws already enacted in Britain. Britishers introduce Acts like the Indian Penal Code, 1860, the Carriers Act, 1865 Law of Tort, The Indian Contract Act, 1872, Sales of Goods Act 1930, and the Agricultural Product (Grading and Marketing) Act 1937. After Independence, many laws were passed in India for shielding innocent customers from unfair and restrictive trade practices. The Acts that were enacted and protected the whole of the Republic of India are: the Drugs Control Act 1950, the Industry’s Development And Regulations Act 1951, The Drugs And Magic Remedies Objectionable Advertisements Act 1954, The Prevention Of Food Adulteration Act 1954, The Essential Commodities At 1955, The Trade And Merchandise Marks At 1958, The Monopolies And Restrictive Trade Practises At 1969, The Cigarettes Regulation Of Production, Distribution And Supply At 1975, The Standards Of Weights And Measures Act 1976, The Prevention Of Black Marketing And Maintenance Of Supplies Of Essential Commodities At 1980, The Standards Of Weights And Measures Enforcement Act 1985, The Bureau Of Indian Standards Act 1986.

There was a need for a focused and strong law to ensure better protection of the interests of consumers and to save them from unfair trade practices and for this The Consumer Protection Act 1986 was enacted by the Indian Government. The motive is to make provision for the organization of consumer councils and other dominance for the arrangement of consumer disputes and matters connected therewith.

Landmark Judgements

The State Commission of Andhra Pradesh in the case of Narasamma v. LIC of India¹ on 20 March, 2018 decided that the widow of the insured is also a consumer and is entitled to benefits.

Morgan Stanley Mutual Funds versus Karthik Das², the court held that the person who has applied for shares cannot be called a consumer till the time the shares are allotted to him.

V. N. Shrikant v. Anita Sena Fernandes³, it was decided that in cases of medical irresponsibility, there is no strait waistcoat formula to decide when the consumer’s source of action arose. In the face of such trauma and pain, the applicant has been inadequate to come up with a clear statement for why she has not contacted her doctor for the past 9 years. The applicant’s actual claim for reimbursement is sabotaged by her tranquility. As an effect, the contested order was altered, and the applicant’s complaint was dispersed.

Springs Meadows Hospitals v. Harmony Ahluwalia⁴, The National Consumer Disputes Redressal Commission held that since the incumbent doctor and nurse were staff of the hospital, both were liable and reimbursed ₹12.51 Lakh to the child and ₹5 Lakh to the parents for genuine psychological trauma.

In the ultramodern times, the desires and beliefs of the consumer have advanced in the wake of rising knowledge and proliferation and thus the protection of the rights of consumers is foremost. The Consumer Protection act 1986 almost a three-decade-old act was replaced by a new Consumer Protection Act, 2019.

The difference between the Act of 1986 and 2019:

Consumer Protection Act 1986 – This Act was narrower in scope it covers only six types of Unfair/ Deceptive Trade Practices. There were no provisions for product liability, unfair contacts, alternative dispute resolution mechanisms, and E-commerce and direct selling. The role of the Central Protection Councils was to promote and protect the rights of Consumers. There were different committees prescribed for the selection of members in consumer dispute Redressal Commissions.

Consumer Protection Act 2019 – This Act is broader in scope it adds more than 3 new unfair trade practices and contains the provisions of Product Liability, unfair contacts, E-commerce, direct selling, and mediation/ alternative dispute resolution. The regulator by the name of the Central Consumer Protection Authority shall be established. The Central government has the power to appoint the members. This act has advisory bodies for the promotion and protection of Consumer rights. A person failing to comply with the orders of the commission can face imprisonment up to three years or a fine not less than Rs 25000 which may extend to Rs one lakh or both.

Conclusion

The Consumer Protection Act simply says that there should not be any restraint or bar to the rights of the customers. While explaining, it is simplified in such a way that the rights of the customers are safeguarded against the unfair trade practices in the market. Consumers should always be conscious of their rights. In some cases, Supreme Court asked the Commission to be broad-minded when constructing the law and take a sensible view of consumer rights. It’s good that the Consumer Protection Act of 2019 was sanctioned contemplating all the ongoing events but still, there is a need for genuine execution of the act. Still, many consumers in our country don’t know much about their legal rights and have a conception that the court work is time taking as a result of which they are in doubt to file the case. The Government of India should try to upskill the consumers on their legitimate rights and should also clarify the case filing structure.

Citations

¹ (1992) CPJ 128 (NC).

² 1994 SCC (4) 225, JT 1994 (3) 654.

³ [SC/0868/2010].

⁴ 1998(2) SCALE 456 (SC).

This article is written by Ashmita Dhumas, who has done her BA LLB from Agra College and is currently doing a diploma in Corporate Law from Enhelion.