Tag: #consumerprotectionact

-Report by Harshit Gupta

In the case of “The Chairman & Managing Director City Union Bank Ltd. & Anr. V. R, Chandramohan“, the apex court held that the burden of proving the deficiency in service is on the aggrieved party, and in the present case, the respondent-aggrieved was not able to prove that there was any deficiency in service.

FACTS:

The present appeal was from the order dated 01.02.2007 passed by National Consumer Disputes Redressal Commission, Circuit Bench at Chennai hereinafter “National Commission.” The National Commission confirmed the judgment and order dated 23.12.2004 of the State Consumer Disputes Redressal Commission, Chennai “State Commission.” The facts behind the case are that the respondent here was a complainant against the appellants before the State Commission for a deficiency in service on the side of banks. The respondent is a Managing Director of “D-Cube Constructions (P) Ltd” and has its office in Chennai. Shri R. Thulasiram and Shri R. Murali were the other directors of the same company. An NRI named Ravindra sent two drafts one for 5 lakhs and another one for 3 lakhs INR. On checking out, the respondent found that the drafts have not been credited to his account. Later the respondent came to know that appellant No. 2 was presented and the same was paid to the City Union Bank, Ram Nagar Branch. The respondent requested that appellant No. 2 to re-credit the amount to his account. Respondent found that another account in the name of “D-Cube Construction” is being operated and the drafts were credited into that account. He thereafter filed a complaint in the State Commission and was decided in the favour of the complainant by granting him rupees 8 lakhs along with one lakh as compensation. Being aggrieved by the order of the State Commission, the appeal was filed in the National Commission and was dismissed by the National Commission.

CONTENTIONS:

Appellants:

The counsel for the appellants contended that both the Commissions had erred while giving Judgement and Order in this case as there was no fault or imperfection from the side of the Bank and there was no deficiency in service under section 2(1)(g) of Consumer Protection Act, 1986. He relied on cases “Ravneet Singh Bagga V. KLM Royal Dutch Airlines and Anr. ” and “Branch Manager, Indigo Airlines Kolkata and Anr. V. Kalpana Rani Debbarma and Ors” that the complaint was not even maintainable before the State Commission and the respondent had failed to prove any deficiency in service on the part of the appellants. He also contended that drafts were issued in the name of “D-Cube Construction” only.

Respondent:

The counsel for the respondent contended that two forums had consistently held the appellants liable for the deficiency in service. He further added that the banks are vicariously liable for the actions of their employees. He further relied on the cases “Kerala State Cooperative Marketing Federation V. State Bank of India and Ors.” and “Indian Overseas Bank V. Industrial Chain Concern.”

JUDGEMENT:

In the current case, the main issue was that was there any deficiency in service as required by the provisions of the Consumer Protection Act, 1986 and in answer to this question the Court held that there was any willful neglect in deficiency in service or imperfection or shortcoming. The Court relied on the appellants’ case of Bagga. The court said that since some disputes were among the director, therefore, the bank cannot hold them liable if they acted bona fide and followed the due procedure. The Court further added that the burden to prove is on the aggrieved party and here the respondent was unable to prove that there was any deficiency in service on the part of the bank. Hence the order of the National Commission and State Commission was set aside.

READ FULL JUDGMENT: https://bit.ly/3KAnvxg

S.no	Contents
1.	Introduction
2.	The Consumer Protection Act
3.	Features of The Consumer Protection Act 2019
4.	Rights of The Consumers
5.	The Consumers Protection Act 2019 Authority
6.	Issues with Consumer Protection Act, 1986
7.	Consumer Protection Act 2019 Amendment
8.	Consumer Protection Act Demonstration and Direct Selling
9.	Supreme Court Cases
10.	Different Features of the Consumer Protection Act 1986 and 2019
11.	Conclusion

Introduction

Each person purchases different goods and services in their everyday life. Anything they purchase needs to Pay for itself and get fulfilment from its utilization and use. But now and again they don’t feel happy with the item they buy. This might be a record of low quality of the item, cheating by the retailer, lower nature of constants, deceiving promoting, etc.^[1]

The digital era has guided and immensely filled in this new period of online business and acquired its degree new assumptions and wants of the shoppers. It has now become effectively available, with more extensive decisions to the customers, and gives viable techniques for business.

Because such a transformation is achieved by digitalization, the consumer protection act, of 1986 had a few difficulties and confronted numerous mishaps which required quick consideration. Be that as it may, the public authority achieved an extraordinary change and presented the Buyer Security Act, 2019 which came into force on 20 July 2020. This previous sanctioning had been reconsidered once in a while to get it congruity with changes achieved by globalization, financial progression, digitalization of items and administrations, and so on be that as it may, its execution was far to accomplish its ideal goal of financial regulation which looked to give security of the interests of the customers. While then again the new Buyer Insurance Act, 2019 will fortify and upgrade the extent of assurance given to the purchasers by redoing the promoting claims, supports, disciplines, prison terms, organization of the debates, and different variables.

The Consumer Protection Act

Consumer Protection Act^[2] is a law that protects consumers from unfair, harmful methods by businesses and sellers of goods and services. First Consumers Protection Act came in 1986 and the parliament of India elected it. It also gives consumers the right to Safety, Choice. Also, the Consumers Protection Act imposes duties and liabilities on producers. It gives hope for the bits of help of helpless consumers. This Consumers Protection Act came as a “Panacea” for consumers all over the country. The Consumers Protection Act makes a system name “three-tier” it is set up at the State, District, and National levels. The Consumer Protection Act was replaced by the Government as The Consumers Protection Act 2019.

Features of The Consumer Protection Act 2019

The Consumer Protection Act 2019 has some features that are: 

• The Consumer Protection Act defines a consumer as a person who buys goods and services with careful thought. 
• Consumer Protection Act does not allow goods and services for commercial purposes. 
• Consumers Protection Act covers transactions with all modes online, and offline through electronic, also multi-level marketing. 
• For Consumer Protection Act central Government made set up it was CCPA (Central Consumer Protection Authority). 
• It protects and enforces the right of consumers CCPA impose a penalty for those who supply goods up to 10 lacks and two-year imprisonment for any false advertisement.
•  For subsequent offense fine extend to Rs 50 lakh and imprisonment for five years.

Rights of The Consumers

In The Consumer Protection Act 2019, Consumers have some rights that are:

• Consumers have the right to know all the information related to the goods and services, like goods and services quality, quantity, how much pure, and also the prices should inform the consumer. 
• Sometimes consumers’ right to protect goods and services can be dangerous to their life and property. Rights to protect from hazardous goods and services.
•  The consumer has the right to be protected from unfair trade practices. 
• They have the right to access a variety of goods and services.
•  Consumers should have the right remedy or compensation for any losses or suffering.
• Right to give consumers proper education.
• Also, the consumer has the right to need a clean and healthy environment.

The Consumers Protection Act 2019 Authority

• The central government establish an authority to protect consumer goods and services, which is CCPA (Central Consumer Protection Authority) as a regulatory authority.
•  CCPA protects consumer rights and regulated some cases that are related to unfair trade practices. 
• CCAP gives power to consumers.
• Consumers can take Suo-Moto action, recall the product and cancel licenses. 
• CCAP has the right to investigate consumer law violations.

Product of Goods and Services Liability

The huge expansion to the 2019 demonstration is the arrangement for item obligation by which the makers or specialist co-ops have been made dependable to repay the purchaser for any mischief, injury, or misfortune experienced because of damaged items, or lack of help. This additionally incorporates web-based business inside its ambit and even they can’t get away from the fury of the go-about as now the item responsibility has been stretched out to the specialist co-ops and not simply restricted to the producers.

• The defeat of some Design. 
• Responsible for all the compensation for injuries and damages. 
• Services of the product provided faulty.

Issues with Consumer Protection Act, 1986

• Remove all the  imperfections from the goods;
• Substitution of the goods;
• Discount of the prices which are paid;
• Give compensation to the consumer for all the losses or injuries;
• Withdrawal of the hazardous goods from being made available for purchase; or Giving satisfactory expenses to parties.
• Evacuation of deformities or lacks in the administrations;
• Discontinuance of unjustifiable exchange rehearses or prohibitive exchange practices or course not to rehash them.

Consumer Protection Act 2019 Amendment^[3]

• In chapter one section 2 sub-clauses(4),(13),(14),(16),(40)
• In chapter two sections 3 to 9 both are inclusive
• In chapter four sections 28 to 73 both are inclusive. Except for some sub-clauses (iv) of clause (a) of sub-section(1) of section 58.
• In chapter five sections 74 to 81 both are inclusive
• In chapter six sections 82 to 87 also both are inclusive
• In chapter seven sections 90 and 91 except sections 88,89,92&93
• In chapter eight  sections 95,98,100 sections 101 except for some clauses (f) and clauses (zg), (zh), and (zi) of the sub-sections 2
• Sections 102,103,105, 106, 107 except sections 94,96,97,99,104

Monetary Limit

The National Consumer Disputes Redressal Commissions(NCDRC) will hear grievances where the debate esteem is worth more than Rs. 10 crores. The State Consumer Disputes Redressal Commissions will hear objections where the contested worth is more than Rs 1 crore but not as much as Rs 10 crore. While the Locale Buyer Questions Redressal Commissions will engage in protests when the worth of products or administration depends on Rs 1 crore.

Consumer Protection Act Demonstration and Direct Selling

One more change was connected with online business working as per the regulations set for direct selling. The rules make it obligatory for the e-organizations to uncover the dealer’s subtleties like their location, site, email, and so on, and data connected with discount, return, assurance and guarantee, conveyance, shipment, instalment choices, the wellbeing of instalment, complaint taking care of the instrument and so on. This step is fundamental as in the developing universe of online businesses damaged and lacking items and administrations are given and through this arrangement the organizations could be punished for something very similar.

“Under the new Demonstration, the web-based business will be represented like direct selling in India and online stages for selling labour and products, or conglomerating administrations will be expected to take responsibility for any infringement of customer privileges or embracing any out-of-line exchange rehearses,”^[4] Mehta said

Supreme Court Cases

• Rojer Mathew v. South Indian Bank LTD.^[5] (This Judgement came in November 2019) Judgement given by Ranjan Gogoi Chief justice of India Leave Granted.
• Association For Consumer Welfare And Aid v. Granite Properties Private Limited (2019) This case was dealt with by the Supreme Court of India. The Judgement of the Court delivered by DR. D.Y. Chandrachud, j. Civil appeal no 259 of 2019 The National consumer disputes redressal commission(NCDR). “ The consumer on whose behalf this complaint is instituted did not hire or avail the services of opposite party 1 and therefore they cannot be said to its consumers.“^[6]

Current cases:

• M/S. Texco Marketing Pvt. Ltd. v. TATA  AIG General Insurance Company Ltd (2022)
• Ibrat Faizan v. Omaxe Buildhome Pvt.Ltd.(2022)
• Shankarlal Nandani v. South Indian Bank LTD.(2022)
• Texco Marketing Private Limited v. Tata Aig General Insurance Company Limited And Others. (2022)
• Sunil Kumar Maity v. State Bank of India and another(2022)

Different Features of the Consumer Protection Act 1986 and 2019

In consumer protection act there is some kind of differences we find between the consumer protection act 1986 and the consumer protection act 2019 that’s are:

• Regulator:
  In Consumer Protection Act 1986 there is no separate regulator but in Consumer Protection Act 2019 there is an authority formed that is CCPA(Central consumer protection act)
• Consumer Court:
  In the consumer act, 1986 complaint was filed in the consumer court where the sellers or the defendant’s office is located but in Consumer Protection Act 201complaintsed filed the consumer court where the complaints are worked. 
• Product Liability: 
  In Consumer Protection Act 1986 there is no such provision of product liability consumers can apply in civil court but not in consumer court. In Consumer Protection Act 2019 consumers have product liability they get their compensation for any kind of harm caused by the services. 
• Mediation Cells: 
  In Consumer Protection Act 1986 there is no such legal provision for Mediation cells but in Consumer Protection Act 2019 court refer settlement through the mediation cells.

Conclusion

The Consumer Protection Act 2019 is a productive step that would bear natural products later on. The act incorporates inside itself a few new ideas which were the need of great importance and the prospect of executing a similar in a nation like India would give a palatable outcome. In the developing universe of digitalization steps like e-recording of cases, and procedures through video conferencing will change, create and upgrade customer freedoms by and large. However, one can’t deny and scrutinize the execution of down-to-earth earth use of the arrangements. For any law and regulation to find actual success, fundamental its execution ought to be done appropriately and productively. Hence, for the 2019 demonstration to become useful it needs to defeat its disadvantages and slack ought to be given to realize the help for the shoppers. Consumer Protection Act gives a law designed to ensure fair competition and free of truthful information in the market areas. The law is designed to prevent businesses that are engaged in fraud or UTP(Unfair Trade Practices). The Consumer Protection Act 2019, is a Constructive Step that would bear fruits in the Future.

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Endnotes:

1. Consumer Protection Act 1987, https://www.which.co.uk/consumer-rights/regulation/consumer-protection-act-1987-a5xTL3w6L9OI
2. THE CONSUMER PROTECTION ACT, 1986, https://legislative.gov.in/sites/default/files/A1986-68_0.pdf
3. The Consumer Protection Act, 2019, https://consumeraffairs.nic.in/sites/default/files/CP%20Act%202019.pdf
4. Draft Consumer Protection (Direct Selling) Rules, 2021, https://consumeraffairs.nic.in/sites/default/files/file-uploads/latestnews/Draft%20Consumer%20Protection%20%28Direct%20Selling%29%20Rules%2C%202021.pdf
5. Rojer Mathew v. South Indian Bank Limited, (2020) 6 Supreme Court Cases
6. Shipra Singh, Here’s how consumers will benefit under the new Consumer Protection Act, https://economictimes.indiatimes.com/wealth/spend/heres-how-consumers-will-benefit-under-the-new-consumer-protection-act/articleshow/70711304.cms?from=mdr

This article is written by Pranita Dhara, a student of Lloyd Law College.

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.

“A market without consumers will be a night sky without the stars and moon.”

The Concept Of Consumer Protection

The consumer movement started in developed countries almost a century ago.  An American businessman was once quoted saying, “God created masses of mankind to be exploited. I exploit them. I will do his will.” This, though may not be the approach of every business person, is by and large true and hence proves the need for Consumer protection. Consumer protection guidelines or consumer protection laws came up as an answer to the malignant exploitation which the consumers faced at the hands of sellers and businessmen. 

Previously it was the buyer’s duty to carefully examine goods for any defects or deficiencies before buying them. This was a time when the maxim “Caveat Emptor” was followed, meaning “let the buyer be aware.” However, gradually it was noticed that since there was no way by which a consumer could know or identify any inherent defect in a product (due to reasons such as lack of knowledge), they were being taken undue advantage of by the sellers. This resulted in the consumer movement. Protests and campaigns worldwide finally resulted in the shift from “Caveat Emptor” to “Caveat Venditor,” meaning, “let the seller be aware. Thus the obligation slowly shifted from the buyers to the sellers. 

Consumer Protection In India

The Government had enacted various legislations for protection of the interest of the consumers after independence including, The Prevention of Food Adulteration Act 1954, The Standard of Weights and Measures Act 1976, The Bureau of Indian Standards Act 1986, The Monopolistic Restrictive and Unfair Trade Practices Act, 1969. However, India still lacked comprehensive legislation benefiting the interests of the consumers. Consumer Protection Act, 1986 was the first step towards safeguarding the rights of consumers in India. It guaranteed some fundamental rights to the consumers, which are explained as follows:

RIGHT TO SAFETY

This right confers the consumers with the power to insist on the quality of goods before buying them. They have the right to be protected against the marketing of hazardous goods and services. Consumers must buy products marked with ISI, AGMARK.

RIGHT TO BE INFORMED

Consumers have a right to be informed about the quality, quantity, standard, potency, and price of the goods as a means of protection from unfair trade practices.

RIGHT TO CHOOSE

Access to a variety of goods and services at a competitive price also is a right of the consumers. In the case of monopolies, the consumers must be ensured of a good quality of product at a fair price and must be protected from any unfair advantages which the seller might try to take. 

RIGHT TO BE HEARD

The consumers have a right to voice their grievances at consumer forums and receive due compensation for any damages incurred.

RIGHT TO SEEK REDRESSAL

The rights to a fair settlement in cases of a genuine grievance and protection against unfair trade practices or exploitation of consumers have also been guaranteed under this Act.

RIGHT TO CONSUMER EDUCATION

 To successfully implement the goal of consumer protection, consumers must be made aware of their rights and ways in which they can exercise them effectively. Rural consumers need special attention in this aspect as they face the most exploitation on account of lack of awareness.

The same Act also introduced a three-tier grievance redressal mechanism. Unfortunately, people in India, less aware of their rights as well as remedies, could not utilize the provisions to their full advantage. To correct this problem, the Government has undertaken measures to educate the consumers about their rights. One such popular campaign was ‘Jago Grahak Jago’ in 2005, which aimed at creating awareness on consumer protection.

Throughout the last decade we have seen an evolution in the ways of trade. As online shopping portals became the go-to place for an increasing number of people, the Parliament realized the loophole in the present Consumer Protection Act, 1986, as it did not cover online transactions. The legislature’s objective was to leverage the power of consumer protection, which had previously been limited to products and services under the Consumer Protection Act of 1986, to include complaints and difficulties stemming from the expansion of virtual markets. The legislature, keeping in mind all the new provisions that needed to be added to keep pace with the digital age, scraped the old statute and enacted the Consumer Protection Act, 2019 which included new concepts such as e-commerce, product liability, mediation, and the establishment of a Central Consumer Protection Authority as an executive authority for settlement of all consumer grievances. 

E-Commerce And Its Inclusion

Under Consumer Protection Act, 2019, e-commerce has been defined as “means buying or selling of goods or services including digital products over a digital or electronic network” Unlike the previous legislation, it includes all online transactions shielding customers of online shopping portals from getting cheated or online frauds. Liabilities such as maintaining a fair trade practice, reimbursing or compensating consumers in return for products, and correct and accurate advertising of products were placed on e-commerce entities and online sellers. Also, incorporating all e-commerce organizations under the Companies Act, 2013 was made compulsory through this Act. 

The new Act has enhanced consumer rights by making e-retailers more accountable and creating a transparent redressal procedure, which has helped customers in making more informed decisions when purchasing products and services. Effective implementation of rigorous restrictions, as well as penalties and punishment, has acted as a catalyst in deterring the producers and retailers from using dishonest and exploitative practices. In addition to this, convenient grievance resolution mechanisms have encouraged more consumers to engage in online transactions and strengthened consumers’ confidence in e-retailers, finally resulting in the development of this sector and an increased flow in profits.

Product Liability Under CONSUMER PROTECTION ACT, 2019

Under Chapter VI of the Consumer Protection Act, 2019, the concept of product liability has been defined. It was not previously included in the 1986 act and is a new addition in order to make the product manufacturers, sellers, and service providers more stringently liable against any defective product sold or poor service delivered. This concept was developed based on the maxim of “Caveat Venditor” Under the following circumstances, and if any harm is suffered by a consumer, they can bring in liability action against the manufacturer or seller:

1. If a product contains any manufacturing defect or is defective in design
2. It does not conform to the express warranty
3. The product does not have sufficient information about the correct method of usage or any warning against any potential harm or injury that could be suffered on account of any incorrect use. 
4. In the case of a service provider, if he was negligent in providing the service, which resulted in an injury to the consumer, or the service delivered was deficient and inadequate, he could be made liable.
5. A product seller can be made liable in cases where he had a substantial amount of say over designing, manufacturing, packaging, or labeling of the product that caused harm.
6. If a product seller altered or modified the product while selling it, then also he could be made liable.

One important point to note is that the liability of the product manufacturer is absolute under all circumstances. Even if he claims to have taken substantial care and there was no negligence on his part, he cannot escape his liability. In comparison, there are certain exceptions allowed to product sellers. In cases where at the time of the accident, the product had been altered or misused, the product seller cannot be made liable.

The Supreme Court, in a case, pointed out that in issues relating to Product Liability, the court will adjudge the matters based on the facts and the evidence presented in the court of law.

Mediation Under CONSUMER PROTECTION ACT, 2019

Alternative Dispute Resolution methods have become an increasingly popular method of settling disputes in the corporate sectors. Through the 2019 act, the Government allowed mediation to be used as a process for addressing the grievance of consumers. In the case of Afcons Infrastructure Ltd v. Cherian Varkey Construction Co. (P) Ltd, the Supreme Court ruled that all the matters related to commerce, trade, consumer dispute, or contract could be mediated. It is placed a duty on the State Government to establish mediation cells, the mediating officers of which, while moderating a case, must follow the principles of natural justice. 

The guidelines to be followed in the process of mediation were laid down by the Supreme Court in the case of Bijoy Sinha Roy V Biswanath Das & Ors. According to the guidelines, if at any point while hearing the consumer disputes, the officer feels that such an issue can be effectively settled through mediation, then with the consent of both the parties, it can be referred for mediation. 

Conclusion

The Consumer Protection Act, 2019, in its true sense, has made it easier for consumers to voice their dissatisfaction with products or services obtained and get remedies for the same. The inclusion of online sale services and the introduction of settlement dispute mechanisms such as mediation have made a positive impact. Also, the undertaking of campaigns to create awareness among consumers has resulted in an informed citizenry resulting in less exploitation of consumers.

The article is written by Debasmita Nandi, a first year law student of CHRIST (DEEMED TO BE UNIVERSITY), LAVASA.

The article is edited by Shubham Yadav, pursuing B.com LL.B. (4th Year) from Banasthali Vidyapith.

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