Chapter 12 Consumer Protection

Right to be heard is the consumer right under which a business firm set up consumer grievance cell.

AGMARK is quality certification mark which is used for agricultural products. AGMARK sign is issued and certified by the government of India Directorate of marketing and inspection.

Under Consumer Protection Act, 1986, all the cases in which the value of goods and services along with the compensation claimed exceeds ₹20 lakhs, but does not exceed ₹1 crore.

However, the appeals against the orders of a District Forum can also be filled before the State Commission.

The reliefs available to a consumer under Consumer Protection Act are:

1. To remove the defect in goods or deficiency in services.
2. To replace the defective good with a new one, free from any defect.

The component of product mix that helps the consumer to exercise the right to information is Quality Certification of the product.

The various Acts passed by the Government of India which help in protection of consumers’ interest are:

1. The Consumer Protection Act, 1986: The Consumer Protection Act, 1986 seeks to protect and promote the interests of consumers. The Act provides safeguards to consumers against defective goods, deficient services, unfair trade practices, and other forms of their exploitation.

2. The Indian Contract Act. 1872: The Act lays down the conditions in which the promises made by parties to a contract will be binding on each other. The Act also specifies the remedies available to parties in case of breach of contract.

3. The Sale of Goods Act, 1930: The Act provides some safeguards and reliefs to the buyers of the goods in case the goods purchased do not comply with express or implied conditions or warranties.

4. The essential Commodities Act, 1955: The Act aims at controlling production, supply and distribution of essential commodities. This Act also provides for action against anti-social activities of profiteers, hoarders and black-marketers.

5. The Agricultural Produce (Grading and Marketing) Act, 1937: The Act prescribes grade standards for agricultural commodities and live-stock products. The Act stipulates the conditions which govern the use of standards and lays down the procedure for grading, marking and packing of agricultural produce.

6. The Prevention of Food Adulteration Act, 1954: The Act aims to check adulteration of food articles and ensure their purity so as to maintain public health.

7. The Standards of Weights and Measures Act, 1976: The provisions of this Act are applicable in case of those goods which are sold or distributed by weight, measure or number. It provides protection to consumers against the malpractice of under-weight or under-measure.

8. The Trade Marks Act, 1999: This Act has repealed and replaced the Trade and Merchandise Marks Act, 1958. The Act prevents the use of fraudulent marks on products and thus, provides protection to the consumers against such products.

9. The Competition Act, 2002: This Act has repealed and replaced the Monopolies and Restrictive Trade Practices Act, 1969. The Act provides protection to the consumers in case of practices adopted by business firms which hamper competition in the market.

10. The Bureau on Indian Standards Act, 1986: The major activity of the Bureau is formulation of quality standards for goods and their certification through the BIS certification scheme. The Bureau has also setup a grievance cell where consumers can make a complaint about the quality of products carrying the ISI mark.

Following are the responsibilities of a consumer:

1. A consumer should be aware about the various goods and services available in the market, so that he can make a wise choice by comparing their features and prices.
2. A consumer must always buy standardized goods as they provide quality assurance. Thus, look for ISI mark on electrical goods, FPO mark on food products, hallmark on jeweler, etc.
3. A consumer must learn about the various risks associated with the use and maintenance goods. He must follow the manufacturer’s instructions carefully.
4. A consumer must read the labels carefully, so as to have complete information about the price, quantity, ingredients, usage, contents, expiry date, etc.
5. A consumer must ensure that he gets a fair deal.
6. A consumer should be honest in his dealings, choose legal goods and discourage unscrupulous practices like black-marketing, hoarding, etc.
7. A consumer should always ask for a cash memo, as it is the proof of purchase required at the time of taking any action against a fraudulent seller/manufacturer.
8. A consumer must file a complaint in case of any shortcoming in goods or services availed.
9. A consumer should take initiative to form consumer societies that can take active part in educating consumers and safeguarding their interests.
10. A consumer should respect the environment and avoid creating pollution.

Under the Consumer Protection Act, 1986 the following can file a complaint:

• A consumer.
• Any voluntary consumer association registered under the Companies Act, 1956 or any other law for the time being enforced.
• The Central Government.
• Any State Government.
• A legal heir or representative of a deceased consumer.

The Consumer Right being reinforced by this proposal is Right to be informed. A consumer has the right to get true and complete information about the quality, quantity, price, contents, expiry date of the goods and services which he intends to buy. This is because of the legal framework in India has made it compulsory to provides all such information on the package of the product.

Under Consumer Protection Act, 1986 a consumer may be defined as a person, who buys any product or hires/avails of any service for consideration, which has been paid or promised, or partly paid and partly promised, or under any system of deferred payment.

A business must also lay emphasis of protecting the consumers and adequately satisfying them. This is important because of the following reasons:

1. Long-term Interest of Business: Customer is the foundation of business. Satisfied consumers not only bring repeated sales but also give positive feedback about the product, which help to increase the customer-base of business.
In order to satisfy and retain consumers for long-term, consumer protection is necessary. This facilities long-term profit maximisation of the firm.

2. Business Uses Society’s Resources: Business firms use resources that belong to the society such as manpower, mineral resources, capital, etc. Therefore, it is the responsibility of businesses to convert these resources into useful goods and services for the welfare of society.

3. Social Responsibility: Business organisation makes money by selling their products to consumers. It is the social responsibility of businessman to provide satisfaction to their customers and take care of their interests.

4. Moral Justification: Business exists to serve human beings. It is the moral duty of a businessman to serve their customers well and keep them away from exploitative and unfair trade practices.
Therefore, business must avoid unfair trade practices such as adulteration, misleading advertising, black-marketing, etc.

5. Government Intervention: If a business organisation is engaged in any form of exploitative trade practices, government would interfere and can tarnish the image of the company. Therefore, it is in the interest of business itself, to take care of consumer protection.

The Consumer Protection Act provides following six rights to consumers to safeguard their interests:

1. Right to Safety: It means a consumer has a right to be protected against the marketing of such goods and services that are harmful to life and health. Thus, consumers are educated to use standardized goods, such as electrical goods with ISI mark, food products with FPO mark, etc as such goods would be an assurance of meeting quality specifications.

2. Right to be Informed: A consumer has the right to get true and complete information about the quality, quantity, price, contents, expiry date of the goods and services which he intends to buy. Therefore, the legal framework in India has made it compulsory to provide all such information on the package of the product.

3. Right to Choose: Consumers have the freedom to choose products of their choice. This implies that the marketers should offer a wide variety of products in terms of quality, brand, size, etc, so that the consumer can make a wise choice by competitive prices.

4. Right to be Heard: The consumer has a right to file a complaint and to be heard in case of dissatisfaction with a good or a service. It is because of this reason, many enlightened business firms have set-up their own consumer service and grievance cell, and help consumers in redressal of their grievances.

5. Right to Seek Redressal: This right assures justice to consumers against exploitation and includes compensation for any loss or injury suffered by the consumers, replacement of goods or repair of defects in the goods in order to provide satisfaction to consumers. Thus, the consumer has a right to get relief in case the product falls short of his expectation.

6. Right to Consumer Education: Consumer should have knowledge about the various rights and reliefs provided by the legislations to protect their interest. Every consumer has the right to be well informed about his rights, and to spread awareness and education by forming consumer organisations and associations.

Following are the responsibilities of a consumer:

1. A consumer should be aware about the various goods and services available in the market, so that he can make a wise choice by comparing their features and prices.
2. A consumer must always buy standardized goods as they provide quality assurance. Thus, look for ISI mark on electrical goods, FPO mark on food products, hallmark on jeweler, etc.
3. A consumer must learn about the various risks associated with the use and maintenance goods. He must follow the manufacturer’s instructions carefully.
4. A consumer must read the labels carefully, so as to have complete information about the price, quantity, ingredients, usage, contents, expiry date, etc.
5. A consumer must ensure that he gets a fair deal.
6. A consumer should be honest in his dealings, choose legal goods and discourage unscrupulous practices like black-marketing, hoarding, etc.
7. A consumer should always ask for a cash memo, as it is the proof of purchase required at the time of taking any action against a fraudulent seller/manufacturer.
8. A consumer must file a complaint in case of any shortcoming in goods or services availed.
9. A consumer should take initiative to form consumer societies that can take active part in educating consumers and safeguarding their interests.
10. A consumer should respect the environment and avoid creating pollution.

There are various ways, by which the objectives of consumer protection can be achieved:

1. Self-regulation by business: Business firms realize that it is in their long- term interest to serve the consumers well. Socially responsible firms follow ethical standards and practices in dealing with their customers. Many firms have set-up their customer service and grievance cells to redress the problems and grievances of their consumers.

2. Business Associations: The Associations of trade, commerce and business like Federation of Indian Chambers of Commerce of India (FICCI) and Confederation of Indian Industries (CII) have laid down certain code of conduct, which lay down for their members the guidelines in their dealings with the customers.

3. Consumer Awareness: A consumer, who is well informed about his rights and the reliefs available to him, would be in a position to raise his voice against unfair trade practices or unscrupulous exploitation. This would enable him to safeguard his interests.

4. Consumer Organisations: They play an important role in educating consumers about their rights and providing protection to them. They can also force business firms to avoid malpractices and exploitation of consumers.

5. Government: The government can protect the interests of the consumers by enacting various legislations. The legal framework in India encompasses various legislations, which provide protection to consumers. The most important of these regulations is the Consumer Protection Act, 1986, which provides three-tier machinery for redressal of consumer grievances.

For the redressal of consumer grievances, the Consumer Protection Act, 1986 provides for setting up of a three-tier machinery at the district, state and the national levels. These agencies are:

1. District Forum or District Consumer Dispute Redressal Forum

• The State Governments are required to establish District Forums in each district.
• Each District Forum consists of a chairman and two members appointed by the State Government, one of whom should be a woman.
• A District Forum can receive consumer complaints, where the value of goods or services and the compensation claimed is not more than ₹20 lakh.
• The complaint can be filed by a consumer to whom goods are sold or services rendered, or any recognised consumer association.
• On receiving the complaint, the District Forum shall refer the complaint to the opposite party concerned and send the sample of goods for testing in a laboratory. The opposite party is the seller, manufacturer or any organisation against whom the complaint has been filed.
• The district Forum, after being satisfied that the goods are defective or there is some unfair trade practice, can issue an order to the opposite party directing him to either resolve the issue or replace the goods, or return the price paid , or pay compensation to the consumer for loss or injury, etc.

2. State Commission or State Consumers Disputes Redressal Commission

• State Commission is set-up by the State government and its jurisdiction Is restricted to the boundaries of the state concerned.
• The State Commission shall consist of a President, who is or has been a judge of a High Court and two other members, one of whom is a woman. All the three shall be appointed by the State Government.
• Only those complaints can be filed, where the value of goods or services and compensation claimed is more than ₹ 20 lakh but not more than ₹ 100 lakh. The appeals against the orders of any District Forum can also be filed before the State Commission, within 30 days of passing of the order.
• The State Commission, after being satisfied that the goods were defective, can issue an order directing the opposite party to either remove the defect or replace the goods or return the price paid or pay compensation to the consumer for loss or injury etc.

3. National Commission or National Consumer Disputes Redressal Commission

• The National Commission is set-up by the central Government.
• It shall consist of a President, who is or has been a judge of the Supreme Court and four other members appointed by the Central Government one of whom shall be a woman.
• All complaints pertaining to those goods or services and compensation whose value is more than ₹ 100 lakh can be filed. Appeals against the order of any State Commission can also be filed before the National Commission, within 30 days of passing of the order.
• The National Commission has the power to issue orders for recall of defective or unsafe products for replacement or removal of deficiency in service. It can make the manufacturer comply with safety provisions and pay compensation for loss or injury caused.
• An order passed by the National Commission is appealable before the Supreme Court.

Consumer organisations and NGOs perform several functions for the protection and promotion of interest of consumers. These include:

• Creating awareness about consumer rights by organising training programmes, seminars and workshops.
• Imparting knowledge about consumer problems, legal reporting and reliefs available by publishing periodicals and publications.
• Carrying out comparative testing of consumer products in accredited laboratories and publishing the results for the general benefits.
• Encourage consumers to take action against any unfair or unscrupulous activity of the seller.
• Providing consumers legal assistance by providing aid, advice, etc to seek legal remedy.
• Filing complaints in appropriate courts on behalf of consumers.
• Taking initiative for filing case in the interest of general public.

a. Which right was exercised by Mrs. Mathur at the first instance?

The right exercised by Mrs. Mathur in the above case at first instance is Right to seek Redressal.

b. Name and explain the right which helped Mrs. Mathur to avail the compensation.

The right that helped Mrs. Mathur to avail the compensation in the above case is ‘Right to seek Redressal’. This right assures justice to consumers against exploitation and includes compensation for any loss or injury suffered by the consumers, replacement of goods or repair of defects in the goods or repair of defects in the goods in order to provide satisfaction to consumers.

c. State which consumer responsibility has been fulfilled by Mrs. Mathur in the above case.

The consumer responsibility that has been fulfilled by Mrs. Mathur in the above case is filling a complaint in case of any shortcoming in goods or services availed.

d. State any other two responsibilities to be assumed by the consumers.

The other two responsibilities to be assumed by the consumers are:

1. A consumer must always buy standardized goods as they provide quality assurance. Thus, look for ISI mark on electrical goods, FPO mark on food products, hallmark on jeweler, etc.

2. A consumer must learn about the various risks associated with the use and maintenance goods. He must follow the manufacturer’s instructions carefully.