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17710052 consumer-protection-act 17710052 consumer-protection-act Document Transcript

  • Name of Team MembersName Roll CallAkhilesh Kumar 1Munish Kumar Bakshi 3Mukesh Cheeta 7Balasaheb Deshmukh 9Nawab Abdullah Fakih 11Sekhar Ghagas 13Dharmesh Gohel 15Mahaveer P. Gupta 17Yogesh Jain 19
  • IndexChapter Particular Page No. No 1 Introduction 2 1.1 Basic Need for the Consumer Protection Act 2 1.2 Objectives & purpose of the Act 5 1.3 Changing phases & Evolution 5 2 Important definitions 7 3 Right of Consumer 9 4 Dispute Settlement Three tier Mechanism 21 Government initiatives for protection of 5 28 consumer rights 6 Case Studies 33 7 Conclusion 38 7.1. Issues to be addressed 38 Future prospects of consumer movement in 7.2 India 39 7.3 Suggestions and Opinions 40 Annexure i Bibliography & Source of Information 42 1
  • CHAPTER - 11. IntroductionAim of Consumer Protection Act (CPA) is to address the grievances of theconsumers and protecting them from the unethical practices/ behavior orunfair trade practices of the manufacturer/ supplier.Earlier though there were several legislations to protect the consumer, butthe same never proved adequate to protect consumer and compensate them fortheir compliances.CPA become statutory umbrella which made the consumer feel like a king.CPA not only enhances the awareness and educate the consumer but alsoprovide compensation to them by summary and inexpensive proceedings.This keeps manufacturer and the trader alert, creative and innovative.In the era of free competition, market has become very dynamic and marginshave squeezes out. These gave rise to adopt other means/unfair means orpractices in execution of transactions, which resulted into increasedgrievances at consumer front. Hence, the need for the CPA has become morerelevant than the past, where monopoly was the key factor.1.1 Basic Need for the Consumer Protection ActToday Consumer rights are an integral part of our lives like the consumerist wayof life. We have all made use of them at some point in our daily lives.Market resources and influences are growing by the day and so is theawareness of ones consumer rights. These rights are well defined and thereare agencies like the 2
  • Government, consumer courts and voluntary organizations that worktowards safeguarding. If these rights are well defined then the basic question iswhy at all the consumer needs protection?, it has to be followed by themanufacturers/suppliers.So let us look at few reasons because of which consumer needs protection1. Illiteracy and Ignorance: Consumers in India are mostly illiterate andignorant. They do not understand their rights. A system is required toprotect them from unscrupulous businessmen.2. Unorganized Consumers: In India consumers are widely dispersed and arenot united. They are at the mercy of businessmen. On the other hand,producers and traders are organized and powerful.3. Spurious Goods: There is increasing supply of duplicate products. It isvery difficult for an ordinary consumer to distinguish between a genuine productandits imitation. It is necessary to protect consumers from such exploitation byensuring compliance with prescribed norms of quality and safety.4. Deceptive Advertising: Some businessmen give misleading informationabout quality, safety andutility of products. Consumers are misled by false advertisementand do not know the real quality of advertised goods. A mechanismis needed to prevent misleading advertisements.5. Malpractices of Businessmen: Fraudulent, unethical and monopolistictrade practices on the part of businessmen lead to exploitation of consumers.Consumers often get defective, inferior and substandard goods and poorservice. Certain measures are required to protect the consumers against suchmalpractices.6. Freedom of Enterprise: Businessmen must ensure satisfaction of consumers.In the long run, survival and growth of business is not possible without thesupport and goodwill of consumers. If business does not protect consumersinterests, Government intervention and regulatory measures will grow to curb
  • unfair trade practices. 3
  • 7. Legitimacy for Existence: Business exists to satisfy the needs and desiresofconsumers. Goods are produced with the purpose of selling them. Goods will, inthe long run, sell only when they meet the needs of consumers.8. Trusteeship: Businessmen are trustees of the societys wealth. Therefore,they should use this wealth for the benefit of people.While we like to know about our rights and make full use of them,consumer responsibility is an area which is still not demarcated and it ishard to spell out that all the responsibilities that a consumer is supposed toshoulder.1.2 Objectives & purpose of the ActThe basic objective/purpose of this Act is to provide for better protection oftheinterest of the consumers and for that purpose to make provisions forthe establishment of consumer councils and other authorities for thesettlement of consumer’s dispute and for matters connected therewith.Hence, the basic objective is to PROTECT and not to provide a loopholeand excuses to well organized traders, producers and big business housesand manufactures on technical grounds. Educating the consumerregarding their rights and to propagate awareness about the Act and theethical practices/means was the other purpose of the act.1.3 Changing phases & EvolutionIn the early years when welfare legislatures like the consumer protection Act didnot exist, the maxim Caveat emptor (let the buyer beware) governed themarket deals.
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  • British regime:During the British regime (1765-1947), also known as the ‘ColonialEra’, Government’s economic polices in India were concerned more withprotecting and promoting the British interests than with advancing thewelfare of the native population. The administration’s primary per-occupation was with maintaining law and order, tax collection and defense.Accordingly much of the legalization enacted during the British regime wasprimarily aimed at serving the colonial rulers intend of the natives. Therewere, however, some pieces of legislation which protected the overall publicinterest through not necessarily the consumer interest. Prominent among thesewere: the Indian Penal code, 1860, the sale of Goods act,1930, the dangerous drugs act, 1930 and the drugs and cosmetics act, 1940.In a sense, the sale of good act, and the principles of the law of torts were morefor the protection of the trader than the consumer.The Post-Independence Scenario:Growing urbanization due to heavy industrialization resulted inproliferation of human needs-of basic necessaries and also of luxuries. Dueto the shortage of certain necessaries and even their non-availability atreasonable rates with growing menace of adulteration, it was foundnecessary to empower the Government to control their production,quality, supply, and distribution. Therefore the decade of 1950s, right fromthe very beginning, saw the enactment ofa number of laws to safeguard the interests of the consumers from various angles.The enactment of the Banking Companies Act,1949 (later called TheBanking Regulation Act) to amend and consolidate the Law related tobanking matters as well as the Industries(Development andRegulation)Act,1951 to implement the Industrial Policy Resolution of 1948were among the earliest stapes taken by the National Government in India inthe direction of consumer protection.As a result of this change in scenario business has now come to besubstantially
  • regulated by Government and Authorities in favour of consumers. 5
  • In spite of various provisions providing protection to the consumer and providingfor stringent action against adulterated and substandard articles in thedifferent enactments like Criminal Procedure Code, 1908, Indian Contract Act,1972, Sales of Goods Act, 1930, Indian Penal Code 1860, Standard of Weightsand Measures Act,1976 and Motor Vehicle Act, 1988, very little could be achieved in the areaofconsumer protection.In order to provide for better protection of the interest of the consumers theConsumer Protection Bill, 1986 was introduced in the Lok Sabha on December 5th1986. The CPA 1986 was enacted to provide for better protection of the interestof consumer and for the purpose to make provisions for establishment ofConsumers Councils and other authorities for settlement of consumer’sdispute and for matters connected therewith.The CPA is only one of the several Laws framed to protect consumers from unfairand undesirable practices of business community such law became necessary dueto growing frustration of consumers with substandard quality of goods,unsatisfactory services and unfair business trade practices.
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  • CHAPTER - 22. Definitions2.1. “Complainant" means-(i) A consumer; or(ii) Any voluntary consumer association registered under the Companies Act, 1956(1 of 1956) or under any other law for the time being in force; or(iii) The Central Government or any State Government;(IV) One or more consumers, where there are numerous consumers havingthe same interest;]Who or which makes a complaint;2.2. “Complaint" means any allegation in writing made by a complainantthat-(i) An unfair trade practice or a restrictive trade practice has been adopted by anytrader;(ii) The goods bought by him or agreed to be bought by him suffer from one ormore defects;(iii) The services hired or availed of or agreed to be hired or availed of byhim]suffer from deficiency in any respect;(iv) a trader has charged for the goods mentioned in the complaint a price in excessof the price fixed by or under any law for the time being in force or displayed onthe goods or any package containing such goods;(v) goods which will be hazardous to life and safety when used, are beingoffered for sale to the public in contravention of the provisions of any lawfor the time being in force requiring traders to display information in regardto the contents, manner and effect of use of such goods, 7
  • 2.3. “Consumer” means any person who-(i) Buys any goods for self use or with the approval of self person, butdoes not include a person who obtains such goods for resale or for anycommercial purpose or(ii) Hires for avails of any services for self use or when such services areavailed with the approval the first mentioned person.2.4. "Consumer dispute""Consumer dispute" means a dispute where the person against whom a complainthas been made, denies or disputes the allegations contained in the complaint;2.5. "Trader""Trader" in relation to any goods means a person who sells or distributesany goods for sale and includes the manufacturer thereof, and where suchgoods are sold or distributed in package form, includes the packer thereof; 8
  • CHAPTER- 33. Rights of ConsumerInternational Consumer Rights:Websters dictionary defines consumerism as "a movement for the protection ofthe consumer against defective products, misleading advertising, etc."Limited consumer protection was present until the 1950s and early 1960s. Inthe 1950s, a significant breakthrough occurred with the establishment of theproduct-liability concept, whereby a plaintiff did not have to provenegligence but only had to prove that a defective product caused an injury.In his 1962 speech to Congress, President John F. Kennedy outlined fourbasic consumer rights, which later became known as the Consumer Bill ofRights. Later, in 1985, the United Nations endorsed Kennedys Consumer Billof Rights and expanded it to cover eight consumer rights. Consumerprotection can only survive in highly industrialized countries because of theresources needed to finance consumer interests.There are two hundred and sixty consumer organizations in over onehundred countries around the world strives to promote a fairer society throughdefending the rights of all consumers, including the poor and themarginalised, by supporting and strengthening member organisations and theconsumer movementin general; campaigning for consumer rights to be placed at the heart ofpolicy-making to encourage sustainable development. There are eight keyinternational consumer rights as defined by the United Nations Guidelinefor Consumer Protection 1985.They can be simplified into the following:— The right to access to basic needs— To safety
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  • — To information— To choice— To representation— To consumer education— To redress— Healthy environmentIn India to safeguard consumer interest, following rights were envisioned. Right to Safety Right to Information Right to Choice Right to be Heard The Right to Redress The right to consumer education The Right to Basic Needs and The right to a healthy and sustained environment.1. Right to Basic NeedsAccess to food, water and shelter are the basis of any consumers life.Without these fundamental amenities, life cannot exist. In September 2001,Indias stock of food grains were around 60 million tonnes, yet one third of theIndian population lives below the poverty line and consumers often gohungry or remain severely malnourished, leading to poor health. The recentstarvation deaths in Orissa are a case in point. A very crucial objective of theconceptualization and existence of consumer rights is to ensure that consumershave an assured food supply, safe and permanent dwellings, and basic amenitiesof life like sanitation and potable water, and power supply. 10
  • Urbanizations is seen as a mark of development but for rural migrant population,living conditions in cities is very poor. The population of cities is growing rapidlyin India and after 1988, the percentage of urban poor has been more than thatof the rural poor. Around 20 to 25 per cent of the urban households live inslums, make-shift colonies or refugee settlements due to non-availability ofaffordable and decent habitat in urban areas. . According to some estimates, inurban areas alone, there is a housing shortage of 17 million units. This has led toa habitat crisisin Indian cities. In rural India, the situation is equally bad, with a large part ofthe population still living in make-shift dwellings and hutment. With non-permanent housing comes lack of sanitation facilities and other amenities likerunning water and electricity supply. Due to burgeoning population, mostpeople do not have access to dry toilets in rural and urban areas.2. Right to Safe EnvironmentFor urban consumers, environment means parks, gardens, and deterioratingair and water quality. Most urban areas are bereft of any wildlife andpeople are unaware of the biodiversity around them. On the other hand, ruralconsumers relyon their environment for fulfillment of their basic needs.The need for environmental conservation is seen as a necessary defenceagainst deteriorating quality of life world-wide. We are all victims ofcontaminated food and water supply, pesticide-ridden food, adulterated milkand choking exhaust fumes emitting from vehicles. According to a WorldBank report, India is being pushed back due to its high environmental costs.We lose around Rs 24,500 crores every year in terms of air and water pollutionalone. If you live in a city, you must have experienced air and water pollution atsome point of time. Children often fallill due to polluted environments, it leads to increased health costs and discomfortfor consumers. Valuable resources and man-days are lost due to polluted
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  • environment and living conditions. Consumers need to understand that only a safeenvironment can ensure the fulfilment of their consumer rights.International Standards for Safeguarding Right to Safe EnvironmentConsumers International (a nodal agency of consumer organisations from allover the world) has made certain guidelines for ensuring consumers rightto safe environment.Consumers should be protected from environmental pollution by:1. Promoting the use of products which are environmentally sustainable.2. Encouraging recycling3. Requiring environmentally dangerous products to carry appropriatewarnings and instructions for safe use and disposal.Promote the use of non-toxic products by:1. Raising consumer awareness of alternatives to toxic products2. Establishing procedures to ensure that products banned overseas do not enternational markets.3. Ensure that the social impacts of pollution are minimized.4. Promote ethical, socially and environmentally responsible practices byproducers and suppliers of goods and services.Rural consumers are invariably closer to their environment than urbanconsumers. Their livelihoods and way of life depend on the environmentaround them. Their firewood and sources of energy come from trees, manurefor fields comes from livestock, water is procured either from undergroundwater supply or from rivers, the crops heavily depend on annual rainfall,even pesticides for safeguarding of crops and storage also come from treeslike neem. In short, the rural life revolves around natural resources. Forthem, this dependence on the environment is complete and they have astake in its preservation, whether it is for building their houses, fodder for theircattle etc. 12
  • 3. Right to SafetyConsumer right to safety is as vast in its purview as the market reach itself.It applies to all possible consumption patterns and to all goods and services. Inthe context of the new market economy and rapid technological advances affectingthe market, the right to safety has become a pre-requisite quality in all productsand services. For e.g. some Indian products carry the ISI mark, which is asymbol of satisfactory quality of a product? Similarly, the FPO and AGMARKsymbolise standard quality of food products. The market has for long madeconsumers believe that by consuming packaged food or mineral water,consumers can safeguard their health. This notion has been proved wrong timeand again due to rampant food adulteration in market products. Right to foodsafety is an important consumer right since it directly affects the health and qualityof life of consumers. Earlier, the interpretation of the right to safety was limited toelectronic products and other such products. Now, its definition has expanded alot to include safety aspects of new technologies like GM food, food labeling,chemical ingredients in food products etc. In todays scenario of globalisation,consumers have no control over where the products or commodities they use,come from. For instance, the chocolates or syrups we consume, may bemanufactured in countries as far as the U.S. or Australia. Consumers in Indiawould have no control over or knowledge of the manufacturing practices of thosecountries and will have to rely completely on import regulations of the Indiangovernment and food labelling. This makes the consumer right to safety a veryimportant and critical issue for consumers.Safety of natural food products is also a problem of growing concern since dueto increased chemical inputs in farms, our food supply is beingcontaminated with pesticides and chemicals. This poses a grave danger toconsumer health. For non- vegetarians, the problem is even more serioussince food animals are being fed
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  • anti-biotics to fight diseases among animals and boost their growth. This can haveserious repercussions on consumer health.4. Right to InformationRight to information means the right to be given the facts needed to makean informed choice or decision about factors like quality, quantity, potency,purity standards and price of product or service. The right to informationnow goes beyond avoiding deception and protection against misleadingadvertising, improper labelling and other practices. For e.g. when you buy aproduct or utilisea service, you should be informed about a) how to consume a product b)the adverse health effects of its consumption c) Whether the ingredientsused are environment- friendly or not etc .Due to the ever increasing influence of the market and the ever changingscene with price wars and hard-sell techniques, the consumers right toinformation becomes even more important. The right to information meansmuch more than simple disclosure of the products weight or price. Aconsumer has the right to know how the product has been prepared, whether ithas been tested or animals or not, if environmentally-sound techniques andresources have been used in its production processes, what kinds of chemicalsare used into its manufacturing and what could be their impact on consumerhealth. Clearly, a consumer has to consider a lot of factors before s/he buys aproduct.Ideally, a consumer should have knowledge of the entire ‘cradle to grave journeyof the product to determine whether its safe and beneficial for use or no.The‘cradle to grave journey refers to the processes a product goes through- fromthe time of it being made out of raw material, the processes of itsmoulding into its final shape, transportation, labour, ingredients used, to theform in which it ends
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  • up on market shelves. It is only when a consumer is aware of the history ofthe product that he can make informed choices.An example of this is the GM food controversy. GM food is promoted asthe answer to worlds hunger and malnutrition but its safety for consumersand the environment is yet to be proved. Despite strong lobbying by pro-GMgroups and the market, consumers in Europe have campaigned effectivelyagainst the entry of GM food into their food chain and markets. There areinformation and publicity campaigns that have made consumers rally behinda common consumer stand against GM food. As a result, the governmentsand the European Union have placed strict restrictions on the trial uses ofGM technology in the market or in agriculture.Recently, it has come to light that most cosmetics like lipsticks, kajal and mascaraare tested on animals in laboratories to see whether they have any adverse effectson them or no. There was also a controversy about how Nike shoe companywas using sweat labour in South Asian countries, paying its workersabysmally low wages for manufacturing shoes. Similarly, there was a‘McLibel case against McDonalds alleging that Mc Donalds generated a lotlot of unwanted waste dueto its excessive packaging and harmed the environment.The advertising techniques of many products, directly targeting andfeaturing children have also been questioned. Many parents dont evenknow that their children are being targeted by market surveyors to determinetheir consumption habits by collecting data through surveys, interviews and byoffering free samplesof products.It is not just the consumers who use information gathering ordisseminating techniques and tools to protect their consumer rights. Informationdissemination is also used very extensively by advertisers and the market toget their message across to the consumer. Tools and agencies of informationlike newspapers, print
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  • media, television and the Internet are utilised by marketing of consumerproducts and services. This has made advertising a multi-million dollarindustry in India and also world-wide.5. Right to RedressCompetition is the by-product of the market economy. Everyday,manufacturers are discovering newer ways of cheating and dupingconsumers. Unscrupulous market practices are finding their way intoconsumer homes, violating consumer rights and jeopardising their safety. Itis to protect consumer interests that consumers have been given the right toobtain redress. In India, we have a redress machinery called Consumer Courtsconstituted under the Consumer Protection Act (1986), functioning at nationalstate and district levels. But it has not been made complete use of underdue to lack of awareness of basic consumer rights among consumersthemselves.While in the developed world, right to redress is perhaps the mostcommonlyexercised consumer right, in developing countries, consumers are still waryof getting involved in legal redress system. There are consumer courts in Indiawhere any consumer can lodge a case if s/he thinks he or she has beencheated. The details of how to lodge a complaint have been explained elsewherein the manual.6. Right to Consumer EducationConsumer education empowers consumers to exercise their consumer rights. Itis perhaps the single most powerful tool that can take consumers from theirpresent disadvantageous position to one of strength in the marketplace.Consumer education is dynamic, participatory and is mostly acquired by
  • hands-on and 16
  • practical experience. For instance, a woman who makes purchase decisions forthe household and does the actual buying in the marketplace would be moreeducated about market conditions and ‘best buys than a person who educateshimself about the market with the help of newspapers or television. Also, today,it is not just the market or products that a consumer needs to educate himabout but s/he also needs to know about company profile, governmentpolicies and introduction of new technology. Market influences have grown so much that, not just wholesale andretail sellers but even medical practitioners are falling prey to theirpressures. The pharmaceutical industry is one such example. India, with its 1billion population and largely uneducated consumers, is a very lucrativemarket for this industry. The pharmaceutical industry, to boost its sales, offers free samples ofmedicines, freebies, and even free luxury holidays to physicians to influencethemto use their brands and give them preference over other brand names. There havebeen many instances when drugs banned in countries like US, havebeen prescribed to Indian consumers and are readily available as over-the-counter drugs. It is a sad example of gross violation of consumer trustby medical practitioners. This situation is rampant not just in rural areasbut also among educated urban consumers. The reason why the market, inconnivance with physicians, is able to exploit consumers is that Indianconsumers are not aware of the prevailing situation and do not keepthemselves abreast with latest developments taking place around them.Consumer education can play a crucial role in protecting consumers againstsuch dangers. In the Indian context, sustainability and traditional knowledge can play avital role in empowering consumers but consumers are unable to connect totheir knowledge base. Consumer education can rejoin the broken linkand make traditional knowledge accessible to consumers again. Somesources of consumer education are past experiences of consumers,
  • information dissemination by 17
  • government agencies and NGOs, classroom teaching by teachers and informallessons by parents. 18
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  • CHAPTER-44. Dispute Settlement Three tier MechanismThe Consumer Production Act provides for a three tier system of redressalagencies:(1) District level known as District Forum,(2) State level known as State Commission, and(3) National level known as National Commission.A complaint is to be made to the district forum of the concerned district where thevalue of goods and services and compensation, if any, is up to Rs 20 lakhs.A complaint is to be made to the State Commission between Rs 20 lakhs and Rs100 lakhs.A complaint is to be made to the National Commission for more than Rs 100 lakhs.Interestingly, there is provision for appeals against the orders of a particularredessal forum by the aggrieved party before the next higher echelon and evenfrom the findings of the National Commission before the Supreme Court.CONSUMER DISPUTES REDRESSAL AGENCIES1) District ForumComposition of the District Forum. —1. Each District Forum shall consist of,—(a) President: a person who is, or has been, or is qualified to be a District Judge,who shall be its President;(b) Member: two other members, one of whom shall be a woman, who shall havethe following qualifications, namely:— 21
  • (i) be not less than thirty-five years of age,(ii) Possess a bachelors degree from a recognized university,(iii) be persons of ability, integrity and standing, and have adequate knowledge and experience of at least ten years in dealing with problems relating to economics, law, commerce, accountancy, industry, public affairs or administration:Every appointment under sub-section (I) shall be made by the State Governmenton the recommendation of a selection committee consisting of the following,namely:—(i) The President of the State Commission — Chairman.(ii) Secretary, Law Department of the State — Member.(iii) Secretary in charge of the Department dealing with Consumer affairs in the State — Member.2. Every member of the District Forum shall hold office for a term of five years orup to the age of sixty-five years, whichever is earlier:Jurisdiction of the District Forum.—1. Monetary: District Forum shall have jurisdiction to entertain complaints where the value of the goods or services and the compensation, if any, claimed does not exceed rupees twenty lakhs.2. Territorial: A complaint shall be instituted in a District Forum within the local limits of whose jurisdiction,—a ) The opposite party or each of the opposite parties ,actually and voluntarily residesb) Any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides,in such cases, either the permission of the District Forum is given or the consent of the opposite party is necessary.c) If the dispute is pending the civil court,the consumer forum has no jurisdiction to entertain the same. 22
  • 3) Manner in which complaint shall be made.—(1) A complaint in relation to any goods sold or delivered or agreed to be sold or delivered or any service provided or agreed to be provided may be filed with a District Forum by –(a) the consumer,(b) any recognized consumer association whether the consumer is a member of such association or not;(c) one or more consumers, where there are numerous consumers having the same interest, with the permission of the District Forum(d) The Central Government or the State Government as a representative of interests of the consumers in general.A complaint has been admitted by the District Forum, it shall not be transferredto any other court or tribunal or any authority set up by or under any other lawfor the time being in force.4) Procedure on admission of complaint. —(1) The District Forum shall, on admission of a complaint, if it relates to any goods,—(a) Refer a copy of the admitted complaint, within 21 days from the date of its admission to the opposite & such extended period not exceeding fifteen days as may be granted by the District Forum;(b) Where the opposite party on receipt of a complaint referred to him under clause (a) denies or disputes the allegations contained in the complaint to take any action to represent his case within the time given by the District Forum5) Powers of District Forum(a) Summoning & enforcing attendance of defendant or witness & examining the witness on oath.(b) The discovery & production of any document or other material ,object producible as an evidence(c) Receipt of evidence on affidavits6) Finding of the District Forum. — 23
  • (1) Remove the defect pointed out by the appropriate laboratory from the goods; or(2) To replace the goods with new goods of similar description which shall be free from any defect; or(3) (3) To return to the complainant the price, or, as the case may be, the charges paid by the complainant; or(4) To remove the defects in goods or deficiencies in the services in(5) question; or(6) To discontinue the unfair trade practice or the restrictive trade practice or not to repeat it;2. State CommissionComposition of the State Commission. —(1) Each State Commission shall consist of—(a) President: A person who is or has been a Judge of a High Court, appointed by the State Government.(b) Member: Two other members who shall be persons of ability, integrity and standing, and have adequate knowledge and experience of at least ten years in dealing with problems relating to economics, law, commerce, accountancy, industry, public affairs or administration: Every appointment under sub-section (1) shall be made by the State Government on the recommendation of a Selection Committee consisting of the following members, namely:— President of the State Commission -- Chairman; Secretary of the Law Department of the State --Member; Secretary incharge of the Department dealing with Consumer Affairs in the State -- Member:(2) Every member of the State Commission shall hold office for a term of five years or up to the age of sixty-seven years, whichever is earlier: 24
  • Jurisdiction of the State Commission. —(1) Subject to the other provisions of this Act, the State Commission shall have jurisdiction—(a) Monitory- Original: to entertain complaints where the value of the goods or services and compensation, if any, claimed exceeds rupees twenty lakhs but does not exceed rupees one crore; and(b) Appellate: To entertain appeals against the orders of any District Forum within the State; and(c) Supervisory or Revisional: to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any District Forum within the State.3. National CommissionComposition of the National Commission.—(1) The National Commission shall consist of—(a) President : A person who is or has been a Judge of the Supreme Court, to be appointed by the Central Government.(b) Member: Two other members who shall be persons of ability, integrity and standing and have adequate knowledge and experience of at least ten years in dealing with problems relating to economics, law, commerce, accountancy, industry, public affairs or administration:Every appointment under this clause shall be made by the Central Governmenton the recommendation of a selection committee consisting of thefollowing, namely:—(a) A person who is a Judge of the Supreme Court,— Chairman; To be nominated by the Chief Justice of India 25
  • (b) The Secretary in the Department of Legal Affairs —Member; In the Government of India (c) Secretary of the Department dealing with consumer—Member Affairs in the Government of IndiaJurisdiction of the National Commission. —Subject to the other provisions of this Act, the National Commission shall have jurisdiction—(a) Monetary: To entertain complaints where, the value of the goods or services and compensation, if any, claimed exceeds rupees one crore;(b) Appellate: To entertain appeals against the orders of any State Commission;(c) Supervisory or Revisional: To call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any State Commission where it appears to the National CommissionAppeal. — Any person aggrieved by an order made by the Redressal agency may prefer an appeal against such order to the next higher level of agency within a specified period from the date of the order.Appeal to the State Commission: Any person aggrieved by an order made by the District Forum, may prefer an appeal against such order to the State Commission within a period of 30 days from the date of the order.Appeal to the National Commission: Any person aggrieved by an order made by the State Commission, may prefer an appeal against such order to the National Commission within a period of 30 days from the date of the order.Appeal to the Supreme Court: Any person aggrieved by an order made bythe National Commission, may prefer an appeal against such order to theSupreme Court within a period of 30 days from the date of the order.Procedure for hearing the Appeal by National Commission 26
  • 1. Memorandum of Appeal: An appeal memorandum shall be presented by the appellant or his/her agent to the national commission in person or be sent by registered post addressed to the commission.2. Appeal After Limited Period: In this, the memorandum shall be accompanied by an application supported by an affidavit to satisfy the national commission that he/she had a sufficient cause for not to appeal within a period of limitation.3. Appearance of Parties to the Appeals: On the date of hearing, if the party or their agent fails to appear on such date, the national commission either dismisses the appeal or decide ex parte on merits.4. Grounds not urged: The appellant shall not urge or be heard in support of any ground of objection not set forth in the memorandum, except by leave of the national commission.5. Penalty of Orders: Every order of a District forum commission or national commission, if no appeal has been preferred against such order, shall be final.6. Enforcement of Orders: Every order of a District forum commission or national commission may be enforced as if it were decree or order made by the court.7. Penalties: Where a trader or a person against whom a complaint is made , or the complainant fails or omits to comply with any order made by redressal agencies , as the case may be, such trader or person or complainant shall be punishable as per the prescribed norms of the agencies . 27
  • CHAPTER- 55. Government initiatives for protection of consumer rightsSteps Undertaken By the Government for Creating Consumer Awareness:  Public campaign like Grahak Jago Grahak, Grahak Dost etc.  Conduct Street shows, dramas, street plays depicting mock characters.  Hold drawing competitions in the schools by giving relevant themes.  Make people aware about their rights through hoardings. T.V. advertisements etc.  Publicity though print media using newspaper advertisements  Publicity through electronic medium by telecast of video spots  Telecast of video spots in north eastern states:  Meghdoot postcards  Printed literature  Exhibition in Indian science congress at shillong  Nukkad natak contest on consumer issues  National consumer helpline  Core centre  Participation in India international trade-fair-2008  Participation in MTNL health mela  Use of sports events  Outdoor publicity  Joint publicity campaign  Use of internet to generate consumer awareness 28
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  • 6. Case Studies 33
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  • 7. ConclusionConsumer protection movement has got a bright future in India. A part fromGovernmental seriousness in the matter, consumer activism, organizations,civil society and other voluntary associations needs to play their part in thefurtheranceof consumer movement. In the current scenario media can play a vital rolein infusing the consumer behavior and can easily generate opinions orenhance awareness about the possible unfair practices in the market.Above all, the consumers have to be aware of their rights and should assertthem selves in the market place.7.1 Issues to be addressedSome of the commonly raised problems are: Adulteration of food substances by traders through addition of substances which are injurious to health or removal of substances which are nutritious or by lowering their quality standards Misleading advertisements of goods and services in television, newspapers and magazines to influence the consumers demand for the same Variations in the contents filled in the package of goods Improper delivery of after sales services Supply of defective goods Hidden price component Use of deceptive or incorrect rates on products Use of false or non-standard weights and measures in supply of goods Production of low quality goods in bulk quantities Illegal fixation of Maximum Retail Price (MRP) Selling above the MRP Unauthorized sale of essential products like medicines, etc. beyond their expiry date to ignorant consumers Poor customer services Non-compliance with the terms and conditions of sales and services Supply of false or incomplete information regarding the product Non-fulfillment of guarantee or warrantee etc.
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  • All such issues and problems must be handled more efficiently both at theCentre and the State level, with a view to protect the interests of theconsumers and promote their welfare.7.2. Future Prospects of Consumer Movement in IndiaAs a matter of fact, three major problems are confronting theconsumer protagonists in India. The first problem concerns activefunctioning of the Consumer Forums throughout the country. Not withstanding the fact that these Forums have now been established, by andlarge, throughout the country, consumer activists and organizations have been repeatedlyvoicing their grievances against thesmooth functioning of these Forums. They argue that these Forums have alsostarted behaving like Civil Courts and are likely to have mounting arrearssoon. In addition, these Forums still lack basic infrastructural facilities. The members sit only part-time and 90 days decision-making requirement is not strictly adhered to. There are also ego and statusproblems between judicial members and the members with non-judicialbackground. Another significant problem is that the stay orders from theHigh Courts have begun to hold up a large number of cases filed beforethe Consumer Forums, thereby denying the benefits of speedy andinexpensive redressal machinery promised under the Consumer protection Act,1986.The second problem concerns the applicability of the Consumer protection Act, 1986to various services. As is evident, ever since the implementation of the 1986Act, whereas there has hardly been any significant case in which the ‘goods’has been vehemently contested, there is a voluminous amount of case lawwhich involved determination of the meaning, definition, and ambit of the term‘service’. Section2(1)(o)of the 1986 Act categorizes certain specific types of services which, inter alia,
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  • include banking, financing, insurance, transport, amusement andentertainment. The definition of the term ‘service’ had already been kept verywide and now with the inclusion of the two terms ‘housing andconstruction’ by the Consumer Protection (Amendment) Act, 1993, it has beenfurther widened. Only two types of services have been kept out of theambit of the 1986 Act. They are services rendered free of charge and servicesrendered under a contract of personal service. The non-mentioning ofservices like education, health, housing, posts and telegraphs andtelecommunications had presumably given these services an impression oftheir exclusion from the ambit of this legislation. At the initial stages, therefore,these services contested the jurisdiction of the 1986 Act, thereby claimingcomplete immunity from their governance by it. The Consumer Forums,however, have appreciably stood the test of time and have brought all theseservices within the ambit of the 1986 Act.Making consumers aware of their rights and taking consumer movement tothe rural India is the third and perhaps the most important problem and achallenge before the consumer organizations. As is well known, mostconsumers are still ignorant of their rights, much less of being assertiveabout them. Though the Government appears to be serious of this issue, muchhowever depends upon the consumer organizations. They have still to covera very long distance so far as taking the movement to rural areas is concerned.7.3. Suggestions or OpinionsWe feel in todays rampant changing market scenario, there is an increasingnecessity to empowering the consumers through education andmotivation regarding their rights and responsibilities. He/she should beequipped to be fully vigilant so as to be able to protect himself/herself fromany wrongful act on the part of the seller/trader. Several steps have been takenby the Government, both at the Central and State level towards generatingawareness among the consumers.
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  • Given all such initiatives, it is the responsibility of the consumer as well to keepin mind the following suggestions: Purchase products only after their complete scrutiny and not at the cost of attractive advertisements. Keep check on the weighing and measuring instruments used by traders. Avoid buying fruits and vegetables from unhygienic place. Check print of MRP on the packet. Check the quantity as per the figure printed on the packet. Check the expiry date of the product, particularly that of eatables and medicines. Always collect bill at the time of purchase.Moreover, the packaging and appearance of the product should not be theguiding factor for consumer purchases. Along with cost consideration,consumer must be cautious of the quality of the product. Mostimportantly, it is the prime responsibility of a consumer to bring to thenotice of the concerned authorities, any violation in their rights. 41
  • BibliographyBooks:Bulchandani K, 1999, Business law, Himalaya PublicationsWeb sites:Alexander, Richard. "The Development of Consumer Rights in the UnitedStates Slowed by the Power of Corporate Political Contributions andLobbying." 1999. Archived at: http://consumerlawpage.com/article. 1999.http://www.answers.com/topic/consumer-bill-of-rightshttp://www.ftc.gov/bcp/menus/resources/guidance/adv.shtmhttp://www.consumerrightsexpert.co.uk/http://www.consumerdirect.gov.uk/http://www.citizensinformation.ie/categories/consumer-affairs/consumer-protection/consumer-rightshttp://www.consumerdirect.gov.uk/after_you_buy/know-your-rights/http://www.moneysavingexpert.com/shopping/consumer-rights-refunds-exchanhttp://www.skillsportal.co.za/training/sales/509560.htmhttp://www.answers.com/topic/consumerismhttp://grehluxmi.blogspot.com/2008/07/jaggo-grahak-jaggo.htmlhttp://alchemistpoonam.wordpress.com/2007/09/16/consumer-rights-awareness-ii/jaago-grahak-jaago/http://fcamin.nic.in/Events/EventDetails.asp?EventId=1740&Section=Consumer%20Information&ParentID=0&Parent=1&check=0http://www.legalserviceindia.com/http://www.legalhelpindia.com/ 42
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