Group 17 consumer protection

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LEGAL ASPECTS OF BUSINESS

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  • It is said consumer is the king in the world of globalization and liberalization . How relevant is it? <ask two persons>
  • Various laws have been enacted both in British India as well as under Indian Constitution
  • Group 17 consumer protection

    1. 1. CONSUMER PROTECTION LEGAL ASPECT OF BUSINESS GROUP 17 SECTION B Anjani(2010PGP044) | Dhara(FPM) | Dipayan(FPM) Kuldeep(2010PGP164) | Pratap(2010PGP259) | Riaz(2010PGP305)
    2. 2. Why Protect Consumer ?? <ul><li>Popular perception </li></ul><ul><ul><li>Consumer has the right to NOT buy </li></ul></ul><ul><ul><li>Producers run risk of their products getting rejected by consumers </li></ul></ul><ul><ul><li>Consumer calls the shots </li></ul></ul><ul><li>The actual scenario </li></ul><ul><ul><li>Consumers are surrounded and continuously bombarded with multitude of information </li></ul></ul><ul><ul><li>Most of these are misleading, misrepresentation </li></ul></ul><ul><ul><li>Unethical practices like imitation, using false weights, adulteration are abound </li></ul></ul><ul><ul><li>Few businesses are solely driven by catch phrase “ Only business of business is to earn maximum possible profits ”. They resort to all sorts of maneuvers ranging from deceptive advertising to coaxing consumers to treating customers in a disrespectful manner. </li></ul></ul>
    3. 3. “ It is not the consumer who is the king, but it is the large corporation who is the king in the economy. Whatever happens is not because the consumers want it that way, but simply because large powerful corporations prefer it that way” - John Kenneth Galbraith Noted diplomat and economist
    4. 4. Laws Protecting Consumer Interest <ul><li>The British Legacy </li></ul><ul><ul><li>The Indian Penal Code,1860 </li></ul></ul><ul><ul><li>The Indian Contract Act,1872 </li></ul></ul><ul><ul><li>The Usurious Loans Act,1918 </li></ul></ul><ul><ul><li>The Sale of Goods act,1930 </li></ul></ul><ul><ul><li>The Agriculture Procedure Act (Grading and Marketing Act),1937 </li></ul></ul><ul><ul><li>The Drugs and Cosmetics Act,1940 </li></ul></ul><ul><li>The Independent India’s Contribution </li></ul><ul><ul><li>The Prevention of Food Adulteration Act,1954 </li></ul></ul><ul><ul><li>The Essential Commodities Act,1955 </li></ul></ul><ul><ul><li>The Standard of Weights and Measurement Act,1976 </li></ul></ul><ul><ul><li>The Consumer Protection Act,1986 </li></ul></ul><ul><li>Exclusive source of consumer protection for 55 years </li></ul><ul><li>Praised as “Consumer’s Charter” </li></ul><ul><li>Section 16 provides main protection for buyer against sellers for defective goods </li></ul><ul><li>Provides exception to the principle of </li></ul><ul><li>Caveat emptor – “Let the buyer beware” </li></ul><ul><li>Safeguards the interest of buyers </li></ul><ul><li>Phrases: “Skill and judgment of sellers”, “Reliance on seller’s skill”; Test: “ Merchantable quality” provide effective remedies </li></ul><ul><li>Rules interpreted by courts in consumer’s favor </li></ul><ul><li>Deals with crimes against consumers </li></ul><ul><li>False weights and measures </li></ul><ul><li>Sale of adulterated foods or drinks </li></ul><ul><li>Sale of adulterated drugs </li></ul><ul><li>Do not require consumer to prove mens rea </li></ul><ul><li>Rather the offences are strict liability and do not depend on prior knowledge </li></ul><ul><li>By enacting these laws an attempt has been made to look at consumer protection as “a public issue rather than as a private issue” </li></ul><ul><li>In Addition to these remedies under contract and criminal law, consumers have rights under tort law. However due to numerous legal intricacies it is not considered ideal remedy in this relevance </li></ul>
    5. 5. Consumer Protection Act,1986 <ul><ul><li>Necessitated owing to orthodox legal requirements under the tort and contracts act </li></ul></ul><ul><ul><li>Considered highly progressive piece of social welfare legislation </li></ul></ul><ul><ul><li>Objective: </li></ul></ul><ul><ul><ul><li>To buttress Sales of Goods Act </li></ul></ul></ul><ul><ul><ul><li>To Provide cheap, simple and quick justice </li></ul></ul></ul><ul><ul><ul><li>Establish consumer councils and other authorities for settlement of consumer disputes </li></ul></ul></ul><ul><ul><ul><li>Safeguard consumers against various exploitations and unfair dealings </li></ul></ul></ul><ul><ul><ul><li>Unlike punitive provisions of various other laws, its provisions are compensatory </li></ul></ul></ul>
    6. 6. Consumer Protection Act,1986 Rights Recognized under the act <ul><ul><li>Right to Safety </li></ul></ul><ul><ul><li>Right to Choose </li></ul></ul><ul><ul><li>Right to Consumer Education </li></ul></ul><ul><ul><li>Right to be heard </li></ul></ul><ul><ul><li>Right to Information </li></ul></ul><ul><ul><li>Right to Seek Redressal </li></ul></ul>Important Features of the act <ul><li>Applies to all goods and services unless specifically exempted by central government </li></ul><ul><li>Covers all the sectors – public, private and cooperative </li></ul><ul><li>Provides simple , speedy and cheap adjudicatory authorities </li></ul><ul><li>Provides for Consumer Protection Councils at District, State and National level </li></ul><ul><li>Compensatory provisions, empowers and safeguards consumers </li></ul>To be protected against the marketing of goods hazardous to life and property To be assured, wherever possible, access to variety of goods at competitive prices To be educated about the rights of consumers To be heard and to be assured that the consumer interests would receive due consideration at appropriate forums To be informed about quality, quantity, potency, standard and price, purity of goods To seek redressal against unfair trade practices or unscrupulous exploitation of consumers
    7. 7. Definitions <ul><li>Consumer </li></ul><ul><li>Person who </li></ul><ul><ul><ul><li>Deals with goods: Buys any goods for a consideration which has been paid/promised/partly paid and partly promised/deferred payment but does not include when goods obtained for resale/commercial purpose. </li></ul></ul></ul><ul><ul><ul><li>Deals with services: hires/avails of any service for a consideration </li></ul></ul></ul><ul><li>Goods </li></ul><ul><li>As defined in the Sale Of Goods Act, 1930. </li></ul>
    8. 8. Definitions <ul><li>Service </li></ul><ul><ul><ul><ul><li>Service of any description which is made available to potential users including the provision of facilities in connection with it. </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Does not include rendering of any service free of charge or under a contract of personal service. </li></ul></ul></ul></ul><ul><ul><ul><li>Consumer Dispute </li></ul></ul></ul><ul><ul><ul><ul><li>Dispute where the person against whom a complaint has been made , denies or disputes the allegation contained in the complaint </li></ul></ul></ul></ul>
    9. 9. Definitions <ul><li>Restrictive Trade Practice </li></ul><ul><ul><ul><ul><li>A practice requiring a consumer to buy, hire or avail of any good/service as a condition precedent for buying, hiring or availing of any other goods/services. </li></ul></ul></ul></ul><ul><li>Unfair Trade Practices </li></ul><ul><ul><ul><ul><li>As defined under the MRTP Act. </li></ul></ul></ul></ul><ul><li>Defect & Deficiency </li></ul><ul><ul><ul><ul><li>Any fault/imperfection/shortcoming in the quality, quantity potency, purity or standard which is required to be maintained by or under any law in force or under any contract(expressed/implied) or as is claimed by the trade in any manner. </li></ul></ul></ul></ul>
    10. 10. Definitions <ul><li>Complainant </li></ul><ul><ul><ul><ul><li>A consumer </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Voluntary consumer association registered under the Companies Act, 1956/any other law in force </li></ul></ul></ul></ul><ul><ul><ul><ul><li>The Central/State Government </li></ul></ul></ul></ul><ul><ul><ul><ul><li>One or more consumers having the same interest. </li></ul></ul></ul></ul>
    11. 11. Definitions <ul><li>Complaint </li></ul><ul><ul><ul><ul><li>Any allegation in writing made by a complainant that: </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Unfair/restricted trade practices adopted by any trader </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Goods(services) bought(availed)/agreed to bought(avail) suffer from one or more defects(deficiency) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Price being charged higher than the price fixed or MRP </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Offering of hazardous goods for sale to the public </li></ul></ul></ul></ul>
    12. 12. Consumer Disputes Redressal Agencies 3-tier judicial system of dealing with consumer grievances
    13. 13. Consumer Disputes Redressal Agencies District Forums Can entertain complaints where the claim does not exceed Rupees Twenty Lakhs
    14. 14. Consumer Disputes Redressal Agencies District Forums <ul><ul><ul><ul><li>A complaint shall be initiated at the district forum within the local limits of whose jurisdiction: </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>The opposite party or the defendant actually or voluntarily resides or carries on business or has a branch office or Personally works for gain at the time of institution of the complaint </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Any one of the opposite parties (where there are more than one) actually or voluntarily resides or carries on business or has a branch office or personally works for gain at the time of institution of the complaint provided that the other opposite party/parties in acquiescence in such institution or the permission of the forum is obtained in respect of such parties </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>The cause of the action rises wholly or in part </li></ul></ul></ul></ul></ul>
    15. 15. Consumer Disputes Redressal Agencies State Commission Can entertain complaints where the claim exceeds Rupees Twenty Lakhs but not Rupees One Crore. Jurisdiction Power; Can entertain complaints where the claim does not exceed Rupees Twenty Lakhs. A complaint shall be initiated at the district forum within the local limits of whose jurisdiction: <ul><li>The opposite party or the defendant actually or voluntarily resides </li></ul><ul><li>Carries on business or has a branch office </li></ul><ul><li>Personally works for gain at the time of institution of the complaint </li></ul><ul><li>Any one of the opposite parties (where there are more than one) actually or voluntarily resides </li></ul><ul><li>Carries on business or has a branch office </li></ul><ul><li>Personally works for gain at the time of institution of the complaint </li></ul><ul><li>Provided that the other opposite party/parties in such institution or the permission of the forum is obtained in respect of such parties </li></ul>The cause of the action rises wholly or partially
    16. 16. Consumer Disputes Redressal Agencies National Commission Can entertain complaints where the claim exceeds Rupees One Crore. Jurisdiction Power; Can entertain complaints where the claim does not exceed Rupees Twenty Lakhs. A complaint shall be initiated at the district forum within the local limits of whose jurisdiction: <ul><li>The opposite party or the defendant actually or voluntarily resides </li></ul><ul><li>Carries on business or has a branch office </li></ul><ul><li>Personally works for gain at the time of institution of the complaint </li></ul><ul><li>Any one of the opposite parties (where there are more than one) actually or voluntarily resides </li></ul><ul><li>Carries on business or has a branch office </li></ul><ul><li>Personally works for gain at the time of institution of the complaint </li></ul><ul><li>Provided that the other opposite party/parties in such institution or the permission of the forum is obtained in respect of such parties </li></ul>The cause of the action rises wholly or partially
    17. 17. Procedure <ul><li>The complainant is required to file complaint on plain paper which includes: </li></ul><ul><ul><li>Name and full address of complainant </li></ul></ul><ul><ul><li>Name and full address of the opposite party </li></ul></ul><ul><ul><li>Description of the goods or services </li></ul></ul><ul><ul><li>The nature of deception and the type of relief prayed for </li></ul></ul><ul><li>The complainant is required to file copies of supporting documents </li></ul><ul><li>The complaint has to be filed within two years form the date of defective service or supply of product </li></ul><ul><li>Lawyers are not required to represent the complaint </li></ul>
    18. 18. Appellate Jurisdiction <ul><li>Appeal must be preferred </li></ul><ul><li>within 30 days of the date </li></ul><ul><li>of the order by respective </li></ul><ul><li>Forum or Commission </li></ul>Supreme Court National Commission State Commission District Commission
    19. 19. Reliefs <ul><li>The reliefs available to consumers on the complaint may include: </li></ul><ul><ul><ul><ul><li>Removal of defects from goods </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Replacement of the goods </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Refund of the price paid </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Award of compensation for loss </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Removal of deficiency in services </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Discontinuance unfair or restrictive trade practice </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Stopping the sale of hazardous goods </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Withdrawal of hazardous from being offered for sale </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Payment of adequate costs to parties </li></ul></ul></ul></ul>
    20. 20. Penalties <ul><li>In case of Failure and Omission to comply with any order of the State commission or National Commission the punishment is: </li></ul><ul><ul><li>Imprisonment of a term which shall not be less than one month and extendable to 3 years, or </li></ul></ul><ul><ul><li>Fine of not less than Rs. 2000 and extendable to Rs. 10000, or both </li></ul></ul><ul><ul><li>It can be reduced depending upon circumstances </li></ul></ul>
    21. 21. Consumer Protection Councils <ul><li>Established at State and National Levels </li></ul><ul><li>The objective is to promote and protect rights and interests of consumers in the society </li></ul><ul><li>Central Consumer Protection Council </li></ul><ul><ul><li>Set up by Central Government </li></ul></ul><ul><ul><li>The Ministers in charge of Consumer Affairs in the Central Government holds Chairman post </li></ul></ul><ul><ul><li>It consists 150 members which includes official and non Official members </li></ul></ul><ul><ul><li>Its term is 3 years </li></ul></ul><ul><ul><li>One meeting in a years is compulsory and may be more depending upon necessity </li></ul></ul>
    22. 22. Consumer Protection Councils <ul><li>State Consumer Protection Council </li></ul><ul><li>The Minister in charge of Consumer Affairs in the State Government holds the Chairman post </li></ul><ul><li>It also consists other official and non official members representing varied interests </li></ul><ul><li>Two meetings every year are compulsory and may be more according to requirement </li></ul>
    23. 23. Alternative Remedy for Defective Products
    24. 24. Alternative Remedy for Defective Products
    25. 25. Mediation Process
    26. 26. Mediation Process
    27. 27. Three Stages of Complaint Handling Stage1: On receipt of the complaint, there is an automatic acknowledgement with a serial number assigned to the complaint and forwarded to the opposite party within 24 to 72 hours with the request to resolve the complaint within 15 days, under intimation to the complainant Stage2: A reminder is issued after 15 days
    28. 28. Three Stages of Complaint Handling Stage3: After expiry of two weeks from the second stage a strongly worded further reminder is sent , mentioning that the name of the opposite party would be included in a ‘shame List’ maintained at the CORE Centre website(www.core.nic.in) A routine follow up at in between stages as may be required. In case the complainant does not get any response, despite all the efforts taken be CORE, he is advised to pursue the matter before the consumer forum
    29. 29. Case Laws Case1: Indian Medical association Vs. V.P. Shantha and others Case2: Two Year Jail for a car dealer Case3: DTC Ticket Checkers fined for roughing old Man Case4: Airlines Held Guilty Case5: Medical Negligence Case6: False claims about fuel consumption by Bajaj Auto Case7: LPG cylinder Blast
    30. 30. CASE-1 INDIAN MEDICAL ASSOCIATION Vs. V.P. SHANTHA AND OTHERS
    31. 31. CASE-1 INDIAN MEDICAL ASSOCIATION Vs. V.P. SHANTHA AND OTHERS
    32. 32. CASE-2 TWO-YEAR JAIL FOR CAR DEALER
    33. 33. CASE-2 TWO-YEAR JAIL FOR CAR DEALER
    34. 34. CASE-2 TWO-YEAR JAIL FOR CAR DEALER
    35. 35. Case 3 – DTC Ticket Inspectors fined <ul><li>An elderly person, Mr. Mukhtyar Singh was abused and kicked for failing to show proof of being a senior citizen </li></ul><ul><li>He was frisked and Rs. 50 were taken away </li></ul><ul><li>Senior Managers failed to address his complaint </li></ul><ul><li>State Commission directed to cut Rs. 2500 each from the salary of the inspectors </li></ul><ul><li>DTC approached National Consumer Disputes Redressal Commission </li></ul><ul><li>National Commission upheld the jurisdiction </li></ul>
    36. 36. Case 4- Airlines held guilty <ul><li>Airline agent failed to inform about flight cancellation to a couple </li></ul><ul><li>Royal Nepal Airlines held guilty of “ Deficiency in service” </li></ul><ul><li>Airlines are directly liable for the acts of commission and omission of their agents </li></ul><ul><li>Delhi State Commission awarded a compensation of Rs. 55,000 </li></ul>
    37. 37. Case 5- Medical Negligence <ul><li>An Ayurvedic doctor undertook treatment as if he was an orthopedic surgeon </li></ul><ul><li>Plastered broken arm without getting an X-ray done </li></ul><ul><li>Boy’s arm became permanently impaired due to blocking of blood supply </li></ul><ul><li>Delhi State Consumer Redressal Commission awarded a compensation of Rs. 150,000 </li></ul>
    38. 38. Case 6- False claims by Bajaj Auto <ul><li>Bajaj Auto claimed fuel efficiency of Boxer motorcycle as 91 kmpl </li></ul><ul><li>Complainant, Harwinder Singh, found it to be at most 50 kmpl </li></ul><ul><li>“ * “ marked standard conditions applied were written in small letters </li></ul><ul><li>Standard conditions were not mentioned in advertisement or in service book </li></ul><ul><li>Commission directed Bajaj Auto to pay Rs. 25000 as compensation and Rs. 1500 as litigation charges </li></ul>
    39. 39. Case 7- LPG Cylinder Blast <ul><li>Can Oil company escape liability by having “ Dealership Agreement” </li></ul><ul><li>Death of a consumer due to injuries from cylinder blast </li></ul><ul><li>Oil company, the dealer and the insurance company tried to escape liability </li></ul><ul><li>Apex Consumer Court ruled HPCL has to take responsibility </li></ul><ul><li>Decision came after 10 years </li></ul>
    40. 40. Conclusion <ul><li>As consumers, be aware, buy quality products/ services, and seek redressal if there is deficiency </li></ul><ul><li>“ Consumer rules the market” </li></ul>
    41. 41. <ul><li>Thank You ! </li></ul>

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