Consumer Protection Act = a brief

AIMS AND OBJECTIVES OF THE ACT

The Consumer Protection Act, 1986 was enacted as a result of widespread consumer protection movement. On the basis of the report of the Secretary General on Consumer Protection dated 27 May 1983, the United Nations Economic and Social Council recommended that the world governments should develop, strengthen and implement a coherent consumer protection policy taking into consideration the guidelines set out therein. The governments were to further provide adequate infrastructure including the bodies as well as financial facilities to develop, implement and monitor consumer protection policies.

The introduction of new products in the developing was to be assessed in relation to the local conditions having regard to the existing production, distribution and consumption patterns of the country or region concerned. With reference to consumer movement and the international obligations for protection of the rights of the consumers, provision has been made in the said Act with the object of interpreting the relevant law in a rational manner and for achieving the objective set forth in the Act. A rational approach and not a technical approach is the mandate of law.

According to the Preamble of the Act, the Act was enacted, ‘to provide for the protection of the interests of consumers. Use of the word ‘protection’ furnishes key to the minds of makers of the Act.

The legislature has taken precaution not only to define ‘complaint,’ ‘complainant’ ,’consumer’ but even to mention in detail what would amount to unfair trade practice by giving an elaborate definition in clause (r) and even to define ‘defect’ and ‘deficiency’ by clauses (f) and (g) for which a consumer can approach the Commission. The Act thus aims to protect the economic interest of a consumer as understood in commercial sense as a purchaser of goods and in the larger sense a user of services. It is a milestone in history of socio-economic legislation and is directed towards achieving public benefit.

Every consumer has certain rights which this Act seeks to protect. For example, every consumer has the right to be informed about the quality, quantity, potency, purity standard and price of goods, right to be protected against marketing of goods which are hazardous to life and property, right to access to a variety of goods at that competitive prices, right to consumer education, right to be heard and to be assured that consumer’s interests will receive due consideration at appropriate forums and finally the right to seek redressal against unfair trade practices or unscrupulous exploitation of consumers.

The Supreme Court has held that the purpose of the Consumer Protection Act is the better protection of interests of consumers and to make provision for the establishment of consumer councils and other authorities for the settlement of consumer disputes and matters connected therewith.

OBJECTS OF THE ACT-

The objects of the Central Council shall be to promote and protect the rights of the consumers such as,-

  • The right to be protected against the marketing of goods [and services] which are hazardous to life and property.
  • The right to be informed about the quality, quantity, potency ,purity ,standard and price of goods [or services, as the case may be] so as to protect the consumer against unfair trade practices;
  • The right to be assured, wherever possible, access to a variety of goods and services at competitive prices;
  • The right to be heard and to be assured that consumer’s interests will receive due consideration at appropriate forums
  • The right to seek redressal against unfair trade practices [or restrictive trade practices] or unscrupulous exploitation of consumers; and
  • The right to consumer education.
  • RIGHT TO PROTECTION AGAINST HAZARDOUS GOODS

The Act gives every consumer the right to be protected against the marketing of goods and services which are hazardous to life and property. Hazardous goods include, for example adulterated food, narcotic drugs, weak cement etc, all these being dangerous to life as well as property.

Although the government authorities have several laws at their disposal for the prevention of marketing of hazardous goods and services, yet any consumer who has been injured either in his person or property may come for protection and he will have a speedy and effective remedy for redressal.

The Law of Torts generally deals with the subject-matter of dangerous goods. The leading case relating to dangerous goods is that of Donoghue v Stevenson in which it was held that a producer sending goods into the market would be liable to the ultimate consumer if his person or property is injured by the normal use of the goods.

In this celebrated case, a manufacturer who sold substandard article to a retailer who sold it to a customer was held liable to a friend of the customer who after consuming it became ill, in fact her illness was aggravated when remains of a dead snail which sprang from the bottle of a drink which she had already taken. This decision broadened the category of persons liable. From the producer to the ultimate consumer every person in the chain has been made liable.

In another leading case of Grant v Australian Knitting Mills liability was attached to the weaver of trousers which contained some chemical because of which the person who wore those trousers had the problem of dermatitis (skin disease).

In the words of Winfield:

The principle has been extended from articles of food and drinks and includes, inter alia kiosks, tombstones, hair dye, industrial chemicals, lifts, motor-cars and parts, toys and scented erasers. Likewise the term ‘consumer’ includes the ultimate user of the article or anyone who is within the physical proximity of it.

 To all cases whether it includes injuries to a child by a falling tombstone, or delivery of defective cars or liability to persons who were stranded in a lift, this principle applies.

RIGHT OF INFORMATION

Every consumer has the right to be informed about the quality, quantity, potency, purity, standard and price of goods or services, as the case maybe, he buys or avails of.

This right of information has been given to the consumers to protect them from unfair trade practices. The term ‘unfair trade practice’ has been described in section 2(1) (r). Unfair trade practices include false representations that goods or services are of particular standard, quality, grade etc; any false warranty or guarantee of performance of the goods or services at a bargain price that are not intended to be offered for sale or supply at the bargain price; offering of gifts; prizes or other items with the intention of not providing them as offered or creating an impression that something is being offered free of charge when in fact it is not so in reality.

The case of Consumer Protection Council v National Dairy Development Board can be usefully cited here. In this case, the complainant want to know that how the Dairy Board was using the imported palmolein oil but the Board was not furnishing the requisite information because according to it the figures were privileged from disclosure in public interest. It was held that the complainant had the right of information.

In India Photographic Co v HD Shourie , an importer of films was not able to print prices on films because the nature of his trade did not permit him to open packages. Therefore, he was directed to make a condition of attaching price tags to each item before selling them to his retailers.

RIGHT OF ACCESS TO VARIETY OF GOODS AND SERVICES AT COMPETITIVE PRICES

Every consumer has a right of access to variety of goods and services at competitive prices. This can be done only when there is organization of markets and fixation of market prices in such a way that all dealers are supplied with the variety of goods for benefit of the consumers and the goods are being offered at competitive prices.

This responsibility of bringing organization of markets and market prices has been cast upon the Central Consumer Protection Council by the Act. Certain liberty has been given to shopkeepers in respect of marketing so that goods and services of variety may become available at competitive prices.

This responsibility of bringing organization of markets and market prices has been cast upon the Central Consumer Protection Council by the Act. Certain liberty has been given to shopkeepers in respect of marketing so that goods and services of variety may become available at competitive prices. When a matter is brought to the notice of the Monopolies Commission that a shopkeeper is insisting upon his customers to buy goods of one kind only, leaving them with no choice as to stock–in-trade . This power has now also been given to the Central Consumer Protection Council by section 6(c).

RIGHT TO BE HEARD AND RECEIVE DUE CONSIDERATION AT APPROPRIATE FORUMS

Every consumer has the right to be heard and receive due consideration at appropriate Forums. The Central Consumer Protection Council has been charged with the responsibility of ensuring that each consumer dispute is heard properly and of assuring that consumer’s interests will receive due consideration at appropriate forums.

RIGHT AGAINST UNFAIR OR RESTRICTIVE TRADE PRACTICES , UNSCRUPULOUS EXPLOITATION

Every consumer has the right to seek redressal against unfair trade practices or restrictive trade practices or unscrupulous exploitation. This responsibility has also been given to the Central Consumer Protection Council. When goods are marketed with ISI but in reality they do not correspond with the requisite standard, where money for purchase of car is deposited in advance but no car is given within the prescribed time, where a lawn is booked for marriage date lawn is not made available for marriage when in fact it was free that day, selling old renovated goods as new ,selling oils which can cure baldness or medicine or which can cure leucoderma when in fact they are not capable of curing these problems, are all included in unfair trade practices.

RIGHT TO CONSUMER EDUCATION

Every consumer has a right to consumer education. This means that every consumer must be made conscious of his rights as well as his legal remedies. As VM Shukla has observed in the preface of his book Legal Remedies that where people do not exercise their legal remedies, the system of remedies tends to become rusted .

People should have knowledge of their rights and availability of their legal remedies when such rights are curtailed. By sec 6(f) the Central Consumer Protection Council has been charged with the responsibility of providing proper education to the people in terms of their remedies under the Consumer Protection Act. Every individual is a consumer one way or the other so that when all of them are made conscious of their rights, they may help themselves against exploitation by manufacturers and traders.

WHO IS A CONSUMER

Section 2(1) (d) of the Consumer Protection Act, 1986 has defined the term ‘consumer’ in two parts, one is a consumer who purchases goods and second is a consumer who hires services. The Act covers both the types of transactions i.e., for supply of goods as well as for rendering of services-

(d) ‘Consumer’ means any person who-

(a) buys any goods for a consideration which has been paid or promised or partly paid partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly promised, or under any system of deferred payment, when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or

(b) Hires or avails of any services for which has been paid or promised or partly paid and partly or under any system of deferred payment and includes any beneficiary or such services other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval the first mentioned person but does not include a person who avails of such services for any commercial purpose:

CONSIDERATION

The definition of the consumer says that consumer means any person who buys any goods for a consideration. Therefore, the first requirement is that the transaction must be for consideration. Therefore, the first requirement is that the transaction must be for consideration. The word ‘consideration’ used in the definition of ‘consumer’ in sec 2(1)(d) has not been defined under the scheme or the Act. Therefore, the dictionary meaning has to be seen. ‘Consideration’ has been defined as: ‘Something that is legally regarded as the equivalent or return given or suffered by general rule, that there is a sufficient consideration for a promise if there is any benefit to the promisor or any loss or detriment to the promisee. The gist of the term ‘consideration’ and its legal significance has been clearly summed up in s 2(d) of the Contract Act, 1872.

Transfer of goods for consideration includes all kinds of transfer of goods for consideration whether in terms of money or other goods i.e. barter or exchange or services. There must be a valid contract between the transacting parties. If the transaction is contained in more than one documents, those documents must be read and interpreted together to find out if it constituted a valid and binding contract between the parties.

FUTURE GOODS NOT INCLUDED

Prospective investor in future goods is not a consumer. Therefore, applicant for allotment of shares of company, being a prospective investor, is not a consumer. In Morgan Stanley Mutual Fund v Kartick Das , the appellant, a domestic mutual fund, was registered with the Securities and Exchange Board of India (SEBI) and was managed by the Board of Trustees. Prior to the SEBI (Mutual Fund) Registrations, 1993, the investment management company of the appellant was also registered with SEBI and was granted certificate of incorporation on 18 October 1993 by the Registrar of Companies, Bombay.

Its Memorandum and Articles of Association were approved by the SEBI. The draft scheme of appellant was accorded approval on 23 November 1993 by SEBI. Thereafter, marketing of the scheme by issue of advertisements was started. All advertisements and publicity material were approved by SEBI in writing.

BENEFICIARY

The definition of consumer includes any user of goods other than the person who buys such goods for consideration paid or promised or partly paid and partly promised or under any system of deferred payment when such use is made with the approval of such person and also includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised or partly paid and partly promised or under any system of deferred payment.

SIMULTENOUS PROCEEDINGS IN CIVIL COURT AND CONSUMER FORUM

Proceedings under the Consumer Protection Act and a civil court can simultaneously go on even if the issues involved in two proceedings are substantially similar. This is so because remedies are independent of each other. The existence of parallel or other adjudicatory forums cannot take away or exclude jurisdiction created under the Consumer Protection Act. The court that the provisions of the Act are in addition to and not in derogation of any other provision of any other law for the time being in force.

Criminal proceeding launched by the complainant on the same cause of action has been held to be no bar to maintainability of complaint under the Consumer Protection Act.

There are certain matters which cannot be the subject of consumer disputes, and therefore, they do not come within the purview of the Act. Some of them are as follows-

  • Breaches of contract
  • Matters sub judice before civil courts;
  • Cases involving complex questions of law and fact,
  • Arbitration clauses
  • Criminal proceedings,
  • Non-issue of permits by the State Government under Rice Procurement levy order;
  • Claims to be lodged before the Accident Claims Tribunal under the Motor Vehicles Act,
  • Matters relating to Stamp and Registration Acts.

PROTECTION OF CONSUMERS

The Consumer Protection Act provides protection to the consumers. The Sale of Goods Act, 1930 also provides protection of some sort to buyers of goods whether consumers or not. It enables the buyer to reject the goods if they do not correspond with their description or which are not fit for his purpose or which are not of merchantable quality or which in bulk do not agree with the sample. But it defines only the substantive rights of the parties but does not provide them any special forum for redressal of their grievances.

In Frances B Martins v Mafalda Maria Teresa Rodrigues the Supreme Court held that the purpose of Consumer Protection Act is better protection of interests of consumers and to make provision for the establishment of consumer councils and other authorities for the settlement of consumer disputes and matters connected therewith.

In Lucknow Development Authority v MK Gupta the Supreme Court observed that the Act has to be construed in favor of the consumer to achieve the purpose of its enactment as it is a social-benefit oriented legislation. The primary duty of the court while construing the provisions of such an Act is to adopt a constructive approach without doing violence to the language of the provisions and without producing a result contrary to the attempted objectives of the enactment.

The Consumer Protection Act provides for the ‘business-to-consumer’ disputes and not for ‘business-to-business’ disputes. Section 3 of the Act says that the provisions of any other law for the time being in force. The remedies provided by the Act are in addition to the existing legal remedies.

There was a consumer dispute about a depositor claiming repayment of his deposit from a non-banking company. It was held that the order of the Company Law Board under s 45-QA of the RBI Act directing the company to repay depositors was not binding on other depositors who were not parties before Company Law Board and who had approached the consumer forum before which the company did not appear.

CONCLUSION

The law of Consumer Protection is intricate, spans various jurisdictions , and can be constantly changing. Despite all this, a law student or new attorney can better understand the field.

When researching in this field, remember the value of beginning research online for free. If no valuable search results are returned, then only some time has been lost. If however, a researcher quickly identifies the applicable statute or regulation through the online search, time and cost can be saved.

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