A Term paper

On

CONSUMER PROTECTION- Problem and Prospects

By

NAME OF STUDENT--

SUBJECT- TERM PAPER -

ROLL NO. - 81/1

1
 CERTIFICATE

It is hereby certified that the term paper comprising the study entitled- CONSUMER
PROTECTION- Problem and Prospects has been carried out by - of B.Com(1st year),
Department of Commerce.

2
 ACKNOWLEDGEMENT

Every project big or small is largely successful mainly due to the effort of a number of wonderful people
who have always given their valuable advice or lent a helping hand. I sincerely appereciate the inspiration
; support and guidance of all those people who have been instrumental in make this project a success.

It would not be possible without the kind of support and the help of many individuals and organizations. I
would like to take this opportunity to express my gratitude to all the people that have involved directly
and indirectly in creation of this project.

With immense pleasure, I would like to thank Dr. -, Principal of - and all its faculty members, for having
given me this privilege of working under them and completing the report.

I would also like to express my sincere gratitutde to all my friends and family for their undying support.
However, I accept the sole responsibility for any possible errors in the project and I would be extremely
grateful to the readers of this project report if they bring such mistakes to my notice.

3
 EXECUTIVE SUMMARY

The Consumer Protection Act, 1986 (CPA) is an Act that provides for effective
protection of interests of consumers and as such makes provision for the establishment of
consumer councils and other authorities that help in settlement of consumer disputes and
matters connected therewith.The CPA seeks to protect the interests of individual
consumers by prescribing specific remedies to make good the loss or damage caused to
consumers as a result of unfair trade practices. However there are strong and clear laws in
India to defend consumer rights, the actual plight of the consumers can be declared
completely dismal. Prior to independence, the main laws under which the consumer
interests were considered were the India.n Penal Code, Agriculture Production, Grading
and Marketing Act, 1937, Drugs and Cosmetics Act, 1940. Out of the various laws that
have been enforced throughout the most important has been the CPA. It is significant that,
as the consumer, one knows the basic rights as well as about the courts and procedures that
follow with the infingement with one’s rights. The technological developments have
multiplied the need of consumers and have changed the tradition that guided our living in
the past. The rapid industrial development has not only brought new innovations and
products into common use but has also affected the mode and outlook of our living. The
simple goods which were catering our needs have been replaced by complex and
complicated goods. In view of the socio – economic changes which have taken place in the
lives of the people it is imperative to build up a strong and broad based consumer
movement which may give impetus and bring about socio- legal measures necessary for
consumer protection. This study aims to project and suggest not only the ways and means
to manufacturers, distributors, traders and all those engaged in serving the consumer but
also evolve balanced viewpoint between the buyers and sellers within socio- economic and
4
legal framework of the society. The main objective of the Consumer Protection Act is to
ensure the better protection of consumers. Unlike existing laws which are punitive or
preventive in nature, the provisions of this Act are compensatory in nature. The Act is also
intended to provide simple, speedy and inexpensive redressal to the consumers'
grievances, and relief of a specific nature and award of compensation wherever
appropriate to the consumer. The act has been amended in 1993 both to extend its
coverage and scope and to enhance the powers of the redressal machinery. The Consumer
Protection Bill, 2018 ("Bill"), which seeks to replace the long existing Consumer
Protection Act of 1986 ("Act"), was passed by the Lok Sabha on December 20, 2018 and
now it awaits Rajya Sabha's approval. The Bill has focused on enforcing the consumer
rights along with timely and effective administration of consumer disputes.The ambit of
the existing Act covers goods and services for consideration excluding free and personal
services. The Bill will widen the ambit of the existing Act to cover and regulate goods and
services, including telecom and housing construction, and all modes of transactions
(online, teleshopping, etc.) for consideration. New concepts such as 'product liability' will
address the changing dynamics of the consumer markets.Inclusion of certain new
definitions such as 'e-commerce', will broaden the scope of the Act to include the e-
commerce sector, which the existing Act does not cover. Interestingly, the explanation
attached to the definition of "consumer" has been worded in a way to include the
consumers who buys goods or avails services through online platforms such as Airbnb,
Quikr and Flipkart. The Bill will govern the consumers of e-commerce platforms along
with the traditional consumer who buys or avails goods and services from brick and mortar
stores.

5
 CONTENTS

Sl No. Topic Page no.

Chapter 1 INTRODUCTION 7
Chapter 2 LITERATURE REVIEW 10

2.1 Rights of the Consumers 12

2.2 Contitutional Perspective 18
2.3 Ammendments to the Consumer Protection 22
Act,1986
2.4 Consumer Forum 24
2.5 Consumer Complaint 27
2.6 Present Situation-The Problems faced 28
2.7 Future Prospects 32
2.8 Case Study 35

Chapter 3 CONCLUSION 37
Chapter 4 REFERENCES 39

6
 Chapter –I
INTRODUCTION

7
 INTRODUCTION
The contemporary era is marked as the era of consumers. No country can knowingly or
unknowingly disregard the interest of the consumers. This can be argued on the basis of
fast enactment of consumer protection laws in almost all part of the world. The
Consumer Protection Act, 1986 is one of the examples that are to be treated as a
milestone in the history of socio-economic legislation to protect the interests of the
consumers in India. The legislation to protect and advance the interest of consumers in
India was finally materialized after an in-depth study of consumer protection laws
operating in other countries and in consultation with representatives of consumers, trade
and industrial segments of India and abroad. In order to better serve the interests of the
consumer and to settle their disputes, Consumer Council and other authoritative
mechanism are also being established.

It is to be argued that much talked about the concept of „consumer protection‟ centres
around the problems of buyers in a world of sellers. The technological developments
have multiplied the need of consumers and have changed the tradition that guided our
living in the past. The rapid industrial development has not only brought new
innovations and products into common use but has also affected the mode and outlook of
our living. The simple goods which were catering our needs have been replaced by
complex and complicated goods. In view of the socio-economic changes which have
taken place in the lives of the people, it is imperative to build up a strong and broad-
based consumer movement which may give impetus and bring about socio-legal
measures necessary for consumer protection. This study aims to project and suggest not
only the ways and means to manufacturers, distributors, traders and all those engaged in
serving the consumer but also evolve balanced viewpoint between the buyers and sellers
within socio-economic and legal framework of the society.

The main objective of the Consumer Protection Act is to ensure the better protection of
consumers. Unlike existing laws which are punitive or preventive in nature, the
provisions of this Act are compensatory in nature. The Act is also intended to provide
simple, speedy and inexpensive redressal to the consumers' grievances, and relief of a
specific nature and award of compensation wherever appropriate to the consumer. The

8
act has been amended in 1993 both to extend its coverage and scope and to enhance the
powers of the redressal machinery.

The salient features of the Act can be summed up as:

● The Act applies to all goods and services unless specifically exempted by the
Central Government.
● It covers all the sectors whether private, public or
cooperative.
● The provisions of the Act are compensatory in nature.

It enshrines the following rights of consumers:

● Right to be protected against the marketing of goods and services which are
hazardous to life and property of the people;
● Right to be informed about the quality, quantity, potency, purity, standard and
price of goods or services so as to protect the consumer against unfair trade
practices;
● Right to be assured, wherever possible, access to a variety of goods and services at
competitive prices;
● Right to be heard and to be assured that consumers' interests will receive due
consideration at appropriate forums;
● Right to seek redressal against unfair trade practices unscrupulous exploitation of
consumers; and
● Right to consumer education.

9
 Chapter II
LITERATURE REVIEW

10
 LITERATURE REVIEW
Aneesh V. Pillai (March 2012) in his research paper entitled “Criminal Law: A Tool for Consumer
Protection in India” has explained that the protection of consumer’s interest is not new, but it has
assumed the added significance because of the vast expansion of business and trade in this century.
Exploitation of consumers in this century manifested itself in various forms such as price hikes,
production and supply of substandard and hazardous goods, use of false weights and measures,
adulteration, false and misleading advertisements, misbranding, black marketing and hoarding etc. In a
welfare state it is the prime duty of the State to see the consumers are not to being exploited in the market.
In response to the increasing malpractices in the market place, many countries have adopted various
legislations to protect the consumers. India has also adopted its Consumer Protection Act in 1986. Most
of these legislations are in civil nature, so provides only civil remedies. Thus this paper tries to examine
the nature and scope of criminal law in protecting rights of consumers.

Dr.J.KRaju Mr.Asifulla A (April 2013) in their research paper entitled “Consumer Protection Act,
1986: Issues and Challenges” throws light on the consumer protection act and its implementation. The
consumer is not only the heart of marketing but also the controller of marketing functions. The reality
consumer may be ‘King’ of corporate activities, but King is misguided by his Kingdom. This paper
explores about the issues and challenges associated with the consumer protection act, 1986. It has drawn
some possible suggestions/recommendations in order to avoid and reduce unfair trade practices made by
the various companies in India. They have done a conceptual paper through secondary data and with real
life examples.

Vijendra B. Khamesra, “Consumer Protection in India,” of Indian Journal of Marketing (Nov. 1980)
article deals with consumer protection in India and stresses that the Indian consumer needs to be educated
about his rights, as has been done in the USA Consumer Protection is possible in India, but effective
enforcement by legislation and a sustained drive to educate the people are necessary.

11
 2.1 The Rights of the Consumers

I. Right to Safety

According to the Consumer Protection Act 1986, the consumer right is referred to as ‘right to be
protected against marketing of goods and services which are hazardous to life and property’. It is
applicable to specific areas like healthcare, pharmaceuticals and food processing; this right is spread
across the domain having a serious effect on the health of the consumersortheir well being viz.
Automobiles, Housing, Domestic Appliances, and Travel etc. The purchased goods and services
availed should not only meet their immediate needs, but also fulfill long term interests.
Nightmare Come True

 The Bhopal gas tragedy that took place in 1984 due to accidental release of 40 tonnes of a
poisonous gas Methyl Isocyanate is another instance challenging the right to safety. As many as
3000 people died immediately and 15,000 other died due to related illness.

 83 children were killed in a major fire raged through a school in Kumbakonam Town‟s
Thanjavur district on July 16, 2004.

Lack of proper testing facilities, bureaucratic intransigence, lack of funds and lack of consumer
awareness are all reasons that militate against the proper implementation of the body of legislation and
existing mechanisms. While there is an elaborate system of granting ISI marks, periodic upgrading etc.,
products with fake ISI marks are often found in the market.

II. Right to be informed

This right means right to be informed about the quality, quantity, potency, purity, Standard and price of
goods so as to protect the consumer against unfair trade practices (UTPs). The key aspects are:
• The right to be given the facts needed to make an informed choice, to be protected against misleading
advertising or labeling.
• The responsibility to search out and use available information.

• To read and follow labels and research before purchase.

Consumer should insist on getting all the information about the product or service before making a
choice or a decision. This will enable him to act wisely and responsibly and also to desist from falling
prey to high-pressure selling techniques. Without information on quality, quantity, potency, purity,
12
 standard and price of goods and services, consumers would not be able make the right decisions and
protect themselves from abusive practices. Various interpretations of Article 19 (2) of fundamental
rights clearly state that there should be a definite policy or uniform guidelines on the part of the state to
help consumers make “informed choice”. Moreover, provisions regarding the right to information are
provided under:
• The Consumer Protection Act, 1986;

• The Standards of Weights and Measures Act, 1976;

• The Bureau of Indian Standards Act, 1986; and

• Competition Act 2002 etc.

The new Right to Information (RTI) Act is expected to have far-reaching implications for the right to
information of the consumer. After many deliberations over the years, the RTI
Right to Information is a key enabler of good governance, and a tool to ensure transparency and
accountability in the government. It also helps ensure participation of public in governance, eliminate
corruption and empower the people. It gives the citizen the right to seek information.

III. Right to choose

This right means right to be assured, wherever possible of access to variety of goods and services at
competitive prices. In case of monopolies, it means right to be assured of satisfactory quality and
service at a fair price. It also includes right to basic goods and services. This is because unrestricted
right of the minority to choose can mean a denial for the majority of its fair share. This right can be
better exercised in a competitive market where a variety of goods are available at competitive prices.
The key elements of this right are:
• The right to choose products and services at competitive prices with an assurance of satisfactory
quality.
• The responsibility to make informed and responsible choices.

In spite of a fair amount of legislation and other safeguards, the right to choice of the Indian consumer
is far from realized. At the micro level, the individual is duped each and every day by dishonest traders,
forced to buy items s/he does not require as part of tied- selling, and cheated by wrong weights and
poor quality. Consumers in many parts of the country are deprived of supply of electricity, good roads,

13
proper transport and other public services and utilities.

IV. Right to be represented

This right means that consumer's interests will receive due consideration at appropriate forums. It also
includes right to be represented in various forums formed to consider the consumer's welfare. The main
aspects of the right are:
• The right to express consumer interests in the making of decisions.

• The responsibility to make opinions known To join an association such as the Consumer Council to
make their voice heard and to encourage others to participate. Effective consumer representation
ensures that the needs of all people are taken into consideration in policy formulation that directly
affects their lives. By magnifying the voice of the individual, representation contributes to good
governance and the achievement of social justice. It affords better and more durable decisions.
Consumer associations have used these guidelines to promote legislation enabling them to seek
representation in the courts, in the law-making process, and in the implementation of regulatory
regimes. Some of the consumer organizations are actively participating at policy making platforms
through websites, consultations and meetings. However, despite the existence of a number of
administrative as well as organizational tools, the implementation of consumer‟s right to representation
faces several drawbacks.

V. Right to seek redressal

This right means right to seek redressal against UTPs or unscrupulous exploitation of consumers. It also
includes right to fair settlement of the genuine grievances of the consumer. Consumers must make
complaint for their genuine grievances. Many a times, their complaint may be of small value but its
impact on the society, as a whole, may be very large. The key aspects are:
• The right to be compensated for misrepresentation, shoddy goods or unsatisfactory services.

• The responsibility to fight for the quality that should be provided.

• To complaint effectively and refusing to accept shoddy workmanship.

The right to seek redress is set out in the Preamble to the Constitution of India, wherein it has been
declared that people has the right to strive for justice, social, economic and political and equality of
opportunity. It has enabled the people to secure speedy and in- expensive redressal of their grievances.
14
The first and the foremost problem is that most state governments do not evince requisite enthusiasm
and attention in promptly implementing the provisions of the Act by establishing properly functioning
District Forums and State Commission. Secondly, the consumer forums are becoming like civil courts
with presidents (judicial members). Sometimes, these forums have asked complainants to engage
lawyers, even when it is not really required. Now the system has improved substantially due to an
amendment in the law requiring a selection committee to appoint them. However, there is a
lackadaisical approach in selecting people for such positions. One major reason is the general apathy
and absence of proper knowledge and fear of exploitation by lawyers. It is rather paradoxical that the
customer is advertised as the "king" by the seller and service provider; but, in actual practice, treated as
a slave or servant.

VI. Right to Consumer Education

This right contains the provision to acquire knowledge and skills needed to make informed, confident
choices about goods and services, while being aware of basic consumer rights and responsibilities and
how to act on them.
• The right to acquire the knowledge and skills necessary to be an informed consumer.

• The responsibility to take advantage of consumer opportunities. Take action by attending seminars
and workshops, work to ensure consumer education takes place in schools.
Consumer awareness and education is meant to ensure that the consumers have easy access to the
knowledge and skills to be an informed consumer. Thus, the right to consumer education envisages the
right to knowledge and skills needed for taking actions to influence factors, which affect consumers‟
decisions.

There is no legal framework establishing the right to consumer education nor are there guarantees in
the Constitution. The Union and state governments, however, have accepted the introduction of
consumer education in school curriculum and progress has been made in some states.
Furthermore, the Government of India, through the Consumer Welfare Fund (CWF), supports
consumer educational programmes undertaken by consumer groups or state governments. The
Consumer Club scheme was launched in the year 2002, with funding from CWF, has the objective to
educate children about the rights of the consumers, protection of their rights, and to strengthen the
consumer movement in the country. The media has also been playing an important role in this context.
Consumer education faces the universal problem of matching limited resources against an infinite need.
15
Moreover, in a large country like India, with multiplicity of languages, the problem is of larger
dimensions.

VII. Right to Basic Needs

All consumers have the right to basic goods and services such as adequate food, drinking water, shelter,
clothing, health care, electricity and education. These rights lay a foundation to lead a life with dignity
and, therefore, give a meaning to citizen's rights.
The key aspects are as follows:

• The right to basic goods and services, which guarantee survival.

• The responsibility to use these goods and services appropriately.

• To take action to ensure that basic needs are available.

The following eight needs constitute the inalienable right to basic needs: food; clothing; healthcare;
drinking water and sanitation; shelter; education; energy; and transportation. Basic needs are important
for everyone's survival and access to a decent standard of life. This is more important for a country like
India, which has a history of the systematic denial of access to basic needs and services to the majority
of its people.
The United Nations‟ Guidelines do not explicitly mention the right to basic needs, but expect
governments to take appropriate measures so that essential goods and services could be easily
accessible to the consumers.

VIII. Right to a Healthy Environment

To live and work in an environment, which is non-threatening to the well-being of present and future
generations. The right contains the following elements:
• The right to live and work in an environment that is neither threatening nor dangerous and which
permits a life of dignity and well-being.
• The responsibility to minimize environmental damage through careful choice and use of consumer
goods and services.
• To reduce waste, reuse products and to recycle whenever possible.

The United Nations‟ Guidelines contain governments, which in partnership with business and

16
relevant organisations of civil society, should develop and implement strategies to promote sustainable
consumption through a mix of policies that could include regulations; economic and social instruments;
sectoral policies in such areas as land use, transport, energy and housing; information programmes to
raise awareness of the impact of consumption patterns; removal of subsidies that promote unsustainable
patterns of consumption and production; and promotion of sector-specific environmental- management
best practices.
As far as the issue of a healthy environment is concerned, Article 21 of the Indian Constitution requires
the State, inter alia, to protect life, which is construed as including the right to a healthy and safe
environment. A healthy and safe environment is inalienably linked with sustainability and promotion of
sustainable consumption. Moreover, the Directive Principles of State Policy direct the state to endeavor
to protect and improve the environment, forests and wild life. Consumer protection in India thus has
dual dimensions. It first has to ensure availability and access to basic needs of life to one section of the
society; on the other hand, those with the purchasing power need to be protected against violation of
their other rights. The consumer policy should strive to cover and address the interests of both the have-
nots and haves.

17
 2.2 The Constitutional Perspective

The Constitution of India in the form of following Articles and topics, 38- State to secure a social order
for the promotion of welfare of the people, 39- Certain principles of policy to be followed by the state,
42- Provision for just and humane conditions of work and maternity relief, 43- Living which, etc, for
workers, 46- Promotion of educational and economic interests of scheduled castes, scheduled tribes and
other weaker sections and 47- Duty of the state to raise the level of nutrition and the standard of living
and to improve public health provides that the state shall strive to secure a social order for the
promotion of welfare of the people; it shall direct its policies in such a way that operation of economic
system does not result in the concentration of wealth and means of production to the common
detriment, it shall make provision for securing just and humane conditions of work and for maternity
relief; it should endeavor to build an economic organization or to make suitable legislation to ensure a
decent standard of life to all the workers who constitute the bulk of the consumers; it should promote
educational and economic interests of schedule castes, scheduled tribes and other weaker sections and it
shall also raise the level of nutrition and standard of living and to improve public health.

Article 46 of the Indian constitution provides that state shall endeavor to protect the economic interest
of the weaker section of its population and also protect them from social injustice and all forms of
exploitation which means all kinds of harassments and frauds in the market place. This also includes
people should be entitled to unadulterated stuff injurious to public health and safety. This principle
amply reflects the inclusion of the philosophy of the concept of consumerism in article 47 of the Indian
Constitution.

18
 THE INDIAN PENAL CODE, 1860

It is the foremost penal law of the country which contains the substantive law of crime. It caters to the
needs of the consumer in some manner. However, sections 264 to 267 of the Indian penal code relate to
fraudulent use of false instrument for weighing, fraudulent use of false weight and measures, anyone in
possession of false weight or measure respectively. The penal code further provides sections 269 to 271
on spreading of infections and in sections 272 to 276 on adulteration of food or drink, adulteration of
drugs, sale of adulterated drugs and sale of drugs as a different drug or preparation are punishable with
imprisonment or with both.

THE DANGEROUS DRUG ACT, 1930

In the area of drugs control the Dangerous drugs Act, 1930 is an important central legislation which
empowers the central government to control certain operations relating to dangerous drugs. It further
empowers to increase and render uniform penalties for offences relating to operations of dangerous act.

THE SALE OF GOODS ACT, 1930

Some spirit of concept of consumerism is also evident in the Sale of Goods Act, 1930. Before this
enactment the situation was uncertain with regard to “sale of goods or movables, the law on the subject
was not only uniform throughout British India but was also outside the limits of the original jurisdiction
of the high court, extremely uncertain in its application.”

The Sale of Goods Act contains the spirit of the concept of consumer protection in several provisions in
several provisions which include contract of sale, conditions and warranties in the sale, transfer of
property between seller and buyer, duties of seller and buyers, right of unpaid sellers against the goods
and suits for the breach of the contract.

THE DRUGS AND COSMETICS ACT, 1940

In order to defend the cause of consumer in the area of drugs and cosmetic industries in India, Drugs
and cosmetic act of 1940 was enacted so as to regulate the airport, distribution and sale of drugs.

19
In pursuance to the recommendations the pharmaceutical enquiry committee appointed by the
Government of India, the drugs and cosmetics act, 1940 empowers the central government to control the
manufacture of drugs, to appoint inspectors for inspecting manufacturing premises and taking samples of
drugs, to appoint government analysts to whom samples drawn by such inspectors could be sent for
analysis and to issue the state government for carrying into any of the provisions of the Act.

THE DRUGS CONTROL ACT, 1950

In 1950 the Drugs (Control) Act was passed which also provides for the control of the sale, supply and
distribution of drugs. This Act briefly provides for fixing of maximum prices and maximum quantities
which may be held or sold, general limitation on quantity which may be possessed at any one time, duty
to declare possession of excess stocks, marking of prices and exhibiting list of prices and stocks.

THE INDUSTRIES DEVELOPMENT AND REGULATION ACT, 1951

Industries (Development and Regulation) Act, 1951 is another example on the part of the union
government to make some attempts in implementing the objectives of consumerism. The act provides
for the development and regulations of certain industries. The Act specifically deals with the central
government‟s power to control supply, distributing price etc of certain articles.

THE INDIAN STANDARDS INSTITUTION( CERTIFICATE MARKS) ACT,

1952

The Act provides for the standardization and marking of goods which is a prerequisite to the
establishment of a healthy trade and to compare favorably with the established makes of foreign
products51.

The Act has been amended in 1961 and 1976 to make more effective in order to achieve its objectives.

20
 THE PREVENTION OF FOOD ADULTERATION, 1954

The Act, keeping in view the menace of adulteration to the society and to make the machinery provided
under it more effective to curb the increasing tendencies in adulteration, was amended in 1964. The
amendment provides that for the proper enforcement of the provision of the Act that the central
government also should have power to appoint food inspectors.

THE MONOPOLIES AND RESTRICTIVE TRADE PRACTICES, 1969

The one of the most important steps taken by central government to protect the interest of consuming
public is the enactment of the monopolies and restrictive Trade practices Act of 1969.the object of this
Act is to provide that the operation of economic system does not result in the concentration of economic
power to common detriment. It also provides for controlling the monopolies and prohibition of
monopolistic and restrictive trade practices.

THE CODE OF CRIMINAL PROCEDURE, 1973

Nevertheless, the criminal laws of the country do protect the consumer in some degree or so. In this
regard section 153 of the code empowers a station- house officer of a police station without warrant to
enter any place within the limits of such station for the purpose of inspecting or searching for any
weights or measures or instruments for weighing, used or kept and whenever there is reason to believe
that in such place weights, measures or instruments for weighing or false.

21
 2.3 Ammendments to the Consumer Protection Act, 1986

Cause of Ammendent of 1993

On July 24, 1991 the Government Of India in its Statement on New Industrial Policy observed
– with the growing complexity of industrial structure and the need for achieving economies of scale for
ensuring higher productivity and competitive advantage in the international market, the interference of
the government through the Monopolies and Restrictive Trade Practices Act in investment decision of
large companies has become deleterious in its effects of Indian Industrial growth. The pre entry scrutiny
of investment decisions by so called monopolies and restrictive trade practices companies will no
longer be required. Instead, emphasis will be on controlling and regulating monopolistic, restrictive and
unfair trade practices rather than making it necessary for the monopoly houses to obtain prior approval
of the central government for expansion, establishment of new undertakings, merger, amalgamation
and take over and appointment of certain directors. The thrust of the policy will be more on controlling
unfair or restrictive business practices. The newly empowered MRTP Commission will be encouraged
to require investigation suo moto or on complaints received from individuals‟ consumers or classes
of consumers.

Despite these positive improvements, the Act failed to fulfill the expectations of consumer activists as it
ignored the important recommendation that some services like health services in hospitals run by
government and local bodies and the services provided on mandatory basis local bodies should be
brought within the purview of the act as they affect the lives of the citizens.

Cause of Ammendment of 2002

The ammendment to the Act provided consumers an opportunity to address their grievances and speedy
disposal of the cases. The Act now also provided the establishment of Consumer Protection Councils at
all the levels including District level, State level and National level for promoting the awareness of the
consumer rights and education to the end users of goods and services. Also, Act will provide the
establishment of three-tier quasi-judicial machinery in the form of Forums in the District level and
Commissions in State and National Level to deal the complaints effectively and speedily.

22
The Consumer Protection Bill, 2015 (withdrawn)

The Consumer Protection Bill, 2015, was introduced in Lok Sabha on August 10, 2015 by the Minister of
Consumer Affairs, Food and Public Distribution, Mr. Ram Vilas Paswan. The Cabinet endorsed another
Consumer Protection Bill 2015 that looks to supplant a 29-year-old law and proposes to set up an
administrative power which will have forces to review items and start class suit against defaulting
organizations, including e-tailers. The key elements of the latest bill incorporate foundation of an
executive agency ‘Central Consumer Protection Authority’ (CCPA) which will protect and enforce the
rights of consumers. For quick disposal of court cases, the bill proposes “mediation” as an ADR
mechanism. The intervention will be under the aegis of customer courts. It also included the formation of
Consumer Grievance Redressal Commissions at the district, state and national levels. A consumer can
file a complaint with these commissions, regarding: (i) unfair or restrictive trade practices, (ii) defective
goods or services, (iii) overcharging or deceptive charging, (iv) the offering of goods or services for sale
which may be hazardous to life and safety, and (v) incurring loss due to an unfair contract.

The Consumer Protection Bill, 2018 (in process)

The Consumer Protection Bill, 2018 ("Bill"), which seeks to replace the long existing Consumer
Protection Act of 1986 ("Act"), was passed by the Lok Sabha on December 20, 2018 and now it awaits
Rajya Sabha's approval..The ambit of the existing Act covers goods and services for consideration
excluding free and personal services. The Bill will widen the ambit of the existing Act to cover and
regulate goods and services, including telecom and housing construction, and all modes of transactions
(online, teleshopping, etc.) for consideration. New concepts such as 'product liability' will address the
changing dynamics of the consumer markets. Inclusion of certain new definitions such as 'e-commerce',
will broaden the scope of the Act. The definition of "consumer" has been worded in a way to include the
consumers who buys goods or avails services through online platforms such as Airbnb, Quikr and
Flipkart.

23
 2.4 Consumer Forum
District Forum

The procedure for filing a complaint is very simple. It can be made on a plain paper with the necessary
particulars. You can file a petition in person or by an authorised agent, after it has been notarised, through
registered post or regular post. It is important that you serve a personal or legal notice to the opposite
party before filing the complaint.

Limitation: complaint must be filed within two years from the date of cause of action having arisen

Monetary Jurisdiction: up to Rs.20 lakhs

State Commission

According to the Consumer Protection Act, 1986, complaints where the value of goods or services
exceeds Rs. 20 lakhs but does not exceed Rs. 1 crore, can be filed straightaway in the State Commission.
An appeal against such order passed by the District Forum to the State Commission within 30 days from
the date of the order.

Limitation: complaint must be filed within two years from the date of cause of action having arisen

Monetary Jurisdiction: Rs.20 lakhs to Rs. 1 crore.

National Commission

The procedure to file a complaint at the National commission is the same as for State Commission. A
complaint directly in the National commission or appeal against the decisions made by State commission
within 30 days from the date of the order.

Limitation: complaint must be filed within two years from the date of cause of action having arisen

Monetary Jurisdiction : above Rs.1 crore

24
The National Consumer Disputes Redressal Commission provides services like case status check.

25
Consumer cases restored or disposed of in 4 years.

26
 2.5 Consumer Complaint
There are certain basic details and contents that have to be included in the complaint, which is filed by the
complainant against the provider of the goods or services. These details are as follows:

i. The name description and address of the complainant.

ii. The name description and address of the opposite party.
iii. Facts about the complaint and when and where it arose.
iv. Copies of the documents, which support the facts and allegations mentioned in the complaint.
v. Details as to how the case falls within the territorial and pecuniary jurisdiction of the particular
consumer forum.
vi. The remedy asked for or claim of the cost of the complaint from the opposite party

The complainant can pray for the following reliefs:

i. To remove the defects or deficiency from the goods or services in question;

ii. To replace the goods with new goods of similar description which shall be free from any defect;
iii. To return to the complainant the price the charges paid by him;
iv. To pay compensation to the consumer for any loss or injury suffered by him
v. To discontinue the unfair trade practice or the restrictive trade practice or not to repeat it;
vi. To withdraw the hazardous goods

27
 2.6 Present Situation- The Problems faced
With globalization and development in the International Trade and Commerce there has been substantial
increase of business and trade, which resulted in a variety of consumer goods and services to cater to the
needs of the consumers. In recent years, there has been a greater public concern over the consumer
protection issues all over the world. Taking into account the interest and needs of the consumers in all
countries, particularly those in developing countries, the consumer protection measures should essentially
be concerned with –

1. the protection from hazards to health and safety;

2. the promotion and protection of economic interests;
3. access to adequate information;
4. control on misleading advertisements and deceptive representation;
5. consumer education and
6. effective consumer redress
The consumer deserves to get what he pays for in real quantity and true quality.

In India however the consumer often experience in the market place frustration, due to the arrogant
behavior of the sellers, which is the product of the prevailing scarcity conditions of articles and cancerous
tendency of hoarding in India. Whatever the remedies which are available in India for the protection of
the consumers in the marketplace are by no means sufficient and the consumer find themselves helpless
due to ineffective legal machinery for redressal of grievances. Apart from legal problems we also face
certain problems which restrict the free flow of protection already provided.

Variation in Prices:
The consumer has to pay different prices for the same item at different places. Big shops are often
expensive as they spend some money on the maintenance of shop, advertisements, and free home
delivery which is hidden at the expense of the consumer.

Some shopkeepers charge higher price than the printed ones by putting their own price tags or increase
the price by adding local taxes.

28
 Non-availability of items in the market:
Sometimes daily items eg: butter, salt etc are not available in the market or one may get these by paying
higher prices. Normally such scarcities are artificial. The moment when there is possibility of price rise
of a commodity, it vanishes from the market.

It reappears in the market immediately after the price is increased. In some situations like drought or
floods, etc., the shopkeepers hoard stock of essential items and sell these items only when consumer
agrees to pay a higher price.

Adulteration:
In the present times the biggest problem is that the consumer does not commodities with a guarantee of
purity even if he is prepared to pay higher prices.Adulteration of coloured powder in powdered spices,
stones in grains, starch in milk, used tea leaves or stating the wrong proportion of cotton and Ethylene in
case of unspecific terry cot cloth.

The Government of India has enacted an act called PFA (Prevention of Food Adulteration Act) in 1954
to check such immoral acts of adulteration. This act was implemented in 1955.

Unfair means of measurement.

 Spurious, under weights, or stones, bricks, etc. are used in place of standard weights.
 Use the hand weighing scales in place of standard scales; the hand weighing scales are usually weighs
less than the actual weight
 Boxes or bottles used in packed goods have a shape that would give lesser quantity to the consumer eg:
with raised bottom.
 Magnet: Use of magnet to increase weight, Hollow weight

In 1976, Standard Weight and Measurement Act were passed. Under this Act, use of any other method
except decimal and metric system is illegal. For weighing and measuring, the use of standard weights
and measures is compulsory. The consumer can immediately lodge a complaint in Weights and Measure
Bureau.
Misleading advertisements
The manufacturer resorts to advertisements for the sale of their products. Normally the manufacturer
gives an exaggerated account of his products.

29
 Such advertisements lure the consumer in buying these products. After the purchase, the consumer
realizes that it does not match with what has been claimed in the advertisement. Such misleading
advertisements cheat the consumer.

Misleading and incomplete labels

The labels on products provide information about the products to the consumer. The consumer can
decide judiciously after comparing the quality and price of the product from the label. Often the
manufacturers try to cheat the consumer by appending incomplete information on the label.

Sale of substandard goods

Sometimes, seller sells sub-standard goods at higher price in place of standard goods. For example,
selling furniture made up of inferior quality wood after polishing, using substandard sheets in steel
almirahs and furniture, selling substandard cloth by claiming it of a superior quality and inflates its
price, etc. He knows it only after use.

Malpractices adopted by the manufacturers or sellers.

Manufacturers or sellers lure the consumer to buy their product by adopting malpractices misleading
schemes like ‘free gifts’ or ‘heavy discounts’ attracts the consumer easily. In reality, the price is inflated
in the first place and then discount is offered.Sometimes the producer imitates the colour, shape, and
name of popular brand available in the market.

A just legal system has to operate in the defence of their citizens and also ultimately for the
establishment of an egalitarian society. The position today that except for law suit in which substantial
amounts of money are involved, the law courts have not proved to be an effective or even feasible
mechanism geared to serve the needs of harassed and troubled consumers.

30
Internet site for consumer affairs of the Indian government for information related to consumer
protection.

31
 2.7 Future Prospects
It can be concluded that very few consumers were fully aware about the rights, responsibilities and
Consumer Protection Act. Hence, it is necessary to educate them on their rights and responsibilities as
consumers, to make them vigilant, rational and aware buyers. Consumer should organize together to
develop the strength and influence to promote and protect their own interest. Government should make
and implement rules of punishment more harsh so that manufacturer and shopkeeper think twice before
adopting fraudulent practices. A campaign should be set in motion to involve each and every consumer
for making them more conscious and aware of their right and responsibilities. Government and other
consumer agencies should make efforts in the direction of propaganda and publicity of district forum,
state and national judiciary established for consumer protection so as to make more and more consumer
aware about machinery for their greater involvement and to seek justice in case of grievances. Redress
procedure should be made more logical, easy enough to be understood by a large number of consumers.
Further procedures shall so designed as to have easy handling and quick disposal of cases.

It is high time that the long-term Consumer Protection Amendment Bill is passed by Parliament.
Consumers continue to be at the receiving end.

For instance, the revelation made in a recent response to an RTI query by the Reserve Bank of India that
banks cannot be held responsible for the loss of valuables kept in bank lockers has come as a rude shock.
This has put a big question mark over the safety of valuables/documents stored in bank lockers for safe-
keeping.

But the crucial issue is this — the proposed Bill requires the inclusion of more provisions to deal with the
fast changing technological and market dynamics, e-commerce being the latest.

Many developments which have altered the market dynamic significantly both from a retail and a
technological perspective were not envisaged by the creators of the Act.

Covering e-commerce Due to tremendous increase in the popularity of e-commerce, the proposed
amendment attempts to include e-commerce transactions under the ambit of the Act. Under the current
Consumer Protection Act, a consumer can initiate legal action against a seller only in the place where
transaction takes place. The new Bill contains an enabling provisions for consumers to file complaints
electronically, and in consumer courts that have jurisdiction over the place of residence of the
complainant. At present, the Government has made about 80 changes in the Bill which will replace the
Consumer Protection Bill introduced in Parliament in 2015. The committee, among other things, has

32
recommended stringent provisions to tackle misleading advertisements, as well as to fix liability on
endorsers and celebrities.

The Consumer Protection Bill, 2018 ("Bill") will allow the complainant to now make a complaint against
a trader or a service provider for entering into an unfair contract and can also make a claim for product
liability. The Bill introduces the concept of 'product liability' which allows a complainant to make a claim
of product liability against a product manufacturer or service provider for any deficiency in a service or
defect in the product.

The Bill further seeks to establish a Central Consumer Protection Authority for efficient and speedier
disposal of consumer grievances. Moreover, the Bill confers advisory functions on the existing Consumer
Protection Councils and provides for the establishment of these Councils at district, state and national
level.

The Bill also makes the endorser and publishers of such misleading advertisements liable and provides a
penalty of up to Rs 50 Lakh and ban upto 3 years on a subsequent offence. Although, this looks like a
positive change, there is a possibility of increased frivolous litigation against the celebrities for pecuniary
or personal gain.

India is one step closer to having its own data protection law after the Srikrishna Committee submitted its
initial assessment and recommendations on data privacy and management last week in a 176-page report,
as well a draft of the legislation on data protection titled Personal Data Protection Bill, 2018.

33
 PROPOSAL FOR CONSUMER AWARENESS AND EDUCATION

The following Table reveals the expenditure for consumer awareness and education is as under: It
shows increasing of expenditure from 2012-13 to 2016-17.

(Rs. in Crore)
Year Amount

I 2012-13 100 Crores

II 2013-14 120 Crores
III 2014-15 135 Crores
IV 2015-16 150 Crores
V 2016-17 160 Crores
G. Total 665 Crores

Expenditure for consumer awareness and

education
15%
24% 2012-13
2013-14
18% 2014-15
2015-16
23% 2016-17

20%
Amount(Rs. In crores)

34
 2.8 Case Study

Maggi noodles by Nestle

Maggi instant noodles came under the scanner for three main reasons. The first was the aforementioned
violation of the regulations for adding lead and MSG into the product. As against the maximum limit of
2.50 parts per million (ppm), the amount of lead detected in the Maggi samples was perilously high at
17.2 ppm. The second offence was mentioning 'No added MSG' on the packaging, which is an act of
mislabeling. Also, it launched 'Maggi Oats Masala Noodles' without meeting the appropriate norms of
standardisation. On June 5, 2015, a nationwide ban was imposed on Maggi by FSSAI (Food Safety and
Standards Authority of India).

Prior to the ban, Maggi owned nearly 80% of the market share in the instant noodles segment. In the blink
of an eye, its share plummeted to zero. The crisis was grave and it was a state of emergency for Nestle
India. It initially denied the allegations of hazardous composition of Maggi leading to more controversy.
But when it was proven guilty for the second time, the customers were furious. There were instances of
mass protests by Maggi consumers who were hurt by the severe breach of trust. Maggi was losing not
only its market share but also credibility.

The Nestle India managed the period of crisis by announcing a recall of all its instant noodles from the
markets. It began to be executed within two days. In addition to that it managed the crisis also by
regularly interacting with their consumers through social media and authorities. Nestle stated on the
official Maggi noodles Facebook page, Twitter and website, that extensive testing revealed no excess lead
in Maggi noodles.The role played by the Maggi higher officials made it possible to get the approval of its
re-sale in India.

But the Consumer Affairs Ministry had also filed a class action suit against Nestle India, seeking about Rs
640 crore in damages for alleged unfair trade practices, false labeling and misleading advertisements. It
was for the first time that the Ministry dragged a company to the National Consumer Disputes Redressal
Commission (NCDRC) using a provision in the nearly three decade old Consumer Protection Act.

35
36
 Chapter III
CONCLUSION

37
 CONCLUSION
Procedural simplicity and speedy and inexpensive redressal of consumer grievances as contained in the
Consumer Protection Act are really unique and have few parallels in the world. Implementation of the Act
reveals that interests of consumers are better protected than ever before. However, consumer awareness
through consumer education and actions by the government, consumer activists, and associations are
needed the most to make consumer protection movement a success in the country. Positively, TV
programmes have begun to discuss the problems of consumer protection and consumer’s movement and a
separate cell for consumer protection has been formed in the Ministry of Food and Supplies. Therefore,
the domestic products should be of high quality to attract the interest and build the trust of consumers, and
the government should enact certain standards for the quality assurance of not only the domestic but also
the imported products.” The efficient and effective programme of Consumer Protection is of special
significance to all of us because we all are consumers. Even a manufacturer or provider of a service is a
consumer of some other goods or services. If both the producers/ providers and consumers realize the
need for co-existence, adulterated products, spurious goods and other deficiencies in services would
become a thing of the past. The active involvement and participation from all quarters i.e. the central and
state governments, the educational Institutions, the NGO’s, the print and electronic media and the
adoption and observance of a voluntary code of conduct by the trade and industry and the citizen’s charter
by the service providers is necessary to see that the consumers get their due. The need of the hour is for
total commitment to the consumer cause and social responsiveness to consumer needs. This should,
however, proceed in a harmonious manner so that our society becomes a better place for all of us to live
in.

38
 Chapter IV
REFERENCES

39
 REFERENCES
For the completion of this project I had refered to the following journals and websites:

Journals

1. The Consumer Protection Act, 1986

2. Planning Commission, Government of India, National Human Development Report, 2001.
3. Consumer Unity Trust Society, 2001- State of the Indian Consumer
4. United Nations, (1985/1999), Guidelines for Consumer Protection, April 9, 1985
5. Rajendra Kumar Nayak, Consumer Protection Law in India: An Eco- Legal Treatise on Consumer
Justice, New Delhi: The Indian Law Institute, 1991)
6. S.K. Verma and M. Afzal Wani, A Treatise On Consumer Protection Laws, New Delhi: Indian
Law Institute,on Consumer Protection Act, 1986 of India.
7. Aneesh V. Pillai (March 2012) in his research paper entitled “Criminal Law: A Tool for
Consumer Protection in India”
8. Dr.J.KRaju Mr.Asifulla A (April 2013) in their research paper entitled “Consumer Protection Act,
1986: Issues and Challenges

9. Vijendra B. Khamesra, “Consumer Protection in India,”

Websites

http://www.wikipedia.org/wiki/Consumer_protection

https://www.lawsenate.com

https://www.thehindubusinessline.com

http://www.mondaq.com

40