DEPARTMENT OF COMMERCE

PROJECT REPORT

On

“The Consumer Protection Act”

SUPERVISED BY:

Dr. Garima Arora

SUBMITTED BY:

Vanini (230649)

2023-24
 CERTIFICATE

This is to certify that the project entitled „Consumer Protection Act‟

submitted by Vanini (230649) student of B.com I (semester 1) of the Post
Graduate Department Of Commerce, session 2023-24 of Guru Gobind Singh
College for Women, Sector-26, Chandigarh, is a bonafide work done by her
under my guidance and supervision and project represents independent work
on the part of the candidate.

Ms. Garima Arora

Supervisory Teacher
 DECLARATION

I, Vanini hereby declare that the project work entitled „Consumer Protection
Act‟ is an authenticated work carried out by me under the guidance of Ms.
Garima Arora for the fulfillment of the award of degree of bachelor of
commerce and this work has not been submitted for similar purpose
anywhere else except to the Post Graduate Department Of Commerce,
GGSCW Sector-26, Chandigarh.

Signature of the Student

The earlier principle of “Caveat Emptor” or “let the buyer beware” which was prevalent has given way to
the principle of “Consumer is king”. The origin of this principle lies in the fact that in today‟s mass
production economy where there is little contact between the producer and consumer, often sellers make
exaggerated claims and advertisements which they do not intend to fulfill.

The concept of consumer protection is to safeguard the interests of the consumers. It adopts measures to
protect consumers from unethical malpractices by businesses and provide a swift redressal of their
grievances with regard to:

1. Sale of adulterated goods such as adding inferior substances to the product being sold.

2. Sale of counterfeit goods such as selling a product of lesser value than the real product.

3. Sale of sub-standard goods such as the sale of products that do not meet the prescribed quality standards.

4. Sale of duplicate goods.

5. Use of malfunctioning weights and measures that lead to underweight of products.

6. Black marketing and hoarding that eventually leads to scarcity of the product and well as a rise in the
price of the same.

7. Overcharging a product, i.e., charging a product above its Maximum Retail Price.

8. Supplying of defective goods.

9. Advertisements that are misleading, i.e., advertisements that falsely claim a product or a service to be
shown as superior quality, grade or standard when not in real.

10. Supply of inferior services, i.e., quality of service lesser than the condition agreed.

The need for consumer protection arises from the need to protect consumers from the loss or injury or other
prevailing malpractices and to ensure:

1. Physical safety of a consumer.

2. Access to information.

3. Corporate Social Responsibility to provide quality and quantity of goods at fair prices.

4. Consumer satisfaction.

5. Social justice and Trusteeship

6. Survival and the Growth of businesses.

 OBJECTIVES OF CONSUMER PROTECTION ACT

(a) To assist countries in achieving or maintaining adequate protection for their population as
consumers;

(b) To facilitate production and distribution patterns responsive to the needs and desires
of consumers;

(c) To encourage high levels of ethical conduct for those engaged in the production and
distribution of goods and services to consumers;

(d) To assist countries in curbing abusive business practices by all enterprises at the national
and international levels which adversely affect consumers;

(e) To facilitate the development of independent consumer groups;

(f) To further international cooperation in the field of consumer protection;

(g) To encourage the development of market conditions which provide consumers with greater
choice at lower prices.

(h) The act aims to provide better and all round protection to consumers.

(i) It provides effective safeguards to the consumers against different types of exploitation such
as defective goods, unsatisfactory (or deficient) services and unfair trade practices.

(j) The Act has made the consumer movement really going and more powerful, broad-based and
effective and people oriented. In fact, the Act and its Amendment in 1993 have brought fresh
hopes to the beleaguered Indian consumer.

(k) To create a framework for consumers to seek redressal.

(l) To safeguard the rights of consumer.

(m) A redressal machinery is provided for in the act for the enforcement of the rights of the
consumers.
The Consumer Protection Act 2019 provides for six rights of consumers. These rights include the
following:

1. Right to Safety: The consumer has a right to be protected against goods and services which are
hazardous to life, health and property. For example, electrical appliances which are
manufactured with substandard products or do not conform to the safety norms might cause
serious injury. Thus, consumers are educated that they should use electrical appliances which are
ISI marked as this would be an assurance of such products meeting quality specifications.

2. Right to be informed: The consumer has a right to have complete information about the
product he intends to buy including its ingredients, date of manufacture, price, quantity,
directions for use, etc. It is because of this reason that the legal framework in India requires the
manufactures to provide such information on the package and label of the product.

3. Right to be assured: The consumer has the freedom to access variety of products at
competitive prices. This implies that the marketers should offer a wide variety of products in
terms of quality, brand, prices, size, etc. and allow the consumer to make a choice from amongst
these.

4. Right to be heard: The consumer has a right to file a complaint and to be heard in case of
dissatisfaction with a good or a service. It is because of this reason that many enlightened
business firms have set up their own consumer service and grievance cells. Many consumer
organisations are also working towards this direction and helping consumers in redressal of their
grievances.

5. Right to seek redressal: The consumer has a right to get relief against unfair trade practice of
restrictive trade practices or unscrupulous exploitation in case the product or a service falls short
of his expectations. The Consumer Protection Act 2019 provides for redressal to the consumers
including replacement of the product, removal of defect in the product, compensation paid for
any loss or injury suffered by the consumer, etc.

6. Right to Consumer Education: The consumer has a right to acquire knowledge and to be a well
informed consumer throughout life. He should be aware about his rights and the reliefs available
to him in case of a product or service falling short of his expectations. Many consumer
organisations and some enlightened businesses are taking an active part in educating consumers
in this respect.
 CASES RELATED TO CONSUMER PROTECTION ACT

National Insurance Company Ltd. Vs Manjeet Singh Vs. National Insurance

Hindustan Safety Glass Works Ltd. & Company Ltd. & ANR :
ANR:
In this case, the appellant had
purchased a second - hand truck under
a Hire Purchase agreement. The
In this case, the insurance company vehicle was insured by the respondent
had refused to compensate the insurance company. One day when he
respondent because of damage caused was driving the truck, a passenger
due to heavy rain during a mentioned asked him to stop the truck and give
period. The Insurance Company him a lift. When he stopped the truck,
admittedly denied relief to the insured the passenger brutally assaulted the
on the basis of one of the conditions of driver and fled with the vehicle. An
the policy which stated that National FIR was lodged and the respondent
Insurance would not be liable for any finance company was intimated about
loss or damage 12 months after the the theft. However, the insurance
event of the loss or damage to the company rejected the claim on the
insured. The insured filed a complaint ground of breach of terms of the
with the National Commission under policy. The complainant approached
the provisions of the Consumer District Consumer Disputes Forum,
Protection Act, 1986. State Commission and National
Commission to compensate him for
Judgment: The National Commission the loss. All of them had rejected the
held that the claim made by the insured case. So, finally he approached the
is actionable. It also observed that the Supreme Court.
goods were insured at the time of
incident and he asked for the claim Judgment: The Supreme court held
next day. It rejected all the contentions that the appellant was not at all in
urged by National Insurance and fault. It can be considered as a breach
ordered the insurance company to of the policy, but not a fundamental
award an amount of Rs. 21, 05,803.89 breach to bring the insurance policy to
with interest at 9% per annum. an end and terminate the insurance
policy. The two - judge bench of
Supreme Court directed the
respondent insurance company to pay
75% of the insured amount along with
9% interest p.a. from the date of filing
the claim. The court also directed the
insurance company to pay sum of Rs.
1, 00, 000 as compensation.
Sehgal School of Competition Vs Sapient Corporation Employees
Dalbir Singh: provident Fund Vs HDFC & Ors:

It is one of the remarkable consumer

protection act cases. This consumer
In is one of the landmark consumer protection act case happened when a
protection act cases and judgments. wrongful debit happened from a bank
A student was asked to deposit lump account. The complainant trust -
sum fees of Rs. 18,734 for coaching of Sapient Corporation Employees
medical entrance examination for the Provident Fund Trust maintained an
next two years. This amount was account with the respondent HDFC
deposited by the student in two Bank. The bank received instructions
complete instalments. However, the from the Employee Provident Fund
student realized that the quality of the Organisation (EPFO) that mentioned
coaching institute was not upto the order of payment of 1.47 crores against
mark and therefore sought a refund for the trust, and that no other payments
the remaining period which was further from the trust‟s account be made until
refused by the coaching institute. The EPFO‟s liability has not been settled
appellant lodged a case against Sehgal by the trust. However, the trust issued
School of Competition before National an instruction to the HDFC bank not to
Commission. While Sehgal School of debit any amount until further
Competition submitted records that communication as they wanted to seek
showed good results of the institute a stay order. However, in payment of
and alleged that it was wrong to the statutory due to EPFO, the bank,
observe that the coaching services are after giving due time, debit the account
substandard. with an amount of 1.47 crores. The
challenged this transaction as a
Judgment: National Commission deficiency in service and demanded the
stated that fees once paid shall not be amount debited along with interest,
refunded is an unfair trade practice. It damages, and legal expenses. Trust
quoted UGC guidelines declaring that lodged the complaint against the
even if a student has not attended a HDFC before the National
single class, an amount of ?1000 can Commission on the ground that bank
get deducted and proportionate charges committed default by paying an
for hostel fees, etc, and the balance amount payable as a statutory due.
amount could be refunded. State
Consumer Forum, mentioned that not Judgment: The National Commission
just the balance amount of fee, but also dismissed the argument of the
a higher compensation for legal costs complainant saying that bank informed
as well as the pain that the student had the trust as its customer and gave them
to undertake, could be availed in such due time. So, it cannot be said that
cases. EPFO conducted deficiency in
services. For this false litigation, the
National Commission had imposed a
penalty of Rs. 25,000 on the
complainant trust to be paid to the
HDFC Bank.
Karnataka Power transmission Indian Medical Association Vs V.P.
Corporation Vs Ashok Iron Works Shantha and others:
Private Limited:

Ashok Iron Works, a private company

which manufactures iron had applied for A writ petition was filed by the Indian
obtaining electricity from the state‟s Medical Association seeking Supreme
power generation company - the Court to declare that the Consumer
Karnataka Power Transmission Protection Act doesn‟t apply to the
Corporation (hereinafter KTPC) for medical profession. Indian Medical
commencing its iron production. Inspite Association validated that medical
of paying charges and obtaining professionals are governed by a separate
confirmation for the supply of 1500 Code of Ethics. Thus medical negligence
KVA energy in February 1991, the can be dealt with by medical experts in
actual supply did not begin until ten their own jurisdiction; the Consumer
months later, in November 1991. This Protection Act shouldn‟t be applied. The
delay incurred a huge loss for Ashok writ petition involved two questions as
Iron Works. This company had filed a given below:
complaint to the Belgaum Consumer
Dispute Forum and later Karnataka High  Whether a medical practitioner
Court. The legal argument by KTPC was can be regarded as rendering
that the complaint was not maintainable ‘service’ under the Consumer
as the consumer Protection Act 1986 Protection Act 1986?
excludes commercial supply of goods. It
also made an argument that the company  If medical services are
in engaged in manufacturing iron and rendered free, then would it be
intended to use it for commercial considered under the Act?
consumption which is excluded under
the Act. He also said that, the Judgment: The Court held that District,
complainant is not a `person‟ State and National Consumer Forums
under Section 2(1)(m) of the Act, 1986. can summon experts in the field of
medicine, examine evidence and protect
Judgment: In this case, Supreme Court the interest of consumers. Doctors and
gave his rulings. The Supreme Court hospitals who render service without any
mentioned the General Clause Act that charge would not fall within the ambit of
includes a private company within the “service”. In a government hospital,
purview of the definition of a “Person.” where services are provided free of
It was also held that the supply of charge - the Consumer Protection Act
electricity by the KPTC to a consumer would not be applied. However, if
would be covered under Section customers are being provided for free to
2(1)(o) being „service.‟ Also, if the the poor, then it shall be covered as a
electrical energy consumer is not service under the act. In case the
provided to a consumer in time as is insurance policy company pays for the
agreed upon, then under Section treatment on behalf of the customer, then
(2)(1)(g), then there can be a case for it will be covered under the Act.
deficiency in service. Therefore, the
clause stating “supply” of goods for
commercial purpose would not be
applied. The Supreme Court sent this
case back to District Forum for retrial on
these grounds.
I can conclude that very few consumers are fully aware of the rights and consumer protection
act. Hence it is necessary to educate them their rights as a consumer to make them vigilant,
rational and aware buyers. The Government has been fruitful in providing protection to the
consumer in the real sense of the term and served the purpose of the act.

Consumer protection act provide for better protection of the interest of consumer and for that
purpose to make provision for the establishment of the consumer councils and other authorities
for settlement on consumer disputes and for matters connected there with.

Nevertheless, there is scope for consumers to realize their role and importance. It is often said
that consumers movement can be effective only with the consumers active involvement. It
requires a voluntary effort and struggle involving the participation of one and all.