Kalra Eduvilla

Institute of commerce Professionals

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Consumer Protection
Concept of Consumer Protection:-
A consumer is said to be a king in a market.
The earlier approach of caveat emptor(Let the buyer beware), has now
been changed to caveat venditor (Let the seller beware).
Sometimes seller involved in practice of unscrupulous, exploitative and
unfair trade practices causing risk to the consumer
Examples, defective and unsafe products, adulteration, false and
misleading advertising, hoarding, black-marketing etc.
So, there is a need to protect consumers from such practices.
Consumer Protection means educating consumers about their rights
and responsibilities, grievances redressals.
They are protected through judicial machinery & consumer associations.

IMPORTANCE OF CONSUMER
PROTECTION

From Consumers’ point of view

1. Consumer Ignorance:
Consumers are exploited and ignored by the seller.
So it is necessary to educate & aware them about their rights and reliefs.
awareness.

2. Unorganised Consumers:
Consumers individually known as unorganized.
They need to be organised in the form of organisations.
Such organisations would take care of their interests & collectively
become powerful to protect their interests.

3. Widespread Exploitation of Consumers:

Consumers are exploited through unscrupulous, exploitative and unfair
trade practices like defective and unsafe products, adulteration, false
and misleading advertising, hoarding, black-marketing etc.
Consumers need protection against such malpractices of the sellers.

From the point of view of Business

1. Long-term Interest of Business:

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Long term survival of Business is only possible through customer

satisfaction.
Satisfied customers repeat sales and also provide good feedback to
prospective customers.
It helps in increasing the customer-base and long-term profit.

2. Business uses Society’s Resources:

Business organisations use resources of the society.
Thus, it is social responsibility of business to work in the interest of
the consumer.

3. Social Responsibility:
A business has social responsibilities towards all stake holders
including customers.
Consumers is an important o u t o f many stakeholders.

4. Moral Justification:
It is the moral duty of business to avoid any form of their exploitation.
So business should avoid defective and unsafe products, adulteration,
false and misleading advertising, hoarding, black marketing etc.

5. Government Intervention:
Exploitative trade practices would invite government intervention
or a c tio n a g a ins t B us ine s s .
Thus, it is advisable that business organisations voluntarily resort to
such practices.

THE CONSUMER PROTECTION ACT , 1986

This Act, seeks to protect and promote the interests of consumers
against defective goods, deficient services, unfair trade practices,
and other forms of their exploitation.
It provides speedy and inexpensive redressal of their grievances.
The scope of the Act is very wide.
It provides three-tier machinery, consisting of District Forums, State
Commissions and the National Commission.
It also provides for the formation of consumer protection councils in
every District and State, and at the apex level.

The Act confers certain rights to consumers.

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CONSUMER RIGHTS by CPA

1. Right to Safety:
The consumer has a right to be protected against goods and services
which are hazardous to life and health.
For example, sub-standard electrical appliances might cause serious
injury.
Thus, so as to protect consumers business should meet quality
standards.

2. Right to be Informed:
The consumer has a right to have complete information about the
product.
Like, ingredients, date of manufacture, price, quantity, directions for
use, etc.
It is mandatory through legal framework for manufactures to
provide such information.

3. Right to Choose:
The consumer has the freedom to choose from a 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 be heard in case of dissatisfaction and a
right to file a complaint.
So, business firms have set up their own consumer service and
grievance cells.
CPA also provides three-tier machinery, consisting of District
Forums, State Commissions and the National Commission.

5. Right to seek Redressal:

The consumer has a right to get relief in case the product or service
falls short of his expectations.
The CPA provides a number of reliefs 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,

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Kalra Eduvilla
Institute of commerce Professionals
9971561561 9818834309

etc.

6. Right to Consumer Education:

The consumer has a right to acquire knowledge and to be a well
informed.
He should be aware about his rights and the reliefs.
Many consumer organisations are taking an active part in educating
consumers in this respect.

CONSUMER RESPONSIBILITIES
1. Be aware about variety of goods and services & choose wisely.
Assert yourself to ensure that you get a fair deal.
2. Buy only standardised goods as they provide quality assurance.
Example, ISI mark electrical goods, FPO mark food products,
Hallmark Assert yourself to ensure that you get a fair deal jewelry
etc.
3. Use the products safely and follow manufacturer’s instructions.
4. Read labels carefully so as to have information about prices, net
weight, manufacturing and expiry dates, etc.
5. Choose only from legal goods and services and discourage
unscrupulous practices like black-marketing, hoarding etc.
6. Ask for Invoice on purchase of goods or services. This would serve as
a proof of the purchase made.
7. File a complaint in an appropriate consumer forum in case of a
defective goods or deficient servie.
8. Be a part of consumer societies which would play an active part in
educating consumers and safeguarding their interests.
9. Respect the environment, avoid waste, littering and contributing to
pollution.

Consumer:
 Any person who buys any goods for a consideration, which has been
paid or promised, or partly paid and partly promised, or under any
scheme of deferred payment.
 It includes any user of such goods, when such use is made with the
approval of the buyer,
 It doesn’t include a person who obtains goods for re-sale or any

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commercial purpose.
 Any person who hires or avails of any service, for a consideration
which has been paid or promised, or partly paid and partly promised,
or under any system of deferred payment.
 It includes any beneficiary of services when such services are
availed of with the approval of the person concerned
 It doesn’t include a person who avails of such services for any
commercial purpose.

Who can file a complaint?:

A complaint before the appropriate consumer forum can be made by:
1. Any consumer;
2. Any registered consumers’ association;
3. The Central Government or any State Government;
4. One or more consumers, on behalf of numerous consumers having
the same interest; and
5. A legal heir or representative of a deceased consumer.

REDRESSAL AGENCIES UNDER THE CONSUMER PROTECTION ACT

Consumer grievances are redressed by the three- tire machinery under
the Consumer Protection Act.
1. District Forum:
Members - a President and two other members, one of whom should be a
woman.
Appointment - by the State Government concerned.
Complaint admissible - A complaint can to be made when the value of
the goods or services along with the compensation claimed, does not
exceed Rs. 20 lakhs.

Action - On receiving the complaint, the District Forum shall

- Intimate the complaint to the party against whom the complaint is
filed.
- If required, sent goods/sample for testing in a laboratory.
- Pass an order after hearing to the both the parties.

Reappeal - In case the aggrieved party is not satisfied with the order of
the District Forum, he can appeal before the State Commission within 30
days of the passing of the order.

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2. State Commission:
Members - a President and not less than two other members, one of whom
should be a woman.
Appointment - They are appointed by the State Government concerned.
Complaint admissible –
A complaint can be made , when the value of the goods or services along
with the compensation claimed, exceeds Rs. 20 lakhs but does not exceed
Rs. 1 crore.
Appeal against the orders of a District Forum.
Action - On receiving the complaint, the state commission shall
- Intimate the complaint to the party against whom the complaint is
filed.
- If required, sent goods/sample for testing in a laboratory.
- Pass an order after hearing to the both the parties.

Reappeal - In case the aggrieved party is not satisfied with the order of
the State Commission, he can appeal before the National Commission within
30 days of the passing of the order.

3. National Commission:
Members - a President and at least four other members, one of whom should
be a woman.
Appointment - They are appointed by the Central Government.
Complaint admissible –
A complaint can be made, when the value of the goods or services in along
with the compensation claimed, exceeds Rs. 1 crore.
The appeals against the orders of a State Commission.

Action - On receiving the complaint, the state commission shall

- Intimate the complaint to the party against whom the complaint is
filed.
- If required, sent goods/sample for testing in a laboratory.
- Pass an order after hearing to the both the parties.

Reappeal - An order passed by the National Commission is appealable

before the Supreme Court.

Relief Available
1. To remove the defect in goods or deficiency in service.

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2. To replace the defective product with a new one, free from any
defect.
3. To refund the price paid for the product, or the charges paid for
the service.
4. To pay a reasonable amount of compensation for any loss or
injury suffered by the consumer due to the negligence of the
opposite party.
5. To pay punitive damages in appropriate circumstances.
6. To discontinue the unfair/ restrictive trade practice and not
to repeat it in the future.
7. Not to offer hazardous goods for sale.
8. To withdraw the hazardous goods from sale.
9. To cease manufacture of hazardous goods and to desist from
offering hazardous services.
10. To pay any amount (not less than 5% of the value of the defective
goods or deficient services provided), to be credited to the
Consumer Welfare Fund.
11. To issue corrective advertisement to neutralise the effect of a
misleading advertisement.
12. To pay Litigation expenses to the appropriate party.

ROLE OF CONSUMER ORGANISATIONS AND NGOS

1. Publishing periodicals and other publications to impart knowledge about
consumer problems, legal reporting, reliefs available and other
matters of interest.
2. Carrying out comparative testing of consumer products in accredited
laboratories to test relative qualities of competing brands and
publishing the test results for the benefit of consumers.
3. Encouraging consumers to take an action against unscrupulous,
exploitative and unfair trade practices of sellers.
4. Providing legal assistance to consumers by way of providing aid, legal
advice etc. in seeking legal remedy.
5. Filing complaints in appropriate consumer courts on behalf of the
consumers.
6. Examples, of consumer organisations and NGOs
Consumer Coordination Council, Delhi
Common Cause, Delhi
Voluntary Organisation in Interest of Consumer Education

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Kalra Eduvilla
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(VOICE), Delhi
Mumbai Grahak Panchayat,Mumbai

WAYS AND MEANS OF CONSUMER PROTECTION

1. Self Regulation by Business:

Firms realizes their long-term interest in customer satisfaction.
Socially responsible firms follow ethical standards and practices in
dealing with their customers.
Many firms have set up their customer service and grievance cells to
redress the problems and grievances of their consumers.

2. Business Associations:
The associations of trade, commerce and business have laid down their
code of conduct for their members for dealings with the customers.
Examples, Federation of Indian Chambers of Commerce of India
(FICCI) and Confederation of Indian Industries (CII)

3. Consumer Awareness:
Now Consumers are well informed about his rights and the reliefs
available to him.
They are in a position to raise his voice against any unfair trade
practices.

4. Consumer Organisations:
Consumer organisations educates consumers about their rights and
provides protection to them.
These organisations can force business firms to avoid malpractices
and exploitation of consumers.

5. Government:
The government can protect the interests of the consumers by
enacting various legislations.
The most important of these regulations is the Consumer Protection
Act, 1986.

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