In todays date, business is confronted with

growth of consumerism and legislative

measures to protect consumers.
Consumer movement is growing in India.
There is growing consumer awareness about
products failing to satisfy quality
requirements.
Exploitation of consumers by unfair trade
practices, poor quality and
spurious( products and overpricing is very
widespread.
Misleading false or deceptive advertisements
is common. At times the advertisement gives
only half the information so as to give a
different impression than is the actual fact.

Misrepresentation about the quality of a product

or the potency of a drug or a medicine can be
projected without much risk.
There are organisations such as Consumer
Guidance Society of India, Mumbai and
Consumer Education and Research Centre,
Ahmedabad.
These organisations are active in conducting
product testing and exposing substandard quality
and adulteration. Outcome of consciousness
regarding consumer rights has led to ISI
certification of food colors now being mandatory.
Consumer organisations also play an important
role in addressing consumer greivances.

Consumer Protection
"The purpose of any business is to create a customer. It is the
customer who determines what a business is. It is the customer
and he alone, who, through being willing to pay for a good or
services, convert economic resources into wealth, things into
goods. What a business thinks it produces is not of first
importance - especially not to the future of the business and to its
success. What the customer thinks he is buying - what he
considers value, is decisive; it determines what a business is,
what it produces and whether it will prosper". (Peter F. Drucker).

For consumer protection all

stakeholders especially Business,
Government and consumers are
equally responsible.
Business, comprising producers and
all elements of distribution channels
have to pay due regard to consumer
rights.

Producer should not charge exorbitant

prices in a sellers market.
Hoarding and black marketing is illegal.

Consumerism
Consumerism is a movement directed to protect the consumer and
ensure that the consumer gets the best return in exchange for the
money he spends.
Consumer education for our country is a must for the:
i.

Creation of critical awareness

ii.

Active consumer involvement

iii.

Imbibing social responsibility

iv.

Realising ecological responsibility

v.

Consumer Solidarity.

Cont.

Consumer Rights
Every year, March 15 is observed as "World Consumer Right Day". Its
significance is that in 1962 on this day, John Fitzgerald Kennedy, the then
president of the US declared four consumer rights. Later, International
Organisation of Consumers Union (IOCU) added three more rights to the list.
The government of India too included these rights in its 20-point programme.
These have also been incorporated in the United Nations Charter of Human
Rights. These are:
1.
2.
3.

Right to Safety
Right to be Informed
Right to Choose
Mentioned by President Kennedy

4.
5.
6.

Right to be Heard
Right to Redress(solution)
Right to Healthy Environment

Added by International Organization of

7.

Right to Consumer Education

Consumers Union (IOCU)

Some of the rights of consumers are:

Right against exploitation by unfair trade practices.
Right to protection of health and safety from goods
and services that are available to the consumer.
Right to be informed about the quality and
performance standards, ingredients of the
products, possible adverse effects etc.
Right to be heard if there is any grievance or
suggestion.
Right to get genuine grievances redressed.
Right to a physical environment that will protect
and enhance the quality of life.

Producers and sellers will not take the consumer

for granted.
Consumerism will provide feedback for businesses
and enable producers to understand consumer
grievances, needs and wants.
Consumerism will make the Government more
responsive to consumer interests, prompt it to take
necessary measures to protect the rights of
consumers.
Help consumer and producer to get together and
co-operate to get rid of unscrupulous traders.

Consumerism has the following roles to play:

Consumer Education: Consumer is given

information about various consumer goods and
services in relation to prices, standard trade
practices etc.
Product Rating: Agencies such as Consumer
Education and Research Society (CERS),
Ahmedabad; carry out tests and report the result
of such tests.
Liaison(communication and corporation) with
Government and with Producers

Objective:
1.
2.
3.

4.
5.
6.
7.

To assist countries in achieving or maintaining adequate

protection for their population as consumers.
Facilitate production and distribution patterns
responsive to the needs and desires of consumers.
Encourage high levels of ethical conduct for those
engaged in the production and distribution of goods and
services.
Assist countries in curbing abusive business practices
by all enterprises which adversely affect consumers.
Facilitate development of independent consumer
groups.
To further international cooperation in the field of
consumer protection
Encourage the development of market conditions which
provide consumers with greater choice at lower levels.

Governments should develop, strengthen or

maintain a strong consumer protection policy,
taking into account guidelines set below:
Protect consumers from hazards to their health
and safety.
Promotion and protection of the economic
interests of consumers.
Access of consumers to adequate information to
enable them make informed choices.
Consumer education.
Availability of effective consumer redress.
Freedom to organise consumer groups to
present their views in decision making
processes affecting them.

Consumer should not make vague or general

complaints and should also have supporting
information and proof such as a bill.
Consumer should try to understand the viewpoint
of the seller.
Consumers in asserting their rights should not
inconvenience or hurt other sections of the public
ie resort to rasta roko movements, bandh etc.
Consumers should complain against a system
and not attack individuals.

Some of the problems faced by Indian consumers are:

Short supply of items of essential needs.

Lack of effective or workable competition.
Unfamiliarity of product features results in sale
of substandard, inferior or even defective
goods
Due to low literacy levels and unsatisfactory
information flows, Indian consumers are not
conscious of their rights.
Consumerism in India is not organised and
developed.
Laws to safeguard interests of consumers are
not effectively implemented.

In India, the Government has taken a number of

measures to protect consumer interests:
Statutory Regulation:
Government of India is empowered to regulate
the terms and condition of sale, nature of trade
and commerce etc. Important legislation in this
respect include the Competition Act, Essential
Commodities Act, Prevention of Food
Adulteration Act, Prevention of Black marketing
and Maintenance of Supplies of Essential
Commodities Act, Consumer Protection Act etc.
Growth of Public Sector was designed to
enhance consumer welfare by increasing
production and making available goods and
services at fair prices, curbing private
monopolies and reducing market imperfections.

The Consumer Protection Act 1986 is a social welfare

legislation which was enacted as a result of
widespread consumer protection movement. The main
object of the legislature in the enactment of this act is
to provide for the better protection of the interests of
the consumer and to make provisions for
establishment of consumer councils and other
authorities for settlement of consumer disputes and
matter therewith connected.
In order to promote and protect the rights and
interests of consumers, quasi judicial machinery is
sought to be set up at district, state and central levels.
The main object of these bodies is to provide speedy
and simple redressal to consumer disputes. It is one of
the benevolent pieces of legislation intended to
protect the consumers at large from exploitation.

Consumer Protection Act 1986

The Consumer
The term 'consumer' is defined in Section 2(d) of the Consumer Protection Act,
1986 in two parts. One is a consumer who purchases goods, the other is a
person who hires services.
a.
"Consumer" means any person who:
i.
Buys any goods for a consideration that has been paid or promised or partly
paid and partly promised, or under 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 paid or partly promised,
or under any system of deferred payment when such use is made with the
approval of the buyer. But it does not include a person who obtains such
goods for resale or for any commercial purpose.*
ii.
Hires or avails of any services for a consideration that has been paid or
promised or partly paid and partly promised, 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

The Act provides for the establishment of a Central

Consumer Protection Council by the Central
Government and a State Consumer Protection Council
in each State by the respective State Governments.

Central Council shall consist of the Minister in charge of

consumer affairs in the Central Government who shall be
its Chairman .

Objective of Council:

Right to be protected against marketing of goods and

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

Aims and Objectives of the Act

The main objective of the Act (according to preamble to the Act) is to provide for
better protection of the interest of consumers. Consumer councils and other
authorities have been set up for settling the consumers' disputes and other
matters. The objective of the Act of 1986 is as follows:
1.

The foremost objective of the Consumer Protection Bill is to provide for

better protection of the interest of the consumer and for that purpose, to
make provisions for the establishment of Consumer Protection Councils and
other authorities for the settlement of consumer disputes and for matters
connected therewith.

The Act provided that for speedy and simple redressal at minimum
expenses to consumer disputes, a quasi-judicial body is to be set up at the
district, state and central levels.
2.

Grounds for Appeal for the Jurisdiction to Redressal

Forums
Consumers can appeal for jurisdiction to the consumer redressal forums
upon any of the five grounds:
a.

Consumer Act and Unfair Trade Practices

b.

False Offer or Bargain Price

c.

Offering of Gifts, Prizes etc., and Conducting Promotional Contests

d.

Product Safety Standards

e.

Hoarding or Destruction of Goods Act

Cont.

UN Guidelines for Consumer Protection, 1986 - General Principles

Governments should develop, strengthen or maintain a strong consumer protection policy, taking into
account the guidelines set out below. In so doing, each government must set its own priorities for the
protection of consumers in accordance with the economic and social circumstances of the country, and
the
needs of its population, and bearing in mind the costs and benefits of proposed measures.

The legitimate needs, which the guidelines are intended to meet, are the following:
a.
The protection of consumers from hazards to their health and safety;
b.
The promotion and protection of the economic interests of consumers;
c.
Access of consumers to adequate information to enable them to make informed choices according to
individual wishes and needs;
d.
Consumer education;
e.
Availability of effective consumer redress;
f.
Freedom to form consumer and other relevant groups or organizations and the opportunity of such
organizations to present their views in decision-making processes affecting them.

Governments should provide or maintain adequate infrastructure to develop, implement and monitor
consumer protection policies. Special care should be taken to ensure that measures for consumer
protection are implemented for the benefit of all sections of the population, particularly the rural
population.

All enterprises should obey the relevant laws and regulations of the countries in which they do business.
They should also conform to the appropriate provisions of international standards for consumer
protection
to which the competent authorities of the country in question have agreed.

The potential positive role of universities and public and private enterprises in research should be
considered when developing consumer protection policies.

Restrictive Trade Practices

Section 2(1) (nn) of the Act provides that "restrictive trade practice" means "any
trade practice which requires a consumer to buy, hire or avail of any goods or, as
the case may be, services as a condition precedent for buying, hiring or availing
of other goods or services".
Goods and Defect [Section 2 (1)(i)&(f)]
Goods: The consumer protection act doesn't define the term 'goods'. It says that
'goods' means that as defined in the Sale of Goods Act, 1930. Section 2(7) of the
Sale of Goods Act defines it such: "Goods means every kind of movable property
other than actionable claims and money, and includes stock and shares, growing
crops, grass , and things attached to or forming part of land which are agreed to
be severed before sale or under the contract of sale".
Defect: Under Section 2(1)(f) of the Act 'defect' means - "any fault, imperfection
or shortcoming in quality potency, purity or standard which is required to be
maintained by or under any law, for the time being in force or as is claimed by the
Cont.
trader in any manner whatsoever in relation to the goods."

Deficiency in Services [Section 2(1)(o)& (g)]

Deficiency in Service: According to Act "deficiency means any fault,
imperfection, shortcoming or inadequacy in the quality, nature and manner of
performance which is required to be maintained by or under any law for the time
being in force or has been undertaken to be performed by a person in pursuance
of a contract or otherwise in relation to any service.
Charging of Excessive Price over that Fixed by Law or Displayed
A complaint may be made against a trader who has charged in excess of the
price:
1.
Fixed by or under any law for the time being in force, or
2.
Displayed on the goods, or
3.
Displayed on any package containing the goods.
Hazardous Goods
The consumer protection act in spite of recognising the right of consumer to be
protected against marketing of goods, which are hazardous to life and property
did not provide any preventative mechanism in favour of the consumer. The term
'hazardous goods' has not been defined in the Act.

Who can File a Complaint [Section 2 (b) & 12]

A complaint in reference to any goods sold or delivered or services
rendered may be filed by any of the following:
a.

By the consumer himself to whom such goods have been sold or delivered
or such service rendered;

b.

Any voluntary consumer association registered under Companies Act, 1956

or under any other law for the time being in force; or

c.

One or more consumers, where there are numerous consumers having the
same interest;

d.

The Central and state government.

In addition to the above, the following are also considered as a consumer an
hence they may file a complaint:

Beneficiary of goods/services, legal representative of the deceased

consumer, legal heirs of the deceased consumer, spouse of the consumer,
Cont.
a relative of consumer, and insurance company.

Relief Available Against Complaint [Section 14 & 22]

If the firm is convinced that the goods were really defective or that the complaint
about the service is proved, the forum shall have to order any of the following
things to be done by the opposite party:
a.
To remove the defect pointed out by the appropriate laboratory for the
goods in question.
b.
To replace the goods with new goods of similar description that shall be free
form any defect.
c.
To refund to the complainant the amount paid as price, or as the case may
be, the charges paid by the complainant.
d.
To pay such amount as may be awarded by it as compensation to the
consumer for any loss or injury suffered by the consumer due to the
negligence of the opposite party.
e.
To remove the defects or deficiencies in the services in question.
f.
To discontinue the unfair trade practice or the restrictive trade practice or
not to repeat it.
g.
Not to offer the hazardous goods for sale.

Consumer Protection Councils

These councils work towards the promotion and protection of consumers.
Consumer councils are created to advise and assist the consumers in seeking
and enforcing their rights. We have consumer protection councils both at the
center level and state level.
Central Consumer Protection Council
The Central government was authorised to establish the Central Council that has
come to existence w.e.f. April 15, 1987 through the framing of the (Central)
Consumer Protection Rules (1987).
Composition [Section 2 and Rule 3]
Member of the councils are selected from various areas of consumer interest,
who are whenever possible, leading members of statewide organizations
representing segments of the consumer public, so as to establish a broadlybased representative consumer council.
Cont.

State Consumer Protection Council

Under Section 7 of the Act, state governments are required to establish their
respective protection councils. The rules regarding its composition and other
modalities are to be established by the respective state government. The
objectives of the State Consumer Protection Council are described in Section 7
to be the same as those of the Central Council, namely, the points enumerated in
Section 6.
Working Groups
The Central government may constitute from amongst the members of the
Council a standing Working Group, under the Chairmanship of the Member
Secretary of the Council. The Standing Working Group shall consist of not more
than 30 members and shall meet when considered necessary by the Central
government.

Consumer Disputes Redressal, Agencies Under the

Consumer Protection Act, 1986 (CDRA)
Under this Act, Consumer Disputes Redressal Agencies have been established.
The Consumer Protection Act provides for a 3-tier approach in resolving
consumer disputes. These three tiers are:
1.
A Consumer Disputes Redressal Forum to be known as the "District
Forum". This is to be established by the state government in each district of
the state by means of a notification.
2.
A Consumer Disputes Redressal Commission to be known as the "State
Commission". This has also to be established by the state government in
the state by means of a notification.
3.
A National Consumer Disputes Redressal Commission to be established by
the Central government by means of a notification.
The Act thus envisages a hierarchy of three redressal forums:

District Forum

State Forum

National Forum

Jurisdiction
The question of has to be jurisdiction considered with reference to the value,
place, and nature of the subject matter:
District Forum: A District Forum deals with cases where the value of claim is
upto Rs. 20 lakhs.
Territorial Jurisdiction: A case is supposed to fall within the purview of District
Council when, at the time of the institution of the complaint:
a.
The party against whom the claim is made actually and voluntarily resides
or carries on business, or has a branch office or personally works for gain in
that area, or
b.
Where there are more than one opposing or contesting parties , each such
party actually and voluntarily resides or carries on business or
c.
Where there are more than one opposing or contesting parties, and any
such party actually and voluntarily resides or carries on business or has a
branch office, or personally works for gain in that area; provided the other
parties not so residing or working agrees.
Cont.
d.
The cause of action, wholly or in part, arises in that area.

State Commission
Cases having a claim exceeding rupees 20 lakhs but upto the limit of Rs. 1 crore
can go to the State Commission.
The Consumer Protection Act does not specifically provide for the territorial
jurisdiction of the State Commission. Broadly, these are on similar lines on which
the territorial jurisdiction of district forum is based.
National Commission
National Commission is the highest level of consumer forums. It may entertain all
matters where the value of claim exceeds Rs. 1 crore. The territorial jurisdiction
of the National Commission is whole of India except the state of Jammu &
Kashmir.