Consumer Protection PDF

chapter 12 Consumer Protection Learning Consumer forum fines SBI for ignoring...

chapter 12 Consumer Protection Learning Consumer forum fines SBI for ignoring customer’s problem Objectives Now, if you do not get money from ATMs, it would be considered as lack of service on part of After studying this bank, due to which it can also be penalised. In a chapter, you should be similar case, Consumer Forum imposed a fine of able to: ` 2,500 on State Bank of India after considering reduction in bank service.Bank officials believe that it is possible that the penalty on the bank ¾¾ state the importance due to lack of service in ATM. It is probably the of consumer first matter. Lawyer Rajiv Aggarwal went to SBI protection; ATM to withdraw money on 25, 26 and 30 April, 2017. On May 4, 2017, he filed a petition in the Consumer Forum. ¾¾ b r i e f l y e x p l a i n In front of the forum, the bank gave a unique legal framework for argument. The bank told the forum that although consumer protection ATM runs with Internet connectivity, so at the in India; time when users use ATM, at that time he is not directly our client, so if money not withdrawn from ATM, then it cannot be considered as a ¾¾ describe consumer reduction in service. rights in India; On this, the forum said that bank is taking an ATM fee every year from the customer and then this argument does not mean that he is not a customer ¾¾ list out consumer of the bank. The forum rejected the bank’s logic completely. The petitioner has presented photo responsibilities; and video recording at the time of withdrawal as evidence in front of forum. Forum acknowledged that the consumers at various times go to ATM to ¾¾ briefly describe the withdrawn money every time the message of ‘cash ways and means of not available’ is the lack in service. consumer protection; The forum accepted the petition. After hearing and the arguments of both the parties, the forum ordered that if the bank will not provide ATM service to the customer, then it will be considered ¾¾ d e s c r i b e t h e r o l e a reduction in service. The forum has ordered the of consumer bank to pay ` 1500 for the mental harassment organisations and suffered by the complainant and ` 1000 for a NGOs in protecting judicial expense within 30 days. consumers’ interests. Source: http://dailypost.in/news/consumer- forum-fines-sbi-ignoring-customers/ 2020-21 Ch_12.indd 323 11/28/2019 3:31:04 PM  BUSINESS  STUDIES 324 The above case is just one of the or sale of spurious products, might examples of the many problems that have to pay a higher price when sellers consumers might have to face in the engage in overpricing, hoarding or purchase, use and consumption of black-marketing, etc. Thus, there is a goods and services. The case also need for providing adequate protection highlights the need for an appropriate to consumers against such practices legal protection to be provided to of the sellers. Let us now discuss the consumers to protect them from various importance of consumer protection. forms of exploitation from the seller. Have you ever thought what would be Importance of Consumer the plight of consumers if adequate Protection protection is not provided to them? Consumer Protection has a wide Can the present day businesses afford agenda. It not only includes educating to ignore the interests of consumers? consumers about their rights and The area of consumer protection has responsibilities, but also helps in emerged as a very important area of getting their grievances redressed. It not study having significance for both the only requires a judicial machinery for consumers and businesses alike. protecting the interests of consumers but also requires the consumers to Introduction get together and form themselves into A consumer is said to be a king in consumer associations for protection a free market economy. The earlier and promotion of their interests. At the approach of caveat emptor, which same time, consumer protection has a means “Let the buyer beware”, has special significance for businesses too. now been changed to caveat venditor (“Let the seller beware”). However, with From Consumers’ point of view growing competition and in an attempt The importance of consumer to increase their sales and market protection from the consumers’ point share, manufacturers and service- of view can be understood from the providers may be tempted to engage in following points: unscrupulous, exploitative and unfair trade practices like defective and (i) Consumer Ignorance: In the light unsafe products, adulteration, false of widespread ignorance of consumers and misleading advertising, hoarding, about their rights and reliefs available black-marketing, etc. This means that to them, it becomes necessary to a consumer might be exposed to risks educate them about the same so as to due to unsafe products, might suffer achieve consumer awareness. from bad health due to adulterated (ii) Unorganised Consumers: Con- food products, might be cheated sumers need to be organised in the because of misleading advertisements form of consumer organisations which 2020-21 Ch_12.indd 324 11/28/2019 3:31:04 PM  consumer protection 325 Compensation for impurities in cold drinks would take care of their interests. marketing, etc. Consumers need Though, in India, we do have consumer protection against such malpractices organisations which are working in of the sellers. this direction, adequate protection is required to be given to consumers till From the point of view of these organisations become powerful Business enough to protect and promote the A business must also lay emphasis on interests of consumers. protecting the consumers and adequately (iii) Widespread Exploitation of satisfying them. This is important Consumers: Consumers might because of the following reasons: be exploited by unscrupulous, exploitative and unfair trade practices (i) Long-term Interest of Business: like defective and unsafe products, Enlightened businesses realise that it adulteration, false and misleading is in their long-term interest to satisfy advertising, hoarding, black- their customers. Satisfied customers 2020-21 Ch_12.indd 325 11/28/2019 3:31:04 PM  BUSINESS  STUDIES 326 not only lead to repeat sales but also the image of the company. Thus, it is provide good feedback to prospective advisable that business organisations customers and thus, help in increasing voluntarily resort to such practices the customer-base of business. Thus, where the customers’ needs and business firms should aim at long- interests will well be taken care of. term profit maximisation through In view of the above, the government customer satisfaction. of India has enacted several regulations (ii) Business uses Society’s designed to provide adequate Resources: Business organisations use protection to consumers. We shall now resources which belong to the society. discuss some of these regulations. They, thus, have a responsibility to supply such products and render Legal Protection to Consumers such services which are in public The Indian legal framework consists interest and would not impair public of a number of regulations which confidence in them. provide protection to consumers. As (iii) Social Responsibility: A business per the Right to Information Act 2005, has social responsibilities towards Section 4, all relevant information various interest groups. Business is required to be made available to organisations make money by selling all citizens of the country. Other goods and providing services to regulations are as under. consumers. Thus, consumers form 1. The Consumer Protection Act, an important group among the many 1986: The Consumer Protection Act, stakeholders of business and like other 1986 seeks to protect and promote stakeholders, their interest has to be the interests of consumers. The Act well taken care of. provides safeguards to consumers (iv) Moral Justification: It is the moral against defective goods, deficient duty of any business to take care of services, unfair trade practices, and consumer’s interest and avoid any form other forms of their exploitation. The Act provides for the setting up of a of their exploitation. Thus, a business three-tier machinery, consisting of must avoid unscrupulous, exploitative District Forums, State Commissions and unfair trade practices like defective and the National Commission. It also and unsafe products, adulteration, provides for the formation of consumer false and misleading advertising, protection councils in every District hoarding, black marketing, etc. and State, and at the apex level. (v) Government Intervention: A 2. The Indian Contract Act, 1872: business engaging in any form of The Act lays down the conditions in exploitative trade practices would which the promises made by parties invite government intervention or to a contract will be binding on each action. This can impair and tarnish other. The Act also specifies the 2020-21 Ch_12.indd 326 11/28/2019 3:31:04 PM  consumer protection 327 Protection against malpractices and exploitation remedies available to parties in case activities of profiteers, hoarders and of breach of contract. black-marketers. 3. The Sale of Goods Act, 1930: 5. The Agricultural Produce (Grading The Act provides some safeguards and Marking) Act, 1937: The Act and reliefs to the buyers of the goods prescribes grade standards for in case the goods purchased do agricultural commodities and live- not comply with express or implied stock products. The Act stipulates the conditions which govern the conditions or warranties. use of standards and lays down the 4. The Essential Commodities Act, procedure for grading, marking and 1955: The Act aims at controlling packing of agricultural produce. The production, supply and distribution quality mark provided under the Act of essential commodities, checking is known as AGMARK, an acronym for inflationary trend in their prices Agricultural Marketing. and ensuring equal distribution of 6. The Prevention of Food essential commodities. The Act also Adulteration Act, 1954: The Act provides for action against anti-social aims to check adulteration of food 2020-21 Ch_12.indd 327 11/28/2019 3:31:04 PM  BUSINESS  STUDIES 328 articles and ensure their purity so as The most important of these to maintain public health. regulations is the Consumer 7. The Standards of Weights and Protection Act which provides for Measures Act, 1976: The provisions of six consumer rights and helps this Act are applicable in case of those consumers in getting their grievances goods which are sold or distributed redressed for any shortcoming in the by weight, measure or number. It goods purchased or services availed. provides protection to consumers against the malpractice of under- The Consumer Protection Act, weight or under-measure. 1986 8. The Trade Marks Act, 1999: This Act The Consumer Protection Act (CPA) has repealed and replaced the Trade seeks to protect and promote the and Merchandise Marks Act, 1958. consumers’ interest through speedy The Act prevents the use of fraudulent and inexpensive redressal of their marks on products and thus, provides grievances. protection to the consumers against The scope of the Act is very such products. wide. It is applicable to all types 9. The Competition Act, 2002: of undertakings, big and small, This Act has repealed and replaced whether in the private or public the Monopolies and Restrictive Trade sector, or in the co-operative sector, Practices Act, 1969. The Act provides whether a manufacturer or a trader, protection to the consumers in case of and whether supplying goods or practices adopted by business firms providing services. which hamper competition in the The Act confers certain rights to market. consumers with a view to empowering them and to protect their interests. 10. The Bureau of Indian Standards Act, 1986: The Bureau of Indian Consumer Rights Standards has been set up under the Act. The Bureau has two major activities: The Consumer Protection Act formulation of quality standards for goods provides for six rights of consumers. and their certification through the BIS The consumer protection councils certification scheme. Manufacturers set up under the Act are intended are permitted to use the ISI mark on to promote and protect the various their products only after ensuring that rights of consumers. These rights the goods conform to the prescribed include the following: quality standards. The Bureau has 1. Right to Safety: The consumer has also setup a grievance cell where a right to be protected against goods consumers can make a complaint and services which are hazardous to about the quality of products carrying life and health. For instance, electrical the ISI mark. appliances which are manufactured 2020-21 Ch_12.indd 328 11/28/2019 3:31:04 PM  consumer protection 329 with substandard products or do not of his expectations. The Consumer conform to the safety norms might Protection Act provides a number of cause serious injury. Thus, consumers reliefs to the consumers including are educated that they should use replacement of the product, removal electrical appliances which are ISI of defect in the product, compensation marked as this would be an assurance paid for any loss or injury suffered by of such products meeting quality the consumer, etc. specifications. 6. Right to Consumer Education: 2. Right to be Informed: The The consumer has a right to acquire consumer has a right to have complete knowledge and to be a well informed information about the product he consumer throughout life. He should intends to buy including its ingredients, be aware about his rights and the date of manufacture, price, quantity, reliefs available to him in case of a directions for use, etc. It is because of product or service falling short of this reason that the legal framework his expectations. Many consumer in India requires the manufactures organisations and some enlightened to provide such information on the businesses are taking an active package and label of the product. part in educating consumers in this 3. Right to Choose: The consumer respect. has the freedom to choose from a The Consumer Protection Act variety of products at competitive by conferring these rights on the prices. This implies that the marketers consumers empowers them to fight should offer a wide variety of products against any unscrupulous, exploitative in terms of quality, brand, prices, size, and unfair trade practices adopted by etc. and allow the consumer to make sellers. The Box on East Delhi eatery a choice from amongst these. shows how a restaurant owner was 4. Right to be Heard: The consumer fined for overpricing bottled water. has a right to file a complaint and to Consumer rights, by themselves, be heard in case of dissatisfaction cannot be effective in achieving the with a good or a service. It is because objective of consumer protection. of this reason that many enlightened Consumer protection can, in business firms have set up their own effect, be achieved only when the consumer service and grievance cells. consumers also understand their Many consumer organisations are also responsibilities. working towards this direction and helping consumers in redressal of their Consumer Responsibilities grievances. A consumer should keep in mind 5. Right to seek Redressal: The the following responsibilities while consumer has a right to get relief in purchasing, using and consuming case the product or service falls short goods and services — 2020-21 Ch_12.indd 329 11/28/2019 3:31:04 PM  BUSINESS  STUDIES 330 Eatery fined for Overpricing Bottled Water A restaurant owner in east Delhi has been directed to pay a fine of ` 5,000 to a customer who was asked to shell out ` 34 for a water bottle which had a maximum retail price (MRP) of ` 12. The fine comes at a time when consumer courts are turning the heat on shop-owners who overcharge. In a recent landmark decision, the state consumer commission had slapped a fine of ` 50,000 on a cineplex for similar malpractice. Goel was awarded the compensation by east district consumer forum president and members directing Zaika Bazaar, Karkardooma Complex, to compensate Goel for overcharging. The Forum said: “The present complaint is covered by the judgment of the state consumer commision in case of Nirulas vs Ankit Jain in which it said no trader or service provider can charge more price than an item’s MRP printed on the packed item, if delivered packed”. Ordering the restaurant owner to discontinue the malpractice, the forum said charging higher amount than MRP, if delivered in packed form, was against the law of the land. Goel had bought a bottle of Aquafina water from the restaurant in November last year and was asked to pay ` 34 for it, including a VAT of ` 4, when the bottle had a MRP of ` 12 printed on it. Source: www.corecentre.org (i) Be aware about various goods and and discourage unscrupulous services available in the market so practices like black-marketing, that an intelligent and wise choice hoarding, etc. can be made. (vii) Ask for a cash memo on purchase (ii) Buy only standardised goods as of goods or services. This would they provide quality assurance. serve as a proof of the purchase Thus, look for ISI mark on made. electrical goods, FPO mark on food products, Hallmark on (viii) File a complaint in an appropriate jewelry, etc. consumer forum in case of a shortcoming in the quality of (iii) Learn about the risks associated with products and services, follow goods purchased or services manufacturer’s instructions and availed. Do not fail to take an use the products safely. action even when the amount involved is small. (iv) Read labels carefully so as to have information about prices, (ix) Form consumer societies which net weight, manufacturing and would play an active part in expiry dates, etc. educating consumers and (v) Assert yourself to ensure that you safeguarding their interests. get a fair deal. (x) Respect the environment. Avoid (vi) Be honest in your dealings. Choose waste, littering and contributing only from legal goods and services to pollution. 2020-21 Ch_12.indd 330 11/28/2019 3:47:40 PM  consumer protection 331 Mark of Bureau of Indian Standards Food Process Order Agmark BIS Hallmark Eco-mark Marks indicating quality in different products A consumers’ awareness about his standards and practices in dealing rights and responsibilities is just one with their customers. Many firms of the ways in which the objective of have set up their customer service and consumer protection can be achieved. grievance cells to redress the problems There are other ways in which this and grievances of their consumers. objective may be achieved. 2. Business Associations: The associations of trade, commerce and Ways and means of Consumer business like Federation of Indian Protection Chambers of Commerce of India (FICCI) and Confederation of Indian There are various ways in which the Industries (CII) have laid down their objective of consumer protection can code of conduct which lay down for be achieved. their members the guidelines in their 1. Self Regulation by Business: dealings with the customers. Enlightened business firms realise 3. Consumer Awareness: A that it is in their long-term interest consumer, who is well-informed about to serve the customers well. Socially his rights and the reliefs available responsible firms follow ethical to him, would be in a position to 2020-21 Ch_12.indd 331 11/28/2019 3:31:05 PM  BUSINESS  STUDIES 332 raise his voice against any unfair 5. Government: The government can trade practices or unscrupulous protect the interests of the consumers exploitation. In addition to this, an by enacting various measures. For understanding of his responsibilities example, the GOI has set up a toll-free would also enable a consumer to national consumer Helpline Number safeguard his interests. In this 1800114000 (9:30 am – 5:30 pm) for regard, the Department of Consumer this purpose. The legal framework Affairs, GOI, has been undertaking the in India encompasses various campaign, Jago Grahak Jago through legislations which provide protection to consumers. The most important multimedia awareness. of these regulations is the Consumer 4. Consumer Organisations: Consumer Protection Act, 1986. The Act provides organisations play an important role for a three-tier machinery at the in educating consumers about their district, state and national levels for rights and providing protection to redressal of consumer grievances. The them. These organisations can force redressal mechanism under this three- business firms to avoid malpractices tier machinery has been explained and exploitation of consumers. hereunder. Consumer Awareness 2020-21 Ch_12.indd 332 11/28/2019 3:31:05 PM  consumer protection 333 Redressal Agencies Under the file a complaint under the Consumer Consumer Protection Act Protection Act. For the redressal of consumer Consumer: A ‘consumer’ is generally understood as a person who uses or grievances, the Consumer Protection consumes goods or avails of any ser- Act provides for setting up of a three-tier vice. Under the Consumer Protection enforcement machinery at the District, Act, a consumer is defined as: State, and the National levels, known as the District Consumer Dispute (a) Any person who buys any goods Redressal Forum, State Consumer for a consideration, which has Disputes Redressal Commission, and been paid or promised, or partly the National Consumer Disputes paid and partly promised, or under Redressal Commission. They are briefly any scheme of deferred payment. referred to as the ‘District Forum’, It includes any user of such goods, ‘State Commission’, and the ‘National when such use is made with the Commission’, respectively. While the approval of the buyer, but does National Commission is set up by not include a person who obtains the Central Government, the State goods for re-sale or any commercial Commissions and the District Forums purpose. are set up, in each State and District, (b) Any person who hires or avails of respectively, by the State Government any service, for a consideration concerned. The Figure on redressal which has been paid or promised, agencies shows the hierarchical or partly paid and partly promised, structure of this three-tire machinery. or under any system of deferred Before studying the set-up and payment. It includes any beneficiary functioning of these redressal agencies of services when such services are let see how the Consumer Protection availed of with the approval of the Act defines a consumer and who can person concerned, but does not Supreme Court National Commission State Commission District Forum Redressal Agencies under the Consumer Protection Act 2020-21 Ch_12.indd 333 11/28/2019 3:31:05 PM  BUSINESS  STUDIES 334 include a person who avails of filed. If required, the goods or a sample such services for any commercial thereof, shall be sent for testing in a purpose. laboratory. The District Forum shall Who can file a complaint?: A pass an order after considering the complaint before the appropriate test report from the laboratory and consumer forum can be made by: hearing to the party against whom the (i) Any consumer can file a complaint complaint is filed. In case the aggrieved on his/her own and does not party is not satisfied with the order need the services of advocate/ of the District Forum, he can appeal professionals; before the State Commission within 30 days of the passing of the order. (ii) A n y r e g i s t e r e d c o n s u m e r s ’ association; 2. State Commission: There are 365 State Commission of India. Each State (iii) The Central Government or any Commission consists of a President State Government; and not less than two other members, (iv) One or more consumers, on behalf one of whom should be a woman. of numerous consumers having the They are appointed by the State same interest; and Government concerned. A complaint (v) A legal heir or representative of a can to be made to the appropriate deceased consumer. State Commission when the value (vi) A complaint under Section 2 (b) of of the goods or services in question, the Consumer Protection Act 1986. along with the compensation claimed, exceeds ` 20 lakhs but does not exceed Let us now see how the consumer ` 1 crore. The appeals against the grievances are redressed by the three- orders of a District Forum can also tire machinery under the Consumer be filed before the State Commission. Protection Act. On receiving the complaint, the 1. District Forum: There are 644 State Commission shall refer the district commissions in India. The complaint to the party against whom District Forum consists of a President the complaint is filed. If required, the and two other members, one of whom goods or a sample thereof, shall be should be a woman. They all are sent for testing in a laboratory. The appointed by the State Government State Commission shall pass an order concerned. A complaint can to be made after considering the test report from to the appropriate District Forum when the laboratory and hearing to the the value of the goods or services in party against whom the complaint is question, along with the compensation filed. In case the aggrieved party is not claimed, does not exceed ` 20 lakhs. On satisfied with the order of the State receiving the complaint, the District Commission, he can appeal before the Forum shall refer the complaint to the National Commission within 30 days party against whom the complaint is of the passing of the order. 2020-21 Ch_12.indd 334 11/28/2019 3:31:05 PM  consumer protection 335 3. National Commission: The National State Commission can be challenged Commission has territorial jurisdiction before the National Commission and over the whole country. The National no further. Commission consists of a President and at least four other members, one Relief Available of whom should be a woman. They are If the consumer court is satisfied about appointed by the Central Government. the genuineness of the complaint, it A complaint can to be made to the can issue one or more of the following National Commission when the value directions to the opposite party. of the goods or services in question, along with the compensation claimed, (i) To remove the defect in goods or exceeds ` 1 crore. The appeals against deficiency in service. the orders of a State Commission (ii) To replace the defective product can also be filed before the National with a new one, free from any Commission. On receiving the defect. complaint, the National Commission (iii) To refund the price paid for the shall refer the complaint to the party product, or the charges paid for against whom the complaint is filed. the service. If required, the goods or a sample (iv) To pay a reasonable amount of thereof, shall be sent for testing in a compensation for any loss or laboratory. The National Commission injury suffered by the consumer shall pass an order after considering due to the negligence of the the test report from the laboratory and opposite party. hearing to the party against whom the (v) To pay punitive damages in complaint is filed. appropriate circumstances. An order passed by the National (vi) To discontinue the unfair/ Commission in a matter of its original restrictive trade practice and not jurisdiction is appealable before the to repeat it in the future. Supreme Court. This means that (vii) Not to offer hazardous goods for only those appeals where the value sale. of goods and services in question, along with the compensation claimed, (viii) To withdraw the hazardous goods exceeded ` 1 crore and where the from sale. aggrieved party was not satisfied with (ix) T o c e a s e m a n u f a c t u r e o f the order of the National Commission, hazardous goods and to desist can be taken to the Supreme Court from offering hazardous services. of India. Moreover, in a case decided (x) To pay any amount (not less than by the District Forum, the appeal can 5% of the value of the defective be filed before the State Commission goods or deficient services and, thereafter, the order of the provided), to be credited to the 2020-21 Ch_12.indd 335 18-12-2019 17:02:26  BUSINESS  STUDIES 336 Some Decided Cases Under the Consumer Protection Act, a consumer can file a complaint against the manufacturers or sellers for any defective good supplied to him or any deficient services rendered to him. In Jose Philip Mampillil vs. M/s Premier automobiles Ltd. & Anr, a diesel car purchased by the appellant (consumer) was found defective. The defects in the car were not removed by the defendants (manufacturer and dealer). The Commissioner appointed by the District Forum found a large number of defects in the car. Consequently, the District Forum directed repair of car free of cost and replacement of engine. The order was upheld by the State Commission except for the direction for replacement of engine. In the case of Sashikant Krishnaii Dole vs. Shikshan Prasarak Mandali, the National Commission held that failure to amount basic safeguards in the swimming pool amounts to deficiency in service. A school owned a swimming pool and offered swimming facilities to the public on payment of a fee. The school conducted winter and summer training camps to train boys in swimming and for this purpose engaged a coach. The plaintiffs enrolled their only son for learning swimming under the guidance of the coach. It was alleged that due to the negligence of the coach, the boy drowned and died. The school denied any responsibility on its part. The coach claimed that he had considerable experience in coaching young boys is swimming. When the deceased was found to have been drowned, the coach immediately took him out of the water and removed the water from his stomach and gave him artificial respiration and thereafter took him to a doctor. The doctor advised that the boy be taken to the nearest hospital where the boy died. The State Commission held the school and the coach deficient in rendering service to the deceased. On appeal, the order was upheld by the National Commission. Adapted from: www.indiainfoline.com Consumer Welfare Fund or any Role of Consumer Organisations other organisation/person, to be and NGOs utilised in the prescribed manner. In India, several consumer (xi) To issue corrective advertisement organisations and non-governmental to neutralise the effect of a organisations (NGOs) have been set misleading advertisement. up for the protection and promotion of consumers’ interests. Non- (xii) To pay adequate costs to the governmental organisations are non- appropriate party. profit organisations which aim at Bring out some decided cases promoting the welfare of people. They where a complaint was filed in a have a constitution of their own and consumer court for defective goods and are free from government interference. deficient services. Consumer organisations and NGOs 2020-21 Ch_12.indd 336 11/28/2019 3:31:05 PM  consumer protection 337 CERS Wins Case against Railways In a case filed by Consumer Education and Research Society (CERS), Ahmedabad, and a senior couple, the Consumer Dispute Redressal Forum, Ahmedabad City, has held the Railways responsible for negligence and directed it to pay ` 2000 to the couple for its mental agony and ` 3000 towards cost. Mr. Man Mohan Singh and his wife Kamlesh had bought a railway journey- cum-reservation ticket at Ahmedabad for travel from New Delhi to Kanpur Central by the Shatabdi Express on 2 December 2001. The details on the ticket, including the coach number, the date of journey, etc., were illegible. Hence, they were forced to buy another ticket for journey from New Delhi to Kanpur. They applied for a refund for the earlier ticket but, as the Forum noted, they had to suffer much for the purpose. In spite of the couple’s giving the Ahmedabad residential address for sending the refund, the Railways sent it to their Delhi address. They approached CERS for help. CERS filed a complaint against the Railways before the Consumer Dispute Redressal Forum, Ahmedabad City, under Sections 2(1)(g) and 2(1)(o) of the Consumer Protection Act, 1986. CERS claimed that the two senior citizens had to face mental harassment due to the deficiency in service by the Railways. The Railways contended, among other things, that the Forum had no territorial jurisdiction after cancellation of the ticket, the couple were no more consumers in the eye of the law, the complaint was time-barred and the Railway Claim Tribunal was the proper forum to entertain the complaint about refund. The Forum, however, observed that the couple’s difficulties amounted to the Railways’ deficiency in service and ordered it to pay ` 2000 to the couple for the mental agony suffered by them and ` 3000 as cost. The Forum did not decide on the amount of refund, which it said, was “to be exclusively dealt with by the Railway Claim Tribunal”. Source: www.corecentre.org perform several functions for the (iii) Carrying out comparative testing of protection and promotion of interest consumer products in accredited of consumers. These include: laboratories to test relative qualities of competing brands and (i) Educating the general public publishing the test results for the about consumer rights by benefit of consumers. organising training programmes, (iv) E n c o u r a g i n g c o n s u m e r s t o seminars and workshops. strongly protest and take an (ii) Publishing periodicals and other action against unscrupulous, publications to impart knowledge exploitative and unfair trade about consumer problems, legal practices of sellers. reporting, reliefs available and (v) Providing legal assistance to other matters of interest. consumers by way of providing 2020-21 Ch_12.indd 337 11/28/2019 3:31:05 PM  BUSINESS  STUDIES 338 aid, legal advice etc. in seeking of Consumer Education (VOICE), legal remedy. Delhi (vi) Filing complaints in appropriate (iv) C o n s u m e r E d u c a t i o n a n d consumer courts on behalf of the Research Centre (CERC), consumers. Ahmedabad (vii) Taking an initiative in filing cases (v) Consumer Protection Council in consumer courts in the interest (CPC), Ahmedabad of the general public, not for any individual. (vi) Consumer Guidance Society of India (CGSI), Mumbai Some of the important consumer organisations and NGOs engaged in (vii) Mumbai Grahak Panchayat, protecting and promoting consumers’ Mumbai interests include the following. (viii) Karnataka Consumer Service (i) Consumer Coordination Council, Society, Bangalore Delhi (ix) Consumers’ Association, Kolkata (ii) Common Cause, Delhi (x) Consumer Unity and Trust Society (iii) Voluntary Organisation in Interest (CUTS), Jaipur Key Terms Consumer Protection Consumer Rights Consumer Responsibilities Redressal of grievance Grades Standards Summary Importance of Consumer Protection: From the point of consumers, consumer protection is important because consumers are ignorant, unorganised and exploited by sellers. Consumer Protection is also important for a business because (i) It is in the long-term interest of business, (ii) Business uses society’s resources, (iii) It is a social responsibility of business, (iv) It has moral justification, (v) It avoids government intervention in the functioning of business. Legal Protection to Consumers: The Indian legal framework consists of a number of legislations which provide protection to consumers. These include (i) The Consumer Protection Act, 1986, (ii) The Indian Contract Act, 1872, (iii) The Sale of Goods Act, 1930, (iv) The Essential Commodities Act,1955, (v) The Agricultural Produce (Grading and Marking) Act, 1937, (vi) The Prevention of Food Adulteration Act, 1954, (vii) The Standards of Weights and Measures Act, 1976, (viii) The Trade Marks Act, 1999, (ix) The Competition Act, 2002, (x) The Bureau of Indian Standards Act, 1986. 2020-21 Ch_12.indd 338 11/28/2019 3:31:05 PM  consumer protection 339 Consumer Rights: The Consumer Protection Act, 1986, provides for six consumer rights. These are: (i) Right to safety, (ii) Right to be informed, (iii) Right to choose, (iv) Right to be heard, (v) Right to seek redressal, (vi) Right to consumer education. Consumer Responsibilities: In addition to exercising his rights, a consumer should also keep in mind his responsibilities while purchasing, using and consuming goods and services. Ways and Means of Consumer Protection: There are various ways in which the objective of consumer protection can be achieved. These Include (i) Self regulation by business, (ii) Business associations, (iii) Consumer awareness, (iv) Consumer organisations, (v) Government. Redressal Agencies under the Consumer Protection Act: The Consumer Protection Act provides for setting up of a three-tier enforcement machinery at the District, State, and the National levels. They are referred to as the ‘District Forum’, ‘State Commission’, and the ‘National Commission’. There are various reliefs available to a consumer under the Act. The appropriate consumer court may pass an order for removal of defect in goods, replace a defective product, refund the price of the product, pay compensation for the loss suffered, etc. Consumer Organisations and NGOs: In India, several consumer organisations and non-governmental organisations (NGOs) are playing an active role in protection and promotion of consumers’ interests. EXERCISES Very Short Answer Type 1. Under which consumer right does a business firm set up consumer grievance cell? 2. Which quality certification mark is used for agricultural products? 3. What is the jurisdiction of cases that can be filed in a State Commission? 4. State any two relief available to consumers under CPA. 5. Name the component of product mix that helps the consumer to exercise the right to information. Short Answer Type 1. Enumerate the various Acts passed by the Government of India which help in protection of consumers’ interests. 2. What are the responsibilities of a consumer? 3. Who can file a complaint in a consumer court? 2020-21 Ch_12.indd 339 11/28/2019 3:31:05 PM  BUSINESS  STUDIES 340 4. FSSAI (Food Safety and Standards Authority of India) has made a proposal for hotels and other food outlets to declare the kind of oil/fat used in cooking each of the food items on their menus. Name and explain the Consumer Right being reinforced by this proposal. 5. Who is a consumer as per CPA? Long Answer Type 1. Explain the importance of consumer protection from the point of view of a business. 2. Explain the rights and responsibilities of consumer? 3. What are various ways in which the objective of consumer protection can be achieved? 4. Explain the redressal mechanism available to consumers under the Consumer Protection Act, 1986. 5. Explain the role of consumer organisations and NGOs in protecting and promoting consumer’s interest. 6. Mrs. Mathur sent a jacket to a laundry shop in January 2018. The jacket was purchased at a price of `4,500. She had previously sent the jacket for dry cleaning with Shine Dry Cleaners and the jacket was cleaned well. However, she noticed that her jacket had white discoloration marks when she collected the jacket this time. On informing the dry cleaner, Mrs. Mathur received a letter confirming that discolouration indeed appeared after the jacket was dry cleaned. She contacted the dry cleaner multiple times and requested for compensation for discoloured jacket but to no avail. Upon Consumer court’s intervention, Shine Dry Cleaners agreed to compensate `2,500 to Mrs. Mathur for the discoloured jacket. a. Which right was exercised by Mrs. Mathur at the first instance. b. Name and explain the right which helped Mrs. Mathur to avail the compensation. c. State which consumer responsibility has been fulfilled by Mrs. Mathur in the above case. d. State any other two responsibilities to be assumed by the consumers. Project work 1. Visit a consumer organisation in your town. List down the various functions performed by it. 2. Collect some newspaper cuttings of some consumer cases and the rulings given therein. 2020-21 Ch_12.indd 340 11/28/2019 3:31:05 PM