17710052 consumer-protection-act

Name of Team Members

Name Roll Call
Akhilesh Kumar 1

Munish Kumar Bakshi 3

Mukesh Cheeta 7

Balasaheb Deshmukh 9

Nawab Abdullah Fakih 11

Sekhar Ghagas 13

Dharmesh Gohel 15

Mahaveer P. Gupta 17

Yogesh Jain 19

Index

Chapter
Particular Page No.
No
1 Introduction 2

1.1 Basic Need for the Consumer Protection Act 2

1.2 Objectives & purpose of the Act 5

1.3 Changing phases & Evolution 5

2 Important definitions 7

3 Right of Consumer 9

4 Dispute Settlement Three tier Mechanism 21
Government initiatives for protection of
5 28
consumer rights
6 Case Studies 33

7 Conclusion 38

7.1. Issues to be addressed 38
Future prospects of consumer movement in
7.2 India 39

7.3 Suggestions and Opinions 40

Annexure
i Bibliography & Source of Information 42

1

CHAPTER - 1

1. Introduction

Aim of Consumer Protection Act (CPA) is to address the grievances of the
consumers and protecting them from the unethical practices/ behavior or
unfair trade practices of the manufacturer/ supplier.

Earlier though there were several legislations to protect the consumer, but
the same never proved adequate to protect consumer and compensate them for
their compliances.

CPA become statutory umbrella which made the consumer feel like a king.
CPA not only enhances the awareness and educate the consumer but also
provide compensation to them by summary and inexpensive proceedings.
This keeps manufacturer and the trader alert, creative and innovative.

In the era of free competition, market has become very dynamic and margins
have squeezes out. These gave rise to adopt other means/unfair means or
practices in execution of transactions, which resulted into increased
grievances at consumer front. Hence, the need for the CPA has become more
relevant than the past, where monopoly was the key factor.

1.1 Basic Need for the Consumer Protection Act

Today Consumer rights are an integral part of our lives like the consumerist way
of life. We have all made use of them at some point in our daily lives.
Market resources and influences are growing by the day and so is the
awareness of ones consumer rights. These rights are well defined and there
are agencies like the

2

Government, consumer courts and voluntary organizations that work
towards safeguarding. If these rights are well defined then the basic question is
why at all the consumer needs protection?, it
has to be followed by the
manufacturers/suppliers.
So let us look at few reasons because of which consumer needs protection

1. Illiteracy and Ignorance: Consumers in India are mostly illiterate and
ignorant. They do not understand their rights. A system is required to
protect them from unscrupulous businessmen.
2. Unorganized Consumers: In India consumers are widely dispersed and are
not united. They are at the mercy of businessmen. On the other hand,
producers and traders are organized and powerful.
3. Spurious Goods: There is increasing supply of duplicate products. It is
very difficult for an ordinary consumer to distinguish between a genuine product
and
its imitation. It is necessary to protect consumers from such exploitation by
ensuring compliance with prescribed norms of quality and safety.
4. Deceptive Advertising: Some businessmen give misleading information
about quality, safety andutility of products.
Consumers are misled by false advertisement
and do not know the real quality of advertised goods. A mechanism
is needed to prevent misleading advertisements.
5. Malpractices of Businessmen: Fraudulent, unethical and monopolistic
trade practices on the part of businessmen lead to exploitation of consumers.
Consumers often get defective, inferior and substandard goods and poor
service. Certain measures are required to protect the consumers against such
malpractices.
6. Freedom of Enterprise: Businessmen must ensure satisfaction of consumers.
In the long run, survival and growth of business is not possible without the
support and goodwill of consumers. If business does not protect consumers'
interests, Government intervention and regulatory measures will grow to curb

unfair trade practices.

3

7. Legitimacy for Existence: Business exists to satisfy the needs and desires
of
consumers. Goods are produced with the purpose of selling them. Goods will, in
the long run, sell only when they meet the needs of consumers.
8. Trusteeship: Businessmen are trustees of the society's wealth. Therefore,
they should use this wealth for the benefit of people.

While we like to know about our rights and make full use of them,
consumer responsibility is an area which is still not demarcated and it is
hard to spell out that all the responsibilities that a consumer is supposed to
shoulder.

1.2 Objectives & purpose of the Act

The basic objective/purpose of this Act is to provide for better protection of
the
interest of the consumers and for that purpose to make provisions for
the establishment of consumer councils and other authorities for the
settlement of consumer’s dispute and for matters connected therewith.
Hence, the basic objective is to PROTECT and not to provide a loophole
and excuses to well organized traders, producers and big business houses
and manufactures on technical grounds. Educating the consumer
regarding their rights and to propagate awareness about the Act and the
ethical practices/means was the other purpose of the act.

1.3 Changing phases & Evolution

In the early years when welfare legislatures like the consumer protection Act did
not exist, the maxim Caveat emptor (let the buyer beware) governed the
market deals.

British regime:
During the British regime (1765-1947), also known as the ‘Colonial
Era’, Government’s economic polices in India were concerned more with
protecting and promoting the British interests than with advancing the
welfare of the native population. The administration’s primary per-
occupation was with maintaining law and order, tax collection and defense.
Accordingly much of the legalization enacted during the British regime was
primarily aimed at serving the colonial rulers intend of the natives. There
were, however, some pieces of legislation which protected the overall public
interest through not necessarily the consumer interest. Prominent among these
were: the Indian Penal code, 1860, the sale of Goods act,
1930, the dangerous drugs act, 1930 and the drugs and cosmetics act, 1940.
In a sense, the sale of good act, and the principles of the law of torts were more
for the protection of the trader than the consumer.

The Post-Independence Scenario:
Growing urbanization due to heavy industrialization resulted in
proliferation of human needs-of basic necessaries and also of luxuries. Due
to the shortage of certain necessaries and even their non-availability at
reasonable rates with growing menace of adulteration, it was found
necessary to empower the Government to control their production,
quality, supply, and distribution. Therefore the decade of 1950s, right from
the very beginning, saw the enactment of
a number of laws to safeguard the interests of the consumers from various angles.
The enactment of the Banking Companies Act,1949 (later called The
Banking Regulation Act) to amend and consolidate the Law related to
banking matters as well as the Industries(Development and
Regulation)Act,1951 to implement the Industrial Policy Resolution of 1948
were among the earliest stapes taken by the National Government in India in
the direction of consumer protection.
As a result of this change in scenario business has now come to be
substantially

regulated by Government and Authorities in favour of consumers.

5

In spite of various provisions providing protection to the consumer and providing
for stringent action against adulterated and substandard articles in the
different enactments like Criminal Procedure Code, 1908, Indian Contract Act,
1972, Sales of Goods Act, 1930, Indian Penal Code 1860, Standard of Weights
and Measures Act,
1976 and Motor Vehicle Act, 1988, very little could be achieved in the area
of
consumer protection.
In order to provide for better protection of the interest of the consumers the
Consumer Protection Bill, 1986 was introduced in the Lok Sabha on December 5th
1986. The CPA 1986 was enacted to provide for better protection of the interest
of consumer and for the purpose to make provisions for establishment of
Consumers Councils and other authorities for settlement of consumer’s
dispute and for matters connected therewith.
The CPA is only one of the several Laws framed to protect consumers from unfair
and undesirable practices of business community such law became necessary due
to growing frustration of consumers with substandard quality of goods,
unsatisfactory services and unfair business trade practices.

CHAPTER - 2

2. Definitions

2.1. “Complainant" means-
(i) A consumer; or
(ii) Any voluntary consumer association registered under the Companies Act, 1956
(1 of 1956) or under any other law for the time being in force; or
(iii) The Central Government or any State Government;
(IV) One or more consumers, where there are numerous consumers having
the same interest;]
Who or which makes a complaint;

2.2. “Complaint" means any allegation in writing made by a complainant
that-
(i) An unfair trade practice or a restrictive trade practice has been adopted by any
trader;
(ii) 'The goods bought by him or agreed to be bought by him suffer from one or
more defects;
(iii) 'The services hired or availed of or agreed to be hired or availed of by
him]
suffer from deficiency in any respect;
(iv) a trader has charged for the goods mentioned in the complaint a price in excess
of the price fixed by or under any law for the time being in force or displayed on
the goods or any package containing such goods;
(v) goods which will be hazardous to life and safety when used, are being
offered for sale to the public in contravention of the provisions of any law
for the time being in force requiring traders to display information in regard
to the contents, manner and effect of use of such goods,

7

2.3. “Consumer” means any person who-
(i) Buys any goods for self use or with the approval of self person, but
does not include a person who obtains such goods for resale or for any
commercial purpose or
(ii) Hires for avails of any services for self use or when such services are
availed with the approval the first mentioned person.

2.4. "Consumer dispute"
"Consumer dispute" means a dispute where the person against whom a complaint
has been made, denies or disputes the allegations contained in the complaint;

2.5. "Trader"
"Trader" in relation to any goods means a person who sells or distributes
any goods for sale and includes the manufacturer thereof, and where such
goods are sold or distributed in package form, includes the packer thereof;

8

CHAPTER- 3

3. Rights of Consumer

International Consumer Rights:

Webster's dictionary defines consumerism as "a movement for the protection of
the consumer against defective products, misleading advertising, etc."
Limited consumer protection was present until the 1950s and early 1960s. In
the 1950s, a significant breakthrough occurred with the establishment of the
product-liability concept, whereby a plaintiff did not have to prove
negligence but only had to prove that a defective product caused an injury.
In his 1962 speech to Congress, President John F. Kennedy outlined four
basic consumer rights, which later became known as the Consumer Bill of
Rights. Later, in 1985, the United Nations endorsed Kennedy's Consumer Bill
of Rights and expanded it to cover eight consumer rights. Consumer
protection can only survive in highly industrialized countries because of the
resources needed to finance consumer interests.

There are two hundred and sixty consumer organizations in over one
hundred countries around the world strives to promote a fairer society through
defending the rights of all consumers, including the poor and the
marginalised, by supporting and strengthening member organisations and the
consumer movement
in general; campaigning for consumer rights' to be placed at the heart of
policy-
making to encourage sustainable development. There are eight key
international consumer rights as defined by the United Nations Guideline
for Consumer Protection 1985.

They can be simplified into the following:

— The right to access to basic needs
— To safety

— To information
— To choice
— To representation
— To consumer education
— To redress
— Healthy environment

In India to safeguard consumer interest, following rights were envisioned.

 Right to Safety
 Right to Information
 Right to Choice
 Right to be Heard
 The Right to Redress
 The right to consumer education
 The Right to Basic Needs and
 The right to a healthy and sustained environment.

1. Right to Basic Needs

Access to food, water and shelter are the basis of any consumer's life.
Without these fundamental amenities, life cannot exist. In September 2001,
India's stock of food grains were around 60 million tonnes, yet one third of the
Indian population lives below the poverty line and consumers often go
hungry or remain severely malnourished, leading to poor health. The recent
starvation deaths in Orissa are a case in point. A very crucial objective of the
conceptualization and existence of consumer rights is to ensure that consumers
have an assured food supply, safe and permanent dwellings, and basic amenities
of life like sanitation and potable water, and power supply.

10

Urbanizations is seen as a mark of development but for rural migrant population,
living conditions in cities is very poor. The population of cities is growing rapidly
in India and after 1988, the percentage of urban poor has been more than that
of the rural poor. Around 20 to 25 per cent of the urban households live in
slums, make-shift colonies or refugee settlements due to non-availability of
affordable and decent habitat in urban areas. . According to some estimates, in
urban areas alone, there is a housing shortage of 17 million units. This has led to
a habitat crisis
in Indian cities. In rural India, the situation is equally bad, with a large part of
the population still living in make-shift dwellings and hutment. With non-
permanent housing comes lack of sanitation facilities and other amenities like
running water and electricity supply. Due to burgeoning population, most
people do not have access to dry toilets in rural and urban areas.

2. Right to Safe Environment

For urban consumers, environment means parks, gardens, and deteriorating
air and water quality. Most urban areas are bereft of any wildlife and
people are unaware of the biodiversity around them. On the other hand, rural
consumers rely
on their environment for fulfillment of their basic needs.
The need for environmental conservation is seen as a necessary defence
against deteriorating quality of life world-wide. We are all victims of
contaminated food and water supply, pesticide-ridden food, adulterated milk
and choking exhaust fumes emitting from vehicles. According to a World
Bank report, India is being pushed back due to its high environmental costs.
We lose around Rs 24,500 crores every year in terms of air and water pollution
alone. If you live in a city, you must have experienced air and water pollution at
some point of time. Children often fall
ill due to polluted environments, it leads to increased health costs and discomfort
for consumers. Valuable resources and man-days are lost due to polluted

environment and living conditions. Consumers need to understand that only a safe
environment can ensure the fulfilment of their consumer rights.
International Standards for Safeguarding Right to Safe Environment
Consumers International (a nodal agency of consumer organisations from all
over the world) has made certain guidelines for ensuring consumers' right
to safe environment.

Consumers should be protected from environmental pollution by:
1. Promoting the use of products which are environmentally sustainable.
2. Encouraging recycling
3. Requiring environmentally dangerous products to carry appropriate
warnings and instructions for safe use and disposal.
Promote the use of non-toxic products by:
1. Raising consumer awareness of alternatives to toxic products
2. Establishing procedures to ensure that products banned overseas do not enter
national markets.
3. Ensure that the social impacts of pollution are minimized.
4. Promote ethical, socially and environmentally responsible practices by
producers and suppliers of goods and services.

Rural consumers are invariably closer to their environment than urban
consumers. Their livelihoods and way of life depend on the environment
around them. Their firewood and sources of energy come from trees, manure
for fields comes from livestock, water is procured either from underground
water supply or from rivers, the crops heavily depend on annual rainfall,
even pesticides for safeguarding of crops and storage also come from trees
like neem. In short, the rural life revolves around natural resources. For
them, this dependence on the environment is complete and they have a
stake in its preservation, whether it is for building their houses, fodder for their
cattle etc.

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3. Right to Safety

Consumer right to safety is as vast in its purview as the market reach itself.
It applies to all possible consumption patterns and to all goods and services. In
the context of the new market economy and rapid technological advances affecting
the market, the right to safety has become a pre-requisite quality in all products
and services. For e.g. some Indian products carry the ISI mark, which is a
symbol of satisfactory quality of a product? Similarly, the FPO and AGMARK
symbolise standard quality of food products. The market has for long made
consumers believe that by consuming packaged food or mineral water,
consumers can safeguard their health. This notion has been proved wrong time
and again due to rampant food adulteration in market products. Right to food
safety is an important consumer right since it directly affects the health and quality
of life of consumers. Earlier, the interpretation of the right to safety was limited to
electronic products and other such products. Now, its definition has expanded a
lot to include safety aspects of new technologies like GM food, food labeling,
chemical ingredients in food products etc. In today's scenario of globalisation,
consumers have no control over where the products or commodities they use,
come from. For instance, the chocolates or syrups we consume, may be
manufactured in countries as far as the U.S. or Australia. Consumers in India
would have no control over or knowledge of the manufacturing practices of those
countries and will have to rely completely on import regulations of the Indian
government and food labelling. This makes the consumer right to safety a very
important and critical issue for consumers.

Safety of natural food products is also a problem of growing concern since due
to increased chemical inputs in farms, our food supply is being
contaminated with pesticides and chemicals. This poses a grave danger to
consumer health. For non- vegetarians, the problem is even more serious
since food animals are being fed

anti-biotics to fight diseases among animals and boost their growth. This can have
serious repercussions on consumer health.

4. Right to Information

Right to information means the right to be given the facts needed to make
an informed choice or decision about factors like quality, quantity, potency,
purity standards and price of product or service. The right to information
now goes beyond avoiding deception and protection against misleading
advertising, improper labelling and other practices. For e.g. when you buy a
product or utilise
a service, you should be informed about a) how to consume a product b)
the adverse health effects of its consumption c) Whether the ingredients
used are environment- friendly or not etc .
Due to the ever increasing influence of the market and the ever changing
scene with price wars and hard-sell techniques, the consumer's right to
information becomes even more important. The right to information means
much more than simple disclosure of the product's weight or price. A
consumer has the right to know how the product has been prepared, whether it
has been tested or animals or not, if environmentally-sound techniques and
resources have been used in its production processes, what kinds of chemicals
are used into its manufacturing and what could be their impact on consumer
health. Clearly, a consumer has to consider a lot of factors before s/he buys a
product.
Ideally, a consumer should have knowledge of the entire ‘cradle to grave' journey
of the product to determine whether its safe and beneficial for use or no.
The
‘cradle to grave journey' refers to the processes a product goes through- from
the time of it being made out of raw material, the processes of its
moulding into its final shape, transportation, labour, ingredients used, to the
form in which it ends

up on market shelves. It is only when a consumer is aware of the history of
the product that he can make informed choices.

An example of this is the GM food controversy. GM food is promoted as
the answer to world's hunger and malnutrition but its safety for consumers
and the environment is yet to be proved. Despite strong lobbying by pro-GM
groups and the market, consumers in Europe have campaigned effectively
against the entry of GM food into their food chain and markets. There are
information and publicity campaigns that have made consumers rally behind
a common consumer stand against GM food. As a result, the governments
and the European Union have placed strict restrictions on the trial uses of
GM technology in the market or in agriculture.
Recently, it has come to light that most cosmetics like lipsticks, kajal and mascara
are tested on animals in laboratories to see whether they have any adverse effects
on them or no. There was also a controversy about how Nike shoe company
was using sweat labour in South Asian countries, paying its workers
abysmally low wages for manufacturing shoes. Similarly, there was a
‘McLibel' case against McDonald's alleging that Mc Donald's generated a lot
lot of unwanted waste due
to its excessive packaging and harmed the environment.

The advertising techniques of many products, directly targeting and
featuring children have also been questioned. Many parents don't even
know that their children are being targeted by market surveyors to determine
their consumption habits by collecting data through surveys, interviews and by
offering free samples
of products.
It is not just the consumers who use information gathering or
disseminating techniques and tools to protect their consumer rights. Information
dissemination is also used very extensively by advertisers and the market to
get their message across to the consumer. Tools and agencies of information
like newspapers, print

media, television and the Internet are utilised by marketing of consumer
products and services. This has made advertising a multi-million dollar
industry in India and also world-wide.

5. Right to Redress

Competition is the by-product of the market economy. Everyday,
manufacturers are discovering newer ways of cheating and duping
consumers. Unscrupulous market practices are finding their way into
consumer homes, violating consumer rights and jeopardising their safety. It
is to protect consumer interests that consumers have been given the right to
obtain redress. In India, we have a redress machinery called Consumer Courts
constituted under the Consumer Protection Act (1986), functioning at national
state and district levels. But it has not been made complete use of under
due to lack of awareness of basic consumer rights among consumers
themselves.
While in the developed world, right to redress is perhaps the most
commonly
exercised consumer right, in developing countries, consumers are still wary
of getting involved in legal redress system. There are consumer courts in India
where any consumer can lodge a case if s/he thinks he or she has been
cheated. The details of how to lodge a complaint have been explained elsewhere
in the manual.

6. Right to Consumer Education

Consumer education empowers consumers to exercise their consumer rights. It
is perhaps the single most powerful tool that can take consumers from their
present disadvantageous position to one of strength in the marketplace.
Consumer education is dynamic, participatory and is mostly acquired by

practical experience. For instance, a woman who makes purchase decisions for
the household and does the actual buying in the marketplace would be more
educated about market conditions and ‘best buys' than a person who educates
himself about the market with the help of newspapers or television. Also, today,
it is not just the market or products that a consumer needs to educate him
about but s/he also needs to know about company profile, government
policies and introduction of new technology.
Market influences have grown so much that, not just wholesale and
retail sellers but even medical practitioners are falling prey to their
pressures. The pharmaceutical industry is one such example. India, with its 1
billion population and largely uneducated consumers, is a very lucrative
market for this industry. The pharmaceutical industry, to
boost its sales, offers free samples of
medicines, freebies, and even free luxury holidays to physicians to influence
them
to use their brands and give them preference over other brand names. There have
been many instances when drugs banned in countries like US, have
been prescribed to Indian consumers and are readily available as over-the-
counter drugs. It is a sad example of gross violation of consumer trust
by medical practitioners. This situation is rampant not just in rural areas
but also among educated urban consumers. The reason why the market, in
connivance with physicians, is able to exploit consumers is that Indian
consumers are not aware of the prevailing situation and do not keep
themselves abreast with latest developments taking place around them.
Consumer education can play a crucial role in protecting consumers against
such dangers.
In the Indian context, sustainability and traditional knowledge can play
a
vital role in empowering consumers but consumers are unable to connect to
their knowledge base. Consumer education can rejoin the broken link
and make traditional knowledge accessible to consumers again. Some
sources of consumer education are past experiences of consumers,

information dissemination by

17

government agencies and NGOs, classroom teaching by teachers and informal
lessons by parents.

18

CHAPTER-4

4. Dispute Settlement Three tier Mechanism

The Consumer Production Act provides for a three tier system of redressal
agencies:

(1) District level known as District Forum,

(2) State level known as 'State Commission', and

(3) National level known as 'National Commission'.

A complaint is to be made to the district forum of the concerned district where the
value of goods and services and compensation, if any, is up to Rs 20 lakhs.

A complaint is to be made to the 'State Commission' between Rs 20 lakhs and Rs
100 lakhs.

A complaint is to be made to the National Commission for more than Rs 100 lakhs.

Interestingly, there is provision for appeals against the orders of a particular
redessal forum by the aggrieved party before the next higher echelon and even
from the findings of the National Commission before the Supreme Court.

CONSUMER DISPUTES REDRESSAL AGENCIES

1) District Forum

Composition of the District Forum. —
1. Each District Forum shall consist of,—

(a) President: a person who is, or has been, or is qualified to be a District Judge,
who shall be its President;

(b) Member: two other members, one of whom shall be a woman, who shall have
the following qualifications, namely:—

21

(i) be not less than thirty-five years of age,

(ii) Possess a bachelor's degree from a recognized university,

(iii) be persons of ability, integrity and standing, and have adequate
knowledge and experience of at least ten years in dealing with
problems relating to economics, law, commerce,
accountancy, industry, public affairs or
administration:

Every appointment under sub-section (I) shall be made by the State Government
on the recommendation of a selection committee consisting of the following,
namely:—

(i) The President of the State Commission — Chairman.
(ii) Secretary, Law Department of the State — Member.
(iii) Secretary in charge of the Department dealing with
Consumer affairs in the State — Member.

2. Every member of the District Forum shall hold office for a term of five years or
up to the age of sixty-five years, whichever is earlier:

Jurisdiction of the District Forum.—

1. Monetary: District Forum shall have jurisdiction to entertain complaints where
the value of the goods or services and the compensation, if any, claimed ''does
not exceed rupees twenty lakhs.
2. Territorial: A complaint shall be instituted in a District Forum within the local
limits of whose jurisdiction,—

a ) The opposite party or each of the opposite parties ,actually and voluntarily
resides
b) Any of the opposite parties, where there are more than one, at the time of
the institution of the complaint, actually and voluntarily resides,in such
cases, either the permission of the District Forum is given or the
consent of the opposite party is necessary.
c) If the dispute is pending the civil court,the consumer forum has no jurisdiction
to entertain the same.

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3) Manner in which complaint shall be made.—
(1) A complaint in relation to any goods sold or delivered or agreed to be sold
or delivered or any service provided or agreed to be provided may
be filed with a District Forum by –
(a) the consumer,
(b) any recognized consumer association whether the consumer is a member
of such association or not;
(c) one or more consumers, where there are numerous consumers having the same
interest, with the permission of the District Forum
(d) The Central Government or the State Government as a representative
of interests of the consumers in general.

A complaint has been admitted by the District Forum, it shall not be transferred
to any other court or tribunal or any authority set up by or under any other law
for the time being in force.

4) Procedure on admission of complaint. —

(1) The District Forum shall, on admission of a complaint, if it relates to any
goods,—
(a) Refer a copy of the admitted complaint, within 21 days from the date
of its admission to the opposite & such extended period not exceeding fifteen
days as may be granted by the District Forum;
(b) Where the opposite party on receipt of a complaint referred to him
under clause (a) denies or disputes the allegations contained in the
complaint to take any action to represent his case within the time given by
the District Forum

5) Powers of District Forum
(a) Summoning & enforcing attendance of defendant or witness & examining the
witness on oath.
(b) The discovery & production of any document or other material
,object producible as an evidence
(c) Receipt of evidence on affidavits

6) Finding of the District Forum. —

23

(1) Remove the defect pointed out by the appropriate laboratory from the goods;
or
(2) To replace the goods with new goods of similar description which shall
be free from any defect; or
(3) (3) To return to the complainant the price, or, as the case may be, the charges
paid by the complainant; or
(4) To remove the defects in goods or deficiencies in the services in
(5) question; or
(6) To discontinue the unfair trade practice or the restrictive trade
practice or not to repeat it;

2. State Commission

Composition of the State Commission. —

(1) Each State Commission shall consist of—

(a) President: A person who is or has been a Judge of a High Court, appointed by
the State Government.

(b) Member: Two other members who shall be persons of ability, integrity
and standing, and have adequate knowledge and experience of at least ten
years in dealing with problems relating to economics, law, commerce,
accountancy, industry, public affairs or administration:

Every appointment under sub-section (1) shall be made by the
State Government on the recommendation of a Selection Committee
consisting of the following members, namely:—

President of the State Commission -- Chairman;

Secretary of the Law Department of the State --Member;

Secretary incharge of the Department dealing with Consumer Affairs in
the
State -- Member:

(2) Every member of the State Commission shall hold office for a term of
five years or up to the age of sixty-seven years, whichever is earlier:

24

Jurisdiction of the State Commission. —

(1) Subject to the other provisions of this Act, the State Commission shall
have jurisdiction—

(a) Monitory- Original: to entertain complaints where the value of the goods or
services and compensation, if any, claimed exceeds rupees twenty lakhs but
does not exceed rupees one crore; and

(b) Appellate: To entertain appeals against the orders of any District Forum
within the State; and

(c) Supervisory or Revisional: to call for the records and pass appropriate
orders in any consumer dispute which is pending before or has been decided
by any District Forum within the State.

3. National Commission

Composition of the National Commission.—

(1) The National Commission shall consist of—

(a) President : A person who is or has been a Judge of the Supreme Court, to be
appointed by the Central Government.

(b) Member: Two other members who shall be persons of ability, integrity
and standing and have adequate knowledge and experience of at least ten
years in dealing with problems relating to economics, law, commerce,
accountancy, industry, public affairs or administration:

Every appointment under this clause shall be made by the Central Government
on the recommendation of a selection committee consisting of the
following, namely:—

(a) A person who is a Judge of the Supreme Court,— Chairman;
To be nominated by the Chief Justice of India

25

(b) The Secretary in the Department of Legal Affairs —Member;
In the Government of India

(c) Secretary of the Department dealing with consumer—Member
Affairs in the Government of India

Jurisdiction of the National Commission. —

Subject to the other provisions of this Act, the National Commission shall
have jurisdiction—

(a) Monetary: To entertain complaints where, the value of the goods or services
and compensation, if any, claimed exceeds rupees one crore;

(b) Appellate: To entertain appeals against the orders of any State Commission;

(c) Supervisory or Revisional: To call for the records and pass appropriate orders
in any consumer dispute which is pending before or has been decided by any
State Commission where it appears to the National Commission

Appeal. — Any person aggrieved by an order made by the Redressal agency
may prefer an appeal against such order to the next higher level of agency
within a specified period from the date of the order.

Appeal to the State Commission: Any person aggrieved by an order made by
the District Forum, may prefer an appeal against such order to the
State Commission within a period of 30 days from the date of the order.

Appeal to the National Commission: Any person aggrieved by an order made
by the State Commission, may prefer an appeal against such order to the
National Commission within a period of 30 days from the date of the order.

Appeal to the Supreme Court: Any person aggrieved by an order made by
the National Commission, may prefer an appeal against such order to the
Supreme Court within a period of 30 days from the date of the order.

Procedure for hearing the Appeal by National Commission

26

1. Memorandum of Appeal: An appeal memorandum shall be presented by
the appellant or his/her agent to the national commission in person or be
sent by registered post addressed to the commission.

2. Appeal After Limited Period: In this, the memorandum shall be accompanied
by an application supported by an affidavit to satisfy the national
commission that he/she had a sufficient cause for not to appeal within
a period of limitation.

3. Appearance of Parties to the Appeals: On the date of hearing, if the
party or their agent fails to appear on such date, the national
commission either dismisses the appeal or decide ex parte on merits.

4. Grounds not urged: The appellant shall not urge or be heard in support of
any ground of objection not set forth in the memorandum, except by leave
of the national commission.

5. Penalty of Orders: Every order of a District forum commission or national
commission, if no appeal has been preferred against such order, shall be final.

6. Enforcement of Orders: Every order of a District forum commission or national
commission may be enforced as if it were decree or order made by the court.

7. Penalties: Where a trader or a person against whom a complaint is made ,
or the complainant fails or omits to comply with any order made by
redressal agencies , as the case may be, such trader or person or
complainant shall be punishable as per the prescribed norms of the agencies
.

27

CHAPTER- 5

5. Government initiatives for protection of consumer rights

Steps Undertaken By the Government for Creating Consumer Awareness:
 Public campaign like Grahak Jago Grahak, Grahak Dost etc.
 Conduct Street shows, dramas, street plays depicting mock characters.
 Hold drawing competitions in the schools by giving relevant themes.
 Make people aware about their rights through hoardings. T.V. advertisements
etc.
 Publicity though print media using newspaper advertisements

 Publicity through electronic medium by telecast of video spots
 Telecast of video spots in north eastern states:
 Meghdoot postcards
 Printed literature
 Exhibition in Indian science congress at shillong
 Nukkad natak contest on consumer issues

 National consumer helpline
 Core centre
 Participation in India international trade-fair-2008
 Participation in MTNL health mela
 Use of sports events
 Outdoor publicity
 Joint publicity campaign
 Use of internet to generate consumer awareness

28

7. Conclusion

Consumer protection movement has got a bright future in India. A part from
Governmental seriousness in the matter, consumer activism, organizations,
civil society and other voluntary associations needs to play their part in the
furtherance
of consumer movement. In the current scenario media can play a vital role
in infusing the consumer behavior and can easily generate opinions or
enhance awareness about the possible unfair practices in the market.
Above all, the consumers have to be aware of their rights and should assert
them selves in the market place.

7.1 Issues to be addressed

Some of the commonly raised problems are:

Adulteration of food substances by traders through addition of substances
which are injurious to health or removal of substances which are nutritious
or by lowering their quality standards
Misleading advertisements of goods and services in television, newspapers
and magazines to influence the consumers demand for the same
Variations in the contents filled in the package of goods
Improper delivery of after sales services
Supply of defective goods
Hidden price component
Use of deceptive or incorrect rates on products
Use of false or non-standard weights and measures in supply of goods
Production of low quality goods in bulk quantities
Illegal fixation of Maximum Retail Price (MRP)
Selling above the MRP
Unauthorized sale of essential products like medicines, etc. beyond
their
expiry date to ignorant consumers
Poor customer services
Non-compliance with the terms and conditions of sales and services
Supply of false or incomplete information regarding the product
Non-fulfillment of guarantee or warrantee etc.

All such issues and problems must be handled more efficiently both at the
Centre and the State level, with a view to protect the interests of the
consumers and promote their welfare.

7.2. Future Prospects of Consumer Movement in India

As a matter of fact, three major problems are confronting the
consumer protagonists in India. The first problem concerns active
functioning of the Consumer Forums throughout the country. Not with
standing the fact that these Forums have now been established, by and
large, throughout the country, consumer activists and organizations
have been repeatedlyvoicing their grievances against the
smooth functioning of these Forums. They argue that these Forums have also
started behaving like Civil Courts and are likely to have mounting arrears
soon. In addition, these Forums still lack basic infrastructural facilities. The
members sit only part-time and 90 days decision-
making requirement is not strictly adhered to. There are also ego and status
problems between judicial members and the members with non-judicial
background. Another significant problem is that the stay orders from the
High Courts have begun to hold up a large number of cases filed before
the Consumer Forums, thereby denying the benefits of speedy and
inexpensive redressal machinery promised under the Consumer protection Act,
1986.

The second problem concerns the applicability of the Consumer protection Act, 1986
to various services. As is evident, ever since the implementation of the 1986
Act, whereas there has hardly been any significant case in which the ‘goods’
has been vehemently contested, there is a voluminous amount of case law
which involved determination of the meaning, definition, and ambit of the term
‘service’. Section2
(1)(o)of the 1986 Act categorizes certain specific types of services which, inter alia,

include banking, financing, insurance, transport, amusement and
entertainment. The definition of the term ‘service’ had already been kept very
wide and now with the inclusion of the two terms ‘housing and
construction’ by the Consumer Protection (Amendment) Act, 1993, it has been
further widened. Only two types of services have been kept out of the
ambit of the 1986 Act. They are services rendered free of charge and services
rendered under a contract of personal service. The non-mentioning of
services like education, health, housing, posts and telegraphs and
telecommunications had presumably given these services an impression of
their exclusion from the ambit of this legislation. At the initial stages, therefore,
these services contested the jurisdiction of the 1986 Act, thereby claiming
complete immunity from their governance by it. The Consumer Forums,
however, have appreciably stood the test of time and have brought all these
services within the ambit of the 1986 Act.

Making consumers aware of their rights and taking consumer movement to
the rural India is the third and perhaps the most important problem and a
challenge before the consumer organizations. As is well known, most
consumers are still ignorant of their rights, much less of being assertive
about them. Though the Government appears to be serious of this issue, much
however depends upon the consumer organizations. They have still to cover
a very long distance so far as taking the movement to rural areas is concerned.

7.3. Suggestions or Opinions

We feel in today's rampant changing market scenario, there is an increasing
necessity to empowering the consumers through education and
motivation regarding their rights and responsibilities. He/she should be
equipped to be fully vigilant so as to be able to protect himself/herself from
any wrongful act on the part of the seller/trader. Several steps have been taken
by the Government, both at the Central and State level towards generating
awareness among the consumers.

Given all such initiatives, it is the responsibility of the consumer as well to keep
in mind the following suggestions:

Purchase products only after their complete scrutiny and not at the cost of
attractive advertisements.
Keep check on the weighing and measuring instruments used by traders.
Avoid buying fruits and vegetables from unhygienic place.
Check print of MRP on the packet.
Check the quantity as per the figure printed on the packet.
Check the expiry date of the product, particularly that of eatables and
medicines.
Always collect bill at the time of purchase.

Moreover, the packaging and appearance of the product should not be the
guiding factor for consumer purchases. Along with cost consideration,
consumer must be cautious of the quality of the product. Most
importantly, it is the prime responsibility of a consumer to bring to the
notice of the concerned authorities, any violation in their rights.

41

Bibliography

Books:

Bulchandani K, 1999, Business law, Himalaya Publications

Web sites:

Alexander, Richard. "The Development of Consumer Rights in the United
States Slowed by the Power of Corporate Political Contributions and
Lobbying." 1999. Archived at: http://consumerlawpage.com/article. 1999.

http://www.answers.com/topic/consumer-bill-of-rights

http://www.ftc.gov/bcp/menus/resources/guidance/adv.shtm

http://www.consumerrightsexpert.co.uk/

http://www.consumerdirect.gov.uk/

http://www.citizensinformation.ie/categories/consumer-affairs/consumer-
protection/consumer-rights

http://www.consumerdirect.gov.uk/after_you_buy/know-your-rights/

http://www.moneysavingexpert.com/shopping/consumer-rights-refunds-
exchan

http://www.skillsportal.co.za/training/sales/509560.htm

http://www.answers.com/topic/consumerism

http://grehluxmi.blogspot.com/2008/07/jaggo-grahak-jaggo.html

http://alchemistpoonam.wordpress.com/2007/09/16/consumer-rights-
awareness-ii/jaago-grahak-jaago/

http://fcamin.nic.in/Events/EventDetails.asp?EventId=1740&Section=Consumer
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http://www.legalserviceindia.com/

http://www.legalhelpindia.com/

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