CONSUMER PROTECTION

LEGAL ASPECT OF BUSINESSGROUP 17SECTION B

Anjani(2010PGP044) | Dhara(FPM) | Dipayan(FPM) Kuldeep(2010PGP164) | Pratap(2010PGP259) | Riaz(2010PGP305)

Why Protect Consumer ??

Popular perceptionConsumer has the right to NOT buy Producers run risk of their products getting rejected by consumers Consumer calls the shots

The actual scenario Consumers are surrounded and continuously bombarded with multitude of information Most of these are misleading, misrepresentation Unethical practices like imitation, using false weights, adulteration are abound Few businesses are solely driven by catch phrase “Only business of business is to earn maximum possible profits”. They resort to all sorts of maneuvers ranging from deceptive advertising to coaxing consumers to treating customers in a disrespectful manner.

“It is not the consumer who is the king, but it is the large corporation who is the king in the economy. Whatever happens is not because the consumers want it that way, but simply because large powerful corporations prefer it that way”

- John Kenneth GalbraithNoted diplomat and economist

Laws Protecting Consumer Interest

The British Legacy The Indian Penal Code,1860 The Indian Contract Act,1872 The Usurious Loans Act,1918 The Sale of Goods act,1930 The Agriculture Procedure Act (Grading and Marketing Act),1937 The Drugs and Cosmetics Act,1940

Deals with crimes against consumers False weights and measures Sale of adulterated foods or drinks Sale of adulterated drugs

The Independent India’s Contribution

Do not require consumer to prove mens rea Rather the offences are strict liability and do not depend on prior knowledge By enacting these laws an attempt has been made to look at consumer protection as “a public issue rather than as a private issue”

The Prevention of Food Adulteration Act,1954The Essential Commodities Act,1955The Standard of Weights and Measurement Act,1976The Consumer Protection Act,1986

Consumer Protection Act,1986

Necessitated owing to orthodox legal requirements under the tort and contracts act Considered highly progressive piece of social welfare legislation Objective:

To buttress Sales of Goods Act To Provide cheap, simple and quick justice Establish consumer councils and other authorities for settlement of consumer disputes Safeguard consumers against various exploitations and unfair dealings Unlike punitive provisions of various other laws, its provisions are compensatory

Consumer Protection Act,1986

Rights Recognized under the act

Right to Safety

To be protected against the marketing of goods hazardous to life and property

Right to Choose

To be assured, wherever possible, access to variety of goods at competitive prices

Right to Consumer Education

To be educated about the rights of consumers

Right to be heard

To be heard and to be assured that the consumer interests would receive due consideration at appropriate forums

Right to Information

To be informed about quality, quantity, potency, standard and price, purity of goods

Right to Seek Redressal

To seek redressal against unfair trade practices or unscrupulous exploitation of consumers

Important Features of the act

Applies to all goods and services unless specifically exempted by central government Covers all the sectors – public, private and cooperative Provides simple , speedy and cheap adjudicatory authorities Provides for Consumer Protection Councils at District, State and National levelCompensatory provisions, empowers and safeguards consumers

Definitions

Consumer Person who

Deals with goods: Buys any goods for a consideration which has been paid/promised/partly paid and partly promised/deferred payment but does not include when goods obtained for resale/commercial purpose.

Deals with services: hires/avails of any service for a consideration

Goods As defined in the Sale Of Goods Act, 1930.

ServiceService of any description which is made available to potential users including the provision of facilities in connection with it.Does not include rendering of any service free of charge or under a contract of personal service.

Consumer DisputeDispute where the person against whom a complaint has been made , denies or disputes the allegation contained in the complaint

Definitions

Restrictive Trade PracticeA practice requiring a consumer to buy, hire or avail of any good/service as a condition precedent for buying, hiring or

availing of any other goods/services.

Unfair Trade PracticesAs defined under the MRTP Act.

Defect & DeficiencyAny fault/imperfection/shortcoming in the quality, quantity potency, purity or standard which is required to be maintained by or under any law in force or under any contract(expressed/implied) or as is claimed by the trade in any manner.

Definitions

Complainant A consumer Voluntary consumer association registered under the

Companies Act, 1956/any other law in force The Central/State Government One or more consumers having the same interest.

Definitions

ComplaintAny allegation in writing made by a complainant that:Unfair/restricted trade practices adopted by any traderGoods(services) bought(availed)/agreed to bought(avail) suffer from one or more defects(deficiency)Price being charged higher than the price fixed or MRPOffering of hazardous goods for sale to the public

Definitions

Consumer Disputes Redressal Agencies

3-tier judicial system of dealing with consumer grievances

District Forums

Consumer Disputes Redressal Agencies

Can entertain complaints where the claim does not exceed Rupees Twenty Lakhs

District Forums

Consumer Disputes Redressal Agencies

A complaint shall be initiated at the district forum within the local limits of whose jurisdiction:

The opposite party or the defendant actually or voluntarily resides or carries on business or has a branch office or Personally works for gain at the time of institution of the complaint

Any one of the opposite parties (where there are more than one) actually or voluntarily resides or carries on business or has a branch office or personally works for gain at the time of institution of the complaint provided that the other opposite party/parties in acquiescence in such institution or the permission of the forum is obtained in respect of such parties

The cause of the action rises wholly or in part

State Commission

Consumer Disputes Redressal Agencies

Can entertain complaints where the claim exceeds Rupees Twenty Lakhs but not Rupees One Crore.

National Commission

Consumer Disputes Redressal Agencies

Can entertain complaints where the claim exceeds Rupees One Crore.

Procedure

The complainant is required to file complaint on plain paper which includes:

Name and full address of complainant Name and full address of the opposite party Description of the goods or services The nature of deception and the type of relief prayed for

The complainant is required to file copies of supporting documentsThe complaint has to be filed within two years form the date of defective service or supply of product Lawyers are not required to represent the complaint

Appellate Jurisdiction

Appeal must be preferred within 30 days of the date of the order by respective Forum or Commission

Supreme Court

National Commission

State Commission

District Commission

Reliefs

The reliefs available to consumers on the complaint may include:

Removal of defects from goodsReplacement of the goodsRefund of the price paidAward of compensation for loss Removal of deficiency in servicesDiscontinuance unfair or restrictive trade practiceStopping the sale of hazardous goodsWithdrawal of hazardous from being offered for salePayment of adequate costs to parties

Penalties

In case of Failure and Omission to comply with any order of the State commission or National Commission the punishment is:Imprisonment of a term which shall not be less

than one month and extendable to 3 years, orFine of not less than Rs. 2000 and extendable to

Rs. 10000, or bothIt can be reduced depending upon circumstances

Consumer Protection Councils

Established at State and National LevelsThe objective is to promote and protect rights and

interests of consumers in the societyCentral Consumer Protection Council

Set up by Central GovernmentThe Ministers in charge of Consumer Affairs in the Central

Government holds Chairman post It consists 150 members which includes official and non

Official members Its term is 3 years One meeting in a years is compulsory and may be more

depending upon necessity

Consumer Protection Councils

State Consumer Protection CouncilThe Minister in charge of Consumer Affairs in

the State Government holds the Chairman post

It also consists other official and non official members representing varied interests

Two meetings every year are compulsory and may be more according to requirement

Alternative Remedy for Defective Products

Alternative Remedy for Defective Products

Mediation Process

Mediation Process

Three Stages of Complaint Handling

Stage1: On receipt of the complaint, there is an automatic

acknowledgement with a serial number assigned to the complaint and forwarded to the opposite party within 24 to 72 hours with the request to resolve the complaint within 15 days, under intimation to the complainant

Stage2: A reminder is issued after 15 days

Stage3: After expiry of two weeks from the second stage a

strongly worded further reminder is sent , mentioning that the name of the opposite party would be included in a ‘shame List’ maintained at the CORE Centre

website(www.core.nic.in) A routine follow up at in between stages as may be

required. In case the complainant does not get any response, despite all the efforts taken be CORE, he is advised to pursue the matter before the consumer forum

Three Stages of Complaint Handling

Case Laws

Case1:Indian Medical association Vs. V.P. Shantha and othersCase2:Two Year Jail for a car dealerCase3:DTC Ticket Checkers fined for roughing old ManCase4:Airlines Held GuiltyCase5:Medical NegligenceCase6:False claims about fuel consumption by Bajaj AutoCase7:LPG cylinder Blast

CASE-1INDIAN MEDICAL ASSOCIATION Vs. V.P. SHANTHA

AND OTHERS

CASE-1INDIAN MEDICAL ASSOCIATION Vs. V.P. SHANTHA

AND OTHERS

CASE-2TWO-YEAR JAIL FOR CAR DEALER

CASE-2TWO-YEAR JAIL FOR CAR DEALER

CASE-2TWO-YEAR JAIL FOR CAR DEALER

Case 3 – DTC Ticket Inspectors fined

An elderly person, Mr. Mukhtyar Singh was abused and kicked for failing to show proof of being a senior citizen He was frisked and Rs. 50 were taken away Senior Managers failed to address his complaint State Commission directed to cut Rs. 2500 each from the salary of the inspectors DTC approached National Consumer Disputes Redressal Commission National Commission upheld the jurisdiction

Case 4- Airlines held guilty

Airline agent failed to inform about flight cancellation to a couple

Royal Nepal Airlines held guilty of “ Deficiency in service”

Airlines are directly liable for the acts of commission and omission of their agents

Delhi State Commission awarded a compensation of Rs. 55,000

Case 5- Medical Negligence

An Ayurvedic doctor undertook treatment as if he was an orthopedic surgeon

Plastered broken arm without getting an X-ray done

Boy’s arm became permanently impaired due to blocking of blood supply

Delhi State Consumer Redressal Commission awarded a compensation of Rs. 150,000

Case 6- False claims by Bajaj Auto

Bajaj Auto claimed fuel efficiency of Boxer motorcycle as 91 kmpl

Complainant, Harwinder Singh, found it to be at most 50 kmpl

“ * “ marked standard conditions applied were written in small letters

Standard conditions were not mentioned in advertisement or in service book

Commission directed Bajaj Auto to pay Rs. 25000 as compensation and Rs. 1500 as litigation charges

Case 7- LPG Cylinder Blast

Can Oil company escape liability by having “ Dealership Agreement”

Death of a consumer due to injuries from cylinder blast

Oil company, the dealer and the insurance company tried to escape liability

Apex Consumer Court ruled HPCL has to take responsibility

Decision came after 10 years

Conclusion

As consumers, be aware, buy quality products/ services, and seek redressal if there is deficiency

“ Consumer rules the market”

Thank You !