Consumer Protection Act

Consumer Protection Act

INTRODUCTION

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 Government, consumer courts and voluntary organizations that work towards safeguarding. 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 responsibility is that a consumer is supposed to shoulder.

Consumer Protection Act, 1986 is an important Act in the history of the consumer movement in the country. The Act was made to provide for the better protection and promotion of consumer rights through the establishment of consumer councils and quasi-judicial machinery. It is mile stone in the history of socio-economic legislation and directed towards public welfare and public benefits.

The CPA was passed by the Lok Sabha on 5th December 1986 and Rajya Sabha on 10th December, 1986 and assented to by the president in the Gazette of India.

Extra Part II: Section 1 dated 26.12.1986.and at PP 1-12 called, “the CPA 1986 (Act No.66 of 1986) and the preamble states that, “An Act 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.”

Under the Act, consumer disputes redressal agencies have been set up through out the country with the District Forum at the District level, State Commission at the State level and National Commission at national level to provide simple, inexpensive and speedy justice to the consumer with complaints against defective goods, deficient services and unfair and restrictive trade practices[1].

The Law relating to consumer protection in India is at recent origin and is developing slowly, day by day, with the pronouncement of orders passed by the commissions constituted under the Act all over India and the National Commission[2]. However the presence of some protective Laws for the benefits of consumer in the ancient culture cannot be denied[3].

BACKGROUND

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.We find the seeds of consumer protection during the Mughal times[4] and especially during the time of Khiljis. It is said that Sultan Ala-ud-Din Khilji(1296 A.D. to 1316 A.D.)had introduced strict price control measures based on production costs[5]. He had also established separate shopping centers in Delhi for (1)grain, (2)cloth, sugar, dried fruits, herbs, butter, and oil,(3) horses, slaves,and cattle, and (4) miscellaneous commodities. The supply of grain was ensured by collecting tax in kind in the production areas and keeping it in the royal storehouses. Hoardings of grain were forbidden. Elsewhere the growers were ordered to sell their grains for cash in their fields at fixed prices and were not allowed to take any grain home for private sale. The market controller, the state intelligence officer, and the Sultan’s secret agents, each submitted independent reports on these shopping centers to the Sultan. Even a minor violation of the rules was not tolerated[6].

The shopping center for cloth, known as the sara-i-adl,was established near one of the royal palaces on the inner side of the Bada-un-Gate. All goods, including foreign imports, were first taken there and their price fixed. Every merchant was registered with the commerce ministry and had to sign a bond guaranteeing a regular supply to the goods in which they traded. The Hindu Multani merchants were advanced money by the treasury to import rare commodities for the sara-i-adl,some price were subsidized. Costly fabrics and luxury goods could be sold only to those who have obtained permits from the Government. The prices of cattle were also fixed and unscrupulous merchants were deprived of their trading rights[7].

The shopping center for general commodities was under the direct control of the commerce ministry. Ala-ud-Din’s Minister of commerce was also the Superintendent of weights and Measure and the Controller of the Commercial transactions. He was assisted by Superintendent for each commodity. Prices and weight and measure were chequed by sending the children employed in the royal pigeon-house to buy petty articles[8].The prices fixed for the Delhi market were also applied in the provincial capitals and towns.

During the British regime (1765-1947)[9], also known as the‘Colonial Era’, Government’s economicpolices 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 defence[10].Accordingly much of the legalisation 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.[11] 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[12].

THE POST-INDENDENCE SCENARIO

The struggle for India’s independence was over by 15th August, 1947.However, the attainment of independence was not an end in itself.Due to the increased emphasis on industrialization during the second five year plan, there was tremendous growth and establishment of heavy industries. As a result there was a considerable amount of migration of rural population to the urban areas in search of employment, as India is characterized by a vast amount of disguised unemployment in the agricultural sector.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.

With the continuous industrialization and urbanization, environmental problems also came more to the forefront, but seldom got any worth while attention of Indian planners and policy makers till the fateful incident of Bhopal in 1984. Thus the Bhopal catastrophe, perhaps for the first time, focused considerable attention on the industrialization hazards, environmental pollution, Government responsibility and business accountability. The Union Carbide tragedy also highlighted the potential risks to the lives of the citizens or consumers from the operations transnational corporations in foreign lands.

Now with the opening up of the Global Market and economics and progressive removal of international trade barriers, two phenomenons have been witnessed with.

First, there is influx of foreign brands and franchises.

Second, within India, there is increasing competition among manufacturers which has benefited consumers in the form of improvement in quality of goods and resources. Thus in turn has witnessed more and more legislations aimed at regulating the manufacturing and trading activities and providing protection to consumers at large. Now the maxim caveat emptor has been replaced by, “let the seller beware”. As a result of this change in scenario business has now come to be substantially regulated by Government and Authorities in favour of consumers.

Inspite 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. Though Monopolies and Restrictive Trade Practices Act, 1969 and prevention of Food Adulteration Act, 1954 have provided relief to consumers, yet it becomes necessary to protect consumers from exploitation and to save them from adulteration and substandard goods and services and to safe guard their interests.

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.

The Act is a social welfare legislation enacted to provide for the better protection of the interest of the consumers and different redressal forums have been established under the said Act for settlement of consumer’s disputes. The legislature hereby enacted such legislation for speedy solution of disputes of the consumers for the benefit of people at large. The people to allow those forums to function as far as possible without avoidable interdiction by the High Court. The consumer legislation is a beneficiary piece of legislation and the legislature in order to help the consumers has not prescribed any court fee to be affixed on the complaint. But it is expected from the complainant that they should come before the Redressal Agencies with clean hands and that the relief claimed by them are not inflated.

On a strict reading of the provisions of the Act as a whole it would be seen that in enacting the statute the interaction of the Parliament was to provide protection and relief to four categories of consumers:

(i)Persons who have suffered loss or damage as a result of any unfair trade practice adopted by any trader.

(ii)Persons who have purchased goods for which the trader has charged 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.

(iii) Persons who have purchased goods for consideration which are found suffer from one or more defects.

(iv) Persons who have hired any services for consideration when the services provided are found to suffer from deficiency in any respect.

OBJECTIVE

The provision of the Act in the light of its preamble reads as: “An Act to provide better protection of the interest of consumers… for the settlement of consumer dispute and for matters connected therewith”.

The word ‘protection’ furnishes the key to the mind of the makers of the act[13]. Its provision has to be interpreted in favour of the consumer, in such a manner as to provide maximum relief to him.

The primary duty of the court, while constructing provisions of the Act is to adopt a constructive approach. It should not do violence to the provisions and should also not be contrary to attempted objective of the Act[14]. This Act has not been frame to provide a loophole and excuses to well organized traders, producers[15] and big business houses and manufactures on technical grounds.

RELIEF UNDER THE CONSUMER PROTECTION ACT

Reliefs provided under the Act, 1986 are as follows:

(I)SPECIFIC RELIEFS

The Act allows consumers to file complaints on five specific grounds. The Act does not allow complaints to frame their reliefs as they do not wish nor does it leave it to the Consumer Disputes Redressal Agencies (CDRAs) towork outremedies according to their discretion. The reliefs possible are indicated in Article 14 of the Act. One can find below the reliefs obtainable in the case of each of the items of complaint listed in Article 2(1) (c).

DEFECTS IN GOODS

There are several remedies in respect of this:

-Removal of the defect pointed out by the laboratory (a);

-Removal of defect in respect of goods not sent to laboratory analysis (e);

-Replacement of goods (d);

-Return of price (c).

In respect of fungible goods the removal of defect will not be of any use to the complainant. But however the order will be operative in future as regards the same goods and would serve the interest of all consumers.

Clause (a) being restricted to defects pointed out by the laboratories, Clause (e) provides the relief in respect of other goods not sent to the laboratory. It is true that the word “goods” is not found in that Clause. The clause should normally read as “to remove the defects in the goods or deficiencies in the services in question”. But it can be understood only as such, since one can gather from the definition of the word “defect” in Clause 2(1)(f) that it relates only to goods. Similarly “deficiency” is only in respect of service [Clause 2(1) (g). The complainant should, therefore, take care not to use the word “defect’ for “deficiency” or vice-versa.

DEFICIENCY IN SERVICE

The reliefs are:

-Return of charges paid (c);

-Removal of the deficiency (e).

Removal of deficiency in not always possible once service has been rendered. Even if possible, it is no usually desired by the consumer, who had a bad experience, to resort to the same person for service.

OVER-PRICING OF ARTICLES

Return of the price against return of the article or reimbursement of the excess price.

UNFAIR TRADE PRACTICE AND RESTRICTIVE TRADE PRACTICE

The reliefs are:

-To discontinue them or not to repeat them (f);

Unfair trade practice and restrictive trade practice are defined in the Act with great precision. These words should be used only in cases contemplated in the definitions of those words, not in case of other grounds of complaint like defect in goods or overt-pricing, because the reliefs in such case are different.

HAZARDOUS GOODS

The reliefs are:

-Not to offer the hazardous goods for sale (g);

-To withdraw the hazardous goods from being offered for sale (h);

It is thus seen that for each ground of complaint there is one or more reliefs available which can be asked for alternatively or cumulatively. It is for the complainant to decide and to frame properly the reliefs with indication of the respective clauses.

(II)GENERAL RELIEF OF COMPENSATION

Compensation may be asked in all cases,

Negligence in case of defects in goods, though not frequent, may however happen. Therefore, compensation will be a welcome relief to the consumer in addition to the other which he possesses.

It is in respect of service that compensation will play a big role.

In this connection it is to be stated that negligence is very close to deficiency which arises in consumer will get only return of charges, whereas if there is negligence, he will get compensation in addition. Compensation has to be specifically asked for and the acts of negligence pointed out. Once negligence is proved, the amount of compensation has tobe determined. As per the Act it is for loss or injury suffered. The complaint has, therefore, to give details of the loss and estimate it in terms to be established. The correctness of the estimate has also to be established. The complainant can start by an affidavit. If the demand appears reasonable the same have to be adduced, failing which the CDRA concerned will determine itself the amount. Lastly how and to what extent loss or injury is attributable to negligence is also to be shown and proved except in cases of res ipsa loquitur, where the fact is eloquent by itself.

Whereas the extent of other reliefs is determined by the Act itself this one is left to the appreciation of the CDRAs. Regarding the assessment of compensation by CDRAs there are two methods: Global assessment to the best of the judgment of the adjudicating body which consists at least of there persons or computation of damages with the help lf some yardsticks. The second course appears to be more accurate. But the yardsticks are not easy to determine properly and may lead some times to grace errors. The preference of the CDRAs is now for global assessment.