The Legal Position of a Consumer

Consumers are those who buy any goods for consideration or those who hire any services for consideration as per section 2(1)(d)(i) and 2(1)(d)(ii) respectively [1]. To protect the consumer from being cheated by manufacturers, resellers, salesmen, the consumers have given the rights under the consumer protection act, 1986. In the business environment, consumer protection laws have been made to ensure fair trade competition and the free flow of truthful information. the main aim of the consumer protection law is to protect the rights of consumers is also regulated or a form of government regulation. The consumer protection act, 1986 provides 3- tier quasi-judicial methods at the national, state/, and district levels for filling the consumer’s complaint. The preamble of this act (Act no 68 of 1986) read as “An Act to provide for better protection of the interest of consumers and for that purpose to make provision for the establishment of consumer councils and other authorities for the settlement of consumers disputes and matters connected therewith. Be it enacted by parliament in the thirty-seventh year of the Republic of India.” [2] The act will extend to the whole of India except the state of Jammu and Kashmir.  The consumer protection Act, 2019 (act no. 35 of 2019) came into force on 20th July 2020. The bill replaces the consumer protection act, 1986.

Introduction

The consumer protection act, 1986 was implemented on 15th April/, 1987, the act received the assent of the president on 24th December/, 1986. Section 2(1)(d) of the consumer protection Act, 1986 defined consumer. Consumer means a person who-

(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under a system of credit and includes any user of such goods aside from the one that buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of credit, when such use is credited with the approval of such Person/ but doesn’t include an individual who obtains such goods for resale or  any commercial purpose; or

(ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first-mentioned person but does not include a person who avails of such services for any commercial purpose;   

From the above provision, it appears that there are two distinct types of consumers

First 2(1)(d)(i) – those who buy any goods for consideration and

Second 2(1)(d)(ii) – those who hire any services for consideration.

2(1)(d)(i) extends the concept of consideration not merely to one paid, but one which is merely promised or partly paid or partly promised and includes within its ambit every system of deferred payments.

2(1)(d)(ii) includes not only the actual hirer of the services but also any beneficiary of such services/ if they are availed with the approval of the first-mentioned person.

Consumer protection bill, 2002 [amendment] [3]

on 26th April 2001, the consumer protection bill, 2001 (amendment) has been introduced in the Rajya Sabha. Some certain changes were required in the 2001 bill, after making changes, amendments to the consumer protection bill (amendment) 2002 were passed by the Rajya Sabha on 11th March 2002 and then the bill was passed to the Lok Sabha. The Lok Sabha passed the bill with the amendment on 30th July 2002. The bill was again passed to the Rajya Sabha with those amendments for its consideration for them. But the bill has not been taken up for consideration on 6th August 2002, because the Rajya Sabha stood adjourned without any business transaction that day.

Consumer Protection Act, 2019 [4]

The consumer protection Act, 2019 came into force on 20th July 2020. The bill replaces the consumer protection act, 1986. the minister of consumer affairs, food/, and public distribution, Mr. Ram Vilas Paswan has introduced the consumer protection bill in the Lok Sabha on 8th July/, 2019. The new consumer protection act 2019, deals with the process of the administration and settlement of consumer disputes, with strict penalties, including jail term for misleading ads by firms.

A consumer is a person who buys goods for consideration or hires any services for consideration. The consumer is not those who obtain a good for resale or service for commercial purposes.

The rights of the consumers

There are six consumer rights have been given in the bill-

  • The right to consumer awareness;
  • The goods which are hazardous to life and property, the right to be protected against the marketing good, services or products;
  • The right to be assured, wherever possible, access to a variety of goods, products/, or services at competitive prices;
  • The right to be informed about the quality, quantity, potency, purity, standard and price of goods, products/, or services, as the case may be, to protect the consumer against unfair trade practices;
  • The rights to be heard and to be assured that consumer’s interests will receive due consideration at appropriate fora;
  • The right to seek redressal against unfair trade practice or restrictive trade practices or unscrupulous exploitation of consumer;

 

Salient features of Consumer Protection Act, 2019 [5]

CCPA (central consumer protection authority) – The CCPA will protect, promote and enforce the rights of the consumers. The CCPA is headed by the director general and the CCPA will have an investigation wing for the investigation against the violation of rights of the consumers.

The Simplified dispute resolution process- the state commission and district commission can now review their own orders. There is deemed admissibility after 21 days of filling complaint. The method of approaching consumer commissions become easy the required things are filing from place of residence/ work, E-filing, videoconferencing for hearing.

Mediation – it is an alternate dispute resolution mechanism. The mediation cell has been attached to consumer commissions. Their will be no appeal against settlement through mediation. The panel of mediation will be selected by selection committee. The committee will be consisting of the president and a member of consumer commission.  Product liability – A manufacturer or product service provider or product seller to be responsible to compensate for injury or damage caused by defective product or deficiency in services. There are some basic product liability action are Manufacturing defect, Design defect, Deviation from manufacturing specifications, Not conforming to express warranty, Failing to contain adequate instructions for correct use, Service provided-faulty, imperfect or deficient.

Rules on e-commerce and direct selling – General Rules, Central Consumer Protection Council Rules, Consumer Disputes Redressal Commissions Rules, Appointment of President & Member in State/District Commission Rules, Mediation Rules, Model Rules for States, E-Commerce Rules

 

Consumer Central protection authority (CCPA) [6]

Section 18 [7]

(1) The Central Authority shall—

(a) protect, promote and enforce the rights of consumers as a class, and prevent violation of consumers rights under this Act;

(b) prevent unfair trade practices and ensure that no person engages himself in unfair trade practices;

(c) ensure that no false or misleading advertising is made of any goods or services which contravenes the provisions of this Act or the rules or regulations made thereunder;

(d) ensure that no person takes part in the publication of any advertisement which is false or misleading.

(2) Without prejudice to the generality of the provisions contained in sub-section (1), the Central Authority may, for any of the purposes aforesaid—

(a) inquire or cause an inquiry or investigation to be made into violations of consumer rights or unfair trade practices, either on a complaint received or on the directions from the Central Government;

(b) file complaints before the District Commission, the State Commission or the National Commission, as the case may be, under this Act;

(c) intervene in any proceedings before the District Commission or the State Commission or the National Commission, as the case may be, in respect of any allegation of violation of consumer rights or unfair trade practices;

(d) review the matters relating to, and the factors inhibiting the enjoyment of, consumer rights, including safeguards provided for the protection of consumers under any other law for the time being in force and recommend appropriate remedial measures for their effective implementation;

(e) recommend adoption of international covenants and best international practices on consumer rights to ensure effective enforcement of consumer rights;

(f) undertake and promote research in the field of consumer rights;

(g) spread and promote awareness on consumer rights;

(h) encourage non-Governmental organizations and other institutions working in the field of consumer rights to co-operate and work with consumer protection agencies;

(i) mandate the use of unique and universal goods identifiers in such goods, as may be necessary, to prevent unfair trade practices and to protect consumers’ interest;

(j) issue safety notices to alert consumers against dangerous or hazardous or unsafe goods or services;

(k) advise the Ministries and Departments of the Central and State Governments on consumer welfare measures;

(l) issue necessary guidelines to prevent unfair trade practices and protect consumers’ interest.

Supreme Court cases on a dispute of consumer

Karnataka Power transmission corporation vs. Ashok Iron Works Private LTD.

In this case, the corporate had argued that the complaint which was filed by the respondent was not maintainable as

i) under the consumer protection act, 1986 section 2(1)(m) says the company is not a person. ii) the complaint is not a consumer within section 2 (1)(d) of the CPA since it purchased electricity for commercial production. And (iii) dispute relating to sale and supply of electricity were not covered under service under section 2(1)(o) of the CPA. The apex court said that the company was excluded from the definition of a person that’s why the court rejected the contention as said. Then the court relied upon the English court decision in Delworth vs. commissioner of stamps. 

HDFC bank limited vs. Balwinder Singh

The complainant was a bank, employing musclemen to require forceful retrieval of the hypothecated vehicle and then inflicting physical harassment and mental trauma to the litigant. The District Forum allowed the complaint and directed the bank to pay compensation of Rs. 4 lakhs for repossessing the vehicle and reselling it to a third party. The State Commission confirmed the order in appeal. addressing the bank’s revision petition, the National Commission expressed shock that the bank had hired musclemen directly or through its recovery agents to recover the loan/repossess the vehicle. The Commission also spoke the State Commission and it ordered that the alleged letter created by the bank purporting to the litigant voluntarily turning in possession of the vehicle was unreliable which no notice was given to the litigant at the stages of retrieval and sale of auto. In dismissing the petition, the Commission relied upon a judgment where it had powerfully deprecated such practices. The Commission dismissed the petition and awarded Rs. 25, 000/- as exemplary costs during this case.

Conclusion

Consumer means somebody who buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of payment and includes any user of such goods aside from the one that buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of payment, when such use is created with the approval of such person, but doesn’t include someone who obtains such goods for resale or for any commercial purpose; or hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of credit and includes any beneficiary of such services aside from the one that hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of credit, when such services are availed of with the approval of the first-mentioned person but doesn’t include someone who avails of such services for any commercial purpose. Salient features of the buyer Protection Act, 2019 are CCPA (central consumer protection authority), Consumer protection councils, Simplified dispute resolution process, Mediation, Penalty for adulteration of products / spurious goods, Product liability, Rules on e-commerce/, and direct selling. the buyer protection act provides rights to consumers.

References

[1] Consumer Protection Act, 1986

[2] consumer Protection Act, 1986 (Act no. 68 of 1986)

[3] http://www.legalserviceindia.com/laws/consumer_laws.htm

[4] https://www.rajras.in/consumer-protection-act-2019-summary-download-pdf/

[5]https://static.pib.gov.in/WriteReadData/userfiles/PIB%20Delhi/CPA%202019-%20PPT-20%20July,%202020.pdf

[6] Consumer Protection Act, 2019 (No.35 OF 2019)

[7] Consumer Protection Act, 2019 (No.35 OF 2019)

 

FAQ [frequently asked questions]

1] when was the consumer protection act implemented?

ANSWER – The consumer protection act, 1986 was implemented on 15th April/, 1987, the act received the assent of the president on 24th December/, 1986.

2] which bill replaced the consumer protection act, 1986?

ANSWER – The consumer protection Act, 2019 came into force on 20th July/, 2020. The bill replaces the consumer protection act, 1986.

3] which minister has introduced the consumer protection bill in the Lok Sabha on 8th July/, 2019?

ANSWER – the minister of consumer affairs, food and public distribution, Mr. Ram Vilas Paswan has introduced the consumer protection bill in the Lok Sabha on 8th July/, 2019.

4]  State the salient features of the consumer protection act, 2019?

ANSWER – Salient features of the Consumer Protection Act, 2019

CCPA (central consumer protection authority)

Consumer protection councils

The Simplified dispute resolution process

Mediation

Penalty for adulteration of products / spurious goods

Product liability

Rules on e-commerce and direct selling

5] which section defined CCPA? State the full form of CCPA?

ANSWER – Section 18 of the consumer protection act, 2019 defined CCPA. CCPA stands for Central consumer protection authority.

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