Provisions of Law and Consumer Protection in India
Dr. Priya Rao
Assistant Professor, School of Studies in Law, Pt. Ravishankar Shukla University, Raipur Chhattisgarh
Consumer Protection in India has gathered momentum since 1986. This was the year in which the Consumer Protection Act was passed. Quite naturally, this marks a watershed and since then the role of the Government in protecting consumers has been steadily growing. The code for the consumer movement is as old as trade and commerce itself. It therefore, comes a no surprise that Kautilya, the great thinker and author of Arthashastra has made considerable references to protection of consumers in this book. Kautilya makes references to protection of consumers against malpractices and exploitation by trade and industry. He also writes with great insight on problems of short weighment and measures as well as adulteration. He recognized the need for punishment for these offences. It can thus be seen that problems that we are tackling today existed many centuries back. Not only was it known to exist but be practitioners of public management recognized the need to do something about these problems. Gandhiji was not only a great leader but also a forward looking thinker. His empathy with the weak, neglected and marginalized is well known. He very clearly recognized the importance of keeping the consumer in sharp focus while undertaking economic actions. His famous quotation bears repetition: "A consumer is the most important visitor in or premises. He is dependent on us, we are dependent on him. He is not an interruption to our work; he is the purpose of it. He is not an outsider to our business; he is a part of it. We are not doing him a favour b y serving him; he is doing us a favour by giving us an opportunity to do so" Thus the idea of consumer satisfaction and consumer protection is not new in India and has continuously been recognized as an important issue.
Consumer entitlement and empowerment:
Increasingly the Indian consumer is offered a variety of product and service offering. The customer has to choose between the various options before him/her. Competition is expected to drive prices and quality to acceptable levels. However a key element of competition is information. Unless consumers have access to timely and reliable information they will not b e able to make the right choices. Consumers being a largely unorganized group the Government have to step in and correct the asymmetry of information that exists in the market. Thus one of the important constituents of our policy is to enable consumers to have access to such information.
The first of the measures that we have been taking is to ensure that the consumer has access to certain basic information about the products he/she is buying. The Standards of Weights and Measures Act, 1976 provides the legal framework for ensuring reliable weighment and measurement of articles sold in the market. The Legal Metrology Department at the Centre and states is charged with this responsibility. Only machines that are stamped for accuracy by the department can be used for measurement. In addition under the Packaged Commodities Rules framed under the Act all packaged commodities have to display certain basic information like the quantity,
Maximum Retail Price, name and address of the manufacturer/ importer, helping number for complaints/assistance etc. These rules are supplemented by rules framed under other Acts like the Prevention of Food Adulteration Act, Drugs and Cosmetics Act which require additional information like ingredients, expiry or best before dates.
The second part of this aspect of our policy is to lay down standards. This is done by the Bureau of Indian Standards which is a statutory body under the BIS Act 1986. Most of the standards are voluntary but some are mandatory. Articles whose consumption can affect health and safety are considered for being made mandatory. Drinking water and electrical appliances are two such articles which cannot be manufactured without a license from BIS. These articles are then marked with the ISI mark so that consumers know that a certain safety standard has been assured.
Thus with the help of the Legal Metrology Department and the BIS consumers are guided with information about the quality, price, quantity and other crucial parameters to make informed choices. This would also help to empower the consumer to know his entitlement and take steps to ensure that his rights are protected.
XI Plan programme:
The XI plan has seen a quantum jump in the planned activities of the Department of Consumer Awareness. This can be readily gauged from the table below:
Thus in the first two years of the plan itself we would have spent more than what was spent in the entire X Plan period. In the X plan itself the expenditure was for in excess of what was originally planned. Now in the remaining part of the XI Plan we would be spending, on an average, every year more than what was spent in the entire stepped up X plan period.
|
|
Tenth Plan (Rs crore) |
Eleventh Plan (Rs crore) |
|
Planned Outlay |
55 |
1083 |
|
Revised Outlay |
283.27 |
NA |
|
Actual Expenditure |
257.42 |
268 (Expected Upto 31/3/09 |
The major activities in the XI Plan are the following:
Consumer Entitlement and Empowerment
(a) Weights and Measures:
This part of the department has seen the sharpest increase in the level of activity. From a mere Rs 7.7 crores in the X Plan the outlay has been ramped up to Rs 187 crores in the XI Plan. In the first year of the XI Plan alone an expenditure of Rs 10.25 crores has been incurred and a further Rs 23.4 crores will be spent in 2008-09. The main thrust in this sphere is to modernize the department at the centre and the states. Corresponding investment will also be made in skill up gradation of the personnel. This also proposed to be complemented by a revision in the legal framework and a new Bill-the Legal Metrology Bill, 2008 was introduced in the RajyaSabha on October 24th, 2008.
(b) Standards and testing:
The BIS is being strengthened by a scheme for improving the system of National standardization, keeping track of international developments in the fields of standards, better training facilities etc. The total XI plan outlay is Rs 120 crores as against the X Plan outlay of Rs. 5.75 crores. Changes are also contemplated in the BIS Act, 1986 which has not been amended since inception. These changes are expected to bring in greater flexibility in adapting to the rapidly changing international environment. The department also has a testing facility called the National Test House (NTH) which has its headquarters at Kolkata and labs in different parts of the country. These labs are being modernized at a total cost of Rs 75 crores in the XI Plan - against the outlay of Rs. 25 crores in the X Plan.
Consumer Awareness:
While the framework given sets out the entitlement of the consumer it is equally important that the consumers is made aware of these rights. A constant awareness campaign is thus absolutely necessary. This is aimed at guiding the consumers on what he/she should expect and what they can do to ensure that their rights are respected. This has to be complemented by policies that seek to encourage a healthy growth of voluntary consumer organizations. These organizations complement the efforts of the Government by providing guidance and support to the individual consumers who do not have the resources to access all the information that they should rightfully possess.
Consumer Protection Act, 1986:
The Act aims to ensure right standards for the goods and services for which one makes a payment. The Act defines the consumer as one "who purchases goods and services for his/her use. The user of such goods and service with the permission of the buyer is also a consumer. However, a person is not a consumer if he purchases goods and services for resale purpose". Hence the Act covers all "products and services". The products are those which are manufactured or produced and sold to consumers through wholesalers and retailers. The services are of the nature of transport, telephones, electricity, constructions, banking, insurance, medical treatment, education etc. The services also include those services provided by professionals such as doctors, engineers, architects, lawyers etc.
The Act postulates establishment of Central Consumer Protection Council and the State Consumer Protection Councils for the purpose of spreading consumer awareness. Central Council is headed by Minister-in-charge of the Consumer Affairs in the Central Government and in the State it is the Minister-in-charge of the Consumer Affairs in the State Government who heads the State Council. A separate Department of Consumer Affairs was also created in the Central and State Governments too exclusively focus on ensuring the rights of consumers as enshrined in the Act.
This Act has been regarded as the most progressive, comprehensive and unique piece of legislation. The stakeholders who have to protect and implement the Act are, voluntary non-government consumer organizations, the government, the regulatory authorities for goods and services in a competitive economy, the consumer courts, organizations representing trade, industry and service providers, the law-makers and those in charge of implementation of the laws and rules.
Consumer Redressal Forums:
To provide cheap, speedy and simple redressal to consumer disputes, quasi-judicial machinery is set up at each District, State and National levels called District Forums, State Consumer Disputes Redrissal Commission and National Consumer Disputes Redressal Commission respectively. There are 604 District Forums, 35 State Commissions at states and Union territories and an apex body of National Consumer Disputes Redressal Commission (NCDRC) having its office at Janpath Bhawan, A Wing, 5th Floor, Janpath, and New Delhi. The National Commission was constituted in 1988. It is headed by Sitting Retired Judge of Supreme Court and other members chosen by Government in consultation with its Chairperson. At least one similarly, while State Commission is headed by a sitting retired High Court Judge and at least 3 Members, one of them should be a woman. Similarly, District Consumer Forum is headed by District Court Judge and at least 3 other members and one of them should be a woman.
Redressal Mechanism:
A written complaint, as amended by Consumer Protection (Amendment) Act, 2002, can be filed before the District Consumer Forum (value up to Rupees twenty lakhs), State Commission (value up to Rupees One crore), National Commission (value above Rupees One crore) in relation to a product or in respect of a service, but does not include rendering of any service free of cost or under a contract of personal service. Proceedings are summary in nature and endeavour is made to grant relief to the parties in the quickest possible time keeping in mind the spirit of the Act which provides for disposal of the cases within possible time schedule prescribed under the Act, preferable within 90-150 days. If a consumer is not satisfied by the decision of the District Forum, he can challenge the same before the State Commission and against the order of the State Commission a consumer can come to the National Commission. In order to attain the objects of the Consumer Protection Act, the National Commission has also been conferred with the powers of administrative control over all the State Commissions by calling for periodical returns regarding the institution, disposal and pendency of cases. National Commission is empowered to issue instructions regarding adoptio0n of uniform procedure in the hearing of the matters; supply of prior service of copies of documents produced by one party to the opposite parties; speedy grant of copies of documents; and generally over-seeing the functioning of the State Commissions or the District Forums to ensure that the objects and purposes of the Act are best served without in any way interfering with their quasi-judicial freedom.
Importance of Consumer laws:
Consumer Protection Act, 1986 lay emphasis on consumer education which is one of the basic rights of the consumer. The purchase of goods and services entitles you to certain rights. Primarily you are entitled to expect a quantity and quality of goods and services as you had asked for when you made the purchase. Of entire gamut of Laws dealing with the protection of the consumer rights the Consumer Protection Act, (CPA) 1986 is probably the most important and gives you as a consumer the most comprehensive protection against violation of your rights. The legal system experienced a revolution with the enactment of the CPA, which was specifically designed to protect consumer interests.
The legal system was completely revolutionized during the British period and the modern system was introduced to administer justice. For more than fifty years, the Sale of Goods Act of 1930 [SGA] was the exclusive source of consumer protection. The SGA, which was described by many as "an admirable piece of legislation", provides exception to the principle of "let the buyer beware" and the interests of the buyer are sufficiently safeguarded. The SGA was the exclusive consumer legislation until 1986, with the passage of the CPA, designed to supplement the remedies already provided under the SGA.
Within criminal justice system, the Indian Penal Code 1860 has a number of provisions to deal with crimes against consumers like offenses related to the sale of adulterated food items or drinks, the sale of noxious food or drink, the sale of adulterated drugs and the use of false weights and measures.
Other legislations, aimed at providing consumer protection enacted after independence, are the Prevention of Food Adulteration Act, 1954, the Essential Commodities Act, 1955, and the Standard of Weights and Measures Act of 1976. Apart from the remedies available under contract and criminal law, consumers have rights under tort law. However, the orthodox legal requirements under the law of torts and contracts and growing feeling for special focus on consumer rights among policy makers forced them to craft "specific" legislation to protect consumers.
The CPA was enacted with the objective of providing "cheap, simple and quick" justice to the millions of consumers in the country. Consumer experts feel that the CPA was passed with affirmed objectives to ensure justice which is "less formal, involves less paper work, cut delay and less expensive". The Act rightly recognizes today's concern for consumer rights like the right to have safe, un-adulterated and defect-free commodities at reasonable prices," said an activist.
The greatness of the CPA lies in its flexible legal framework, wider jurisdiction and inexpensive justice. Consumer groups, the central or any state government are all empowered to lodge complaints under the Act. The innovativeness of the CPA was the inclusion of both goods and services within its ambit which empowers the consumer to bring suit for defective products as well as for deficiency of services. Under the CPA, which ensures flexibility in procedural requirements and introduced simple and easy methods of access to justice, the consumer need only pay a nominal fee and need not send any notice to the opposite party and a simple letter addressed to the consumer forum draws enough attention to initiate legal action.
Another noticeable procedural flexibility is the option the consumer has to engage a lawyer and if consumer prefers, he can represent himself before forum. The Consumer Disputes Redressal agencies, the National Commission, the State Commission, and the District Forum provided under the Act are working together to ensure timely, cheap and quick justice to consumers which in a way revolutionizing the present legal system. With easy access to the courts guaranteed by the CPA, consumers now wage legal battles against unscrupulous traders or service providers without any hesitation. The consumer forum created by the CPA have proven to be effective, disposing of thousands of cases with few legal formalities, and leading the way towards Well-founded consumer jurisprudence in India.
The civil justice system is tainted with deficiencies that discourage the consumer from seeking legal recourse. However, the CPA, which provides easy access to justice to millions of consumers, has revolutionized legal system as a result of its cost-effective mechanisms and popular support. In this age of consumers, the regime of consumer law will undoubtedly rule Indian markets and bestow a new phase on the existing Indian legal structure. The CPA provides for effective safeguards to consumers against various types of exploitations and unfair dealings, relying on mainly compensatory rather than a punitive or preventive approach. It applies to all goods and services unless specifically exempted and covers the private, public and cooperative sectors and provides for speedy and inexpensive adjudication.
India, home to the majority of the world's consumers, is committed to working for the welfare of consumers through new legal innovations. Keeping in mind, consumer protection as a matter of great concern, government came out with changes in existing consumer laws, including amendments in CPA aimed at strengthening and widening the ambit of consumer protection, a major step toward empowering citizens. The new proposal aims to empower you to haul up municipal authorities in consumer courts if they fail to provide an array of services from street lighting and drinking water to drainage and health. Seeking to expand the reach of the protection promised under the CPA, 1986, the amendments propose to expand the definition of consumer to include such goods and services for which relief could be obtained only in civil courts.
The government is also seeking to enable consumers to sue their service providers for passing on personal information to salespersons. In other words, those deluged by pesky calls from banks, insurance company's etc will soon have the option of hauling up their service provider for disclosing personal information. Also, "rights of consumers" are proposed to be prescribed to protect citizens against goods which are hazardous to life and property, and to help them get authentic information on price and quality.
Consumer Justice System in India:
The consumer justice system, as envisaged under the Consumer Protection Act, was meant to help consumers get redress without the help of lawyers and through simple summary procedure that would facilitate quick disposal of cases. But today, the entire process of adjudication has become so technical that consumers feel that they cannot fight a case without the help of a lawyer. And that renders the entire system of consumer justice, expensive...
(a) Justice delayed is justice denied:
Unlike the civil courts, the consumer courts are quasi judicial bodies that need to follow a simple, summary procedure for quick disposal of complaints. However, repeated adjournments, delay on the part of the state governments in filling up the posts of presidents and members of the courts and unnecessary technicalities have all combined to slow down considerable the process of justice. Delays have in fact taken away the very essence of the law. Here is a case that illustrates the point. Following loss of yield during the sowing season of 1993 due to defective hybrid cotton seeds sold to them, 130 farmers from Maharashtra filed a class action suit seeking compensation. Eventually they won the case, but it took 14 long years, during which time, ten farmers had died.
Farmers rarely file complaints before the consumer courts. But when they do such complaints invariably pertain to their very source of livelihood-farming or agriculture- and relate to defective seeds resulting in very low and poor quality yield. In all such cases, it is obvious that farmers need help urgently to overcome the financial crisis caused by the failure of the crop. And in they choose the consumer court over a civil court; the obvious is the hope of getting compensation quickly. But consumer courts have often failed them.
In order to ensure expeditious disposal of complaints, Section 13 (3A) of the CP Act provides for expeditious disposal of the case and stipulates a period of three months where the complaint does do require any analysis or testing of commodities, or else, five months. However, this is a provision that is practiced more in its breach. So also the provision pertaining to adjournment's.
Since adjournments were found to be the main cause of delays in consumer courts, the union government courts, the union government amended the Consumer Protection Act in 2003 to eliminate such delays. Accordingly consumer courts are not to give adjournments at all, in exceptional circumstances, where it is given, the court has to record the reasons for it in writing and justify it. But this provision is again flouted constantly.
(b) Need for better compensation:
While introducing the Consumer Protection Bill of 1986 in Parliament, the government had explained that the law was compensatory and not penal in character. And this very nature of the law would limit the time taken for setting a dispute, while at the same time promoting a healthy respect for consumers among manufacturers, traders and service providers, the government had said.. In other words, for the law to be effective the process of adjudication has to be quick and the compensation awarded by them, fair and just.
However, the computation of damages by these courts in most cases is too conservative and meagre to be just and too small to have any salutary effect on the opposite party. In fact the Supreme Court, in the case of Lucknow Development Authority vs MK Gupta has said that the compensation should serve the dual purpose of recompensing the individual while simultaneously bringing about a qualitative change in the attitude of manufacturers and service providers. But for that to happen, compensation should be large enough to make an impact.
Even in cases pertaining to defective goods, the compensation awarded by the courts to consumers is too insignificant to bring about any attitudinal change in the manufacturer or the retailer Yes, the courts do get them to rectify the defect or replace the product or refund its cost, but the compensation paid towards the harassment undergone by the consumer is often so meagre that the complainant is left wondering whether he did the right thing is going to the court.
All this does not mean that the Consumer Protection Act has not served any purpose. The law, providing for a parallel system of consumer justice, is one of the best in the world. Its enactment is a milestone in the history of the Indian consumer movement and it has contributed most significantly to the empowerment of consumers in the country. (From the time of their inception till November 21, 2008, the consumer courts at the national, state and the district level have complaints. Around 356219 cases are pending). But for the law to be fully effective and serve the purpose for which it was enacted, simple, inexpensive and speedy justice ought to become the raison d'être of these courts. Or else the consumer will lose faith in the system. State governments, for example, need to monitor closely the working of these courts to ensure that causes of delay, including delays in appointing members and presidents, are completely eliminated. As on August 2007, as many as 42 District Forums (out of a total of 608) were not functioning because of delays in such appointments. Needless to say that such vacancy affects the speedy adjudication of complaints. It would also help the cause of consumers if the law were to prohibit appeals in cases where the value of goods or services being complained against is up to Rs 1 lakh.
It is also necessary to sensitize those who sit in judgment in these courts to the plight of consumers in the country and the need for a more just and liberal calculation of compensation that is a tune with the basic concept of consumer protection embodied in the law. Since adjournments and hyper-technical procedures are also the cause of delays, a close scrutiny of the orders of the consumer courts is necessary to rid the consumer justice system of those prone to violating the provisions of the Consumer Protection Act. Such a review would also help identify those members and presidents with questionable integrity. To put it differently, a regular, independent audit is a must to remove those members and presidents who do not implement the Consumer Protection Act is its letter and spirit.
REFERENCES:
1. Amartya Sen, Development as Freedom, Alfred A.Knopf, Newyork,1999,pp 10-11
2. Source: The Indian Express New Delhi January 18, 2011)
3. Aristotle, The Nicomachean Ethics, translated by D. Ross (Oxford: Oxford University Press, revised edition, 1980), book I, Section 5, p.7.
4. See Henry Steiner and Philip Alston, International Human Rights in Context: Law, Politics and Morals (Oxford: Clarendon Press, 1996).
5. See, Jean Dreze and Amartya Sen, Hunger and Public Action (Oxford: Clarendon Press, 1989)
6. See,S.R. Osmani, ed., Nutrition and Poverty (Oxford: Clarendon Press, 1993)
7. Amartya Sen "From Income Inequality to Economic Inequality," Southern Economic Journal 64(1997).
8. see UNDP, Human Development Report 1994.
9. "Agency and Well-Being: The Development Agenda, in A Commitment to the Women, edited by Noeleen Heyzer (New York: UNIFEM, 1996).
10. Amartya Sen, " Population and Reasoned Agency: Food, Fertility and Economic Development," in Lindahl-Kiessling and Landberg, Population, Economic Development, and the Environment (1994);
11. Amartya Sen. Ibid., pp.38-39
12. World Bank, The East Asian Miracle: Economic Growth and Public Policy (New York Oxford University Press, 1993). See also the Asian Development Bank, Emerging Asia: Changes and Challenges (Manila: Asian Development Bank, 1997)
Received on 14.05.2013
Modified on 20.05.2013
Accepted on 28.05.2013
© A&V Publication all right reserved
Research J. Humanities and Social Sciences. 4(2): April-June, 2013, 258-263