Basic Overview of Consumer
Rights & Responsibilities
We are all consumers. From the obvious
necessities we purchase daily, to how we connect with the world using mobile
phones or travel to and from work. We consume every day and in every part of
our lives.
Consumer
Rights is an insight into what rights consumer holds when it comes to seller
which provide the goods. What if the goods provided to the consumer by the
business is not up to the standard? Then in that case – what should a consumer
do? To be precise, what rights consumer have is in the court of law to fight
against the malpractices of the business firms or seller.
A
person who buys a good or service for his own personal use and not for further
manufacture is called a consumer. Consumers play an important role in the market. The
market for a good or service constitutes all the consumers and producers of
that good or service. If there is no consumer, producers will have no one to
provide the good.
Responsibilities of Consumer
The
consumer has a certain responsibility to carry as an aware consumer can bring
the changes in the society and would help other consumers to fight the unfair
practice or be aware of it.
·
They should be aware of
their rights under the Consumer Protection Act and should practice the same in
case of need.
·
They should be well
aware of the product they are buying. Should act as a cautious consumer while
purchasing the product.
·
If in case a product is
found of anything false or not satisfactory a complaint should be filed.
·
The consumer should ask
for a Cash Memo while making a purchase.
·
A customer should check
for the standard marks that have been introduced for the authenticity of the
quality of the product like ISI or Hallmark etc.
l
s
The Consumer Protection Act, 1986 (COPRA)
·
In this, it protects the
right of the consumer and makes user aware of their rights.
·
They have developed or
formed three-tier system wherein there is District Forums, State Commission,
and National Commission thus to protect the right of the consumer.
Indian Contract Act, 1972
·
They lay down the
conditions in which the parties promise each other of the services to be
provided and agree on certain terms.The contract is made that is binding on
each other.
·
They protect the
interest that the contract is not breached and in case if breached the
remuneration to be provided.
The Sales of Good Act, 1930
·
To ensure the consumer
rights in case the goods offered to the consumer is not up to the standard
which was promised and the false claim was made.
The Essential Commodities Act, 1955
·
To keep track of the
commodities which are essential and monitor their production and supply. Also
keep a track of any hoarders, black marketers,
The Agricultural Produce (Grading and Marking ) Act,
1937
·
To implement the grading
standard and hence monitoring the same whether standard checks are been done to
issue the grading. In this, AGMARK is the standard introduced for agricultural
goods.
The Prevention of Food Adulteration Act, 1954
·
This act makes sure the
purity of the food items and the health of the consumers which could be
affected by the adulterated items.
The Standards of Weights and Measures Act, 1976
·
The Standards of Weights
and Measures Act protects the right against the goods which is underweight or
under measured.
The Trade Marks Act, 1999
·
This act protects users
from false marks which could mislead the consumer and hence cheat them in the
ground of quality of the product.
The Competition Act, 2002
·
The Competition Act
replaced from the Monopolies and the Restrictive Trade Practices Act
following to take action against the firms which use such practice which in
turn affect the competition in the market.
The Bureau of Indian Standards Act, 1986
·
The Bureau of Indian
Standards Act ensures about the quality of the product to be used by the
consumer and have introduced BIS Mark to certify the quality of the product and
have set up grievance cell which can take complaints regarding the quality of
the product.
Salient
Features of Consumer Protection Bill
Till the 1960s, India was
plagued with cases of black marketeering, hoarding, inadequate weighing and
food adulteration. These were problems
that affected the well-being of the consumer and amount to consumer
exploitation.
The
consumer movement began in the 1960s and gained momentum in the 1970s. Consumer dissatisfaction started to
be demonstrated through the written word and in articles and newspapers.
The
level of dissatisfaction with sellers and manufacturers and their practices
resulted in consumers raising their voice.
Resultantly, the government decided to give recognition to consumer protection by enacting the Consumer Protection Act on 24thDecember 1986. The Act was aimed at protecting the rights of the consumers and ensuring free trade in the market, competition and accurate information to be available. This day is now observed as National Consumers’ Day.
Resultantly, the government decided to give recognition to consumer protection by enacting the Consumer Protection Act on 24thDecember 1986. The Act was aimed at protecting the rights of the consumers and ensuring free trade in the market, competition and accurate information to be available. This day is now observed as National Consumers’ Day.
The
Consumer Protection Act, 1986 enforces rights of consumers, and provides for
redressal of complaints at the district, state and national level
.[1] Such complaints may be regarding
defects in goods or deficiency in services. The Act also recognises
offences such as unfair trade practices, which include providing false
information regarding the quality or quantity of a good or service, and
misleading advertisements.
Over
the years, there have been challenges in the implementation of the Act. A
high number of consumers were unaware of their rights under the Act.[2] While the disposal rate of consumer
cases was high (about 90%), the time taken for their disposal was long.[3],[4] It took 12 months on an average to
resolve a consumer case.4 Also, the Act does not address
consumer contracts between a consumer and manufacturer that contain unfair
terms. In this context, the Law Commission of India had recommended that
a separate law be enacted and presented a draft Bill in relation to unfair
contract terms.[5]
In
2011, a Bill to amend the 1986 Act was introduced to enable consumers to file
online complaints, and against unfair terms in a contract. However, the Bill lapsed with
the dissolution of the 15th Lok Sabha.[6] The Consumer Protection Bill, 2015 was introduced in Lok Sabha to replace
the 1986 Act.[7] The Bill introduced various new
provisions, which included:
(i)
product liability;
(ii)
unfair contracts; and
(iii)
setting up of a regulatory body.
The
Bill was examined by the Standing Committee on Consumer Affairs which submitted
its report in April 2016.[8] The Committee gave several recommendations
with regard to:
(i)
product liability;
(ii)
powers and functions of the regulatory body (Central Consumer Protection
Authority) being set up;
(iii)
penalties for misleading advertisements and endorsers of such advertisements;
and
(iv)
pecuniary jurisdiction of the adjudicatory body at the district level.
The
Consumer Protection Bill, 2018 was introduced in January 2018 to replace the
2015 Bill.
Here’s
the comparison your understanding:
updating time to time
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Understanding
the Consumer Protection Bill, 2018
Here’s the Highlights of the Consumer
Protection Bill, 2018
Consumer Complaints
·
The Bill sets up
Consumer Disputes Redressal Commissions (consumer courts) to hear complaints on
matters like: (i) defect in goods or deficiency in services; (ii) unfair or
restrictive trade practices; (iii) excessive pricing; (iv) knowingly selling
goods or providing services that do not meet safety norms; and (v) product
liability. Such complaints can be filed electronically and from where the
complainant resides or works.
·
These Commissions will
be set up at District, State and National level, with pecuniary jurisdiction up
to Rs one crore, Rs one crore to Rs 10 crore, and above Rs 10 crore,
respectively. In case of unfair contracts, the State Commissions will hear
complaints where the value is up to Rs 10 crore, and National Commissions will
hear complaints above that value. These Commissions can declare unfair
terms of such contracts to be null and void.
·
Appeals from the
District Commissions will be heard by the State Commission, and from the State
Commission by the National Commission. Appeals from the National Commission
will be heard by the Supreme Court.
·
The Commissions will
attempt to dispose a complaint within three months, if the complaint does not
require analysis or testing of commodities. If analysis and testing is
required, the complaint will be disposed within a period of five months.
·
The District Commissions
will consist of a President and at least two members. The State and National
Commissions will consist of a President and at least four members. The
qualifications, tenure, and method of appointment and removal of the President
and members of these Commissions will be prescribed by central government
through notification.
·
The Bill also provides
for mediation cells attached to the District, State and National Commissions.
The Commissions may refer a matter for mediation if the parties consent to
settle their dispute in this manner.
Other Bodies established under the Bill
·
Central Consumer Protection Authority: The Bill sets up the Central
Consumer Protection Authority (CCPA) to promote, protect, and enforce the
rights of consumers as a class. It will be headed by a Chief Commissioner
and comprise other Commissioners. It will have an investigation arm
headed by a Director General. It may: (i) issue safety notices; (ii) pass
orders to recall goods, prevent unfair and restrictive trade practices; (iii)
reimburse purchase price paid; and (iv) impose penalties for false and
misleading advertisements. It may also file complaints before
the Consumer Disputes Redressal Commissions.
·
Consumer Protection Councils: The Bill sets up Consumer
Protection Councils (CPCs) at the district, state, and national levels as
advisory bodies. The Councils will advise on promotion and protection of
consumer rights. Under the Bill, the Central and State Council will be
headed by the Minister-in-charge of Consumer Affairs at the central and state
level, respectively. The District Council will be headed by the District
Collector.
Product Liability
·
The Bill allows a person
to make a claim of product liability against a manufacturer, seller, or service
provider for any defect in a product or deficiency in a service. A claim for
compensation may be made for any harm caused, including: (i) property damage;
(ii) personal injury, illness, or death; and (iii) mental agony or emotional
harm accompanying these conditions.
Unfair contracts
·
A contract is said to be
unfair if it causes significant change in the rights of the consumer, which
include the following: (i) requiring excessive security deposits; (ii) imposing
a disproportionate penalty for a breach in contract; (iii) refusing to accept
early repayment of debts; (iv) terminating the contract without reasonable
cause; (v) transferring a contract to a third party to the detriment of the
consumer without his consent; or (vi) imposing unreasonable charge or
obligations which put the consumer at a disadvantage.
·
The State and National
Commissions may determine if the terms of a contract are unfair and declare
such terms to be null and void.
Unfair and restrictive trade practices
·
An unfair trade practice
includes: (i) making a false statement regarding the quality or standard of a
good or service; (ii) selling of goods not complying with standards; (iii) manufacture
of spurious goods; (iv) non-issuance of a receipt for a good or service sold;
(v) refusing to withdraw or refund goods or services within 30 days; or (vi)
disclosing personal information provided by a consumer to any other person.
·
A restrictive trade
practice is one that imposes unjustified costs or restrictions on consumers,
including: (i) delays in supply that lead to increase in price; and (ii)
requiring purchase of certain goods or services as a condition for procuring
any other goods or services.
·
The CCPA may take steps
to prevent and discontinue unfair and restrictive trade practices.
The District, State or NationalCommissions may order the discontinuation
of unfair and restrictive trade practices.
Penalties
·
If a person does not
comply with the orders of the District, State or National Commissions, he may
face imprisonment up to three years, or a fine not less than Rs 25,000
extendable to Rs one lakh, or both.
·
If a person does not
comply with an order issued by the CCPA, he may face imprisonment of up to six
months, or a fine of up to Rs 20 lakh, or both.
·
For false and misleading
advertisements, a penalty of up to Rs 10 lakh may be imposed on a manufacturer
or an endorser. For a subsequent offence, the fine may extend to Rs 50
lakh. The manufacturer can also be punished with imprisonment of up to
two years, which may extend to five years in case of every subsequent offence.
·
The CCPA can also
prohibit the endorser of a misleading advertisement from endorsing any
particular product or service for a period of up to one year. For every
subsequent offence, the period of prohibition may extend to three years.
There are certain exceptions when an endorser will not be held liable for such
a penalty.
·
The CCPA may also impose
penalties for manufacturing, selling, storing, distributing or importing
adulterated products. The penalties are as follows: (i) if injury is not caused
to a consumer, the penalty would be a fine of up to Rs one lakh along with
imprisonment of up to six months; (ii) if injury is caused, penalty would be a
fine up to Rs three lakh along with imprisonment of up to one year; (iii) if
grievous hurt is caused, penalty would be a fine up to Rs five lakh along with
imprisonment up to seven years; and (iv) in case of death, penalty would be Rs
ten lakh or more along with a minimum imprisonment of seven years, extendable
to imprisonment for life.
·
The CCPA may also impose
penalties for manufacturing, selling, storing, distributing or importing
spurious goods. The penalties are as follow: (i) if injury is caused, penalty
would be a fine up to Rs three lakh along with imprisonment of up to one year;
(ii) if grievous hurt is caused, penalty would be a fine up to Rs five lakh
along with imprisonment up to seven years; and (iii) in case of death, penalty
would be Rs ten lakh or more along with a minimum imprisonment of seven years,
extendable to imprisonment for life.
Composition of the Consumer Disputes Redressal
Commissions
The
Bill sets up Consumer Disputes Redressal Commissions (consumer courts) at the
district, state and national level, as quasi-judicial bodies for adjudication
of consumer disputes. We discuss some issues with regard to the
composition of these Commissions and method of appointment of the members.
Composition of the Commissions could violate the
principle of separation of powers
The
District, State and National Consumer Disputes Redressal Commissions will
adjudicate complaints on defective goods and deficient services of varying
values. They have been given the powers of a civil court. The State
and National Commissions act as appellate bodies on the decisions of the
District and State Commissions, respectively. Appeals from the National
Commission will be heard by the Supreme Court. Therefore, these Commissions
are quasi-judicial bodies with the National Commission being on par with High
Courts.
The
Bill specifies that the Commissions will be headed by a ‘President’ and will
comprise other members. However, the Bill delegates to the central
government the power of deciding the qualifications of the President and
members. In particular, the Bill does not specify that the President or
members should have minimum judicial qualifications. This is in contrast
with the existing Consumer Protection Act, 1986, which states that the District
Commission will be headed by a person qualified to be a district judge.
Similarly, the State and National Commissions are headed by a person qualified
to be a High Court or a Supreme Court judge, respectively. The 1986 Act
also specifies the minimum qualification of members. The earlier 2015
Bill too specified judicial members to head the State and National Commissions,
though it permitted the District Commission to be headed by the district
magistrate in addition to a person qualified to be a district judge.
If the
Commissions were to have only non-judicial members, it may violate the
principle of separation of powers. One may also argue that prescribing
the qualifications through Rules may be an excessive delegation of
powers. The Supreme Court has held that in the absence of standards,
criteria or principles on the contents of rules, the powers given to the
executive may go beyond the permissible limits of valid delegation.[9]
Executive involvement in the appointment of
Commissions may affect judicial independence
The
Bill permits the central government to notify the method of appointment of
members of the Commissions. There is no requirement that the selection
involve the higher judiciary. It may be argued that allowing the
executive to determine the appointment of the members of Commissions could
affect the independent functioning of the Commissions. With regard to
Appellate Tribunals, such as the National Tax Tribunal, the Supreme Court has
held that they have similar powers and functions as that of High Courts and
hence matters related to appointment and tenure must be free from executive
involvement.[10]
The Bill is not in line with this direction of the Supreme Court.
The
1986 Act contains provisions on selection committees that would appoint members
on these Commissions. This method of selection was also specified in the
2015 Bill. These selection committees were chaired by a judicial
member. The 2018 Bill does not set up such selection committees and
leaves it to the central government to appoint members of the Commissions.
----------------------------------------------------------------------
Selection Committees under the 1986 Act, 2015 Bill
and 2018 Bill
1986 Act
|
2015 Bill
|
2018 Bill
|
|
National Commission
|
·
Comprises Supreme
Court Judge and two central government officials.
·
Head of Commission
to be appointed in consultation with Chief Justice of India.
|
·
Comprises Supreme
Court Judge and two central government officials.
·
Head of Commission
to be appointed in consultation with Chief Justice of India.
|
·
No provision for
selection committee. Central government will appoint through
notification.
|
State Commission
|
·
Comprises High
Court Judge and two state government officials.
·
Head of Commission
to be appointed in consultation with Chief Justice of High Court.
|
·
Comprises High
Court Judge and two state government officials.
·
Head of Commission
to be appointed in consultation with Chief Justice of High Court.
|
·
No provision for
selection committee. Central government will appoint through
notification.
|
District Commission
|
·
Comprises High
Court Judge and two state government officials.
|
·
No provision for
selection committee. State government appoints on the recommendation of
State Public Service Commission.
|
·
No provision for
selection committee. Central government will appoint through
notification.
|
Sources: The Consumer Protection Act,
1986; The Consumer Protection Bill, 2015; The Consumer Protection Bill, 2018;
PRS.
Composition and role of the Consumer Protection
Councils
The
Bill establishes Consumer Protection Councils (CPCs) at the district, state and
national levels, as advisory bodies. The Councils will advise on
promotion and protection of consumer rights. Under the Bill, the Central
Council and the State Council will be headed by the Minister-in-charge of
Consumer Affairs at the central and state level, respectively. The District
Council will be headed by the District Collector.
The
Bill states that these bodies shall “render advice on promotion and protection
of consumer rights”. It is unusual for a body headed by a Minister or the
District Collector (who are implementing authorities) to be given an advisory
role. Further, the Bill does not specify whom the CPCs will render the
advise to.
The
1986 Act provides for such Councils but their role is to promote and protect
consumer rights (which is not an advisory role). The Bill has vested the
Central Consumer Protection Authority with this duty.
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