NCERT Textbook - Consumer Protection | Business Studies (BST) Class 12 - Commerce PDF Download

 Page 1


chapter 
11
Learning Objectives
After studying this  
chapter, you should be 
able to:
 ¾ state the importance of 
consumer protection;
 ¾ briefly explain legal 
framework for consumer 
protection in India;
 ¾ describe consumer 
rights in India;
 ¾ briefly desc ribe the ways 
and means of consumer 
protection; and
Consumer Prote Ction Banks r esPonsiBle for f ailed 
t ransaCtions and n o Cash in atm s In a landmark consumer forum judgement, 
now, if you do not get money from ATMs, it 
would be considered as deficiency of services 
on part of bank,.On May 4, 2017, a petition in 
the Consumer Forum in Raipur was filed where 
the complainant submitted photos and video 
recording of three failed ATM transactions due 
to non-availability of cash bank’s ATMs. 
In front of the forum, the bank argued 
that ATM runs with Internet connectivity, so 
at the time when users use ATM, he/she is 
not directly the bank client. Hence, if the said 
money not withdrawn from the ATM, then it 
cannot be termed as a deficiency in service.
The forum rejected the bank’s logic 
completely. The petitioner has presented 
photo and video recording at the time of 
withdrawal as evidence in front of forum. 
Forum acknowledged that the consumers at 
various times go to ATM to withdrawn money 
every time the message of ‘cash not available’ 
is the lack in service.
The forum accepted the petition. After 
hearing the arguments of both the parties, the 
forum ordered that if the bank will not provide 
ATM service to the customer, then it will be 
considered a reduction in service Consumer 
Forum imposed a fine of Rs. 2,500 on the bank 
including Rs1,500 as compensation for mental 
harassment and Rs1,000 for legal expenses 
for non-availability of cash in its ATMs as 
deficiency in bank services. 
Source:http://dailypost.in/news/
consumer-forum-fines-sbi-ignoring-
customers/, 2017. 
Ch_11.indd   289 10-08-2022   10:03:34
Rationalised 2023-24
Page 2


chapter 
11
Learning Objectives
After studying this  
chapter, you should be 
able to:
 ¾ state the importance of 
consumer protection;
 ¾ briefly explain legal 
framework for consumer 
protection in India;
 ¾ describe consumer 
rights in India;
 ¾ briefly desc ribe the ways 
and means of consumer 
protection; and
Consumer Prote Ction Banks r esPonsiBle for f ailed 
t ransaCtions and n o Cash in atm s In a landmark consumer forum judgement, 
now, if you do not get money from ATMs, it 
would be considered as deficiency of services 
on part of bank,.On May 4, 2017, a petition in 
the Consumer Forum in Raipur was filed where 
the complainant submitted photos and video 
recording of three failed ATM transactions due 
to non-availability of cash bank’s ATMs. 
In front of the forum, the bank argued 
that ATM runs with Internet connectivity, so 
at the time when users use ATM, he/she is 
not directly the bank client. Hence, if the said 
money not withdrawn from the ATM, then it 
cannot be termed as a deficiency in service.
The forum rejected the bank’s logic 
completely. The petitioner has presented 
photo and video recording at the time of 
withdrawal as evidence in front of forum. 
Forum acknowledged that the consumers at 
various times go to ATM to withdrawn money 
every time the message of ‘cash not available’ 
is the lack in service.
The forum accepted the petition. After 
hearing the arguments of both the parties, the 
forum ordered that if the bank will not provide 
ATM service to the customer, then it will be 
considered a reduction in service Consumer 
Forum imposed a fine of Rs. 2,500 on the bank 
including Rs1,500 as compensation for mental 
harassment and Rs1,000 for legal expenses 
for non-availability of cash in its ATMs as 
deficiency in bank services. 
Source:http://dailypost.in/news/
consumer-forum-fines-sbi-ignoring-
customers/, 2017. 
Ch_11.indd   289 10-08-2022   10:03:34
Rationalised 2023-24
BUSINESS  STUDIES
290
IntroductIon Each one of us is a consumer in one 
way or another. It is important for us 
to be an aware and informed consumer 
of goods and services available to us in 
the market.The above case is just one 
of the examples of the many problems 
that consumers face in the purchase, 
use and consumption of goods and 
services. But, very few consumers 
are aware of their rights given to 
them by the Consumer Protection 
Act 2019. The Consumer Protection 
Act 20192019 has replaced the Act 
1986 and seeks to widen its scope in 
addressing consumer concerns.
Have you ever thought what 
would be the plight of consumers if 
adequate protection is not provided 
to them? With growing competition 
and in an attempt to increase 
their sales and market share, 
manufacturers, sellers and service-
providers may be tempted to engage 
in unscrupulous, exploitative and 
unfair trade practices like defective 
and unsafe products, adulteration, 
false and misleading advertising, 
hoarding, black-marketing, etc. 
This means that a consumer might 
be exposed to risks due to unsafe 
products, might suffer from bad 
health due to adulterated food 
products, might be cheated because 
of misleading advertisements or sale 
of spurious products, might have 
to pay a higher price when sellers 
engage in overpricing, hoarding or 
black-marketing, etc. As a result, 
consumer becomes unsafe, feels 
cheated and is exposed to many risks 
and health problems. 
Can business afford to ignore the 
interests of consumers? The market 
forces have changed from a seller 
market i.e., the earlier approach of 
caveat emptor which means Let the 
buyer beware, to a consumer market 
i.e., caveat venditor which implies 
Let the seller beware. A consumer 
is said to be a KING in the free 
market economy. Hence, consumer 
protection has significance for both 
consumers and business alike. Under 
the Consumer Protection Act 2019, the 
Government of India has conferred a 
legal protection to safeguard interests 
of a consumer. 
Importance of c onsumer p rotectIon The concept of consumer protection 
is to safeguard the interests of the 
consumers. It adopts measures to 
protect consumers from unethical 
malpractices by businesses and 
provide a swift redressal of their 
grievances with regard to:
1. Sale of adulterated goods such as 
adding inferior substances to the 
product being sold.
2. Sale of counterfeit goods such as 
selling a product of lesser value 
than the real product.
3. Sale of sub-standard goods such 
as the sale of products that do 
not meet the prescribed quality 
standards.
4. Sale of duplicate goods.
Ch_11.indd   290 10-08-2022   10:03:34
Rationalised 2023-24
Page 3


chapter 
11
Learning Objectives
After studying this  
chapter, you should be 
able to:
 ¾ state the importance of 
consumer protection;
 ¾ briefly explain legal 
framework for consumer 
protection in India;
 ¾ describe consumer 
rights in India;
 ¾ briefly desc ribe the ways 
and means of consumer 
protection; and
Consumer Prote Ction Banks r esPonsiBle for f ailed 
t ransaCtions and n o Cash in atm s In a landmark consumer forum judgement, 
now, if you do not get money from ATMs, it 
would be considered as deficiency of services 
on part of bank,.On May 4, 2017, a petition in 
the Consumer Forum in Raipur was filed where 
the complainant submitted photos and video 
recording of three failed ATM transactions due 
to non-availability of cash bank’s ATMs. 
In front of the forum, the bank argued 
that ATM runs with Internet connectivity, so 
at the time when users use ATM, he/she is 
not directly the bank client. Hence, if the said 
money not withdrawn from the ATM, then it 
cannot be termed as a deficiency in service.
The forum rejected the bank’s logic 
completely. The petitioner has presented 
photo and video recording at the time of 
withdrawal as evidence in front of forum. 
Forum acknowledged that the consumers at 
various times go to ATM to withdrawn money 
every time the message of ‘cash not available’ 
is the lack in service.
The forum accepted the petition. After 
hearing the arguments of both the parties, the 
forum ordered that if the bank will not provide 
ATM service to the customer, then it will be 
considered a reduction in service Consumer 
Forum imposed a fine of Rs. 2,500 on the bank 
including Rs1,500 as compensation for mental 
harassment and Rs1,000 for legal expenses 
for non-availability of cash in its ATMs as 
deficiency in bank services. 
Source:http://dailypost.in/news/
consumer-forum-fines-sbi-ignoring-
customers/, 2017. 
Ch_11.indd   289 10-08-2022   10:03:34
Rationalised 2023-24
BUSINESS  STUDIES
290
IntroductIon Each one of us is a consumer in one 
way or another. It is important for us 
to be an aware and informed consumer 
of goods and services available to us in 
the market.The above case is just one 
of the examples of the many problems 
that consumers face in the purchase, 
use and consumption of goods and 
services. But, very few consumers 
are aware of their rights given to 
them by the Consumer Protection 
Act 2019. The Consumer Protection 
Act 20192019 has replaced the Act 
1986 and seeks to widen its scope in 
addressing consumer concerns.
Have you ever thought what 
would be the plight of consumers if 
adequate protection is not provided 
to them? With growing competition 
and in an attempt to increase 
their sales and market share, 
manufacturers, sellers and service-
providers may be tempted to engage 
in unscrupulous, exploitative and 
unfair trade practices like defective 
and unsafe products, adulteration, 
false and misleading advertising, 
hoarding, black-marketing, etc. 
This means that a consumer might 
be exposed to risks due to unsafe 
products, might suffer from bad 
health due to adulterated food 
products, might be cheated because 
of misleading advertisements or sale 
of spurious products, might have 
to pay a higher price when sellers 
engage in overpricing, hoarding or 
black-marketing, etc. As a result, 
consumer becomes unsafe, feels 
cheated and is exposed to many risks 
and health problems. 
Can business afford to ignore the 
interests of consumers? The market 
forces have changed from a seller 
market i.e., the earlier approach of 
caveat emptor which means Let the 
buyer beware, to a consumer market 
i.e., caveat venditor which implies 
Let the seller beware. A consumer 
is said to be a KING in the free 
market economy. Hence, consumer 
protection has significance for both 
consumers and business alike. Under 
the Consumer Protection Act 2019, the 
Government of India has conferred a 
legal protection to safeguard interests 
of a consumer. 
Importance of c onsumer p rotectIon The concept of consumer protection 
is to safeguard the interests of the 
consumers. It adopts measures to 
protect consumers from unethical 
malpractices by businesses and 
provide a swift redressal of their 
grievances with regard to:
1. Sale of adulterated goods such as 
adding inferior substances to the 
product being sold.
2. Sale of counterfeit goods such as 
selling a product of lesser value 
than the real product.
3. Sale of sub-standard goods such 
as the sale of products that do 
not meet the prescribed quality 
standards.
4. Sale of duplicate goods.
Ch_11.indd   290 10-08-2022   10:03:34
Rationalised 2023-24
c ONSUMER pROTEc TION
291
5. Use of malfunctioning weights and 
measures that lead to underweight 
of products.
6. Black marketing and hoarding that 
eventually leads to scarcity of the 
product and well as a rise in the 
price of the same.
7. Overcharging a product, i.e., 
charging a product above its 
Maximum Retail Price.
8. Supplying of defective goods.
9. Advertisements that are 
misleading, i.e., advertisements 
that falsely claim a product or a 
service to be shown as superior 
quality, grade or standard when 
not in real.
10. Supply of inferior services, i.e., 
quality of service lesser than the 
condition agreed.
That is why we as an informed consumer 
have to wake up and save our self 
need for consumer Protection
The need for consumer protection arises 
from the need to protect consumers from 
the loss or injury or other prevailing 
malpractices and to ensure: 
1. Physical safety of a consumer.
2. Access to information.
3. Corporate Social Responsibility 
to provide quality and quantity of 
goods at fair prices.
4. Consumer satisfaction.
5. Social justice and  Trusteeship
6. Survival and the Growth of 
businesses.
from various types of exploitation and 
should complain about it. Consumer 
protection has a wide scope. It not only 
includes educating consumers about 
their rights and responsibilities, but 
also helps in getting their grievances 
redressed. It not only requires a judicial 
machinery for protecting the interests 
of consumers but also requires the 
consumers to be united and form 
themselves into consumer associations 
for protection and promotion of their 
interests. 
From consumers’ point of view
The importance of consumer protection 
from the consumers’ point of view can 
be understood from the following 
points:
 (i) Consumer Ignorance: In the 
light of widespread ignorance 
of consumers about their rights 
and reliefs available to them, it 
becomes necessary to educate 
them about the same so as to 
achieve consumer awareness.
 (ii) Unorganised Consumers:  Consumers need to be organised 
in the form of consumer 
organisations which would 
take care of their interests. 
Though, in India, we do have 
consumer organisations which 
are working in this direction, 
adequate protection is required 
to be given to consumers till 
these organisations become 
powerful enough to protect 
and promote the interests of 
consumers.
Ch_11.indd   291 10-08-2022   10:03:34
Rationalised 2023-24
Page 4


chapter 
11
Learning Objectives
After studying this  
chapter, you should be 
able to:
 ¾ state the importance of 
consumer protection;
 ¾ briefly explain legal 
framework for consumer 
protection in India;
 ¾ describe consumer 
rights in India;
 ¾ briefly desc ribe the ways 
and means of consumer 
protection; and
Consumer Prote Ction Banks r esPonsiBle for f ailed 
t ransaCtions and n o Cash in atm s In a landmark consumer forum judgement, 
now, if you do not get money from ATMs, it 
would be considered as deficiency of services 
on part of bank,.On May 4, 2017, a petition in 
the Consumer Forum in Raipur was filed where 
the complainant submitted photos and video 
recording of three failed ATM transactions due 
to non-availability of cash bank’s ATMs. 
In front of the forum, the bank argued 
that ATM runs with Internet connectivity, so 
at the time when users use ATM, he/she is 
not directly the bank client. Hence, if the said 
money not withdrawn from the ATM, then it 
cannot be termed as a deficiency in service.
The forum rejected the bank’s logic 
completely. The petitioner has presented 
photo and video recording at the time of 
withdrawal as evidence in front of forum. 
Forum acknowledged that the consumers at 
various times go to ATM to withdrawn money 
every time the message of ‘cash not available’ 
is the lack in service.
The forum accepted the petition. After 
hearing the arguments of both the parties, the 
forum ordered that if the bank will not provide 
ATM service to the customer, then it will be 
considered a reduction in service Consumer 
Forum imposed a fine of Rs. 2,500 on the bank 
including Rs1,500 as compensation for mental 
harassment and Rs1,000 for legal expenses 
for non-availability of cash in its ATMs as 
deficiency in bank services. 
Source:http://dailypost.in/news/
consumer-forum-fines-sbi-ignoring-
customers/, 2017. 
Ch_11.indd   289 10-08-2022   10:03:34
Rationalised 2023-24
BUSINESS  STUDIES
290
IntroductIon Each one of us is a consumer in one 
way or another. It is important for us 
to be an aware and informed consumer 
of goods and services available to us in 
the market.The above case is just one 
of the examples of the many problems 
that consumers face in the purchase, 
use and consumption of goods and 
services. But, very few consumers 
are aware of their rights given to 
them by the Consumer Protection 
Act 2019. The Consumer Protection 
Act 20192019 has replaced the Act 
1986 and seeks to widen its scope in 
addressing consumer concerns.
Have you ever thought what 
would be the plight of consumers if 
adequate protection is not provided 
to them? With growing competition 
and in an attempt to increase 
their sales and market share, 
manufacturers, sellers and service-
providers may be tempted to engage 
in unscrupulous, exploitative and 
unfair trade practices like defective 
and unsafe products, adulteration, 
false and misleading advertising, 
hoarding, black-marketing, etc. 
This means that a consumer might 
be exposed to risks due to unsafe 
products, might suffer from bad 
health due to adulterated food 
products, might be cheated because 
of misleading advertisements or sale 
of spurious products, might have 
to pay a higher price when sellers 
engage in overpricing, hoarding or 
black-marketing, etc. As a result, 
consumer becomes unsafe, feels 
cheated and is exposed to many risks 
and health problems. 
Can business afford to ignore the 
interests of consumers? The market 
forces have changed from a seller 
market i.e., the earlier approach of 
caveat emptor which means Let the 
buyer beware, to a consumer market 
i.e., caveat venditor which implies 
Let the seller beware. A consumer 
is said to be a KING in the free 
market economy. Hence, consumer 
protection has significance for both 
consumers and business alike. Under 
the Consumer Protection Act 2019, the 
Government of India has conferred a 
legal protection to safeguard interests 
of a consumer. 
Importance of c onsumer p rotectIon The concept of consumer protection 
is to safeguard the interests of the 
consumers. It adopts measures to 
protect consumers from unethical 
malpractices by businesses and 
provide a swift redressal of their 
grievances with regard to:
1. Sale of adulterated goods such as 
adding inferior substances to the 
product being sold.
2. Sale of counterfeit goods such as 
selling a product of lesser value 
than the real product.
3. Sale of sub-standard goods such 
as the sale of products that do 
not meet the prescribed quality 
standards.
4. Sale of duplicate goods.
Ch_11.indd   290 10-08-2022   10:03:34
Rationalised 2023-24
c ONSUMER pROTEc TION
291
5. Use of malfunctioning weights and 
measures that lead to underweight 
of products.
6. Black marketing and hoarding that 
eventually leads to scarcity of the 
product and well as a rise in the 
price of the same.
7. Overcharging a product, i.e., 
charging a product above its 
Maximum Retail Price.
8. Supplying of defective goods.
9. Advertisements that are 
misleading, i.e., advertisements 
that falsely claim a product or a 
service to be shown as superior 
quality, grade or standard when 
not in real.
10. Supply of inferior services, i.e., 
quality of service lesser than the 
condition agreed.
That is why we as an informed consumer 
have to wake up and save our self 
need for consumer Protection
The need for consumer protection arises 
from the need to protect consumers from 
the loss or injury or other prevailing 
malpractices and to ensure: 
1. Physical safety of a consumer.
2. Access to information.
3. Corporate Social Responsibility 
to provide quality and quantity of 
goods at fair prices.
4. Consumer satisfaction.
5. Social justice and  Trusteeship
6. Survival and the Growth of 
businesses.
from various types of exploitation and 
should complain about it. Consumer 
protection has a wide scope. It not only 
includes educating consumers about 
their rights and responsibilities, but 
also helps in getting their grievances 
redressed. It not only requires a judicial 
machinery for protecting the interests 
of consumers but also requires the 
consumers to be united and form 
themselves into consumer associations 
for protection and promotion of their 
interests. 
From consumers’ point of view
The importance of consumer protection 
from the consumers’ point of view can 
be understood from the following 
points:
 (i) Consumer Ignorance: In the 
light of widespread ignorance 
of consumers about their rights 
and reliefs available to them, it 
becomes necessary to educate 
them about the same so as to 
achieve consumer awareness.
 (ii) Unorganised Consumers:  Consumers need to be organised 
in the form of consumer 
organisations which would 
take care of their interests. 
Though, in India, we do have 
consumer organisations which 
are working in this direction, 
adequate protection is required 
to be given to consumers till 
these organisations become 
powerful enough to protect 
and promote the interests of 
consumers.
Ch_11.indd   291 10-08-2022   10:03:34
Rationalised 2023-24
BUSINESS  STUDIES
292
Compensation for impurities in cold drinks
 (iii) Widespread Exploitation of 
Consumers: Consumers might 
be exploited by unscrupulous, 
exploitative and unfair trade 
practices like defective and 
unsafe products, adulteration, 
false and misleading advertising, 
hoarding, black- marketing, 
etc. Consumers need protection 
against such malpractices of the 
sellers.
From the point of view of Business
A business must also lay emphasis 
on protecting the consumers and 
adequately satisfying them. This is 
important because of the following 
reasons:
 (i) Long-term Interest of 
Business: Enlightened 
businesses realise that it is 
in their long-term interest to 
satisfy their customers. Satisfied 
customers not only lead to 
repeat sales but also provide 
good feedback to prospective 
customers and thus, help in 
increasing the customer-base of 
business. Thus, business firms 
should aim at long-term profit 
maximisation through customer 
satisfaction.
Ch_11.indd   292 10-08-2022   10:03:34
Rationalised 2023-24
Page 5


chapter 
11
Learning Objectives
After studying this  
chapter, you should be 
able to:
 ¾ state the importance of 
consumer protection;
 ¾ briefly explain legal 
framework for consumer 
protection in India;
 ¾ describe consumer 
rights in India;
 ¾ briefly desc ribe the ways 
and means of consumer 
protection; and
Consumer Prote Ction Banks r esPonsiBle for f ailed 
t ransaCtions and n o Cash in atm s In a landmark consumer forum judgement, 
now, if you do not get money from ATMs, it 
would be considered as deficiency of services 
on part of bank,.On May 4, 2017, a petition in 
the Consumer Forum in Raipur was filed where 
the complainant submitted photos and video 
recording of three failed ATM transactions due 
to non-availability of cash bank’s ATMs. 
In front of the forum, the bank argued 
that ATM runs with Internet connectivity, so 
at the time when users use ATM, he/she is 
not directly the bank client. Hence, if the said 
money not withdrawn from the ATM, then it 
cannot be termed as a deficiency in service.
The forum rejected the bank’s logic 
completely. The petitioner has presented 
photo and video recording at the time of 
withdrawal as evidence in front of forum. 
Forum acknowledged that the consumers at 
various times go to ATM to withdrawn money 
every time the message of ‘cash not available’ 
is the lack in service.
The forum accepted the petition. After 
hearing the arguments of both the parties, the 
forum ordered that if the bank will not provide 
ATM service to the customer, then it will be 
considered a reduction in service Consumer 
Forum imposed a fine of Rs. 2,500 on the bank 
including Rs1,500 as compensation for mental 
harassment and Rs1,000 for legal expenses 
for non-availability of cash in its ATMs as 
deficiency in bank services. 
Source:http://dailypost.in/news/
consumer-forum-fines-sbi-ignoring-
customers/, 2017. 
Ch_11.indd   289 10-08-2022   10:03:34
Rationalised 2023-24
BUSINESS  STUDIES
290
IntroductIon Each one of us is a consumer in one 
way or another. It is important for us 
to be an aware and informed consumer 
of goods and services available to us in 
the market.The above case is just one 
of the examples of the many problems 
that consumers face in the purchase, 
use and consumption of goods and 
services. But, very few consumers 
are aware of their rights given to 
them by the Consumer Protection 
Act 2019. The Consumer Protection 
Act 20192019 has replaced the Act 
1986 and seeks to widen its scope in 
addressing consumer concerns.
Have you ever thought what 
would be the plight of consumers if 
adequate protection is not provided 
to them? With growing competition 
and in an attempt to increase 
their sales and market share, 
manufacturers, sellers and service-
providers may be tempted to engage 
in unscrupulous, exploitative and 
unfair trade practices like defective 
and unsafe products, adulteration, 
false and misleading advertising, 
hoarding, black-marketing, etc. 
This means that a consumer might 
be exposed to risks due to unsafe 
products, might suffer from bad 
health due to adulterated food 
products, might be cheated because 
of misleading advertisements or sale 
of spurious products, might have 
to pay a higher price when sellers 
engage in overpricing, hoarding or 
black-marketing, etc. As a result, 
consumer becomes unsafe, feels 
cheated and is exposed to many risks 
and health problems. 
Can business afford to ignore the 
interests of consumers? The market 
forces have changed from a seller 
market i.e., the earlier approach of 
caveat emptor which means Let the 
buyer beware, to a consumer market 
i.e., caveat venditor which implies 
Let the seller beware. A consumer 
is said to be a KING in the free 
market economy. Hence, consumer 
protection has significance for both 
consumers and business alike. Under 
the Consumer Protection Act 2019, the 
Government of India has conferred a 
legal protection to safeguard interests 
of a consumer. 
Importance of c onsumer p rotectIon The concept of consumer protection 
is to safeguard the interests of the 
consumers. It adopts measures to 
protect consumers from unethical 
malpractices by businesses and 
provide a swift redressal of their 
grievances with regard to:
1. Sale of adulterated goods such as 
adding inferior substances to the 
product being sold.
2. Sale of counterfeit goods such as 
selling a product of lesser value 
than the real product.
3. Sale of sub-standard goods such 
as the sale of products that do 
not meet the prescribed quality 
standards.
4. Sale of duplicate goods.
Ch_11.indd   290 10-08-2022   10:03:34
Rationalised 2023-24
c ONSUMER pROTEc TION
291
5. Use of malfunctioning weights and 
measures that lead to underweight 
of products.
6. Black marketing and hoarding that 
eventually leads to scarcity of the 
product and well as a rise in the 
price of the same.
7. Overcharging a product, i.e., 
charging a product above its 
Maximum Retail Price.
8. Supplying of defective goods.
9. Advertisements that are 
misleading, i.e., advertisements 
that falsely claim a product or a 
service to be shown as superior 
quality, grade or standard when 
not in real.
10. Supply of inferior services, i.e., 
quality of service lesser than the 
condition agreed.
That is why we as an informed consumer 
have to wake up and save our self 
need for consumer Protection
The need for consumer protection arises 
from the need to protect consumers from 
the loss or injury or other prevailing 
malpractices and to ensure: 
1. Physical safety of a consumer.
2. Access to information.
3. Corporate Social Responsibility 
to provide quality and quantity of 
goods at fair prices.
4. Consumer satisfaction.
5. Social justice and  Trusteeship
6. Survival and the Growth of 
businesses.
from various types of exploitation and 
should complain about it. Consumer 
protection has a wide scope. It not only 
includes educating consumers about 
their rights and responsibilities, but 
also helps in getting their grievances 
redressed. It not only requires a judicial 
machinery for protecting the interests 
of consumers but also requires the 
consumers to be united and form 
themselves into consumer associations 
for protection and promotion of their 
interests. 
From consumers’ point of view
The importance of consumer protection 
from the consumers’ point of view can 
be understood from the following 
points:
 (i) Consumer Ignorance: In the 
light of widespread ignorance 
of consumers about their rights 
and reliefs available to them, it 
becomes necessary to educate 
them about the same so as to 
achieve consumer awareness.
 (ii) Unorganised Consumers:  Consumers need to be organised 
in the form of consumer 
organisations which would 
take care of their interests. 
Though, in India, we do have 
consumer organisations which 
are working in this direction, 
adequate protection is required 
to be given to consumers till 
these organisations become 
powerful enough to protect 
and promote the interests of 
consumers.
Ch_11.indd   291 10-08-2022   10:03:34
Rationalised 2023-24
BUSINESS  STUDIES
292
Compensation for impurities in cold drinks
 (iii) Widespread Exploitation of 
Consumers: Consumers might 
be exploited by unscrupulous, 
exploitative and unfair trade 
practices like defective and 
unsafe products, adulteration, 
false and misleading advertising, 
hoarding, black- marketing, 
etc. Consumers need protection 
against such malpractices of the 
sellers.
From the point of view of Business
A business must also lay emphasis 
on protecting the consumers and 
adequately satisfying them. This is 
important because of the following 
reasons:
 (i) Long-term Interest of 
Business: Enlightened 
businesses realise that it is 
in their long-term interest to 
satisfy their customers. Satisfied 
customers not only lead to 
repeat sales but also provide 
good feedback to prospective 
customers and thus, help in 
increasing the customer-base of 
business. Thus, business firms 
should aim at long-term profit 
maximisation through customer 
satisfaction.
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c ONSUMER pROTEc TION
293
 (ii) Business uses Society’s 
Resources: Business 
organisations use resources 
which belong to the society. 
They, thus, have a responsibility 
to supply such products and 
render such services which are 
in public interest and would 
not impair public confidence in 
them.
 (iii) Social Responsibility:  A 
business has social 
responsibilities towards various 
interest groups. Business 
organisations make money by 
selling goods and providing 
services to consumers. Thus, 
consumers form an important 
group among the many stake-
holders of business and like 
other stakeholders, their interest 
has to be well taken care of.
 (iv) Moral Justification: It is the 
moral duty of any business to 
take care of consumer’s interest 
and avoid any form of their 
exploitation. Thus, a business 
must avoid unscrupulous, 
exploitative and unfair trade 
practices like defective and 
unsafe products, adulteration, 
false and misleading advertising, 
hoarding, black marketing, etc.
 (v) Government Intervention: A 
business engaging in any form 
of exploitative trade practices 
would invite government 
intervention or action. This 
can impair and tarnish the 
image of the company. Thus, 
it is advisable that business 
organisations voluntarily resort 
to such practices where the 
customers’ needs and interests 
will well be taken care of.
t he c onsumer p rotect Ion a ct , 2019
The Consumer protection Act 2019 
seeks to protect and promote the 
consumers’ interest through speedy 
and inexpensive redressal of their 
grievances. It extends to the whole of 
India. It is applicable to all types of 
businesses whether a manufacturer 
or a trader and whether supplying 
goods or providing servicesincluding 
e-commerce firms. The Act confers 
certain rights to consumers with a view 
to empowering them and to protect 
their interests.
Who Is a c onsumer ?
A ‘consumer’ is generally understood 
as a person who uses or consumes 
goods or avails of any service. Under 
the Consumer Protection Act 2019, 
a consumer is a person who buys 
any goods or avails services for a 
consideration, which has been paid 
or promised, or partly paid and partly 
promised, or under any scheme of 
deferred payment. It includes any 
user of such goods or beneficiary of 
services if such use is made with the 
approval of the buyer. It applies to 
both offline and online transactions 
through electronic means or by 
teleshopping or direct selling or 
multilevel marketing. However, any 
person who obtains goods or avails 
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