Consumer Protection | Management Optional Notes for UPSC PDF Download

Introduction

• The consumer movement significantly influences the socio-economic environment of business. Imperfections in both product and factor markets often lead to the exploitation of consumers. In countries like India, a large portion of the population is illiterate, poorly informed, and has limited purchasing power. Critical goods are frequently in short supply, necessitating the government's active role in safeguarding consumer interests by fostering fair competition and influencing business decisions.
• The Central Government has already implemented legislative measures to protect Indian consumers. There is a growing concern for consumer protection in India, leading to various enactments aimed at safeguarding consumers. This unit explores the evolution of the consumer movement, including the development of consumer protection laws. Additionally, it delves into the rights and responsibilities of consumers.

Evolution of The Consumer Movement

• Consumer exploitation through unfair business practices is not a recent phenomenon. The industrial revolution, population shifts from rural to urban areas, and the anonymity of urban living provided ample opportunities for malpractices by businesses. In India, consumer exploitation has become a serious issue due to the increasing population and a demand for goods and services that often exceeds supply, creating a near seller's market. Consumers, having weak bargaining power, find it challenging to assert their rights, leading businesses to engage in unfair practices.
• To address this, the Indian Government has enacted several laws, including the Sales of Goods Act, 1930; The Drugs and Cosmetics Act, 1940; Prevention of Food Adulteration Act, 1954; The Essential Commodities Act, 1955; The Indian Standards Institution Certification Act, 1952; Agricultural Products and Grading and Marketing (AGMARK) Act, 1937; The Standards of Weights and Measures Act, 1956; and Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act, 1980. While these laws aim to protect consumers in terms of price, quality, service, information, and safety, their implementation leaves much to be desired.
• The MRTP Act, 1969, with amendments in 1984, initially addressed consumer protection but fell short in certain aspects. Recognizing the need for more comprehensive legislation, the Consumer Protection Act, 1986, was enacted as a unique measure to safeguard consumers.
• In addition to legislative measures, consumer education and organization for collective action are necessary. Despite progress in the United States, the consumer movement in India has not advanced significantly. However, internationally, consumer movements have gained strength in countries like Norway, Sweden, Netherlands, Australia, and the United Kingdom. The United Nations General Assembly adopted guidelines on consumer protection in 1985, covering aspects such as physical safety, economic interests, access to information, redressal of grievances, distribution of goods and services, product and performance standards, fair business practices, and international cooperation.
• Developing countries, including India, have taken steps to protect consumer interests, with governmental agencies and voluntary consumer associations playing a role. Although the consumer movement in India is still in its early stages, it is steadily progressing. Consumer awareness of existing protection laws is crucial for the movement's success.

Consumer Rights And Responsibilities 

Understanding the various rights granted to consumers is crucial for their self-protection. These rights are not mere social norms; many of them now carry legal backing through consumer protection laws and judicial decisions. The Consumer Protection Act of 1986 in India recognizes six key consumer rights in Section 6:

• Right to Safety: This entails protection against goods and services that pose hazards to life and property, covering various risks associated with products like electrical appliances, drugs, and pressure cookers.
• Right to be Informed: Consumers have the right to detailed information about the quality, quantity, potency, purity, standard, and price of goods and services, protecting them from unfair trade practices.
• Right to Choose: Ensures access to a variety of goods and services at competitive prices, allowing consumers to make informed choices without succumbing to high-pressure sales tactics.
• Right to be Heard: Consumers are entitled to have their interests considered at appropriate forums, including the right to protest against defects in goods or deficiencies in services.
• Right to Seek Redressal: This involves the consumer's right to a fair settlement of legitimate claims, including compensation for misrepresentation or substandard goods and services.
• Right to Consumer Education: Consumers have the right to acquire knowledge and skills to make informed decisions, protecting themselves from fraudulent information and understanding their legal rights.

Additionally, there are other rights:

• Right to a Healthy Environment: Ensures protection against environmental pollution, enhancing citizens' quality of life.
• Right to Satisfaction of Basic Needs: Grants access to essential goods and services like food, clothing, shelter, healthcare, education, and sanitation.

Duties and Responsibilities of Consumers

Consumer rights come with corresponding duties. Consumers have duties related to the enforcement of their rights and responsibilities towards other consumers. These include:

• Being cautious about the quality of goods while purchasing and ensuring they are free of defects.
• Insisting on comprehensive information about products or services before making a choice.
• Inspecting various goods before making a decision, especially in a competitive market.
• Participating in consumer associations and making complaints to appropriate authorities for genuine grievances.
• Acquiring knowledge about different rights and duties, contributing to overcoming consumer ignorance.

Additionally, consumers have social and ecological responsibilities, making responsible choices that consider the impact on society and the environment. Irresponsible consumption can lead to waste of resources, energy, and environmental pollution, affecting others' rights to a healthy environment. Therefore, consumers must be mindful that their choices impact others and the environment.

Consumer Protection Act, 1986

Various enactments were discussed, each having a bearing on the protection of consumer interests. However, these laws primarily offered relief in specific situations, lacking comprehensive coverage of consumer rights. The doctrine of caveat emptor, or "let the buyer beware," persisted, leaving consumers without effective remedies. With the introduction of the Consumer Protection Act, 1986, the scenario has significantly shifted, providing consumers with avenues to address grievances against businesses.

Salient Features of the Consumer Protection Act, 1986

The Consumer Protection Act, 1986, exhibits several key features:

• It aims to offer comprehensive protection to consumers.
• Applicable throughout India, excluding Jammu and Kashmir.
• Covers all goods and services unless expressly exempted by the Central Government.
• Recognized as a progressive piece of social welfare legislation, often termed the magna carta of Indian consumers.
• Provides effective safeguards against exploitation, including defective goods, deficient services, and unfair trade practices.
• Establishes a three-tier consumer grievance redressal machinery, comprising District Forums, State Commissions, and the National Commission, each functioning as quasi-judicial bodies.
• Redressal Forums operate without strict technicalities, adhering to basic principles of natural justice. No court fees are required.
• Ensures simple, speedy, and cost-effective resolution of consumer grievances related to defective goods or deficient services.
• Simplifies the complaint filing process, allowing consumers to express grievances in a straightforward manner without the need for formalities or legal representation.
• Defines 'service' comprehensively, encompassing various categories, but excludes services rendered free of charge or under personal service contracts.
• Sets a time frame for case disposal, ensuring swift resolution.
• Allows for 'class action' complaints, enabling groups of consumers with common interests to file complaints.
• Covers complaints related to unfair trade practices, allowing consumers to directly address issues such as food adulteration and overcharging.
• Encourages consumer resistance and education through the formation of Consumer Protection Councils in each state, promoting the six consumer rights outlined in Section 6 of the Act.

Definitions of Certain Expressions used in the Act

Understanding key terms is crucial for comprehending the provisions of the Act:

• Consumer: Encompasses buyers of goods or services, those hiring services, or beneficiaries of services, excluding those obtaining goods for resale or commercial purposes.
• Consumer dispute: Involves a dispute where the accused denies or disputes the allegations in the complaint.
• Defect: Refers to faults, imperfections, or shortcomings in the quality, quantity, potency, purity, or standard of goods.
• Deficiency: Corresponding to 'defect' for goods, 'deficiency' applies to services, denoting faults, imperfections, or shortcomings in service quality, nature, or manner.
• District Forum: A Consumer Disputes Redressal Forum established at the district level.
• Goods: Defined as per the Sales of Goods Act, 1930, encompassing movable property, excluding actionable claims and money.
• Manufacturer: Includes those making or assembling goods, putting their mark on goods made by others, or dispatching goods with claimed ownership.
• National Commission: Refers to the National Consumer Disputes Redressal Commission established by the Central Government.
• Person: Includes firms, Hindu Undivided Families, and other associations of persons.
• Restrictive Trade Practice: Any trade practice requiring consumers to buy certain goods or services as a condition for purchasing others.
• Service: Encompasses services made available to potential users, excluding those rendered free of charge or under personal service contracts.
• State Commission: Denotes a Consumer Disputes Redressal Commission established by the State Government.
• Trader: Someone selling or distributing goods, including the manufacturer; in packaged goods, it includes the packer.
• Unfair Trade Practice: Involves adopting unfair methods or deceptive practices to promote the sale, use, or supply of goods or services.

No Relief to Consumers in the case of Unfair and Restrictive Trade Practices

• For unfair and restrictive trade practices, the district forum can only order discontinuation, with no additional relief for consumers.
• Persons who can File a Complaint under the Act

The Act allows the following categories of individuals to file a complaint:

• Consumer
• Voluntary consumer associations registered under applicable laws
• Central Government
• State Government
• One or more consumers with common interests