Consumer Protection in India: How is it construed by the Legislature and the Judiciary?
This Blog is written by Raman Poonia from VGU School of Law, Vivekananda Global University, Jaipur. Edited by Pranoy Singhla.
The contemporary era is marked as the era of consumers. No country can knowingly or unknowingly disregard the interest of the consumers. This can be argued on the basis of fast enactment of consumer protection laws in almost all part of the world. Apart from the consumer protection laws in developed world, we could find the accelerated rate of lawmaking or consumers in developing countries like Thailand, Sri Lanka, Korea, Mongolia, Philippines, Mauritius, China, Taiwan, Nepal, Indonesia, Malaysia and other countries. India is not an exception to this rule. The Consumer Protection Act, 1986 is one of the examples that is to be treated as a milestone in the history of socioeconomic legislation to protect the interests of the consumers in India. The legislation to protect and advance the interest of consumers in India was finally materialized after in-depth study of consumer protection laws operating in other countries and in consultation with representatives of consumers, trade and industrial segments of India and abroad. In order to better serve the interests of the consumer and to settle their disputes, Consumer Council and other authoritative mechanism are also being established. The growing interdependence of the world economy and international character of many business practices have contributed to the development of universal emphasis on consumer rights protection and promotion. Consumers, clients and customers world wide are demanding value for money in the form of quality goods and better services. Modern technological developments have no doubt made a great impact on the quality, availability and safety of goods and services. But the fact of life is that the consumers are still victims of unscrupulous and exploitative practices. Exploitation of consumers assumes numerous forms such as adulteration of food, spurious drugs, dubious hire purchase plans, high prices, poor quality, deficient services, deceptiveadvertisements, hazardous products, black marketing and many more. In addition, with revolution in information technology newer kinds of challenges are thrown on the consumer like cyber crimes, plastic money etc., which affect the consumer in even bigger way. ‘Consumer is sovereign’ and ‘customer is the king’ are nothing more than myths in the present scenario particularly in the developing societies. However, it has been realized and rightly so that the consumer protection is a socio- economic programme to be persued by the government as well as the business as the satisfaction of the consumers is in the interest of both. In this context, the government, however, has a primary responsibility to protect the consumers’ interests and rights through appropriate policy measures, legal structure and administrative framework.
SIGNIFICANCE OF THIS DEVELOPMENT:
Consumer Protection Act provides Consumer Rights to prevent consumers from fraud or specified unfair practices. These rights ensure that consumers can make better choices in the marketplace and get help with complaints.
1. Right to Safety:
Meaning: Consumers has the right to be protected against products and services which are hazardous to health, life and property. The requirement from products and services: Quality, Quantity, Reliability and Performance should be assured in the products and services provided by sellers.
Example: Electrical appliances without ISI mark may cause serious injuries. While offering iron into the market, the uses of iron should be mentioned with that product.
The other four Consumer Protection Rights are as follows:
2. Right to Get Information: This is an act to give for setting out the practical management of Right to information for citizens to acquire the data under control of public jurisdictions, in order to develop clarity and responsibility in the working of every public authority, the organisation of a central information Commission and State Information.
3. Right to Choose: The meaning of Right to Choose as per the Consumer Protection Act 1986 is ‘the right to be assured, wherever possible, to have access to a variety of goods and services at competitive prices’.
4. Right to be Heard: This right says that the complaints of customers should be understood by the seller. And it also allows them to be heard before the sessions and consumer panels. Right to be heard is one of the rights granted to consumers by the consumer protection act.
5. Right to Seek redressal: Right to seek redressal against illegal trade systems or unfair exploitation of consumers. It also involves the right to a reasonable settlement of the legitimate complaints of the consumer. They should be well aware of their rights and must execute them.
6. Right to Consumer Education: The right to obtain the knowledge and skill to be an acquainted consumer throughout life. Ignorance of consumers, especially of rural consumers, is chiefly accountable for their exploitation. They should be well aware of their rights and must execute them.
From the consumer point of view:
To shape Consumers– Indian customers are not well-organised, and vendors exploit them easily.
Impart Market Information- Most of the consumer is clueless, and have no information about the product they are buying and this might cause them losses.
Physical Safety- Some products are adulterated and can hamper consumer health. So, they need to be protected.
Avert Monopoly- Irrespective of different restriction many organisation follows monopoly practice and consumers gets influenced and should be protected.
Malpractices- Company pursues biased trade practices, and unlawful trade practices and this protection plays a crucial role.
Misleading advertisement- Many enterprises, intentionally trick consumers through incorrect or deceptive advertisements. This act will shield consumers from getting exploited.
Education Consumers about their Basic Rights- Most consumers ignore or do not know about their rights. The Consumer Protect Act educates them and secures their rights and interests.
The Consumer Protection Act (hereinafter referred as CPA), 2019 is a significant positive development to ensure that consumers’ rights are protected. However, as the CPA, 2019 applies to all industries, goods and services, the legislation may cause an overlap in claims for certain sectors which are already specifically regulated. The medical device industry happens to be one of them. As a result, at least in clear cases of overlap between the CPA, 2019 and MDR, the provisions of the MDR should ideally take precedence. This will ensure both the protection of consumer rights as well as providing a more conducive business environment for the medical device industry. At the CCPA’s level, the CPA, 2019 already provides the option for the CCPA to forward any reports of prima facie cases to relevant sectoral regulators. If this option is used liberally, especially with respect to medical device claims, the process may in turn be beneficial for the consumer, as it widens the avenues for a consumer to raise a claim, while also being assured of a more structured process overseen by a sectoral regulator for resolution.
Section 21(2) and Section 89 of the 2019 Act provides the Central Authority with the power to impose a penalty in respect of any false or misleading advertisement, by a manufacturer or an endorser, it may, by order, impose on manufacturer or endorser a penalty which may extend to ten lakh rupees. Apart from this, a separate chapter (Chapter VII) for offences and penalties has been introduced where detailed penalties and punishments have been mentioned in relation to non-compliance, or manufacturing for sale or storing, selling or distributing or importing products that are adulterated or spurious.
The Consumer Protection (E-Commerce) Rules, 2020 which are mandatory and are not advisories, lay down all the important information relating to the e-commerce entities keeping in mind both the consumer and the product/service provider. Key highlights are:
E-commerce entities according to Rule 5 are required to provide information to consumers, relating to return, refund, exchange, warranty and guarantee, delivery and shipment, modes of payment, grievance redressal mechanism, payment methods, security of payment methods, charge-back options and country of origin. These platforms will have to acknowledge the receipt of any consumer complaint within 48 hoursand redress the complaint within one month from the date of receipt. They will also have to appoint a grievance officer for consumer grievance redressal.
Sellers cannot refuse to take back goods or withdraw services or refuse refunds,if such goods or services are defective, deficient, delivered late, or if they do not meet the description on the platform. The rules also prohibit the e-commerce companies from manipulating the priceof the goods or services to gain unreasonable profit through unjustified prices.
As per the Consumer Protection (Consumer Disputes Redressal Commissions) Rules, 2020 which came into force on 20th July 2020, the amount of fee payable for filing the complaint in the District Commission up to Rs 5 lakhs has been made Nil according to Rule 7. The credit of the amount due to unidentifiable consumers will go to the Consumer Welfare Fund(CWF).
State Commissions will furnish information to the Central Government on a quarterly basis on vacancies, disposal, the pendency of cases and other matters. Apart from these general rules, there are Central Consumer Protection Council Rules, provided for the constitution of the Central Consumer Protection Council(CCPC). It will be an advisory body on consumer issues, headed by the Union Minister of Consumer Affairs, Food and Public Distribution with the Minister of State as Vice Chairperson and 34 other members from different fields. It will have a three-year tenure and will have Minister-in-charge of consumer affairs from two States from each region: North, South, East, West, and North-East Region.
In order to have a better understanding of the concepts have a glance over some of the landmark judgments given by our Courts according to the Consumer Protection Act, 1986 which is now repealed but the guidelines laid down in those cases helped in framing the new Consumer Protection Act, 2019.
The Delhi High Court while examining the concept of advertisement decided the case of, Horlicks Ltd. v. Zydus Wellness Products Ltd., 2020 SCC OnLine Del 873
The High Court passed an interim order restraining Zydus from telecasting its advertisement comparing Complan to Horlicks on the grounds that the same was misleading and disparaging. The Court relied on various judgments on misleading advertisements, disparagement and law governing publication of advertisements on television. Major decisions were:
Dabur (India) Ltd. v. Colortek (Meghalaya) (P) Ltd., 2010 SCC OnLine Del 391
The Delhi High Court culled out the principles governing disparagement in the advertisements and held:
On the basis of the law laid down by the Supreme Court, the guiding principles for us should be the following:
(i) An advertisement is commercial speech and is protected by Article 19(1)(a) of the Constitution.
(ii) An advertisement must not be false, misleading, unfair or deceptive.
(iii) Of course, there would be some grey areas but these need not necessarily be taken as serious representations of fact but only as glorifying one’s product.
To this extent, in my opinion, the protection of Article 19(1)(a) of the Constitution is available. However, if an advertisement extends beyond the grey areas and becomes a false, misleading, unfair or deceptive advertisement, it would certainly not have the benefit of any protection.
Pepsi Co. Inc. v. Hindustan Coca Cola Ltd., 2003 SCC OnLine Del 802
In Pepsi Co. it was held that certain factors had to be kept in mind while deciding the question of disparagement. Those factors were:
(i) Intent of the commercial.
(ii) Manner of the commercial, and
(iii) Story line of the commercial and the message sought to be conveyed.
These factors were amplified or restated in the following terms:
“(1) The intent of the advertisement – this can be understood from its story line and the message sought to be conveyed.
(2) The overall effect of the advertisement – does it promote the advertiser’s product or does it disparage or denigrate a rival product?
In this context it must be kept in mind that while promoting its product, the advertiser may, while comparing it with a rival or a competing product, make an unfavorable comparison but that might not necessarily affect the story line and message of the advertised product or have that as its overall effect.
(3) The manner of advertising – is the comparison by and large truthful or does it falsely denigrate or disparage a rival product? While truthful disparagement is permissible, untruthful disparagement is not permissible.”
In Connaught Plaza Restaurants Ltd. Kapil Mitra, 2020 SCC OnLine NCDRC 192
The complainant/respondent had participated in Mc Donald’s widely published scheme ‘Mc Donald’s Mein Khao Har Bar Prize Le Jao’ by placing two separate orders worth Rs 81. It was alleged by the complainant that Connaught Plaza Restaurants Ltd. (CPRL) a franchisee running Mc Donald restaurants has indulged in unfair trade practices by not giving the assured prizes as per the scheme, rather put the participants under the obligation to make a further purchase of a minimum Rs 20 in order to avail free French Fries. Also, the complainant had to send two SMS giving the coupon numbers, for which Rs 3 per SMS were charged. Moreover, the details of the entire scheme with its terms and conditions and the result of the winners were also concealed from the participating customers. Therefore, the complainant filed a consumer complaint before the District Forum praying to declare the scheme as unfair trade practice and that Connaught Plaza Restaurants Ltd. be directed to disclose the entire scheme and winners of the prizes. The District Forum allowed the complaint and awarded compensation and costs to the complainant of Rs. 10,000 and Rs.2,000.
Aggrieved, CPRL filed an appeal before the State Commission, but the State Commission modified the order of the District Forum by enhancing the compensation and awarding punitive damages to the tune of Rs. 2,00,000 and Rs. 10,00,000.
CPRL then appealed before the NCDRC. The NCDRC held that no proof had been filed by the complainant that CPRL had collected the SMS charges or that it had an agreement with the Telecom Company/Service provider on sharing of SMS charges. Thus, the order of the State Commission could not be sustained on those grounds. On the other hand, it held that it is also true that the scheme was an unfair trade practice followed by Connaught Plaza Restaurants Ltd. This fact having been established by the concurrent findings given by the District and the State Commission. The complainant and other similar customers who may not have come forward to file a complaint need to be granted relief. Partly allowing the appeal, the NCDRC reduced the amount of compensation to Rs. 30,000 and costs to Rs. 70,000 respectively.
The National Consumer Disputes Redressal Commission (NCDRC) in the recent case of, Ernakulam Medical Centre P.R. Jayasree, 2020 SCC Online NCDRC 490 observed that, “Releasing a dead body by a hospital to an unrelated third person unquestionably constitutes ‘deficiency in service’ within the meaning of Section 2(1)(g) and (o) of Consumer Protection Act, 1986.”
Recently, the Supreme Court in a judgment laid emphasis on the role of NCDRC in Union of India N.K. Srivastava, 2020 SCC OnLine SC 636, wherein the Court had dismissed an appeal which had aroused from an order of the National Consumer Disputes Redressal Commission. The complaint alleged medical negligence against Sarvodaya Hospital and Safdarjung Hospital. The NCDRC allowed the revision of Sarvodaya Hospital. While exonerating it of the finding of medical negligence, it held Safdarjung Hospital liable to pay the compensation of Rs 2 lakhs imposed by the State Consumer Disputes Redressal Commission.
The District Forum had dismissed the consumer complaint stating that there was no deficiency on the part of Sarvodaya Hospital in referring the complainant to a specialized facility. An appeal was filed before the State Consumer Disputes Redressal Commission by the original complainant. The SCDRC, by its judgment concluded that Sarvodaya Hospital was guilty of medical negligence and directed it to pay a sum of Rs 2 lakhs as compensation and costs quantified at Rs 20,000. However, the complaint was held not to be maintainable against Safdarjung Hospital. A revision was filed against the judgment of the SCDRC by Sarvodaya Hospital before the NCDRC which allowed the revision and came to the conclusion that Sarvodaya Hospital was not guilty of medical negligence, however, the NCDRC elaborated on the question as to whether Safdarjung Hospital had been correctly exonerated. The NCDRC held that though the complainant had not filed a revision against the order of the SCDRC specifically holding that Safdarjung Hospital was not amenable to the jurisdiction of the consumer fora, he was not precluded from challenging a finding which was adverse to him in the revision petition. On these facts, the NCDRC sustained the finding of medical negligence against Safdarjung Hospital and directed it to pay compensation quantified at Rs 2 lakhs.
The protection of consumers is not only a responsibility of the State but also a mandate against commercial and business entities. A satisfied consumer base is essential for the successful existence of commercial enterprises. At the same time consumer matters must be taken care of by the use of Information and Communication Technology in India. An online environment must be provided to take care of consumer rights and disputes in a transparent, efficient and hassle free manner. The consumer dispute resolution essentially requires use of “Alternative Dispute Resolution Mechanism” (ADRM) as well as “Online Dispute Resolution Mechanism” (ODRM). Although ODR in India has started gaining momentum yet there is lot to be done. If we analyse the culture of ADR in India than one fact is very clear. In India we have not yet given due importance to the ADRM, much less to ODRM. The e-governance plan of India is silent in this regard. This is one of the flaws of the ICT strategy of India that is not in conformity with the contemporary standards. The electronic governance in India is not taking care of the ODR perspective and the same will be a fatal mistake by all counts in this consumer driven society. We need to capatilise “collective expertise” and an “ideal public- private partnership” base in India to effectuate consumers rights in India.
Apart from the above discussion, it is important to note that although huge amount has been spent by the government for creating awareness, but the procedural part is not being shown in those awareness advertisements. Special advertisements should be created to educate the consumers regarding procedure for filing complaint- where to file complaint, when to file complaints etc. News Papers, News Channels and other media agencies should also come forward to educate the consumers on these points. Consumer Association should also come forward to work more and more to aware the consumers to raise voice against exploitation. Last but not the least; it is also the duty of the consumers that they must educate themselves and their neighbours about their rights and availability of redressal mechanisms.
The efficient and effective programme of Consumer Protection is of special significance to all of us because we all are consumers. Even a manufacturer or provider of a service is a consumer of some other goods or services. If both the producers/ providers and consumers realize the need for co-existence, adulterated products, spurious goods and other deficiencies in services would become a thing of the past. The active involvement and participation from all quarters i.e. the central and state governments, the educational Institutions, the NGO’s, the print and electronic media and the adoption and observance of a voluntary code of conduct by the trade and industry and the citizen’s charter by the service providers is necessary to see that the consumers get their due. The need of the hour is for total commitment to the consumer cause and social responsiveness to consumer needs. This should, however, proceed in a harmonious manner so that our society becomes a better place for all of us to live in. Educate consumers to develop an understanding about their responsibilities as consumers. Consumer should organize together to develop the strength and influence to promote and protect their own interest. Government should make and implement rules of punishment more harsh so that manufacturer and shopkeeper think twice before adopting fraudulent practices. A campaign should be set in motion to involve each and every consumer for making them more conscious and aware of their right and responsibilities. Government and other consumer agencies should make efforts in the direction of propaganda and publicity of district forum, state and national judiciary established for consumer protection so as to make more and more consumer aware about machinery for their greater involvement and to seek justice in case of grievances. Redress procedure should be made more logical, easy enough to be understood by a large number of consumers. Further procedures shall so designed as to have easy handling and quick disposal of cases.
(4) The Consumer Protection Act, 2019.
(5) Consumer Protection in India: Some Reflections By S. S. SINGH, Professor of Justice and Administration, IIPA, New Delhi & SAPNA CHADAH, Assistant Professor, Consultancy Project on Consumer Protection and Welfare, IIPA, New Delhi, INDIAN INSTITUTE OF PUBLIC ADMINISTRATION, NEW DELHI, available on http://consumereducation.in/publications/1_consumer_orotection_%20in_India.pdf
(8) International Journal of Transformations in Business Management http://www.ijtbm.com (IJTBM) 2012, Vol. No. 1, Issue No. 6, Apr-Jun ISSN: 2231-6868 International Journal of Transformations in Business Management, CONSUMER AWARENESS AND CONSUMER PROTECTION ACT –A STUDY SEWANAND, Research Scholar, CMJ University.