Special Content

volume-38,22-28 December 2018




Dr. Sheetal Kapoor

The Consumer Protection Act, 1986, is a socio-economic legislation to protect and promote the interests of consumers in a unified and effective manner. Consumer Protection Act on one hand is a weapon in the hands of consumers to fight against the exploitation by the sellers, manufacturers and traders related to defective goods, deficiency in service, restrictive and unfair trade practices. The CPA, empowers consumers to make informed choices; ensures fair, equitable and consistent outcomes for consumers; and facilitates timely and effective consumer grievance redress. It is the only Act which provides compensation to the Indian consumer and has a three-tier grievance redressal structure at the District, State and National level known as, Consumer Forums, where the disposal rate as on 1st Jan 2018 was 91%.

In India, there are large number of laws which have provisions for protecting consumers, but the consumer movement gained impetus in India after the enactment of the Consumer Protection Act, 1986. 24th December is a landmark day in the history of consumer movement in India as on this day the Consumer Protection Act, 1986 came into existence. On this day the Consumer Protection Bill finally became an Act in 1986, after the assent from the President of India. The Consumer Protection Act, protects the interests of the consumers against substan-dard products, increased prices through market manipulation, failed warranties, poor after sales service and unfair trade practices. Thus, 24th December is observed as National Consumer Day in India.

Changing Indian Buying Behaviour

Over the past ten years Indian business environment has undergone a drastic change. With the rapid development of digital technologies and the increasing penetration of e-business, smart phones, cloud and internet there is a change in how the Indian consumers are buying products. Internet mainly the World Wide Web (www) as an electronic medium of exchange and mobile phones have given rise to a de-territorial virtual market place and the sales in the business - to - consumer segment has been increasing manifold over the past few years. Use of smart phones is the game changer in the digital market in India and one out of three customers currently makes transactions using mobiles. A study by ASSOCHAM reports that in 2017 there has been a large-scale growth in the Indian e-business sector and the number of consumers who bought online have reached to 100 million and the e-retail market would jump 65% in 2018. A Marketing Research firm eMarketer has reported that the online retail sale in India is expected to grow by 31% in 2018 and going to touch $32.7 Billion. Increasing internet and mobile penetration, growing acceptability of digital payments and favourable demographics have provided the unique opportunity for consumers to shop online 24 hours a day and also track the delivery status of their purchases. But shopping online sometimes poses problems related to cross-border transactions, risks of poor quality and unsafe products, predatory prices, exploitative and unfair trade practices.

The Indian economy presently is growing at 7 per cent and many flagship schemes such as, JagoGrahakJago, Jan Dhan Yojana, RERA, GST, Aadhar, Hallmarking have been launched by the government to make consumers aware about their consumer rights in order to avoid being duped by the malpractices of businesses. The consumer movement exercises a considerable influence on the socio-economic environment of business. In a country like India where there is a high percentage of illiteracy among people, where people are less informed and where critical goods are always in short supply, the Govern-ment has a significant role in safeguarding the interests of consumers by promoting a climate of fair competition and preventing exploitation of consumers.

The Union Government on 20.12.2017 approved the introduction of the New Consumer Protection Bill, in Parliament to protect the interest of consumers by strengthening the existing Act, faster redressal of consumer grievances, empowering consumers, especially online and protecting vulnerable and economically disadvantaged consumers. The New Consumer Protection Bill, 2018 was introduced in Lok Sabha on 5th January 2018 to keep pace with the ongoing changes in the market.

UN Guidelines for Consumer Protection

The United Nations Guidelines for Consumer Protection, 2016 emphasise that all member countries should ensure more effective and better-coordinated protection efforts in all countries and across all areas of commerce .Further protection of consumers' rights in the digital context are a key for a sustainable and inclusive development of e-commerce and it also lays down guidelines related to data security and privacy. The United Nations guidelines for consumer protection have the following objectives:

(a)          To assist countries in achieving or maintaining adequate protection for their population as consumers.

(b)          To facilitate production and distribution patterns responsive to the needs and desires of consumers.

(c)           To encourage high levels of ethical conduct for those engaged in the production and distribution of goods and services to consumers.

(d)          To assist countries in curbing abusive business practices by all enter-prises at the national and international levels which adversely affect con-sumers.

(e)          To facilitate the develop-ment of independent consumer groups.

(f)           To further international cooperation in the field of consumer protection.

(g)          To encourage the development of market conditions which provide consumers with greater choice at lower prices.

(h)          To promote sustainable consumption.

Principles for good business practices under UNGCP

The principles that establish benchmarks for good business practices for conducting online and offline commercial activities with consumers are as follows:

(a)          Fair and equitable treatment. Businesses should deal fairly and honestly with consumers at all stages of their relationship, so that it is an integral part of the business culture. Businesses should avoid practices that harm consumers, particularly with respect to vulnerable and disadvantaged consumers.

(b)          Commercial behaviour. Businesses should not subject consumers to illegal, unethical, discri-minatory or deceptive practices, such as abusive marketing tactics, abusive debt collection or other improper behaviour that may pose unnecessary risks or harm consumers. Businesses and their authorized agents should have due regard for the interests of consumers and responsibility for upholding consumer protection as an objective.

(c)           Disclosure and trans-parency. Businesses should provide complete, accurate and not misleading information regarding the goods and services, terms, con-ditions, applicable fees and final costs to enable consumers to take informed decisions. Businesses should ensure easy access to this information, especi-ally to the key terms and conditions, regardless of the means of technology used.

(d)          Education and awareness-raising. Businesses should, as appropriate, develop programmes and mechanisms to assist consumers to develop the knowledge and skills necessary to understand risks, including financial risks, to take informed decisions and to access competent and professional advice and assistance, preferably independent when needed.

(e)          Clear and timely information regarding the goods or services offered by businesses and the terms and conditions of the relevant transaction.

(f)           Clear, concise and easy to understand contract terms that are not unfair.

(g)          A transparent process for the confirmation, cancellation, return and refund of transactions.

(h)          Secure payment mechanisms.

(i)            Fair, affordable and speedy redressal mechanisms.

(j)           Consumer privacy and data security.

(i)            Consumer and business education.

Member countries of UNGCP should work towards ensuring that consumer protection enforcement agencies have the necessary human and financial resources to promote effective compliance and to obtain or facilitate redress for consumers in appropriate cases.

Consumer Protection Bill 2018

A comprehensive up gradation of the existing Consumer Protection Act, 1986, by way of introduction of a new Bill is currently under consideration of the Parliament, aimed at making the consumer law more effective, functional and purposeful. Salient features of the Bill include:

(a)          The definition of 'Consumer' would include both offline and online consumers. The expressions "buys any goods" and "hires or avails any services" would includes offline or online transactions through electronic means or by teleshopping or direct selling or multi-level marketing.

(b)          Establishment of the Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of consumers, to investigate and intervene when necessary to prevent consumer detri-ment arising from unfair trade practices, and to initiate class action including enforcing recall, refund and return of products. Investigation Wing has also been set up under CPA. For false and misleading advertisements CCPA may issue a penalty upto 10lakh on a manufacturer and endorser and includes online marketing. For a subsequent offence, the fine may extend to Rs 50lakh. 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.

(c)           The pecuniary jurisdiction of adjudicatory bodies increased in case of District Commission to Rs 1Crore, in case of State Commission between 1Crore to 10Crore and National Commission Above Rs 10Crore. Further simplification of procedure for filing of complaints and online filing of complaints.

(d)          Provisions for "product liability" action for or on account of harm caused by or resulting from any product by way fixing the liability of a manufacturer to a claimant.

(e)          Provision for "mediation" as an alternate dispute resolution (ADR) mech-anism which aims at giving legislative basis to resolution of consumer disputes through mediation, thus making the process less cumbersome, simple and quicker. This will be done under the aegis of the consumer fora.

The Constitution of India includes different provisions in the Fundamental Rights and Directive Principles of State Policy, which lay emphasis on expansion of public enterprise, avoid concentration of economic power in few hands and restriction of private monopolies, safeguarding the interests of the consumers of manufactured goods and producers of raw materials etc. to further the concept of welfare state. Thus consumer justice is a part of social and economic justice enshrined in the Constitution.

Following the Constitutional mandate, a number of laws have been enacted to protect the consumers.

Some important ones are:

•             Drugs Control Act, 1950;

•             Prevention of Food Adulteration Act, 1954;

•             Drug and Magic Remedies (Objectionable Advertisements) Act, 1954;

•             Essential Commodities Act, 1955;

•             Export Quality Control and Inspection Act, 1963;

•             Monopolies and Restrictive Trade Practices Act, 1969;

•             Standard of Weights and Measures Act, 1976;

•             Prevention of Black-marketing and Maintenance of Supplies of Essential Commodities Act, 1980.     - EN

 (f)           Several provisions aimed at simplifying the consumer dispute adjudication process in the consumer  fora are envisaged. These include, among others, enhancing the pecuniary jurisdiction of  the consumer disputes redressal agencies, increasing minimum number of members in the con-sumer  fora to facilitate quick disposal of com-plaints, power to review their own orders by the state and district commission, constitution of 'circuit bench' to facilitate quicker disposal of complaints, reforming the process for the appointment of the president and members of the district fora, enabling provisions for consumers to file complaints electronically and file complaints in consumer fora that have jurisdiction over the place of residence of the complainant, and deemed admissibility of complaints if the question of admissibility is not decided within the specified period of 21 days.

Conclusion: An aware consumer is an asset for any society. Discerning and demanding consumers assert for their rights and are not ready to make compromises on poor quality, substandard products and put pressure on businesses to provide safe and quality goods and services to them. Further, many new schemes have been started by the government to empower the Indian consumers. The cost and time involved in litigation is so much that ADR started by the government, especially mediation centres, in consumer forums would be helpful in quick disposal of consumer complaints. Hoping that the New Consumer Protection Bill, 2018 is immediately implemented which would take care of the short-comings in the Consumer Protection Act, 1986.

No initiatives taken by the government can be fruitful unless businesses start thinking like consumers, by understanding consumer buying behaviour and developing customer retention programs. It is believed that it is very difficult for businesses to look for new customers rather than retaining the existing ones. A satisfied customer is a key to reap profits. Therefore, maintaining good relationship with customers becomes imperative. The efficient and effective programme of consumer protection is of special significance to all of us since all of us are consumers. Even the marketer, producer or the service provider is a consumer of some other goods and services. Only alert consumers can protect themselves and the society.

(The author teaches at Kamla Nehru College, University of Delhi. Email: sheetal_kpr@hotmail.com)

Views expressed are personal