LAW MANTRATHINK BEYOND OTHERS

(National Monthly Journal, I.S.S.N 2321-6417)

Consumer Protection Law in India: Modern Days
*Akash Valappil & Shailendra Pathak
For Legalance, Pune.


A Consumer is the most important visitor on our premises. He is not dependent on us we are
on him. He is not an interruption to our work; he is the purpose of it. We are not doing a favor to
a consumer by giving him an opportunity. He is doing us a favor by giving an opportunity to
serve him.
- Mahatama Gandhi.

This quote from the father of our nation is vocal about the importance and might of the
consumer. The conventional and highly industrial relevant subjects like economics, marketing,
sale, contracts etc would be rendered meaningless consumer or a better way to phrase it would
be that without the consumer these subjects would sound half of what they actually mean.
Come to think of it, Commerce and business would be stillborn without the consumer . This
leads to the question as to who or what is a consumer? The consumer is the one who pays to
consume the goods bought or service rendered. The word consumer in effect is the center of the
commerce and business, as without a buyer there would be no business and without business
there would hardly be any commerce. By merely removing consumer from the scene we would
take the whole civilized society to the age of barter which existed way before the age of
currency. This article attempts to connect the origin of the word consumer and its present
status vis--vis various statutory provisions in todays context and tries to evaluate the power of
the modern consumer.
Lets emphasize on the modern concept of a movement that has led to a catena of judgements by
various courts and has catapulted the consumer from a weak and unorganized individual to a
super-hero in terms of remedies against fraud and illegal practices adopted by mean businessmen
to pursue their greedy aims.

Consumerism:-

Consumerism can be called as the philosophical and abstract aspect of the consumer. The term
consumerism helps us to better understand the term consumer. There is no precise definition
of the term consumerism. There are several definitions which are not related and contradictory to
each other. However in this article we shall look into the most recent and accepted meaning of

the term consumerism. Consumerism is all about the protection of the interest of the consumers
1
.
According to McMillan Dictionary (1985) Consumerism is concerned with protecting
consumers from all organisations with which there is exchanged relationship. It encompasses the
set of activities of government, business, independent organisations and concerned consumers
that are designed to protect the rights of consumers.
In short consumerism is an ideology where a consumer, in relation to goods or services
purchased, has the protection from government, business and independent organizations for the
dissatisfaction of the goods and services rendered.

Evolution of consumer protection in India:-

The consumer protection in India has evolved through the following sources:-
1) The common law.
2) Assorted statutes.
3) Consumer protection Act, 1986
4) Courts of law and Consumer courts.

Historical evolution:-

Prior to 1950 the issues of consumer protection where resolved by the English Common law
rules made by the British. The common law evolved at least three distinct heads of law that are
relevant to consumer protection in India even today: (a) tort (b) contract and (c) fiduciary laws.
Enforcement takes place through suits filed in courts of law.
After the creation of the Constitution of India, the Union Parliament had passed several
legislations from which consumers could derive protection like the Drugs Control Act, 1950,
Prevention of Food Adulteration Act, 1954, Essential Commodities Act, 1955 however these
were not enough to cover the wide range of issues faced by the consumer. This led to legislation
of the Consumer Protection Act, 1986 which was exclusively made for the protection of the
consumer and also made a chain of courts specifically for their enforcement.

1. The new Shorter Oxford Dictionary,1993, p.490.


Consumer protection at the international level:-

Consumerism and consumer protection rights are universal laws. 15
th
March of every year is
observed as World Consumer Rights day. The General Assembly of the United Nations adopted
a set of general guidelines for the protection of the consumers.(General Assembly Resolution
39/85). The Secretary General was authorized to persuade the member countries to adopt the
guidelines by inculcating them in their domestic laws or by any other method of adoption. These
guidelines though not legally binding they are model laws to be replicated as much as possible
by the governments which include:-
1) Physical Safety.
2) Protection and promotion of consumer economic interest.
3) Standards for the safety and quality of consumer goods and services.
4) Distribution of facilities for consumer goods and services.
5) Measures enabling consumers to obtain redress.
6) Measures relating to specific areas (food, water and pharmaceuticals) and
7) Consumer education and information program

In India after the Consumer Protection Act, 1986 (hereinafter CPA) came in to force it has
received primacy in all matters regarding the consumers. The CPA, 1986 is the greatest shield
which the consumer possesses however, the inference that the CPA is the only legislation from
which the consumer can derive protection would be wrong. This article aims at providing an
insight into a few laws for consumer protection including the CPA, 1986.

In India, there are various laws though not exclusively enacted for the protection of the
consumers like the CPA, but the provisions included in them are useful for consumer protection.
The Acts such as the Indian Penal Code, 1860; Indian Contract Act, 1872; Drugs Control Act,
1950; Industries (Development and Regulation) Act, 1951; Indian Standards Institution
(certification marks) Act, 1952; Drug and Magic Remedies (Objectional Advertisement) Acts,
1954; Prevention of Food Adulteration Act, 1954; Essential commodities Act, 1955; Trade and
Merchandise Marks Act, 1958; Hire purchase Act, 1972; Cigarettes (Regulation of Production,
Supply and Distribution) Act, 1975; Prevention of Black-marketing and Maintenance of Supplies
of Essential Commodities Act, 1980; Essential commodities (Special Provisions) Act, 1981;
Multi-State-Co-operative Societies Act, 1984; Standard of Weights and Measures (Enforcement)
Act, 1985; and Narcotic Drugs and Psychotropic Substances Act, 1985. Some significant
consumer protection enactments of pre-independence time are the Sale of Goods Act, 1930;
Agriculture Produce (Grading and Marketing) Act, 1837 and Drugs and Cosmetics Act, 1940.
First lets look into the dominant legislation for consumer protection that is the Consumer
Protection Act, 1986.

A) Consumer Protection Act, 1986:-
a(i) Definition of Consumer:-
According to Section 2(d), Consumer means any person who:-
1) buys any goods for a consideration which has been paid or promised or partly paid and partly
promised, or under any system of deferred payment and includes any user of such goods other
than the person who buys such goods for consideration paid or promised or partly paid or partly
promised, or under any system of deferred payment when such use is made with the approval of
such person, but does not include a person who obtains such goods for resale or for any
commercial purpose; or
2) hires or avails of any services for a consideration which has been paid or promised or partly
paid and partly promised, or under any system of deferred payment and includes any beneficiary
of such services other than the person who 'hires or avails of the services for consideration paid
or promised, or partly paid and partly promised, or under any system of deferred payment, when
such services are availed of with the approval of the first mentioned person.
Thus in short if any person either buys any goods for a consideration or hires or avails of any
service for a consideration he is a consumer.
In simple commercial transaction of sale it is easy to ascertain the consumer and the goods or
service provider so as to impose liability upon the goods or service provider upon any defect.
However in certain business or professional relationships the implication of consumer and goods
or service provider may not easy be to ascertain. If any apprehension of liability is upon the
goods or service provider in such complex relationships then the goods or service provider tries
to evade the liability the service provided by him does not fall within the definition of services or
the consumer is not within the definition of the consumer. For example in Regional Provident
Fund Commissioner vs Bhavani
2
the Apex Court held that the appellant, who was a person
responsible for working of Pension Scheme under the Employees Provident Fund and Family
Pension Scheme, 1971 was a service giver and the respondent a consumer within the
meaning of Section 2(1)(o) 2(1)(d)(ii) respectively of the Consumer Protection Act, 1986.
An explanation has been added to sec 2(d) which read as follows:-
Explanation. For the purposes of this clause, commercial purpose does not include use by a
person of goods bought and used by him and services availed by him exclusively for the
purposes of earning his livelihood by means of self-employment;

The purchaser of a car (or other goods) as a means of self employment for earning his livelihood
is a consumer and is entitled to seek relief under the CPA, 1986
2
. Even before the 1993
amendment the National commission had taken the same view in Secretary, Consumer Guidance
& Research Society vs B.P.L India Ltd.
3

a(ii) Definition of Service:-
According to section 2(1)(o):
"service" means service of any description which is made available to potential users and
includes, but not limited to, the provision of facilities in connection with banking, financing
insurance, transport, processing, supply of electrical or other energy, board or lodging or both,
housing construction, entertainment, amusement or the purveying of news or other information,
but does not include the rendering of any service free of charge or under a contract of personal
service;
The definition of service is the most controversial definitions of the CPA act. To enable a
consumer to bring action he must have availed the services for a consideration. The
consideration may be either paid or promised or partly paid and partly promised or under any
system of deferred payment. In Union of India vs Mrs. S. Prakash
4
it has been held that
subscriber of a telephone is a consumer as the rental charges paid to the Central Government is
the consideration for the services rendered by the Tele-Communication Department. The
Consumer Forum, therefore, has full jurisdiction to entertain complaint in the matter.
2) Hindustan Motors Ltd v N.P. Tamakar, I (1996) C.P.J 313 (N.C)
3) I (1991) C.P.J 140 (N.C)
4) 1991 (1) CPR 307




The definition of the service includes very wide connotations. The following are included within
the term of service
Telephone:-
Telephone service has been held to be service for the purpose of application of the provisions of
this act. If the appellant suffered loss in business due to non-shifting of the external extension of
his telephone due to the negligence of the telecommunication department, he was awarded
compensation for the same.
5



Railways:-
The conditions and services provided by the Indian railways generally has a negative opinion
among the masses. The plight of the passenger is known to both the passenger and the
government however the latter turns a blind eye to this condition. One should not feel helpless
about this situation as the law has always been in the guardian of the consumer in such cases.
In Union of India vs Kedar Nath J ena & Others
6
the complainant, an Advocate, purchased tickets
from Cuttack to Banglore, to take his sons for treatment there. The Gauhati Express train which
was to leave Banglore at 10:30 p.m on 9-6-90 actually started at 9 a.m on 10-6-90. The
complainant suffered inconvenience and the expenses to hire a lodging room. The railways failed
to disclose the reasons for the delay. There was deficiency in the service. Each complainant was
awarded compensation of rupees 500.

Airlines:-
The same rules and principles also apply to the airlines. In Satish Bagdoria v Airdoot
7

International the complainant purchased a ticket from the respondents for a flight from
Chandigarh to New Delhi. The said flight was cancelled but the complainant was not informed.
5) Mahaveer Electricals v The District Manager, Telecommunications, II (1991).
6) III (1997) C.P.J 198 (Orissa S.C.D.R.C)
7) III (1996) C.P.J . 96 (Chandigarh S.C.D.R.C)




He was entitled to the refund of the price of the ticket of 720 /- together with compensation of
Rs. 5000/- and costs of rupees 1000/-.

Electricity:-
The electricity provider is also within the ambit of the definition of the term service. In Gita
Rani Chakroborty v S.S.B, W.B.S.E.B
8
the defective electricity meter on the complainants
premises was not replaced in spite of repeated reminders. It was held to be negligence and
deficiency in service on the part of the O.P. Compensation of Rs. 1000/- was awarded to the
complainant for harassment and metal pain caused to him.

Insurance:-
The insurance companies are also included within the term of service for their services provided.
In United India Insurance Co. Ltd v M/s Kiran Combers & Spinners
9
the insured property was
damaged on account of collapse of the building due to heavy rainfall and floods. The Insurance
Policy contained an exclusion clause covering only typhoon, storm, cyclone, tempest, hurricane,
tornado, flood and inundation. Since the exclusion did not include subsidence, the appleant
company was held liable to compensate. Plea of defective structure was held not tenable, when
the building was certified by the insurance company.

Medical Services:-
In a siginificant ruling in Vasantha P. Nair v Smt. V.P. Nair the National Commission
10
upheld
the decision of the Kerala State Commission which said that the patient is a consumer and the
medical assistance was a service and therefore in the event of any deficiency in the performance
of medical service the consumer courts can have the jurisdiction. It was further observed that the

8) I (1997) C.P.J . 450 (West Bengal S.C.D.R.C)
9) A.I.R 2007 S.C 393
10) I (1991) C.P.J 685


medical officers service was not a personal service so as to constitute an exception to the
application of Consumer Protection Act.

B) Competition Act, 2002:-

The intention to legislate the Competition Act, 2002 is to regulate the competition in the markets
and restrain Monopolistic policies, thereby increasing the economic growth. One might be
curious to know the need for competition in the markets. When there is competition in the
markets the poor performing products and services are eliminated from the markets and only the
outstanding ones remain for the consumption of the masses. Only good quality product at
economical rates remains in the market thereby making the consumer the beneficiary due to such
theme of this act. Hence we can infer from the legislation that this act has substantial consumer
protection provisions. The definition under the Competition Act, 2002, is not very different from
the definition of the CPA, 1986. According to section 2(f) it recognizes a person who buys or
uses goods or services for commercial purpose or for resale, as a consumer. In this way, the
Competition Act aims to protect the larger public interest from anti- competitive practices.
The Competition Act, 2002, in its Preamble, states protection of the interests of consumers
as one of its goal. Further, Section 18 of the Competition Act which defines the duties of the
CCI clearly mentions that protection of interests of Consumers is one of the duties of CCI.
The consumers or consumer associations are also given the right to complain against any
Anti-competitive practices in contravention of sections 3(1) and section 4(1) to the CCI
under section 19(1) of the Act.
Consumer awareness is also a goal under the Consumer Protection Act, and under Sec. 6, the
right to consumer education is listed as an object of the Consumer Council. It is imperative for
the consumer organizations to be aware of the Act and to be with the Commission for achieving
the common objective of consumer welfare through competition
While some jurists regard consumer welfare as the ultimate object of competition law,
others consider it as a consequence of the operation of competition law. In order to clarify
the position, the arrangement of the redressal agencies of the two laws may be taken into
consideration.
Indian law provides for two separate machineries to deal with competition and consumer
cases. The CCI addresses only those consumer complaints which involve a competition
issue. For all other consumer grievances, there are Consumer dispute redressal agencies.
Similarly, individual redressal mechanism while available under the Consumer Protection
Act, are not open to address systemic anti-competitive practices, which call for a different
approach and redress mechanism. From this kind of arrangement, it can be inferred that
consumer protection and competition law, though have a common goal, are different in their
approach regarding redressal.


C) The Indian Contract act, 1872:-

Indian Contract Act, 1872 which has codified the law regarding contract has contributed to the
development of consumer law. It can also said to have provided consumer protection in a nascent
form. For instance Section 14 defines Free Consent as the one without Fraud, Misrepresentation
etc. This provides with an opportunity to make a claim that contract is invalid. However this
option is available to buyer (consumer) or seller. Consumer laws have made such an option more
prominent with an express recognition of the same.
The development of Consumer laws by contract laws in the case of Delhi Electric Supply
Undertaking v. Basanti Devi
11
. In this case, a claim for insurance was said to be repudiated due
to nonpayment of premium which was deducted by the employer from the salary. Under the
earlier decision of State of Orissa v. LIC
12
, such a person, was not a consumer as the service was
done free of charge. In the later decision, recourse was made to the principle of Agent under
Section 182 of the contract Act and held that the employer was an agent of the employer, his
service not free of charge and hence, the person availing of such a service was a consumer and
district forum has the jurisdiction to award compensation or the required remedy which would
vary from case to case.

D) The Legal Metrology Act 2009:-
The Legal Metrology Act, 2009 (Act 1 of 2010) repeals and replaces the Standard of Weights
11) 1989(1) Bom.C.R. 286


and Measures Act, 1976 and the Standards of weights and Measures (Enforcement) Act, 1985.
The central government has appointed the date 01.04.2011 from which the provisions of the
Act will come into force.
However, a state can enforce the provisions of the Act and Rules made there under after
framing its own Legal Metrology (Enforcement) Rules for the state and on notification of the
date from which it will come into force.
According to section 2(g) ) "Legal Metrology" means that part of metrology which treats units of
weighment and measurement, methods of weighment and measurement and weighing and
measuring instruments, in relation to the mandatory technical and legal requirements which have
the object of ensuring public guarantee from the point of view of security and accuracy of the
weighments and measurements. The key words from this articles point of view is ensuring
public guarantee. This act provides various provisions which benefit the consumer. At times
when we visit the local markets we witness the deceitful tactics of the shopkeepers to increase
the weight by placing a stone or any other non standard equipment on the weight scale. However
the consumer is now protected from such fraud due to this act. Using, keeping for use,
manufacturing or importing any non-standard weight, measure or numeral is prohibited.
[Sections 8(3) and 8(4)]. The standard weights and measures are given under the LM (General)
Rules, 2011 it also requires conformity to physical characteristics, configuration, construction
details, materials, equipment, performance and tolerance which should be verified and re-verified
as per the schedule. (sec 7 and 8).

E) Prevention of Food Adulteration Act, 1954:-

Adulteration of food articles has been a fraudulent practice since ages. The addition or
subtraction of any part of the product to increase its monetary value without any regard to the
consumers disadvantage can be called as adulteration. The practice of adulteration includes
artificial colours, sand, marble, stones, mud, talc, chalk powder, water, mineral oil, vegetable oil,
aregemone seeds and many other chemicals. The ultimate result of such adulteration is that the
consumer is cheated or becomes a victim of a disease which may also be fatal. It is due to this
evil practice which had become rampant in India, the Prevention of Food Adulteration Act, came
into force from J une 1, 1995.
Section 7 of the act prohibits the adulteration of food for commercial purpose. The
adulteration of food has very wide connotations which is given in section 2(1-a) and covers all
the mal practices involved. The food inspector is given the power to collect samples and send it
to the public analyst among other powers conferred upon him to enforce the provisions of this
act. The food inspector has to comply with all the procedural matters so that the accused does not
evade the law. For example in the case of State of Maharashtra Vs Usha Vinayak Bal &
another
11
the accused was acquitted due to the noncompliance of procedure by the food
inspector. In para 2 the court held The respondents-accused were prosecuted for having sold
adulterated milk on 4th February, 1982. The learned Judicial Magistrate found that the
complainant Food Inspector did not comply with the provision of Rule 9(a) of the Prevention of
Food Adulteration Rules 1955, in not sending a copy of the report of the public analyst to the
accused after launching the prosecution. The said Rule (9)(a), as it stood before the amendment
effected in 1982, required that a copy of the report of the public analyst should be sent to the
accused immediately after launching the prosecution.
This is necessary to afford the accused a valuable defence under section 13(2) of the Prevention
of Food Adulteration Act, 1954, whereby he can get the sample examined by the Central Food
Laboratory. The learned Public Prosecutor is not able to show us that the requirement of Rule
9(a) was complied with by the complainant food inspector. As that requirement was not
complied with, the accused lost the valuable right to get the sample examined by the Central
Food Laboratory and as such the accused could not be convicted by the learned J udicial
Magistrate. In this view of the matter, we find that there is no infirmity in the judgment and order
of the learned J udicial Magistrate.

Conclusion:-

The number of acts enacted and efforts taken by the government show the desperate need to save
the consumer form the various evil of business mal practices. However it is to be noted that the
law still rest on paper to a considerable extent. The consumer can be protected only when there is
effective enforcement of the all laws made for consumer protection to the fullest extent. Every
business entity has moral obligations towards its consumers. It has to be understood that the
quality of the products and the confidence of the consumers is directly proportional to each other.
The increase in confidence of the consumer leads to direct positive impact on the sales and
production and ameliorate the conditions of the economy. This shall in turn, lead to the ultimate
inference that if the consumer is happy so will be the country.