Eco Project

ECONOMICS OF CONSUMER AWARENESS
NATIONAL LAW UNIVERSITY ODISHA
MICROECONOMICS PROJECT
SEMESTER-II(JAN-MAY2019)
TOPIC: Economics of consumer Project
Submitted by:
Dhruv Sirpurkar (2018/B.A./LLB./033)
Divyansh Pareek (2018/B.A./LLB./034)
Mohit Meena (2018/B.A./LLB./062)
Piyush Balot (2018/B.A./LLB./075)
Shashank Chaturvedi (2018/B.A./LLB./096)
Submitted to:
Ms. Madhubrata Rayasingh
(Assistant Professor of Economics)
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ACKNOWLEDGEMENT
This project has come into existence due to constant guidance and support of some people.
Firstly, we would like to thank our Professors, Ms. Madhubrata Rayasingh, who not only gave
us this interesting topic to work on but also helped us in broadening our views on the various
concepts, flaws and concerns which we came across.
We would like to thank the librarian and other staff members for providing us the required
sources and materials without which this project would have been just a dream, far from reality.
And finally, we would like to acknowledge our friends who readily helped us and without
whose constant support, this project could not have been completed.
Dhruv Sirpurkar
(2018/B.A./LLB./033)
Divyansh Pareek
(2018/B.A./LLB./034)
Mohit Meena
(2018/B.A./LLB./062)
Piyush Balot
(2018/B.A./LLB./075)
Shashank Chaturvedi
(2018/B.A./LLB./096)
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CERTIFICATE OF DECLARATION
We hereby declare that this project was made by each member of this group. Each member of
our group has contributed equally for the completion of this project. Without any avoidance or
fickleness each member has contributed equally.
Dhruv Sirpurkar
(2018/B.A./LLB./033)
Divyansh Pareek
(2018/B.A./LLB./034)
Mohit Meena
(2018/B.A./LLB./062)
Piyush Balot
(2018/B.A./LLB./075)
Shashank Chaturvedi
(2018/B.A./LLB./096)
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TABLE OF CONTENTS
TABLE OF CONTENTS ........................................................................................................... 5
Introduction ................................................................................................................................ 8
1. MEANING OF CONSUMER ........................................................................................ 8
2. CONCEPT OF CONSUMER PROTECTION AND COMMON MALPRACTICES” . 9
4. NEED FOR CONSUMER PROTECTION .................................................................. 10
4.1. SOCIAL RESPONSIBILITY:” ............................................................................. 10
4.2. INCREASING AWARENESS:” ........................................................................... 10
4.3. CONSUMER SATISFACTION:” ......................................................................... 10
4.4. GROWTH AND SURVIVAL OF BUSINESS: .................................................... 10
4.5. PRINCIPLE OF SOCIAL JUSTICE:” .................................................................. 10
4.6. PRINCIPLE OF TRUSTEESHIP:” ....................................................................... 10
CAUSES OF CONSUMER EXPLOITATION ....................................................................... 11
5. What are the reasons that a consumer is cheated and exploited? ................................. 11
5.1. LACK OF KNOWLEDGE:................................................................................... 11
5.2. TELE MARKETING:”.......................................................................................... 11
5.3. LIMITED INFORMATION:” ............................................................................... 11
5.4. MONOPOLY:” ...................................................................................................... 11
5.5. IGNORANCE:....................................................................................................... 11
5.6. CONSUMER’S INDIFFERENCE TOWARDS THE MARKET: ....................... 11
5.7. ILLITERACY AND FEELING OF SATISFACTION: ........................................ 12
6. Examples of Consumer Exploitation in India: .............................................................. 12
Rights of Consumers ................................................................................................................ 13
7. Right to Safety .............................................................................................................. 13
8. Right to Information ..................................................................................................... 14
9. Right to Choose............................................................................................................. 15
10. Right to be Heard ...................................................................................................... 15
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11. Right to Redressal ..................................................................................................... 16
12. Right to Consumer Education ................................................................................... 16
13. Right to Basic Needs ................................................................................................. 17
14. Right to Healthy Environment .................................................................................. 17
Duties of Consumers ................................................................................................................ 18
Consumer protection act 1986 ................................................................................................. 19
15. Objective of the Consumers Protection Act, 1986 .................................................... 21
16. Scope of act ............................................................................................................... 21
16.1. Consumer protection council ............................................................................. 21
16.2. Central consumer’s protection council .............................................................. 21
16.3. State consumers protection council : ................................................................. 22
16.4. District Consumer protection Council ............................................................... 22
16.5. Redressal Machinery under the ACT;................................................................ 22
16.6. Substantive provisions ....................................................................................... 23
16.7. Procedural provisions......................................................................................... 23
17. Jurisdiction of Consumer Forums ............................................................................. 23
17.1. District Forum .................................................................................................... 23
17.2. State Commission .............................................................................................. 24
17.3. National Commission......................................................................................... 24
17.4. Appeal to Supreme Court................................................................................... 25
review of literature ................................................................................................................... 26
Conclusion ............................................................................................................................... 28
Annexure 1: Survey Report ..................................................................................................... 29
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INTRODUCTION
A consumer buys a variety of goods and services in his/her day-to-day life. Whatever they buy
they pay for it and get satisfaction from its usage or consumption. But sometimes the consumers
are not satisfied with the goods or services they buy. This may be because of misleading
advertisement, poor quality of products, or overcharging by the seller, etc.
1. MEANING OF CONSUMER
A consumer is an individual who purchases goods and services for consumption and
satisfaction. Goods here refer to eatables like “sugar, fruit, etc. or durable items like,
refrigerator, T.V., car, etc. and services refers to items like transportation, electricity, banking,
etc.
In the eyes of law, the individual who purchases any goods or hires services for a certain price
and the one who uses these goods and services with the buyer’s approval are also termed as
consumers. For example, if a man buys an apple for his son and afterwards he consumes it, he
and his father will both be treated as consumers. However, an individual who buys goods for
resale purpose (like wholesaler or retailer) or for any commercial purpose are not treated as
consumer.
“Under the Consumer Protection Act 1986, the word consumer has been defined separately for
the purpose of goods and services.”
a) For the purpose of goods, a consumer is defined as

i. Person who buys goods for consideration, and
ii. Any user of these goods other than the individual’ who actually buys
it, provided such usage is made with the acceptance of the buyer.
b) For the purpose of services, a consumer is defined as

i. One who rents any services for consideration and
ii. Any beneficiary of these services provided the service is availed with
the permission of such person.
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2. CONCEPT OF CONSUMER PROTECTION AND COMMON MALPRACTICES”
Consumer Protection refers to protecting the rights and interests of the consumers. In other
words, it refers to the steps adopted to safeguard consumers from different malpractices done
by the business and to provide consumers immediate compensation for their grievances.
Some most common business malpractices leading to exploitation of consumers are:
a. Sale of duplicate products.

b. Exchange of defective goods.
c. Black marketing and storing of products leads to scarcity in the market which
will result in higher prices.
d. Exchanging products for more than “Maximum Retail Price (MRP) fixed for
the product”
e. False advertising i.e. providing false information to consumers to sell different
products.
The above practices show the exploitation of consumers with reference to goods and services.
Therefore, the measures or steps adopted by the Government or the Non-Government
organizations (NGOs) for protecting the rights and “interests of the consumers constitute
consumer protection.”
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4. NEED FOR CONSUMER PROTECTION
The current market condition is disorder in state, with the existence of competition, where each
and every seller is doing his best to dominate the market. So as to maximize profits, sometimes
seller’s uses different malpractices which are harmful for consumers. Therefore, consumers are
in need for protection for the following reasons:
4.1. SOCIAL RESPONSIBILITY:”

The business must be lead by certain social and good gauges. It is the obligation of the
business to serve the enthusiasm of the clients. As per this rule, it is the duty of
merchants and makers to give right quality and quantity at sensible costs to the
purchasers.
4.2. INCREASING AWARENESS:”

The shoppers have now turned out to be increasingly mindful of their obligations and rights
against acts of neglect done by the dealers. There are numerous affiliations and buyer
association who are attempting for purchaser mindfulness, helping the buyers to uphold
their rights.
4.3. CONSUMER SATISFACTION:”

The buyers' satisfaction is a key to progress for a merchant. Consequently, a merchant
should find a way to serve the customers interests by giving them quality merchandise
and ventures at reasonable costs.
4.4. GROWTH AND SURVIVAL OF BUSINESS:

If a business has to survive and grow in a long run, they have to serve consumer interests.
Due to increased competition and globalization, any business organization which gets
involved in various malpractices or are not able to provide better services to their
consumers, will find it difficult to survive in the market. Hence, for their own interest they
should become consumer oriented.
4.5. PRINCIPLE OF SOCIAL JUSTICE:”

As laid under the Constitution of India, exploitation with consumers is against the
principles of state policy. Keeping up with this principle, manufactures, traders and service
providers are expected to avoid malpractices and take care of the interests of the consumers.
4.6. PRINCIPLE OF TRUSTEESHIP:”

As indicated by Gandhian rationality, fabricates and makers are not the genuine
proprietors of the business. Assets are provided by the general public. They are just the
trustees of the assets and, consequently, they should utilize such assets adequately to
help the general public, which also includes the consumers.
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CAUSES OF CONSUMER EXPLOITATION
5. WHAT ARE THE REASONS THAT A CONSUMER IS CHEATED AND EXPLOITED?
The above question is a worrisome question. We as a whole are purchasers and it is imperative
to know the reason of misuse with the goal that the shoppers are not conned. It is simply after
we become acquainted with about the reasons, the buyers can discover the approaches to spare
themselves from misuse. The primary reasons of buyers' exploitation are:
5.1. LACK OF KNOWLEDGE:

In India consumers are not well aware of their rights and duties. The common reason of
exploitation is lack of knowledge to the consumers. Many consumers do not have the
knowledge about the quality, price, etc. Due to lack of knowledge about the product make
consumers trust the seller, thus exploited.
5.2. TELE MARKETING:”

Today in the time of PCs, tele-advancing and online business have ended up being
uncommonly outstanding. The data about the stock and the costs is in like manner given in the
notice. The buyer can send the required money and get the thing through bundle. One requests
for exorbitant items on being affected, yet he doesn't get the due advantage from that great.
5.3. LIMITED INFORMATION:”

In this time of globalization there are distinctive kinds of products things in the market. A
maker is allowed to create merchandise. There is no settled law for quality and rate. There is
absence of information on few sections of items like rate, quality, rules for use, and so forth.
Along these lines a buyer settles on wrong choice and bears fiscal loses.
5.4. MONOPOLY:”
It refers to a market structure where there is a sole seller of a particular commodity in the
market. The seller faces no competition and there is no close substitute available. As a result,
producers succeeds in exploiting consumers by charging higher prices.
5.5. IGNORANCE:
Consumers in India are mostly ignorant. They are not aware of their rights and duties. A system
is needed to protect them various malpractices.
5.6. CONSUMER’S INDIFFERENCE TOWARDS THE MARKET:

There is a huge group of such buyers who carry on apathetically with respect to buying. There
are a few buyers who think as – what to do, everything is okay, abandon it, for what reason to
take money notice, whatever products the businessperson gives are great, things ought to be
shoddy, great and tough, what is the need of the institutionalization marks like ISI and
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AGMARK and so on. The makers take full advantage of this detached conduct of shoppers and
prevail with regards to misusing them.
5.7. ILLITERACY AND FEELING OF SATISFACTION:

When the consumers are illiterate, the sellers cheat the consumers very easily. The seller easily
sells poor quality products to these people. After being cheated, most customers think that it
was a loss and then they let it go, or now who will fight etc. This thought makes the consumer
prey of exploitation. The sellers know the mentality of consumers and they take full advantage
of it by exploiting them freely.
6. EXAMPLES OF CONSUMER EXPLOITATION IN INDIA:
 “The after sales service provider of the television set charged Rs.200 as service charge
though he repaired the set within the warranty period.”’
 “The tickets issued to different passengers on the same day for the same journey
showed the same seat number.”’
 “Penalty of Rs.50 was charged by SBI after issuing the cheque book to the customer
showing that the balance available in the account was less than the minimum required
balance for issue of cheque book.”’
 “The supply of cooking gas cylinder to the consumers is found to be underweight.”
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RIGHTS OF CONSUMERS
The definition of Consumer right is ‘the right to have information about the quality, potency,
quantity, purity, price and standard of goods or services’, as it may be the case, but the
consumer is to be protected against any unfair practices of trade. It is very essential for the
consumers to know these rights.
“In general, the consumer rights in India are listed below:
1. The right to be protected from all kind of hazardous goods and services
2. The right to be fully informed about the performance and quality of all goods and services
3. The right to free choice of goods and services
4. The right to be heard in all decision-making processes related to consumer interests
5. The right to seek redressal, whenever consumer rights have been infringed
6. The right to complete consumer education”1
According to Section 6 of Consumer Protection Act 1986, there are six rights to which the each
customer is entitled:
7. RIGHT TO SAFETY
“According to the Consumer Protection Act 1986, the consumer right is referred to as ‘right to
be protected against marketing of goods and services which are hazardous to life and property’.
It is applicable to specific areas like healthcare, pharmaceuticals and food processing; this right
is spread across the domain having a serious effect on the health of the consumers or their well-
being viz. Automobiles, Housing, Domestic Appliances, and Travel etc. When there is
violation of the right then there occur medical malpractice lawsuits in the country. It is
estimated every year that thousands or millions of citizens of India are killed or seriously
injured by immoral practices by doctors, hospitals, pharmacies and the automobile industry.
Still the government of India, known for its callousness, does not succeed in acknowledging
this fact or making a feeble effort for maintaining statistics of the mishaps. The Government
of India needs to have world class product testing facilities to test drugs, food, cars or any other
consumable product that can prove to be a menace to life. It does not happen coincidently that
Tata Nano is sold in India for half of what it costs in a country which is industrially developed;
this is a classic case of requirement of a cheap product that outweighs the need for safety of
family and self. The developed countries like the United States have stalwart agencies which
1
“Consumer Rights” (Jago Grahak Jago) <http://www.jagograhakjago.com/consumer-rights/> accessed
February 10, 2019
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oversee the protection of consumer products, the Food and Drug Administration (FDA) for
food and drugs, the National Highway Traffic Safety Administration (NHTSA) for automobiles
and the Consumer Product Safety Commission (CPSC) for various other consumer products
etc. This right needs each product which can potentially be a danger to our lives to be marketed
after adequate and complete verification as well as validation. India is 50 years away, for
empowering this right adequately and completely.”2
8. RIGHT TO INFORMATION
“The right to information is defined as ‘the right to be informed about the quality, quantity,
potency, purity, standard and price of goods or services, as the case may be so as to protect the
consumer against unfair trade practices’ in the Consumer Protection Act of 1986. In the market
place of India, consumers get information by two ways namely advertising and word of mouth
however these sources are considered to be unreliable but still this word of mouth is quite
common here. Because of this, the Indian consumers hardly have precise and complete
information for assessing the true value, safety, suitability, reliability of any product. Usually
the hidden costs can be found, lack of suitability, quality problems and safety hazards only
after the purchase of the product. There is another right claimed by Indian government on
paper, this right must ideally make sure that all consumable products have been labeled in a
standard manner containing the cost, quantity, the ingredients and instructions given to use the
product safely. It is unfortunate that even the medicines in the country do not follow a
standardized labeling convention. There should be establishment of unit price publishing
standards for consumer market where costs are revealed in standard units like per kg or per
liter.”3
“The consumers, ought to be informed in an exact yet accurate manner for the cost involve
during time of availing a loan. For providing benefit to the society through this right, advertisers
must be held against the standards of products in the advertisements. The pharmaceuticals
require disclosing potential side effects related to their drugs and manufacturers ought to be
required to publish reports from independent product testing laboratories for the purpose of
comparing the quality of their products from competitive products. There is a website:
Consumerdaddy.com, for the purpose of empowering the consumers with right to information.
Without help of these types of websites it is difficult to spread awareness among the consumers
2
Ibid
3
“Consumer Rights” (Consumer Rights in India) <http://www.consumerrights.org.in/to-information.htm>
accessed February 10, 2019
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of India. The right to information gives the power to the consumers to have an easy access to
information which is necessary for the consumer.”4
9. RIGHT TO CHOOSE
“The right to be assured access to a variety of products at competitive prices, without any
pressure to impose a sale, i.e., freedom of choice. Consumer Protection Act, 1986 defines this
right as ‘the right to be assured, wherever possible, to have access to a variety of goods and
services at competitive prices’. Competition, invariably, is the best regulator of a market place.
Existence of oligopolies, cartels and monopolies are counterproductive to consumerism. How
often have you noticed a conglomerate of companies that lobby the government to compromise
consumer rights.”5
10. RIGHT TO BE HEARD
“As stated in the Consumer Protection Act 1986, ‘the right to be heard and to be assured that
consumer’s interests will receive due consideration at appropriate forums’ is the definition of
the right to be heard. This right helps to empower the consumers of India for putting forward
their complaints and concerns fearlessly and raising their voice against products or even
companies and ensure that their issues are taken into consideration as well as handled
expeditiously. However, till date the Indian Government has not formed even one outlet for
hearing the consumers or their issues to be sorted out.
There are a number of websites striving to do this. The major objective of Consumer is to
ensure that their voices are heard by the corporate world. There is a website,
Consumerdaddy.com, where consumers can upload their criticisms as well as file complaints.
Every criticism filed gradually lessens the overall score of the product which is being criticized
therefore each complaint is independently checked by an investigator who belonged to
Consumerdaddy.com website. This website provides the consumers the benefit of doubt
always, so their voice is considered over that of the company. It is believed at
consumerdaddy.com, that consumer is always right, and that he is the king. In case a consumer
makes an allegation regarding the product, the onus goes to the dealer, or supplying company
or manufacturer to disprove that allegation is not true. To be precise, the consumer is heard,
and the load of proof goes to the company. Various attempts are made by the government for
empowering the citizens with this right, and it is believed that about 10-15 years more are
4
Supra note 1
5
“Consumer Rights Awareness: Problems And Prospects” (Shodhganga)
<http://shodhganga.inflibnet.ac.in/bitstream/10603/13130/10/10_chapter 1.pdf>
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required for the accomplishment of this goal.”6

11. RIGHT TO REDRESSAL
“The right to seek redressal against unfair trade practices or restrictive trade practices or
unscrupulous exploitation of consumers’ is referred to as the right to redressal according to the
Consumer Protection Act 1986. The government of India has been bit more successful with
regard to this right. The Consumer courts like District Consumer Disputes Redressal Forums
at district level, State Consumer Disputes Redressal Commissions and National Consumer
Disputes Redressal Commissions have been incorporated with the help of the consumer
protection act.
These consumer grievance redressal agencies have fiduciary as well as geographical
jurisdictions which address consumer cases between businesses and consumers. About 20 lakhs
Consumer cases are heard in the district consumer forum, and around one crore can be heard
in the state consumer court while more than one crore cases are heard at national consumer
court. It has been found that if one becomes guardian of consumer protection or consumer
rights in the country these courts today are found to be ineffective because of bureaucratic
sabotages, clogged cases, callousness of government and decadent infrastructure. Only some
of the district forums have appointed officials for time being and majority of them are non-
functional because of funding and infrastructure constraints.
There are around 20-30 million open cases in India which remain unsolved and would take
around 320 years to wind up. Having such type of compromised legal system the consumer
cases form just civil litigations and are carried forward to the bottom of the priority list. It is
estimated that India is 10 years away in effectively ensuring the right to redressal to every
consumer of India.”7
12. RIGHT TO CONSUMER EDUCATION
“The right of every Indian citizen to have education on matters regarding consumer protection
as well as about her/his right is regarded as the last right provided by the Consumer Protection
Act 1986. The right makes sure that the consumers in the country have informational programs
and materials which are easily accessible and would enable them to make purchasing decisions
which are better than before. Consumer education might refer to formal education through
college and school curriculums as well as consumer awareness campaigns being run by non-
governmental and governmental agencies both. Consumer NGOs, having little endorsement
6
Supra note 1
7
Supra note 5
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from the government of India, basically undertake the task of ensuring the consumer right
throughout the country. India is found to be 20 years away from giving this right that gives
power to the common consumer.”8
In addition to these six rights there are two more rights which are listed in the guidelines United
Nations :
13. RIGHT TO BASIC NEEDS
“The basic needs mean those goods and services which are necessary for a dignified living of
people. It includes adequate food, clothing, shelter, energy, sanitation, health care, education
and transportation. All the consumers have the right fulfill these basic needs.”9
14. RIGHT TO HEALTHY ENVIRONMENT
“This right provides the consumers, protection against environmental pollution so that the
quality of life is enhanced. Not only this, it also stresses the need to protect the environment
for the future generations as well.”10
8
Supra note 3
9
“What Are the Consumers' Rights Under Section 6 of the Consumer Protection Act?” (Your Article Library
February 24, 2014) <http://www.yourarticlelibrary.com/consumers/what-are-the-consumers-rights-under-
section-6-of-the-consumer-protection-act/1135> accessed February 10, 2019
10
Ibid
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DUTIES OF CONSUMERS
Responsibilities of a consumer are not defined in the Consumer Protection Act 1986, but rights
and duties are complementary to each other, with rights comes the responsibilities. So, some
of the responsibilities of the consumers consuming product or services, which comes along
with the rights are:
1. Buying quality products at reasonable price.
2. To check the weights and meas-ures before making purchases.
3. Not buying the goods above MRP.
4. To check the security measures like ISI mark, Agmark, ISO, Hallmark, Woolmark, etc.
5. Asking for the bills every time from the seller to have a proof, so that if there is any
problem with the product, you can always redress the issue.
6. Always redress the problem if any, consumer should not keep quiet and should
immediately redress the problem by approaching Consumer Courts.
7. In case of edible items, consumers should always check the ingredients and nutrition
content.
Consumers should be aware of misleading schemes, on the first instance they could be alluring
but when examine closely, they could mislead the consumers.
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CONSUMER PROTECTION ACT 1986
The Consumer Protection Act, 1986 enacted "to provide better protection of the
interests of the consumers" - the consumers 'goods and services' as defined under
the Act. The Act "is a milestone in the history of socio-economic legislation ... to
meet the long felt need of protectioning the common man from such wrongs for
11
various reasons for the common law is illusory." The legislation, no doubt, has
the unique distinction of being the only one in the country, with its interests
against 'defective goods' and 'deficient services', even though a plethora of
existing legislations do have different ways to deal with consumer rights. Degrees
on specific matters The Act envisages a better legal frame work with an ordinary
consumer can fight for its rights and get his complaints. It provides for speedy and
inexpensive settlement of disputes within limited time-frame, as against civil suits
which are expensive and time-consuming. The provisions of the Act are in addition
to and in derogation of any other law for the time being in force and are
compensatory in nature 12..
The Act provides for the establishment of Consumer Protection Councils at the
Central, State and District levels "to promote and protect the rights of the
consumers" and a three-tier quasi-judicial machinery at the district, state and
13
national levels for "the settlement of consumer disputes ". The composition of
these authorities and their territorial and pecuniary jurisdictions, the process to be
followed by them in the complaints and the relief that the can be granted specially
laid down under the Act. In the light of the experience gained during
The initial years of its enforcement by the consumer courts, the Act has been
amended in 1991 and substantially in 1993 and 2002, with a view to make it more
effective in bringing justice to the doorsteps of the consumers.
Mahatma Gandhi, the father of nation, attached great importance to what he

described as the "poor consumer", who according to him should be the prime
11
See Rajendra Kumar Nayak, Consumer Protection law in India: An Eco-Legal Treatise On Consumer Justice,
New Delhi: The Indian Law Institute,1991)
12
P.V.N. F. Rao, "Need for training, education and creation of awareness amongst, A Report: December,
1993, 18.
13
See Consumer Protection Act, 1986 of India.
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beneficiary of the consumer movement. "
A Consumer is the most important visitor on our premises. He is not dependent on

us He is not an interruption to our work; He is the purpose of it we are not doing
14
a favour to a consumer by giving him a chance. He is doing us a favour by giving
him a chance to serve him. "Inspire of these views is the subject of consumerism
is still in its infancy in our country, thanks to the sellers' market and the
government monopoly in most services. Consumer awareness is low due to the
apathy and lack of education in the masses. No one has asked them about their
rights-to be informed about product quality, price, protection against unsafe
products, access to variety of goods at competitive prices, consumer education etc.
What consumerism lacks here are education andinformation resources, testing
facilities, competent leadership, price control mechanism, and adequate quasi-
judicial machinery. The providers of goods and services have been unsuccessful
to give due consideration to consumer interest protection.
In present situation, consumer protection, though as old as consumer exploitation,

has assumed greater importance and relevance. Consumerism is cent and universal
phenomenon. It is a social movement. Consumerism is all about protection of the
consumers According to McMillan dictionary "Consumerism is concerned with
protecting consumers from all organizations with which was exchanged
relationship. It encompasses the set of activities of government, business,
15
independent organizations and related consumers ". The Chamber's Dictionary
(1993) Defines Consumerism as the protection of the interests of the goods and
services against defective or dangerous goods etc. "Consumerism is a movement
or policies aimed at regulating the products or services, methods or standards of
manufacturers, sellers and advertisers in the interest of buyers, such a regulation
maybe institutional, statutory or a specific industry by occupying a voluntary code
in embodied or Result of more than the impact of consumer organization.
14
F. Jhanwar, Consumer Protection: Today, Need, Fight for Right, 2003
15
Dr. V.K.Agarwal, Consumer Protection Law and Practice: A Commentary on the Consumer Protection
Act, 1986, 6th Ed., New Delhi: B.L.H Published. 57 See Indian Legislation, Consumer Protection Act
1986 at http://www.commonlii.org/in/legis/num_act/cpa1986246/. Accessed on 10-02-19.
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15. OBJECTIVE OF THE CONSUMERS PROTECTION ACT, 1986
According to the preamble, the act is to provide the best protection of the interest of consumers,
for that purpose to make provision of the establishment of consumer’s councils and other
authorities for the settlement of consumer’s interest herewith. The basic rights of the consumers
are sought to be promoted and protected;
 The Right to Be Protected against Marketing of Goods and Services Which Art
hazardous To Life and Property.
 The Right to Be Informed about the Quality, Quality, Potency, Purity, Standard and
Price Of The Goods, Or Service As To Protect The Consumers Against The fire Trade
Practices
 Right To Be Assured, When Possible, At Competitive Price of Access to Variety of
Goods and service. That Consumers Interest Will Receive The Consideration At
Suitable Forums.
 The Right To Be Hearted A To Be Assured That Consumers Will Enjoy The Benefits
Of Consideration At Appropriate Forums.
 The Right to Seek Redressed against Unfair Trade Practice or Restrictive Trade
practices Or Unscrupulous Exploitation Of Consumer; And
 Right to Consumer Education. This Is the Basic Right of Consumers as Defined by
International organization Of Consumers (Icon) through. The Right Of Safety, To
Information Of Choice, To Be Hearted, To Be Repressed, To Consumers Education ,
To Healthy, To Healthy environment And To Basic Needs.
16. SCOPE OF ACT
16.1. Consumer protection council

The interests of the consumers are sought to be promoted and protected under theAct
inter alias by establishment of consumers protection councils at the central andstate
levels. chapter II so the consumer protection Act ,1986 comprising section 4to section
6 deals with consumers protection councils
16.2. Central consumer’s protection council
Section 4 empowers the central government to establish a council to be known sthe
central consumer protection council consisting of Minster in charge of consumers
affairs In the central government , as its chairman , and such number of other officials
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or non – official members representing such its chairman , andsuch number of other
officials or non – officials member representing such interest as may be prescribed .
However, the Consumers Protection Rules 1987restrict the number of members of the
councils to 150 members Section 5 of the Act requires the central councils shall meet
as a when necessary. But at least once in every year. The procedure in this regards to
transaction of its business at the meeting is given in Rule 4 of the Rules.
16.3. State consumers protection council :
Section 7 provides for the establishment (by notification) to be known as consumers
protection council for (name of the state). the state council shall consist of a Minister
in charge of consumers affairs in the state government as its chairman and such number
of other officials or non – officials members representing such interest asmay be
prescribed by the state government . The state councils shall meet as and when
necessary but not less than two meeting shall be held every year. Theprocedure to be
observed in regards to the transaction of its business at suchmeeting shall be prescribed
by the state government.
16.4. District Consumer protection Council
Section 8-A provides for the establishment (by notification) for every district a
councilto be known as district consumer protection council consisting of a collector of
thedistrict who will be the chairman and number of other officials and non
officialsmembers representing such interests. The district councsil shall meet as and
whennecessary but not less than two meetings in a year as prescribed by
stategovernment.The objects of the district council shall be to promote and protect
within the districtthe rights of the consumers laid down in clauses (a) to (f) of section
6.
16.5. Redressal Machinery under the ACT;
The Act provides for a three –tier quasi judicial redressal machinery at the district,state
and national level to redressal of consumers dispute and grievances. Thedistrict from
has jurisdiction to entertain complaint where the value of goods /services complained
against and the compensation. If the claimed. is less than Rs20 lakhs , the state
commission for claims exceeding Rs 20 lakhs but not exceedingRs 1 crores and the
national commission for the claims exceeding Rs 1 crores.(National commission also
have the jurisdiction to entertain appeals against theorders of any state commission
{section 21} )Broad review of CPA would show that its provisions may be classified
into two broad categories.
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16.6. Substantive provisions

The important provisions, such as, consumer, defect, deficiency, restrictive tradepractice,
service and unfair trade practice cover substantive part of CPA.
16.7. Procedural provisions
The provisions of CPA other than above substantive provisions are procedural provisions.
17. JURISDICTION OF CONSUMER FORUMS
The provisions regarding jurisdiction of various Consumer Dispute Redressal forums and their
jurisdiction may be summarized as follows.
17.1. District Forum
17.1.1. Pecuniary jurisdiction

Section 11(1) of CPA deals with pecuniary jurisdiction. It provides that the District
Forum has the jurisdiction to entertain complaints where the value of the goods or
services and the compensation, if any, claimed does not exceed rupees twenty lakhs.
The complaint involving claims exceeding rupees twenty lakhs cannot be entertained
by the District Forum. The pecuniary jurisdiction depends upon the amount of relief
claimed and not upon the value of the subject-matter, nor upon the relief allowed by the
Forum.
17.1.2. Territorial jurisdiction

Section 11(2) deals with territorial jurisdiction of the District Forum. It provides that a
complaint shall be instituted in a District Forum within the local limits of whose
jurisdiction:-(a) The opposite party or each of the opposite parties at the time of
institution of the complaint actually and voluntarily resides, carries on business, has a
branch office or personally works for gain.(b) Where there are more than one opposite
parties, any of the opposite parties at the time of institution of the complaint actually
and voluntarily resides, carries on business, has a branch office or personally works for
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gain.Provided that in such case, either the permission of the District Forum is given,
or the opposite parties who do not reside, or carry on business or have a branch office,
or personally work for gain, as the case may be, acquiesce in such institution; or (c)
The place where the cause of action, wholly or in part, arises (section 11).
17.2. State Commission

17.2.1. Original jurisdiction
Under section 17(a)(I) of CPA, the State Commission can entertain complaints where
the value of the goods or services and compensation, if any, claimed exceed twenty
lakes of rupees but does not exceed rupees 1crore the matter can be heard by the state
commission.
17.2.2. Appellate jurisdiction

Under section 17(a) (ii) of CPA, the State Commission has jurisdiction to entertain
appeals against the order of any District Forum within the State. According to section
15 of CPA, any person aggrieved by an order made by the District Forum may prefer
an appeal against such order to the State Commission within a period of thirty days
from the date of order. However, the State Commission may entertain an appeal after
the expiry of the said period of thirty days if it is satisfied that there was sufficient cause
for not filingit within that period.
17.2.3. Revisional jurisdiction

Under clause (b) of section 17 of CPA, the State Commission has jurisdiction to call
for the records and pass appropriate orders in any consumer dispute which is pending
before or has been decided by any District Forum within the State, where it appears to
the State Commission that such District Forum has exercised jurisdiction not vested in
it by law, or has acted in exercise of its jurisdiction illegally or with material
irregularity.
17.3. National Commission
17.3.1. Original jurisdiction

Under section 21(a) (I) of CPA, the National Commission can entertain complaints
where the value of the goods or services and compensation, if any, claimed, exceeds
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hundred lakhs of rupees. The pecuniary jurisdiction depends upon the amount of relief
claimed and not upon the value of the subject-matter.
17.3.2. Appellate jurisdiction
Section 21(a) (ii) of CPA provides that the National Commission shall have jurisdiction
to entertain appeals against the order of any State Commission. According to section
19, an appeal can lie to the National Commission only against the order made by the
State Commission in exercise of its power under its original jurisdiction. The appeal
may be preferred within a period of thirty days from the date of the order of the State
Commission. However, the National Commission may entertain an appeal after the
expiry of the said period of thirty days, if it is satisfied that there was sufficient cause
for notfiling it within that period. The appeal should be decided as far as possible, within
ninety days from the date of hearing.
17.3.3. Revisional jurisdiction

The jurisdiction of the National Commission in revision has been laid down in section 21(b) of
CPA. This is limited to consumer disputes wherein a State Commission.
17.3.3.1 State Commission has exercised a jurisdiction not vested in it by law, or

17.3.3.2 State Commission has failed to exercise jurisdiction so vested, or
17.3.3.3 State Commission has acted in the exercise of its jurisdiction illegally or
with material irregularity.
17.3.3.4 The National Commission can exercise its power in revisions only
under these situations.
17.4. Appeal to Supreme Court

Under Section 23, any person, aggrieved by an order made by the National Commission in
exercise of its powers conferred by sub-clause (i) of clause (a) of section 21, may prefer an
appeal against such order to the Supreme Court within a period of thirty days from the date of
the order: Provided that the Supreme Court may entertain an appeal after the expiry of theperiod
of thirty days if it is satisfied that there was sufficient cause for not filing it within that period.
No appeal by a person who is required to pay any amount in terms of an order of the national
commission shall be entertained by the Supreme Court.
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REVIEW OF LITERATURE
Economists and social scientists have conducted a number of studies relating to Consumer
behaviour and consumer protection. A detailed review of literature has been made to find out
the research gap and to identify the relevant issues for the study. This section provides a sketch
of the available related studies carried out in National and International level. This literature
review is from various books and articles related to consumer protection law.
Cheena Gambhir (2002) in her study “Consumer protection: Law and Practice” reveals that 54
percent of the respondents are aware of ISI mark and 46 percent of respondents were not aware.
Further out of 54 percent respondents, only 30 percent bought products that had ISI mark and
remaining 70 percent even though aware, did not buy these products.
Savarkar, G. (1996) in his study “Consumer Awareness: A Survey Analysis” concluded that
the main reasons, why dissatisfied consumers did not file complaint before any District Forums
were the lack of awareness about the Consumer Protection Act’s measures.
SampathKumar, R. (2002) in the study “Consumerism in India: An overview” state that
consumerism is society’s attempt to redress the inconsistency in the exchange transactions
between sellers and consumerism.
C&AG (2006)34 according to their survey commissioned through ORG centre for social
research report that about sixty-six percent of the consumers interviewed were not aware of
consumer rights and 82 percent were even unaware of the Act and Nearly 49 percent of the
aware consumers had come to know about the Act only in the last 4 years.
Shashi Nath Mandal (2009) in his study entitled “Protection of Consumers Right through
Judicial and Extra Judicial Mechanism in India” concludes that consumer protection laws are
federal and state statutes governing sales and credit practices involving consumer goods such
statutes prohibit and regulate deceptive or unconscionable advertising and sales practices,
product quality, credit financing and reporting, debt collection, leases and other aspects of
consumer transaction.
Hawa Singh and Monika Singh (2011) in their study, “Consumer Education and Awareness”
suggest that the Government should take necessary steps to improve the functioning of
consumer redressal for quick settlement of complaints by providing all necessary amenities
such as infrastructure and staff facilities.
Jayasubramanian, P. and Vaideke, A. (2012) in their study “A Study on Consumer Awareness
and Attitude towards Consumer Protection Measures” shows that consumer protection
measures are not aware to general public because of lack of proper communication. They also
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said that consumerism is not going to be a threat but only a better opportunity for better
business.
Sune Donoghue and Helena M.de Klerk (2009) in their study “The Right to be Heard and to
be Understood :A Conceptual Frame Work for Consumer Protection in Emerging Economics”
state that one way of protecting the consumer is by establishing a redress environment that
would ensure fair redress as well as an understanding and appreciation of the consumer.
Fetterman, E. and Schiller, M.K. (1978) in their book “Let the Buyer Be Aware: Consumer
Rights and Responsibilities”, explains how the consumer can avoid problems through better
buying techniques and careful planning. They also stress the need of the consumer for knowing
about their rights and responsibilities to choose the alternatives among the available choice.
Vanisree, D. (2013) in her study “Role of Media in Consumer Protection” state that television
was the main media which influence their buying. There is a significant difference between the
awareness levels of the respondent of different age group about consumer organization working
in and around their area. Respondent above the age group of 42 were more aware about the
consumer organization working in their area than the respondent below the age group of 41.
Parag A. Inamdar, (2013) in his study of “Consumer Protection - A Study of Consumer
Awareness in Mumbai City District” found that 32% consumers were aware about the
consumer protection law and 68% were not about such protection law and 14.6% know the
procedure of filing a complaint in consumer courts and 85.4% does not know the procedure of
filing a complaint in consumer courts.
Partap Singh and Joginder Grewal (2013) in their study entitled “Consumer Protection in India:
Some Issues & Trends” state that consumer rights could be protected in a competitive economy
only when right standards for goods and services are ensured by evolving a network of
institutions and legal protection system.
Review of literature enables the researcher to know the availability of related literature in the
context to the present study. The information given in this chapter is from the newspaper
articles, journals, magazines and internet sites. The present review of literature is an attempt to
fill up the gaps by studying the fundamental values of consumer protection laws, which are
expected to be followed in general in the consumer education as consumer in particular. Thus,
the researchers have made a reliable and sincere attempt to cover the hindrances and limitations
that are responsible for not having the awareness of consumer protection laws.
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CONCLUSION
We conclude that very few consumers are fully aware about the rights, responsibilities and
Consumer Protection Act. Hence, it is necessary to educate them on their right sand
responsibilities as consumers, to make them vigilant, rational and aware buyers.
From the interviews, it can be understood that all consumers and traders felt that the consumer
must be educated about his supremacy, his rights and duties and the way he should make wise
purchases Besides, the methods of procuring redressal of grievances should be explained
clearly to them Consumer education refers to the conscious preparation of an individual, so
that he is no longer gullible and hence not deceived easily by traders. This is the first step
towards the consumer movement, because without education, consumers will not fight against
exploitation and traders will continue to take advantage of their ignorance.
To conclude, no amount of consumer bills will help the Indian consumer, unless he is prepared
to help himself One such way is by refusing to accept inferior quality goods and services now
rendered to him. He must insist that he is entitled to get full value for his money.
Self help is the best help. This realization must dawn on every consumer in our country. It is
only then that the consumers can find salvation from their problems The crying need of the
hour is the organisation of consumers into powerful unions at various 174 levels to protect their
rights and privileges and safeguard themselves against the exploitation by the fraudulent
businessmen and industrialists. All this makes us realise how weak is the Indian consumer, and
what a Herculean task is ahead of him.
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ANNEXURE 1: SURVEY REPORT
We conducted an online survey of 100 people where we collected their responses regarding
their level of consumer awareness. They were asked whether they were aware about their rights
and duties as consumers and whether they were availing them. Please find attached a report
which analyses the data we have collected.
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ECONOMICS OF CONSUMER AWARENESS

NATIONAL LAW UNIVERSITY ODISHA

TABLE OF CONTENTS ........................................................................................................... 5

1. MEANING OF CONSUMER ........................................................................................ 8

2. CONCEPT OF CONSUMER PROTECTION AND COMMON MALPRACTICES” . 9

4. NEED FOR CONSUMER PROTECTION .................................................................. 10

4.1. SOCIAL RESPONSIBILITY:” ............................................................................. 10

4.2. INCREASING AWARENESS:” ........................................................................... 10

4.3. CONSUMER SATISFACTION:” ......................................................................... 10

4.4. GROWTH AND SURVIVAL OF BUSINESS: .................................................... 10

4.5. PRINCIPLE OF SOCIAL JUSTICE:” .................................................................. 10

4.6. PRINCIPLE OF TRUSTEESHIP:” ....................................................................... 10

CAUSES OF CONSUMER EXPLOITATION ....................................................................... 11

5.1. LACK OF KNOWLEDGE:................................................................................... 11

5.2. TELE MARKETING:”.......................................................................................... 11

5.3. LIMITED INFORMATION:” ............................................................................... 11

5.4. MONOPOLY:” ...................................................................................................... 11

5.6. CONSUMER’S INDIFFERENCE TOWARDS THE MARKET: ....................... 11

5.7. ILLITERACY AND FEELING OF SATISFACTION: ........................................ 12

6. Examples of Consumer Exploitation in India: .............................................................. 12

Rights of Consumers ................................................................................................................ 13

7. Right to Safety .............................................................................................................. 13

8. Right to Information ..................................................................................................... 14

10. Right to be Heard ...................................................................................................... 15

11. Right to Redressal ..................................................................................................... 16

12. Right to Consumer Education ................................................................................... 16

13. Right to Basic Needs ................................................................................................. 17

14. Right to Healthy Environment .................................................................................. 17

Duties of Consumers ................................................................................................................ 18

Consumer protection act 1986 ................................................................................................. 19

15. Objective of the Consumers Protection Act, 1986 .................................................... 21

16. Scope of act ............................................................................................................... 21

16.1. Consumer protection council ............................................................................. 21

16.2. Central consumer’s protection council .............................................................. 21

16.3. State consumers protection council : ................................................................. 22

16.4. District Consumer protection Council ............................................................... 22

16.5. Redressal Machinery under the ACT;................................................................ 22

16.6. Substantive provisions ....................................................................................... 23

16.7. Procedural provisions......................................................................................... 23

17. Jurisdiction of Consumer Forums ............................................................................. 23

17.1. District Forum .................................................................................................... 23

17.2. State Commission .............................................................................................. 24

17.3. National Commission......................................................................................... 24

17.4. Appeal to Supreme Court................................................................................... 25

review of literature ................................................................................................................... 26

Annexure 1: Survey Report ..................................................................................................... 29

a) For the purpose of goods, a consumer is defined as

b) For the purpose of services, a consumer is defined as

2. CONCEPT OF CONSUMER PROTECTION AND COMMON MALPRACTICES”

Some most common business malpractices leading to exploitation of consumers are:

a. Sale of duplicate products.

4. NEED FOR CONSUMER PROTECTION

4.1. SOCIAL RESPONSIBILITY:”

4.2. INCREASING AWARENESS:”

4.3. CONSUMER SATISFACTION:”

4.4. GROWTH AND SURVIVAL OF BUSINESS:

4.5. PRINCIPLE OF SOCIAL JUSTICE:”

4.6. PRINCIPLE OF TRUSTEESHIP:”

CAUSES OF CONSUMER EXPLOITATION

5. WHAT ARE THE REASONS THAT A CONSUMER IS CHEATED AND EXPLOITED?

5.1. LACK OF KNOWLEDGE:

5.2. TELE MARKETING:”

5.3. LIMITED INFORMATION:”

5.6. CONSUMER’S INDIFFERENCE TOWARDS THE MARKET: