consumer protection act 1986

Consumer Protection Act-1986

“NEED FOR CONSUMER PROTECTION ACT

IN AN ERA OF FREE COMPETITION

WHERE CONSUMER IS THE KING

THEREFORE, KING NEED PROTECTION”


TABLE OF CONTENT

SR.

NO.TOPIC

PAGE

NO.

1 Introduction………………………………………………...……… 4

2 Problems Faced By Consumers……………………………………. 6

3 Evolution Of Consumer Protection Rights In India……..………… 8

4 Consumer Protection Act - 1986…………………………………... 9

5 Consumer…………………………..……………………………… 10

6 International Scenario …………………………………....……….. 12

7 Rights Of A Consumer/ Objectives Of The Act ………………….. 14

8 Complaint …………………………….…………………………… 18

9 Procedure Of Filing A Complaint………………………………… 22

10 Forums ………………………………………………………..…… 23

11 “Jago Grahak Jago” Scheme Of Govt. Of India ……………….… 25

12 Consumer Guidance Society Of India (CGSI)…………………..… 31

13 Statistical Data …………………………………………..………… 34

14 Comparison Of Consumer Protection Act In India And Brazil…… 36

15 Case Studies ……………………………………………………… 49

16 Recommendations…………………………………………………. 46

17 Conclusion………………………………….…………………….... 47

18 Webliography…………………………………………………….... 50


INTRODUCTION

“A customer is the most important visitor on our premises.

He is not dependent on us. We are dependent on him.

He is not an interruption of our work. He is the purpose of it.

He is not an outsider of our business. He is part of it.

We are not doing him a favour by serving him.

He is doing us a favour by giving us the opportunity to do so.”

-By Mahatma Gandhi

To any business, customer eccentricity is as important as product. Today the markets are guided by the

desire of customers. There are companies like Marks & Spencer whose principal is based on its tagline

i.e. “The customer is always and completely right!” Customer eccentricity is extremely essential to a

business, because without customers no business can survive.

It has been studied that customer are very prone to lose interest in the

product with every new product launch. Therefore, in today’s world the

firms do not leave any stone unturned to attract the consumer and gain a

significant market share. The companies have started differentiating their

own products with the consumers’ eyes.

Today’s consumers are at a far better position than that of past as

consumers with more safety, security and choices towards product, as the products are made as per their

convenience, needs and desires. Lately the markets have been transformed from “sellers’ market” to

“buyers’ market” where the choice exercised by the consumer will be influenced by the level of

consumer awareness achieved. When it comes to customer preferences, it is not a matter of right, wrong

or what might ultimately be acceptable. It’s simply a matter of what the customer wants to buy.

Therefore, consumers are considered to be king in a free market.


Webster's dictionary defines “Consumerism” as “the promotion of the consumer’s interests” or

alternately “the theory that an increasing consumption of goods is economically desirable”.

“Consumerism’s likely to dominate the Indian market in the coming years, thanks to the economic

reforms in the present years and increased direct foreign investment in the retail sector. Consumerism also

means the process of realizing the rights of the consumer as envisaged in the Consumer Protection Act-

1986 i.e. right to safety, right to be informed, right to choose, right to be heard, right to redress, right to

consumer education, right to satisfaction of basic needs and ensuring right standards for the goods and

services for which one makes payment.

The big multinationals will leave no stone unturned to gain the attraction of the consumer and will try to

gain a respectable market share. However, some of the companies try to engage in unscrupulous,

exploitative and unfair trade practices like defective and unsafe products, adulteration, false and

misleading advertising, hoarding, black-marketing etc. The earlier approach of caveat emptor, which

means “Let the buyer beware”, has now been changed to caveat venditor “Let the seller beware”. There is

an active need for having awareness on the consumer protection rights.

Manufacturers and service providers offer product and services to fulfill needs & wants of customers. On

one hand and to increase their level of profit, sales & market share on another. However, in an attempt to

increase their sales and market share, these producers may be tempted to engage in unfair practices like

defective and unsafe products, adulteration, false and misleading advertising, hoarding, black-marketing

etc. Hence, there is a need to provide adequate protection to consumer’s against such practices of the

seller. According to the Cambridge Advance Learning Dictionary, “Consumer protection is the protection

of buyers, of goods & services against low quality, or dangerous products and advertisements that deceive

people. Consumer protection includes educating consumers about their rights and responsibilities and

helping them to seek redressal of their grievances.


REASONS FOR WHICH CONSUMER NEEDS PROTECTION/

PROBLEMS FACED BY CONSUMERS

1. Illiteracy and Ignorance: -

Consumers in India are mostly illiterate and ignorant. They do not understand their rights.

A system is required to protect them from unscrupulous businessmen.

2. Unorganized Consumers: -

In India consumers are widely dispersed and are not united. They are at the mercy of businessmen.

On the other hand, producers and traders are organized and powerful.

3. Spurious Goods: -

There is increasing supply of duplicate products. It is very difficult for an ordinary consumer to

distinguish between a genuine product and its imitation. It is

necessary to protect consumers from such exploitation by

ensuring compliance with prescribed norms of quality and

safety.

4. Deceptive Advertising: -

Some businessmen give misleading information about quality, safety and utility of products.

Consumers are misled by false advertisement and do not know the real quality of advertised goods. A

mechanism is needed to prevent misleading advertisements.


5. Adulteration:-

Most of the times consumers even after paying high price, do not get pure or we can say quality

goods. The organization usually supplies adulterated goods for their profit maximization.

6. Irregular Supply: -

One of the common problems faced by consumers is an irregular supply of goods. This is because of

shortage of goods. The organizations create artificial scarcity of necessary goods by hoarding these

goods resulting in high prices.

7. Other Problems Include:-

Malpractices of businessmen and companies,

Deceptive and misleading techniques,

False warranties or guarantees,

Black marketing etc.

EVOLUTION OF CONSUMER PROTECTION RIGHTS IN INDIA


The consumer movement in India is as old as trade and commerce. In Kautilya's Arthashastra, there

are references to the concept of consumer protection against exploitation by the trade and industry, short

weights and measures, adulteration and punishment for these offences. However, there was no organized

and systematic movement actually safeguarding the interests of the consumers. Prior to independence, the

main law under which the consumer interests were considered were the Indian Penal Code, Agricultural

Production, Grading and Marketing Act, 1937, Drugs and Cosmetics Act, 1940. Even though different

parts of India exhibited different levels of awareness, in general, the level of awareness was pretty low.

Indian consumer movement began with Passengers and Traffic Relief Association (PATRA) in

Mumbai, in 1915. The growth from there has been incredible and the momentum of this growth started

during the‘60s. In 1969, Monopolies and Restrictive Trade Practices Act was enacted and MRTP

commission was set up under the provision of the act. The act deals with cases of restrictive trade

practices adversely affecting competition and with unfair trade practices arising largely out of false and

misleading advertisements. After this act, consumer groups emerged. The emergence of Consumer

Education and Research Centre in Ahmadabad, in 1978, was a milestone in the consumer movement of

India. It provided a thrust and a direction to the movement in terms of a result-oriented approach through

effective uses of the law and the courts, and injecting professional inputs into the movement. In 1980s

various consumer rights and many consumer groups were formed in different parts of the country.

In 1986 the Consumer Protection Act was enacted. In 1987, the Indian Standards Institute (ISI),

which was started around 1947 as a membership society largely dominated by industries, was turned into

a statutory corporation called the Bureau of Indian Standards with greater participation by consumer

organizations thereafter. In 1993, the Consumer Protection Act was amended overcoming few limitations

and making it more effective and inducing the concept of consumer courts. Three tier consumer courts at

the nation, state and district level known as the District Consumer Dispute Redressal Forum, State

Consumer Disputes Redressal Commission, and the National Consumer Disputes Redressal Commission

respectively was established under the provision of the act. Consumer Welfare Fund was also created

during that time. The act includes the Securities and Exchange Board of India, 1992, the

Telecommunication Regulatory Authority of India, 1997, and the Central Electricity Regulatory

Commission, 1998. Apart from these, a number of acts like Indian Contract Act, Sale of Goods Act, The

Essential Commodities Act, The Agricultural Produce (Grading and Marking) Act, The Prevention of

Food Adulteration Act, The Standards of Weights and Measures Act have been enacted by the Indian

legislature from time to time to protect the interest of the consumer. The system has been considered as

one of the best in the world in the matter of consumer protection.

CONSUMER PROTECTION ACT - 1986


Consumer Protection Act is an Indian federation law enacted in 1986 to protect interests of consumers

in India. Except Jammu and Kashmir State, this Act extends to whole of India. It makes provision for the

establishment of consumer councils and other authorities for the settlement of consumer disputes and for

matters connected therewith. The growing interdependence of the world economy and international

character of many business practices have contributed to the development of universal emphasis on

consumer rights protection and promotion. Consumers, clients and customer’s world over, are demanding

value for money in the form of quality goods and better services. Modern technological developments

have no doubt made a great impact on the quality, availability and safety of goods and services. But the

fact of life is that the consumers are still victims of unscrupulous and exploitative practices. Exploitation

of consumers assumes numerous forms such as adulteration of food, spurious drugs, dubious hire

purchase plans, high prices, poor quality, deficient services, deceptive advertisements, hazardous

products, black marketing and many more.

In addition, with revolution in information technology newer kinds of challenges are thrown on the

consumer like cyber-crimes, plastic money etc., which affect the consumer in even bigger way.

“Consumer is sovereign” and “customers the king” are nothing more than myths in the present scenario

particularly in the developing societies.

However, it has been realized and rightly said so that the Consumer protection is a socio- economic

programed pursued by the government as well as the businesses for the satisfaction of the consumers is in

the interest of both. In this context, the government, however, has a primary responsibility to protect the

consumers’ interests and rights through appropriate policy measures, legal structure and administrative

framework. The intention and object of the Consumer Protection Act, is to provide a speedy remedy and

for better protection of interests of consumer.

The Consumer Protection Act, 1986 has defined the term ‘Consumer’. Only the customers who falls

under the definition of Consumer can be benefited through Consumer Protection Act. Hence the

definition of consumer is of much importance to determine the applicability of the Act.

CONSUMER


Any person who buys any commodity or service or is a user of such commodity or service is known as

consumer. Any person must satisfy two conditions to claim himself as a consumer:-

1) The service must have been rendered to him

2) He must have paid or promised to pay for the same.

If any person buy capital goods to provide services to other individuals, then he is also recognized as

consumer.

Who is not a consumer?

If any person buys a commodity with an intention to resale.

A person who obtains services without consideration.

A person who obtains services for commercial purpose.

Example:-

1.When a person buys milk to consume for himself or his family than he

can be considered as consumer but if he buys the milk for selling purpose

than he is not a consumer he is termed as seller.

2. Television is made for purpose of entertainment, so when the person is just sitting and watching the

television and getting entertained is the consumer and the person who is manufacturing the television for

the purpose of entertainment is not a consumer he is the manufacturer or producer.

DEFECT


Defect means any fault, imperfection or shortcoming in the quality, quantity, potency, purity or

standard which is required to be maintained by or under any law for the time being in force or under any

contract, express or implied or as is claimed by the trader in any manner whatsoever in relation to any

goods. Defect means lack or absence of something essential for completeness. If seller fails to deliver the

goods which he agreed to sell will be treated as defect.

Examples:-

i. Suppose a customer buys a refrigerator and finds that the cooling is not proper then the product is

defective.

ii. A customer purchases chocolate and finds worms in it then the product i.e. chocolate is considered to

be defective.

SERVICE

Service means service of any description which is made available to potential users and includes 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.

Examples:-

1. Whenever we travel in flights, the food which is provided to us is a service which the flight agency

gives to us.

2. whereas now a days we get all the alert messages on our smart phones regarding our bank transactions

that is also a service provided to us by banks


INTERNATIONAL SCENARIO

The process of development coupled with increasing liberalization and globalization across the

country has enabled consumers to realize their increasingly important role in society and governance.

However, concentration of the market power in the hands of a select few has affected consumers’

behavior over time. In a developing country like India where the incidence of poverty and unemployment

is very high and the level of literacy is very low, the people face a volume of problems, particularly in the

context of consumer related issues. Unlike in the developed world, consumers in these countries have not

been able to play a greater role in the development process.

The purpose of economic planning is to allocate resources, as far as possible, for the maximum

satisfaction of consumers’ needs. Any goods or services produced in an economy are ultimately meant for

consumers. There is a logical, moral and political force in the proposition that the consumers themselves

should have the right to take decisions about the allocation of resources for their own needs.

Realizing this need, the International Organization of Consumer Unions, now known as Consumers

International, took the initiative and under its consistent lobbying, the United Nations adopted a set of

Guidelines for Consumer Protection on April 9, 1985 which was revised in 1999. The Guidelines address

the interests and needs of consumers worldwide and provide a framework for Governments, particularly

those of developing and newly independent countries, to use for elaborating and strengthening consumer

protection policies and legislation.

The UN Guidelines have outlined the following eight areas for

Developing policies for consumer protection:

Physical safety,

Promotion and protection of consumers’ economic interests,

Standards for safety and quality of consumer goods and services,

Distribution facilities for essential consumer goods and services,

Measures enabling consumers to obtain redress,

Education and information programs,

Promotion of sustainable consumption and

Measures relating to specific areas like water, food and pharmaceuticals.


These areas have been translated into the following six

Consumer rights by the Consumers’ International.

Right to Basic Needs,

Right to Safety,

Right to Choice,

Right to Information,

Right to Consumer Education,

Right to Redressed,

Consumers International Strategy is to unlocking consumer power on a global scale. Imagine a world

where individuals are as powerful as the governments and corporations they interact with. A global

marketplace where consumers have the power to challenge unfair, unsafe and unethical corporate

practice and win. To achieve this each individual need to think big & act global.

It is now more than 50 years since President John F Kennedy articulated the concept of consumer

rights in his historic message to the US Congress in which he outlined his vision of consumer rights. This

was the first time any politician had formerly set out such principles.

Consumers by definition include us all,' Kennedy said in his Congressional Statement, 'They are the

largest economic group, affecting and affected by almost every public and private economic decision.

Yet they are the only important group, whose views are often not heard.'

Even today in many countries the goal of realizing these rights is still a long way off. CI believes that

the time is ripe for a more concerted, intensive and aggressive effort to put new consumer protection

measures in place and make this goal a reality.


OBJECTIVES OF THE ACT

The legislative intention behind this Act is to clear all hurdles in promoting competition among

business units whether of domestic or foreign origin. The Consumer Protection Act of 1986 was enacted

with an objective to provide better protection of the interests of the Consumers, to make provision for

the establishment of Consumer Councils and other authorities for the settlement of consumer disputes.

This is indeed a very unique and highly progressive piece of Social Welfare Legislation. The provisions

of this Act are intended to provide effective and efficient safeguards to the consumers against various

types of exploitations and unfair dealings.

Unlike other laws, which are basically punitive or preventive in nature, the provisions of the Act are

compensatory. It is a matter of great satisfaction that we can legitimately boast that we now have in our

country a statute, which provides more effective protection to the consumers than any corresponding

legislation in force in countries, which are considered to be much more advanced and industrialized.

CPA has been in operation for about 18 years. A number of deficiencies and shortcoming in respect of

its operation have come to light there by requiring amendments thrice, still leaving scope for further

improvements. Despite all this it is a handy weapon for consumers to ensure accountability of producers

of goods and providers of services.

In the International Conference on Consumer Protection held in Malaysia in 1997, the Indian

Consumer Protection Act was described as one “which has set in motion a revolution in the field of

consumer rights, the parallel of which has not been seen anywhere else in the world”.

Basic purpose for the Consumer Protection Act:-

Right To Safety,

Right To Be Informed,

Right To Choose,

Right To Be Heard,

Right To Seek Redressal and

Right To Consumer Education.


They are being explained in detail as follows:-

1. Right To Safety:-

Consumer has the right to be protected against marketing of such goods and services which are

hazardous to health, life and property. There are several fake, adulterated, inferior, defective, ineffective

and dangerous goods available in market. They are injurious to body and health. Consumer, therefore,

has the right to safety from all such goods which are likely to cause harm to his body and health, besides

causing loss of money. Here the consumer’s responsibility is to use the product safely.

Example: - Certain products mentions warning and preventions to be taken into account for the safety

measures. Like a tobacco packet should have a label which

advice that consumption of the same leads to cancer. Here the

manufacturer must specify all the factors which are related to the

safety of the consumers.

SMOKING KILLS!!

2. Right To Choose:-

Under this right, consumer can choose any from among the variety of goods and services available in

the market. In the market we find goods of different brand, quality, shape, color, size, design and price

produced by different manufacturers. Under this right, the consumer must be assured access to variety of

goods and services at competitive prices as far as possible. By misleading or false advertisement, wrong

information or in any other way, If any person (manufacturer, seller) influences his preference, in an

unfair or unnecessary manner, it will be treated as intervention in consumers right to choose.

Example: - A man went to a showroom for buying mobile in a shop. Where in for each mobile there are

various substitutes available varying in price, brand and composition. Suppose he wants to purchase a

Samsung mobile, here the man has a choice of selecting any

mobile of his choices available in the showroom. Here the

consumer can enjoy the “Right to choose”. And the consumer’s

responsibility is to make selection carefully.

3. Right To Be Informed:-


Consumer has the right to get all necessary information on the basis of which he may decide to buy

the good or service. He has therefore the right to be informed about the quality, quantity, purity,

potency, standard, price of goods, etc.

Example: - The duty of the manufacturer is to clearly mention the exact food ingredients used for

making the product with its composition on a visible label. It is mostly printed on the back side of the

food packet. The packet should also indicate whether the ingredients used in making the product are

non-veg based or veg based. Green colour indicates use of vegetarian ingredients and brown colour

indicates use of non-vegetarian ingredients. Here the consumer has the “Right to be informed.” And

hence he should pay attention to details while buying any product.

VEGETARIAN

NON- VEGETARIAN

4. 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.

Right to be heard initiative allows consumer to upload videos, post complaints and suggestions on

various issues and agendas. It also help consumer reach out to the right authorities and ensure that they

are heard and get the speedy justice that they deserve.


5. Right To Seek Redressal:-

Consumer has the right to get his claims and complaints settled against the manufacturers and sellers.

This right provides the consumer freedom from unfair trade practice or unscrupulous exploitation by the

trader. Besides, it helps him secure compensation. A warranty is usually a written guarantee for a

product and declares the maker's responsibility to repair or

replace a defective product or its parts. A guarantee is an

agreement assuming responsibility to perform, execute, or

complete something and offering security for that agreement.

Any consumer who has issued a complaint to the producer, but

the producer does not address the issue. Here, the consumer has

the right to approach the district consumer court for this issue

and file a complaint against the producer.

Example: - If any consumer has purchased a mobile phone, but it stopped working within the warranty

period. Though the consumer has approached the manufacturer for the same issue but the manufacturer

hadn’t taken any heed to attain his complaint. So, the Consumer can approach the consumer court for

this issue.

6. Right to Consumer Education:-

Under this right, consumer is entitled to get information or educated about those things which are

necessary for him. Such an education creates awareness about his rights and he comes to know when to

approach for the redressal of his grievance and exploitation. This helps a consumer protects himself

against fraudulent, deceptive and misleading advertisement and poor or negligent services.

Manufacturer should make consumer aware and educate them about the product they buy. He should

guide them about how to use the product, precautions to be taken, the dos and don’ts of it etc.

Example: - Suppose a consumer bought an air conditioner. So the manufacturer should provide him

with the knowledge regarding the operation of the air conditioner, such as working, cooling etc. This

depicts the “Right of consumer education”

COMPLAINT


In legal terminology, a complaint is any formal legal document that sets out the facts and legal

reasons that the filing party or parties believes are sufficient to support a claim against the party or

parties against whom the claim is brought that entitles the filing party to a remedy (either money

damages or injunctive relief). Any allegation in writing made by a complainant.

Complaint is filed for:-

Defect in goods,

Deficiency in service,

Charging of excess price,

Hazardous goods,

Unfair trade practice or restrictive trade practice.

GUIDELINES FOR FILING A COMPLAINT BEFORE THE DISTRICT CONSUMER

DISPUTES REDRESSAL FORUM

Following is an outline of the procedure for filing a complaint before the District Forum or the State

Commission. We have attempted to give simple information and key pointers, but you may consult the

Consumer Protection Act for further details.

1. Jurisdiction: If the relief claimed in the complaint is less than Rs. 20,00,000/-, then the complaint

must be filed before the District Consumer Forum. If the relief claimed is between Rs. 20,00,000/-

and Rs. 1,00,00,000/-, then the complaint must be filed before the State Commission. When the

relief claim exceeds Rs. 1,00,00,000/- then the complaint must be filed before the National

Commission at New Delhi. However, see point 6(j) for more details regarding jurisdiction of the

Consumer Courts.

2. A ‘prescribed fee’ is payable for filing a complaint before the District Forum,

State Commission or National Commission as follows:

http://en.wikipedia.org/wiki/Filing_(legal)

http://en.wikipedia.org/wiki/Injunctive_relief

http://en.wikipedia.org/wiki/Money_damages

http://en.wikipedia.org/wiki/Money_damages

http://en.wikipedia.org/wiki/Legal_remedy


FORUM/ RANGE OF LOSE FEES

DISTICT FORUM

Upto 1 lakh Rs.100/-

1 lakh to 5 lakhs Rs.200/-

5 lakhs to 10 lakhs Rs.400/-


STATE COMMISSION


50 lakhs to 1 crore Rs.4000/-

NATIONAL COMMISSION

Above 1 crore Rs.5000/-

3. The complainant can present his / her complaint in person or by his / her authorised representative to

the District Forum / State Commission. There is no requirement for a lawyer or consumer group to

represent the complainant.

4. The complaint can be sent by Registered Post to the District Forum / State Commission. A

minimum of 5 copies of the complaint have to be filed. This includes three copies for the Forum [in

green (Court) paper] plus one for the Office of the Forum and one for the opposite party. Do

remember to keep one copy for yourself. An additional copy for each additional opposite party has

to be filed. Since the Forum / Commission have the power to pass ex parte orders or dismiss your

complaint, please ensure that you carry out regular follow-up after filing the complaint. Every

hearing date has to be attended to prevent any damage to the complaint.

5. The complaint should be signed by you, the complainant. If you are authorising someone to

represent you, give him / her a signed authorisation letter. In the event of the death of a

complainant, his/her legal heir or representative can continue as a complainant.


6. A complaint should contain the following information:

a. A cause-title before the main heading. For example,

Before the Hon’ble Chennai District Consumer Redressal Forum

Mr. A ...Complainant

Vs.

XYZ Co. Pvt. Ltd. ... Opposite Party

b. A heading -- e.g. ‘Complaint under Section 12(a) of the Consumer Protection Act’.

c. The name, description and address of the complainant.

d. The name, description and address of the opposite party or parties as the case may be, so far as they

can be ascertained.

e. The facts relating to the complaint and when and where it arose.

f. How the opposite parties are liable to be proceeded against - why are they answerable or accountable

to you in relation to the complaint

g. Copies of documents in support of the allegation contained in the complaint, complainants are

advised to keep copies of the complaint and all furnished documents for their records. A list of

documents should also be furnished along with the complaint, duly signed by you.

h. In case you want to claim consequential damages due to negligence please note that negligence or

deficiency must be clearly alleged, defined and established to get compensation under Consumer

Protection Act.

i. Compensation may also be sought on account of consequential damages, irrespective of the fine

print in many contracts that may suggest that the seller is not responsible. There is no ceiling on

compensation claimed.

ii.

j. The value of the relief includes (where applicable) refunds, damages, litigation costs and interest.

Please remember that the Act provides for adequate litigation costs to the parties. If you are asking for

compensation, quantify the amount and state the break-up i.e., how the amount is arrived at and under

what heads. If the relief cannot be quantified, give a notional value. Remember the District Forum can

entertain complaints of value up to Rs. 20,00,000/- and the State Commission, complaints of value from

Rs. 20,00,000/- up to 1,00,00,000/-.


k. State how the case falls within the jurisdiction of the tribunal - whether the opposite party resides or

carries on business or has a branch office or personally works within the jurisdiction of the Forum or

whether the cause of action (for defective, spurious, fake, substandard or dangerous goods OR deficient

or delayed services or services not carried out OR for misleading advertisements OR for unfair trade

practices) started within the Forum’s jurisdiction. The cause of action can be defined as the factor from

which this dispute arose. For example, if you are buying shares for which you have not received the

share certificates, then the cause for this action in the Consumer Courts arose when you bought the share

certificates. Therefore the Forum situated in the place where you bought these shares will have

jurisdiction to adjudicate your complaint.

l. The relief which the complainant is seeking: here state whether you want removal of defects,

replacement of goods, refund of excess price, refund of charges paid for deficient services, cessation of

unfair trade practice, correction of misleading advertisements etc. apart from damages and costs of filing

the complaint.

m. With the coming into force of the 2002 Amendment (on 15.03.2003) the Consumer Forum and

Commission can also pass interim orders and grant punitive damages. Specifically if your complaint is

about the sale of hazardous goods, the Forum / Commission can direct the Opposite Party not to offer

the hazardous goods for sale and to withdraw the hazardous goods from being offered for sale.

n. You are also entitled to claim the costs of your complaint from the opposite party. Hence include

that amount in your complaint.

o. The limitation period for filing complaint is two years from the date of the cause of action. In case the

limitation period expires, the Forum or Commission may still take your complaint on board, if they are

convinced about the reasonableness of the cause for the delay. However, do avoid delays, since you will

be required to provide explanations for every single day.

6. Consumers facing the same problem can come together and file a single complaint. Enclosing a

petition with the complaint stating that the facts and circumstances relating to the complaint and the

relief claimed are the same for all the petitioners and that they may be allowed to join together and file a

single complaint.

7. Complainants who appear in person often are asked to present an affidavit of proof when there is no

recorded evidence on a point of fact. This affidavit of proof must be in first person and should contain

the details given in the format enclosed.


PROCEDURE OF FILING A COMPLAINT


FORUMS


1. District Forum

This is established by the state governments in each of its districts.

Composition : The district forums consist of a Chairman and two other members one of whom shall be a

woman. The district forums are headed by the person of the rank of a District Judge.

Jurisdiction : A written complaint can be filed before the District Consumer forum where the value of

goods or services and the compensation claimed does not exceed Rs. 20 lakh

Appeal : If a consumer is not satisfied by the decision of the District forum, he can challenge the same

before the State Commission, within 30 days of the order


2. State Commission

This is established by the state governments in their respective states.

Composition : The State Commission consists of a President and not less than two and not more than

such number of members as may be prescribed, one of whom shall be a women. The Commission is

headed by a person of the level of High Court judge.

Jurisdiction : A written complaint can be filed before the State Commission where the value of goods or

services and the compensation claimed exceeds Rs. 20 lakh but does not exceed Rs. One crore.

Appeal : In case the aggrieved party is not satisfied with the order of the State Commission he can appeal

to the National Commission within 30 days of passing of the order

3. National Commission

The National commission was constituted in 1988 by the central government. It is the apex body in the

three tier judicial machinery set up by the government for redressal of consumer grievances. Its office is

situated at JanpathBhawan (Old Indian Oil Bhawan), A Wing, 5th Floor, Janpath, New Delhi.

Composition : It consists of a President and not less than four and not more than such members as may

be prescribed, one of whom shall be a woman. The National Commission is headed by a sitting or

retired judge of the Supreme Court.

Jurisdiction : All complaints pertaining to those goods or services and compensation whose value is

more than Rs. one crore can be filed directly before the National Commission.

Appeal : An appeal can be filed against the order of the National Commission to the Supreme Court

within 30 days from the date of order passed.

It may be noted that in order to attain the objects of the Consumers Protection Act, the National

Commission has also been conferred with the powers of administrative control over all the State

Commissions by calling for periodical returns regarding the institution, disposal and pending of cases

and issuing instructions for adoption of uniform procedures, etc


“JAGO GRAHAK JAGO”

SCHEME OF GOVT. OF INDIA

An enlightened consumer is an empowered consumer. An aware consumer not only protects himself

from exploitation but induces efficiency, transparency and accountability in the entire manufacturing and

services sector. Realizing the importance of consumer awareness, Government has accorded top priority

to ‘Consumer Education, Consumer Protection and Consumer Awareness.

MULTI MEDIA PUBLICITY CAMPAIGN


As part of the Multi Media publicity campaign, the activities being undertaken are:

Printed Literature

Publicity through print media using newspaper advertisements, to educate the consumers about their

rights and responsibilities.

Video telecast

Publicity through electronic medium by telecast of video spots of 30 seconds duration on various

consumer related issues such as Grievance Redressal system, MRP, ISI Hall-Mark, Alternate

Dispute, Redressal system, weights and measures, Rights of Consumers etc. Issues pertaining to rural

and remote areas have been given prominence in the various advertisement spots.

Advertisement

Telecast of advertisement in North Eastern states in Regional languages of 20 seconds and 30 seconds

duration on various consumer related issues such as M.R.P. (Maximum Retail Price), Short

Measurement, Expiry date on medicine, adulteration, damaged product and redressal system.

Meghdoot Post

The Department in consultation with the Department of Post has disseminated consumer awareness

messages through Meghdoot Post cards to reach far-flung rural areas including North East States. A

bigger plan of partnership with the Department of Posts to use the vast network of postal department for

spreading the message of consumer awareness has been chalked out Calendars containing the message

of consumer awareness are being displayed through the vast network of 1.55 lakhs post offices.

Printed Literature

The Department through Printed Literature is also creating awareness. A folder entitled “Consumer

Awareness Mission” containing the salient features of Consumer Protection Act 1986, Consumer

Resource kit as well pocket calendars and posters is being distributed during various events such as

IITF, Nukkad Nataks and also through the State Governments at grass root level. The publicity material

relating to consumer awareness has also been translated in regional languages and is being disseminated

to various State Governments.

Nukkad Nataks

Nukkad Nataks are being performed in consultation with Song & Drama division of the Ministry of

Information and Broadcasting. More than 1000 programmes in all the States/UTs have

been organised to create awareness at grass root level.


National Consumer Help Line

A pilot project National Consumer Help Line initiated can be accessed through a

Toll Free Number 1800-11-4000 which is being operated by Delhi University for counseling the

Consumers to redress their grievances. The timing of toll free number facility is available to consumers

from 9-30 A.M. to 5-30 P.M. on all the working days (Monday—Saturday). Through the various

advertisements pertaining to Department of Consumer Awareness adequate publicity has been given to

National Helpline so that the affected consumers could seek guidelines/counseling through the national

helpline.

Online Medium

In order to reach maximum number of consumers, the Department has telecast video spots containing

consumer related information during the popular sports events such as Tri-series cricket tournament,

Indo-Pak Series, Indo-Australia Series, Indo- England Cricket Series etc.

India is a country with more than 70% population being under 35 years. The youngsters are using the

internet in a big way for various purposes and also happen to be major consumers. Realizing this, a

major initiative is being taken to spread consumer awareness through the online medium. The

advertisements being brought out by the Department are also being displayed on the website of the

Ministry www.fcamin.nic.in.

journals

Advertisements are being carried in journals of Publication Division such

as Yojana, Kurukshetra, Bal Bharti, Aajkal and their regional editions. Focused articles on consumer

awareness are being published in these magazines keeping in view their target readership. Employment

News, the flagship publication of Publication Division, which is the largest selling career weekly of its

kind occasionally publishes articles that are of interest to youngsters in keeping them informed about

their rights. The advertisements of Department are also published regularly in Employment

News/Rojgar Samachar so that the youth of the country are made aware of their consumer rights.

http://www.fcamin.nic.in/


PARTICIPATION IN INDIA INTERNATIONAL TRADE FAIR

Keeping in view the large number of visitors to India International Trade Fair, the Department displayed

its activities through a stall in IIPA. Publicity material regarding main provisions of Consumer

Protection, Standardization, Weights & Measures, ISI, Hall Marking and other issues of consumer

interest was distributed free of cost. On the spot guidance was also given to consumers during the Trade

Fair.

Joint Campaign

‘Jago Grahak Jago’ has become the focal theme through which issues concerning the functioning of

almost all Government Departments having a consumer interface can been addressed. To achieve this

objective joint campaigns have been undertaken/are being undertaken with a number of Government

Departments. The Department had run a joint campaign with Bureau of Energy Efficiency to educate

people about energy conservation by having awareness of the BEE star labels. A joint campaign with

National Pharmaceuticals Product Authority is being devised to educate consumers about the various

issues concerning pharma industry. Similarly, campaigns with Reserve Bank of India, FICCI, Ministry of

Urban Development (for real estate sector) and HRD (for education sector) are being planned.

Meghdoot postcards


NCH is a project of the Union Ministry of Consumer Affairs operates under the Centre for Consumer

Studies at Indian Institute Of Public Administration from The Project recognizes the need of consumers

for a Telephone Helpline to deal with multitude of problems arising in their day-to-day dealings with

business and service providers.

NCH provides a National Toll Free No-1800-11-4000. SMS can also be sent to +918130009809

(charges apply) mentioning the name and city. A consumer can call to seek information, advice or

guidance for his queries and complaints.

NATIONAL CONSUMER HELPLINE SUPPORTS CONSUMERS BY

Guiding consumers in finding solutions to problems related to Products & Services.

Providing information related to Companies and Regulatory Authorities.

Facilitating consumers in filing complaints against defaulting Service Providers

Empowering consumers to use available Consumer Grievances Redressal

Mechanisms, Educating Consumers about their Rights and Responsibilities.

NCH VISION

“A Nation of awakened, empowered and responsible consumers and socially and legally responsible

Corporations."

NCH MISSION

"To provide telephonic advice, information and guidance to empower Indian consumers and persuade

businesses to reorient their policy and management systems to address consumer concerns and grievances

adopting world class standards."

NCH provides a National Toll Free No-1800-11-4000 (for BSNL/MTNL Users), Other users can

dial- 011-27006500 (normal call charges applicable). SMS to 8800939717 can also be sent mentioning

the name and city. Users can also file the online complaint by using its website.

(Source- http://www.nationalconsumerhelpline.in/)

CONSUMER ONLINE RESOURCE & EMPOWERMENT CENTRE (CORE)

Consumer Online Resources and Empowerment (CORE) Centre helps in consumer advocacy and online

redressal of consumer grievances. Users can also call at the toll free number 1800-180-4566.

http://www.archive.india.gov.in/outerwin.php?id=http://www.core.nic.in/

http://www.archive.india.gov.in/outerwin.php?id=http://www.nationalconsumerhelpline.in/ComplaintFile.aspx


CONSUMER GUIDANCE SOCIETY OF INDIA (CGSI)

Since Independence, India has been striving to develop and strengthen its industrial base. In this

pursuit of “self-sufficiency”, however, the consumer has been made to endure sub-standard products and

services: adulterated foods, short weights and measure, spurious and hazardous drugs, exorbitant prices,

endemic shortages leading to black marketing and profiteering, unfulfilled manufacture guarantees,and a

host of other ills. In one infamous case, forty persons were struck with dropsy and glaucoma after

consuming groundnut oil adulterated with toxic Argemone oil. The culprits were never brought to justice.

This outrage energized nine ladies to organize a movement to fight for consumer rights. They formed the

Consumer Guidance Society of India (CGSI) to resist consumer exploitation of all forms.

The Consumer Guidance Society of India (CGSI) is the first and foremost consumer body of the country.

The Maharashtra State Government has entrusted CGSI to establish and manage the Maharashtra State

Consumer Helpline. You can reach out to the CGSI – Maharashtra State Consumer Helpline by calling

the Toll-free Number : 1800 22 22 62 or by e-mail : [email protected]. Register your complaint

CGSI has reached out to lakhs of consumers and conducted workshops and seminars on consumer

awareness topics like food adulteration, becoming a smart investor and consumer protection.

CGSI has been actively championing the rights of consumers for more than 40 years. The Society was

founded by women activists in the year 1966. Their aim was to protect the rights of consumers, who

found themselves helpless whenever they were supplied with defective goods or services.

Activities taken up by CGSI:

CGSI’s involvement in consumer education is concentrated in rural areas on the outskirts of Mumbai

and among the urban poor. CGSI first started its rural project in 1997 and by 1999, its work extended to

people from 112 villages. The following are CGSI’s achievement in consumer education:

Over 32,000 people received consumer education in two years, through talks, demonstrations and

exhibitions.

107 training programs were organized and 5,700 potential activists were given special training in

consumer activism. This resulted in many local consumer groups in remote villages, set up by the

consumers themselves.

Due to its efforts, the Maharashtra Education Board introduced consumer education at the 9th standard

level, progressively covering students from 4th standard upwards. Consumer education is also introduced

in colleges.

http://cgsiindia.org/2013/05/register-your-complaint-at-maharashtra-state-consumer-helpline/


Consumer education is also promoted through its monthly magazine. “Keemat” and consumer guides

published by CGSI. It has also printed 85,000 illustrated brochures in English, Hindi, and Marathi for free

distribution.

Currently conducting ‘Training

Provides training for school and college students in consumer education.

Conducts training program for the urban and rural low income consumers using creative methods

such as games and street plays. The combination of amusement and instruction as a medium of

education often produce astounding success.

Among the topics discussed are:

Rights and responsibilities of consumers

Food adulteration with simple household tests for detecting common adulterants

Family Budget

Weights and measures – how the consumer may be tricked by being given short weight and

measure

Drugs and cosmetics

Importance of breast feeding and the dangers of bottle feeding

Misleading advertisement

Protection of the Environment

Rights of Ration Card Holders

Complaints Rederessal and the Consumer Protection Act 1986


COMPLAINT REDRESSAL BY CGSI

CGSI handles consumer complaints and offers legal guidance to those wishing to file suits in the

Consumer Court. In case where there are a number of complaint against a particular party, both sides are

brought together to resolve the issue. The CGSI'S Complaints Committee meets twice a week. Many

thousands of grievances have been handled over the years, with 70% success in favor of the complaints

cover medical/surgical malpractice and negligence; insurance non-payment; sub-standard drugs and

medicines; home remedies; defective household appliances; poor quality foods and drinks; misleading

advertising claims; and grievances concerning investments, real estate, insurance, telephones, electricity

supply, etc.

Following are some of the landmarks achieved by CGSI:

CGSI is the earliest consumer organization in India, founded in 1966.

CGSI was the first to demand a Consumer Protection Act with Consumer Course

to implement it. This becomes a reality in 1986.

To date, 70% of the thousands of complaints referred to CGSI have been redressed.

CGSI established formal Product Testing in India.

CGSI was the first to publish a monthly magazine "Keemat" carrying information

of importance to consumer.

CGSI promotes consumer education; initiates training projects in rural areas;

Promotes publicity drives; represents consumer interests with Government and other bodies.

CGSI received the National Award for consumer Protection in 1991.

CGSI is the only Indian consumer organization to be a council member of

Consumer International for 25 years.

CGSI is a member of the Maharashtra State Consumer Protection Council.

CGSI participates in a large number of technical committees and government

decision-making bodies.

Example:

March – April 2011

CGSI had taken up the issue of high content of trans-fats in Vanaspati, which is health hazard. The good

news is that many biscuit manufactures have switched over to edible oil instead of vanaspati in biscuits,

in order to comply with “O” (zero) trans-fat requirements for the export of Indian Biscuit.


STATISTICAL DATA

NO. OF CASES FILED STATE WISE


CASES DISPOSEDS AND CASES PENDING IN STATE COMMISSION

TOTAL NO. OF CONSUMER COMPLAINTS FILED/ DISPOSED

SINCE INCEPTION UNDER CONSUMER PROTECTION LAW


COMPARISON OF CONSUMER PROTECTION ACT

IN INDIA AND BRAZIL

INDIA

The Act provide for better protection of the interests of consumers and for that purpose to make

provision for the establishment of consumer councils and other authorities for the settlement of

consumers disputes and for matters connected therewith.

1. The Act aims to provide better and all-round protection to consumers. It applies to all goods and

services unless otherwise expressly notified by the Central Government. Goods under this Act have the

same meaning as assigned to them under the sale of goods Act, 1930 (Sec. 2(7) (i)). Accordingly,

Goods means every kind of movable property other than actionable claims and money; and includes

stock and shares, growing crops, grass and things attached to or forming part of the land which are

agreed to be served before sale or under the contract of sale.


2. The definition of service in the Act in very wide and comprehensive. In fact, it will take in service of

any description rendered for consideration by any person or organisation including public sector

undertakings (PSUs) and Government agencies. However, services rendered free of charge or under

any contract of personal service, are excluded. Thus, the following services do not fall within its scope,

Health Services provided by Government hospitals, Civic amenities provided by municipal authorities.

All suppliers of goods and services, both in the private and in the public sector and the cooperative

sector, are covered by the Act.

3. The Act allows filling of "class action" complaints on behalf of groups of consumers having common

interest.

4. To organize consumer resistance further and educate them, the Act also provides for the formation of

consumer protection councils in every State. These councils do not have any legal authority under the

Act but are meant to promote the cause of consumer protection and cover the six consumer rights -

right to safety, to be informed, to choose, to be heard, to redress, and to consumer education.

5. For enforcement of the rights of the consumers, the Act has created special consumer Courts. As Act

provides for a three-tier consumer grievance redressal machinery with the District Forums at the base,

the State Commission at the middle level and the National Commission at the apex level. Any verdict

given by the National Commission can be challenged in the Supreme Court.

6. Under this Act there is provision to settle the complaint within three months of filing it. If the

complaint needs laboratory testing, the period is extended to five months.

7. Where a trader or a person against whom a complaint is made fails or omits to comply with any order

made by the District Forum, the State Commission or the National Commission, as the case may be,

such trader or person or complainant shall be punishable with imprisonment for a term which shall not

be less than one month but which may extend to three years, or with fine which shall not be less than

two thousands rupees but which may extend to ten thousand rupees, or with both

BRAZIL


Brazil has one of the most complete Consumer Defense system of the world, counting with the

support of several institutions and regulations. Know more about how national laws protect the consumers

and what to do in case you feel damaged Consumer Rights in Brazil only acquired visibility after the

Constitution of 1988, responsible for reestablishing democracy in the country after a long dictatorship.

Following the US model, the Government issued the Consumer Defense Code (Código de Defesa do

Consumidor) in 1990, a law that would organize all the rules to protect consumers. Also, the Code came

to discipline the relations and responsibilities between providers and consumers, establishing standards of

conduct, terms and penalties.

The Consumer Defense Code the Brazilian Consumer Defense Code (Federal Law 8.078) can

be summarized in the following ten points:

1. Life and Health protection: Before selling, providers must warn their consumers about the possible

risks a determined product or service can offer.

2. Education for consumption: Consumers have the right to be given proper orientation about the

adequate use of products and services.

3. Freedom of choice: Consumers have the right to choose the products and services that better fill their

needs.

4. Information: Every product must bring clear information about its amount, weight, composition,

price, possible risks and how to use it. Consumers also have the right to know every detail about their

purchased services.

5. Protection against misleading or abusive advertisement: Consumers have the right to demand for

everything that was promised in the adds. If what was announced was not complied, then consumers

have the right to cancel the purchase and have their money back. Misleading or abusive advertisements

are considered a crime according to the Code (art. 67)

6. Contractual protection: The Code protects consumers in case of no fulfillment of contract terms or

when the terms are damaging to them. In this case, the judge can cancel or modify the clauses.


7. Indemnity: When damaged, consumers have the right to be indemnified by who sold the product or

provided the service, including moral damage.

8. Access to Justice: The consumer whose rights were violated can appeal to court and ask the judge to

force the provider to respect his rights.

9. Facilitation of rights defense: An example is the inversion of the burden of the proof. That means that

it will be the provider the one obliged to bring proof that he is innocent, not the consumer will have to

prove that the provider is guilty.

10. Quality of Public Services: There are rules present in the Code that assure the quality in public

services, as well as a good customer service by public institutions or concessionary companies of those

services.

CASE STUDY 01

PATIENT WINS BATTLE AGAINST INSURANCE COMPANY, GETS 1.2L

MUMBAI,| JUN 8, 2011


Coming to the aid of policy holders who are often short-changed by medical insurance companies, a

consumer forum recently ruled in favour of an Andheri resident whose claim had been rejected by his

insurance provider.

The Mumbai Suburban Consumer Redressal Forum ordered HDFC Ergo General Insurance Company

Ltd to reimburse Rs 1.18 lakh at 9% interest to Dharamdas Pritiani, a heart patient who underwent a rare

and state-of-the-art treatment. The interest is to be calculated from the date Pritiani filed the claim. The

company has also been directed to pay an addition Rs 5,000 to Pritiani for mental agony.

Pritiani bought a medical insurance policy from the company for the period 2008-09. Pritiani

experienced difficulty in breathing and underwent a series of tests to ascertain the cause. An angiography

revealed that he suffered from a heart ailment, following which he was advised to undergo treatment

immediately. Pritiani then underwent a treatment called Enhanced External Counter Pulsation (EECP).

The treatment was completed in 45 sittings and required both medicines and special equipment. Pritiani

incurred expenses amounting to Rs 1.18 lakh and claimed this amount from his insurance company.

However, the company rejected his claim in May 2009 saying the treatment was experimental and not

recognized by it.

Pritiani argued that the treatment was recognized by the US and over 700 hospitals abroad provided

EECP. As many as 40 hospitals in India use EECP method to treat heart patients, he claimed. Pritiani then

filed a complaint in the forum on November 23, 2009.

Justifying its rejection of Pritiani`s claim, the insurance company said that a policy holder must be

hospitalized for at least 24 hours for reimbursement.

Pritiani filed documents in the forum showing that another insurance company had reimbursed a client

in a similar case. He also submitted documents describing the exact nature and method used in the

treatment. Pritiani also cited a 2007 order passed by the Thane District Consumer Redressal Forum

directing an insurance company to pay the reimbursement to another patient who had undergone EECP.

Taking the medicines and the equipment into consideration the forum observed that EECP looked like

it was "state-of-the-art treatment". It observed that the company did not provide any evidence to support

its claim that the treatment was only being implemented on an experimental basis in India. The forum

relied on a clause of the insurance company stating that the 24-hour rule will not apply if a "state-of-the-

art treatment" did not require hospitalization


Further it observed that the insurance company has nowhere stated that the order passed by the Thane

forum was stayed by a senior forum or been reversed. The bills produced by Pritiani support his claim,

the forum said.

The Mumbai Suburban Consumer Redressal Forum ruled in favour of Andheri (w) resident whose

insurance claim was rejected on the ground that his treatment did not require hospitalization for a

minimum of 24 hours. The forum ordered that Dharamdas Pritiani, a heart patient who underwent a rare

and state of the art treatment should be reimbursed Rs 1.18 lakh. The forum relied on a clause of the

insurance company that stated that in case a state of the art treatment did not require hospitilisation, the 24

hour mandatory hospitilisation clause will not apply. The forum has ordered the insurance company to

pay the amount with a 9 percent interest and addition Rs 5,000 for the mental agony caused to Pritiani.


CASE STUDY 02

COMPUTER INSTITUTE FINED RS 94K FOR REFUSING REFUND

MUMBAI, MAR 19, 2013

A consumer forum has directed MET-Institute of Computer Science to

return the course fee of Rs 62,200 to a Worli student who had to withdraw from a postgraduate course

after he failed to clear his BSc exam. The institute will also have to pay the complainant, Chetan Prakash,

Rs 32,000 as compensation for harassment.

The Mumbai Suburban District Consumer Disputes Redress Forum pointed out that the student had

not withdrawn the admission after securing a seat in another institute but had done so after he failed his

exams. Under such circumstances, not refunding the fees would amount to deficiency in service, said the

forum.

According to his complaint lodged in March 2009, Prakash was still a third year BSc student when he

had sought admission in the computer institute for a Masters in Computer Science (MCS) course. On

August 9, 2008, he reportedly paid Rs 63,200 as fee. The institute had stipulated that in order to pursue

the MSC course, a student has to clear third-year exams. While Prakash took his BSc exams in April

2008, his results were declared on August 18, 2008. Seeing that he had failed to clear the exams, Prakash

tried to withdraw the admission from the computer institute on the very day the results were declared. But

despite several attempts, the institute reportedly did not respond to his requests for a refund. Finally on

January 29, 2009, Prakash sent a legal notice to the institute, but to no avail. Aggrieved, he lodged a

complaint in the consumer forum.

Contesting the charges against them, the institute claimed that even after the results were announced,

Prakash did not get in touch with them. They also said that the final list of eligible candidates was

updated on the website on August 20, 2008 and his name was on it. Alleging that as Prakash did not

inform them about his disposition, a seat remained vacant and so his fee could not be refunded. The

institute claimed Prakash came to them only in September 2008.

The forum, however, said there was no justification to support the institute's claim and that the seat

would remain vacant for three years.

http://timesofindia.indiatimes.com/topic/Touch


CASE STUDY 03

PEPSICO PENALIZED FOR SHORT-CHANGING CONSUMER

AHMEDABAD, SEPTEMBER 14, 2012

Contrary to the commonly-held belief that well-known, leading brands live up to their name and

refrain from duping consumers, Consumer Education & Research Society (CERS), Ahmedabad, has

brought to light one case wherein the Indian subsidiary of the international food & beverages giant

PepsiCo was found selling underweight packets of its popular potato chips brand “Lay’s”.

CERS had received a complaint from Krishan Kumar Bajaj about a “Lay’s – Shipra Tangy Twist” potato

chips packet bought by him being underweight. When the weight was checked, the sealed packet was

found to weigh a mere 8 gm instead of 30 gm mentioned on the packet, a shocking 72% less!

CERS filed a case against PepsiCo at the Consumer Disputes Redressal Forum. In a landmark

judgement, issued on 7 September 2012, the Forum ordered PepsiCo India Holdings Ltd. to deposit Rs.

50,000 in the Consumer Welfare Fund of India within 90 days from the receipt of the order. PepsiCo was

also asked to pay the complainant Rs. 5,000/- for mental agony and Rs. 2,000 for the litigation cost.

While just one packet was randomly discovered to be underweight by an alert consumer, a simple

calculation indicates that the company can earn an extra profit worth around Rs. 2.75 lakh, if the entire

production of 36,700 packets under the batch mentioned on the packet is sold underweight. This holds

significance since, on CERS’ query, the company could not totally rule out this possibility. CERS

resorted to legal action in its attempt to compel PepsiCo to pay compensation and punitive damages, and

uphold consumer rights.

Bajaj, a resident of Vastrapur, Ahmedabad, had purchased the disputed packet from a shop in Thaltej

area on 28 June 2010 and had immediately sensed its being underweight. His doubt was confirmed when

he actually weighed the pack. The manufacturing date on the pack was 19 April 2010 and the production

batch no. was N-207 C. He wrote twice to the manufacturer. While the first letter got no response, in

reply to the record, the company accepted that the packet was underweight but didn’t take the complaint

seriously. It offered Bajaj a gift hamper from PepsiCo which he refused.


Bajaj approached CERS and the pack was weighed in the in-house laboratory of the organisation. On

ascertaining that it weighed only 8 gm, i.e. 22gm less than that claimed, CERS immediately wrote to

PepsiCo. “There is practically no possibility of such a pack coming out of our plant,” replied PepsiCo.

CERS in turn demanded an explanation as to how the pack reached the market and finally to the

consumer. The company gave several unsatisfactory clarifications. It explained that sometimes, due to

technical glitch, packets might be underweight at the beginning and the end of the packaging process.

Such packets are “segregated in a separate hold area and destroyed”, it claimed.

Further probe by CERS led to startling revelations : Simi Mehta, a PepsiCo spokesperson, admitted on

phone that the company had been getting complaints about underweight packets from its Pune plant. This

was, therefore, not an isolated incident. CERS had good reasons to believe that the sale of underweight

packets to consumers was not a freak incident. This could happen with their various products in several

batches from different PepsiCo plants. Even if such an instance / technical glitch occurs at PepsiCo on a

given day, it has huge implications for the company and its consumers.

Eventually, CERS took the issue to the Consumer Disputes Redressal Forum, Ahmedabad (Rural),

alleging unfair trade practice. The forum also gave a favourable ruling dismissing all the arguments made

by PepsiCo. On PepsiCo’s request, the Forum got the pack weighed at a government laboratory and the

report from the lab revealed that the weight of the pack was 8.42 gm. The company argued that the

complaint should not be entertained, as Bajaj could not produce the bill for the purchase. For a product

of Rs.10/- very often consumers may not have a bill. To address this issue, Bajaj submitted on affidavit

that he had bought the “Lay’s” packet from Brahmani Provision Stores, Thaltej, Ahmedabad.

The Court was of the view that, as PepsiCo could not deny that the packet bought by Bajaj was their

product, the argument of his not having a bill and, therefore, his not being a consumer under the C P Act

was overruled.

CERS in its prayer had requested the court to direct PepsiCo to immediately stop such unfair trade

practice, deposit Rs.2,00,000 in the Consumer Welfare Fund and award Rs.2,75,250 as punitive damages.

CERS had also appealed to the court to order PepsiCo to give Rs.75,000 as costs of litigation and also

inform the media. If PepsiCo stands to gain Rs. 2,75,250 from underweight delivery in one single

product, in one single batch of one particular manufacturing plant, the implications of this happening

more often are simply huge and that too at the cost of consumers.

The court gave the order with the comment that if PepsiCo claims to be an international company, then

this kind of negligence is not acceptable.


CASE STUDY 04

PUNJAB STATE CONSUMER COMMISSION FINES MARUTI & ITS DEALER

OF RS.1 LAKH EACH

PUNJAB, JANUARY 1, 2011

The Punjab State Consumer Disputes Redressal Commission at Chandigarh has fined of Rs.1 lakh

each on Regional Manager, Maruti Suzuki, Chandigarh and Tara Automobiles, Jalalabad on account of

selling a defective Wagon R VXI Model car to a soldier Hav Kulwinder Singh of Indian Army.

On 10.9.2010, Hav Kulwinder Singh of Indian Army Purchased a Maruti Wagon R XVI car

manufactured by Maruti Suzuki Company from its authorised dealer Tara Automobiles under ‘Army

Quota’ through Canteen Stores department Bathinda after payment of entire sale consideration vide

delivery Challa No.147.

Finding a deficiency in service on pointing a manufacturing defect and unfair trader practice,

Kulwinder Singh filed a complaint before the District Consumer Disputes Redressal Forum, Ferozepur

but the dealer did not come present despite service of notice and was proceeded against ex-parte.

The Company and its Regional Manager appeared before the Consumer Forum Ferozepur and pleaded

that the claim of the complainant is not covered under the warranty because the complainant drove the

vehicle in water flooded area where the water entered into the engine of the vehicle and resulted into

Hydrostatic Lock and only the repairs are to be carried on chargeable basis as this fact has been

mentioned in the job card issued by Shakti Motors Sirsa. The company further denied its liability being

the dealer to be liable for the defect, if any.

The District Consumer Forum, Ferozepur consisting of Sanjay Garg, president and Tarlok Singh

member, after considering all the facts brought record that the seller and the manufacturer are guilty of

selling a defective car to the complainant and ordered to refund the complainant, the price of the car to the

tune of Rs.356295 plus insurance charges of Rs.10775 and Rs.550 paid as accessories along with interest

@ 7% per annum from the date of complaint i.e. from 1.10.2010 till realization along with Rs.2000 as

litigation expenses. The said order in complaint No.541 of 2010 was passed by the District Consumer

Forum on 19.1.2011.

Aggrieved from the said order, the Company Maruti Suzuki through its Regional Manager, Chandigarh as

well as the dealer Tara Automobiles Jalalabad (W) filed two separate appeals before the Punjab State

Consumer Disputes Redressal Commission, Chandigarh for setting aside the award passed against them.


The Punjab State Consumer Disputes Redressal Commission, Chandigarh has decided both the appeals

in a single order dated 23.7.2012 holding the dealer and the Company guilty and also concluded that the

Company as well as dealer at Jalalabad are also guilty of tempering with the Job card issued by Shakti

Motors Sirsa by writing on the said computerized Job card mentioning, “Vehicle stopped due to water

enter in engine, Engine Need O/H.” There was a warranty for the vehicle for a period of 24 months or

40000 KMs from the date of purchase but the defect occurred on the same day of sale of car only after a

run of 269 KMs.

The Punjab State Consumer Disputes Redressal Commission, Chandigarh held that both the appeals

by dealer Tara Automobile Jalalabad, are merit less and dismissed with exemplary costs of Rs.1 lakh each

to be paid by the Regional Manager, Maruti Suzuki, Chandigarh and Tara Automobiles, Jalalabad(W) to

Hav Kulwinder Singh within one month from the date of receipt of copy of order.

So that in future no person in India dares to harass such like a present case, to a soldier, who is always

ready to sacrifice his life without bothering his responsibilities towards his family.

So, both the appeals are dismissed with costs of Rs.1,00,000/- each to be paid by the appellants of both

the appeals to have Kulwinder Singh within one month from the date of receipt of copy of order.


RECOMMENDATIONS

Very few consumers are fully aware about the rights, responsibilities and Consumer Protection

Act. Hence, it is necessary to educate them on their rights and responsibilities as consumers, to make

them vigilant, rational and aware buyers. In the current situation media can play an important role which

can help people to get aware about possible unfair practices in the market. The government has been

fruitful in providing protection to the consumers in the real sense of the term and served the purpose of

the Act Consumers have to be aware of their rights.

Also consumer activism, organizations, civil society and other voluntary associations needs to play

their part in the furtherance of consumer movement. In all consumers need to know their rights and

should assert them in the market place.

In today's rampant changing market scenario, there is an increasing necessity to empowering the

consumers through education and motivation regarding their rights and responsibilities. He/she should be

equipped to be fully vigilant so as to be able to protect himself/herself from any wrongful act on the part

of the seller/trader. Several steps have been taken by the Government, both at the Central and State level

towards generating awareness among the consumers.

Consumers should always conduct market surveys and tap all the sources of information (TV,

magazines, newspapers, salespersons, and if possible somebody who is already using the product)

before buying a product.

Consumers should buy from fair price shops, authorised company showrooms, cooperative stores or

other reliable shops of good reputation in your area. This will enable you to buy good quality products

at right price.

Consumers should obtain bills, receipts and guarantee cards for all purchases made and keep them

safely. They will be of use in case of any fault in the products.

Instead of loose items, preferably buy properly packed and labelled products.

Read labels carefully for brand names, ingredients, net weight, MRP (maximum retail price), expiry

date and standardization mark.

They should not accept irregular weight and be alert vigilant about the weights and measures and the

procedure used by the seller.

Consumers should report any unfair trade practices to redressal agencies.

Consumers should only buy goods carrying standardized marks.


The State should ensure that the ordinary citizen is a lot more aware about the procedure for filing a

complaint and the necessary helplines should be advertised.

The State should make the system more transparent and encourage the participation of the ordinary

citizens.

CONCLUSION

Business houses have the right to make profits in order to survive. Similarly, consumers have the

legitimate right to expect goods and services promised by business houses and advertisements; and if it is

not to their expectations, have a right to complaint and seek redressal. Complaining and getting justice

helps, all of us to improve the manner, we treat each other. Taking appropriate action helps in improving

the overall goods and services quality in the country. One point however, to note is that consumer bodies

only cannot protect all the consumers from irresponsible profiteers, or even resolve all their related

complaints. Consumers alone can take the fight forward and safeguard the legitimate consumer protection

rights granted by the Indian constitution.

As a matter of fact, three major problems are confronting the consumer protagonists in India. The first

problem concerns active functioning of the Consumer Forums throughout the country. Notwithstanding

the fact that these Forums have now been established, by and large, throughout the country, consumer

activists and organizations have been repeatedly voicing their grievances against the smooth functioning

of these Forums. They argue that these Forums have also started behaving like Civil Courts and are likely

to have mounting arrears soon. In addition, these Forums still lack basic infrastructural facilities. The

members sit only part-time and 90 days decision- making requirement is not strictly adhered to. There are

also ego and status problems between judicial members and the members with non-judicial background.

Another significant problem is that the stay orders from the High Courts have begun to hold up a large

number of cases filed before the Consumer Forums, thereby denying the benefits of speedy and

inexpensive redressal machinery promised under the Consumer protection Act, 1986.

The second problem concerns the applicability of the Consumer protection Act, 1986 to various

services. As is evident, ever since the implementation of the 1986 Act, whereas there has hardly been any

significant case in which the ‘goods’ has been vehemently contested, there is a voluminous amount of

case law which involved determination of the meaning, definition, and ambit of the term ‘service’.


The definition of the term ‘service’ had already been kept very wide and now with the inclusion of the

two terms ‘housing and construction’ by the Consumer Protection (Amendment) Act, 1993, it has been

further widened. Only two types of services have been kept out of the ambit of the 1986 Act. They are

services rendered free of charge and services rendered under a contract of personal service. The non-

mentioning of services like education, health, housing, posts and telegraphs and telecommunications had

presumably given these services an impression of their exclusion from the ambit of this legislation. At the

initial stages, therefore, these services contested the jurisdiction of the 1986 Act, thereby claiming

complete immunity from their governance by it. The Consumer Forums, however, have appreciably stood

the test of time and have brought all these services within the ambit of the 1986 Act.

Making consumers aware of their rights and taking consumer movement to the rural India is the third

and perhaps the most important problem and a challenge before the consumer organizations. As is well

known, most consumers are still ignorant of their rights, much less of being assertive about them. Though

the Government appears to be serious of this issue, much however depends upon the consumer

organizations. They have still to cover a very long distance so far as taking the movement to rural areas is

concerned.

We, therefore, concluded that even though the Consumer is in a dominant position with respect to

numerous choices of products and services available in the market due to fierce competition between the

companies, he is still in a vulnerable position. Consumers as a class can be called as King but an

individual consumer barely enjoys such a status. The king, in this case, is vulnerable and requires

protection form unfair trade practices.

The efficient and effective program of Consumer Protection is of special significance to all of us

because we all are consumers. Even a manufacturer or provider of a service is a consumer of some other

goods or services. If both the producers/providers and consumers realize the need for co-existence,

adulterated products, spurious goods and other deficiencies in services would become a thing of the past.

The active involvement and participation from all quarters i.e. the central and state governments, the

educational Institutions, the NGO’s, the print and electronic media and the adoption and observance of a

voluntary code of conduct by the trade and industry and the citizen’s charter by the service providers is

necessary to see that the consumers get their due. The need of the hour is for total commitment to the

consumer cause and social responsiveness to consumer needs. This should, however, proceed in a

harmonious manner so that our society becomes a better place for all of us to live in.


a) Addition of substances in food material which are injurious to health or removal of substances which

are nutritious to health or by lowering their quality standards.

b) Improper delivery of after sales services, supply of defective goods, hidden price component,

production of low quality goods in bulk quantities, Use of deceptive or incorrect rates on products

c) Illegal fixation of Maximum Retail Price (MRP)

d) Selling above the MRP

e) Non-compliance with the terms and conditions of sales and services

f) Supply of false or incomplete information regarding the product

g) Poor customer services

h) Non-fulfillment of guarantee or warrantee

All such issues and problems must be handled more efficiently both at the Centre and the State level with

a view to protect the interests of the consumers and promote their welfare.


WEBLIOGRAPHY

http://ncdrc.nic.in/statistics.html

http://timesofindia.indiatimes.com/city/mumbai/Patient-wins-battle -against-insurance-company-gets1-2L/articleshow/8767206.cms

http://timesofindia.indiatimes.com/city/mumbai/Computer-institute- fined-Rs-94k-for-refusing-refund/articleshow/19051870.cms

http://consumerresources.in/2012/10/05/pepsico-penalized-for- shortchanging-consumer/

http://www.consumercourt.in/address/14149-commentary-consumer- protection-act.html

http://www.cag.org.in/guidelines-filing-complaint

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http://www.consumersinternational.org/who-we-are/un-guidelines-on-consumer- protection

http://www.consumerredressal.com/content/contentID/14/consumer_protection_act

Legal aspects of Business By Akhileshwar Pathak

http://consumerresources.in/2012/09/20/how-to-prepare-and-submit-a-complaint-to-a-consumer-forum/

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http://consumerresources.in/2012/10/05/pepsico-penalized-for-%0Bshortchanging-consumer/

http://timesofindia.indiatimes.com/city/mumbai/Computer-institute-%0Bfined-Rs-94k-for-refusing-refund/articleshow/19051870.cms

http://timesofindia.indiatimes.com/city/mumbai/Computer-institute-%0Bfined-Rs-94k-for-refusing-refund/articleshow/19051870.cms

http://timesofindia.indiatimes.com/city/mumbai/Patient-wins-battle%0B-against-insurance-company-gets1-2L/articleshow/8767206.cms

http://timesofindia.indiatimes.com/city/mumbai/Patient-wins-battle%0B-against-insurance-company-gets1-2L/articleshow/8767206.cms

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