Consumer Movement

UNIT 8 CONSUMER MOVEMENT

IN INDIA
Structure
8.1 Objectives
8.2 Introduction
8.3 History and Growth of Consumer Movement in India
8.3.1 Consumer Protection in Ancient Times
8.3.2 Development of Co-operatives

8.4 Consumer Movement in the Modern Era

8.4.1 Stages of Development of the Consumer Movement
8.4.2 Some Important Consumer Organisations

8.5 Achievements of the Consumer Movement

8.6 Future Tasks/Challenges Ahead
8.7 Let Us Sum Up
8.8 Key Words
8.9 Some Useful Books and References
8.10 Answers to Check Your Progress Exercises

8.1 OBJECTIVES
After studying this unit, the learner shall be able to:
 trace out the development of consumer movement in India from Ancient
period to the present modern period;
 learn the basic reasons and the factors, which encouraged the consumer
movement in recent years in India;
 understand the difference between the development of consumer Co-
operatives and the Consumer Movement
 explain a few important Consumers’ Organisations and their role in consumer
movement; and
 examine the achievements of the consumer movement, challenges ahead
and tasks for the future, etc.

8.2 INTRODUCTION
Consumer movement indicates the collective power of consumes to take the
human society forward with regard to awareness, education, buying behaviour
in the market and its emancipation from the malpractices of the producers and
sellers of goods and service providers. In Unit 1 you were introduced to the
origin and growth of the consumer movement and to the history of consumer
movement in the world. It showed how the early development of consumer
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cooperatives in 1930’s initiated the present consumer movement in India. In Consumer Movement in India
Unit 8 an attempt has been made to trace the history of consumer movement
in India from the Ancient period to the early development of consumer
cooperatives and finally to the formation of consumer associations and
organisations. It is a fact that some consumer organisations and their role has
brought far reaching changes in the behaviour of the consumers in India, yet
there are challenges and tasks ahead for the future. This unit ends up with some
important suggestions to further strengthen the consumer movement in future in
India.

8.3 HISTORY AND GROWTH OF CONSUMER

MOVEMENT IN INDIA
In Ancient India consumers were provided protection by the rulers as it was
a part of Ancient culture and the administration was serious about it. But this
old culture could not stay more because of heavy commercialisation of activities
of the society. Ass in Europe, in India also the consumer cooperatives were
originally formed which ultimately gave rise to consumer movement.
8.3.1 Consumer Protection in Ancient Times
Ancient history tells us that in India there were enough provisions for consumer
protection. Ancient culture recognised the importance of protection of consumers.
Kautilya’s Arthasasthra was the basic law of Ancient India and the same was
strengthened with provisions to protect consumers. Sale of commodities was
organised in such way that general public was not put to any trouble. If high
profits (for the ruler) put general public in trouble, then that trade activity was
stopped immediately. For traders, profit limit was to be fixed. Even for services
timely response was prescribed; e.g. for sculpturist, carpenter, tailor, washerman,
rules for the protection of consumer interest were given. Thus, for a washerman,
it was said that he should return washed clothes in a given time period, i.e.,
light coloured ones in five days, blue dark coloured in six days and silken,
woollen or embroidered in seven days. Failing this they had to pay fine.
Weights and measures that were used by the business community were
supervised by the Superintendent of Commerce to ensure the consumers that
they are not cheated in this regard. For shortfall in weighing/measuring, sellers
were find heavily. Weights and measures used in trade were manufactured only
by the official agency responsible for standardisation and inspected every four
months. Sellers passing off inferior products as superior were fined eight times
the value of articles thus sold. For adulterated things, the seller was not only
fined but also compelled to make good the loss.
In the remembrance of Ancient periods, where, it is believed, consumers’ welfare
was of the utmost priority for the rulers, the people in different parts of the
country celebrate even today, in various ways, the dates dedicated in this regard.
‘Onam’ in Kerala is one such example. The folk songs relating to Onam celebrate
the fact that during the rule of King Mahaballi, people were not at all exploited
in any manner. It is believed that neither there were shortages or malpractices
in weights or measures and nor excessive advertisements.
8.3.2 Development of Co-operatives
A Cooperative is an autonomous association of people united voluntarily to meet
their common economic, social and cultural needs and aspirations through a
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Consumer Movement jointly owned and democratically controlled business. The development of
consumer cooperatives in India may be divided into three phases, Phase I, II
and III.

Phase I

Consumer cooperatives are enterprises owned by consumers managed

democratically, aiming at fulfilling the needs and aspiration of the members. The
consumer cooperatives operate the market according to the cooperative
principles. The starting point of the consumer movement was the development
of consumer cooperatives in the world including India. It is understood that
Consumer Cooperatives have been successful, to some extent, in breaking the
monopolies of sellers of goods and commodities and of service providers, and
in eliminating some of the unfair business practices such as short weighing and
measuring, massive profiting, unfair and unreasonable prices, supply of inferior
goods against high prices etc. This role of cooperatives has also helped lower
income groups of the society. These cooperatives have also undertaken the task
of consumer awareness and their education and safeguarding the other interests
of their members and also of other low income consumers. However,
cooperatives perform certain services, particularly, for their members or for
themselves. They do not provide much help to people who are not their members.
There is no doubt that they have replaced private enterprises in certain areas
but they cannot be taken at par with ‘Consumer Movement’ because this
movement takes steps in the interest of all classes of people, irrespective of
certain persons or classes.

Consumer Movement activities have been directed towards improving business

practices to help the consumers in general. These activities may be with or without
the government aid. Consumer movement has its own independent position
without any kind of pressure of individuals or groups. It can be successful only
under these circumstances.

In consumer oriented marketing system, the role of consumer cooperatives is

of utmost significance as it has achieved commendable success in certain
European countries. It has proved as a counter force against the traditional
marketing mechanism and has served the interests of the consumers in various
ways. Encouraged by this governments of many countries including India
emphasised consumer cooperatives. While the first consumer cooperatives in
Great Britain and the USA came up in 1844, in India there was not much
development till 1962. The first consumer cooperative store in India came up
in Madras in 1904. However, the proper appearance of consumer cooperatives
in India could be seen only in 1918, increasingly their number to 88 in 1920-
21 and 323 in 192829. But in 193637, their number reduced to 25 as they
were still not organisations of consumers on felt needs.

Phase II

A long span of Second World War, from 1939 to 1945, created scarcity of
goods and commodities as during that period, the producers were reluctant to
manufacture consumer goods. This gave impetus to increase the number of
consumer cooperatives, which again rose to 396. But the following factors
stopped their smooth functioning:
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1) Lack of suitable management; Consumer Movement in India

2) Widespread corruption in the market;

3) Low salaries and remuneration of staff; and

4) Insufficient storage facilities.
However, after independence of the country, their number rose to 9674 with
a membership of 19 million persons. The annual sale turnover of these consumer
cooperatives was also recorded as high as Rs. 76 million.
Phase III
A setback to the cooperative movement was seen in 195152 on account of
decontrol and detraining. In 1960, an all India seminar on consumer cooperatives
was held in Bombay for a critical appraisal of the entire of scenario. From
the third Five Year plan onwards, there has been much emphasis on the
development of consumer cooperatives by the government to make them viable.
In 197576, Rs. 5.5 crores were invested for consumer cooperatives in
accordance with the 20 point programme. Consumer cooperatives are very
important for improving the distribution of essential goods through Public
Distribution System (PDS) and combating inflation. It has been announced that
10 to 20% of the supplies of baby foods, bicycles, blades, cloth and students
needs etc. would be through cooperatives. In the distribution of consumer
goods the cooperatives under PDS account for about 28% of retail outlets
(fair price shops) in rural areas. Nearly 51,000 village societies and their various
branches distributed Rs. 2500 crores worth of consumer articles in rural areas
in 198990. The number of very active consumer cooperatives, excluding village
societies, is about 12 thousand with a membership of more than about 40 million.
The cooperative movement treaded its path among the consumers but this
movement did not provide measures for consumer protection as have been
enforced in the modern times. The consumer movement made its presence for
the first time in India in 1960 when a large number of consumer organisations
came into existence. These organised consumer groups have done a lot of
exercise to strengthen the consumer movement in the present times.
Check Your Progress 1
1) Tick mark the following statements True (T) or False (F)
a) In the ancient period, consumer was the “King”. (T) (F)
b) Cooperatives and consumers organisations are one and
the same thing. (T) (F)
c) Cooperatives came up after the start of the consumer
movement. (T) (F)
d) Government of India has always encouraged cooperatives. (T) (F)
e) In the Second World War period the number of consumer
cooperatives increased. (T) (F)
f) The cooperative movement provided protection of the
modern type to the consumers. (T) (F)
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Consumer Movement 2) Describe briefly how cooperatives have helped in consumer protection.
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3) Describe briefly the role of consumer Cooperatives in consumer oriented
marketing system.
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8.4 CONSUMER MOVEMENT IN THE

MODERN ERA
In the west, consumer movement in the present form came into being in 1930’s.
However, in India it came into force in the 1960’s. The basic objectives of
consumer movement world-wide are as follow:
 To provide opportunity to the consumers to buy intelligently;
 Recognition of reasonable consumer requests;
 Protection against fraud, misrepresentation, unsanitary and unjust products;
 Participation of consumer representatives in management of aspects affecting
consumers;
 Promoting consumers interests;
 To provide help to the consumers for the redressal of their grievances against
the sellers or producers.
In the west, consumer movement was the result of post industrialisation affluence
for more information about the merits of the competing products and to pressurise
producers, particularly, for new and more sophisticated products. However, in
India, the basic reasons for the consumer movement have been:
 Scarcity of consumer products and inflation of early 1970’s;
 Black marketing;
 Limited product choice due to lack of development of technology; and
 Thrust on availability of commodities, their purity and reasonable prices.
In recent years, the following factors have given impetus to consumer movement
in India:
 Adulteration: adding or subtracting some substance from the product, which
alters the quality of respective product;
 Practice of short weighing or measuring consumable items in the market;
 Supply of sub-standard quality of goods and services to the consumers;
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 Massive profiteering : Producers or sellers create artificial shortage of Consumer Movement in India
commodities and thereby they force the consumers to pay more, to earn
huge profits;
 Unreasonable price charged by the sellers at the time of crop failure and
thus, the exploitation of the consumers;
 Evil practices of Multinationals; and
 Imitation manufacture: sub-standard goods carrying popular brand names
or similar brand names are frequently sold in the market, which has impaired
the faith of the consumers.
On the one hand the above malpractices in the market and on the other increasing
awareness and education of consumers, organised efforts of the consumer welfare
societies and influence of the leaders of consumer movement have stimulated
strongly the consumer movement in India.

8.4.1 Stages of Development of the Consumer Movement

The Consumer Movement today is undergoing a silent revolution. The movement
is bringing qualitative and quantitative changes in the lives of people enabling
them to organise themselves as an effective force to reckon with. But the path
to reach this stage has not been easy. It is a struggle against bad business
practices, which always think more profit ignoring fairness in business transactions.
The first stage of consumer movement was more representational in nature i.e.
to make consumers aware of their following rights:
 The right to fair leading;
 The right to have satisfactory quality goods;
 The right to know the fair price of the commodities;
 Right to information of retail price of essential commodities;
 Right to know the date of expiry;
 Right to select or choose the goods of choice;
 Right to be heard in case of exploitation by the sellers;
 Right to be consulted; and
 Right to redressal of grievances of the consumers by the producers or sellers
of goods.
These rights were communicated to the consumers through speeches, articles
in newspapers and magazines and holding of exhibitions.
The second stage was direct action i.e. boycotting of commodities and goods,
picketing, demonstrations etc. but direct action is not an easy task as it has
its own various limitations.
The third stage, which has become more popular, is the constitution of well
managed consumer organisations. From educational activities and handling
complaints, it ventured into areas involving lobbying, litigation and laboratory
testing. This gave good results. Thus, for instance business sector has started
45
Consumer Movement taking notice and cooperating with the movement. It has played a role in hastening
the process of passing the Consumer Protection Act, 1986 which has led to
the fourth stage. This Act promotes and protects the rights of the consumers
such as:
 The right to be protected against marketing of goods which are hazardous
to life and property:
 The might to be informed about the quality, quantity, potency, purity standard
and price of goods to protect the consumers interests against unfair trade
practices;
 The right to seek redressal against unfair trade practices or exploitation
of the consumers;
 The right to be heard and to be assured that consumer interests will receive
the due consideration etc.
The Act of 1986 provides for setting up of Consumer Protection Councils at
the Centre and State levels, for redressal of consumer disputes. To provide
steady and simple redressal to consumer disputes, quasi-judicial machinery has
been set up at the District, State and Central levels. The quasi-judicial bodies
observe the principles of natural justice.

8.4.2 Important Consumer Organisations

Consumer movement in India had its beginning in the early part of this century.
The first known collective body of consumers in India was set up in 1915 with
the ‘Passengers and Traffic Relief Association” (PATRA) in Bombay. Women
Graduate Union (WGU), Bombay was another organisation started in 1915.
One of the earliest consumer cooperatives was the ‘Triplicane Urban Cooperative
Stores’ started in late 40’s in Madras. It has about 150 branches all over the
city. The Indian Association of Consumer (IAC) was set up in Delhi in 1956.
This was an all India Association for consumer interests with the government’s
support. However, even IAC did not make any headway.
The first organisation to really make an impact was the Consumer Guidance
Society of India (CGSI) Bombay started by nine housewives in 1966 with Mrs.
Leela jog as its founder secretary. Instead of just holding conferences and
meetings and asking questions like earlier consumer associations, it stated testing
and reporting the quality of items of daily use of foodstuffs and handling consumer
complaints. It has eight branches at various places carrying on publicity,
exhibitions and education. It publishes a magazine called ‘Keemat’ in English,
for consumer information.
The second consumer organisation which made quite an impact in making the
cause of consumers known throughout the country is the ‘Karnataka Consumer
Service Society’ (KCSS) formed in 1970. The main strength of the KCSS was
Mrs. Mandana who spread the word of the movement throughout the country,
especially among government circles at a time when the word ‘consumer’ was
not familiar to many. It is based in Bangalore. It organised important seminars
on consumers’ education in schools and is represented on prevention of Food
and Drug Adulteration Committee and Karnataka Food and Civil Supplies
Corporation.
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Visaka Consumers Council (VCC) started in 1973 in Vishakhapatnam, Andhra Consumer Movement in India
Pradesh, is another pioneering consumer organisation which has made a
significant contribution to the consumer movement. It represented the plight of
the poor ration card holders and LPG gas users, who had to stand in long
queques because of the irresponsible attitude of the concerned authorities.
Mr. V K Parigi with 20 members held meetings survey of ration card holders
and succeeded in achieving necessary changes in the fair price shops and the
public distribution system. Besides this, about 15 more organisations came up
in Andhra Pradesh taking up the task of solving problems of fair shops and
milk distribution in different parts of the state.
To wage a war against exploitation by the traders, some organisations came
up with the novel idea of buying quality product of everyday use at wholesale
and selling these to the consumers at much lower prices than that being sold
by the merchants. These are the ‘Akhil Bhartiya Garahak Panchayat’ (ABGP)
started in 1974 in Pune, Mumbai Grahak Panchayat (MGP) in 1979 in Mumbai
and Grahak Panchayat at 1979 in Jamshedpur.
Another organisation which made a significant contribution to the cause of
consumers is the Consumer Education and Research Centre (CERC) which
started in Ahmedabad in 1978. It added a new dimension to the Consumer
movement with Prof. Manubhai Shah, the Managing Trustee of CERC. The
organisation constantly used legal machinery to bring about changes and protect
consumer rights. Its special focus and interventions is against the governments
and public cooperations. It has a big library, computer centre and a product
testing laboratory. Recently, it has also launched a project on comparative testing
in Ahmedabad where cooperative testing, ranking and evaluation of consumer
products are being undertaken with the aim of publication of such findings for
consumer education. To begin with, testing of food, pharmaceuticals and domestic
appliances had started. Findings will be published and action may be initiated
against unsafe products. CERC also undertakes internship training for any
consumer organisation, besides routine exhibitions, seminars and publications of
the magazine ‘Consumer Confrontation’.
The Eighties of the present century saw the dawn of a new era in consumer
movement in India. There was mushrooming of consumer organisations, many
floated by politicians to earn additional income and capture a gullible vote bank.
However some associations were really committed to the cause of the consumers.
One of these was ‘Jagrut Grahak’ in Baroda, Gujarat started in 1980 by ten
retired professionals. It imparts consumer education through seminars and
publications and runs a network of 45 complaint centres. ‘Consumers Forum’
is another important organisation started in 1980 in a small form in Udupi in
South Karnataka. Under the leadership of Dr. P Narayan Rao, it succeeded
in bringing relief to many aggrieved consumers, chiefly from their problems with
the State bureaucrats.
VOICE, the voluntary organisation in the interest of consumer education, was
founded by energetic young students and teachers of the Delhi University in
1983 in Delhi to fight against unfair trade practices. It gives consumers information
about the benefits of shortcomings of various products and brands and enables
them to make informed choices. With Dr. Shri Ram Khanna as the Managing
Trustee, it has launched comparative testing. Its first attempt was directed at
comparative testing of well known brands of colour TVs.
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Consumer Movement Consumer Unity and Trust Society (CUTS) started in Jaipur, Rajasthan, in March
1984, made its impact by effectively making use of media and publicity. For
example, to tackle problems of garbage, it announced prizes for a photograph
depicting the biggest heap rubbish or the biggest pothole, and this galvanised
authorise into taking prompt action. Consumer Action Group (CAG) founded
in 1985 in Madras concerns itself with the issues of civic amenities, health and
environments. For example, shortage in Chennai and Chemical pollution in Adyar
river.
Some individual consumer activists who have been in the forefront of the
consumer movement in the country. Mr. R R Dollani, an old Gandhian, started
a number of associations in Madras. He organises meetings and rallies on
consumers’ issues and other public interest issues in various parts of the city.
Mr. H D Shourie, Director, Common Cause; Delhi, is a well known litigant
in consumer circles. This organisation has 5000 members from all over the
country keeping contract with the various consumers’ outfits and taking up cases
on problems of electricity, hospitals, taxation and similar issues. Another consumer
activist who works primarily with his pen is Mr. R. Desikan of SMN Consumer
Protection Council, Madras.
A new impetus was given to the consumer movement with the enactment of
the Consumer Protection Act, 1986. It applies to the whole of India except
J & K. The detailed information on this act is dealt with elsewhere in this course.
Here, it is suffice to mention that this act is unique since it provides for setting
up of quasi-judicial bodes vested with jurisdiction concurrently with the
established courts for redressal of consumer disputes at the District, State and
national levels. The basic objective is to provide inexpensive justice to consumers.
For the enactment of this legislation, the late Prime Minister, Mr. Rajiv Gandhi
deservers special mention from several ministries and public sector monopolies
and after vested interests, he went ahead and got the act passed.
The Nineties saw the fulfillment of efforts towards a unified approach. It had
been always felt that there were benefits in collective and united approach. In
March, 1990 the Federation of Consumer Organisations (FEDCOT) was
established in Tamil Nadu to bring together as many consumer groups as possible
in the State under one umbrella. In 1992, consumer groups of Gujarat joined
hands to form a federation, Gujarat State, Federation of Consumer Organisation
(GUSFECO). Now 9 States in the country have federations. Besides Tamil
Nadu and Gujarat, they are Kerala, Karnataka, Andhra Pradesh, Maharashtra,
Rajasthan, Odisha and Uttar Pradesh. Besides, at the apex level, there are
Confederation of Indian Consumer Organisation (CICO), New Delhi, formed
in February 1991 and Consumer Coordination Council (CCC), New Delhi,
formed in April 1992. The primary reason for forming these apex bodies is
networking of consumer groups coming together for a common cause.
These and several other Consumer Organisations have contributed a lot towards
Consumer education and protection of their rights and to promote their welfare.
Check Your Progress Exercise 2
1) Give any two basic objectives of the consumer movement.
i) ............................................................................................................

48
ii) ...........................................................................................................
2) Enumerate any two causes of development of consumer movement in India. Consumer Movement in India

i) ............................................................................................................
ii) ...........................................................................................................
3) Give any two factors, which stimulated the consumer movement in modern
times.
i) ............................................................................................................
ii) ...........................................................................................................

8.5 ACHIEVEMENTS OF THE CONSUMER

MOVEMENT
The achievements of the consumer movement in India are varied. Particular
mention may, however, be made of the following:
 Emphasis is now given to the consumer education by the government and
social organisations in various ways.
 The study on Consumer Protection has been incorporated in the courses
at different levels in schools and colleges. In law and business management
courses full-fledged courses have been introduced at degree and post-
graduate levels in various universities and institutes of eminence in India.
 Some significant changes have taken place in the provisions laid down by
the business organisations and associations, which have recognised the
concept and consumer welfare.
 Consumer grievance cells have been set up by large business organisations
for the redressal of grievances of the consumers on their premises. For
example, Life Insurance Corporation of India (LIC) has set up claims review
committees at the zonal and central levels. Petroleum Companies, Railways,
Banks, Income Tax Departments, have also initiated setting up of public
grievance cells. The Government of India has set up a separate Directorate
called Directorate of public Grievances at Sardar Patel Bhavan, Sansad
Marg, New Delhi. It deals with complaints relating to hawks, railways,
insurance, pensions and related matters. In the long run, it will cover all
the ministries. The nationalised banks are observing 15th of every month
as the: Consumer Grievance Day’, where an aggrieved consumer can walk
into the top mangers’ offices in their respective town, district or zone. The
Council of Fair Business Practices, of more than 20 years standing, is also
trying to help in the redressal of complaints against business from individual
consumers or groups. Federation of India Chambers of Commerce and
Industry (FICCI) has set up a Consumer Business Forum which meets
once a quarter in different cities of the country. All stock exchanges in
the country have also set up similar cells. The Advertisement Standard
Council of India (ASCI), Confederation of Indian Industry (CII) and FICCI
have evolved a code of ethics for their activities.
 Representation is now given to consumer organisations on the policy making
bodies of governments and Advisory/Welfare Committees of business
organisations and the service sector. Central and State governments,
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Consumer Movement Consumer Protection Councils, regulatory departments of Preventions of
Food Adulteration, Supplies of Food and Drugs, Weights and Measures
Department, Quality Control Institutions like Bureau of Indian Standards
(BIS) and AGMARK, Petroleum Product Department, Railway Commuters
Welfare Committees, Regional Advisory Committees for Indian Airlines
Services all have representatives of the various consumer organisations.
Thus, consumers get full opportunity to participate in policy making aspects
which relate to their welfare in general.
 Doordarshan is telecasting a fortnightly programme named as
“SANRAKSHAN UPBOKTA KA” and the all India Radio as “JAGO
GRAHAK JAGO” to increase awareness of consumers.
 The ministry of civil supplies has instituted a National Award named as
“National award for Consumer Protection”. This award is for the voluntary
consumer organisations for their outstanding work in this field.
SOME LEADING CASES:
Synco Textile Pvt. Ltd. v. Greaves Cotton & Co. Ltd.1
The National Commission observed that the main determinates of the
character of a transaction – whether it is for a commercial purpose of
purchase/sale in the name from or after conversion and direct nexus with
profit or loss. Thus, buyers of goods or commodities for self-consumption
in economic activities in which they are engaged for release shall make
transaction for commercial purpose.
Kody Elcot Ltd. v. C.P. Gupta2
The complaint who was a medical practitioner claimed that he had
purchased an ultrasound scanner and the same had stopped functioning
within a short period of time. The supplier pleaded that the complaint was
not a consumer in that the scanner was purchased for the purpose of his
professional work and that he was making profit out of it. But the complaint
claimed that it was being run by his personal skill and to earn his livelihood.
The National Commission held as follow:
The question of profit was not relevant. The question to be seen was whether
the goods purchased by consumer were being used by himself. The appellant
had not led any evidence to the effect that the complaint was not personally
using the unit. On the other hand, from the affidavit of the complaint,
it was clear that the scanner was used by him by his skill for earning
his livelihood. Hence, he was a consumer. The supplier was directed to
refund its price.
Barsad Ali v. Managing Director3
A ration shop supplied a ration card – holder rapeseed oil adulterated with
known toxic adulterants. The complaint, his family, as a result of that
rapeseed oil consumption suffered severely. He was attacked with paralysis
of lower limbs and in spite of prolonged treatment he did not recover fully.
1 1991 CPJ 499 (NC)
2 1996, CPJ 7
50 3 1993, CCJ 476
His wife, in spite of medical treatment, was not able to carry on her ordinary Consumer Movement in India
avocation as housewife because of ailment. His two daughters and a son,
all growing children were also affected and medical report was that they
had severe attack. There education carrier was doomed. Rs. 1,50,000,
awarded to complainant, Rs. 50,000 for his wife and Rs. 25,000 for each
children from the decision by the National Commission.
Maina Devi Bairlaia v. Life Insurance Corporation of India
In this case Maina Devi husband took a life insurance policy for Rs. 50,000.
Before the second premium fell due, he died due to sudden illness. The
claim made by Smt. Maina Devi, the widow of the insured, was not
entertained for as long as 14 years. It was only when she got her miseries
published in newspapers and certain MPs took up the matter in Parliament
that she was sent a cheque for Rs. 50,310.
On a suit before National Commission, it was held that the Corporation
had been highly negligent in the performance of its services. Smt. Maina
Devi, the complaint, had suffered hardship and loss on account of deficiency
in service. She was held entitled to interest @ 12% p.a. from the date
of expiry of 3 months from the date of death of the assured till the amount
was paid to her. The commission also awarded her compensation of Rs.
15, 000 for mental torture and harassment.
State Bank of India v. Ravendran Nair4
A demand draft of Rs. 98,000 was issued by the State Bank of Travancore
on the State Bank of India, Surat. When presented at the drawee branch,
the payment was refused on the ground that under the signature of one
of the persons signing the draft (accountant), the capacity in which he
signed the same was not mentioned. Held the refusal amounted to deficiency
in service and the bank should be held liable for the inconvenience and
consequent loss to the payee of the draft.
Union of India v. Nathmal Hansaria5
This case held that the railways are liable for deficiency in services when
a person passing through the inter connecting passage way between two
compartments of a train fell down resulting in death.
Station Manager, Indian Airlines v. Jiteswar Ahir6
In this case the National Commission held t hat removal of ladder while
a passenger was disembarking, leading to injury to the passenger amounted
to deficiency in service. The complainant after he was seated on the plane,
was intimated by the announcement that part of his luggage was lying
on the ground unidentified. He moved towards the door and finding that
the ladder was in place, tried to get down. But before the could get his
body on the ladder, the ladder was moved as a result of which he fell
to the ground and sustained injuries. The passenger demanded compensation
of Rs. 10 laks form the Airlines. The Airlines was willing topay Rs. 40,000
which was the maximum amount payable under the Carriage by Air Act,

4 LAW (NCI) 1992-8-52

5 LAW (NCD) 1993-9-49
6 1996 (1) CTJ 108 51
Consumer Movement 1972. The state Commission ordered a compensation of Rs. 4 lakh and
Rs. 1 lakh for mental agony and distress plus costs. The order of the State
Commission was upheld by the National Commission.
Mohindra Gas Enterprises v. Jagdish Poswal7
In this case (1992) it was held that registering for gas connection amounts
to hiring of services. Reference was made to the Manual of the Indian
Oil Corporation which states that an LPG customer gets continuing or
recurring services like loan of the Corporation’s equipment, delivery of refill
cylinders, technical service for appliance or leakage of equipment, and so
on. But, can a person be upheld as a consumer at the stage of registration
or only when he signs subscription voucher and makes deposit for LPG
connection. To this, National Commission observed as follows: Service as
defined in sub-clause (o) of sub-section (1) of Section 2 means “service
of any description which is made available to potential users”. The
consumer who hires a service has been defined in clause (ii) of Section
2(1) of the Act, according to which it is not necessary that consideration
should be paid at the time of hiring of service. If the transaction is
supported by consideration which has been paid or promised or partly paid
or partly promised or under any system of deferred payment, even then
it will be a valid consideration for the hiring of the service. The present
case is one in which payment of part consideration was deferred till the
gas connection was released. Hence, a person becomes a consumer of LPG
right at the time of registration for an LPG connection.
Indian Oil Corporation Ltd. v. Venkataraman8
In this case, the State Commission as well as the National Commission
held that the supply of a gas cylinder with a defective valve and the failure
of the distributor’s supply-man to check the defect at the time of delivery
amounted to deficiency of service. Accordingly, the Indian Oil Corporation
was held liable to compensate for loss of life and injury resulting from
fire caused by the leakage from the defective valve. A sum of Rs.1,50,000
was awarded.
Nivrutti G. More v. Dr. Vinayak Deshmukh9
The failure on the part of a doctor leaving station without making
competent alternative arrangements to attend to serious cases was held
to be a deficiency of service. Consequently, doctor was held liable for the
medicine administered by an unqualified person working as compounder
resulting in death of the patient.
Sudha Devi Agarwalla v. Unit Trust of India10
In October 1993, Unit Trust of India had declared that master shareholders
would be eligible for redemption of shares at the rate of 49.70 per share
and that necessary documents for redeeming the shares should be filed
between 1.11.1993 and 30.11.1993 if a shareholder wanted to redeem his
shares. The complainant who had 14,300 shares lodged all the necessary
7 1993 (1) CTJ 108
8 (NCDRC), F.A. Nos. 92 & 85 of 1992.1
9 (1995) CCJ 981
1 0 (1996) CCJ 1293
52
documents against redemption value of Rs.7,10,710. There was delay in Consumer Movement in India
repayment of the redemption value of the shares. The State Commission
ordered payment of Rs.7,10,710 plus Rs.2,60,000 as compensation and
Rs.1,000 towards costs.
With these achievements of the Consumer Movement in India, it is hoped that
the consumer will soon be “The King in the Market”. After all, the efforts
and sacrifices made by the eminent persons, groups and individuals to promote
the consumer movement and to ensure their welfare will not go in-vain. A bright
future of the consumers in India, which it is hoped will be free of their exploitation
at the market place, is certain.

8.6 FUTURE TASKS/CHALLENGES AHEAD

Though consumer movement has achieved commendable success in various
spheres, yet there are several challenges and tasks for the future.
It is now three decades since the Consumer Protection Act, 1986 was passed
after years of lobbying by the various consumer organisations. The redressal
machinery, however, is not fully satisfactory. The number of cases pending in
the district forums is piling high.
Unless consumer groups take determined action to see that the institutions set
up for their protection work effectively, the redressal agencies will go the way
of civil courts, where litigants have to wait for years and spend fortunes for
the settlements of their disputes. Making the Consumer Protection Act effective
is therefore, the first challenge facing the consumer movement in India.
There are now about 2000 active organisations of consumers in existence, but
all the cities and towns have not been covered. The rural areas where presently
about 80 crore consumers live are still virtually untouched by the consumer
movement. Though the aim is to have a Consumer Complaints Redressal Forum
in every district, it is not easy for poor rural consumers to go to the forum
with complaints, nor do many consumers have an awareness of ways to assert
their consumer rights. The solution lies in training rural workers who are already
active in the villages. Mass media should be used to penetrate rural houses.
Creating consumer awareness in the vast reaches rural India with its variety
of customs, traditions and languages and little formal education is the second
challenge for the consumer movement.
Another matter of concern for the consumer is the likely fall out of the libralisation
policy adopted by the government. Undoubtedly, libralisation is going to bring
us many benefits, notably, up-to-date technology, more competition and better
products, more employment and investment opportunities. But some possible
adverse effects must be taken into account. The export to India of drugs,
pesticides and cosmetics which are sometimes banned in the countries from which
they originate is likely to be much easier with libralised import laws. Consumer
groups will have to be on their guard against such products and services. For
example, obesity treatment, hair restoration treatment and arthritis cures which
were not approved in the countries of origin have been brought in here through
collaboration and launched with tremendous publicity. Consumer organisations
need to take action against them for their misleading and highly exaggerated
claims. Laws against cigarette and liquor advertising are being openly flouted
through advertising on hoardings and through cable television. Consumer 53
Consumer Movement movement needs to be extremely alert regarding dubious or hazardous products
entering the country in the wake of libralisation.
Some other emerging areas of consumer protection are environment protection,
investor protection and freedom of information. Relentless increase in environmental
pollution of all kinds has totally impoverished the quality of our lives and is
taking a heavy toll of our health. Consumer groups need to strongly support
and work with environmentalists. Every consumer will have to join with others
to reduce pollution in his/her own neighboured.
Further, the concern of consumer movement should also be to discourage racism,
communalism, violence and conspicuous consumption. Violence is today (act,
law or case or advertisement, environment) the real hero in most TV serials
and films. It enters our homes, assaults our senses and influences all of us,
specially our children. In the words of Anwar Fazal, Regional Director,
United Nations Development Progranmme for the Asia Pacific Region,
“The Consumer Movement should be directed towards service to the
people and the Environment instead of just ensuring “value for money
for consumers”. Consumer movement should seek a new vision which
embodies 3 new cultures, i.e., the culture of balance and harmony (so well
provided by nature), the culture of trusteeship and stewardship (as we are only
guardians of earth) and culture of accountability to the future.
Check Your Progress 3
1) Fill in the blanks.
i) Schools and colleges are incorporating . ……………......... in
courses at different levels.
ii) Large business organisations have set up .....................................
on their premises.
iii) In India it is hoped that the consumer will soon be ..................
.....................................................................................................................................
2) How are the consumers participating in policy decisions for consumer
welfare?
.................................................................................................................
.................................................................................................................
.................................................................................................................
3) Enumerate any two important challenges before consumer activist.
i)

ii)

8.7 LET US SUM UP

You have learnt that the protection to consumers was provided in the Ancient
period. It was a part of culture and traditions at that time. Generally, there
were no shortages and exploitation. Culprits were fined heavily. However, the
golden era got over with the invasion of foreigners and modernisation.
The origin of consumer activities can be traced to the emergence of cooperatives
at the beginning of the present century. The governments also encouraged the
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development of Consumer Cooperatives. In general, cooperatives have been Consumer Movement in India
successful in halting abuses of the monopolies and improving conditions of the
lower groups.
Consumer movement, in its present form in India, came into being in the 1960’s
with the formation of Consumer Guidance Society of India in 1966 in Bombay.
With its success, the consumer movement spread over to fight for availability,
purity and standard prices of commodities. At present, there are about 2000
active organisations all over the country. One can say that the consumer
movement in India has come of age. From simple awareness generation, it took
over to direct action and then to testing and litigation. Its contribution to the
passing of Consumer Protection Act, 1986, has been a historic achievement.
Both business and bureaucrats have started taking consumers seriously. Consumer
grievance cells have been established by important organisations and corporations.
Consumers are represented on a number of consumer welfare committees set
up by various organisations and the Central and State Governments.
However, challenges are there to seek a new vision of the consumer movement
in India. This task has to be taken up by the consumer activists.

8.8 KEY WORDS

Ancient Period : Period before the invasion by foreigners; i.e.
about 800 years back.
Kautilaya Arthasashtra : Writings of Chanakya describing in detail various
strategies for administration and diplomacy.
Consumer : Any person who purchases goods or hires
services for self/family use.
Consumer Protection : Safeguarding consumer interest.
Consumer Movement : consumer cause pursued with mass base and
organisation.
Consumer Cooperatives : Voluntary associations of economically week
persons to eliminate middlemen and get advantage
on a large scale.
Consumer Organisations : Voluntary/non-government organisations of people
to safeguard the interests of consumers.
Achievements : Gains from the consumer movement.

8.9 SOME USEFUL BOOKS AND REFERENCES

1) Agarwal, V.K. “Consumer Protection in India” Deep & Deep Publication,
New Delhi, 1989.
2) Kumar, Niraj, “Consumer Protection Act,” Himalaya Publishing House,
New Delhi, 1999.
3) Mehta, Vinod “Consumer Becoming King in India,” Assam Tribune,
10.7.99, Newspaper.
4) Saxena, Nitin, “Consumer is the Master,” Pioneer, 12.6.99, Newspaper.
5) Sohewalla, Gajanand, “Consumers and their Rights” Assam Tribune,
15.3.99, Newspaper
6) Bhandari, Arvind, “Consumer Movement Needs Expansion, Tribune,
25.3.99, Newspaper.
55
Consumer Movement 7) Joshi, Navin Chandra, “Need for Spreading Consumer Movement,
Central Chronical, 22.12.99, Newspaper.
8) Stevan, Miles, “Consumer as a Way of Life,” Sage Publication, London,
Thousand Oaks, New Delhi.
9) Sharma, S.S., “Consumer Behaviour” Arihant Publishing House, Jaipur,
1995.
10) Woods, Walter A, “Consumer Behaviour Adopting and Experiencing,”
New York: Elsevier North Holland, 1981.

8.10 ANSWERS TO CHECK YOUR PROGRESS

EXERCISES
Check Your Progress 1
1) a) T b) F c) F d) T e) T f) F
2) Preventing abuses of monopolies by eliminating middlemen and checking
price rise. By understanding consumer education and product improvement.
Teaching lessons on self help; morality and unity.
3) In consumer oriented marketing system the role of consumer cooperatives
is of utmost significance because it has proved as a counter force against
the traditional marketing mechanism and has served the interests of the
consumers in various ways.
Check Your Progress 2
1) i) Opportunities to buy reasonably.
ii) Protection against fraud, mispresentation, unjust products etc.
2) i) Shortages of Consumer products and inflation.
ii) Black marketing and lack of quality and purity of goods.
3) i) Adulteration and massive profiting by seller
ii) Practice of short weighting and measuring.
Check Your Progress 3
1) Fill in the blanks:
i) Schools and colleges are incorporating Consumer Protection in courses
at different levels.
ii) Large business organisations have set up Consumer Grievances cells
on their premises.
iii) In India, it is hoped that the consumer will soon be The King in the
market.
2) Consumer organisations have been gain representation on policy making
bodies of governments, Advisory and welfare committees of big business
organisations and the service sector.
3) The challenges before the consumer activities are to ensure:
i) that the institutions set up for their protection work effectively.
ii) that the racism, communalism, violence and conspicuous consumption
do not exist and the consumer movement is directed towards service
to the people instead of just ensuring value for money for consumers.

56