chapter

11
Consumer Protection
Banks Responsible for Failed
Transactions and No Cash in ATMs
In a landmark consumer forum judgement,
Learning Objectives now, if you do not get money from ATMs, it
would be considered as deficiency of services
on part of bank,.On May 4, 2017, a petition in
After studying this
the Consumer Forum in Raipur was filed where
chapter, you should be the complainant submitted photos and video
able to: recording of three failed ATM transactions due
to non-availability of cash bank’s ATMs.
In front of the forum, the bank argued
¾¾ state the importance of
that ATM runs with Internet connectivity, so
consumer protection; at the time when users use ATM, he/she is
not directly the bank client. Hence, if the said
money not withdrawn from the ATM, then it
¾¾ briefly explain legal cannot be termed as a deficiency in service.
framework for consumer The forum rejected the bank’s logic
protection in India; completely. The petitioner has presented
photo and video recording at the time of
withdrawal as evidence in front of forum.
¾¾ d e s c r i b e c o n s u m e r Forum acknowledged that the consumers at
rights in India; various times go to ATM to withdrawn money
every time the message of ‘cash not available’
is the lack in service.
¾¾ briefly describe the ways The forum accepted the petition. After
and means of consumer hearing the arguments of both the parties, the
forum ordered that if the bank will not provide
protection; and
ATM service to the customer, then it will be
considered a reduction in service Consumer
Forum imposed a fine of Rs. 2,500 on the bank
including Rs1,500 as compensation for mental
harassment and Rs1,000 for legal expenses
for non-availability of cash in its ATMs as
deficiency in bank services.
Source:[Link]
consumer-forum-fines-sbi-ignoring-
customers/, 2017.

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Introduction cheated and is exposed to many risks

and health problems.
Each one of us is a consumer in one
Can business afford to ignore the
way or another. It is important for us
to be an aware and informed consumer interests of consumers? The market
of goods and services available to us in forces have changed from a seller
the [Link] above case is just one market i.e., the earlier approach of
of the examples of the many problems caveat emptor which means Let the
that consumers face in the purchase, buyer beware, to a consumer market
use and consumption of goods and i.e., caveat venditor which implies
services. But, very few consumers are Let the seller beware. A consumer
aware of their rights given to them by is said to be a KING in the free
the Consumer Protection Act 2019. market economy. Hence, consumer
The Consumer Protection Act 2019 protection has significance for both
has replaced the Act 1986 and seeks consumers and business alike. Under
to widen its scope in addressing the Consumer Protection Act 2019, the
consumer concerns. Government of India has conferred a
Have you ever thought what legal protection to safeguard interests
would be the plight of consumers if of a consumer.
adequate protection is not provided
to them? With growing competition Importance of Consumer Protection
and in an attempt to increase The concept of consumer protection
their sales and market share,
is to safeguard the interests of the
manufacturers, sellers and service-
consumers. It adopts measures to
providers may be tempted to engage
protect consumers from unethical
in unscrupulous, exploitative and
malpractices by businesses and
unfair trade practices like defective
and unsafe products, adulteration, provide a swift redressal of their
false and misleading advertising, grievances with regard to:
hoarding, black-marketing, etc. 1. Sale of adulterated goods such as
This means that a consumer might adding inferior substances to the
be exposed to risks due to unsafe product being sold.
products, might suffer from bad 2. Sale of counterfeit goods such as
health due to adulterated food fake
selling a product of lesser value
products, might be cheated because than the real product. Nike
of misleading advertisements or sale
of spurious products, might have 3. Sale of sub-standard goods such shoes
to pay a higher price when sellers as the sale of products that do
engage in overpricing, hoarding or not meet the prescribed quality
black-marketing, etc. As a result, standards.
consumer becomes unsafe, feels 4. Sale of duplicate goods.

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5. Use of malfunctioning weights and from various types of exploitation and

measures that lead to underweight should complain about it. Consumer
of products. protection has a wide scope. It not only
6. Black marketing and hoarding that includes educating consumers about
eventually leads to scarcity of the their rights and responsibilities, but
product and well as a rise in the also helps in getting their grievances
price of the same. redressed. It not only requires a judicial
machinery for protecting the interests
7. Overcharging a product, i.e.,
charging a product above its of consumers but also requires the
Maximum Retail Price. consumers to be united and form
themselves into consumer associations
8. Supplying of defective goods. for protection and promotion of their
9. Advertisements that are interests.
misleading, i.e., advertisements
that falsely claim a product or a From Consumers’ point of view
service to be shown as superior The importance of consumer protection
quality, grade or standard when from the consumers’ point of view can
not in real. be understood from the following
10. Supply of inferior services, i.e., points:
quality of service lesser than the (i) Consumer Ignorance: In the
condition agreed. light of widespread ignorance
of consumers about their rights
Need for Consumer Protection and reliefs available to them, it
The need for consumer protection arises becomes necessary to educate
from the need to protect consumers from them about the same so as to
the loss or injury or other prevailing achieve consumer awareness.
malpractices and to ensure: (ii) U n o r g a n i s e d C o n s u m e r s :
1. Physical safety of a consumer. Consumers need to be organised
2. Access to information. in the form of consumer
organisations which would
3. Corporate Social Responsibility
to provide quality and quantity of take care of their interests.
goods at fair prices. Though, in India, we do have
4. Consumer satisfaction. consumer organisations which
are working in this direction,
5. Social justice and Trusteeship
adequate protection is required
6. Survival and the Growth of
to be given to consumers till
businesses.
these organisations become
powerful enough to protect
That is why we as an informed consumer and promote the interests of
have to wake up and save our self consumers.

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Compensation for impurities in cold drinks

Unethical
(iii) Widespread Exploitation of important because of the following
Consumers: Consumers might reasons:
be exploited by unscrupulous, (i) L o n g - t e r m I n t e r e s t o f
exploitative and unfair trade Business: Enlightened
practices like defective and businesses realise that it is
unsafe products, adulteration, in their long-term interest to
false and misleading advertising, satisfy their customers. Satisfied
hoarding, black-marketing, etc. customers not only lead to
Consumers need protection repeat sales but also provide
against such malpractices of the good feedback to prospective
sellers. customers and thus, help in
increasing the customer-base of
From the point of view of Business business. Thus, business firms
A business must also lay emphasis should aim at long-term profit
on protecting the consumers and maximisation through customer
adequately satisfying them. This is satisfaction.

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(ii) B u s i n e s s u s e s S o c i e t y ’ s it is advisable that business

Resources: Business organisations voluntarily resort
organisations use resources to such practices where the
which belong to the society. customers’ needs and interests
They, thus, have a responsibility will well be taken care of.
to supply such products and
render such services which are The Consumer Protection Act, 2019
in public interest and would
The Consumer protection Act 2019
not impair public confidence in
seeks to protect and promote the
them.
consumers’ interest through speedy
(iii) Social Responsibility: A and inexpensive redressal of their
business has social grievances. It extends to the whole of
responsibilities towards various India. It is applicable to all types of
interest groups. Business businesses whether a manufacturer
organisations make money by or a trader and whether supplying
selling goods and providing goods or providing servicesincluding
services to consumers. Thus, e-commerce firms. The Act confers
consumers form an important certain rights to consumers with a view
group among the many stake- to empowering them and to protect
holders of business and like their interests.
other stakeholders, their interest
has to be well taken care of. Who is A Consumer?
(iv) Moral Justification: It is the A ‘consumer’ is generally understood
moral duty of any business to as a person who uses or consumes
take care of consumer’s interest goods or avails of any service. Under
and avoid any form of their the Consumer Protection Act 2019,
exploitation. Thus, a business a consumer is a person who buys
must avoid unscrupulous, any goods or avails services for a
exploitative and unfair trade consideration, which has been paid
practices like defective and or promised, or partly paid and partly
unsafe products, adulteration, promised, or under any scheme of
false and misleading advertising, deferred payment. It includes any
hoarding, black marketing, etc. user of such goods or beneficiary of
(v) Government Intervention: A services if such use is made with the
business engaging in any form approval of the buyer. It applies to
of exploitative trade practices both offline and online transactions
would invite government through electronic means or by
intervention or action. This teleshopping or direct selling or
can impair and tarnish the multilevel marketing. However, any
image of the company. Thus, person who obtains goods or avails

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Protection against malpractices and exploitation

services for resale or commercial Consumer Rights

purpose is nottreated as a consumer
and is outside the scope of Consumer The Consumer Protection Act 2019
Protection Act 2019. provides for six rights of consumers.

Terms & Definitions MCQs

With
1. Complaint: Any allegation in writing made by the complainant for obtaining relief
respect w.r.t restrictive trade practice, defect in goods or deficiency in services provided,
to overcharging of price or offer of goods or service injurious to life and safety.
2. Complainant: means one or more consumers, or any voluntary consumer
association, central or state government or the central authority or a legal heir
or legal representative or a parent or legal representative in case of a minor.
3. Spurious goods: Goods that are falsely claimed to be genuine.
4. Unfair trade practice: A trade practice for the purpose of promoting sale, use or
supply of any goods or service falsely represents its quality, standard, quantity,
composition, style or model.

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5. Restrictive trade practice: A trade practice which manipulates price or affect the
flow of supplies in the market relating to goods and services in such a manner
that an unjustified cost is imposed on the consumer.
6. Defect: Any fault, imperfection, shortcoming or inadequacy in quality, nature
and manner of performance in relation to goods or a product.
7. Deficiency: Any fault, imperfection, shortcoming or inadequacy in quality,
nature and manner of performance in relation to in relation to any service and
includes act of negligence or omission or commission or withholding relevant
information which causes loss or injury to the consumer.
8. Injury: Any harm illegally caused to any person in body, mind or property.
9. Product: Any article or goods or substance or raw material or any extended cycle
of such product either in gaseous , liquid or solid state possessing intrinsic
value capable of delivery either as assembled or a component produced or
manufactured to trade. It does not include human tissues, blood, blood products
and organs.
10. Product Seller: Any person in the course of business imports, sells, distributes,
leases, installs, prepares, labels, markets, repairs, maintains or otherwise
involved in placing the product for commercial use or a service provider.
11. Product Liability: Responsibility of a product manufacturer or seller of any
product or service to compensate for any harm caused to a consumer by defective
product manufactured or sold or by deficiency in services.

These rights include the following: complete information about

1. Right to Safety: The consumer the product he intends to buy
has a right to be protected including its ingredients, date
against goods and services which of manufacture, price, quantity,
are hazardous to life, health directions for use, etc. It is
and property. For example, because of this reason that the
legal framework in India requires
electrical appliances which are
the manufactures to provide such
manufactured with substandard
information on the package and
products or do not conform to
label of the product. Also
the safety norms might cause
serious injury. Thus, consumers 3. R i g h t t o b e a s s u r e d : T h e known
are educated that they should consumer has the freedom to as right
use electrical appliances which access variety of products at to
are ISI marked as this would be competitive prices. This implies chose
an assurance of such products that the marketers should offer a
meeting quality specifications. wide variety of products in terms
of quality, brand, prices, size, etc.
2. Right to be informed: The and allow the consumer to make
consumer has a right to have a choice from amongst these.

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4. Right to be heard: The consumer Consumer Responsibilities

has a right to file a complaint
and to be heard in case of The Consumer Protection Act
dissatisfaction with a good or empowers the consumer to fight
a service. It is because of this against any unscrupulous, exploitative
reason that many enlightened and unfair, restrictive trade practices
business firms have set up adopted by sellers. Consumer rights,
their own consumer service and by themselves, cannot be effective in
grievance cells. Many consumer achieving the objective of consumer
protection. Consumer protection can,
organisations are also working
in effect, be achieved only when the
towards this direction and helping
consumers also understand their
consumers in redressal of their
responsibilities.
grievances.
A consumer should keep in mind
5. Right to seek redressal: The
the following responsibilities while
consumer has a right to get relief
purchasing, using and consuming
against unfair trade practice
goods and services —
of restrictive trade practices or
unscrupulous exploitation in (i) Be aware about various goods
case the product or a service and services available in the
market so that an intelligent and
falls short of his expectations.
wise choice can be made.
The Consumer Protection Act
2019 provides for redressal to the (ii) Buy only standardised goods as
consumers including replacement they provide quality assurance.
of the product, removal of defect Thus, look for ISI mark on
in the product, compensation paid electrical goods, FPO mark on
for any loss or injury suffered by food products, Hallmark on
the consumer, etc. jewelry, etc.
6. Right to Consumer Education: (iii) Learn about the risks associated
The consumer has a right to with products and services, follow
acquire knowledge and to be manufacturer’s instructions and
use the products safely.
a well informed consumer
throughout life. He should be (iv) Read labels carefully so as to
aware about his rights and the have information about prices,
reliefs available to him in case net weight, manufacturing and
of a product or service falling expiry dates, etc.
short of his expectations. Many (v) Assert yourself to ensure that
consumer organisations and you get a fair deal.
some enlightened businesses are (vi) Be honest in your dealings.
taking an active part in educating Choose only from legal goods
consumers in this respect. and services and discourage

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unscrupulous practices like Ways and Means of Consumer

black-marketing, hoarding, etc. Protection
(vii) Ask for a cash memo on purchase
of goods or services. This would A consumers’ awareness about their
serve as a proof of the purchase rights and responsibilities is just one
made. of the ways in which the objective of
consumer protection can be achieved.
(viii) File a complaint in an appropriate There are other ways in which this
consumer forum in case of a objective may be achieved.
shortcoming in the quality of
1. Self-regulation by Business:
goods purchased or services
Socially responsible firms follow
availed. Do not fail to take an
ethical standards and practices in
action even when the amount
dealing with their customers Good
involved is small.
and ethical practices encourage
(ix) Form consumer societies which firms to realise that it is in their
would play an active part in long-term interest to serve the
educating consumers and customers in a rightful manner.
safeguarding their interests. Many firms have set up their
(x) Respect the environment. Avoid customer service and grievance
waste, littering and contributing cells to redress the problems and
to pollution. grievances of their consumers.

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2. Business Associations: The enable a consumer to safeguard

associations of trade, commerce his interests. In this regard, the
and business like Federation of Department of Consumer Affairs,
Indian Chambers of Commerce of GOI, has been undertaking
India (FICCI) and Confederation of Jago Grahak Jago campaign,
Indian Industries (CII) have laid for generating awareness among
down their code of conduct which consumers.
lay down for their members the 4. C o n s u m e r O r g a n i s a t i o n s :
guidelines in their dealings with Consumer organisations play
the customers. an important role in educating
3. C o n s u m e r A w a r e n e s s : A consumers about their rights and
consumer, who is well-informed providing protection to them. These
about his rights and the reliefs organisations can force business
available to him, would be in a firms to avoid malpractices and
position to raise his voice against exploitation of consumers.
any unfair trade practices or 5. Government: The government
unscrupulous exploitation. In can protect the interests of the
addition to this, an understanding consumers by enacting various
of his responsibilities would also measures. For example, the GOI

Mark of Bureau of Indian

Standards

Food Process Order Agmark

BIS Hallmark Eco-mark

Marks indicating quality in different products

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has set up a toll-free national R edressal A gencies U nder T he

consumer Helpline Number Consumer Protection Act
1800114000 for this purpose.
The legal framework in India For the redressal of consumer
encompasses various legislations grievances, the Consumer Protection
which provide protection to Act 2019 provides for setting up
consumers. The most important of of a three-tier enforcement machinery
these regulations is the Consumer at the District, State, and the
Protection Act, 2019. The Act National levels.
provides for a central authority As per the Consumer Protection
to regulate matters relating to Rules 2021, the jurisdiction of District
violation of rights of consumers, Commission, State Commission and
unfair trade practices and false or the National Commission is as follow:
misleading advertisements which 1. District Commission:District
are prejudicial to the interests commission has a jurisdiction
of consumers. This is known to entertain complaints where
as Central Consumer Protection value of goods or services paid
Authority (CCPA). A three-tier as consideration does not exceed
machinery at the district, state fifty lakh rupees. Either on the
and national levels for redressal first hearing or at any later stage,
of consumer grievances. it appears to district commission

Consumer Awareness

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that there exists elements of consideration that exceeds rupees

settlement which may be fifty lakh but does not exceed
acceptable to the parties, it may two crore. If any of the parties
direct them to give their consent are not satisfied by the order of
for settlement of dispute through State Commission can appeal
mediation within five days. In case against such order to the National
the parties agree for settlement Commission within a period of
by mediation and give written thirty days of such order.
consent, the district commission 3. National Commission: The
refers the matter for mediation National Commission has
and the provisions relating to territorial jurisdiction over
mediation shall apply. However, in the whole country. National
the event of failure of settlement Commission has a jurisdiction
by mediation proceeds with the to entertain complaints where
complaint. If the complaint alleges value of goods or services paid as
defect in goods which cannot consideration exceeds two crores
be determined without proper of rupees. If any of the parties
analysis or test of goods, the are not satisfied by the order of
commission obtains the sample National Commission can appeal
of goods, seal it and refer to the against such order to the Supreme
appropriate authority for analysis. Court of India within a period of
In case of services, the dispute thirty days of such order.
is settled based on the basis of
evidence brought to its notice Relief Available
by the complainant and can ask Where District or State or National
for any required information Commission is satisfied about defect
document or records from the in goods, or deficiency in services on
service provider for settlement. any unfair trade practice or claim for
If any of the parties are compensation under product liability,
not satisfied by the order of issues an order:
District Commission can appeal (i) To remove the defect in goods or
against such order to the State deficiency in service.
Commission on the grounds of
facts or law within a period of forty (ii) To replace the defective product
five days from the date of order. with a new one, free from any
defect.
2. S t a t e C o m m i s s i o n : I t i s
(iii) To refund the price paid for the
established by the respective
product, or the charges paid for
state government and ordinarily
the service.
function at the state capital. State
Commission has a jurisdiction to (iv) To pay a reasonable amount of
entertain complaints where value compensation for any loss or
of goods and services paid as injury suffered by the consumer

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Functions of NGOs:
due to the negligence of the perform several functions for the
opposite party. Legal Fine protection and promotion of interest
(v) To pay punitive damages in of consumers. These include:
appropriate circumstances. (i) Educating the general public
(vi) To discontinue the unfair/ about consumer rights by
restrictive trade practice and not organising training programmes,
to repeat it in the future. seminars and workshops.
(vii) Not to offer hazardous goods for (ii) Publishing periodicals and
sale. other publications to impart
knowledge about consumer
(viii) To withdraw the hazardous
problems, legal reporting, reliefs
goods from sale.
available and other matters of
(ix) T o c e a s e m a n u f a c t u r e o f interest.
hazardous goods and to desist
(iii) C a r r y i n g o u t c o m p a r a t i v e
from offering hazardous services.
testing of consumer products
(x) Compensate for any loss or injury in accredited laboratories to test
suffered by consumer under relative qualities of competing
product liability action and brands and publishing the
withdraw hazardous products test results for the benefit of
from being offered for sale etc. consumers.
However, every order of a district (iv) Encouraging consumers to
commission, the state commission or strongly protest and take an
the national commission is deemed action against unscrupulous,
final if no appeal for such order is exploitative and unfair trade
made by any of the parties involved practices of sellers.
in dispute. (v) Providing legal assistance to
Role of Consumer Organisations consumers by way of providing
And Ngos aid, legal advice etc. in seeking
In India, several consumer legal remedy.
organisations and non-governmental (vi) Filing complaints in appropriate
organisations (NGOs) have been set consumer courts on behalf of the
up for the protection and promotion consumers.
of consumers’ interests. Non- (vii) Taking an initiative in filing
governmental organisations are non- cases in consumer courts in the
profit organisations which aim at interest of the general public,
promoting the welfare of people. They not for any individual.
have a constitution of their own and (viii) Consumer unity and Trust
are free from government interference. Society (CuTS), Jaipur.
Consumer organisations and NGOs

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Key Terms

Consumer protection Consumer Rights Consumer Responsibilities

Redressal mechanism Mediation

SUMMARY

Importance of Consumer Protection: From the point of consumers, consumer

protection is important because consumers are ignorant, unorganised and
exploited by sellers. Consumer Protection is also important for a business
because (i) It is in the long-term interest of business, (ii) Business uses
society’s resources, (iii) It is a social responsibility of business, (iv)It has moral
justification, (v) It avoids government intervention in the functioning of business.
Legal Protection to Consumers: The Indian legal framework consists of a
number of legislations which provide protection to consumers. These include
(i) The Consumer protection Act, 1986, (ii) The Indian Contract Act, 1872, (iii)
The Sale of Goods Act, 1930, (iv) The essential Commodities Act,1955, (v) The
Agricultural produce (Grading and Marking) Act, 1937, (vi) The prevention of
Food Adulteration Act, 1954, (vii) The Standards of Weights and Measures Act,
1976, (viii) The Trade Marks Act, 1999, (ix) The Competition Act, 2002,(x) The
Bureau of Indian Standards Act, 1986.
Consumer Rights: The Consumer Protection Act, 1986, provides for six
consumer rights. These are: (i) Right to safety, (ii) Right to be informed, (iii)
Right to choose, (iv) Right to be heard, (v) Right to seek redressal,(vi) Right to
consumer education.
Consumer Responsibilities: In addition to exercising his rights, a consumer
should also keep in mind his responsibilities while purchasing, using and
consuming goods and services.
Ways and Means of Consumer Protection: There are various ways in which
the objective of consumer protection can be achieved. These Include (i) Self
regulation by business, (ii) Business associations, (iii) Consumer awareness,
(iv)Consumer organisations, (v) Government.
Redressal Agencies under the Consumer Protection Act: The Consumer
Protection Act provides for setting up of a three-tier enforcement machinery at
the District, State, and the National levels. They are referred to as the ‘District
Forum’, ‘State Commission’, and the ‘National Commission’. There are various
reliefs available to a consumer under the Act. The appropriate consumer court

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may pass an order for removal of defect in goods, replace a defective product,
refund the price of the product, pay compensation for the loss suffered, etc.
Consumer Organisations and NGOs: In India, several consumer organisations
and non-governmental organisations (nGOs) are playing an active role in
protection and promotion of consumers’ interests.

EXERCISES

Very Short Answer Type

1. Under which consumer right does a business firm set up consumer
grievance cell?
2. Which quality certification mark is used for agricultural products?
3. What is the jurisdiction of cases that can be filed in a State Commission?
4. State any two relief available to consumers under CPA.
5. Name the component of product mix that helps the consumer to exercise
the right to information.

Short Answer Type

1. Enumerate the various Acts passed by the Government of India which help
in protection of consumers’ interests.
2. What are the responsibilities of a consumer?
3. Who can file a complaint in a consumer court?
4. FSSAI (Food Safety and Standards Authority of India) has made a proposal
for hotels and other food outlets to declare the kind of oil/fat used in cooking
each of the food items on their menus. Name and explain the Consumer
Right being reinforced by this proposal.
5. Who is a consumer as per CPA?

Long Answer Type

1. Explain the importance of consumer protection from the point of view of
a business.
2. Explain the rights and responsibilities of consumer?
3. What are various ways in which the objective of consumer protection can
be achieved?

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4. Explain the redressal mechanism available to consumers under the

Consumer Protection Act, 2019
5. Explain the role of consumer organisations and NGOs in protecting and
promoting consumer’s interest.
6. Mrs. Mathur sent a jacket to a laundry shop in January 2018. The jacket
was purchased at a price of `4,500. She had previously sent the jacket
for dry cleaning with Shine Dry Cleaners and the jacket was cleaned well.
However, she noticed that her jacket had white discoloration marks when
she collected the jacket this time. On informing the dry cleaner, Mrs. Mathur
received a letter confirming that discolouration indeed appeared after the
jacket was dry cleaned. She contacted the dry cleaner multiple times and
requested for compensation for discoloured jacket but to no avail.
Upon Consumer court’s intervention, Shine Dry Cleaners agreed to
compensate Rs. 2,500 to Mrs. Mathur for the discoloured jacket.
(a) Which right was exercised by Mrs. Mathur at the first instance.
(b) Name and explain the right which helped Mrs. Mathur to avail the
compensation.
(c) State which consumer responsibility has been fulfilled by
Mrs. Mathur in the above case.
(d) State any other two responsibilities to be assumed by the consumers.

Project work
1. Visit a consumer organisation in your town. List down the various functions
performed by it.
2. Collect some newspaper cuttings of some consumer cases and the rulings
given therein.

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