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Is Consumer Really the King in India

Is Consumer Really the King in India



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Published by Amartya Bag
This paper explains the legal framework for consumer protection in India and the real situation as of now and a possible solution to the protect the rights of the consumers.
This paper explains the legal framework for consumer protection in India and the real situation as of now and a possible solution to the protect the rights of the consumers.

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Categories:Types, School Work
Published by: Amartya Bag on Mar 26, 2009
Copyright:Attribution Non-commercial


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Is Consumer Really The King in India?
Amartya Bag
Consumers are considered to be king in a free market; the sellers are guided by the will of aconsumer. Webster's dictionary defines Consumerism as "the promotion of the consumer'sinterests" or alternately "the theory that an increasing consumption of goods is economicallydesirable". "
" is likely to dominate the Indian market in the coming years, thanksto the economic reforms in the present years and increased direct foreign investment in the retailsector. The transition will be from a predominantly "sellers market" to a "buyers market" wherethe choice exercised by the consumer will be influenced by the level of consumer awarenessachieved. By "consumerism" we also mean the process of realising the rights of the consumer asenvisaged in the Consumer Protection Act (1986) viz. right to safety, right to be informed, rightto 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 apayment. The big multinationals will leave no stone unturned to gain the attraction of theconsumer and will try to gain a respectable market share. However, some of the companies try toengage in unscrupulous, exploitative and unfair trade practices like defective and unsafeproducts, adulteration, false and misleading advertising, hoarding, black-marketing etc. Theearlier approach of 
caveat emptor 
, which means “Let the buyer beware”, has now been changedto
caveat venditor 
(“Let the seller beware”). There is an active need for having awareness on theconsumer protection rights.
Evolution of Consumer Protection Rights in India
The consumer movement in India is as old as trade and commerce. In Kautilya's
,there are references to the concept of consumer protection against exploitation by the trade andindustry, short weights and measures, adulteration and punishment for these offences. However,there was no organised and systematic movement actually safeguarding the interests of theconsumers. Prior to independence, the main laws under which the consumer interests wereconsidered were the Indian Penal Code, Agricultural Production, Grading and Marketing Act,1937, Drugs and Cosmetics Act, 1940. Even though different parts of India exhibited differentlevels of awareness, in general, the level of awareness was pretty low. Indian consumermovement 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 commissionwas set up under the provision of the act. The act deals with cases of restrictive trade practicesadversely affecting competition and with unfair trade practices arising largely out of false andmisleading advertisements. After this act, consumer groups emerged. The emergence of the
Amartya Bag, B.A. LL.B. (1
Semester), KIIT Law School, KIIT University, Bhubaneswar, Orissa. Email :amartyabag@gmail.com
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Consumer Education and Research Centre in Ahmedabad, in 1978, was a milestone in theconsumer movement of India. It provided a thrust and a direction to the movement in terms of aresult-oriented approach through effective uses of the law and the courts, and injectingprofessional inputs into the movement. In the 1980s was the time for the consumer rights andmany consumer groups were formed by now in different parts of the country. In 1986 theConsumer Protection Act was enacted. In 1987, the Indian Standards Institute (ISI), which wasstarted around 1947 as a membership society largely dominated by industries, was turned into astatutory corporation called the Bureau of Indian Standards with greater participation byconsumer organizations thereafter. In 1993, the Consumer Protection Act was amendedovercoming few limitations and making it more effective and inducing the concept of consumercourts. Three tier consumer courts at the nation, state and district level known as the DistrictConsumer Dispute Redressal Forum, State Consumer Disputes Redressal Commission, and theNational Consumer Disputes Redressal Commission respectively was established under theprovision of the act. Consumer Welfare Fund was also created during that time. We have theSecurities and Exchange Board of India, 1992, the Telecommunication Regulatory Authority of India, 1997, and the Central Electricity Regulatory Commission, 1998. Apart from these, anumber 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 fromtime to time to protect the interest of the consumer. The system has been considered as one of thebest in the world in the matter of consumer protection.
Consumer Awareness and Rights – a Ground Reality
Even with so many milestones, the system is not perfect and there are still hurdles in providing justice to the consumer in some cases. In spite of having a separate ministry or department of consumer affairs at centre and in every state, the reality is that consumer loses the battle everytime and bows before the big wigs that own the industries and rein the huge consumer market inIndia. The consumer is nothing but a crownless king; the real power lies in the hands of bigmultinationals and retail chains. Another reason may be the lack of awareness amongst theconsumer about their rights. A recent study found that although the people have basic knowledgeabout the Weights and measures act but very few people have knowledge about the other lawslike the Drug and cosmetic Act; Prevention of food adulteration, food product order, the essentialcommodity Act; Display of price order; prevention of black marketing and maintenance of supplies. It was also found in the survey that the males are much more aware about the consumerprotection laws than the females. It was also found out that the people were not aware aboutorganization working at district and national level. Out of total sample, 48 percent males and 20percent females were aware of both consumer courts as well as consumer forum. Only 6 percenteach of male and female respondents were aware about the sub- divisional magistrate (S.D.M.)office. Very few knew about the public supply office. Majority of respondents that is 50 percentmales and 12 percent females were aware about the National Consumer Forum at Delhi. 2percent males each were aware of consumer Guidance Society, Hyderabad and Consumer ForumBombay. None of the female respondents were aware about Consumer Guidance Society andForum. This survey shows how the consumers in India are unaware about their legal rights.Indian consumers want quantity not quality, they prefer to compromise rather than complain.Though charging of a good above the maximum retail price (MRP) is against the law, it is a very
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common observance that the seller tends to charge a good above the MRP. It is common that onehas been charged above MRP for buying a bottle of mineral water at railway station ormultiplexes. There are many goods which are sold in the market without much information abouttheir quality, quantity and purity. In case of goods meant for mass consumption like, food, milk products, edible oil etc. the ingredients are not known. Manufacturers or producers seldomfollow the safety regulations in the products like, lamps, batteries, footwear, electricalequipments, wires, cement, LPG cylinders, stoves, switches, plugs, sockets etc. leading to manyfatal accidents. Adulteration of food is another major problem. Milk can contain detergent,refined oil, caustic soda or urea. Mustard oil can be adulterated with argemone oil and
arhar dal
 with yellow colour. Vegetables and fruits are artificially coloured. Indiscriminate use of pesticides by farmers and untreated effluents by industries, have led to the problem of foodcontamination by pesticide residues and toxic heavy metals. The consumers are cheated by asection of sellers.The big multinational companies make a huge profit from whatever they sell; they try to gain theattention of an average consumer through catchy slogans and advertisements with Bollywoodcelebrities and cricket players as their brand ambassador to promote the goods. The consumerlured by the advertisement follows the preference of their silver screen idol blindly withoutknowing the ingredients of an article and suffers. Sometimes the sellers offers unrealisticschemes on anything ranging from soap to a two-wheeler or a computer, the consumer isdeceived by these schemes offered by the manufacturers, who spend crores of rupees on theirbrand ambassadors. The poor consumer, who is caught-up in ‘buy-one, get one schemes’ hardlyfinds time to apply his mind that it is he who pays everything, even for those so-called free-giftsand gold coins that are used as marketing tools.The tragic part of all this is that at the time of purchasing the goods, the consumer is never shownthe clauses of warranty, written in the microscopic fonts, with so many “conditions apply”mentioned in the foot-notes of these documents hidden somewhere in ‘owner’s manual’. Theconsumer gets this owner’s manual only after he makes the payment of the product he intends topurchase. However, a closer look at such ‘warranties’ makes one to ponder upon the fraud mostof the companies commit with a consumer. Take an example of a two-wheeler or a four-wheelerpurchased from any ‘reputed’ automobile company. The warranty says like this: “This warrantydoesn’t apply to proprietary parts like tyres, tubes, battery, plastic items, bulbs, indicators, rubbercomponents, grommets, ‘O’ rings, bellows etc.” Then what is left that comes under warranty?There is another fraud attached to such goods. A branded company uses and assembles the tyresand spare-parts of lesser known companies. The consumer hardly knows about this arrangement,as no such trade secrets are revealed through the advertisements by the brand ambassadors. Thepoor consumer, who intends to bring home the ‘leader’ from the firm of international fame,comes to know about such fraud only after the purchasing of the goods that is stuffed with lowquality
spare-parts.Now have a look at the warranty card provided with any electric or electronic goods item,including television sets, DVDs, computers etc. The consumer is again duped in the similarfashion. Here again, the hidden warranty speaks something like this: “In the event of damage onaccount of high or low voltage, fluctuation in current, lightening etc, the warranty is

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