CONSUMER PROTECTION

INTRODUCTION
The consumer movement in India is as old as trade and commerce. In Kautilyas

Arthashastra, there are references to the concept of consumer protection against

exploitation by the trade and industry, short weighment and measures, adulteration and
punishment for these offences.

However, there was no organized and systematic

movement actually safeguarding the interests of the consumers.

With the advent of the 20th century due to rapid industrialization and
multifaceted development in India after the Independence, there appeared a flood of
consumer goods and services in the Indian Market, which almost changed the
relationship between the consumer and the trader. Technological advancements in the
field of media led to flooding of advertisements of goods and services further worsening
the otherwise grim situation. Lack of consumer awareness, illiteracy, poverty, etc.
further led to the exploitation of consumers1.
Awareness of consumer rights varies in different regions in the country. It is very
poor especially among the population in rural and far-flung areas of the country.
Compared to the developed countries, the levels of consumer awareness in such a vast
country with a large population like India is much lower. This is rooted in economic
inequality, low levels of literacy and ignorance. Because of this, consumers are not able
to assert their rights and on many occasions are exploited by the trade and industry
and service providers. Protecting and promoting the welfare of consumers has thus
become one of the major concerns.
Globalisation and liberalisation of trade and business has resulted in many
products and services being available to the consumers. Growth in economy has
resulted in increase in the purchasing power of the middle class section, which is the
1

Consumers Awareness about Rights and Grievance Redressal, by Dr. Durga Surekha, 2010, page 8-9

2
largest segment of the population. This has necessitated giving high priority for the
protection of the consumers and promotion of responsible consumer movement in the
country2.
Modern technological growth and complexities of the sellers techniques,
existence of a vast army of middlemen and unethical and untruthful advertisements
have aggravated the situation of consumer exploitation3. The consumer has to be
aware of his rights and play a key role. The success of consumerism is a strong function
of

consumer

awareness

and

to

avoid

exploitation

consumer

must

become

knowledgeable4.

GOVERNMENT INITIATIVES
Consumer movement is a socio-economic movement which seeks to protect the
rights of consumers in relation to the goods purchased and services availed.
Government has been according high priority to better protect consumer interests. The
Department of Consumer Affairs, has initiated a number of steps to promote a
responsible and responsive consumer movement in the country. Such measures include
the use of multi-media campaign for promoting consumer awareness and encouraging
consumers' involvement through efforts of Government and Non-Governmental
Organizations and others.
The main objectives of the consumer protection programme are:(i)

To create suitable administrative and legal mechanisms which would be within

the easy reach of consumers and to interact with both Government and nonGovernmental Organizations to promote and protect the welfare of the
consumers.

(ii) To involve and motivate various sections of society including consumer

organizations, women and youth to participate in the programme.

2
3
4

Report of the Working Group on Consumer Protection Twelfth Plan (2012-17), p.15
Consumers Awareness about Rights and Grievance Redressal, by Dr. Durga Surekha, 2010 , p.19
Ibid, p.21

3
(iii) To generate awareness among consumers about their rights and responsibilities,
motivate them to assert their rights so not to compromise on the quality and
standards of goods and services and to seek redressal of their disputes in
consumer fora, if required.
(iv) To educate the consumers as to be aware of their rights & social responsibilities5.

CONSUMER RIGHTS
The importance of consumer rights lies in their enforceability, which in turn
depends largely on level of consumer education and awareness. In other words, it is
not enough to have dynamic consumer laws in the country. There must be an equal
thrust on education of all citizens on the consumer rights available to them and the
mechanisms through which these rights, if violated can be redressed.
The rights of consumer which are being sought to be promoted and protected
through the legislative mandate available under the Consumer Protection Act, 1986

inter- alia include:

5
6

(a)

The right to be protected against marketing of goods and services which are
hazardous to life and property;

(b)

The right to be informed about the quality, quantity, potency, purity,

standard and price of goods or services, as the case may be to protect the
consumer against unfair trade practices;

(c)

The right to be assured, wherever possible to access to variety of goods and

services at competitive prices;

(d)

The right to be heard and to be assured that consumers interests will receive
due consideration at appropriate fora;

(e)

The right to seek redressal against unfair trade practices or restrictive trade
practices or unscrupulous exploitation of consumers; and

(f)

The right to consumer education6.

Department of Consumer Affairs, Annual Report, 2011-12, p.51

Op.cit Report of the Working Group, p.65

4
From all these rights, it is the right to consumer education that can be said to be
of paramount importance, since this is the gateway through which all the rights can be
secured. An aware consumer not only protects his own rights but also induces efficiency
in the economy which enables a country to become globally competitive7.

CONSUMER AWARENESS
In a world of information asymmetry the government has the responsibility to
redress this imbalance.

In the Government of India, the Department of Consumer

Affairs is the focal point for different Departments and organizations to make the
consumers aware of market realities as well as the rights of the consumers and the
manner in which they can educate themselves and also enforce their rights.
Accordingly, the Jago Grahak Jago campaign has become immensely popular and is
now being used by several Departments to communicate with consumers8.
Increase in consumer awareness has propelled manufacturers and traders to
ensure quality service to consumers. Resultant to that number of cases filed in National
and State Commission have come down from total of 40,391 in the year 2007 to 22,101
in the year 2011. Similarly, number of cases filed in District Consumer Forums have also
come down from 1,53,738 to 78,440 during the same period9.

LEGISLATIVE MEASURES ON CONSUMER PROTECTION

CONSUMER PROTECTION ACT, 1986

One

of

the

most

important

milestones

in

the

area

of

consumer

protection/consumer movement in the country has been the enactment of the

Consumer Protection Act, 1986. This Act has been necessitated because the wellorganized sectors of manufacturers, traders and service providers with the knowledge
of market and manipulative skills often attempt to exploit the consumers, in spite of the
7
8
9

Ibid , p.66
Department of Consumer Affairs, Strategic Plan, 2011-15, p.13
Rajya Sabha, Unstarrred Question no.2524 dated 17.12.2012

5
existence of various provisions of different laws for protecting their interests. Moreover,
the increase in population has resulted in enormous pendency and delay in disposal of
cases in the civil courts. . Hence, the Consumer Protection Act, 1986 was enacted to
better protect the interests of consumers. It is one of the most progressive and
comprehensive pieces of legislation and is umbrella legislation covering all goods and
services.
The Salient Features of the Act are as under:
(i)

The Act provides for establishing three-tier consumer dispute redressal

machinery at the national, state and district levels.

(ii) It applies to all goods and services.

(iii) It covers all sectors, whether private, public or any person.
(iv) The Act provides for relief of a specific nature and also for compensation to the
consumer as appropriate.
(v) The Act also provides for setting up of Consumer Protection Councils at the
Central, State and District levels, which are advisory bodies to promote and
protect the rights of the consumers.
(vi) The provisions of the Act are in addition to and not in derogation of the
provisions of any other law for the time being in force10.
Consumer Protection Act has been in operation for about 25 years. A number of
deficiencies and shortcoming in respect of its operation have come to light thereby
requiring Amendments on three occasions, still leaving scope for further improvements.

CONSUMER GRIEVANCE REDRESSAL

Consumers need an inexpensive and quick grievance redressal mechanism to
ensure that manufacturers and service providers are accountable for the price and
10

Op.cit Report of the Working Group, pp.15-16

6
quality that the consumers are entitled to.

Accordingly, it is necessary to provide

several methods of grievance redressal including those which are available in

accordance with the provisions of the Consumer Protection Act11.
Consumer Protection Act, 1986 enables the ordinary consumers to secure less
expensive and often speedy redressal of their grievances. The Act mandates
establishment of Consumer Protection Council at the Centre as well in each States and
District, with a view to promoting the consumer awareness. It also provides for a threetier structure of the National and State Commissions and District Forums for speedy
resolution of consumer disputes. At present there are 632 District Forums, 35 State
Commissions with the National Consumer Disputes Redressal Commission(NCDRC) at
the apex (Annexure-I). The provisions of this Act covers goods as well as services.
The goods are those which are manufactured or produced or sold to consumers
through whole sellers and retailers. The services are in the nature of transport,
telephone, electricity, housing, banking, insurance, medical treatment etc. If, the
consumer is not satisfied by the decision of the District Forum, he can appeal to the
State Commission and against the order of State Commission a consumer can appeal in
the National Commission12.
As per information made available by NCDRC, out of 38,73,772 cases filed in
consumer fora at three-tier level since inception, 35,24,221 cases (almost 91%) have
been disposed off (Annexure-II & III).
To ensure speedy disposal of cases, State Government advised to avoid any
delay in appointment of President and Members in Consumer Fora. In order to dispose
of the pending cases, Circuit Benches from National Commission frequently visits the
State. So far National Commission has held Circuit Bench sitting at Hyderabad,
Bengaluru, Chennai, Pune, Kolkata, Ernakulam, Ahmadabad and Bhopal. Some of the

11
12

Op.cit Strategic Plan, p.12

NCRDC.nic.in

7
State Commissions also held Lok Adalats for speedy disposal of the cases13. Under the
scheme of Strengthening Consumer Fora (SCF), financial assistance is provided to the
States/Union Territories for strengthening infrastructure of building as well as nonbuilding assets14 (Annexure-IV).
Scheme of Computerization and Computer Networking of Consumer Fora
(CONFONET) was launched in March 2005. Under this scheme, the Consumer Fora at all
the three-tiers throughout the country were to be fully computerised to enable access
of information and quicker disposal of cases. The project is being implemented by the
National Information centre (NIC) on a turnkey basis. The scheme has been extended
during 11th Plan period with a total outlay of Rs.25.69 crores. During the year 2011-12
an amount of Rs.0.75 crores has been released to NIC for activities to be undertaken
under CONFONET Project in the XIth Plan15.

CONSUMER PROTECTION (AMENDMENT) BILL, 2011

Consumer Protection Act was earlier amended thrice by Act no.34 of 1991, Act
no.50 of 1993 and Act no.62 of 2002. Amendment made in 1991 was mainly to
incorporate provisions for the quorum of District Forum, appointing persons to preside
over State Commissions/District Forums, in case of absence of President to enable the
court function uninterruptedly16. In 1993, the Act was again amended to address the
inadequacies in the coverage of the main Act. It aimed to plug loopholes and enlarge
the scope of areas covered and interest more power to the redressal agencies under
the Act17. In 2002, Act was again amended to facilitate quicker disposal of complaints,
enhancing the capability of redressal agencies, strengthening them with more powers,

13

Lok Sabha, Unstarred Question no.3928 dated 18.12.2012

Rajya Sabha Unstarred Question no.2498 dated 17.12.2012
15
Op.cit Annual Report, 2011-12, p.54
16
Consumerism Global and Indian Perspectives by J.S. Panswar, Navin Mathur and Darshana R. Dave,
2006, p. 94
17
Consumer Protection Amendment Bill, 1993
14

8
streamlining the procedure and widening the scope of the Act to make it more
functional and effective18.
As a pro-active measure, in July 2004 a Working Group was set up to examine
the provision of the Act and consider relevant amendment to make the Act more
meaningful, functional and vibrant. A number of proposed amendments were circulated
to all State Governments, concerned Central Ministries and NCDRC in July 2006.
Revised proposed amendments were re-circulated in 2009 and in light of the comments
received on the draft proposal, the Department of Consumer Affairs in consultation with
the Ministry of Law and Justice formulated Consumer Protection (Amendment) Bill,
2010. In meantime some fresh additional comments of the Department of Financial
Services were received on the proposed sections regarding unfair trade practice and
unfair contract. These changes were got approved by the Ministry of Law and Justice
and formed part of the draft proposal of Consumer Protection (Amemdment) Bill, 2011.
The Bill was introduced in Lok Sabha on 16.12.2011. The Bill was referred to Standing
Committee on Food, Consumer Affairs and Public Distribution on 26.12.201119.
The Committee Report was presented in Lok Sabha on 19.12.2012.
The main objectives of the proposed Bill are :(i)

Widening the scope and amplifying the provisions of the Act.

(ii) Facilitating quicker disposal of complaints.

(iii) Rationalising the qualifications and procedure of selection of the Presidents and
Members of Consumer Fora.
(iv) Strengthening penal provisions/enforcement orders of Consumer Fora20.

18
19

Op.cit Report of the Working Group, pp.16-17

26th Report of Standing Committee on Food, Consumer Affairs on Consumer Protection (Amdt.) Bill,
2011, pp.1-2
20
Ibid, pp.5-8

9
The Standing Committee Report on above Bill observed that a cooperative
approach between Central and State Governments will result in uniform implementation
of consumer protection laws and rules across all jurisdictions. The Committee also
recommended Ministry to effectively implement consumer related programmes and
policies in close co-ordination with the State Governments in the interest of consumers.
A need for updation of the quality of goods and standards of services provided to
consumers so as to conform to the international standard is also stressed upon. It also
draws attention towards strong need to spread awareness in order to educate the
consumer about their rights as provided under the Act. Committee recommended that
Consumer Fora should be given power to grant punitive damages of not less than five
times of the loss or compensation awarded to aggrieved consumer by the defaulting
Companies21.

Future Roadmap
As per the Strategic Plan of the Department of Consumer Affairs, the vision is to
protect the rights and interests of consumers, to spread awareness about consumer
rights, duties and responsibilities and to promote consumer welfare by strengthening
consumer movement in the country. Active participation of State Governments,
academic and research institutions, schools and voluntary organizations will be sought
to create a vibrant consumer movement in the country. Strict parameters regarding
consumer products will be developed and enforced along with regular monitoring of
prices to ensure the sovereignty of consumers22.
12th Plan strategy and implementation plan: (i)

21
22

Consumers need an inexpensive and quick grievance redressal mechanism to

ensure that manufacturers and service providers are accountable for the price
and quality that the consumers are entitled to. Accordingly, it is necessary to
provide several methods of grievance redressal including those which are
available in accordance with the provisions of the Consumer Protection Act.

Ibid, pp.10-11
Op.cit Report of the Working Group, p.24

10
Thus, mediation or in-house grievance redressal should be tried, but without
giving up the right of the consumer to obtain legal redress ;
(ii) Amendment of Consumer Protection Act to make it more effective and tuned to
reducing the backlog of cases.
(iii) Of recent there has been derogation or poaching on the jurisdiction of Consumer
Protection Act in some of the areas due to the orders passed by the Courts. Such
loopholes in the Act should be plugged through appropriate amendments to the
Act and Rules.
(iv) Computerisation and Networking of consumer fora across the country so that
consumers can file complaints and access their case status online.
(v) Setting up counselling and a mediation mechanism at pre-litigation stage and so
as to reduce the burden of consumer courts and resolve disputes through out of
court settlements.
(vi) Provision of adequate infrastructure to Consumer fora so as to make them
function effectively.
(vii) Moving from manual system to computer based system to bring in more
efficiency and transparency.
(viii) Provision for monitoring the performance of functioning of District Fora by
developing dynamic MIS Reports on the performances related to total no. of
cases filed/ disposed and other related performance indicators.
(ix) Provision of funds for the annual maintenance of confonet hardware items like
computers, ups, replacement of ups batteries etc. under the Scheme on
Strengthening Consumer Fora23.

Conclusion
The prospect of the consumer justice system in our country appears to be bright
in view of the proactive policy, schemes / programmes adopted by the Government.
However, the present drive and direction need to be supplemented by adopting

23

Op.cit Report of the Working Group, p.27

11
different channels of redressal. And there is a dire need for the State Governments to
give deserving priority to Consumer welfare and gear up themselves to meet the
challenges thrown up by market economy. Involvement of trade and industry, civil
society organizations and above all consumer themselves are vital for betterment of
consumer welfare in the years to come24.

24

Op.cit Report of the Working Group, p.37

12
Annexure-I
STATEMENT REFERRED TO REPLY TO PART (b) OF LOK SABHA UNSTARRED QUESTION NO. 3928 FOR
18.12.2012 REGARDING ASSISTANCE FOR CONSUMER FORA

SI.. No. States

INFORMATION REGARDING FUNCTIONAL/NON-FUNCTIONAL (STATE

COMMISSIONS/DISTRICT FORUMS)
(as on 04.12.2012)
Whether SC
No. of District
Functional Non-functional
As on
Functional or
Fora
Nonfunctional

Andhra Pradesh

Yes

A & N Islands

Yes

Arunachal Pradesh

Yes

Assam

Yes

Bihar

29

29

30.09.2012

31.3.2006

16

13

30.09.2012

27

27

31.12.2011

Yes

38

38

30.09.2012

Chandigarh

Yes

30.09.2012

Chattisgarh

Yes

16

16

30.09.2012

Daman & Diu

Yes

31.03.2011

Dadra & Nagar Haveli

Yes

31.03.2011

10

Delhi

Yes

10

10

30.09.2012

11

Goa

Yes

30.09.2012

12

Gujrat

Yes

30

30

30.09.2012

13

Haryana

Yes

21

19

30.09.2012

14

Himachal Pradesh

Yes

12

12

30.09.2012

15

Jammu & Kashmir

Yes

31.03.2009

16

Jharkhand

Yes

22

16

30.09.2011

17

Karnataka

Yes

30

30

30.09.2012

18

Kerala

Yes

14

14

31.12.2010

19

Lakshadweep

Yes

30.09.2012

20

Madhya Pradesh

Yes

48

48

30.09.2012

21

Maharashtra

Yes

40

40

30.06.2011

22

Manipur

Yes

31.12.2008

23

Meghalaya

Yes

30 11.2011

24

Mizoram

Yes

31.12.2010

25

Nagaland

Yes

31.12.2011

26

Orissa

Yes

31

31

30.06.2012

27

Pondicherry

Yes

30.09.2011

28

Punjab

Yes

20

20

30.09.2012

29

Raj as than

Yes

37

37

30.06.2012

30

Sikkim

Yes

31.12.2011

31

Tamil Nadu

Yes

30

22

30.09.2012

32

Tripura

Yes

30.09.2012

33

Uttar Pradesh

Yes

75

75

30.09.2012

34

Uttaranchal

Yes

13

12

31.10.2012

13
35

West Bengal

Yes

TOTAL

21

21

632

612

20

30.06.2012

Annexure-II
STATEMENT REFERRED TO REPLY TO PART (d) TO (f) OF LOK SABHA) UNSTARRED
QUESTION NO. 3928 FOR 18.12.2012 REGARDING ASSISTANCE FOR CONSUMER FORA
Total Number of Consumer Complaints Filed / Disposed since inception Under Consumer
Protection Law

(as on 04.12.2012)
SI.
No.

Name of Agency

Cases filed
since
inception

Cases
disposed of
since
inception

Cases
Pending

%of total
Disposal
Remarks

1.

National Commission

78471

68241

10230

86.96%

2.

State Commissions

589771

495717

94054

84.05%

3.

District Forums

3205530

2960263

245267

92.35%

TOTAL

3873772

3524221

349551

90.98%

14

Aneexure-III
(as on 30.06.2012)

YEAR-WISE FILING & DISPOSAL OF CONSUMER CASES IN STATE COMMISSIONS

States

2007

2008

2009

2010

2011

2012

Filed

Disp.

Filed

Disp.

Filed

Disp.

Filed

Disp.

Filed

Disp.

Filed

Disp.

Andhra Pradesh

2101

2061

2014

1595

1485

1446

1579

1024

1240

377

539

35

A & N Islands

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

Arunachal
Pradesh

N.A.

N.A.

N.A.

N.A.

Assam

26

19

146

20

79

194

73

133

N.A.

N.A.

N.A.

N.A.

Bihar

780

766

616

755

720

717

700

389

N.A.

N.A.

N.A.

N.A.

Chandigarh

1228

1090

2376

1448

783

1127

575

1061

537

737

292

288

Chattisgarh

728

710

962

451

891

1232

843

1109

815

758

321

393

D & N Haveli/
Daman &Diu

10

N.A.

N.A.

N.A.

N.A.

Delhi

1541

2475

1464

1859

1359

1129

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

Goa

136

93

90

177

75

121

78

65

54

25

19

83

Gujrat

2565

1618

2428

1739

2248

2516

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

Haryana

3570

1792

2274

2134

1923

3906

2013

4201

1826

7202

861

3215

Himachal
Pradesh

2180

1935

1508

1521

1694

1789

1722

1689

1357

1183

629

915

Jammu &
Kashmir

321

200

182

236

211

236

259

286

260

280

N.A.

N.A.

Jharkhand

820

268

583

515

448

418

368

435

242

363

N.A.

N.A.

Karnataka

2685

3294

3149

3105

4610

4500

5569

3056

4405

4238

1400

1565

Kerala

449

864

463

1632

834

1684

792

1545

N.A.

N.A.

N.A.

N.A.

Lakshadweep

N.A.

N.A.

N.A.

N.A.

Madhya Pradesh

3101

2706

3250

3201

2764

1962

2880

2228

1986

1709

N.A.

N.A.

Maharashtra

4708

3153

4673

3935

3839

3783

3532

3645

1475

169

N.A.

N.A.

Manipur

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

Meghalaya

23

22

11

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

Mizoram

22

21

21

25

12

12

N.A.

N.A.

N.A.

N.A.

Nagaland

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

Orissa

1238

1613

1122

573

1216

1136

840

1725

871

1192

N.A.

N.A.

Pondicherry

26

48

34

19

25

12

14

30

N.A.

N.A.

Punjab

1716

1303

1742

1926

2020

1791

2339

1681

2056

1627

1051

89

Rajasthan

3204

5213

3196

4604

2887

3902

3535

3201

3200

3155

N.A.

N.A.

Sikkim

N.A.

N.A.

Tamilnadu

2777

91

1039

933

566

309

1056

1180

1371

2014

N.A.

N.A.

Tripura

85

82

68

121

71

63

53

57

109

86

N.A.

N.A.

Uttar Pradesh

3181

3293

2832

3569

2733

2161

2760

6998

N.A.

N.A.

N.A.

N.A.

15
Uttarakhand

453

115

290

289

242

391

482

330

281

310

113

128

West Bengal

707

983

502

694

769

825

967

743

N.A.

N.A.

N.A.

N.A.

TOTAL

40391

35783

37063

37101

34516

37380

33039

36811

22101

25458

5225

6711

Source: Rajya Sabha Starred Question no.311 dated 3.9.2012.

16
Annexure-IV

Financial Assistance for Strengthening Consumer Fora (SCF) Scheme During 2011-1225

Sl.
No.
1.

25

State/UT
Kerala

Released Amount
(Rs. in lacs)
15.00

2.

Punjab

44.40

3.

Sikkim

12.50

4.

Nagaland

260.25

5.

Tamil Nadu

196.79

6.

West Bengal

148.21

Rajya Sabha Unstarred Question No.2498 dated 17.12.2012

17