SEMINAR PROJECT ON

PUBLIC INTEREST LITIGATION AND CONSUMER

PROTECTION IN INDIA

SUBMITTED BY : RAO ABDUL AHAD KHAN

SEMESTER : IXth
FACULTY OF LAW
JAMIA MILLIA ISLAMIA

SUBMITTED TO: DR. FAIZANUR RAHMAN

I INTRODUCTION

In the late 1970s, India saw another wonder of legal activism. New technique has turned out to
be well known to be specific Public Interest Litigation or Social Interest Litigation. Since 1990,
huge changes have occurred in the field of customer insurance in India. There is not really a
noteworthy occasion of such kind of case in the mid 1980s in the interest of customers, yet now
under the shopper Protection Act, 1986, there is birth of India's driving and most intense
purchaser affiliation, the CERC (Consumer Education and Research Center) at Ahmadabad in
1978, harmonize with the development of the social activity prosecution development in India.
Indeed, even the sanctioning of the Consumer Protection Act, 1986 itself has been to a great
extent affected by escalated campaigning by such buyer gatherings and willful social
associations.

The surge of open intrigue case started in the United States in the late 1960s when it developed
as a piece of the legitimate Aid and Civil Rights Movement. This procedure has been utilized by
PIL activists and attorneys for the insurance of purchasers.1

In the late 1970s, India saw another marvel of legal activism. New procedure has turned out to be
well known to be specific Public Interest Litigation or Social Interest Litigation. Since 1990,
critical changes have occurred in the field of buyer assurance in India. The Social Action
Litigation (SAL) as an instrument for securing monetary equity to the underprivileged has been
one of the remarkable advancement in the Indian lawful framework.

The creator accepts and it is said that the Law is dynamic and thus requires to correct and
develop itself for keeping up Law and Order and furthermore rendering equity to the poor and
underprivileged classes. This likewise approaches the customer insurance laws. In any case, the
Consumer Protection law misses the mark concerning doing as such. Since there is extremely
restricted extension to record the PIL under this Act which is denying the weaker segments
access to square with equity.

1
For more subtle elements see: Clark D. Cunningham, "Open Interest Litigation in Indian Supreme Court: A Study
in the light of American Experience, The Journal of Indian Law Institute, Vol. 20, No. 4, October-December, pp.
494-523.
The mechanical upset and the improvement in the exchange and trade have prompted the
immense development of business and exchange. As an outcome of this advance an assortment
of buyer products have showed up keeping in mind the end goal to provide food the requirements
of the purchasers and a large group of administrations have been influenced accessible to the
customers to like protection, transport, power, lodging, excitement, fund and managing an
account. An efficient segment of makers and merchants with better learning of advertising has
appeared, in this way influencing the connection between the brokers and the shoppers.

It is obvious, along these lines, that the alternative of recording PIL under the Consumer
Protection Act is constrained both from the point perspective of locus standi and the reliefs
accommodated under the Act. Be that as it may, more than a fourth of century has breathed easy
the Act. Be that as it may, more than a fourth of century has sat back the Act was established and
from that point forward there have been numerous advancements on which the creator will center
under the paper . Finally the Author will finish up the paper clarifying that how there is a
desperation to alter the Act to impact the unwinding the lead with respect to the PIL under the
Act.

II. THE LEGAL RESPONSE AND ITS SHORTCOMINGS

The Consumer Protection Act, 1986, was the authoritative reaction to check these inclinations of
the broker group and to secure the interests of the general shoppers of the nation. The
authorization of the Act is viewed as 'magna carta' in the field of customer assurance for
checking the uncalled for exchange practices and insufficiency in products and enterprises. The
demonstration endeavors to evacuate the powerlessness of the buyers against intense agents;
depicted as the 'system of racketeers'.2 But the working of the Act has demonstrated that it has
numerous shortcomings and should be returned to in the light of changed mechanical innovations
and the advance made by the human imagination. Under the present law, many demonstrations
of deception by merchants go unreported and thus render dealers unaccountable in light of the

2
J N BAROWALIA, „COMMENTARY ON CONSUMER PROTECTION ACT, ( 4th ED, 2010), UNIVERSAL
LAW PUBLISHING CO, pp 15,16.
fact that the expenses of conveying it to the notice of the specialists isn't conservative. This is for
the most part since, when seen from a littler scale, a buyer might be made to pay a little or
irrelevant measure of additional cash if the merchant erroneously charges additional sum for his
items. Be that as it may, saw from a bigger scale, the broker makes benefits in crores every day
by essentially charging a unimportant measure of additional cash from the poor purchasers. This
cash goes to his kitty by falling back on unjustifiable means and supports him and different
merchants like him to depend on those methods over and over. Such practices have been
pronounced by the Act as 'Unjustifiable exchange practice'3.

However, the merchants turn to new and imaginative strategies to attract an ever increasing
number of clients towards their items. Consistently new methods for trickery are developed and
used. The advanced methods for correspondence, especially the TV makes the introduction of
these beguiling cases so appealing that one could scarcely think about its misrepresentation. All
the more so when the purchaser is an unskilled man unfit to separate between articles of trickery.
Indeed, even knowledgeable men are beguiled, given the way of introduction once in a while by
performing artists and models who are exhibited as specialists wearing specific garbs. The better
conditions are typically composed, both in print and electronic media in such little text styles that
it needs a magnifier to read those lines. Example, one advertisement of detergent powder Ariel in
its audio states that it has lemon and chandan extracts but the finer text of the same
advertisement reads „contains no chandan or lemon extracts‟. Presuming that an illiterate
consumer is watching the advertisement, the untrue audio claim in the advertisement surely
amounts to deceptive trade practice.

Another such recent example presently in operation is the trend adopted by the likes of Indian
Trading Corporation (ITC) and Proctor and Gamble (P&G). These traders/marketers, in their
advertisements declare that on purchase of their products, a specified amount will go towards
girl‟s education or for the education in rural areas in the form of construction of schools etc.
Though a noble claim, but this gives birth to many issues: first, can a private corporation force an
individual to make a compulsory contribution towards a social cause - which otherwise falls
under domain of corporation‟s personal social responsibility? Secondly, does it amount to
taxation by private individuals? And what is the mechanism through which it is ensured that the

3
See Section 2 (r) of the Consumer Protection Act, 1986.
amount thus collected is spent for the purpose claimed for? Or is it simply another tool of luring
consumers by appealing to their emotions and making them believe that they are contributing
towards a noble cause?

Legally, no person, whether juristic or natural born, has any authority to tax any other person for
personal benefits. It is only the Government that has the authority to tax an individual. The
power to tax is an essential attribute of sovereignty. The power is reserved with the legislative
bodies at Centre and in States under various provisions of the Constitution.4 „In a democratic
system, levying tax is exclusively the function of the legislature‟.5 „Power to tax can be delegated
only subject to legislature itself exercising essential legislative functions‟6 otherwise it cannot
even be delegated. Therefore, without any support of law, a corporation cannot therefore
compel a purchaser either to make an obligatory commitment for a specific reason, regardless of
how respectable the reason might be. What's more, in the event that anyone needs to do
philanthropy, let he outs of his own pocket. Without any lawful premise, the training must along
these lines meet all requirements to be an Unfair Trade Practice. Area 2(r) characterizes an
Unfair Trade Practice as: 'unreasonable exchange hone' implies an exchange rehearse which, to
promote deal, utilize or supply of any products or for the arrangement of any administration,
embraces any out of line technique or uncalled for or misleading practice… '7

The definition at that point goes before on to show a portion of the out of line exchange rehearses
however the definition isn't comprehensive. The recorded practices have turned into a class of
representations and the idea of out of line exchange rehearse is a general concept. But the above
expressed practice falls in a similar classification given the way that it has no legitimate premise
and it is essentially implied for shooting up the offer of their items. It is unreasonable in light of
the fact that there is no way to analyze regardless of whether the cash guaranteed to be
accumulated is utilized for the reason asserted. As underlined by the House of Lords, 'reasonable

4
See Lakshmi Sadasivan, “Concept of Taxing Power in Democracy- Indian Perspective”. (2013) at
www.legalserviceindia.com/article/I471-Taxing-Power-In-Democracy, html Accessed on 07- 01-13.
5
M P JAIN & S N JAIN, „PRINCIPLES OF ADMINISTRATIVE LAW‟ (4th ED., 2005), WADHWA AND CO
NAGPUR, p 50.
6
I P MASSEY , „ADMINISTRATIVE LAW‟ ( 7TH ED., 2008) , EASTERN BOOK CO LUCKNOW, p 121.
7
Section 2(r) of Consumer Protection Act, 1986.
managing requires that a provider ought not, regardless of whether purposely or unwittingly,
exploit customer's need, poverty, absence of experience… or some other factor… '8

Despite the fact that it might be contended that these organizations are doing the demonstration
being referred to for the reasons and under the order of Corporate Social Responsibility. In any
case, the reality remains that a company needs to satisfy the obligation of spending some capital
under the plan of Corporate Social Responsibility out of its own benefits. It can't propel, one way
or different its clients to pay an obligatory charge or assessment for this reason. Provision 135(5)
of the new Companies Bill 2012, as affirmed by the Lok Sabha states that: 'The leading body of
each organization… should guarantee that the organization spends, in each budgetary year, no
less than two percent, of the normal net benefits of the company9 made amid the three promptly
going before budgetary years, in compatibility of its corporate social obligation policy'10

Be that as it may, regardless of the possibility that the training is proclaimed as an out of line
exchange hone, there still remains the issue of enforceability and successful punishment against
such dealers. The issue comes from the way that, by and large, when seen from a little scale, the
sums included are insignificant subsequently, rendering it uneconomical for a customer to
approach buyer discussions.

III. THE WAY OUT

One of the methods for handling the issue is the arrangement of Public Interest Litigation. Any
open lively individual detecting unfairness in the interest of any seller influencing privileges of
people everywhere could convey it to the notice of the courts. Be that as it may, the extent of
recording a Public Interest Litigation under the Consumer Protection Act, 1986 is exceptionally
restricted. Despite the fact that the protest of recording open intrigue case before Consumer
gatherings is the same as if there should be an occurrence of Public Interest Litigations under the
steady gaze of High Courts and the Supreme Court, that is the headway of open equity, however
its extension under the Act is restricted by the arrangements of the Act.

8
Director General of Fair Trading v. First national Bank Plc, (2002) 1 All Er 97 (HL)
9
Emphasis supplied.
10
Clause 135(5) of Companies Amendment Bill, 2012.
Under the Act, a protest against a seller for out of line exchange practices can be recorded by a
'complainant' characterized under Section 2(1)(b) of the Act. It characterizes "Complainant" as:

Complainant implies

(i) a customer; or

(ii) any deliberate customer affiliation enlisted under the Companies Act, 1956 (1 of 1956),
or under some other law for now in constrain; or

(iv) one or more shoppers, where there are various purchasers having a similar intrigue;

(v) in instance of death of a buyer, his legitimate beneficiary or agent who or which makes a
complaint;11

In perspective of provisions (ii), (iii) and (iv) of Section 2(1)(b) characterizing complainant,
there is degree for establishing Public Interest Litigation either by an intentional purchaser
affiliation or by the State or Central Governments or by at least one buyers having same intrigue.
The definition, accordingly, does not force a flat out precondition of being a 'consumer'12 for
documenting a grievance under the Act.

The utilization of the word 'Complainant' rather than the 'Customer' infers the expectation of the
composers of the Act to permit certain other lawful elements separated from purchasers to
document a protest and bring any demonstration of merchants or specialist organizations that is
biased to the interests of buyers when all is said in done to the notice of shopper courts. The
thought is make shopper equity a reality and to seal every one of the escape clauses that might be
utilized by the dealers to abuse the basic buyer.

In any case, there are numerous down to earth issues in using these arrangements of the Act. To
begin with, not at all like in United States of America, there is no entrenched culture of
intentional buyer affiliations who are devote to the reason for purchasers. There are just couple
of willful customer affiliations who are either situated in the capital city or in the capital urban
communities of dynamic states like

11
Section 2(1)(b) of the Consumer Protection Act, 1986.
12
As defined under Section 2(1)(d) of the Consumer Protection Act, 1986.
Maharashtra, Tamil Nadu, Gujarat and Karnataka.13 Therefore, the Pre requisite of being an
intentional buyer affiliation has not ended up being of much functional utility in India and may
not be sufficient in future moreover given the crowded idea of the nation. Furthermore, however
the State and Central Governments can likewise document the objections under the Act, yet after
advancement, the Government has taken a dynamic part in exchange and business and numerous
partnerships who turn to these strategies are Government possessed and they dislike to record
grievances against their own particular organs. Additionally that frequently the administrations
are pre-involved with different tasks and obligations and customer interests might be cornered.

Under condition (iv) any purchaser or any number of buyers can bring a class activity against a
dealer gave they have same enthusiasm, in the item or administrations. The articulation 'same
intrigue' implies that the intrigue must be regular to all and they should have a typical grievance
against the trader.14 Such a case will, along these lines, be of the idea of delegate suit. What's
more, thusly it won't be important that the gatherings ought to have same reason for activity or
their rights ought to have been encroached throughout same transaction.15 However, given the
way that in such buyer cases the sums included are extremely pitiful, for the most part a rupee or
less, when seen at an individual level and furthermore that the buyers are unskilled and poor, the
arrangement likewise does not appear to be excessively useful. It turns out to be less sparing to
bring activity against the blundering specialist organization. This causes the failing merchants to
get away from the rage of law and it energizes them and others like them to enjoy all the more
such exercises without being responsible to the law. In this specific situation, the arrangement of
documenting a Consumer Interest Litigation for the advantage of the considerable number of
buyers by an open energetic individual can be a useful instrument.

13
These primarily include Consumer education and Research Centre (Ahmadabad), Consumers Association of India
(Chennai), Citizen Consumer and Civic Action Group (Chennai), Consumer Guidance Society of India (Mumbai),
Association for Consumers Action on Safety and Health (Mumbai). C. f. Consumer Daddy at
http://www.consumerdaddy.com/a-11-major-consumer- ngos-in-india.htm accessed on 19-04-2013
14
See C K TAKWANI, CIVIL PROCEDURE, (LUCKNOW, ED. 2006) EASTERN BOOK COMPANY, p. 124.
15
Tamil Nadu Housing Board v. Ganapati (1990) 1 SC 608.
Further, such an alternative of recording Public Interest Litigation under the arrangements of the
present Act has all the earmarks of being limited to the cases secured under sub provisions (I),
(iv) and (vi) of segment 2(1)(c) of the Act that characterizes the term 'Grievance'. The Act
characterizes 'Dissension' as:

"Protest implies any charge in composing made by a complainant that

(i) an uncalled for exchange hone or a prohibitive exchange hone has been embraced by any
trader;]

(ii) the merchandise purchased by him or consented to be purchased by him] experience the
ill effects of at least one deformity;

(iii) the administrations employed or profited of or consented to be contracted or benefited of

by him] experience the ill effects of insufficiency in any regard;

(iv) a broker has charged for the products said in the grumbling a cost in abundance of the
cost settled by or under any law for now in compel or showed on the merchandise or any bundle
containing such merchandise;

(v) goods which will be unsafe to life and wellbeing when utilized, are being offered
available to be purchased to people in general in negation of the arrangements of any law for the
present in compel expecting dealers to show data with respect to the substance, way and impact
of utilization of such merchandise. with a view to getting any alleviation gave by or under this
Act;16

In this manner, these affirmations entomb alia incorporate that:

(a) An out of line exchange hone or prohibitive exchange hone has been received by any
broker.

(b) A dealer has charged for the products said in the objection a cost in overabundance of the
cost settled by or under any law for the present in drive or showed on the merchandise or any
bundle containing such merchandise with a view to getting help gave by or under this Act.

16
Section 2(1)(c) of the Consumer Protection Act, 1986 § 2(1)(c).
(c) Goods which will be unsafe to life and wellbeing when utilized are being offered
available to be purchased to people in general in contradiction of the arrangements of any law
until further notice in drive expecting dealers to show data concerning the substance, way and
impact of utilization of such goods.17

It, be that as it may, stays hazy as whether for an activity under condition (iv) the complainant
should be a purchaser or any individual approved by the purchaser.

For the cases secured under sub provisos (ii) and (iii) it isn't feasible for a deliberate shopper
association or the State or Central Government to document a protestation unless it goes under
the meaning of 'Buyer'. A customer as characterized under Section 2(d) as any buyer of products
or hirer of administration for thought or any individual utilizing such merchandise or getting a
charge out of such administrations with the authorization of the genuine buyer.18

Further, the claims in a protestation must be made with a view to acquiring alleviation under this
Act.19 The cures accessible under this are listed under Section 14 of the Act. On an examination
of the Section, plainly if there should be an occurrence of Public Interest Litigation, the reliefs
that a buyer discussion may concede are limited to those contained in sub-provisions (f) to (h) (c)
of Section 14 of the Act. Segment 14 of the Act peruses as:

20
On the off chance that, after the procedure led under segment , the District Forum is fulfilled
that the products griped against experience the ill effects of any of the imperfections indicated in
the dissension or that any of the charges contained in the protest about the administrations are
demonstrated, it might issue a request to the inverse party guiding him to 1[do] one or more of
the accompanying things, to be specific,-

(a) to evacuate the deformity called attention to by the fitting research facility from the
products being referred to;

(b) to replace the goods with new goods of similar description which shall be free from any
defect;

17
Consumer Protection Act, 1986 § 2(1)(c).
18
Consumer Protection Act, 1986 § 2(1)(d).
19
Consumer Protection Act, 1986 § 2(1)(c).
20
As defined under Section 2(1)(d) of the Consumer Protection Act, 1986.
 (c) to return to the complainant the price, or, as the case may be, the charges paid by the
complainant;

(d) to pay such amount as may be awarded by it as compensation to the consumer for any
loss or injury suffered by the consumer due to the negligence of the opposite party.

(e) to remove the defects or deficiencies in the services in question;

(f) to discontinue the unfair trade practice or the restrictive trade practice or not to repeat
them;

(g) not to offer the hazardous goods for sale;

(h) to withdraw the hazardous goods from being offered for sale;

(i) to provide for adequate costs to parties.21

These reliefs inter alia include:

(i) an order to requiring a trader to discontinue the unfair trade practice or the restrictive
trade practice or not to repeat them;22

(ii) not to offer the hazardous goods for sale;23

(iii)to withdraw the hazardous goods from being offered for sale;24

(iv) to cease manufacture of hazardous goods and desist from offering services which are
hazardous in nature;25

(v) to pay such sum or may be determined by it if it is of the opinion that loss or injury has
been suffered by a large number of consumers who are not identifiable conveniently;26

21
Consumer Protection Act, 1986 § 14(1).
22
Consumer Protection Act, 1986 § 14(1)(f).
23
Consumer Protection Act, 1986 § 14(1)(g).
24
Consumer Protection Act, 1986 § 14(1)(h).
25
Consumer Protection Act, 1986 § 14(1)(ha)
26
Consumer Protection Act, 1986 § 14(1)(hb).
 (vi) an order to issue corrective advertisements.27

(vii)to provide for adequate costs to parties28

The relief mentioned in sub-clause (1)(hb) of Section 14 of the Act is particularly important
wherein the consumer courts are empowered to order any sum to be paid by any manufacturer or
service provider in case found guilty of any act declared unfair by the Act. This provision will be
particularly helpful in cases where a trader illegally charges some extra amount of money, which
though negligible if viewed at small scale but involves huge amounts of money when viewed at
larger scale. This provision is also important from the point that very often it will be difficult to
identify all the affected consumers in such cases. For the purpose of clauses (a), (b), (c), (d) and
(c), it will be necessary that the complainant is a consumer or anybody who has used the goods
with the consent of the consumer. But it remains unclear as to whether Public Interest Litigation
can be instituted by any person other than a consumer or the person using goods or services with
the consent of the consumer, for obtaining the relief under these sub clauses.

27
Consumer Protection Act, 1986 § 14(1)(hc).
28
Consumer Protection Act, 1986 § 14(1)(i).
IV CONCLUSION

It is obvious, in this way, that the choice of documenting a Public Interest Litigation under the
Consumer assurance Act is restricted both from the perspective of locus standi and the reliefs
accommodated under the Act. In any case, more than a fourth of century has breathed easy the
Act was ordered and from that point forward there have been numerous advancements in the
field of data and innovation and the exchange procedure of dealer group. There is in this manner
a pressing need to revise the Act to the impact of unwinding the control with respect to
documenting of open intrigue case under the Act. This is critical in the setting that 'where the
damage to the group is extraordinary, it is vital that components are found to dispute such issues.
Indeed, even where little sums are included, these might be critical to the people concerned and
particulars should be set up to address their worries. Unless the full scope of shopper concerns
are accepted, purchaser law will keep on being seen as white collar class law, for it might be
worth prosecuting question including high cost divine beings and services'29.

It additionally ends up noticeably imperative to get such changes into the Act request to
influence access to equity to a reality for poor people and defenseless subjects of this nation who
shape a sizable piece of the populace. The Consumers can hence 'be allowed to total individual
claims in gatherings or class actions' or customers can be permitted to bring class activity for the
benefit of all shoppers. This will in a successful advance in accomplishing the objective of
securing the general population in their ability as purchasers which is a sign of dynamic social
and monetary strategy went for improving the personal satisfaction and higher norms of living.
Unless that is done, the entrance to shopper courts and buyer equity remains a session of few.

The consumer protection Act, 1986 is the most effective act till date in India to protect the
interest of consumers. However, to make it more effective and useful an urgent need is felt to
improve some old and to make some new provisions. To aware the consumer at mass level is
needed mostly in rural areas and it‟s a big challenge. The number of dispute settlement bodies
also should be increased to meet the requirement. There should be more transparent method to
file complaint and proceeding of judgment. Last but not least timely relief is the key of justice. It

29
See David Harland, Implementing the Principles of United Nations Guidelines for Consumer Protection, (1991)
33 JJLJ 1898, c. f AVTAR SINGH, „LAW OF CONSUMER PROTECTION: PRINCIPLES AND PRACTICE‟
(4TH ED., 2005), EASTERN BOOK CO, p. 158.
is said that justice delayed is justice denied. Hope, in near future we will see a more effective
form of Consumer Protection Act as the new government seems more conscious about it.

Public Interest Litigation Public Interest Litigation (PIL) is a scheme under which any person can
move to the court of law in the interest of the society. It involves efforts to provide legal remedy
to un-represented groups and interests. Such groups may consist of consumers, minorities, poor
persons, environmentalists and others. Any person or organisation, though not a party to the
grievances, can approach the court for remedial action in case of any social atrocities.