Consumer Protection

Laws in India
Background
• Wide spectrum of Laws
• Constitution to CPA, 2019
• Constitutional Mandate
• Art 19(1)(g)- Freedom of profession, trade or business
• Art 19(2)- Reasonable restrictions
• Business on streets, harmful/dangerous trade
• Art 21- RTL also includes Right to health
• Vincent v UOI
• Art 47- State to raise the level of nutrition and standards of living
to improve public health
Wide Spectrum of Laws
• Prevention of Food Adulteration Act, • Drugs and Cosmetic Act, 1940
1954 • Competition Act, 2002
• Essential Commodities Act, 1955 • Electricity Act, 2003
• Prevention of Black marketing Act, • Intellectual Property Laws
1980 • Consumer Protection Act, 1986
• Standards of Weights and Measures • Consumer Protection Act, 2019
Act, 1976
• Bureau of Indian Standard Act, 1986
• Sugar (Regulation of Production) Act,
1961
IPC, 1860
• Sec 264, 267
• False instruments for weighing
• Imprisonment one year or fine or both

• Sec 272, 273

• Adulteration of food or drink, making noxious
• Six months imprisonment or fine Rs 1000 or both
Law of Torts
Donoghue v Stevenson [1932] UKHL 100
• Mrs. Donoghue's friend bought ginger beer from Cafe in Paisley
• Bottle opaque glass- She consumed half bottle
• Remaining pour into a glass
• She noticed decomposed snail floated out
• Severe gastro-enterities
• She sued Stevenson, a manufacturer
• Defendant contented
• No contractual agreement
Source: https://i.ytimg.com/vi/WgEYzgrNvy0/hqdefault.jpg
HOL held that
• It was a negligence
• Even no contractual arrangement with Stevenson
• He is still responsible for integrity of product

• Duty to care breached

• Not to sell opaque bottles of ginger-beer

• Held defendant liable and to pay damages to plaintiff

Doctor- Negligent Services?
State of Gujarat and Others v Laxmiben Jayantilal Sikligar
• Patient suffering from pain in swallowing
• Government hospital- Doctor performed surgery
• Result- permanent paralysis of larynx (voice box)
• Doctor contented- no intention to cause harm

• Court held guilty of negligence

Res ipsa loquitur
• General rule for Burden of proof
• In Civil cases- On part of plaintiff
• In Criminal Cases
• State (prosecution) to prove

• Tort of negligence
• The thing speaks for itself
• Plaintiff need not prove negligence on part of defendant
• Inference of negligence drawn from facts

Source: https://study.com/cimages/multimages/16/resipsa.png
A.H. Khodwa v. State of Maharashtra
• Sterilization operation in govt hospital
• Later some complications
• Another doctor found that
• Towel left inside her body
• Resulted in her death

• SC applied res ipsa loquitur doctrine

• Doctor was negligent & State is vicariously liable
Consumer Protection Act, 2019 (old 1986)
• Better protection to rights of consumers
• Based on Doctrine of Caveat emptor
• Let the buyer beware
Exceptions
• Fitness of product
• Bicycle for trekking but sold ordinary bicycle
• Seller will be responsible
• Goods of marketable quality
• Sale by sample
• Seller will be responsible
Objectives of the Act
• To promote rights of consumers
• For establishment of consumer councils and other
forums
• To provide simple and speedy disposal
• Commission- Quasi judicial authority
Who is a Consumer?
• Any person who
• Buys any goods for a consideration which has been paid or will be paid
• Hires or avails any service for a consideration which has been paid or
will be paid
• It includes offline or online transactions through electronic means or by
tele-shopping or direct selling or multi-level marketing
• Prevent unfair trade practices in e-commerce
• Not consumer
• A person who purchase goods for resale or any commercial purpose
• Obtain services under Contract of Service
Complaint
• Means any allegation in writing made by complainant
that,
• Unfair trade practices or restrictive trade practices
• Goods bought by him suffer from defects
• Services availed/hired suffer from deficiency
• Trader charged a price in excess
• Hazardous goods/services offered for sale
“Complainant" means
• A consumer (end-user)
• Any voluntary consumer association registered under the
Company Law
• The Central Government or any State Government,
• One or more consumers, where there are numerous
consumers having the same interest
• In case of death of a consumer, his legal heir or
representative
Goods and Product Liability
• "Goods" means every kind of movable property and includes "food"
• "Product liability" means the responsibility of a product manufacturer
or product seller, of any product or service, to compensate for any
harm caused to a consumer by such defective product manufactured
or sold or by deficiency in services relating thereto
• Eg. Pressure cooker explodes due to manufacturing defect and harms
consumer
• Earlier act
• Only compensate for cooker's cost & for injury separate suit before the civil court
• Now it can be sued before consumer forum for injury as well
• Merck- Vioxx Medicine Case
Rights of a Consumer
• Right to safety
• Right to be informed
• Right to choose
• Right to be heard
• Right to seek redressal
• Right to consumer education
Consumer Protection Councils (CPC)
• Promotion and protection of rights of consumers
• Central CPC
• Minister for Consumer affairs- Chairman
• Other members
• Term- 3 years
• State CPC
• State Minister, Chair
• Other Members appointed by the State
• District CPC
• District Collector, Chair
• Other Members appointed by the State
Composition of Consumer Disputes Redressal
Commission
Forums Composition of Appointment of Compensation Further
Members Members Limit Appeals
District President State Govt Rs 1 crore State
Forum (Dist Judge) Commission
-Min 2 members -Within 45 days

State President (HC Judge) State Govt Rs 1 cr to Rs 10 National

Commission -Min 4 members cr Commission
-Within 30 days

National President (SC Judge) Central Govt Above Rs 10 cr Supreme Court

Commission -Min 4 members -Within 30 days
Procedure for Complaint
• Limitation- Within 2 years of cause of action (Sec 69)
• Jurisdiction
• Where seller has his business
• Incident happened
• Where complainant resides
• Video conferencing also possible (physical presence is not compulsory)
• Submit- 3 copies of complaint with supporting documents
• Name and address of complainant & opposite parties
• Date of purchase, amount paid, item of goods
• Receipts if any, relief sought
Powers and Functions of Redressal Agencies
• Powers of Civil Court
• Summons, examine witness, attendance
• Forum can order following reliefs
• To remove the defect
• To replace defected goods with new
• To pay compensation for any loss
• To discontinue unfair trade practices
• Not to offer hazardous goods for sale
• Encourages settlement by Mediation
Central Consumer Protection Authority
(CCPA)
• Misleading ad, unfair trade practices
• False information regarding quality/quantity of good/service
• Fill the void in existing regulatory regime
• Consists of Chief Commissioner & other commissioners
• HQ- New Delhi

• Investigation wing, headed by DG

• To carry out inquiries and investigations, search and seizure
Functions and Powers of CCPA
• Inquire violations of consumer rights
• Issuance of safety notices
• Impose penalty for violation
• Adopt best international practices on consumer rights
• Initiate suo motu actions
• Penalty for False/misleading ad
• 10 lakh & Rs 50 lakh for subsequent violation
• It can be imposed on endorsers as well
• Ban the endorser for 3 years
• Appeals from CCPA- to National Commission within 30 days
Penalties
• Fails to comply with direction of CCPA
• Imprisonment 6 months or fine 20 lakh or both

• Penalty for adulterated products

• For injury- fine 3 lakh or imprisonment 1 year
• For death- fine 10 lakh or imprisonment 7 years
Source: https://img.etimg.com/photo/msid-70711442/consumer-protection-act.jpg
Limitations of CPA
• No interim relief- injunction
• Education is not a service under CPA
• Hospital (Shantha case)
• Free treatment (contract of service)- CPA doesn’t apply
• Because no master-servant relationship
• Private Hospital (contract for service)- CPA applies
Indian Medical Association v VP Shantha (1995)
• Deficiency in medical services fall within the scope of the Act
• Service by a medical practitioner by way of consultation, diagnosis and
treatment would fall within the ambit of service under CPA
• Except where the doctor renders service free of charge to every patient or under a
contract of personal service
• Contract for service is covered under the provisions of CPA but not contract of
service.

Sehgal School of Competition v Dalbir Singh

• Paid full fee but left within short period
• Services within CPA
• Must refund the fee paid
Recent Case
• Banks liable under Consumer Protection Act for deficiencies in
locker services: Supreme Court issues guidelines on allotting,
operating lockers
https://www.barandbench.com/news/litigation/supreme-court-issues-
guidelines-to-banks-allotting-operating-lockers-judgment