AN OVERVIEW OF CONSUMER PROTECTION IN INDIA

INTRODUCTION

Everyone in this world is a consumer, one way or the other. We all purchase products we
need or desire and use them. But the process of buying and selling and the subsequent
consumption is riddled with mal practices. Achieving consumer satisfaction by providing
goods and services at the right place and time, in correct quantity and at fair price without
compromising quality is supposed to be the main duty of business people. Sadly, this is
not the case in reality. Consumer manipulation for profiteering has been accorded the
highest importance by people in business. Sellers and service providers, often with shady
intent, fool consumers with eye catching advertisements and with empty promises of fair
price and high quality. They exploit the ignorance of the buyers who fall for their tactics
every time. These unfair practices and exploitation has created the need for consumer
protection. Consumer protection can be simply defined as safeguarding gullible
consumers from the unfair practices of traders. Buyers rarely have complete knowledge
about the safety and quality of the products that they buy. The allure of advertisements
draws hordes of buyers towards a particular product, who choose to be ignorant about its
quality and are more concerned with its appearance and price. Thus strong consumer
protection legislation in every country is paramount in the modern world.

A BRIEF HISTORY OF CONSUMER PROTECTION

The need for consumer protection has been recognized by lawmakers since the ancient
times. Vedic literature such as the Manu Smriti, Narada Smriti and Brihaspati Smriti
have laid down codes for rulers, officials, business people and consumers during the
conduct of economic activities. The Arthashastra mentions how consumers can seek
justice in courts.1
The idea of consumer protection can also be found in the Code of Hammurabi and the
Old Testament. But then its importance eroded over the years. The concept was revived
again in the 1900s. The publication of the book ‘Your Money's Worth: A study in the
waste of the consumer's dollar’ by Stuart Chase and Fredrick Schlink is a book that
sparked off the consumer protection movement. This book introduced the practice of
product testing. These movements for consumer protection resulted in the introduction of
the Consumer Bill of Rights by John.F.Kennedy in 1962.

1
Sonika Shekar, The History of Consumer Protection, lawtimesjournal (November 19, 2018),
https://lawtimesjournal.in/the-history-of-consumer-protection/ .
 In India too, consumer protection movements gained momentum. Mahatma Gandhi once
remarked, “A customer is the most important visitor on our premises. He is not dependent
upon us. We are dependent upon him. He is not an interruption in our work – he is the
purpose of it. We are not doing him a favour by serving him. He is doing us a favour by
giving us the opportunity to serve him".2

CONSUMER PROTECTION LAWS IN INDIA

Consumer Protection Act, 1986

In October 1986 the Consumer Protection Act was enacted by the Parliament. This Act
was considered to be the Magna Carta in the area of consumer protection. Its main
objective was to provide justice which is “less formal, and involves less paper work, less
delay and less expense.” This act was considered as poor man’s legislation, providing
easy access to justice.
This act has led to the establishment of different levels of consumer redressal forums
across the country and has changed the approach of both buyers and sellers. The
definition of a consumer can be found in Section 2 (d) of the Act as

“buys any goods for a consideration which has been paid or promised or partly paid and
partly promised, or under any system of deferred payment and includes any user of such
goods other than the person who buys such goods for consideration paid or promised or
partly paid or partly promised, or under any system of deferred payment when such use is
made with the approval of such person, but does not include a person who obtains such
goods for resale or for any commercial purpose.”
According to Section 6 of this Act, consumers were with vested six rights in India:

1. Right to Safety
2. Right to be informed
3. Right to Choose
4. Right to be heard
5. Right to Redressal
6. Right to Consumer Education

Consumer Dispute Redressal Commissions were established at the District, State and
National levels.3

The Consumer Protection Act of 1986 was a landmark act in India and it proved to be a
tool in lowering consumer exploitation in India. The Act was repealed in 2019.

2
Inger L. Stole, Consumer Movement- A History, wileyonlinelibrary ( January 15 2015),
https://onlinelibrary.wiley.com/doi/full/10.1002/9781118989463.wbeccs056.
3
Consumer Protection Act, 2019, § 6, No.68, Acts of Parliament, 1986 (India).
Consumer Protection Act, 2019

Times have changed. The 21st century brought and continues to bring novel challenges.
Buyers and seller relationship has undergone several changes, but the unfair trade
practices still remain and have also evolved. The rise of e-commerce also presented
different challenges regarding product liability, privacy concerns and lack of regulation.
Thus a need was felt for a legislation that is more suited to the current scenario. Thus
Consumer Protection Act, 1986 was repealed and the new Consumer Protection Act was
passed by the Parliament in August, 2019.

The newly amended act expanded the definition of ‘consumer’ to include those who shop
online or avail any e commerce services. It has introduced more stringent rules to
safeguard the consumers. It provides for the establishment of a Central Consumer
Protection Authority which serves as the central agency to regulate issues regarding
violation of consumers’ rights, unfair trade practices, and prohibition of false and
misleading advertisements. It protects and enforces the rights of consumers.

This act also introduced the concept of product liability. It defined product liability as
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.

Section 94 of the Act provides for measures to prevent unfair trade practices in the realm
of e-commerce.4 The Central government issued a notification titled ‘Consumer
Protection (E-commerce Rules), 2020. This notification stipulated the duties of e-
commerce sites towards its consumers, such as appointing a grievance officer, refund and
replacement of spurious goods, and being a part of the National Consumer Helpline.
These rules ensure accountability in e-commerce service providers.

The new act has made the redressal of consumer issues swift and less time consuming.
This Act has empowered the District and State Consumer Redressal Commissions to
review their own orders. It also allowed consumers to file cases electronically, and
enabled hearing through video conferencing. The Consumer Protection Act of 2019 has
taken into account all the issues a modern day consumer might face. It has taken a more
‘caveat venditor’ approach rather than caveat emptor. It has reinforced accountability in
sellers and service providers and has enabled a swift redressal mechanism through its
District and state forums. But the effectiveness of this new legislation is yet to be proved.
Only time will tell.

4
Consumer Protection Act, 2019, § 94, No. 35, Acts of Parliament, 2019(India).
 STATUS QUO OF CONSUMER PROTECTION IN INDIA

To protect consumers from unfair trade practices, to hear their complaints and to uphold
their basic rights, the Consumer Protection Act of 1986 provided for the establishment of
Consumer Protection Councils at the district, state and national level. These courts were
formed with the aim of safeguarding consumer rights such as protection against
marketing of goods that are hazardous to life, right to consumer education and to seek
redressal. When the new Consumer Protection Act came into force in 2019, it also
contained a provision for the establishment of a similar three tier structure, called
Consumer Dispute Redressal Commission at the district, state and national levels. The
provision for the establishment of these commissions can be founder under Chapter IV of
the act, sections 28, 42 and 53 for district, state and national commission respectively. At
present, there are 629 district commissions, 35 state commissions and one national
commission headquartered at New Delhi. It is headed by former judge of the Supreme
Court, Justice R.K.Agarwal.

CONSUMER PROTECTION IN INDIA: THE WAY FORWARD

The objectives set out by the Consumer Protection Act, 2019 can be realized only when
the redressal mechanism is functioning. A reformation of consumer courts at the district
and state levels must be undertaken.

▪ Better Infrastructure

It is the need of the hour to improve the infrastructure of the consumer courts, particularly
the district level where the caseload are alarmingly high.
In State of U.P. v. All U.P. Consumer Protection Bar Association5 the Supreme Court
appointed a committee headed by retired Justice Pasayat to look into the state of the
commissions at all levels. When the committee submitted its report, the Court made the
following observation:
"The Committee, during its visits to states, has found that there are no proper court-rooms
with lights and fans, chairs and tables.….. The Record-Rooms are, also, either too small
and have no almirah, shelves or compactors to keep the files. The files are kept in open
and get misplaced or eaten by termites”

This is the status quo. To ensure consumers get their justice, infrastructural development
is the first step.

5
State of U.P. v. All U.P. Consumer Protection Bar Association [2018] SCC OnLine SC 570
 ▪ Many of the members of the District Commissions are selected from different
departments and most of them have little experience with judicial practices. Proper
training must be given to them.

▪ A major reason for the inefficiencies in consumer forums is the vacancies. In

February 2021, a division bench of the Supreme Court comprising of the Justice Sanjay
Kishan Kaul and Justice Hemant Gupta registered suo motu proceedings concerning “the
inaction of the governments in appointing the President, Members and respective staff of
various District and State Consumer Disputes Redressal Commissions across India."
These vacancies impede the functioning of the courts. So they must be suitably filled at
the earliest.

▪ Consumer protection organizations must be encouraged. The government must

financially assist these organizations People, particularly in the rural areas must be
sensitized about these organizations and about the services rendered by them.

▪ An alternative dispute resolution mechanism must be established to lessen the burden

of consumer courts.

▪ AI (Artificial Intelligence) driven technology must be adopted on a wider scale to

ease the overburdened commissions. The COVID 19 pandemic has shown how
essential it is for courts and other quasi judicial organizations to embrace technology.

The consumer protection laws in India can be called successful only if it satisfies the
consumers. So it is imperative that the changes are made to ensure that justice isn’t in
short supply to the consumers.