DEPARTMENT OF COMMERCE

PROJECT REPORT

On

“The Consumer Protection Act”

SUPERVISED BY:

Dr. Garima Arora

SUBMITTED BY:

Vanini (230649)

2023-24
 CERTIFICATE

This is to certify that the project entitled „Consumer Protection Act‟

submitted by Vanini (230649) student of B.com I (semester 1) of the Post
Graduate Department Of Commerce, session 2023-24 of Guru Gobind Singh
College for Women, Sector-26, Chandigarh, is a bonafide work done by her
under my guidance and supervision and project represents independent work
on the part of the candidate.

Ms. Garima Arora

Supervisory Teacher
 DECLARATION

I, Vanini hereby declare that the project work entitled „Consumer Protection
Act‟ is an authenticated work carried out by me under the guidance of Ms.
Garima Arora for the fulfillment of the award of degree of bachelor of
commerce and this work has not been submitted for similar purpose
anywhere else except to the Post Graduate Department Of Commerce,
GGSCW Sector-26, Chandigarh.

Signature of the Student

The earlier principle of “Caveat Emptor” or “let the buyer beware” which was prevalent has given way to
the principle of “Consumer is king”. The origin of this principle lies in the fact that in today‟s mass
production economy where there is little contact between the producer and consumer, often sellers make
exaggerated claims and advertisements which they do not intend to fulfill.

The concept of consumer protection is to safeguard the interests of the consumers. It adopts measures to
protect consumers from unethical malpractices by businesses and provide a swift redressal of their
grievances with regard to:

1. Sale of adulterated goods such as adding inferior substances to the product being sold.

2. Sale of counterfeit goods such as selling a product of lesser value than the real product.

3. Sale of sub-standard goods such as the sale of products that do not meet the prescribed quality standards.

4. Sale of duplicate goods.

5. Use of malfunctioning weights and measures that lead to underweight of products.

6. Black marketing and hoarding that eventually leads to scarcity of the product and well as a rise in the
price of the same.

7. Overcharging a product, i.e., charging a product above its Maximum Retail Price.

8. Supplying of defective goods.

9. Advertisements that are misleading, i.e., advertisements that falsely claim a product or a service to be
shown as superior quality, grade or standard when not in real.

10. Supply of inferior services, i.e., quality of service lesser than the condition agreed.

The need for consumer protection arises from the need to protect consumers from the loss or injury or other
prevailing malpractices and to ensure:

1. Physical safety of a consumer.

2. Access to information.

3. Corporate Social Responsibility to provide quality and quantity of goods at fair prices.

4. Consumer satisfaction.

5. Social justice and Trusteeship

6. Survival and the Growth of businesses.

 OBJECTIVES OF CONSUMER PROTECTION ACT

(a) To assist countries in achieving or maintaining adequate protection for their population as
consumers;

(b) To facilitate production and distribution patterns responsive to the needs and desires
of consumers;

(c) To encourage high levels of ethical conduct for those engaged in the production and
distribution of goods and services to consumers;

(d) To assist countries in curbing abusive business practices by all enterprises at the national
and international levels which adversely affect consumers;

(e) To facilitate the development of independent consumer groups;

(f) To further international cooperation in the field of consumer protection;

(g) To encourage the development of market conditions which provide consumers with greater
choice at lower prices.

(h) The act aims to provide better and all round protection to consumers.

(i) It provides effective safeguards to the consumers against different types of exploitation such
as defective goods, unsatisfactory (or deficient) services and unfair trade practices.

(j) The Act has made the consumer movement really going and more powerful, broad-based and
effective and people oriented. In fact, the Act and its Amendment in 1993 have brought fresh
hopes to the beleaguered Indian consumer.

(k) To create a framework for consumers to seek redressal.

(l) To safeguard the rights of consumer.

(m) A redressal machinery is provided for in the act for the enforcement of the rights of the
consumers.
The Consumer Protection Act 2019 provides for six rights of consumers. These rights include the
following:

1. Right to Safety: The consumer has a right to be protected against goods and services which are
hazardous to life, health and property. For example, electrical appliances which are
manufactured with substandard products or do not conform to the safety norms might cause
serious injury. Thus, consumers are educated that they should use electrical appliances which are
ISI marked as this would be an assurance of such products meeting quality specifications.

2. Right to be informed: The consumer has a right to have complete information about the
product he intends to buy including its ingredients, date of manufacture, price, quantity,
directions for use, etc. It is because of this reason that the legal framework in India requires the
manufactures to provide such information on the package and label of the product.

3. Right to be assured: The consumer has the freedom to access variety of products at
competitive prices. This implies that the marketers should offer a wide variety of products in
terms of quality, brand, prices, size, etc. and allow the consumer to make a choice from amongst
these.

4. Right to be heard: The consumer has a right to file a complaint and to be heard in case of
dissatisfaction with a good or a service. It is because of this reason that many enlightened
business firms have set up their own consumer service and grievance cells. Many consumer
organisations are also working towards this direction and helping consumers in redressal of their
grievances.

5. Right to seek redressal: The consumer has a right to get relief against unfair trade practice of
restrictive trade practices or unscrupulous exploitation in case the product or a service falls short
of his expectations. The Consumer Protection Act 2019 provides for redressal to the consumers
including replacement of the product, removal of defect in the product, compensation paid for
any loss or injury suffered by the consumer, etc.

6. Right to Consumer Education: The consumer has a right to acquire knowledge and to be a well
informed consumer throughout life. He should be aware about his rights and the reliefs available
to him in case of a product or service falling short of his expectations. Many consumer
organisations and some enlightened businesses are taking an active part in educating consumers
in this respect.
 CASES RELATED TO CONSUMER PROTECTION ACT
National Insurance Company Ltd. Vs
Hindustan Safety Glass Works Ltd. &
ANR:
In this case, the insurance company
had refused to compensate the
respondent because of damage caused
due to heavy rain during a mentioned
period. The Insurance Company
admittedly denied relief to the insured
on the basis of one of the conditions of
the policy which stated that National
Insurance would not be liable for any
loss or damage 12 months after the
event of the loss or damage to the
insured. The insured filed a complaint
with the National Commission under
the provisions of the Consumer
Protection Act, 1986.
Judgment: The National Commission
held that the claim made by the insured
is actionable. It also observed that the
goods were insured at the time of
incident and he asked for the claim
next day. It rejected all the contentions
urged by National Insurance and
ordered the insurance company to
award an amount of Rs. 21, 05,803.89
with interest at 9% per annum.
Manjeet Singh Vs. National Insurance
Company Ltd. & ANR :
In this case, the appellant had
purchased a second - hand truck under
a Hire Purchase agreement. The
vehicle was insured by the respondent
insurance company. One day when he
was driving the truck, a passenger
asked him to stop the truck and give
him a lift. When he stopped the truck,
the passenger brutally assaulted the
driver and fled with the vehicle. An
FIR was lodged and the respondent
finance company was intimated about
the theft. However, the insurance
company rejected the claim on the
ground of breach of terms of the
policy. The complainant approached
District Consumer Disputes Forum,
State Commission and National
Commission to compensate him for
the loss. All of them had rejected the
case. So, finally he approached the
Supreme Court.
Judgment: The Supreme court held
that the appellant was not at all in
fault. It can be considered as a breach
of the policy, but not a fundamental
breach to bring the insurance policy to
an end and terminate the insurance
policy. The two - judge bench of
Supreme Court directed the
respondent insurance company to pay
75% of the insured amount along with
9% interest p.a. from the date of filing
the claim. The court also directed the
insurance company to pay sum of Rs.
1, 00, 000 as compensation.
Sehgal School of Competition Vs
Dalbir Singh:
In is one of the landmark consumer
protection act cases and judgments.
A student was asked to deposit lump
sum fees of Rs. 18,734 for coaching of
medical entrance examination for the
next two years. This amount was
deposited by the student in two
complete instalments. However, the
student realized that the quality of the
coaching institute was not upto the
mark and therefore sought a refund for
the remaining period which was further
refused by the coaching institute. The
appellant lodged a case against Sehgal
School of Competition before National
Commission. While Sehgal School of
Competition submitted records that
showed good results of the institute
and alleged that it was wrong to
observe that the coaching services are
substandard.
Judgment: National Commission
stated that fees once paid shall not be
refunded is an unfair trade practice. It
quoted UGC guidelines declaring that
even if a student has not attended a
single class, an amount of ?1000 can
get deducted and proportionate charges
for hostel fees, etc, and the balance
amount could be refunded. State
Consumer Forum, mentioned that not
just the balance amount of fee, but also
a higher compensation for legal costs
as well as the pain that the student had
to undertake, could be availed in such
cases.
Sapient Corporation Employees
provident Fund Vs HDFC & Ors:
It is one of the remarkable consumer
protection act cases. This consumer
protection act case happened when a
wrongful debit happened from a bank
account. The complainant trust -
Sapient Corporation Employees
Provident Fund Trust maintained an
account with the respondent HDFC
Bank. The bank received instructions
from the Employee Provident Fund
Organisation (EPFO) that mentioned
order of payment of 1.47 crores against
the trust, and that no other payments
from the trust‟s account be made until
EPFO‟s liability has not been settled
by the trust. However, the trust issued
an instruction to the HDFC bank not to
debit any amount until further
communication as they wanted to seek
a stay order. However, in payment of
the statutory due to EPFO, the bank,
after giving due time, debit the account
with an amount of 1.47 crores. The
challenged this transaction as a
deficiency in service and demanded the
amount debited along with interest,
damages, and legal expenses. Trust
lodged the complaint against the
HDFC before the National
Commission on the ground that bank
committed default by paying an
amount payable as a statutory due.
Judgment: The National Commission
dismissed the argument of the
complainant saying that bank informed
the trust as its customer and gave them
due time. So, it cannot be said that
EPFO conducted deficiency in
services. For this false litigation, the
National Commission had imposed a
penalty of Rs. 25,000 on the
complainant trust to be paid to the
HDFC Bank.
Karnataka Power transmission
Corporation Vs Ashok Iron Works
Private Limited:
Ashok Iron Works, a private company
which manufactures iron had applied for
obtaining electricity from the state‟s
power generation company - the
Karnataka Power Transmission
Corporation (hereinafter KTPC) for
commencing its iron production. Inspite
of paying charges and obtaining
confirmation for the supply of 1500
KVA energy in February 1991, the
actual supply did not begin until ten
months later, in November 1991. This
delay incurred a huge loss for Ashok
Iron Works. This company had filed a
complaint to the Belgaum Consumer
Dispute Forum and later Karnataka High
Court. The legal argument by KTPC was
that the complaint was not maintainable
as the consumer Protection Act 1986
excludes commercial supply of goods. It
also made an argument that the company
in engaged in manufacturing iron and
intended to use it for commercial
consumption which is excluded under
the Act. He also said that, the
complainant is not a `person‟
under Section 2(1)(m) of the Act, 1986.
Judgment: In this case, Supreme Court
gave his rulings. The Supreme Court
mentioned the General Clause Act that
includes a private company within the
purview of the definition of a “Person.”
It was also held that the supply of
electricity by the KPTC to a consumer
would be covered under Section
2(1)(o) being „service.‟ Also, if the
electrical energy consumer is not
provided to a consumer in time as is
agreed upon, then under Section
(2)(1)(g), then there can be a case for
deficiency in service. Therefore, the
clause stating “supply” of goods for
commercial purpose would not be
applied. The Supreme Court sent this
case back to District Forum for retrial on
these grounds.
Indian Medical Association Vs V.P.
Shantha and others:
A writ petition was filed by the Indian
Medical Association seeking Supreme
Court to declare that the Consumer
Protection Act doesn‟t apply to the
medical profession. Indian Medical
Association validated that medical
professionals are governed by a separate
Code of Ethics. Thus medical negligence
can be dealt with by medical experts in
their own jurisdiction; the Consumer
Protection Act shouldn‟t be applied. The
writ petition involved two questions as
given below:
 Whether a medical practitioner
can be regarded as rendering
‘service’ under the Consumer
Protection Act 1986?
 If medical services are
rendered free, then would it be
considered under the Act?
Judgment: The Court held that District,
State and National Consumer Forums
can summon experts in the field of
medicine, examine evidence and protect
the interest of consumers. Doctors and
hospitals who render service without any
charge would not fall within the ambit of
“service”. In a government hospital,
where services are provided free of
charge - the Consumer Protection Act
would not be applied. However, if
customers are being provided for free to
the poor, then it shall be covered as a
service under the act. In case the
insurance policy company pays for the
treatment on behalf of the customer, then
it will be covered under the Act.
I can conclude that very few consumers are fully aware of the rights and consumer protection
act. Hence it is necessary to educate them their rights as a consumer to make them vigilant,
rational and aware buyers. The Government has been fruitful in providing protection to the
consumer in the real sense of the term and served the purpose of the act.

Consumer protection act provide for better protection of the interest of consumer and for that
purpose to make provision for the establishment of the consumer councils and other authorities
for settlement on consumer disputes and for matters connected there with.

Nevertheless, there is scope for consumers to realize their role and importance. It is often said
that consumers movement can be effective only with the consumers active involvement. It
requires a voluntary effort and struggle involving the participation of one and all.