Protection of consumers has had relevance since the existence of consumers in India. It is surprising to see the roots of matters relevant to consumer protection in the Manu Smriti, a text which came into existence between 800 to 200 BC.
Consumer protection was of paramount importance in the medieval period in India ranging from 1000 AD to 1750 AD.
Consumer protection was also provided within India’s criminal justice system. The Indian Penal Code of 1860 has a number of provisions to deal with crimes against consumers.
It deals with offenses related to the use of false weights and measures, the sale of adulterated food or drinks, the sale of noxious food or drink, and the sale of adulterated drugs.
Learn about:-
1. Historical Prospective of Consumer Protection in India 2. Why Consumer Protection is Needed in India? 3. Ways and Means that Helps in Achieving the Objectives 4. Methods for Redressal of Grievances of Consumer and Protection 5. Redressal Forums.
Consumer Protection in India: History, Needs, Ways, Means, Redressal Methods and Forums
Consumer Protection in India – Historical Prospective of Consumer Protection from Ancient India to Modern India
Consumer Protection in Ancient India
In ancient India, all sections of society followed Dharma-sastras (“Dharma”) Codes of Morals They also deal with the rules of conduct, law and customs, which laid out social rules and norms, and served as the guiding principle governing human relations. The principles of Dharma were derived from Vedas were considered the words of God, and law was said to have divine origin which was transmitted to society through sages. Thus, Vedas were the primary sources of law in India.
Many writers and commentators’ of the ancient period documented the living conditions of the people through their innovative and divine writings, including Smriti (tradition) and sruti (revelation) and also prescribed codes to guide the kings and rulers about the method of ruling the State and its subjects. Consumer protection was also a major concern in their writings.
Among the Dharmas, the most authoritative texts are:
(a) The Manu Smriti (800 B.C. to 600 B.C.);
(b) The Yajnavaikya Smriti (300 B.C. to 100 B.C);
(c) The Narada Smriti (100 A.D to 200 A.D.);
(d) The Bruhaspati Smriti (200 A.D. to 400 A.D.); and
(e) The Katyayana Smriti (300 A.D. to 600 A.D).
Among these, Manu Smriti was the most influential.
Consumer Protection and the Manu Smriti:
Protection of consumers has had relevance since the existence of consumers in India. It is surprising to see the roots of matters relevant to consumer protection in the Manu Smriti, a text which came into existence between 800 to 200 BC. Manu Smriti or Manusmriti is a semi-religious Hindu text recording the traditions narrated by Brahma to Manu, who is the first man to have lived on earth. The word Manu Smriti means the traditions as laid out by Manu (based on Brahma’s wisdom).
Manu Smriti describes the social, political and economic conditions of ancient society Manu the ancient law giver, also wrote about ethical trade practices. It is interesting to note that Manu was the first to write about the eighteen heads or titles of litigation and matters pertaining to buyers and consumers including money lending, deposits and pledges, sale without ownership of property, non-performance of contracts and breach of contract of sale etc.
He prescribed a code of conduct to traders and specified punishments to those who committed certain crimes against buyers. For example, he referred to the problem of adulteration and said one commodity mixed with another must not be sold (as pure), nor a bad one (as good) rot less (than (he property quantity or weight) nor anything that is at hand or that is concealed.
The punishment “for adulterating unadulterated commodities and for breaking gems or for improperly boring (them)” was the least harsh Severe punishment was prescribed for fraud in selling seed corn, “he who sells (for seed-corn that which is) not seed-com, he who takes up seed (already sown) and he who destroys a boundary (mark) shall be punished by mutilation.”
Interestingly, Manu also specified the rules of competency for parties to enter into a contract. He said “a contract made by a person intoxicated or insane or grievously disordered (by disease and so forth) or wholly dependent, by an infant or very aged man, or by an unauthorized (party) is invalid.”
During the ancient period, the King had the power to confiscate the entire property of a trader in two instances, (1) when the king had a monopoly over the exported goods; and (2) when the export of the goods was forbidden. There was also a mechanism to control prices and punish wrongdoers.
The King fixed the rates for the purchase and sale of all marketable goods. Manu said “man who behaves dishonestly to honest customers or cheats in his prices shall be fined in the first or in the middle most amercement” There was a process to inspect all weights and measures every six months, and the results of these inspections were duly.
The significance of Manu Smriti in matters of consumer protection is in the fact that it heeds immense importance to the economic aspects of the society and in particular unethical trade practices. Manu Smriti lays out a charter of ethics for sellers on how to sell consumer products to consumers. It also specifies the penalties that must be handed out to sellers who are unethical in their actions.
Focus on prevention of adulteration is a key consumer protection issue even in those days and ages. Manu Smriti specifically prohibits the sale of any commodity that has been mixed with another commodity. This is particularly significant on purchase of items such as gold where by the purity of it becomes questionable due to adulteration. It is also significant in commodities the consumption of which could have a detrimental effect on the health of the consumer; commodities include pharmaceuticals, food or personal care supplies.
Manu Smriti also mandates proper disclosure of quality and quantity of all items that are sold to consumers and prohibits the concealment of any aspects related to the product sold. This is particularly significant as the majority of consumer complaints arise around issues related to the quantity and quality of the consumed product. Manu Smriti gives guidelines on how often weights and measures have to be calibrated, inspected and also lays out the manner in which the results of inspections have to be dissipated.
All these measures show how effective ancient society was in regulating the many wrongs of the market place. These measures also show how developed the system was in identifying the market strategies of traders. Thus, Manu Smriti effectively dealt with various consumer matters, many of which remain of great concern in modern legal systems.
Written subsequent to Manu Smriti, Kautilya’s Arthasastra (400 B.C. to 300 B.C) is considered to be a treatise and a prominent source, describing various theories of statecraft and the rights and duties of subjects in ancient society. Though its primary concern is with matters of practical administration, consumer protection occupies a prominent place in Arthasastra. It describes the role of the State in regulating trade and its duty to prevent crimes against consumers.
Between 400 and 300 B.C., there was a director of trade whose primary responsibility was to monitor the market situations. Additionally, the director of trade was made responsible for fair trade practices. The director of trade was required to be “conversant with the differences in the prices of commodities of high value and of low value and the popularity or unpopularity of goods of various kinds whether produced on land or in water [and] whether they … arrived along land-routes or water-routes, [and] also [should know about] suitable times for resorting to dispersal or concentration, purchase or sale.”
The director of trade advised to “Avoid even a big profit that would be injurious to the subjects… He should not create a restriction as to time or the evil of a glut in the market in the case of commodities constantly in demand.”
During this period, several measures were taken to maintain official standards of weights and measures. Kautilya observed, “The superintendent of standardization should cause factories to be established for the manufacture of standard weights and measures.”
He further said “[the superintendent] should cause a stamping [of the weights and measures] to be made every four months. The penalty for unstamped [weights] is twenty seven panas and a quarter. [Traders] shall pay a stamping fee amounting to one kakani every day to the superintendent of standardization.”
According to Kautilya, “the trade guilds were prohibited from taking recourse to black marketing and unfair trade practice.” Severe punishments were prescribed for different types of cheating. For example, “for cheating with false cowrie-shells, dice, leather straps, ivory-cubes or by sleight of hand, [the punishment shall be] cutting-off of one hand or a fine.”
The rights of the traders were also well protected. Kautilya said, “On the subject of the return of an article purchased or payment of price thereof, there was fixed rule of time, after which an article could not be returned.”
During Chandragupta’s period, (Chandragupta Maurya ranks as one of the India’s greatest rules. The period dates back to 323 B.C.) in which Kautilya lived, good trade practices were prevalent. For example “Goods could not be sold at the place of their origin, field or factory. They were to be earned to the appointed markets (panya sala) where the dealer had to declare particulars as to the quantity, quality and the prices of his good which were examined and registered in the books.”
Every trader was required to take a license to sell. A trader from outside had to obtain permission. The superintendent of commerce fixed the whole-sale prices of goods as they entered the Customs House. He allowed a margin of profit to fix retail prices. Speculation and cornering to influence prices were prohibited.
Thus, the State bore a heavy responsibility for protecting the public against unfair prices and fraudulent transactions. There were severe punishments for smuggling and adulteration of goods. For example, public health was guarded by punishing adulteration of food products of all kinds, including grains, oils, alkalies, salts, scents and medicines.
Also during Chandragupta’s period, (Chandragupta Maurya ranks as one of the India’s greatest rules. The period dates back to 323 B.C.), easy access to justice for all, including consumers, was considered of great importance. The king was the central power to render justice.
According to Kautilya, “The king should took to the complaints of the people [of the town and village] in the second part of the day. The mobile and circuit courts worked at night, when necessity arose. They also must have worked on holidays in urgent matters.” The king was required to pay full attention to the truth and he was primarily responsible for administering justice. Everyone could approach the king’s court for justice.
However, standing was strictly followed. The king only entertained cases if the aggrieved presented a valid complaint. The king was directed not to “foster litigation by starting an action without a complaint, and moreover, the king was told that no complaint should be taken notice of when it proceeded from a person altogether unconnected with the person aggrieved.” In addition to this, different set of courts were prevalent in ancient India.
The court system during Kautilya’s time was well organized. There were two different benches comprising judges and magistrates to try civil and criminal cases. In civil matters, the judges themselves were empowered See cognizance of the cases of disadvantaged persons who could not approach the court for example, the cases concerning ascetics, women, and minors, old, sick and helpless people.
Thus, rendering justice was regarded as one of the essential duties of the rulers, and care was taken to ensure that justice was accessible to all. Indeed, this emphasis on justice for all remains a cornerstone of India’s legal system.
Consumer Protection in Medieval India:
Consumer protection was of paramount importance in the medieval period in India ranging from 1000 AD to 1750 AD. Several prominent Muslim rulers had ruled India during this period from their capital in Delhi. The Delhi Sultanate, being the start of such a long period of Islamic rule in India, laid the foundation to the economic, financial and commercial backbone of the Indian medieval period.
The most notable achievements in Consumer Protection during the Delhi Sultanate were during the period of Alauddin Khilji (1296 AD to 1316 AD). Alauddin Khilji was the second ruler of the Khilji dynasty. During his reign, there were unprecedented improvements in the weights and measures standardization process bringing about dramatic changes in the transparency practices of traders with consumers. Commodities were weighed and measured through standards established by the Sultan and people who did not Mow standards were punished through fines and even capital punishment.
The Sultan had judges who were omnipotent in enforcing the rights of the consumers and approaching the courts when injustice occurred was simple and without bureaucracy.
In the medieval period, consumer protection continued to be of prime concern of the rulers During Muslim rule, a large number of units of weights were used in India. During the Sultanate period, the prices used were determined by local conditions. During the rule of Alauddin Khilji, strict controls were established in the market place.
In those days, there was unending supply of grain to the city and grain-earners sold at prices fixed by the Sultan. There was a mechanism for price-enforcement in the market. Similarly, shopkeepers were punished for under weighing their goods.
Several generations of rulers following the Khilji did not contribute much to the consumer protection cause until Sher Shah Suri who ruled during the brief period between 1540 and 1545 AD. Sher Shah Suri was a visionary in matters related to commerce. He envisioned that an economy is always dependent on how well its consumers are treated.
He emphasized on standardized measures and set forth decimal and centenary systems with respect to measures. He also published quality guidelines especially for produce, grocery, confectionaries and pharmaceuticals. The financial system he introduced along with the currency Rupiyah forms the foundation of the monetary system of modern India. Although his reign was brief, he is thought to be one of the most important medieval ruler who has influenced consumer protection policies of modern India.
During the reign of Akbar (1556-1605), the third Mughal Emperor of India, several significant achievements were made in matters related to consumer protection. The right of the consumer to be informed perhaps found its earliest roots during the period. All traders were required to publish details regarding the quality and quantity of their merchandise including weights, measures, adulteration if any, age, grade, and usability.
This law was strictly enforced through prefects and secret service personnel employed by the emperor. Violations and deceitful behavior were dealt with the harshest of punishments including amputation of limbs. Consumers also enjoyed the right to return merchandise which did not meet the standard requirements related to quality and quantity. Akbar’s contribution is notable in that his rule improved accountability and transparency in commodity transactions which were perhaps non-existent in the medieval days in India.
Although the Mughal kings that came afterwards did continue the achievements laid by their forefather, they concentrated more on literary, architectural and military pursuits. Eventually by the time the British gained control over the whole Indian peninsula, consumer issues had deteriorated into a stage that needed a rigorous revival.
Nevertheless, the awareness, vision and perseverance through which the medieval rulers of India preserved the importance of consumer protection issues has been a source of fascination for international historians and economists.
Consumer Protection in Modern India:
In the modern period, the British system replaced the age old traditional legal system of India. However, one of the outstanding achievements of British rule in India was “the formation” of a unified nationwide modern legal system during the British period from 1600 to 1947.
The Regulating Act of 1773 was passed by the British Parliament and one of its objectives was to bring the management of the East India Company under the control of the British Parliament and British Crown. The Indian legal system was totally revolutionized and the English legal system was introduced to administer justice.
However, it is important to note that the traditions and customs of the Indian legal system were not ignored. “The law itself underwent considerable adaptation. The British institutions and rules were combined with structural features [e.g. a system of separate personal laws] and rules [e.g. Dharma, and local custom] which accorded with indigenous understanding.
The borrowed elements underwent more than a century and a half of pruning in which British localisms and anomalies were discarded and rules [were] elaborated to deal with new kinds of persons, property and transactions.” To administer justice, “they were confronted [with] the problem of the value suitable to attach in practice to the [Indian traditions and customs].” Despite the challenges of combining the British and Indian legal systems, “the fabric of modern Indian Law… is unmistakably Indian in its outlook and operation” and consumer protection is not an exception to this perception.
Some of the laws which were passed during the British regime concerning consumer interests are, the Indian Contract Act of 1872, the Sale of Goods Act of 1930, and the Indian Penal Code of 1860. The Drugs and Cosmetics Act of 1940, the Usurious Loans Act of 1918, and the Agriculture Procedure (Grading and Marketing Act) of 1937. These laws provided specific legal protection for consumers.
For fifty-five years, the Sale of Goods Act of 1930 [SGA] was the exclusive source of consumer protection in India. The SGA, drafted with precision, is “an admirable piece of legislation.” It is also praised as a “Consumer’s Charter.” The main protection for the buyer against the seller for defective goods is found in Section 16 of the Act. S.16 of Sale of Goods Act says, Subject to the provisions of this Act and of any other law for the time being in force, there is no implied warranty or condition as to the quality or fitness for any particular purpose of goods supplied under a contract of sale, except as follows-
(1) Where the buyer, expressly or by implication, makes known to the seller the particular purpose for which goods are required, so as to show them that the buyer relies on the seller’s skill or judgment and the goods are of a description which it is in the course of the seller’s business to supply (whether he is the manufacturer or producer or not), there is an implied condition that the goods shall be reasonably fit for such purpose.
Provided that, in the case of a contract for the sale of a specified article under its patent or other trade name, there is no implied condition as to its fitness for any particular purpose.
(2) Where the goods are bought by description from a seller who deals in goods of that description (whether he is the manufacturer or producer or not), there is an implied condition that the goods shall be of merchantable quality,
Provided that, if the buyer has examined the goods, there shall be no implied condition as regards defects which such examination ought to have revealed.
(3) An implied warranty or condition as to quality or fitness for a particular purpose many be annexed by the usage of trade.
(4) An express warranty or condition does not negative a warranty or condition implied by this Act unless inconsistent therewith. Sale of Goods Act, No. 3 of 1930; India Code (1930).
It provides exceptions to the principle of Caveat emptor (“let the buyer beware”) and the interests of the buyer are sufficiently safeguarded. Phrases such as “skill and judgment of the seller”, “reliance on sellers’ skill” and the test of “merchantable quality” provide effective remedies to buyers.
Courts interpreted these rules in the consumer’s favour. The SGA was the exclusive consumer legislation until 1986, with the passage of the Consumer Protection Act of 1986, designed to supplement the remedies already provided under the SGA.
Consumer protection was also provided within India’s criminal justice system. The Indian Penal Code of 1860 has a number of provisions to deal with crimes against consumers. It deals with offenses related to the use of false weights and measures, the sale of adulterated food or drinks, the sale of noxious food or drink, and the sale of adulterated drugs.
Consumer protection legislation enacted after India’s independence from Britain include, the Essential Commodities Act of 1955, the Prevention of Food Adulteration Act of 1954 and the Standard of Weights and Measures Act of 1976.
It has been said that “the functional value of criminal law in the field of consumer protection is a high one and it has a respectable pedigree.” Another view is that there has been an attempt to look at consumer protection as “a public interest issue rather than as a private issue” to be left to individuals for settlement in court.
In addition to the remedies under contract and criminal law, consumers have rights under tort law. Based on its numerous legal intricacies, however, tort law is not the ideal remedy for injured consumers in India. For example, the traditional doctrine of negligence imposes heavy responsibility on the plaintiff to prove each of its required elements.
These traditional legal requirements naturally encourage injured consumers to pursue legal remedies under different laws. Not surprisingly, it is estimated that for about half a century from 1914 to 1965, only 613 tort cases came before the appellate courts.
The orthodox legal requirements under the law of torts and contracts forced the policy makers to craft specific legislation to protect consumers. As a result, the Consumer Protection Act of 1986 was enacted with the objective of providing “cheap, simple and quick” justice to Indian consumers. It is said, due to the congestion of courts with heavy arrears, it may take 5 to 15 years for a claimant to wade through the different levels of courts in tort litigation in India.
In the modern day, business contracts are significant to consumer protection. Very often we can see consumers and consumable companies engaging in Service Level Agreements (SLA) to safe guard consumer interests especially when purchasing services that are consumed regularly over extended periods of time. Interestingly the text of Manu Smriti also provides guidelines on how business contracts may be executed and when such contracts may be deemed void.
The most significant tenet of consumer protection is given absolute importance in the Smriti. The text explicitly prohibits any form of collusions in the market which could lead to monopoly or oligopoly. The king had the absolute right and the moral obligation to control the prices keeping in mind the absolute interest of the consumer. When viewed in the background of today’s antitrust laws and agencies, price conspiracies had its due share of attention even in the pre-Christ period in India.
Although in itself Manu Smriti’s sole focus is not consumer protection, this work seems to focus broadly on several aspects related to the well-being of the consumer. It also shows how concerned the ancient society was in matters related to consumerism. It is also surprising that despite having such a pro- consumer oriented culture 2500 years or so ago, the consumer protection movement has still not evolved to meet the challenges that Indian consumers face in this day and age.
In present situation, consumer protection, though as old as consumer exploitation, has assumed greater importance and relevance. Consumerism is a recent and universal phenomenon. It is a social movement. Consumerism is all about protection of the interests of the consumers. According to McMillan Dictionary (1985) “Consumerism is concerned with protecting consumers from all organizations with which there is exchanged relationship.
It encompasses the set of activities of government, business, independent organizations and concerned consumers that are designed to protect the rights of consumers”. The Chamber’s Dictionary (1993) defines Consumerism as the protection of the interests of the buyers of goods and services against defective or dangerous goods etc.
“Consumerism is a movement or policies aimed at regulating the products or services, methods or standards of manufacturers, sellers and advertisers in the interest of buyers, such regulation maybe institutional, statutory or embodied in a voluntary code occupied by a particular industry or it may result more indirectly from the influence of consumer organizations”
As commonly understood consumerism refers to wide range of activities of government business and independent organizations designed to protect rights of the consumers. Consumerism is a process through which the consumers seek redress, restitution and remedy for their dissatisfaction and frustration with the help of their all organized or unorganized efforts and activities.
It is, in-fact a social movement seeking to protect the rights of consumers in relation to the producers of goods and providers of services. Infact consumerism today is an all-pervasive term meaning nothing more than people’s search for getting better value for their money. Consumer is the focal point of any business. Consumers’ satisfaction will benefit not only business but government and society as well.
So consumerism should not be considered as consumers’ war against business. It is a collective consciousness on the part of consumers, business, government and civil society to enhance consumers’ satisfaction and social welfare which will in turn benefit all of them and finally make the society a better place to live in.
Consumer Protection in India – Why Consumer Protection is Needed in India?
The ‘why’ of consumer protection is evident at least in India.
Marketing is increasingly impersonal. Consumer choice is influenced by mass advertising using highly developed arts of persuasion. The consumer typically cannot know whether drug preparations meet minimum standards of safety, quality and efficacy. He usually does not know how much he pays for consumer credit; whether one prepared food has more nutritional value than others ; whether the performance of a product will in fact meet his needs and expectations ; or whether the “large economy size” is really a bargain. Hence, we need consumer protection.
(1) We need physical protection of the consumer, for instance, protection against products that are unsafe or endanger health and welfare of consumer.
(2) We need protection of the consumer against deceptive and unfair trade practices. Consumer must have adequate rights and means of redress against business malpractices and frauds.
(3) Ecological and environmental effects of chemical, fertiliser or refinery complexes will have to be seriously considered because they pollute water, air and food and endanger human life. Consumer wants due protection against all types of pollution; he wants quality of life—a healthy and peaceful environment free from pollution.
(4) We must have adequate protection of consumer public against the abuse of monopoly position and/or restrictive trade practices. Protection delayed is protection denied.
Greater and free competition in the market is of definite advantage to the consumer. Competition can reduce prices, enhance quality and stimulate innovation in product mix and marketing mix. Innovation means progress and progress means life, a prosperous life. Competition is the dispenser of justice to the consumer and producer.
Consumer seeks protection, advice and information when his rights are adversely affected. The shift from buyer beware to seller beware has increased the role of Government in promoting the consumer’s right to safety, the right to be informed, the right to choose, the right to be heard, the right to redress and right to represent.
These consumer rights constitute Consumer Bill of Rights. In 1962, President John F. Kennedy, in his consumer message, summed up these rights of consumers and paved the way for organised consumerism in the U.S.A. and all over the world. The programme for protection of consumer interest as outlined by J.F. Kennedy in 1962 placed unique importance upon consumerism.
Some other reasons for which consumer protection is needed in India:
1. Consumer has no voice in the product which is manufactured for his consumption. Hence, consumer naturally demands the existence of fair trade practices which would ensure physical safety when he consumes the product. Similarly, fair trade practices will enable him to get the real value for his money.
2. It is very difficult to effectively organise consumers in a country as vast as India. The backwardness of people is a further obstacle to consumer organisation.
3. A majority of the population is illiterate and ignorant.
4. Poverty, lack of education, lack of information, traditional outlook of Indians to suffer in silence (considering poverty and misery as God-given things)—all these negative sides of our life have enabled unscrupulous businessmen to exploit consumers in India. To prevent this ruthless exploitation, we need a forceful, well- organised consumerism or consumer movement coupled with Government support and patronage in the form of special legislation.
Of course, legislation can protect consumers only when consumers themselves assert their rights and exert necessary pressure on the producers, dealers and the Government. Then only the prevailing malpractices like profiteering, black marketing, hoarding, adulteration, short measures and weights, misleading advertisement, faulty packaging, mail-order frauds, etc., can be cured or reduced to the minimum.
5. The march of the science and technology has increased the difficulties of the consumer along with his opportunities of selection from a very wide variety of goods (many of them highly sophisticated and complicated).
Increasing technical complexity of consumer goods, especially those containing machinery, clearly points out that consumers (who are not professional buyers) cannot know the ins and outs of such goods. Rational choice between and among such goods would require the skills of amateur electrician, mechanic, dietician, mathematician, etc. Marketing is now becoming increasingly impersonal (professional).
The consumer choice is influenced by mass advertising and promotional devices, utilising highly developed art of persuasion. Commercial sources are the core of the existing information system.
But consumers find that most advertising and promotion today are false, deceptive or misleading. Hence, consumer cannot know whether drug preparations meet the minimum standards of safety, quality and efficacy. He usually does not know whether one processed food has more nutritional value than another. He may not know whether the performance of a product will in fact meet his needs or whether the large economy size or the best buy is really a bargain.
Consumers wish to meet producers as equals. They want value for money, reasonable quality, prices related to the cost of production, transport, etc. Too many producers are bringing out products that people do not really need and cannot afford. But aggressive advertising and salesmanship make people want the things.
In many cases people spend the money they otherwise need for food, clothing and shelter on gadgets that are not really needed. The advertising industry in the U.S.A. spent S 250 per person per year (in 1983) to push goods on consumers. The consumer wants protection against deceptive, false and misleading advertisements and sales promotion devices.
Therefore, in the present intricate and complicated market, he is just an amateur. In short, consumers do need protection under the present circumstances.
Consumer Protection in India – 5 Important Ways and Means that Helps in Achieving the Objectives of Consumer Protection in India
Awareness about the rights and responsibilities helps a consumer to protect his/her interests. Thus it is the most important means to achieve the objective of consumer protection. However, there are many other ways and means through which objective of consumer protection in India can be achieved.
i. Self Regulation by Business:
Most businesses realize that protection of customers’ interest will benefit business in the long run. Therefore, they setup their own customer care and grievance cells to redress the problems or complaints of their customers. The socially responsible businesses ensure that all business activities are conducted ethically and quality standards are maintained.
For example, most business firms apply for quality certifications voluntarily to ensure that their products conform to the standards specified by the regulatory framework established by Government of India.
ii. Business Associations:
The various business associations of trade and commerce like Federation of Indian Chambers of Commerce of India (FICCI), Confederation of Indian Industries (CII) have laid down the code of conduct and the guidelines which its members must follow while dealing with their customers.
iii. Consumer Awareness:
A consumer is always in a better position to safeguard his/her interest and also raise voice against the unscrupulous exploitation or unfair trade practices followed by sellers if he/she is aware about his/her rights, responsibilities and reliefs available in case his/her interest is not protected by the manufacturer, trader or service provider.
iv. Consumer Organisations:
Consumer organisations help to achieve the objective of consumer protection by spreading awareness among consumers about their rights and reliefs available to them. These organisations also put pressure on business forms to avoid malpractices and exploitation of consumers.
v. Government:
The government provides a legal framework within which various legislations or acts are enacted to protect consumers’ interest. These legislations lay down rules and regulations which business firms must follow. They also specify the rights and reliefs for consumers against the malpractices of sellers and the mechanism under which the consumers’ grievances can be redressed. The Consumer Protection Act, The Essential Commodities Act etc. are examples of such legislations.
Government, by having special Acts and implementing those laws strictly. Mere legislation is not enough. More important is their enforcement not only in letter but also in spirit. The legislation ensures competition, provision of information to buyers, and regulation of unfair trade practices.
The consumer interest in the market place is the focus or the heart of enlightened marketing mix. The business and consumerism both aim at the protection of consumer—business through self-regulation and consumerism through self-help. Consumerism invokes Government assistance when business misbehaves and fails to fulfill social responsibilities.
In exchange relationship normally, we have only two parties – 1. Seller and 2 Buyer However, in the modern market, the seller is organised and has professional skill, whereas the buyer is usually unorganised and amateur. Hence, we need consumer legislation and consumerism.
If business morality is high and if ethical and moral values are at a premium, there is no reason why self-regulation by traders and their associations should fail to give meaningful guarantee or money back to consumers. In reality, the problem of consumer protection is bilateral. 1. Organised consumer movement inducing consumers to take intelligent interest in consumer democracy and 2. Self- regulation and self-discipline by producers and traders. Government intervention takes place only to protect the weaker party (consumer) in the market and to prevent exploitation by the stronger party (businessmen).
Consumer legislation is a rough substitute for self-regulation of business. It appears as a last resort, when consumerism is recognised as a shame of marketing. Consumer legislation offers insurance against business malpractices and ensures distributive justice to amateur consumers.
It is virtually impossible to achieve the task of pleasing all of the people all the time when we have millions of consumers having tremendous variety of desired satisfactions and expectations. Some dissatisfaction is inherent in any mass-production/mass-consumption system. Some discontent may be the price for freedom of choice. However, it cannot be denied that there is the basis for ever growing consumer dissatisfaction and consumerism.
Marketing management has the direct responsibility to find out areas in which company’s products and services fail to fulfil consumer needs and expectations and to initiate vigorously marketing programmes to provide desired satisfactions explicitly demanded by consumerism. The new view of marketing is that this opportunity is also a social responsibility. Consumer and social viewpoints constitute the public environment of the business enterprises.
Management must respond to these viewpoints positively and adapt itself to the dynamic needs and expectations of the community. The easiest and most urgent step that marketing management can take will be the adoption of more acceptable ethics and business morality while offering marketing mix to customers. Similarly, it can take immediate and intelligent efforts to improve marketing efficiency and thereby reduce the cost of distribution appreciably.
Consumer Protection in India – Methods for Redressal of Grievances of Consumer and Protection of their Interests and Rights in India
The following are the various ways for the redressal of grievances of consumers and protection of their interests and rights in India:
1. Business Self-regulation – The business community itself can help in achieving consumer protection and satisfaction through self -discipline. Businessmen can regulate their own behaviour and actions by adopting higher ethical standards. Trade associations and chambers of commerce can check unfair trade practices used by some businessmen.
2. Consumer Self-help – Every consumer must be alert as self-help is the best help. He should educate himself and know his rights. He should not allow unscrupulous businessmen to cheat him.
3. Consumers’ Associations – Consumers should form voluntary associations. These associations can educate and awaken consumers. They can take organized action and put pressure on businessmen to adopt fair trade practices.
4. Government Regulations – The State can ensure consumer protection through legislative, executive and judicial actions. The laws enacted by the Government must be strictly enforced by the executive.
Government of India has enacted several laws to protect the interests and rights of consumers.
Consumer Protection in India – Top 3 Consumer Protection Redressal Forums in India
The Consumer Production provides for a three tier system of redressal agencies – one at district level known as District Forum, second at state level known as ‘State Commission’, and third at national level known as ‘National Commission’.
A complaint is to be made to the district forum of the concerned district where the value of goods and services and compensation, if any, is up to Rs.20 lakhs, to the ‘State Commission’ between Rs.20 lakhs and Rs.100 lakhs, and to the National Commission for more than 100 lakhs.
Interestingly, there is provision for appeals against the orders of a particular redressal forum by the aggrieved party before the next higher echelon and even from the findings of the National Commission before the Supreme Court.
Lok Adalats are a unique innovation for quick and inexpensive redressal of grievances. It has been decided by the Govt. that the functioning of Lok Adalat be started on the last working day of each week for settlement of consumer disputes. The District Forum is also taking steps to organize Lok Adalat for the benefit of consumers. The concept of Lok Adalat is a very convenient option for the consumers to seek redressal of their grievances.
Consumer Court is the special purpose court, mainly in India, that deals with cases regarding consumer disputes and grievances. These are judiciary set ups by the government to protect the consumer rights. Its main function is to maintain the fair practices by the sellers towards consumers. Consumers can file a case against a seller if they are harassed or exploited by sellers.
The court will only give a verdict in favour of the consumers/customers if they have proof of exploitation, i.e., bills or other documents. If a consumer does not have the proper documents required for filing a case then it would be very difficult for the consumer to win or even file a case.
Who can File a Complaint:
A complaint before the appropriate consumer forum can be made by:
(i) Any Consumer.
(ii) Any registered consumers’ association.
(iii) The State or Central Government.
(iv) One or more consumers, on behalf of numerous consumers having the same interest.
(v) A legal heir or representative of a deceased consumer.
Against whom the complaint can be filed:
A consumer can file a complaint against the following:
(i) The seller, manufacturer or a trader who has sold defective goods.
(ii) The service provider in case the services are deficient in any manner.
1. District Consumer Redressal Forum:
As per the Consumer Protection Act, 1986 the state government establishes District Consumer Forums at each district in their respective districts. The district forums are headed by a person of the rank of a district judge. Every member of the District Forum holds office for a term of five years or up to the age of sixty-five years, whichever is earlier.
The District Forum shall have jurisdiction to entertain complaints where the value of the goods or services and the compensation, if does not exceed rupees twenty lakhs. The complaints to the District Forums can be filed by the aggrieved consumer, by any recognized consumer association on behalf of the aggrieved consumer, or by one or more consumers affected.
Any person aggrieved by an order made by the District Forum may prefer an appeal against such order to the State Commission within a period of thirty days from the date of the order, in prescribed form and manner.
2. State Consumer Disputes Redressal Commission (SCDRC):
At the state level works the SCDRC. The Commission is headed by a person of the rank of a high court judge. It is also provided that not more than fifty per cent of the members shall be from amongst persons having a judicial background, the State Commission has the jurisdiction to entertain complaints where the value of the goods or services and compensation exceeds rupees twenty lakhs but does not exceed rupees one crore; and appeals against the orders of any District Forum within the State; and to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any District Forum within the State.
Any person aggrieved by an order made by the State Commission may prefer an appeal against such order to the National Consumer Disputes Redressal Commission (NCDRC) within a period of thirty days from the date of the order, in prescribed form and manner.
3. National Consumer Disputes Redressal Commission (NCDRC):
At the apex level works NCDRC for redressal of the grievances of the consumers. The commission is headed by a person of the rank of a Supreme Court judge. The National Commission has the jurisdiction to entertain complaints where the value of the goods or services and compensation exceeds rupees one crore; and appeals against the orders of any State Commission; and to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any State.
Any person, aggrieved by an order made by the National Commission in exercise of its powers conferred by sub-clause (i) of clause (a) of section 21, may prefer an appeal against such order of the Supreme Court within a period of thirty days from the date of the order.
Let us now discuss the process of redressal of consumers’ grievances at various levels:
District forum is setup for redressal of consumers’ grievances at district level. The forums are set up by the respective State Government.
i. The District Forum consists of a President and two other members appointed by the concerned State Government. One of the members must be a woman.
ii. A complaint is made to the District Forum if the value of goods or services along with the compensation claimed does not exceed Rs.20 lakh.
iii. On receiving the complaint the District Forum refers to the party against whom the complaint is filed and may send the goods for testing in a laboratory. The District Forum passes an order after considering the testing report from the laboratory and hearing to the party against whom complaint is filed.
iv. If the aggrieved party is not satisfied with the District Forum’s order he/she may appeal to the State Commission within 30 days of the passing of the order.
State Commission is setup at the State level by the respective State Government.
i. The State Commission consists of a President and at least two other members appointed by the concerned State Government. One of the members must be a woman.
ii. A complaint is made to the State Commission if the value of goods or services along with the compensation claimed exceeds Rs.20 lakh but is less than 1crore or as an appeal against the orders of a District Forum.
iii. On receiving the complaint the State Commission refers to the party against whom the complaint is filed and may send the goods for testing in a laboratory. The State Commission passes an order after considering the testing report from the laboratory and hearing to the party against whom complaint is filed.
iv. If the aggrieved party is not satisfied with the State Commission’s order he/she may appeal to the National Commission within 30 days of the passing of the order.
The National Commission is setup by the Central Government.
i. The National Commission consists of a President and at least four other members appointed by the Central Government. One of the members must be a woman.
ii. A complaint is made to the National Commission if the value of goods or services along with the compensation claimed exceeds 1 crore or as an appeal against the orders of the State Commission.
iii. On receiving the complaint the National Commission refers to the party against whom the complaint is filed and may send the goods for testing in a laboratory. The State Commission passes an order after considering the testing report from the laboratory and hearing to the party against whom complaint is filed.
iv. If the aggrieved party is not satisfied with the National Commission’s order he/she may appeal to the Supreme Court of India.
v. The order passed by National Commission for appeal cases against the orders passed by the State Commission cannot be challenged further.
Reliefs Available to Consumers:
If the consumer court is satisfied with the genuineness of the complaint then it can issue one or more of the following directions to the opposite party:
(i) To remove the defect in goods or deficiency in service.
(ii) To replace the defective product with a new one, free from any defect.
(iii) To refund the price paid for the product or the charges paid for the service.
(iv) To pay a reasonable amount of compensation for any loss or injury suffered by the consumer due to the negligence of the seller.
(v) To pay punitive damages in appropriate circumstances.
(vi) To discontinue the unfair/restrictive trade practice and not to repeat in future.
(vii) Not to offer hazardous goods for sale.
(viii) To withdraw the hazardous goods from sale.
(ix) To cease manufacture of hazardous goods and to desist from offering hazardous services.
(x) To pay at least 5% of the value of defective goods or deficient services towards Consumer Welfare Fund or any other organisation or person who may utilize the amount in the prescribed manner.
(xi) To issue corrective advertisement to neutralise the effect of a misleading advertisement,
(xii) To pay adequate cost to the aggrieved party.