16 Consumer Access To Justice

Dr. G. Shaber Ali

1. Introduction

The term consumer has been defined in terms of goods and services. Those who buy goods or avails service are consumers. In view of this everyone in the society is a consumer. When I purchase a LED TV, Laptop, I pod, I could be a consumer of goods. When I open a bank account, take insurance policy, get my car repaired, I could be a consumer of service.

The word trader and customer have its relevance since the date of civilization. So protection of consumer has been a matter of concern from the olden times. In early days the economic and commercial activities were governed by the principle of laissez faire which means least interference of the State in the economic and commercial dealings of the people. The doctrine was based on the individualistic philosophy of absolute economic freedom of men. They allowed complete freedom of contract to individuals during the period of Industrial Revolution during 18th Century. Consequently ‘caveat emptor’ was the rule that prevailed in market transactions, which literally meant ‘let the buyer be aware’. It was based on the assumption that a buyer possess the capacity and skill while making purchase or entering into commercial transaction. It was the duty of the consumer to keep his eyes open when he purchases goods or hires services.

Slowly there was a change, the economic history of 19th Century reveals that there was a direct conflict between the seller of commodities and the buyer. Consumer was always cheated in the market place, buyer has no choice for bargain and thus compelling them to buy at seller’s terms. Consumer was always at the mercy of seller. Every time in case of exploitation, there has been some sort of action taken, either by the consumer or their representatives or by the government to protect the interests of the consumers.

During the 20th century there has been a rapid increase in the supply of consumer goods and services. The development of modern technology, new methods of salei and services made it difficult for the consumer to bare a valid choice on his own, unaided experience and judgment. The gap between the seller and consumer has widened. Marketers have taken undue advantage of consumer ignorance and helplessness. They adopted various techniques to meet their selfish ends. They have made the consumer a target of their unscrupulous practices. Consumers do not get adequate response from the producer to settle their grievances. As a result consumers have become victim of various typesii of exploitationiii. To protect the interest of consumer a new concept ‘caveat vendettor’ means ‘let the seller be aware’ has evolved. Burden is imposed on the seller when he is selling goods in the market place, because he is aware about the quality of the goods, he is selling in the market.

In today’s situation the consumer is no longer sovereign. Consumer choice is unlimited due to various ranges of goods. Buyer mostly depends on advertisements for the choice of goods they wish to purchase or the services they intended to hire. Consumer abuse is common in market place. Consumers are duped or cheated because of deceptive advertisements and false and exaggerated description about the quality of goods which they propose to sale.

For easy understanding access to justice in dealing with consumer aspects is broadly classified in to two stages. They are first stage during the British period and the second after independence.

2. Learning Outcomes

After reading this module the reader is able to

1) Understand the development of consumer enactments during British era

2) Learn how consumer law was evolved after independence to protect consumer interest

3) Comprehend objectives and remedies available to consumer under Consumer Protection Act, 1986

4) Make note the hierarchy of authorities set up for consumer justice

5) Grasp the idea about competition enactment in dealing with consumers

Consumer Protection – During the British Period

The British initiated written and unwritten statutes in India during their tenure. There were some pieces of legislation which protected the consumer interest during British period. Prominent among these were,

Important provisions of these enactments dealing with consumers given below

3.1 Indian Penal Code, 1860

The first ever notable provisions for consumer protection adopted in India are found in the Indian Penal Code, 1860 iv . This is the most relevant Act for the prevention of food adulteration. Sections 272v and 273vi of IPC, 1860 dealing with the offences affecting public health, made certain offences like adulteration of food or drink, making it noxious, and sale of noxious food or drink, punishable with six months imprisonment or with fine up to one thousand rupees or with both. Section 274 to 276, made the offences of adulteration of drugs intended for sale, sale of adulterated drugs and sale of drugs as a different drug, or preparation, punishable with similar sentence. Sections 264vii and 267 of the Code, made punishable, the fraudulent use of false instruments for weighing, and fraudulent use, possession and making and selling of false weights and measures publishable with imprisonment extendable to one year or with fine or with both.

Section 479 to 489viii deals with the fraudulent and misleading description of articles of trade and fake packages. Section 486 covers offences pertaining to counterfeit trademark. The offence of public nuisance has been defined under Section 268, in general, to mean an act or illegal omission which may cause any common injury, danger or annoyance to the public or people in general. Further Section 269 to 278 deals with certain specific categories of public nuisance.

Chapter XIX of IPC, deals with offences ‘of criminal breach of contract of service’, making especially punishable the breach of a contract to attend on and supply wants of helpless persons ix , is very much relevant for consumer safety or persons incapable to do so themselves, because of ‘youth, or of unsoundness of mind.

Under the criminal law, the only remedy available to the victim of market practice is imprisonment of the offender. This law fails to provide any benefit to the victim. Most of the victims are incapable to approach the appropriate criminal court to avail the remedy due to their poverty, illiteracy and incompetence.

3.2 Law of Contract

The law relating to buyer and sellers, their rights and responsibilities and conditions on which the contract is to be executed, is contained in The Indian Contract Act, 1872. This Act has specified basic principles by which an agreement becomes a contract. This Act contains important provisions relevant to consumer interest, though, in remedial aspects the scope of the Act is limited because of the concept of privity of contract. Hence, the third party cannot seek remedy generally under the Act which leads to the exclusion of large number of consumers from the purview of the Act. In spite of such limitations, the Act is important from the consumer perspective. In this respect judiciary has played an important role in protecting the interest of the consumers.

Section 27x of Indian Contract Act, 1872 declares that agreement in restraint of trade is void. This serves consumer interest by promoting competition and restricting monopolistic tendencies. Consumer can also claim protection of their interests under Section 73 and 74 of the Act, dealing with compensation for the loss or damage, by breach of contract or may have recourse to alternative remedies available under the Specific Relief Act, 1963. Earlier, the Act contained provisions about sale of goods in Sections 76 -123. They were found inadequate to look into the whole law on sale of goods. A new enactment was passed in 1930, namely the Sale of Goods Act, 1930 to serve the purpose of regulating the sale of goods.

Sale of Goods Act, 1930 provides for the settlement of consumer and seller disputes. This Act has changed the principles of ‘Caveat Emptor’ casting a responsibility on the seller to offer mercantile goods. The ordinary rule in sale of goods is that conditions and warranties are not implied. The Sale of Goods Act provides several important exceptions to this rule. Further there is an implied condition that the goods are free from any charge or encumbrance, are of the description tendered and shall perform according to usage and standards.

Sale of Goods Act needs a revision, taking into account the complexities of transactions involving goods and services in the market place in the modern times. The Contract Act fails to provide remedy to the buyer of goods even if he is harmed by the seller. Contract law requires privity of contract between the buyer and retailer, dealer or the manufacturer. In such a situation the Common Law remedy is available under Law of Torts.

3.3 Law of Torts

In spite of various legislations related to consumer protection, the Common Law remedies under Law of Torts are still available to consumers in India. Under the law of Torts, liability may be imposed on the manufacturer, supplier, importer, distributor or retailer or two or more of them together.

The foundation of this approach is well reflected by the case of Donoghue v. Stevensonxi, which laid down the principle that a manufacturer owes a duty of care to every possible consumer of his product and a consumer can bring an action against the manufacturer even if there is no contract between the two.

Duty in tort is owed not to any specific individual but to the entire world at large. This decision made the Law of Torts very relevant to consumers and also made the manufacturers liable to compensate the claimants harmed by their products.

Under the Law of Torts the consumers are entitled to damages for loss caused by any defective, unfit or dangerous product, and the liability may arise whether the respondent is negligent or has defrauded the plaintiff or has committed a willful act. In cases of fraud, the tort of deceit enables a consumer to recover damages for fraud practiced on him by the defendant. If the defendant is negligent, the tort of negligence would provide to the consumers, redress for damage suffered due to defective and unsafe products. The remedy for negligence is available in case of deficiency in service also.

Passing off is another remedy recognized by the law of tort to prevent the traders from using deceptive devices to push up sales. In this, the goods are passed off under an impression that they are the goods of some other person. In passing off, liability arises even without the proof of any knowledge or intention to deceive. The only proof required is that the goods were marked or made up or described to mislead an ordinary purchaser by making him believe that the goods of the defendant were that of the plaintiff. The basic purpose of this concept is to protect the good will of a trader which he may have earned by his trade name or a particular make, design, get-up, or colour of his goods.

The principles of Common Law contained in the law of torts had been received in the Indian law through various judgments of the Privy Council and the High Courts. Thus Torts Law has played an important role even after independence in India to protect the interest of consumers. Besides this, the contract legislation and the criminal law legislation have played a vital role in providing various remedies in protecting the rights of customers before Indian independence.

4. Consumer Protection – After Independence

After the Indian independence Indian Parliament made various enactments from time to time to protect the interest of consumer. The Banking Regulation Act, 1949, and the Industrial Development and Regulation Act, 1951 were the first two legislations aimed at securing the protection of consumers. In course of time to solve the complaints against banking and insurance services they appointed separate authority like Ombudsman was established. Thereafter, the Prevention of Food Adulteration Act, 1954 was brought to protect consumers from any kind of adulteration. It was followed by Essential commodities Act, 1955 that aimed at ensuring the availability of essential commodities and goods by regulating their production, supply and distribution. Indian Standards Institution (Certification of Marks) Act, 1956 mainly to ensure quality in marketable products. The Monopolies and Trade Restrictive Practices Act, 1969 was made to prevent the concentration of economic power and to prohibit monopoly which was prejudice to consumer interest. Essential Commodities Act, 1955 was replaced by the Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act, 1980 to prevent black marketing, adulteration and smuggling of goods and the National Security Act, 1980 also deal with similar problems.

Under the above enactments consumer was moving form pillar to post to avail justice. Consumer justice was expensive and time consuming. There was no specific legislation to protect the interest of consumer. Considering the needs of the consumer finally the Indian Parliament enacted Consumer Protection Act, 1986. It is a milestone in the history of socio economic legislation in India. It is one of the most progressive and comprehensive legislation made for the protection and welfare of the consumer.

Consumer Protection Act, 1986

This Act is primarily intended to provide better protection to the consumer. It is one of the benevolent social legislation intended to protect the large interest of consumer form exploitation in the market area. This Act was made with the objective to provide simple, speedy and inexpensive consumer justice. With the enactment of this law, now consumer feels that they are in a position to declare ‘seller be aware’.

The Act postulates for the establishment of Central Consumer Protection Councilxii and State Consumer Protection Councilxiii for the purpose of spreading consumer awareness. Central Council is headed by Minister in-charge of the Consumer Affairs in the Central Government and in the State Minister in-charge of the Consumer Affairs in the State Government. The objectivesxiv of the Central and State Council shall be to promote and protect the rights of the consumer such as

According to the CP At, 1986 the term ‘consumer’ xv means a person who buys any goods/commodity to consume either as eatable or otherwise from a shop, business house, corporation, store, fair price shop etc. OR Hires or avails of any services for consideration.

The definition of the term consumer may be as follows:

For instance if a person purchases a sewing machine to earn his livelihood by means of self employment, he is a consumer. If a person purchases 50 sewing machines and appoints designers for stitching designed dresses, to obtain large scale profit, he is not a consumer. The Services are of the nature of transport, telephones, electricity, construction, banking, insurance, medical treatment, and further professional services like engineers, doctors, lawyers and architects.

For the purpose of Consumer Protection Act any one of the following could be a complainant

A complaint could be made under Section 2 (c) for the following Matters

5.1 Consumer Dispute Redressal Agencies:

At the lowest level aggrieved person may approach Consumer Conciliation Committee set up at the Civil Supplies and Consumer Affairs Department. It is not necessary to go for conciliation. In order to reduce complaints before the CDRA complainant can solve the matter through conciliation method. If he wishes he directly can approach CDRA.

A three tier system of CDRA has been adopted for addressing the issues and problems of consumers and to ensure consumer justice against manufacturers, producers or sellers of goods and services. To provide simple, speedy and inexpensive redressal to consumer disputes, quasi judicial machinery is set up at each District, State and National level known as District Consumer Redressal Forum, State Consumer Redressal Commission and National Consumer Redressal Commission respectively. The National Commission which exercises supervisory control over the State Commission as well as District Forum. The functions of these CDRA are to initiate measures to protect consumer interests and to enforce the provisions of the CP Act, 1986 to promote consumer welfare.

The CP Act is an alternative and cheapest remedy already available to the aggrieved person/consumer by way of civil suit. In the complaint/appeal/petition submitted under the Act, the consumer is not required to pay any court fees or even process fee.

Proceedings are summary in nature and endeavour is made to grant relief to the parties in the quickest possible time keeping in mind the spirit of the Act which provides for disposal of the cases within possible time schedule prescribed under the Act. (90 days or 150 days if it requires of analysis or testing of commodities).xvi

5.2 Appeals by aggrieved Party:

The aggrieved party can prefer an appeal against the decision from lowest to the higher redressal agency. Appeal against the decision of a District Forum can be filed before the State Commission within a period of thirty days. Similarly, an appeal against the State Commission can be filed before the National Commission within thirty days and an appeal against the order of the National Commission lies before the Supreme Court within thirty days of the date of such order. The period of thirty days may be condoned in appropriate cases by the appellate authority.

The appellant is required to remit the prescribed fee along with his appeal petition and a certified copy of the order appeal against must also accompany the petition. All the CDRA under the Act required to decide complaint, as far as possible within a period of three months from the date of notice received by the opposite party or five months if it requires testing of commodities.

5.3 Reliefs available under the Act:

The Consumer Redressal Forum or Commission, as the case may be, may order one or more of the following relief’s to the complainant depending on the facts stated in the complaint and the relief sought by him

• Removal of defect in goods or services
• Replacement of goods
• Refund of the price paid
• Award of compensation for the loss or damage suffered
• Discontinuance of unfair trade practice or restrictive trade practice or direct not to repeat them
• Not to offer the hazardous foods for sale
• Withdrawal of hazardous or spurious goods from being offered for sale
• To issue corrective advertisement to neutralize the effect of misleading advertisement at eh cost of opposite party responsible for issuing such misleading advertisement
• Award of costs to parties

The quasi judicial authorities set up under the CP Act, 1986 are trying to ensure the objects and purpose of the Act without any interference from any stakeholders. Functioning of these authorities is consumer friendly, and thus consumer can file complaint and can address arguments in person. In genuine cases where the parties are unable to engage the services of an advocate Bar Association of National Commission provides legal aid to consumers.

6. The Competition Act, 2002

As per the changing trend in the market place like globalization, liberalization and privatization and to cope with changing realities, India has enacted the Competition Act, 2002 with many innovative features w.e.f. 14.01.03. The present Act was amended by the Competition (Amendment) Act, 2007xvii. The Act seeks to repeal the Monopolies Restrictive Trade Practices Act, 1969 and to dissolve the M.R.T.P. Commission from the date notified as such by the Central Governmentxviii. In pursuit of globalization, India has responded to opening up its economy, removing controls and resorting to liberalization. As a consequence of this, the Indian market has to be geared up to face competition from within the country as well as outside it.

The present legislation reflects a bifocal vision of competition policy that addresses the short term and long term policy issues with a focus on consumer welfare. A calibrated intervention of state is envisioned through a regulatory body which is empowered to ensure sustainable economy by regulating the competition forces. Indian legislation provides a direction to other developing countries which are in the process of integrating the domestic economy into a global economy.

The Act aims at providing free and fair competition in India and to protect the interest of Indian consumers. The Act provides for the establishment of a regulatory body called as Competition Commission of Indiaxix (CCI). In exercise of the power conferred under Section 7(1) of the Competition Act, 2002.

The most important functions of Competition Commission of India, includes competition advocacy, creating awareness and imparting training on competition issues. The Commission feels that in order to create greater awareness about the competition law and competition issues. It has power to grant interim relief and also power to award compensation.

Any aggrieved person by decision or order of the commission may file an appeal to the Supreme Court with in sixty days from the date of communication of the decision or orderxx. The Act deals with

There are a number of laws to protect the rights of consumers but the fact is that due to lack of awareness and education in consumerism as well as complex and lengthy legal procedure, consumer cannot avail these rights. Therefore, consumer education assumes priority of generating awareness among the people in general and consumers in particular.

7.  Concern

Consumer Protection Act, 1986 as amended and the Competition Act, 2002 are compassionate enactments introduced by the Indian Parliament in protecting the interest of consumer from exploitation in the market place. Though the CP Act, 1986 made with various objectives in practice there is a difficulty in implementing the objectives due to the following problems

CDRA are headed by retired judges or qualified judges they may tend to follow the procedure laid down under CPC in deciding the matter as a result complaints are pending before the CDRA.

Non appearance and adjournment by the opposite party further daly in the proceedings

Many times the government takes time in appointment of presiding officers for the CDRA, again it leads to delay in consumer justice.

Manufacturer being MNC/industrialist is always engaging their attorney who is well versed with consumer law and loopholes to argue the complaint. Whereas the complainant is illiterate, not aware about the legal points, except he is exploited by the trader. He is forced to appoint his own advocate to argue the complaint by paying huge amount.

8. Summary

In this module we discussed about the term consumer and his exploitation in the market place. Further we highlighted various enactments made from time to time to protect the interest of consumer during British period and after independence and brief critique regarding delay in consumer justice before 1986, due to various lacunae.

We examine in detail the CP Act, 1986 as amended from time to time. We looked in the importance, objectives, authorities established under the Act in providing consumer justice and various reliefs that can be awarded by the authorities.

Finally we dealt with another important enactment made by the Parliament in providing consumer justice with its authority that is Competition Act, 2002.

References:-

1. Chaudhary RNP, Consumer Protection Law Provisions and Procedure, (Deep and Deep Publications, New Delhi, 2005)

2. Paranjape NV, Law of Torts and Consumer Protection Law in India, (Central Law Agency, Allahabad, 2010)

3. Saraf D.N, Law of Consumer Protection in India, (NM Tripathi P. Ltd, Bombay, 2nd Ed. 1995)

4. Sharma Chandrakant, Role of Consumer Organizations in Consumer Protection, (Kanishka Publishers, New Delhi, 1995)
5. Singh Avtar, Contract and Specific Relief, (Eastern Book Co., Lucknow, 10th Ed.2008)

6. Singh Gurjeet, The Law of Consumer Protection in India Justice Within reach, (Deep & Deep Publications, New Delhi, 1996)
7. Verma S.K., A Treatise on Consumer Protection Laws, (ILI, New Delhi, 2004)

8. Ali Shaber G, “Competition Commission of India – Need of the Hour” Legal News and Views, New Delhi, March, 2008.

9. Ratanlal & Dhirajlal, Law of Torts, (Wadhwa and Company, Nagpur, 25th Ed. 2008)

10. Ratanlal & Dhirajlal, The Indian Penal Code, (Wadhwa and Company, Nagpur, 30th Ed. 2005)