By : Dr. Sheetal Kapoor : Due to globalization and opening of Indian markets to foreign players Indian consumers today have an access to innumerable brands. In every industry whether it is fast moving consumer goods (FMCG) or durable goods or service industry there are more than twenty brands at national level catering to the needs of the consumers. This situation of plenty is giving the consumer an opportunity to choose goods and services from a wide spectrum. But is the consumer getting value for money? why is consumer protection becoming more important in today’s scenario? and is the concept ‘let the buyer beware’ still exists? or are we moving towards consumer sovereignty?
Importance of Consumer Welfare
Consumerism, importance of consumers in the market, increasing awareness among consumers are some of the important milestones in the development of consumer affairs in India. A country’s economy revolves around its markets. When it is a seller’s market the consumer exploitation is the maximum. When there are large number of buyers and sellers, consumers enjoy a number of choices. Before enactment of the Consumer Protection Act, 1986 India had a sellers market. Thus, the year 1986 marks a watershed since then consumer protection in India gained momentum.
Further liberalization of our economy in 1991 gave opportunity to Indian consumers to get quality products at competitive prices. Earlier in order to protect our own industries government restricted foreign competition. This led to a situation where consumers were getting very few choices and quality wise also our products were inferior. For purchase of car there used to be a huge booking and there were only two brands available. Nobody bothered about consumer interests and the attitude was towards protecting our own industry.
Thus the need for consumer satisfaction and consumer protection was recognized. A consumer is considered as an inevitable part of a socio-economic –political system, where the exchange initiated and transaction realised between two parties, namely buyers and sellers has an impact on a third party ie, society. However, the inherent profit motive in mass production and sales also offers the opportunity to many manufacturers and dealers to exploit consumers. Problems of defective goods, deficiency in service, spurious and duplicate brands, misleading advertisements are rampant and often the gullible consumer falls prey to it.
A Brief History
On April 9, 1985 the General Assembly of the United Nations passed a Resolution adopting a set of guidelines for consumer protection and authorized Secretary General, United Nations to persuade the member countries, especially the developing ones to adopt policies and laws for better protection of the interests of the consumers. Consumers today want value for money, a product or service that would meet reasonable expectations, should be safe in use and full disclosure of the product specification. These expectations are termed as ‘Consumer Rights’. 15th March is observed as the World Consumers’ Day.
This date has a historic importance as it was on this day in 1962, when the Bill for Consumer Rights was moved in the US Congress. During his speech President John F. Kennedy had remarked: “If a consumer is offered inferior products, if prices are exorbitant, if drugs are unsafe or worthless, if the consumer is unable to choose on an informed basis, then his dollar is wasted, his health and safety may be threatened, and national interest suffers.”
The Consumers International (CI), formerly known as International Organisation of Consumer Unions (IOCU), the umbrella body, for 240 organisations in over 100 countries, expanded the charter of consumers rights contained in the US Bill to eight, which in a logical order reads: 1.Basic Needs 2.Safety 3.Information 4.Choice 5.Representation 6.Redress 7.Consumer Education and 8. Healthy Environment.
This charter had a universal significance as they symbolised the aspirations of the poor and disadvantaged. On this basis, the United Nations, in April 1985, adopted its Guidelines for Consumer Protection.
Consumer Protection Act, 1986
India being one of the signatory to the Resolution enacted the Consumer Protection Act, 1986 to fulfill its obligation. The Parliament enacted the legislation in December 1986, which came into force on April 15, 1987. The main objectives of the Act are to provide for better protection of the interests of the consumers and for that purpose to make provision for the establishment of consumer councils and other authorities for the settlement of consumers’ disputes.
The Act provides effective, people oriented, broad based and efficient remedy to consumers against unfair dealings and exploitation. The Act applies to all goods and services whether by private, public or co-operative body unless it is especially exempted by the Central Government by a notification in the Official Gazette. The Act is an improvement over the other existing laws for consumer protection as it is compensatory in nature, where as remedies under other laws are basically punitive or preventive in nature and are designed to provide relief only in specific situations. The remedy under The Act is in addition to and not in derogation of provisions of any other law for the time being in force. The Act gives statutory recognition to six consumer rights, which are right to safety, right to information, right to choose, right to be heard, right to seek redressal and right to consumer education. The Act postulates establishment of advisory and adjudicatory bodies to safeguard the interests of consumers. The Advisory structure is in the form of Consumer Protection Councils at Centre, State and District levels. These Councils are constituted on public- private partnership basis. The purpose of these bodies is to review the consumer related policies of the Government and suggest measures for further improvements.
The Act also provides for quasi-judicial adjudicatory machinery at three levels i.e. District, State and National levels called District Forum, State Consumer Disputes Redressal Commission and National Consumer Disputes Redressal Commission. At present, there are 621 District Forums, 35 State Commissions and apex body the National Commission. The District Forum can adjudicate on matters, where the value of claim is upto rupee twenty lakh, the State Commission, where value of claim is more than twenty lakh but upto rupee one crore and the National Commission, where the claim is over one crore. These adjudicatory bodies are quasi-judicial bodies and are regulated according to the principles of natural justice. They are required to decide complaint within a period of three months from the date of notice where no testing is required and within a period of five months where testing is required.
The Consumer Protection Act, 1986, is a socio-economic legislation to protect and promote the interests of consumers in a unified and effective manner. Consumer Protection Act is a weapon in the hands of consumers to fight against the exploitation by the sellers, manufacturers and traders related to defective goods, deficiency in service, restrictive and unfair trade practices. From the time of its inception as on January 1, 2010, the Consumer courts at National, State and District level have together registered 33,30,237 cases and 29,58,875 cases have been disposed.