CONSUMERISM &CONSUMER PROTECTION

ACT, 1986.

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ACKNOWLEDGEMENT

No book is complete without this page, our project would be incomplete if we

missed to say a simple “THANK YOU” to all those who have made it possible.

99% perspiration and 1% inspiration is all that what it takes to drive one for

challenges. The 1% though being just one, 1% is the initiator and a true driver.

We would like to extend our heartfelt gratitude to Prof. Mrs. NEELIMA

KALLATH for giving us the opportunity to do this valuable study and develop

into this project.

We express our gratitude towards all the people who have helped us directly or

indirectly in completion of our project.

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EXECUTIVE SUMMARY

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TABLE OF CONTENTS

SR NO. PARTICULARS PAGE NO.

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CONSUMERISM

Meaning:

Consumerism is a term used to describe the effects of equating personal happiness with purchasing material possessions and consumption." Basically, Consumerism is the concept that most people living in wealthy nations have that spending money brings happiness. Spending money on fancy food, spending money on fancy clothing, spending money on pointless magazines, spending money on posh vacations, these are all examples of consumerism. And every day, the exorbitant consumption of the wealthy brings down the poor. As the rich get richer and buy more things, the poor get poorer and can buy even less.

Definition:

Materialistic attitude: an attitude that values the acquisition of material goods (disapproving ) .

Belief in benefits of consumption: the belief that the buying and selling of large quantities of consumer goods is beneficial to an economy or a sign of economic strength.

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Growth of Consumerism…

1991 2009

Food & Grocery

Clothing

Footwear

Consumer durables

Home Linen

Movies & theatre

Eating out

Food & Grocery

.Clothing

Footwear

Consumer durables

Expenditure on DVDs & VCDs

Home Linen

Home accessories

Accessories

Gifts

Take away/ pre-cooked/RTE meals

Movies & theatre

Eating out

Entertainment parks

Mobile phones & service

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Household help

Travel packages

Club membership

Computer peripheral & Internet usage

Pros of consumerism

1. The increased demand from the increased desires created in modern man by consumerism have given rise to a vast global middle class. Although millions of people still live in poverty, the affects of consumption have eradicated the same for others.

2. Consumerism has created vast consumer choice. As people became more sophisticated consumers, their demands for varied products increased. As demand increased, suppliers rose to fulfill their needs. Modern consumers have more choice concerning products than group of people in history.

3. Consumerism has improved customer quality. Again, as the customer became King, they demanded the finest quality at the lowest price. Now consumers can pay small amounts of money for products of extremely high quality.

4. Consumerism has resulted in lower prices and a higher standard of living. As demand rose and products became cheaper, consumers could spend less on items and have more money to spend on their quality of life.

Cons of consumerism

1. A high rate of consumption has caused a number of health issues that are now bordering on epidemics. Obesity, colon cancer, and other maladies can be attributed to overconsumption of certain foods. Sometimes too much choice can be deadly.

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2. Consumerism has pushed the world towards climate change. In the drive to produce more for consumption, man has created a number of untenable processes that put great strain on the environment.

3. Overconsumption of energy is putting huge strain on earth’s natural resources. Mankind is making the push towards alternative energy right now because the decisions of the past century are haunting society. Extremely high levels of energy use result in higher prices for energy and goods.

4. Consumerism is creating more competition worldwide for resources. As resources dwindle and demand stays high, more people are competing for the same things. With increased competition, comes increased tension.

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CONSUMER PROTECTION ACT, 1986

“An act to provide for better protection of the interests of consumers and for that purpose to make provision for the establishment of consumer councils and other authorities for the settlement of consumer disputes and for matters connected therewith.”

Aim of consumer protection is to address the grievances of theConsumers and protecting them from the unethical practices behavior or Unfair trade practices of the manufacturer supplier.

CPA become statutory umbrella which made the consumer feel like a king not only enhances the awareness and educate the consumer but alsoprovide compensation to them by summary and inexpensive proceedings This keeps manufacturer and the trader alert, creative and innovative.

In the era of free competition, market has become very dynamic and margins have squeezes out. These gave rise to adopt other means/unfair means or practices in execution of transactions, which resulted into increasedgrievances at consumer front. Hence the need for the CPA has become more relevant than the past, where monopoly was the key factor.

OBJECTIVES OF CONSUMER PROTECTION ACT

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Consumer protection is essential for a healthy economy. We need Consumer Protection Act for the following:-

Physical protection of the consumer. Protection against deceptive and unfair trade practices. Protection against the abuse of monopoly position and/or restrictive trade

practices. Protection of enjoying the rights.

DEFINITIONS:

1. "Complainant" means—

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(i) a consumer; or

(ii) any voluntary consumer association registered under the Companies Act, 1956 or under any other law for the time being in force; or

(iii) the Central Government or any State Government,

(iv) one or more consumers, where there are numerous consumers having the same interest;

(v) in case of death of a consumer, his legal heir or representative; who or which makes a complaint.

2. “Complaint" means any allegation in writing made by a complainant that— 

(i) an unfair trade practice or a restrictive trade practice has been adopted by any trader or service provider;

(ii) the goods bought by him or agreed to be bought by him; suffer from one or more defects;

(iii) the services hired or availed of or agreed to be hired or availed of by him suffer from deficiency in any respect;

(iv) a trader or service provider, as the case may be,  has charged for the goods or for the service mentioned in the complaint a price in excess of the price –

(a) fixed by or under any law for the time being in force

(b)displayed on the goods or any package containing such goods;

(c) displayed on the price list exhibited by him by or under any law for the time being in force;

(d)    agreed between the parties;

(v) goods which will be hazardous to life and safety when used or being offered for sale to the public,

(a) in contravention of any standards relating to  safety of such goods as required to be complied with, by or under any law for the time being in force;

(b)  if

3. "Consumer" means any person who—

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Consumer of goods:(i) buys any goods for a consideration which has been paid or

promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or

Consumer of services:

(ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who 'hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person but does not include a person who avails of such services for any commercial purposes.

4. "Consumer dispute" means a dispute where the person against whom a complaint has been made, denies or disputes the allegations contained in the complaint.

5. .

6. "Deficiency" means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be m

7. "Unfair trade practice" means a trade practice which, for the purpose

of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive

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practice including any of the following practices, namely;—

(a)   the practice of making any statement, whether orally or in writing or by visible representation which,—

(i)   falsely represents that the goods are of a particular standard, quality, quantity, grade, composition, style or model;

(ii)  falsely represents that the services are of a particular standard, quality or grade;

(iii)  falsely represents any re-built, second-hand, renovated, reconditioned or old goods as new goods;

(iv)  represents that the goods or services have sponsor ship, approval, performance, characteristics, accessories, uses or benefits which such goods or services do not have;

(v)   represents that the seller or the supplier has a sponsorship or approval or affiliation which such seller or supplier does not have;

(vi)  makes a false or misleading representation concerning the need for, or the usefulness of, any goods or services;

(vii) gives to the public any warranty or guarantee of the performance, efficacy or length of life of a product or of any goods that is not based on an adequate or proper test thereof;

     Provided that where a defence is raised to the effect that such warranty or guarantee is based on adequate or proper test, the burden of proof of such defence shall lie on the person raising such defence;

(viii)makes to the public a representation in a form that purports to be—

a warranty or guarantee of a product or of any goods or services; or

a promise to replace, maintain or repair an article or any part thereof or to repeat or continue a service until it has achieved a specified result, if such purported warranty or guarantee or promise is materially misleading or if there is no reasonable prospect that such warranty, guarantee or promise will be carried out;

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(ix) materially misleads the public concerning the price at which a product or like products or goods or services, have been or are, ordinarily sold or provided, and, for this purpose, a representation as to price shall be deemed to refer to the price at which the product or goods or services has or have been sold by sellers or provided by suppliers generally in the relevant market unless it is clearly specified to be the price at which the product has been sold or services have been provided by the person by whom or on whose behalf the representation is made;

(x)  gives false or misleading facts disparaging the goods, services or trade of another person. 

(b) permits the publication of any advertisement whether in any news paper or otherwise, for the sale or supply at a bargain price, of goods or services that are not intended to be offered for sale or supply at the bargain price, or for a period that is, and in quantities that are, reasonable, having regard to the nature of the market in which the business is carried on, the nature and size of business, and the nature of the advertisement.

(c)   permits—

(i)  the offering of gifts, prizes or other items with the intention of not providing them as offered or creating impression that something is being given or offered free of charge when it is fully or partly covered by the amount charged in the transaction as a whole;

(ii) the conduct of any contest, lottery, game of chance or skill, for the purpose of promoting, directly or indirectly, the sale, use or supply of any product or any business interest;

(d)  Permits the sale or supply of goods intended to be used, or are of a kind likely to be used, by consumers, knowing or having reason to believe that the goods do not comply with the standards prescribed by competent authority relating to performance, composition, contents, design, constructions, fin ishing or packaging as are necessary to prevent or reduce the risk of injury to the person using the goods;

(e)  Permits the hoarding or destruction of goods, or refuses to sell the goods or to make them available for sale or to provide any

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service, if such hoarding or destruction or refusal raises or tends to raise or is intended to raise, the cost of those or other similar goods or services.

(f)   Manufacture of spurious goods or offering such goods for sale or adopts deceptive practices in the provision of services. 

9. “Restrictive trade practice” means a trade practice which tends to bring about manipulation of price or conditions of delivery or to affect flow of supplies in the market relating to goods or services in such a manner as to impose on the consumers unjustified costs or restrictions and shall include—

(a) delay beyond the period agreed to by a trader in supply of such goods or in providing the services which has led or is likely to lead to rise in the price;

(b)any trade practice which requires a consumer to buy, hire or avail of any goods or, as the case may be, services as condition precedent to buying, hiring or availing of other goods or services;

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IMPORTANCE OF A CONSUMER TO BUSINESS ORGANISATIONS

TRADITIONAL SCENARIO

Prior to independence, there was no organized and systematic movement for safeguarding consumers’ interest. The laws under which consumer interest were protected included the – Indian Penal Code, agricultural production, grading and marketing act,1937, drugs and cosmetics act,1940. Though different levels of awareness were exhibited in India this awareness was low due to mass poverty & illiteracy which resulted in consumer problems.

PROBLEMS FACED BY THE CONSUMERS

Lack Of Safety Illegal Trade Unfair Warranties Imitation Manufacture

(Misbranding) Evil Practices Of

Multinationals Massive Profiteering Sale Gimmicks Unfair Trade Practices

Variation In Prices Adulteration Defective Weights And

Measures Hoarding Commodities Substantial Quality Inadequate Labeling Customer Persuasion By

Shopkeepers

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Need for survival Brand loyalty Good image Expansion of market Product development Customer complaints

Economic development Optimum use of resourcesConsumer sovereigntyCapital formationSocial welfareFacing competition

RIGHTS OF CONSUMERS:

The act seeks to promote and protect the rights of consumers such as;

1. Right to safety: It is Right to safety against such goods and services as are hazards to health, life and property of the consumer. For example, spurious and sub-standard drugs ; appliances made of low quality of raw material, such as, electric press, pressure cooker, etc. and low quality food products like bread, milk, jam, butter etc. Consumers have the right to safety against loss caused by such products.

2. Right to be Informed/ Right to Representation:consumer has also the right that he should be provided all those information on the basis of which he decides to buy goods or services. This information relates to quality, purity, potency, standard, date of manufacture, method of use, etc. of the commodity. Thus, producer is required to provide all these information in a proper manner, so that consumer is not cheated.

3. Right to choose: Consumer has the full right to buy good or services of his choice from among the different goods or services available in the market. In other words, no seller can influence his choice in an unfair manner. If any seller does so, it will be deemed as interference in his right to choice.

4. Right to be Heard: Consumer has the right that his complaint be heard. Under this Right the consumer can file complaint against all those things which prejudicial to his interest. First there rights mentioned above (Right to Safety; Right to be Informed; Right to choose) have relevance only if the consumer has right to file his complaint against them. These days, several large and small

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organisations have set up Consumer service cells with a view to providing the right to be heard to the consumer. The function of the cell is to hear the complaints of the consumers and to take adequate measures to redress them. Many newspapers like The Economic Times have weekly special columns to entertain the complaints of the consumers.

5. Right to Seek redress: This provides compensation to consumer against unfair trade practice of the seller. For instance, if the quantity and the quality of the product do not confirm to the promise of the seller, the buyer has the right to claim compensation, such as free repair of the product, taking back of the products, changing of the product by the seller

6. Right to consumer education: Consumer education refers to educate the consumer constantly with regards to their rights. In other words, consumers must be aware of the rights they enjoy against the loss they suffer on account of goods and services purchased by them. Government has taken several measures to educate the consumers. For instance, Ministry of civil supplies publishes a quarterly magazine under the title “Upbhokta Jagran”. Doodarshan telecasts programme tittles “Sanrakshan Upbhokta Ka”.

MACHINERY UNDER CONSUMER PROTECTION ACT,1986

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(I) CONSUMER PROTECTION COUNCILS

1. CENTRAL CONSUMER COUNCIL

Establishment (Sec 4): The Central Government may, by notification, establish with effect from such date as it may specify in such notification, a Council to be known as the Central Consumer Protection Council (hereinafter referred to as the Central Council).

Membership: The Central Council shall consist of the following members, namely :-

(a) the Minister in charge of Consumer Affairs in the Central Government, who shall be its Chairman, and

(b) such number of other official or non-official members representing such interests as may be prescribed.

According to Rule 3 of the Consumer Protection Rules, 1987, the Central Council shall consist of the following 150 members namely;

(a) 8 Members of Parliament, 5 from Loksabha and 3 from the Rajya Sabha;

(b) The Commissioner for Scheduled Castes and Scheduled Tribes;(c) representatives of the Consumer Organisations or consumers-not less

than 35;(d) representatives of women-not less than 10.(e) representatives of farmers, trade and industries-not exceeding 20.(f) persons capable of representing consumer interests not specified above-

not exceeding 15;(g) the Secretary in the Department of Civil Supplies shall be the member

secretary of the Central Council.The term of the Council shall be 3yrs.Any member may, by writing under his hand to the Chairman of the Central Council, resign from the Council. The vacancies, so caused or otherwise shall be filled from the same category by the Central Government. The person shall hold office so long as the member whose place he fills would have been entitled to hold office, if the vacancy had not occurred.

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Meetings: The Central Council shall meet as and when necessary, but at least one meeting of the Council shall be held every year. The Central Council shall meet at such time and place as the Chairman may think fit and shall observe such procedure in regard to the transaction of its business as may be prescribed.

Objects of the Central Council (Sec 6): The objects of the Central Council shall be to promote and protect the rights of the consumers such as, -

(a) the right to be protected against the marketing of goods and services which are hazardous to life and property;

(b) the right to be informed about the quality, quantity, potency, purity, standard and price of goods or services, as the case may be  so as to protect the consumer against unfair trade practices;

(c) the right to be assured, wherever possible, access to a variety of goods  and services  at competitive prices;

(d) the right to be heard and to be assured that consumers' interests will receive due consideration at appropriate forums;

(e) the right to seek redressed against unfair trade practices or restrictive trade practices or unscrupulous exploitation of consumers; and

(f) the right to consumer education.

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2. STATE CONSUMER COUNCIL

Establishment: The State Government may, by notification, establish with effect from such date as it may specify in such notification, a Council to be known as the Consumer Protection Council for (hereinafter referred to as the State Council).

Membership: The State Council shall consist of the following members, namely :-

(a) the Minister in-charge of consumer affairs in the State Government who shall be its Chairman; (b) such number of other official or non-official members representing such interest as may be prescribed by the State Government. (c) such number of other official or non-official members, not exceeding 10, as may be prescribed by the Central Government.

Meetings: The State Council shall meet as and when necessary but not less than two meetings shall be held every year. The State Council shall meet at such time and place as the Chairman may think fit and shall observe such procedure in regard to the transaction of its business as may be prescribed by the State Government.

Objects of the State Council (Sec 8): The objects of every State Council shall be to promote and protect within the State the rights of the consumers as laid down in Sec 6.

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3. DISTRICT CONSUMER COUNCIL

Establishment: The State Government shall establish for every district, by notification a council to be known as the District Consumer Protection Council with effect from such date as it may specify in such notification.

Membership: The District Consumer Protection Council (hereinafter referred to as the District Council) shall consist of the following members, namely:-

(a) the Collector of the district (by whatever name called), who shall be its Chairman; and(b) such number of other official and non-official members representing such interests as may be prescribed by the State Government.

Meetings: The District Council shall meet as and when necessary but not less than two meetings shall be held every year.The district council shall meet as such time and place within the district as the Chairman may think fit and shall observe such procedure in regard to the transaction of its business as may be prescribed by the State Government.

Objects of the State Council: The objects of every District Council shall be to promote and protect within the district the rights of the consumers laid down in section 6.

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(II) CONSUMER DISPUTE REDRESSAL AGENCIES

Establishment of consumer disputes redressal agencies.

There shall be established for the purpose of this Act, the following agencies, namely:

(a) A Consumer Disputes Redressal Forum to be known as the "District Forum" establishment by the State Government in each district of the State by notification.

(b) A Consumer Disputes Redressal Commission to be known as the "State Commission" established by the State Government in the State by notification; and

(c) A National Consumer Disputes Redressal Commission established by the Central Government by notification.

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The Consumer disputes Redressal Forum

DISTRICT FORUMSTATE

COMMISSIONNATIONAL

COMMISSION

LEVEL District level State level National level

MEMBERS

THREE-

District court judge-chairman 2 other members of which one shall be a woman.

THREE

High court judge-president 2 other members of which one shall be woman.

FIVE

Supreme court judge president 4 other members of which one shall be woman.

QUALIFICATIONS

be not less than 35yrs of age;

posess a bachelor’s degree from a recgnised university;

be a person of ability, integrity and should have adequate knowledge & experience of atleast 10yrs, in fields related to economics, law, commerce, accountancy, industry, public affairs or administration.

be not less than 35yrs of age;

posess a bachelor’s degree from a recgnised university;

be a person of ability, integrity and should have adequate knowledge & experience of atleast 10yrs, in fields related to economics, law, commerce, accountancy, industry, public affairs or administration

be not less than 35yrs of age;

posess a bachelor’s degree from a recgnised university;

be a person of ability, integrity and should have adequate knowledge & experience of atleast 10yrs, in fields related to economics, law, commerce, accountancy, industry, public affairs or administration

COMPENSATION Less than 20 lakhs 20 lakhs to 1 Crore More than 1 Crore

CAN APPEAL TOState commission within a period of 30 days from the

date of order.

National commission within a period of 90 days from the date of

order.

Supreme court within a period of 30 days from the

date of order.

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APPOINTED BYState Government on the recommendation of the Selection Committee.

State Government on the recommendation of

the Selection Committee.

Central Government on the recommendation of the Selection Committee.

TERM OF OFFICE

Every member shall hold office for a term of 5yrs or

up to the age of 65yrs, whichever is earlier.

Every member shall hold office for a term of 5yrs or up to the age of

65yrs, whichever is earlier.

Every member shall hold office for a term of 5yrs or

up to the age of 70yrs, whichever is earlier.

JURISDICTIONIt can control the activities

of the consumer court under its own territory.

Can control the activities of the District

Forum.

Can control the activities of the State Commision.

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HOW CAN YOU FILE A COMPALINT?

Following steps are part of a complaint procedure:-

The complaint is to be filed within two years from the date on which cause of action has arisen or as provided by limitation Act, 1983.

There is no fee for filing a complaint. A complaint can be sent by post or presented in person by complainant or his authorized agent.

Engaging a lawyer is not compulsory Usually the Forums require 4-6 copies of complaint.

WHAT INFORMATION SHOULD A COMPLAINT CONTAIN?

Name and complete address of complainant. Name and complete address of opposite party or parties as the case may be.

Date of purchase/service obtained.

Amount paid for consideration.

Items of goods with quantities/nature of service.

Whether the complaint relates to unfair restrictive trade practice/defective goods/deficit services/charging excess price.

Copies of bills/vouchers/receipts and copies of correspondence made, if any.

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The relief sought.

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CONSUMER AWARENESS

Consumer is the largest economic group in every country. They have been victims of many unfair practices of the business persons. This highlights the need for consumer welfare and awareness.

The Indian government through its legislative and other measures is committed to the welfare of the consumers.

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Following are the steps taken by the government:-

1. Some of THE LAWS ENACTED BY GOVERNMENT for consumer welfare:-

YEAR LEGISLATION

1930 THE SALES OF GOODS ACT

1940 THE DRUGS AND COSMETICS ACT

1954 THE PREVENTION OF FOOD ADULTERATION ACT

1955 THE ESSENTIAL COMMODITIES ACT

1969 THE MONOPOLIES AND RESTRICTIVE TRADE PRACTICES

1986 THE ENVIRONMENT PROTECTION ACT

1986 THE CONSUMER PROTECTION ACT

1986 THE BUREAU OF INDIAN STANDARDS(BIS)ACT

1992 THE SECURITY AND EXCHANGE BOARD OF INDIA(SEBI) ACT

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2. STANDARDIZATION AND QUALITY CONTROL :-‘Standardization’ of goods and services implies that goods are of a specified and uniform quality. Various marks that indicate quality standards are:-

a. ISI MARK- Became widely popular after setting up of Bureau Of Indian Standards in 1986

b. ECO MARK-Evolved by ministry of environment under Water Act,1974 And Air Act,1981

c. AGMARK-Issued by authorities constituted under AGRICULTURE PRODUCE ACT,1937

d. FPO- Provided in rules framed under PREVENTION OF FOOD ADULTERATION ACT,1954

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3. Consumer education through various publications such as ‘Upbhokta Jagran’ and programmes like ‘Sanrakshan Upbhokta’ and ‘Jago Grahak Jago’

4. Consumer Day is observed every year on 15th march. Exhibitions, seminars,etc. are held on this day to educate consumers of their rights

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CONSUMER AWARENESS THROUGH MEDIA

FORMALNON FORMAL

Television Cinema Radio Print Media-Press Other Printing Media

Outdoor Audio Visuals/Publicity Vans Rural Specific Art Forms Like Puppet Show, Harikatha Demonstrations Meeting, Announcement, Processions Music Record

Caparisoned Elephants And decorated Bullock Carts carrying Advertisement PanelsCONSUMER RESPONSIBILITY TOWARDS HIMSELF

To study price range and quality the consumer is loading for or acceptable by him.

To feel free to change product from variety available, according one’s specific needs.

Buying decisions should be made by him to make purchase from right place in order to avoid unscrupulous traders.

Try to obtain information about the details of product and services. To see that buy any quality products. To keep receipts and other relevant documents for future reference in case of

durable goods.

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No misuse of rights in order to exploit sellers. To buy as per the requirement and avoid hoarding.

CONCLUSION

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BIBLIOGRAPHY/WEBLIOGRAPHY

Bibliography:

Elements of Mercantile Law

- N.D. Kapoor

Webliography:

Google search engine

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GROUP MEMBERS

Divya agarwal (2)

Pakshal Bhandari (10)

Vaibhav Mastakar (18)

Rishubh Jywra (32)

Shraddha Keny (36)

Bhavna Marothi (47)

Pariza Mehta (53)

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