Consumer Protection and Remedies
In regulatory jurisdictions that provide for it (comprising most or all developed countries with free market economies), consumer protection is a group of laws and organizations designed to ensure the rights of consumers as well as fair trade, competition and accurate information in the marketplace. The laws are designed to prevent the businesses that engage in fraud or specified unfair practices from gaining an advantage over competitors. They may also provide additional protection for those most vulnerable in society. Consumer protection laws are a form of government regulation that aim to protect the rights of consumers. For example, a government may require businesses to disclose detailed information about products—particularly in areas where safety or public health is an issue, such as food.
Consumer protection is linked to the idea of consumer rights and to the formation of consumer organizations, which help consumers make better choices in the marketplace and get help with consumer complaints. Other organizations that promote consumer protection include government organizations and self-regulating business organizations such as consumer protection agencies and organizations, ombudsmen, the Federal Trade Commission in America and Better Business Bureaus in America and Canada, etc.
A consumer is defined as someone who acquires goods or services for direct use or ownership rather than for resale or use in production and manufacturing. Consumer interests can also be protected by promoting competition in the markets which directly and indirectly serve consumers, consistent with economic efficiency, but this topic is treated in competition law. Consumer protection can also be asserted via non-government organizations and individuals as consumer activism.
Bills and acts and other systems by central government to protect consumer rights
National Consumer Disputes Redressal Commission
The National Consumer Disputes Redressal Commission (NCDRC), India is a quasi-judicial commission in India which was set up in 1988 under the Consumer Protection Act, 1986. Its head office is in New Delhi. The commission is headed by a sitting or retired judge of the Supreme Court of India. The present head is Justice R K AGRAWAL, former judge of the Supreme Court of India.
Section 21 of Consumer Protection Act, 1986 describes, the National Consumer shall have jurisdiction:- to enter a complaint valued more than 1 crore and also have Appellate and Revisional jurisdiction from the orders of State Commissions.
- complaints where the value of the goods or services and compensation, if any, claimed 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 Commission where it appears to the National Commission that such State Commission has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity.
The consumer protection act 1986
One of the most important milestones in the area of consumer protection/consumer movement in the country has been the enactment of the Consumer Protection Act, 1986. It was a progressive and comprehensive pieces of legislation of its time, covering all goods and services. The Act ensures the rights of consumer for safety, information, choice, representation, and redressal and consumer education, and provides for a simple, speedy and inexpensive redressal to the consumers’ in the nature of a specific nature and also awards compensation, wherever appropriate, to the consumer. An exclusive three tier redressal machinery as an alternative to the civil court and other legal remedies available in the country has been established under the Act, wherein an aggrieved consumer can seek redressal against any defect in the goods purchased or deficiencies in services availed, including restrictive/unfair trade practices adopted by such manufacturer and trader of goods/service provider. In the past thirty years more than 4.3 million consumer cases were adjudicated and decided by the consumer fora.
The Consumer Protection Bill, 2018
Highlights of the Bill
- The Bill replaces the Consumer Protection Act, 1986. The Bill enforces consumer rights, and provides a mechanism for redressal of complaints regarding defect in goods and deficiency in services.
- Consumer Disputes Redressal Commissions will be set up at the District, State and National levels for adjudicating consumer complaints. Appeals from the District and State Commissions will be heard at the next level and from the National Commission by the Supreme Court.
- The Bill sets up a Central Consumer Protection Authority to promote, protect and enforce consumer rights as a class. It can issue safety notices for goods and services, order refunds, recall goods and rule against misleading advertisements.
- If a consumer suffers an injury from a defect in a good or a deficiency in service, he may file a claim of product liability against the manufacturer, the seller, or the service provider.
- The Bill defines contracts as ‘unfair’ if they significantly affect the rights of consumers. It also defines unfair and restrictive trade practices.
- The Bill establishes Consumer Protection Councils at the district, state and national levels to render advise on consumer protection.
Key Issues and Analysis
- The Bill sets up the Consumer Disputes Redressal Commissions as quasi-judicial bodies to adjudicate disputes. The Bill empowers the central government to appoint members to these Commissions. The Bill does not specify that the Commissions will comprise a judicial member. If the Commissions were to have members only from the executive, the principal of separation of powers may be violated.
- The Bill empowers the central government to appoint, remove and prescribe conditions of service for members of the District, State and National Consumer Disputes Redressal Commissions. The Bill leaves the composition of the Commissions to the central government. This could affect the independence of these quasi-judicial bodies.
- Consumer Protection Councils will be set up at the district, state, and national level, as advisory bodies. The State and National Councils are headed by Ministers in-charge of Consumer Affairs. The Bill does not specify whom the Councils will advise. If the Councils advise the government, it is unclear in what capacity such advice will be given.
• Each state has one State Commission.
• It consists of a President, who is or has been a Judge of a High Court and two other members, one of whom shall be a woman.
• Complaints can be filed in State Commission where the value of claim is above ` 20 Lakhs upto ` one Crore.
• Appeals against the Orders of the District Forums can also be filed in the State Commission.