Class 12-commerce NCERT Solutions Business Studies Chapter 4 - Consumer Protection

The following are some Acts passed by the Government of India for the protection of consumers' interests:

1. The Consumer Protection Act, 1986: This Act provides for consumer protection interests against various exploitative business practices such as in the form of defective goods, deficiency in services and unfair trade practices. According to the Act, a three-tier machinery has been set up for seeking redressal by consumers. It comprises the District Forum, the State Commissions and the National Commission.
2. The Contract Act, 1982: Under this Act, various conditions under which the promises in a contract bind are specified. In addition, it specifies the remedies available in case of breach of contract.
3. The Sale of Goods Act, 1930: The Act defines the various protection and relief alternatives available to consumers in case the goods or services purchased by them are not according to the expressed or implied conditions and warranties.
4. The Agriculture Produce (Grading and Marking) Act, 1937: This Act is specifically for agriculture and livestock commodities. The Act defines the grade standards and the procedures for grading, pacing and marking of for such commodities. The Act provides a quality certification mark called AGMARK for agriculture products.
5. The Prevention of Food Adulteration Act, 1954: This Act provides for a check against adulteration in food items.
6. The Standards of Weights and Measures Act, 1976: This Act provides for the protection of consumers against exploitative practises related to wrong weighing and measuring of goods.
7. The Essential Commodities Act, 1955: This Act provides for controlling production, supply and distribution of essential goods such that inflation remains under control. This Act also provides for a check against anti-social activities such as hoarding and black marketing.
8. The Trade Marks Act, 1999: This Act provides for a check against the use of false marks on goods.
9. The Competition Act, 2002: This Act is formed for the prevention of business practices which hinder competition in the market.
10. The Bureau of Indian Standards Act, 1986: Under the Act, the Bureau of Indian Standards has been established that defines the standards for the quality of various goods. Based on the standards it provides a certification of quality (called ISI) through the BIS certification scheme. Under the Act, a grievance cell has also been set up for redressal of consumer complaints regarding the quality of products. 

A consumer is responsible for protecting his own interests and safeguarding himself from any form of exploitation.

1. Awareness: A consumer must be aware with regard to the availability of various goods and services such that he can take wise decisions.
2. Looking for Quality Marks: A consumer must always purchase goods and services which have the concerned quality certification marks. For instance, they must look for the ISI mark on electrical goods and the AGMARK on agricultural goods.
3. Asking for Cash Memo: For every purchase of a good or service, a consumer must always ask for a cash memo or bill. The bill is the proof of purchase and can be used for reference purposes.
4. Reading Labels: A consumer must always look and read carefully the labels providing information about the product such as price, weight and expiry date of the product.
5. Honest Transactions: A consumer must always indulge in honest business transactions and should discourage illegal trade practices such as black marketing and hoarding.
6. Ensure Safety: A consumer must always ensure his own safety. He must carefully read the instruction manuals provided by the manufacturer before using the product.
7. Filing Complaint: In case the consumer finds a product to be defective in any regard, he must file a complaint in the appropriate forum.
8. Consumer Societies: Consumer organisations and societies must be formed which actively work towards consumer education and awareness.
9. Environment Protection: It is the responsibility of consumers to take care of the environment. They must avoid wastes and pollution. 

Under the Consumer Protection Act, consumer courts and consumer forums have been established where the grievances of consumers are addressed. The following can file a complaint in the consumer court:

1. Any consumer
2. Any registered consumer association or organisation
3. Central and State Governments
4. A consumer or group of consumers on behalf of several consumers having common interests

A legal heir or representative of the deceased consumer 

A business firm can set up consumer grievance cell under the Right to Seek Redressal: 

• Refers to the right of consumers to seek redressal in case of a grievance and, if required, demand a suitable compensation.
• The Consumer Protection Act provides for compensation in the form of replacement of product, cash compensation and repair/removal of defects.
• Various redressal forums are set up under the Consumer Protection Act.

Quality certification mark called AGMARK is used fir agricultural products which is provided by the The Agriculture Produce (Grading and Marking) Act, 1937. This Act specifically deals with agriculture and livestock commodities and also stipulates the conditions which govern the use of standards and lays down the procedure for grading, marking and packing of agricultural produce.

State Commissions as established under the Consumer Protection Act comprise a President and one or more members, at least one of whom is a woman. A case can be filed in the State Commission in case the value of goods or services in question is more than 20 lakhs (but less than 1 crore). In addition, an appeal can be filed in the State Commission in case an aggrieved consumer is not satisfied with the judgement at the District forum.

Consumer Protection Act of 1986 seeks to protect and promote consumers’ interest through speedy and inexpensive redressal of their grievances. A three-tier machinery comprising District Forum, State Commission and National Commission was set up for the redressal of consumer grievances.

Scope of the Act:

• Applicable to all types of undertakings
• Providing certain rights and responsibilities to consumers
• Safeguards consumers against unfair trade practices and other forms of exploitation

Right to be Informed:

• Every consumer has the right to have complete information with regard to goods and services. For instance, they must have information regarding quality, quantity, price, ingredients and weight of goods and services.
• In India, it is mandatory under law for manufacturers to provide information about the product on its package and the label. This helps the consumer in making an informed choice. 

The Consumer Right being reinforced by the above proposal is Right to be Informed. According to this right,

• Every consumer has the right to have complete information with regard to goods and services. For instance, they must have information regarding quality, quantity, price, ingredients and weight of goods and services.
• In India, it is mandatory under law for manufacturers to provide information about the product on its package and the label. This helps the consumer in making an informed choice.

According to the Consumer Protection Act, a consumer is

• Anyone who buys goods and or hires services for some value.
• Any user of those goods or beneficiary of services with approval of the buyer.
• Anyone who uses the goods bought or services hired to earn livelihood by self-employment.

a. The right exercised by Mrs. Mathur at the first instance is Right to Seek Redressal.

b. Right to Seek Redressal refers to the right of consumers to seek redressal in case of a grievance and, if required, demand a suitable compensation. The Consumer Protection Act provides for compensation in the form of replacement of product, cash compensation and repair/removal of defects. Various redressal forums are set up under the Consumer Protection Act.

c. The consumer responsibility that has been fulfilled by Mrs. Mathur in the above case is that of filing a complaint in an appropriate consumer forum in case of any issue with the quality of goods purchased or services provided.

d. The two responsibilities to be assumed by the consumers are looking for quality marks  at the time of purchase and checking information on labels.

Consumer protection refers to educating consumers regarding their rights and responsibilities along with the redressal of their grievances and complaints. Consumer protection plays an important role not just for consumers but also for businesses.

1. Long-Term Interest: For any business, consumer satisfaction is essential. In today's times, with increasing competition, consumer satisfaction has become all the more important. As the organisation takes care of the interests of consumers, it builds goodwill and reputation in the market. This in turn helps in increasing the sales and profits of the business. Thus, protecting consumer's interests benefits the business in the long run.
2. Use of Resources: Any business survives on the basis of society. It uses the resources of society for its various production activities. It earns profits with the sale of these goods and services to society. Thus, the business must take care of the interest of society and supply goods and services which adhere to the overall interests and well-being of society.
3. Ethical Reasoning: Every business must follow basic moral and ethical values. It must not follow any such business practices which lead to exploitation of consumers in any form.
4. Responsibility towards Society: Any business strives to exist on the basis of society. It sells various goods and services to consumers in society and earns profit. Thus, it is the responsibility of the business to take into consideration and work towards satisfying consumer interests.
5. Government Interference: A business organisation must be devoid of any unfair trade practices; else it draws unwanted intervention from the government. This in turn has a negative impact on its goodwill and image. 

Nowadays, various consumer organisations and NGOs have been set up which play an important role in protecting and safeguarding consumer interests. Some popular NGOs and consumer organisations in India include Consumer Coordination Council, Common Cause, Consumer Protection Council, Consumers' Association and Mumbai Grahak Panchayat.

The following functions are performed by these organisations with the basic objective of protecting consumer interests:

1. Consumer Education: The NGOs work towards educating and spreading awareness among consumers regarding their rights and responsibilities. For this, they organise various training programmes and workshops.
2. Publishing Journals: They regularly publish journals and periodicals which provide information regarding various consumer problems, the legal remedies available and other related matters.
3. Legal Assistance: They help consumers in seeking redressal by providing them legal assistance.
4. Encouraging Protest against Exploitation: They encourage consumers to stand up against any form of exploitation or unfair trade practices faced by them.
5. Assistance in Filing Complaints: They encourage and assist consumers in filing complaints in appropriate forums. In addition, they file complaints on behalf of consumers.
6. Taking Initiatives: Besides encouraging individual consumers to file complaints in case they face exploitation, consumer organisations themselves take initiatives in filing cases on behalf of the public as a whole in matters of general interests.
7. Testing Quality of Products: To ensure that quality products reach consumers, they carry out quality tests for various products in laboratories, the results of which are then published. 

The Consumer Protection Act enlists six rights for a consumer. Rights of a consumer:

1. Right to Safety: It is the right of consumers to safeguard themselves against goods and services which can be hazardous to life, health or property. For example, a consumer can get injured if they use defective electrical appliances. Every consumer has the right to protect himself against such goods.
2. Right to be Informed: Every consumer has the right to have complete information with regard to goods and services. For instance, they must have information regarding quality, quantity, price, ingredients and weight of goods and services. In India, it is mandatory by law for manufacturers to provide information about the product on its package and the label. This helps the consumer in making an informed wise choice.
3. Right to Choose: A consumer has the right to have access to and choose from a wide variety of goods and services available in the market at competitive prices. Accordingly, the retailers or suppliers should offer a large variety of products to consumers. Also, they must not be biased towards a particular product.
4. Right to be Heard: It is the right of consumers to be heard in an appropriate legal forum in case of any grievance or dissatisfaction faced by them. In other words, a consumer has the right to file a complaint in case of any grievance.
5. Right to Seek Redressal: It is the right of consumers to seek redressal in case of a grievance and, if required, demand a suitable compensation. The Consumer Protection Act provides for compensation in the form of replacement of product, cash compensation and repair/removal of defects.
6. Right to Consumer Education: It is the right of consumers to have knowledge and be aware of their rights and responsibilities. They must have knowledge with regard to various legal remedies available in case they face any form of exploitation. Various consumer organisations and NGOs actively work in this regard.  

The following are some responsibilities of a consumer:

1. Awareness: A consumer must be aware with regard to the availability of various goods and services such that he can take wise decisions.
2. Looking for Quality Marks: A consumer must always purchase goods and services which have the concerned quality certification marks. For instance, they must look for an ISI mark on electrical goods and the AGMARK on agricultural goods.
3. Asking for Cash Memo: For every purchase of a good or service, a consumer must always ask for a cash memo or bill. The bill is the proof of purchase and can be used for reference purposes.
4. Reading Labels: A consumer must always look and read carefully labels providing information about the product such as price, weight and expiry date of the product.
5. Honest Transactions: A consumer must always indulge in honest business transactions and should discourage illegal trade practices such as black marketing and hoarding.
6. Ensure Safety: A consumer must always ensure his own safety. He must carefully read the instruction manuals provided by the manufacturer before using the product.
7. Filing Complaint: In case the consumer finds a product to be defective in any regard, he must file a complaint in the appropriate forum.
8. Consumer Societies: Consumer organisations and societies must be formed which actively work towards consumer education and awareness.
9. Environment Protection: It is the responsibility of consumers to take care of the environment. They must avoid wastes and pollution. 

Consumer protection refers to making consumers aware and educated about their rights and responsibilities and to help them in seeking redressal for their grievances and complaints. Consumer protection is of prime importance for both consumers and businesses. The following are some ways in which the objectives of consumer protection can be achieved:

1. Self-Administration by Business: Every business must realise that consumer satisfaction is the key to its success. It must be realised that it is in their own long-term interest to protect and take care of the interest of consumers. They must increasingly work towards their satisfaction. As the organisation takes care of the interests of consumers, it builds goodwill and reputation in the market. They must avoid any unethical and exploitative business practices. Nowadays, as a step towards consumer protection, many business firms have set up special grievance cells and customer care centres for consumers where the queries or complaints of consumers are heard and suitable solutions are provided.
2. Formation of Business Associations: In India, many business and commerce associations have been formed with the basic objective of protecting consumer's interests. Two such organisations are Federation of Indian Chambers of Commerce and Industry (FICCI) and Confederation of Indian Industries (CII). The business organisations can become a member of these organisations. They provide guidelines regarding the code of conduct to the business regarding customer dealings.
3. Consumer Education and Awareness: A consumer must have knowledge and be aware of his rights and responsibilities. In addition, he must know the various reliefs available to him under the law in case he faces any form of exploitation.
4. Formation of Consumer Associations and Organisations: Consumer associations and organisations can play an important role in consumer protection. They actively work towards educating consumers regarding their rights, responsibilities and other related matters. For this, they organise training and workshops and regularly publish journals providing various important information. Moreover, these organisations encourage and assist consumers to file complaints and seek redressal in case they face any form of exploitation. Some important consumer organisations in India are Consumer Unity and Trust Society, Consumer Guidance Society of India and Consumer Protection Council.
5. Role of Government: The government has a key role in consumer protection. It is the government which passes various rules and legislations regarding consumer protection. For instance, the Government of India has provided the Consumer Protection Act. Under the Act, a three-tier machinery comprising the District Forum, State Commission and National Commission has been set up with the basic objective of providing redressal to consumer grievances and complaints. Other such Acts passed by the Government of India are the Contract Act, the Trade Marks Act and the Competition Act. 

Role of Consumer Organisations and NGOs in Consumer Protection

1. Consumer Education: NGOs work towards educating and spreading awareness among consumers regarding their rights and responsibilities. For this, they organise various training programmes and workshops.
2. Publishing Journals: They regularly publish journals and periodicals which provide information regarding various consumer problems, the legal remedies available and other related matters.
3. Legal Assistance: They help consumers in seeking redressal by providing them legal assistance.
4. Encouraging Protests against Exploitation: They encourage consumers to stand up against any form of exploitation or unfair trade practices faced by them.
5. Assistance in Filing Complaints: They encourage and assist consumers in filing complaints in appropriate forums. In addition, they file complaints on behalf of consumers.
6. Taking Initiatives: Besides encouraging individual consumers to file complaints in case they face exploitation, consumer organisations themselves take initiatives in filing cases on behalf of the public as a whole in matters of general interests.
7. Testing Quality of Products: To ensure that quality products reach consumers, they carry out quality tests for various products in laboratories, the results of which are then published. 

Under the Consumer Protection Act, a three-tier machinery comprising the District Forum, State Commission and National Commission have been formed with the basic objective of consumer redressal.

The following is a brief explanation of the three-tier machinery:

1. District Forum:

1. Set up: It is set up at the district level by the concerned State Government.
2. Comprises: The forum comprises one President and two or more other members, one of whom is a woman.
3. Complaint: A complaint can be filed in the District forum in case the value of goods, including the compensation claimed, is less than Rs 20 lakh.
4. Action taken: On receiving the complaint, the forum refers to the concerned party against whom the complaint is filed. The necessary tests are performed and reports are prepared. It hears both concerned parties and then passes a suitable judgement order.
5. Appeal: In case the aggrieved party is not satisfied with the judgement of the forum, it can file an appeal in the State Commission within 30 days of passing the judgement. 

2. State Commission:

1. Set up: It is set up at the state level by the State Government.
2. Comprises: The forum comprises one President and two or more other members, one of whom is a woman.
3. Complaint: A complaint can be filed in the District forum in case the value of goods, including the compensation claimed, is between Rs 20 lakh and Rs 1 crore.
4. Action taken: On receiving the complaint, the forum refers to the concerned party against whom the complaint is filed. The necessary tests are performed and reports are prepared. It hears both concerned parties and then passes a suitable judgement order.
5. Appeal: In case the aggrieved party is not satisfied with the judgement of the forum, it can file an appeal in the National Commission within 30 days of passing the judgement. 

3. National Commission:

1. Set up: It is set up by the Central Government.
2. Comprises: The forum comprises one President and four or more other members, one of whom is a woman.
3. Complaint: A complaint can be filed in the District forum in case the value of goods, including the compensation claimed, is more than Rs 1 crore.
4. Action taken: On receiving the complaint, the forum refers to the concerned party against whom the complaint is filed. The necessary tests are performed and reports are prepared. It hears both concerned parties and then passes a suitable judgement order.
5. Appeal: In case the aggrieved party is not satisfied with the judgement of the forum, it can file an appeal in the Supreme Court.  

Available Reliefs

The following reliefs are available under the Consumer Protection Act:

1. Repairing the defect in the goods or removing the deficiency in the service.
2. Providing a new good in place of the defective good.
3. Refunding the cost of the good or the service to the consumer.
4. Providing compensation in cash in case of loss or injury.
5. Payment of punitive damages.
6. Removing any misleading advertisements and passing orders for issuing a correct advertisement.
7. Crediting an appropriate amount to the Consumer Welfare Fund.
8. Ceasing the production and manufacturing of goods which are hazardous.