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Consumer laws in India

Consumer rights are the rights given to a "consumer" to protect him/her from being cheated by salesman / manufacturer. Consumer protection laws are designed to ensure fair trade competition and the free flow of truthful information in the marketplace
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National Consumer Disputes Redressal Commission (NCDRC)

Is the Highest court of appeal in matters related to Consumer Disputes in India, the presiding Judges in NCDRC are Retired Judges of The Supreme Court.

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Law Articles

Consumer Laws and Procedure

Consumer rights are the rights given to a "consumer" to protect him/her from being cheated by salesman/manufacturer. Consumer protection laws are designed to ensure fair trade competition and the free flow of truthful information in the marketplace.

The laws are designed to prevent businesses that engage in fraud or specified unfair practices from gaining an advantage over competitors and may provide additional protection for the weak and those unable to take care of themselves. Consumer Protection laws are a form of government regulation which 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" (that consumers have various rights as consumers), and to the formation of consumer organizations which help consumers make better choices in the marketplace.

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.

How to Lodge a Consumer Complaint
To provide simple, speedy and inexpensive redressal of consumer disputes, the CPA envisages a 3-tier quasi-judicial machinery at the National, State and District levels.

National Consumer Dispute Redressal Commission, known as National Commission, deals with complaints involving costs and compensation higher than Rs. One Crore.

State Consumer Dispute Redressal Commission, known as State Commission, deals with complaints involving costs and compensation higher than Rs. Twenty Lakh and less than Rs. One Crore.

District Consumer Dispute Redressal Forum

known as District Forum, deals with complaints involving costs and compensation less than Rs. Twenty Lakh. Consumers can file different types of complaints depending on their specific grievance by visiting the Consumer Court at the district, state or national level along with the documents required for filing the complaint. Following is a list of documents that the prospective complainants need to carry with them to the Consumer Court at the time of filing the complaint

Consumer Protection Law In India: The growing interdependence of the world economy and international character of many business practices have contributed to the development of universal emphasis on consumer rights protection and promotion.

Competition law and Consumerism
In the pursuit of globalization, India has responded to opening up its economy, removing controls and resorting to liberalisation. The natural corollary of this is that the Indian market should be geared to face competition from within the country and outside. The Monopolies and Restrictive Trade Practices Act, 1969 has become obsolete in certain respects in the light of international economic developments relating more particularly to competition laws and there is a need to shift our focus from curbing monopolies to promoting fair competition. A broad definition of competition is a situation in the market in which firms or sellers independently strive for the buyers' patronage in order to achieve a particular business objective. The law aims to promote healthy competition. It bans anti-competitive agreements between firms such as agreements to fix prices or to carve up markets, and it makes it illegal for businesses to abuse a dominant market position.

Judicial Interpretation of Medical Negligence under Consumer Protection:
Medical profession is one of the most oldest professions of the world and is the most humanitarian one. There is no better service than to serve the suffering, wounded and the sick. Aryans embodied the rule that, Vidyo narayano harihi (which means doctors are equivalent to Lord Vishnu). Since long the medical profession is highly respected, but today a decline in the standard of the medical profession can be attributed to increasing number of litigations against doctors for being negligent narrowing down to medical negligence. Hospital managements are increasingly facing complaints regarding the facilities, standards of professional competence, and the appropriateness of their therapeutic and diagnostic methods. When incidents like these began to rise,

Consumer the King:
The consumer protection in India is not a post modern thought, it has evolved through centuries. Its roots can be found in Manu Smiriti. Consumer Protection has had relevance since the existence of consumers in India. Manu smriti lays out a charter of ethics for sellers on how to sell consumer products to consumers. It also specifies the penalties that must be handed out to sellers who are unethical in their actions. Manu Smriti prohibits the mixing of one commodity with other. It also mandates proper disclosure of quantity and quality. In itself Manu Smriti does not focus on consumer protection but does show the concern of ancient society on consumerism matters.

Consumer Protection Act, An analysis of Branch Office:
Section 11 of the Consumer Protection Act states: "(2) A complaint shall be instituted in a District Forum within the local limits of whose jurisdiction," (a) the opposite party or each of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or 2 [carries on business or has a branch office or] personally works for gain, or (b) any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides, or 3 [carries on business or has a branch office], or personally works for gain, provided that in such case either the permission of the District Forum is given, or the opposite parties who do not reside, or 4 [carry on business or have a branch office], or personally work for gain, as the case may be, acquiesce in such institution; or (c) the cause of action, wholly or in part, arises.

Product Liability: Who is liable?
Product liability and consumer protection laws both differ from country to country. But the basic reasoning behind this is to deal with the protection and safety of consumer, even if the damage is caused by consumer's own negligence. The first general issue that arises from the product liability is that, what should be the criteria for this and what should be the limit to decide, that the defect in a product can harm any consumer

Instances of Disingenuous Advertisements and Consumers:
The sway of advertisements on consumer picking is incontrovertible. And it's this information that makes it very important that advertisements be fair and truthful. Misleading and false advertisements are not just unscrupulous; they warp competition and of course, consumer choice. False and misleading advertisements in fact violate several basic rights of consumers: the right to information, the right to choice, the right to be protected against unsafe goods and services as well as unfair trade practices.

A Vision of Food:
Our personal consumer choices have ecological, social, and spiritual consequences. It is time to re-examine some of our deeply held notions that underlie our lifestyles-David Suzuki Importance of Food: Food is an important part of religious observance and spiritual ritual for many faiths including Christianity, Judaism, Islam, Hinduism and Buddhism. The role of food in cultural practices and religious beliefs is complex and varies among individuals and communities

Consumer Justice In India:
In our day to day life we become consumer through buying goods or services. In the era of science and technology globalization, urbanization and modernization developed rapidly, which resulted into vast competition in market. The traditional view of buying goods and particular services changed and many products, services, and professions came under widened scope of consumer law. As a consumer we have much concern about the money, choice, health and safety of the life. Market is always dominated by the sellers and their attitude towards consumer as weaker section. In last few years' market is found to be influenced by the false, misleading advertisements or representations, bargaining, offering gifts, prizes, contests and hoardings attracting public for product or services.

Special and Differential Treatment in WTO:
The WTO Agreements containing special provisions give developing countries special rights and developed countries the possibility to treat developing countries in a more favoured way than other WTO Members. The provisions include, things like, longer time periods for implementing Agreements, commitments or measures to increase trading opportunities for developing countries. Such provisions are referred to as special and differential treatment provisions.

The Consumer Protection (Amendment) Act:
The year 1986 is a 'Magna Carta' in the history of Consumerism. It was this year that witnessed the enactment of the Consumer Protection Act. The first ever legislation in India of its kind which solely aimed at the grief staken consumers who the victims of the unfair trade practices and sub standard services rendered to them. The preamble to this Act reads as follows: An Act to provide for better protection of the interests of the consumers and to make provisions for the establishment of consumer councils and other authorities for the settlement of consumers' disputes and fpr matter connected therewith. Thus the preamble to this Act makes the intention of the framers of this Act crystal clear.

Maximum Retail Price:
Under the Weights and Measures (Packaged Commodities) Rules, all packed goods should carry certain essential information on the contents of the package, such as its weight or volume, the name and address of the manufacturer, the date of manufacture, and in case of food packages, the best before date and, of course, the maximum retail price (MRP). Under the Consumer Goods (Mandatory Printing of Cost of Production and Maximum Retail Price) Act, 2006, certain guidelines has been provided so that the consumer can not charged over to the maximum price printed on the goods by the manufacturer.

Consumerism in the Globalize world:
It would be in fitness of the fact to recall the greatest of Arab historians, Ibn Khaldun saying: That in civilization there is a limit that cannot be overstepped. When prosperity and luxury come to a people, they are followed by excessive consumption and extravagance, with which the human soul itself is undermined, both in its worldly well-being and in its spiritual life [1] particularly in context of globalization, liberalization and consumerism in India. This is what happening in India under the auspices of MNCs and trade policies of developed countries which are supposedly formulated to devour the third world consumer kingdom.

Unethical Drug Promotion - An Emerging Threat for the Indian Society:
What Is Unethical Drug? The main objective of ethical criteria for medicinal drug promotion is to support and encourage the improvement of health care through the rational use of medicinal drugs. In this context the ethical criteria start from the validity of the drug itself: is the drug or combination of drugs rational. According to a World Health Organization (WHO) survey, 35% of the world's spurious drugs are produced in India, which has a Rs. 4,000-crore fake drugs market, the largest in the world.

Consumer Protection Act, 1986 - 2002 Amendments- Laurels and Loopholes:
It would not be an exaggeration to point out that the Consumer Protection Act, 1986, is one of the most important legislations that governs the life of every human being in his transactions with the society for availing goods and services provided by others. It not only comes into daily use but prevents the exploitation of common man, the consumer, at the hands of the affluent and moneyed business man or service provider. Hence any change or amendment whatsoever, in the Act directly affects the common people thereby needing a close scrutiny of the amendments thereto.

Services - Consumer Protection Act:
Consumer is the purpose and most powerful motivating force of production, yet at the same time consumer is equally vulnerable segment of the whole marketing system. Attempts have been made to guard the interest of the consumer. In 1986, Government of India enacted a comprehensive legislation-Consumer Protection Act, to safe guard the interest of the consumer. The Consumer Protection Act, 1986, applies to all goods and services, excluding goods for resale or for commercial purpose and services rendered free of charge and under a contract for personal service. The provisions of the Act are compensatory in nature. It covers public, private, joint and cooperative sectors.

Analyzing The Consumer Protection (Amend) Bill, 2002:
The Consumer Protection (Amendment) Bill, 2001 was introduced in the Rajya Sabha on 26th April 2001. After certain amendments the Consumer Protection (Amendment) Bill, 2002 was passed by the Rajya Sabha at its sitting held on 11th March, 2002 and was referred to the Lok Sabha. At its sitting held on 30th July 2002, the Lok Sabha passed it with certain amendments. The Bill so passed was returned to the Rajya Sabha with those amendments for its consideration of them. The Bill could not be taken up for consideration on 6th August 2002, as the House stood adjourned that day without transaction of any business. The Bill may now be moved before the Rajya Sabha only during its next session.

Phenomenon of Consumerism:
Today, consumer is called the king of the market. He is at the centre stage of all market activities. It is constant endeavour of producers that the production of product must conform to the needs of consumer. In addition to the satisfaction of consumer, it also the endeavour of producer that their sale should be maximum. They, therefore try to increase their sales by all possible means. Some of the means adopted to increase sale are such as to serve both the producers and the consumers. On the other hand, some of the methods adopted to increase the sale are such as to sub serve the interest of producers but the same against the interest of consumer. In other words the consumers are exploited.

Criminalization of Politics:
After 60 years of India's independence the lives of commoners is far worse than under Britishers. The benefits of independence have reached only few, thus creating islands of few ultra rich people surrounded by vast sea of utterly poor. The rich people in nexus with those in power are getting favourable laws enacted to suit their ends. Those in power are shamelessly enjoying 5-star luxuries all at tax payer's expense, while more then 50 million are starving to death. The criminalization of politics, executive and judiciary is almost complete. The corruption has spread its tentacles far and wide, there is corruption from womb to tomb, from maternity hospital to grave yard. The injustices mated out, the atrocities perpetrated by public servants are worse than Britishers. The biggest confounding factor in the political environment of business is criminalization of politics: people with criminal backgrounds becoming politicians and elected representatives. Around 20% of the members of the current Lok Sabha have criminal cases pending against them. The charges in several of these cases are of heinous crimes such as murder, robbery, kidnapping, and not just violation of Section 144, or something similar.

Indian Domestic Arbitration:
In India, laws/rules that govern the arbitration process are laid down in Arbitration and Conciliation Act, 1996. But the act itself does not give any right to any party unless parties have entered into an arbitration agreement/contract for adjudication of dispute(s)/difference(s) by way of arbitration. Section 2(1) (b) of the act says that an arbitration agreement means an agreement referred to in section 7. Section 7(1) further states that an arbitration agreement means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. The act does not prescribe any formal form for arbitration agreement. It says that "an arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement" like any other agreement- Section 7(2). But an arbitration agreement shall be in writing - Section 7(3). Here the term "writing" has special meaning that has been clarified in sub-section 4 of section 7

Fourth Estate:
The stance taken by Delhi High court against the Mid day journalists for allegations against ex-chief justice Y.K.Sabharwal had taken many by surprise ruffling the feathers of big brains of the country and small brained social observers alike. The media played its role well in accordance with the spirit of giving the right information at the right time. But coupled with the contempt proceedings initiated by the HC it has raised many questions in the intellectual circles as to what is of greater importance - the free judiciary or a free press. Should judiciary be left alone to freely execute its functions as enjoined by the Constitution and statutes emanating from it and to deal with malfunctioning on its own or the press should be given a free rein to criticize every action of state organs.

Consumer Protection Act:
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 consum­ers' disputes and for matters connected therewith. BE it enacted by Parliament in the Thirty-seventh Year of the Republic of India as follows

SC Rules Relevant to Consumer Protection Act
In exercise of the powers conferred by Article 145 of the Constitution and all other powers enabling it in this behalf, the Supreme Court hereby makes, with the approval of the President, the following rules further to amend the Su­preme Court Rules, 1966

Rights of a Consumer:
Means right to be protected against the marketing of goods and services, which are hazardous to life and property. The purchased goods and services availed of should not only meet their immediate needs, but also fulfill long term interests. Before purchasing, consumers should insist on the quality of the products as well as.

Commentary on Consumer Protection Act:
The moment a person comes into this would, he starts consum­ing. He needs clothes, milk, oil, soap, water, and many more things and these needs keep taking one form or the other all along his life. Thus we all are consumers in the literal sense of the term.

Consumer laws in India - Consumer lawyers in India

Section 2 (d) of the Consumer Protection Act, 1986, defines 'consumer' as any person who-
(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

(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 1[hires or avails of] the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payments, when such services are availed of with the approval of the first-mentioned person.

In our day to day life we become consumer through buying goods or services. In the era of science and technology globalization, urbanization and modernization developed rapidly, which resulted into vast competition in market. The traditional view of buying goods and particular services changed and many products, services, and professions came under widened scope of consumer law. As a consumer we have much concern about the money, choice, health and safety of the life. Market is always dominated by the sellers and their attitude towards consumer as weaker section. In last few years' market is found to be influenced by the false, misleading advertisements or representations, bargaining, offering gifts, prizes, contests and hoardings attracting public for product or services.

Therefore, keeping view of consumer interest legislative and judicial contributions played a significant role in consumer justice. There is need to prevent exploitation of consumer from these sales, manufacturing or unfair trade practices. The scope of the Act extended to public services and utilities also - - says Nagnath Chandrakant Borphalkar (Consumer laws in India)

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Supreme Court Decisions on Consumer Cases

New India Assurance Company Limited v Abhilash Jewellery
The complainant/respondent, who had taken a jeweller's block policy, lodged a claim with the opposite party insurer for loss of gold ornaments. The insurer repudiated the claim on the ground that the loss occurred when the gold was in the custody of an apprentice, who was not an employee (because the policy stipulated that for indemnification of the loss, the property insured had to be "in the custody of the insured, his partner or his employee"). The National Commission allowed the complaint holding that an apprentice was an 'employee' since section 2(6) of the Kerala Shops and Commercial Establishments Act (as well as some other statutes) defined an 'employee' to include an 'apprentice'. The Supreme Court, however, held that the word 'employee' in the contract of insurance mentioned had to be given the meaning in common parlance. The definition in the local Act, including an 'apprentice' in the category of 'employee', was only a 'legal fiction', which is a concept in law and could not be applied to an insurance contract. The Court, therefore, allowed the appealClick here for complete judgment

Karnataka Power Transmission Corporation v Ashok Iron Works Private Limited
The appellant corporation contended that the complaint filed by the respondent was not maintainable as (i) a company is not a 'person' under section 2(1)(m) of the Consumer Protection Act, 1986 (CPA); (ii) the complainant is not a 'consumer' within section 2(1)(d) of the said Act since it purchased electricity for commercial production; and (iii) disputes relating to sale and supply of electricity were not covered under 'service' under section 2(1)(o) of the CPA. The Apex Court rejected the appellant's contention that a company was excluded from the definition of 'person'. In this, the Court relied upon the English Court decision in Dilworth v Commissioner of Stamps Click here for complete judgment

HDFC Bank Limited v Balwinder Singh
The complaint was of the bank, or its loan recovery agent, employing musclemen to take forcible repossession of the hypothecated vehicle and thus causing physical harassment and mental trauma to the complainant. The District Forum allowed the complaint and directed the bank to pay compensation of Rs. 4 lakh for repossessing the vehicle in this manner and reselling it to a third party. The State Commission confirmed the order in appeal. Dealing with the bank's revision petition, the National Commission expressed shock that the bank had hired musclemen directly or through its recovery agents. Click here for complete judgment

Malka Tarannum v Dr. C. P. Gupta
The District Forum allowed the complaint of the complainant that there was negligence in applying (the first) plaster cast on the complainant's daughter's fractured hand, which led to the need to apply the plaster for the second time. In appeal, the State Commission dismissed the complaint and also held that the complainant was not a consumer since he was not charged any fee for the treatment. In revision, the National Commission held that application of the plaster for the second time did not imply medical negligence on the first occassion since application of POP slab (also known as temporary cast) was a normal procedure adopted in the first instance whenever there was swelling at the site of the injury. Relying on the Supreme Court decision in Jacob Mathew v State of Punjab and Another [(2005) 6 SCC 1], the Commission observed that the doctor who had applied the plaster in the first instance was a senior orthopaedic specialist with considerable experience and the complainant could not dispute his professional decision on the basis of mere allegations, without any expert evidence. Click here for complete judgment

Arvind Shah (Dr.) v Kamlaben Kushwaha
The complainant alleged that her deceased son, aged 20 years and otherwise healthy, died as a result of medical negligence on the part of the appellant doctor (original opposite party) who administered wrong treatment. The State Commission awarded to the complainant a compensation of Rs. 5 lakh with interest and costs. In appeal, the National Commission, on consideration of the material on record, came to the conclusion that the two medical prescriptions, which the doctor sought to deny, could have been written only by him. It also observed that though, in the appeal, the doctor admitted for the first time to having treated the patient; he did not produce any prescription on record. More important, the two prescriptions available on record did not mention any of the patient's complaints/symptoms, the doctor's clinical observations on examining the patient. Click here for complete judgment

Sehgal School of Competition v Dalbir Singh
The complainant sought refund from the opposite party's coaching school after only one year of the two-year course on the ground that the coaching was not up to the mark. The District Forum directed refund of the fees and the opposite party's appeal was dismissed. In revision, the petitioner contended that payment of lump sum fees for two years was a condition (of the contract) that and no part of the fees could either be refunded or transferred under any circumstances. The Commission held that this condition was one sided and biased in favour of the opposite party, against natural justice. Click here for complete judgment

Medical Superintendent, St. Gregorious Mission Hospital v Jessy and Another
The District Forum awarded Rs. 2.75 lakh along with interest to the complainants, viz., the wife and daughter of the deceased since the opposite party hospital had been negligent in not providing due care on account whereof the deceased who was undergoing alcoholic psychosis treatment for de-addiction of drugs, had committed suicide by hanging in the hospital. In its revision petition, the hospital contended that it was impossible to provide 24-hour service to look after the affairs and needs of each patient. The National Commission held that the patient was allowed to move away on his own from his ward into an empty ward without being noticed by the nurses and ward boys. The patient hung himself with lungi which was not noticed Click here for complete judgment

Life Insurance Corporation of India v Gowramm
The petitioner insurer repudiated the life insurance policy in the name of the respondent's late husband (insured) on the ground of deliberate misstatements and withholding of correct facts regarding the health of the insured. The lower Fora rejected the various contentions of the insurer and allowed the complaint. Before the National Commission, the insurer relied upon the Commission's decision in L.I.C. of India and Another v Parveen Dhingra [II (2003) CPJ 70 (NC)] and contended that revival of the policy constituted a new contract between the parties and the limitation period of two years Click here for complete judgment

Narinder Kumar Suneja v R.K. Goel
In revision, the petitioner who was a lawyer claimed that he was entitled to retain the fee which he took from the respondent since the respondent had executed the power of attorney/vakalatnama and handed over some papers to the petitioner in connection with a proposed case to be filed. He claimed having wasted valuable time when the respondent met and sought expert advice. The National Commission referred to the order of the State Commission which, in turn, referred to the District Forum's order holding that the opposite party (petitioner) was not entitled to retain the fee when he did not perform the duty for which the fee was meant and that a complaint made by the complainant to the Bar Council related only to misconduct on the part of its member (i.e., petitioner) whereas the Consumer Fora were required to determine whether proper service had been rendered or not. The Commission relied upon D.K. Gandhi v M. Mathias [III (2007) CPJ 337 (NC)] in holding that deficiency Click here for complete judgment
Rajasthan Financial Corporation v M.K. Bhoot & Another
The complainant/respondent participated in an auction conducted by the petitioner for moveable and immoveable properties. The complainant deposited the requisite sum/earnest money at the time of making his bid, which bid was then accepted. Due to non-payment of 25% of the bid amount, the sum/earnest money was forfeited. The District Forum dismissed the complaint for refund of the earnest money but the State Commission allowed the appeal. Click here for complete judgment

K. A. Bhandula & Another v Indraprastha Apollo Hospital & Others
Complainant no. 1 (a patient of nasopharyngeal cancer) made various allegations of medical negligence against the opposite party hospital and consultant doctor. The National Commission partly allowed the complaint holding first that the hospital was negligent in not duly preserving the biopsy tissue sample (in formalin) after the opposite party consultant doctor carried out the biopsy of the nasal tumour of the complainant. It rejected the hospital's plea of mere 'human error.' In this the Commission relied on the Supreme Court decision in Savita Garg v. Director, National Heart Institute [IV (2004) CPJ 40 (SC)]. Click here for complete judgment

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