File Copyright Online - File mutual Divorce in Delhi - Online Legal Advice - Lawyers in India

Consumer Guardianship: Tackling Deceptive Practices And Service Shortfalls Under The Consumer Protection Act, 2019

Goods and services are fundamental to human survival and the enhancement of living standards. They encompass everything from basic necessities such as food, clothing, and shelter to advanced services that improve quality of life and contribute to economic growth. Beyond mere survival, the consumption of goods and services is integral to achieving higher living standards, promoting well-being, and enabling individuals to lead fulfilling lives.

In the commercial realm, goods and services play a critical role. Businesses engage in the purchase and resale of goods to generate profit, driving economic activity and creating wealth. Services, on the other hand, are pivotal in improving efficiency and productivity across various sectors. Whether it's through professional services, technological support, or logistical enhancements, the effectGoods and services are fundamental to human survival and the enhancement of living standards. They encompass everything from basic necessities such as food, clothing, and shelter to advanced services that improve quality of life and contribute to economic growth. Beyond mere survival, the consumption of goods and services is integral to achieving higher living standards, promoting well-being, and enabling individuals to lead fulfilling lives.

In the commercial realm, goods and services play a critical role. Businesses engage in the purchase and resale of goods to generate profit, driving economic activity and creating wealth. Services, on the other hand, are pivotal in improving efficiency and productivity across various sectors. Whether it's through professional services, technological support, or logistical enhancements, the effective utilization of services can significantly impact the performance and success of businesses.

In this context, the Consumer Protection Act, 2019, serves as a cornerstone for safeguarding consumer rights in India. It provides a comprehensive definition of a consumer under Section

2(7)[1]:
Section 2 (7) Consumer means any person who:
  1. 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
     
  2. 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 purpose."[2]
This definition is pivotal as it delineates the boundaries between personal consumption and commercial exploitation.[3]By explicitly excluding those who obtain goods for resale or any commercial purpose, the Act focuses on protecting individuals who are the end users of products and services, ensuring their rights are upheld against unfair practices.

The Consumer Protection Act, 2019, emerged in response to the evolving complexities of the modern marketplace.7 With rapid advancements in technology and the proliferation of digital platforms, consumers are exposed to new forms of deception and exploitation.[4] Companies, in their pursuit of profit, have adopted practices that can mislead and harm consumers. These practices encompass various deceptive strategies used by companies to manipulate consumer behavior and market dynamics.

The first reference here for the manipulate consumer practices is made towards the "Publishing misleading advertisements" involves creating promotional content that exaggerates or falsifies the benefits of products or services. This can lead consumers to make decisions based on inaccurate information, ultimately resulting in disappointment or financial loss. For example, misleading claims in the skincare industry have led to significant legal actions and damaged brand reputations. The classic case of the skincare company which claimed "clinically proven" to "boost genes", leading to "visibly younger skin in just seven days" had faced the risk of eventually paying hefty fine for the false and unsubstantiated claims.9

Secondly as most witnessed in the unregulated market space, selling of the refurbished goods as new is another unethical practice in existence. Small vendors repurpose returned or used items within the unregulated spaces, presenting them as brand new to unsuspecting customers. This not only deceives consumers but also undermines trust in the marketplace.

Thirdly, even engaging celebrities to endorse products or services deceptively can also mislead consumers. Celebrity endorsements have a powerful influence on consumer purchasing decisions.10 However, when these endorsements are based on false claims or when the celebrity does not actually use the product, it can mislead consumers. A recent example involves Indian cricketers (athletes) endorsing pan masala products, which drew criticism for promoting harmful substances.11 This not only mislead the consumers to believe that by consuming the same product, one might become equivalent to the one's who are promoting it, without knowing that these deceptive endorsements are only done for the purposes to attract more consumer driven behaviour

Fourthly, engaging in unfair or unethical trade practices includes manipulating product information and making false claims about product efficacy. Companies might advertise a product's effectiveness in ways that are not supported by scientific evidence, leading consumers to have unrealistic expectations. For example, dietary supplements are often marketed with exaggerated claims of health benefits without sufficient clinical evidence.

Fifthly, providing substandard services entails offering services that fail to meet the advertised standards. This can result in consumer dissatisfaction and potential harm, especially in industries like healthcare or finance where the stakes are high. For example, a financial advisory service promising high returns but providing poor investment advice can lead to significant consumer losses.

And lastly, the manipulating prices through artificial inflation or misleading discount offers is another deceptive practice. Companies might create a false sense of scarcity or advertise fake discounts to entice consumers into making purchases. Another tactic is creating a false sense of scarcity. Companies might claim that a product is available in limited quantities or for a limited

9 5 misleading advertising examples Publift, https://www.publift.com/blog/misleading-advertising-examples (last visited May 19, 2024) 10 Roberts, A. J. (2020). False influencing. Geo. LJ, 109, 81.

11 Disgusting! is money so important?:
Gambhir Blasts Sehwag, Gavaskar for endorsing "Pan Masala" with "Sachin" remark Hindustan Times, https://www.hindustantimes.com/cricket/disgusting-is-money-so-important-gautam-gambhir-blasts-virender-sehwag-sunil-gavaskar-endorsingpan-masala-sachin-remark-101686660167569.html (last visited May 19, 2024)

time only, pushing consumers to make impulsive purchases out of fear of missing out. This sense of urgency can cloud judgment, leading to hasty decisions without thorough consideration of the actual value or necessity of the product.

Such practices not only deceive consumers but also undermine trust in the market. They can lead to dissatisfaction and a sense of betrayal when consumers realize they have been misled. Additionally, these practices are often legally questionable and can lead to regulatory actions. For example, the National Consumer Disputes Redressal Commission (NCDRC) in India has addressed cases where retailers charged VAT on discounted MRP (Maximum Retail Price), labeling it as an unfair trade practice. This highlights the legal and ethical implications of such deceptive strategies.[5]

The list of unfair trade practice, continues, with lots of example there in existence. The roots of ethical trade practices can be traced back to ancient times. Historical texts such as the Manu Smriti highlight the importance of fairness and integrity in business dealings. Sage Manu[6], in his writings, advocated for stringent measures to curb unfair practices. For instance, the Manu Smriti prescribed severe punishment for those engaging in fraudulent trade activities. Relevant abstract is reproduced here -[7]

"Manu Smriti advocated severe punishment for unfair business practices. To deal with faulty weights and measures, the Manu Smriti provided that the king must duly mark all weights and measures and the process should be re-examined every six months."

In contemporary society, similar to such historical practices from the past, the Consumer Protection Act, 2019, builds upon these foundational principles, adapting them to address the sophisticated and dynamic challenges of the modern economy. This Act not only delineates the rights and responsibilities of consumers but also establishes mechanisms to enforce these rights, thereby fostering a fair and transparent marketplace. By empowering consumers with legal recourse and promoting ethical business practices, the Act aims to create a balanced ecosystem where consumer interests are protected, and businesses can thrive without resorting to deceptive tactics.

In 1986, the Government introduced the Consumer Protection Act, which for the first time legally specified the rights and responsibilities of the consumer. This groundbreaking legislation aimed to safeguard consumer interests and ensure fair practices in the marketplace. The rights of consumers are further detailed under section 2(9) of the Consumer Protection Act of 2019, which expanded and reinforced the original provisions.[8] This Act is crucial as it provides consumers with several fundamental rights:

  1. Right to be Heard: Consumers have the right to voice their complaints and concerns regarding products and services. This ensures that their grievances are acknowledged and addressed in a timely manner.
  2. Right to Have Safe Quality Goods: Consumers are entitled to receive products that meet safety standards and are free from defects. This right protects consumers from hazardous goods and ensures their well-being.
  3. Right to Choose from Different Options Available in the Market: Consumers have the freedom to select from a variety of products and services, fostering a competitive market that encourages better quality and prices.
  4. Right to Know the Necessary Information about the Product to Avoid Any Unforeseen Damage: Consumers should be provided with complete and accurate information about the products they purchase. This includes details on usage, risks, and benefits, helping consumers make informed decisions and avoid potential harm.
  5. Right to Seek Compensation: If any damage is caused to the consumer after the consumption of a product, they have the right to seek compensation. This can be pursued through the court system or via arbitration, ensuring that consumers are protected and can receive redress for any harm suffered.

In furtherance to this, a notable case highlighting the significance of consumer rights is Z. Ahmed vs. M/s. Coca-Cola India[9]. This case, filed with the State Consumer Disputes Redressal Commission (SCDRC), underscored the critical aspects of consumer protection laws and the enforcement of consumer rights, which is referred here -

"Coca-Cola introduced a prize scheme in September 1998 by offering various prices for bottles having crowns with a yellow band. The prices included 5 Honda City cars. The scheme also had several conditions. The Complainant bought one such bottle which entitled him to one such car as the printed liner on his bottle matched the winning criteria as per Condition 6 of the scheme.

The Complainant sent the liner via postal mail to Coca-Cola. Despite Condition 9 stipulating that entries must be submitted before 28.10.1998 by ordinary post, the Complainant alleged that entries via other postal means were accepted by Coca-Cola through its appointed agency, M/s Bansal & Co., Chartered Accountants.

After receiving no clear response, the Complainant issued a legal notice. The legal notice was not replied to either. Feeling aggrieved, the Complainant filed a consumer complaint in the State Consumer Disputes Redressal Commission, Delhi ("State Commission"). The State Commission held that Coca-Cola engaged in unfair trade practices as the prices were only 10-15 for crores of sold bottles. This was considered to deceive people by prompting them to buy Coca-Cola even if they didn't consume it normally. The State Commission directed Coca-Cola to deposit Rs. 1 Lakh in the State Consumer Welfare Fund (Legal Aid) and pay Rs. 25,000/- as compensation to the Complainant."[10]

The significance of this case extends beyond the immediate parties involved. It set a precedent for similar disputes, empowering other consumers to come forward and seek justice against deceptive practices. The judgment also served as a warning to corporations about the potential consequences of misleading consumers, thereby promoting greater transparency and accountability in marketing strategies. Additionally, the Consumer Protection Act has evolved over the years to address new challenges in the marketplace. The 2019 amendments introduced more stringent measures and broader definitions of unfair trade practices, further strengthening consumer rights. These changes reflect the ongoing commitment to adapting the legal framework to protect consumers in an everchanging economic landscape.

Unfair Trade Practices
The 2019 Consumer Protection Act in India addresses unfair trade practices, which encompass deceptive, fraudulent, or unethical behaviors by businesses that harm consumers. Key examples include misleading representations about the quality or price of goods, selling counterfeit products, hoarding goods to manipulate prices, and failing to meet safety standards. The Act aims to protect consumers from such practices by defining them clearly and establishing stringent measures to ensure market fairness and transparency.

To enforce these protections, the Act sets up Consumer Dispute Redressal Commissions at various levels. These bodies handle consumer complaints, impose penalties for misleading advertisements, and ensure compliance with safety standards. The Act also introduces the concept of product liability, holding businesses accountable for harm caused by defective products. By empowering consumers with rights to information, safety, and redressal, the Act promotes a fair and competitive market, ensuring consumers can trust the products and services they purchase.

It is further defined in the Act. According to Section 2(47) of the Consumer Protection Act, 2019 "unfair trade practice" means a trade practice which, to promote the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice including any of the following practices, namely:
  1. Making any statement, whether orally or in writing or by visible representation including by means of electronic record, which:
     
    1. falsely represents that the goods are of a particular standard, quality, quantity, grade, composition, style or model;
    2. falsely represents that the services are of a particular standard, quality or grade;
    3. falsely represents any re-built, second-hand, renovated, reconditioned or old goods as new goods;
    4. represents that the goods or services have sponsorship, approval, performance, characteristics, accessories, uses or benefits which such goods or services do not have;
    5. represents that the seller or the supplier has a sponsorship or approval or affiliation which such seller or supplier does not have;
    6. makes a false or misleading representation concerning the need for, or the usefulness of, any goods or services;
    7. 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;
    8. makes to the public a representation in a form that purports to be—
      1. A warranty or guarantee of a product or of any goods or services; or
      2. 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;
    9. 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;
    10. gives false or misleading facts disparaging the goods, services or trade of another person, permitting the publication of any advertisement, whether in any newspaper or otherwise, including by way of electronic record, 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.
Examples of unfair trade practices can be seen in various cases where companies have made misleading claims about their products. Hindustan Unilever Ltd (HUL) was found to be misleading consumers with its Lever Ayush soap by claiming it was based on 5,000-year-old Ayurveda scriptures and contained 15 Ayurvedic herbs.[12] These claims were inadequately substantiated, leading consumers to believe in the authenticity and traditional efficacy of the product without proper evidence. Such practices exploit consumer trust and misrepresent the true nature of the product.

Another instance involves cab aggregator Uber India, whose advertisement promised a discount of Rs 500 on the next 10 rides with the claim "save Rs 500 on your next 10 Uber rides and ride Uber and the discount will auto apply."[13]The Advertising Standards Council of India (ASCI) found this claim misleading, as it failed to clarify the terms and conditions associated with the offer, thereby deceiving consumers about the actual benefits. Similarly, Indian Oil Corporation was reprimanded for its Servo oil advertisement that claimed it was "India's largest selling trusted lubricants."[14]

This claim was found to be misleading as it did not provide adequate evidence to support the assertion, potentially deceiving consumers about the product's market position and reliability. These examples highlight the importance of truthful advertising and the need for companies to substantiate their claims to maintain consumer trust and market integrity. E. Important Judgements in the Regime of Unfair Trade Practices

As discussed above, the consumer forums play a vital role in upholding consumer rights and ensuring fair trade practices. These forums, established under the Consumer Protection Act 2019, provides a platform for consumers to seek redressal for grievances without navigating the conventional court system. Understanding the significance of landmark judgments from these forums is crucial for both consumers and businesses.

The reference herein is further made to the notable decisions from the District, State, and National Consumer Disputes Redressal Commissions. Each case highlights the application of consumer protection laws, illustrating the forum's role in addressing unfair trade practices, product tampering, misleading advertisements, and more. By examining these judgments, readers will gain insight into the legal precedents set by these forums, the responsibilities of businesses, and the rights of consumers. Through these examples, the article further aims to enhance awareness and understanding of the consumer protection landscape, reinforcing the importance of fair and transparent business practices.
  1. In District Dispute Redressal Commission:
    The Bench of Dr Shyam Sundar Lata (President) and Afsana Khan (Member), relying on Rupasi Multiplex v. Mautusi Chaudhuri, 2015, opined that restaurants and cafes have a legal and moral obligation to provide free regular drinking water to their patrons.[15]
     
  2. National Consumer Disputes Redressal Commission (NCDRC):
    While deciding upon the instant complaint concerning alleged unfair trade practice followed by Flipkart of tampering with a product's MRP, the Bench of Mamidi Christopher (President), S. Sandhya Rani and K. Venkateshwarlu (Members) observed that there is a tripartite contract between the seller, service provider (herein 'Flipkart') and the consumer. The seller and service provider are liable for any defect, deficiency of service and unfair trade practice on the services provided or goods/products sold by them. It was held that Flipkart had tampered with the original MRP of the product (herein 'oil sachet') and charged an amount more than the MRP from the consumer, thereby illegally extorting the consumer and causing economic loss and mental agony. Flipkart's conduct thereby falls within the ambit of deficiency in service and unfair trade practice.[16]
     
  3. State Consumer Disputes Redressal Commission (SCDRC):
    While deciding the instant appeal filed by VLCC Health Care Ltd. against the order of the District Consumer Court whereby they were directed to refund and compensate the respondent for the mental agony caused due to the failure of VLCC's weight loss program; the Bench of Raj Shekhar Attri, J. (President) and Rajesh K. Arya (Member) observed that VLCC's act of giving false assurances on one hand by way of misleading advertisements, and on the other hand obtaining a declaration from the consumers qua no guarantee/assurance regarding the result and outcome of the program, is a clear example of unfair trade practices adopted by them, and for which the consumers cannot be made to suffer at their hands. "The appellants are very much held liable to refund the amount paid by the respondent purely based on their advertisement, 'Lose 4 Kgs in 30 days or take your money back! [17]
     
  4. National Consumer Disputes Redressal Commission (NCDRC):
    While considering the instant complaint instituted by the Department of Consumer Affairs, Government of India seeking to prevent Nestle from undertaking any unwanted manufacturing activity of Maggi Masala Noodles and Maggie Oats Noodles and other variants with the alleged deceptive labelling of "No Added MSG", as these commodities are likely to jeopardize the general health conditions of people who consume these products extensively; the Bench of A.P. Sahi, J., (President) dismissed the complaint on the ground that neither the violation of the advisory dated 11-05-2013 nor the violation of the provisions of either the Food Safety and Standard Act, 2006, or any ingredient under the Consumer Protection Act, 1986, has been established in the instant complaint. It was noted that the scientific analysis and the clarifications issued by the Government itself did not indict Nestle India, therefore, there is no material to support the allegations made in the complaint to proceed any further.[18]

Deficiency In Services
According to Section 2(11) of the Consumer Protection Act 2019, "deficiency"

"Means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service and includes—
  1. Any act of negligence or omission or commission by such person which causes loss or injury to the consumer; and
  2. Deliberate withholding of relevant information by such person to the consumer.
As referred above, as per the Consumer Protection Act 2019, deficiency in services refers to any fault, imperfection, shortcoming, or inadequacy. Here are some examples of the deficiency in services in order to understand the practical side:
  1. Defective Product Due to Manufacturer's Negligence:
Example: A car sold by a seller to a consumer has defective brakes due to the negligence of the manufacturer. This poses a significant safety risk and is considered a deficiency in service because the product does not meet the expected standards of safety and quality. ii. Non-functional Facilities in a Service:

Example: An AC hotel room is sold to the consumer, but the AC is not working. This situation constitutes a deficiency in service because the hotel failed to provide the amenities that were promised and expected by the consumer.

These examples illustrate how deficiency in services can arise from either a defect in the product itself or a failure to deliver promised services. Any consumer who has suffered deficiency of service is entitled for the compensation as in accordance with Consumer Protection Act, 2019. Can the failure of promised services result in a deficiency in services?

Yes, failure of promised services results in a deficiency in services because every service provider aims to serve the consumers with the best of their efforts and satisfy them as per their expectations. However, there may be situations in which the consumer is not able to satisfy the needs for which he is paying. There may also be dissatisfaction amongst the consumers if they do not receive what was promised to them at the time of negotiations.[19]

Remedies for deficiency in services
According to Chapter VII(Section 88-93) of the Consumer Protection Act 2019, the 'offences and penalties' are provided for deficiency in services and unfair trade practices.

For instance, Section 90 has stated that:
Punishment for manufacturing for sale or for storing or selling or distributing or importing spurious goods.
  1. Whoever, by himself or by any other person on his behalf, manufactures for sale or stores or sells or distributes or imports any spurious goods shall be punished if such act:
    1. causing injury not amounting to grievous hurt to the consumer, with imprisonment for a term which may extend to one year and with a fine which may extend to three lakh rupees;
    2. causing injury resulting in grievous hurt to the consumer, with imprisonment for a term which may extend to seven years and with a fine which may extend to five lakh rupees;
       
    3. results in the death of a consumer, with imprisonment for a term which shall not be less than seven years, but may extend to imprisonment for life and with a fine which shall not be less than ten lakh rupees.
  2. The offences under clauses (b) and (c) of sub-section (1) shall be cognizable and non-bailable.
     
  3. Notwithstanding the punishment under sub-section (1), the court may, in case of first conviction, suspend any licence issued to the person referred to in that sub-section, under any law for the time being in force, for a period up to two years, and in case of second or subsequent conviction, cancel the licence.
With a focus on Section 90, which addresses the punitive measures for manufacturing, storing, selling, distributing, or importing spurious goods. It is pivotal to note that the act ensures the integrity of goods sold in the market. The section explicitly outlines the repercussions for individuals or entities involved in the dissemination of spurious goods. Spurious goods, often synonymous with counterfeit or fake products, pose significant risks to consumer health and safety, making stringent regulations essential.

Subsection (1): Discusses Penalties Based on Severity of Consumer Harm
Clause (a):
The law herein prescribes a punishment for those whose actions result in non-grievous injury to consumers. The term "non-grievous" implies injuries that do not pose long-term harm or risk of serious health consequences. For such offenses, the Act mandates imprisonment for a term extending up to one year, coupled with a fine that may reach up to three lakh rupees. This clause underscores the importance of holding manufacturers and sellers accountable even for lesser injuries, thereby deterring negligence and malpractice.

Clause (b):
For more severe cases where spurious goods cause grievous hurt to consumers, the penalties are substantially harsher. "Grievous hurt" typically refers to serious injuries that can have long-term health implications. Offenders in these cases face imprisonment for up to seven years and a fine that can extend to five lakh rupees. This provision reflects the legislative intent to impose stricter consequences for actions resulting in significant consumer harm, emphasizing the gravity of such offenses.

Clause (c):
The most severe penalties are reserved for cases where the consumption or use of spurious goods results in the death of a consumer. In such tragic instances, the law mandates a minimum imprisonment term of seven years, which can extend to life imprisonment. Additionally, the offender must pay a fine not less than ten lakh rupees. This stringent punishment serves as a powerful deterrent against the distribution of deadly counterfeit products, underscoring the critical need to protect consumers' lives.

Subsection (2): Cognizability and Non-Bailability
Offenses outlined in Clauses (b) and (c) of Subsection (1) are categorized as cognizable and non-bailable. A cognizable offense allows law enforcement agencies to arrest the accused without a warrant and commence an investigation without prior approval from the court. This provision ensures swift action against serious offenders, facilitating prompt legal recourse and reinforcing the seriousness of the crime.

Subsection (3): Suspension and Cancellation of Licenses
Beyond imprisonment and fines, the Act also empowers courts to impose additional sanctions on first-time and repeat offenders. For a first conviction under Subsection (1), the court may suspend the offender's license for up to two years. In cases of second or subsequent convictions, the court holds the authority to cancel the license altogether. This provision acts as a further deterrent, targeting the commercial viability of businesses engaging in unfair practices.

Chapter VII of the Consumer Protection Act 2019, and particularly Section 90, highlights the Indian government's commitment to protecting consumers from the hazards posed by spurious goods. By establishing clear penalties that escalate with the severity of consumer harm, the Act aims to foster a safer marketplace. The categorization of offenses as cognizable and non-bailable, combined with the potential suspension or cancellation of licenses, further reinforces the Act's robust framework for consumer protection. As consumer markets continue to expand, the rigorous enforcement of these provisions will be crucial in maintaining public trust and ensuring the safety and well-being of consumers across India.

Concept of Caveat Emptor
The Latin maxim "Caveat Emptor," translating to "Let the buyer beware," serves as a foundational tenet in the realm of law. This doctrine traditionally places the burden of responsibility on the purchaser to thoroughly investigate and evaluate the quality and suitability of goods before finalizing a transaction. Historically entrenched in market transactions, Caveat Emptor underscores the necessity for buyers to exercise diligence and caution, ensuring their acquisitions meet their requirements and standards. At its core, Caveat Emptor is predicated on the buyer's proactive engagement in the transaction process.

The principle asserts that buyers should conduct a meticulous examination of prospective purchases, scrutinizing their attributes and ascertaining their fitness for the intended use. This precept acknowledges the inherent profit-driven motives of sellers, who may not voluntarily disclose all pertinent details about a product. Consequently, the onus is on the buyer to remain vigilant and well-informed.

For example, consider the scenario of purchasing a pre-owned vehicle, wherein, under the Caveat Emptor framework, the buyer is expected to carry out a comprehensive inspection, potentially enlisting a mechanic's expertise to uncover latent defects. Should the buyer neglect this due diligence and subsequently encounter issues, legal recourse against the seller is typically limited. This principle presupposes that buyers possess, or have the means to acquire, the necessary acumen to make informed decisions.

Despite the stringent expectations placed on buyers by Caveat Emptor, the complexities of contemporary markets have prompted significant developments in consumer protection legislation. Modern products' technological intricacy often surpasses the average consumer's capacity for thorough evaluation. Acknowledging this disparity, legislative bodies globally have introduced regulations designed to shield consumers from deceptive practices and substandard goods.

For instance, the Consumer Protection Act of 2019 in India exemplifies such legislative advancements. This act mandates truthful product information disclosure, outlaws misleading advertisements, and establishes grievance redress mechanisms. These provisions transfer a portion of the responsibility from buyers to sellers, fostering a more equitable marketplace.

Is there any Consumer Sovereignty in Market Dynamics?
The adage "consumer is the king of the market" epitomizes a contemporary shift towards prioritizing consumer rights and satisfaction. In today's competitive commercial environment, businesses recognize that their viability hinges on addressing consumer needs and preferences. This consumer-centric approach has effectively transformed the traditional Caveat Emptor doctrine, enhancing seller accountability. Consumer sovereignty entails that businesses must emphasize quality, transparency, and exemplary customer service to succeed.

With access to extensive information and numerous alternatives, consumers hold substantial influence. A single dissatisfied customer can readily pivot to a competitor, and adverse reviews can swiftly damage a brand's reputation. The proliferation of e-commerce underscores this transition. Online platforms frequently offer comprehensive product descriptions, user reviews, and comparison tools, empowering consumers to make well-informed choices. Additionally, policies such as hassle-free returns and refunds further safeguard consumer interests, even post-purchase.

Understanding Different Levels Of Consumer Forums In India
The Consumer Protection Act has established a network of Consumer Forums in India across different levels - district, state, and national - to ensure that consumers can resolve their disputes without the need to go through the conventional court system. These forums provide a streamlined and accessible way for consumers to seek redressal for grievances related to goods and services.

i District Dispute Redressal Commission At District Level Not exceeding Rs.1 Crore
ii State Dispute Redressal Commission At State Level Exceeding Rs.1 Crore but not Exceeding Rs.10 Crore
iii National Consumer Dispute Redressal Commission At Central Level Exceeding Rs.10 Crore


Note: Consumer disputes can also be resolved by the mode of mediation, i.e., Pre-Litigative and Post-Litigative. Also, the decisions of NCDRC can be challenged in Hon'ble Supreme Court of India.
  1. District Level: District Dispute Redressal Commission
    At the district level, the District Dispute Redressal Commission serves as the initial point of contact for consumers with complaints. This commission handles cases where the value of goods and services, including any compensation claimed, does not exceed Rs. 1 crore. It aims to provide quick and effective relief to consumers within its jurisdiction.
     
  2. State Level: State Dispute Redressal Commission
    For complaints involving higher stakes, the State Dispute Redressal Commission comes into play. This commission has jurisdiction over cases where the value of goods and services, including compensation, exceeds Rs. 1 crore but does not exceed Rs. 10 crore. Additionally, it handles appeals against the orders issued by the District Dispute Redressal Commissions. This ensures that consumers have a higher level of authority to turn to if they are not satisfied with the district level decisions.
     
  3. National Level: National Dispute Redressal Commission
    At the pinnacle of the consumer forum hierarchy is the National Dispute Redressal Commission. This commission addresses complaints involving goods and services valued at more than Rs. 10 crore, including compensation claims. It also handles appeals against the decisions made by the State Dispute Redressal Commissions. This national body serves as the ultimate forum for consumer disputes before escalating to the judicial level.
     
  4. Escalation to Supreme Court
    If a consumer is dissatisfied with the decision of the National Dispute Redressal Commission, they have the right to appeal to the Supreme Court of India. This provides a final avenue for justice, ensuring that consumer rights are upheld at the highest level of the judicial system. The establishment of Consumer Forums at various levels under the Consumer Protection Act is a significant step towards empowering consumers and providing them with accessible and effective means to resolve their disputes. By understanding the jurisdiction and functioning of these forums, consumers can better navigate the path to justice and ensure their rights are protected.
To curb unfair trade practices and deficiency in services, the government introduced consumer forums to provide remedies/compensation to the consumer and punishment to the seller. The courts in India are overloaded with the number of cases to deal with in a particular court and to provide speedy relief to the consumer, consumer forums formed by the statutory act. Consumer Forums were necessary to be made because 'justice delayed is justice denied.' So to ensure fair justice consumer forums had to be made and solve consumer disputes. These commissions have the jurisdiction to only solve consumer disputes.

Conclusion & Suggestions
The Consumer Protection Act, 2019, marks a significant advancement in safeguarding consumer rights in India, addressing the complexities and challenges posed by the modern marketplace. As goods and services become increasingly integral to both basic survival and enhanced living standards, the need for robust consumer protection mechanisms is more critical than ever. This Act embodies the principles of fairness and integrity, aligning contemporary legal frameworks with historical practices such as those found in the Manu Smriti, which emphasized the importance of ethical business conduct.

At the core of this legislation is the comprehensive definition of a consumer, which delineates between personal consumption and commercial exploitation. By excluding those who acquire goods for resale or commercial purposes, the Act prioritizes the protection of end users against deceptive and unfair practices. The emergence of new forms of deception, driven by technological advancements and digital platforms, underscores the need for such legislation. Misleading advertisements, the sale of refurbished goods as new, deceptive celebrity endorsements, and false claims about product efficacy are among the unethical practices targeted by this Act.

The Consumer Protection Act, 2019, not only outlines the rights of consumers but also establishes a robust framework for redressal. This includes the creation of Consumer Dispute Redressal Commissions at various levels, which provide accessible and effective means for consumers to seek justice. Landmark judgments by these forums have set important precedents, reinforcing the Act's provisions and ensuring that businesses adhere to fair trade practices.

Furthermore, the Act introduces stringent penalties for deficiency in services and the distribution of spurious goods, reflecting the serious implications of such practices on consumer health and safety. By categorizing certain offenses as cognizable and non-bailable, and by empowering courts to suspend or cancel licenses, the Act ensures rigorous enforcement and accountability. The principle of Caveat Emptor, while still relevant, is now balanced by a more consumer-centric approach where businesses are held accountable for the accuracy and honesty of their claims. This shift towards consumer sovereignty is evident in the proliferation of online platforms that offer comprehensive product information and user reviews, empowering consumers to make informed decisions.

In conclusion, the Consumer Protection Act, 2019, represents a pivotal step towards creating a fair and transparent marketplace. By empowering consumers with legal recourse and promoting ethical business practices, the Act aims to foster a balanced ecosystem where consumer interests are protected, and businesses can thrive without resorting to deceptive tactics. Consumers, on their part, must remain vigilant and informed, exercising their rights and seeking redress when necessary. This symbiotic relationship between informed consumers and accountable businesses will ultimately contribute to a healthier and more trustworthy market environment.

End Notes:
  1. Consumer Protection Act, 2019
  2. Ibid
  3. Averitt, N. W., & Lande, R. H. (1996). Consumer sovereignty: A unified theory of antitrust and consumer protection law. Antitrust LJ, 65, 713.
  4. Bandara, R., Fernando, M., & Akter, S. (2021). Managing consumer privacy concerns and defensive behaviours in the digital marketplace. European Journal of Marketing, 55(1), 219-246.
  5. Calo, R. (2013). Digital market manipulation. Geo. Wash. L. Rev., 82, 995.
  6. Charging vat on Discounted MRP is Unfair Trade Practice: NCDRC TaxGuru, https://taxguru.in/corporate-law/charging-vat-on-discountedmrp-is-unfair-trade-practice-ncdrc.html(last visited May 19, 2024)
  7. Pandita, D.K. (2023) Protecting consumer rights, Daily Excelsior. Available at: https://www.dailyexcelsior.com/protecting-consumer-rights-3/#(Accessed: 17 May 2024)
  8. Ibid
  9. Rajanikanth, M. (2017). A Study on Evolution of Consumer Protection Act in India-CPA1986. International Journal of Application or Innovation in Engineering & Management, 6(4), 133.
  10. Singh, S. (2024, May 17). Coca-Cola's scheme of awarding Honda City for lucky bottles was genuine marketing strategy, aggrieved consumer eligible for compensation: NCDRC. Live Law. https://www.livelaw.in/consumer-cases/ncdrc-coca-cola-promotional-scheme-honda-city-carslucky-coupon-compensation-258154?infinitescroll=1
  11. Ibid
  12. Consumer Protection Act 2019
  13. Kaushik, T. K., & Singh, A. (2022). Misleading Advertisement and Law in India. RES MILITARIS, 12(5), 1515-1523.
  14. Moitra, R., Purohit, N., & Bhattacharjee, A. (2022). Advertising Ethics: Towards a Stakeholder Approach. PURUSHARTHA-A journal of Management, Ethics and Spirituality, 15(1), 142-158.
  15. Sucheta, & Ridhi. (2024, February 21). Not providing free drinking water facility thereby compelling patrons to buy packaged mineral water; DCDRC finds Foresta Café liable for unfair trade practices. SCC Times. https://www.scconline.com/blog/post/2024/01/10/foresta-caf-unfair-trade-practice-sale-packagedmineral-water-forcing-dcdrc-legal-news/
  16. Sucheta, & Ridhi. (2024, February 21). Not providing free drinking water facility thereby compelling patrons to buy packaged mineral water; DCDRC finds Foresta Café liable for unfair trade practices. SCC Times. https://www.scconline.com/blog/post/2024/01/10/foresta-caf-unfair-trade-practice-sale-packagedmineral-water-forcing-dcdrc-legal-news/
  17. Editor_4, & Ridhi. (2022, September 26). NCDRC: In a tripartite contract between the seller, Service Provider and consumer, the seller and service provider are liable for any defect, deficiency and unfair trade practice on any product sold by them. SCC Times. https://www.scconline.com/blog/post/2022/09/26/ncdrctripartite-contract-seller-service-provider-consumer-liability-of-seller-and-service-provider-defective-deficient-product-service-consumerprotection-legal-news-and-updates/
  18. Editor_4, & Ridhi. (2022a, August 31). SCDRC: Consumers should not suffer due to VLCC's unfair trade practices of giving misleading ads and then slapping them with a disclaimer regarding outcome of their programs. SCC Times. https://www.scconline.com/blog/post/2022/08/31/scdrc-chandigarh-vlcc-unfairtrade-practice-misleading-ads-disclaimer-protect-consumer-legal-updates-legal-news/
  19. Sucheta, & Ridhi. (2024b, May 2). NCDRC dismisses government's 2015 complaint vis-à-vis lead content found in Nestle's Maggie Noodles. SCC Times. https://www.scconline.com/blog/post/2024/04/11/maggie-noodles-lead-found-consumer-complaint-union-of-india-ncdrc-legal-news/
  20. Maan, Dr. P. W. (n.d.). Services marketing. Service Failures and Service Recovery Strategies - Services Marketing. https://ebooks.inflibnet.ac.in/mgmtp10/chapter/service-failures-and-service-recovery-strategies/
  21. Consumer Protection Act 2019
ive utilization of services can significantly impact the performance and success of businesses.

In this context, the Consumer Protection Act, 2019, serves as a cornerstone for safeguarding consumer rights in India. It provides a comprehensive definition of a consumer under Section

2(7)[1]:
Section 2 (7) Consumer means any person who:
  1. 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
     
  2. 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 purpose."[2]
This definition is pivotal as it delineates the boundaries between personal consumption and commercial exploitation.[3]By explicitly excluding those who obtain goods for resale or any commercial purpose, the Act focuses on protecting individuals who are the end users of products and services, ensuring their rights are upheld against unfair practices.

The Consumer Protection Act, 2019, emerged in response to the evolving complexities of the modern marketplace.7 With rapid advancements in technology and the proliferation of digital platforms, consumers are exposed to new forms of deception and exploitation.[4] Companies, in their pursuit of profit, have adopted practices that can mislead and harm consumers. These practices encompass various deceptive strategies used by companies to manipulate consumer behavior and market dynamics.

The first reference here for the manipulate consumer practices is made towards the "Publishing misleading advertisements" involves creating promotional content that exaggerates or falsifies the benefits of products or services. This can lead consumers to make decisions based on inaccurate information, ultimately resulting in disappointment or financial loss. For example, misleading claims in the skincare industry have led to significant legal actions and damaged brand reputations. The classic case of the skincare company which claimed "clinically proven" to "boost genes", leading to "visibly younger skin in just seven days" had faced the risk of eventually paying hefty fine for the false and unsubstantiated claims.9

Secondly as most witnessed in the unregulated market space, selling of the refurbished goods as new is another unethical practice in existence. Small vendors repurpose returned or used items within the unregulated spaces, presenting them as brand new to unsuspecting customers. This not only deceives consumers but also undermines trust in the marketplace.

Thirdly, even engaging celebrities to endorse products or services deceptively can also mislead consumers. Celebrity endorsements have a powerful influence on consumer purchasing decisions.10 However, when these endorsements are based on false claims or when the celebrity does not actually use the product, it can mislead consumers. A recent example involves Indian cricketers (athletes) endorsing pan masala products, which drew criticism for promoting harmful substances.11 This not only mislead the consumers to believe that by consuming the same product, one might become equivalent to the one's who are promoting it, without knowing that these deceptive endorsements are only done for the purposes to attract more consumer driven behaviour

Fourthly, engaging in unfair or unethical trade practices includes manipulating product information and making false claims about product efficacy. Companies might advertise a product's effectiveness in ways that are not supported by scientific evidence, leading consumers to have unrealistic expectations. For example, dietary supplements are often marketed with exaggerated claims of health benefits without sufficient clinical evidence.

Fifthly, providing substandard services entails offering services that fail to meet the advertised standards. This can result in consumer dissatisfaction and potential harm, especially in industries like healthcare or finance where the stakes are high. For example, a financial advisory service promising high returns but providing poor investment advice can lead to significant consumer losses.

And lastly, the manipulating prices through artificial inflation or misleading discount offers is another deceptive practice. Companies might create a false sense of scarcity or advertise fake discounts to entice consumers into making purchases. Another tactic is creating a false sense of scarcity. Companies might claim that a product is available in limited quantities or for a limited

9 5 misleading advertising examples Publift, https://www.publift.com/blog/misleading-advertising-examples (last visited May 19, 2024) 10 Roberts, A. J. (2020). False influencing. Geo. LJ, 109, 81.

11 Disgusting! is money so important?:
Gambhir Blasts Sehwag, Gavaskar for endorsing "Pan Masala" with "Sachin" remark Hindustan Times, https://www.hindustantimes.com/cricket/disgusting-is-money-so-important-gautam-gambhir-blasts-virender-sehwag-sunil-gavaskar-endorsingpan-masala-sachin-remark-101686660167569.html (last visited May 19, 2024)

time only, pushing consumers to make impulsive purchases out of fear of missing out. This sense of urgency can cloud judgment, leading to hasty decisions without thorough consideration of the actual value or necessity of the product.

Such practices not only deceive consumers but also undermine trust in the market. They can lead to dissatisfaction and a sense of betrayal when consumers realize they have been misled. Additionally, these practices are often legally questionable and can lead to regulatory actions. For example, the National Consumer Disputes Redressal Commission (NCDRC) in India has addressed cases where retailers charged VAT on discounted MRP (Maximum Retail Price), labeling it as an unfair trade practice. This highlights the legal and ethical implications of such deceptive strategies.[5]

The list of unfair trade practice, continues, with lots of example there in existence. The roots of ethical trade practices can be traced back to ancient times. Historical texts such as the Manu Smriti highlight the importance of fairness and integrity in business dealings. Sage Manu[6], in his writings, advocated for stringent measures to curb unfair practices. For instance, the Manu Smriti prescribed severe punishment for those engaging in fraudulent trade activities. Relevant abstract is reproduced here -[7]

"Manu Smriti advocated severe punishment for unfair business practices. To deal with faulty weights and measures, the Manu Smriti provided that the king must duly mark all weights and measures and the process should be re-examined every six months."

In contemporary society, similar to such historical practices from the past, the Consumer Protection Act, 2019, builds upon these foundational principles, adapting them to address the sophisticated and dynamic challenges of the modern economy. This Act not only delineates the rights and responsibilities of consumers but also establishes mechanisms to enforce these rights, thereby fostering a fair and transparent marketplace. By empowering consumers with legal recourse and promoting ethical business practices, the Act aims to create a balanced ecosystem where consumer interests are protected, and businesses can thrive without resorting to deceptive tactics.

In 1986, the Government introduced the Consumer Protection Act, which for the first time legally specified the rights and responsibilities of the consumer. This groundbreaking legislation aimed to safeguard consumer interests and ensure fair practices in the marketplace. The rights of consumers are further detailed under section 2(9) of the Consumer Protection Act of 2019, which expanded and reinforced the original provisions.[8] This Act is crucial as it provides consumers with several fundamental rights:

  1. Right to be Heard: Consumers have the right to voice their complaints and concerns regarding products and services. This ensures that their grievances are acknowledged and addressed in a timely manner.
  2. Right to Have Safe Quality Goods: Consumers are entitled to receive products that meet safety standards and are free from defects. This right protects consumers from hazardous goods and ensures their well-being.
  3. Right to Choose from Different Options Available in the Market: Consumers have the freedom to select from a variety of products and services, fostering a competitive market that encourages better quality and prices.
  4. Right to Know the Necessary Information about the Product to Avoid Any Unforeseen Damage: Consumers should be provided with complete and accurate information about the products they purchase. This includes details on usage, risks, and benefits, helping consumers make informed decisions and avoid potential harm.
  5. Right to Seek Compensation: If any damage is caused to the consumer after the consumption of a product, they have the right to seek compensation. This can be pursued through the court system or via arbitration, ensuring that consumers are protected and can receive redress for any harm suffered.

In furtherance to this, a notable case highlighting the significance of consumer rights is Z. Ahmed vs. M/s. Coca-Cola India[9]. This case, filed with the State Consumer Disputes Redressal Commission (SCDRC), underscored the critical aspects of consumer protection laws and the enforcement of consumer rights, which is referred here -

"Coca-Cola introduced a prize scheme in September 1998 by offering various prices for bottles having crowns with a yellow band. The prices included 5 Honda City cars. The scheme also had several conditions. The Complainant bought one such bottle which entitled him to one such car as the printed liner on his bottle matched the winning criteria as per Condition 6 of the scheme.

The Complainant sent the liner via postal mail to Coca-Cola. Despite Condition 9 stipulating that entries must be submitted before 28.10.1998 by ordinary post, the Complainant alleged that entries via other postal means were accepted by Coca-Cola through its appointed agency, M/s Bansal & Co., Chartered Accountants.

After receiving no clear response, the Complainant issued a legal notice. The legal notice was not replied to either. Feeling aggrieved, the Complainant filed a consumer complaint in the State Consumer Disputes Redressal Commission, Delhi ("State Commission"). The State Commission held that Coca-Cola engaged in unfair trade practices as the prices were only 10-15 for crores of sold bottles. This was considered to deceive people by prompting them to buy Coca-Cola even if they didn't consume it normally. The State Commission directed Coca-Cola to deposit Rs. 1 Lakh in the State Consumer Welfare Fund (Legal Aid) and pay Rs. 25,000/- as compensation to the Complainant."[10]

The significance of this case extends beyond the immediate parties involved. It set a precedent for similar disputes, empowering other consumers to come forward and seek justice against deceptive practices. The judgment also served as a warning to corporations about the potential consequences of misleading consumers, thereby promoting greater transparency and accountability in marketing strategies. Additionally, the Consumer Protection Act has evolved over the years to address new challenges in the marketplace. The 2019 amendments introduced more stringent measures and broader definitions of unfair trade practices, further strengthening consumer rights. These changes reflect the ongoing commitment to adapting the legal framework to protect consumers in an everchanging economic landscape.

Unfair Trade Practices
The 2019 Consumer Protection Act in India addresses unfair trade practices, which encompass deceptive, fraudulent, or unethical behaviors by businesses that harm consumers. Key examples include misleading representations about the quality or price of goods, selling counterfeit products, hoarding goods to manipulate prices, and failing to meet safety standards. The Act aims to protect consumers from such practices by defining them clearly and establishing stringent measures to ensure market fairness and transparency.

To enforce these protections, the Act sets up Consumer Dispute Redressal Commissions at various levels. These bodies handle consumer complaints, impose penalties for misleading advertisements, and ensure compliance with safety standards. The Act also introduces the concept of product liability, holding businesses accountable for harm caused by defective products. By empowering consumers with rights to information, safety, and redressal, the Act promotes a fair and competitive market, ensuring consumers can trust the products and services they purchase.

It is further defined in the Act. According to Section 2(47) of the Consumer Protection Act, 2019 "unfair trade practice" means a trade practice which, to promote the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice including any of the following practices, namely:
  1. Making any statement, whether orally or in writing or by visible representation including by means of electronic record, which:
     
    1. falsely represents that the goods are of a particular standard, quality, quantity, grade, composition, style or model;
    2. falsely represents that the services are of a particular standard, quality or grade;
    3. falsely represents any re-built, second-hand, renovated, reconditioned or old goods as new goods;
    4. represents that the goods or services have sponsorship, approval, performance, characteristics, accessories, uses or benefits which such goods or services do not have;
    5. represents that the seller or the supplier has a sponsorship or approval or affiliation which such seller or supplier does not have;
    6. makes a false or misleading representation concerning the need for, or the usefulness of, any goods or services;
    7. 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;
    8. makes to the public a representation in a form that purports to be—
      1. A warranty or guarantee of a product or of any goods or services; or
      2. 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;
    9. 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;
    10. gives false or misleading facts disparaging the goods, services or trade of another person, permitting the publication of any advertisement, whether in any newspaper or otherwise, including by way of electronic record, 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.
Examples of unfair trade practices can be seen in various cases where companies have made misleading claims about their products. Hindustan Unilever Ltd (HUL) was found to be misleading consumers with its Lever Ayush soap by claiming it was based on 5,000-year-old Ayurveda scriptures and contained 15 Ayurvedic herbs.[12] These claims were inadequately substantiated, leading consumers to believe in the authenticity and traditional efficacy of the product without proper evidence. Such practices exploit consumer trust and misrepresent the true nature of the product.

Another instance involves cab aggregator Uber India, whose advertisement promised a discount of Rs 500 on the next 10 rides with the claim "save Rs 500 on your next 10 Uber rides and ride Uber and the discount will auto apply."[13]The Advertising Standards Council of India (ASCI) found this claim misleading, as it failed to clarify the terms and conditions associated with the offer, thereby deceiving consumers about the actual benefits. Similarly, Indian Oil Corporation was reprimanded for its Servo oil advertisement that claimed it was "India's largest selling trusted lubricants."[14]

This claim was found to be misleading as it did not provide adequate evidence to support the assertion, potentially deceiving consumers about the product's market position and reliability. These examples highlight the importance of truthful advertising and the need for companies to substantiate their claims to maintain consumer trust and market integrity. E. Important Judgements in the Regime of Unfair Trade Practices

As discussed above, the consumer forums play a vital role in upholding consumer rights and ensuring fair trade practices. These forums, established under the Consumer Protection Act 2019, provides a platform for consumers to seek redressal for grievances without navigating the conventional court system. Understanding the significance of landmark judgments from these forums is crucial for both consumers and businesses.

The reference herein is further made to the notable decisions from the District, State, and National Consumer Disputes Redressal Commissions. Each case highlights the application of consumer protection laws, illustrating the forum's role in addressing unfair trade practices, product tampering, misleading advertisements, and more. By examining these judgments, readers will gain insight into the legal precedents set by these forums, the responsibilities of businesses, and the rights of consumers. Through these examples, the article further aims to enhance awareness and understanding of the consumer protection landscape, reinforcing the importance of fair and transparent business practices.
  1. In District Dispute Redressal Commission:
    The Bench of Dr Shyam Sundar Lata (President) and Afsana Khan (Member), relying on Rupasi Multiplex v. Mautusi Chaudhuri, 2015, opined that restaurants and cafes have a legal and moral obligation to provide free regular drinking water to their patrons.[15]
     
  2. National Consumer Disputes Redressal Commission (NCDRC):
    While deciding upon the instant complaint concerning alleged unfair trade practice followed by Flipkart of tampering with a product's MRP, the Bench of Mamidi Christopher (President), S. Sandhya Rani and K. Venkateshwarlu (Members) observed that there is a tripartite contract between the seller, service provider (herein 'Flipkart') and the consumer. The seller and service provider are liable for any defect, deficiency of service and unfair trade practice on the services provided or goods/products sold by them. It was held that Flipkart had tampered with the original MRP of the product (herein 'oil sachet') and charged an amount more than the MRP from the consumer, thereby illegally extorting the consumer and causing economic loss and mental agony. Flipkart's conduct thereby falls within the ambit of deficiency in service and unfair trade practice.[16]
     
  3. State Consumer Disputes Redressal Commission (SCDRC):
    While deciding the instant appeal filed by VLCC Health Care Ltd. against the order of the District Consumer Court whereby they were directed to refund and compensate the respondent for the mental agony caused due to the failure of VLCC's weight loss program; the Bench of Raj Shekhar Attri, J. (President) and Rajesh K. Arya (Member) observed that VLCC's act of giving false assurances on one hand by way of misleading advertisements, and on the other hand obtaining a declaration from the consumers qua no guarantee/assurance regarding the result and outcome of the program, is a clear example of unfair trade practices adopted by them, and for which the consumers cannot be made to suffer at their hands. "The appellants are very much held liable to refund the amount paid by the respondent purely based on their advertisement, 'Lose 4 Kgs in 30 days or take your money back! [17]
     
  4. National Consumer Disputes Redressal Commission (NCDRC):
    While considering the instant complaint instituted by the Department of Consumer Affairs, Government of India seeking to prevent Nestle from undertaking any unwanted manufacturing activity of Maggi Masala Noodles and Maggie Oats Noodles and other variants with the alleged deceptive labelling of "No Added MSG", as these commodities are likely to jeopardize the general health conditions of people who consume these products extensively; the Bench of A.P. Sahi, J., (President) dismissed the complaint on the ground that neither the violation of the advisory dated 11-05-2013 nor the violation of the provisions of either the Food Safety and Standard Act, 2006, or any ingredient under the Consumer Protection Act, 1986, has been established in the instant complaint. It was noted that the scientific analysis and the clarifications issued by the Government itself did not indict Nestle India, therefore, there is no material to support the allegations made in the complaint to proceed any further.[18]

Deficiency In Services
According to Section 2(11) of the Consumer Protection Act 2019, "deficiency"

"Means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service and includes—
  1. Any act of negligence or omission or commission by such person which causes loss or injury to the consumer; and
  2. Deliberate withholding of relevant information by such person to the consumer.
As referred above, as per the Consumer Protection Act 2019, deficiency in services refers to any fault, imperfection, shortcoming, or inadequacy. Here are some examples of the deficiency in services in order to understand the practical side:
  1. Defective Product Due to Manufacturer's Negligence:
Example: A car sold by a seller to a consumer has defective brakes due to the negligence of the manufacturer. This poses a significant safety risk and is considered a deficiency in service because the product does not meet the expected standards of safety and quality. ii. Non-functional Facilities in a Service:

Example: An AC hotel room is sold to the consumer, but the AC is not working. This situation constitutes a deficiency in service because the hotel failed to provide the amenities that were promised and expected by the consumer.

These examples illustrate how deficiency in services can arise from either a defect in the product itself or a failure to deliver promised services. Any consumer who has suffered deficiency of service is entitled for the compensation as in accordance with Consumer Protection Act, 2019. Can the failure of promised services result in a deficiency in services?

Yes, failure of promised services results in a deficiency in services because every service provider aims to serve the consumers with the best of their efforts and satisfy them as per their expectations. However, there may be situations in which the consumer is not able to satisfy the needs for which he is paying. There may also be dissatisfaction amongst the consumers if they do not receive what was promised to them at the time of negotiations.[19]

Remedies for deficiency in services
According to Chapter VII(Section 88-93) of the Consumer Protection Act 2019, the 'offences and penalties' are provided for deficiency in services and unfair trade practices.

For instance, Section 90 has stated that:
Punishment for manufacturing for sale or for storing or selling or distributing or importing spurious goods.
  1. Whoever, by himself or by any other person on his behalf, manufactures for sale or stores or sells or distributes or imports any spurious goods shall be punished if such act:
    1. causing injury not amounting to grievous hurt to the consumer, with imprisonment for a term which may extend to one year and with a fine which may extend to three lakh rupees;
    2. causing injury resulting in grievous hurt to the consumer, with imprisonment for a term which may extend to seven years and with a fine which may extend to five lakh rupees;
       
    3. results in the death of a consumer, with imprisonment for a term which shall not be less than seven years, but may extend to imprisonment for life and with a fine which shall not be less than ten lakh rupees.
  2. The offences under clauses (b) and (c) of sub-section (1) shall be cognizable and non-bailable.
     
  3. Notwithstanding the punishment under sub-section (1), the court may, in case of first conviction, suspend any licence issued to the person referred to in that sub-section, under any law for the time being in force, for a period up to two years, and in case of second or subsequent conviction, cancel the licence.
With a focus on Section 90, which addresses the punitive measures for manufacturing, storing, selling, distributing, or importing spurious goods. It is pivotal to note that the act ensures the integrity of goods sold in the market. The section explicitly outlines the repercussions for individuals or entities involved in the dissemination of spurious goods. Spurious goods, often synonymous with counterfeit or fake products, pose significant risks to consumer health and safety, making stringent regulations essential.

Subsection (1): Discusses Penalties Based on Severity of Consumer Harm
Clause (a):
The law herein prescribes a punishment for those whose actions result in non-grievous injury to consumers. The term "non-grievous" implies injuries that do not pose long-term harm or risk of serious health consequences. For such offenses, the Act mandates imprisonment for a term extending up to one year, coupled with a fine that may reach up to three lakh rupees. This clause underscores the importance of holding manufacturers and sellers accountable even for lesser injuries, thereby deterring negligence and malpractice.

Clause (b):
For more severe cases where spurious goods cause grievous hurt to consumers, the penalties are substantially harsher. "Grievous hurt" typically refers to serious injuries that can have long-term health implications. Offenders in these cases face imprisonment for up to seven years and a fine that can extend to five lakh rupees. This provision reflects the legislative intent to impose stricter consequences for actions resulting in significant consumer harm, emphasizing the gravity of such offenses.

Clause (c):
The most severe penalties are reserved for cases where the consumption or use of spurious goods results in the death of a consumer. In such tragic instances, the law mandates a minimum imprisonment term of seven years, which can extend to life imprisonment. Additionally, the offender must pay a fine not less than ten lakh rupees. This stringent punishment serves as a powerful deterrent against the distribution of deadly counterfeit products, underscoring the critical need to protect consumers' lives.

Subsection (2): Cognizability and Non-Bailability
Offenses outlined in Clauses (b) and (c) of Subsection (1) are categorized as cognizable and non-bailable. A cognizable offense allows law enforcement agencies to arrest the accused without a warrant and commence an investigation without prior approval from the court. This provision ensures swift action against serious offenders, facilitating prompt legal recourse and reinforcing the seriousness of the crime.

Subsection (3): Suspension and Cancellation of Licenses
Beyond imprisonment and fines, the Act also empowers courts to impose additional sanctions on first-time and repeat offenders. For a first conviction under Subsection (1), the court may suspend the offender's license for up to two years. In cases of second or subsequent convictions, the court holds the authority to cancel the license altogether. This provision acts as a further deterrent, targeting the commercial viability of businesses engaging in unfair practices.

Chapter VII of the Consumer Protection Act 2019, and particularly Section 90, highlights the Indian government's commitment to protecting consumers from the hazards posed by spurious goods. By establishing clear penalties that escalate with the severity of consumer harm, the Act aims to foster a safer marketplace. The categorization of offenses as cognizable and non-bailable, combined with the potential suspension or cancellation of licenses, further reinforces the Act's robust framework for consumer protection. As consumer markets continue to expand, the rigorous enforcement of these provisions will be crucial in maintaining public trust and ensuring the safety and well-being of consumers across India.

Concept of Caveat Emptor
The Latin maxim "Caveat Emptor," translating to "Let the buyer beware," serves as a foundational tenet in the realm of law. This doctrine traditionally places the burden of responsibility on the purchaser to thoroughly investigate and evaluate the quality and suitability of goods before finalizing a transaction. Historically entrenched in market transactions, Caveat Emptor underscores the necessity for buyers to exercise diligence and caution, ensuring their acquisitions meet their requirements and standards. At its core, Caveat Emptor is predicated on the buyer's proactive engagement in the transaction process.

The principle asserts that buyers should conduct a meticulous examination of prospective purchases, scrutinizing their attributes and ascertaining their fitness for the intended use. This precept acknowledges the inherent profit-driven motives of sellers, who may not voluntarily disclose all pertinent details about a product. Consequently, the onus is on the buyer to remain vigilant and well-informed.

For example, consider the scenario of purchasing a pre-owned vehicle, wherein, under the Caveat Emptor framework, the buyer is expected to carry out a comprehensive inspection, potentially enlisting a mechanic's expertise to uncover latent defects. Should the buyer neglect this due diligence and subsequently encounter issues, legal recourse against the seller is typically limited. This principle presupposes that buyers possess, or have the means to acquire, the necessary acumen to make informed decisions.

Despite the stringent expectations placed on buyers by Caveat Emptor, the complexities of contemporary markets have prompted significant developments in consumer protection legislation. Modern products' technological intricacy often surpasses the average consumer's capacity for thorough evaluation. Acknowledging this disparity, legislative bodies globally have introduced regulations designed to shield consumers from deceptive practices and substandard goods.

For instance, the Consumer Protection Act of 2019 in India exemplifies such legislative advancements. This act mandates truthful product information disclosure, outlaws misleading advertisements, and establishes grievance redress mechanisms. These provisions transfer a portion of the responsibility from buyers to sellers, fostering a more equitable marketplace.

Is there any Consumer Sovereignty in Market Dynamics?
The adage "consumer is the king of the market" epitomizes a contemporary shift towards prioritizing consumer rights and satisfaction. In today's competitive commercial environment, businesses recognize that their viability hinges on addressing consumer needs and preferences. This consumer-centric approach has effectively transformed the traditional Caveat Emptor doctrine, enhancing seller accountability. Consumer sovereignty entails that businesses must emphasize quality, transparency, and exemplary customer service to succeed.

With access to extensive information and numerous alternatives, consumers hold substantial influence. A single dissatisfied customer can readily pivot to a competitor, and adverse reviews can swiftly damage a brand's reputation. The proliferation of e-commerce underscores this transition. Online platforms frequently offer comprehensive product descriptions, user reviews, and comparison tools, empowering consumers to make well-informed choices. Additionally, policies such as hassle-free returns and refunds further safeguard consumer interests, even post-purchase.

Understanding Different Levels Of Consumer Forums In India
The Consumer Protection Act has established a network of Consumer Forums in India across different levels - district, state, and national - to ensure that consumers can resolve their disputes without the need to go through the conventional court system. These forums provide a streamlined and accessible way for consumers to seek redressal for grievances related to goods and services.

i District Dispute Redressal Commission At District Level Not exceeding Rs.1 Crore
ii State Dispute Redressal Commission At State Level Exceeding Rs.1 Crore but not Exceeding Rs.10 Crore
iii National Consumer Dispute Redressal Commission At Central Level Exceeding Rs.10 Crore


Note: Consumer disputes can also be resolved by the mode of mediation, i.e., Pre-Litigative and Post-Litigative. Also, the decisions of NCDRC can be challenged in Hon'ble Supreme Court of India.
  1. District Level: District Dispute Redressal Commission
    At the district level, the District Dispute Redressal Commission serves as the initial point of contact for consumers with complaints. This commission handles cases where the value of goods and services, including any compensation claimed, does not exceed Rs. 1 crore. It aims to provide quick and effective relief to consumers within its jurisdiction.
     
  2. State Level: State Dispute Redressal Commission
    For complaints involving higher stakes, the State Dispute Redressal Commission comes into play. This commission has jurisdiction over cases where the value of goods and services, including compensation, exceeds Rs. 1 crore but does not exceed Rs. 10 crore. Additionally, it handles appeals against the orders issued by the District Dispute Redressal Commissions. This ensures that consumers have a higher level of authority to turn to if they are not satisfied with the district level decisions.
     
  3. National Level: National Dispute Redressal Commission
    At the pinnacle of the consumer forum hierarchy is the National Dispute Redressal Commission. This commission addresses complaints involving goods and services valued at more than Rs. 10 crore, including compensation claims. It also handles appeals against the decisions made by the State Dispute Redressal Commissions. This national body serves as the ultimate forum for consumer disputes before escalating to the judicial level.
     
  4. Escalation to Supreme Court
    If a consumer is dissatisfied with the decision of the National Dispute Redressal Commission, they have the right to appeal to the Supreme Court of India. This provides a final avenue for justice, ensuring that consumer rights are upheld at the highest level of the judicial system. The establishment of Consumer Forums at various levels under the Consumer Protection Act is a significant step towards empowering consumers and providing them with accessible and effective means to resolve their disputes. By understanding the jurisdiction and functioning of these forums, consumers can better navigate the path to justice and ensure their rights are protected.
To curb unfair trade practices and deficiency in services, the government introduced consumer forums to provide remedies/compensation to the consumer and punishment to the seller. The courts in India are overloaded with the number of cases to deal with in a particular court and to provide speedy relief to the consumer, consumer forums formed by the statutory act. Consumer Forums were necessary to be made because 'justice delayed is justice denied.' So to ensure fair justice consumer forums had to be made and solve consumer disputes. These commissions have the jurisdiction to only solve consumer disputes.

Conclusion & Suggestions
The Consumer Protection Act, 2019, marks a significant advancement in safeguarding consumer rights in India, addressing the complexities and challenges posed by the modern marketplace. As goods and services become increasingly integral to both basic survival and enhanced living standards, the need for robust consumer protection mechanisms is more critical than ever. This Act embodies the principles of fairness and integrity, aligning contemporary legal frameworks with historical practices such as those found in the Manu Smriti, which emphasized the importance of ethical business conduct.

At the core of this legislation is the comprehensive definition of a consumer, which delineates between personal consumption and commercial exploitation. By excluding those who acquire goods for resale or commercial purposes, the Act prioritizes the protection of end users against deceptive and unfair practices. The emergence of new forms of deception, driven by technological advancements and digital platforms, underscores the need for such legislation. Misleading advertisements, the sale of refurbished goods as new, deceptive celebrity endorsements, and false claims about product efficacy are among the unethical practices targeted by this Act.

The Consumer Protection Act, 2019, not only outlines the rights of consumers but also establishes a robust framework for redressal. This includes the creation of Consumer Dispute Redressal Commissions at various levels, which provide accessible and effective means for consumers to seek justice. Landmark judgments by these forums have set important precedents, reinforcing the Act's provisions and ensuring that businesses adhere to fair trade practices.

Furthermore, the Act introduces stringent penalties for deficiency in services and the distribution of spurious goods, reflecting the serious implications of such practices on consumer health and safety. By categorizing certain offenses as cognizable and non-bailable, and by empowering courts to suspend or cancel licenses, the Act ensures rigorous enforcement and accountability. The principle of Caveat Emptor, while still relevant, is now balanced by a more consumer-centric approach where businesses are held accountable for the accuracy and honesty of their claims. This shift towards consumer sovereignty is evident in the proliferation of online platforms that offer comprehensive product information and user reviews, empowering consumers to make informed decisions.

In conclusion, the Consumer Protection Act, 2019, represents a pivotal step towards creating a fair and transparent marketplace. By empowering consumers with legal recourse and promoting ethical business practices, the Act aims to foster a balanced ecosystem where consumer interests are protected, and businesses can thrive without resorting to deceptive tactics. Consumers, on their part, must remain vigilant and informed, exercising their rights and seeking redress when necessary. This symbiotic relationship between informed consumers and accountable businesses will ultimately contribute to a healthier and more trustworthy market environment.

End Notes:
  1. Consumer Protection Act, 2019
  2. Ibid
  3. Averitt, N. W., & Lande, R. H. (1996). Consumer sovereignty: A unified theory of antitrust and consumer protection law. Antitrust LJ, 65, 713.
  4. Bandara, R., Fernando, M., & Akter, S. (2021). Managing consumer privacy concerns and defensive behaviours in the digital marketplace. European Journal of Marketing, 55(1), 219-246.
  5. Calo, R. (2013). Digital market manipulation. Geo. Wash. L. Rev., 82, 995.
  6. Charging vat on Discounted MRP is Unfair Trade Practice: NCDRC TaxGuru, https://taxguru.in/corporate-law/charging-vat-on-discountedmrp-is-unfair-trade-practice-ncdrc.html(last visited May 19, 2024)
  7. Pandita, D.K. (2023) Protecting consumer rights, Daily Excelsior. Available at: https://www.dailyexcelsior.com/protecting-consumer-rights-3/#(Accessed: 17 May 2024)
  8. Ibid
  9. Rajanikanth, M. (2017). A Study on Evolution of Consumer Protection Act in India-CPA1986. International Journal of Application or Innovation in Engineering & Management, 6(4), 133.
  10. Singh, S. (2024, May 17). Coca-Cola's scheme of awarding Honda City for lucky bottles was genuine marketing strategy, aggrieved consumer eligible for compensation: NCDRC. Live Law. https://www.livelaw.in/consumer-cases/ncdrc-coca-cola-promotional-scheme-honda-city-carslucky-coupon-compensation-258154?infinitescroll=1
  11. Ibid
  12. Consumer Protection Act 2019
  13. Kaushik, T. K., & Singh, A. (2022). Misleading Advertisement and Law in India. RES MILITARIS, 12(5), 1515-1523.
  14. Moitra, R., Purohit, N., & Bhattacharjee, A. (2022). Advertising Ethics: Towards a Stakeholder Approach. PURUSHARTHA-A journal of Management, Ethics and Spirituality, 15(1), 142-158.
  15. Sucheta, & Ridhi. (2024, February 21). Not providing free drinking water facility thereby compelling patrons to buy packaged mineral water; DCDRC finds Foresta Café liable for unfair trade practices. SCC Times. https://www.scconline.com/blog/post/2024/01/10/foresta-caf-unfair-trade-practice-sale-packagedmineral-water-forcing-dcdrc-legal-news/
  16. Sucheta, & Ridhi. (2024, February 21). Not providing free drinking water facility thereby compelling patrons to buy packaged mineral water; DCDRC finds Foresta Café liable for unfair trade practices. SCC Times. https://www.scconline.com/blog/post/2024/01/10/foresta-caf-unfair-trade-practice-sale-packagedmineral-water-forcing-dcdrc-legal-news/
  17. Editor_4, & Ridhi. (2022, September 26). NCDRC: In a tripartite contract between the seller, Service Provider and consumer, the seller and service provider are liable for any defect, deficiency and unfair trade practice on any product sold by them. SCC Times. https://www.scconline.com/blog/post/2022/09/26/ncdrctripartite-contract-seller-service-provider-consumer-liability-of-seller-and-service-provider-defective-deficient-product-service-consumerprotection-legal-news-and-updates/
  18. Editor_4, & Ridhi. (2022a, August 31). SCDRC: Consumers should not suffer due to VLCC's unfair trade practices of giving misleading ads and then slapping them with a disclaimer regarding outcome of their programs. SCC Times. https://www.scconline.com/blog/post/2022/08/31/scdrc-chandigarh-vlcc-unfairtrade-practice-misleading-ads-disclaimer-protect-consumer-legal-updates-legal-news/
  19. Sucheta, & Ridhi. (2024b, May 2). NCDRC dismisses government's 2015 complaint vis-à-vis lead content found in Nestle's Maggie Noodles. SCC Times. https://www.scconline.com/blog/post/2024/04/11/maggie-noodles-lead-found-consumer-complaint-union-of-india-ncdrc-legal-news/
  20. Maan, Dr. P. W. (n.d.). Services marketing. Service Failures and Service Recovery Strategies - Services Marketing. https://ebooks.inflibnet.ac.in/mgmtp10/chapter/service-failures-and-service-recovery-strategies/
  21. Consumer Protection Act 2019

Law Article in India

You May Like

Legal Question & Answers



Lawyers in India - Search By City

LawArticles

How To File For Mutual Divorce In Delhi

Titile

How To File For Mutual Divorce In Delhi Mutual Consent Divorce is the Simplest Way to Obtain a D...

Increased Age For Girls Marriage

Titile

It is hoped that the Prohibition of Child Marriage (Amendment) Bill, 2021, which intends to inc...

Facade of Social Media

Titile

One may very easily get absorbed in the lives of others as one scrolls through a Facebook news ...

Section 482 CrPc - Quashing Of FIR: Guid...

Titile

The Inherent power under Section 482 in The Code Of Criminal Procedure, 1973 (37th Chapter of t...

The Uniform Civil Code (UCC) in India: A...

Titile

The Uniform Civil Code (UCC) is a concept that proposes the unification of personal laws across...

Role Of Artificial Intelligence In Legal...

Titile

Artificial intelligence (AI) is revolutionizing various sectors of the economy, and the legal i...