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Evolution of Consumer Laws Around The Globe And In India

A Consumer is defined as one who consumes or uses any commodity or service available to him either from natural resources or through a market. According to John F.Kennedy, “Consumer by definition includes everyone. basically in simple terms it means any person who buys something. All the consumers have some consumer rights provided to them by the law such such as right to be informed, right to be protected, right to be assured, right to be heard, right to seek redressal and right of consumer awareness. All these rights are provided to every consumer and the need for providing these to consumer are:
  1. We need physical protection of the consumer, for example protection against products that are unsafe or dangerous to his health and welfare.
  2. Consumer want protection against deceptive and unfair trade and market practices.
  3. Consumers protection is needed against all types of pollution so that they can enjoy a healthy environment-free from water, air and food pollution.
  4. Consumer protection is also needed against the abuse of monopolistic and restrictive trade practices. Protection delayed is protection denied.

Now, when we all have go through the basic of Consumer laws ,what is a consumer what are the rights that every consumer posses and why is there a need of protection of consumer rights now we are going to study how our consumer laws have evolved to from the barter system to modern- day Consumer protection act.

Evolution Of Consumer Laws:

When we study about the course of development of the consumer rights around the worlds and in India, we should start understanding about its history so we can take a closer look on how it developed.

History:

Around The Globe:

The consumer constitutes the starting point of economic activities and its role has always been valued by the development of the market. In effect, an adequate consumer protection allows the economic systems to work through the consolidation of the rights of the citizens. The Old Testament mentions a form of consumer protection, and so does the Code of Hammurabi, but only in a mercantile perspective. An early form of movement in defense of consumers was born in the United States where the bases for the birth and development of monopoly and oligopolistic capitalism have been started.

Until the 18th century, the consumers had to verify themselves the quality of the goods they purchased and only in presence of gross negligence the seller could have been hold liable. The struggle against capitalism and food fraud started the first phase of consumerism but it wasn't until the third phase, in the 1950s, that we saw the involvement of the European countries. The first consumer's organizations were born in Denmark in 1947 and in Great Britain in 1955 where the Government created the Consumer Council in order to enable consumers to express themselves on issues reserved to producers and traders.

But the real normative breakthrough came with the Single European Act; it modified the Treaty of Rome by strengthening the role of the Economic and Social Committee, to whom were attributed powers to protect the consumers. Over the years, some important changes were made to that paved the way for a wider consumer policy. But despite these additions, it still lacked a solid foundation that allowed getting a real consumer protection. And from here on the actual development started.

In 1962, former US President John F Kennedy declared four basic consumer rights:
  • The right to safety;
  • The right to be informed;
  • The right to choose and
  • The right to be heard.

His declaration issued a license for the world's consumer groups which have expanded since then to reflect the need of consumers in the market.

The guidelines were formulated to:
  • Assist countries to achieve and maintain adequate protection for consumers
  • Encourage ethical conduct in the market
  • Encourage the development of market conditions which provide consumers with greater choice at lower prices

After extensive international consultation, UN General Assembly adopted few UN Guidelines for Consumer Protection in April 1985, and updated in 1999. All this acted as a tool for the nations to support consumer protection. At the international level this has become the foundation for consumer movement. Today 240 organizations from over 100 countries has come up and united under a single body named Consumers International.

India:

In India the movement was initiated as a ‘social force' to safeguard and encourage the interests of the consumers. But the Consumer Protection Act in 1986 gave it a legal authority with the declaration of six consumer rights. Separate government departments of consumer affairs were set up and three tier system of consumer courts at national, state and district levels.

As codified under the Indian Laws the Consumers have the following Rights:
  • Right to Safety-to protect against hazardous goods
  • Right to be Informed-about price, quality, purity
  • Right to choose-access to a variety of goods and services at competitive prices.
  • Right to be Heard-consumers interest and welfare must be taken care of
  • Right to seek Redress-protection against unfair trade practices and settling genuine grievances.
  • Right to Consumer Education. -Knowledge about goods and issues related to consumers.
As stated earlier, Consumer Protection Act was enacted so as to have a single comprehensive law for the protection of the interest of consumers and for the creation of special courts to solve the consumer disputes speedily and inexpensive manner.

Salient features of the Act are as follows:
  • Declaration of Six Consumer Rights.
  • Setting up of a separate Department of Consumer Affairs in Central and State Governments.
  • Setting up of a three tier consumer courts for deciding the consumer disputes, namely:
    i. National Commission at national level
    ii. State Commission at State Level
    iii. District Commission at District Level
This was all about how it all started and evolved around the globe and in India and give it a legalized framework.Now we'll study about the latest amendments of consumer law of India.

The Consumer Protection Act,2019:

Recently(9TH August,2019),president gave assent to the Consumer Protection Act,2019.The new act,which would replace the consumer protection act,1986 is not an amendment to the 1986 law,but a new consumer protection law with many changes for instance, section 107 is now repealed.This new act proposes law of measures and tightens the existing rules to further safeguard consumer rights. It aims to address consumer vulerabilities to new forms of unfair trade practices and unethical business practices in the fast-changing new-age economy.

So the amendments in the Consumer Protection Act,2019 are as follows:
  • Definition of ‘Consumer' expanded: A consumer now also includes a purchaser who purchases goods on-line. ( S. 2(7), Explanation).
     
  • Liability of Endorsers : An endorser of a product / service ( for instance a Celebrity inviting you to buy a house) finds mention in CPA 2019. Endorsers have onus (in addition to manufacturer / service provider ) to not participate in false / misleading advertisements. (S. 21).
     
  • Goods now explicitly include ‘food' as well: As defined in Food Safety and Standard Act 2006. (S. 2(21). So, every food vendor, including food delivery platforms are also now in the ambit of CPA 2019.
     
  • Services now explicitly include ‘Telecom' as well : As set out in S. 2(42). Interestingly though, the definition of Telecom services is not there. Perhaps it is considered as a very common in-use term.
     
  • Product Liability introduced : Whole of chapter VI of the new Act is devoted to this. Manufacturers / sellers of products/services are liable to compensate a consumer for any harm caused due defective products or deficiency in services. Exceptions have also been provided therein to provide reasonable protection to the manufacturers / sellers. For instance, a product manufacturer ‘shall not be liable for failure to instruct or warn about a danger which is obvious or commonly known to the user or consumer of such product or which, such user or consumer, ought to have known, taking into account the characteristics of such product.'
     
  • Unfair Contracts introduced: S. 2 (46) explicitly introduces this and other sections provide for various reliefs, including nullification of such contracts. Certainly this is a welcome step.
     
  • Scope of ‘unfair trade practices' enhanced: S. 2(47) elaborates on such practices and includes, for instance, misleading advertising, refusal to take back defective goods, refusal to refund consideration for such goods within period specified( and if no period specified within thirty days) etc. An unfair trade practice also includes ‘(ix) disclosing to other person any personal information given in confidence by the consumer unless such disclosure is made in accordance with the provisions of any law for the time being in force.'
     
  • Pecuniary Jurisdictions enhanced : Now consumers can approach relevant District Commissions for complaints valued upto Rs. 1 Crore (S. 34(1)), State Commissions for complaints valued above Rs. 1 Crore and upto Rs. 10 Crore ( S. 47(1)) , and the National Commission for complaints valued above Rs. 10 Crore ( S. 58(1)). This is expected to reduce the burden on the State and National Commissions.
     
  • Locational Jurisdiction of the Consumer Commissions expanded : Now complaints can be made in the jurisdiction where the complainant resides or personally works for gain (S. 34(2). Per CPA 1986 complaints had to be instituted where the Opposite Party resided or conducted business, or where the cause of action arose. This will certainly ease the burden on the complainants as they can institute a complaint at district level where they reside and need not travel afar to pursue their complaints. Besides, it may also reduce burden on the state and national level Commissions.
     
  • Admissibility of complaints to be decided within twenty-one days: Although this was there in CPA 1986 as well, CPA 2019 makes this stronger with an enabling provision. That is, if the issue of whether the complaint is admissible or not to begin with ( for instance, the Complainant may not be a consumer as per the Act, or the Commission where the complaint is lodged may not have jurisdiction) is not decided within twenty-one days of the Complaint being made, the complaint shall be ‘deemed to have been admitted'. (S. 36(3).

    Interestingly, this provision seems to be only for the District Commissions and is lacking in case of State and National Commissions. Procedural amendments in rules may follow
     
  • Judicial Review introduced : The District, State and National Commissions can all review their own orders if there is any error apparent on the face of the record, either of their own motion or on an application made by any of the parties to the complaint within thirty days of such an order. ( S. 40, S. 50 and S. 60 ) . This is a welcome step and will reduce the burden of appeals on State and National Commissions.
     
  • Appeal from State to National Commission only when substantial question of law : While CPA 1986 did not ask for any such grounds, CPA 2019 allows for appeal only in this specific case, the issue of whether the appeal rests on a ‘substantial question of law' to be decided by the National Commission ( S. 51(2) ). Hence CPA 2019 renders the State Commissions as practically the last forums.

    At the same time however, an appeal lies both on facts and question of law if someone fails to comply with an order of a Commission and punishment thereupon (S. 72(1) and S. 73(1). S. 73(1) prescribes the hierarchy (as before) as District, State, National Commissions with final appeal lying with the Supreme Court. This raises the specter of disobedience of a lower forum orders to get the opportunity to agitate the matters again in front of higher forum.
     
  • Appeals from National Commission to Supreme Court only when complaints originally filed in National Commission: This is clear from a reading of S. 67. This means that a complaint filed in a District Forum can be pursued only till corresponding state forum and no further.
     
  • E-filing of complaints: In a strong effort to be consumer friendly, CPA 2019 provides for a consumer to electronically file his/her complaint to the forum having required jurisdiction ( S. 35 (1), proviso). S. 101(2)(p) enables the Central Government to formulate the rules for this purpose.
     
  • Hearings via video-conferencing: At the District level, upon an application made for hearing or for examination of parties in person or through video conferencing, the District Commission may, on sufficient cause being shown, and after recording its reasons in writing, allow the same. S. 38(6), proviso.
     
  • Central Consumer Protection Authority established: Whole of chapter III ( S. 10 to S. 27) of CPA 2019 is devoted to the Central Consumer Protection Authority ( CCPA). The CCPA will have an investigation wing to conduct inquiry/investigation into consumer law violations. It has been granted wider powers such as suo-motu actions, recall products, order reimbursement of the price of goods/services, cancel licenses and file class action suits, if a consumer complaint affects more than one individual. Additionally, the Authority can also file complaints and intervene in matters before corresponding consumer commissions.

    The major focus of the CCPA is violations such as misleading advertisements that have potential to affect a large number of consumers. Existing District Collectors will carry out the inquiries and investigations. Search and seizure may be carried out by officers appointed under CCPA, or by existing District Collectors. Appeals against orders of CCPA lie before the National Commission.
     
  • Mediation introduced: CPA 2019 introduces alternate dispute resolution mechanism of mediation with chapter V ( S. 74 to S. 81 ) devoted to it, as well as at other places such as S. 37. Hopefully, this will make dispute resolution quicker and easier for all the stakeholders and also reduce pressure on the Consumer Courts.

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