The Consumer Protection Act of 1986 was by far one of the most thought provoking
and innovative step to stand up for the consumer rights and lead up for their
rights. Although the consumer movement has a lot to achieve but the existence of
the act has stimulated the creation of quite a few good and remarkable consumer
organizations in the country. The number of organizations have grown to around
600-800 organizations in the voluntary sector.
The sad part is that majority of
the consumers in the country are unaware of the existence of these voluntary
organizations and even unaware about the Consumer Protection Act and subsequent
guidelines in the country. While few of the consumers claim that it is because
of lack of these organizations that they are unable to provide proper education
which makes them passive and apathetic, and blame consumer organizations. There
are hardly any unified action and no movement has blossomed in the real sense to
male an impact and demonstrate the strength of the consumer protection in India.
While first step is to understand the historical aspect of how the consumer
protection was even seen in the Ancient India, Mughal period and the Colonial
The discussion would sincerely revolve around the long of consumer
protection in the country. A comprehensive display of facts and figures is
presented along with case law to categorically highlight the current scenario of
consumer protection and allied concept in India. The discussion shall commence
from Pre-Independence times till 2020. The text also throws light on the
formation of Voluntary Consumer Association (VCA) and its legal aspect supported
by Supreme Court Judgements. The discussion would help the readers to lay down
a foundation of deep understanding and analytical approach towards consumer
In ancient India, Manu Smriti laid down the few fundamental core principles to
safeguard consumer interest. Manu Smriti laid down code of conduct for the
traders regarding adulteration, short weight, fixed profits and code of conduct
for the merchants. All goods had a market price or a sale price, as set by the
king. All weights and measures were inspected every six months, and the results
of these inspections were kept a record of.
Such efficient means of consumer
protection has developed in such an early stage of settlement is noteworthy.
Even during the Mughal India, Royals Granaries who had extra food were supposed
to offer food in the emergency period. Even profiteering in trade was also
controlled. Colonial India was all about British Mercantilist Laws on Contracts.
Mercantilist were the rulers during the British era. During this time bulk of
the consumers were poor.
Post-Independence (1950 to 1975)
Post-Independence was a period where India could focus on developing its own
laws for the betterment of the country. It was in the year 1956 where Planning
Commission supported Indian Consumers laws to come up which eventually failed.
In the year 1962 and 1965 India had war with Pakistan and china respectively. It
was at this stage when India felt the shortages of food and essential items as
the prices were very high and public protests broke out.
The same was the period
when food rationing system was introduced. Chain of consumer coop stores were
opened with the government support including Super Bazaars to control prices and
supply. Chain of coffee houses by the coffee workers corporation was getting
common. Certain notable women's movement started such as The Consumer Guidance
Society of India (CGSI), 1966. Voluntary Consumer Associations were created
across the country such as Mumbai Grahak Panchayat which connected 25 to 32
thousand families in a short span of time.
In the year 1978, Consumer Education Research Centre was set-up. Its main
purpose was to protect and promote the interest of the consumers. Certain
exhibitions were started to educate the consumers and Consumer Interest
Litigation was promoted. In 1980 certain notable organizations joined the
movement such as VOICE, New Delhi (1983), CUTS (1984), Jagruk Grahak, Baroda and
RRDalwai in Chennai. Even the United Nations guideline in the year 1985 promoted
the idea of VCOs. It was finally in the year 1986 when Consumer Protection Act,
186 gave boost to concept of Consumer Rights and also Locus Standi to VCOs.
Post 1988 (Setting up of Consumer Courts)
It was for the first time in the year 1988 that a network of consumer courts set
up after litigation in the Supreme Court in the case Common Cause vs UOI & ors
followed by avalanche of cases in 1990s. An attempt was made during this time to
create National Bodies such as CICO and CCC. Even the State designated Ministry
of civil supplies to handle Consumer affairs along with Public Distribution
The Period of 2000
The period was 2000 and this new decade was a turning point in the Indian
history. Campaigns such as Jago Grahak Jago was adopted during this period to
spread consumer awareness. The huge impact that this campaign brought was that
public sector companies started setting up consumer grievance systems to listen
to the consumer complaints. LIC, Petroleum companies and electricity companies
were the first one to adopt this consumer redressal system.
Setting up of
ombudsman was the effective way of functioning in Banking, insurance and
Electricity ombudsman. It was then the private companies also started to adopt
this system. A law was mandated to print consumers helpline number on the
packing which should be in workable condition and can be contacted in working
hours. International standard ISO 10000 Suite was adopted in India.
Regulatory Bodies Set Up for Consumer Welfare:
- TRAI: Telecom Regulatory Authority of India
- SERC: State Electricity Regulatory Authority
- IRDA: Insurance Regulatory and Development Authority
- FSSAI: food Safety and Standards Authority of India
- SEBI: Securities and Exchange Board of India
- RBI: Customer Services Division Created
- BS: Strengthened to handle complaints against Airlines
- RERA: to handle companies against Real Estate Companies
Working Model of VCAs
VCA stands for Voluntary Consumer Association to enforce consumer rights, guide
and assist consumers. They are basically self help or advocacy groups. They may
be dealing with single issue or multiple issues. They also advice and aware the
consumers on nutrition, adulteration, MRP and food labels. They help in
assisting in filing complaints I consumer courts who don't have sufficient
knowledge in drafting and filing consumer cases.
Here are a few criteria for successfully setting up of VCA:
- Permanent Office
- Full time working staff
- One or more regular activity
- Board to manage
- Maintain regular accounts
- Filing of IT returns
- Local, City, District wide Foot Print
- Not a proxy for any commercial interest
Legal standing of VCA (2017 supreme Court ration)
Justices Dipak Misra, A M Khanwilkar and M M Shantangoudara on 21 Feb 2017 SC in
M/s. Amrapali Sapphire Developers Private Limited vs. M/s. Amrapali Sapphire
Flat Buyers Welfare Association
held that multiple flat buyers can join with
VCA to file a complaint. Value of each flat can be combined to decide the
pecuniary jurisdiction of the complaint.
SC Justices Mohan M Shantanagoudar and R Subhash Reddy dismissed a civil appeal
filed by Sobha Hibiscus Condominium Vs. Sobha Developers Ltd
the term Voluntary consumer associations as a body formed by a group of persons
coming together, of their own will and without any pressure or influence from
anyone and without being mandated any other provisions of law.
The VCA is formed by a group of persons coming together, of their own will,
without any pressure or influence from anyone and without being mandated by nay
other provisions of law. An association which contains of members of flat owners
in a building, which has come into existence pursuant to a declaration which is
required to be compulsory under the provisions of 1972 Act, cannot be said to be
Voluntary association to maintain the complaint under Consumer Protection Act.
Vibrant Global Consumer Movement
Consumer International (CI) is the membership organization for consumer groups
around the world. They believe in a world where everyone has access to safe and
sustainable products and services. They bring together over 200 member
organizations in more than 100 countries to empower and champion the rights of
consumers everywhere. There are in total over 125 members in over 100 countries
with Head Quarter in London.
They are their voice in international policy-making forums and the global
marketplace to ensure they are treated safely, fairly and honestly. They are
resolutely independent, unconstrained by businesses or political parties. They
also work in partnership and exercise our influence with integrity, tenacity and
passion to deliver tangible results.
After having being discussed about the history aspect of consumer protection in
India, it shall be worthwhile to note that the Parliament introduced the
Consumer Protection Bill, 2019 on 6 August 2019 to replace the Consumer
Protection Act, 1986. The President gave its assent to this new Act on 9 August
2019. The 2019 Act has been enacted for the purpose of providing timely and
effective administration. It provides enhanced protection to consumers while
taking into consideration the booming e-commerce platform. The new Act expands
the horizon of the meaning of Consumer
by including customers in
involved in E-commerce businesses while its ambit.
The meaning of Unfair Trade Practices as compared to the fact 1986 Act which now
also includes online misleading advertisements, issuing bill/memo for the goods
and services, failing to take back defective goods, refund amount and disclosure
of personal in formation in accordance with law.
The Act also includes the concept of Unfair Contract
. Any complaint
regarding ‘unfair contract' can be filed by a consumer. This would help in
regulating businesses including banks and e-commerce sites that try to take
advantage of their dominant position in the market. One of the remarkable things
that this 2019 Act has proposed is to establish Central Consumer Protection
Authority (CCPA) so as to protect the interest the interest of the unfair trade
practices. The main task of CCPA is to inquire, investigate and take action
against violations of this 2019 Act.
It also penalizes anyone who tries to publish mis-leading advertisements. The
CCPA may give penalty of Rs. 10 lakhs for first violation and up to Rs. 50 lakhs
for subsequent violations along with imprisonment up to 2 years. Another term
introduced is product liability. The term 'product liability' is defined by the
2019 Act as the responsibility of a product manufacturer or product seller, of
any product or service, related to the product to compensate for any harm caused
to a consumer by such defective product manufactured or sold or by deficiency in
services relating to the product.
The consumer can now file complaint where he resides (Territorial jurisdiction).
The pecuniary limit for the District Commission has been increased to up to Rs.1
Crore from up to Rs.20 Lakhs; for State Commission it has been increased to up
to Rs.10 Crores from up to Rs.1 Crore; and for National Commission the pecuniary
jurisdiction has been increased to over and above Rs.10 Crores as against Rs.1
Crore in the 1986 Act. The Act also provides ADR for speedy resolution.
Complaint can also be filed via E-commerce.
Conclusively, the Consumer Protection Act, 2019 provides greater protection to
the consumers. The Act provides technological advancements. However, the major
impact of this Act and subsequent changes along with guided notifications are
yet to be guided by the government.