All India Consumer Council (Government Registered Organisation)
The need for consumerism has been primarily due to the indifference of the business community. The main aim of all business is to maximize profit. Consumers have not only been called upon to pay higher prices but also have to settle at lower quality, spurious, duplicate and adulterated products that are being sold through misleading and powerful advertisement media. Hence, consumerism is required to protect consumer interest. The producer has the power to design the product, distribute, advertise and price it, but the consumer has only the power of not buying it. One may argue that the producer runs his business with greater risks in spite of having several rights, because the veto power remains with consumer. However the consumer often feels that while he has the power of veto, he is not always fully equipped to exercise that power. This situation may be the effect of lack of information, too much indigestible information or even misinformation from one or several competing producers. Consumerism is like any other social movement. It has a big role to pay in the world of business and as such it has to be studied.
The important objectives of the consumer movement as are follows:
- To restore the balance in the buyer-seller relations in the market place.
- To protect and promote the consumer’s interest.
- To safeguard consumer right.
- To prevent consumer exploitation by unscrupulous traders.
- To represent consumer interest before the Government and pressurise the Government to provide a meaningful consumer protection through proper legislation.
- To organize consumer resistance against unfair trade practices and create a strong public opinion in favour of fair trade practices.
- To collaborate with Government and business centres for consumer protection.
- To undertake programmes of consumer education.
- To ensure consumer-oriented practices of marketing programme by business enterprises
- To redress the affected consumer through Government and non-Government organizations.
Consumer Movement thus represents an organised, collective and united effort to create a buyers’ market for all mass consumption of goods and services.
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 tion of quite a few good and remarkable consumer organizations in the country.
The sad part is that majority of the consumers in the country are 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 period.
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 no 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 protection.
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 an 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, the 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 the Consumer Protection Act, 186 gave a boost to the 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 an avalanche of cases in the 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 the Public Distribution System.
The Period of 2000
The period was 2000 and this new decade was a turning point in 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 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 a single issue or multiple issues. They also advise 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:
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
The 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. explained 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 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 information in accordance with the 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 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 misleading advertisements. The CCPA may give a penalty of Rs. 10 lakhs for the 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 a deficiency in services relating to the product.
The consumer can now file a 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. The complaint can also be filed via E-commerce.
Conclusively, the Consumer Protection Act, 2019 provides greater protection to 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.
All India Consumer Council (Govt. Regd. Organisation) in association with Consumer Co-ordination Council has completed a decade of service to the consumers of the country.