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NATIONAL UNIVERSITY OF ADVANCED

LEGAL STUDIES

(A State University Est. by Act 27,2005 of Kerala State Legislature)

KOCHI, KERALA

Nandan M

1st Semester-Batch A-B.A L.L..B(Hons.)-2023-28

Roll no:2067

THE CONSUMER PROTECTION ACT

Submitted to: Mr. Jacob Joseph

Faculty: LEGAL METHODS (National University of Advanced

Legal Studies)

Date of submission: 16 October 2023


2

ABSTRACT

This project looks into one of the most critical topics in the modern economic and

legal age: Consumer Protection. The project highlights the importance of The Consumer

Protection Act 1986 and 2019 in our lives. It provides awareness about the rights every

citizen has as a consumer. Also, in this modern era where the economy is rapidly changing

in various ways, and the emergence of electronic commerce, artificial intelligence, and

electronic business also enormously affected the market, consumer rights undergo several

changes discussed in this project. The historical aspect relating to consumer protection laws,

the rights guaranteed, the challenges they face, and several other issues are also dealt with in

this paper.
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CONTENTS

1. INTRODUCTION………………………………………………………………………4

2. THE CONSUMER PROTECTION ACT……………………………………………….4-5

3. Objectives, Scope of Application, and Guidelines for Consumer Protection under the

United Nations….............................................................................……………………5-7

4. Significant elements that constitute the Consumer Protection Act in India……………..8-

11

5. E-Commerce and Consumer Protection..........................................………………… .11-12

6. Benefits and Issues faced by consumers through e-commerce……………………... .12-13

7. Need of Legal defense for Consumer Protection through e- commerce………………14-

15

8. Important Cases…………………………………………………………………..……….15-17

9. CONCLUSION...............................................................................…………………...18
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INTRODUCTION

“Jago grahak jago” or “customer is the king” are some of the slogans that we have

often come across in our daily lives and must have caught our attention in some point of

time. These slogans are aimed at creating consumer awareness and advocating importance

of consumer. The Consumer Protection Act, whether it is India or the whole world, is one

of the most important laws in the world, both in a social and economic view. The Consumer

Protection Act 1986 was implemented in India to safeguard the rights and grievances the

citizens had as a consumer and provide appropriate measures and compensations for their

rights violated about goods and services they had consumed or were to consume. This Act

prevents the producers from finding loopholes in trade laws and conducting their businesses

illegally related to their respective goods or services. It ensures aid to producers and

consumers when a situation arises to avoid a long and tiring case and finish the position

legally the fastest way.

THE CONSUMER PROTECTION ACT

The Consumer Protection Act is an Act that protects the interests of the consumer

when relating to the product they consumed having undergone a particular situation that

needs settlement through authorities, which ensures that the consumers are compensated

effectively by the party they need compensation from. It is spread throughout India except

the states of Jammu and Kashmir.


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This Act is considered one of the most significant pieces of the Indian Legislature as it

revolutionized the rights and protection of the consumers of India. It defines who a consumer

is and by what provisions, deficiencies, or unfair happenings the consumer can claim

compensation from the producer. It also talks about the ways and methods through which a

consumer can file a complaint to the concerned authorities, which protects and safeguards

the consumer's rights. Even though this Act stood through time effectively, it did not predict

the emergence of commerce in the modern era, that is, the electronic way of business.

Therefore, for the upbringing of provisions and rules relating to modern economic methods

like e-commerce, online shopping, etc., the government of India gave rise to a bill called the

Consumer Protection Bill in 2018, which eventually got passed and became the Consumer

Protection Act,2019. The 2019 Act widens the scope of consumer protection, mainly through

e-commerce, unfair contracts, and product liability. It also explored aspects like Misleading

Advertisements, Dispute Redressal Commissions, and Consumer Rights at different levels

where the 1986 Act failed to.1

Objectives, Scope of Application, and Guidelines for Consumer

Protection under the United Nations

The United Nations has provided several objectives and guidelines for the

Consumer Protection rules and where these can be applicable. Countries that come under

the UN generally follow these to keep a uniform rule system for the betterment of the

1
Taj Reefa H, COMPARATIVE ANALYSIS OF CONSUMER PROTECTION
ACT, 1986 WITH THE 2019 ACT, Vol. 2, Indian Journal of Integrated Research in Law, 1, 2022
6

people. These rules given by the United Nations consist of a vast network, and some of the

most important of them are discussed below:

OBJECTIVES:

(a) Assisting the citizens of the country to obtain adequate protection relating

to their rights as a consumer

(b) Identifying the needs and desires of the consumer and producing and distributing

goods and services according to those needs

(c) For ethical conduct of trade practices of the producers and

distributors (d)For the development of independent consumer groups

(e) For upbringing of market conditions that provide goods and services of more

excellent choices with lower prices. 2

SCOPE OF APPLICATION:

The scope on which the Consumer Protection Act is applicable widens to a large

extent. This Act defines who qualifies as a consumer (it can be an individual, household, or

business that purchases goods for personal, family, or household purposes), the goods,

services, and transactions covered, Businesses that are regulated, Rights are given to

Consumers, Practices that has been prohibited, Mechanisms that can be used to enforce the

rights of the consumers, Penalties, and Remedies for violation of the rights of consumers,

2
UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT,
https://unctad.org/system/files/official-document/ditccplpmisc2016d1_en.pdf, 15 Oct 2023
7

Jurisdiction of the Act, etc. It also established the authorities that must enforce consumer

rights and form consumer organizations to protect these rights. 3

GUIDELINES:

(a) The National Policies for Consumer Protection like fair business practices,

proper availability of information to the consumers for easy accessibility to the

businesses and accurate information regarding the goods and services offered by the

companies, fair policies regarding return, refund, confirmation and cancellation of

transactions, secure payment methods and proper business and product education.

(b) Physical safety guidelines, which are to adopt appropriate measures, including legal

systems that provide safety regulations, certified national, international, or voluntary

standards, proper proof of safety records that show that the product is safe for use, and

every kind of precaution to be taken if by any chance there are defects found in the

product.

(c) To promote and protect the economic interests of consumers, provide distribution

facilities for essential consumer goods and services, dispute resolution and redress,

education and informative programs about consumer protection, promotion of sustainable

consumption, establish measures relating to certain specific areas that need special

attention and promote international cooperation. \

3
Supra note 2
8

Significant elements that constitute the Consumer Protection

Act in India: The Rights and Regulations under the

Consumer Protections Act and How a Complaint is filed

RIGHTS:

1) Right to Safety- A consumer has every right to get complete information about the

quality and guarantee of the goods they insist on buying. Producers generally use

several certifications like ISI and AGMARK to prove that their product is of accepted

quality.

2) Right to Choose- Choose-The Consumer has every right to choose the goods/service

they want from a variety they have found satisfiable with the aspects of quality, quantity,

price, etc.

3) The right to be informed is the right of a consumer to attain knowledge about the

complete details of the product that has to be given by the producer, which decides

whether the consumer buys the product or not.

4)Right to Consumer Education- The Consumer also has the right to know about his

rights, as ignorance can cost them more.


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5) The right to be heard is given to the consumer to file a complaint and listen to

their grievances when their consumer rights have been violated.

6)Right to seek compensation- The right of the consumer to seek appropriate

compensation when their consumer rights have been exploited.4

REGULATIONS:

1) Responsibility to be aware – Consumers should be mindful of the quality and

safety of the products they ought to buy.

2) Responsibility to think independently–Consumers should be well assured about

their independent choices about what they want and need.

3) Responsibility to speak out: Consumers should speak out if they have faced

any problems due to the product and give feedback about their taste preferences.

4) Responsibility to complain- The Consumer should express their dissatisfaction,

if any, and file a complaint for that product.

5) Responsibility to be an Ethical Consumer- They should be fair in their activities

and not engage in deceptive practices.

4
Byjus’s, What is Consumer Protection Act? meaning, definition, rights and responsibilities (byjus.com), 15 Oct
2023
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HOW TO FILE A COMPLAINT:

While filing a complaint, several things must be considered to get relief for

violating consumer protection rights. The complaint should talk briefly about the details of

the problem and whether the consumer wants a replacement or exchange of the product or

compensation for the mental or physical torture they have gone through. The person filing

the complaint can send it to the consumer forum via email, post, fax, or hand-delivered in

any language. The consumer should also keep the receipts, bills, or any other materials that

act as proof of purchase, and saving every document that has been sent or received is also

advised. There's also a time limit when the consumer can file a complaint within two years

of purchasing the product or service. If all these guidelines are followed when filing a

complaint for consumer protection rights, your complaint shall be valid.

There are three dispute resolution forums and on the basis of the below mentioned

territorial and pecuniary jurisdiction, the complaints can be filed.

At the district level, there is district consumer dispute redressal commission or

district forum. Complaints can be filed in district forum within whose jurisdiction any of

the parties reside or in case cause of action accrued in within the respective jurisdiction.

The district forum entertains only those matters where total value of the goods or services

or goods sought are not exceeding 20 lakh rupees.

At the state level, there is state consumer redressal commission or state

commission. The forum entertains only complaints where the value of the goods and

services or compensation in total exceeds 20 lakhs rupees but does not exceed 1 crore

rupees and entertain appeals too from respective district consumer dispute redressal forum.

At the national level, there is national consumer dispute redressal commission. It

entertains complaints and appeals from orders of state consumer dispute redressal forums.
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Appeals from the orders of national commission shall lie with the Supreme Court of India. 5

E-Commerce and Consumer Protection

Technology is the most growing aspect of the modern era. In this ever increasing

stage of technology, by analyzing our current lives, we can assure you with no doubt that its

impact on every part of our lives, including business activities, is enormous. Therefore, the

effect on consumers has also become very large, and it has even changed the tastes and

preferences of consumers according to the best technological advancements in the

ecommerce field. The emergence and improvement of e-commerce and its subsidiaries, like

online transactions, massively helped the world's economy. It also gave rise to various

issues, and because of this, a new framework on how businesses should be conducted

5
Law Senate, https://www.lawsenate.com/publications/articles/consumer-protection-in-india.pdf, 14 Oct 2023
12

online has been developed. The framework is designed in such a way that it protects the

interests of both the supplier and the consumer. (Khare 61)

Benefits and Issues faced by consumers through e-commerce

When taking the influence of e-commerce, it's the advantages that have

supremacy over the disadvantages; some of them are:

a) global access and more excellent choice

b) enhanced competitiveness and quality of service

c) mass customization and personalized products and services

d) elimination of intermediaries and product availability

e) greater efficiency and lower costs

f) new business opportunities and new products and services

Even though the benefits are extended to a wide range, the issues that come with

it must also be considered. The many problems that come with the use of e-commerce

include the following:

1) The Consumer will be exposed to unfair marketing ways through improper disclosure
of information, fraudulent enforceability of contracts, unfair merchandise and

delivery practices, payment frauds, etc.


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2) Unsafe product.

3) Confidentiality of any information that consumers provide.

4) Identity of seller.

5) Effective grievance system and legal remedies if anything goes wrong.

6) Protection from the ill effects of highly competitive markets may include selling
the same product at different prices.

7) Goods delivered should correspond to the description, quality, and quantity the
consumer has paid for.

8) Delivery of goods at the correct place and time.

9) Insecure payment methods.

10) Loss of personal privacy (Violation of data privacy).

11) Risk and misuse of personal information.

12) Other concerns include computer fraud, hacking, viruses, interception and alteration
of financial data, and misuse of personal information. 6

6
Rajiv Khare and Gargi Rajvanshi, E-COMMERCE AND CONSUMER PROTECTION: A CRITICAL
ANALYSIS OF LEGAL REGULATIONS, https://clap.nls.ac.in/wp-content/uploads/2021/01/E-COMMERCE-
AND-CONSUMER-PROTECTION-A-CRITICAL-ANALYSIS-OF-LEGAL-REGULATIONS.pdf, 2021
14

Need for Legal defense for Consumer Protection through e-commerce.

In the above discussion about the benefits and issues faced by Consumers during

E-Commerce usage, we noted that although e-commerce undoubtedly offers consumers

several advantages when conducting their commercial transactions, it also has drawbacks.

To the protection of consumers as well.

This negative response to e-commerce affects the customer's interest in and

readiness to take action concerning consumer protection and perform ecommerce

transactions, which could harm the development of e-commerce.

Consequently, a clear and sufficient set of laws and regulations is necessary to address the

problems with consumer protection in e-commerce.

Transactions that won't just contest the necessity of consumer protection increases the

confidence of Consumers. Legal and regulatory frameworks that are sufficient and effective

have to be developed with the title of Consumer Protection laws for e-commerce for the

betterment of the consumers.

Several researchers discussed the need to find the pros and cons of every system for welfare

in society; as Furmstone said, "the aim of contract law should be the protection of the

contractual relationship and the balancing of the involved interests which is attainable

through the articulation of legal standards ” Applying the same balancing theory in solving

the issues of consumer protection in e-commerce transactions, it is argued that the role of

consumer protection law should be "to regulate market practices and social practices for

controlling distressing consequences of probable violation of consumer protection with a


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view of ensuring adequate consumer protection along with the growth of e-commerce

market." The laws and other regulatory mechanisms should protect consumer welfare and

support consumer's free will in e-commerce without fear of losing fundamental consumer

rights in those transactions." .Sahoo and Chatterjee believed that in online business

transactions (e-commerce), unfair and deceptive sellers' market strategies and practices may

not only infringe basic consumer protection standards but likely diminish the e-commerce

market's growth. In light of this, it may further be argued that the legal arrangement of the

electronic marketplace under the perspective of consumer protection and the growth of e-

commerce will support the reconsideration of consumer protection rules and mandates to be

applicable in cyberspace at the more efficient, convincing and rewarding approach to

consumer protection in e-commerce. 7

IMPORTANT CASES

1. Manjeet Singh Vs. National Insurance Company Ltd. & Anr: In this case, the appellant

had purchased a second - hand truck under a Hire Purchase agreement. The vehicle was

insured by the respondent insurance company. One day when he was driving the truck, a

passenger asked him to stop the truck and give him a lift. When he stopped the truck, the

passenger brutally assaulted the driver and fled with the vehicle. An FIR was lodged and the

respondent finance company was intimated about the theft. However, the insurance company

rejected the claim on the ground of breach of terms of the policy. The complainant

approached District Consumer Disputes Forum, State Commission and National Commission

to compensate him for the loss. All of them had rejected the case. So, finally he approached

the Supreme Court.

Judgment: The Supreme Court held that the appellant was not at all in fault. It can be

considered as a breach of the policy, but not a fundamental breach to bring the insurance
7
Ragvanshi, supra note 6.
16

policy to an end and terminate the insurance policy. The two - judge bench of Supreme Court

directed the respondent insurance company to pay 75% of the insured amount along with 9%

interest p.a. from the date of filing the claim. The court also directed the insurance company

to pay sum of Rs. 1, 00, 000 as compensation.

2. National Insurance Company Ltd. Vs. Hindustan Safety Glass Works Ltd. & Anr.

In this case, the insurance company had refused to compensate the respondent because of

damage caused due to heavy rain during a mentioned period. On the grounds of one of the

policy's clauses, which specified that National Insurance would not be responsible for any loss

or damage for 12 months following the occurrence of the loss or damage to the insured, the

Insurance Company admittedly refused relief to the insured. The insured reported the incident

to the National Commission in line with the requirements of the Consumer Protection Act of

1986.

Judgment: The National Commission held that the claim made by the insured is actionable. It

also observed that the goods were insured at the time of incident and he asked for the claim

next day. It rejected all the contentions urged by National Insurance and ordered the insurance

company to award an amount of Rs. 21, 05,803.89 with interest at 9% per annum.

3. Karnataka Power Transmission Corporation (KPTC) Vs. Ashok Iron Works Private

Limited

Ashok Iron Works, a private company which manufactures iron had applied for obtaining

electricity from the state’s power generation company - the Karnataka Power Transmission

Corporation (hereinafter KTPC) for commencing its iron production. Inspite of paying

charges and obtaining confirmation for the supply of 1500 KVA energy in February 1991, the

actual supply did not begin until ten months later, in November 1991. This delay incurred a

huge loss for Ashok Iron Works. This company had filed a complaint to the Belgaum
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Consumer Dispute Forum and later Karnataka High Court. The legal argument by KTPC was

that the complaint was not maintainable as the consumer Protection Act 1986 excludes

commercial supply of goods. It also made an argument that the company in engaged in

manufacturing iron and intended to use it for commercial consumption which is excluded

under the Act. Additionally, he said that the complaint is not a "person" as defined by Section

2(1)(m) of the Act of 1986.

Judgment: In this case, Supreme Court gave his rulings. The Supreme Court mentioned the

General Clause Act that includes a private company within the purview of the definition of a

“Person.”It was also determined that the KPTC's provision of power to a customer would be

considered a "service" for the purposes of Section 2(1)(o). Additionally, under Section (2)(1)

(g), a consumer may claim a failure in service if the electrical energy consumer is not

delivered to them in a timely manner as promised.

Therefore, the clause stating “supply” of goods for commercial purpose would not be applied.

The Supreme Court sent this case back to District Forum for retrial on these grounds.8

CONCLUSION
8
Legit Quest, Top 7 Consumer Protection Act Cases - Legitquest, 14 Oct 2023
18

Any reader who wants to gain basic knowledge of what Consumer Protection is

and its different aspects can quickly gain understanding from the above discussed essay.

The essay discussed Consumer Protection descriptively and comprehensively on how it is

relevant in the modern world. It talks about the emergence of different rules and regulations

and how it is suitable for every citizen in the country.

Most consumers don't know their rights and importance while they are the critical

factor the world economy revolves around. In this modern period, Consumer protection is

one of the most important aspects of world trade, and even developing a legal career in the

branch of Consumer Protection Law for us as law students is a career of great scope.

The Law for Consumer Protection, a key aspect in this era, still lacks many

essentials. Even though the government has made several laws ensuring the protection of

consumers, some are far beyond reach. In this modern era where unethical hacking and data

and information leak is vast, the government has yet to make efficient laws and adopt

preventive measures for these crimes. Even though there are many existing laws against

these crimes, I still make this statement because e-commerce transactions cheat a large

community of consumers. But there is a limit on which we can blame the inefficiency of the

government for this because even if the government conducted maximum strictness in these

issues, people who commit crimes would still find ways to do it as the internet has many

loopholes. A day will arrive when every consumer can use the market, either electronically

or in a standard manner, and they do not have to fear the current threats they face.

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