29 March 2014

consumer protection act


Consumer Protection Act, 1986 is an act to provide for better protection of the interest of consumers and for that purpose to make provisions for the establishments of consumer councils and other authorities for the settlement of consumer’s disputes and for matters connected therewith.

Consumer is considered as the most powerful motivating force and also the purpose of production. At the same time consumer is equally liable to higher penalties segment of the whole marketing system. There were attempts to safe guard the interest of the consumer in a sporadic (occasional) way till 1986 until the Government of India enacted a comprehensive legislation-Consumer Protection Act. The act applies to all the goods and services excluding goods for resale or for commercial purpose and services rendered free of charge and under a contract for personal service. The provisions of the Act are compensatory in nature. It covers public, private, joint and cooperative sectors. 
Consumer Protection Councils are established at the national, state and district level to increase consumer awareness.


The main reasons for the need for consumer protection in India can be explained as follows:
1. Illiteracy and Ignorance:
Consumers in India are mostly illiterate and ignorant. They do not understand their rights. A system is required to protect them from unscrupulous businessmen.
Eg. Illiterate people in India often buy Nokai mobile phones considering it as nokia brand.                      
2. Unorganized Consumers:
In India consumers are widely dispersed and are not united. They are at the mercy of businessmen. On the other hand, producers and traders are organized and powerful.
Eg. Consumers in India often agree to buy substitute products which are relatively cheaper than the standard products. Tooth brush which are not branded but cheaper are introduced to consumers possessing low purchasing power.
3. Spurious Goods:
There is increasing supply of duplicate products. It is very difficult for an ordinary consumer to distinguish between a genuine product and its imitation. It is necessary to protect consumers from such exploitation by ensuring compliance with prescribed norms of quality and safety.
Ex. Eclare was sold as duplicate product of Eclair which is a branded chocolate bit.

4. Deceptive Advertising:
Some businessmen give misleading information about quality, safety and utility of products. Consumers are misled by false advertisement and do not know the real quality of advertised goods. A mechanism is needed to prevent misleading advertisements.
Ex. Pan bahar pan masala is advertised as a safe and symbol of royalty however it contains tobacco, excessive use of which may have adverse effects.
5. Malpractices of Businessmen:
Fraudulent, unethical and monopolistic trade practices on the part of businessmen lead to exploitation of consumers. Consumers often get defective, inferior and substandard goods and poor service. Certain measures are required to protect the consumers against such malpractices.
Ex.  Cases of expired products being sold with new expiry dates have been registered, in order to gain profits from unsold products.
6. Freedom of Enterprise:
 Businessmen must ensure satisfaction of consumers. In the long run, survival and growth of business is not possible without the support and goodwill of consumers. If business does not protect consumers' interests, Government intervention and regulatory measures will grow to curb unfair trade practices.
Ex. Cost of products will vary informally in order to maximize profits if no control is empowered over business enterprises.
7. Legitimacy for Existence:
Business exists to satisfy the needs and desires of consumers. Goods are produced with the purpose of selling them. Goods will, in the long run, sell only when they meet the needs of consumers.
Ex. Indian markets are flooded with variety of fabrics many of which do not fill quality needs, attractive outlook of such fabric cheats consumer on quality points.
8. Trusteeship:
Businessmen are trustees of the society's wealth. Therefore, they should use this wealth for the benefit of people.


The purpose of Consumer Protection act was to protect the basic rights of a consumer as defined by the constitution of India. The basic objective/purpose of this Act is to provide for better protection of the interest of the consumers and for that purpose to make provisions for the establishment of consumer councils and other authorities for the settlement of consumer’s dispute and for matters connected therewith. Hence, the basic objective is to PROTECT and not to provide a loophole and excuses to well organized traders, producers and big business houses and manufactures on technical grounds. Educating the consumer regarding their rights and to propagate awareness about the Act and the ethical practices/means was the other purpose of the act.

Salient features of Consumer Protection Act
Ø  The Act applies to all goods and services
   Unless specially exempted by Union Government
Ø  It covers all sectors – public, private or cooperative
Ø  Provisions of the Act are compensatory in nature.
Ø  It envisages establishment of consumer protection councils at the central and state levels.
Ø  Provisions of this act are in addition to and not in derogation of the provisions of any other act.

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