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.
NEED FOR CONSUMER PROTECTION ACT IN INDIA:
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.
PURPOSE & OBJECTIVES:
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.