Consumer Protection in India: A Brief Analysis

Aditya Pratap is a lawyer practicing in the Bombay High Court. He can be reached at aditya@adityapratap.com

Introduction

The Consumer Protection Act came into being in 1986, and since its inception a lot has changed in the Indian Market, the main catalyst of that change is definitely the Internet. The Internet has provided a common platform for buyers and sellers across the world, giving birth to the e-commerce which we are familiar with today. But it was not the case back in 1986 and hence, the act had many lacunae which needed to be filled.

With the advent of digital technologies, increasing influence of e-commerce, smart phones, cloud and internet, global supply chains, have provided new opportunities for consumers by providing easy access of products and services. But on the other hand, today’s consumer is vulnerable to new forms of challenges such as, online fraud, ATM data leak, getting defective, substandard, duplicate, poor quality and unsafe products, predatory prices, exploitative and unfair trade and unethical business practices. Further, misleading advertisements especially digital, tele-marketing, multi-level marketing, direct selling and e-tailing are some other challenges which never existed in 1986.

Changing dynamics

Owing to the drastic change in the manner market functions new consumer protection laws were needed. There is a rise in international trade, global supply chains and rapid development of e-commerce. India has also witnessed the backlog of pending cases in the consumer courts, a whopping number of 4.3 lakh cases are pending in our consumer courts. The new market set-up has witnessed mis-leading advertisements, and a special check was needed on direct selling and multi-level marketing. The new Act is going to benefit the society at large and has a lot to offer. But, as the rule goes, there are always challenges which accompany the change and its implementation.

Establishment of the Central Consumer Protection Authority (CCPA)

The latest amendment of the Consumer Protection Act, which was introduced in 2019 has come up with some novel ways to cover the areas which were left in the previous amendments. Central Consumer Protection Authority (CCPA) has been set up to promote, protect and enhance consumer rights. The headquarter shall be in NCR and regional offices shall be decided by the government. The authority shall regulate the violation of consumer rights, unfair trade practices, and misleading advertisements.

To enforce and enhance this authority will be dedicated task for the government and its implication will certainly be very important for 2019 Act.

  • While it is laudable initiative but it is unclear as to how this authority will function and certain function relating to investigations and inquiries.
  • There is an overlap between the functions of director General while considering the investigative wing and search and seizure functions.
  • CCPA is empowered to order recall of goods, reimburse price and issue directions and penalize manufacturers or endorsers. Interestingly, appeal against such orders can only be preferred before the National Commission.
  • The circumstances or the criteria under which National Commission shall entertain such cases is still unclear.
  • It is unclear whether the existing cases will be transferred on account of change in pecuniary jurisdiction. However, there are speculations that only fresh cases shall fall under the new jurisdiction.

Introduction of Alternate Dispute Redressal in CPA

The absence of effective and efficient consumer dispute redressal system can result in lack of consumer confidence in the Justice Delivery System. Consumers find it difficult and expensive to have their disputes settled because most of their claims are of small value and some consumers are low-income earners. The Consumer Protection Act, 2019 seeks to empower consumers against above mentioned challenges and replaces the three-decade old legislature.

In a developing country like India, Alternative Dispute Resolution Mechanism can be one of the best strategies for quicker resolution of consumer disputes and to lessen the burden on the consumer forums and to provide suitable mechanism for expeditious resolution of consumer disputes. As, it is a popular and a true saying indeed that Justice delayed is justice denied the Consumer Protection Act, 2019 envisages introducing the process of mediation for speedy disposal of consumer disputes.

Understanding the act through case laws:

  • Corporate Bodies can be sued under the Consumer Protection Act (CPA):

Karnataka Power Transmission Corporation (KPTC) v Ashok Iron Works Private Limited;

Ashok Iron Works Pvt. Ltd. Filed a complaint under the Consumer Protection Act, 1986, against KPTC claiming damages in the sum of Rs. 99,900 for delay in supply of electricity.

The court allowed the complaint on the two grounds that the applicant – Ashok Iron Works Private Limited, can sue as a person, and that supply of electricity, if found deficient can be a fit ground for claiming compensation. The Supreme Court sent the case back to District Forum for retrial on these grounds.

  • Medical services fall within the scope of the Consumer Protection Act (CPA):

Indian Medical Association v V.P. Shantha and others;

A three-judge bench of the Apex Court ruled that services rendered by a medical practitioner fall within the ambit of ‘services’ under the section (1)(o) of the Consumer Protection Act, 1986.

The Court held that District, State and National Consumer For a can summon experts in the field of medicine, examine evidence and generally act to protect the interest of consumers. Thus, there is no legal bar or deficiency in examining medical profession cases by consumer courts.

  • Educational institutions must refund any extra fee paid:

Sehgal School of Competition v. Dalbir Singh;

The State Tribunal, following the view of the apex court and the National Commission, held that no educational institution shall collect lump sum fee for the duration of the entire course and if one does, such extra fee should be returned in the case the student drops out due to deficiency.

  • Both parents and minor can claim for compensation under the Consumer Protection Act:

Spring Meadows Hospital & Anr v Hajrol Ahluwalia;

This appeal was filed before the Supreme Court by a hospital defending the negligence of its nurses and a doctor which resulted in a minor being in a permanent vegetative state subsequent to a brain haemorrhage. The court held that the definition of services in the CPA is wide enough to include both the parents who pay for the services and the child who is the beneficiary of the services.

  • Discovery rule for medical negligence:

Dr. V.N. Shrikhande v. Anita Sena Fernandes;

The petitioner, Anita Sena Fernandes, alleged negligence by a medical practitioner, Dr. V.N. Shrikhande, claiming that he left a mass of gauge in her abdomen during a procedure to remove stones from the gallbladder. The Supreme Court following the ‘Discovery Rule’ evolved by the courts in the United States, noted that the petitioner had been experiencing pain and discomfort since the time of the operation for which she continued to take painkillers for nine years without consulting the doctor. In light of this, the court set aside the Commission’s order and dismissed the complaint.

Conclusion

People buy goods and services, an inevitable process of their daily lives. We all need food clothing and shelter, which forms the basic necessities of our lives. And with the growing dependency on technology, it has also formed in some shape or form, a basic necessity. The world revolves around technology and the internet. While purchasing goods or services, you can come upon various problems from the one who delivers your goods or the service provider or an online vendor or anyone else.

The Consumer Protection Act is a way to address and resolve those problems. New amendments are introduced time and again to meet with the changing times, as it should. However, there are still many drawbacks and lack of awareness amongst the consumers, as well as the system, which is the reason behind the low success rate and a huge number of pending cases. Combined efforts of the people and policy makers is required to make the situation better.

About the Author – Aditya Pratap

Aditya Pratap is a lawyer practising in Mumbai. He argues cases in the Bombay High Court, Sessions and Magistrate Courts, along with appearances before RERA, NCLT and the Family Court. For further information one may visit his website adityapratap.in or view his YouTube Channel to see his interviews. Questions can be emailed to him at aditya@adityapratap.com.

Cases argued by Aditya Pratap can be viewed here.

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