Part I - Unit IV Copra 2019
Part I - Unit IV Copra 2019
Consumer Protection:
Brief history of Consumer Movement.
Introduction to Consumer Protection Act, 2019.
Problems of the consumers,
Consumer Protection Councils.
Definition of key terms: Consumer, Defect, Deficiency, Unfair Trade Practices,
Restrictive Trade Practices.
COPRA, 2019
INTRODUCTION
- LAISSEZ FAIRE – meaning least interference of the Sate in the economic and
commercial dealings of the people (based on individualistic philosophy of absolute
economic freedom of men) – 18th century Industrial Revolution
- Caveat Emptor (let the buyer beware) rule prevailed in the market transactions
- By 19th century – the economic histories reveal – the existence of direct conflict
between the sellers of the commodities and the buyers
- Monopolistic practices (to increase profit)
- Later half of 19th century – influence of individualistic policy – led to capitalism –
eventually resulting in concentration of wealth in the hands of few
- Social thinkers (Bentham, Stuart Mills etc) stand legal reforms – triggered campaigns
and awareness and stressed the need for the regulation of economic law by the State
to curb the unbridled monopolistic practise of merchants and traders in the interest of
public and consumers
- 2nd part of 20th century – development and expansion of trade and commerce
influenced by industrial revolution – different kinds of consumer goods flooded the
market. Likewise, in the field of services – insurance, transport, electricity, houses,
entertainment, finance and banking became prominent
- Well organised traders and manufacturers – MNC trends – strong relationship
between/among the traders & consumers – but let to serious problem with regard to
protection of consumer interests
- The demands of consumer goods and services were influenced by publicity &
advertisements in television, newspapers, magazines etc
- Lesser choice for consumers, defects and deficiency in goods and services (consumers
had to compromise)
- The need for international consumers’ protection movement was felt to protect the
consumers and prevent the exploitative practices by imposing certain restrictions
- International institutions and organisations also contributed for the promotion and
protection of interests and rights of the consumers – such as
o Economic and Social Council (ECOSOC) of UN
o International Labour Organisation (ILO)
o World Health Organisation (WHO)
o United Nations Conference on Trade and Development (UNCTAD)
o United Nations International Children Emergency Fund (UNICEF)
o World Intellectual Property Organisation (WIPO) etc
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Consumer Protection – Historical Perspective
I) Ancient India
- Consumer protection has its deep roots in the rich soil of Indian civilisation (back to
3200 BC) – human values where cherished and ethical practices were of great
importance - all societies followed Dharma Sastras – (derived from Vedas – the
primary source of law)
- Smritis – Consumer protection was also major concern in the ‘smritis’
- Manu Smriti – Manu, the ancient law giver wrote about ethical trade practice –
prescribed a Code of Conduct to traders and specified punishments to those who
committed certain crimes against buyers
- The king had the power to confiscate the entire property of the trader in certain cases.
There was also a mechanism to control prices and punish wrongdoers. There was a
process to inspect all weights and measures every six months and the results of these
inspections were duly noted. Thus, Manu Smriti effectively dealt with various
consumer matters, many of which remain of great concern in modern legal systems.
- Kautilya’s Arthasastra – primarily concerned with matters of practical administration,
consumer protection occupied a prominent place in it. The State regulated trade and it
is its duty to prevent crimes against consumer. Additionally, the director of trade was
made responsible for fair trade practices. During this period, several measures were
taken to maintain official standards of weights and measures. Speculations and
hoarding to influence practices and fraudulent transactions were prohibited. Public
health was guarded by stopping adulteration of food products of all kinds including
grains, oils, alkalies, salt, scents and medicines. During Chandragupta’s period, easy
access to justice for all, including consumers, was considered of great importance.
(Superintendent of Commerce, Superintendent of Standardization etc)
II) Medieval Period
- Consumer Protection continued to be of prime concern of the rulers in the medieval
period. During Muslim rule, large number of units of weights - used in India. During
the Sultanate period, the prices used were determined by local conditions. Strict
controls during Alladin Khilji’s period – established market place, fixed maximum
price of all essential goods such as wheat, barley, rice, pulses, cloth, sugar, sugarcane,
fruit, animal fat, also horses and livestock. Storing/hoarding of paddy, cereals were
prohibited. Black marketing was seriously addressed. Any violations invited serious
punishments on the defaulters – like imposition of fine, imprisonment, expulsion fro
the capital, cutting flesh from face etc. special officers like Diwani-Riyasat, Sahana-i-
mandi were appointed.
III) Modern Period
- British system of administration continued the protection of consumers by enacting
laws – Sale of Goods Act of 1930, The Drugs and Cosmetics Act of 1940, the Indian
Penal Code of 1860 etc. (continued in Genesis of Consumer Protection Laws)
- The need to ensure protection of basic rights of the consumers has been long been
recognised all over the world, and various legislations were enacted in various
countries
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- In India – the consumer’s interest protected by certain General Enactments other
than the law of torts
- It includes
o The Indian Contract Act, 1872
o The Sale of Goods Act, 1930
o The Dangerous Drugs Act, 1930
o The Drugs and Cosmetics Act, 1940
o The Agricultural Produce (Grading and Marketing) Act, 1937
o The Indian Standards Institution (Certification Marks) Act, 1952
o The Prevention of Food Adulteration Act, 1954
o The Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954
o The Essential Commodities Act, 1955
o The Standards of Weights and Measures Act, 1976 (now knows as the Legal
Metrology Act, 2009)
o The Trade and Merchandise Marks Act, 1958 (now the Trade Marks Act,
1999)
o The Patents Act, 1970
o The Hire Purchase Act, 1972
o The Prevention of Black Marketing and Maintenance of Supplies of Essential
Commodities Act, 1980 etc
o +++ Monopolistic and Restrictive Trade Practices Act, 1969 & the National
Security Act, 1980 – both with similar objectives
o The legislations attracted civil liabilities + expensive + time consuming etc
o Paved way for the Consumer Protection Act, 1986
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PROBLEMS OF CONSUMERS – include…
1) Adulteration
2) False weights and measures
3) High prices
4) Low quality products
5) Non-availability of goods
6) Misleading advertisements
7) Black markets
8) Unregulated competitions
9) Unfair terms in contract
10) Fraudulent practices
11) Lack of food safety
12) Mal-administration by State
13) Lack of effective remedies
14) Polluted environment
15) Lack of awareness
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o And to be assured that consumer’s interests will receive due consideration at
appropriate forums
- Right to seek Redressal
o Against unfair trade practices or restrictive trade practices or
unscrupulous exploitation of consumer
- Right to Consumer Education
CONSTITUTIONAL BACKGROUND
COMPARISON TABLE
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SCHEME OF COPRA 2019
Salient Features:
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2. Consumer Disputes Redressal Commissions (CDRCs) are vested with the powers of
Civil Court
3. The Commissions (forums) have the power to award punishment for disobedience
or default in compliance of its orders
4. The doctrine of caveat emptor is not applicable to the Act
5. The principle of ‘privity of contract’ does not apply to consumer dispute cases
6. The Act provides for setting up of Consumer Protection Council (at District, State
and Central level)
7. The Act has been held to have Constitutional validity
8. The Act strictly provides for establishment of mediation cell to be attached to each
of District/State Commission and National Commission
9. The Act provides for Product Liability action against the defaulting manufacturers
or the product service providers with stringent penal provisions
- Chapter II – Sections 3 to 9
Chapter – III
Central Consumer Protection Authority
(Central Authority)
Sections 10 to 27
Establishment of Central Consumer Protection Authority (S. 10)
- By central Government
- To regulate matters relating to
a) Violation of rights of consumer
b) Unfair trade practice
c) False or misleading advertisements
(which are prejudicial to the interests of public and consumers)
Vacancy, etc not to invalidate proceeding of the Central Authority (S. 12)
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- Reimbursement of prices
- Discontinuation of practices
Power of Central Authority to issue direction and penalise against false or misleading
advertisement (S. 21)
- In case of Manufacturer or endorser – penalty – extending to 10 lakhs rupees
- For every subsequent contravention – penalty – 50 lakhs rupees
- ++ prohibit endorsers from making endorsements – for one year
- Subsequent – prohibit upto three years
- Any person publishing misleading advertisement – penalty up to 10 lakhs rupees
Designation of any statutory authority or body to function as Central Authority (S. 23)
Appeal (S.24)
- Any person aggrieved by any order passed by Central Authority (u/S. 20 & 21) – may file
appeal to the National Commission within – 30 days from the date of receipt of such
order
Grants by Central Government (S. 25)
- Complaint – S. 2(6)
- Complainant – S. 2(5)
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- Consumer Dispute – S. 2(8)
- Consumer – S. 2(7)
Complaint – S. 2(6)
Complaint means any allegation in writing, made by the complainant for obtaining any
relief provided u/the Act
Complainant – S. 2(5)
- Complainant means –
i) A consumer, or
ii) Any voluntary consumer association
iii) The Central Government or State Government – CG/SG
iv) The Central Authority
v) One or more consumers – representing consumer interest
vi) i/c of death – legal representative
vii) i/c minor (consumer) – parent or legal guardian
- means a dispute where the person against whom a complaint has been made, denies
or disputes the allegation contained in the complaint.
Consumer – S. 2(7)
Explanation:
Illustrations:
Consumer –
Not a consumer –
Defect – S. 2(10)
Deficiency – S. 2(11)
Goods – S. 2(21)
- ‘goods’ means every kind of movable property and includes ‘food’ as defined in….
the Food Safety and Standards Act, 2006
U/ the Sale of Goods Act, 1930 –
‘Goods’ is defined as per Section 2 (7) of the ‘Act’ as. “Every kind of movable property other than actionable claims
and money; and includes stock and shares, growing crops, grass, and things attached to or forming part of the land
which are agreed to be severed before sale or under the contract of sale.”
Service – S. 2(42)
- ‘service’ means service of any description which is made available to potential users
and includes, but not limited to, the provision of facilities in connection with
- Banking, financing, insurance, transport, processing, supply of electrical or other
energy, telecom, boarding or lodging or both, housing construction, entertainment,
amusement or the purveying (to provide) of news or other information,
- But does not include the rendering of service free of charge or under a contract of
personal service
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Restrictive Trade Practice – S. 2(41)
i) Refusal to deal
ii) Tie-up sales
iii) Full line forcing
iv) Exclusive dealings
v) Price discrimination
vi) Re-sale price maintenance
vii) Area restriction
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g) Gives to the public any warranty or guarantee of the performance, efficacy
or length or life of a product or of any goods that is not based on an adequate
or proper test thereof;
(adequate or proper test – burden of proof – on the person raising such
defence)
h) Makes to the public a representation in a form—
Materially misleading warranty, guarantee or promise
i) Materially misleads the public concerning the price of the
product/goods/service
j) Gives false or misleading facts disparaging the goods, services or trade of
another person
Explanation:
- Statement…
o On article/display/wrapper/container
o Anything attached/inserted
o Advertisement in newspaper etc
o Bargain price
o Offering gifts, prize or other items
o Contest, lottery, game of chance or skill
o Offering gifts, prizes..
o Hoarding or\spurious goods
o Not issuing bills
o Refuse – taking back or withdraw defective goods
o Etc
+++ Offences and penalties of Unfair Trade Practice and Measures taken by the
Authority to prohibit and prevent UTP
Also definition of Misleading Advertisements, illustration and offences and penalties for
misleading advertisements
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