Consumer Protection Laws in India


This article was written by Pragha Paramita Saha a student of Lloyd Law College.


 – George Lorimer    

When we buy a good or service, we rarely have adequate knowledge about its quality and safety. We are quite concerned about getting cheated. This is when the need for consumer protection arises. In the past few years, the subject of consumer protection has become a matter of increasing public concern because unscrupulous business tactics seriously affect the nation’s well-being by contributing to social unrest and by causing undue financial distress to consumers. The consumer is the one who pays to consume the goods and services produced. As such, consumers play a vital role in the economic system of a nation. In the absence of their effective demand, the producers would lack a key motivation to produce, which is to sell to consumers.

The term “Consumer Protection” has undergone several changes with growing consumerism and modification of the common law doctrine of “caveat emptor” i.e. let the buyer beware which permits the seller not to shoulder his liability as it shifts the whole of responsibility on the buyer. During the first half of 20th century, the development of consumer welfare societies mushroomed. The President of U.S.A.  Mr. John F. Kennedy in his speech to the Congress, while introducing a bill on consumer’s right, has outlined four rights of the consumer’s, namely:-

  • The right to safety.
  • The right to be informed.
  • The right to choose.
  • The right to be heard.

This bill of Consumer’s Right is now regarded as the magna carta of the rights of consumer.

In India the consumer movement started since 1960 which travelled a long distance to reach to the middle class consumers in 1980. The making of Consumer Protection Act commenced in January 1986, with an All India Seminar held in New Delhi.

What is Consumer Rights Law?

Consumer rights and consumer protection law provide a way individuals to fight back against abusive business practices. It makes aware every individual from any mishappening at the time of buying any product. These laws are designed to hold sellers of goods and services accountable when they seek to profit by taking advantage of a consumer’s lack of information or balancing power. Some conduct addressed by consumer’s rights laws is simply unfair, while other conduct can be described as outright fraud. Consumer rights laws exist at federal and state level. They are enforced by government agencies, offices of attorney general, and through individual and class action law suits filed by victims.

Generally consumer protection comes in the form of government regulations. Consumer protection is a group of laws and organizations designed to ensure the rights of consumers as well as fair trade, competition and accurate information in the marketplace. The laws are designed to prevent business that engage in fraud or specified unfair practices from gaining an advantage over competitors. They may also provide additional protection for those most vulnerable in society.

Expression “Consumer”- As interpreted by the Supreme Court

In Spring Meadows Hospital v. Harjal Ahluwalia[1], the Apex Court has said that extent of persons covered by the expression “Consumer” for claiming compensation, a liberal approach is desirable. Where a child was taken to a private hospital by his parents, said child as well parents could be covered by the expression “consumer” and both of them will be entitled to claim damages on account of negligence on the part of the hospital, its members and doctors.

In the present case, interpretation of clause ii of section 2(1) (d) was involved. In the said clause a consumer would mean a person who hires or avails of any services and includes any beneficiary of such services other than the person who hires or avails of the services. When a young child is taken to a hospital by his parents and the child is treated by the doctor, parents would come within the definition of “consumer” having hired the services and the young child would also become a consumer under inclusive definition being beneficiary of such services.

The definition clause being wide enough to include not only the person who hires the services but also the beneficiary of such services which beneficiary is other than the person who hires the services, it was held that both child and his parents are consumer within the meaning of section 2 (1) (d) (ii) of the consumer protection act, 1986.

Object and Purpose of the Consumer Protection Act, 1986:-

According to Supreme Court of India[2] in terms of preamble of the Consumer Protection Act, 1986, the Act being a beneficial legislation and therefore, the provisions of the Act must receive a liberal construction.

The United Nations has passed a resolution indicating certain guidelines under which the government could make law for better protection of the interest of the consumers. Such laws were more necessary in the developing countries to protect the consumers from hazards to their health and safety and make them available speedier and cheaper redress. Consumerism has been a movement in which the trader and the consumer find each other as adversaries. The Act gives comprehensive definition of “consumer” who is the principal beneficiary of the legislation.

The object of legislature envisaged under the Consumer Protection Act is for redressal of grievance of consumers. They wanted to protect the interest of consumers against the exploitation by traders or manufactures. Therefore, legislation was introduced and enacted with enthusiasm as a benevolent legislation objected to protect consumer from unfair trade practices, exploitation by unscrupulous traders or manufacturers of goods.

The Act provides three-tier forum for redressal of consumer’s grievances,

  • Firstly, the District Forum at district level,
  • Secondly, the State Forum at State level and it is called the State Commission and,
  • Thirdly, the National Commission at the National Level.

The main object behind the constitution of Forums at three-tier levels, namely to ensure speedy redressal of consumer disputes where complainant was not required to undergo long-drawn litigation reflecting so much financial burden on him.

[1] 1998 (4) SCC 39

[2] Spring Meadows Hospital v. Harjal Ahluwalia, 1998 (4) SCC 39: JT 1998 (2) SC 620.

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