CREDIT - RISHI RAJ
TOPIC - Meaning and Definitions of Consumer under CPA, 1986 and 2019, Protection of their Interests of under Criminal Law and other analysis
TABLE OF CASES
Sr.No. NAME OF CASES
1 Spring meadows hospital v. Harjot Ahluwalia
2 Laxmi Engineering Works v. PSG Industrial Institute
3 POONAM VERMA VS ASHWINI PATEL AND OTHERS
INTRODUCTION
Since the very beginning, the person comes into existence, he/she needs some basic amenities to live a life of a human and not a mere animal life, as said in article 21 of the indian constitution also. These basic amenities may be taken as Food, cloth & shelter. And this basic requirement continues to be required throughout the life of the person. Thus we all are consumers in a basic sense.
On the other hand, there are suppliers in the market. When we go to the Market to get the product which has utility for us, we expect some value for our money, the money which we have paid to the seller. That value could be the right quality of the product acquired/purchased , it could be quantity, right price, right information of the goods purchased etc. We expect the sellers to fulfill their duty and meet our expectations, the legitimate ones.
But there may be instances where consumers aren't satisfied or get harrassed or cheated by the sellers. Again cheating and harassing can be done in many ways such as hoarding , black marketing and blackmailing. In addition to all these we live in a world where there is perfect competition ¹ , which also leads to unscrupulous practices of the suppliers or sellers.
The government understood the need to protect the genuine and legitimate buyers from unscrupulous suppliers , and in furtherance of the same, they made certain laws. The Indian government has enacted the sales of goods act, dangerous drugs act, the agricultural produce act, the prevention of food adulteration act and many other several laws of similar kind, each having their own purpose of establishment. These laws, to some extent, protect consumers from untrue and deceitful sellers, thereby protecting consumer's interests too. However these laws require/ demands the buyers to file a civil suit if they want to initiate any type of action against the sellers for their illegitimate practices. The suits may provide them ( buyers) relief, but this process sometimes takes a lot of time and proves expensive sometimes. This might affect the minds of other buyers , not to seek remedy by filing a civil suit.
Taking into mind the above broached problems in seeking remedy, the government in 1986 , for the first time, enacted a law, named Consumer protection act 1986. The very purpose behind establishing this law was to provide speedy Trial and quicker access to redressal of consumer grievances. This was for the first time, the term consumer was defined in legal context. We'll later in this project know about who is the consumer in literal meaning.
Now You might be thinking how the consumers will seek redressal. For this, the act has provided or set-up some grievance redressal mechanisms , whereby the consumers will be listened to by the consumer Forums specially setup for the purpose of grievance redressal only. This act was different from aforementioned acts in the context that it doesn't require the buyers to acquire a lawyer to file a suit
DECODING THE CONSUMER
We often see people using the term " buyer " synonymously with the word "consumer'. As we're analysing the Consumer protection act, it is very important for us to get acquainted with the difference between a consumer and a buyer.
In layman terms, Buyers are persons who purchase goods for consideration and a buyer becomes a consumer when he's the one who'll consume the goods purchased.
A buyer can become a consumer also, when the goods he purchased in exchange of money or something worth value , sells it to any other person.
Now, let us understand the term consumer as given in the new Consumer Protection Act, 2019.
Consumer according to the CPA 2019, which was enacted in July 20,2020, published by the ministry's of law and justice, means any person who
(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or
under any system of deferred payment, when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or
(ii) hires or avails of any service for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such service other than the person who hires or avails of the services for consideration paid or promised, or partly
paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person, but does not include a person who avails of such service for any commercial purpose.
Explanation.—For the purposes of this clause,—
(a) the expression "commercial purpose" does not include use by a person of goods bought and used by him exclusively for the purpose of
earning his livelihood, by means of self-employment;
(b) the expressions "buys any goods" and "hires or avails any services" includes
offline or online transactions through electronic means
or by teleshopping or direct selling or multi-level marketing.
EVOLUTION OF CONSUMER PROTECTION ACT & WHY THERE WAS A NEED FOR IT.
As we discussed earlier, from the birth of an individual to its end, he needs goods for various purposes. Goods can be Edible goods, non edible goods. Not online he needs goods for his survival, but another key thing he requires is Services.
There are certain rights of the consumer. Rather say, these rights are the basic expectations of a consumer, when he goes to the Market for purchasing goods and Services.
Earlier, say before 1986, the consumers were not aware of their rights. This sentence can be backed by the fact that there was only approx 48% literacy rate in the 1990s. The then congress government felt it as a necessarily required step to bring an act, which was going to be enacted only for consumers. The act was passed in the Assembly in October 1986 and came into force on December 24, 1986. Since then, we have named 24th December as "Consumer day". This was set-up for the speedy settling of disputes, arising from unfair trade practices of the sellers.
This Act is regarded as the 'Magna Carta' in the field of consumer protection for checking unfair trade practices, ‘defects in goods’ and ‘deficiencies in services’ as far as India is concerned. This act led to the widespread establishment of the consumer forums and appellate courts all over india. It has, to a very large extent, has impacted the vision of businesses towards consumers.
The said act also gave some rights to the consumers which have empowered them to a great extent. There rights are :-
(i) the right to be protected against the marketing of goods, products or services which are hazardous to life and property;
(ii) the right to be informed about the quality, quantity, potency, purity, standard and price of goods, products or services, as the case may be, so as to protect the consumer against unfair trade practices;
(iii) the right to be assured, wherever possible, access to a variety of goods, products or services at competitive prices;
(iv) the right to be heard and to be assured that consumer's interests will receive due consideration at appropriate fora;
(v) the right to seek redressal against unfair trade practice or restrictive trade practices or unscrupulous exploitation of consumers; and
(vi) the right to consumer awareness;
The then government , for saving the aforementioned rights of the consumers , came up with the CPA 1986.
WHY THERE WAS A NEED TO REPEAL THE 1986 LAW | LIMITATIONS IN THE THEN EXISTING LEGAL APPROACH
The CPA 1986, even though it had changed the perspective towards the consumers, had some limitations. It had limitations in terms of penalty it could impose. The sanctions were limited only to civil ones. It could only provide civil remedies. Due to this limited sanction, various forms of consumer harassment activities were not sufficiently addressed. As a consequence, the act went through a major change, got repealed and eventually got replaced by a new legislation, CPA 2019.
Several Sections of the Act came into force on July 20, 2020 and the remaining Sections came into force on July 24, 2020.
Despite having special provisions for consumers to protect them from unfair trade practices, the old law(1986) , in some manners, has been found ineffective throughout the time.
The act to some extent has failed in regulating certain wrongs and deceptive acts committed against consumers. One such was in relation to product liability.
In 2015, there was a case of excess content of lead in maggie.
According to a March 2019 recall, more than 50,000 Volkswagen Golf, Jetta, and Tiguan models manufactured from 2015 through 2019 are at risk for tire failures and crashes.
These two cases show the deficiency of the old act in dealing with the issues related to certain defective goods and services. There are many more which show the deficiency of the old law in proving itself as sufficient for providing relief to consumers.
Another issue which could be highlighted when it comes to state the reason for the requirement of new legislation is the promotion and advertisement of unhealthy and fatal products. We often see celebrities promoting the sales of Gutka, tobacco , pan masala and many more unhygienic products. These types of false and misleading endorsements and advertisements can indirectly affect the right to choice of an individual, clearly broached in CPA.
Penalties for Misleading Advertisement
Misleading and false advertisements is one of the many aspects that were introduced by the 2019 Act. The repealed Act did not deal with the concept of misleading and false advertisements
Problem with 3 tier Redressal mechanism in respect to 1986 legislation and its comparison to New Legislation
The government has Set-up a 3 tier Redressal mechanism for the speedy and inexpensive justice to the consumers. These 3 were set-up at District, state and national level, with their jurisdictions. Jurisdictions are as follows-
District forum - upto 20lakh
State commission - 20lakh to 1cr
National commission - Above 1 cr.
These jurisdictions were according to CPA 1986. Now the problem with that is since 1986, our economy has undergone much of the change and as a consequence, the price of goods amd services and purchasing power of consumers has increased manifold.
This has put a lot of burden on district level Forums as consumers purchase and acquire goods and services respectively, of below the amount of Rs 20 lakhs. So also for this obvious reason, the then 2019 government thought to bring a new legislation, annulling the previous one.
• As per the new legislation, there will be no fee for filing cases up to Rs. 5 lakh.
• There was no separate regulatory body in 1986 legislation, but there is a central consumer protection authority to be formed.
• There was no legal provision for mediation in the old legislation whereas according to the new legislation, courts can allow settlement of disputes through mediation also.
• There was no legal provision for E- commerce in the old legislation, whereas all rules of direct selling are extended to e-commerce.
So for the above broached drawbacks of the old law , the government in 2019, thought to annul it and formulate and enact a new legislation.
PROVISIONS/SANCTIONS UNDER IPC
The new 2019 act , although has a number of newly made provisions, one of the major changes being criminalization of certain acts under IPC. Earlier the remedy provisions were provided wrt. civil remedies only.
We'll see how the new legislation has spread its domain to procedural and substantive laws.
Adulteration of food and drugs can be dealt with under the Indian Penal Code , under section 272 , 273 , 274 , 275.
Let us understand each of them.
Section 272 as it says for adulteration of food or drink intended for sale.—Whoever adulterates any article of food or drink, so as to make such article noxious as food or drink, intending to sell such article as food or drink, or knowing it to be likely that the same will be sold as food or drink, shall be punished with imprisonment of either description for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both.
Section 273 as it says for sale of noxious food or drink.—Whoever sells, or offers or exposes for sale, as food or drink, any article which has been rendered or has become noxious, or is in a state unfit for food or drink, knowing or having reason to believe that the same is noxious as food or drink, shall be punished with imprisonment of either description for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both.
Section 274 as it says for adulteration of drugs.—Whoever adulterates any drug or medical preparation in such a manner as to lessen the efficacy or change the operation of such drug or medical preparation, or to make it noxious, intending that it shall be sold or used for, or knowing it to be likely that it will be sold or used for, any medicinal purpose, as if it had not undergone such adulteration, shall be punished with imprisonment of either description for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both.
Section 275 of IPC as it says for sale of adulterated drugs.—Whoever, knowing any drug or medical preparation to have been adulterated in such a manner as to lessen its efficacy, to change its operation, or to render it noxious, sells the same, or offers or exposes it for sale, or issues it from any dispensary for medicinal purposes as unadulterated, or causes it to be used for medicinal purposes by any person not knowing of the adulteration, shall be punished with imprisonment of either description for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both.
In addition to these provisions under ipc , Chapter VII of the Act provides for penalties, including imprisonment ranging from up to six months and extending to life imprisonment if the defective goods or services leads to death of the consumer.
CASE LAW
Spring meadows hospital v. Harjot Ahluwalia [(1998) 4 SCC 39]
In this case, a child named Harjot Ahluwalia was admitted by his parents to Spring meadows hospital . He was diagnosed with typhoid and injected a solution by the nurse due to which his condition deteriorated and it was found that due to the injection administered, his brain got damaged and he would only live in a vegetative state for life. Parents of the child filed a suit asking for the pain , loss and mental agony caused by the negligence of the nurse. It was held by the supreme court that the parents will also be considered as a consumer when their young child is being treated by the hospital. As a result, the court directed the compensation of Rs.17.5 lakhs awarded by the National Commission, which was also the highest amount ever awarded until the case was decided in 1997.
Laxmi Engineering Works v. PSG Industrial Institute [1995 SCC 3 583]
Laxmi engineering works, plaintiff, placed an order for an Universal Turing Machine with the respondent, PSG. They ordered the machine 6 months late and that was the defective one. The plaintiff company sent a notice informing the same, in response of which the respondent company sent a mechanic to repair the machine, but after repairing it again got defected. The appellant then filed a case against the respondent in the Consumer forum. The respondent succeeded in the lower forum on the account of the plaintiff not being covered under the definition of consumer under section 2(d) of CPA. Then the plaintiff again bought an appeal in the SC. SC after hearing the facts concerned, held that if an individual has brought a product to earn his livelihood by means of self-employment is a consumer and will fall under the ambit of section 2(d).
POONAM VERMA VS ASHWINI PATEL AND OTHERS [(1996) 4 SCC 332]
In this case, the respondent( Ashwin patel) who was a homeopathy doctor prescribed allopathic medicine to the appellant's ( Poonam verma) husband Pramod verma initially for the treatment of viral fever and subsequently for Typhoid fever which didn't respond and he subsequently died. The SC held that the right to practice the allopathic system of medicine was restricted by the central and state acts which prohibit such practice unless the person possess requisite qualification and is registered according to the Acts. Based on the facts that the Respondent was qualified and registered to practice Homeopathy only and his lack of expertise in the Allopathic system of medicine was responsible for deficiency in the treatment administered by him.He was found to be in violation of the statutory duty not to practice Allopathy given under the section 15(3) of Indian Medical Council Act, 1956. Respondent’s act was held to be actionable negligence and he was ordered to pay a compensation of 3 lakhs.
CONCLUSION
The Consumer Protection Act is one of the most needed legislation created till now. As consumers go to market, he expects few duties to be satisfied by the sellers and producers and does not cheat him/her. The Consumer Protection Act was created by the legislature keeping in mind that the basic rights acquainted with the consumers should not get infringed and if any seller or producer does do , should be made liable in the eyes of the law. Repealing the old law and enacting COPRA, 2019 with some new and improvised provisions, had made consumers more powerful in using their rights engraved in the COPRA, 2019.
Bibliography
BOOKS
● RK BANGIA
WEBSITE