How Consumer–friendly is the Consumer Protection Act?

The Consumer Protection Bill (2018) is expected to be passed in this winter session of Parliament. This reading list looks at the issues to be resolved within the existing Consumer Protection Act.

 

The Consumer Protection Act (CPA), originally passed in 1986, was intended to protect the  Indian consumer. Prior to the act, aggrieved consumers were forced to approach civil courts to address complaints, where cases often took years—notwithstanding the duress caused by hiring a lawyer, cumbersome procedure and court fees—before they were even presented before a judge. How successful have consumer courts been in protecting the interests of grahaks?

This reading list examines the inadequacies of the Consumer Protection Act—from its insufficient constitution to the government's reluctance in its implementation—and highlights the issues to be addressed.

Who is a Consumer?

Writing on the need to redefine “unfairness” within the Consumers Protection Act (CPA), Akhileshwar Pathak argues for an expansion of persons allowed to petition consumer courts. Due to the rigidity of the act, only a “consumer”—that is, someone who purchases goods and services, could approach the court to complain about harmful practices. The author states that this definition of unfairness is restrictive in that it assumes that only consumers’ rights can be infringed upon. It does not include unfair trade practices by rival companies, which may negatively affect the sale of products.

The CPA has had very limited protection against unfair trade practices. A company is not a consumer under the CPA and cannot approach a consumer forum. In a competitive environment, an institutional platform is needed for a company to deter its rivals from indulging in unfair trade practices. Further, an unfair trade practice may cause losses to a company. For example, an advertisement disparaging products of another company would cause losses to the company … Effectively, it is only the consumer associations that can approach a consumer forum against an unfair trade practice. As the field has become completely unregulated, business entities have indulged in unfair trade practices without fetters.

Exploiting Loopholes?

Sakuntala Narasimhan’s 2015 article criticises the government's reluctance to implement the CPA, since its passage in 1986. It was only after a Public Interest Litigation (PIL) was filed in the Supreme Court, she writes, that any effort was made to enact the law.

The government set up consumer courts hurriedly, but with scant interest. For example, the district forum at Mumbai’s Nariman Point was housed in decrepit barracks next to a stinking toilet; some others had no proper clerical staff, no stenographer to dictate orders to (so orders reached the parties after four weeks whereas the limit for filing an appeal is 30 days). The district forum at Mysore was set up 10 km from the nearest bus stop. Consumers’ convenience was, apparently, not a priority.  

Using case studies, Narasimhan’s article looks at how corporations misuse provisions within the act to refuse relief on the basis of technicalities, and the government's reluctance to mediate the situation.

The union minister for consumer affairs had sent out a circular to all state chief secretaries in 1999, saying that the clause “goods once sold cannot be returned or exchanged” is unethical and to be forbidden (DO no II (II) 99-CPU/1647). Neither the states’ chief secretaries nor the union government have bothered to enforce this far-reaching order, and consumers continue to be at the receiving end of an exploitative relationship as buyers of goods and services, 15 years after such a directive from the highest authority.

Are Digital Transactions Secure?

Countries within the European Union provide consumers with a “distance contract,” wherein parties that conduct business without being in each other’s presence can cancel the contract (sale) within 15 days from the date of purchase. Akhileshwar Pathak’s article argues in favour of such a clause, writing that a “cooling off period” post-purchase, within which time a consumer can return an item and ask for a refund, will not only protect the consumer, but also improve the quality of services offered.

The trader or the agent is not interested in giving a complete or true picture and indulges in half-truths, if not downright misrepresentations. Once the consumer parts with his money, the only remedy for him is to approach a consumer forum to contest and establish that the contract was caused by misrepresentation. This is obviously an unnecessary hardship for the consumer … The law will not only bring relief to the customer but improve the quality of services. The service providers will be transparent in order to minimise cancellation of contracts. 

 

Read More:

  1. Consumer Protection Act and Medical Profession | Arun Bal, 1993

  2. Protecting Health Care Consumers-Is CPA Effective | Arun Bal, 1996

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