Is the Indian consumer protected?

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Consumer rights is a very evolved concept, which is still not very widely adopted in India. Prof. Suresh Misra takes us through the Consumer Protection Act, and why it hasn’t been as effective as envisaged.

In a globalised, market-driven economy, consumers are the backbone of any business, as business starts with consumers and ends with the consumers’ satisfaction. Therefore, the welfare of consumers is an essential pre-requisite for a healthy and sustainable economy. In any society, confident, informed and empowered consumers are the engine of economic change, as their choices drive innovation and efficiency. Globalisation, rapid technological changes as a result of ICT (Information and Communication Technology), and its impact on consumer behaviour, is taking place at a time when there is a global drive to compete, which has brought new challenges to the consumers. Due to the prevalent unfair trade practices, consumers’ faith in the market has been shaken. Therefore, the consumers’ welfare must be enhanced and increased in terms of parameters like price, quality, diversity, affordability, safety, etc. Besides this, consumers must be protected against serious risks and threats posed by a globalised marketplace.

Consumer protection ensures that consumers receive information that will allow them to make informed decisions, they are not subject to unfair and deceptive practices, and they have access to recourse mechanisms to resolve disputes when transactions go awry, while maintaining privacy of their personal information. At its heart, the need for consumer protection arises from an imbalance of power, information and resources between consumers and their service providers, placing consumers at a disadvantage. Therefore, consumer protection aims to address these market failures and imbalances.

The Consumer Protection Act – a milestone
In India, the enactment of the Consumer Protection Act (CPA) in 1986 was a milestone in the history of the consumer movement in the country. Before this, even though there were a number of legislations to protect the consumers, they were mostly punitive in nature, and did not provide for holistic protection to the consumers in a cost effective and time bound manner. There were no institutional mechanisms available to the consumers which would redress their grievances in a simple and expeditious manner. The CPA sought to provide for better protection of the consumers, and stipulates the establishment of authorities for the settlement of consumer disputes. The remedy provided under the Consumer Protection Act to the consumer is in addition to and not in derogation of the provisions of any other law for the time being in force.

The Consumer Protection Act, 1986, is no doubt a benevolent, unique and highly progressive piece of social welfare legislation, providing for simple, speedy and less expensive remedy for the redressal of consumer grievances in relation to defective goods and deficient services. It is a weapon in the hands of consumers to fight against exploitation by traders, manufacturers, sellers and service providers. With the enactment of this law, the consumers felt that they were in a position to declare “sellers be aware”, whereas previously the consumers were at the receiving end and generally told “buyers be aware”. Since then, the Act has been amended thrice in 1991, 1993 and 2003 to make it more effective, efficient and consumer friendly.

The Act guarantees six rights to the consumers, which are; right to safety, right to be informed, right to choose, right to be heard, right to seek redressal and right to consumer education. Besides the aggrieved person who has locus standi under the general law, Voluntary Consumer Organisations (VCOs) and government can also file complaints on behalf of consumers. Even class actions have been allowed under the Act.

The Act defines “consumer” as any person who buys any goods or hires or avails of any services for a consideration. The Act postulates establishment of advisory and adjudicatory bodies to safeguard the interests of consumers. The advisory structure is in the form of Consumer Protection Councils at the centre, state and district levels. These councils are constituted on public-private partnership, and their purpose is to review consumer related policies of the government and suggest measures for further improvements. The object of this three-tier council structure is to promote and protect the rights of the consumers.

The Act also provides for quasi-judicial adjudicatory machinery at three levels, i.e., district, state and national levels, called District Forum, State Consumer Disputes Redressal Commission, and National Consumer Disputes Redressal Commission. These adjudicatory bodies are quasi-judicial bodies, and are regulated according to the principles of natural justice. The quasi-judicial bodies are to observe the principles of natural justice and have been empowered to give relief of a specific nature and to award, wherever appropriate, compensation to consumers. Penalties for non-compliance of the orders given by the quasi-judicial bodies have also been provided. The state commissions and the district forums were constituted and are functioning for more than two decades now. At present there are 35 state commissions and 634 district forums in the country set up under the Act, of which 616 are functional.

The lacunae in the CPA
The Consumer Protection Act has not been able to achieve its objectives of empowering and protecting the consumers, mainly due to the delay in disposal of complaints, and procedures being too complicated. The Act was to provide a simple and inexpensive remedy to the consumers, but over a period it has come to function like a civil court. The advocates have taken over the forums, resulting in prolonged litigation. Moreover, the capacity of the forums is lacking, as many of the members appointed do not have any understanding of law and procedures. Poor infrastructure and manpower have rendered these redressal agencies ineffective. Complaints are taking several years to be disposed. In the early period of the Act, a number of judgments in various sectors like, medical, housing, insurance and telecom had far reaching impact on consumer protection, but in the last decade there has been a perception that the Act has only weakened as a result of various decisions of the redressal agencies and the courts.

An analysis of CPA reveals that the Act has much less impact on the marginalised sections of the society who lack education, and are living in the rural areas with low levels of income. The limited impact and the ineffectiveness of the Consumer Protection Act, 1986, to a large extent is not due to inadequacy of the law or its provisions, but it is due to the poor implementation of the Act and the apathy of the governments and other stakeholders, including the consumers.

The impact of the Consumer Protection Act is marginal as far as redressals of consumer complaints are concerned. The district forums to a very large extent are not able to deliver justice quickly and in a cost effective manner as envisaged under the Act, and therefore consumers are losing faith in the redressal mechanism at the district level. Moreover, the compensation awarded is so small that there is apathy among the consumers to file complaints in the district forums, as the time and cost factor do not favour the consumer. Complaint redressal is the key to the success of CPA.
There is a broad consensus among the various stakeholders that the delay in disposal of cases is largely due to the involvement and appearance of lawyers in all cases.

Because of this, the proceedings have become too technical, cumbersome, and expensive, as slowly the procedures of the civil court have crept into the proceedings of the district forums. Out of the total 47,54,029 complaints filed, 43,34,135 have been disposed and 4,29,8,94 are still pending. Those that have been disposed, also have taken several years to do so. This has negated the very objective of the CPA to provide quick and inexpensive justice to the consumers.

The district forums to a large extent lack the capacity to deliver speedy justice due to lack of adequate infrastructure, poor management of record, shortage of manpower, and the required skill and knowledge of the members manning the forums. The delay in filling up of vacancies at all the three levels of the redressal mechanism has further added to the problem, leading to a large pendency of complaints. Computerisation of the redressal agencies/mechanism should have helped in better management of data, and thereby bringing greater efficiency in the working of the redressal agencies. The impact of computerisation has been lacklustre due to a lack of computer skills among the members of the redressal agencies, shortage of technical manpower and consumer peripherals, inadequate bandwidth leading to poor internet connectivity, as also irregular power supply. This has led to delays in the disposal of complaints, and the CPA has not been very effective in protecting consumer interests in the country.

It’s nearly two years that the country has been waiting for a new Consumer Protection Act that will help strengthen the protection regime, and also cater to new challenges being faced by the consumers, particularly in the areas of e-commerce and cyber frauds that have assumed a greater menace, apart from plugging the loopholes in the existing Act.


Prof.-Suresh-Misra

Prof. Suresh Misra

Prof. Suresh Misra is a well-known expert on consumer issues and is currently Professor (Consumer Affairs) and Coordinator, Centre for Consumer Studies, a think-tank and knowledge partner of the Department of Consumer Affairs, Government of India, Indian Institute of Public Administration, New Delhi. He holds his Master’s in Political Science from Jawaharlal Nehru University, New Delhi, Masters in Human Resource Management from Pondicherry Central University, and a D.Phil. from Allahabad Central University.
He has been associated with consumer studies for the last 25 years, and has carried out a number of research and evaluation studies sponsored by national and international agencies. His pioneering study on ‘Food wastage in social gatherings’ and a study on the ‘Impact and effectiveness of the Consumer Protection Act’ during the last 25 years have been received very well.

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