Consumer Protection Acts

• Sale of Goods Act, 1930
• Drugs and Cosmetics Act, 1940                                        
• Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954
• Consumer Protection Act, 1986
• Competition Act, 2002 
• The Food Safety and Standards Act, 2006
• The Legal Metrology Act 2009
• The Bureau of Indian Standard Act 2016

Sale of Goods Act, 1930 

Overview

Section 4– Sale

It is when one party agrees to transfer property to another for a price. It is also applicable in part ownership of property transfer. It may be absolute or conditional. Where the transfer of goods takes place in the future, it is known as an agreement to sell

Section 5– A contract

It is made by an offer to buy or sell goods for a price and the acceptance of the offer. The payment or delivery of goods need not be immediate.

Definitions [Section 2]

Goods – means 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 is agreed to be severed before sale or under the contract of sale. (There are three types of goods; Future Goods, Contingent Goods and Existing Goods)

a) Specific Goods[Section 2(14)]: These are the goods which are identified and agreed upon at the time when a contract of sale is made.

b) Ascertained Goods: Goods are said to be ascertained when out of a mass of unascertained goods, the quantity extracted for is identified and set aside for a given contract. Thus, when part of the goods lying in bulk are identified and earmarked for sale, such goods are termed as ascertained goods.

c) Unascertained Goods: These are the goods which are not identified and agreed upon at the time when a contract of sale is made.

Section 12– Condition and warranty

(1) A stipulation in a contract of sale with reference to goods which are the subject thereof may be a condition or a warranty.

(2) A condition is a stipulation essential to the main purpose of the contract, the breach of which gives rise to a right to treat the contract as repudiated.

(3) A warranty is a stipulation collateral to the main purpose of the contract, the breach of which gives rise to a claim for damages but not to a right to reject the goods and treat the contract as repudiated.

Section 14 – Implied undertaking

(b) an implied warranty that the buyer shall have and enjoy quiet possession of the goods.

(c) an implied warranty that the goods shall be free from any charge or encumbrance in favour of any third party not declared or known to the buyer before or at the time when the contract is made.

Section 16 – Implied condition as to quality or fitness

(1) Where the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are required, so as to show that the buyer relies on the seller’s skill or judgement, and the goods are of a description which it is in the course of the seller’s business to supply (whether he is the manufacturer or producer or not), there is an implied condition that the goods shall be reasonably fit for such purpose. In the case of a contract for the sale of a specified article under its patent or other trade names, there is no implied conditions to its fitness for any particular purpose.

(2) Where goods are bought by description from a seller who deals in goods of that description, there is an implied condition that the goods shall be of merchantable quality. If the buyer has examined the goods, there shall be no implied conditions as regards defects which such examination ought to have revealed.

Remedies

Under the Sale of Goods Act, a suit can be instituted for the following remedies-

• Suit for the price (under S. 55)
• Damages for Non- delivery (under S. 57)
• Specific Performance of contract (under S. 58)
• Interest by the way of damage and special damages (under S. 61)

To avail these remedies the buyer can institute a civil lawsuit, and sue the seller.

Drugs and Cosmetics Act, 1940

 Overview

It is an act to regulate the import, manufacture, distribution and sale of drugs and cosmetics. The objective of the act is to ensure that drugs or cosmetics are safe and effective. It sets a standard of quality for these products (Section 16). It concerns misbranded (Section 17 & 17C), adulterated (Section 17A) and spurious (Section 17B & 17D) drugs/cosmetics. Ayurvedic, Siddha and Unani drugs are also covered under it. The schedule provides a classification of drugs and regulations for storage, sale, display and prescription.

Definition [Section 3]

Ayurvedic, Siddha or Unni Drug – all medicines for internal and external use, made exclusively in accordance with the formulae described in authoritative books specified in the 1st schedule of the Act

Cosmetic – means any article intended to be rubbed, poured, sprinkled or sprayed on, or introduced into, or otherwise applied to, the human body or any part thereof for cleansing, beautifying, promoting attractiveness, or altering the appearance, and includes any article intended for use as a component of cosmetic.

Drugs – All medicines/ substances/ component of drugs, for internal or external use, intended for the use in the diagnosis, treatment, mitigation or prevention of any disease or disorder in human/ animals.

Misbranding – If a product claims to be more therapeutic than it actually is, mislabelled or makes false claims.

Remedies

The remedies for offences under this Act are criminal in nature. Therefore, the remedies are of imprisonment and fines according to the offence as prescribed by the Act. 

Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954

Overview

The act controls the advertising of drugs and magical remedies in India. It makes advertisement of certain drugs and all magical remedies a cognizable offence. Publication of advertisements of drugs that related to abortions and contraception, drugs for sexual usage, for menstrual disorder and any provided in the Schedule of Act (Section 3). It prohibits misleading advertisements for drugs(Section 4). Lastly, advertisements for magical remedies are banned (Section 5). It also prohibits the import and export pf such advertisements (Section 6).

Definition [Section 3]

Magic remedy – includes a talisman, mantra, kavacha, and any other charm of any kind which is alleged to possess miraculous powers for or in the diagnosis, cure, mitigation, treatment or prevention of any disease in human beings or animals or for affecting or influencing in any way the structure or any organic function of the body of human beings or animals.

Penalty

The penalties for conviction under this act are of imprisonment and fines according to the offence as prescribed by the Act.

Consumer Protection Act, 1986

Definitions [Section 2]

1. c) Complaint – It is defined as an allegation in writing about unfair/restrictive trade practice, defective or deficient product/service, price more than the actual price [above the Maximum Retail Price, price fixed under law or pre-agreed by the parties], hazardous goods [in contravention to standards or deficiency in due diligence]
2. d) Consumer – It is defined as any buyer/ hirer of any good or service, or any person consuming the good or service after obtaining permission from the buyer/ hirer. When the buyer/hirer has purchased/ availed goods or services for a consideration, where the payment could have been made at the time of purchase, on a promise or any form of deferred payment set-up (For example – EMI). Where such a good or service is not a resale item or used for a commercial purpose; which does not include exclusive usage for earning a lively hood through self-employment (For example – a car bought to run a sole taxi or to become an Uber driver)
3. f) Defect – means any fault, imperfection or shortcoming in the quality, quantity, potency, purity or standard which is required to be maintained by or under any law/ contract, whether express, implied, or claimed.
4. g) Deficiency – means any fault, imperfection, shortcoming or inade­quacy in the quality, nature and manner of performance which is required to be maintained by or under any law/contact/general practice
5. i) Goods – as defined under the Sale of Goods Act, 1930
6. j) Manufacturer – a person/ entity that makes, manufactures, assembles, puts his mark or has cause to put his mark on any product. ( For Example – Pepsi Co. subcontracts the manufacture of their aerated beverage but has the mark of “Pepsi”)
7. k) Spurious goods and services – goods and services which falsely claim to be original.

Consumer Protection Council

The act mandates the establishment of the Central, State and District Councils, under Section 4, Section 7 and Section 8 respectively. Their purpose being, enumerated in Section 6, to promote and protect the rights of the consumers such as – 

(a)     the right to be protected against the marketing of goods and services which are hazardous to life and property;

(b)     the right to be informed about the quality, quantity, potency, purity, standard and price of goods or services, as the case may be so as to protect the consumer against unfair trade practices;

(c)     the right to be assured, wherever possible, access to a variety of goods and services at competitive prices;

(d)     the right to be heard and to be assured that consumer's interests will receive due consideration at appropriate forums;

(e)     the right to seek redressal against unfair trade practices or restrictive trade practices or unscrupulous exploitation of con­sumers; and

(f)      the right to consumer education. 

Consumer Dispute Redressal

Section 9 provides for the establishment of District Forums, State Commissions and National Consumer Dispute Redressal Commission.

As per Section 11, the jurisdiction of the District Forum would be where the value of the compensation and the goods/services does not exceed Rs. 20 Lakhs and falls within the local limits of the jurisdiction [where the parties or one party, actually and voluntarily reside/ carries on business, or where the cause of action arises]

Section 12 – Complaint Procedure and Guidelines

A complaint needs to be filed by either the consumer or any recognized consumer association[voluntary consumer association registered under the appropriate law], the Central/ State Government [in an individual capacity or as representative of consumer interest in general]. With the permission of the District Forum, numerous consumers having the same interest can file a complaint together. A complaint should be filed along with fee prescribed. The District Forum may accept or reject a complaint. In case of a rejection, a complainant should first be given the right to be heard and the admissibility of the complaint should be decided within 21 days from the date of receipt of the complaint.

Section 13 – Procedure on Admission of Complaint

Upon the admission of a complaint, the Forum will within 21 days refer a copy of the complaint to the opposite party. The opposite party will have a period of 30 days [extension of 15 days can be granted], thereafter to respond to the complaint. If the opposite party denies or disputes the complaint, omits or fails to take action, the forum will proceed with the complaint.

In case of a claim for defect where testing is required, the forum can have a sample, obtained from the complainant, tested for the defect from the appropriate laboratory within 45 days or within extension granted by the Forum. For such testing, the Forum may require the complainant to submit the fees as may be specified. The Forum shall forward a copy of the report to the opposite party. Any objection with regard to the report is to be submitted in writing, then the party would be provided with the reasonable opportunity of being heard as to the correctness of the report. The Forum will issue an order under section 14.

Where the product is such that it can’t be tested, the Forum would decide on the basis of evidence brought to its notice by the complainant and the opposite party, where the opposite party denies or disputes the allegations contained in the complaint. In an ex parte case, on the basis of evidence brought to its notice by the complainant where the opposite party omits or fails to take any action to represent his case within the time given by the Forum. Where the complainant fails to appear on the date of hearing before the District Forum, the District Forum may either dismiss the complaint about default or decide it on merits.

The Forum shall endeavour to complete the case in 3 months [5 months in cases where laboratory testing is required] from the date of receipt of notice by the opposite party.

Section 14 – The Holding

The Forum shall issue an order to the opposite party directing him to do one or more of the following things, namely:—

(a)     to remove the defect from the goods in question;

(b)     to replace the goods with new goods of similar description which shall be free from any defect;

(c)     to return the charges paid by the complainant;

(d)     to pay such amount as may be awarded by it as compensation to the consumer for any loss or injury suffered by the consumer due to the negligence of the opposite party. The District Forum shall have the power to grant punitive damages in such circumstances as it deems fit;

(e)     to remove the defects in goods or deficiencies in the services in question;

(f)     to discontinue the unfair trade practice or the restrictive trade practice or not to repeat it;

(g)     not to offer the hazardous goods for sale;

(h)   to withdraw the hazardous goods from being offered for sale;

(ha)to cease manufacture of hazardous goods and to desist from offering services which are hazardous in nature;

(hb)to pay such sum as may be determined by it if it is of the opinion that loss or injury has been suffered by a large number of consumers who are not identifiable conveniently:

The minimum amount of sum payable shall not be less than five per cent of the value of such defective goods sold or service provided, to such consumers:

(hc)to issue corrective advertisement to neutralize the effect of misleading advertisement at the cost of the opposite party responsible for issuing such misleading advertisement;

(i)   to provide for adequate costs to parties. 

Section 15 – Appeal

Any person aggrieved by an order made by the District Forum may prefer an appeal against such order to the State Commission within a period of thirty days from the date of the order, in such form and manner as may be prescribed [An extension of 30 days with sufficient cause can be granted by the State Commission]. In case the appeal is made by a person required to pay according to the order of a District Forum, the appellant is required to submit 50% of said amount or Rs. 25,000, whichever is less.

Section 17 – Jurisdiction of the State Commission

The jurisdiction of the State Commission would be where the value of the compensation and the goods/services between Rs. 20 Lakhs and Rs. 1 Crore. It also has the Jurisdiction over appeals from the District Forum, and where it appears to the State Commission that such District Forum has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction vested or has acted in exercise of its jurisdiction illegally or with material irregularity. It needs to fall within the local limits of the jurisdiction.

Section 19 – Appeal

Any person aggrieved by an order made by the State Commission may prefer an appeal against such order to the  National Commission within a period of thirty days from the date of the order, in such form and manner as may be prescribed [An extension of 30 days with sufficient cause can be granted by the National Commission]. In case the appeal is made by a person required to pay according to the order of a State Commission, the appellant is required to submit 50% of said amount or Rs. 35,000, whichever is less. An endeavour shall be made to finally dispose of the appeal within a period of ninety days from the date of its admission.

Section 17 – Jurisdiction of the National Commission

The jurisdiction of the National Commission would be where the value of the compensation and the goods/services exceeds Rs. 1 Crore. It also has the Jurisdiction over appeals from the State Commission, and where it appears to the National Commission that such State Commission has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction vested or has acted in exercise of its jurisdiction illegally or with material irregularity. It needs to fall within the local limits of the jurisdiction.

Section 19 – Appeal

Any person aggrieved by an order made by the National Commission may prefer an appeal against such order to the  Supreme Court within a period of thirty days from the date of the order, in such form and manner as may be prescribed [An extension of 30 days with sufficient cause can be granted by the Supreme Court]. In case the appeal is made by a person required to pay according to the order of the National Commission, the appellant is required to submit 50% of said amount or Rs. 50,000, whichever is less. An endeavour shall be made to finally dispose of the appeal within a period of ninety days from the date of its admission.

Section 24A – Limitation Period

The District Forum, the State Commis­sion or the National Commission shall not admit a complaint unless it is filed within two years from the date on which the cause of action has arisen. A complaint may be entertained after the period specified, if the complainant satisfies the District Forum, the State Commission or the National Commission, as the case may be, that he had sufficient cause for not filing the complaint within such period.

The Competition Act, 2002

The Act governs Indian competition law. Competition laws would be a part of unfair trade practices. It is a tool to implement and enforce competition policy and to prevent and punish anti-competitive business practices by firms and unnecessary Government interference in the market. Competition law is equally applicable on written as well as oral agreement, arrangements between the enterprises or persons.

The Food Safety and Standards Act, 2006

  The Act envisages regulation of the manufacture, storage, distribution, sale and import of food to ensure availability of safe and wholesome food for human consumption and for consumers connected therewith. Under Chapter II of the Act, the Food Safety and Standards Authority of India (FSSAI) has been established under this Act for laying down scientific standards for articles of foods and to regulate their manufacture, storage, distribution, sale and import to ensure availability of safe and wholesome food for human consumption. Under Chapter VI, it puts a special responsibility on food business operators, manufacturer, distributors and seller.

The Legal Metrology Act 2009

The Government ensures through the Act that all weights and measures used for trade or commerce or for protection of human health and safety are standardized, accurate and reliable so that users are guaranteed for correct measurement. Section 4 standardized all measurements in accordance to the international metric system. Section 11 prohibits the use of any other system of measurement. Provisions of the Act also empower regulatory and enforcement actions for ensuring that the consumer gets the right quantity for which he has paid for, the penalty ranging from imprisonment to fines [under Chapter V].

The Bureau of Indian Standard Act 2016 

The Bureau of Indian Standards (BIS) is established as the National Standards Body of India. Section 13 and 14 contain the provision to bring under compulsory certification regime any article, process or service which it considers necessary from point of view of health, safety, environment, prevention of deceptive practices, security etc. Enabling provisions have also been made for making hallmarking of the precious metal articles mandatory. The Act allows multiple types of conformity assessment schemes; including Self-Declaration of Conformity against any standard. It provides simplified options to manufacturers to adhere to the standards and get a certificate of conformity.

 

The emergence of Public Interest Litigation has symbolically articulated the right of citizens to their elective “pathway to justice” which by principle is a fundamental and essential right in any welfare-oriented state that guarantees social rights. This form of welfare-oriented litigation plays a pivotal role in the civil justice system, as it can achieve those objectives that can’t under normal circumstances be achieved under general private litigation. It offers a well-defined ladder towards justice and provides an avenue to uphold diffused or collective rights. With respect to Indian legal history, the first official record of a lawsuit being filed in public interest was the 1979 case of Hussainara Khatoon Vs State of Bihar. This case witnessed multiple prisoners of the Bihar Jail presenting a petition in front the Supreme Court of India to fast-track the hearing of their pending suits in court. The success of this petition resulted in 40,000 prisoners whose cases were pending in courts, to be released from jail. Various similar petitions were deliberated upon in the coming years, but it was in the case of SP  Gupta vs The Union of India that the Supreme Court defined the term “public interest litigation” in the Indian context.

However, before progressing further it is necessary to understand what the phrase Public Interest Litigation or a “PIL” means in itself, and in what capacity is it relevant to the Indian legal context. In simple words, it refers to litigation filled in both trial and appellate courts for the protection and upholding of public interest. It acts as a petition that an individual,  group of individuals or non-governmental organisations can file in a court of law to seek justice in an issue that has a larger public interest. It provides a window of opportunity to common citizens to gain direct access to the judiciary to obtain legal redressal for a greater cause.

The next few questions that need to be addressed are those regarding the procedures surrounding a public interest litigation. A very basic question in this regard is that – who can file a PIL? In the Indian legal system,  only Indian citizens and nationals have the authority to file a PIL. The primary condition for filing, however, is that it should not be filed with private interest, but in a larger public interest. If the issue raised is highly pertinent, Courts in the country can even appoint special advocates to take up the cases filed. An important factor that a petitioner of a PIL must keep in mind is who the defending party of their PIL is going to be, and it is this factor that leads on to another pertinent question. In the context of the defending party, as discussed, a question that commonly arises is – should the defence of a PIL be aware of the case prior to filing in court? The answer, surprisingly, is in a way a yes. 

This is so because if the defending party is made aware of the issue, it gives them a chance to take remedial steps beforehand itself so that no courts need to get involved. For instance, if a case demands a change in government policy or the introduction of a new policy from a particular government department, it is advisable to raise the issue with the relevant authority first to give them a chance to sort out the issue by themselves. However,  if this step fails and no remedial action is provided, then the petition should be taken to court.

Another pertinent question is – where can PILs be registered or filed? Under Article 32 of the  Constitution, any citizen can file a PIL in the Supreme Court directly, while under Article 226,  a PIL can be filed in a High Court and in a Magistrate Court under Section 133 of the Criminal  Procedure Code. However, the relevant court must be satisfied that the petition the basic criteria to qualify as PIL, such as its cause being for public benefit. It is in this context it becomes necessary to draw a line between what qualifies a Writ Petition and PIL. In simplest terms, a writ petition is filed by individuals or institutions for their private benefit,  and not for public interest, while a PIL as already discussed is the vice versa of the same. The filing of the case in itself is a very economical fifty rupees. However, affixing advocates to represent the case might lead to further expenses.

A crucial factor to be considered while filing a PIL is considering what category of cases can be accepted as a PIL and what can’t. As per Supreme Court Guidelines, landlord-tenant disputes, pensions and gratuity disputes, admission into medical or educational institutions and petitions to prepone hearing dates pending in High Courts or subordinate courts, are not considered to be valid for filing a PIL.

With respect to the last condition, it might come across as ironic that the premises of the case of the Bihari Prisoners which founded the PIL culture in India, has not been included.  Hence, it can be interpreted that there has been an abuse of the right which caused the Supreme Court to outlaw it. In fact, 2010 was a year which witnessed a rigorous revision of  PIL laws in India by the Supreme Court to ensure no frivolous petitions which have no standing as public issues get acted upon in courts. Having discussed all the factors to be considered while filing a Public Interest Litigation  Petition, the final question that needs consideration is the redressal period or in how long will the filed case be closed.

The answer to this seemingly simple question has a complex manifold answer. One immediate factor that affects the duration of closure of a PIL is the nature of the case itself. If the PIL is regarding matters of utmost public importance such lives of individuals,  humanitarian needs, human rights violations or national interest matters, courts will be more inclined to take up the case, conduct hearings and dispose of the issue as soon as possible.

However, it is, unfortunately, a fact that due to the piling up of a high number of petitions,  the hearing and closure of cases is a time-consuming process. The courts in most cases use their own discretion in deciding hearing dates or issuing orders to external parties. It is only after the hearing of both parties’ counsels is the case considered for closure.

In conclusion, it can be said with fairly reasonable certainty that the introduction of Public  Interest Litigations has revolutionised the judicial system in India, by making it more public,  inclusive and just. However, it is admissible that the PIL system isn’t the panacea to solve public issues but is definitely a step in the right direction. In spite of its limitations due to slow processing and misuse, PILs have evolved to a great extent over the years and has been used in monumental cases in India’s legal history such as M.C Mehta v. Union of India and the Vishaka v. State of Rajasthan cases. It is hence a pinnacle of legal inclusiveness in our country and when pursued with the right intention and right spirit can be used to bring about justice in a wide array of social, cultural, political and economic avenues.

References

1. Hussainara Khatoon & Ors. vs Home Secretary, State of Bihar
2. PIL AND DIFFERENCE BETWEEN “PUBLIC INTEREST LITIGATION” AND “PRIVATE INTEREST LITIGATION” by 
Amar Bharat
3. Citizen Matters: A guide to filing a Public Interest Litigation – Activism Through Law by Akshatha M.
 

Contributed by

Rayan Bhattacharya
Student at Durham University, UK

During a divorce, many men and women go through the emotional and financial trauma of
divorce. They are concerned about financial survival. When the property and the income will be
divided between the spouses, each of them will have only half of what they had before or maybe
even less than that.

Everyone undergoing a divorce faces certain common financial pitfalls. The financial pitfalls are
the unsuspected danger or the difficulty regarding the economic and financial situation of the
spouses going for a divorce. The common financial pitfalls that the parties undergoing divorce
faces are as follow:

1. Not enough cash – In divorce, things always cost more and time seems longer than the expectations. As the divorce process starts, expenses will begin to grow. Starting from the legal fees, court costs, new living expenses and myriad other costs will drain the financial resources.
2. Little preparation – Divorce is a complicated and long process which requires careful and good preparation for every situation and the consequences after it. People often lack in preparation for a divorce and end up having a trouble. Generally, they pack up their bags, load up the kids and drive away in a car that needs four new tires. They decide on having a divorce without any consultation with legal and financial professionals.
3. No records – The most important asset during divorce is the documents which are the proofs. In most of the cases the wives do not possess a charge of any finances while they were married and because of which it causes her difficulty during the divorce procedure. As there are no records of those finances it may sometimes also cause a problem on the counterpart during the procedure to prove a certain subject. 
4. Overlooking assets – Sometimes small assets such as frequent flyer points and vacation pay can add up. Mostly these things are often overlooked thinking of them as not necessary. The parties overlook hobbies or side businesses that might use expensive equipment or generate income later. Even if they don’t want an asset, it can be used to trade for something in use.
5. Ignorance of tax consequences – Though divorce is not a taxable event, it still can have tax consequences. If the parties owned their house for a number of years, it’s probably gone up in value and can be put on a sale so that each of them can claim the capital gain exclusion. Another huge asset in most divorces is the retirement plans. Most often the parties ignore these tax consequences.
6. Ignorance is not bliss – In divorce, ignorance is not a bliss at all and if anyone does that it can result in being very expensive. The people carry on being a passive observer of their own divorce. They usually don’t take an active role in the negotiations which results in conflict and litigation after the divorce.
7. Mixing money and emotions – It is obvious that in a divorce emotions will occupy place but it is wrong to mix money with emotions. During this trying time, it’s easy to confuse the feelings with the facts. The parties need to make themselves dispassionate and businesslike rather than being impassioned or emotional.
8. Not taking control – Going through a divorce can sometimes make feel like a huge crisis at every turn. This time of upheaval should be used wisely by taking control of their life. In most cases, people are unable to take control and keep worrying in the dark. They cause them and the process of divorce harm and it sometimes has even more bed consequences.
9. Not being ready for the worst – During divorce the people are not prepared mentally for the worst that can happen. There are certain situations which mostly the children, as well as the spouses, are not mentally prepared such as the children moving in with their parents, the loss of money during the court procedures, one of the spouses getting remarried and not willing to pay any support etc.
10. Not developing a career – Many women put their careers aside to concentrate on their families. By doing this they lack in having a support financially as well lose faith and suffer from depression. They feel not being enough to go for a job or not possessing the required qualities for earning a livelihood.

Therefore looking at all the financial pitfalls of divorce it can be said that getting a divorce can
generate high levels of financial stress. A little bit of advanced financial planning before going
for a divorce goes a long way in the procedure of a divorce.

 

Contributed by

Ms.Chayanika Kalita, 
University Law College, Gauhati University