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]
- 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]
- 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)
- 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.
- 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
- i) Goods – as defined under the Sale of Goods Act, 1930
- 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”)
- 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.
