ACS -01

7th Part

Q  Discuss the salient features of the Bureau of Standards Act, 1986.        10

A  For the standardization, marking and quality certification of goods, the Bureau of Indian Standards Act, 1986 was enacted by the Parliament. Section 10 of the Act lays down the functions of the Bureau incorporated under the Act. The powers include - 

1) The power to establish, publish, and promote in such a manner as may be prescribed in relation to any article or process. 

2  The power to recognize any standard established by any other institution in India or elsewhere, in relation to any article or process

3  The power to recognize any institution in India or outside which is engaged in the standardization of any article or process or the improvement of the quality of any article or process;

4  The power to specify or recognize a Standard Mark to be called the Bureau of India Standards Certification Mark. 

5   The power to establish, maintain, and recognize laboratories for the purpose of standardization and quality control of an article or process or for some other purpose as may be prescribed.

6  The power to undertake research for the formation of Indian Standards in the interests of consumers and manufacturers.

7  The power to provide services to manufacturers and consumers of articles or processes on such terms and conditions as may be mutually agreed upon

8  The power to appoint agents in India or outside for the inspection, testing and such other purpose as may be prescribed

9  The power to make an inspection of any article or process, at such times and at such places as may be prescribed in relation to the standard Mark when such article is brought or intended to be brought into India from a place outside India; 

10  The power to coordinate activities of any manufacturer or association of manufacturers or consumers that are engaged in standardisation and in the improvement of the quality of any article or process or in the implementation of any quality control activities. 

11 The power to make an inspection and take the samples of any material or substance as may be necessary for relation to any article or process which has been given the Standard Mark, the objective is to see if it conforms to the Indian Standard or whether the Standard Mark has been improperly used in relation to any article or process with or without a license.

Section 11 of the Act prohibits improper-use of the Standard Mark. Section 33 provides for the penalty for improper use of Standard Mark.

Q  Sale of Goods Act, 1930 or The salient features of the sales of good Act, 1930       5

A  The Sale of Goods Act deals with the contracts of sale of goods. The Act was enacted to define and amend the law relating to the sale of goods. Section 14 to 17 of the Act contains the provisions that are designed to protect the interests of the buyers. They are given the right to avoid the transaction, besides the claim for damages, in case certain conditions are not satisfied by the seller according to the contract. Section 14(b) & 14(c) of the act contain the provisions whereby a buyer is entitled to claim damages in case the right of quiet possession of a buyer is distributed or the goods purchased turn out to be subject to a change. Besides, Sections 57 to 59 contains the provisions whereby a buyer can exercise certain rights for non-delivery of goods or for any other breach of the contract. These rights include a claim for damages, specific performance, etc. 

Q  Q  Features of the Weights and Measures Act, 1976           10

Q  Examine the objectives & importance of Standards of Weights and Measures Act 1976.     

A  The Parliament of India enacted the Standards of Weights and Measures Act, 1976 to replace the Standards of Weights and Measures Act, 1956 in order to modernize the system of weights and measures in the country. This act not only provides for the enforcement of the standards of weights and measures but also provides better protection to the consumer in terms of meteorological accuracy in commercial transactions, industrial measurements, and measurement that ensures public health and human safety. The main features of the Act are: 

1  The extension of legal control to cover meteorological accuracy in commercial transactions, industrial measurements, and measurements involved in ensuring public health and human safety.  

2  The creation of effective enforcement machinery in the states.  

3  The registration of users of weights and measures which are subject to periodical Verification.   

4  The regulation of the manufacture, repair, and sale of weights and measures. 

5  The regulation of sale and distribution of packed commodities in intra-state trade or commerce;  

6  The regulation of the sale of commodities which are sold by heaps; and

7  The punishment for offences that are committed against the legislation. 

Provisions in this act have been made for the appointment of Controllers, Inspectors and other officers and staff for exercising the powers  conferred or imposed on them under the Standards of Weights and Measures (Enforcement) Act.

 Section 16 of the Act states that no person shall use any weight or measure in any commercial transaction or for industrial measurement unless he is registered under the Act. Section 24 states that any person having any weight or measure in his possession, custody, or control that is intended or likely to be used by him shall firstly be verified by the Controller.

 The Act prohibits the use of non-standard weights and measures and provides for the penalty for the manufacture of non-standard weights and measures. A six month imprisonment or a fine of one thousand rupees or both can be given to an offender for using any weight or measure other than the standard weight or measure and for the second time subsequent offence, the imprisonment can be for a period of two years. 

Section 39 of the Act provides that the quantities and origin of various commodities in the packaged form are to be declared and on every package the name of the manufacturer, the packer or distributor is required to be inscribed. 

Q  Explain the salient features of the Agricultural Produce (Grading and Marking) Act, 1937.   5

A  With a view to providing for the grading and marking of agricultural and other products, the Agricultural Produce (Grading and Marking) Act, 1937 was enacted. The failure to provide standard agriculture goods of expected quality is an offence under Sections 488,489 of the Indian Penal Code. It is punishable with imprisonment up to three years or with fine or with both. In many cases, this also constitutes as an offence under Section 4 of this Act, which is punishable with imprisonment for a term not exceeding six months and fine not exceeding Rs. 5000/-. In the public interest or for the protection of consumers, the Central Government has been authorized under Section 58 of the act to declare compulsory grade designations in respect of certain agricultural products. By the newly added Section 5C, it has been provided that not only the central government or the state government or any officer authorised , but also a recognised consumer association, or the aggrieved person whether the person aggrieved is a member of that association or not, may make a complaint about taking cognizance of an offence which is punishable under the Act. 

Q  Explain the salient features of the prevention of Food Adulteration Act, 1954.     10

A  The Prevention of Food Adulteration Act, 1954 was passed by the Parliament to provide comprehensive legislation for preventing the adulteration of foodstuffs and check various kinds of nefarious acts connected with articles of food. Prior to this enactment, different states of India had their own laws for the prevention of food adulteration. Since these state laws were not adequate, the Parliament passed this Act of 1954. 

The Act provides for the establishment of a Central Committee for food standards and also for a Central Food Laboratory for testing of food articles. Import of certain articles of food has been prohibited and powers have been given to customs officers to seize any prohibited article of food that is being imported. Certain articles of food have also been prohibited, from being manufactured. Adulterated food is examined by public analysts and food inspectors who are appointed by the government to enforce the law. The manufacturers, distributors, and dealers of food need to give a warranty for the good quality and contents of food. Sellers have to disclose the name of the people from whom they have originally purchased the food. Instances of food poisoning are to be reported by medical practitioners to such officers as may be notified by state governments. Strict penalties have been imposed for violation of the law. Courts have been empowered to punish those found guilty, forfeit their property and also impose a heavy penalty. 

Central Food Laboratory

The Central Government will establish one or more Central Food Laboratories as per the provisions of this Act. Its functions include analyzing the samples of food and submitting certificates of analysis, inspecting, and fixing the standard of any article of food. 

Prohibition of Import of Certain Articles of Food

The Act prohibits the import of food articles into India which are adulterated, misbranded or any food article which is in violation of the conditions of the import license or any provision of the Act or Rules made thereunder. Powers have been given to customs officers to seize any prohibited article of food that is being imported. 

Food Inspectors

Both the Central Government and the State Governments have been empowered to appoint food inspectors. A medical officer who is in charge of the health administration of a local area can also be appointed as a food inspector. The duty of a food inspector is to inspect the premises, take samples for testing, carry out searches, ask for records or examine them. 

Food Poisoning Cases

Instances of food poisoning coming within the knowledge and jurisdiction of medical practitioners are to be reported to such officers as may be notified by state governments. 

Offenses and Penalties

Any person who is found guilty for importing or manufacture, sale, store or distribute any article of food which is adulterated, or in contravention of any provision of this Act shall be punished with imprisonment for a term up to 6 months which may extend to 3 years and fine of Rs.10000. 

Q  Discuss the important provisions of the Drugs and Cosmetics Act, 1940.

A.   To protect the consumers from the ill effects of adulterated, wrong medicines and harmful cosmetics, The Drugs and cosmetic Act 1940 were enacted. According to this Acts, the import, manufacture, sale, storage, and distribution of drugs and cosmetics which are not of standard quality or are misbranded, adulterated or spurious are prohibited as per the law. The provisions are setting up - 

The Drug Technical Advisory Board

The Board has been set up by the Central Government to advise it and the State Governments on technical matters related to the administration of this Act and for carrying out other functions laid down under this Act. 

Central Drugs Laboratory

This is established by the Central Government and it is under the control of a Director to carry out functions laid down under the Act. Its functions include analysis or testing of various samples of drugs and cosmetics etc.

The Drugs Consultative Committee

This has been constituted by the Central Government as an advisory committee to advise the Central, State Governments, and the Board on any matter related to the administration of this Act. It has representatives of the Central & State Governments. 

A Cosmetic shall be deemed to be misbranded if it contains a color that is not of standard quality. A Cosmetic can be deemed as spurious for the same reasons as specified for a drug. 

The Central Government has the power to prohibit the import of drugs or cosmetics which are not of standard quality or are misbranded, adulterated or spurious or which are in violation of the conditions of the import license or in which the contents are not disclosed or which has harmful ingredients. Customs officials can seize any drug or cosmetics which is prohibited from being imported. Any person involved in imports any prohibited drug or cosmetic shall be punished under the law. 

Manufacture, Sale, and Distribution of Drugs and Cosmetics

No person shall himself or through his agent manufacture for sale, distribute, sell or stock or exhibit or offer for sale drugs & cosmetics which are not of standard quality, or misbranded,

adulterated or spurious or in contravention of the provisions of the Act. Both the Central Government & the State Governments can appoint inspectors under the Act. The inspector can inspect premises, take samples, carry out searches, ask for records or examine them.

Ayurvedic, Siddha and Unani Drugs

Similar but separate provisions have been made in this Act for these drugs. There is a separate Technical Advisory Board, Consultative Committee. As per the law, the manufacture and sale of Ayurvedic, Sidha, and Unani drugs which may not be of the requisite standard quality, or are adulterated, misbranded or spurious are prohibited.

Penalty -

The Penalty for manufacture, sale, distribution, etc. of adulterated, spurious drugs and cosmetics could lead to imprisonment from three years to life and fine up-to Rs.10,000/-. It can’t be considered as defence for the accused to say that he was ignorant about nature, quality of the drug, or cosmetic or that the purchaser or user was not prejudiced by the sale. Thus, the Drugs and Cosmetics Act, 1940 seeks to secure the rights of the consumer of drugs and cosmetics.

Q.    Discuss in detail the remedies available for negligence in ‘Banking Service’.

A.    The bankers are professionals, who undertake to pay on consumer's cheques to the extent of money available in their credit balance. The failure to do so is called negligence on part of banks and make them liable to pay for damages. The banks are liable to pay for damages for any kind of forgery related to the cheque committed by third persons. If the signatures of the customer on the cheque are not genuine, there is no mandate on the bank to pay. A bank which makes a payment on a forged cheque, cannot make the customer liable except on the ground of negligence committed by the consumer. In such a case, blaming the customer of negligence, such as leaving off the cheque-book carelessly so that a third party can easily get hold of it, can not be considered as a defence to the bank. Similarly, if a bank fails to carry out the instructions of a customer, it will be liable for negligence.

There are two laws enacted to safeguard the interests of customers of banking services they are -

1)   The Usurious Loans Act, 1918 - 

            Section 1 of the Money Lenders Act, 1900 empowers the courts to reopen transactions of money or loans, in cases where the Court is satisfied

(1) that the interest or other return is excessive and

(2)  that the transaction is substantially unfair, 

and after investigation of the circumstances, the court can direct both the attendant and antecedent to revise the transactions between the parties. If necessary it can ask them to reduce the amount payable to such amount, as the Court after understanding the risk and all the circumstances of the case, may decide to be reasonable. Section 3 of the Act provides for the re-opening of certain transactions.

2)  The Banking Ombudsman scheme, 1995 -   

The main objective of the scheme is to enable the resolution of complaints related to the banking services and to facilitate the settlement of such complaints. Under this scheme, the Reserve Bank of India has to appoint one or more persons to be known as the Banking Ombudsman to carry out the functions entrusted upon them under the Scheme.

Procedure for redressal of grievance: Clause 16 of the Scheme provides that any person having a grievance against a bank, may himself or through an authorized representative Can make a complaint in writing to the Banking Ombudsman under whose jurisdiction the branch or office of the bank, against whom the complaint has been made is located.

Under Clause 17 of the Scheme, the Banking Ombudsman can ask the Bank to provide any information or furnish certified copies of any document related to the subject matter of the complaint which is or is alleged to be in possession of the bank.

Under clause 18 of the Scheme, it is the duty of the Banking Ombudsman to promote a settlement through agreement between the complainant and the bank by means of conciliation or mediation. For this purpose, the Banking Ombudsman may follow any procedure as considered appropriate and is not bound by any rule of evidence. 

Recommendation for settlement:- If a complaint is not settled by agreement within a period of one month from the date of receipt of the complaint or any further period considered necessary by the Banking Ombudsman, then under Clause 19 of the Scheme, he may make a recommendation which according to him is fair under the circumstances. Such a recommendation is binding upon the complainant if he accepts all terms of recommendation as a full and final settlement of the complaint. The recommendations so accepted by the complainant shall be binding on the bank, if acceptable to it.

Award by the Banking Ombudsman - Where the complaint is not settled by agreement or recommendations, the Banking Ombudsman, under Clause 20 of the Scheme, shall inform the parties of his intention to pass an Award. The parties may submit any further representation or evidence in support of their claim. The Banking Ombudsman shall pass an Award after giving sufficient time to the parties and chance to present their case.

No complaint to the Banking Ombudsman can be made unless - 

a)   The complainant before making a complaint to the Banking Ombudsman has made a written representation about his grievance to the bank and either the bank had rejected the complaint or the complainant had not received any reply within a period of two months from the date of making his representation or the complainant is not satisfied with the reply of the Bank.

b)  The complaint is made not later than one year after the bank had rejected the representation or sent its final reply to the representation of the complainant.

c)  The complaint is not in respect of the same subject matter which was settled through the office of the Banking Ombudsman in any previous proceedings whether received from the same complainant or any one of the parties concerned with the same subject matter.

d)  The complaint is not the same subject matter, for which any proceedings before any court, tribunal or arbitrator or any other forum is pending or order of dismissal had already been passed by any such court, tribunal, arbitrator or forum.

e)  The complaint is not frivolous or vexatious in nature.

Q  Remedy for negligence against Railways                     10

A  Railways as a common carrier is an insurer of goods that is under its charge and is responsible for their safe transport and delivery. Therefore in case of loss or damage to the goods, it is liable even when there is no negligence on its part. A railway is duty-bound to take care of passengers and carry them safely to their respective destinations. It is the responsibility of railways to provide good coaches which are required for safe transportation of passengers and also competent drivers. The railway is liable for any loss or damage caused to passengers by its negligence during the journey. 

General Liability of Railways Towards Passengers in Accident Cases -

Under section 124 of the Railways Act, 1989 the extent of liability of the railways is as follows :

While during the course of the journey in a railway if an accident occurs, either due to a collision between trains or the derailment, whether or not there has been any wrongful act, neglect, or default on the part of the railway administration, the passenger is entitled to receive compensation. A passenger who has been injured or has suffered a loss or damaged his goods is entitled to recover damages. 

1) An application for compensation under Section 124 may be made to the Claims Tribunal:

a) by the person who has sustained an injury or suffered any loss during the journey, or

b) by any agent duly authorized by such a person on his behalf, or

c) where such person is a minor, then by his guardian, or '

d) where death has resulted because of the accident, then by any defendant of the deceased or where such a defendant is a minor, then by his guardian.

2) Every application by a defendant for compensation under this section shall be for the benefit of every other defendant.

3)  Provisions have been made under Section 126 to give interim relief to the affected by the railway administration.

Notice of Claim for Compensation and Refund :

Section 106 of the Railways Act, 1989 provides:

1) A person shall not be entitled to claim compensation against a railway administration for the loss, destruction, damage, deterioration or non-delivery of goods carried by railway unless a notice thereof is served by him or on his behalf:

a) To the railway administration which was entrusted with goods for carriage; or

b) To the railway administration on whose destination the station lies.

Q  What are the remedies available to the consumers for negligence committed by medical professionals? Discuss. 10

A  It is important to understand what constitutes medical negligence. A doctor owes certain duties to the patient who consults him for illness. A deficiency in this duty on the part of the doctor can be called negligence. The diagnosis of a disease is normally the first matter with which the medical man is concerned. But it must be remembered that a mistaken diagnosis does not necessarily mean negligent diagnosis. A doctor can only be held liable for negligence in this regard if his diagnosis is so palpably wrong that there is no doubt that it is a blatant case of negligence. That means his mistake is of such grievous nature which implies an absence of reasonable skill and cares on his part. 

To initiate action for negligence against a doctor, the plaintiff has to prove :

(1) that the plaintiff was under the care of a doctor and the accused doctor was duty-bound to take care of the plaintiff to avoid the damage complained of,

2) that there was a breach of duty on the part of the defendant doctor and 

3) that the breach of duty was the real cause of the damage complained of and such damage was avoidable and reasonably foreseeable.     

The legal action that can be taken against a medical practitioner for medical negligence can broadly be put into three categories:-  

(i) Criminal liability, 

(ii) monetary liability, and 

(iii) disciplinary action.

Criminal liability - Section 304A of IPC can be applied in case of medical negligence, where it has resulted in the death of the patient. It may lead to imprisonment for a period of up to 2 years. Similarly, other general provisions of IPC, such as Section 337 (causing hurt) and 338 (causing grievous hurt), are also often deployed in relation to medical negligence cases.

Civil liability - monetary compensation can be given to the patient or his defendant under the general law by appropriate civil court or consumer forums. 

Disciplinary Action - Another consequence of medical negligence could be in the form of imposition of penalties, suspension of a license pursuant to disciplinary action.

Q. Define the terms 'defect' & 'deficiency' under the Consumer Protection Act, 1986 with the help of decided case laws.     20

A  Defect: Under the CPAct, the word 'defect' means any fault, imperfections or shortcoming in the quality, quantity, potency, purity, and standard of an article that is required to be maintained under any law for the time being in force or under any contract by the trader in relation to any goods.

Case law For Defect -

A ration shop supplied a ration card holder rapeseed oil which was adulterated with the known toxic adulterants. The complainant, and his family, as a result of that rapeseed oil consumption, suffered severely. As a consequence of consuming adulterated oil, the complainant was attacked with paralysis of lower limbs, and in spite of prolonged treatment, he did not recover fully. His wife, in spite of medical treatment, was not able to carry on her ordinary duties as a housewife effectively because of ailment. His two daughters and a son, who were growing children were also affected because of the consuming adulterated oil, and according to the medical reports, their bodies had suffered severely. Their educational carrier was doomed. Considering all these facts, the Commission awarded a sum of Rs. 1,50,000/- to the complainant and Rs. 50,000/- for his wife and Rs. 25,000/- to each of the children resulting in awarding of a total of Rs. 2,75,000/- (Barsad Ali vs. Managing Director, West Bengal Essential Commodities Supplies Corp. 1993)

Deficiency: Under CPA, whereas the 'defect' was related to goods, the 'deficiency' is used in relation to services. It means any fault, imperfections or shortcomings in the quality, quantity, potency, purity or standard which is required to be maintained under any law for the time being in force or has been undertaken to be performed by a person in relation to any service.  

      Case law for the deficiency -

Maina Devi Bairalia v. Life Insurance Corporation of India (decided by the National Commission,1993). In this case, Maina Devi's husband took a life insurance policy for Rs. 50,000. Before the second premium can be paid, he died due to sudden illness. The claim made by Smt. Maina Devi, the widow of the insured, was not entertained for as long as 14 years. It was only when she got her miseries published in newspapers and certain MPs took up the matter in Parliament that she was sent a cheque for Rs. 50,310. On a suit before National Commission, it was held that the Corporation had been highly negligent in the performance of its services. Smt. Maina Devi, the complainant, had suffered hardship and loss on account of deficiency in service by LIC. She was held entitled to receive compensation in the form of interest at 12 % p.a. on the original amount from the date of expiry of 3 months from the date of death of the insured till the amount was paid to her. The Commission also awarded her compensation Rs. 15,000 for mental torture and harassment at the hands of Corporation.

Another case - In Lucknow Development Authority v. Roop Kishore Tandon (1990), the failure on the part of a Housing Board to give possession of the flat to the complainant even after payment of the full amount and after registration of the flat in favor of the allottee. It was held to be a deficiency in service on the part of LDA.

Q.  State if the following are consumers under the Consumer Protection Act, 1986 :  

(a) The purchaser of a sewing machine for earning her livelihood.  

(b) passengers traveling by train.   

A  (a) Purchaser of a sewing machine for earning her livelihood - 

 b) passengers traveling by train - In General Manager, Southern Railway v. Anand Prasad Sinha (1989), it was held that passengers traveling by trains m payment of the stipulated fee charged for the ticket are consumers' and the facility of transportation by rail provided by the railway administration is a 'service' rendered for consideration as defined in the Act. 

Q. Discuss briefly various 'Services' covered under the Consumer Protection Act,1986.    10

A  Section 2 (1) (0) provides that Service means service of any description which is made

available to potential users and includes the provision of facilities in connection with banking, financing, insurance, transport, processing, the supply of electrical or other energy, boarding or

lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service.

Government Hospitals not under services - complaints

against government hospitals cannot be entertained under the Act on the ground that person receiving treatment in such hospitals is not a consumer as the patient does not hire the services of the hospital; moreover, the treatment provided is free of charge, and therefore, it does not amount to 'service'. It further observed that this was their interpretation within the scope of the Act and if the Legislature intended otherwise, the Act ought to be amended suitably. However, service rendered by doctors in private hospitals for consideration would come under the purview of service (Cosmopolitan Hospitals v. Smt. Vasantha P. Nair 1992. 

Q  What is your opinion are the three most important features of the Consumer Protection Act, 1986.

A  The three most important features of the Consumer Protection Act, 1986 are:

a) This is the first legislation of its kind in as much as it provides for reliefs against different kinds of exploitation including defective goods, unsatisfactory or deficient services, restrictive and unfair practices.

b) The Act provides for speedy and inexpensive redressal of grievances through three-tier machinery at the District, State, and National level. It is an Act that also provides for an inexpensive method of seeking relief. No court fee or any other charge is to be paid. Moreover, the consumer can argue his own case. Engaging an advocate is not necessary.

c) This Act gives statutory recognition to the right of consumers.  

Q  State, if the following are the consumers under the Consumer Protection Act, 1986:

i) Purchase of a sewing machine for earning her livelihood.

ii) A person registered for gas-connection but before allotment of the same.

iii) User of electricity

A  i) Yes..The purchase of a sewing machine for earning a livelihood is not a purchase for commercial purposes.

ii) Yes. See Mahindra Gas Enterprises v. Jagdish Poswal (1992).

iii) Yes. Refer to the National Commission decision in Y.N. Gupta v. DESU (1992).

Q  Are the following 'goods' under the Consumer Protection Act, 1986:

i) Growing crops

ii) Shares before allotment

A  i) Yes. See the definition of 'goods'.

ii) Yes. See decision of the Supreme Court in Morgan Stanley Mutual Fund v. Kartick

Das (1994)