ACS - 01

9th Part 

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 in their credit balance. The failure to do so constitutes negligence and makes them liable for damages including for injury to the credit of the consumer. The banks are liable for any forgery in the cheque committed by third persons. A bank which makes a payment on a forged cheque, cannot make the customer liable except on the ground of negligence imputable to the consumer. If the signatures of the customer on the cheque are not genuine, there is no mandate on the bank to pay. In such a case, the question of any negligence on the part of the customer, such as leaving off the cheque-book carelessly so that a third party can easily get hold of it, can afford no defense to the bank. Similarly, if a bank fails to carry out the instructions of a customer, it will be liable for negligence. For example, if a bank issues a bank draft without authority in accordance with the customer's instructions against valid cheques of the customer, owing to the fraud of the customer's servant, the bank will be liable for damages in respect thereof.

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

1)   The Usurious Loans Act, 1918 -

               It empowers the courts on the lines of Section 1 of the Money Lenders Act, 1900 to reopen transactions by way 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, both attendant and antecedent, to revise the transactions between the parties and if necessary, reduce the amount payable to such sum as the Court, having regard to 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 object of the scheme is to enable resolution of complaints relating to the provision of banking services and to facilitate the satisfaction, or 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 to him by or 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 make a complaint in writing to the Banking Ombudsman within whose jurisdiction on the branch or office of the bank complained against is located.

No complaint to the Banking Ombudsman shall lie unless -

a)   The complainant had before making a complaint to the Banking Ombudsman made a written representation to the bank named in the complaint and either the bank had rejected the complaint or the complainant had not received any reply within a period of two months after the bank concerned received his representation or the complainant is not satisfied with the reply given to him by the Bank.

b)  The complaint is made not later than one year after the bank had rejected the representation or sent its final reply on 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 or more 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 are pending or a decree or award 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.

Under Clause 17 of the Scheme, the Banking Ombudsman may require 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 its possession.

Under clause 18 of the Scheme, the Banking Ombudsman is under a duty to promote a settlement by agreement between the complaint & the bank through conciliation or mediation. For this purpose, the Banking Ombudsman may follow such procedure as he may consider 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 such further period as the Banking Ombudsman may consider necessary, under Clause 19 of the Scheme, he may make a recommendation to what is, in his opinion, fair in all circumstances. Such recommendation is binding upon the complainant if he accepts all terms of recommendation in 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 allowing the parties reasonable time and chance to present their case.

Q.  Discuss in detail various ‘Activities of an Organisation’ dealing with Consumer Problems and issues.

A. The various ‘Activities of an Organisation’ dealing with Consumer Problems & issues are -

#  Education - The main objectives of consumer education are :

- develop skills

- gain knowledge, and

- develop understanding

          Consumer education should focus on specific issues like health, sanitation, nutrition, food and product safety, pharmaceuticals, basic needs, environmental problems, market malpractices, finance, workers' rights, unethical advertisement practices, culture, and lifestyles, etc. Consumer education should be provided to all sections of people including school & college students, teachers, women, and youth groups, religious organizations, and masses in general. This can be imparted through seminars, workshops, exhibitions, drama, and competitions on consumer issues. Consumer education can also be imparted through electronic media like film shows, radio, tv, and campaigns. The organization can also organize exhibitions of books and magazines. CPA itself provides for consumer education. Consumer education helps in making an alert and awake citizen who behaves responsibly at the market place, enquires about the quality of goods.

# Research -

          Many of the consumer problems can be solved by conducting research studies and surveys. Initially, the organization should carry out research to find out what kind of consumer education is required in society and to what level and to what extent. The research can be carried out in all the areas under consumer education. Research also needs to be carried out in the market place regarding business malpractices and tests performed to check the safety and quality of consumer products such as water and foodstuffs. The results of these tests can also be published in-the organization's magazine or newsletter.

# Grievances and Complaints -

The consumers generally have a lot of complaints related to consumer issues like poor quality of products & services, food adulteration, unhygienic conditions, water & electric supply, etc. These complaints may be received through the mail, telephone, or in person. Proper guidance should be provided so that the grievance of consumers are redressed.

#  Vigilance

In India, many services like postal services, telephone, electricity, water supply, and the public distribution system are managed by governmental agencies. Unfortunately, most of these services aren’t performed to the satisfaction of the consumers. Hence, some of the volunteers of an organization, especially the younger group, can form a vigilance group to keep an eye on these services. For example, if a ration shop receives its stock for distribution to the ration cardholders, the members of the vigilance group can take the responsibility for delivery of the goods to the holders, without any harassment. Similarly, these members can also oversee the staff responsible for the cleanliness of roads, streets, etc. do their work properly.

# Counselling

A few members of an organization who are well versed with the legal provisions can help train, educate, and guide individual consumers so that these individuals can represent themselves in grievance redressal forums effectively. Thus they can provide assistance and legal advice to consumers who are in need of such advice. In addition, they can observe the implementation of the laws enacted by the local government which affects the consumers. Such people can also file PIL in courts on consumer-related issues.

# Publications and Media

          Consumer organizations can bring out the appropriate publications, such as manuals and magazines, pamphlets and leaflets in local languages. It can highlight various aspects of consumer protection in different areas, with reference to the law, rules, regulations, and procedures. It can educate consumers regarding rights and responsibilities.

         They can also organize workshops, seminars, and training programs not only on consumer-related topics but also in building up the capacities and developing skills of individual consumers. This will enable them to take a more effective part in the consumer movement.

# Library

An organization can also become a good information center if it maintains a library. A wide range of books, journals, research reports, and pamphlets along with press clippings can be kept in the library for the reference needs of the consumer. The library premises can also be used occasionally as a meeting point for the members of the organization. A library is an ideal place for the display of charts, posters, etc. Notices for the members can also be put up on the notice board in the library for their information.

Q.  Discuss the Limitations of the Consumer Protection Act, 1986, and difficulties faced in its implementation.

A.   Some of the Limitations of the Consumer Protection Act, 1986 are -

i)  Only those services come within this Act for which specific payment is made, such as electricity, telephones, banking, etc. Government hospitals do not come within the ambit of the Act. Also, the mandatory civil services, such as sanitation, water supply, etc. provided by the State or local authorities are not covered by the Act. 

ii)  The Consumer Protection (Amendment) Act, 1993 incorporated two clauses regarding the supply of hazardous goods, but it does not impose strict liability on those who supply such goods. 

iii)  The Act does not give any definition of safety requirements and permitted hazard levels. 

iv)  Under the Act, a consumer can seek redressal only he has suffered a loss on damage as a result of the unfair trade practice or deficiency in service or the unfair trade practices resorted to by a trader. However, the per se rule is not invoked. The per se rule ensures that any act or practice which prima facie appears to be unfair shall be regarded as unfair and against consumer interest as such, pending its justifications by the opposite party. 

v)  The Act does not empower the Consumer Redressal Forums to take up cases suo moto.

vi)  The Act does not empower the Consumer Redressal Fora to issue either interim injunction or "cease and desist orders".

vii)  The Act does not empower consumer fora to publish the names of manufacturers, traders, and dealers whose goods are found to be hazardous to public safety. 

viii)  The Act does not permit a consumer to lodge a complaint with the Consumer Fora if an alternative remedy is available under some other law. 

ix)  The Act does not impose liability on the chief executive, manager, or director where an offense is shown to have been committed by an organization.

x)   The Act specifies a time frame within which the dispute is to be disposed of. The period specified is 90 days, but the actual time taken is much longer.

xi)  The Act completely ignores the right of consumers to a healthy environment.

xii)  The Act is silent on the question of storage of commodities.

xiii)  The Act concedes six rights of consumers viz. right to choice; right to safety; right to be informed; right to be heard; right to redress; and right to consumer education. But these rights have not been made justiciable.

xiv)  The Consumer redressal agencies do not have the requisite infrastructure; as a result, they are hamstrung functioning effectively.

xv)  An important issue relating to the execution of the orders is that the consumer courts have to depend on the Civil Courts for the execution of the orders or on the Criminal Courts when cases are referred for service of warrants leading to delays. 

xvi)  There is a rift between the judicial and non-judicial members of the consumer courts. This is growing day by day & threatening of effect the functioning of these quasi-judicial bodies.

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

A.   The provisions are setting up -

The Drug Technical Advisory Board

The Board has been set up by the Central Government to advise it & the State Governments of technical matters arising out of the administration of this Act and for carrying out other functions assigned to it by this Act.

Central Drugs Laboratory

This is established by the Central Government under the control of a Director to carry out functions laid down under the Act. Rules provide for the procedure for admission of samples of drugs or cosmetics for analysis or test, forms of reports, fees to be paid, 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 tending to secure uniformity in 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 of a label that is not prescribed or bears\a false or misleading statement. A Cosmetic can be spurious for the same reasons as specified for a drug.

The Central Government has the power to prohibit the import of drugs or cosmetics not of standard quality, or which are misbranded, adulterated or spurious or which are imported in violation of the terms of the license, or in which the contents are not disclosed or which has harmful ingredients. Customs officials can detain and seize any drug or cosmetics which were prohibited from being imported. Any person who imports any drug or cosmetic which is prohibited shall be punishable by 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, and the prohibitions as to manufacture and sale of Ayurvedic, Sidha and Unani drugs which may not be of the requisite standards, quality, or which may be adulterated, misbranded or spurious has been provided for with corresponding penalties for their breach.

Q.   Discuss in brief the Consumer Disputes Redressal Agencies created under the Consumer Protection Act, 1986.

A.  Consumer Protection Act, 1986 established a three-tier structure for redressal of consumer disputes. The redressal machinery consists of the following agencies, namely -

a)  Consumer Disputes Redressal Forum is known as the 'District Forum'

b)  Consumer Disputes Redressal Commission is known as the 'State Commission'.

c)  National Consumer Disputes Redressal Commission is known as the 'National Commission'.

District Forum - Each District Forum consists of a president and two other members & one of them should be a woman. A president is a person who has been or is qualified to be a District Judge. The two other members are persons of ability, standing & integrity & have adequate knowledge or experience or have shown capacity in dealing with problems relating to economics law, commerce, accountancy, industry, public affairs or administration.

1)  The 'District Forum' has jurisdiction to entertain complaints where the value of goods, services, and compensation claimed (if any) does not exceed Rs. five lakhs.

2)  A complaint can be filed in the District Forum in whose territorial jurisdiction the opposite party or parties, at the time of instruction of complaint, actually and voluntarily resides, carries on business, has a branch office or personally works for gain.

3)  If any of the opposite parties do not voluntarily reside, carry on business, have a branch office, or personally work for gain the District Forum should grant permission or the opposite parties should consent to such an institution.

4)  The complaint can also be filed before the District Forum in whose jurisdiction the cause of action, wholly or in part arises.

State Commission

Composition of State Commission

State Commission consists of three members. One of them is the President and one of the members should be a woman. The President of the State Commission is a person who is or has been a judge of the High Court. The two other members are a person of ability, integrity, and standing and have adequate knowledge or experience or have shown capacity in dealing with problems relating to economics, law, commerce, accountancy, industry, public affairs or administration. The Consumer Protection (Amendment) Act, 1993 has provided that no appointment is to be made except after consultation with the Chief Justice of High Court.

The other two members are appointed by the State Government on the recommendation of a Selection Committee consisting of

i)  President of State Commission -Chairman

ii)  Secretary of the Law Department of the State -Member.

National Commission

The President is appointed by the Central Government after consultation with the Chief Justice of India. The other members are appointed by the Central Government on the recommendation of a Selection Committee consisting of :

a)  a person who is the judge of the Supreme Court, nominated by the Chief Justice of India - Member.

b)  Secretary of the Department dealing with consumer affairs in the Government of India - Member.

Jurisdiction

The National Commission has jurisdiction to entertain

i)  Complaints, where the value of goods, services, and compensation claimed, exceeds Rs.20 lakhs and

ii)  Appeals against the orders of any State Commission.

The National Commission can also call for records and pass orders in any consumer dispute which is pending before the State Commission or has been decided by the State Commission where it appears to the National Commission that such State Commission has exercised the jurisdiction vested in it or has acted in its exercise of jurisdiction illegally or with material irregularity.

Q.   Discuss the strategies of effective ‘Campaign and Advocacy Programmes’. 

A.   The Three Basic Techniques Involved in Effective Strategy is -

#  Information and publicity

#  Soliciting support

#  Techniques to influence those people who have the power to bring about the requisite changes, and thereby make the campaign successful.

Information and Publicity

This involves spreading awareness of the campaign and the issues involved in it by:-

1  Using the mass media, press releases, letters to editors, interviews on T.V. and Radio, Cable TV/Cassettes, and other audio/visual aids. -

2.  Organising public meetings to be addressed and attended by popular public personalities, celebrities, and other popular figures who are sympathetic to the cause.

3  Organizing the mobile groups to travel widely to create awareness among the people.

4. Involving schools and colleges are considered necessary.

5  Circulation of posters, handbills, pamphlets, banners, stickers, etc. and putting up hoardings.

6  Taking the advice from experts and professionals as well as relevant scientists, etc. In order to add further weight to the campaign.

7  increasing the credibility of the campaign by showcasing the support they have received in the form of publications and declarations from International organizations. such as WHO and other U.N. bodies, as well as national organizations such as the Bureau of Indian Standards, Food Laboratories, etc.

8  Involving the officials and authorities concerned wherever possible in it.

9.  Seminars/Workshops/symposium to discuss and debate on such issues.

10  Preparing comprehensive briefing material for Members of Parliament and State Legislatures, Legislative Councils, etc. for effective lobbying with different political organizations and government for the cause.

11  To file Lawsuits & Public Interest Litigation along with wide publicity for such action.

Soliciting Support - They should try to get the support of groups including:-

- the general public

- key groups in society

- groups related to the issue

This can best be achieved by identifying the individuals and groups-

#  who are known to be in support of the cause

#  who is known to be opposed to the cause

#  who are fence-sitters and have not made up their mind.

-  It can be in the form of easily readable material like pamphlets, etc. containing all relevant information regarding the issues.

-  proper timing in approaching the media or the judiciary or using other tools of advocacy and campaign is very important.

-  getting the support of all like-minded individuals, groups, journalists, community leaders, and other activists and make full use of their respective strengths.

Influencing the Powerful -

It involves identifying those who are in a position to change the situation and solve the problems, these includes -

- professional groups

- business communities.

- various decision making authorities at different levels.

- Members of Parliament, MLAs, or other elected representatives.

Q.   Write a note on ‘Duties of Consumers as a Corollary to Consumer Right’.

A.    Rights and duties are two sides of the same coin. As consumers, we have two types of duties. One, duties which are required for enforcement of our own rights. For instance, for meaningful enforcement of rights to safety and a healthy environment, it is our duty to buy only ISI marked goods, particularly where safety is most important, for example, electronic items, helmet, etc. Two duties toward others. These can be called our social and ecological responsibility. It means that as consumers we should make responsible choices about our purchases and consumption in relation to society and the environment. Pollution, exhaustion of resources and energy, and the proliferation and hazardous wastes are all problems associated with irresponsible consumption.

Q.  Discuss in brief the important provisions of ‘Sale of Good Act, 1930’.

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 has been designed to protect the interests of the buyers in terms of granting them the remedy of avoiding the transaction, besides the claim for damages, in case certain conditions are not satisfied. Sec. 14(b) & 14(c) contain 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 charge. Besides, Sections 57 to 59 entitle the buyer to 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.  Discuss the manner of taking cognizance of PIL.

A.    The two methods of taking cognizance of PIL are -

 Letters and Telegrams

The courts, with the aim of enabling even the poor and disadvantaged to seek judicial redressal of their grievances, have dispensed with procedural formalities to such an extent that they have even accepted letters, postcards, and telegrams, addressed to judges, the court, or the Legal Aid Committees, as writ petitions, and have taken appropriate action.

Suo Moto

Even if nobody files a petition before the court, in case there is a violation of the rights of people, the court can initiate the proceedings on its own by simply taking note of it either

through a newspaper or through any other source. Such practice is called suo moto.

Q.   Discuss in brief the structure and purpose of Consumer International (CI).

A.    Structure - The membership of the Consumers International has two categories -one, the full members, and the other known as 'The Affiliates'. Full membership is given to those organizations which give a proportion of their gross annual income while the other members - Affiliates - pay a membership fee. 15 members of the council have entrusted the work of charting the Consumers International's course of action. Six council members form executive which drafts the budget and policies for the council's approval.

Purpose -  CI believes that strong and effective consumer organizations can transform the world into a more just, equitable place & responsive to the people's needs. Consumers International's programs and campaigns mainly committed to consumers' interest. They include:

-  promotion of consumer education and protection

-  program on trade, food, health, and sustainable consumption.

-  campaigns for proper controls on the marketing and use of pesticides, pharmaceuticals, tobacco, and other hazardous products.

-  lobbying in the international bodies for checking anti-consumer programs (like the UN Guidelines for consumer protection). 

ACS- 01

8th Part 

1.   Discuss various dimensions of the Consumer Environment.

A.   Various dimensions of Consumer Environment are -

1) Economic Environment

The Consumers buying decisions are influenced by economic factors that comprise income, price, technology, the economy of purchase, dependability, quality, and effectiveness of the product. These factors significantly affect the consumer's decision-making process. The other factors are the following :

a) Income -

           Income is the primary factor that determines the expenditure on the consumption of goods by individuals. The personal disposable income is the amount of money people are left with after paying the taxes. On the basis of income, consumers are grouped as upper-class, middle class, working-class, and low-income groups. In India, there exist considerable disparities in income and wealth distribution. An increase in income influence the buying habits of the consumers.

b) Savings and Debt -

Consumer expenditures are also affected by savings and debt patterns. In India, people hold savings in the form of bank saving accounts, bonds, shares, real estate, jewelry, and other assets. These savings are utilized by people to finance purchases. Consumers can increase their purchasing power also through borrowing. The availability of consumer credit due to the development of banking and financial institutions has been a major contributor to the growth of the Indian market.

c) Product Considerations -

Products are packaged and labeled attractively and various customer services are also offered along with the product. All these things exert a considerable influence on the decision of the buyers. Brand names, for example, tell the buyer something about the product quality and finally gets associated with the good or bad quality of products. The packaging gives benefits such as protection, economy, and convenience, this also influences the decisions making the process of the buyers.

d) Price Considerations - 

The consumer before purchasing the product weighs its price against the perceived values of using the product. Consumers differ in the values they assign to different product features. Keeping this in mind the marketers often change their pricing strategy to cater to and attract different consumer segments. Sales at a concessional price, price reductions, discount offers, and free gifts are some of the sales promotion methods used by marketers.

e) Influence of Technology -

The most important factor today in shaping people's consumption is technology. The consumers today are exposed to different new products, which claim features of greater efficiency, comfort, speed, and reliability, etc and many other new features.

2)Social Environment

   The social class comprises a large group of people who possess something in common like values, interests, culture, lifestyles, and social behavior. The social classes are formed when people share similar values, economic circumstances, and feel empathy towards each other. A member of any social class would normally select items that are suitable and considered worthy and of good taste by his class. For example, families of the upper-middle class include successful executives, bankers, businessmen, etc. They are likely to buy particular kinds of houses, furniture, clothing, automobile, recreation and luxuries that are considered worthy and their class thinks is the proper way to live. The social class comprises of several groups -

Reference Group - This is a relatively small social group to which a consumer belongs or aspires to belong. It acts as a guide to acceptable beliefs, values, attitudes, and behavior. Members of such groups consist of small but intimate members who frequently meet and interact with each other. Suitable examples of such groups are friends, peer groups, family, work associates, professional associations, etc.

Membership Groups - Among membership groups, the family is considered the most powerful influential group because of its unique role in early childhood socialization.

Aspirational groups - These are the groups to which an individual makes maximum efforts and aspires to be part of. Sports heroes and movie stars are examples of aspirational groups.

Face-to-face groups - These are the small groups of people where individuals communicate directly. Such groups have a direct influence on an individual's ideas, tastes, values, and behavior.

3) Cultural Environment

The Consumption habits of people are affected by the prevailing culture of the society to which people belong. The society develops distinctive cultures that become part of their traditional way of life, their lifestyle. Individuals may react quite differently to the same situation according to their cultural background and their general experience. Cultural trends are used for market segmentation, product development, advertising, and other aspects of marketing strategy.

3.  Discuss in detail the six Consumer Rights provided under the Consumer Protection Act, 1986. 

A.   The Consumer Protection Act enshrines six rights of the consumers. These are the Right to Safety, Information, Choice, Be Heard, Redressal, and Consumer Education.   

1)  Right to Safety

The Right to Safety means the right to be protected against the marketing of goods and services which are hazardous to life and property. This means that the purchased goods (or services) should meet the safety requirements of the consumer. The right to Safety is not limited to the quality of the product just at the time of purchase. The products should fulfill the long term interests of consumers in terms of safety needs. Therefore before purchasing, consumers should insist on the quality of the products as well as on the guarantee of the products and services. But this does not mean that without a guarantee a consumer does not have the right to safety.

2) Right to be Informed

Right to be informed implies information 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. In other words the consumer can insist on getting all the information about the product or service before making a choice or a decision to purchase the product. The manufacturer or trader is duty-bound to give this information. This right, enables the consumer to act wisely, and responsibly do not fall prey to the high-pressure selling techniques.

3)  Right to Choose

 The right to choose means a buyer has the right to buy a particular product out of a number of products available and get the satisfaction in terms of quality and price of goods. A shopkeeper cannot force or impress upon a customer to buy a particular brand or a type of product. In case a particular product is manufactured by only one producer, that is a monopoly product, then this Right ensures satisfactory quality and services at a fair price.

4)  Right to be Heard

The Right to be heard means that consumer's interests will receive due consideration at the appropriate forums. It also includes the Right to be represented in various forums that are formed to look into the welfare of consumers.

        For the exercising of this right, both the State and the voluntary agencies are supposed to provide necessary forums. Under the social accountability of producers, they should also provide such forums in the shape of grievance redressal or customer service departments or wings. By enacting the Consumer Protection Act, the Government of India has created Consumer Forums at district, state & national levels to look into the complaints of consumers. The consumers themselves have started forming non-political & non-commercial consumer organizations which can be given representation in various committees formed by the Government in matters relating to consumers.

5)  Right to Seek Redressal

This Right implies the right of a consumer to seek redressal against the unfair trade practices or unscrupulous exploitation of consumers. It also includes the Right to fair settlement of the genuine grievances of the consumer. It also includes the right to receive compensation for faulty goods or services. Redressal is the natural follow-up after making a complaint and thus making a settlement in such a manner that it is acceptable to both the consumer as well as the seller. Consumers must make a complaint about their genuine grievances. Many a time the value of the complaint may be very small but its impact on the society as a whole may be very large. They can also take the help of consumer organizations in seeking redressal of their grievances.

6)  Right to Consumer Education

This Right encourages a person to acquire the knowledge and skill to become an informed consumer throughout life. As we know that the ignorance of the consumers is largely responsible for their exploitation at the hands of the seller's ex rural consumers, so the consumers should be aware of their rights and must exercise them willingly. The Consumer Protection Act itself provides the Right to consumer education. Therefore it becomes the responsibility of the government to provide necessary information to the consumers about their rights. Creating awareness among consumers is also part of their education. This will help a consumer in protecting himself/herself against fraudulent, deceit, and grossly misleading information, advertising, labeling, or other practices. Consumer education also brings alertness and the ability to question about price and quality of goods.

5.  Who is a Consumer? Discuss the Characteristics of ‘Consumer Buying’.

A.    The consumer is one who buys a good or hires a service, on payment, for final consumption or uses irrespective of age, sex, language, religion, or social group. The main characteristics of the definition of the consumer can be stated as follows:

i)  A consumer is one who consumes either goods or hires or avails of any services.

ii)  The word 'Consumer' is defined separately for the purpose of goods and services.

iii)  For the purpose of goods, a consumer means a person belonging to any of the following two categories:

a)  One who buys any goods for consideration.

b)  One who uses such goods with the approval of the buyer.

iv)  For the purpose of services, a consumer means a person belonging to any one of the following:

a)  One who hires any service or services for consideration.

b)  One who is a beneficiary of such service.

v)  A person who buys goods for commercial purposes is not a consumer. In other words, only a person who buys goods for private use or conception only is a consumer. 

Characteristics of Consumer Buying -

Consumers purchase small quantities of a variety of goods. Buying is often crowded into spare moments and is only one of the many tasks carried on. A multitude of different goods may be selected. Types of goods consumers buy include convenience goods, shopping goods, and specialty goods. Convenience goods (like food products, soap, daily newspapers, confectionery, etc.) are usually purchased frequently and with a minimum of effort in buying. Shopping goods (lie ready-made garments, furniture, shoes, etc.) are those which the consumers buy after considering such factors as suitability, quality, price, and style in the process of selection.

        Specialty goods (like TV, Stereo, refrigerators, camera, etc.) have unique characteristics or brand identification for which most buyers are willing to make a special purchasing effort. Included in the types of services that consumers hire or avail of on payment are transportation, communication, banking, insurance, house building, medical treatment. education and training, electricity and water supply, etc. 

6.   Write a note on ‘Consumer Responsibility’. 

A.    A responsible consumer is a person who exercises his/her discretion with the full awareness of the implication of his/her right to choose and is accountable or answerable to other consumers and to the environment for his/her purchase decisions.

 The components of the consumer's responsibility include:

-  recognition of one's power & ability to control one's own consumption practices.

-  creation of an environmentally friendly lifestyle, or what is called a "greener lifestyle".

-  awareness of accountability for one's actions and purchase decisions

-  capacity for rational thought

-  Being a watchdog over the activities of the industries and businesses

-  Demanding the standards and quality of the products.

Citizen as Consumer

A person's range of activities and interactions extends from his/her home to the market place as a consumer. But as a citizen, the area of his/her activity expands to encompass not only what he/she can carry from the market to his/her home for personal use, but what he/she can give in return to society and to the environment. This involves not only action but also the decision not to act in a certain established or acceptable manner. For example, as Consumer Responsibilities a user of market commodities he/she takes partial responsibility for garbage disposal.

          The following are some of the areas where consumer intervention can influence the market to act responsibly towards the consumer. For that the consumer should always check correct weights and measures, dates of manufacture and expiry, pricing and ingredient labeling, the inclusion of quality marks (ISI, Agmark, Eco-mark), Warranties, and guarantees, etc., before making a purchase. This is the first dimension of the consumer's responsibility as a citizen. His/Her other dimension of responsibility is to the environment which is global and thus makes he/her a citizen of the world. This awareness of environmental issues determines the choice of products which provides a negative environmental impact. For example use of Chloro Flouro Carbon (CFC) - free air- conditioners and refrigerators. It also involves a conscious rejection of non-biodegradable packaging, and minimal use of chemicals at home.

Ethical Consumer

The ethical consumer buys and invests appropriately and ethically. Price is not the only priority for he/her; ethical behavior means one is doing what is right and good in most situations for most people. An Ethical Consumer is also a green consumer. The evolution of a consumer into a green consumer means that the consumer exercises He/her vote, not only in favor of market responses to his needs but also the individual's responsibility towards the environment.

7.   Write a note on the History and Growth of the Consumer Movement in India. 

A.   The origin and growth of the consumer movement in India have many similarities to the movements elsewhere. In the 1960s, organizations such as the Consumer Guidance Society of India (Bombay) were formed to inform and educate consumers on the quality of goods and services and to conduct simple tests on goods of daily consumption. Shortages in the supply of essential commodities and the unsatisfactory functioning of the public distribution system (PDS) led activists to form consumer organisations in their towns and localities to ventilate their grievances to the authorities concerned. Several such organisations which were formed between 1970-1980 were primarily concerned with the problems of inflation, food adulteration, and the public distribution system. These organisations serve a very useful purpose as voluntary vigilance groups in the market place.

         The third phase of growth covering the period from 1981 to 1990 signifies the expansion and consolidation of the consumer movement in India, especially after 1986. With the enactment of the Consumer Protection Act 1986, there has been a spurt in the number of new organisations in the country.

         The period from 1991 to 2000 AD is being considered as a period that would empower the Indian consumer. The major programmes include consumer education, product testing, product safety, promotion of eco-labeled products, and conservation as compared to the mindless consumption of goods.

          In India, the basic reasons for the consumer's movement have been:

#  Shortage of consumer products; inflation of the early 1970s

#  Adulteration and the Black Market.

#  Lack of product choices due to lack of development in technology

#  Thrust of consumer movement in India has been on availability, purity, and prices

The factors which stimulated the consumer movement in recent years are:

#  Increasing consumer awareness

#  Declining quality of goods and services

#  Increasing consumer, expectations because of consumer education

#  Influence of the pioneers and leaders of the consumer movement

#  Organized effort through consumer societies

               The first stage of movement was more representational in nature, i.e., to make consumers aware of their rights through speeches and articles in newspapers and magazines and holding exhibitions. The second stage was direct action based on the boycotting of goods, picketing, and demonstration. However, direct action had its own limitations, which led to the third stage of professionally managed consumer organisations. From educational activities and handling complaints, it ventured into areas involving lobbying, litigation, and laboratory testing.  It has played a role in hastening the process of passing the Consumer Protection Act, 1986 which has led to the fourth stage. 

8.  Write a note on ‘Why the Consumer needs Protection’. 

A.    Fleecing of customers by sellers has become widespread today in the market. False or misleading advertisements or representations, fixing, bargain prices, the offering of gifts, prizes, contents, non-compliance of product safety standards and hoarding of goods has become rampant in the markets that make us knowingly or unknowingly victims in one way or the other. All these factors are responsible for creating pressure on the government for enacting laws to protect consumers from greedy elements in the markets.

      Consumer protection envisages policies and actions, usually involving intervention by the government, designed to ensure that all consumers obtain goods and services of reasonable quality at fair prices. Consumer protection embraces all goods and services and the protection sought is against unscrupulous sellers or uncaring civil servants, against information regarding price and quality that may be false, biased, or incomplete, or the protection needed may be from laws, regulations and regulatory agencies which favor producers rather than consumers. To protect consumers, the govt enacted certain laws. These laws confer a number of rights on consumers and impose duties on the sellers, manufacturers, or those who provide services. More importantly, these rights are not merely social codes but most of these now have legal sanctions behind them. In other words, we now have enforceable rights. 

       The idea of Consumer Rights is a product of modern times. For long the traders and manufacturers have been disregarding the interests of consumers in respect of quality, price, and availability. In legal terms protection of consumer interests by the provision of rights also means the imposition of duties on the sellers, manufacturers, and providers of services. Therefore violation of these rights and duties may entail legal action or punishment. The producers, manufacturers, and providers of services are supposed to be conscious of their duties towards society. That is, their sole concern should not be profit only. At present, there are pressures from the social, legal, and judicial institutions in addition to those from the consumer and environment movements to ensure consumer interests are protected.

12. Discuss in brief the factors responsible for attitudinal changes. 

A.   There are many factors responsible for changes in consumer behaviour and attitudes, these are -

Inherent Nature of Consumers

By virtue of their inherent nature consumers do not always make rational, economic, extensive decisions. In fact, there are consumers who are rash or passive in their decisions. The rash individual just buys products and services on impulse, whereas the passive buyer gets easily lured by attractively exhibited goods or packaging. They end up buying products they really do not need and soon regret having bought them.

Personality Traits

Every person has some natural and acquired personality traits, based on which people are divided into two broad categories. The extrovert and the introvert. The extroverts are usually impulsive buyers and they-easily try new products.

Social Influences

Social influences include the influence of family, friends, peer groups, workgroups, club mates, etc. Family is the basic social group in which an individual is born and therefore is most influenced during the formative years of life. Social groups include workgroups, leisure groups, walking companions, shopping groups and partying groups, and consumer action groups. The social group may influence a consumer's behaviour through discussions about products, services, and particular stores which the members may patronize.

13.  Write a note on ‘The Consumer Manifesto’.

A.   The Consumer Manifesto is based on the principles of - Access to essential goods, safety, representation, health; environment, fair practice, equity, availability of grievance redressal means, ethics, accountability, etc. It sets out to redress the imbalance in

knowledge and power between suppliers and consumers. It demands -

#  Participation by consumer organizations on an equal footing with other corporate groups in society, in the formation of policies that affect those they represent;

#  Ensuring that the basic needs of all consumers are met; adequate food, clothing

shelter, health care, sanitation, and education;

#  Measures to enhance fair competition and to control harmful business and professional

practices; for example, to oppose a practice that misleads, restrict choice, or erect barriers to trade so as to "protect" business and state enterprises at the expense of the private individual;

#  Laws and standards that safeguard consumers from hazardous goods and services,

as well as from the social costs and environmental pollution;

#  Procedures, formal and informal, to provide effective redress to aggrieved consumers

at all income levels;

#  Accurate and adequate information to help consumers choose;

#  Consumer education to ensure that all people may acquire the knowledge and skills

necessary to be informed and active consumers exercising their rights and unfulfilling their economic role, special attention must be given to the needs of vulnerable groups such as children, handicapped, and the elderly.

#  Consumers assert the right of organized consumers to be represented, heard and

heeded nationally, regionally, and internationally.

14.  Discuss in brief the impact of Mass Media and Advertisement on Consumers.

A.   The main objective of Mass Media and Advertisement is to influence the short-term and or long-term behavior of consumers. They follow the principle of AIDA(attention, interest, desire, and action), and make use of behavioral concepts for effectiveness. There is both a positive and negative impact of advertisements. Some advertisements add to our knowledge. We may even feel inspired to work more and earn more on watching such ads. However, we can also come across consumers among ourselves who experience some negative effects of advertising. They may often be found dissatisfied, irritated and anxious, confused, experiencing restriction on freedom of choice, or undergoing stress. However, it can be added that some such effects are more likely to occur when we start believing blindly every advertisement that is projected upon us. They are more likely to happen when we

consistently fail to use wisdom, ours, or others.

15. Discuss in brief the ‘Role of Trade and Industry’.

A.   Trade and industry whether producing and selling goods or providing services cannot function in isolation. They have to realize that their survival depends on consumer satisfaction. They have, therefore, to evolve a code of conduct and business ethics through discussions with consumer groups and organizations. They have to ensure that the quality of their products is according to prescribed standards and that they are safe and priced reasonably. They have to voluntarily ensure that they do not adopt any unfair or restrictive trade practices to exploit the consumers.

         They have also to ensure that the quality of their products conforms to the standards of weights and measures and that their packaged commodities, conform to the prescribed rules and regulations containing all relevant information about the product. They have to voluntarily evolve and adhere to certain ethical standards and codes of conduct in advertising their goods and services to avoid misrepresentation and misleading of consumers.

         They have to ensure that their products and services carry appropriate guarantees and warranties and that these are scrupulously honored whenever defects and deficiencies are pointed out by the consumer. They have also to ensure courteous behavior towards customers and provide proper and effective after-sales service where required. 

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)