Chapter 12: Consumer Protection

Consumer Protection

Business Studies • Chapter 12 • Exercises

Very Short Answer Type
1. Under which consumer right does a business firm set up consumer grievance cell?
Right to be Heard (Right to Representation).
2. Which quality certification mark is used for agricultural products?
AGMARK.
3. What is the jurisdiction of cases that can be filed in a State Commission?
As per the Consumer Protection Act, 2019, the State Commission has jurisdiction to entertain complaints where the value of goods or services paid as consideration exceeds ₹ 1 Crore but does not exceed ₹ 10 Crore.
4. State any two relief available to consumers under CPA.
  1. Removal of defects from the goods or deficiency in services.
  2. Replacement of the goods with new goods of similar description.
5. Name the component of product mix that helps the consumer to exercise the right to information.
Labelling.
Short Answer Type
1. Enumerate the various Acts passed by the Government of India which help in protection of consumers’ interests.
Besides the Consumer Protection Act, 2019, the other important Acts are:
  • The Sale of Goods Act, 1930
  • The Essential Commodities Act, 1955
  • The Food Safety and Standards Act, 2006 (FSSAI)
  • The Bureau of Indian Standards Act, 2016
  • The Legal Metrology Act, 2009
  • The Trademarks Act, 1999
2. What are the responsibilities of a consumer?
  1. Be aware: Know about various goods and services available to make an informed choice.
  2. Buy only standardized goods: Look for ISI, Agmark, Hallmark labels.
  3. Ask for a Cash Memo: It is proof of purchase required for filing complaints.
  4. Follow instructions: Read labels and use products safely.
  5. Assert yourself: File a complaint in case of dissatisfaction.
3. Who can file a complaint in a consumer court?
A complaint can be filed by:
  • Any consumer.
  • Any registered voluntary consumer association.
  • The Central Government or any State Government.
  • One or more consumers, on behalf of numerous consumers having the same interest.
  • The legal heir or representative of a deceased consumer.
4. FSSAI Proposal Case: Name and explain the Consumer Right being reinforced.
Context: FSSAI proposing hotels/food outlets to declare the kind of oil/fat used in cooking on menus.
Right Reinforced: Right to be Informed.
This right states that the consumer has the right to have complete information about the quality, quantity, potency, purity, standard, and price of goods or services so as to protect the consumer against unfair trade practices. Knowing the ingredients (oil/fat) is part of this right.
5. Who is a consumer as per CPA?
Under the Consumer Protection Act, a consumer is defined as a person who:
  • Buys any goods for a consideration which has been paid or promised, including any user of such goods (with approval of the buyer), but excludes a person who obtains goods for resale or any commercial purpose.
  • Hires or avails of any service for a consideration, including any beneficiary of such service, but excludes a person who avails of such service for any commercial purpose.
Long Answer Type
1. Explain the importance of consumer protection from the point of view of a business.
Consumer protection is beneficial for business because:
  1. Long-term Interest of Business: Satisfied consumers not only become loyal customers but also provide positive word-of-mouth feedback, leading to increased sales.
  2. Moral Justification: It is the moral duty of any business to protect the interests of society and avoid exploitation.
  3. Social Responsibility: Businesses use societal resources; thus, they have a responsibility to supply safe and quality goods to society.
  4. Government Intervention: Engaging in unfair trade practices invites government intervention, which can tarnish the image of the company.
  5. Consumer is the Purpose: The basic purpose of business is to create and serve a customer.
2. Explain the rights and responsibilities of consumer?
Rights (as per CPA 2019):
  • Right to Safety: Protection against hazardous goods.
  • Right to be Informed: Info about quality, quantity, price, etc.
  • Right to Choose: Access to variety of goods at competitive prices.
  • Right to be Heard: Right to represent oneself in consumer forums.
  • Right to Seek Redressal: Relief against unfair trade practices/exploitation.
  • Right to Consumer Education: Acquiring knowledge to be an informed consumer.
Responsibilities:
  • Be aware of goods available.
  • Buy only standardized goods.
  • Read labels carefully.
  • Ask for a cash memo.
  • File complaints for redressal of genuine grievances.
3. What are various ways in which the objective of consumer protection can be achieved?
  1. Self-Regulation by Business: Ethical businesses set up their own grievance cells and follow fair practices.
  2. Business Associations: Associations like FICCI and CII lay down codes of conduct for their members.
  3. Consumer Awareness: Educated consumers can protect themselves by knowing their rights.
  4. Consumer Organisations (NGOs): Groups like VOICE and CERC educate consumers and fight cases on their behalf.
  5. Government: Enacting and enforcing laws (like CPA 2019) to protect consumer interests.
4. Explain the redressal mechanism available to consumers under the Consumer Protection Act, 2019.
The CPA 2019 establishes a three-tier quasi-judicial machinery:
Level Jurisdiction (Value of Consideration) Appellate Authority
District Commission Up to ₹ 1 Crore State Commission
State Commission Exceeds ₹ 1 Crore but up to ₹ 10 Crore National Commission
National Commission Exceeds ₹ 10 Crore Supreme Court
Note: The Act also introduces Mediation Cells attached to these commissions for settlement through mutual consent.
5. Explain the role of consumer organisations and NGOs in protecting and promoting consumer’s interest.
NGOs play a vital role by:
  • Educating the general public about consumer rights by organizing workshops and seminars.
  • Publishing periodicals and journals to disseminate knowledge (e.g., ‘Insight’, ‘Consumer Voice’).
  • Carrying out comparative testing of products in accredited labs and publishing results.
  • Encouraging consumers to protest against unfair trade practices.
  • Filing complaints in consumer courts on behalf of consumers.
6. Mrs. Mathur vs. Shine Dry Cleaners Case Study: (a) Rights exercised, (b) Responsibilities fulfilled.
Context: Mrs. Mathur’s expensive jacket (₹ 4,500) was discoloured by dry cleaners. She complained, they refused, she went to court and got ₹ 2,500 compensation.
(a) Right exercised at first instance: Right to be Heard (Right to Representation). She informed the dry cleaner about the grievance.

(b) Right which helped avail compensation: Right to Seek Redressal. This right assures the consumer the right to get relief (compensation) in case the product/service falls short of expectations or causes loss.

(c) Responsibility fulfilled by Mrs. Mathur: Asserting oneself to ensure a fair deal. She did not accept the loss silently but contacted the dry cleaner multiple times and eventually approached the consumer court.

(d) Two other responsibilities:
  1. Ask for a Cash Memo on purchase of goods or services.
  2. Be honest in your dealings and file complaints for genuine grievances only.
Project Work
  • 1. Visit a Consumer Organisation: Find a local NGO (e.g., Common Cause, VOICE), interview the office bearers, and list their activities like legal aid, magazine publication, and awareness camps.
  • 2. Collect Newspaper Cuttings: Create a scrapbook of recent consumer court judgments (e.g., cases against builders for delay, airlines for deficiency in service) highlighting the compensation awarded.
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