case study on consumer rights exploitation

Top 10 Case Study on Consumer Rights

We know consumer laws and courts exist, but only by reading through some case law can you understand how you as a consumer can exercise your rights!

Table of Contents

On an everyday basis, we purchase products and services. From our basic necessities like food and clothing to services like banking and education, we are dependent on companies and organisations to live comfortably in the present day, and we give them our hard-earned money in return. But sometimes, companies might fail to provide quality services or products. Many know there exist consumer courts and laws that protect consumers from consumer exploitation . But have you ever wondered who goes to these courts and what types of cases are filed? You would be surprised to know how basic these cases can be. So, here are 10 interesting case study on consumer rights curated for you.

Top 10 Case Studies on Consumer Rights

1. banks can’t always escape using ‘technical difficulties’.

We have come to rely on banks so much. A recent case study on consumer rights highlighted the need for stronger regulations. More than ever, most of our transactions are digital and heavily reliant on banks for these. Have you ever had your transaction fail due to the server being down or other errors?

Dipika Pallikal, a squash champion and Arjuna awardee found herself in an awkward situation when she used her Axis Bank Debit Card in a hotel at Netherlands’ Rotterdam failed. She had had 10 times the bill amount in her account at that time. Due to this, she faced a loss of reputation and humiliation. The bank said the incident was a case of ‘ Force Majeure’ (an act of god/ something beyond control)

Apart from that, the bank had also returned a cheque of ₹1 lakh issued to her by the government of India and blamed it on a technical error.

Dipika moved the consumer court in Chennai against Axis Bank

Court Decision

The court found that there was a deficiency of service on the part of Axis Bank and directed the bank to pay a compensation of ₹5 lakh and ₹5000 as expenses.

Key Takeaway

Banks are like any other service provider. We trust them with our money and they must perform the services we were promised. They cannot hide behind ‘technical difficulties’ or ‘ force majeure ’ and let customers suffer for it.

2. You Don’t Have to Be a Celebrity to Win a Consumer Case

A humble tea vendor, Rajesh Sakre, is an example of this. He had ₹20,000 in his State Bank of India account and had withdrawn ₹10,800. On his next visit to the ATM, however, he realized all his money was gone. When he asked the bank authorities they blamed it on him. 

So, he went to the District Consumer Disputes Redressal Forum with his grievance. He couldn’t afford a lawyer and he argued the case himself. This case study on consumer awareness presents insights into how consumers are becoming more vigilant.

The forum ruled in his favor and ordered the State Bank of India to return the ₹9,200 with 6% interest, pay ₹10,000 as compensation for mental anguish caused by the issue, and ₹2,000 for legal expenses.

It doesn’t matter who you are, as long as you have a valid case you can approach the Consumer Cases Forum. And even big companies and government entities like the State Bank of India can be made to answer for their mistakes.

3. Not All Free Items Are Welcome

Imagine you bought a bottle of Pepsi and found a packet of gutka floating in it! It happened to Rajesh Rajan from Ahmedabad when he bought Pepsi from a local store. He sent a legal notice to the company immediately and approached a Consumer Cases Dispute Redressal Forum. Every case study on consumer complaints tells a unique story of a consumer’s journey towards justice.

Moreover, he claimed that there was a deficiency in service that could have caused a health hazard to him. He demanded compensation of ₹5 lakh for the same.

The consumer forum passed an order in favor of Rajesh Rajan and directed the company to pay a total of ₹4008 (₹4000 for compensation and ₹8 for the Pepsi he purchased).

Rajesh moved the State Consumer Dispute Redressal Commission, asking for higher compensation as ₹4008 was too low and he had spent ₹500 on sample testing itself. The State Commission passed an order asking the company to pay ₹20,000 as compensation and ₹2000 towards costs as it found Rajesh’s argument reasonable.

Free items are not all welcome! It is a deficiency in service on the part of the provider if you find anything in your food (packaged or otherwise) that isn’t supposed to be there. The Consumer Cases Forums are a good place to take them.

4. Paying More Than the MRP? You Shouldn’t.

It has become common to charge more than the maximum retail price (MRP) for packaged goods. Especially in places like theatres, food courts, railway stations, etc, we see this happen a lot and mostly ignore it. Among the prominent consumer cases last year, the MRP case stood out for its complexity

Mr Kondaiah from Andhra Pradesh, on the other hand, didn’t ignore it when he noticed that Sarvi Food Court charged him ₹40 for a water bottle where the MRP was ₹20. He filed a case against them in the District Consumer cases Disputes Redressal Forum for ‘unfair trade practice’. He supported his claim by producing the bill. The MRP case study on consumer rights brought to light some gaps in the existing regulations.

The court decided in favour of Mr Kondaiah and said that a practice is not justified just because it is widely common. Mr Kondaiah was awarded a compensation of ₹20,000, ₹20 (the extra money charged) and ₹5,000 in costs. 

No authority has the power to charge above the MRP for any packaged goods. It doesn’t matter where it is sold, you are not required to pay a rupee above the MRP.

5. No MRP at All on the Product?

Baglekar Akash Kumar, a 19-year-old got a book and ₹12,500 because of the book. How? He purchased the book online and when it was delivered, he noticed that there was no MRP mentioned in it. He browsed the internet and saw that the book was sold at different prices in different places.

So, he went to the consumer cases forum and filed a case against Penguin Books India Pvt. Ltd and the paper company.

The court held that not publishing MRP on the product without a valid reason is an ‘unfair trade practice’. MRP exists to ensure that a consumer is not overcharged for the product. So, it is mandatory for companies to print MRP.

The publishers were asked to print the retail price of the book and Akash was awarded ₹10,000 as compensation and ₹2,500 as costs.

It is required under law for companies to put MRP on every product. If you see a product without MRP, then it is a violation of Consumer Cases Protection Laws and you can take them to court. 

6. Medical Services Fall Within the Scope of the CPA

Do medical services fall under CPA? When there was a little confusion in this regard, the Indian Medical Association (IMA) decided to get this question resolved once and for all. The CPA case study on consumer rights brought to light some gaps in the existing regulations. The Medical Services case study on consumer complaints became a landmark case in consumer rights advocacy.

IMA approached the Supreme Court, asking them to declare that medical services are out of the scope of the CPA. They gave the following arguments to support their claim:

• Medical professionals are governed by their own code of ethics made by the Medical Council of India. 
• In the medical profession, it is hard to guarantee the end result of treatments. Many external factors which are out of the control of the professional can impact the outcome. So, allowing consumer claims will cause people to file a case whenever a treatment doesn’t work out.
• There are no medical science experts in the consumer complaints online.
• Medical service provided by government hospitals will not fall under the Act especially when the service is provided for free. 

These were decent points. After consideration, the court settled the claims in the following manner.

Medical services provided by any professional (private or government) will be covered by CPA. This means  people can file a case in a Consumer Court if the service provided is not in confirmation with the Act.

• Doctors and hospitals who treat patients for free cannot be sued by a person who availed their services for free. 
• In a government hospital, where services are provided free of charge – the Consumer Protection Act India would not apply.

Apart from these two exceptions, the Act will apply when a person gets treated in government hospitals for free, when a poor person gets treated for free, and when insurance money is used for treatment.

7. Tired of the False Claims Made by Skin and Hair Care Products Yet?

Maybe you are not tired yet or you are too tired to question. However, a 67-year-old man from Kerala’s remotest areas was tired of these consistent lies and how companies got away with them.

In 2015, K Chaathu complained against Indulekha (beauty product manufacturers) and Mammootty (an actor who was the brand ambassador of the company) for putting up misleading ads. The tagline of the soap was ‘soundaryam ningale thedi varum’ which meant ‘beauty will come in search of you. The ads also claimed that people using the soap would become ‘fair’ and ‘beautiful’ but the 67-year-old didn’t become fair or beautiful.

Funny, right?

Compensation Paid

Indulekha paid him ₹30,000 in an out of court settlement while the initial claim of Chaathu was ₹50,000. When he was asked about this, he said that this case was never about the money but about how these companies put up advertisements every day with false claims. And it is not okay to let these people get away with it.

Key Takeaways

Advertisements are made to sell the products, so exaggeration of results is too common. But this doesn’t make it okay to make false claims just for the sake of selling the products. Making false claims in violation of the CTA.

8. Homebuyers Are Consumers

Imagine you decide to buy a house (a dream come true for many). You do a lot of research, pool your hard-earned money, and pay a real estate developer to build the house for you. They promise to deliver within 42 months but 4 years later they haven’t even started construction. 

This is what happened to two people and they decided to move the National Consumer Disputes Redressal Commission (NCDRC) for it. The Homebuyer’s case study on consumer rights was instrumental in changing local regulations.

NCDRC decided in favour of the homebuyers and asked the real estate developer to refund the money with a simple interest of 9% per annum. They were also awarded a compensation of ₹50,000 each.

The real estate developer challenged this in the Supreme Court, saying that the issue is covered under another Act (Real Estate (Regulation and Development) Act) and therefore cannot be taken in a consumer court. But the Supreme Court denied their argument saying that as long as the other Act explicitly stops people from getting remedy under other laws, they will be allowed to do so.

Our laws are in such a way that even though there are other remedies available, in most cases where you are a buyer of a product or a service, you will have protection under the Consumer Protection Act. 

9. Insurance Claims Cannot be Rejected on Mere Technicalities

We pay the premium and get insurance to protect us from losses we can’t foresee. Sadly, many people have had bad experiences with the insurance company. Om Prakash, for example, had his truck stolen and claimed insurance for the same. The truck was stolen on 23.03.2010, the FIR was filed on 24.03.2010, and the insurance claim was filed on 31.03.2010. 

The insurance investigator was sent and he confirmed that the claim was genuine. The claim was approved for the amount of ₹7,85,000/-. But the amount was never given to Om Prakash. With the rise in consumer court cases , companies are now more cautious about their policies and practices. When he sent the insurance company a legal notice for the same, they replied saying that there was a breach of terms and conditions: 

“immediate information to the Insurer about the loss/theft of the vehicle”

Om Prakash was late to apply for insurance because he was held up by the police to try and recover his vehicle.

While the consumer courts didn’t allow his case, the Supreme Court allowed his appeal and held in favour of him. It was ruled that insurance companies cannot escape from paying the claimants on technical grounds. Especially when the claimant has valid reasons for it.

The Court directed the Respondent company to pay a sum of ₹8,35,000/- to the Appellant along with interest @ 8% per annum. He was also awarded ₹50,000 as compensation.

Over the years, many judgments have been made to ensure that insurance companies are accountable and do not escape from paying valid claims. If you experience a similar situation with your insurance provided, you can approach the consumer court.  

10. iPhone 5S Gold for ₹68 + ₹10,000

Let’s close the list with a fun one! How would it be to get an iPhone at just ₹68? In 2014, Nikhil Bansal (a student) saw this unbelievable offer on Snapdeal (a discount of ₹46,651) and ordered it immediately as any sane person would. He received an order confirmation but later he was told that the order was canceled. They claimed that the offer itself was a technical glitch. “The iPhone case study on consumer complaint showcased the challenges consumers face even in today’s digital age.

When he approached the e-commerce consumer complaints India Forum, he claimed that these kinds of offers were misleading people and it was the duty of Snapdeal to honour the order. The forum ruled in his favor and asked Snapdeal to deliver him the iPhone for ₹68 and asked him to pay a compensation of ₹2,000.

When Snapdeal appealed this order, the compensation was raised to ₹10,000! 

Key Takeaway – Case Study on Consumer Rights

E-commerce stores are just as answerable as any other shop owner under the Consumer Protection Act. So if you face any issues like this with them, consider taking it to the consumer court. Through each case study on consumer rights, we can learn more about our rights and responsibilities

Consumer forums exist to protect consumers from consumer exploitation and ensure that we are not cheated by the companies we pay for getting products or services. Knowing your rights is the first step towards becoming a conscious consumer. 

Don’t hesitate to approach the consumer court if you have a valid claim of consumer exploitation . Even if it is for an ₹ 8 product like Pepsi, a valid claim should be taken to the forum.

What is the Consumer Protection Act?

The Consumer Protection Act is a law that safeguards the interests of consumers against unfair trade practices and ensures their rights to quality goods and services.

When was the Consumer Protection Act passed?

The Consumer Protection Act was passed in 1986 and later updated with the Consumer Protection Act, 2019.

Who is a consumer under the Consumer Protection Act?

A consumer is any individual who purchases goods or services for personal use, not for manufacturing or resale.

Who can file a complaint under the Consumer Protection Act?

A complaint can be filed by a consumer, any recognized consumer association, or the Central or State Government on behalf of a consumer.

What is a consumer rights case study?

A consumer rights case study involves analyzing a real-life scenario where a consumer faced issues with a product or service and sought legal resolution under consumer protection laws.

What are consumer cases in India?

Consumer cases in India refer to legal disputes brought by consumers against businesses for grievances related to defective goods, poor services, or unfair trade practices.

What are some examples of consumer rights?

Examples of consumer rights include the right to safety, the right to be informed, the right to choose, the right to be heard, and the right to redressal.

What is the consumer rights class 10 project?

The consumer rights class 10 project typically involves students researching and presenting on the various rights of consumers and how they are protected under the law.

Who is a consumer class 10 SST project?

In the class 10 Social Science (SST) project, a consumer is defined as an individual who purchases goods or services for personal use and is protected under consumer laws.

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Top Ten cases on Consumer Disputes

This article is written by Deepanshi of JGLS. The article discusses ten cases of Consumer Disputes.

Introduction

Purchase or hire of good and services has become an inevitable part of our daily lives. This decision to effectuate such purchase or hire such service is essentially based on trust, failing which can cause, more often than not to the consumers, anything from a monetary loss to physical harm. Consumer Protection Act, 1986 (hereinafter referred to as CPA) aims to provide speedy relief to such breach of trust or negligence. A hierarchy of three tribunals has been set up for this purpose —

• The District Consumer Disputes Redressal Forum (DCDRF),
• The State Consumer Dispute Redressal Commission (SCDRC), and
• The National Consumer Dispute Redressal Commission (NCDRC) .

Over the years, these tribunals, along with the apex court, have developed a better understanding of the CPA, meanwhile making sure to strike a perfect balance between the demands of both sides.

Following are ten important cases that hold relevance in case of consumer disputes:

Corporate Bodies can be sued under CPA

Karnataka power transmission corporation v ashok iron works private limited.

The Supreme court, in this case, held that a corporate body is included in the meaning of ‘person’ in section 2(1)(m) of the CPA. It reiterated the position of Lord Watson in Dilworth v. Commissioner of Stamps that the word “includes” is generally used to enlarge the meaning of the word but can alternatively be used to say “mean and include”, in which case what follows is an exhaustive explanation. The interpretation depends on the text, context, and objective of the Act. It was held that the section never intended to exclude juristic persons from its purview and the definition is inclusive in nature.

It also reiterated its own position in Southern Petrochemical Industries that the word “supply” is not the same as “sale” and in the context of electricity, it would be a provision of service as under section 2 (1)(d)(ii) of the Act.

Professional services fall within the scope of the Act

Indian medical association v v.p. shantha and others.

In deciding this case of deficiency of medical service, the court held that the services rendered by a medical professional fall within the ambit of ‘services’ under the section 2(1)(o) of the Act. It rejected the contention that a medical practitioner, being a professional and falling under the scope of Indian Medical Council Act, stands excluded from the CPA.

Moreover, it held that provision of a token fee (for the hospital administrative purposes) would not include an otherwise free service within the ambit of the definition of services. Also, the cost of the services paid by the employer or the insurance company would be deemed similar to paying for the service by the consumer itself.

Services have to be rendered with due care and in accordance with the Law

Arvind shah (dr.) v kamlaben kushwaha.

In this case, the complainant alleged that his son died due to the administration of a wrong treatment by the doctor. The State Commission upholding negligence provided a compensation of five lakh rupees.

In appeal, the National Commission observed that the two prescriptions that were available on record neither contained any description of the symptoms that the patient was experiencing nor did it have any preliminary vital information that a doctor is mandated to check, as per the guidelines and regulation of the Medical Council of India or the concerned State Medical Council, like body temperature, blood pressure, pulse rate, prior medical history et cetera. If further tests were required for the diagnosis, such was also mandated to be mentioned. The commission, following the case of Samira Kohli v Dr Prabha Manchanda [I (2008) CPJ 56 (SC)], held that failure to put such essentials in the prescription amounted to medical negligence. The Commission also noted that availability of such essentials, clinical observations and consent of the patient, point towards the care and diligence of the doctor and act as evidence against frivolous cases of medical negligence.

However, due to lack of available evidence that attributed the death of the patient directly to the negligence, the National Commission reduced the compensation to two and a half lakhs along with the interest thereon.

Poonam Verma v Ashwin Patel & Ors

In this case, the respondent, a homoeopathic doctor, prescribed allopathic medicines for the treatment of a patient who did not respond to the medicine and subsequently died. The Supreme Court held that the right to practice the allopathic system of medicine was restricted by the Central and State Acts which prohibit such practice unless the person possesses requisite qualification and is registered according to the Acts. Based on the fact that the respondent was qualified and registered to practice Homeopathy only, he was found to be in violation of the statutory duty not to practice Allopathy given under the section 15(3) of the Indian Medical Council Act, 1956. Respondent’s act was held to be actionable negligence and he was ordered to pay a compensation of three lakhs.

Educational institutions must refund extra fee paid

Sehgal school of competition v dalbir singh.

To seek admission in a medical coaching center, the petitioner, in this case, was made to deposit a lump sum fee for two years within the first six months. When the petitioner left the course midway on account of deficiency in the services, the coaching center refused to refund the remaining amount. The State Tribunal, following the view of the apex court and the National Commission, held that no educational institution shall collect lump sum fee for the duration of the entire course and if one does, such extra fee should be returned in case the student drops out due to deficiency. It noted that any clause in a contract contrary to this is invalid due to lack of equal bargaining power and contravention of the principles of natural justice.

The court was also of the opinion that additional compensation should be granted for the mental agony caused due to approaching the legal forum. However, since such was not asked in the petition, it could not be granted.

Sympathy should not influence compensation

Nizam institute of medical sciences v prasanth s. dhananka & ors ..

In this case, the complainant claimed for compensation due to alleged medical negligence before, during and after a medical procedure that led to a partial paralysis of the patient. The National Tribunal ruled medical negligence stating various lapses in all three phases mentioned including on the ground that consent of the patient was taken only for the examination of the tumor and not for its removal.

In the appeal, the Supreme Court confirmed the findings of the Commission and stated that the removal of the tumor was deferred through discussion on record and therefore an implied consent cannot be inferred.

The court recognised that a balance has to be struck between the inflated demands of the victim and the unreasonable claim of the opposition party that on compensation needs to be paid. It recognised that sympathy for the victim should not come in the way while deciding compensation but the court should not refuse to provide “adequate compensation”. In light of this and the peculiar facts of the case, it increased the sum of compensation to twenty-five lakhs each for the continuous medical expenses that need to be borne and the loss of employment that the petitioner had suffered. Additionally, compensation for the pain and suffering that the appellant had undergone amounting to ten lakhs, for the expenses of a driver-cum-attendant for thirty years amounting to seven lakhs and twenty thousand, for nursing care amounting of fourteen lakhs and forty thousand and physiotherapy expenses of thirty years amounting to ten lakhs and eighty thousand  along with interest of 6% was also granted.

Discovery rule for medical negligence

V.n.shrikhande vs anita sena fernandes.

The petitioner alleged negligence by a medical practitioner, claiming that he left a mass of gauge in her abdomen during a procedure to remove stones from the gallbladder. However, the petition was raised nine years after the procedure when the petitioner underwent a second operation, in another hospital, to remove the mass.

The Supreme Court recognized that in cases of medical negligence no straightforward formulae is present to determine when the cause of action has accrued. The court, following ‘Discovery Rule’ evolved by the courts in the United States, stated that in the case where the effect of the negligence is obvious, the cause of action is deemed to have arisen at the time of negligence. However, in case the effect of negligence is dormant, the cause of action arises when the patient figures out about the negligence with reasonable diligence. The court noted that the petitioner had been experiencing pain and discomfort since the time of the operation for which she continued to take painkillers for nine years without consulting the doctor. In the light of this and the fact that she herself was an experienced nurse who can reasonably be expected to possess more knowledge than a layman, the court set aside the Commission’s order and dismissed the complaint.

Both parents and minor can claim for compensation under Consumer Protection Act

Spring meadows hospital & anr v harjol ahluwalia.

This appeal was filed before the Supreme Court by a hospital defending the negligence of its nurses and a doctor which resulted in a minor being in a permanent vegetative state subsequent to a brain haemorrhage. The issues revolved around whether the parents of the child, not being the patient themselves, can ask for compensation for mental agony caused to them. The court held that the definition of services in the CPA is wide enough to include both the parents who pay for the services and the child who is the beneficiary of the services. The National Commission was found correct in its approach as it granted compensation to the child for the cost of equipments and recurring expenses that he would have to bear owing to his vegetative state, whereas the compensation provided to the parents was for the agony caused and the lifetime care that the parents would have to provide.

Imposition of penalty for frivolous consumer claims

Sapient corporation employees provident fund trust v hdfc & ors..

In a complaint against HDFC for debiting money without the permission of the holder, the National Commission noted that payment was done in compliances with the order of a statutory authority and only after giving the complainant due notice of the same. The Commission stated that there is a need to guard against the possibility of frivolous complaints from being filed due to the absence of any court fees. For this reason, holding that the complaint lacked seriousness and was filed without sufficient grounds, the Commission imposed a fine of twenty-five thousand on the complainant under section 26 of the Act.

Compensation to the complainants for frivolous appeals

Delhi development authority v d.c. sharma.

In the case of an accidental double allotment of a plot by the Delhi Development Authority, the State Commission refused to accept the defence that the plot had not been provided to the complainant only for his failure to pay the cost. It was found from the records that the plot had been allocated to another person. It, therefore, ordered the Delhi Development Authority to either provide another plot of the same description to the appellant under the same conditions or pay the escalated price of the plot.

The National Commission dismissed the revision petition for lack of infirmity in the State Commission’s judgment and ordered the payment of five lakhs for indulging in unfair trade practices and unduly harassing the respondent for more than eighteen years.

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RELATED ARTICLES MORE FROM AUTHOR

K.c. gajapati narayan deo vs. state of orissa (1953), g. basi reddy vs. international crops research institute (2003) , guardianship of a minor.

It is satisfactory but please give the dates of when these happened.

Do Make it user friendly.. Good job tho..

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Zebersky Payne Shaw Lewenz is a boutique litigation and trial law firm that handles almost exclusively high-stakes litigation matters. Though its flagship office is in Fort Lauderdale, Florida, Zebersky Payne Shaw Lewenz handles complex commercial litigation, class actions, consumer protection litigation, personal injury, and wrongful death matters across the United States and the world.

11 times Big Brands Violated Consumer Protection Laws

• May 2, 2018 September 21, 2022
• Jordan A. Shaw

With the recent Facebook fiasco, consumer protection and the safety of our personal information is yet again in the public spotlight.

Facebook is not the only big name brand out there who has dropped the ball on consumer’s safety in recent years.

Many brands we know, and trust, have made costly mistakes in regards to keeping their consumers safe. It just does not always hit your newsfeed.

The other problem is, most people are not even sure about what consumer protection means.

It can be fuzzy for most people at times.

That is why:  When trying to explain the scope of consumer protection laws to clients (and family members), I always find it best to use everyday examples.In this post, I will show you 11 times when brand names we all know (and trust), violated the Consumer Protection Act.

But, first…

What is consumer protection?

Consumer protection relates to a specific area of law that ensures the ethical and fair treatment of consumers of products and services in the US and promotes a competitive marketplace for the benefit of the consumer.In the US, modern consumer protection law started as early as the 19 th century, when public crises forced the government to respond by creating a body with jurisdiction to oversee products and services offered to the public.

Since then…

Consumer protection laws have evolved to cover topics like ethical marketing and advertising, identity and privacy protection, financial services regulation, deceitful business activities, anti-trust laws and more.

All of this falls under the jurisdiction of the Federal Trade Commission or FTC.

What is the FTC?

Founded by President Woodrow Wilson in 1914, the FTC, or Federal Trade Commission, is a government body created to protect consumers in the US from unethical or unfair treatment and deceptive business practices.

On their website, FTC.gov , the Federal Trade Commission says that it has three goals:

• To protect consumers by preventing fraud, deception and unfair business practices in the marketplace,
• To maintain competition by preventing anti-competitive business practices, and lastly;
• To advance individual and collective organizational performance .

To achieve its goals:

The Federal Trade Commission works closely with people from all sectors, from policy and lawmakers to businesses owners and the public and focuses on three main areas of activities:

1.Advisory Board

The FTC provides research and advice to key national and international governmental agencies to help guide and shape rules that help to maintain a safe and fair marketplace

2  Law Enforcement

The FTC acts as both an investigator and an enforcer. It collects complaints from the public, conducts follow-up investigations and, if necessary, files a lawsuit against the offending entity.

(examples coming up soon)

3. Education

The FTC provides educational workshops and materials for both the general public and business communities to promote a fair and ethical free Global market while educating people on current scams and fraudulent activities of which to remain aware.

11 Times Big Household Brands Violated Consumer Protection Laws

Every year the FTC can process well over a hundred Consumer Protection Act violation lawsuits.

(You can keep an eye on all of them on the FTC’s website .)

If you were to look though, you probably wouldn’t know most of the companies, so it would be harder to relate to for your daily life.

So, to make things easier:

I grabbed 11 consumer protection cases where big brands you know (and trust), violated the consumer protection act.

Let’s take a look…

AT & T’s Misleading Marketing

Ever wonder how “unlimited” phone plans mean that after watching a certain number of videos on YouTube that your internet would still slow down?

So did the FTC in 2014…

That is when:

They brought a formal complaint against AT & T for misleading customers by marketing “Unlimited” plans that…tended to have too many limitations.

(For the FTC, This falls under what is called the Marketing Practices Division)

The FTC’s complaint was that, while AT&T was promoting “Unlimited” plans…

Once consumers passed a certain level of data usage, their service would slow down – by up to 90%.

If that does not sound unlimited to you, it didn’t to the FTC either, who considered it deceitful advertising, and in direct violation of the Consumer’s Protection Act.

Although this case is still in the courts at the date of writing, AT&T is doing their best to try and dismiss this case.  However, no luck so far.

Reference: AT & T’s Case

Lenovo Risking All With a 3 rd Party Install

All computers come with “bloatware.”

Bloatware is a nickname used to describe pre-installed applications and programs on new computers. Probably named so because of their tendency to fill up (and slow down) what should be an empty machine. Maybe because of the discomfort they cause too.

Most bloatware is harmless…

…but, that was not the case with one such program, which Lenovo pre-installed on their computers.

VisualDiscovery, a popup ad delivery program, came as part of the package when buying a Lenovo computer.

Unbeknownst to Lenovo, this made them an accomplice in violating the Consumer Protection Act, but not because of the popup ad functionality. Although annoying, it is not technically in breach of consumer protection law (yet).

The issue was:

This 3 rd party program could access whatever sensitive information it wanted on the user’s system. This included their online logins, banking details, and in some cases, their social security number.

All in all, a serious breach of the Consumer Protection Act.

(This is an example of a case which would be handled by the Privacy and Identity Protection Division of the FTC)

To remedy the situation, the courts ordered Lenovo to conduct comprehensive software security audits on any pre-installed software to ensure consumers safety.

Plus, they had to get consumers express permission before activating any such software on their new computer.

Reference: Lenovo’s Case

Dish Network Keeps Calling

Telemarketing calls can be annoying.

When you have already put your name on the national Do Not Call registry and STILL get telemarketing calls, it can be infuriating.

That is what many people felt when Dish Network – in connection with their telemarketing partners – made millions, yes, millions, of robocalls to customers on the “Do Not Call” list.

(what are “robocalls”? We talk more about that in this article)

However, regardless of whether someone is on the registry, it is still in breach of the Consumer Protection Act when you use automatic dialing systems to call people with pre-recorded messages without their express written consent.

This rule is the basis of the Telephone Consumers Protection Act (TCPA), an area of Consumer Protection law.

In the end, a class action suit has held against Dish Network, who were forced to pay 341 million dollars for their violations of the Telephone Consumer Protection Act.

Reference: Dish Network’s Case

DeVry’s Deception

Here’s another example of promising something to consumers that you cannot deliver.

For years, the popular university advertised promises around the idea that their students would find jobs within six months of graduating and would make better money than their peers.

DeVry claimed that as much as 90% of students would have a job within six months of graduating, and would earn up to 15% more than their peers.

A formal investigation from the FTC proved otherwise.

Although it was found to be true that most students did have a job after graduating,  many of the jobs were not in the alumni’s field of study.

They found business graduates working as servers in restaurants, and others working in car sales. DeVry also failed to acknowledge that a number of the students who had jobs six months after graduating already had those jobs before graduating .

DeVry’s promise was misleading.

It led consumers to believe that they had a high certainty of obtaining a job within their chosen field after studying with DeVry.

The court agreed that DeVry’s advertising was in direct violation of the Consumer Protection Act.

DeVry ended up paying a $100 Million settlement and had to refrain from such promises in any and all future public communications.

Reference: DeVry’s Case

  Amazon’s Child’s play

Back in the 90s and early 00’s (known as the naughty’s), every parent’s biggest fear was getting a surprise momentous phone bill because of their kid’s shenanigans.

It is still a parent’s fear. The only difference is that now it is the App and Play Stores that makes the hairs on the back of their neck stand on their ends.

The good thing is that thanks to the FTC’s hard work, it is not as easy as it used to be for kids to buy 10,000 tokens on Candy Crush or Plants vs. Zombies.

Up until recently…

Companies like Amazon had little in place to protect parents from paying for in-app purchases made by their, less financially astute, children.

This ended up costing parents millions of dollars in app purchases they did not approve.

To remedy the situation:

The FTC stepped in, stating that Amazon must change its in-app purchase processes to protect account holders from paying for purchases they did not willingly make.

Amazon has since instated a refund policy for these occurrences and put new security measures in place to stop children from making large purchases on their parents’ accounts.

As a side note, Apple went through this exact same issue in 2014 for in-app purchases made without a parent’s consent.

Reference: Amazon’s Case

Volkswagen’s Cheated Tests

You probably heard about this example in the news.

In their monumental lawsuit, Volkswagen had to pay more than 14 Billion dollars to fix problems they had caused by deceiving consumers.

What did they do?

Volkswagen cheated emissions tests, reporting that their cars were up to the standards they should have been…

…and they deceived customers about how “eco-friendly” their vehicles were in marketing communications.

These actions put them in violation of both the Environmental Protection Act and the Consumer protection act.

As Deputy Attorney General Sally Q. Yates succinctly described it:

“By duping the regulators, Volkswagen turned nearly half a million American drivers into unwitting accomplices in an unprecedented assault on our atmosphere,”

This is a perfect example of:

How consumer protection violations not only end in costly lawsuits and damages. They also have a ripple effect that changes the market’s view of a company for years to come.

Just like a personal relationship, a consumer’s trust is hard to win back once broken.

Reference: Volkswagen’s Case

Western Union Supports Scammers

If you have ever been scammed online…

…chanced are the transaction took place through a Western Union.

In fact, many overseas scammers rely heavily on the access to international transfers that Western Unions provides.

————–

For example:

Nigerian 419 scams, otherwise known as “advance fee” scams.  These (now famous) scams are when a scammer finds a way to manipulate an individual to send them money.

This type of scam usually uses a story that creates an emotional connection with the person to build trust which then leads to favors or asking for help…

Alternatively it involves promises of large sums of money, in exchange for a small fee.

(How many Nigerian Princes have emailed you in the last 12 months?)

There are other countries from where these types of scams originate, but as over 51% of these types of scams originate from Nigeria, these scams are referred to as Nigerian scams.

The criminal code for this kind of scam is 419, explaining the number.

———–

Because so many of such scams successfully used Western Union’s services to complete their transactions, the FTC filed a suit against Western Union in 2014, issuing a 586 Million dollar fine to the company to reimburse those affected between January 2014 and 2017.

If you were affected by a scam operated through Western Union during that period, you can still (as of the time of this writing) apply for a claim in the case. See the reference below.

Reference: Western Union’s Case

Uber’s Two Strikes

Uber is often criticized for its disruptive business model and actions.

But, they crossed the Consumer Protection line with, not one, but two separate accounts of violating the consumer protection act.

The first time was back in 2017.

This is when Uber was caught making hyperbolic promises about how much new Uber drivers could make, explicitly quoting high earnings for both New York and California drivers.

When the FTC conducted their independent research, they found average yearly earnings up to $30,000 lower than claimed by Uber.

This deceitful advertising cost Uber 20 Million dollars in settlements.

The other instant was more recent when it became known that Uber employees were able to access and misuse personal data obtained from ride-sharing contractors.

Although still under investigation…

…it is apparent that an Uber employee’s access key was used to make over 100,000 Uber driver’s bank account details and social security details public.

The severity of this breach is still yet to be seen because such a thing can have lifelong repercussions for the drivers ( a social security number is with you for life)

The case continues…

Reference: Uber’s Case 1 , Uber’s Case 2

7 – Eleven Eats Competition

Consumer protection does not always have to be about deceit or unethical behavior.

It also involves protecting consumers through promoting competition.

When companies have competition, it motivates them to offer the best possible deal to consumers, to “beat” their competitors.

That is why you see many brands trying their hardest to improve quality or lower prices.

In fact, there is a point in Apple’s history where Bill Gates bailed Steve Jobs out of potential bankruptcy precisely for this reason.

Without competition, a business has fewer incentives to lower prices or strive to make better quality products for its customers.

This is why:

When 7 – Eleven announced that it was buying 1,000+ of its competitor’s stores, the FTC took notice.

By doing so, they radically reduced competition within multiple geographical marketplaces, which would lower incentives for them to provide their customers the best prices.

(This falls under the protection subcategory known as anti-trust laws)

In this case, 7-Eleven’s parent company had to agree upon restructuring its deal to maintain a fair level competition in the marketplace.

Reference: 7-Eleven’s Case

Herbalife Pays For the Wrong Reasons

If you have ever been to a seminar hosted by a Multi-level marketing company, you know how many grandiose stories of a person joining and just a few months later being able to quit their job and buy a mansion, you will hear at those events.

The problem is, this is often misleading for new “recruits” who sign up thinking the company will solve all their life’s problems.

When Herbalife, a major international Multi-Level Marketing brand with over 4 Billion dollars in revenues, actively promised new registrants that they would have the opportunity to quit their jobs, make career level incomes and potentially become rich in the process…

A Consumer Protection investigation followed, which proved their claims to be false.

In reality, less than half of all Herbalife salespeople made less than $300 in a single reporting period.

The other problem that surfaced was their benefits structure. As it turned out, Herbalife incentivized the recruiting of new people more than the purchasing of useful goods.

This incentive structure is the basic principle of a pyramid scheme, which is illegal.

All these findings led to a $200 million dollar lawsuit and a court order to restructure their business model and payment structures.

Reference: Herbalife’s Case

Lending Club’s Hidden Fees

Nobody likes hidden fees . Especially the Consumer Protection Act.

The Lending Club is a popular peer-to-peer lending platform that connects those they call investors, interested in lending money at an interest rate, with borrowers.

This peer-to-peer lending platform promoted its services as free of “hidden fees” or surprises, but this was not true.

Investigations found that the Lending Club issued hidden charges that ended up costing their customers hundreds, or even thousands, of dollars more than they thought they would have to pay.

Furthermore:

Many potential borrower clients received congratulatory emails insinuating they had passed all criteria to obtain a loan, before Lending Club’s final credit history checks, which could often result in a final rejection for the loan.

In early 2018, Lending Club was sued for deceitful marketing activities and unlawful hidden fees.

Want to know how to avoid hidden fees? Read this post.

What did you think?

In my opinion, these examples are a reminder that we, the consumers, can’t just rely on companies to do the right thing. It’s our duty to stay vigilant and keep our eyes out for unethical behavior in the marketplace. Every one of us can help to keep big corporations honest.

If you have experienced a violation of the Consumers Protection Act, leave a comment below.

Or, better yet; give us a call. 1+ (877) 722-5943

(954) 989-7781 (954) 989-6333

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Looking Ahead: Consumer

The Court is likely to continue to evaluate consumers’ right to have their day in court in the coming year. In the decade since the Supreme Court decided AT&T Mobility v. Concepcion , 563 U.S. 333 (2011) , clauses requiring mandatory pre-dispute arbitration and prohibiting class actions have proliferated. In Concepcion , the Court held that the Federal Arbitration Act (FAA) preempted a California law under which class-action bans in arbitration clauses were deemed to violate state public policy and, thus, were unenforceable . Id. at 343. As of 2018, at least half of U.S. households and 25 million employees were subject to mandatory arbitration clauses prohibiting class actions.

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The importance of arbitration clauses in civil litigation, thus, continues undiminished, and two cert petitions pending before the Court provide further opportunities for the Court to clarify the reach of arbitration. Both cases, Viking River Cruises, Inc. v. Moriana (No. 20-1573) , and HRB Tax Group v. Snarr (No. 20-1570) , challenge judicial decisions holding that California laws authorizing plaintiffs to proceed in representative capacities are not preempted by the FAA.

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In Moriana , a plaintiff whose employment contract required her to waive her right to bring a private attorney general action sued her employer under California’s Private Attorneys General Act (PAGA) for allegedly violating California labor law. Moriana v. Viking River Cruises, Inc ., No. B297327, 2020 WL 5584508, at *1 (Cal. Ct. App. Sept. 18, 2020) . Under PAGA, a plaintiff can seek damages against her employer on behalf of herself and other employees if the State declines to intervene in the case. Petition for Writ of Certiorari, at 8, Moriana (20-1573). Those employees receive a quarter of any monetary recovery, with the remaining three-quarters going to the State. Id. at 9. The California Supreme Court has held that Concepcion does not require arbitration of a PAGA claim because such claims represent a dispute between an employer and the State, whereas the aim of the FAA is to ensure efficient resolution of disputes over a litigant’s private rights. Iskanian v. CLS Transportation Los Angeles, LLC , 59 Cal. 4th 348, 384 (Cal. 2014) . (The Ninth Circuit has also rejected a challenge to Iskanian , though on the grounds that PAGA actions do not raise the same efficiency concerns as class actions.) The Viking Cruises cert. petition argues that Iskanian is nearly identical to Concepcion , in that both involved the State declining to enforce an arbitration agreement pursuant to an important public interest and asks the Supreme Court to overrule Iskanian . Petition for Writ of Certiorari, at 2-3, Moriana (20-1573).

The second case, HRB Tax Group v. Snarr , involves a California rule governing “public injunctions,” which are defined as injunctions that have “‘the primary purpose and effect of’ prohibiting unlawful acts that threaten future injury to the general public.’” Snarr v. HRB Tax Group, Inc. , 839 Fed.Appx. 53, 54 (9th Cir. 2020) (quoting McGill v. Citibank, N.A. , 393 P.3d 85, 90 (Cal. 2017)). California case law makes unenforceable a contract that waives the right to seek public injunctive relief in all forums. Snarr , 389 Fed. Appx. at 54. In Snarr , the plaintiff sought a public injunction against HRB, claiming the tax preparation company misleadingly steered tax filers away from a free service and toward a paid one, in violation of California consumer protection laws. Id. at 55. The plaintiff’s arbitration agreement with HRB forbids public injunctions and so is unenforceable under California law, and the Ninth Circuit refused to compel arbitration of the plaintiff’s claim. Id. at 54

In so doing, the court relied on Blair v. Rent-A-Center, Inc. , 928 F.3d 819 (9th Cir. 2019) , a prior circuit case holding that the FAA does not preempt the public-injunction rule. Blair rests on the premises that, unlike the ban on class-action waivers at issue in Concepcion , the public-injunction rule does not single out arbitration and does not undermine the purported efficiency and informality of bilateral arbitration, given that a plaintiff can seek a public injunction in a bilateral arbitration without resort to class-certification procedures. Id .  at 827-29

In its petition seeking review of Snarr , HRB rejects these arguments, contending that the rule’s focus on the general public and the higher stakes and complexity at issue undermine the traditional benefits of bilateral arbitration. Petition for Writ of Certiorari, at 16-17, Snarr (No. 20-1573). HRB also argues that, in practice, the public-injunction rule allows plaintiffs to avoid arbitration by seeking public injunctions. Id. at 5. In opposing Supreme Court review, Snarr distinguishes substantively complex claims (like those for a public injunctions) from the procedural complexity at the heart of the Court’s arbitration jurisprudence and notes that the evasion HRB raises can occur only in the particular cases of arbitration provisions drafted as HRB’s is. Respondent’s Brief in Opposition, at 26-27, Snarr (No. 20-1573). Snarr additionally argues that, under Supreme Court precedent, the “FAA does not require enforcement of arbitration provisions that expressly waive statutory claims and remedies,” as HRB’s contract does, and that the public-injunction rule applies equally to all contracts, whether or not they contain arbitration clauses. Id. at 5-6.

If the Supreme Court takes up Viking Cruises or Snarr , we will learn how far the Court is willing to extend its arbitration jurisprudence. Any decisions will have important consequences for consumer litigation in California and other states authorizing private-attorney-general suits and public injunctions.

Ali Naini [email protected]

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Maggi Case study: The 2015 Maggi crisis

If you’re reading this, we’re sure in your lifetime you would’ve had a pleasure of sparing those controversial two minutes to cook a Maggi and another few to eat it. We’ll never know how those advertisements manage to cook their Maggi in two minutes. Anyway, we’re not here to question the two-minute proposition of our most loved Noodle brand and rather to discuss a controversy that happened in 2015. Which has become the famous Maggi case study, a case study that teaches you how to emotionally connect well with your consumer.

Before you learn about the controversy – here’s a quick intro to the brand: Maggi was introduced in India by a Global FMCG company called Nestlé in 1982 and over this time, until 2015 the brand captured 60% of the noodle market in India . Maggi was in every nook of the country, this was because of how affordable, portable and instant these noodles are.

However, as all good things come to an end. Maggi faced a temporary ban in 2015, here’s the entire story for you (This post has a lot of videos, we’d recommend you at least watch the last few ones).

FSSAI is not very well known for surprise food inspections, however, April 2015 was different.  FSSAI conducted a surprise Inspection for testing any possible food adulteration issue on Maggi’s manufacturing unit in the Barabanki district of Uttar Pradesh. The tested samples were sent to FSSAI labs and reports of higher than permissible levels of lead and the presence of Monosodium Glutamate(MSG) was released, these substances are banned to use for consumable products.

Naturally, Nestlé India Limited (NIL) appealed against the report and said MSG was a result of natural processes (it’s also mentioned on their website) and requested re-inspection of the products in the unit. Following this appeal, samples were sent to a government-authorized lab in Kolkata which only supported the findings of state FSSAI laboratory.

These reports led to several states banning sale and use of Maggi, obviously because of the health concerns. And unfortunately, on 9 th June, 2015, FSSAI (Food Safety and Standards Authority of India) i.e. the food regulator in India put a nationwide ban on sale on Maggi noodles for 5 months. Owing to this nationwide ban Nestlé recalled all the Maggi products from all the outlets and emotionally promised that they’ll be back in market as soon as the lab reports were clear. Almost 38,000 tonnes of Maggi was destroyed by Nestlé which worth Rs.320 crore.

Impacts of the ban:

The then brand Ambassadors of Maggi – Amitabh Bachchan, Preity Zinta, and Madhuri Dixit were slammed for endorsing the brand. Criminal cases were filed against them – yep, no joke. See here . Competitors: Top Ramen, Yippie, Patanjali Noodles started marketing their noodles healthy – we guess fats were not really unhealthy back then. Well, we can’t really blame them, 60% of the Market was now open for them to capture.

Things went south when the Government filed a case against Nestlé and charged Rs.640 crore for damages – Yikes! Nestlé posted its first loss in 17 years after the Maggi was banned. But worse, the consumers were now losing their trust in Maggi. Yep, FSSAI and the Government is all serious when it comes to your health – but the story wasn’t over yet.

And, the Return:

Surprisingly even when the Maggi was banned, it really wasn’t ready to give up on its consumers. The brand had an active social media page through which it stayed connected to its audience by the way of various social media posts and advertisements. Even on their Facebook page , they kept posting that their (consumers’) favorite food will be safe to consume very soon. There was a loyal set of customers that believed in Maggi and would occasionally post on their social media about how much they wanted their favorite noodles to return. Responding to them Maggi ran a campaign showcasing how they were missing their customers as well. They also created helpline numbers and FAQ pages for customers’ related queries.

In August 2015, the ban was lifted by the Bombay High court on the condition that it will be relaunched only after the reports are cleared by the FSSAI. And, in November 2015, when Nestlé got a nod from the food regulatory authority of India (FSSAI), it launched its WELCOME BACK campaign – an emotional campaign that won the heart of its consumers. They even launched 15 new variations of Maggi. They teamed up with e-commerce giants and started selling welcome kits which contained 12 Maggi packs. The response was great, the then e-commerce company Snapdeal sold 60,000 Maggi kits in just 5 minutes after the launch.

Learning from the Maggi case study:

All in all, this teaches at all that matters in end is the emotional connection you have with your customers. Unfortunately for Maggi’s competitors, they really did not achieve a lot during the ban. Maggi captured over 60% again in the next two years to come. And, this was the story of the crisis our favorite noodles faced – we hoped we killed it. You can write to us if you’d like any improvements.

Read more here . Stay safe, have a good one! Take a look at our page here for more case studies .

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4 thoughts on “ maggi case study: the 2015 maggi crisis ”.

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Very good and informative site thankyou for collecting valuable information…

I was really curious to know about what happened back in 2015, after my friend told me that Maggi was banned, the site helped me find the entire information about it.

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Celebrating 20 Years of IP Excellence

Latest Consumer Protection Cases in 2021 – Part 1

The bombay dyeing and … vs ashok narang and anr.

In this case, the Appellant, The Bombay Dyeing and Manufacturing Company Ltd was the builder-promoter whereas Mr. Ashok Narang and others were the allotees/buyers of the flats. It was agreed by the Parties that the possession would be delivered by 2017 at a 20:80 scheme consideration (20% initially and 80% at the time of delivery), in which the Respondents had already made payment of 20% in 2012-13 inclusive of tax and premium. The appellants failed to deliver the flats for possession on the stipulated time and extended it by 2 years. Thus, the Respondents filed a complaint u/s 31 of the Real Estate (Regulation and Development) Act, 2016 (“2016 Act”) before the Authority citing breach u/s 12 read with S. 18 of the 2016 Act seeking cancellation of the allotment and also a refund of the amount they had paid. The Authority did not pass any order regarding the refund stating that S. 12 did not apply retrospectively, and also that the cancellation should be done as per the allotment agreement. Further when appealed before the Appellate authority, it found that S. 12 of the 2016 Act had a retroactive operation and directed the respondent to refund with due interest and also ordered cancellation of the allotments. Consequently, the Appellants approached the Bombay High Court wherein the Appellant-counsel submitted that the provisions of the 2016 Act were prospective in operation and that the written agreement for sale was also absent due to which no liabilities could be imposed upon it as u/s 18. To this, the Respondent-counsel contended that the application of the 2016 Act to an ongoing project itself indicated that the provisions were quasi-retroactive in nature. Also, regarding the absence of a written agreement, it was argued that the Appellant could not be permitted to raise a new contention for the first time in the second appeal, thus it had waived the right to raise any such claims and that could not be allowed to approbate and then reprobate later on. The Court pointed out that no one should be made to wait indefinitely for delivery of possession and thereby held that there was a deficiency of service and disposed of the appeals with no order as to costs.

Citation : The Bombay Dyeing and … vs Ashok Narang and Anr., Decided by Bombay High Court on 30th August, 2021, available at : The Bombay Dyeing and … vs Ashok Narang and Anr , visited on 9th September 2021.

PUNIT JAIN VS M/S. IREO GRACE REALTECH PVT. LTD.

Mr. Punit Jain, the Complainant, filed a consumer complaint against Ireo Grace Realtech Pvt. Ltd. for making him sign a one-sided agreement concerning the sale of a 1483.28 sq. ft. apartment at 9200/ – per sq. ft. instead of the previously agreed rate of 8750/ – per sq. ft on 16.03.2013. The company also agreed to make the apartment available to the Complainant within 42 months of execution of the agreement 03.04.2014. The Agreement also mentioned a 180 days’ grace period. The Complainant made full payment of the agreed amount of 1,55,17,716/ – Rupees before filing the present complaint against the builder when it failed to complete the construction within the stipulated time period. The Counsel for the builder contended that the Complainant would not be considered as a ‘Consumer’ under Section 2(1)(d) of the Consumer Protection Act, 1986 as he had bought the apartment for a commercial purpose and had also made a similar booking in another project by the builder. It was also argued that there was an arbitration clause in the agreement signed by the complainant. The builder’s counsel further contended that the Complainant was bound by the terms of the agreement on the Basic Sale Price. The Consumer Disputes Redressal Forum held that the present agreement was a one-sided agreement and was an unfair contract. It was stated that the Developer could not compel the apartment buyers to be bound by the one-sided contractual terms contained in the Buyer’s Agreement. The court also directed the builder to pay interest @ 9% S.I. per annum from 27.11.2018 till the date of payment of the entire amount. The court also directed interest @ 12% S.I. p.a. should be paid in case of a default.

Citation: Punit Jain vs M/S. Ireo Grace Realtech Pvt. Ltd., Decided by The Consumer Disputes Redressal on 31st August, 2021, available at: Punit Jain vs M/S. Ireo Grace Realtech Pvt. Ltd. , visited on 9th September, 2021.

KHATEMA FIBRES LTD. V. NEW INDIA ASSURANCE COMPANY LTD.

The Appellant, Khatema Fibres Ltd., took out a “Standard Fire and Social Perils” insurance policy from Respondent-Insurance Company New Assurance Co. Ltd. for a sum of approx. 42 crores from 7/5/2007 to 6/5/2008, but a fire broke out on its factory premises on 15/11/2007. The firm, M/s Adarsh Associates, appointed by the Respondent ascertained the value of loss as approx. 2 crores upon their investigation. The Appellants felt the assessment of was loss was approx. 13 crores, but the Insurance Company stated that it could give a maximum claim only up to the amount quoted by the firm. The Appellant filed a consumer complaint under Section 21 (a)(i) of the CPA, 1986 before the NCDRC seeking various types of compensation from the insurance company, for loss caused due to fire, financial stress, legal fees, and so on. The Commission allowed payment to the Appellant for 2 crores, which was original amount assessed by Respondents. The present case was an appeal under Section 23, where the Appellant contended that the net weight of the damaged material was not correct. The Respondents made the counter-argument that the surveyor was an expert at his field and did the assessment in a scientific manner. The Supreme Court observed that there were many discrepancies found by the surveyor with respect to documents submitted, wherein one document showed a certain amount of waste paper stock, and the other showed a huge increase in the stock. The Court agreed with the National Commission’s finding that the Appellant was not able to establish deficiency in service under Section 2(1)(g). Thus, the Court upheld the previous judgement because there was no arbitrariness or unjustness exercised by the Commission in granting claim to the extent of 2 crores.

Citation: Khatema Fibres Ltd. vs New India Assurance Company Ltd. & Anr. , Decided by The Supreme Court on 28th September, 2021, available at:  Khatema Fibres Ltd. v. New India Assurance Co. Ltd. (2021) /, last visited on 4th October, 2021.

This post is brought to you by BananaIP’s IP Consulting & Strategy Department.

About BananaIP’s IP Consulting & Strategy Department

BananaIP’s IP Consulting & Strategy Department has the experience of helping companies use IP for business and competitive advantage. Companies regularly seek their assistance, advise and opinions on identifying/mining inventions and creations, conducting IP audits, protecting IP assets appropriately, launching risk free products, managing litigation for business benefit, resolving disputes out of Court, making money out of IP, enforcing IP, and licensing transactions.

Updates on recent orders and judgments are brought to you jointly by the Entertainment Law and Consulting/Strategy Divisions of BananaIP Counsels, a Top ranked IP Firm in India. If you have any questions, or need any clarifications, please write to [email protected]    with the subject: Trademark Judgements

Please note that these case updates have been put together from different sources, primary and secondary, and BananaIP’s reporters may not have verified all the decisions published in the bulletin. You may write to [email protected]   for corrections and take down.

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Exploitation of Consumer Decision-making and How to Address it: Lessons From Past Demand-side Interventions

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Amelia Fletcher, Exploitation of Consumer Decision-making and How to Address it: Lessons From Past Demand-side Interventions, Journal of European Competition Law & Practice , Volume 8, Issue 8, October 2017, Pages 517–523, https://doi.org/10.1093/jeclap/lpx065

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I. Introduction

Cases like these are implicitly based on consumers exhibiting ‘behavioural biases’; if consumer decision-making was not influenced by salience within rankings, default options, or the desire for social inclusion, then such firm conduct would have no anticompetitive impact.

As such, these cases have strong links with, and similarities to, another area of regulatory action: ‘demand-side interventions’ (DSIs).

DSIs can be viewed as part of wider competition policy. They focus on enabling the demand-side of markets to function more effectively, working alongside standard antitrust to promote competition and thereby drive benefits such as lower prices, higher quality, and enhanced innovation.

The importance of a well-functioning demand-side should not be underestimated. If buyers fail to switch between suppliers in response to better offers, then competition may be weaker than expected or—worse—it may be focused on aspects of the product offering which customers do not value, or which could even harm them.

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The Top 10 Consumer Court cases and Trails in India – Complete List

Buying goods and services is an inevitable part of our daily lives and problems might occur from the vendors who deliver these goods and services. Below are the top 10 consumer court cases curated for the readers:

Top 10 Consumer Court Cases and Trials in India

1. Dipika Pallikal , a squash champion, and an Arjuna awardee found used her Axis Bank Debit Card in a hotel at Netherlands’ Rotterdam which failed. She had 10 times the bill amount in her account at that time. The bank said the incident was a case of ‘Force Majeure’ (an act of God/ something beyond the control) and returned a cheque of ₹1 lakh issued to her by the government of. Dipika approached the consumer court in Chennai against Axis Bank

Court judgment:

The court found that there was a deficiency of service on the part of the Axis Bank and directed the bank to pay a compensation of ₹5 lakh and ₹5000 as expenses.

2. Poonam Verma v Ashwin Patel & Ors: In this case, the respondent who is a homeopathic doctor, prescribed allopathic medicines for the treatment of a patient who did not respond to the medicine well and subsequently died. Based on the fact that the respondent was qualified and registered to practice under Homeopathy only,

It was found to be in violation of the statutory duty not to practice Allopathy under section 15(3) of the Indian Medical Council Act, 1956. Respondent’s act was held to be actionable negligence was ordered to pay a compensation of three lakhs.

3. A tea vendor, Rajesh Sakre , is an example of this who had ₹20,000 in his State Bank of India account and he withdrew ₹10,800. On his next visit to the ATM, he realized all his money was gone. When he asked the bank authorities they blamed it on him for the fault.

So, he went to the District Consumer Disputes Redressal Forum with his grievance and as he couldn’t afford a lawyer he argued the case himself.

Court Judgement:

The forum ruled in his favor and ordered the State Bank of India to return the ₹9,200 with 6% interest also to pay ₹10,000 as compensation for mental anguish and ₹2,000 for the legal expenses.

4. Baglekar Akash Kumar who was a 19-year-old got a book online and when it was delivered, he noticed that there was no MRP printed on it. He browsed the internet and saw that the book was sold at different prices at different places after which he went to the consumer forum and filed a case against Penguin Books India Pvt. Ltd and the paper company.

The court held non-publishing MRP on the product without a valid reason is ‘unfair trade practice’. MRP ensures that a consumer is not overcharged for the product. So, it is mandatory for companies to print MRP and the publishers were asked to print the retail price on the book Akash was awarded ₹10,000 as compensation and ₹2,500 as costs.

In any consumer court case, the bills and similar legal paperwork are the most powerful and useful weapons for lawsuits. This is why it’s important that you keep hold of the bills carefully. For this you can ask for our agents’ help who are experts in preparing, managing, and overtaking legal paperwork. At DailyFiling, we have consultants who are experienced with all sorts of lawsuits like income tax consultants , GST consultants , company registration agents, and more.

5. Mr. Kondaiah from Andhra Pradesh noticed that Sarvi Food Court charged him ₹40 for a water bottle where the MRP was actually ₹20. He filed his case against them in the District Consumer Disputes Redressal Forum for ‘unfair trade practice’. He supported his claim by producing the bill of the bottle.

The court decided in favor of Mr. Kondaiah and said that the practice is unjustified and Mr. Kondaiah was paid a compensation of ₹20,000, ₹20, and ₹5,000 for the costs.

6. Rajesh Rajan from Ahmedabad bought a Pepsi from a local store and found a gutka floating in it. He sent a legal notice to the Pepsi company immediately and approached a Consumer Dispute Redressal Forum and demanded compensation of ₹5 lakh for the same.

Court Decision

The consumer forum passed an order in favor of Rajesh Rajan and directed the company to pay a total of ₹4008 which on being low was later paid ₹20,000 as compensation and ₹2000 towards costs.

7. In the year 2015, K Chaathu complained against Indulekha (beauty product manufacturers) and Mammootty (an actor who was the brand ambassador of the company) for displaying misleading ads. The ads claimed that people using the soap will become ‘fair’ and ‘beautiful but the 67-year-old didn’t become fair or beautiful.

Indulekha paid Chaathu ₹30,000 in an out-of-the-court settlement while the initial claim of Chaathu was ₹50,000.

8. A person bought a house after researching and pooling hard-earned money and paid to the developer who promised to deliver within 42 months but even after 4 years the construction wasn’t started. So the two people decided to move the National Consumer Disputes Redressal Commission (NCDRC) for it.

The real estate developer was asked to refund the money with a simple interest of 9% per annum. They were awarded a compensation of ₹50,000 each.

You might also read “ How to have a mutual divorce in India ?”

9. 10 iPhone 5S Gold for ₹68 + ₹10,000 LIn 2014, Nikhil Bansal (a student) saw this unbelievable offer on the Snapdeal on iPhone which was quoted for Rs68000 (a discount of ₹46,651) and ordered it immediately. Upon receiving an order confirmation later the order was canceled stating it to be a technical glitch.

The court ruled in his favor and asked Snapdeal to deliver him the iPhone for ₹68 and asked to pay a compensation of ₹2,000 and when Snapdeal appealed this order, the compensation got raised to ₹10,000.

10. Om Prakash’s truck was stolen , and he filed a claim for compensation. The truck was taken on March 23, 2010, the police report was submitted on March 24, 2010, and the insurance claim was filed on March 31, 2010.

The insurance investigator was dispatched to verify the authenticity. The claim for Rs. 7,85,000/- was approved, however the money was never provided to Om Prakash. When he inquired about it, the insurance company responded that there had been a breach of terms and conditions:

“immediate notification of the vehicle’s loss or theft to the insurer”

While the consumer courts rejected his claim, the Supreme Court ruled in his favour. It was decided that insurance companies cannot avoid paying claimants if they have a valid justification for doing so, and the company was ordered to pay the Appellant a payment of Rs. 8,35,000/- plus interest at 8% per annum, as well as a compensation of Rs. 50,000.

These were a few cases to educate us to get rid away of the hesitation of approaching the court for a wrongful act and avail for our right as informed consumers.

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Forms of Consumer Exploitation

Introduction.

If someone has the right then they should have the remedies too because there are many people who may cheat or deceive other people. When a person has to buy a product or avail of the services, then he or she needs to be very careful. ‘ Caveat Emptor ’ means let the buyer beware. There are different ways to exploit people like convincing the consumers, building trust, showing the fake products as real, charging high prices, etc.

The Consumer Protection Act, 1986 is formulated for the consumers and the law protects the consumers from swindlers. Rights, duties, and responsibilities are to be performed by all the people to stop the swindlers from committing fraud again in the future. Both parties have responsibilities to fulfill.

Consumer – A person who purchases the goods or avail of the services provided by the supplier by paying them in return for goods and services.

Exploitation – A person who has been deceived in any way (like fraud, misrepresentation , coercion, fake information)or by any person, is said to be exploited.

1. Fake Advertisement

Whatever is shown and disclosed through advertisements about the product and service, is not completely true. The quality of the product and its durability is not always perfect and long-lasting. The way it is shown only attracts the customers and compels the people to buy it. Non-disclosure of reality is a disadvantage.

2. Substandard Products

Every business aims to earn profit and in order to gain profit, they tend to sell inferior quality products which may cause harm. This practice is also unethical.

3. High Price

Sellers those who have a monopoly of the products and have the control to change the price, take unfair advantage of charging the high prices of the products, and people are left with no choice.

4. Adulteration

This is the worst forms of consumer exploitation. It not only causes monetary loss but also affects the health of a person. The unwanted materials are mixed in the food items which harms the body and may result in different types of diseases.

5. Under Measurement

The quantity printed in the packet is not always accurate. Also, the material which is measured while purchasing is not correct. Sometimes, sellers sell under measured goods and ask for the original quantity price.

6. Black Marketing

When there is a high demand for a certain product, sellers start stocking the product and they will pretend that there is a scarcity of the product due to which the price will be increased and people will buy it because they need it. This happens especially for essential commodities.

For instance, the increase in the price of tomatoes in the market but in reality, they were stored in the warehouse. This is an essential commodity and people have to buy it. Earlier, tomatoes were sold at Rs. 20/- per kg but later on the price was increased to Rs. 80/-. This is hoarding and black marketing.

7. Duplicate Goods

Many sellers sell the goods in the name of branded goods. They change the quality and material and puts the name and logo of different brands. This is misrepresentation and unethical to practice in business.

8. Lack of after Sale Service

A seller has the duty and responsibility towards customer providing after-sale service. Manufacturing and selling are not the only activity to be performed, if any customer faces any kind of problem after using the product, then the problems must be heard and shall be solved.

9. Lack of Information

The ingredients used, manufacturing date, harm, and consequence of the product, etc. are the information that should be disclosed to the customers otherwise they might face problems that will leave a negative impact on the market.

Consumer Awareness

The most important and key objective of an Act is to create awareness among consumers. Consumers shall be aware of rights, products, detailed information, rules, etc. there are incidents where people face problems whether it is online shopping or in physical form. Consumer Protection Act makes sure that people are aware of all the particulars and details.

Importance of Consumer Awareness

1. Every consumer must be satisfied after buying any product or availing of services. People work hard to earn money and the money they spend on goods must be worth it. Therefore, they must not be cheated in any way.

2. Sellers usually charge more than expected or prescribed, just to earn profit. Those who do not have knowledge regarding underweighting, fake articles, etc., are in the trap of suppliers, and in this way, the manufacturers and sellers exploit the end-users.

3. There is a variety of products in the market which are for benefit of the people or may harm the health of a person. For instance, tobacco, liquor, etc. may harm health due to which awareness should be spread regarding products that are not good for health.

4. Many consumers spend a lot of money on expensive products and they are not even aware of the actual price and raw materials used to make it. If consumers are aware of the product then they would save money and buy a substitute good and will make the right decisions while buying the goods.

5. When a consumer or customer is deceived by any retailer, producer, manufacturer, etc., he should be aware of the solutions to solve the issue as many people are innocent, illiterate due to which they do not have proper knowledge regarding laws prevailing in the country. Consumer awareness helps people to make understand that they can approach consumer court if they face any kind of problem.

6. To maintain a healthy relationship between consumers and producers, the first step should be building trust and not deceiving anyone. This will develop a healthy society.

Rights of Consumers

1. Right to Choose

A customer has full right to select the goods from different shops. No seller can force any customer to buy or avail of the service from that particular seller. If in case, any seller forces the customer to buy or does any act or compels him to buy then the consumer can take legal actions against him.

2. Right to be Informed

Every small detail must be mentioned on the packet, especially any unique information to be given while using or consuming it. Like date of manufacturing, expiry date, ingredients, directions to use, where to store, etc., these are the information that must be circulated. For instance, we buy winter clothes, directions to wash must be mentioned so that the quality of the product must retain for a long time.

3. Right to Safety

Safety is a very important step to be taken by manufacturers. Business is not to only earn profit but to provide safety. They shall make sure that every product must be safe to use. Many products are there in the market which may cause risk to the customer if not properly used. For example, gas cylinders, food coloring, etc.

4. Right to be Heard

If any risk or problem is faced by the consumer, then the grievance must be heard. Selling the product does not end the duty and responsibility of seller after-sale service is also important. Without being heard, the problem will remain unsolved, and this is against business ethics.

5. Right to be Educated

Every person must be educated. They may have at least basic knowledge regarding their rights and laws framed for them. This will help in the reduction of forms of consumer exploitation.

6. Right to be Compensated

When an incident takes place and causes great loss, then in terms of money, a consumer must be compensated. This will reduce malpractices, exploitation, and many more evil activities. Compensation is a mode of remedy given to the consumer and punishment to the seller.

Consumer Courts

Three courts are formed for consumers where they can file the complaint and get compensation. Courts are divided on basis of compensation.

1. District Forum

District Consumer Dispute Redressal Forum takes cases on the district level and the compensation shall not exceed more than 20 lakh rupees. If any consumer is not satisfied with the decision of the district forum, then they can appeal to the state forum.

2. State Forum

State Consumer Dispute Redressal Commission works on the state level and the compensation must be more than 20 lakh rupees and less than 1 crore rupees. If any consumer is not satisfied with the decision of the state forum, then they can appeal to the apex court, i.e., the national forum.

3. National Forum

National Consumer Dispute Redressal Commission  is the apex court and the compensation amount must be more than 1 crore rupees. If consumers are not satisfied with the decision of the national forum, then, at last, they can appeal to Supreme Court and their decision will be final.

The main function of any business is customer satisfaction. Without it, there is no use in the business. All the activities involved in marketing and business are done only for customers. If customers are not happy with the goods and services then the business will not be able to progress and grow. Therefore, the rights and thoughts of the end-users must be respected, and taking them into consideration, they should not be exploited in any way.

This article has been written by Vaishnavi Gupta, 3rd Year, BBA LL.B Student at Bharati Vidyapeeth University, New Law College, Pune.

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A Study of Consumer Rights under Consumer Protection Act,2019

• the right to be protected against the marketing of goods, products or services which are hazardous to life and property;
• the right to be informed about the quality, quantity, potency, purity, standard and price of goods, products or services, as the case may be, so as to protect the consumer against unfair trade practices;
• the right to be assured, wherever possible, access to a variety of goods, products or services at competitive prices;
• the right to be heard and to be assured that consumer's interests will receive due consideration at appropriate fora;
• the right to seek redressal against unfair trade practice or restrictive trade practices or unscrupulous exploitation of consumers; and
• the right to consumer awareness;
• the right to consumer awareness; [2]

Article 38(1):

Article 47:.

• To help the countries to achieve and maintain protection adequate to their consumer population;
• To render help in production and distribution in accordance with the needs and desires of the consumers;
• To encourage the high standards of moral conduct the persons involved in making available goods and services to the consumers;
• To help the countries at national and international levels to supress the defective business systems affecting the interests of the consumers;
• To help in development of independent consumer groups or unions;
• To encourage the condition of market which may provide more opportunities of choice at less cost. [10]

Consumer Rights

The right to be protected, the right to be informed, right to be assured or the right to choice, right to be heard, the right to consumer awareness, supriyo ranjan mahapatra v. amazon development centre india (p) ltd. [21], tata press ltd v. mahanagar telephone nigam ltd. (�tata press�)[22], ernakulam medical centre v. p.r. jayasree & anr. [23], hdfc bank limited v. balwinder singh [24].

• The Consumer Protection Act, 2019, No. 35, Acts of Parliament, 2019 (India
• The Consumer Protection Act, 2019, No. 35, Acts of Parliament, 2019 (India).
• Dr. S.K. Kapoor, Law Of Torts & Consumer Protection Act 1986 479 (2013).
• India Const. art. 38 cl. 1
• India Const. art. 47
• Nupur Roy, Globalizing India and Consumerism in a New World Order (1991-2016), JSTOR (Jan. 11, 06:14 PM) https://www.jstor.org/stable/10.2307/26552733
• Dr.S.K.Kapoor, Law Of Torts & Consumer Protection Act 1986 477 (2013)
• Dr.S.K.Kapoor, Law Of Torts & Consumer Protection Act 1986 477-478 (2013)
• Dr.S.K.Kapoor, Law Of Torts & Consumer Protection Act 1986 477 478 (2013
• United Nations, Draft Resolution for Consideration by The General Assembly, UNCTAD (Jan. 13, 03:25PM) https://unctad.org/system/files/official-document/ditc-ccpb2015_02res_en.pdf.
• PTI From September 1, entry of imported toys in India only after quality testing: Paswan The Economic Times
• Consumer Rights Consumer Affairs: https://consumeraffairs.nic.in/organisation-and-units/division/consumer-protection unit/consumerrights#:~:text=Means%20right%20to%20be%20informed,a%20choice%20or%20a%20decision.
• The Consumer Protection Act, 2019, No. 35, Acts of Parliament, 2019, (India).
• Dr.Roopa Vajpayee & Akanksha Rana, Consumer Claims 54 (Eastern Book Company 2020
• The Competition Act, 2002, Act No. 12, Acts of Parliament 2003 (India).
• Dr. Roopa Vajpayee & Akanksha Rana, Consumers Claims 55 (Eastern Book Company 2020)
• Ginka Kalyan, Analysis of The Consumer Protection Act, 2019, MANUPATRA (Jan. 07, 11:07 AM)
• The Consumer Protection Act, 2019, Act No. 35, Acts of Parliament 2019 (India)
• (2011) 4 S.C.C. (Civ.) 835, 850
• Consumer Complaint No. 42 of 2018 District Consumer Redressal Forum Behrampore Odisha (India).
• (1995) 5 SCC 139.
• 2020 SCC Online NCDRC 490.
• III (2009) CPJ 49 (NC)
• AIR 1994 SC 787 791.

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8 Important Cases of Consumer Disputes

The article '8 important cases of consumer disputes' delves into eight pivotal legal cases that have played a crucial role in shaping consumer rights..

The article '8 Important Cases of Consumer Disputes' delves into eight pivotal legal cases that have played a crucial role in shaping consumer rights within India's legal framework governed by the Consumer Protection Act.

Click Here and Read about the History and Development of Consumer Protection Laws in India

Introduction

The buying or hiring of goods & services is a vital facet of our daily lives, depending heavily on trust. Deteriorating this trust can outcome in various significances for consumers, extending from monetary loss to physical harm. The Consumer Protection Act, of 1986, is intended to punctually address such breaking of trust or negligence. To ease this, a hierarchy of 3 tribunals is established:

• the District Consumer Disputes Redressal Forum (DCDRF),
• the State Consumer Dispute Redressal Commission (SCDRC), and
• the National Consumer Dispute Redressal Commission (NCDRC).

These tribunals have gained an understanding of the Consumer Protection Act, safeguarding a stable approach that reflects the needs of both consumers as well as service providers.

A "consumer" is any individual who purchases goods or uses services for individual consumption. This description includes all individuals except one acquiring such goods/ services for commercial/ resale purposes.

A complaint from consumers can be filed by:

• an individual or group of consumers,
• the Central or State Government,
• any duly listed volunteer consumer association,
• or the legal representative of the consumer.
• For a consumer being a minor, the complaint can be made by their legal guardian/ parents.

Click Here to Take a closer look at the Judgment: National Insurance Co. Ltd. v. Harsolia Motors and Ors., (2023) | | Consumer Protection Act, 1986

Let’s discuss some relevant case laws of Consumer Dispute:

1. national insurance company ltd. v. hindustan safety glass works ltd. & anr. [1].

In this case, the insurance company rejected compensation to the respondent for loss caused by heavy rain during a stated period. The refusal was grounded on a policy term stating that the company would not pay for losses or damages happening 12 months post the event. Disgruntled with this renunciation, the insured filed a complaint under the Consumer Protection Act, 1986 , with the National Commission .

The National Commission believed that the insured claim was valid, stating that the goods were protected at the time of the incident and the claim was duly filed the next day. It terminated all arguments stated by National Insurance and ordered the company to compensate for Rs. 21,05,803.89 with 9% interest per annum.

2. Manjeet Singh v. National Insurance Company Ltd. & Anr [2]

In this case, the appellant took a 2nd hand truck by executing a Hire Purchase agreement, with the vehicle insured by the respondent’s insurance company. Once while driving, the appellant stopped the truck at the demand of a passenger who then assaulted the driver and stole the said vehicle. He filed an FIR and notified the finance company, but the insurance claim was disallowed for an alleged policy breach. The appellant requested compensation from various consumer dispute forums and eventually reached the Supreme Court.

The Apex Court stated that there was no fault of the appellant, and acknowledged a breach of policy but it was not noteworthy enough to terminate it. The 2-judge bench ordered the insurance company to give 75% of the insured amount with 9% annual interest from the entitlement filing date. Moreover, the court directed the insurance company to recompense a compensation sum of Rs. 1 Lakh.

3. Indian Medical Association v. V.P. Shantha and Others [3]

The Indian Medical Association issued a writ petition requesting the Apex Court to pronounce that the Consumer Protection Act does not spread to the medical profession. They contended that the medical professional obeys to distinct Code of Ethics, resulting in medical negligence a matter for medical specialists in their jurisdiction rather than coming under the CPA. The petition raised 2 important questions:

1. Whether a medical practitioner be suitable for giving 'service' under the Consumer Protection Act, 1986?

2. That if medical services are given free of cost, would they still come under the purview of the Act?

The Court observed that the District, the State, and the National Consumer Forums have the power to call medical experts, evaluate evidence, and protect consumer interests. Services provided by doctors and hospitals without due charges will not come within the scope of "service." The Act does not extend to government hospitals which offer free services.

However, if services are given free to the poor, they will fall under the Act. If an insurance company provides the treatment cost for the customer, it also lies under the purview of the Act.

4. Arvind Shah (Dr.) v. Kamlaben Kushwaha [4]

The complainant's son's death was caused by the doctor's incorrect treatment, which led to the State Commission to give a compensation of Rupees 5 lakh for negligence.

On the appeal, the National Commission stated that the existing prescriptions required essential patient information as delegated by medical rules. The Commission, mentioning the case of Samira Kohli v. Dr Prabha Manchanda [5] , believed the absenteeism of dynamic details in the prescription slip was medical negligence. While recognizing the crucialness of such information, the Commission also emphasized that their occurrence specifies the doctor's care and conscientiousness, symbolising evidence against unsupported claims. But, due to an absence of direct evidence connecting the patient's demise to negligence, the National Commission abridged the compensation to 2.5 lakhs, along with applicable interest.

5. Sehgal School of Competition v. Dalbir Singh [6]

The petitioner, looking for admission at a medical coaching centre, was asked to deposit a lump sum fee for a 2-year course within the first 6 months. However, upon ending the course due to insufficient services, the coaching centre declined to refund the existing remaining amount.

The State Tribunal brought into line with the Supreme Court and National Commission, held that educational institutions in no case can collect lump sum fees for the whole course. If such fees are collected, they must be repaid in case of a student's withdrawal due to insufficiencies. The court observed any contract clause which is contrary to this ruling is considered invalid due to unsatisfactory bargaining power and abuse of natural justice principles.

The court also stated that additional compensation for mental torture should be granted, but it couldn't be bestowed because it had not been asked in the petition.

6. Spring Meadows Hospital & Anr v. Harjol Ahluwalia [7]

This appeal to the Supreme Court , involved a hospital shielding negligence by its nurses and a doctor, leading to a minor in an enduring vegetative state because of a brain haemorrhage. The main issue was whether parents,(not including the patients themselves), could pursue compensation for the mental torture caused. The court held that the service defined under the Consumer Protection Act includes paying parents and the child who are being benefited by the services . The National Commission was believed correct in giving compensation to the child for apparatus costs and the expenses which led to the vegetative state.

7. Karnataka Power Transmission Corporation v. Ashok Iron Works Private Limited [8]

The Supreme Court elucidated that a corporate body comes within the definition of 'person' under section 2(1)(m) of the Consumer Protection Act. The Court highlighted that the use of the word ‘includes’ in the Act is explanatory and can be thorough. The understanding depends on the text, the context, and the objective of the Act. It was avowed that juristic persons were never envisioned to be omitted from the Act's scope, and the definition is comprehensive.

8. Sapient Corporation Employees Provident Fund Trust v. HDFC & Ors. [9]

In a complaint, HDFC was accused of illegal debit, the National Commission stated that the payment was executed in harmony with a statutory authority's order and the complainant was duly informed. Identifying the potential for frolicsome complaints due to the absenteeism of court fees, the Commission, thinking the complaint missing in seriousness and adequate grounds, levied a fine of 25,000 Rs. on the complainant by Section 26 of the Act.

9. Nizam Institute of Medical Sciences v. Prasanth S. Dhananka & Ors. [10]

In the instant case, the complainant pursued compensation for medical negligence happening during the entire medical procedure which resulted in partial paralysis. The National Tribunal gave judgment in favour of medical negligence, stating that the patient's consent was gained only for the tumour examination and not its removal.

On further appeal to the Supreme Court, the court avowed the Commission's findings, highlighting that the tumour removal was delayed through recorded debate, and thus, implied consent could not be incidental. The court recognized the necessity to strike a balance between the victim's genuine requirements and the opposition party's irrational claims concerning compensation. While identifying that compassion for the victim should not affect compensation decisions, the court highlighted the duty to provide suitable compensation.

As per the circumstances, the court raised the compensation to 25 lakhs each for ongoing medical expenditures and the petitioner's loss of occupation . Additionally, 10 lakhs were given for the appellant's pain and misery, 7,20,000 for the attendant over 30 years, 14,40,000 for nursing care, and 10,80,000 for the physiotherapy expenses over 30 years, additionally with 6% interest.

For further in-depth notes on various subjects visit Oxbridge Notes .

10. V.N.Shrikhande v. Anita Sena Fernandes [11]

The Petitioner was alleged of medical negligence. It was contended that a gauge mass was left in her abdomen during a gallbladder operation by a medical practitioner. But this petition was filed after 9 years, subsequently, a 2nd operation at a different hospital was done by the petitioner to remove the mass.

The Apex Court recognized the absenteeism of a straightforward formula to regulate the accumulation of cause of action in medical negligence cases . By applying the Discovery Rule, practised in the United States, the court observed that when the result of negligence is evident, the cause of action arises at the very time of negligence. But if the effect is dormant, the cause of action ascends when the patient becomes conscious of the negligence. However, in the instant case, the petitioner had been feeling pain since the operation, which continued for nine years, for which she took painkillers without doctor consultation.

Therefore, the court, considering her profession as a nurse and her skill to have more knowledge than a layman, discarded and set aside the order of the Commission and further dismissed the complaint.

Click Here to Read about the Major Amendments to the Consumer Protection Act of 2019

[1] Civil Appeal No. 3883 of 2007

[2] Revision Petition No. 4419 of 2014

[3] AIR 1996 SC 550

[4] 2009(3) C.P.C.24; III (2009) CPJ121(NC)

[5] [I (2008) CPJ 56 (SC)]

[6] Appeal No.FA-08/1043

[7] Civil Appeal No. 7858 of 1997

[8] Civil Appeal No 1879 of 2003

[9] Consumer Complaint No.123 of 2012

[10] Civil Appeal No. 4119 of 1999

[11] Civil Appeal No. 8983 of 2010

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Consumer Awareness: Why It’s Necessary For Consumer Protection?

This article will understand the extent of consumer awareness through a data set of eighty urban households in Bhubaneshwar, Odisha. The piece argues the importance of consumer awareness and the realisation of the same internationally and in various nation-states. Based on the data, Ritesh Singh draws a graphic analysis of consumer purchasing habits and their awareness regarding the same.

By Ritesh Singh , New Law College, Pune

Introduction 

In the globalisation, liberalisation and privatisation era, most economic decisions are taken by the market. Though the government has withdrawn itself from many economic activities,  it often interferes when the market mechanism fails due to structural rigidities in the economy and other factors to provide goods and services to the people.

Consumption is one of the essential economic activities, which requires regular government intervention,  as the market cannot be trusted to promote the consumers’ security and welfare. But, on the other hand, consumers have to be aware of the commercial aspects of the sale and purchase of goods and the health and security aspect. Besides this, they should be mindful of their rights and duties.

Though the first consumer movement began in  England after the  Second World War, US President John F. Kennedy made the modern declaration about consumer’s rights in 1962. His speech against consumer harassment and for awareness spiralled many laws that dedicatedly protected the consumers’ interests. This movement upheld consumer rights, like choice, information, safety, and the right to be heard, later recognised and codified as laws.

Following several consumer associations and long campaigns in several countries, the United Nations prepared a ‘Model Code for Consumer Protection’. Finally, drawing from Economic Co-operation and Development (OECD) and the United States Consumer Bill of Rights, the United Nations Guidelines for Consumer Protection (UNGCP) got drafted and adopted on April 16, 1985.

These guidelines were adopted to protect consumers, establishing a high level of ethical conduct for those engaged in producing and distributing goods and services.

India also constituted the Consumer Protection Act in 1986, established against adulterated and sub-standard products. Its promulgation on December 24 is celebrated as ‘Consumer’s Day’ every year.

Objectives of the Study

The study is based on the following objectives:

• To study the level of consumer awareness of the consumers in the study area
• To make the students habituated about the survey work.
• To make the students acquainted with how different statistical tools can be applied in different socio-economic problems.

As the name suggests, consumer awareness extends protection and knowledge for consumption. It could afford awareness to things like:

• Maximum Retail Price (MRP).
• Fair Price Shop.
• Consumer awareness about price, quality and expiry date of the product.
• certified products like ISI, Agmark, ISO-2000

In the face of blatant exploitation, duplication and cheating, consumer awareness becomes imperative. For instance, some common ways certain sellers or businesses exploit consumers include:

• Underweight and under-measurement
• Sub-standard quality
• High prices
• Duplicate articles
• Adulteration and impurity
• Lack of safety devices
• Artificial scarcity
• False and incomplete information
• Unsatisfactory after-sale services
• Rough behaviour

All of these are essentially a result of limited information, supply, competition and literacy. Thus its important that consumers recognise their rights and duties. The Consumer Protection Act also features a set of rights that all businesses alike must not abrogate. Including:

• Right to safety
• Right to choose
• Right to seek redressal
• Right to consumer education
• Right to be heard
• Right to be informed.

But rights don’t exist in silos. Thus it’s more important that to secure these rights, consumers also fulfil their duties, such as:

• While purchasing goods, consumers should look at the quality of the products and the warranty of the product.
• They should ask for Cash Memo for the item purchased.
• They should form consumer awareness organisations.
• They must complain of their genuine grievances.
• They must know their rights and duties.

Consumer Protection Measures

To protect the interest of the consumers, the government has adopted three strategies that are administrative, technical and legislative:

Administrative Measures

Administrative measures of the government include the distribution of essential commodities through the Public Distribution System (PDS). Through PDS, the government distributes some essential commodities at a reasonable price through the Fair Price Shops. In a free-market economy, a commodity’s price is determined through the free play of demand and supply.

The equilibrium price is the price at which demand and supply of the commodity are equal, i.e. there are zero excess demand and excess supply.

But sometimes government interferes in the market systems by fixing the price lower than the equilibrium price to protect the interest of the consumers belonging to the lower strata of the society. This price is known as Control Price.

When the government fixes prices lower than the equilibrium price, demand exceeds supply, which leads to black-marketing and hoarding. To check these government sales different commodities at different FPS at control price.

Technical Measures

Technical measures consist of the standardisation of the product. Therefore, one of the necessary measures taken by the government to protect the consumers is the creation of institutions for setting up the standards for making and producing various products and enforcing them. In India, this has been achieved through the Bureau of Indian Standards (BIS) and Agmark. At the same time, BIS caters to industrial and consumer goods while Agmark is meant for agricultural products.

The Bureau of Indian Standards, earlier known as the Indian Standards Institution (ISI), whose headquarter is located in Delhi, is responsible for laying down industrial and consumer goods standards on a scientific basis and certifying the goods that meet the requirements standards and the prescribed quality.

The Agmark is implemented under the Agricultural Produce (Grading and Marketing) Act of 1937, amended in 1986. This scheme is run by the Directorate of Marketing and Intelligence (DMI) in the Ministry of Agriculture, Government of India. Products such as honey, masala etc., carry such marks.

At the international level, an institution called International Organization for Standardization (ISI), established in 1947 located in Geneva, serves to provide such a common reference standard. All the international Companies, goods produced by them, and institutions are certified as ISO 6000, ISO 14000 etc.

For setting international food standards, there is a similar body called Codex Alimentarius Commission (CAC). CAC got formed in 1963 by the Food and Agricultural Organisation (FAO) and the World Health Organization(WHO) in Rome, Italy. It develops food standards, guidelines and codes for production and international trade in food products like milk, fish etc.

Legislative Measures

These include the enactment of the Consumer Protection Act, 1986. In addition, the government enacted a specific law called the Consumer Protection Act, 1986. The Act provides for the establishment of consumer disputes redressal agencies at the District, State and National levels for the protection of consumer interests and to redress their grievances in a speedy, inexpensive and straightforward manner.

The Act has led to the setting up separate Department of Consumer Affairs in Central and State Government, which focus exclusively on the rights of the consumers, as enshrined in the Act.

Consumer Protection Act of 1986 And Case Studies

Although legal provisions like that offered a sense of protection to consumers, the laws were exclusive for protecting consumers and making them aware. Thus to fill that lacuna Consumer Protection Bill was introduced in Lok Sabha on  5th  December 1986.

The promulgation of the 1986 Act was intended to safeguard the interests of the consumers and for the purpose that there is Consumer Councils and other authorities for the settlement of consumer disputes and matter connected therewith.

To provide quick redressal of consumer disputes, a quasi-judicial institution is set up at all three levels. These bodies were empowered to give relief of a specific nature and award, wherever appropriate, compensation to the consumers. In addition, penalties of non-compliance with the orders given by the quasi-judicial bodies have also been provided.

Case Studies

• S.L.Pati vs Postmaster, Aligarh, Orissa(1993)

In this case, the money order was not delivered in time to the concerned person. If this were the normal Act of the Post Office and the office, which belong to the Union Government, no one would have faith in services rendered by them.

As a result, an amount of Rs250/- plus the money order amount of Rs.1000/- along with interest @ 18% was the compensation awarded to the deprived person.

• KC Panda  VS  SDO, Telecom Department, Berhampur, Orissa(1994)

The telephone line was disconnected even if the bill was paid. Proceeding before District Forum, Telecom Department made an apology for the mistake that occurred inadvertently. But, despite the apology, an amount of Rs. 2000/- was the compensation awarded to the person concerned by the Telecom Department.

Data and Methodology

For this piece, around eighty households in the city of Bhubneshwar were selected using judgment sampling. And further, it was analysed to deduce consumer behaviour.

Statistical Tools Used        

For the analysis of data simple percentage method and the arithmetic average is used.

Percentage:

Percentage increase/decrease=    _________   X 100

G t = Value of the Variable in time period t

G t-1 = Value of the Variable in time period t-1

Arithmetic Average (Mean):

Sum of all the values of different items in the series

Arithmetic Mean= ____________________________________________

Total number of items

X 1 + X 2 +………………………+X n

=    _____________________________

N   =   å Xi       i = 1, 2, 3………….n

Limitations of the Study

The study area of the project is limited to Bhubaneswar city only. Thus, the sample size is relatively small. Further, all the respondents were from an urban background.

Analysis And Interpretation Of Data

Socio-economic conditions of the Households

The total number of households surveyed for the purpose is 80. For the same, the head of the family was interviewed to fathom aspects of consumer awareness mentioned in the questionnaire.

Table No. 1 : total family members of the surveyed households.

Table No. 2 : occupational status of the head of the household.

Table No. 3 : educational qualifications of the head of the household.

Table No. 4 : education status of total households surveyed.

Table No.5 : income level of surveyed households.

Total family members of the surveyed households are 420, of which 220 are female and 200 are male—the average family size of the home is 5.35.

Out of 80 people interviewed, 68 belong to the service class. The rest had their own business.

Out of the total 80 of the families interviewed, 55 are highly qualified, including graduate, post-graduate, and even some possess Professional and Technical qualifications. Out of the total, 23 are at the Primary and Secondary levels, whereas two are illiterate.

Out of total family members, 190 were graduate, postgraduate and professionally and technically qualified. Again, 170 members are at Primary and Secondary or Higher Secondary level, whereas 10 are illiterates.

Rest 20 belonged to below five years and hence are not mentioned in the educational status. Table No. 5 represents the distribution of income levels of surveyed households. Out of 80 families, 10, 60, 10 belong to low income, medium income, and high-income groups.

Table No. 1

Sex-wise family members of the households.

Occupational Status of the Head of Households

Table No. 3

Educational level of head of families.

Educational Status of Family Members

Income Level of the Households

b) Diagrammatic Presentation of Data

Different types of diagrams are used to represent the data. Diagram No. 1, a Bar Diagram represents sex-wise family members of the households. Diagram No.2,  a pie chart, represents the occupational structure of the head of the household. Diagram No.3 and 4 are the Pie Charts that represents the income level of the head of households and the educational status of the heads respectively. Diagram No.5 and 6 are the Bar diagrams representing the whole family’s educational status and income level of the heads.                                                                                              

Consumer Awareness of the Households

Table No. 6 represents the preferred use of toothpaste. Table No. 7 represents the influence of different agencies on families while purchasing a different brand of toothpaste used by the surveyed households. Finally, Table No.8 shows aspects of consumer awareness in the everyday lives of the surveyed households.

  Table No.6

The preferred use of toothpaste.

Source of influence on the Purchase of different  Brand of Toothpaste

Table No. 8

Different aspects of consumer awareness.

From table No.6, it is evident that the highest percentage of families, i.e. 37.5%,  prefer Close-up followed by Colgate with 27.5%. Income and occupation factors did not influence the purchase or consumption of toothpaste of Close-up or Colgate. However, in the case of a lower-income group, out of  10, 6 families use either Anchor or Promise, and they prefer it as it cost less than the other brand of toothpaste.

On the other hand, the quality of the product is important for the high and medium-income groups, using Close-up and Colgate. Besides, the quality of product and price, children’s choices was also taken considered while using the Colgate or Close-up for about 20% of the households. The majority came to know about the product through an advertisement on TV, followed by magazines, newspapers and other agencies, as evident from Table 7.

Table No.8 depicts different aspects of consumer awareness, i.e., standardisation, MRP, date of manufacturing and expiry, knowledge about Consumer Courts, rights and duties of the consumers, etc. Out of total families, 81.25% of families check MRP, date of manufacturing and expiry. However, 56.25% of people were interviewed to check the ingredients used in the product.

As far as Consumer Court is concerned, most of them (96.25%) know about it, but only 10 out of the total respondents have gone to the Consumer Court to redress their problems on different occasions.

Lastly, it is clear from Table No. 8 that the majority of households(71.25%) surveyed insist on Cash Memo at the time of purchase. However, it is limited to non-consumable durable items and some consumable items when a large quantity is purchased.

Summary and Conclusion

This project aims to assess the people of different classes in society about various aspects of consumer awareness viz., price and quality of products used by them, Fair Price Shop, standardisation of products, Consumer Forum, and their Rights Duties etc. Consumers will lead a happy, healthy, and prosperous life if they are fully aware of the aspects mentioned above.

For the project report, the head of households interviewed is 80, and all belong to urban areas. Out of the total heads of families interviewed, 78 are literate, whereas only two are illiterate. All belong to different income groups, i.e. high, medium and low-income groups. However, the majority of them belong to the medium income group (75%). Again, based on occupation, 85%  of respondents are government servants, whereas other are businessmen.

Close-up was the most preferred brand (37.5%) of toothpaste, followed by  Colgate(27.5%) among the surveyed households. Households from medium and high-income groups prefer a respective brand of toothpaste, taking into account the quality of the product and their children’s wishes. On the other hand, for the low-income group, the most important factor determining the use of toothpaste is the product’s price. Again, most respondents (70%) were influenced by the televised advertisement about the product.

As far as consumer awareness is concerned, most respondents did not know about certified products, check MRP, date of manufacturing and expiry at the time of purchase. However, the majority of them do not check about the ingredients used in the product.

On the other hand, many knew Consumer Courts,  but only ten had ever visited the court regarding their grievances.

To conclude, people are inclined to know their rights, product details and other relevant information that could affect them somehow.

The educational implications of the study are that every student and parent should be aware of different aspects of different commodities they consume in day-to-day life. For example, they should know about certified products, Check MRP, date of manufacturing, and expiry at the purchase of a commodity.

They must have awareness about their rights and duties.  This gives a preliminary idea about survey work to the students. Lastly, students will get an idea about how statistical techniques can be used in different socio-economic problems.

  Bibliography

• Prof. S.P. Gupta, “Statistical Methods”, S.Chand and Company Ltd, 1994, New Delhi.
• S.Mishra and V.K.Puri, “Indian Economy”, Himalaya Publishing House, Mumbai,2000
• Ruddar Dutt and K.P.M. Sundharam, “Indian Economy”, S. Chand and Company Ltd., 1994.
• Statistics for Economics, Textbook for Class XI, NCERT, New Delhi, 2005.
• Indian Economic Development, Textbook for Class XI, NCERT, New Delhi,2005.
• The Consumer Protection Act 1986, the Law House, New Delhi.
• Contemporary India, A Social Science Textbook for Class X, NCERT, New Delhi,2003.
• Economic Survey, Directorate of Economics and Statistics, Planning and Co-ordination Department, Government of Orissa, 2006-07.

This article was first published in 2015

Questionnaire

• Name of the head of family:__________________________

                                                      Education:________ Occupation:_______

                                                               Age:_________   Sex(M/F):_______

• Residential Address:_____________________________________________

                                                           _____________________________________________

• Age (In years)                                                            No. of Persons

                                                                                                  ________________________

                                                                                                    Male     Female       Total 

                                      ________________________________________________________                                                                

• 5-14         
• 65 and above

_________________________________________________________

                                                                                         Total: 

• Level of Education                                                

                                                                                                            No. Of Persons

                           ________________________________________________________

                           Illiterate

                           Primary

                           Secondary

                           Graduation

                           Others

                         __________________________________________________________

                            Total                  

• Monthly Income

                                                                                                                   ( In Rs/-)

                          _________________________________________________________

                          Up to  1000

                          1000-5000

                          5000-20000

                          20000-50000

                          50000 and above

                          __________________________________________________________ 

• What do you use to clean your teeth?

                                    Toothpaste_____  Tooth Powder_____  Any Other______

• Which brand of toothpaste do you use regularly?

                                     Aquafresh___ Cibaka____  Anchor_______

                                     Close-up____Promise_____Pepsodent_____

                                      Oral B_____ Furhans_____Any Other____

• The price for a 100-gram pack of toothpaste (used by them).

                               Price_______(actual)

                               Price________(approx.)

                               Do not know______.    

_________________________________________________________________________

• Do you find the product costly?     Yes/No
• Do you check MRP, date of manufacturing and date of expiry?   Yes/No
• Do you check the standardisation of products like ISI, Agmark, ISO 2000?   Yes/No
• Do you check the ingredients used in the product?   Yes/No
• Are you satisfied with the quality of the product? Yes/No
• Are you aware of the Fair Price Shop? Yes/No
• Do you find the availability of products at FPS?  Yes/No
• Do you complain to the shopkeeper in case of dissatisfaction? Yes/No  
• Has your complaint been timely attended? Yes/No
• Was your complaint attended to your satisfaction? Yes/No
• Are you aware of Consumer Courts? Yes/No                   
• Have you ever gone to a Consumer Court in case of any dissatisfaction? Yes/No
• Do you insist Cash Memo at the time of purchase to ensure genuine purchase and tax revenue to the government? Yes/No
• Do you insist on Cash Memos for other commodities at the time of purchase? Yes/No
• How do you come to know about the product?                                                 Yes/No

                                    Advertisement                                         Family influenced

                                    _______________________________________________

                                     TV                                                               _______

                                     Newspaper                                                   _______

                                     Magazine                                                     _______

                                    Cinema                                                         _______

                                    Sales Representatives                                    _______

                                     Exhibits Stall                                                _______

                                     Radio                                                            ________

                                     Any other                                                     ________

                                    _____________________________________________________                 

16. Are you attracted by promotional offers like rebates, free toothbrushes, buy one get one free?Yes/No

        17.   Do children influence the purchase of particular toothpaste?   Yes/No

        18. If a new toothpaste brand is launched in the market, will you buy it?  

                                               If yes, then what consideration?                                                                   Yes/No 

                                               Price of the Product________      Quality of the product______

                                               Promotional offer_______            Any Other______

———————————————————*———————————————————————–

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Consumer Protection – Rights and Exploitation

January 17, 2022

A consumer is defined as a person who buys goods and services and makes use of public utilities as well as natural resources like air and water. In its most basic sense, it refers to those who use goods and services for the satisfaction of their wants. Thus, excluding buyers who purchase for manufacturing purposes or resale. Consumers present a striking contrast to purchasing agents of government or any private enterprise. Consumers purchase small quantities of a variety of goods.Nowadays markets have become consumer orientated. The importance of consumers is increasing day by day. With the increase in production, many manufacturers have started using unfair means for selling their products. They cheat consumers in one way or another. In India, many people are still illiterate who can be easily cheated by the manufacturers are traders. Consumer exploitation is more common in rural areas where consumers are less aware of their rights. Consumer education means to educate the consumers about their rights like the right to be informed, right to choose, right to seek re-dressal, etc. Consumer education is an important determinant of consumer protection.Consumer exploitation through unfair business practices is not a new phenomenon. The consumer is the forgotten and the least organized in the modern economy. Adulteration, poor quality, variations in the contents of the pack, use of deceptive or fractional weights, misleading and dishonest advertisements, unfair monopolistic and restrictive trade practices are the ways and means by which the consumer is exploited to the maximum extent possible. In India exploitation of consumers has assumed serious proportions. The ever-increasing population and the need for goods and services on a large scale without a corresponding matching supply have created a situation of near seller’s market. The consumers have very weak bargaining power and therefore cannot exert their rights.Consumers invariably are a vulnerable lot for exploitation, more so with the prevalence of mass poverty and illiteracy in a developing country. India to is not an exception to it. Instances like black marketing, adulteration, overcharging are very rampant that talking about them seems to be platitudinous. From time to time to comment has tried to save cut in trust of the consumers through legislation and the Consumer Protection Act of 1986 is considered as the most progressive statute for consumer protection. Procedural simplicity and speedy and inexpensive consumer literacy provinces as uniquely consist in this act.

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Case Study Questions Class 10 Social Science Economics Chapter 5 Consumer Rights

CBSE Class 10 Case Study Questions Social Science Economics Consumer Rights. Important Case Study Questions for Class 10 Board Exam Students. Here we have arranged some Important Case Base Questions for students who are searching for Paragraph Based Questions Consumer Rights.

Case Study 1:

The consumer is the focal point of all business activities. In contemporary times, it is widely acknowledged that the consumer is the sovereign of the market. The primary objective of business activities is to cater to the needs and desires of consumers. A commercial entity is entirely reliant on its customers not only for its survival but also for its expansion. Currently, the customer is accorded utmost importance, and every effort is made to satisfy their requirements. However, in reality, the position of the consumer is different. They are akin to slaves who are exploited by well-organized and well-informed sellers through exorbitant pricing, provision of substandard goods, supply of adulterated products, short weight, misleading advertising, and so on. Customers remain unorganized and are unaware of their fundamental rights, such as the right to safety, the right to choose, the right to be heard, and so forth. The term “Consumerism” refers to the user or customer, and “ism” denotes a movement. Therefore, the consumer movement is commonly referred to as “Consumerism.” It is a collective and organized movement of consumers. The primary objective of this movement is to educate and unite consumers and to fight for the protection of their rights.

Answer Consumer groups can take several steps to protect consumers, including advocating for stronger consumer rights and protection laws, raising awareness about product safety, promoting ethical business practices, and engaging in campaigns against unfair pricing and fraudulent advertising. They may also provide information and support to affected consumers.

Case Study 2:

Prior to making a purchase, consumers should insist on the quality of the products and the assurance of their reliability. It is advisable to opt for products that bear quality marks such as ISI, AGMARK, and others.

Q2) What do you understand by Right to informed in consumer protection act? 1

Case Study 3:

Q1) What is the difference between consumer protection council and Consumer Disputes Redressal Commission? Mark 2

Answer Consumer Protection Council is a voluntary organization that educates and raises awareness about consumer rights. In contrast, Consumer Disputes Redressal Commission is a government body that legally resolves consumer disputes and complaints, providing a platform for grievance resolution and compensation.

Case Study 4:

Furthermore, the Act mandates that e-commerce companies have a return policy in place and provide more detailed information about the product and the seller in their listings.

 Q1) Mention a few factors which cause exploitation of consumers. Mark 1

Case Study 5:

Q1) What do you understand by the term ”right to repair”? Mark 2

Answer  The “right to repair” is a concept that advocates for consumers’ ability to repair and modify their own purchased products, from electronics to appliances, without facing legal or technical barriers imposed by manufacturers. It aims to promote sustainability, reduce electronic waste, and empower consumers to extend the lifespan of their possessions.

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Top 5 Milestone Consumer Cases in India that Every Consumer Should Know

We buy products and services on a regular basis. From fundamental essentials such as food and clothing to services like banking and education, we rely on companies and organisations to live comfortably in the modern world, and we pay them with our hard-earned money. However, businesses may occasionally fail to provide high-quality services or products. Many people are aware that consumer courts and regulations exist to protect consumers in such situations. Have you ever thought about who goes to such courts and what kinds of cases they hear? You'd be shocked how simple these situations may be. So, here are five fascinating consumer complaint cases for your knowledge:

1. Banks can't always claim "technical difficulties" as an excuse

We have become so reliant on banks. Most of our transactions are now digital, and we rely largely on banks for them. Have you ever had a transaction fail because the server was down or there were other issues?

Ms Dipika Pallikal, a squash champion and Arjuna awardee, was caught off guard when her Axis Bank Debit Card failed in a hotel in Rotterdam, Netherlands. At the moment, she had ten times the bill amount in her account. She suffered a loss of reputation and shame as a result of this. According to the bank, the situation was caused by "Force Majeure" (an act of God/something beyond their control).

Aside from that, the bank had also returned a 1 lakh cheque issued to her by the Indian government, blaming it on a technological error.

Dipika filed a consumer complaint with the Chennai Consumer Court against Axis Bank.

Court Ruling

The court found that Axis Bank had provided inadequate service and ordered the bank to pay a compensation of Rs 5 lakh and expenses of Rs 5000.

The Key Takeaway

Banks are similar to any other type of service provider. We entrust them with our money, and they must deliver on their promises. Customers cannot be made to suffer because of "technical issues" or "force majeure."

2. Insurance claims cannot be denied based on technicalities alone

We pay a fee and receive insurance to protect us against unforeseeable losses. Many people, unfortunately, have had negative encounters with insurance companies. For example, Mr Om Prakash had his truck stolen and claimed insurance for it. The truck was taken on March 23, 2010, the police report was submitted on March 24, 2010, and the insurance claim was filed on March 31, 2010.

The insurance investigator was dispatched, and he validated the validity of the claim. The claim was authorised for a total of Rs 7,85,000.00. However, Mr Om Prakash was never given the money. When he sent a legal notice to the insurance company, they responded that there had been a breach of terms and conditions:

“immediate information to the Insurer about the loss/theft of the vehicle”

Om Prakash was late in applying for insurance since he was detained by the police while attempting to collect his vehicle.

While the consumer courts rejected his claim, the Supreme Court upheld his appeal and ruled in his favour. Insurance firms cannot avoid paying claimants on technical grounds, according to the ruling. Particularly when the claim has good justification.

The court ordered the Respondent firm to pay the Appellant Rs 83,5000 plus interest at the rate of 8% per annum. He was also given a monetary prize of Rs 50,000.

The Key Takeaway 

Many decisions have been taken throughout the years to guarantee that insurance firms are held accountable and do not avoid paying valid claims. If you have a similar problem with your insurance provider, you can file a complaint with the consumer court.

3. Tired of Skin and Hair Care Products Making False Claims? 

Perhaps you are not yet exhausted or are too tired to question. However, a 67-year-old guy from Kerala's far reaches was fed up with the company’s constant lies and how they got away with it.

In 2015, Mr K Chaathu filed a complaint against Indulekha (a beauty product maker) and Mammootty (the company's brand ambassador) for running misleading advertisements. The soap's tagline was 'soundaryam ningale thedi varum,' which means 'beauty will seek you out.' The advertising also stated that anyone who used the soap would become 'fair' and 'beautiful,' but the 67-year-old did not. Amusing isn't it?

Court Ruling 

Indulekha paid him 30,000 in an out-of-court settlement, but Chaathu's original claim was for 50,000. When asked about this, he stated that the lawsuit was never about the money, but rather about how these corporations place commercials with fraudulent claims on a daily basis. And it's not acceptable to allow these individuals to get away with it.

Because advertisements are created to sell items, exaggeration of outcomes is all too prevalent. However, making false promises only for the purpose of selling things is not acceptable. 

4. Is there no MRP on the product?

Mr Baglekar Akash Kumar, a 19-year-old, received a book and Rs 12,500 as a result of the book. How? He ordered the book online, but when it arrived, he discovered that it didn't have an MRP on it. He looked on the internet and discovered that the book was available at various costs in several locations.

So he filed a complaint with the consumer forum against Penguin Books India Pvt. Ltd.

The court ruled that failing to display the MRP on goods without a valid cause is an "unfair trade practice." MRP exists to ensure that a customer does not pay too much for a product. As a result, printing MRP is required for businesses.

Akash was given Rs 10,000 in compensation and 2,500 in costs and the publishers were asked to print the retail price on the book.

Companies are required by law to include MRP on all products. If you notice a product that does not have an MRP, it is a breach of Consumer Protection Laws, and you have the right to sue.

5. Not All Freebies Are Accepted

Imagine buying a Pepsi and discovering a package of gutka floating in it! When Mr Rajesh Rajan of Ahmedabad bought Pepsi from a neighbourhood store, this occurred to him. He promptly complained against the corporation with a legal notice and contacted a Consumer Dispute Redressal Forum.

Furthermore, he alleged that there was a service flaw that could have put his health at risk. He requested Rs. 5 lakh in compensation for the incident.

The consumer forum ruled in Mr Rajesh Rajan's favour, ordering the corporation to pay a total of Rs 4,000 to him (Rs 4,000 for compensation and Rs 8 for the Pepsi he bought).

Rajesh filed a complaint with the State Consumer Dispute Redressal Commission, claiming that the compensation of Rs 4008 was insufficient and that he had spent Rs 500 on sample testing. The State Commission considered Rajesh's argument reasonable and ordered the corporation to pay Rs 20,000 in compensation and Rs 2,000 in fees.

Not all freebies are acceptable! If you uncover something in your food (packaged or not) that isn't supposed to be there or could be damaging to your health, the supplier has failed to offer adequate service. Take them to one of the Consumer Court.

A lot of people fail to file a complaint because they are seldom not aware of the legalities and process involved or about their basic consumer rights. Online Legal India helps them not only file their consumer complaints but also helps them in understanding the process involved in a simple manner. If you want to file in the consumer court then contact Online Legal India today.

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