Detailed, Step-by-Step NCERT Solutions for 12 Business Studies Chapter 12 Consumer Protection Questions and Answers were solved by Expert Teachers as per NCERT (CBSE) Book guidelines covering each topic in chapter to ensure complete preparation.
Consumer Protection NCERT Solutions for Class 12 Business Studies Chapter 12
Consumer Protection Questions and Answers Class 12 Business Studies Chapter 12
True Or False
State whether the following statements are true or false.
(i) Consumer Protection has a moral justification for business.
Answer:
True.
(ii) In addition to rights, a consumer also has some responsibilities.
Answer:
True.
(iii) A complaintcan to be made to a District Forum when the value of goods.or services in question, along with the compensation claimed, exceeds its. 2.1 Lakhs.
Answer:
False.
(iv) The Consumer Protection Act provides for six consumer Rights.
Answer:
True.
(v) ISI is the quality certification mark used in case of food products.
Answer:
False.
(vi) Under the Consumer Protections^ a complaint can be filed by a consumer for a defective good aiq ais0 for deficiency in service.
Answer:
True.
Short Answer Type Questions
Question 1.
Explain the importance of consumer Protection from the point of view of business.
Answer:
Importance of Consumer Protection : Consumer protection has a wide agenda. It not only miuc[es educating consumers about their rights and responsibility, but is0 helps in getting their grievances readressed. It not only requires, judicial machinery for protecting the interests of consumers but also requires the consumers to get together and form themselves into consumers associations for protection and promotion of their interests.
At the same time, consumer protection has a special significance for business too. From the point of view of business . A business must also lay emphasis on protecting the consumers and adequately satisfying them. This is important because of the following reasons
1. Long-term interest of business Enlightened business realize that it is in their long-term interest to satisfy their customers. Satisfied customers not only lead to repeat sales but also provide good feed back to prospective customers and thus, help in increasing the customers base of business. Thus, business firms should aim at long¬term profit-maximisation through customer satisfaction.
2. Business uses society’s resources :- Business organisations use resources which belong to the society, thus, they have a responsibility to supply such products and render such services which are in public interest and would not impair public confidence in them.
3. Social Responsibility :-Abusiiess has social responsibilities towards various interest groups. Bupbess organizations make money by selling goods and providing sences to consumers. Thus, consumers form an important group amon? the many stake holders of business and like other stake holders, meir interests has to be well taken care of.
4. Moral Justified*011ft is the moral duty of any business to take care of consul1^s interests and avoid any form of their exploitation. Thus J business must avoid unscrupulours, exploitative and unfair tradepmetices like defective goods and unsafe products, adulteration.‘alse and misleading advertising, hoarding, black marketing ec-
5 government Intervention :- A business engaged in any form of expaltative trade practices would invite government intervention or aoon. This can impair and tarnish the image of the company. Thus, its advisable that business organisations voluntarily resort to such .jractices where the customer’s needs and interests will well be taken care off.
Question 2.
Enumerate the various Acts Passed by the Government of India which helps in protection of Consumers interests.
Answer:
The Indian Legal Framework consists of a number of regulations which provide protection to consumers. Some of these regulations are as under.
1. The Consumer Protection Act, 1986 : The Consumer Protection Act, 1986 seeks to protect and promote the interests of consumers. The Act provides safeguards to consumers against defective goods, deficient services, unfairtrade practices, and other forms of their exploitatioin.
The Act provides for the setting up of a three-tier machinery, consisting of District Forums, State commissions and the National commissions. It also provides for the formation of Consumers Protection Council in every District and State, and at the Apex level.
2. The Contract Act, 1872 The Act lays down the conditions in which the promises made by parties to a contract will be binding on each other. The Act also specified the remedies available to parties in case of breach of contract.
3. The Sale of Gopds Act, 1930 The Act provides some safeguards and reliefs to the buyers of the goods in case the goods purchased do not comply with express or implied conditions or warranties.
4. The Essential Commodities Act, 1955 : The Act aims at controlling production, supply and distribution of essential commodities checking inflationery trend in their prices and ensuring equal distribution of essential commodities. The Act also provides for action against anti-social activities of frofitbeers, boarders and black-marketers.
5. The Agricultural Produce (Grading and Marketing) Act, 1937 : The Act prescribed grade standards for agricultural commodities and live-stock products. The Act stipulates the conditions which govern the use of standards and lays down the procedure for grading, marketing and packing of agricultural produce. The quality mark provided under the Act is known as AGMARK, an acronym for Agriculatural Marketing.
6. The Prevention of Food Adulteration Act, 1954 The act aims to check adulteration of food articles and ensure their purity so as to maintain Public Health.
7. The Standards of Weights aVid Measures Act, 1976 : The provisions of this Act are applicable in case of those goods which are sold or distributed by weight, measures or number. It provides protection to consumers against the malpractice of under-weight or under-measure.
8. The Trade Marks Act, 1999 The Act has repeated and replaced the Trade and Merchandise MarksAct, 1958. The Act prevents the use of fraudulent marks on products and thus, provides protection to the consumers against, such products.
9. The Competition Act, 2002 The Act has repeated and replaced the Monopolies and Restrictive Trade practices Act, 1969. The Act provides protection to the consumers in case of practices adopted by business firms which hamper competition in the market.
10. The Bureau of Indian Standards Act, 1986 : The Bureau of Indian Standards has been set up under the Act. The Bureau has two major activities: Formulation of quality standards for goods and their certification through the BIS Certification Scheme.
Manufacturers are permitted to use the ISI Mark on their products only after ensuring that the goods conform to the prescribed quality standards. The Bureau has also set up a grievence cell where consumers can make a complain about the quality of products carrying the ISI Mark.
The most important of these regulations is the Consumer, Protection Apt which provides for consumer rights and helps consumers in getting their grievances redressed for any shortcoming in the goods purchased or services availed.
Question 3.
What are the responsibilities of a consumer?
Answer:
Responsibilities of Consumers :-
A consumer should keep in mind the following responsibilities while purchasing, using and consuming goods and services.
1. Beaware about various goods and services available in the market so that an intelligent and wise choice can be made.
2. Buy only standardized goods as they provide quality assurance. Thus, look for ISI Mark on electrical goods. FPO Mark on food products, Hallmark on jewellery etc.
3. Learn about .the risks associated with products and services, Follow, manufacturer’s instructions and use the products safely.
4. Read labels carefully so as to have information about prices, net weight, manufacturing and expiry dates etc. ,
5. Assert yourself to ensure that you get a fair deal.
6. Be honest in your dealings, choose only from legal goods and services and discourage unscrupulous practices like black-marketing, hoarding etc.
7. Ask for a cash memo at the time of purchase of goods or services. This would serve as a proof of the purchase made.
8. File a complaint in an approapiate consumer forum in case of a shortcoming in the quality of goods purchased or services availed. Do not fail to take an action even when the amount involved is small.
9. Form Consumer Societies which would play an active part in educating consumers and safeguarding their interests.
10. Respect the Environment. Avoid waste, littering and contributing to pollution.
Question 4.
Who can file a complaint in a Consumer Court?
Answer:
A complaint before the appropriate Consumer Forum can be made by ,
- Any Consumer
- Any registered Consumers’ Association;
- The Central Government or any State Government;
- One of more consumers, on behalf of numerous consumers having the same interest; and
- A legal heir or representative of a deceased consumer.
Question 5.
What kind of cases can be filed in a State Commission?
Answer:
The following types of cases can be filed in a State Commission’s juridiction.
(i) The State Commission can entertain complaints/cases where the value of goods or services and the compensation exceeds Rs. 20 lakhs but does not exceed Rs. 1 crore (As per Amendmend 2002).
(ii) The State Commission also has the powers to entertain appeals against the orders of any District Forum within the State.
(iii) The State Commission also has the power to call the record and pass appropriate orders in the cases against the orders of District Forum within the state.
Question 6.
Explain the role of Consumer organisation and NGO’s in protecting and promoting consumer’s interests. .
Answer:
Role of Consumer organisations and NGO’s : In India, several consumer organisations and Nori-govemmental organisation (NGO’s) have been set up for the protection and promotion of Consumer’s interests. Non-governmental organisations are non¬profit organisations which aim at promoting the welfare of people. They have a constitution of their own and are free from government interference.
Consumer organisations and NGO’s perform several functions for the protection and promotion of interest of consumers These include
1. Educating the general public about Consumers rights by organising training programmes, seminars and workshops.
2. Publishing periodicals and other publications to impart knowledge about consumers problems, legal reporting, reliefs available and other matters of interest.
3. Carrying out comparative testing of consumers products in accredited laboratories to test relative qualities of competing brands and publishing the test results for the benefit of consumers.
4. Hncourging consumer to strongly protest and take an action against unscrupulous, exploitative and unfair trade practices of sellers.
5. Providing legal assitance to consumers by way of providing aid, legal advice etc. in seeking legal remedy.
6. Filing complaints in appropriate consumer courts on behalf of the consumers.
7. Taking an intiative in filing cases in consumer courts in the interest of the general public, not for any individual.
Some of the important consumer organisations and NGO’s engaged in protecting and promoting Consumer’s include the following.
- Consumer Coordination Council, Delhi
- Common Cause, Delhi
- Voluntary Organisation in Interest of Consumer Education (VOICE) Delhi.
- Consumers Education and Research Centre (CERC), Ahmedabad.
- Consumer Protection Council (CPC), Ahmedabad
- Consumer Guidance Society of India (CGS1), Mumbai.
- Mumbai Grahak Panchayat, Mumbai
- Karnatake Consumer Service Society, Bangalore.
Long Answer Type Questions
Question 1.
Explain the rights and responsibilities of a consumer.
Answer:
The Consumer Protection Act, 1986 : The CPA seeks to protect and promote the consumer’s interest through speedy and inexpensive redressal of their grievances. The scope of the Act is very wide. It is applicable to all types of undertakings, big and small, whether in the private or public sector, or in the co-operative sector, whether a manufacturer or a trader, and whether supplying goods or providing services.
The Act confers certain rights to consumers with a view to empowering them and to protect their interests.
Consumers Rights
The consumer Protection Act provides for six rights of consumers. The Consumer Protection Councils set-up under the Act are intended to promote and protect the various rights of consumers. These rights include the following
1. Right to Safety The consumer has a right to be protected against goods and services which are hazardous to life and health. For instance, electrical appliances which are manufactured with substandard products or do not conform to the safety norms might cause serious injury. Thus, consumers are educated that they should use electrical appliances which are ISI marked as this would be an assurance of such products meeting quality specifications.
2. Right to be informed The consumer has a right to have complete information about the product he intends to buy including its ingredients, date of manufactures, price, quantity, directions for use, etc. It is because of this reason that the legal framework in India requires the manufactures to provide such information on the package and label of the product.
3. Right to choose The consumer has the freedom to choose from a variety of products at competitive prices. This implies that the marketers should offer a wide variety of products in terms of quality, brand, prices, size, etc and allow the consumer to make a choice from amongst these.
4. Right to be heard The consumer has right to file a dissatisfaction with a good or a service. It is because of this reason that many enlightened business firms have set up their own consumer service and grievance cells. Many consumer organizations are also working towards this direction and helping consumers in redressal of their grievances.
5. Right to seek redressal The consumer has a right to get relief in case the product or service falls short of his expectations. The Consumer Protection Act provides a number of reliefs to the consumer including replacement of the product, removal of defect in the product, compensation paid for any loss or injury suffered by the consumer, etc.
6. Right to Consumer education The consumer has a right to acquire knowledge and to be a well-informed consumer through out life. He should be aware about his rights and the reliefs available to him in case of a product or service falling short of his expectations. Many consumer organisations and some enlightened business are taking an active part in educating consumers in this respect.
The Consumer Protection Act by conferring these rights o the consumers empowers them to fight against any unscrupulous, exploitative and unfair trade practices adopted by sellers. Consumer rights, by themselves, cannot be effective in achieving the objective of consumer protection can, in effect, be achieved only when the consumer also understand their responsibilities.
Responsibilities of Consumers
A consumer should keep in mind the following responsibilities while purchasing, using and consuming goods and services.
1. Beaware about various goods and services available in the market so that an intelligent and wise choice can he made.
2. Buy only standardized goods as they provide quality assurance. Thus, look for ISI Mark on electrical goods. FPO Mark on food products, Hallmark on jewellery etc.
3. Learn about the risks associated with products and services, Follow, manufacturer’s instructions and use the products safely.
4. Read labels carefully so as to have information about prices, net weight, manufacturing’and expiry dates etc.
5. Assert yourself to ensure that you get a fair deal.
6. Be honest in your dealings, choose only from legal goods and services and discourage unscrupulous practices like black-marketing, hoarding etc.
7. Ask for a cash memo at the time of purchase of goods or services. This would serve as a proof of the purchase made.
8. File a complaint in an approapiate consumer forum in case of a shortcoming in the quality of goods purchased or services availed. Do not fail to take an action even when the amount involved is small.
9. Form Consumer Socities which would play an active part in educating consumers and safeguarding their interests.
10. Respect the Environment. Avoid waste, littering and contributing to pollution.
Question 2.
What are various ways in which the objective of consumer protection can be achieved? Explain the role of consumer organisation and NGO’s in this regard.
Answer:
A consumer’s awareness about his rights and responsibilities is just one of the ways in which the objective of consufner protection can be achieved. There are other ways in which this objective may be achieved.
1. Self Regulation by business Enlightened business firms realize that it is in their long term interest to serve the customers well. Socially responsible firms follow ethical standards and practices in dealing with their customers. Many firms have set up their customer service and grievance cells to redress the problems and grievances of their consumers.
2. Business AssociationsThe associations of trade, commerce and business like Federation of Indian Chambers of commerce (FICCI) and Confederation of Indian Industries (CII) have laid down their code of conduct which lay down for their members the guidelines in their dealings with the customers.
3. Consumer Awareness A consumer, who is well informed about his rights and the reliefs available to him, would be in a position to raise his voice against any unfair trade practices or unscrupulous exploitation. In addition to this, an understanding of his responsibilities would also unable a consumer to safeguard his interests.
4. Consumer OrganisationsConsumer organisations play an important role in educating consumers about their rights and providing protection to them. These organisations can force business firms to avoid malpractices and exploitation of consumers.
5. GovernmentThe government can protect the interests of the consumers by enacting various legislations. The legal framework in India emcompasses various legislations which provide protection to consumers. The most important of these regulations is the Consumer Protection Act, 1986. The Act provides for a three-tier machinery at the District, State and National levels for redressal of consumer grievances.
Role of Consumer organisations and NGO’s
‘ In India, several consumer organisations and Non-governmental organisation (NGO’s) have been set up for the protection and promotion of Consumer’s interests. Non-governmental organisations are non¬profit organisations which aim at promoting the welfare of people. They have a constitution of their own and are free from government interference. Consumer organisations and NGO’s perform several functions for the protection and promotion of interest of consumers
These include :-
1. Educating the general public about Consumers rights by organising training programmes, seminars and workshops.
2. Publishing periodicals and other publications to impart knowledge about consumers problems, legal reporting, reliefs available and other matters of interest.
3. Carrying out comparative testing of consumers products in accredited laboratories to test relative qualities of competing brands and publishing the test results for the benefit of consumers.
4. Encourging consumer to strongly protest and take an action against unscrupulous, exploitative and unfair trade practices of sellers.
5. Providing legal assitance to consumers by way of providing aid, legal advice etc. in seeking legal remedy.
6. Filing complaints in appropriate consumer courts, on behalf of the consumers.
7. Taking an intiaive in filing cases in consumer courts in the interest of the general public, not for any individual.
Some of the important consumer organisations and NGO’s engaged in protecting and uromoting Consumer’s include the following.
- Consumer Ceerdination Council, Delhi
- Common Cause, Delhi
- Voluntary Organisation in Interest of Consumer Education (VOICE) Delhi.
- Consumes Education and Research Centre (CERC), Ahmedabad.
- Consumer Protection Council (CPC), Ahmedabad
- Consumer Guidance Society of India (CGSI), Mumbai.
- Munibai Grahak Panchayat, Mumbai
- Karnatake Consumer Service Society, Bangalore.
Question 3.
Explain the redressal machanism available to consumers under the Consumer Protection Act, 1986.
Answer:
Redressal Agencies under the Consumer Protection Act : For the redressal of consumer grievances, the Consumer Protection Act provides for setting up of a three-tier enforcement machinery at the District, Sate, and the National levels, known as the District Consumer Dispute Redressal Forum, State Consumer Disputes Redressal Commission, and the National Consumer Disputes Redressal Commission.
They are briefly referred to as the ‘District Forum’, ‘State Commission’, and the ‘National Commission’, respectively. While the National Commission is set up by the Central Government, the State Commissions and; the District Forums are set up, in each State and District, respectively, by the State Government concerned.
Figure 1 shows the hierarchical structure of this three-tire machinery/Before studying the set-up and
functioning of these redressal agencies let see how the Consumer Protection Act defines a consumer and who can file a complaint under the Consumer Protection Act.
Consumer A ‘consumer’ is generally understood as a person who uses or consume goods or avails of any service. Under the Consumer Protection Act, a consumer is defined as :-
a. Any person who buys any goods for a consideration, which has been paid or promised, or partly paid and partly promised, or under any scheme of deferred payment. It includes any user of such goods, when such use is made with the approval of the buyer, but does not include a person who obtains goods for re-sale or any comercial purpose.
b. Any person who hires or avails of any service, for a considerations which has been paid or promised or partly paid and partly promised or under any system of deferred payment. It includes any beneficiary of services when such services are availed of with the approval of the person concerned, but does not include a person who avails of such services for any commercial purpose.
Let us now see how the consumer grievances are redressed by the three-tier machinery under the Consumer Protection Act.
District Forum . The District Forum consists of a President and two other members, one of whom should be a woman. They all are appointed by the State Government concerned. A complaint can to be made to the appropriate District Forum when the value of the goods or services in question, along with the compensation claimed, does not exceed Rs. 20 Lakhs.
On receiving the complaint, the District Forum shall refer the complaint to the party against whom the complaint is filed. If required, the goods or a? sample there of, shall be sent for testing in a laboratory. The District Forum shall pass an order after considering the test report from the Laboratory and hearing to the party against whom the complaint is filed. In case the aggrieved party is not satisfied with the order of the District Forum, he can appeal before the State Commission within 30 days of the passing of the order.
State Commission Each State Commission consists of a President dnd not less than two other members, one of whom should be a woman. They are appointed by the State Government concerned. A complaint can to be made to the appropriate State Commission when the value of the goods or services in questions, along with the compensation claimed, exceeds Rs. 20 lakhs but does not exceed Rs. 1 crore.
The appeals against the orders of a District Forum can also be filed before the State Commission. On receiving the complaint, the State Commission shall refer the complaint to the party against whom the complaint is filed. If required, the goods or a sample thereof, shall be sent for testing in a laboratory.
The State Commission shall pass an order after considering the test report from the laboratory and hearing to the party against whom the complaint is filed. In case the aggrieved party is not satisfied with the order of the State Commission, he can appeal before the National Commssion within 30 days of the passing of the order.
National Commission The National Commission consists of a President and at least four other members, one of whom should be a wpman. They are appointed by the Central Government. A complaint can to be made to the National Commission when the value of the goods or services in question, along with the compensation claimed, exceeds Rs. 1 crore. The appeals against the orders of a State Commission can also be filed before the National Commission.
On receiving the complaint, the National Commission shall refer the complaint to the party against whom the complaint is filed. If required, the goods or a sample there of shall be sent for testing in a laboratory. The National Commission shall pass an order after considering the test report from the laboratory and hearing to the party against whom the complaint is filed.
An order passed by the National Commission in a matter of its orginal jurisdiction is appealable before the Supreme Court. This means that only those appeals where the value of goods and services in question, along with the compensation claimed, exceeded Rs. 1 crore and where the aggrieved party
Was not satisfied with the order of the National Commission, can be taken to the Supreme Court of India. Moreover, in a case decided by the District Forum, the appeal can be filed before the State Commission and, thereafter, the order of the State Commission can be challenged before the National Commission and no further.
Relief Available If the consumer court is satisfied about the genuiness of the complaint, it can issue one or more of the following directions to the opposite party.
1. To remove the defect in goods or deficiency in service.
2. To replace the defective product with a new one, free from any defect.
3. To refund the price paid for the product, or the charges paid for the service.
4. To pay a resonable amount of compensation for any loss or injury suffered by the consumer due to the neglience of the opposite party.
5. To pay punitive damages in appropriate circumstances.
6. To discontinue the unfair/restrictive trade practice and not to repeat it in the future.
7. Not to offer hazardous goods for sale.
8. To withdraw the hazardous goods from sale.
9. To cease manufacture of hazardous goods and to desist from offering hazardous services.
10. To pay any amount (not less than 5% of the value of the defective goods or deficient services provided), to be credited to the Consumer Welfare Fund or any other organisation/person, to be utilized in the precribed manner. ‘
11. To issue corrective advertisement to neutralize the effect of a misleading advertisement.
12. To pay adequate costs to the appropriate party.
Application Based Questions
Question 1.
Visit a consumer organisation in your town. List down the various functions performed by it.
Answer:
As mentioned in the question, students are advised to pay a visit to any consumer organisation operating in their town or nearby city and make a note of various functions performed by that organization to protect the consumers under Consumer Protection Act 1986, Mainly the functions of these organisation is to safeguard the interests of consumer against hazardous products and services or any deficiency in their delivery.
Question 2.
Collect some newspaper cuttings of some consumer cases and the rulings given therein.
Answer:
Students are advised to visit website of various Consumer forums like National Consumer Disputes Redressal Commission i.e. www.necrc.nic.in. They may collect some newspaper cuttings of different court’s judgements on the topic.
Case Problems
Now, filing complaint is just a click away. Filing a complaint in consumer court’s going to get a lot easier by the-end of this year, virtually. No matter which part of the country you’re in, it’s going to happen at the click of a mouse.
The project, called Confonet (Computerisation and Computer Networking of Consumer Fora), is being executed on a turnkey basis by the National Informatics Centre (NIC).
“Online registration of complaints, the government hopes, will promote e-governance, transparency, efficiency and streamlining of consumer fora,” said an official in the consumer affairs ministry. Of Rs. 48.64 crore set aside for the project, the government has released Rs. 30.56 crore so far, the official added.
“Besides software development and testing, networking and project implementation, integration and site preparation, it will include purchase of hardware for all the 583 district fora, 35 state commissions and the National Commission,” the official said.
At present, computer systems and system software have been delivered to 25 state commissions and 300 district fore – never mind the fact that it’s sometimes a long wait before the hardware is finally unpacked and set up in some of the districts. Meanwhile, training of staff, sometimes in the classroom and sometimes through e-learning sessions, are in full swing.
“But just setting up an online complaint filing system won’t ensure a strong consumer protection movement in the country – for that .we’re working on GenNext and the next way to do that is tojro to schools,” the official said.
The government is, therefore, involving school children to form consumer clubs so as to involve them in various consumer welfare activities.
Part of the funding for running the club is to come from various State Governments, with an equally matching grant from the Centre. Howevera number of state governments are yet to sanction the fund – some of these include Uttar Pradesh, Madhya Pradesh and Kerala. (Source – www.economictimes.indiatimes.com downloaded on 14/3/2007
Question 1.
What new measure is the ministry of consumer affairs taking to make filing of complaint easy?
Answer:
In the above case, filing a complaint in a consumer court, the government is going to get it easier. Online registration of complaints suggested by the respective state government will promote e-governance, transparency, efficiency and streamlining of complaints . in consumer fora. Rs. 48.64 crores set aside for such protect. “But just setting up an online complaint filing system won’t ensure a strong consumer protection movement in the country.
Question 2.
What role can you as a student play to contribute to the cause of consumer protection?
Answer:
The Government should work on GenNext and the best way to do that is to go to schools. The government is, therefore, involving school chi ldren to form consumer clubs so as to involve them in.various consumer welfare activities. Part of the funding for running such clubs is to come from various state governments, with an equally matching grant from the centre.
Question 3.
What scenario of consumer protection do you foresee when the measures proposed in the above news report are implemented?
Answer:
At present, Computer systems and system software have been delivered to 25 state commission and 300 districts forum. Meanwhile, training of staff, sometimes in the class rooms and sometimes through e-learning sessions, are in full swing. When all the state government will make serious attempt for strengthening the consumer’s rights, this Act will be a boon for redressing the consumer’s grievances.
(Teachers are advised to help students to study judgements of various consumer forums including National Consumer 5 Disputes Redressal Commission at www.ncdrc.nic.in. This initiative will help the pupils to understand the role of consumer protection in India better. Various published material can also be used. Consumer, clubs in schools can also help the students in this regard)