Thunderous year 2018 for Consumers :Is consumer enjoying thrill at peak (International consumer day special )

Thunderous year 2018 for Consumers :Is consumer enjoying thrill at peak

(International consumer day special )

After three decades from its commencement in 1986, Consumer Protection Bill 2018 was placed before Lok Sabha in the very first month of the year on 5th of January 2018 and was got through lok Sabah in December 2018 with totally new profile and dimensions. This Act shall repeal the earlier Act. The new features of the act have already been widely explained and publicized by now and consumers are thrilled with the strength they are going to gain very shortly. But at the same time we should not forget about the teething problem the act and its new inserted provisions may have to undergo.

Marketing style and Attitude of consumers and Product liability clause

It is not out of place to mention that Indian consumers are never seen in comfort zone with the market due to their own marketing style and attitude. They compromise with quality against cost of the product and attracted towards ‘buy one get one free’ schemes. Consumer in India buys for the lust and not for the need at most of the time and goes for rosy schemes.  Markets go with the preference of consumers and allure them, attract them the manner they like. As of now when product liability clause will come into operation, producer, trader, retailer and authorized dealer-all shall be liable for their own role for the product they sell. Even the“electronic intermediary ‘shall be responsible to take notice on behalf of actual manufacturer or dealer and make an effort to produce them before the courts if situation so occurs in on line purchase cases.the question is-

!)Will the consumer now use a slight caution while picking up goods from the shelf in the malls and check expiry date, time for use of eatable goods, MRP and other particulars where you are the choser.Seller often argues before the courts that it was the consumer who comes to us for billing and it was his duty also to check the same.

!!!) Will the consumer now read terms and conditions of the schemes floated and check if there is any rider. The new act does not bar the seller to frame conditions when they give discount on product sold on ‘as is where is’ basis. Consumer commission will not be in position to put product liability when goods bought on auction or ‘as is where basis’ is

!V) Will the consumers now read the pamphlet enclosed with the product they have purchased and learn the operation first before moving court or contacting authority.

V) Will the  consumer be able to prove the fact that prize offer gift is part of the cost of goods he has bought and can complain against the same to the authority referring to section 2(46)111given as hereunder

 (iii) Permitting—

(a)   the offering of gifts, prizes or other items with the intention of not providing them as offered

Or creating impression that something is being given or offered free of charge when it is fully

 Or partly covered by the amount charged, in the transaction as a whole;

These are the areas which seem to be attractive but proving the same shall not be an easy task.


Liability of the person who becomes the face for misleading information:

This is the most publicized clause which is going to create a very difficult situation when comes in operation. It has been provided in chapter 111 giving powers to the consumer protection authority to deal with the issue of advertising for the product giving misleading information Regarding misleading advertisements, the person who becomes the face for advertising for the product giving misleading information shall also be liable and answerable before the courts and authority shall take up the matter under its powers and may also refer matter to the consumer commissions.In other words  it will be responsibility of a person  to check the truth of what one is made to say and advertise. This is the one part and the person becoming face of advertisement is bound to check the quality. But one cannot constantly go on checking if manufacturer makes some changes in between without informing the model who becomes face for their advertisement. It’s going to become a tough task to prove. Even in other modes of advertisements like print media, no where news paper or magazines etc. are made liable the manner it has been provided in the act. It has become big responsibility of the Ministry to set rules and regulations carefully with detailed explanation for making this clause effectively applicable.

Question of, unfair contract as defined under section 2, sub clause 46 of the act

Unfair contract is defined but not clear as to whether authority set up for consumer protection will declare any contract uncautionable or unfair contract .We see under chapter 111, unfair trade practices to be dealt by consumer protection authority, fair enough. But does this mean authority is to declare unfair contract as an outcome of investigation. Even if it is left to the consumer commissions, the interpretation of these words cannot go beyond the Indian Contract Act. Under the consumer protection act. Section 2(46) crux of it is that a contract is unfair if parties to the contract are not at equal bargaining power and if terms go against the spirit of consumer protection act.

Section 23 of the Indian contract act states -object or consideration of the contract should be lawful. This means if object of the contract is lawful, consideration fixed for the agreement is lawful and also not against the public policy or immoral, terms of contract cannot be questioned.

Here we need to refer to the popular Supreme Court verdict on unfair and unreasonable contract which is an established law on contracts. In the famous case   Water Transport Corporation Limited and Anr. V. Brojo Nath Ganguly and Anr." [(1986) IILLJ 171 SC] held Justice D.P. Madon when speaking for the Bench of the Supreme Court held

·         That what is good for the public or in public interest or what would be harmful or injurious to the public good or interest varies from time to time.

·         An award, which is on the face of it, patently in violation of statutory provisions cannot be said to be in public interest.

While explaining inequality of bargaining power between the parties and of unfair advantage of one party over the other, this judgment explained Section 16 of the Indian contract act 1872 which comes into play

"Section 16(1) A contract is said to be induced by "undue influence" where the relations subsisting between the parties are such that one of the parties is in a position to dominate the will of the other; when a party has authority over other or contracting with a person whose mental capacity is temporarily or permanently affected by reason of age, illness, or mental or bodily distress.

Here for proving unequal bargaining power, undue influence is to be proved either having dominant position of one party or mental incapability of the other part. In consumer related matters, consumer agrees to such unequal clauses in most of real estate matters, admission in school colleges etc but it will be still difficult to prove that the other part is having dominant position because it is up to the contracting parties to agree or disagree with the terms.

Now coming on the point of unreasonable and unfair terms, Indian contract act does not say contract void or voidable if parties are not at equal bargaining powers.It even does not bar to have unreasonable clause under restraints clause 27 of the Indian contract act.In number of judgments it has been spelled out that term of contract is valid whatever unreasonable it is but it should not be illegal on face of it. For example one wants to sell his house worth one caror for fifty lacks may not be illegal clause if a man needs money for treatment of ailing beloved one at that point of time. But a contract is illegal if money given to a contracting party for murder.   

The above discussion goes to show that unfairness of the contract or unreasonable of contract shall be defined by the court. If authority has to spell out, it has to be interpreted the words in context of law of the land i.e Indian contract act. Unless any amendment made in contract act, consumer protection act cannot make its own law as far as contract between the parties is concerned. Intension of the act is paramount feature of the law but it can be interpreted only by the courts and not by the authorities.

Dr Prem Lata


Regulate unfair terms of a contract  

(Article -Business standard January 11 2015.)

Indian contract laws do not have a law regulating unfair terms of a contract, points out Sen of VERUS Advocates. "It is necessary to evolve general principles regulating unfairness in contracts. This will have wide ramifications in a range of contracts including lending agreements, builder-developer agreements, debt instruments, landlord-tenancy agreements, government contracts, arbitration agreements, among others," he says.

Legal experts say most developed jurisdictions have evolved ways to deal with unfairness in contracts, and recognise the possibility of 'procedural' and 'substantive' unfairness. "Courts should also be vested with the power to raise an issue of unfairness even if the parties have not raised such a plea," says Sen.

Many in legal fraternity point out that even the Law Commission has recommended that a separate legislation should be enacted to grant protection to parties from such unfair terms.

Most legal experts agree that The Indian Contract Act is well-drafted legislation, but certain amendments would help it to keep it up to date with latest global business practices. This can only give more confidence to foreign parties wishing to do business in India.

Article -Business standard January 11 2015. 

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