By going through these Maharashtra State Board Organisation of Commerce and Management 12th Notes Chapter 7 Consumer Protection students can recall all the concepts quickly.

Maharashtra State Board Organisation of Commerce and Management 12th Notes Chapter 7 Consumer Protection

→ Lobby: A group of persons who try to influence legislators to vote in a certain way.

→ Adulterated product: Product that becomes impure after the addition of inferior materials. Consumption of such products may affect health adversely.

→ Spurious goods: Goods resembling real or original but are not genuine or real. Consumption of such goods may lead to harmful effects on health.

Maharashtra Board OCM 12th Commerce Notes Chapter 7 Consumer Protection

→ Redressal forum: Court or tribunal having the power to decide or give justice to the aggrieved party to the consumer disputes.

→ Compensation: Something, especially money given by the person responsible for a fault to the person to whom damage or loss is caused.

→ Misleading advertising: Advertising of the products or services which misleads and deceives the people. Unscrupulous traders or producers deceive the consumers through misleading advertising.

→ Rational decision: Decision in accordance with the principle of logic or reason.

→ Amendment: An alteration of or addition made to any Act after it is passed by the legislative body say Parliament of India.

→ Consumer disputes: Disputes between the consumer and the trader in respect to the product purchased and related issues.

→ Jurisdiction: The official power to make legal decisions and judgements about something or the . limits within which a legal authority can exercise its power.

→ Appellate: A court of law or higher court where decisions given by the lower court is challenged by the aggrieved party; an application made for this purpose is termed as “appeal”.

→ Exploitation: Taking advantage of especially a person for one’s own benefit or profit.

→ guasi-judicial: Having a partly judicial character by possession of the right to hold hearings on and conduct investigations into dispute claims and alleged violation of rules and regulations and to make decisions in the general manner of courts.

→ Public affairs: Public relations efforts of a firm that are associated with government agencies, mass media and public interest and pressure groups.


The survival and success of a business organisation depends upon the customers. They are the backbone of economy of any country as whole economy revolves around them. All the manufacturing and production activities are carried out in anticipation of demand and also to give maximum satisfaction to the consumers. In today’s competitive market, the consumer is regarded as the ‘King of Market’. Even today the exploitation of the consumers by the traders and manufacturers in the form of adulteration, false weighing and measurement, price rise, artificial scarcity, black marketing, misleading advertisement cannot be denied. Therefore, every consumer must have adequate knowledge of product and services in respect of their quality, quantity, price, standard, etc. to choose right product or service.

Maharashtra Board OCM 12th Commerce Notes Chapter 7 Consumer Protection

Meaning and Definition of Consumer-

Meaning: The word ‘consumer’ is derived from the Latin word ‘consumere’ which means ‘to eat or drink’. Accordingly, consumer is one who consumes or uses any product or service available to him either from nature or through market. For instance, if a person purchases bananas to eat, or uses railway services he is called consumer. If he purchases 10 dozens of bananas to sell them at higher prices, then he is called seller and not consumer.

Need and Importance of Consumer Protection-

  • Need of participation of consumers: Many a time it is noticed that most of the companies | take decisions which affect the consumers’ interest without consulting them.
  • Lack of information: On account of vast distance between manufacturer and consumer, it is not easy to establish direct contact between them. It is also very difficult to get correct and reliable information about the products they want to buy. In both the cases consumers’ exploitation cannot be denied.
  • Ignorance of consumers: In India, most of the consumers are ignorant about their rights, market conditions, price levels, product details, etc. Many a time consumers are being cheated.
  • Unorganised consumers: The consumers are widespread, scattered and unorganised. They are not united. Hence, they are easily exploited by the producers and sellers. An individual or a single consumer cannot fight against united and powerful manufacturers or sellers.
  • Spurious Goods: Some traders imitiate (duplicate) the popular brand names and cheat the consumers by supplying them duplicate or defective goods. Consumers find it difficult to recognise genuine and duplicate products. It is necessary to protect them by ensuring compliances and safety standards.
  • Misleading Advertisement: Most of the traders make false claims and exaggerate the facts but do not disclose the drawbacks of the products in the advertisements. Most of the consumers are misled by the advertisement and do not know the real and true quality of the products.
  • Malpractices of businessmen: To earn and make more money many unscrupulous traders adopt fraudulent, unethical and monopolistic trade practices. This leads to exploitation of consumers. Measures must be taken to protect the consumers.
  • Trusteeship: According to Gandhian philosophy, businessmen are the trustees of the society’s wealth. So businessmen should not misuse the society’s wealth. They should use the. wealth of the society for the benefits of the people.

Rights of Consumer-

The President of USA, J. E Kennedy declared certain rights of the consumers on 15th March, 1962, therefore it is observed as ‘World Consumer Rights Day.’

The rights of consumer are explained as follows:

1) Right to Safety: The right to safety means the right to be protected against the products, production processes and service which are hazardous to consumer’s life, property or health.

2) Right to Information: According to this right, consumers should get adequate information about all aspects of goods and services like price, name of manufacturer, contents used, batch number, date of manufacture, expiry date, safety instructions, etc. It helps consumers to select right products or services.

3) Right to Choose: As per this right, consumer should be given full liberty to select an article as per his requirements, liking, financial ability, etc. According to this right, seller cannot force the buyer to purchase a particular product or services.

4) Right to be Heard: This right states that the consumers have right to lodge their complaint .to consumer forum. Consumers can also give suggestions to manufacturers or traders on certain matter like quality, quantity, price, packaging, etc. The consumers can also file online complaints through portal or mobile applications.

Maharashtra Board OCM 12th Commerce Notes Chapter 7 Consumer Protection

5) Right to Consumer Education: This right has made it clear that every consumer has right to know about consumer rights and solutions to their problems. This is to create awareness among the consumers to protect themselves from the exploitation of unscrupulous businessmen.

6) Right to Represent: The Consumer Protection Act, 2019 has given am opportunity to individual consumers and consumer groups to be represented by a person to represent consumers’ complaint before consumer forum.

7) Right to Redress: According to this right, every consumer has the right to receive a fair amount of compensation or get the article replaced or repaired free of cost for defective products and for poor services received from the manufacturer or dealer.

8) Right to Healthy Environment: According to this right all consumers have right to clean and healthy environment in present as well as in future. As per this right, consumer can demand actions against business organisations causing pollution. Businessmen and companies must take suitable measures to control pollution.

9) Right to protect against Unfair Business Practices: As per this right, the consumers have right to raise voice against unfair business practices adopted by any trader, e.g. using faulty weights and measures, hoarding products to create artificial scarcity, black marketing, profiteering, adulteration, charging high prices, selling goods after expiry dates, etc.

10) Right against Spurious Goods: This right is against the traders who sells goods which are health hazards, spurious (false or not genuine) and pose danger to life.

Responsibilities of Consumer:

  • Consumer should use his rights: The consumers must be aware that they have many rights in respect to the products or services they have purchased. They can use their right if they are cheated or misled by advertisement or get faulty or defective articles.
  • Cautious consumer: The consumer should be alert and cautious while dealing with trader. Before buying any product or service, he should make detail enquiry about the quality, quantity, utility, price, date of expiry, user manual, etc.
  • Filing of complaint: If the consumer has any complaint about the products or services he has purchased, he should immediately approach the officer concerned and lodge complaint about the same. If consumers ignore the dishonest acts of the traders, it indirectly amounts to encourage unethical business practices.
  • Quality conscious: The consumers should always buy quality products. They should never compromise on the quality of goods. They should always ensure about the quality symbols like ISI, AGMARK, Hallmark, etc. They indicate that the quality of goods is good.
  • Beware from exaggerated advertisement: Many a time seller exaggerates the facts in their advertisements. It is the responsibility of the consumers to find out the truth of advertisement and then buy the products or services.
  • Demand of Invoice and Guarantee, Warranty Card: After purchasing the products or services, consumers should always ask for or demand guarantee card, cash memo from the i seller or dealer. They should preserve these for future claim in case of any defects, inferior quality, etc.
  • Pre-planned buying: The consumers should make proper planning before buying any product. He should make an estimate of products, j budget to spend, etc. He should also decide in advance from which place the buyer to buy the product. He should not buy any product in a hurry or without thought.
  • Organised efforts: It is the responsibility j of the consumer to shoulder the responsibility to promote and protect the interest of his own and other consumers. He should join the group or organisation which is working for the welfare of j consumers.

Maharashtra Board OCM 12th Commerce Notes Chapter 7 Consumer Protection

Ways and Means of Consumer Protection-

1) Lok Adalat: Lok Adalat also referred as People’s Court is established by the government to settle disputes by compromise. The aggrieved party can directly lodge the complaint or grievances. Issues are discussed and judgement is given immediately. The order passed thereby is given statutory recognition. Railways, Insurance | companies, banks, etc. organise Lok Adalat regularly.

2) Public Interest Litigation (Janhit Yachika): Under this legal facility, any person can approach court of law in the interest of the public j or society and ask for justice. Its main objective is ) to provide legal remedy to unrepresented groups j of society. It can be directly filed in the High Court as well as in Supreme Court in some cases.

3) Redressal Forum: Under the Consumer Protection Act, 2019, consumer dispute redressal agencies have been established by the Government to protect the rights of consumers and to offer simple, speedy and inexpensive redressal for consumer complaints. These three tier quasi judicial consumer disputes redressal agencies are set up at District, State and National level.

4) Awareness Programmes: The Government of India has adopted various publicity measures such as use of journals, brochures, posters, observation of World (International) Consumer Rights Day on 15th March and National Consumer Day on 24th December every year. Various consumer related programmes are also telecast on various TV channels and social media and broadcasted on All India Radio and FM channels.

5) Consumer Organisations: Many consumer organisations such as Consumer Guidance Society of India, Grahak Panchayat, Grahak Shakti, Consumers’ Association, etc., are active throughout India to fight for consumers’ rights through protest, campaigning, lobbying, etc. It is now required to strengthen consumer movement throughout the country.

6) Consumer Welfare Fund (CWF): This fund is created by the Department of Consumer Affairs for providing financial help to voluntary consumer movement specially in rural areas. This financial assistance is used for consumer education, complaint handling, counselling, guidance, etc.

7) Legislative measures: The Government of India has passed several Acts such as Sales of Goods, Act, 1930; Essential Commodities Act, 1955; Standards of Weights and Measures Act, 1956; Bureau of Indian Standards Act, 1969; Food Safety and Standard Act, 2006 and National Food Security Act, 2013, etc. to protect the interest of consumers.

However, these laws could not protect the consumers as such and therefore the Government of India has passed a powerful act known as Consumer Protection Act, 2019 to protect the interest of consumers.

Consumer Protection Act, 2019-

The Consumer Protection Act was passed by the Parliament on 24th December, 1986 to provide for expeditious and inexpensive settlement of consumer disputes. In 2019, the Ministry of Law and Justice has proposed new act as ‘Consumer Protection Act, 2019’ which got the President’s assent on 9th August 2019. This Act, provided for the establishment of three-tier quasi-judicial consumer dispute redressed agencies known as District Commission, State Commission and National Commission at District Level, State Level and National Level respectively. National Commission also acts as an Apex body at the central level. This act provides and covers all the complaints in respect to goods, services and unfair business practices.

1) District Commission: A consumer dispute redressal commission called the District Commi¬ssion is established by the State Government in each district to entertain complaints where the value of the goods or services paid as consideration does not exceed ₹ 1 crore. Each district commission shall consist of the President who is sitting or retired as a district Judge and who is not less than 35 years. The members will hold office for a term of 5 years or up to the age of 65 years whichever is earlier. Territorial jurisdiction of district commission is entire district in which it is established. Any person not satisfied with the order of District Commission can appeal against such order to the State Commission within a period of 45 days from the date of such order.

Maharashtra Board OCM 12th Commerce Notes Chapter 7 Consumer Protection

2) State Commission: A Consumer Dispute Redressal Commission called the State Commission is established by the State Government in each state to entertain complaints where the value of the goods or services paid as consideration, exceeds ₹ 1 crore but does not exceed ₹10 crore. Each State Commission shall consist of President who is sitting or retired Judge of High Court and not less than 4 members. The members will hold office for a term of 5 years or up to the age of 67 years whichever is earlier. It can entertain original cases as well as appeals against the order of District Commission which are within the territorial jurisdiction of the entire state in which it is established. Any person not satisfied with the order of State Commission can appeal against such order to the National Commission within a period of 30 days from the date of such order.

3) National Commission: A Consumer Dispute Redressal Commission at the national level established by the Central Government by notification is referred to as National Commission. It entertains complaints where the value of the goods or services paid as consideration exceeds ₹ 10 crore. National Commission consists of President who is sitting or retired as judge of the Supreme Court and not less than 4 members. The members will hold office for a term of 5 years or up to the age prescribed whichever is earlier. It entertains original cases and appeals against the order of State Commission which are within the territorial jurisdiction of the entire nation. Any person not satisfied with the order passed by the National Commission may appeal against such order to the Supreme Court within a period of 30 days from the date of such order.

Role of Consumer Organisations and NGOs-

Non-Government Organisations (NGOs) are non-profit and non-political organisation which aim at promoting the welfare of the people.
The Role of consumer organisation and NGOs in Consumer Protection and Education:

  • To arrange and organise campaigns and different programmes on the topics of consumers to create social awareness.
  • To arrange training programmes for consumers to make them aware of their rights and different modes of redressal of their complaints and grievances.
  • To publish journals, periodicals to make consumers understand about various consumer related development.
  • To provide free legal advice to the members on the issues of consumer’s interest and help them to put up grievances before appropriate authority.
  • To communicate with the businessmen, Chambers of Commerce and Industry for ensuring a better deal for consumers.
  • To file Janahit Yachika (Public interest litigation) on vital consumers issues like ban on sale of products injurious to public health.

The following are the examples of NGOs: Consumer Guidance Society of India (CGSI), Voluntary Organisation in Interest of Consumer Education (VOICE), Consumer Education and Research Centre (CERC), Consumers Association of India (CAI), Mumbai Grahak Panchayat (MGP), Grahak Shakti (GS).