Consumer Protection - Solutions

 CBSE Class 12 Business Studies

NCERT Solutions
Chapter 12
Consumer Protection


True/ False:

1. State whether the following are true or false.

(i) Consumer protection has a moral justification for business.
(ii) 
In addition to rights, a consumer also has some responsibilities.
(iii) 
A complaint can to be made to a District Forum when the value of the goods or services in question, along with the compensation claimed exceeds Rs 20 lakhs.
(iv) 
The Consumer Protection Act provides for six consumer rights.
(v) 
ISI is the quality certification mark used in case of food products.
(vi) 
Under the Consumer Protection Act, a complaint can be filed by a consumer for a defective good and also for deficiency in service.

Ans:  (i) True, consumer protection has a moral justification for business. It is the moral duty of every business to protect the interests of its customers. Business organisations must follow ethical values and any form of exploitation of the consumers such as unfair trade practices, adulteration, etc. must be avoided.

(ii) True, in addition to rights, a consumer also has some responsibilities such as being aware of the availability of various goods and services; being informed of the price, weight, expiry date, etc. of the goods; asking for bills and cash memo while purchasing goods and services.

(iii) False, A District Forum offers for redressal of consumer grievances when the value of goods and services in question, along with the compensation claimed is less than Rs 20 lakhs. In case the value exceeds Rs 20 lakhs, a complaint can to be filed in the appropriate State Commission.

(iv) True, The Consumer Protection Act, 1986 provides for six consumer rights, namely
a) Right to Safety
b) Right to be Informed
c) Right to Choose
d) Right to be Heard
e) Right to seek Redressal
f) Right to consumer Education

(v) False, ISI is the quality certification mark used in case of goods other than food products. For food products the quality certification mark is known as FPO.

(vi) True, The Consumer Protection Act, 1986 provides for protection of consumer interests against defective goods, deficiency in services and other such forms of exploitation.


Short Answer Type:

1. Explain the importance of consumer protection from the point of view of a business.

Ans: Businessmen cannot survive for a long time by ignoring the interest of consumer. They have to give due importance to consumer if they want to prosper in competitive market. Consumer protection provides following benefits to businessmen:

(i) Long-Term Interest: With increasing competition and the drive to survive in the market, consumer satisfaction and interest is of prime importance for any business. While taking due care of the interest of the consumers, a business builds goodwill and reputation. A satisfied customer not only comes back and results in repeated sales for the firm, but also pulls new customers by spreading the good word. Thus, it is in long-term benefit of the business to protect consumers' interest.

(ii) Use of Resources: A business uses the resources of society for the production of various goods and services. Through the sale of these goods and services to the society, a business earns profits. Thus, it is their duty to supply such goods and services that adhere to the overall interest of the society.

(iii) Ethical Reasoning: Today moral values and ethics play an important role in business. It is the moral duty of every business to protect the interests of its customers. They must follow ethical and moral values and avoid any form of exploitation of the consumers such as unfair trade practices, adulteration, etc.

(iv) Responsibility towards Society: As the business earns profits by selling various goods and services to consumers, it becomes their responsibility to take care of the interests and satisfaction of the consumers.

(v) Government Interference: If businessmen want to avoid intervention of government then they should not involve in unfair trade practices. Government intervention may spoil the image of business. Businessmen should voluntarily involve in the activities which protect the interest of the consumer.

(vi) Consumer is the purpose of business: The basic purpose of the business is to create more and more customers and retain them and businessmen can create more customers only by satisfying the customers.


2. Enumerate the various Acts passed by the Government of India which help in the protection of consumers' interests.

Ans: The following are some of the Acts passed by the Government of India for the protection of consumers' interests.

(i) The Consumer Protection Act, 1986: This Act provides for the protection of consumer interests against various forms of exploitation such as defective goods, deficiency in services, unfair trade practices, etc. Under the Act, a three-tier machinery comprising of District Forum, State Commissions and the National Commission, has been set up for the redressal of consumer grievances.

(ii) The Contract Act, 1982: This Act defines the conditions under which the promises in a contract are binding. In addition, the remedies available in case of breach of contract are also specified in the Act.

(iii) The Sale of Goods Act, 1930: The Act provides protection and relief to the consumers in case the goods purchased by them do not abide by the expressed or implied conditions and warranties.

(iv) The Agriculture Produce (Grading and Marking) Act, 1937: This Act defines grade standards for agricultural and livestock commodities. It provides the procedure for grading, packing and marking of agricultural products. The quality certification mark provided by the Act is called as AGMARK.

(v) The Prevention of Food Adulteration Act, 1954: This Act is formed to check the adulteration in food items and to maintain their purity.

(vi) The Standards of Weights and Measures Act, 1976: This Act safeguards the interest of the consumers against exploitative practices related to under-weight and under-measure of the goods.

(vii) The Essential Commodities Act, 1955: This Act provides for control in production, supply and distribution of essential goods. It also controls inflationary trends and ensures equality in distribution of these goods. It also checks anti-social activities such as hoarding and black marketing.

(viii) The Trade Marks Act, 1999: This Act is formed to check the use of false marks on the goods and thereby, protects the consumers against such goods.

(ix) The Competition Act, 2002: This Act is formed to prevent such practices by the business firms that hinder competition in the market.

(x) The Bureau of Indian Standards Act, 1986: Under the Act, The Bureau of Indian Standards has been established that formulates the standards for the quality of the goods and based on these standards provides certification of quality through BIS certification scheme. The quality certification mark provided by the Act is called as ISI. In addition, a grievance cell has also been set up to redress complaints regarding the quality of the products.


3. What are the responsibilities of a consumer?

Ans: A consumer is also responsible for safeguarding his own interest and to protect himself from exploitation. The following are some of the responsibilities of a consumer.

1. Consumer must exercise his rights: Under consumer protection Act the consumer is granted various rights, but these rights will be useful only when consumer exercise these rights. The consumer must select the product according to his preferences, he must file a complaint if he is not satisfied with the quality of the product.

2. Cautious Consumer: The consumer should not blindly believe on the words of seller. He must insist on getting full information on the quality, quantity, utility, price etc. of the goods or services.

3. Looking for Quality Marks: A consumer must always look for the quality certification marks before the purchase of goods such as ISI in case of electrical goods, AGMARK in case of agricultural goods, etc.

4. Asking for Cash Memo: A consumer should always ask for cash memo or bills for the goods and services purchased. The bill acts a proof of purchase and can be used for future references.

5. Honest Transactions: A consumer must always choose legal dealings and discourage illegal trade practices such as black marketing and hoarding.

6. Ensure Safety: A consumer must carefully read the manuals and instructions provided by the manufacturer so as to ensure safe use of the product.

7. Filing Complaint: In case the product is found defective or any deficiency is found in the quality of the product, a complaint must be filed in the appropriate forum.

8. Consumer Societies: Consumer organisations and societies must be formed to work towards consumer education and awareness.

9. Environment Protection: The consumers must also work towards environment protection by avoiding wastes, pollution, etc.


4. Who can file a complaint in a consumer court?

Ans: For the redressal of the grievances of consumers, consumer courts and consumer forums have been established under the Consumer Protection Act. The following can file a complaint in a consumer court.

(i) Any consumer

(ii) Any registered consumer association or organization.

(iii) The Central and State Government

(iv) A consumer or a group of consumers on behalf of a number of consumers having same interest.

(v) A legal heir or a representative of the deceased consumer.


5. What kind of cases can be filed in a State Commission?

Ans: It consists of a president and two other members. The president must be retired or working judge of high court. The complaints of the goods worth more than Rs 20 lakhs and less than Rs 1 crore can be filed in state commission on receiving complain the state commission contacts the party against whom the complaints is filed.


6. Explain the role of consumer organisations and NGOs in protecting and promoting consumers' interests.

Ans: Consumer organisations and NGOs play an important role in protecting and promoting consumers' interests. Some of the important NGOs and consumer organisations include Consumer Coordination Council, Common Cause, Consumer Protection Council, Consumers' Association, Mumbai Grahak Panchayat, etc. The following are the functions performed by these organisations in regard of safeguarding the interest of the consumers.

1. Bringing out brochures, journals etc.

2. Spreading consumer awareness.

3. Collecting data of different products and testing them.

4. Arrange seminar, conferences for the purpose of focusing on the problems of consumers.

5. Filing suits or complaints on behalf of customers.

6. Educating the consumers to help themselves.

7. Running voluntary complaint counters for consumer guidance and counselling.

8. Educating women regarding consumerism.            

9. Motivating people to ask for quality marks such as ISI mark, Agmark etc.

Long Answer Type:

1. Explain the rights and responsibilities of a consumer.

Ans: The Consumer Protection Act enlists six rights for a consumer. The following are the rights of a consumer.

(a) Right to Safety: Every consumer has the right to be safeguarded against those goods and services that are hazardous to life, health and property. For example, manufacturing defects in electrical appliances, cooking gas cylinders can be injurious. The consumer has the right to be protected against such products.

(b) Right to be Informed: According to this, the consumer has the right to be informed of the quality, quantity, price, ingredients, weight, etc. of the goods and services. In India, it is legally mandatory for the manufactures to provide all such information on the package and the label of the goods. This enables the consumer to make a wise choice.

(c) Right to Choose: A consumer has the right to choose from a variety of goods and services at competitive prices as per his wishes. That is, the consumer has the right to have access to a variety of products at fair and competitive price. Thus, the retailer or the supplier should offer a variety of products in terms of quality, brand, price, etc. They should not induce the consumers towards the purchase of a particular product or service.

(d) Right to be Heard: In case of any grievance or dissatisfaction, a consumer has the right to file a complaint. A consumer can file a legal complaint and seek redressal against any form of exploitation in appropriate forums established by the government. Nowadays, many consumer organisations and associations also work in this direction.

(e) Right to Seek Redressal: A consumer has the right to seek redressal and compensation in case of any exploitation. The Consumer Protection Act provides for compensation in the form of replacement of product, cash compensation, repair/removal of defects, etc.

(f) Right to Consumer Education: A consumer has the right to be educated and aware of his rights and the available remedies in case of exploitation. Many government and non-government organisation work actively in this regard.

In addition to the rights, a consumer has some responsibilities to safeguard himself from exploitation. The following are some of the responsibilities of a consumer.

(i) Awareness: A consumer should be well aware of the availability of various goods and services. This enables him to make an informed and wise choice.

(ii) Looking for Quality Marks: A consumer must always look for the quality certification marks before the purchase of goods such as ISI in case of electrical goods, AGMARK in case of agricultural goods, etc.

(iii) Asking for Cash Memo: A consumer should always ask for cash memo or bills for the goods and services purchased. The bill acts a proof of purchase and can be used for future references in case of a complaint.

(iv) Reading Labels: Labels on goods provide information regarding price, weight, expiry date of the product. The consumer must read these labels carefully before purchasing the goods.

(v) Honest Transactions: A consumer must always choose legal dealings and discourage illegal trade practices such as black marketing and hoarding.

(vi) Ensure Safety: A consumer must carefully read the manuals and instructions provided by the manufacturer so as to ensure safe use of the product. For example, instructions provided on the electrical appliances must be carefully read before using them.