case study on consumer rights in india

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 for defective goods 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.

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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

Surjeet lal chhabda vs. commissioner of income tax, bombay , mahammad ali vs. dinesh chandra roy choudhury (1940)  , section 28 of trade marks act, 1999 .

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

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

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Cheated as a Consumer? 8 Important Consumer Court Judgements You Should Know About

From Supriyo Ranjan Mahapatra's complaint against Amazon for a cancelled order to Dinesh Prasad Raturi's legal action against Bata India for bag charges, here are 8 cases that highlight the importance of consumer rights and awareness. #WorldConsumerRightsDay

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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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E-Commerce and Consumer Protection in India: The Emerging Trend

• Original Paper
• Published: 09 July 2021
• Volume 180 , pages 581–604, ( 2022 )

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• Neelam Chawla   ORCID: orcid.org/0000-0003-2161-1102 1 &
• Basanta Kumar   ORCID: orcid.org/0000-0003-3339-7481 2  

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Given the rapid growth and emerging trend of e-commerce have changed consumer preferences to buy online, this study analyzes the current Indian legal framework that protects online consumers ’  interests. A thorough analysis of the two newly enacted laws, i.e., the Consumer Protection Act, 2019 and Consumer Protection (E-commerce) Rules, 2020 and literature review support analysis of 290 online consumers answering the research questions and achieving research objectives. The significant findings are that a secure and reliable system is essential for e-business firms to work successfully; cash on delivery is the priority option for online shopping; website information and effective customer care services build a customer's trust. The new regulations are arguably strong enough to protect and safeguard online consumers' rights and boost India’s e-commerce growth. Besides factors such as s ecurity, privacy, warranty, customer service, and website information, laws governing  consumer rights protection in e-commerce influence customers’ trust. Growing e-commerce looks promising with a robust legal framework and consumer protection measures. The findings contribute to the body of knowledge on e-commerce and consumer rights protection by elucidating the key factors that affect customer trust and loyalty and offering an informative perspective on e-consumer protection in the Indian context with broader implications.

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Study Background

The study context, which discusses two key aspects, namely the rationale for consumer protection in e-commerce and its growth, is presented hereunder:

The Rationale for Consumer Protection in E-commerce

Consumer protection is a burning issue in e-commerce throughout the globe. E-Commerce refers to a mechanism that mediates transactions to sell goods and services through electronic exchange. E-commerce increases productivity and widens choice through cost savings, competitiveness and a better production process organisation Footnote 1 (Vancauteren et al., 2011 ). According to the guidelines-1999 of the Organisation for Economic Cooperation and Development (OECD), e-commerce is online business activities-both communications, including advertising and marketing, and transactions comprising ordering, invoicing and payments (OECD, 2000 ). OCED-1999 guidelines recognised, among others, three essential dimensions of consumer protection in e-commerce. All consumers need to have access to e-commerce. Second, to build consumer trust/confidence in e-commerce, the continued development of transparent and effective consumer protection mechanisms is required to check fraudulent, misleading, and unfair practices online. Third, all stakeholders-government, businesses, consumers, and their representatives- must pay close attention to creating effective redress systems. These guidelines are primarily for cross-border transactions (OECD, 2000 ).

Considering the technological advances, internet penetration, massive use of smartphones and social media penetration led e-commerce growth, the OECD revised its 1999 recommendations for consumer protection in 2016. The 2016-guidelines aim to address the growing challenges of e-consumers’ protection by stimulating innovation and competition, including non-monetary transactions, digital content products, consumers-to-consumers (C2C) transactions, mobile devices, privacy and security risks, payment protection and product safety. Furthermore, it emphasises the importance of consumer protection authorities in ensuring their ability to protect e-commerce consumers and cooperate in cross-border matters (OECD, 2016 ). The United Nations Conference on Trade and Development (UNCTAD), in its notes-2017, also recognises similar consumer protection challenges in e-commerce. The notes look into policy measures covering relevant laws and their enforcement, consumer education, fair business practices and international cooperation to build consumer trust (UNCTAD, 2017 ).

E-commerce takes either the domestic (intra-border) route or cross-border (International) transactions. Invariably, six e-commerce models, i.e. Business-to-Consumer (B2C), Business-to-Business (B2B), Consumer-to-Business (C2B), Consumer-to-Consumer (C2C), Business-to-Administration (B2A) and Consumer-to-Administration (C2A) operate across countries (UNESAP and ADB, 2019 ; Kumar & Chandrasekar, 2016 ). Irrespective of the model, the consumer is the King in the marketplace and needs to protect his interest. However, the focus of this paper is the major e-commerce activities covering B2B and B2C.

The OECD and UNCTAD are two global consumer protection agencies that promote healthy and competitive international trade. Founded in 1960, Consumer International Footnote 2 (CI) is a group of around 250 consumer organisations in over 100 countries representing and defending consumer rights in international policy forums and the global marketplace. The other leading international agencies promoting healthy competition in national and international trade are European Consumer Cooperation Network, ECC-Net (European Consumer Center Network), APEC Electronic Consumer Directing Group (APECSG), Iberoamerikanische Forum der Konsumer Protection Agenturen (FIAGC), International Consumer Protection and Enforcement Agencies (Durovic, 2020 ).

ICPEN, in the new form, started functioning in 2002 and is now a global membership organisation of consumer protection authorities from 64 countries, including India joining in 2019 and six observing authorities (COMESA, EU, GPEN, FIAGC, OECD and UNCTAD). While it addresses coordination and cooperation on consumer protection enforcement issues, disseminates information on consumer protection trends and shares best practices on consumer protection laws, it does not regulate financial services or product safety. Through econsumer.gov Footnote 3 enduring initiative, ICPEN, in association with the Federal Trade Commission (FTC), redresses international online fraud. Footnote 4 Econsumer.gov, a collaboration of consumer protection agencies from 41 countries around the world, investigates the following types of international online fraud:

Online shopping/internet services/computer equipment

Credit and debit

Telemarketing & spam

Jobs & making money

Imposters scam: family, friend, government, business or romance

Lottery or sweepstake or prize scams

Travel & vacations

Phones/mobile devices & phone services

Something else

Online criminals target personal and financial information. Online trading issues involve scammers targeting customers who buy/sell/trade online. Table 1 on online cross-border complaints of fraud reported by econsumer.gov reveals that international scams are rising. Total cross-border fraud during 2020 (till 30 June) was 33,968 with a reported loss of US$91.95 million as against 40,432 cases with a loss of US$ 151.3 million and 14,797 complaints with the loss of US$40.83 million 5 years back. Among others, these complaints included online shopping fraud, misrepresented products, products that did not arrive, and refund issues. Figure  1 shows that the United States ranked first among the ten countries where consumers lodged online fraud complaints based on consumer and business locations. India was the third country next to France for online fraud reporting in consumer locations, while it was the fifth nation for company location-based reporting. Besides the USA and India, Poland, Australia, the United Kingdom, Canada, Turkey, Spain, and Mexico reported many consumer complaints. Companies in China, the United Kingdom, France, Hong Kong, Spain, Canada, Poland and Turkey received the most complaints. The trend is a serious global concern, with a magnitude of reported loss of above 60%.

Source: Data compiled from https://public.tableau.com/profile/federal.trade.commission#!/vizhome/eConsumer/Infographic , Accessed 7 October 2020

Online shopping-top consumer locations and company locations.

The international scenario and views on consumer protection in e-commerce provide impetus to discuss consumer protection in e-business in a regional context-India. The reason for this is that India has become a leading country for online consumer fraud, putting a spotlight on electronic governance systems-which may have an impact on India's ease of doing business ranking. However, to check fraud and ensure consumer protection in e-commerce, the government has replaced the earlier Consumer Protection Act, 1986, with the new Act-2019 and E-Commerce Rule-2020 is in place now.

E-commerce Growth

E-commerce has been booming since the advent of the worldwide web (internet) in 1991, but its root is traced back to the Berlin Blockade for ordering and airlifting goods via telex between 24 June 1948 and 12 May 1949. Since then, new technological developments, improvements in internet connectivity, and widespread consumer and business adoption, e-commerce has helped countless companies grow. The first e-commerce transaction took place with the Boston Computer Exchange that launched its first e-commerce platform way back in 1982 (Azamat et al., 2011 ; Boateng et al., 2008 ). E-commerce growth potential is directly associated with internet penetration (Nielsen, 2018 ). The increase in the worldwide use of mobile devices/smartphones has primarily led to the growth of e-commerce. With mobile devices, individuals are more versatile and passive in buying and selling over the internet (Harrisson et al., 2017 ; Išoraitė & Miniotienė, 2018 ; Milan et al., ( 2020 ); Nielsen, 2018 ; Singh, 2019 ; UNCTAD, 2019a , 2019b ). The growth of the millennial digital-savvy workforce, mobile ubiquity and continuous optimisation of e-commerce technology is pressing the hand and speed of the historically slow-moving B2B market. The nearly US$1 Billion B2B e-commerce industry is about to hit the perfect storm that is driving the growth of B2C businesses (Harrisson et al., 2017 ). Now, e-commerce has reshaped the global retail market (Nielsen, 2019 ). The observation is that e-commerce is vibrant and an ever-expanding business model; its future is even more competitive than ever, with the increasing purchasing power of global buyers, the proliferation of social media users, and the increasingly advancing infrastructure and technology (McKinsey Global Institute, 2019 ; UNCTAD, 2019a , 2019b ).

The analysis of the growth trend in e-commerce, especially since 2015, explains that online consumers continue to place a premium on both flexibility and scope of shopping online. With the convenience of buying and returning items locally, online retailers will increase their footprint (Harrisson et al., 2017 ). Today, e-commerce is growing across countries with a compound annual growth rate (CAGR) of 15% between 2014 and 2020; it is likely to grow at 25% between 2020 and 2025. Further analysis of e-commerce business reveals that internet penetration will be nearly 60% of the population in 2020, and Smartphone penetration has reached almost 42%. Among the users, 31% are in the age group of 25–34 years old, followed by 24% among the 35–44 years bracket and 22% in 18–24 years. Such a vast infrastructure and networking have ensured over 70% of the global e-commerce activities in the Asia–Pacific region. While China alone accounts for US$740 billion, the USA accounts for over US$$560 billion (Kerick, 2019 ). A review of global shoppers making online purchases (Fig.  2 ) shows that consumers look beyond their borders-cross-border purchases in all regions. While 90% of consumers visited an online retail site by July 2020, 74% purchased a product online, and 52% used a mobile device.

Source: Data compiled from https://datareportal.com/global-dig ital-overview#: ~ :text = There%20are%205.15%20billion%20unique,of%202.4%20percent%20per%20 year and , Accessed 12 October 2020

Global e-commerce activities and overseas online purchase.

The e-commerce uprising in Asia and the Pacific presents vast economic potential. The region holds the largest share of the B2C e-commerce market (UNCTAD, 2017 ). The size of e-commerce relative to the gross domestic product was 4.5% in the region by 2015. E-commerce enables small and medium-sized enterprises to reach global markets and compete on an international scale. It has improved economic efficiency and created many new jobs in developing economies and least developed countries, offering them a chance to narrow development gaps and increase inclusiveness—whether demographic, economic, geographic, cultural, or linguistic. It also helps narrow the rural–urban divide.

Nevertheless, Asia’s e-commerce market remains highly heterogeneous. In terms of e-commerce readiness—based on the UNCTAD e-commerce index 2017, the Republic of Korea ranks fifth globally (score 95.5) while Afghanistan, with 17 points, ranks 132 (UNCTAD, 2017 ). According to a joint study (2018) by the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) and Asian Development Bank (ADB), Asia is the fastest-growing region in the global e-commerce marketplace. The region accounted for the largest share of the world’s business-to-consumer e-commerce market (UNESCAP and ADB, 2019). World Retail Congress (2019) brought out the Global E-Commerce Market Ranking 2019 assessing the top 30 ranking e-commerce markets on various parameters-USA, UK, China, Japan and Germany were the first top countries. India figured at 15 with a CAGR of 19.8% between 2018 and 2022. The report suggests that companies need to enhance every aspect of online buying, focusing on localised payment mode and duty-free return. Footnote 5 The observation of this trend implies online consumers’ safety and security.

Figure  3 explains that global cross-border e-commerce (B2C) shopping is growing significantly and is estimated to cross US$1 Trillion in 2020. Adobe Digital Economic Index Survey-2020 Footnote 6 in March 2020 reported that a remarkable fact to note is about steadily accelerated growth in global e-commerce because of COVID-19. While virus protection-related goods increased by 807%, toilet paper spiked by 231%. Online consumers worldwide prefer the eWallet payment system. The survey also revealed an exciting constellation that COVID-19 is further pushing overall online inflation down.

Source: Authors’ compilation from https://www.invespcro.com/blog/cross-border-shopping/ , Accessed on 15 October 2020

Global cross-border e-commerce (B2C) market. *Estimated to cross US$ 1 Trillion in 2020.

According to UNCTD’s B2C E-Commerce Index 2019 survey measuring an economy’s preparedness to support online shopping, India ranks 73rd with 57 index values, seven times better than the 80th rank index report 2018 (UNCTAD, 2019a , 2019b ). The E-commerce industry has emerged as a front-runner in the Indian economy with an internet penetration rate of about 50% now, nearly 37% of smartphone internet users, launching the 4G network, internet content in the local language, and increasing consumer wealth. Massive infrastructure and policy support propelled the e-commerce industry to reach US$ 64 billion in 2020, up by 39% from 2017 and will touch US$ 200 by 2026 with a CAGR of 21%. Footnote 7 Now, India envisions a five trillion dollar economy Footnote 8 by 2024. It would be difficult with the present growth rate, but not impossible, pushing for robust e-governance and a digitally empowered society. The proliferation of smartphones, growing internet access and booming digital payments and policy reforms are accelerating the growth of the e-commerce sector vis-a-vis the economy.

Analysis of different studies on the growth of e-commerce in India shows that while retail spending has grown by a CAGR of 22.52% during 2015–2020, online buyers have climbed by a CAGR of 35.44% during the same period (Fig.  4 ). The government’s Digital India drive beginning 1 July 2015-surge using mobile wallets like Paytm, Ola Money, Mobiwik, BHIM etc., and the declaration of demonetisation on 9 November 2016 appears to be the prime reasons for such a vast growth in the country’s e-commerce industry. The Times of India (2020 October 12), a daily leading Indian newspaper, reported that India's increase in digital payments was at a CAGR of 55.1% from March 2016 to March 2020, jumping from US$ 73,90 million to 470.40, reflecting the country's positive policy environment and preparedness for the digital economy. The government's policy objective is to promote a safe, secure, sound and efficient payment system; hence, the Reserve Bank of India (RBI), the national financial and fiscal regulating authority, attempts to ensure security and increase customer trust in digital payments (RBI, 2020 ).

Source: Data compiled from https://www.ibef.org/news/vision-of-a-new-india-US$-5-trillion-economy , http://www.ficci.in/ficci-in-news-page.asp?nid=19630 , https://www.pwc.in/research-insights/2018/propelling-india-towards-global-leadership-in-e-commerce.html , https://www.forrester.com/data/forecastview/reports# , Accessed 12 October 2020

E-Commerce growth in India during 2015–2020.

The massive growth of e-commerce in countries worldwide, especially in India, has prompted an examination of the legal structure regulating online consumer protection.

Literature Review and Research Gap

Theoretical framework.

Generally speaking, customers, as treated inferior to their contracting partners, need protection (Daniel, 2005 ). Therefore, due to low bargaining power, it is agreed that their interests need to be secured. The ‘inequality of negotiating power’ theory emphasises the consumer's economically weaker status than suppliers (Haupt, 2003 ; Liyang, 2019 ; Porter, 1979 ). The ‘inequality in bargaining power’ principle emphasises the customer's economically inferior position to suppliers (Haupt, 2003 ). The ‘exploitation theory’ also supports a similar view to the ‘weaker party’ argument. According to this theory, for two reasons, consumers need protection: first, consumers have little choice but to buy and contract on the terms set by increasingly large and powerful businesses; second, companies can manipulate significant discrepancies in knowledge and complexity in their favour (Cockshott & Dieterich, 2011 ). However, a researcher such as Ruhl ( 2011 ) believed that this conventional theoretical claim about defining the customer as the weaker party is no longer valid in modern times. The logic was that the exploitation theory did not take into account competition between firms. Through competition from other businesses, any negotiating power that companies have vis-a-vis clients is minimal. The study, therefore, considers that the ‘economic theory’ is the suitable theoretical rationale for consumer protection today.

The principle of ‘economic philosophy’ focuses primarily on promoting economic productivity and preserving wealth as a benefit (Siciliani et al., 2019 ). As such, the contract law had to change a great deal to deal with modern-age consumer transactions where there is no delay between agreement and outcomes (McCoubrey  & White, 1999 ). Thus, the ‘economic theory’ justifies the flow of goods and services through electronic transactions since online markets' versatility and rewards are greater than those of face-to-face transactions. The further argument suggests that a robust consumer protection framework can provide an impetus for the growth of reliability and trust in electronic commerce. The ‘incentive theory’ works based on that argument to describe consumer protection in electronic transactions (McCoubrey & White, 1999 ).

Online shopping needs greater trust than purchasing offline (Nielsen, 2018 ). From the viewpoint of ‘behavioural economics, trust (faith/confidence) has long been considered a trigger for buyer–seller transactions that can provide high standards of fulfilling trade relationships for customers (Pavlou, 2003 ). Pavlou ( 2003 ) supports the logical reasoning of Lee and Turban ( 2001 ) that the role of trust is of fundamental importance in adequately capturing e-commerce customer behaviour. The study by O'Hara ( 2005 ) also suggests a relationship between law and trust (belief/faith), referred to as ‘safety net evaluation’, suggesting that law may play a role in building trust between two parties. However, with cross-border transactions, the constraint of establishing adequate online trust increases, especially if one of the parties to the transaction comes from another jurisdiction with a high incidence of counterfeits or a weak rule of law (Loannis et al., 2019 ). Thus, the law promotes the parties' ability to enter into a contractual obligation to the extent that it works to reduce a contractual relationship's insecurity. The present research uses the idea of trust (faith/belief/confidence) as another theoretical context in line with ‘behavioural economics’.

As a focal point in e-commerce, trust refers to a party's ability to be vulnerable to another party's actions; the trustor, with its involvement in networking, sees trust in the form of risk-taking activity (Mayer et al., 1995 ; Helge et al.,  2020 ). Lack of confidence could result in weak contracts, expensive legal protections, sales loss and business failure. Therefore, trust plays a crucial role in serving customers transcend the perceived risk of doing business online and in helping them become susceptible, actual or imaginary, to those inherent e-business risks. While mutual benefit is usually the reason behind a dealing/transaction, trust is the insurance or chance that the customer can receive that profit (Cazier, 2007 ). The level of trust can be low or high. Low risk-taking behaviour leads to lower trustor engagement, whereas high risk-taking participation leads to higher trustor engagement (Helge et al.,  2020 ). The theory of trust propounded by (Mayer et al., 1995 ) suggests that trust formation depends on three components, viz. ability, benevolence, and integrity (ABI model). From the analysis of the previous studies (Mayer et al., 1995 ; Cazier, 2007 ; Helge et al.,  2020 ), the following dimensions of the ABI model emerge:

Precisely, ability, benevolence and integrity have a direct influence on the trust of e-commerce customers.

Gaining the trust of consumers and developing a relationship has become more challenging for e-businesses. The primary reasons are weak online security, lack of effectiveness of the electronic payment system, lack of effective marketing program, delay in delivery, low quality of goods and services, and ineffective return policy (Kamari  & Kamari, 2012 ; Mangiaracina & Perego, 2009 ). These weaknesses adversely impact business operations profoundly later. Among the challenges that are the reasons for the distrust of customers and downsides of e-commerce is that the online payment mechanism is widely insecure. The lack of trust in electronic payment is the one that impacts negatively on the e-commerce industry, and this issue is still prevalent (Mangiaracina  & Perego, 2009 ). The revelation of a recent study (Orendorff, 2019 ) and survey results Footnote 9 on trust-building, particularly about the method of payment, preferred language and data protection, is fascinating. The mode of payment is another matter of trust-building. Today’s customers wish to shop in their local currency seamlessly. In an online shoppers’ survey of 30,000 respondents in 2019, about 92% of customers preferred to purchase in their local currency, and 33% abandoned a buy if pricing was listed in US$ only (Orendorff, 2019 ). Airbnb, an online accommodation booking e-business that began operations in 2009, has expanded and spread its wings globally as of September 2020-over 220 countries and 100 k + cities serving 7 + billion customers (guests) with local currency payment options. Footnote 10

Common Sense Advisory Survey Footnote 11 -Nov. 2019-Feb. 2020 with 8709 online shoppers (B2C) in 29 countries, reported that 75% of them preferred to purchase products if the information was in their native language. About 60% confirmed that they rarely/never bought from an English-only website because they can’t read. Similarly, its survey of 956 business people (B2B) moved in a similar direction. Whether it is B2B or B2C customers, they wanted to go beyond Google translator-this is about language being a front-line issue making or breaking global sales. Leading Indian e-commerce companies like Amazon Footnote 12 and Flipkart Footnote 13 have started capturing the subsequent 100 million users by providing text and voice-based consumer support in vernacular languages. These observations suggest trust in information that the customers can rely upon for a successful transaction.

Data protection is probably the most severe risk of e-commerce. The marketplaces witness so many violations that it often seems that everyone gets hacked, which makes it a real challenge to guarantee that your store is safe and secure. For e-commerce firms, preserving the data is a considerable expense; it points a finger to maintaining the safety and security of the e-commerce consumers’ data privacy in compliance with General Data Protection Regulations (GDPR) across countries. Footnote 14

PwC’s Global Consumer Insight Survey 2020 reports that while customers’ buying habits would become more volatile post-COVID 19, consumers’ experience requires safety, accessibility, and digital engagement would be robust and diversified. Footnote 15 The report reveals that the COVID-19 outbreak pushed the popularity of mobile shopping. Online grocery shopping (including phone use) has increased by nearly 63% post-COVID than before social distancing execution and is likely to increase to 86% until its removal. Knowing the speed of market change will place companies in a position to handle the disruption-74% of the work is from home, at least for the time being. Again, the trend applies to consumers’ and businesses’ confidence/trust-building. The safety and security of customers or consumer protection are of paramount importance.

Given the rationale above, the doctrine of low bargaining power, exploitation theory and the economic approach provides the theoretical justification for consumer protection. Economic theory also justifies electronic transactions and e-commerce operations as instruments for optimising income. The trust theory based on behavioural economic conception also builds up the relationship between the law and customer trust and thus increases confidence in the online market. These premises form the basis for this research.

Need and Instruments for Online Consumer Protection

The law of the land guides people and the living society. Prevailing rules and regulations, when followed, provide peace of mind and security in all spheres, including business activities (Bolton et al., 2004 ). Previous research by Young & Wilkinson ( 1989 ) suggested that those who have more legally strict contracts face more legal problems in contrast to trust-related issues (Young & Wilkinson, 1989 ). Time has changed; people going for online transactions go with the legal framework and feel safe and secured (Bolton et al., 2004 ). An online agreement is a valid contract. Most UNCTAD member countries, including India, have adopted various laws concerning e-governance/e-business/e-society, such as e-transaction laws, consumer protection laws, cyber-crime laws, and data privacy and protection laws. The trend indicates that the law is vital in establishing trust in online transactions.

A review of literature on e-commerce and consumer protection suggests that over the years, consumer protection in e-commerce has received significant attention, particularly from the regulatory authorities-government agencies, trade associations and other associated actors (Belwal et al., 2020 ; Cortés, 2010 ; Dhanya, 2015 ; Emma et al., 2017 ; Ibidapo-Obe, 2011 ; ITU, 2018 ; Jaipuriar et al., 2020 ; Rothchild, 1999 ; Saif, 2018 ). The OECD ( 2016 ), UNCTAD ( 2017 ), and World Economic Forum ( 2019 ) guidelines on e-commerce have facilitated countries to have regulations/laws to provide online customers with data privacy, safe transaction and build trust. Table 2 explains policy guidelines on consumer protection based on a summary of online consumer challenges and possible remedies at different purchases stages.

Research Issue and Objective

The research gap identification involves reviewing the literature on various aspects of e-commerce and consumer rights protection issues spanning two decades. An objective review of 36 highly rated (Scopus/Web Services/ABDC Ranking or the like) e-commerce related publications from over 100 articles published in the last 20 years (2000–2020) suggests that the vast majority of earlier studies in this field have been conceptual/theoretical and generic. Regarding the legal framework of e-commerce and consumers’ rights protection, six current papers exclusively in the Indian context were available for analysis and review. The observations are that while the focus on consumer privacy and rights protection concerns is too general, the legal framework's scrutiny has limited its scope. A review of selected studies on trust and consumer rights protection in e-commerce, as shown in Table 3 , reveals that application aspects, particularly legal issues, are lacking. Indian experience in e-commerce consumer rights protection through jurisprudence is nascent. Review studies show the research of a combination of management and law-related analysis in e-commerce and consumer rights protection is lacking. This scenario showed a gap in exploring a more comprehensive research opportunity in the Indian context.

While e-commerce and electronic transactions have evolved as a global trend, it is noteworthy that Indian customers are still reluctant to place complete confidence and trust in commercial online transactions. Compared to conventional offline customers, online customers face greater risk in cyberspace because they negotiate with unknown vendors and suppliers. Footnote 16 The common issues Footnote 17 related to e-commerce are data privacy and security, product quality, uncertain delivery, no/low scope of replacement, the jurisdiction of filing complaints, and inconceivable terms and conditions (Lahiri, 2018 ). “Country of origin” of the product is a significant issue in e-commerce, particularly in cross-border transactions (Bhattacharya et al., 2020 ). The inadequacy of the Consumer Protection Act, 1986 and other associated laws has surged the insecurity and lack of trust among online customers. The significance of digital payments pursued by the Government of India's essential demonetisation policy-2016 has pushed for online transaction security and consumer protection in e-commerce activities. Therefore, the Consumer Protection Act, 2019 Footnote 18 replaced the Consumer Protection Act 1986 and became effective with effect from 20 July 2020, Footnote 19 while on 7 July 2020, the Consumer Protection (E-commerce) Rules, 2020 Footnote 20 came into force to address the e-commerce challenges. Nevertheless, it was evident that to attract additional investment and to engage with the global market, India, as an emerging country, had to gain the confidence of e-consumers.

These two legislations primarily govern domestic e-commerce businesses. Therefore, the research focuses on these two legal infrastructure strands-new laws enacted during 2019 and 2020 and discusses their implications for online consumer security to increase customers' interest and trust in India's electronic transactions. Like the  ABI model , the study also examines the factors influencing e-commerce customers' confidence in the present research context.

Methodology

The research initially depended on the rigorous review of the consumer protection guidelines released from time to time by various bodies, such as the OECD and UNCATD, accompanied by an analysis of the Indian consumer protection legal structure. The Indian Consumer Protection Act, 2019 and the Consumer Protection (E-commerce) Rules, 2020 were the review and analysis subjects. The study used e-commerce driver data collected from secondary sources-published material; the survey reported e-commerce growth and trends and consumer protection and conducted an online survey of 432 online consumers during August and September 2020.

Analysing the arguments of Zikmund ( 2000 ), Bryman ( 2004 ), Saumure & Given ( 2008 ), Bill et al., ( 2010 ) and Bornstein et al. ( 2013 ) about the representative of convenience sampling and bias, we consider it is similar to that of the population, and there is no harm with due care. Regarding inherent bias in convenience sampling, data collection from different sources with different respondents’ inclusion provides more data variability and considerably reduces prejudice (Sousa et al., 2004 ; Edgar and Manz, 2017 ). Therefore, the respondents included in the research were students, professors, advocates, doctors, professionals, and homemakers, avoiding excluding family, relatives and friends to ensure bias-free. Their contact details sources were various channels, including public institution websites, social networking sites, and the authors’ email box. Assuming that more respondents feel fun filling out online questionnaires and providing truthful answers (Chen & Barnes, 2007 ; Saunders et al.,  2007 ), the study used an online survey. Furthermore, because people in the digital age are more computer/smartphone savvy, they are more likely to follow a similar trend. Besides, such a technique was convenient during the COVID-19 pandemic condition because of its timeliness, inexpensive methods, ease of research, low cost (no support for this research), readily available, and fewer rules to follow. The respondents' contact details sources were various channels, including public institution websites, social networking sites, and the authors' email box.

The study used a structured questionnaire comprising seven questions with sub-questions except the 7th one being open-ended, consuming about 8–10 min, designed based on the insights gained from responding to customer surveys of different e-commerce companies last year. Pretesting the questionnaire with 17 responses from the target group supported modifying the final questionnaire partially. The first four questions were background questions-gender, age, respondent's attitude towards internet purchasing. Question number five with sub-questions, being the focused question, provided the answer to some trust-building factors found in the literature review. Following previous research (McKnight et al.,  2002 ; Corbit et al.,  2003 ; Pavlou,  2003 ) tested the Likert-scale, this question's solicited response relied on a five-point Likert-rating scale (1 = Not important at all, 2 = Less important, 3 = Somewhat important, 4 = Important, 5 = Very important). The query six asked was about the consumer protection issues in e-commerce/online transaction-scam/fraud and grievance settlement. The final question seven was open-ended for any remark the respondent wanted to make. The questionnaire was reliable on a reasonable basis with greater internal consistency on overall internal reliability (Cronbach's alpha = 0.829) at a 1% level of significance. The Zoho Survey technique was used to solicit required information. The response rate was 76% (327) of the total emails sent (432). The retained responses were 290, i.e. 88.69% of the replies received, completed in all respects and satisfying the research requirement. The research applied statistical instruments like percentage, weighted mean and multiple regression analysis using SPSS-26 for analysis and interpretation.

Figure  5 highlights the research framework and process.

Research framework and process

Deficiency in Act, 1986 and Key Feature of the New Act Governing E-Commerce Consumer Protection

The rapid development of e-commerce has led to new delivery systems for goods and services and has provided new opportunities for consumers. Simultaneously, this has also exposed the consumer vulnerable to new forms of unfair trade and unethical business. The old Act, 1986, has severe limitations regarding its applicability and adjudication processes in consumer rights protection in e-commerce. The new Act, 2020 brings fundamental changes regarding its scope of application, penalty and governance; and envisages CCPA and vests regulating and controlling powers. Table 4 explains the comparative picture between the old Act, 1986 and the new Act, 2019.

The Act, 2019 applies to buying or selling goods or services over the digital or electronic network, including digital products [s.2 (16)] and to a person who provides technologies enabling a product seller to engage in advertising/selling goods/services to a consumer. The Act also covers online market places or online auction sites [s.2 (17)].

Necessary definition/explanation connected to e-commerce provided by the Act are:

Consumer: Meaning

If a person buys any goods and hires or avails any service online through electronic means, the person would be a consumer of the Act [Explanation b to s.2 (7)].

Product Seller: Electronic Service Providers

The electronic service providers are the product sellers under the Act and have the same duties, responsibilities, and liabilities as a product seller [s.2 (37)].

Unfair Trade Practice: Disclosing Personal Information

Unfair trade practice under the Act [s.2 (47) (ix)] refers to electronic service providers disclosing to another person any personal information given in confidence by the consumer.

Authorities: Central Consumer Protection Authority (CCPA)

The Act, 2019 provides, in addition to the existing three-tier grievance redress structure, the establishment of the Central Consumer Protection Authority [CCPA] [s.10 & 18] to provide regulatory, investigative or adjudicatory services to protect consumers’ rights. The CCPA has the powers to regulate/inquire/investigate into consumer rights violations and/unfair trade practice  suo motu  or on a complaint received from an aggrieved consumer or on a directive from the government. The specific actions it can take include:

Execute inquiries into infringements of customer rights and initiate lawsuits.

Order for the recall of dangerous/hazardous/unsafe products and services.

Order the suspension of unethical commercial practises and false ads.

Impose fines on suppliers or endorsers or publishers of false advertising.

The power of CCPA is categorical regarding dangerous/hazardous/unsafe goods and false/misleading advertisements. The CCPA has the authority to impose a fine ranging from Rs 100 k to Rs 5 million and/imprisonment up to life term for the violators depending on the type of offences committed by them (Table 5 ).

Redress Mechanism

The provisions laid down in Sect. 28 through Sect. 73 deal with various aspects of the consumer dispute redress system. The new Act has changed the District Consumer Dispute Redressal Forum terminology to the District Consumer Dispute Redressal Commission. The pecuniary jurisdiction of filling complaints in the three-tier consumer courts at the District, State and National level has increased (Table 5 ). For better understanding, Fig.  6 shows a diagrammatic picture of the judicial system of dispute settlement.

Grievance redress mechanism

The Act, 2019 provides a dispute settlement mechanism through the mediation process in case of compromise at the acceptance point of the complaint or some future date on mutual consent (Sec 37). A mediation cell would operate in each city, state, national commission, and regional bench to expedite redress. Section 74 through 81 of the Act lays down the detailed procedure. Section 81(1) maintains that no appeal lies against the order passed by Mediation, implying that the redress process at the initial stage would be speedy, impacting both the consumers and service providers.

Consumer Protection (E-Commerce) Rules, 2020

The Consumer Protection (E-Commerce) Rules, 2020, notified under the Consumer Protection Act, 2019 on 23 July 2020, aims to prevent unfair trade practices and protect consumers' interests and rights in e-commerce.

Applicability (Rule 2)

The Rules apply to:

Both products and services acquired or sold through automated or electronic networks;

All models of e-commerce retail;

All the e-commerce entities, whether they have inventory or market place model. The inventory-based model includes an inventory of goods and services owned by an e-commerce entity and directly sold to consumers [Rule 3(1) f]. In the marketplace model, an e-commerce entity has an information infrastructure platform on a digital and electronic network that facilitates the consumer and the seller. [Rule 3(1)g];

All aspects of unfair trading practise in all models of e-commerce; and

An e-commerce entity is offering goods or services to consumers in India but not established in India.

General Duties of E-commerce Entities (Rule 4)

The duties of e-commerce entities are:

An e-commerce entity must be a company incorporated under the Companies Act.

Entities must appoint a point of contact to ensure compliance with the Act.

They have to establish an adequate grievance redress mechanism; they would appoint a grievance officer for this purpose and display his name, contact details, and designation of their platform. He would acknowledge the complaint's receipt within 48 h and resolve the complaint within a month from receipt of the complaint.

If they are offering imported goods, the importers’ names and details from whom the imported goods are purchased, and the sellers’ names are to be mentioned on the platform.

They cannot impose cancellation charges on consumers unless they bear similar costs.

They have to affect all payments towards accepted refund requests of the consumers within a reasonable period.

They cannot manipulate the goods' prices to gain unreasonable profit by imposing unjustified costs and discriminating against the same class of consumers.

Liabilities of Marketplace E-commerce Entities (Rule 5)

The liabilities of marketplace e-commerce entities include the following:

The marketplace e-commerce entity would require sellers to ensure that information about goods on their platform is accurate and corresponds with the appearance, nature, quality, purpose of goods.

They would display the following information prominently to its users at the appropriate place on its platform:

Details about the sellers offering goods-principal geographic address of its headquarters and all branches and name and details of its website for effective dispute resolution.

Separate ticket/docket/complaint number for each complaint lodged through which the user can monitor the status of the complaint.

Information about return/refund/exchange, warranty and guarantee, delivery and shipment, payment modes and dispute/grievance redress mechanism.

Information on the methods of payment available, the protection of such forms of payment, any fees or charges payable by users.

They would make reasonable efforts to maintain a record of relevant information allowing for the identification of all sellers who have repeatedly offered goods that were previously removed under the Copyright Act/Trademarks Act/Information Technology Act.

Sellers’ Duties on the Marketplace (Rule 6)

The duties of sellers on the market encompass:

The seller would not adopt any unfair trade practice while offering goods.

He should not falsely represent himself as a consumer and post-product review or misrepresent any products' essence or features.

He could not refuse to take back goods purchased or to refund consideration of goods or services that were defective/deficient/spurious.

He would have a prior written contract with the e-commerce entity to undertake sale.

He would appoint a grievance officer for consumer grievance redressal.

He would ensure that the advertisements for the marketing of goods or services are consistent with the actual characteristics, access and usage conditions of goods.

He will provide the e-commerce company with its legal name, the primary geographic address of its headquarters and all subsidiaries/branches, the name and details of the website, e-mail address, customer contact details such as faxes, landlines and mobile numbers, etc.

Duties and Liabilities of Inventory E-commerce Entities (Rule 7)

As in the inventory-based model, inventory of goods and services is owned and sold directly to consumers by e-commerce entities, so inventory e-commerce entities have the same liabilities as marketplace e-commerce entities and the same duties as marketplace sellers.

The Act 2019 has several provisions for regulating e-commerce transactions with safety and trust. Since the Act is new, it would be premature to comment on its operational aspects and effectiveness. In a recent judgement in Consumer Complaint No 883 of 2020 ( M/s Pyaridevi Chabiraj Steels Pvt. Ltd vs National Insurance Company Ltd , the NCDRC Footnote 21 has proved the Act's operational effectiveness by deciding the maintainability of a claim's jurisdiction based on the new Act's provisions. However, it is inevitable that "beware buyer" will be replaced by "beware seller/manufacturer"; the consumer will be the real king. The Rules 2020 strike a balance between the responsibilities of e-commerce business owners and on-the-platform vendors. Contravention, if any, of the new regulation/rules would invite the provisions of the Act 2019. The observation is that limited liability partnerships are missing from the e-commerce entities. However, with the Act and Rules' operational experience, the judiciary or legislature will address this issue sooner or later.

Nevertheless, the Rules 2020 provide a robust legal framework to build consumers' trust in e-commerce transactions and protect their rights and interests, thereby proving the notion, "consumer is the king". The COVID-19 impact has pushed the government to adopt and encourage online compliant filling procedures through the National Consumer Helpline. Using various APPs is likely to expedite the adjudication process and benefit the aggrieved consumer and build trust in the governance system.

Reading the Rules, 2020, with the Act, 2019, the observation is that by making smartphones the primary target of the new legislation, the Act, 2019 is hailed as an all-inclusive regulatory regime that would raise customer interest investment in e-commerce. To safeguard consumers' rights in all modern-day retail commerce models, the Act, 2019 attempts to turn the jurisprudence pervading consumer protectionism from a caveat emptor to a caveat seller. In addition, the Act formally incorporated e-commerce within its limits and entered the realm of B2C e-commerce. One crucial takeaway benefit for consumers is simplifying the complaint filing process, enabling consumers to file complaints online and redress grievances.

E-commerce has become a gift to all customers in the COVID-19 pandemic's aftermath. The E-Commerce Rules, 2020 follow the stringent consumer protection regime under the new Act, 2019. In the raging pandemic, the timing of the E-Commerce Rules, 2020 is beneficial considering the current limitations on customers' freedom of travel and increased reliance on e-commerce. The grievances redress mechanism as provided in the Rules, 2020 is indubitably a calibrated step ensuring neutrality in the e-commerce market place, greater transparency, stringent penalties and a striking balance between the commitments of e-commerce firms and vendors in the marketplace. The mandatory provisions of appointing a consumer grievance redress officer and a nodal contact person or an alternative senior appointed official (resident in India) with contact details, acknowledging consumer complaints within 48 h of receipt with a ticket number, and resolving complaints within 1 month of receipt are unquestionably beneficial to consumers. Although each e-commerce company has its refund policy, all refund claims must have a timely settlement. However, anxiety abounds as daily online fraud and unethical trading practices have made consumers fearful of exposing themselves to unscrupulous vendors and service providers. Moreover, the regulations' effective enforcement would dissuade unethical retailers and service providers, thereby building consumer trust, which time will see.

Practical Contributions

The practical contributions of the paper emerge from survey findings. Concerning the primary survey, the male–female ratio is nearly 1:1, with an average age of 36 years in the age range of 20–65. As regards profession, 67% were working professionals, and 22% were students. While all of the respondents were computer/tablet/mobile-savvy, 96% had at least a five-time online shopping experience during the last 7 months between January–July 2020. The desktop with 61% response is still the preferred device for online shopping. The pricing with cash on delivery, shipping convenience, and quality reviews determined online shopping factors. About 57% of them agreed that COVID-19 impacted their online purchase habits and pushed for online transactions even though they feared insecurity about online shopping. The primary concerns were low-quality products at a high price, a refund for defective products, and a delay in settlement of wrong/excess payments. The top five leading e-commerce platforms reported were Amazon, Flipkart, Alibaba, Myntra, and IndiaMart. Netmeds was also a leading e-commerce business platform in the pharmaceutical sector. During the COVID-19 pandemic, JioMart was very popular for home-delivery food products, groceries and vegetables in the metro locality. The customer feedback system was found robust on Amazon.

The respondents' trust in online shopping reveals that a secure and reliable system was essential for 93% of the respondents. For nearly the same proportion, information about how e-business firms work provided security solutions was a priority factor. Choosing a payment option, 76% of the respondents prioritised “cash on delivery-online transfer at the doorstep. Regarding the privacy of personal information shared by online shoppers, 52% said that they cared about this aspect. Factors like warranty and guarantee (67%) and customer service (69%) were important factors of trust-building with the e-entities. Information on the websites (easy navigation/user friendly and reviews) was either important or very important, with 77% of the respondents’ confidence building to buy online. Information about the product features and its manufacturer/supplier was essential to 86% of the respondents for trust-building on the product and the supplier (manufacture) and e-commerce entity. Along with the ABI model discussed above, the presumption is that security, privacy, warranty/guarantee, customer service, and website information factors positively influence e-commerce customers' trust.

Multiple regression analysis suggests that as the  P  = value of every independent variable is below 0.05% level of significance, the independent variables security, privacy, warranty, customer service, and website information are all significant. Alternatively, the overall  P value of 0.032 with R 2 0.82 supports the presumption that security, privacy, warranty/guarantee, customer service, website information factors have a combined influence on e-commerce customers' trust.

Given this backdrop, Table 6 summarises the micro findings on respondents' online shopping behaviour, their trust and safety aspects, and understanding of the provisions of the new Act, 2019 and Rules, 2020. The higher mean value for a sub-factor implies higher importance attached to the factor by the respondents. P value at a 5% level of significance explains an individual element's contribution to trust-building behaviour for online buying.

Managerial Insights

The first observation from the data analysis is that, comparatively, the younger generation is prone to online shopping; it goes along with Xiaodong and Min ( 2020 ). Secondly, the respondents of all age groups have online buying experience even in a pandemic situation forced by COVID-19, compromising their safety and security concerns. The third observation is that factors like “cash on the delivery option (COD)”, adequate information on the e-commerce entity corporate website, and effective grievance/complaint redress mechanism are the three crucial factors that build consumers’ trust in e-commerce transactions. The reason probably is that this Act and Rules are new and significant dispute (s) could yet be reported seeking invoking the relevant provisions of the Act and Rules in an appropriate legal forum.

Further, the logical observation of the COD option being a perceived influential factor in trust-building emanates from the fact that protection and security are the essential elements that make customers hesitant toward utilizing other e-payment options. The studies by Mekovec and Hutinski ( 2012 ), Maqableh ( 2015 ) and Ponte et al.( 2015 ); have similar views. However, post-demonetization (2016), India is growing with more digital payments. In this context, we value Harvard researchers Bandi et al. ( 2017 ) contention that customers who switch to digital payments maintain their purchasing recurrence but spend more and are less likely to restore their purchases. The firms in emerging markets may appreciate gains from customer interest, notwithstanding operational increases from payment digitalization. The coherent perception about the impact of website information on trust-building is in line with the findings of Brian et al. ( 2019 ) that the online information source creates a spill-over effect on satisfaction and trust toward the retailer. The implication of the need for an effective grievance redress mechanism is that trust-building would be a tricky proposition if the company cannot ensure dedicated and tailored customer service and support. Kamari and Kamari ( 2012 ) and Mangiaracina and Perego ( 2009 ) had comparative perspectives likewise.

The final observation is that the level of trust required to engage in online shopping/transaction varies among the respondents depending on their trust perception level. The younger generation, less than 35 years old, is more risk-taking when it comes to pre-purchase online payment, but women over 45 years old are a little hesitant and prefer to do their online shopping with payment at the time of placing an order. This is ostensibly because the younger generation is more tuned to network connectivity via smartphone/tablet, and they perceive online transactions as less dangerous. The present research findings on the influence of security, privacy, warranty/guarantee, customer service, and website information on e-commerce customers' confidence-building support the earlier discussed ABI model proposition (Mayer et al., 1995 ; Cazier, 2007 ; Helge et al.,  2020 ). The  R 2 -value of 0.82 implies that there are other factors beyond what is studied. The other probable factor (s) that might have influenced trust is the new Act and Rules' effectiveness in protecting online consumers' interests. The new regulations need a couple of years (at least 2 years) of operational experience for proper assessment. The Act 2019 appears robust to protect consumer rights and interests of e-commerce customers with specific regulations (i.e. Consumer Protection (E-Commerce) Rules, 2020) in force, helping the country's economic growth.

The study variably supports Nehf ( 2007 ) view that consumers make decisions about distributing their data in exchange for different benefits like, e.g., information on web sites and access to databases. Trust, credibility, privacy issues, security concerns, the nature of the information on the website, and the e-commerce firm's reputation directly influence consumers' internet trust (Kim et al., 2008 ). Trust is the focal point of online consumers' decision-making; the observation endorses  Larose and Rifon ( 2007 ) creation of privacy alerts as part of consumer privacy self-regulation initiatives and the use of a social cognitive model to consider consumer privacy behaviours. Besides, data privacy and trust breaches adversely affect the firm's market value (Tripathi & Mukhopadhyay, 2020 ) also hold good in the present context. Figure  7 demonstrates a diagrammatic model of trust of the consumer on e-commerce transactions leading to his decision-making.

Model for consumers’ trust on e-commerce transactions

Limitations

Every research has more or less some limitations; this one has too. The main impediment was the non-availability of adequate literature defining the impact assessment of the legal framework of consumer protection measures in e-commerce. The probable reasoning is that the Acts/Laws governing e-commerce and online consumer rights protection under consideration are new; ethical dispute resolution and judicial interventions have only recently begun. Sample size limitation is also a hindering factor in the generalisation of the findings. The observations and managerial insights are likely to change with a few more years of implementation experience of the Acts.

Conclusions, Implications and Future Research

Conclusions.

Lack of trust in goods and their suppliers/manufacturers was one of the primary reasons for people not buying online. The widespread internet penetration and the growing use of computer/tablets/smartphones have pushed e-commerce growth across countries, including India. The rapid e-commerce development has brought about new distribution methods. It has provided new opportunities for consumers, forcing consumers vulnerable to new forms of unfair trade and unethical business. Further, the government's measures to protect consumer rights, particularly online consumers, are inadequate. Hence, the government enacted the Consumer Protection Act, 2019 and the Consumer Protection (E-commerce) Rules, 2020 and made them effective from July 2020. The new Act and Rules have less than 6 months of operational experience, implying premature comment on its effectiveness in providing safety and security to online consumers. However, online consumers' positive responses suggest that people gain confidence in online shopping with safety and security. Because consumer rights protection is paramount in the growth of e-commerce, the new regulations strengthen the grievance redress mechanism of online consumers, ensuring their trust-building ability, safety, and security. The "Consumer is the King with power" now. The new reform, i.e., enactment of the two laws, aids in doing business too. Some legal complications may arise with more operational experience in the future. Still, with judiciary intervention and directives, the online consumer's safety and security will pave the growth of e-commerce in India.

Implications

Some stakeholders have apprehension about the new Act and Rules' effectiveness because of the slow judiciary process, inadequate infrastructure support, and corrupt practices. The findings provide some practical implications for consumer activists, policymakers, and research communities to explore how to strengthen trust-building among online consumers. Regarding theoretical implications, the research improves the scientific community's understanding of the existing body of knowledge about online trust and e-consumer protection. The article further contributes to the body of literature on e-commerce and consumer protection, understanding the crucial factors impacting customer trust and loyalty and provides an insightful perspective on e-consumer protection in the Indian context on the eve of the new legislation enacted in 2019–2020.

Future Research

Given the presumption that e-commerce and trust are areas of constant change, trust in e-commerce will change, and it will be more challenging to integrate e-commerce into people's lives. The scope for further research to test the effectiveness of the Act, 2019, and Rule, 2020 in redressing e-commerce consumers' grievances and protecting their rights is wider only after a couple of years of operational experience. The government's policy drive for accelerating online transactions also poses challenges considering the importance of trust-building and consumer rights protection in e-commerce. Future research would shed more light on these issues.

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Chawla, N., Kumar, B. E-Commerce and Consumer Protection in India: The Emerging Trend. J Bus Ethics 180 , 581–604 (2022). https://doi.org/10.1007/s10551-021-04884-3

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Consumer rights: How Indian consumers made system accountable despite long court battles

Some consumers in India fought for as little as one rupee and won their case despite the wheels of justice in consumer courts grinding slowly. Other consumers continue to fight long-drawn court battles to make companies and the government accountable.

A One-Rupee Fight : Consumer Rights In India

Consumer Rights In India: Bhagwan Karia, a senior citizen and an RTI activist, fought a one-rupee case with a consumer court in Mumbai and won against the Indian Railways and a private limited company. What started as a mere exercise of checking weight on a weighing scale in a railway station in Mumbai later turned out to be a pitched battle that exposed an enormous scandal and lurking corruption within the system.

Dr MS Kamath, General Secretary of the Consumer Guidance Society of India speaks to The Probe on the state of consumer rights in India.

"Around eight years ago, I went to the Mulund station in Mumbai, used the weighing machine there, and put in a two rupee coin to check my weight. I didn't even get a ticket or reading in one machine; my weight was shown as 15 kgs more in the second weighing machine. Then I went to the Mulund station master and told him, "sir, pls give my 4 rupees back". So, he called me a "madman". I told him, "I am not a madman. I am a common man. Today, you may think of me as a madman, but tomorrow you will know the power of this common man whom you identify as a madman," reminisces Karia speaking to The Probe about Consumer Rights In India.

Karia notes that he immediately filed an RTI petition and found out that the railways had a 60 per cent margin in the income from the weighing scales installed in the railway stations, and the private limited company had a 40 per cent share. "I later learned that even part of this margin used to be grabbed by the Station Masters and the private limited company's agents, causing a huge revenue loss to the Indian Railways. I went to consumer court in Bandra and lodged a one-rupee case. Do you know that these one or two rupee machines give a turnover of one to two crores all over India, and this money is tax-free? There is a monopoly related to the company involved in providing this service," claims Karia.

Finally, when the consumer court's verdict came in, Karia said the company was slammed with a 50 lakh rupees penalty for not displaying their licence number on the weighing machines. "All this happened because of my one-rupee case. People always ask me why I fought a one-rupee case. It is not a question of one rupee. I spent more money from my pocket and fought for one rupee. The reason is not to get back the amount. The reason is to make the system more transparent and accountable to the common man."

Man Who Brought An Insurance Company To Its Knees

Like Karia, another consumer KR Srinivas from Bangalore, filed a case against an insurance company after they refused to give him the assured sum after he had a severe heart ailment. “I had taken an insurance policy from the Syndicate Bank, and the insurance company was United India Insurance Company. Then the Syndicate Bank merged with the Canara Bank, and my insurance was forcibly shifted to Bajaj Allianz. This was not my choice. I had chest pain and was admitted to Sagar hospital in Bangalore. The doctors did an angiogram on me and said a stent had to be placed. The hospital authorities gave me the documents, but Bajaj Allianz refused to give cashless approval and I wasn’t paid anything,” states Srinivas.

Srinivas, too, like Karia, went to the consumer court and filed an application and argued his own case and won against the insurance firm. “My bill was 1,62,000 rupees. I went to the consumer court in Bangalore. I produced all the papers to the court, and I argued on my own. Judgement came in my favour. I finally got my money and was also given a compensation of 25,000 rupees for the mental agony that I went through and 10,000 rupees for legal expenses with 12 per cent interest per annum for the entire amount from the date of discharge from the hospital to the final settlement day,” adds Srinivas.

While World Consumer Rights Day was observed on March 15, many consumer rights activists say India’s record for delivering justice to consumers is abysmally poor. Speaking to The Probe, Dr MS Kamath, General Secretary of the Consumer Guidance Society of India, says that consumer courts do not redress grievances on a fast-track basis, because of which the consumers’ faith in the justice delivery system has taken a beating.

“Every consumer knows that he has rights, but the implementation is not that great. That is why the number of people escalating their complaints is not as high as it should be. A consumer in India is always at the receiving end when he buys some goods or services. Until he buys the product or uses the services, sellers are always after him. But after he buys, then he has to run after them. That’s because our country’s consumer rights regulatory mechanism is not strong enough. On average, a consumer court takes three to five years to give orders. The implementation of consumer rights is abysmally low in our country,” affirms Dr Kamath.

A 5000-Rupee Fight For Nine Long Years

Neelam Palkar's long and tireless battle bears testament to Dr Kamath's statements on India's poor justice delivery mechanism. Neelam, a makeup artist in Vile Parle in Mumbai, bought a phone in 2014 from a showroom in the city for 5000 rupees, and the phone stopped working within a month. Neelam claims the company refused to keep up their assurances, and she filed a case before the consumer court. For nine years, Neelam has been fiercely contesting her case in the consumer court, hoping that one day she would be able to make the company accountable.

"In 2014, I bought a phone from Vijay Sales showroom for 5000 rupees. They also gave me papers that said that the phone would be repaired if it got damaged within a year. But within a month, the phone got damaged. The battery used to get constantly discharged. I approached the repair centre many times, but they refused to change the battery. They also started misbehaving with me when I told them about the warranty and the promises they made to me, which were in the documents. Then I decided they needed to be taught a lesson and shouldn't take consumers for a ride. That's when I took them to the court," asserts Neelam.

Neelam contends that the long court battle caused her huge mental agony, but she refused an out-of-court settlement with the company and promised to fight until she got justice. "I gave an application to the consumer court. The court sent notices to the company, but they did not answer the court at least twice. The case is still in court. The case is not moving forward. Whenever I approached the court, they kept saying that there was a dearth of professionals in the court, including judges. Then they said there were issues because of the pandemic, and that's why the case is not being heard. I have been fighting for nine long years. In between, someone from the company approached me and said they would pay me 5000 rupees and asked me to stop my fight. I refused and told them that now that I had chosen the legal route, I wanted to take this fight to its logical end. I don't want to give up my fight. I want them to know even a commoner like me can fight for her rights."

Dr Kamath notes that most consumer cases do not reach a logical end because of a lack of unity among consumers. He says that justice cannot be delivered to the Consumer Rights In India until those who are unaffected are as outraged as consumers who have been cheated off or victimised.

“Raising the voice for wrongdoing is a citizen’s fundamental duty. For instance, if I am travelling by train and someone is carrying petrol, kerosene, or some other inflammatory material, I must call the nearby authorities and alert them. Like how consumers have rights, they also have their duties. But we can only bring about change by focusing on consumer unity. If consumers can get together and stop using a bad product, then they can bring the company to its knees. I know of cases where, for even two rupees, people fought and won cases. Consumer fights can be pretty taxing. It will drain your time, energy and resources, but in the long run, you are doing a great favour to society,” maintains Dr Kamath.

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Upholding Consumer Rights in India: Complicated, Uncomplicated or In-between? 

On World Consumer Right Day we delve into three case studies to understand the workings of consumer rights and redressal in India.

Every year on march 15th, the world celebrates world consumer rights day, a day dedicated to raising awareness about consumer rights and advocating for fair practices in the marketplace. in india, this day holds significant importance as it serves as a reminder of the essential rights bestowed upon every consumer and the ongoing efforts to protect and uphold these rights., the essence of world consumer day, world consumer rights day traces its origins back to march 15, 1962, when president john f. kennedy first addressed the issue of consumer rights. since then, this day has been observed globally to emphasise the importance of consumer protection and welfare., in india, where a diverse population engages in various economic activities, the significance of world consumer day cannot be overstated. it serves as a platform to educate consumers about their rights, promote responsible consumption, and highlight the need for fair trade practices., consumer rights in india, consumer rights in india are safeguarded by the consumer protection act, 2019, which replaced the earlier consumer protection act of 1986. these rights include:, right to safety: consumers have the right to be protected against the marketing of goods and services that are hazardous to health or life., right to information: consumers have the right to be informed about the quality, quantity, potency, purity, standard, and price of goods or services., right to choose: consumers have the right to choose from a variety of goods and services at competitive prices., right to be heard: consumers have the right to be heard and to seek redressal for grievances regarding the purchase of goods or services., right to redressal: consumers have the right to seek redressal against unfair trade practices or restrictive trade practices., right to consumer education: consumers have the right to be educated about their rights and responsibilities as consumers., consumer protection mechanisms in india, the consumer protection act, 2019, strengthened the legal framework for consumer protection in india. it established the central consumer protection authority (ccpa) to promote, protect, and enforce consumer rights. the act also introduced the concept of product liability, holding manufacturers, sellers, and service providers accountable for defective products or deficient services., in addition to legislative measures, consumer forums at the district, state, and national levels provide a platform for consumers to seek redressal for their grievances. these forums offer a speedy and cost-effective mechanism for resolving consumer disputes., let’s understand the essence of consumer rights in india through three compelling case studies., case study 1: bournvita vs revant himatsingka, influencer revant himatsingka also known as foodpharmer took to social media to highlight the high sugar content in health drink bournvita. explained through the brand’s tagline, “tayyari jeet ki” (preparation for victory) positioned in the children’s health drink category, ironically has extremely high sugar content. on which the influencer suggested a more apt tagline change to, “tayyari diabetes ki” (preparation for diabetes). this sparked many reactions by netizens and soon the video became viral. the brand got the influencer to take down the video, eventually suspending the account as well. but a group of 8 doctors and nutritionists did further research and validated the influencers claims. mondelez international, the parent company of bournvita dismissed the claims as “unscientific”., finally the indian government’s national commission for protection of child right (ncpcr) intervened and asked bournvita to withdraw their misleading ads or serve fines. this fiasco led bournvita to reduce the sugar content by 14.4 percent. the bournvita controversy is a prime example of consumers “right to safety” where they have the right to be protected against the marketing of goods and services that are hazardous to health or life., case study 2: state bank of india vs rajesh sakre, tea vendor rajesh sakre had rs. 20,000 in his state bank of india account and had withdrawn rs.10,800. but on his next visit to the atm he realised that all his money was gone. on asking the bank authorities, he received no satisfactory answer and got blamed instead. then he went to the district consumer disputes redressal forum (dcdrf) and since he couldn’t afford a lawyer he argued the case himself., the court ruled in his favour and ordered state bank of india to return the rs. 9,200 with 6% interest, rs. 10,000 as compensation for mental anguish caused by the issue and rs. 2,000 for legal expenses. this case showcases a consumer’s “right to redressal” where they have the right to seek redressal against unfair trade practices or restrictive trade practices., case study 3: pepsi vs rajesh rajan, ahmedabad’s rajesh rajan bought the famous aerated drink pepsi from a local store and found a packet of gutka (tobacco) floating in it. he sent a legal notice to the company immediately and approached a state consumers dispute redressal forum (cdrf) claiming 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 favour of rajesh, asking the company to pay rs. 4000 for compensation and rs. 8 for the pepsi he purchased. he moved the state cdrf and asked for a higher compensation stating that rs. 4008 was too low as he had spent rs. 500 for sample testing itself. finally the commission passed an order asking pepsi to pay rs. 20,000 as compensation and rs. 2000 towards cost, finding rajesh’s argument reasonable., complicated, uncomplicated or in-between, to answer the question stated at the beginning, it is complicated to seek redressal for consumer rights in india, since there are many government bodies involved in the ruling of a case. but it is also less complicated since sometimes even taking up to social media can grab the attention of the government and the concerned company. consumer rights in india are an in-between process depending on the perseverance of the consumer. having said that, the growing misleading ads in the country are definitely amounting to stronger actions from individuals and autonomous bodies alike., on world consumer rights day, let us reaffirm our commitment to protecting and promoting consumer rights in india. by empowering consumers with knowledge, advocating for fair trade practices, and fostering a culture of accountability, we can create a marketplace that is transparent, inclusive, and conducive to the welfare of all stakeholders. through these case studies, we witness the tangible impact of consumer rights in india striving towards a marketplace where consumer rights are respected, upheld, and celebrated., related articles more from author.

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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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Strengthening Consumer Rights: The Advent of Consumer Protection Act, 2019

SEBI and Corporate Laws, Vol. 156(2), 2019, at p. 7

9 Pages Posted: 13 Jul 2020 Last revised: 16 Oct 2020

Vipan Kumar

Rajiv Gandhi National University of Law

Adya Sharma

Affiliation not provided to ssrn.

Date Written: September 1, 2019

No economy can flourish without the rights of the consumer being protected. A consumer is an indispensable actor of any economy as he is the person who buys or hires goods or services from the seller and in turn boosts employment in the country. Thus, protecting the rights of the consumer is important because in the present times the demands and expectations of the consumer have changed due to globalization and growing awareness. However, the availability of a large number of goods and services sometimes proves to be harmful to the consumer as not all sellers and service providers are genuine. The Consumer Protection Act, 1986 was established to address the grievances of the consumer and to protect their interests. It was a laudable step at that point of time and amended from time to time. However, the three-decade-old legislation failed to keep pace with the developments in the market and digital technology in the country. For example, the right to proceed against a person who had violated the rights of the consumer was not given in the Act, and the State and District Consumer Redressal Forums had to be approached, which only compensated consumers for the loss they had incurred. There was neither any collection of data nor any inquiry regarding injuries or deaths on account of defective products or services. In short, there was no regulatory body to control or keep a check on violation of the rights of consumers. Now, a new phase in Consumer Rights in India has begun with the Parliament passing the Consumer Protection Act, 2019 and repealing the Consumer Protection Act, 1986 making the Consumer more powerful than before. The main highlight of the Consumer Protection Act, 2019 is that it establishes a Central Consumer Protection Authority which acts as a regulatory body to “promote, protect, enforce consumer rights as a class.” A clear shift from Caveat emptor (let the buyer be aware) to Caveat venditor (let the seller be aware) can be seen in the new provisions as the unfair trade practices and fraud done by the seller will now be penalized. The latest Act also makes provisions for punishment regarding unfair trade practices and misleading advertisements and many more changes which keep the rights of the consumer up to date with the contemporary changes in the market. This article deals with the major highlights of the concepts under the Consumer Protection Act, 2019. A humble attempt has been made to discuss and evaluate certain changes which have been made under this Act in comparison to its old counterpart.

Keywords: Consumer Protection Act

JEL Classification: K2

Suggested Citation: Suggested Citation

Vipan Kumar (Contact Author)

Rajiv gandhi national university of law ( email ).

Bhadson Road Sidhuwal Patiala, Punjab 147006 India +91-93160-11531 (Phone)

HOME PAGE: http://www.rgnul.ac.in

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Consumer Rights and Protection

Last updated on July 31, 2024 by ClearIAS Team

Consumer rights and protection in India are safeguarded through various laws and regulations aimed at ensuring fair trade practices, preventing unfair business activities, and protecting the rights and interests of consumers. Read here to learn more.

Consumer rights and protection refer to the rights and measures in place to ensure the well-being, safety, and fair treatment of consumers in the marketplace.

These rights are designed to safeguard consumers from unfair business practices, provide them with accurate information, and empower them to make informed choices.

The need for consumer rights and protection arises from various factors, and these measures contribute to a balanced and ethical marketplace.

Table of Contents

Consumer Rights

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• Right to Safety: Consumers have the right to be protected against goods and services that may be hazardous to their health or safety.
• Right to Information: Consumers have the right to receive accurate and complete information about products and services, enabling them to make informed choices.
• Right to Choose: Consumers have the right to choose from a variety of goods and services at competitive prices.
• Right to be Heard: Consumers have the right to be heard and to have their grievances addressed by businesses and regulatory authorities.
• Right to Seek redressal: This means the right to seek redressal against unfair trade practices or unscrupulous exploitation of consumers. It also includes the right to fair settlement of the genuine grievances of the consumer.
• Right to Consumer Education: This means the right to acquire the knowledge and skill to be an informed consumer throughout life. Ignorance of consumers, particularly of rural consumers, is mainly responsible for their exploitation. They should know their rights and must exercise them. Only then real consumer protection can be achieved with success.

Consumer responsibilities

• Be Critically Aware: The responsibility to be more alert and to question more – about prices, about quantity and quality of goods bought and services used.
• Be Involved: The responsibility to be assertive – to ensure that you get a fair deal as a consumer. Remember, if you are passive, you are likely to be exploited.
• Be Organized: The responsibility to join hands and raise voices as consumers; to fight in a collective and to develop the strength and influence to promote and protect consumer interest.
• Practice Sustainable Consumption: The responsibility to be aware of the impact of your consumption on other citizens, especially the disadvantaged or powerless groups; and to consume based on needs – not wants.
• Be Responsible to the Environment: The responsibility to be aware and to understand the environmental consequences of our consumption. We should recognize our individual and social responsibility to conserve natural resources and protect the earth for future generations.

Need for Consumer Rights and Protection

• Information Asymmetry: Consumers often lack the same level of information as sellers. This asymmetry can lead to exploitation, and consumer rights ensure access to accurate and transparent information.
• Unfair Trade Practices: Some businesses engage in unfair practices, such as false advertising or misrepresentation. Consumer protection laws are necessary to prevent such practices and hold businesses accountable.
• Product Safety : The safety of products is crucial for consumer well-being. Consumer rights ensure that products meet safety standards, and consumers have the right to seek compensation for harm caused by defective products.
• Redressal Mechanism: Disputes between consumers and businesses are inevitable. Consumer protection laws establish forums and mechanisms for the resolution of these disputes, ensuring fair and efficient redressal.
• Market Competition: Consumer rights contribute to a competitive marketplace by encouraging fair business practices. When consumers are empowered to make choices based on accurate information, businesses are incentivized to improve their products and services.
• Vulnerable Consumers: Certain groups of consumers, such as the elderly, disabled, or economically disadvantaged, may be more vulnerable to exploitation. Consumer protection laws aim to safeguard the interests of these vulnerable groups.
• Globalization and E-commerce: With the rise of globalization and e-commerce, consumers are exposed to a wide range of products and services. Consumer rights become crucial in ensuring the safety and fairness of transactions conducted online and across borders.
• Ethical Business Practices: Consumer rights promote ethical business practices, emphasizing fairness, transparency, and honesty in dealings with consumers.

Legislative framework for consumer rights and protection in India

India celebrates National Consumer Rights Day on 24 th  December every year to raise awareness about consumer rights and responsibilities. The day commemorates the day when the Consumer Protection Act 1986 received the President’s assent on December 24, 1986.

Consumer Protection Act, 2019:

• The Consumer Protection Act, of 2019 replaced the earlier Consumer Protection Act, of 1986, and it came into effect on July 20, 2020.
• The new act introduces several provisions to enhance consumer rights and strengthen the mechanism for consumer protection.
• It establishes the Central Consumer Protection Authority (CCPA) to promote, protect, and enforce consumer rights.

Consumer Forums:

• Consumer forums, also known as Consumer Disputes Redressal Commissions, are established at the district, state, and national levels to adjudicate consumer disputes.
• Consumers can file complaints at the appropriate forum based on the value of the claim.

Consumer Protection (E-Commerce) Rules, 2020

• The new act addresses issues related to e-commerce and provides for the liability of e-commerce entities.
• It regulates direct selling, prevents unfair trade practices, and ensures transparency in e-commerce transactions.

Global standards

United Nations Guidelines for Consumer Protection:

• The United Nations Guidelines for Consumer Protection (UNGCP) are “ a valuable set of principles for setting out the main characteristics of effective consumer protection legislation, enforcement institutions and redress systems and for assisting interested Member States in formulating and enforcing domestic and regional laws, rules and regulations that are suitable to their own economic and social and environmental circumstances, as well as promoting international enforcement cooperation among Member States and encouraging the sharing of experiences in consumer protection. “

International Organization for Standardization (ISO):

• ISO develops and publishes international standards, including those related to consumer protection.
• ISO 9001, for example, addresses quality management systems and includes considerations for customer satisfaction and meeting customer needs.

Organization for Economic Co-operation and Development (OECD):

• The OECD has guidelines and recommendations on consumer protection that member countries are encouraged to adopt.
• The OECD Principles on Consumer Protection in E-commerce guide ensuring fair business practices in online transactions.

United Nations Conference on Trade and Development (UNCTAD):

• UNCTAD works on issues related to trade, development, and consumer protection.
• UNCTAD’s Consumer Protection Toolkit offers practical guidance for countries seeking to enhance their consumer protection policies.

World Trade Organization (WTO):

• While the WTO primarily focuses on trade-related issues, it recognizes the importance of consumer protection in international trade.
• The WTO agreements acknowledge the need to balance trade interests with consumer protection and public health.

International Consumer Protection and Enforcement Network (ICPEN):

• ICPEN is a network of consumer protection authorities from various countries.
• It facilitates cooperation and information exchange among consumer protection agencies globally.

In essence, consumer rights and protection are essential for creating a fair, transparent, and responsible marketplace where consumers can confidently make choices, and businesses operate ethically. These measures contribute to a healthier economic ecosystem by fostering trust between consumers and businesses.

Consumer rights and protection in India are evolving to address contemporary challenges, especially in the context of e-commerce and digital transactions. The emphasis on product liability and the establishment of the CCPA under the new Consumer Protection Act, of 2019, reflects a commitment to strengthening consumer rights and redressal mechanisms. Consumer awareness and education continue to play a crucial role in empowering consumers to make informed choices and exercise their rights effectively.

Global standards for consumer protection are dynamic and responsive to emerging challenges, including those posed by technological advancements and changes in consumer behavior. Cooperation among nations, international organizations, and consumer advocacy groups is vital to maintaining and enhancing these standards in an interconnected and rapidly evolving global marketplace.

Read: D igital monopolies by big techs

-Article by Swathi Satish

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Hon'ble Mr. Justice D. K. Jain

Hon'ble Mr. Justice Amreshwar Pratap Sahi

     The National Consumer Disputes Redressal Commission (NCDRC), India is a quasi-judicial commission in India which was set up in 1988 under the Consumer Protection Act of 1986. Its head office is in New Delhi. The commission is headed by a sitting or retired judge of the Supreme Court of India.The commission is presently headed by Justice R K Agrawal, former judge of the Supreme Court of India.     Section 21 of Consumer Protection Act, 1986 posits that the National Commission shall have jurisdiction:- to entertain a complaint valued more than two crore and also have Appellate and Revisional jurisdiction from the orders of State Commissions or the District fora as the case may be.       Section 23 of Consumer Protection Act, 1986, provides that any person aggrieved by an order of NCDRC,  may prefer an Appeal against such order to Supreme Court of India within a period of 30 days.

     The National Consumer Disputes Redressal Commission (NCDRC), India is a quasi-judicial commission in India which was set up in 1988 under the Consumer Protection Act of 1986. Its head office is in New Delhi. The Commission is headed by a sitting or a retired Judge of the Hon'ble Supreme Court of India or a sitting or a retired Chief Justice of an Hon'ble High Court, in terms of Rule 3(12)(a) of the Tribunal(Conditions of Service) Rules, 2021. The Commission is presently headed by Hon'ble Mr. Justice Amreshwar Pratap Sahi, former Chief Justice of Patna and Madras High Courts.     Section 21 of Consumer Protection Act, 1986 posits that the National Commission shall have jurisdiction:- to entertain a complaint valued more than two crore and also have Appellate and Revisional jurisdiction from the orders of State Commissions or the District fora as the case may be.       Section 23 of Consumer Protection Act, 1986, provides that any person aggrieved by an order of NCDRC,  may prefer an Appeal against such order to Supreme Court of India within a period of 30 days.

     The Consumer Protection Act, 2019 (In short,‘The Act’) is a benevolent social legislation that lays down the rights of the consumers and provides their for promotion and protection of the rights of the consumers. The first and the only Act of its kind in India, it has enabled ordinary consumers to secure less expensive and often speedy redressal of their grievances. By spelling out the rights and remedies of the consumers in a market so far dominated by organized manufacturers and traders of goods and providers of various types of services, the Act makes the dictum, caveat emptor (‘Buyer Beware’) a thing of the past.     The Act mandates establishment of Consumer Protection Councils at the Centre as well as in each State and District, with a view to promoting consumer awareness.The Central Council is headed by Minister In-charge of the Department of Consumer Affairs in the Central Government and the State Councils by the Minister In-charge of the Consumer Affairs...  Read More

    The Right to Information Act (RTI) is an Act of the Parliament of India "to provide for setting out the practical regime of right to information for citizens" and replaces the erstwhile Freedom of information Act, 2002.The Act applies to all States and Union Territories of India except Jammu & Kashmir. Under the provisions of the Act, any citizen may request information from a "public authority" (a body of Government or "instrumentality of State") which is required to reply expeditiously or within thirty days. The Act also requires every public authority to computerise their records for wide dissemination and to proactively certain categories of information so that the citizens need minimum recourse to request for information formally.It is an initiative taken by the Department of Personnel and Training, Ministry of Personnel, Public Grievances and Pensions...  Read More

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Scooping up justice: a look at consumer rights in india.

Introduction

Consumer rights in India are safeguarded by the robust framework of the Consumer Protection Act, 2019 , which empowers consumers with six basic rights. [1] This legislation ensures that consumers are protected from hazardous products/services, provided with comprehensive information, and granted the freedom to choose among competitive options.

Recent developments in consumer court rulings underscore the importance of upholding consumer rights and ensuring accountability in commercial transactions.

Empowering Consumers: Key Consumer Rights in India

The Consumer Protection Act, 2019 empowers Indian consumers with six key rights:

• Right to be Protected : This safeguards consumers from hazardous products and services. It allows them to demand guarantees and quality checks, especially for products like appliances and gas cylinders. Consumers should look for AGMARK or ISI certifications for added assurance.
• Right to be Informed : This ensures that consumers receive all necessary details about a product or service, including its quantity, quality, standards, purity, potency, and price. This protects them from unfair trade practices. Sellers and manufacturers must provide comprehensive information on labels and packaging to empower informed decisions.
• Right to Choose : This guarantees access to a variety of products and services at competitive prices. Consumers cannot be forced to buy a specific brand and have the freedom to choose based on their preferences and budget. This right also promotes fair competition and discourages monopolies, ensuring good quality and reasonable prices.
• Right to be Heard :  This guarantees that the consumers’ voices will be heard and considered. They have the right to raise concerns in relevant forums and have your interests addressed. If they encounter unfair trade practices, they can file complaints with consumer organizations or designated authorities.
• Right to Redressal : This empowers consumers to seek remedies against unfair or restrictive trade practices or exploitation. They can file complaints for legitimate grievances and seek solutions like compensation, repair/replacement of defective goods, or other resolutions depending on the issue. Consumer organizations can also assist in this process.
• Right to Consumer Ed u cation : This emphasizes the importance of consumer awareness to avoid exploitation. Consumers have the right to acquire knowledge and skills to become informed consumers. Knowing consumer rights and the existing legal framework empowers them to take action against unfair practices. The government has also integrated consumer education into school curriculums and university courses.

Recent Developments

In recent cases, consumer courts in India have made significant rulings that uphold consumer rights and hold businesses accountable for deficient services and unfair trade practices.

Case 1: Swiggy Ordered to Pay Compensation

In a case against food delivery platform Swiggy, a Bengaluru Consumer Court directed the company to compensate a customer for failing to deliver an ice cream order. Despite the status on the app showing the order as ‘delivered’, the customer did not receive the ice cream. The court deemed this a “deficiency of service” and an “unfair trade practice”, ordering Swiggy to refund the amount paid for the ice cream, along with compensation and litigation costs. [2]

Analysis : This ruling underscores the responsibility of service providers like Swiggy to ensure the timely and accurate delivery of orders. It emphasizes the importance of transparency and accountability in online service transactions, where consumers rely heavily on digital platforms for their purchases.

Case 2: Travel Agency Directed to Pay Compensation

In another case, the Ernakulam District Consumer Disputes Redressal Commission directed a New Delhi-based travel agency to pay compensation to customers who were unable to attend a trade fair in Germany due to the agency’s failure to obtain visas as promised. The commission cited deficiency of service and business ethics violation, highlighting the need for businesses to fulfill their commitments to customers.

Analysis : This ruling highlights the duty of travel agencies to deliver on their promises and ensure a seamless travel experience for customers. It emphasizes the importance of maintaining ethical business practices and providing adequate compensation for the inconvenience caused to consumers due to service failures.

These recent developments in consumer rights enforcement demonstrate the commitment of Indian consumer courts to protect the interests of consumers and hold businesses accountable for their actions. They serve as reminders to businesses to prioritize customer satisfaction, adhere to ethical standards, and provide prompt redressal for grievances. As consumers increasingly rely on digital platforms and services, it becomes imperative for businesses to uphold consumer rights and ensure a fair and transparent marketplace.

Taking Action: How Consumers can Exercise their Rights?

The most common way of exercising consumer rights is by filing a consumer complaint with a consumer court. Following is how a consumer can file a complaint and seek redressal:

Before Filing

• Confirm Eligibility : Ensure that either the consumer or someone authorized by the consumer (spouse, relative) is eligible to file based on the relationship to the purchased goods/services.

Identify Jurisdiction

• Pecuniary Jurisdiction : District Forum (up to ₹20 lakh), State Commission (₹20 lakh – ₹1 crore), National Commission (over ₹1 crore).
• Territorial Jurisdiction : File at the court where the opposite party resides/works, where the cause of action arose (similar to contract law for online transactions), or where the consumer resides (for online transactions).

Prepare the Complaint

• Gather Documents : Bills, receipts, and proof of communication with the trader requesting rectification.
• Draft the Complaint : Clearly outline facts establishing the cause of action (what went wrong).
• Include Details : Names, and addresses of the consumer and the opposite party, along with a signature and authorization letter if filed by a representative.
• Specify Relief Sought : Mention the compensation amount (including litigation fees, interest, refunds, and damages) with a breakdown.
• Adhere to Time Limits : File within 2 years from the issue. Explain any delays that might arise.

Filing Process

• Court Fees : Pay the required fee based on the claimed amount and court level (district, state, national).
• Number of Copies : File 5 copies of the complaint – one for each opposite party and the court, along with an affidavit verifying the truth of the statements.

Conclusion and Looking Forward

The recent rulings by consumer courts in India, such as the cases against Swiggy and the travel agency, highlight the proactive stance taken to safeguard consumer rights and ensure accountability in commercial transactions. As India moves towards a digital-centric economy, the protection of consumer rights becomes increasingly vital. Regulatory bodies and consumer courts must stay abreast of emerging challenges in online transactions and adopt measures to address them effectively. Additionally, efforts should be made to enhance consumer awareness and education to empower individuals in asserting their rights.

[1] https://www.indiacode.nic.in/bitstream/123456789/15256/1/a2019-35.pdf .

[2] https://www.barandbench.com/news/consumer-court-swiggy-pay-5000-failure-to-deliver-death-by-chocolate-ice-cream .

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Safeguarding the Rights of Consumers

• 13 Mar 2023
• GS Paper - 2
• Government Policies & Interventions
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• IT & Computers

This editorial is based on “Strengthening consumer trust” which was published in the Financial Express on 11/02/2023. It discusses the challenge of ensuring consumer protection and the possible solutions to improve the efficiency of consumer dispute resolution mechanisms.

For Prelims: ADR, ODR, NGOs, Consumer Protection Act 2019, CPGRAMS, PPP Model, E-commerce

For Mains: Safeguarding the Rights of Consumers and related issues, Government Policies & Interventions, Transparency & Accountability, Issues Relating to Development

Consumer protection is a crucial aspect of modern economies, with the objective of safeguarding the rights of consumers against unfair trade practices and ensuring fair and efficient dispute resolution mechanisms.

India, one of the world's fastest-growing economies, has made significant strides in consumer protection, with the Consumer Protection Act 2019 strengthening the legal framework for consumer rights.

However, despite these policy efforts and grievance redressal mechanisms, the overall time consumed in addressing consumer grievances in India remains a challenge, with a significant backlog of pending cases.

The pendency in the dispute redressal system causes mental, financial, and emotional hardships for consumers and requires reimagining or redesigning the current dispute resolution framework. There is an urgent need to lessen the mediation of the procedural, proper, and process brokers in the system.

Why is Consumer Protection Necessary?

• Consumer protection measures help to empower consumers by giving them the necessary information to make informed decisions about their purchases. When consumers are protected, they can exercise their rights to demand quality products and services, and also demand compensation if they receive substandard products or services.
• Consumer protection laws help to prevent fraudulent activities, such as false advertising, misleading labeling, and price manipulation. This not only protects consumers but also promotes fair competition in the market.
• Consumer protection measures help to reduce the health and safety risks associated with using products and services. For example, regulations on food products, pharmaceuticals, and medical devices help to ensure that they meet minimum safety standards.
• Ensuring consumer protection can promote economic growth by creating a level playing field for businesses to compete fairly. This can increase consumer confidence in the market, leading to increased spending, investment, and job creation.
• Consumer protection measures help to uphold the basic rights of consumers, such as the right to be informed, the right to choose, the right to safety, and the right to be heard. These rights are essential for building a fair and just society.

What are the Roadblocks in Consumer Protection in India?

• The pendency of consumer cases in India is quite high, with a backlog of cases at both state and national levels.
• As of December 2022, the state commissions had 1,12,000 pending cases, while district commissions had 4,29,000.
• The national commission had a pendency rate of 20.5% for the 1,06,088 cases filed with it, while the pendency rate for the 35 state and 637 district commissions stood at 22%.
• Many consumer forums and commissions lack the necessary infrastructure and manpower to handle a large number of cases effectively.
• This results in delays in the resolution of cases, which could have been resolved quickly.
• Although there are several grievance redressal mechanisms in place, they are often inefficient and do not address the consumer's grievances effectively.
• In a study conducted by the National Council of Applied Economic Research, it was found that only 18% of consumers who filed a complaint with a company received a satisfactory resolution, while the rest either did not receive any response or were not satisfied with the response.
• Many consumers in India are not aware of their rights and the legal procedures involved in seeking redressal . This makes it difficult for them to approach the consumer forums and seek justice.
• Businesses in India have been slow to adopt consumer-centric policies and participate in dispute resolution mechanisms.
• This limits the effectiveness of consumer protection laws and slows down the resolution of consumer grievances.

What are the Related Initiatives taken?

• Integrated Grievance Address Mechanism (INGRAM) Portal
• Organisation of national Lok Adalats in partnership with the National Legal Services Authority.
• Consumer Protection Act, 2019

What should be the Way Forward?

• Consumer awareness plays a crucial role in protecting consumer rights.
• Consumers should be aware of their rights and responsibilities, and the government should conduct regular awareness campaigns to educate consumers about their rights.
• The government should establish and enforce strict quality standards for products and services to protect consumers from substandard and hazardous products.
• The government can leverage the infrastructure and platforms already established by Alternative Dispute Resolution (ADR) and Online Dispute Resolution (ODR) institutions through a Public-Private Partnership (PPP) model and treat them as digital public goods.
• Establishing a tech-capabilities-led National Consumer Lok Adalat helpline can help synchronise efforts between complainants, companies, commissions, legal services authorities, private ADR and ODR agencies, and Non-governmental Organizations (NGOs) during the process of Lok Adalats.
• With the rise of e-commerce, the government has also introduced regulations to protect consumers who shop online.
• E-commerce platforms are required to provide accurate information about products, pricing, and delivery times, and they must have a robust system for handling consumer complaints.
• By making it mandatory to collect all KYC details of the parties involved in disputes, communication time can be saved.
• Institutional parties like banks, e-commerce entities, and large corporations can appoint nodal officers for speedier communication, negotiations, and settlements, which will translate into faster complaint disposals.

The Law Gurukul

Legal Awareness Initiative

• Feb 14, 2022

A New Case Study on Consumer Rights

Written by: Girish N P

Everybody is consumer in a way or other. But, it's pathetic that only few are aware of their rights.

Why it's important to know consumer right?

Well, the simplest answer is to get rid of deception by cheater.

What actually is Consumer Right?

It's an exclusive right of the end user as prescribed by the law of a country. Hence, consumer rights vary from country to country.

What's new now?

Because of the emerging technologies and COVID19 like unexpected situations, every government is regulating to the future scenario. Thus a reforming, revolutionary and resolving consumer rights is very much in need.

A recent case study by iconsumer.in shows a magnificent number of 33 Consumer Rights! The analysis included top economics of the world, middle income and low income category. A total of 49 countries were taken into consideration.

Here is the list: -

33 Consumer Rights across the globe

1. Right to Safety

2. Right to be Informed

3. Right to Choose

4. Right to be Heard

5. Right to Seek redress

6. Right to Consumer Education

7. Right to a healthy environment

8. Right to satisfaction of basic needs

9. Right to file a Consumer Complaint from anywhere

10. Right to seek compensation under product liability

11. Right to protect consumers as a class

12. Right to seek a hearing using video conferencing

13. Right to know the reason for complaint rejection

14. Right to Truthful Advertising

15. Right to have faulty goods repaired or replaced

16. Right to contracts without unfair clauses

17. Right to return most goods purchased online within 14 days

18. Right to free assistance from European Consumer Centers

19. Right to access goods and services on the same terms as local customer

20. Right to change your mind

21. Right to refund for delayed or non-delivery

22. Off-Premise Purchases Rights

23. Store Purchase Rights

24. Air Passenger Rights

25. Rail Passenger Rights

26. Maritime Travel Rights

27. Road Travel Rights

28. Package Travel Rights

29. Accommodation Rights

30. Right of Fair Deal

31. Right that Human Dignity is respected

32. Right to exercise supervision

33. Right to Privacy

Some of the key findings of study are:

The highest priority of all 49 countries was found to be the safety of the consumers.

The basis of all the consumer rights is guidelines set by United Nations.

Few of the countries don't have consumer rights. And some have laws on consumer protection.

Fascinated to read more in detail

Check out the link here

https://iconsumer.in/consumer-rights/

• Consumer Rights

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Indian Consumer Protection Cases Recap – 2021

In this post, we bring to you a recap of important Consumer Protection cases of Year 2021

The Bombay Dyeing  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 Consulting & Strategy Department.

About BananaIP’s Consulting & Strategy Department

BananaIP’s 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. If you have any questions, or need any clarifications, please write to [email protected] .

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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