The purpose of the Act is to provide for the establishment of the Commission:
• To prevent practices harming competition;
• To promote and sustain competition in markets;
• To protect the interests of consumers and
• To ensure freedom of trade carried on by other participants in the markets, in India
The major focus of the consumer protection Act is on the following areas:
• Prohibition of anti-competitive agreements;
• Prohibition against abuse of dominant position;
• Advocacy of competition policy.
The legislative intent behind this Act is to clear all hurdles in promoting competition among business units whether domestic or foreign origin.
The Consumer Protection Act of 1986 was enacted to provide better protection of the interests of the Consumers, to make provision for the establishment of Consumer Councils and other authorities for the settlement of consumer disputes.
This is indeed a very unique and highly progressive piece of Social Welfare Legislation. The provisions of this Act are intended to provide effective and efficient safeguards to consumers against various types of exploitation and unfair dealings.
Unlike other laws, which are punitive or preventive, the provisions of the Act are compensatory. It is a matter of great satisfaction that we now have in our country a statute, which provides more effective protection to the consumers.
Scope Of The CPA
The protection of the rights of consumers is of paramount importance. Irrespective of the kind of goods and services being offered in the market it is imperative that the interest and benefit of the consumers are safeguarded by the Government and sellers of any industry.
Before the year 1986, there was no specific legislation protecting and safeguarding the rights and interests of the consumer from unfair trade practices.
The remedy if any available to a consumer in case of any kind of deceit or unfair trade practice was available under various laws i.e. Indian Penal Code, CPC, Indian Contract Act, Drugs Control Act, Prevention of Food Adulteration Act, Essential Commodities Act, Standard weights and measures (enforcement act), Sale of Goods Act, etc.
However, the rights accruing in favor of a consumer in the above enactments were ambiguous and unclear. Considering the confusion prevailing about the rights of a consumer in case of deficiency of goods/services and in case of unfair trade practices by an entity selling its goods/services the Government thought for a need of specialized legislation to safeguard the rights and interest of the consumers.
Based upon the need of a specialized enactment in 1986 the Government of India introduced a bill called as ‘The Consumer Protection Bill, 1986’ before both the house of parliament and the same was passed by the parliament and finally the said bill received the assent of President on 24th December 1986. After the consent of the President.
It came into effect as an act known as “The Consumer Protection Act, 1986 (CPA). The enactment of CPA acted as a milestone in the history of socio-economic legislation in India.
This act protected the rights and interests of consumers in India and resolved the problems of consumers in a time framed period.
Under this act, the proceedings are of a summary nature, and forums established under the Act expeditiously resolve the consumer’s problems without resorting to endless trials as done in civil disputes.
Under this Act three-tier Consumers, Forums have been established for speedy and effective remedies to the consumers, and complaints can be filed in any of the three forums depending upon the monetary value of the claim.
Consumer Disputes Redressal Forum (District Forum)
State Consumer Disputes Redressal Commission (State Commission)
National Consumer Disputes Redressal Commission (National Commission)
Importance Of CPA
Importance From Consumer's Point Of View:
1 CONSUMER IGNORANCE – Consumer protection provides information to ignorant customers regarding rights and remedies available to them. It spreads awareness so that consumers can know about the various redressal agencies where they can approach to protect their interests.
2 Unorganized CONSUMERS: – In developing countries like India, consumers are not organized. They are very few consumers’ organization which is working to protect the interest of the consumer.
3 EXPLOITATION OF CONSUMERS: – Now a day’s consumer is the kingpin of the market but then also there is a lot of exploitation of consumer as businessmen use various unfair trade practices to cheat and exploit consumers.
Importance Of Consumer Protection From Businessmen's Point Of View:
• SOCIAL RESPONSIBILITY: – A businessman has a social obligation towards various groups and the customer is one of the important groups. It is the responsibility of a businessman to provide quality goods at a reasonable price.
• MORAL JUSTIFICATION: – Ethics was part of the profession only but today ethics is playing a very important role in business also. Moral value practiced by the businessmen adds glory to businessmen.
• GOVERNMENT INTERVENTION:- If businessmen want to avoid the intervention of govt. Then they should not involve in unfair trade practices. Govt intervention may spoil the image of business so businessmen should involve in the activities to protect the interest of the consumer.
Importance Of Consumer Protection Act
(1) To Organize Consumers: Indian consumers are scattered over a wide geographical area. They are not well organized. They have low power and businessmen exploit consumers. Here we need consumer protection.
(2) Provide Market Information: The majority of the consumers have no information about quality, type, price, and other marketing facilities. Many customers buy without product knowledge and this makes them suffer losses.
(3) Importance of Physical Safety: Indian markets are over flooded with products. The products may be adulterated and maybe health hazardous. This may endanger their life and due to this a consumer needs to be protected.
(4) Avoiding Monopoly: Consumer Protection is very important in terms of avoiding monopoly. A monopoly is the crown of the modern market. Most of the organizations, irrespective of various restrictions follow monopoly practice. Due to this consumers get affected and need to be protected.
(5) Prevention from Malpractices: Business malpractices are rapidly growing in the modern market. Businessmen follow unfair trade practices, restrictive trade practices, and monopolistic trade practices and consumer protection plays a vital role.
(6) Misleading Advertisements: Many organizations deliberately cheat consumers through wrong or misleading advertisements. This will protect consumers from getting exploited.
(7) Informing Consumers about their Basic Rights: The majority of the consumers are ignorant. They do not know about consumer rights. Consumer movements inform consumers about their rights and protect their interests and rights.