Consumer Protection Class 12 Notes: CBSE Business Studies Chapter 11

Consumer protection refers to the measures taken to safeguard consumers from unethical practices by manufacturers or sellers that engage in anti-consumer activities.

Earlier Approach

The traditional approach was ‘caveat emptor,’ meaning "let the buyer beware," where the responsibility was on the buyer to avoid fraud.

Present Approach

The current approach is ‘caveat venditor,’ meaning "let the seller beware," placing the responsibility on sellers to avoid unfair practices. Exploitative practices like selling defective goods, adulteration, false advertising, hoarding, and black-marketing require robust consumer protection measures.

Importance of Consumer Protection

A. From the Consumer’s Point of View

1. Consumer Ignorance: Many consumers are unaware of their rights, making them vulnerable to exploitation. Consumer protection is necessary to safeguard them from such practices.

2. Widespread Exploitation: Consumers face widespread abuse through various unfair trade practices, making protection essential to safeguard their interests.

3. Unorganised Consumers: Consumers in India are often unorganised, with few consumer organisations advocating for their rights, underscoring the need for effective consumer protection.

B. From the Business Point of View

1. Business Utilises Societal Resources: Businesses use societal resources and are therefore obligated to operate in ways that benefit society.  

2. Long-term Business Interests: Satisfied customers lead to repeat business, helping to grow the company’s customer base and secure its future.

3. Government Intervention: Engaging in unfair practices can lead to government action against the business, harming its reputation.

4. Social Responsibility: Businesses must provide high-quality goods at fair prices, reflecting their responsibility to owners, employees, the government, and customers.

5. Moral Justification: Businesses are morally obligated to act in the best interests of their customers, avoiding exploitation through unsafe products, adulteration, false advertising, and other unfair practices.

The Consumer Protection Act, 2019

The Consumer Protection Act of 2019 was enacted to safeguard and promote consumer interests by resolving complaints efficiently and cost-effectively. It came into effect on July 20th, 2020.

• Coverage: The Act applies across India, except in Jammu and Kashmir.

• Scope: It covers all types of enterprises, including manufacturers, traders, and e-commerce companies.

• Rights: The Act provides consumers with specific rights to empower them and protect their interests.

Scope of the Act

The scope of this act is broad and covers a wide range of activities. This act covers all the undertakings;

• Both large and small-scale undertakings.

• All three sectors are covered, namely private, public, and cooperative.

• It applies to e-commerce companies as well.

• It applies to the whole of India.

• All goods, services, and trade practices are a part of this act until specifically exempted.
  
  

Legal Protection for Consumers

The legal framework that offers protection to consumers includes:

1. The Indian Contract Act, 1872:
   The Indian Contract Act of 1872 stipulates the requirements for the applicability of a contract signed by the parties to the contract, as well as the remedies available in the event of a breach of contract.

2. The Sale of Goods Act, 1930:
   The Act gives buyers various protections and benefits concerning the agreement made for the sale of goods.

3. The Essential Commodities Act, 1955:
   This Act prohibits profiteers, hoarders, and black marketers from engaging in anti-social behaviour. Its goal is to maintain control over the production, supply, and distribution of critical commodities.

4. The Agricultural Produce (Grading and Marketing) Act, 1937:
   The Act establishes grade requirements for agricultural and livestock commodities.

5. Adulteration Act, 1954:
   The Adulteration Act of 1954 was enacted to prevent the adulteration of food products and to preserve their purity to protect public health.

6. The Standards of Weights and Measures Act, 1976:
   It protects customers from the practice of under-weighting or under-measurement.

7. The Trade Marks Act, 1999:
   This Act prohibits the use of deceptive marks on products.

8. The Competition Act, 2002:
   Consumers are protected by the Act if businesses engage in unethical actions.

9. The Bureau of Indian Standards Act, 1986:
   The Bureau's main tasks are to develop quality standards for goods and to certify them using the BIS certification method.

Consumer

A consumer is defined as someone who buys or receives consumer goods or services against a payment. It includes anyone who benefits from such services, but it excludes anyone who uses such services for financial gain.

Under the Consumer Protection Act 2019, a consumer is a person who buys any goods or avails services for a consideration, which has been paid or promised, or partly paid and partly promised, or under any scheme of deferred payment.

Consumer Rights

1. Right to Safety: Consumers are entitled to protection from products and services that could harm their health or well-being. They can demand quality assurance through marks like ISI, FPO, AGMARK, and Hallmark.

2. Right to be Informed: Consumers have the right to complete information about a product, including quality, quantity, ingredients, purity, and price before making a purchase.

3. Right to Choose: Consumers can freely select products based on their preferences without undue influence from sellers.

4. Right to Seek Redressal: Consumers can seek remedies such as replacement, repair, or compensation if a product or service fails to meet expectations or is unsafe.

5. Right to Consumer Education: Consumers have the right to continuous education about their rights and remedies, with government initiatives like "Jaago Grahak Jaago" helping to spread awareness.

6. Right to be Heard: Consumers have the right to express their opinions on products and services and file complaints if their rights are violated. Various consumer cells in India ensure this right is upheld.

Consumer Responsibilities

1. Be Knowledgeable: Consumers should be informed about products on the market to make educated decisions.

2. Standardised Products: Purchase only standardised products, such as those marked with ISI, FPO, and Hallmark, to ensure quality.

3. Follow Instructions: Adhere to product instructions and be aware of any associated risks for safe usage.

4. Cautious Purchasing: Carefully read labels for information on price, weight, manufacturing, and expiration dates.

5. Assert Yourself: Ensure you receive a fair deal and price for products.

6. Honesty: Engage in truthful interactions and purchase only legal goods and services to discourage unethical practices like black marketing.

7. Cash Memo: Always request a cash memo as proof of transaction when purchasing products or services.

8. Consumer Societies: Participate in or establish consumer societies to contribute to consumer education and protection.

9. Take Action: File a complaint with the appropriate forum if a product or service is defective, regardless of the amount involved.

10. Avoid Littering: Respect the environment by avoiding actions that negatively impact it.

Ways and Means of Consumer Protection

1. Self-regulation by businesses: Businesses that value corporate social responsibility adhere to ethical norms and practices while working with customers.

2. Business associations: The FICCI and the CII have established codes of conduct for their members to follow while interacting with clients.

3. Consumer Awareness: A well-informed consumer will be able to speak out against any unethical business activities.

4. Consumer Organisations: Consumer organisations play a vital role in informing consumers about their rights and protecting them.

5. Government: The government safeguards consumers' interests by establishing various consumer protection regulations.

Redressal Under The Consumer Protection ACT

a. Who can file a complaint under CPA, 2019

• a consumer; or

• any voluntary consumer association registered under any law for the time being in force; or

• the Central Government or any State Government; or

• the Central Authority; or

• one or more consumers, where numerous consumers have the same interest; or

• in case of death of a consumer, his legal heir, or legal representative; or

• in case of a consumer being a minor, his parent or legal guardian.
  
  

b. Redressal Agencies

As per Consumer Protection Act, 2019, The statute establishes a three-tier system for resolving consumer complaints, as follows:

c. District Commission

The District Commission is established in each district by the state government with the following key characteristics:

1. Composition: A President and two members, one of whom must be a woman, appointed by the state government.

2. Jurisdiction: Handles consumer complaints where the value does not exceed Rs. 1 crore.

3. Procedure: Upon receiving a complaint, it forwards it to the opposing party and may send items for laboratory testing.

4. Orders: If goods are found defective or unfair trade practices are confirmed, the opposite party may be ordered to repair, return items, or pay compensation.

5. Appeals: Parties can appeal to the State Commission within 45 days if unsatisfied with the decision.

d. State Commission

The State Commission is established in each state with the following key characteristics:

1. Composition: A President and at least two members, one of whom should be a woman, appointed by the state government.

2. Jurisdiction: Handles complaints where the value exceeds Rs. 1 crore but is less than Rs. 10 crore.

3. Procedure: Upon receiving a complaint, it may forward it to the opposing party and send items for laboratory examination.

4. Orders: The State Commission may order the replacement, reimbursement, or compensation for the issue.

5. Appeals: Dissatisfied parties can appeal to the National Commission within 30 days of the order.

e. National Commission

The National Commission is established by the central government with the following provisions:

1. Composition: A President and at least four members, one of whom should be a woman, appointed by the central government.

2. Jurisdiction: Handles complaints where the value exceeds Rs. 10 crore.

3. Procedure: The National Commission can refer complaints to the opposing party and send items for testing.

4. Orders: It can order product replacement, compensation, or other appropriate relief.

5. Appeals: Parties can appeal to the Supreme Court of India within 30 days if dissatisfied with the decision.

f. Reliefs Available to the Consumer

1. Removal of Defects: Flaws in goods or deficiencies in services can be removed.

2. Replacement: Defective goods can be replaced with new, flawless ones.

3. Refund: The price paid by the complainant can be refunded.

4. Compensation: Payment for any loss or injury incurred.

5. Punitive Damages: Applicable in suitable cases.

6. Discontinuance: Stop unfair/restrictive trade practices or the sale of hazardous goods.

7. Corrective Advertisements: Run ads to counteract misleading advertisements.

8. Expenses: Reimbursement of expenses to all parties involved.

Important Topics of Business Studies Class 12 Chapter 11 Consumer Protection

Learnings of Class 12 Chapter 11 of Business Studies

• Understanding of consumer protection and its significance.

• Overview of the Consumer Protection Act, 2019, and its provisions.

• Knowledge of consumer rights and responsibilities.

• Insights into legal protection are available under various acts.

• Awareness of the redressal mechanisms and reliefs available under the Consumer Protection Act.

Importance of Revision Notes for Class 12 (Business Studies) Chapter 11

• Summarises Key Points: Condenses important concepts for quick review.

• Saves Time: Provides a fast way to revise before exams.

• Highlights Essentials: Focuses on crucial topics and definitions.

• Improves Memory: Helps in better retention of information.

• Enhances Exam Prep: Targets weak areas for more effective study.

• Clarifies Concepts: Simplifies complex ideas for easier understanding.

• Includes Visuals: Uses diagrams and charts for better grasp.

• Boosts Confidence: Prepares students thoroughly for exams.

Tips For Learning the Class 12 Chapter 11

1. Focus on core processes with illustrations and examples.

2. Draw and label diagrams for clarity.

3. Create summaries of each process.

4. Connect concepts to everyday examples.

5. Solve past exam questions to test understanding.

6. Explain concepts to others to reinforce learning.

7. Revisit material frequently to retain information.

8. Utilise platforms like Vedantu for additional support.

Conclusion

The Consumer Protection Act, of 2019, ensures that consumer rights are safeguarded in a rapidly evolving marketplace, including digital platforms. By understanding their rights and responsibilities, consumers can make informed decisions and seek redressal against unfair trade practices. This chapter equips students with the knowledge to navigate consumer protection laws effectively and highlights the importance of ethical practices in business for long-term success.

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