NCERT Class 12 Business Studies Chapter 11 Consumer Protection

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NCERT Class 12 Business Studies Chapter 11 Consumer Protection

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Consumer Protection

Chapter: 11

PART – ⅠⅠ – BUSINESS FINANCE AND MARKETING

EXERCISE

VERY SHORT ANSWER TYPE

1. Under which consumer right does a business firm set up consumer grievance cell?

Ans: Right to be heard.

2. Which quality certification mark is used for agricultural products? 

Ans: AGMARK (Agricultural produce Grading and Marketing) is a certification mark given to agricultural products. It’s a government trademark that ensures agricultural products meet quality standards. 

3. What is the jurisdiction of cases that can be filed in a State Commission? 

Ans: Under the Consumer Protection Act, 2019, the State Commission has jurisdiction over cases where the value of goods or services and the compensation claimed exceeds ₹50 lakh but does not exceed ₹2 crore. 

4. State any two relief available to consumers under CPA. 

Ans: (i) The consumer can claim a full refund if the product/service is defective or deficient.

(ii) The consumer can demand a replacement of the defective or faulty product with a new one. 

5. Name the component of product mix that helps the consumer to exercise the right to information. 

Ans: The component of the product mix that enables the consumer to exercise his or her right to information is known as the product’s quality certification.

SHORT ANSWER TYPE

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

Ans: Government of India has provided various laws and legislations to protect the interest of consumer and some of these regulations are:

(i) Consumer Protection Act, 2019.

(ii) Indian Contract Act, 1872.

(iii) Sale of Goods Act, 1930.

(iv) Essential Commodities Act, 1955.

(v) Agricultural Produce (Grading and Marking) Act, 1937.

(vi) Food Safety and Standards Act, 2006 (Replaced Prevention of Food Adulteration Act, 1954).

(vii) Legal Metrology Act, 2009 (Replaced Standards of Weights and Measures Act, 1976).

(viii) Trade Marks Act, 1999.

(ix) Competition Act, 2002.

(x) Bureau of Indian Standards Act, 2016.

2. What are the responsibilities of a consumer? 

Ans: The responsibilities of a consumer include:

(i) Being aware of the quality and safety of products and services.

(ii) Buying only standardized goods with quality marks (e.g., ISI, AGMARK).

(iii) Reading labels carefully for information like price, expiry date, and ingredients.

(iv) Asking for a bill or receipt as proof of purchase.

(v) Reporting unfair trade practices and defective products.

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

Ans: Under the consumer protection act, a complaint can be filed by a consumer for defective goods and also for deficiency in service.

(i) A consumer.

(ii) A registered consumer association.

(iii) The central or state government.

(iv) A legal heir or representative of the consumer.

(v) Multiple consumers with a common interest.

(vi) The Central Consumer Protection Authority (CCPA).

4. FSSAI (Food Safety and Standards Authority of India) has made a proposal for hotels and other food outlets to declare the kind of oil/fat used in cooking each of the food items on their menus. Name and explain the Consumer Right being reinforced by this proposal. 

Ans: Right to be informed: The consumer has a right to have complete information about the product he intends to buy including its ingredients, date of manufacture, price, quantity, directions for use, etc.

5. Who is a consumer as per CPA?

Ans: A consumer is a person who buys any goods or services for consideration and uses the goods for non-commercial purposes.

LONG ANSWER TYPE

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

Ans: A business must also lay emphasis on protecting the consumers and adequately satisfying them.

This is important because of the following reasons:

(i) Long-term Interest of Business: Enlightened businesses realise that it is in their long-term interest to satisfy their customers. Satisfied customers not only lead to repeat sales but also provide good feedback to prospective customers and thus, help in increasing the customer-base of business. Thus, business firms should aim at long-term profit maximisation through customer satisfaction.

(ii) Business uses Society’s Resources: Business organisations use resources which belong to the society. They, thus, have a responsibility to supply such products and render such services which are in public interest and would not impair public confidence in them. It is advisable that business organisations voluntarily resort to such practices where the customers’ needs and interests will well be taken care of. The consumer protectIon act, 2019.

(iii) Social Responsibility: A business has social responsibilities towards various interest groups. Business organisations make money by selling goods and providing services to consumers. Thus, consumers form an important group among the many stakeholders of business and like other stakeholders, their interest has to be well taken care of. 

(iv) Moral Justification: It is the moral duty of any business to take care of consumer’s interest and avoid any form of their exploitation. Thus, a business must avoid unscrupulous, exploitative and unfair trade practices like defective and unsafe products, adulteration, false and misleading advertising, hoarding, black marketing, etc. 

(v) Government Intervention: A business engaging in any form of exploitative trade practices would invite government intervention or action. This can impair and tarnish the image of the company. 

2. Explain the rights and responsibilities of consumer? 

Ans: A consumer should keep in mind the following responsibilities while purchasing, using and consuming goods and services:

(i) Be aware about various goods and services available in the market so that an intelligent and wise choice can be made. 

(ii) Buy only standardised goods as they provide quality assurance. Thus, look for ISI mark on electrical goods, FPO mark on food products, Hallmark on jewelry, etc. 

(iii) Learn about the risks associated with products and services, follow manufacturer’s instructions and use the products safely. 

(iv) Read labels carefully so as to have information about prices, net weight, manufacturing and expiry dates, etc. 

(v) Assert yourself to ensure that you get a fair deal. 

(vi) Be honest in your dealings. Choose only from legal goods and services and discourage  unscrupulous practices like black-marketing, hoarding, etc. 

(vii) Ask for a cash memo on purchase of goods or services. This would serve as a proof of the purchase made. 

(viii) File a complaint in an appropriate consumer forum in case of a shortcoming in the quality of goods purchased or services availed. Do not fail to take an action even when the amount involved is small. 

(ix) Form consumer societies which would play an active part in educating consumers and safeguarding their interests. 

(x) Respect the environment. Avoid waste, littering and contributing to pollution.

3. What are various ways in which the objective of consumer protection can be achieved? 

Ans: A consumers’ awareness about their rights and responsibilities is just one of the ways in which the objective of consumer protection can be achieved. There are other ways in which this objective may be achieved. 

(i) Self-regulation by Business: Socially responsible firms follow ethical standards and practices in dealing with their customers Good and ethical practices encourage firms to realise that it is in their long-term interest to serve the customers in a rightful manner. Many firms have set up their customer service and grievance cells to redress the problems and grievances of their consumers.

(ii) Business Associations: The associations of trade, commerce and business like Federation of Indian Chambers of Commerce of India (FICCI) and Confederation of Indian Industries (CII) have laid down their code of conduct which lay down for their members the guidelines in their dealings with the customers. 

(iii) Consumer Awareness: A consumer, who is well-informed about his rights and the reliefs available to him, would be in a position to raise his voice against any unfair trade practices or unscrupulous exploitation.

(iv) Consumer Organisations: Consumer organisations play an important role in educating consumers about their rights and providing protection to them. These organisations can force business firms to avoid malpractices and exploitation of consumers. 

(v) Government: The government can protect the interests of the consumers by enacting various measures. For example, the GOI has set up a toll-free national consumer Helpline Number 1800114000 for this purpose. The legal framework in India encompasses various legislations which provide protection to consumers. 

4. Explain the redressal mechanism available to consumers under the Consumer Protection Act, 2019.

Ans: For the redressal of consumer grievances, the Consumer Protection Act 2019 provides for setting up of a three-tier enforcement machinery at the District, State, and the National levels, known as the District Consumer Disputes Redressal Commission, State Consumer Disputes Redressal Commission, and the National Consumer Disputes Redressal Commission. They are briefly referred to as the ‘District Commission’, ‘State Commission’, and the ‘National  Commission’, respectively. While the National Commission is set up by the Central Government, the State Commissions and the District Forums are set up, by the State Government. The Figure on redressal agencies shows the hierarchical structure of this three-tire machinery. 

The consumer grievances are redressed by the three tire machinery:

(i) District Commission: District commission has a jurisdiction to entertain complaints where value of goods or services paid as consideration does not exceed one crore rupees. Either on the first hearing or at any later stage, it appears to district commission that there exists elements of settlement which may be acceptable to the parties, it may direct them to give their consent for settlement of dispute through mediation within five days. In case the parties agree for settlement by mediation and give written consent, the district commission refers the matter for mediation and the provisions relating to mediation shall apply. 

(ii) State Commission: It is established by the respective state government and ordinarily function at the state capital. State Commission has a jurisdiction to entertain complaints where value of goods and services paid as consideration exceeds one crore but does not exceed ten crore rupees. If any of the parties are not satisfied by the order of State Commission can appeal against such order to the National Commission within a period of thirty days of such order. 

(iii) National Commission: The National Commission has territorial jurisdiction over the whole country. National Commission has a jurisdiction to entertain complaints where value of goods or services paid as consideration exceeds ten crores of rupees. If any of the parties are not satisfied by the order of National Commission can appeal against such order to the Supreme Court of India within a period of thirty days of such order. 

5. Explain the role of consumer organisations and NGOs in protecting and promoting consumer’s interest. 

Ans: In India, several consumer organisations and non-governmental organisations (NGOs) have been set up for the protection and promotion of consumers’ interests. Non governmental organisations are non profit organisations which aim at promoting the welfare of people. They have a constitution of their own and are free from government interference. Consumer organisations and NGOs perform several functions for the protection and promotion of interest of consumers.

These include:

(i) Educating the general public about consumer rights by organising training programmes, seminars and workshops. 

(ii) Publishing periodicals and other publications to impart  knowledge about consumer problems, legal reporting, reliefs available and other matters of interest. 

(iii) Carrying out comparative testing of consumer products in accredited laboratories to test relative qualities of competing brands and publishing the test results for the benefit of consumers. 

(iv) Encouraging consumers to strongly protest and take an action against unscrupulous, exploitative and unfair trade practices of sellers. 

(v) Providing legal assistance to consumers by way of providing aid, legal advice etc. in seeking legal remedy. 

(vi) Filing complaints in appropriate consumer courts on behalf of the consumers. 

(vii) Taking an initiative in filing cases in consumer courts in the interest of the general public, not for any individual. 

(viii) Consumer unity and Trust Society (CuTS), Jaipur.

6. Mrs. Mathur sent a jacket to a laundry shop in January 2018. The jacket was purchased at a price of Rs. 4,500. She had previously sent the jacket for dry cleaning with Shine Dry Cleaners and the jacket was cleaned well. However, she noticed that her jacket had white discoloration marks when she collected the jacket this time. On informing the dry cleaner, Mrs. Mathur received a letter confirming that discolouration indeed appeared after the jacket was dry cleaned. She contacted the dry cleaner multiple times and requested for compensation for discoloured jacket but to no avail. Upon Consumer court’s intervention, Shine Dry Cleaners agreed to compensate Rs. 2,500 to Mrs. Mathur for the discoloured jacket.

(a) Which right was exercised by Mrs. Mathur at the first instance.

Ans: Right to Safety: The consumer has a right to be protected against goods and services which are hazardous to life, health and property. For example, electrical appliances which are manufactured with substandard products or do not conform to the safety norms might cause serious injury. Thus, consumers are educated that they should use electrical appliances which are ISI marked as this would be an assurance of such products meeting quality specifications.

Mrs. Mathur exercised her right to be heard by informing the dry cleaner about the issue and requesting compensation. 

(b) Name and explain the right which helped Mrs. Mathur to avail the compensation.

Ans: Right to seek redressal: The consumer has a right to get relief against unfair trade practice of restrictive trade practices or unscrupulous exploitation in case the product or a service falls short of his expectations. The Consumer Protection Act 2019 provides for redressal to the consumers including replacement of the product, removal of defect in the product, compensation paid for any loss or injury suffered by the consumer, etc.

This right ensures that consumers can seek compensation or remedy for defective goods or deficient services. It helped Mrs. Mathur receive compensation for her discolored jacket.

(c) State which consumer responsibility has been fulfilled by Mrs. Mathur in the above case. 

Ans: Mrs. Mathur fulfilled the responsibility of seeking redressal for her grievances by approaching the consumer court when the dry cleaner did not respond to her complaint.

(d) State any other two responsibilities to be assumed by the consumers.

Ans: A consumer should keep in mind the following responsibilities while purchasing, using and consuming goods and services: 

(i) Be aware about various goods and services available in the market so that an intelligent and wise choice can be made.

(ii) Buy only standardised goods as they provide quality assurance. Thus, look for ISI mark on electrical goods, FPO mark on food products, Hallmark on jewelry, etc.

(iii) Ask for a cash memo on purchase of goods or services. This would serve as a proof of the purchase made.