Consumer Protection

Brief History of Consumer Protection

BLOG/ NEWS Consumer Protection LAW EXPLAINED
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Introduction

In recent times one of the most significant areas of economic regulation in all countries has been the adoption of Consumer Protection legislation in a big way. India being a late starter has just reached the take off-stage in consumerism though there have been significant development before this stage. The consumers in India have not yet organized like in many other countries in the West. Consequently the exploitation to which the consumer is
subjected to by the organized class continues unchecked . Today, a large number of countries have laws for protecting the interest of the consumer. It will be appropriate to discuss here the laws adopted by some of the countries to control unfair and deceptive trade practices and to protect the interest of the
consumers.

Ancient India

In Ancient India, VEDAS were considered the words emanating from  the mouth of God himself and were considered the supreme and sacred  injunctions governing supposedly the entire society during the ancient period.  It has been to learn the law from the letter of ‘Vedas’ and ‘upnishads’, the law  could be easily ascertained by following indications available there in  abundance, either in the form of positive Vidhis or negative Nishedhas  injunctions. To quote only a few: (i) Tell the truth, (ii) Never tell the untruth, (iii) Never hurt anyone and (iv) Perform the acts which are not forbidden. Manu Smriti describes the social, political and economic
conditions of ancient society. Manu, the ancient law giver, also wrote about ethical trade practices.

Severe punishments were prescribed for different types of cheating. For example, “for cheating with false cowrieshells, dice, leather straps, ivory-cubes or by sleight of hand, [the punishment shall be] cutting-off of one hand or a fine.In “YAJNAVALKYA SAMHITHA” one finds elaborate mechanism regarding pricing  policy, and profit ratio charged by the traders on the sold goods. Principle of caveat emptor and breach of warranty is the modern .principle of law applicable in sale of goods Caveat Emptor (Buyer Beware)  finds place in “NARDA-SAMRITI”

The brief description given above reveals that serious efforts had been  made by the law makers in the ancient period of civilization in India to protect  the different interests of consumers by providing rules and regulation
prescribing certain duties and the violators of these rules/regulations were in  most of the cases, subjected to punishment by fine. Prophet Mohammad impressed upon his followers, the duty of strictly  fulfilling their contracts. Sura 5 opens with the words: “O believers perform  your contracts”.

 

Medieval India

In the medieval period, consumer protection continued to be of prime concern of the rulers. During Muslim rule, a large number of units of weights were used in India. During the Sultanate period, the prices used were determined by local conditions. During the rule of Alauddin Khalji, strict controls were established in the market place.In those days, there was unending supply of grain to the city and grain-carriers sold at prices fixed by the Sultan. There was a mechanism for pricing for cementing the market. Similarly, shop-keepers were punished for under weighing their goods.

In the Qoran men are taught to abstain from dishonest dealing lest they be deprived of God’s blessing. It is said: “A perfect and just weight shall then have, a perfect and just measure shall those have; that they days may be long upon the land which the cord by God give the thee”

Since the advent of British rule in India along with the application of English Common Law, various legislative measures were also taken, from time to time, since 1600, with a view to protect the interest of public at large  (which indirectly covered consumers interests) but most of them were by and  large and overshadowed by Common Law Principles in their contents,  however inspite of these enactments, principles of Common Law also  continued to be applied through the judgments of the Privy Council and the  High Courts as and when necessity arose for either interpreting or clarifying these statutes or for dealing with those subjects which were not covered by  these statutes.

Because of this and the Consumer Developments Internationally, the following developments took place:-

USA

In the United States, the rapid industrialization after the end of Civil War in 1865 led to mergers and amalgamations and to formation of trusts and cartels, which advanced a great deal by 1880s. The concentration of corporate power at such an early stage of economic development and the awareness to check the economic power promoted the passing of the first antitrust legislation as early as 1890 which came to be known as the Sherman Act. The Act declared every contract, combination in the form of trust or otherwise or, conspiracy in restraint of trade or commerce, to be illegal.   Two major legislations were passed in 1914 namely the Federal Trade Commission Act, 1914 and the Clayton Act. The Federal Trade Commission Act set up – new machinery the Federal Trade Commission which shared with the department of justice the responsibility for enforcement of all anti-trust legislation in addition to the setting up of this new enforcement agency. The citizens of United States are protected from unsafe products, fraud, deceptive advertising, and unfair business practices through a variety of federal, state and local laws. The Principal Consumer Protection Agency at the federal level is the United States Federal Trade Commission (FTC)

United Kingdom

In the United Kingdom, the anti-monopoly legislations came immediately after the World War-II. Between 1948 and 1973 a number of statutes were passed for this purpose. These statutes were the Monopolies and Restrictive Practices Enquiry and Controls Act, 1948 amended by the Monopolies and Restrictive Practices Act, 1953, the Restrictive Trade Practices Act, 1968; the Resale Price Act, 1964; the Monopolies and Mergers Act, 1965 and the Fair Trading Act, 1973. All these legislations except the Fair Trading Act, 1973 have been repealed by the consolidating enactments, the Restrictive Trade Practices Act, 1976 the Resale Price Act, 1976 and the
Restrictive Practices Court Act 1976. The Restrictive Trade Practices Act, 1976 has been supplemented by the Restrictive Trade Practices Act, 1977. Consumer protection in the United Kingdom is effected through a multiplicity of Acts of Parliament, statutory instruments, government agencies and departments and citizens’ lobby groups and aims to ensure the market economy produces fairness and quality in goods and services people buy.

India’s Law

 

The Indian legal system experienced a revolution with the enactment of the Consumer Protection Act of 1986 [“CPA”],which was specifically deigned to protect consumer interests. The CPA was passed with avowed objectives.It is intended to provide justice which is “less formal, [and involves] less paper work, less delay and less [expense]”. The CPA has received wide recognition in India as poor man’s legislation, ensuring easy access to
justice.  The greatness of the CPA lies in its flexible legal framework, wider jurisdiction and inexpensive justice. One can find in the CPA a mixture of principles of torts and contracts.Simply speaking, it is “a shorthand term to indicate all the many different aspects of general law.”

Conclusion

Consumer protection is always a matter of great concern.In ancient India, effective measures were initiated to protect consumers from crimes in the market place. Ancient law givers ably described various kinds of unfair trade practices and also prescribed severe punishments for wrong doers. Mainly, acts of adulteration and false weights and measures were seriously dealt with. In ancient India, the king was the supreme authority to render justice, but his authority was circumscribed by the rules of Dharma. In the medieval period, some Muslim rulers developed well organized market mechanisms to monitor prices and the supply of goods to the markets. There were teething troubles at the initial stages but the Act, with the passage of time will surely act as an abstergent against the unfair
trade practices, for the Act is not a mere logomachy, but is eclectic. The Consumer Protect Act is regarded as “Magna Carta” in the field of consumer protection for checking the unfair trade practices and deficiency in goods and services.

Pranav Bajaj.

References:

  1. https://en.wikipedia.org/wiki/Hindu_texts
  2. https://www.ancient.eu/The_Vedas/
  3. http://www.sacred-texts.com/hin/
  4. http://www.jtexconsumeom/V11N3/JCCL_India.pdfrlaw.c
  5. https://en.wikipedia.org/wiki/Consumer_protection
  6. http://www.lpig.org/artman/US-consumer-protection-laws.html

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