NCERT solutions class 12 Business Studies Chapter 12 Consumer Protection

Chapter 12: Consumer Protection

Part I: Very Short Answer Type

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

A business firm sets up a consumer grievance cell under the Right to be Heard. This right ensures that consumers have a platform to voice their complaints and be assured that their interests will receive due consideration.

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

The AGMARK quality certification mark is used for agricultural and livestock products to assure consumers of standard quality.

3. What is the jurisdiction of cases that can be filed in a State Commission? Pecuniary Jurisdiction (CPA 2019)

Under the Consumer Protection Act, 2019, a State Commission has the jurisdiction to entertain complaints where the value of the goods or services paid as consideration exceeds ₹1 crore but does not exceed ₹10 crores.

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

1. Removal of Defect: To remove the defect in goods or deficiency in services.
2. Replacement or Refund: To replace the defective product with a new one or refund the price paid by the consumer.

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

The component is Labeling. A well-designed label provides complete information about the product's ingredients, usage, manufacturing date, and safety warnings.

Part II: Short Answer Type

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

The Government of India has enacted several laws to protect consumer interests. The primary act is the Consumer Protection Act, 2019. Other supporting acts include:

• The Sale of Goods Act, 1930
• The Essential Commodities Act, 1955
• The Agricultural Produce (Grading and Marking) Act, 1937
• The Prevention of Food Adulteration Act, 1954
• The Standards of Weights and Measures Act, 1976
• The Trade Marks Act, 1999
• The Competition Act, 2002

2. What are the responsibilities of a consumer? Consumer Responsibilities

Consumers must act responsibly to safeguard their own interests:

• Be Aware: Gather information about various goods and services to make an intelligent choice.
• Look for Quality Marks: Buy only standardized goods marked with ISI, AGMARK, or FPO to ensure quality.
• Ask for a Cash Memo: Always insist on a cash memo as proof of purchase for filing a complaint.
• Read Labels Carefully: Pay attention to prices, net weight, manufacturing, and expiry dates.
• File a Complaint: Do not hesitate to file a complaint in the appropriate consumer court for genuine grievances.

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

Under the Consumer Protection Act, the following parties can file a complaint:

1. Any Consumer who has purchased the goods or availed the services.
2. Any registered Voluntary Consumer Association.
3. The Central Government or any State Government.
4. One or more consumers, on behalf of numerous consumers having the same interest.
5. A legal heir or representative of a deceased consumer.

4. FSSAI has made a proposal for hotels... to declare the kind of oil/fat used in cooking. Name and explain the Consumer Right being reinforced. Reinforced Consumer Right

This proposal reinforces the Right to Information.

Explanation: The Right to Information guarantees that consumers have the right to be informed about the quality, quantity, potency, purity, standard, and price of goods or services. By declaring the type of oil or fat used, consumers can make healthy, informed choices and protect themselves against unfair trade practices.

5. Who is a consumer as per CPA? Definition of a Consumer

According to the Consumer Protection Act, a consumer is any person who:

• Buys any goods or hires/avails any services for a consideration which has been paid, promised, or partly paid and partly promised.
• Includes any user of such goods or beneficiary of services when used with the approval of the buyer.

Note: It strictly excludes a person who obtains goods for resale or purchases goods/services for any commercial purpose.

Part III: Long Answer Type

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

A business cannot survive in isolation; it must protect consumer interests for its own long-term success. The key reasons are:

1. Long-term Interest of Business: Satisfied customers lead to repeat sales and provide positive word-of-mouth. Firms that ignore consumer interests eventually lose their market share.
2. Business Uses Society's Resources: Businesses utilize physical and human resources from society. Thus, it is their ethical duty to supply safe, quality products to the society in return.
3. Social Responsibility: A business has social obligations towards various stakeholders, including consumers. Protecting them from adulteration and false advertising is a core social responsibility.
4. Moral Justification: It is the moral duty of any business to avoid unscrupulous practices like black marketing, hoarding, and misleading advertisements.
5. Government Intervention: Exploitative trade practices invite strict government intervention and legal penalties, which permanently damage the goodwill and public image of the business.

2. Explain the rights and responsibilities of consumer? Consumer Rights

• Right to Safety: Protection against goods and services that are hazardous to life and property.
• Right to Information: The right to know the quality, quantity, purity, and price of goods.
• Right to Choose: Access to a variety of goods and services at competitive prices.
• Right to be Heard: Assurance that consumer interests will receive due consideration at appropriate forums.
• Right to seek Redressal: The right to seek legal relief against unfair trade practices or exploitation.
• Right to Consumer Education: Acquiring knowledge to be an informed consumer throughout life.

Consumer Responsibilities

• Be Aware: Actively gather market information.
• Quality Check: Always look for standardization marks (ISI, Agmark).
• Ask for Cash Memo: It acts as legal proof of purchase.
• Honest Dealings: Choose legal goods and discourage black marketing.
• File Complaints: Proactively report genuine grievances to consumer courts.

3. What are various ways in which the objective of consumer protection can be achieved? Ways to Achieve Consumer Protection

1. Self-Regulation by Business: Ethically conscious firms voluntarily adopt codes of conduct and establish dedicated customer grievance cells to swiftly resolve complaints.
2. Business Associations: Trade bodies like FICCI and CII lay down strict codes of conduct for their members to ensure fair trade practices with customers.
3. Consumer Awareness: Educated consumers who know their rights, responsibilities, and the legal relief available can actively protect themselves against exploitation.
4. Consumer Organisations: Independent NGOs aggressively advocate for consumer rights, file public interest litigations (PILs), and spread mass awareness.
5. Government Intervention: The state protects consumers by enacting stringent laws. The primary legislation is the Consumer Protection Act, which provides a three-tier quasi-judicial machinery for redressal.

4. Explain the redressal mechanism available to consumers under the Consumer Protection Act, 2019. Three-Tier Redressal Machinery (CPA 2019)

The Act establishes a strict three-tier quasi-judicial system to ensure speedy and inexpensive justice:

1. District Commission: It has the jurisdiction to entertain complaints where the value of goods/services paid does not exceed ₹1 crore. If a party is aggrieved by its order, they can appeal to the State Commission within 45 days.
2. State Commission: It entertains original complaints where the value exceeds ₹1 crore but does not exceed ₹10 crores, and handles appeals against District Commission orders. Appeals against State Commission orders go to the National Commission within 30 days.
3. National Commission: Situated in New Delhi, it entertains complaints where the value exceeds ₹10 crores and hears appeals from State Commissions. An order passed by the National Commission in its original jurisdiction can be appealed in the Supreme Court within 30 days.

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

Non-Governmental Organisations (NGOs) and consumer groups play a massive role in empowering buyers:

• Educating the General Public: They organize training programs, seminars, and workshops to educate people about their consumer rights.
• Publishing Periodicals: They impart knowledge about consumer problems, legal reporting, and market scams through brochures and magazines.
• Comparative Testing: They independently test consumer products in accredited laboratories and publish the results to expose inferior or hazardous goods.
• Providing Legal Assistance: They offer legal advice and aid to consumers seeking remedies in consumer courts.
• Filing Complaints: They file complaints in consumer courts on behalf of an individual or file PILs to protect the collective interest of consumers at large.

6. Mrs. Mathur sent a jacket to a laundry shop... (a) Which right was exercised at the first instance. (b) Name and explain the right which helped avail compensation. (c) Which responsibility was fulfilled. (d) State any other two responsibilities. (a) Right Exercised Initially

By contacting the dry cleaner multiple times to lodge her complaint regarding the discolouration, Mrs. Mathur exercised her Right to be Heard.

(b) Right that Secured Compensation

The right that helped her secure the ₹2,500 compensation is the Right to Seek Redressal.
Explanation: This right entitles consumers to seek fair relief against unfair trade practices or unscrupulous exploitation. It ensures that consumers are legally compensated, or defective goods/services are rectified or refunded.

(c) Responsibility Fulfilled

Mrs. Mathur fulfilled the vital responsibility of Filing a complaint for the redressal of a genuine grievance, proving she did not ignore the deficiency in service.

(d) Two Other Responsibilities

1. Ask for a Cash Memo: To ensure she has legal proof of the transaction with the dry cleaner to present in court.
2. Be Aware: To be aware of the terms and conditions or the risks involved before handing over expensive clothing for chemical dry cleaning.