Let the vendor/service provider beware!

In addition to the right to be informed and the right to choose, the consumers' right to redress is an important aspect of consumer law. Whether it is the impact of consumer laws, competitive marketing, developments in information & technology, one can certainly say that the quality of consumerism has improved over the last few years.

The Consumer Protection Act (with the upcoming amendments) addresses a wide range of matters, including but not limited to product liability, deficiency of service, e-commerce transactions, unfair trade practices and misrepresentation.

In this article, an attempt is made to understand the nuances of remedies available against unfair trade practices, unfair terms in contracts, and the enforcement of orders of the consumer courts.

Section 2(1)(r) in the Consumer Protection Act, 1986 defines "unfair trade practice" as a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice including any of the following practices:

♦    false representation of the quality, quantity, standard, composition etc. of goods and services;

♦    false and misleading representation that the goods or services have sponsorship, approval, performance, characteristics, accessories, uses or benefits which such goods or services do not have (NCDRC in M/s. Honda Siel Cars India Ltd. vs Rohit Jain & Anr. on 31/3/2016)

♦    false or misleading representation concerning the need for, or the usefulness of, any goods or services(Where a manufacturer of moped advertises that it gives an average of 90km per litre, but the actual mileage is 60 km per litre-M.R. Ramesh vs M/S. Prakash Moped House & Ors. 2/5/2003)

In view of the need to protect consumers and particularly to grant protection from the disadvantages of extensive introduction of standard terms of contracts which are one-sided, it has become necessary to provide additional provisions for redressal against unfair terms of contracts.

Unfair contract terms can easily be discovered in invoices, receipts, as well as other consumer contracts and sale documents. These terms, are cleverly and mischievously applied against consumers by limiting, denying and restricting their rights as a consumer.

A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.

Following are some of the contractual terms deemed prejudicial to the consumer rendering them null and void- (unilateral and patently unfair terms imposed by the builders upon the flat buyers as held by NCDRC in Shalabh Nigam vs Orris Infrastructure Pvt. Ltd. & another on 6/5/2019)

Terms

♦    that are discriminatory or prejudicial to consumer interest;

♦    that connote inequality between the rights of the consumer and the obligations of the vendor;

♦    that waive or limit the statutory obligations or the responsibilities of the vendor;

♦    that entitle the vendor to unilaterally amend the terms or terminate the contract at its sole discretion;

♦    that leave no meaningful choice to the consumer, unreasonably favouring one party against the other.

All the regulators including banking, insurance, health, transport and telecom, are required to spell out and scrutinise to prevent exploitative clauses in consumer agreements.

In addition to enlarging the scope of consumer law, calling attention to the strategic and operational dynamics for effective redressal not only for defective goods and deficiency of service, but both as regards injunctive and declaratory relief against unfair trade practices, the Consumer Fora are empowered to discontinue unfair trade practices, in addition to providing relief of compensation.

Ubi jus, ibi remedium- Where there's a right, there must be a remedy. Sections 25 and 27 have been thus incorporated to achieve speedy and effective enforcement of the orders of the Consumer Redressal Fora.

While section 25 visualise the enforcement of such orders by a civil process as if they were a decree or order made by a court of law in a suit proceeding therein Section 27 confers a quasi-criminal sanction for their enforcement by way of punishment with imprisonment or imposition of monetary penalties.

In fact, Sec.27 of the Act is the penal provision that gives teeth to the consumer fora to enforce compliance of the orders, acting as a deterrent to those manufacturers, traders, or service providers who think they are above the law.

All said and done, more powers need to be vested in the Consumer Courts for execution of orders in time bound manner, penalties for non-compliance of orders by way of effective execution of arrest warrant or attachment order with the help of the police authorities, thereby enhancing the faith and confidence of the consumers in these adjudicatory bodies

(The author is Member, District Consumer Forum-1, Hyderabad)