(..12..)
CONSUMER OF GOODS[1]
SHORT NOTES
- Defect.
- Price fixation
SYNOPSIS
- GOODS DEFINED (S. 2 (1)
(j)):-
- CONSUMER OF GOODS (S.2 (1) (d))
III. DEFECT IN GOODS (S. 2 (1) (f)):-
(a) Standard of purity, quality, quantity, and potency.
(b) Statutes prescribing Standards-
(i) Case of Adulteration of food.
(ii) Defect in engineering goods.
(c) Defect in electrical goods.
- PRICE:-
(a) Price Fixation in a competitive market-
(b) Restrictive Trade Practice-
(c) Administrative price fixation
I. GOODS DEFINED [S.2 (1) (j)]:-
(a) The Consumer Protection Act[2] has not defined ‘goods’ in detail. However, it provides that “Goods” means goods defined in the Sale of Goods Act of 1930.
(b) S. 2 (7) of the Sale of Goods Act defines ‘goods’ to mean ‘every kind of movable property other than actionable claims and money, and includes stocks and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale.
(c) Generally, ‘goods’ means and includes every kind of movable property.
II. CONSUMER OF GOODS (S.2 (1) (d))-
The term ‘consumer’ is defined in two parts-
Firstly, it contains consumers who purchase or use goods (i.e. Consumers of Goods). Secondly, it refers to a person who hires services. The ‘Goods’ may be defective, whereas ‘services’ may be ‘deficient’.
Thus, the Act covers transactions for selling goods and rendering services. In this topic, we are concerned with the ‘Consumer of goods’ concept. The concept of ‘Consumer of services’ is discussed in the latter part.
Consumer means any person who-
(a) buys any goods– for consideration- (which has been paid or promised or –partly paid or partly promised,- or under any system of differed payment)- and
(b) Includes any user of such goods (other than the person who buys such goods for consideration paid or promised or partly paid and partly promised or under any system of differed payment) when such use is made with the approval of such person-
(c) But does not include such person who obtains such goods for resale or for any commercial purpose or
Explanation– The word ‘commercial purpose’ used above does not include use by a consumer of goods bought and used by him exclusively to earn his livelihood by means of self-employment.
III. DEFECT IN GOODS[3] (S. 2 (1) (f)):-
The complaint under the Consumer Protection Act can only be made if the goods purchased suffer from one or the other form of ‘defect’ in the goods.
The term ‘defect’ means-
- Any fault, imperfection, or shortcoming,
- In the quality, quantity, potency, purity, or standard
- Which is-?
(i) Either required to be maintained by or under any law for the time being in force or
(ii) Under any contract, express or implied, or
(iii) As is claimed by the trader in any manner whatsoever in relation to any goods.
The definition of ‘defect’ is wide enough to include any fault, imperfection, or shortcoming- in the quality, quantity, potency, purity, or standard of goods.
In Jose Philip V/s. M/s Premier Automobile Ltd
2004 AIR SCW 648
Facts– In the instant case, the defective car was sold as a brand new car, and the dealer did not take any action to repair it through the defect brought to his notice. From the material on record, it is clear that the car was defective at the time of delivery. Furthermore, the dealer acknowledged that the piston rings were also defective.
Held—that the purchaser is entitled to get a car repaired from a reputed garage at the dealer’s or manufacturer’s cost; in addition, the purchaser is awarded Rs 40,000 for mental agony and torture and Rs 50,000 as cost following litigation.
(a) Standard of purity, quality, quantity, and potency-
Where the quality, quantity, potency, purity, or standard of goods are not in accordance with the law or promise made by the trader, the goods will be deemed defective. Much legislation, such as the Drugs and Cosmetics Act, is to that effect.1940, Drugs (Control) Act.1950, Prevention of Food Adulteration Act.1954, Essential Commodities Act.1955, Standards of Weights and Measures Act.1976, Bureau of Indian Standards Act.1986, etc. These legislations provide standards, quality, quantity, etc., of several goods. Where the goods do not fulfil the requirements of these legislations, they will be defective for the purpose of the Consumer Protection Act, Agmark, ISI, etc., are the marks authenticating standards of agricultural or industrial goods.
(b) Statutes prescribing Standards-
Different laws have prescribed standards for food and drugs, engineering and electrical goods, etc. These Acts are the Drugs and Cosmetics Act.1940, Drugs (Control) Act.1950, Prevention of Food Adulteration Act.1954, Essential Commodities Act.1955, Standards of Weights and Measures Act.1976, Bureau of Indian Standards Act.1986, etc.
(i) Case of Adulteration of food.
In Tulsiram V/s. State of Madhya Pradesh [4]
The Supreme Court held that the vendor of adulterated goods, such as a mixture of two edible oils without declaration, is liable for conviction irrespective of whether the mixture has an injurious effect or not.
(ii) Defect in engineering goods-
In one case,[5] the machine of the scooter just purchased was found defective. It was because the scooter would run below the mileage prescribed by the company. As a consequence, the complainant was to pay more for petrol.
The National Commission held that the scooter should be taken back and its value refunded if it does not run 40 kilometres on a litre of petrol.
(c) Defect in electrical goods-
It should be replaced if the T.V. set purchased does not work properly even within the guarantee period. The defective T.V. tube would be replaced.
IV. PRICE:-
- (2) (10) of the Sale of Goods Act of 1930 defines ‘Price’ as the money consideration for a sale of goods.
(a) Price Fixation in a competitive market-
The price of goods or services is fixed in a competitive market by the force of demand and supply. Thus, price fixation in a competitive market is automatic, governed by the rule of demand and supply. If demand is more and supply is less, prices go up; if demand is less and supply is more, prices go down. The equal demand and supply fix prices at a specific level or equilibrium. Thus, in competitive markets, the market overtly decides prices. Competition in the market is healthy for consumers since it provides a quality product at a low price.
(b) Restrictive Trade Practice[6]–
However, fixing prices by the associations of traders or by the association of service providers to eliminate competition without considering the consumer’s interest is the commonest form of restrictive trade practice found in a competitive market. S.33 (1) of the Monopolies and Restrictive Trade Practice Act provides that any agreement to purchase or sell goods or to tender for the sale or purchase of goods only at prices or on terms or conditions agreed upon between the sellers or purchasers shall be subject to registration under the Act. The MRTP Commission may inquire about the price so fixed by agreement. In many cases, the Commission condemns price fixing in concert or fixing of other terms or conditions of sale or purchase. It has been held that the price fixing in concert is generally due to the instrumentality of the combination of the manufacturers or suppliers or their associations, and it is prima facie anti-competitive in effect and adversely affects consumers.
(c) Administrative price fixation[7]:-
The Essential Commodities Act of 1955, in the interests of the general public, provides rules for control of production, supply, distribution, and fixing the price of trade and commerce. The very object of the Act is to control the inflationary tendency in prices and to ensure equitable distribution of essential commodities. This Act empowers administrators, i.e., the Government, to overtly fix prices of essential commodities, irrespective of demand and supply. Such price fixing is made to achieve this Act’s objective. Ss.3 (1) and 3(2) (c) of the Essential Commodities Act empowers the Government to fix not only ex-factory prices but also wholesale and retail prices. What prices the Government will fix depends upon their estimate of the situation.
*****
[1] वस्तुचा ग्राहक [ वस्तु का ग्राहक ]
[2] बरोबर आहे [ सही है]
[3] मालातील दोष [ माल में दोष]
[4] AIR 1985 SC 299
[5] S. L. Hens V/s M/s. Raghomal Nahar Singh (Pvt) Ltd, (1) 1991 CPJ 495 (NC)
[6] नियंत्रीत व्यापार पध्दती [ नियंत्रित व्यापार प्रथाएं ]
[7] प्रशासकीय किंमत निष्चिती [ प्रशासनिक लागत निर्धारण ]