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Consumer Protection Class 12th Business Studies Part Ii CBSE Solution

Class 12th Business Studies Part Ii CBSE Solution

Very Short Answer
Question 1.

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


Answer:

Right to be heard: The consumer has a right to file a complaint and to be heard in case of dissatisfaction with a good or service.



Question 2.

Which quality certification mark is used for agricultural products?


Answer:

AGMARK sign is issued and certified by Govt. of India Directorate of marketing and inspection.




Question 3.

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


Answer:

A complaint can be made to the appropriate State Commission when the value of the goods or services in question, along with the compensation claimed, exceeds Rs. 20 lakhs but does not exceed Rs. 1 crore.



Question 4.

State any two reliefs available to consumers under CPA.

i.


Answer:

To cease manufacture of hazardous goods and desist from offering services which are hazardous in nature

ii. Removal of defects from the goods or Replacement of the goods



Question 5.

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


Answer:

Quality Certification of the product.




Short Answer
Question 1.

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


Answer:

The Government of India has passed various regulations to protect the interests and rights of consumers which are as follows:


1. The Consumer Protection Act, 1986: this Act safeguards the consumer against defective goods, deficient services, unfair trade practices and other forms of exploitation.


2. The Contract Act, 1982: The Act lays down the conditions in which promises made by parties to a contract will be binding on each party. It also specifies the remedies and punishment available to any party in case of breach of contract.


3. The Sale of Goods Act, 1930: this Act safeguards buyers of the goods in case goods purchased by them do not comply with express or implied terms, conditions and warranties.


4. The Essential Commodities Act, 1955: this Act prevents anti-social activities such as profiteering, hoarding and black marketing. It aims at controlling production, supply and distribution of essential commodities.


5. The Agricultural Produce (Grading and Marketing) Act, 1937: the Act stipulates the conditions which govern the use of standards and lays down the procedure for grading, marking and packing of agricultural commodities and livestock products.


6. The Prevention of Food Adulteration Act, 1954: the Act aims to check adulteration of food articles and ensure their purity to maintain public health.


7. The Standard of Weights and Measures Act, 1976: it safeguards consumer interest against malpractice of underweight or under-measure of goods sold.


8. The Trademarks Act, 1999: it prevents the use of fraudulent marks on products.


9. The Competition Act, 2002: This Act prevents business firms from anti-competitive or monopoly practices in the market.


10. The Bureau of Indian Standards Act, 1986: the bureau has been set up to formulate the quality standards for goods and provide certification to goods which adhere to the standard. It also provides speedy redressal to consumers against complaints about the quality of goods carrying the certification mark provided under this Act.



Question 2.

What are the responsibilities of a consumer?


Answer:

A consumer must also be responsible while purchasing, using, consuming goods and services. This is one of the ways in which consumer protection can be strengthened. The responsibilities of a consumer are as follows:


1. The consumer must have knowledge about the products available in the market so that a wise choice can be made.


2. They must buy only standardised goods as they provide quality assurance. Hence, they must look for certification marks like ISI mark for electrical goods, FPO mark on food products, Hallmark on jewellery, etc.


3. They should learn about the risks associated with products and services.


4. The consumer must read the labels on the products to have information about prices, net weight, manufacturing, expiry dates, etc.


5. They should assert to ensure that they get a fair deal.


6. Be honest in their dealings. For example: they should only purchase legal goods and services and discourage malpractices like black-marketing, hoarding, etc.


7. Ask for a memo on purchase of goods and services which would serve as proof of purchase.


8. File a complaint in appropriate consumer forum in case of grievances related to quality or standard of the goods purchased or services availed.


9. Form consumer organisations which would play active role in educating consumers about their rights and remedies and safeguard their interest.


10. The consumer must keep their environment clean by avoiding wastage, littering and pollution.



Question 3.

Who can file a complaint in a consumer court?


Answer:

A complaint before the appropriate consumer forum can be made by the following:


1. Any consumer


2. Any registered consumers’ 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. Explain the redressal mechanism available to consumers under the Consumer Protection Act, 1986.


The Consumer Protection Act, 1986, seeks to protect and promote the consumers’ interest through speedy and inexpensive redressal of their grievances. It is applicable to all types of undertakings, big or small, public or private, manufacturing or trading and whether a supplier of goods or of services. The Act provides for the setting up of a three-tier machinery consisting of the District forums, State Commissions and the National Commission. The National Commission is set up by the Central Government while the State Commissions and District Forums are set up in each State and District, respectively, by the concerned State Government.


A complaint before the appropriate consumer forum can be made by the following:


1. Any consumer


2. Any registered consumers’ 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.


The redressal mechanism available to consumers under the three-tier machinery are as follows:


1. District Forum: a complaint can be made to the District forum only when the value of goods or services in question along with the compensation claimed does not exceed Rs. 20 Lakhs. Once the complaint has been filed, the District Forum will summon the party against whom the complaint has been filed. If required, a sample of the product in question shall be sent for testing in an accredited laboratory. The Forum shall pass its order on basis of the tests from the Laboratory and after hearing to the complaints of both parties. The order passed by the District Forum can be appealed before the concerned State Commission by the aggrieved party within 30 days of passing of the order.


2. State Commission: A complaint can be filed in the appropriate State Commission when the value of goods or services in question, along with the compensation claimed, exceeds Rs. 20 lakhs but does not exceed Rs. 1 crore. The appeals against the order of the District Forum can also be filed before the State Commission. A similar procedure is followed by the State commission as that of the District Forum. Once the complaint has been filed, the State Commission will summon the party against whom the complaint has been filed. If required, a sample of the product in question shall be sent for testing in a accredited laboratory. The Commission shall pass its order on basis of the tests from the Laboratory and after hearing to the complains of both parties. The order passed by the State Commission can be appealed before the National Commission by the aggrieved party within 30 days of passing of the order.


3. National Commission: a complaint can be made to the National Commission when the value of goods or services in question along with the compensation claimed exceeds Rs. 1 crore. The appeals against the order of the State Commission can also be filed before the National Commission. Once the complaint has been filed, the National Commission will summon the party against whom the complaint has been filed. If required, a sample of the product in question shall be sent for testings in an accredited laboratory. The Commission shall pass its order on basis of the tests from the Laboratory and after hearing to the party against whom the complaint has been filed. The order passed by the National Commission can be appealed by the aggrieved party in the Supreme Court.


If the Consumer Court is satisfied with the genuineness of the complaint, it can issue one or more directions to the opposite party in its Order which are as follows:


1. To remove the defect in the goods or deficiency in the service.


2. To replace the defective product.


3. To refund the prices or fees paid for the product or the service, respectively.


4. To compensate the aggrieved party with a reasonable amount for the loss or injury suffered by the party due to negligence of the opposite party.


5. To pay penal damages in appropriate circumstances.


6. To withdraw and to not offer hazardous goods for sale. Also, cease manufacture of hazardous goods and stop providing hazardous services.


7. To discontinue permanently unfair/ restrictive trade practices.


8. To pay an amount (not less than 5% of the value of the defective goods or deficient services provided), to be credited to the Consumer Welfare Fund or any other organisation/ person to be utilised in prescribed manner.



Question 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.


Answer:

The Consumer Right being reinforced by this proposal is Right to be informed. Here 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. It is because of this reason that the legal framework in India requires the manufactures to provide such information on the package and label of the product.



Question 5.

Who is a consumer as per CPA?


Answer:

A Consumer is a person who purchases a product or avails a service for a consideration, either for his personal use or to earn his livelihood by means of self-employment. The consideration may be: Paid, Promised Partly paid and partly promised. It also includes a beneficiary of such goods/services when such use is made with the approval of such person




Long Answer
Question 1.

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


Answer:

Business cannot survive or profit without consumers protection and satisfaction because of the following reasons:


1. Long term interest: long term profit maximisation should be the aim of the business by retaining the consumers interest by satisfying them with the products.


2. Business uses society's resources: Business uses resources from the society therefore it's their responsibility to supply such products and render such services which are of consumers interest.


3. Social responsibility: consumers are the major stockholders in the business firm and this holds the responsibility of the business to supply good quality products and reasonable prices to consumers.


4. Moral Justification: It is the moral duty of any business firm to take care of their consumers by avoiding them from getting exploited, insecure losses and unfair trade.


5. Government Intervention: A business engaging in exploitative trade practice would attract government intervention, where punishable laws will be followed in case of exploitation of the consumer which can spoil the image of business. Hence, such practices of fraud need to be avoided.



Question 2.

Explain the rights and responsibilities of consumer?


Answer:

The Consumer Protection Act enlists six rights for a consumer. They are:


i. Right to Safety - this act emphasis mainly on quality of the products that needs to be bought by the consumer which safeguards the consumer against the goods and services that are hazardous to his/her life, health and property.


ii. Right to be Informed – here the consumer has the right to know about the detailed description of his products such as manufacturing date, quantity, price, ingredients, weight, etc., of goods and services.


ii. Right to Choose - Right to Choose gives the consumer a choice to choose from a variety of goods and services available at different prices from which a consumer can buy the most suitable one.


iv. Right to be Heard - In case of any complaints or dissatisfaction regarding a product needs to be dealt by a business firm. A consumer has the right to file a complaint and a complaint receiving cell needs to be established.


v. Right to Seek Redressal - Here a consumer has the right to seek compensation in case of any exploitation such as defect in the product or deuteriation in the quality of the product


vi. Right to Consumer Education - A consumer has the right to be educated regarding his rights of the product and available remedies in case of exploitation.


The responsibilities of consumers are as follows:


i. To be aware - consumer should be we aware of their rights while buying a product


ii. To be active - consumer should be careful while purchasing a product for its quality and certification.


iii. To protect environment - consumer should be careful with buying the products regarding its environmental safety and should involve in its safe disposal methods without harming the environment.


iv. To read labels - Consumer should buy standardized goods by seeing the label on a product with respect to their information regarding its price, weight, manufacturing and expiry date


v. To ensure honest transactions - Consumer should buy the product in a legal way and avoid illegal ways such as black marketing and ask cash memo on purchase.


vi. To ensure safety A consumer should carefully read the instructions provided by the business firm on the product as to ensure safety of it before use



Question 3.

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


Answer:

Other then consumer awareness there are multiple by which consumers can be protected


1) Consumer awareness – Consumer needs to be aware of his right and responsibilities and he should take action against the wrongdoing of sellers, government and many other organisations are working to make more and more consumers aware about their rights


2) self-regulation by business- it is in the interest of the business of the serve the customers better to retain them for the long term and increase profitability. Many companies have set up their own redressal mechanism to help consumers, and they follow their standard procedures to do business ethically


3) Business Association –the Association and business federation like FICCI and CII have setup code of conduct for laid down guidelines for there members for dealing with customers


4) Consumer organisations – consumer organization and various NGO are working for consumer protection. They provide information about consumer rights, organise seminars and help the consumer to approach redressal mechanism in legal ways, on behalf of the general public they also file cases in consumer courts.


5) Government – the Government protect the interest of the customer by taking various measures, For example, the GOI has set up a toll-free national consumer Helpline Number 1800114000 for this purpose. Under the consumer protection act, the government has also set up the redressal mechanism at district state and national level to protect the consumers.



Question 4.

Explain the redressal mechanism available to consumers under the Consumer Protection Act, 1986.


Answer:

Under the consumer protection act, three redressal forums have been set up to deal with consumer protection -

1) District forum –


• It is available in every district, it consists of one president and minimum2 members and one of them should be a woman, who is appointed by the state government.


• All cases where the value of goods and services is less than 20 lakh Rs, needs to be addressed by the district forum


• If the consumer is not satisfied with the decision of the district forum, he can appeal to the state commission


2) State commission


• It consists of one president and minimum 2 members which are appointed by the state government


• It is for the goods and services where the value of the item concerned is more than 20 lakhs but less than 1 cr, also for the cases where one of the parties is not satisfied with the decision of district forum and has approached the state commission


• If any of the party is not satisfied with the decision of state commission, he can appeal to the national commission within 30 days


3) National commission -


• The national commission is established by the central government and it has one president and minimum of four other members, one of them should be a woman


• It is for the goods and services where the value of the matter concerned is more than 1 crore, also for the cases where any of the party is not satisfied with the decision of state commission


• If any of the party is not satisfied with the decision of the central government, they can move to the supreme court, only those cases where the value of material concerned is more then a crore will go to the supreme court.



Question 5.

Explain the role of consumer organisations and NGOs in protecting and promoting consumers’ interests.


Answer:

Consumer Organisations and NGOs perform several functions to protect and promote consumer interests. These include:


1. Educating the general public about consumer rights by organising workshops, seminars and other training programmes.


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


3. Carrying out comparative testing of consumer products in accredited laboratories to test relative qualities of competing brands and publishing the same for consumer benefit.


4. Encouraging consumers to protest and take legal action against exploitative, unscrupulous and unfair trade practices of business organisations.


5. Providing assistance to consumer seeking legal remedy.


6. Filing complaints in appropriate consumer courts on behalf of the consumer.


7. Taking an initiative in filing cases in consumer forums in the interest of general public.



Question 6.

Mrs Mathur sent a jacket to a laundry shop in January 2018. The jacket was purchased at a price of `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 discolouration 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 a discoloured jacket but to no avail. Upon Consumer court's intervention, Shine Dry Cleaners agreed to compensate `2,500 to Mrs Mathur for the discoloured jacket.

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

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

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

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


Answer:

a. Right to seek Redressal

b. Right to seek Redressal is the right which helped Mrs Mathur to avail the compensation. Here consumer has a right to get relief in case the product or service falls short of his expectations. The Consumer Protection Act provides a number of reliefs to the consumers including replacement of the product, removal of a defect in the product, compensation paid for any loss or injury suffered by the consumer, etc.


c. Mrs Mathur has been fulfilled with the consumer responsibility of File a complaint in an appropriate consumer forum in case of a shortcoming in the quality of goods purchased or services.


d. i. Buy only standardised goods as they provide quality assurance. Thus, look for ISI mark on electrical goods, FPO mark on food products, Hallmark on jewellery etc.


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