A report submitted for internal assessment of

SERVICE AND CONSUMER PROTECTION

(BUSINESS & COMPANY LAW)

Under the guidance of

Prof. S N Ghosh

PREPARED BY
Roll No. Name Section Group No. Signature

53 Shruti Rana
21 Hally Mahajan
SE 2 07
38 Pramiti Vij
37 Piyush Garg
32 Narinder Sharma
02 Aditya Gupta
24 Keshav Verma

IIPM
IIPM TOWER, SATBARI
CHANDAN HAULA, CHATTARPUR-BHATIMINES ROAD
NEW DELHI

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 ACKNOWLEDGEMENT

We thank Mr. S.N. Ghosh in particular for assigning us this topic and encouraging us to write in
the first place. We owe much to Mr. S.N.Ghosh for his helpful comments.

We are indebted to all those who have been helpful throughout the process of writing this
Report–
Ms. Shruti Rana, Ms. Hally Mahajan, Ms. Pramiti Vij, Mr. Piyush Garg, Mr. Narinder Sharma,
Mr. Aditya Gupta and Mr. Keshav Verma but as the cliché goes, we are solely responsible for
any remaining errors of fact or judgment.

Signature of group members

Ms. Shruti Rana Ms. Hally Mahajan Ms. Pramiti Vij

Mr. Piyush Garg Mr. Narinder Sharma Mr. Aditya Gupta
Mr. Keshav Verma

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 Introduction of Service

A service is the intangible equivalent of an economic good. For example- Services

rendered to a patient by a medical practitioner are charged by him because the patient has
gained something out of it. There is large number of service providers and customers hiring
services so in order to safegaurd the mutual benefit of both parties the Service Act has been
introduced..

Service definition

The generic clear-cut, complete and concise definition of the service term reads as follows:

A service is a set of singular and perishable benefits

 delivered from the accountable service provider, mostly in close coaction with his service
suppliers,
 generated by functions of technical systems and/or by distinct activities of individuals,
respectively,
 commissioned according to the needs of his service consumers by the service customer
from the accountable service provider,
 rendered individually to an authorized service consumer at his/her dedicated trigger,
 and, finally, consumed and utilized by the triggering service consumer for executing
his/her upcoming business or private activity.

Signature of group members

Ms. Shruti Rana Ms. Hally Mahajan Ms. Pramiti Vij

Mr. Piyush Garg Mr. Narinder Sharma Mr. Aditya Gupta
Mr. Keshav Verma

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Service characteristics
Services can be paraphrased in terms of their generic key characteristics.

1. Intangibility

Services are intangible and insubstantial: they cannot be touched, gripped, handled, looked at,

smelled, tasted or heard. Thus, there is neither potential nor need for transport, storage or
stocking of services. Furthermore, a service cannot be (re)sold or owned by somebody, neither
can it be turned over from the service provider to the service consumer nor returned from the
service consumer to the service provider. Solely, the service delivery can be commissioned to a
service provider who must generate and render the service at the distinct request of an authorized
service consumer.

2. Perishability`

Services are perishable in two regards

 The service relevant resources, processes and systems are assigned for service delivery
during a definite period in time. If the designated or scheduled service consumer does not
request and consume the service during this period, the service cannot be performed for him.
From the perspective of the service provider, this is a lost business opportunity as he cannot
charge any service delivery; potentially, he can assign the resources, processes and systems
to another service consumer who requests a service. Examples: The hair dresser serves
another client when the scheduled starting time or time slot is over. An empty seat on a plane
never can be utilized and charged after departure.
 When the service has been completely rendered to the requesting service consumer, this
particular service irreversibly vanishes as it has been consumed by the service consumer.
Example: the passenger has been transported to the destination and cannot be transported
again to this location at this point in time.

Signature of group members

Ms. Shruti Rana Ms. Hally Mahajan Ms. Pramiti Vij

Mr. Piyush Garg Mr. Narinder Sharma Mr. Aditya Gupta
Mr. Keshav Verma

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3. Inseparability
The service provider is indispensable for service delivery as he must promptly generate and
render the service to the requesting service consumer. In many cases the service delivery is
executed automatically but the service provider must preparatorily assign resources and systems
and actively keep up appropriate service delivery readiness and capabilities. Additionally, the
service consumer is inseparable from service delivery because he is involved in it from
requesting it up to consuming the rendered benefits. Examples: The service consumer must sit in
the hair dresser's shop & chair or in the plane & seat; correspondingly, the hair dresser or the
pilot must be in the same shop or plane, respectively, for delivering the service.

4. Simultaneity

Services are rendered and consumed during the same period of time. As soon as the service
consumer has requested the service (delivery), the particular service must be generated from
scratch without any delay and friction and the service consumer instantaneously consumes the
rendered benefits for executing his upcoming activity or task.

5. Variability

Each service is unique. It is one-time generated, rendered and consumed and can never be
exactly repeated as the point in time, location, circumstances, conditions, current configurations
and/or assigned resources are different for the next delivery, even if the same service consumer
requests the same service. Many services are regarded as heterogeneous or lacking homogeneity
and are typically modified for each service consumer or each new situation (consumerised).
Example: The taxi service which transports the service consumer from his home to the opera is
different from the taxi service which transports the same service consumer from the opera to his
home - another point in time, the other direction, maybe another route, probably another taxi
driver and cab.

Signature of group members

Ms. Shruti Rana Ms. Hally Mahajan Ms. Pramiti Vij

Mr. Piyush Garg Mr. Narinder Sharma Mr. Aditya Gupta
Mr. Keshav Verma

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Each of these characteristics is retractable per se and their inevitable coincidence complicates the
consistent service conception and make service delivery a challenge in each and every case.
Proper service marketing requires creative visualization to effectively evoke a concrete image in
the service consumer's mind. From the service consumer's point of view, these characteristics
make it difficult, or even impossible, to evaluate or compare services prior to experiencing the
service delivery.

Mass generation and delivery of services is very difficult. This can be seen as a problem of
inconsistent service quality. Both inputs and outputs to the processes involved providing services
are highly variable, as are the relationships between these processes, making it difficult to
maintain consistent service quality. For many services there is labor intensity as services usually
involve considerable human activity, rather than a precisely determined process; exceptions
include utilities. Human resource management is important. The human factor is often the key
success factor in service economies. It is difficult to achieve economies of scale or gain
dominant market share. There are demand fluctuations and it can be difficult to forecast demand.
Demand can vary by season, time of day, business cycle, etc. There is consumer involvement as
most service provision requires a high degree of interaction between service consumer
and service provider. There is a customer-based relationship based on creating long-term
business relationships. Accountants, attorneys, and financial advisers maintain long-term
relationships with their clientes for decades. These repeat consumers refer friends and family,
helping to create a client-based relationship

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 Signature of group members

Ms. Shruti Rana Ms. Hally Mahajan Ms. Pramiti Vij

Mr. Piyush Garg Mr. Narinder Sharma Mr. Aditya Gupta
Mr. Keshav Verma
INTRODUCTION

India is a vast country where a majority of consumers are poor, helpless and disorganized.
Further, the market in India is generally a sellers market and it is very easy to dupe the innocent
consumer. It is now realized that a common consumer is neither knowledgeable nor well
informed. seller. A common consumer is not in a position to approach civil court. He needs
support and protection from unscrupulous

The central government enacted a law in the year 1986 for the protection of consumer
known as “The Consumer Protection Act, 1986”.
 It extends to the whole of India except the State of Jammu and Kashmir.
 It shall come into force on such date I as the Central Government may, by
notification, appoint and different dates may be appointed for different States and for
different provisions of this Act.
 Save as otherwise expressly provided by the Central Government by notification, this Act
shall apply to all goods and services.

Consumer is defined as someone who acquires goods or services for direct use or
ownership rather than for resale or use in production and manufacturing. Consumer interests can
also be protected by promoting competition in the markets which directly and indirectly serve
consumers, consistent with economic efficiency, but this topic is treated in Competition law.
Consumers play a vital role in the economic system of a nation because in the absence of
effective demand that emanates from them, the economy virtually collapses.

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 Signature of group members

Ms. Shruti Rana Ms. Hally Mahajan Ms. Pramiti Vij

Mr. Piyush Garg Mr. Narinder Sharma Mr. Aditya Gupta
Mr. Keshav Verma

OBJECTIVES OF THE CONSUMER PROTECTION ACT:

In view of the factual position of our society, where problems like illiteracy, ignorance,
poverty and backwardness are existing and where the trading community is well organized while
the consumers are still unorganized, consequently their exploitation continues unchecked.

The act has recognized six rights of the consumers :

1. Right to Safety: The right to be protected against goods which are hazardous to life and
property.

2. Right to Information: The right to be informed about the quality, quantity, purity, price
and standards of goods.

3. Right to Choose: The right to be assured access to a variety of products at competitive

prices, without any pressure to impose a sale, i.e., freedom of choice.

4. Right to be Heard: The right to be heard and assured that consumer interests will
receive due consideration at appropriate forums.

5. Right to Seek Redressal: The right to get relief against unfair trade practice or
exploitation.

6. Right to Education: The right to be educated about rights of a consumer.

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 Signature of group members

Ms. Shruti Rana Ms. Hally Mahajan Ms. Pramiti Vij

Mr. Piyush Garg Mr. Narinder Sharma Mr. Aditya Gupta
Mr. Keshav Verma

Protection of Consumer Rights :

Consumer protection means safeguarding the rights and interests of consumers. It

includes all the measures aimed at protecting the rights and interests of consumers.
Consumers need protection due to the following reasons:

1. Illiteracy and Ignorance: Consumers in India are mostly illiterate and ignorant. They do not
understand their rights. A system is required to protect them from unscrupulous businessmen.

2. Unorganised Consumers: In India consumers are widely dispersed and are not united. They
are at the mercy of businessmen. On the other hand, producers and traders are organized and
powerful.

3. Spurious Goods: There is increasing supply of duplicate products. It is very difficult for an
ordinary consumer to distinguish between a genuine product and its imitation. It is necessary to
protect consumers from such exploitation by ensuring compliance with prescribed norms of
quality and safety.

4. Deceptive Advertising: Some businessmen give misleading information about quality, safety
and utility of products. Consumers are misled by false advertisement and do not know the real
quality of advertised goods. A mechanism is needed to prevent misleading advertisements.

5. Malpractices of Businessmen: Fraudulent, unethical and monopolistic trade practices on the

part of businessmen lead to exploitation of consumers. Consumers often get defective, inferior
and substandard goods and poor service. Certain measures are required to protect the consumers
against such malpractices.

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 6. Freedom of Enterprise: Businessmen must ensure satisfaction of consumers. In the long run,
survival and growth of business is not possible without the support and goodwill of consumers. If
business does not protect consumers' interests, Government intervention and regulatory measures
will grow to curb unfair trade practices.

7. Legitimacy for Existence: Business exists to satisfy the needs and desires of consumers.
Goods are produced with the purpose of selling them. Goods will, in the long run, sell only when
they meet the needs of consumers.

8. Trusteeship: Businessmen are trustees of the society's wealth. Therefore, they should use this
wealth for the benefit of people

Signature of group members

Ms. Shruti Rana Ms. Hally Mahajan Ms. Pramiti Vij

Mr. Piyush Garg Mr. Narinder Sharma Mr. Aditya Gupta
Mr. Keshav Verma

Methods of Consumer Protection :

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 There are four main methods of protecting the interests of consumers:

1. Business Self-regulation: The business community itself can help in achieving consumer
protection and satisfaction through self -discipline. Businessmen can regulate their own
behaviour and actions by adopting higher ethical standards. Trade associations and chambers of
commerce can check unfair trade practices used by some businessmen.

2. Consumer Self-help: Every consumer must be alert as self-help is the best help. He should
educate himself and know his rights. He should not allow unscrupulous businessmen to cheat
him.

3. Consumers' Associations: Consumers should form voluntary associations. These associations

can educate and awaken consumers. They can take organized action and put pressure on
businessmen to adopt fair trade practices.

4. Government Regulations: The State can ensure consumer protection through legislative,
executive and judicial actions. The laws enacted by the Government must be strictly enforced by
the executive. Government of India has enacted several laws to protect the interests and rights of
consumers

THE CONSUMER PROTECTION ACT, 1986

The Act provides following remedies to an aggrieved consumer:

 Removal of defects in goods or deficiency in service.

 Replacement of defective goods with new goods of similar description which shall be
free from any defect.

 Return of price paid by the consumer.

 Payment of compensation for any loss or injury suffered by the consumer.

 Discontinue the restrictive, or unfair trade practice, and not to repeat it.

 Withdraw the hazardous goods from being offered for sale and not to offer them for sale.

 Provide for adequate cost to the aggrieved party.

Signature of group members

Ms. Shruti Rana Ms. Hally Mahajan Ms. Pramiti Vij

Mr. Piyush Garg Mr. Narinder Sharma Mr. Aditya Gupta
Mr. Keshav Verma
LIST OF AMENDING ACTS:

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 1. The Consumer Protection (Amendment) Act, 1991 (34 of 1991).
2. The Consumer Protection (Amendment) Act, 1993 (50 of 1993).

3. The Consumer Protection (Amendment) Act, 2002 (62 of 2002).

Signature of group members

Ms. Shruti Rana Ms. Hally Mahajan Ms. Pramiti Vij

Mr. Piyush Garg Mr. Narinder Sharma Mr. Aditya Gupta
Mr. Keshav Verma

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