NCERT Solutions for Class 12 Business Studies Business Studies II Chapter 3: Consumer Protection

Chapter at a glance

Exercises – Very Short Answer Type

Question VSA – Q1

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

Answer

Right to be heard – the consumer has the right to file a complaint and be heard if dissatisfied; firms set up consumer service/grievance cells for this.

Right to be heard.

Question VSA – Q2

Which quality certification mark is used for agricultural products?

Answer

AGMARK.

AGMARK.

Question VSA – Q3

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

Answer

Complaints where the value of goods or services paid as consideration exceeds ₹ 50 lakh but does not exceed ₹ 2 crore. It also hears appeals against District Commission orders.

Cases where the consideration paid exceeds ₹ 50 lakh but not ₹ 2 crore (and appeals against District Commission orders).

Question VSA – Q4

State any two reliefs available to consumers under CPA.

Answer

1. Replacement of defective goods with new, defect-free goods.
2. Refund of the price paid for the product/service. (Others: removal of defect, compensation for loss or injury, punitive damages, discontinuing unfair trade practice.)

Replacement of defective goods and refund of the price paid (also removal of defect, compensation, punitive damages).

Question VSA – Q5

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

Answer

Labelling (and packaging) – the label provides information about ingredients, price, quantity, date of manufacture and expiry, directions for use, etc.

Labelling.

Exercises – Short Answer Type

Question SA – Q1

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

Answer

1. The Consumer Protection Act, 2019
2. The Indian Contract Act, 1872
3. The Sale of Goods Act, 1930
4. The Essential Commodities Act, 1955
5. The Agricultural Produce (Grading and Marking) Act, 1937 (AGMARK)
6. The Food Safety and Standards Act, 2006 (replaced the Prevention of Food Adulteration Act, 1954)
7. The Legal Metrology Act, 2009 (replaced the Standards of Weights and Measures Act, 1976)
8. The Trade Marks Act, 1999
9. The Competition Act, 2002
10. The Bureau of Indian Standards Act, 2016

CPA 2019, Indian Contract Act, Sale of Goods Act, Essential Commodities Act, Agricultural Produce (Grading and Marking) Act, Food Safety and Standards Act, Legal Metrology Act, Trade Marks Act, Competition Act and BIS Act.

Question SA – Q2

What are the responsibilities of a consumer?

Answer

1. Be aware of various goods and services available.
2. Buy only standardised goods (ISI, AGMARK, FPO, Hallmark, Woolmark).
3. Learn about the risks associated with products and follow instructions.
4. Read labels carefully – price, weight, dates, ingredients.
5. Assert yourself to get a fair deal.
6. Be honest – buy only from legal sources; avoid black marketing and hoarding.
7. Ask for a cash memo/bill.
8. File a complaint in case of deficiency.
9. Form consumer societies to educate consumers.
10. Respect the environment – avoid waste, littering and pollution.

Be aware, buy standardised goods, learn risks, read labels, be assertive, be honest, insist on a cash memo, file complaints, form consumer societies and respect the environment.

Question SA – Q3

Who can file a complaint in a consumer court?

Answer

Under the Consumer Protection Act, 2019, a complaint can be filed by:

1. A consumer.
2. Any registered voluntary consumer association.
3. The Central Government or any State Government.
4. The Central Consumer Protection Authority (CCPA).
5. One or more consumers, on behalf of numerous consumers with the same interest.
6. Legal heir or representative of a deceased consumer.
7. Parent or legal guardian of a minor consumer.

A consumer, a registered consumer association, the Central or State Government, the CCPA, consumers on behalf of many with the same interest, a legal heir of a deceased consumer, or the guardian of a minor.

Question SA – Q4

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

Right to be informed – the consumer has the right to have complete information about the product (ingredients, quality, quantity, price, date of manufacture and expiry, method of use) before buying it. Declaring the oil/fat used helps health-conscious consumers make informed choices and protects them against unfair practices.

Right to be informed – the consumer is entitled to full information about the product (here, the oil or fat used) to make an informed choice.

Question SA – Q5

Who is a consumer as per CPA?

Answer

According to the Consumer Protection Act, 2019, a consumer is:

1. Any person who buys any goods for a consideration (paid, promised, partly paid or under deferred payment), and includes any user of such goods with the approval of the buyer – but not a person who obtains goods for resale or commercial purpose.
2. Any person who hires or avails of any services for a consideration, and includes any beneficiary of such services with the approval of the hirer – but not for commercial purposes.

It includes transactions made offline or online (e-commerce, teleshopping, direct selling, multi-level marketing).

A consumer is one who buys goods or hires services for a consideration (and their approved users or beneficiaries), not for resale or commercial purposes, including online purchases.

Exercises – Long Answer Type

Question LA – Q1

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

Answer

1. Long-term interest of business – satisfied customers bring repeat sales and goodwill; exploiting customers harms the business in the long run.
2. Business uses society’s resources – it is responsible to supply goods in the interest of the public.
3. Social responsibility – business has responsibilities towards various groups, including consumers.
4. Moral justification – it is the moral duty of business to protect consumers’ interests and avoid exploitation (adulteration, black marketing, misleading ads).
5. Government intervention – if business does not protect consumers, the government will intervene through laws and penalties, which may harm the firm’s image.

It serves the long-term interest of business, is owed because business uses society’s resources, fulfils social responsibility and moral duty, and avoids government intervention.

Question LA – Q2

Explain the rights and responsibilities of consumer?

Answer

Rights (under the Consumer Protection Act)

1. Right to safety – protection against goods and services hazardous to life and health (e.g. ISI-marked electrical appliances).
2. Right to be informed – complete information about the product before buying.
3. Right to choose – freedom to choose from a variety of products at competitive prices.
4. Right to be heard – to file complaints and be heard in appropriate forums.
5. Right to seek redressal – relief against unfair trade practices or exploitation: replacement, refund, compensation.
6. Right to consumer education – to acquire knowledge and be a well-informed consumer.

Responsibilities

• Be aware of the products available.
• Buy standardised goods.
• Learn the risks of products.
• Read labels carefully.
• Be assertive and honest.
• Insist on a cash memo.
• File complaints for genuine grievances.
• Form consumer societies.
• Respect the environment.

Rights: safety, information, choice, to be heard, redressal and consumer education. Responsibilities: awareness, buying standardised goods, knowing risks, reading labels, assertiveness, honesty, taking a cash memo, filing complaints, forming societies and respecting the environment.

Question LA – Q3

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

Answer

1. Self-regulation by business – socially responsible firms follow ethical standards and set up customer service and grievance cells.
2. Business associations – FICCI, CII and others lay down codes of conduct for members.
3. Consumer awareness – a well-informed consumer can protect himself and know his rights.
4. Consumer organisations – educate consumers, protect their interests and file complaints on their behalf.
5. Government – passes laws (Consumer Protection Act, 2019 and others), sets up the redressal machinery (District, State and National Commissions) and the Central Consumer Protection Authority.

Through self-regulation by business, codes of business associations, consumer awareness, consumer organisations and government laws and redressal machinery.

Question LA – Q4

Explain the redressal mechanism available to consumers under the Consumer Protection Act, 2019.

Answer

The Act provides a three-tier quasi-judicial machinery:

1. District Commission – set up by the State Government in each district.
   • Jurisdiction: complaints where the consideration paid does not exceed ₹ 50 lakh.
   • It sends the goods for testing if required; if satisfied, orders relief.
   • Appeal against its order lies with the State Commission within 45 days.
2. State Commission – set up by the State Government, usually at the state capital.
   • Jurisdiction: complaints where the consideration exceeds ₹ 50 lakh but not ₹ 2 crore; also appeals from District Commissions.
   • Appeal lies with the National Commission within 30 days.
3. National Commission – set up by the Central Government, with jurisdiction over the whole country.
   • Jurisdiction: complaints where the consideration exceeds ₹ 2 crore; also appeals from State Commissions.
   • Appeal lies with the Supreme Court within 30 days.

Reliefs

• removal of defect;
• replacement or refund;
• compensation for loss or injury;
• punitive damages;
• discontinuance of unfair or restrictive trade practices;
• withdrawal of hazardous goods;
• payment of an adequate amount to consumers who cannot be identified;
• corrective advertisement.

Complaints can be filed electronically, and mediation is also available.

A three-tier system: District Commission (up to ₹ 50 lakh), State Commission (₹ 50 lakh – ₹ 2 crore) and National Commission (above ₹ 2 crore), with appeals up to the Supreme Court, granting reliefs such as removal of defect, replacement, refund, compensation and punitive damages.

Question LA – Q5

Explain the role of consumer organisations and NGOs in protecting and promoting consumer’s interest.

Answer

1. Educating the public about consumer rights through training programmes, seminars and workshops.
2. Publishing periodicals and other publications to spread awareness about consumer problems, legal reporting and reliefs.
3. Testing products in laboratories and publishing results of comparative tests of competing brands.
4. Encouraging consumers to protest strongly and take action against unscrupulous, exploitative and unfair trade practices.
5. Providing legal assistance to consumers through help, legal advice etc. in seeking redressal.
6. Filing complaints in appropriate consumer courts on behalf of consumers.
7. Taking initiative in filing cases in the interest of the general public, not individual consumers.

Examples: Consumer Coordination Council (Delhi), Common Cause (Delhi), Consumer Guidance Society of India (Mumbai), CERC (Ahmedabad), VOICE (Delhi).

They educate consumers, publish awareness material, test products, encourage protest against exploitation, give legal aid, file complaints on consumers’ behalf and file public-interest cases.

Question LA – Q6

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 discoloration 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 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 be heard – she first complained to the dry cleaner and requested compensation.

(b) Right to seek redressal – the consumer is entitled to relief against unfair trade practices or deficiency in service (removal of defect, replacement, refund or compensation). Through the consumer court she obtained compensation of ₹ 2,500.

(c) Filing a complaint for genuine grievances in an appropriate consumer forum (and being assertive to get a fair deal). She also kept written proof (the dry cleaner’s letter).

(d) Other responsibilities: ask for a cash memo/bill for purchases and services; read labels carefully and buy standardised goods (ISI, AGMARK, etc.).

1. Right to be heard; (b) right to seek redressal, which got her ₹ 2,500 compensation; (c) filing a complaint for a genuine grievance; (d) e.g. insisting on a cash memo and buying standardised goods after reading labels.

Question LA – Q7

Project work 1: Visit a consumer organisation in your town. List down the various functions performed by it.

Answer

Guidelines and a sample report. Visit a registered consumer organisation – e.g. a district consumer forum/consumer society or a consumer help centre – and interview its office-bearers. Functions typically found:

1. Spreading consumer awareness – camps in schools, colleges and villages; street plays; pamphlets.
2. Running a consumer helpline and guiding consumers on how to file complaints (including the e-Daakhil portal and National Consumer Helpline 1915).
3. Helping consumers file complaints in District/State Commissions and representing them.
4. Mediation between consumers and sellers for out-of-court settlement.
5. Testing or reporting substandard products, adulteration and short weights to authorities.
6. Publishing newsletters and results of product comparisons.
7. Celebrating World Consumer Rights Day (15 March) and National Consumer Day (24 December).
8. Making representations to government on consumer policy.

Record the organisation’s name, address, year of registration, number of complaints handled in a year, and two case examples in your file.

A consumer organisation typically creates awareness, runs helplines, helps file and represent complaints, mediates disputes, reports substandard goods, publishes information, observes consumer days and advocates consumer policy – to be recorded with details in the project file.

Question LA – Q8

Project work 2: Collect some newspaper cuttings of some consumer cases and the rulings given therein.

Answer

Guidelines. Collect 4–6 newspaper reports (or online news) of decisions by District, State or National Consumer Commissions. For each case, record:

Typical types of cases found: a builder ordered to refund with interest for delayed possession; an airline ordered to compensate for lost baggage; a hospital held liable for medical negligence; an e-commerce firm penalised for delivering a used phone; a shop fined for charging above MRP; an insurer directed to pay a wrongly rejected claim. Paste the cuttings, summarise each in the table above, and write a short conclusion on how consumer courts protect consumers.

Collect newspaper reports of consumer-court decisions and record the parties, forum, grievance, right involved, ruling and lesson for each – e.g. refunds for delayed flats, compensation for lost baggage or negligence, penalties for overcharging.

Topic checklist

• ☒ Importance of consumer protection (LA 1, 3)
• ☒ Consumer as per CPA 2019; who can file (SA 3, 5)
• ☒ Rights and responsibilities (VSA 1, 5; SA 2, 4; LA 2, 6)
• ☒ Redressal machinery and reliefs (VSA 3, 4; LA 4)
• ☒ Laws, quality marks and consumer organisations (VSA 2; SA 1; LA 5, 7, 8)

Total questions answered: 18 of 18