Consumer Protection — Business Studies STD 12 Commerce — Question

The Consumer Protection Act, 1986 was enacted to provide a simpler and quicker access to redressal of consumer grievances. The Act introduced the concept of 'consumer and conferred express additional rights on him. The protection is meant for the person who fits in the definition of 'consumer' given by the Act.Section 2(d) of the Consumer Protection Act says that consumer means any person who:

1. Buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment, and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or
2. Hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment, and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person.

For the purposes of the sub-clause (i), "commercial purpose" does not include use by a consumer of goods bought and used by him and services availed by him exclusively for the purpose of earning his livelihood, by means of self-employment. This is an exception to the rule that a buyer of commercial goods is not a consumer under the Act. When goods are bought for commercial purposes and such purchase satisfy the following conditions then such use would not be termed as for commercial purposes under the act, and the user is recognized as a consumer.

• The goods are used by the buyer himself.
• Exclusively for the purpose of earning his livelihood.
• By means of self-employment.

For example:

1. X buys a truck for plying it as a public carrier by himself, then X is a consumer.
2. Y buys a truck and hires a driver to ply it, then Y is not recognized as a consumer.
3. Z has a grocery shop. He starts another business of a photocopier and buys a photocopy machine. Here, Z has not bought this machine exclusively for the purpose of earning livelihood. He is not a consumer under the Act.

The intention of the legislature is to exclude big business houses carrying on business with profit motive from the purview of the Act. At the same time, it is pertinent to save the interests of small consumers who buy goods for self employment to earn their livelihood such as a farmer purchasing fertilizer for his crops, a taxi driver buying a car to run it as a taxi. It is worthwhile to note that in case of goods, buyer of goods for commercial purpose ceases to be a consumer under the Act. On the other hand, a consumer of service for commercial purpose remains a consumer under the Act.