Legal Recourse If Seller Refuses To Accept The Return Of Goods

INTRODUCTION

Returning of the good(s) bought is an option often resorted to by a buyer, when either the good is damaged, not of good quality, or different from what was offered initially by the seller and accepted by the buyer. Generally, lot of e-commerce websites and other retail shops have their own return policy, wherein the buyer can return the goods so bought within a stipulated time frame and adhering to certain conditions, like keeping the tags or packaging intact, goods that are being returned should not be damaged (or further damaged if already received damaged by the buyer), etc.

An option to return the goods to the seller is imperative to a buyer/consumer. A well thought out return policy always attracts a consumer because;

  • In e-commerce, return policy is a must as the buyers choose and buy goods without seeing or holding the actual product. Hence, e-commerce sites must ensure that their return policies are fair and appealing to the consumers.
  • In retail businesses, a clear return policy helps the consumer/buyer to build a trust on the seller and his product. It gives them a feeling of security that what they are buying is exactly what is represented by the seller.
  • Consumers essentially see it as a reflection of the seller’s trust on his product. It can basically be considered as an element of goodwill.
  • Giving the consumers an option to return the good(s) ensures that they do not end up with substandard goods, or even if they have bought standard goods of good quality, they might not be satisfied with the product, example, if the product is a garment, and is not of the right size and fit, the consumer should be given an option to return the good(s) for both his personal satisfaction as well as for creating a goodwill for the seller.

In India, there are extensive laws that protect the rights and interests of consumers like the Consumer Protection Act of 1986, the Consumer Protection Act of 2019, the Sale of Goods act of 1930 etc. Although there is no express mention of there being a “right to return” conferred on consumers per se, however, the consumers can seek protection under the law in many other ways.

CONCEPT OF CAVEAT EMPTOR

Before we understand the remedy for when a seller refuses to accept return of goods, we need to know the concept of Caveat Emptor, which is Latin for “let the buyer beware”. This basically holds the buyer responsible for their own choices. This concept applies in cases involving specific goods where the buyer can make his own judgement regarding the same.

The concept of Caveat emptor is enshrined in section 16 of the Sale of Goods Act,1930 which provides that “there is no implied warranty or condition as to the quality or the fitness for any particular purpose of goods supplied”.

This doctrine basically intends to make the buyer more cautious and conscious about his/her choices. The fundamental principle on which this doctrine is based is that once the buyer is satisfied with the product, he has no reason or right to subsequently reject the said product.

The exceptions to this doctrine are as follows:

  • If the seller has been made aware of the purpose for buying a product by the buyer and if the latter is buying the product based on the former’s skill or judgement and the product to be so purchased is of the description in the ordinary course of the seller’s supply, there exists an implied condition of the goods shall be in accordance with the said purpose.

Provided, the buyer buys a product based on the trade name/ branded good.

Example: A goes to B to buy a bicycle. He informs B he wants to use the cycle for mountain trekking. If B sells him an ordinary bicycle that is incapable of fulfilling A’s purpose the seller will be responsible. 

  • The seller, (either the manufacturer or otherwise) has a duty to deliver goods of “merchantable quality”, meaning, goods that are capable of passing the market standards.

Provided, the seller gives the buyer full opportunity to examine the good and the buyer does so (or even doesn’t despite been given the opportunity to do so).

  • When the buyer buys the goods based only on the description, and if the goods do not match the description then in such a case the seller will be responsible for the goods.
  • When the buyer buys the goods based on a sample, then the seller cannot be held responsible, Provided, the rest of the goods do not resemble the sample examined by the buyer.

Example: the buyer examines a white plate and orders for 100 more such plates, but the seller delivers black plates instead, in which case, the seller will be held responsible.

  • If the seller obtains consent from the buyer by fraud, or if the seller does not reveal any material damage to the good(s), then the seller will be held responsible.

Now, despite the buyer having a duty to be conscious and cautious of his choice while making a purchase according to the doctrine of Caveat emptor, there are cases wherein the buyer genuinely has a right to return the good(s) and the seller has a subsequent duty to accept such return of good(s).

LEGAL STANDING–

According to Section 2 (47) (viii) of the latest Consumer Protection Act of 2019, the act of refusal to take back defective goods and refusal to refund the amount thereof, if paid, would constitute an ’’unfair trade practise”.

The section reads as follows:

“S.2 (47)“unfair trade practice” means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice including any of the following practices, namely:—

(…)

(viii) refusing, after selling goods or rendering services, to take back or withdraw defective goods or to withdraw or discontinue deficient services and to refund the consideration thereof, if paid, within the period stipulated in the bill or cash memo or receipt or in the absence of such stipulation, within a period of thirty days;”

Hence, refusal to accept return of goods by the seller would amount to unfair trade practise as under Consumer Protection Act 2019, and the buyer/consumer has the right to seek redressal for the same (section 2(9)(v)).

E-COMMERCE–

Generally, e-commerce sites will have their personally curated return policy which will be clearly mentioned in their website, and will be accessible to the consumers.

While making a purchase online, both the buyer and seller enter into a contract of sale, wherein both the parties are required to comply with the terms and conditions of the particular e-commerce site. Hence, when a buyer purchases goods from the e-commerce site, it is implied that upon return of the said good(s), the seller has to accept the same, provided the buyer has followed the prerequisites mentioned in the return policy.

As per the Draft Rules of the 2019 Act, consumers have remedies in cases where the delivered good(s) does not conform to the standard or description mentioned in the site. The e-commerce entity thereafter is liable to accept return of goods and refund the money paid by the buyer within 14 days.

RETAIL BUSINESS-

In case of retail businesses as well, the buyer and seller enter into a contract when the buyer makes a purchase. And if the goods turn out to be defective or in deviation from what was originally agreed to be purchased by the buyer as mentioned under the exceptions of doctrine of caveat emptor, the seller is responsible and has a duty to accept the return of goods.

DIRECT SELLING ENTITY-

 They are defined under section 2(13) of the Consumer Protection Act 2019 as, “”direct selling” means marketing, distribution and sale of goods or provision of services through a network of sellers, other than through a permanent retail location;”

As per the Draft rules of the 2019 act, the direct selling businesses have an obligation to provide a cooling-off period for direct sellers wherein they can return any goods or services purchased by them, which will not be counted as a breach of contract. 

Also, the direct sellers are under an obligation to explain the return policy clearly to the consumers they’re approaching.

HOW TO FILE A COMPLAINT?

  • The first step before filing aconsumer complaint is to determine the territorial and pecuniary jurisdiction of the complaint.
  • The next step requires the consumer to serve a legal or personal notice to the opposite party.
  • After which, a complaint can be made either in writing or through the electronic mode to the District Collector, the Commissioner of regional office or the Central Authority for violation of consumer rights or unfair trade practices or false or misleading advertisements which are prejudicial to the interests of consumers as a class (section 17).
  • In the case of violation of consumer rights, a complainant can approach the District Commission, State Commission or the National Commission.
  • A Consumer Complaint can be made either in a written manner or in electronic mode to the respective redressal authority.
  • A complaint is to be filed on a plain paper (stamp paper not required) containing details of the complainant and the opposite party along with the particulars of the dispute and the relief to be sought. Also, copies of relevant documents required to prove the claim mentioned in the complaint shall be attached to the complaint.
  • It can either be registered in person, or sent by post, addressed to the concerned redressal commission.
  • It is not compulsory to engage a lawyer to file a case

CONTENTS OF A CONSUMER COMPLAINT-

A consumer complaint shall include the following details:

  • Name and address of the complainant and the opposite party.
  • The date on which the goods were purchased or services were availed, details of such goods and services and the amount paid for the same.
  • The subject of the complaint, whether it was an unfair trade practice, defective goods were supplied, deficiency in services provided etc.
  • The bills and receipts of the concerned product or service.
  • The relief to be sought under the Act.
  • Signature of the complainant or his authorized agent.

CONSUMER REDRESSAL AUTHORITIES-

To protect the consumers’ rights and uphold their interests, the 2019 has provided for the establishment of three consumer redressal mechanisms, namely:

  • District Commission
  • State Commission
  • National Commission;

 Where the consumers can approach to seek legal remedy for their grievances.

DISTRICT COMMISSION–

  • The District Commission can entertain cases where the redressal value is 1 crore or less.
  • The District Commission is established by the State Government under section 28(1).
  • The District Commission comprises of minimum 1 President and two members.
  • Under section 35(1), a consumer; consumer association; one or more consumers representing on behalf of many others with common interest ; the Central Government, the Central Authority or the State Government, as the case may be, can file a complaint.
  • Upon filing a complaint the Commission must admit or reject the same within 21 days, but cannot reject without hearing the complaint as under section 36
  • Proceeding must be presided by the President and one member at least.
  • The Commission is required to dispose of the case as expeditiously as possible (3 months if no analysis or testing of goods is required; 5 months if the same is required).
  • If the party is aggrieved by its order, an appeal can be preferred to the State Commission within 45 days of receiving such order.
  • The State Commission shall not hear any appeal unless the party who has to pay a certain amount as per the order of District Commission, pays at least 50%of the said amount.

STATE COMMISSION–

  • The State Commission can entertain cases where the redressal value is more than 1 crore but cannot exceed 10 crores
  • State Commission can also entertain appeals against the orders of any District Commission within the State
  • State Commission is established by the State Government under section 42(1). The State Government can also establish regional branches if it deems fit.
  • State Commission comprises of minimum 1 President and 4 members (maximum can be as many as is required).
  • The proceedings must be presided by the President and one or more members if the President deems fit.
  • The State Commission disposes of the cases in the exact same manner the District Commission does, and also has the power to review its own orders.
  • If the party is aggrieved by its order, an appeal can be preferred to the National Commission within 30 days pf receiving such an order.
  • The National Commission shall not hear any appeal unless party who has to pay a certain amount as per the order of State Commission, pays at least 50%of the said amount.
  • The appeal must be endeavoured to be disposed of expeditiously within 90 days of its admission.

NATIONAL COMMISSION–

  • The National Commission can entertain cases where the redressal value exceeds 10 crores.
  • National Commission can also entertain any appeals against the orders of State Commission and central authority.
  • National Commission is established by the Central Government under section 53(1), it usually operated in the national capital, but the Central Government can establish regional branches if it deems fit.
  • National Commission comprises of minimum 1 President and 4 members (maximum can be as many as is required).
  • The proceedings must be presided by the President and one or more members if the President deems fit.
  • The National Commission disposes of the cases in the exact same manner the State Commission does, and also has the power to review its own cases, either suo moto or on an application filed by any party.
  • If the party is aggrieved by its order, an appeal can be preferred to the Supreme Court within 30 days pf receiving such an order.
  • The Supreme Court shall not hear any appeal unless the party who has to pay a certain amount as per the order of National Commission, pays at least 50%of the said amount.

According to sections 39, 49 and 59 of the 2019 Act, if the District Commission, State Commission or National Commission respectively, are satisfied that the goods complained against suffer from any of the defects specified in the complaint or that any of the allegations contained in the complaint about the services or any unfair trade practices, or claims for compensation under product liability are proved, they shall direct the opposite party to –

  • Remove the defect pointed out by the appropriate laboratory from the goods in question;
  • Replace the goods with new goods of similar description which shall be free from any defect;
  • Remove the defects in goods or deficiencies in the services in question;
  • Return to the complainant the price, or, as the case may be, the charges paid by the complainant along with such interest on such price or charges as may be decided;
  • Discontinue the unfair trade practice or restrictive trade practice and not to repeat them; etc.

CENTRAL AUTHORITY-

  • The Central Government under section 10 of the 2019 Act, shall establish a Central Consumer Protection Authority to be known as the Central Authority.
  • It shall regulate matters relating to violation of rights of consumers, unfair trade practices and false or misleading advertisements which are prejudicial to the interests of public and consumers and to promote, protect and enforce the rights of consumers as a class.

LIMITATION PERIOD – As per section 69(1) of the 2019 Act, Period of limitation to file a complaint is 2 years from the date when the cause of action arises. There is also a provision for condonation of delay.

In the case of National Insurance Company Ltd. v. Hindustan Safety Glass Works Ltd. & Anr. (2017) 5 SCC 776, the respondents were seeking Supreme Court interference in the dispute being heard by the National Commission on the grounds that the complaint was admitted by the Commission after the duration prescribed by the Statute of Limitation. The Court noticed that the delay in filing a complaint was due to the delay caused by the respondent. In this case, the complainant had filed for insurance the day after the mishap happened but the insurance company stalled the payment by taking the opinion of two different surveyors before completely denying the payment.

The court stated that the limitation was not supposed to be strictly followed. Rather, a pragmatic view of the rights of the consumer must be taken into consideration. Moreover, if the delay caused is beyond the power of the complainant then some concession can be granted. Therefore the Supreme Court allowed the case to be admitted in the commission.

Also, Section 71 of the 2019 Act states that every decision of the Commission must be enforced in the same way as a decree made by the Court under Order XXI of the first schedule of the Civil Procedure Code. 

Section 72, which deals with the punishment for disobedience of the commission’s order, states that:

“Whoever fails to comply with any order made by the District Commission or the State Commission or the National Commission, as the case may be, shall be punishable with imprisonment for a term which shall not be less than one month, but which may extend to three years, or with fine, which shall not be less than twenty-five thousand rupees, but which may extend to one lakh rupees, or with both.”

This section further grants the Commissions the same power as a Judicial Magistrate First Class has under the Code of Criminal Procedure.

Moreover, a product liability action can be brought by a complainant against  product manufacture or service provider or seller , as the case may be, for any harm caused to him/her on account of a defective product.

 

RELATED CASE LAWS-

In The Officer In Charge, vs  M.N. Manohar, on 29 June, 2013 – (Hon’ble Mr. Justice Sri P.Q.Barkath Ali (President) And  Hon’ble Mr. V.V Jose (Member) at the State Consumer Disputes Redressal Commission,

It was observed that in the Cash Memos/Bills issued by the Traders/Shopkeepers in the State a unilateral condition is included stating “goods once sold will not be taken back/exchanged”.  This condition is against section 14 of the Consumer Protection Act, 1986.

As per section 14 of the Consumed Protection Act, 1986, any aggrieved consumer has a right to get relief against defective goods, deficiency in service, over price charges including unfair and restrictive trace practice followed by the traders, manufacturers and service providers.  The consumer Courts have power to give directions to the opposite parties to repair/replace the defective goods or return money etc., to the aggrieved consumers. 

Upholding the view of the District Forum, the State Consumer Disputes Redressal Commission (presided by the President and Member) held that “a customer who buys goods from the appellant would be under the impression that even if the goods are defective he may not be in a position to get it replaced.  For all these reasons I am of the view that Forum is perfectly justified in ordering removal of the said condition from the cash bills of the appellant.”

In Cochin International Airport Ltd vs State Of Kerala on 7 June, 2019 (WP(C).No. 30706 of 2013),

A writ petition was filed by the Cochin International Airport Ltd. challenging the order passed by the Kerala State Consumer Disputes Redressal Commission, Thiruvananthapuram, whereby the order of the Consumer District Forum, Ernakulam in CC No.432/12 was affirmed and the Consumer Forum has directed the petitioner herein to delete the lettering contained in the invoice, “goods once sold will not be taken back” from their bills in future. The writ petition was dismissed.

In CVC v Proprietor (C.C No. 84/2008),

The complainant had purchased an expensive saree, of whose colour bled after one use, and the bill on the purchase of the same had mentioned that once sold, goods cannot be returned or exchanged, to which the District Consumer Dispute Redressal Forum, Thiruvananthapuram held that the said act amounted to unfair trade practise and was in violation of the Government order no. 60/07 FCS&CA dates 03.11.2007.

In Mr.Prem Tukaram Lonke v M/s.Maharasthra Family Showroom (First Appeal No. A/14/62 (Arisen out of Order Dated 16/12/2013 in Case No. CC/13/123 of Addl.District Forum Mumbai Suburban) )

An appeal was directed against the order passed by the Additional District Consumer Disputes Redressal Forum, Mumbai Suburban dismissing consumer complaint holding that the bill in respect of the goods sold specifically mentions that, ‘the goods once sold would not be taken back’.

However, The appeal was admitted on the appellant’s pointing out to the State Consumer Disputes Redressal Commission, Maharashtra, Mumbai a letter issued by the Government of India stating that the condition, “goods once sold will not be taken back/exchanged” was against the law.

FOOD FOR THOUGHT–

The consumer goods ( rights to free return ) bill of 2015 was put forth to provide for consumers the right to free return of consumer goods within a stipulated time and for all matters connected therewith and incidental thereto. However, this bill has not been passed and hence, is not a law in force. 

CONCLUSION-

If a seller refuses to accept return of goods, the consumer must know that it amounts to unfair trade practice and that the latter has a right to seek remedy for the same.  It is absolutely crucial for consumers to know about their rights and duties, and what is even more important is for them to stand up for their rights. Without which the sellers and manufacturers may not take the required measures and precautions to not infringe the consumers’ rights. The Consumer Protection Act of 2019 is the latest development in the Consumer Law, which might have invalidated the infamous adage “let the buyer beware” (Caveat Emptor) and has definitely empowered the consumers. So, it is our duty as consumers to know our rights and ensure they’re well protected and not violated.