As consumers, we all have experienced instances of being misled or cheated. Fortunately, we now have a dedicated avenue for seeking justice: the Consumer Court. 

The government of Nepal published a notice in the Gazette on Feb 10, announcing the formation of such a court in the Kathmandu Valley, which will begin hearing the cases from March 15. Such courts are yet to take shape in other parts of the country, though Section 41 of the Consumer Protection Act, 2018 allows relevant authorities to establish consumer courts across the country.  

In 2022, the Supreme Court’s division bench of Justices Bam Kumar Shrestha and Nahkul Subedi, in the case filed by Forum for the Protection of Consumer Rights, directed the government to establish consumer courts in all provinces to uphold consumer’s rights and interests and curb unfair trade practices. 

Three years into the top court ruling and nearly six years after the enactment of the Act, 2018, the government has decided to partially implement the legal mandates by constituting a Consumer Court in the capital city. Against this backdrop, let’s have a look at the legal arrangements under the 2018 Act, a specialized legislation designed to safeguard the interest of buyers.   

Consumer Court 

The law envisages that the Consumer Court shall consist of a Chairperson, a government-designated district judge, and two gazetted second class officers. One of these officers must be from the judicial service, while the other may be selected from the administrative service at the discretion of the government. The decisions of the Consumer Court can be challenged before the concerned High Court within 35 days.

Rights of consumers

Article 44 of the Constitution of Nepal grants every consumer the right to obtain quality goods and services. The government has enacted “Consumer Protection Act, 2018” to translate the constitutional mandates into action. This law intends to provide remedy to the aggrieved consumers, secure their rights and address their concerns. 

Section 3 of the Act guarantees rights to every consumer to have quality goods and services. Clause-2 confers extensive rights to consumers, including the right to have accessible reach over goods and services, right to select quality goods and services at competitive prices and the right to know the details of products such as price, quantity and purity. 

This respect, the consumers have the right to know about the composition of the product, the distributor, manufacturer and among other details as to the product. Along with this, the consumers have the right to initiate legal action against unfair trade practices. They could claim compensation against the loss caused by the goods and services.

Government role 

As per Section 4(1), the government shall keep an eye on details of the product such as quality, maximum retail price, label and advertisement for the protection of consumer rights.

The Ministry of Industry has been conferred with a plethora of powers, including that of formulating policy as to goods or services' standard, price and accessibility; framing plan of action to fight against “unfair trade practices” and initiating a regular analysis of goods and services consumed in the country. 

The “Consumer Protection Council” led by the Minister for Industry, Commerce and Supplies plays an instrumental role in making policies on the matters incidental to the rights of consumers.

There appears to be a “Central Market Monitoring Committee” under the coordination of the Secretary, Ministry of Industry. This Committee has been entrusted with the power to ensure “protection of the rights and interests of the consumers or for making coordination among the bodies involved in the monitoring or inspection of the supply system.” This Committee dispenses many functions, including that of identifying the shortage of goods or services in market; to monitor and supervise the “Supply System”, to make recommendation for “market monitoring”, to maintain coordination in the function of the “Market Monitoring Team” and “Local Monitoring Committee” or to form committees or subcommittees or to set up “Consumer Information Centre. The “Market Monitoring Committee” could be established at provincial levels [Section 27].

Duty of manufacturers 

The manufacturer would have to use labels in their products by displaying the credentials like the name and address of the manufacturer, composition, weight and quantity, batch number, date of manufacture, expiry date, guarantee and warranty details. 

The information about the products produced from Nepal should be written in Nepali or English. The products without label should not be sold or distributed in Nepal [Section 6(4)]. However, the unpacked agricultural produce or fruits could be sold in the open market without a label. But, the vegetables and fruits which are for export need to be labelled. 

Also, the manufacturers have a duty to manufacture quality goods and services. They should refrain themselves from producing sub-standard products. The service providers should maintain transparency.

Unfair trade practices

Under Section 16, the Act provides that no person shall do or cause to do any form of “unfair trade practice”. The goods and services providers or any person should not hide information as to the label, price and other details and fix a new one to charge more than the actual retail price. The advertisement should not be made false or misleading.

The substandard goods should not be re-labelled for deception purposes. The creation of artificial shortage of goods, hoarding has been banned by this law under Section 16. The goods which are not good for consumption should not be sold or made available to consumers. Section 18 outlaws the sale or distribution of the substandard goods. 

The government of Nepal has been empowered to determine the list of essential food and other goods or services by notification in gazette [Section 19]. This respect, the law remains centralized. This law suggests that the employees of the Centre, Province or local bodies could be designated as Inspectors.  

Way forward 

Protecting and promoting consumerism is a challenging task unless there is awareness among buyers (Caveat Emptor) and accountability among sellers and service providers (Caveat Venditor). The establishment of institutional mechanisms, the formation of consumer courts across the country and the strict enforcement of law and order are essential to effectively realize the mandates of the consumer protection laws.

The state has made a positive step toward advancing consumerism by establishing a dedicated court, initially in Kathmandu. For true progress in consumer rights, the government, people, manufacturers, sellers, service providers and all stakeholders must stand on the same page. After all, Nepal deserves a robust system and society that upholds the rights of its consumers.