Monday, July 4th, 2022 19:59:00

National Pride : Consumer Protection in Ancient India

By Dr Pratibha Goyal
Updated: September 2, 2021 3:25 pm

Consumer satisfaction holds a great significance in the area of commerce and business management. Supply of quality goods and services at the right place, right time, in right quantity can make industry grow and flourish. Realization of this fact is not something new in India because the need for consumer protection was recognized by our law makers even in ancient times. The ancient Indian law codes regulated not only social conditions but also the economic life of people by establishing human values and code of trade practices to protect the interests of buyers. The evidences regarding this are clearly available in many shastras such as Manu Smriti, Narada Smriti, Brihaspati Smriti and Arthshastra.

In the post-Vedic India (1000-600 BC) trade and commerce was quite developed. Introduction of money and markets intensified commercial trade. Production and exchange were facilitated through the institution of guild (sreni) or the ancient Indian corporations. With the increase of economic activity, the need to make rules and regulations for the protection of consumers was felt. In Mahabharata, Maharsihi Ved Vyas clearly highlights the importance of protecting consumers against the unethical practices of business.

Indian Dharamashastras or smritis formed the basis of the Hindu law which was adopted by the Englishmen in India. The Smriti literature and kautilya’s Arthsastra give detailed provisions regarding recovery of debts, deposits, sale and purchase, partnership, resumption of gifts, non-payment of wages and non performance of agreements. Manu Smriti (between 8th and 6th century B.C.), Narada Smriti (between 1st and 2nd century AD) and Brihaspati Smriti (from 200 AD to 400 AD) lay down various codes to guide rulers, officers, businessmen and consumers regarding the conduct of economic activity. The total number of Smritis is quite large and the commentaries on them larger still. The commentaries not only explain the Smritis but also considerably modify their doctrines in order to bring them in line with the changed conditions of society. Arthshastra written by Vishnugupta or Kautilya was the work of Maurya period during fourth century BC.  The ancient Indian jurists regarded law as a branch of Dharma whereby law and Dharma were not differentiated. Dharma meant the aggregate duties and obligations- religious, moral, social and legal and based all dealings on mutual good and right of one party was the responsibility of the other. Deviation from the rules of fair conduct meant going away from the path of Dharma. The rules governing these were formulated by Dharmashastras or Smritis which lay down a comprehensive code to regulate human conduct.

Many of the provisions of Arthshastra are similar to those of the Smritis. The striking correspondence between Arthshastra and the Smritis may as well be taken to lead to the inference that Kautilya turned the metrical rules of Dharmashastras into prose and more over the rules that were earlier treated as the tenets of Dharma became administrative law through Arthshastra. Our Dharmashastras teach dharma, and regard deviation from it as sin. The Arthshastra lays down rules and regards transgression of law as crime to be punished by government.


Control over Services

Protection of interests of consumers was an essential part of welfare of people. In case of goldsmiths, details are given about possible frauds in weighing, substitution, interchange, knocking off or cutting out, scratching out and rubbing out of precious metals and the punishments and fines in such cases are prescribed. Goods entrusted to artisans for repair or making were covered by a guarantee from appropriate guild. The work was to be completed within stipulated period. Every artisan or craftsman was responsible for compensating the owner if the entrusted article was lost or destroyed, unless that was due to sudden calamity.

Consumers were protected from the malpractices of service providers. Manu Smriti provides that a washerman shall wash gently on a smooth board of Salmaliwood, he shall not return the clothes of one person as those of the other, nor allow any body but the owner) to wear them. Similarly, Kautilya provides that if a washerman does not wash clothes on wooden planks or smooth stone he shall be fined six panas (silver coin) and shall pay compensation equal to the damage. Disputes about dyeing were adjudicated by experts. Arthshastra gives minute details of time limit and quality of services.

Failure to render a promised service was termed as breach of contract. According to Manu, in case a service provider failed to deliver goods at a given place and time as promised, no money was to be paid by the customer. According to Narada Smriti one who abandoned merchandise which he had agreed to convey to its destination, was to give away sixth part of the wage. When the merchandise was damaged by the carriers’ fault, he was to make good every loss.


Sale and Purchase of Goods

According to Manu Smriti, adulteration of commodities was severely punishable Dishonesty with customer was heavily fined. Ancient Indian society highly effective in n regulating the many wrongs of the market place. When a seller showed one thing but delivered other with blemishes, he was to pay twice the value to the purchaser and an equal amount as fine. A person misrepresenting the quality or quantity of commodity was fined eight times the value of product. According to Narada and Brihaspati, a man who knowingly sold a blemished product, was to pay twice its value to the purchaser and a fine of the same amount to the king.

Sale of articles such as timber, iron, brilliant stones, ropes, skins, earthenware, threads, fibrous garments and woolen clothes as superior though they were really inferior was punished with a fine of eight times the value of the articles sold.


Rescission of Purchase

If the purchaser was not satisfied with the quality of the commodity it could be returned to seller within 10 days, according to Manu Smriti, but Narada Smriti provides that when a purchaser, after having purchased an article for a certain price thinks he has made a foolish bargain, he may return it to the vendor on the same day, in an undamaged condition. When the purchaser returns it on the second day, he shall lose a thirtieth part of price. He shall lose twice as much on the third day. After that time, the purchaser was to keep it. Arthshastra provides that goods with inherent defects or those devoid of quality could be returned by purchaser. If the article was without any flaw and still the customer tried to return it, he was liable to pay a fine of 12 panas.


Non-Delivery of Goods

Narada Smriti provides that if a man sells property for a certain price, and does not hand it over to the purchaser, he shall have to pay its produce, if it is immovable, and the profits arising on it, if it is movable property. If there has been a fall in the market value of the article in question (in the interval, the purchaser) shall receive both the article itself, and together with it the difference (in point of value). This law applied to those who were inhabitants of the same place; but in case of those who traveled abroad, the profit arising from (dealing in) foreign countries was made over (as well). If the article (sold) should have been injured, or destroyed by fire, or carried off, the loss shall be charged to the seller, because he did not deliver it after it had been sold by him. Similarly if a man sold something to one person and then delivered it to another person he gave as compensation twice its value and the same amount as a fine to the king.


Regulation of Price

Price of all marketable goods were based on origin, destination, time taken to produce, time spent in storage and the probable profit and the probable outlay. Narada states that it is for the sake of gain that merchants are in the habit of buying and selling merchandise of every sort for profit. The question of fair price was considered important so that it might not harm the consumers. Exploitation of consumer was considered adharma or immoral practice. Kautilya enjoined upon the state to have a special department for supervising market and ensuring that artisans did not cheat citizens.  The superintendent of markets (samsthadhyaksha) was appointed to safeguard against fraudulent trade practices.

Trade combinations aiming at bringing about artificial rise or fall in prices were severely punished. The trade practices which destroy competition were highly condemned. Predatory practices such as sales below cost were prohibited. Code of Vishnu provided that illegal combination of traders to cut prices to the detriment of competitor was an offence, which was punishable by the highest amercement. Hoarding was prohibited. Only authorized persons could collect and store merchandise. Collection of commodities without permission was confiscated by superintendent of commerce.


Weights and Measures

In ancient Indian period, in order to protect consumers from wrong practices of merchants, all weights and measures were duly marked. Manu’s law provided that weights and measures be examined by the officers of king once in six months. Arthshashra provides for appointment of superintendent of weights and measures (pautavadhyaksha) by the king. It was the duty of superintendent to get weights, measures and balances as per the prescribed standards. A trader using the weights and measures was to get them stamped by the superintendent who used to charge four mashas for stamping. Any kind of cheating in weights and measures was punished.


Consumer responsibilities

Ancient Indian law expected the consumer to act in a responsible manner. It was wrong on the part of consumer to purchase at unreasonably low price or in a secret manner or outside the village or from a dishonest person. When the consumer purchased at a fair price announced by the kind there was nothing wrong about it but he who made a fraudulent purchase was considered a thief. According to Narada Smriti in such a case, the purchaser was as guilty as the seller. A purchase from unknown or suspicious seller was one fault of the consumer, want of care in keeping the article was another and these two faults were viewed as legitimate grounds of loss to each party. As per Brihaspati, the purchaser was supposed to examine product carefully and show it to others and when after examining and approving it he accepted it, he was not at liberty to return it again.  If a blemish in cloth was discovered after wearing and washing it once, the eighth part of the price was lost by consumer; in case of washing it second time one fourth price was lost, the third part or the third time washing and half was lost at the time of its being washed four times. Manu writes that a sensible man should make a deposit (only) with a person of good family, of good conduct, well acquainted with the law, veracious, having many relatives, wealthy and honourable.



India has ancient history of consumer protection. It was an integral part of the culture and formed the core of administration during those times when such rules and regulations were missing in the other parts of the world. Sale of commodities was organized in such a manner that a timely quality service was provided. Minute details in possible deficiencies of services and defects in goods and punishments thereof were given. In ancient Indian society business was based on Dharma or moral values. In present times when erosion of human values has taken place, we need to keep in mind the national glory and refrain from unfair materialistic practices. Our conduct should be fair, honest and in the mutual interest of the business and consumer.


By Dr Pratibha Goyal

(The writer is Professor, Punjab Agricultural University, Ludhiana, Punjab.)

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