qCONSUMER PROTECTION ACT—1986Consumer is at the core of business world in the present day economy. Quantity and quality of goods areproduced as per the needs of the consumer. Advancement of any business unit depends on the satisfactionof the consumer. That product will be in great demand which gives maximum satisfaction to theconsumer and so will be produced on large scale. As a result, the concerned production unit will developand earn large profit. Despite the Fact that Importance of the consumer is widely recognized, he isdeprived of his rights and privilege and is subjected to diverse kinds of exploitation. For instanceexploitation in the form of short weight and measure poor quality of the product, adulteration, supply offake goods, boarding and black marketing of the goods, delivery of goods not on schedule. With a view toprotecting the consumers from such exploitation and making them aware of their rights, a method ofconsumer protection has been launched. Need for protection arid satisfaction of the consumer is nowbeing widely recognized across the world. India has also adopted the concept of consumer protectionmore seriously and vigoursly.Meaning of Consumer Protection:Consumer protection means the protection of the consumers from their exploitation by the unfair tradepractices of the producers/sellers. In fact, providing proper protection of the fundamental rights andInterests of the consumers, freeing them from exploitation, creating consumer awareness, consumerproviding the right to clean business environment to the consumers by means of Legal amendments Is allthat protection means,Consumer Protection Act In India:In India, Central and State Governments have passed various legislative enactments regarding ConsumerProtection. Among them, main Acts are:Drug and Cosmetics Act 1940,Industries Development and Regulation Act 1951Indian Standards Institution (Certification Marks) Act 1952Prevention of Food Adulteration Act 1954Essential Commodities (Supply) Act 1955
The Trade and Merchandise Marks Act, 1958Monopolies and Restrictive Trade Practices Act 1969Packaged Commodities Regulation Order 1975Standards of Weights and Measures Act 1976Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act 1980Standards of Weights and Measures (Enforcement) Act. 1985In spite of above Acts Interests of the consumers were not being properly safeguarded. There are manyreasons for it, but main among them are two,First consumer in general had no knowledge about the authority to whom complaints under these actswere to be addressed.Second to seek remedy under these various acts consumer had to take legal action Involving lot of timeand money.Need was therefore felt to enact such a legislative measure as provide quick and less expensive remedy tothe aggrieved consumer. Consequently, to protect properly the interest of the consumers and to settlequickly their disputes, in December 1986 Consumer Protection Act was passed in India. It was enforcedwith effect from April 15,1987. Last amendment In the Act was made in. 2002.SCOPE AND EXTENT OF THE ACT:Except Jammu and Kashmir state, this Act extends to whole of IndiaProvisions of this Act are In addition to the provisions made previously in the context of the consumersThis Act shall apply to all goods and services that come under the scope of this Act.Main Elements/Features of Consumer Protection Act, 1986:Consumer Protection Act is the most progressive Act of Social well are and is referred to asMagna Carta of consumer protection. It is a land mark event In the history of Acts In India.Main features of the Act are as under
•It applies to all kinds of goods and services.•Provisions of this Act are in addition to the provisions of any other Act in force In the country. Thus, thisAct does not limit or reduce the scope of any other Act•Under this Act, there Is a provision for the Centre and State Governments to setup Consumer ProtectionCouncils composing of both official and non-official members. The objectives of the council are:-- to promote the rights and Interests of the consumers,--to educate and protect them.This Act provides for the following rights to the consumer:oRight to safety,oRight to be heard,oRight to consumer education,oRight to seek redressaloRight to ChooseoRight to be InformedThis Act is based on the principle of compensation wherein fair compensation to the aggrieved party isprovided for. To redress the grievance, there Is provision for three-tier judicial machineryoDistrict leveloState level andoNational LeveL•This Act provides affective protection to the consumer from different types of exploitations, such asdefective goods, adulteration, under-weight, excessive price, unsatisfactory or deficient services andunfair trade practices.•This Act redresses in a simple, cheap and dynamic manner the grievance of the consumer in limited time
•All suppliers of goods and services belonging to private, public and co-operative sectors come under thepurview of this Act.Right to Consumer:In a free market economy, consumer is sovereign. He has the right to buy or not to buy a product offeredfor sale, to expect the product to be safe; to expect the product sale, to bewhat it is claimed to be; to beadequately informed about the most salient aspect of the product. He has a right to receive proper andefficient service and satisfaction. Under section 6 of Consumer Protection Act, consumer has followingrights:(I) Right to Safety:Consumer has the right to be protected against marketing of such goods and services as are hazardous tohealth, life and property. There are several fake, adulterated, inferior, defective, ineffective and dangerousgoods available in market .They are injurious to body and health. Consumer therefore, has the right tosafety from all such goods as well as are likely to cause harm to his body and health, besides causing lossof money.(II) Right to Choose:Under this right, consumer can choose any from among the variety of goods and services available in themarket. One finds in the market goods of different brand, quality, shape, colour, size, design and priceproduced by different manufacturers. Under this right, the consumer must be assured access to variety ofgoods and services are competitive prices as far as possible. Misleading or false advertisement, wronginformation or in any other way, If any person (manufacturer, seller) influences his preference, in anunfair or unnecessary manner, it will be treated as intervention in his right to choose.(III) Right to be informed:Consumer has the right to get all necessary information on the basis of which he may decide to buy thegood or service. He has therefore the right to be informed about the quality, quantity, purity, potency,standard, price of goods, etc.(IV) Right to be heard: Consumer has the right to present before the appropriate forum or authorities all those matters whicheffect his interests. This right Includes the right to make protest and file complaints. This right implies
that matters of interest to the consumer will receive due consideration at appropriate forums, so that he isencouraged to express his problems, complaints and unjust treatment meted out to him.(V) Right to seek redressal:Consumer has the right to get his claims and complaints settled against the manufacturers and sellers.This right provides the consumer freedom from unfair trade practice or unscrupulous exploitation by thetrader. Besides, it helps him secure compensation.(VI) Right to Consumer Education:Under this right, consumer is entitled to get Information or educated about those things which arenecessary for him. Such an education creates awareness about his rights and he comes to know when toapproach for the redressal of his grievance and exploitation. This helps a consumer protect himself againstfraudulent, deceptive and misleading advertisement and poor or negligent services.Machinery for Redressal of Consumer Grievances:To provide simple, speedy and inexpensive redressal of consumer grievances, the act envisagesthree- tierquasi-judicial machinery at the national, state and district levels.* National Consumer Disputes Redressal Commission - known as National Commission.* Consumer Disputes Redressal Commissions known as State Commission”.* Consumer Disputes Redressal Forums- known as District Forum”.(I) The District Consumer Protection Council:The State Government shall establish for every district, by notification a council to be known as theDistrict Consumer Protection Council with effect from such date as it may specify in such notification.Composition of the district forum:Each District Forum shall consist of•A person who is, or who has been or is qualified to be, a District Judge, who shall be its President;•There will be 2 other members who shall be persons of ability, integrity and standing and have adequateknowledge or experience or have shown capacity In dealing with problems rebating to economics, law,commerce, accounting, industry, public affairs or administration, one of whom shall be a women.
•Every appointment shall be made by the State Government on the recommendation of SelectionCommitteeconsisting of the following namely:oThe President of the State Commission- Chairman,oSecretary, Law Department of the State- Member,oSecretary, in charge, of the Department dealing with Consumer affairs in the State- Member.Terms and age:Provided that a member shall be eligible for re-appointment for another term of 5 years or up to the age of65 years, whichever is earlier.Jurisdiction of the district forum:(1) Subject to other provisions of this Act, the District Forum shall have jurisdiction to entertaincomplaints where the value of the goods or services and the compensation if any, claimed does not exceedrupees twenty lakhs.(2) A complaint shall be instituted in a District Forum within the local limits of whose jurisdiction, -The opposite party or each of the opposite parties, where there are more than one, at the time of theinstitution of the complaint, actually and voluntarily resides or carries on business or has a branch office,or personally works for gain; or(b) Any of the opposite parties where there are more then one, at the time of the institution of thecomplaint, actually and voluntarily resides, or carries on business or has a branch office, or personallyworks for gain, provided that insuch case either the permission of the District Forum is given, or theopposite parties who do not reside, or carry on business or have a branch office, or personally works forgain, as the case may be, acquiesce in such institution; or (c) The cause of action, wholly or in part arises.(II) The State Commission:Regarding State Commission following provision have been made In Consumer Protection Act 1986.
Establishment: In every state, the state government, by issuing a notification can establish consumerGrievance Redressal Commission to be called ‘State Commission’.Composition: Each State Commission shall consist of:•A person (member) who is or has been a judge of a High Court, appointed by the State Government. whoshall be its President. But his appointment shall be made only after consultation with the Chief Justice ofthe High Court.•There will be 2 other members who shall be persons of ability, integrity andstanding and have adequateknowledge or experience or have shown capacity Indealing with problems rebating to economics, law,commerce, accounting,industry, public affairs or administration, one of whom shall be a women.•Every appointment shall be made by the State Government on therecommendation of the selectioncommittee. TheSelection committee shall be composed of:oPresident of the State Commission — ChairmanoSecretary of the Law Department of the State — MemberoSecretary incharge of the Department dealing with Consumer Affairs in the State — MemberTerms and Age:Every member of the State Commission shall hold office for a term 5 years, or up to the age of 67 years,whichever is earlier, and shall not be eligible for re-appointment.Jurisdiction of State Commission:Subject to the other provision of this Act., the State Commission Shall have Jurisdiction:(a) to entertain: (i) complaints where the value of the goods or services and compensation, if any claimed exceedsrupees 20lakhs but does not exceed rupees one crore .(ii) appeals against the orders of any District Forum within the Stale; and(b) to call for the records and pass appropriate and pass appropriate orders In any consumer dispute whichis pending before or has been decided by any District Forum within the State, where It appears to the
State Government that such District Forum has exercised a jurisdiction not vested In it by law or hasfailed to exercise a Jurisdiction so vested or has acted in exercise on its jurisdiction illegally or withmaterial irregularity.III. The National Commission:Following are the provisions of the Consumer Protection Act in NCEstablishment :By issuing a notification Central Government can set up a National Commission ThisCommission has been established at New Delhi.Composition:The National Commission shall compose of:•A person (member) who is or has been a judge of the Supreme Court shall be appointed by the CentralGovernment. He shall be its President. Provided that no appointment under this clause shall be madeexcept after consultation with the Chief justice of India.•There shall be 4 other members including one woman. They shall be persons of ability integrity,experience of, or have shown capacity in dealing with problems relating to economics, law, commerce,accountancy, industry, public affairs or Administration.Every appointment shall be made by the Central Government on the recommendation of aSelection Committee consisting of the following namely:•A person who is a judge of the Supreme Court, to be nominated by the chief justice shall be itsChairman.•The secretary Department of Legal Affairs In the government of India shall be Hmember.•Secretary of the Department dealing with consumer affairs in the government of India shall be its othermembers.Term of Members:Every member of the National Commission shall hold office for a term of 5 years or upto the age of 70years, whichever is earlier..
Jurisdiction of the National CommissionSubject to the other provisions of this Act, the National Commission shall have Jurisdiction as underto entertain complaints where the value of the goods or services and compensation, if any, claimedexceeds rupees 1crore.•to entertain appeals against the orders of any State Commission;•to call for the records and pass appropriate orders In any consumer dispute which is pending before orhas been decided by any state commission where it appears to the National Commission that such StateCommission has exercised a jurisdiction not vested in it by Law, or has failed to exercise a jurisdiction sovested, or has acted in the exercise of its jurisdiction illegally or with material irregularity
Statement of ObjectsThe Consumer Protection Bill, 1986 seeks to provide better protection of interests of theconsumers and for that purpose to make provision for establishment of consumer councils andother authorities for the settlement of consumer’s disputes and for matters connected therewith.It seeks to promote and protect the rights of consumers, such as: The right to be protected against marketing of goods where are hazardous to life and property. The right to be informed about the quality, quantity, potency, purity, standard and price of goods to protect the consumer against unfair trade practices. The right to be assured, wherever possible, access of variety of goods at competitive prices. The right to be heard and to be assured that consumers’ interests will receive due consideration at appropriate forums. The right to seek redressed against unfair trade practices or unscrupulous exploitation of consumers, and The right to consumer education.To provide steady and simple redressal to consumers’ disputes, a quasi-judicial machinery issought to be set up at the district, state and central levels. The quasi-judicial bodies will observethe principles of natural justices and have been empowered to give relieves of a specific natureand to award wherever appropriate compensation to consumers. Penalties for non-complianceof the orders given by the quasi-judicial bodies have also been provided.Salient features of the Consumer Protection Act, 1986The salient features of the Act are as follows:1) The Act provides speedy redressal to consumer Redressal Forum in every district, acommission at the State level and the National commission at the Centre. The Forum in theDistrict will have original jurisdiction to redress complaints up to claim of Rs. 1lakh (afteramendment up to 10 lakhs). The National Commission can entertain any claim for damagesabove Rs. 10 lakhs (after amendment above 20 lakhs). The State Commission will be vested withappropriate Appellate and Revisional powers.2) To promote voluntary consumer movement and to ensure involvement of consumers. TheBill provides for the establishment of Consumer Protection Councils in centre and the states.These Councils will have both non-official and official members. The objects of the Council willbe to promote and protect the rights of the consumers.3) It shall apply to all goods and classes of goods or all services or classes of services exceptthose which are specially exempted by notification by the central government.4) The provisions of the Bill shall be in additional to and not in derogation of any other law forthe time being in force.
5) Necessary penal and punitive provisions have been corporate to ensure that the proposedlegislation is effective in protecting consumers.6) The complain can be filed by a consumer or an organization being a society registered underthe Societies Registration Act, or a company registered under the Companies Act, representingconsumers or by the central or state government.7) The complaint can be field on account of any unfair trade practices resulting in loss ordamage, defect in the goods, deficiency in the services, prices charged in excess of the pricesfixed by or under any law or displayed on the goods/packetsDefinitions According Consumer Protection Act(a) "complainant" means(I) a consumer; or(ii) any voluntary consumer association registered under the Companies Act, 1956 (1 of1956), or under any other law for the time being in force; or(iii) the Central Government or any State Government who or which makes a complaint;(iv) one or more consumers, where there are numerous consumers having the sameinterest;(b) "complaint" means any allegation made by a complainant that -(I)an unfair trade practice or a restrictive trade practice has been adopted by any trader;(ii)the goods bought by him or agreed to be bought by him suffer from one or more defects;(iii) the services hired or availed of or agreed to be hired or availed of by him suffer fromdeficiency in any respect;(iv)a trader has charged for the goods mentioned in the complaint price in excess of theprice fixed by or under any law for the time being in force or displayed on the goods forany package containing such goods,(v) goods which will be hazardous to life and safety when used, are being offered for saleto the public in contravention of the provisions of any law for the time being in forcerequiring traders to display information in regard to the contents, manner and effect ofuse of such goods. with a view to obtaining any relief provided by or under this Act;(c) "consumer" means any person who, -(I)buys any goods for a consideration which has been paid or promised or partly paid andpartly promised, or under any system of deferred payment and includes any user of suchgoods 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 ismade with the approval of such person, but does not include a person who obtains suchgoods for resale or for any commercial purpose; or(ii) hires or avails of any services for a consideration which has been paid or promised orpartly paid and partly promised, or under any system of deferred payment and includesany beneficiary of such services other than the person who hires or avails of the servicesfor consideration paid or promised, or partly paid and partly promised, or under anysystem of deferred payment, when such services are availed of with the approval of thefirst mentioned person;Explanation : For the purposes of sub-clause (I), "commercial purpose" does not include useby a consumer of goods bought and used by him exclusively for the purpose of earning hislivelihood, by means of self-employment;(d) "consumer dispute" means a dispute where the person against whom a complaint hasbeen made, denies or disputes the allegations contained in the complaint;(e) "defect" means any fault, imperfection or shortcoming in the quality, quantity, potency,purity or standard which is required to be maintained by or under any law for the timebeing in force or under any contract, express or implied, or as is claimed by the trader inany manner whatsoever in relation to any goods;(f) "deficiency" means any fault, imperfection, shortcoming or inadequacy in the quality,nature and manner of performance which is required to be maintained by or under any lawfor the time being in force or has been undertaken to be performed by a person inpursuance of a contract or otherwise in relation to any service;(g)"District Forum" means a Consumer Disputes Redressed Forum established under clause(a) of section 9;(h) "goods" means goods as defined in the Sale of Goods Act, 1930 (3 of 1930);(I) "manufacturer" means a person who -(I)makes or manufactures any goods or parts thereof; or(ii)does not make or manufacture any goods but assembles parts thereof made ormanufactured by others and claims the end-product to be goods manufactured by himself;or(iii) puts or causes to be put his own mark on any goods made or manufactured by any
other manufacturer and claims such goods to be goods made or manufactured by himself.Explanation : Where a manufacturer dispatches any goods or part thereof to any branchoffice maintained by him, such branch office shall not be deemed to be the manufacturereven though the parts so dispatched to it are assembled at such branch office and are soldor distributed from such branch office;(j) "National Commission" means the National Consumer Disputes Redressed Commissionestablished under clause (c) of section 9;(k) "State Commission" means a Consumer Disputes Redressed Commission established in aState under clause (b) of section 9;(l) "service" means service of any description which is made available to potential usersand includes the provision of facilities in connection with banking, financing, insurance,transport, processing, supply of electrical or other energy, board or lodging or both,housing construction, entertainment, amusement or the purveying of news or otherinformation, but does not include the rendering of any service free of charge or under acontract of personal service;(m)"trader" in relation to any goods means a person who sells or distributes any goods forsale and includes the manufacturer thereof, and where such goods are sold or distributedin package form, includes the packer thereof;(n) "unfair trade practice" means a trade practice which, for the purpose of promoting thesale, use or supply of any goods or for the provision of any service, adopts any unfairmethod or unfair or deceptive practice.AMENDMENTS a) The Government has introduced Consumer Protection (Amendment) Bill, 2011, in Lok Sabha on December 16, 2011, to facilitate quicker disposal of cases and to widen and amplify the scope of some of the provisions of the Act.The enactment of the Consumer Protection Act, 1986, was an important milestone in the field of consumer protection. In terms of the Act, consumer disputes redressal agencies have been set up at the 629 District, 35 State and National levels to render simple, inexpensive and speedy justice to consumers in respect of complaints against defective goods, deficient services and unfair/restrictive trade practices. With a view to faster redressal of complaints and to
rationalize procedure of appointments in consumer disputes redressal agencies, it has been felt necessary to amend the AcAmendments proposed provide for the following-On line filing of consumer complaints Making provision for registering complaint by electronic form (on line filing complaint)- Sincethe Consumer Forums are being computerized it is proposed to make provision in the law topermit consumers to file complaints as well as pay fee online, which would make the consumerfor a move towards e-governance/ time bound redressal.Enforcement of orders as a Decree of Civil Court Making provision that an order of the District Forum / State Commission/ NationalCommission will be enforced as a Decree of a Civil Court- This modification is consideredessential in view of the experiences gained during implementation of the amended Act and isintended to deter willful offenders and also to ensure speedy and proper execution of the orderof the consumer forums, so that justice to the aggrieved consumers is not frustrated.Payment to be made for non-compliance of the order Making provision for payment by every person for not complying of the order of DistrictForum / State Commission / National Commission of an amount of not less than Rs.500 or 1½per cent of the value of the amount awarded- whichever is higher, for each day of delay of suchnon-compliance of the order. This modification is considered essential in view of theexperiences gained during implementation of the amended Act and is intended to deter willfuloffenders and also to ensure speedy and proper execution of the orders of the consumer forums,so that justice to the aggrieved consumers is not frustrated.Powers to District Forum Empowering District Forum to function in any other place apart from District HQrs, inconsultation with State Government / State Commission - This provision is considerednecessary to allow State Governments the flexibility to club neighboring Districts Forum as alsogive additional charge to President/Members to hear cases in more than one District Forum soas to effectively deal with the non-functionality of Districts Forum caused due to vacancy ofPresident/Member.Conferring powers to District Forum to issue order to the opposite party to pay reasonable rateof interest on such price or charges as may be decided by the District Forum- This provision is
considered necessary to empower the consumer forum to award interest where the consumerhas suffered due to protracted litigation.Powers to State Government in selection process Empowering State Government to refer back the recommendation of the Selection Committeefor making fresh recommendation in order to avoid any delay in the Selection process- This isfelt necessary to facilitate quicker filling up of the posts in the Consumer Forums and to avoidthe consumer Forum remaining non-functional for long due to such vacancy thereby adverselyaffecting consumers’ interest.Increase of age in the appointment Increasing the minimum age for appointment as Member in the case of State Commissionsfrom 35 to 45 years, and in case of National Commission from 35 to 55 years- This is proposed toimprove the quality of persons applying for these posts.Experience for members Increasing the period of experience for appointment as Member in the case of StateCommission from 10 years to 20 years and in the case of National Commission from 10 years to30 years-This is proposed in order to improve the quality of persons applying for these posts.Powers to National Commission / State Commission to direct any one to assist the case Conferring powers to National Commission / State Commission to direct any individual ororganization or expert to assist National Commission / State Commission in the cases of largeinterest of the consumers- This provision would enable the National Commission or the StateCommission, in cases involving the larger interests of the consumers, an opportunity to suomoto enlist the services of an expert or an outside party, in an ongoing case, in the interest ofjustice.Monitoring system of pending cases Conferring powers to Central Government to call upon periodical reports of pending casesfrom National Commission and to State Government from State Commission or any DistrictForum- The provision is considered necessary to enable easy availability of data regarding filingand disposal of consumer complaints, which would help in monitoring the functioning of theconsumer for a and effectiveness of the law. The above said amendments proposed in the Actwill go a long way in speedy redressal of Consumer grievances and sturdy protection ofConsumer rights.
b) Consumer to soon be king: Govt mulls more power for buyers through ConsumerProtection (Amendment) Bill 2010 to be Introduced in parliament very soon.Bill amplifies the provisions of the Act, facilitates quicker disposal of consumer complaintsand rationalizes the qualifications and procedure of selection of President and members of theconsumer fora.If a shopkeeper doesn’t give you a bill for your purchase, you may soon be able to take him tocourt. At the same time, anything and everything you buy can be challenged legally if it isfound to be of poor quality. A product need not be “hazardous” at the beginning to be “unsafe”later. Most importantly, consumers will be able to receive extra money from consumer fora incase of protracted litigation.The central government is mulling a clutch of amendments to Consumer Protection Act, 1986,to empower consumers and to inject transparency in the three-tier consumer protection fora atthe district, state and national levels. If accepted, the Act will make a shopkeeper not issuingcash memo or bills for goods sold as guilty under the law. The possession of bill makes aconsumer a “bonafide” customer and its absence robs him of a stronger footing in courts if hechallenges a sale. It will henceforth be dubbed an “unfair trade practice”.The most consequential change may be the widening of the definition of “defect” and“deficiency”. While the Act clubs a few shortcomings in a product to qualify as “defect”, it isproposed to keep the definition open-ended — by replacing “means” which follows the spelt-out defects with “includes” — to qualify any unspecified flaw as defect.The seller will in future have to give the buyer every bit of information about a commodity. It isproposed that withholding information about a good, which can influence the choice of acustomer, should be treated as an offence.The definition of “unfair trade practice” is to be expanded to include the unforeseen modusoperandi of traders as offences. It will allow the law to not specify every unfair practice in thelaw.A key change relates to safeguarding the consumers who are fleeced by the sellers throughvarious contracts or conditions which place them in “unequal bargaining capacity”. The 199threport of the Law Commission had suggested the change to bring the consumers on a strongerfooting to challenge any unfair practice. A contract or a condition will be “unconstitutional and
illegal” if it is between two parties of unequal bargaining capacities, one-sided and unfair to theweaker party. Such a contract is said to be offending spirit of the Constitution.The amendments also seek to bring transparency in consumer courts with regard to selection ofpresiding officers, filing of cases and discharge of justice. Consumers will be able to file “casesonline” in what is an attempt to empower them. A key proposal says that presidents ormembers in consumer fora should be barred from pleading before them. This includes thosewho either held office in these for a or wielded administrative control there. It is an attempt tostop any unfair clout to be pedalled in the courts.The Act seeks to empower consumer courts to award “interest” to compensate consumers whosuffer from prolonged court battles.State commissions are to be given more power to be able to renew their own orders if theynotice factual mistakes in the records. The powers of judicial magistrate first class will be moreexplicit under the Act.The quasi-judicial three-tier consumer disputes redressal machinery — national, state anddistrict — provided by the Consumer Protection Act has led to a culture of consumerprotection. The rising consciousness among people about their rights has led to consumersgoing to courts to seek redressal against unfair deals or cases of cheating.