The document discusses key aspects of the Consumer Protection Act 1986 in India. It summarizes that the Act aims to protect consumers from unscrupulous businesses and provides easy remedies for complaints. It established three consumer dispute redressal forums - district forums for claims up to 10 lakhs, state commissions for claims up to 20 lakhs, and a national commission for claims over 20 lakhs. The forums have powers like summoning witnesses and imposing penalties on traders if complaints are found to be valid. The Act also provides for consumer protection councils and defines the rights and responsibilities of consumers.

1. Business Law-V
(State Regulation of Business)
Consumer Protection Act, 1986
Sagar Bansal
LL.M ( Business law)
7035
Dr Asha Verma
Associate Professor
Amity University

2. Introduction
In business, consumers occupy a very important place. The producers produce goods on the basis of
tastes, likings, preferences etc. of the consumers. Consumer is the central point around which business
activities revolves. In Spite of great importance of consumers they may be the victims of immoral
businessmen. An important aspect is that there is lack of knowledge on the part of consumers and they
are not organized as opposed to the sellers who are well informed and organized. To protect the
consumers from unscrupulous businessmen and to provide easy remedy for their complaints, the
Consumer Protection Act was passed in the year 1986. The Act extends to the whole of India except the
State of Jammu and Kashmir. After completion of this unit you will be able to understand some important
definitions under this Act as well as the various provisions under which consumers are given wide legal
power to resolve their complaints. We will also discuss the various consumer forums created under this
Act as redressal agencies for consumer grievances along with the procedure of filing a complaint in
consumer forums, consumer protection councils, penalties for not complying with the orders of forums etc.
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3. Consumer
According to Section 2 (1) (d) of the Act ‘consumer’ means any person who
I. Buys any goods for a consideration, which has been paid or promised or partly paid and partly
promised. It also includes
a)User of such goods who is using the goods with permission of the buyer or
b)Person who has obtained goods under any system of deferred payment. Person who has obtained
goods for resale or for commercial purposes is not covered under this section.
Ii. Hires or avails any services for a consideration, which has been paid or promised or partly paid and
partly promised. It also includes
a) Beneficiary of services who has availed the services with approval of the person who has hired
the services
b) A person who has hired or availed services under any system of deferred payment.
An important aspect of this definition is that those persons who buy goods for commercial purposes are
not considered as ‘consumer’ under this Act. But if a person buys goods for self- employment that will not
be treated as commercial purpose and therefore, that person will be considered as ‘consumer’ under this
Act.
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4. Features of the Consumer Protection Act
1. The Act provides speedy redressal to consumer complainants. The Bill provides for setting up of a
Consumer Redressal Forum in every district, a commission at the state level and the National
Commission at the Centre. The Forum in the District will have original jurisdiction to redress complaints up
to claim of Rs. 1 lakh (after amendment up to 10 lakhs).
The State Commission will be original jurisdiction to settle claims up to the amount Rs. 10 lakhs (after
amendment 20 lakhs). The National Commission can entertain any claim for damages above Rs. 10 lakhs
(after amendment above 20 lakhs). The State Commission will be vested with appropriate Appellate and
Revisional powers.
2. To promote voluntary consumer movement and to ensure involvement of consumers. The Bill provides
for the establishment of Consumer Protection Councils at centre and in the states. These Councils will
have both non-official and official members. The objects of the Councils will be to promote and protect the
rights of the consumers.
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5. 3. It shall apply to all goods and classes of goods or all services or classes of services except those which
are specially exempted by notification by the central government.
4. The provisions of the Bill shall be in addition to and not in derogation of any other law for the time being
in force.
5. Necessary penal and punitive provisions have been corporate to ensure that the proposed legislation is
effective in protecting consumers.
6. The complaint can be filed by a consumer or an organization being a society registered under the
Societies Registration Act, or a company registered under the Companies Act, representing consumers or
by the central or state government.
7. The complaint can be filed on account of any unfair trade practices resulting in loss or damage, defect
in the goods, deficiency in the services, prices charged in excess of the prices fixed by or under any law or
displayed on the goods/packets.
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6. Consumer Rights
1.Right to safety
Means right to be protected against the marketing of goods and services, which are hazardous to life and
property. The purchased goods and services availed of should not only meet their immediate needs, but
also fulfil long term interests. Before purchasing, consumers should insist on the quality of the products as
well as on the guarantee of the products and services. They should preferably purchase quality marked
products such as ISI,AGMARK, etc
2. Right to choose
Means right to be assured, wherever possible of access to variety of goods and services at competitive
price. In case of monopolies, it means right to be assured of satisfactory quality and service at a fair price.
It also includes right to basic goods and services. This is because unrestricted right of the minority to
choose can mean a denial for the majority of its fair share. This right can be better exercised in a
competitive market where a variety of goods are available at competitive prices
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7. 3. Right to be informed
Means right to be informed about the quality, quantity, potency, purity, standard and price of goods so as
to protect the consumer against unfair trade practices. Consumer should insist on getting all the
information about the product or service before making a choice or a decision. This will enable him to act
wisely and responsibly and also enable him to desist from falling prey to high pressure selling techniques.
4. Right to consumer education
Means the right to acquire the knowledge and skill to be an informed consumer throughout life. Ignorance
of consumers, particularly of rural consumers, is mainly responsible for their exploitation. They should
know their rights and must exercise them. Only then real consumer protection can be achieved with
success.
5. Right to be heard
Means that consumer's interests will receive due consideration at appropriate forums. It also includes right
to be represented in various forums formed to consider the consumer's welfare. The Consumers should
form non-political and non-commercial consumer organizations which can be given representation in
various committees formed by the Government and other bodies in matters relating to consumers.
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8. 7. Right to Seek redressal
Means right to seek redressal against unfair trade practices or unscrupulous exploitation of consumers. It
also includes right to fair settlement of the genuine grievances of the consumer. Consumers must make
complaint for their genuine grievances.Many a times their complaint may be of small value but its impact
on the society as a whole may be very large. They can also take the help of consumer organisations in
seeking redressal of their grievances.
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9. This particular Act has been passed to protect the consumers and for that purpose
certain agencies will be established under the Act. In this content, we will discuss
the redressal agencies.
The Act provides for the establishment of three consumer forums at three levels.
● District Forum at district level
● State Consumer Disputes Redressal Commission at state level
● National Commission at the national level.
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REDRESSAL AGENCIES UNDER THE ACT

10. POWERS OF REDRESSAL AGENCIES
The powers of the redressal agencies under the Act.
● These redressal agencies have the powers of civil court like,
a) summoning and enforcing attendance of witnesses and examining the witness on oath;
b) discovery and production of any document or other material as evidence;
c) receiving evidence on affidavits;
d) requisitioning report of test or analysis from concerned laboratory;
e) issuing commission for examination of witnesses;
f) any other matter that may be prescribed by Central or State Government by rules.
● The redressal agencies have the power to require a person to produce before them books of
account, documents or commodities.
● The agencies can authorize a person to seize books of account, documents or commodities required
for purposes of the Act.
● The agencies have no power to declare any statutory order as illegal.
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11. PENALTIES UNDER THE ACT
● The consumer disputes redressal agencies decides the consumer disputes on the
basis of the evidences brought by the complainant as well as the opposite party. Under
the provisions of the Act, the consumer disputes redressal agencies can impose
penalties on the trader, if found guilty. At the same time the Act provides for imposing
penalties on the complainant, if the complaint is found to be frivolous.
● If the trader against whom an order has been passed by the consumer forum and if he
fails to comply with such order, he shall be punishable with imprisonment for a term not
less than one month but not more than three years and/ or with fine of minimum Rs. 2,
000 and maximum up to Rs. 10, 000 or with both (Section 27). If an order imposing
penalty is made by State Commission or National Commission, no appeal can be made
against such order.
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12. Summary
● According to the provisions of the Act the ‘consumer’ is the person who buys goods or services for
consideration or under deferred payment basis as well as the person who uses such goods or
services with the permission of the buyer.
● A person who buys goods for commercial purpose is not a consumer under the Act.
● The Act provides for the formation of the following forums for settling consumer disputes-
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13. ● An individual consumer or any registered consumer association can file a complaint
with such agencies.
● The redressal agencies pass the necessary order after following the procedure
prescribed by the Act for the settlement of the consumer disputes.
● The redressal agencies have the powers of civil court.
● Besides the consumer disputes redressal agencies, the Act provides for the
establishment of Consumer Protection Councils at central and state levels. These
councils are advisory in nature.
● The Act provides for penalties for the immoral trader as well as for the complainant if
any false complaint is made.
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14. THANK YOU
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