CONSUMER PROTECTION ACT 1986

1. CONSUMER PROTECTION AND
BUSINESS ETHICS
The
Consumer
Protection
Act, 1986
BY:-
PROF. RITA KAKADE
M.COM, M.PHIL, N ET, DTL, G. D. C. & A.
ASST. PROF. S. P. COLLEGE

2. CONTENTS
 Introduction
 Need for consumer protection
 Scope of consumer protection act
 Features of consumer protection act
 Definitions under consumer protection act 1986.
 Organizational set-up
1. Consumer protection councils
2. Consumer disputes redressal agencies
 Procedure of filing complaints

3.  Enacted by the Parliament in 1986
 To provide for better protection of interest of
consumers.
 To make provisions for the establishment of
Consumer Councils and other authorities for the
settlement of consumer disputes.
 Act applies to whole of India except Jammu and
Kashmir and shall apply to all goods and
services.
Introduction

4. NEED FOR CONSUMER PROTECTION
1. Social responsibility
2. Misleading advertisement
3. Consumer satisfaction
4. Principle of social justice
5. Principle of trusteeship
6. Unfair trade practices
7. Physical protection

6. SCOPE OF COMSUMER PROTECTION ACT
1. Protect the rights of consumers
2. Redressal to consumer disputes
3. Applied to all goods and services
4. Covers all the sectors
5. Compensatory in nature
6. ACTs are in addition to and not in derogation of
the provisions
7. Establishment of protection council

7. FEATURES OF CONSUMER PROTECTION ACT
1. Provision for better protection
2. Establishment of consumer councils
3. Promotion of rights
4. Speedy redressal machinery
5. Provides effective safe guards
6. Manga-Carta of Indian consumers

8. DEFINITIONS UNDER CONSUMER PROTECTION
ACT 1986.
1. Consumer [Section.2 (I) (D)]
2. Goods
3. Services [Section.2(o)]
4. Complaint [Section.2 (1)(c)]
5. Complainant [Section.2 ]
6. Defect In Goods [Section.2(1)(f)]
7. Deficiency In Services [Section.2 (G)]
8. Unfair Trade Practices
9. Restricted Trade Practices

9. Who is a “Consumer”?
According to Section.2 (i) (d)
• Consumer is one who :-
– Buys any goods for a consideration and
includes a hire-purchaser;
– Any user of such goods for consideration
but excludes one, who obtains for re-sale or
for commercial purposes;
– Hires a service for consideration and
includes a beneficiary of such service, if
availed of with the approval of the hirer.

10. What is “Goods” ?
According to Section 2 (7) of the sales of goods
ACT, goods means, ― every kind of movable
property other than actionable claims and money.
Include stock, shares, grass and things attached to,
or forming part of the land which are agreed to be
served before sale or under the contract of sale.‖

11. What is “Services” ?
– According to [section.2(o)] :-
―service‖ means service of any description which is made
available to potential users and includes the provision of
facilities in connection with banking, financing,
insurance, transport, processing, supply of electricity or
other energy board or lodging or both purveying of news
or other information, but does not include the rendering
of any service free of charge or under a contract of
personal service.

12. What is a “Complaint” ?
 An allegation in writing by a complainant that:
 An unfair or restrictive trade practice is practiced by
trader or service provider
 Goods bought or to be bought or services hired or to
be hired suffered from any ―deficiency‖
 Service hired or availed of or agreed to be hired or
availed by him suffers from ―deficiency‖
 Trader or service provider has charged excess price
 Goods and services are hazardous or are likely to be
hazardous to life and safety.

13. Who is a “Complainant” ?
 A consumer
 Any voluntary consumer association registered
under the Companies Act or any other law
 Central or State Government, if it makes a
complaint
 One or more consumers having same interest
 In case of death of a consumer, his legal heir or
representative.
A Consumer Dispute arises when a complaint is
denied or disputed.

14. What is “Defect in “Goods” ?
According to section.2 (1) (f) -
– "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 time being in force under any
contract, express or implied or as is claimed by the
trader in any manner whatsoever in relation to any
goods;

15. What is “Deficiency in Service” ?
• ‗Deficiency‘ means
– a fault, imperfection, shortcoming or inadequacy in quality,
nature, or manner of performance than is required.
• ‗Service‘ includes
– service in connection with banking, financing, insurance,
transport, processing, supply of electrical and other energy,
boarding or lodging, housing construction, entertainment,
amusement or purveying of news and other information
– but does not include any service free of charge or under a
personal contract.

16. What is “Unfair Trade Practices” ?
 "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;—

17. 1) The practice of making any statement, whether orally or in
writing or by visible representation falsely represents that -
 The goods or services are of a particular standard, quality, quantity, grade,
composition, style or model; /
 Any re-built, second-hand, renovated, reconditioned or old goods as new goods; /
 The goods or services have sponsorship, approval, performance, characteristics,
accessories, uses or benefits which such goods or services do not have; / The seller
or the supplier has a sponsorship or approval or affiliation which such seller or
supplier does not have;
 Makes a false or misleading representation concerning the need for, or the
Usefulness of, any goods or services; /
 Gives to the public any warranty or guarantee of the performance, efficacy or
Length of life of a product or of any goods that is not based on an adequate or
Proper test thereof; /

18. 2) permits the publication of any advertisement whether in any newspaper or
otherwise, for the sale or supply at a bargain price, of goods or services that are
not intended to be offered for sale or supply at the bargain price, or for a period
that is, and in quantities that are, reasonable, having regard to the nature of the
market in which the business is carried on, the nature and size of business, and
the nature of the advertisement.
3) The offering gifts, prizes or other items with the intension of not providing
them as offered or creating impression that something is being given offered
free of charge, when it is fully or partly covered by the amount charged, in the
transaction as a whole.

19. 4) permits the sale or supply of goods intended to be used, or are of a kind likely to
be used, by consumers, knowing or having reason to believe that the goods do not
comply with the standards prescribed by competent authority relating to
performance, composition, contents, design, constructions, finishing or packaging as
are necessary to prevent or reduce the risk of injury to the person using the goods;
5) permits the hoarding or destruction of goods, or refuses to sell the goods or to
make them available for sale or to provide any service, if such hoarding or
destruction or refusal raises or tends to raise or is intended to raise, the cost of those
or other similar goods or services.
6) manufacture of spurious goods or offering such goods for sale or adopts
deceptive practices in the provision of services.

20. What is “Restricted Trade Practices”?
―Restrictive trade practice‖ means a trade practice which tends to bring about
manipulation of price or conditions of delivery or to affect flow of supplies in
the market relating to goods or services in such a manner as to impose on the
consumers unjustified costs or restrictions and shall include—
a. Delay beyond the period agreed to by a trader in supply of such goods
or in providing the services which has led or is likely to lead to rise in
the price;
b. Any trade practice which requires a consumer to buy, hire or avail of
any goods or, as the case may be, services as condition precedent to
buying, hiring or availing of other goods or services;

21. REASONS FOR COMPLAINTS
One can file a consumer complaint under Consumer Protection Act, 1986 for any of the following reasons.
 When a company cheats a consumer after purchasing a product.Cheating by giving false promises.
 Not delivering the goods and services for which payment is made.
 Consumer has suffered loss or damage as a result of any unfair Trade Practice.
 Any unfair trade practice as defined in the Act or restrictive trade practices like tie-up sales adopted by any trader
 The goods purchased suffer from one or more defects
 The trader charging excess of amount of the price displayed on goods or on any packet containing such good or
fixed by any law for the time being in force
 The goods hazardous to life and safety, when used, are being offered for sale to public in contravention of
provisions of any law for the time being in force
 Deficiencies in services
 Misleading advertisements and false representation.
 Any other factors that affected the consumer.

22. Organizational Set-up
Advisory Bodies
(Consumer Protection Councils)
Adjudicative Bodies
(Consumer Disputes
Redressal Agencies)
Central
Consumer
Protection
councils
State
Consumer
Protection
Councils
District
Consumer
Protection
Councils
District
Forum
(580
District)
State
Commission
(35 State
& Union
Territories)
National
Commission
Organizational Set-up

23.  To advise and assist consumers in seeking and enforcing their rights.
 These councils works towards the promotion and protection of
consumers.
 Make investigations and give publicity to the matters concerning
consumer interests, take steps towards furthering consumer education
and protecting consumer from exploitation.
 Advice the govt. in the matter of policy formulation keeping consumer
interest as pivotal concern, etc.
Advisory Bodies
(Consumer Protection Councils)

24. Organizational Set-up
Consumer Protection Councils
Central Consumer
Protection councils
State Consumer
Protection Councils
District Consumer
Protection Councils

25. District Consumer Protection Councils
(1) Establishment (8A.) :-
The State Government shall establish for every
district, by notification, a council to be known as
the District Consumer Protection Council with
effect from such date as it may specify in such
notification.

26. (2) Composition :-
The District Consumer Protection Council (hereinafter
referred to as the District Council) shall consist of the
following members, namely:—
a) The collector of the district (by whatever name called),
who shall be its chairman; and
b) Such number of other official and non-official members
representing such interests as may be prescribed by the
state government.
Continued…

27. Continued…
(3) Working:-
The District Council shall meet as and when necessary but not
less than two meetings shall be held every year.
(4) Time and agenda of meeting:-
The District Council shall meet at such time and place within
the district as the Chairman may think fit and shall observe
such procedure in regard to the transaction of its business as
may be prescribed by the State Government.
(5) Objectives (8B.):-
The objects of every District Council shall be to promote and
protect within the district the rights of the consumers laid
down in clauses (a) to (f) of section 6.

28. Clauses (a) to (f) of Section 6.
(a) The right to be protected against the marketing of goods and services which are
hazardous to life and property;
(B) The right to be informed about the quality, quantity, potency, purity, standard and price of
goods or services, as the case may be so as to protect the consumer against unfair trade
practices;
(C) The right to be assured, wherever possible, access to a variety of goods and
services at competitive prices;
(D) The right to be heard and to be assured that consumer's interests will receive
due consideration at appropriate forums;
(E) The right to seek redressal against unfair trade practices or restrictive trade
practices or unscrupulous exploitation of consumers; and
(F) The right to consumer education.

29. State Consumer Protection Councils
1) Establishment :-
The State Government may by notification in Official
Gazette, under Section 40(1) of the Consumer Protection
Act, establish with effect from such date as it may specify
in such notification, a Council to be known as State
Consumer Protection Council.

30. Continued…
2) Composition :-
The State Council shall consist of the following members, namely:—
(a) the Minister incharge of consumer affairs in the State Government
who shall be its Chairman;
(b) such number of other official or non-official members representing
such interests as may be prescribed by the State Government.
(c) such number of other official or non-official members, not
exceeding ten, as may be nominated by the Central Government.

31. Continued…
3) Working :-
The State Council shall meet as and when necessary but not less
than two meetings shall be held every year.
4) Time and agenda of meeting:-
The State Council shall meet at such time and place as the
Chairman may think fit and shall observe such procedure in
regard to the transaction of its business as may be prescribed by
the State Government.
(5) Objectives (8B.):-
The objects of every District Council shall be to promote and
protect within the district the rights of the consumers laid
down in clauses (a) to (f) of section 6.

32. Central Consumer Protection councils
1) Establishment :-
The Central Government may by notification in
Official Gazette, establish a council as the central
council. The council may start working with effect
from such date as it may be specified in such
notification.

33. Continued…
2) Composition :-
The Central Council shall consist of the following members,
namely:—
(a) the Minister in charge of the consumer affairs in the
Central Government, who shall be its Chairman, and
(b) such number of other official or non-official members
representing such interests as may be prescribed.

34. Continued…
3) Working :-
The Central Council shall meet as and when necessary, but at least one meeting of the
Council shall be held every year.
4) Time and agenda of meeting:-
The Central Council shall meet at such time and place as the Chairman may think fit and
shall observe such procedure in regard to the transaction of its business as may be
prescribed.
5) Objectives (8B.):-
The objects of Central Council shall be to promote and protect within the district the
rights of the consumers laid down in clauses (a) to (f) of section 6.

35. Adjudicative Bodies
(Consumer Disputes Redressal Agencies)
 Three-tier consumer grievance redressal machinery.
 State and national level bodies-Appellate Authorities
 Verdict given by the national commission can be challenged
in the Supreme Court.
 Objective :-
 To provide speedy, simple and inexpensive (no court fee ) redressal to
consumers grievances.
 They driven by the basic rules of natural justice.

36. National Consumer
Disputes Redressal
Commission
State Consumer
Disputes Redressal
Commission
District Consumer
Disputes Redressal
Forum
Sr.
No.
Forums Amount
1 District Forum Up to Rs. 20 Lakhs
2
State
Commission
Rs. 20 Lakhs to Rs. 1 Crores
3
National
Commission
Exceeding Rs. 1 Crores
PECUNIARY JURISDICTION OF CONSUMER FORUMS

37. 37
CONSUMER DISPUTES REDRESSAL AGENCIES
 District Consumer Disputes Redressal Forum-
a Consumer Disputes Redressal Forum to be known as
the "District Forum" established by the State
Government in each district of the State by notification:

38. 38
Each District Forum shall consist of,—
• a person who is, or has been, or is qualified to be a District
Judge, who shall be its President;
• two other members, one of whom shall be a woman, who shall
have the following qualifications, namely —
Continued…

39. 39
– be not less than thirty-five years of age,
– possess a bachelor's degree from a recognised university,
– be persons of ability, integrity and standing, and have
adequate knowledge and experience of at least ten years
in dealing with problems relating to economics, law,
commerce, accountancy, industry, public affairs or
administration:
Continued…

40. 40
Jurisdiction of the District Forum.
The District Forum shall have jurisdiction to
entertain complaints where the value of the goods
or services and the compensation, if any, claimed
''does not exceed rupees twenty lakhs.

41. 41
State Consumer Disputes Redressal Commission - A
Consumer Disputes Redressal Commission to be known
as the "State Commission" established by the State
Government in the State.
Continued…

42. 42
 Each State Commission shall consist of—
A person who is or has been a Judge of a High Court,
appointed by the State Government, who shall be its
President.
Continued…

43. 43
• not less than two, and not more than such number of members,
and one of whom shall be a woman, who shall have the following
qualifications, namely:—
- be not less than thirty-five years of age;
- possess a bachelor's degree from a recognised university;
- be persons of ability, integrity and standing, and have adequate
knowledge and experience of at least ten years in dealing with
problems relating to economics, law, commerce, accountancy,
industry, public affairs or administration:
Continued…

44. DEFICIENCY IN SERVICE
 Meaning :- Section 2(1) (g) of the Act provides that,
―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 law for the time being in force or has been
undertaken to be performed by a person in pursuance of a
contract or otherwise in relation to any service.

45.  “Deficiency” means any fault, imperfection, shortcoming or
inadequacy in the quality, nature and manner of performance.
 Such quality and manner of performance of service should
have been required to be maintained by or under any law for
the time being in force or undertaken to be performed by a
person in pursuance of a contract or otherwise.
 The deficiency must be in relation to a service.

46. Service [u/s 2(1)(o)]
Meaning
‗Service of any description which is made available its
potential users and includes but not limited to the
provisions of facilities in connection with banking,
financing, insurance,…….. But does not include the
rendering of any service free of charge or under a
contract of personal service‘.

47. Examples
 Bank of Maharashtra v/s Mrs Jyothi Satya
 When the locker facility is provided by the bank, the relationship b/w
the bank and hirer of a locker is not that of a landlord and tenant.
 In event of loss of contents of lockers as a result of robbery, the bank
will be liable for deficiency of service.
• Failure of the housing board to give possession of the flat
after receiving the price and registering it in favour of the
allottee.

48. Examples
 Non-delivery of consignment by the courier.
 Failure of railways to provide cushioned seats in the
first class compartment as per specifications laid down
by the board.
 The removal of ladder of an aircraft while the
passenger was disembarking and thereby causing 10%
permanent disability.
 The fall of the passenger from a running train while
passing through the vestibule passage.

49. Tenure and
Removal of President or
Members (Rule 13)

50. Tenure
 Every member of the national commission shall hold the office
for 5 years or up to the age of seventy years, whichever is
earlier.
 A member shall be eligible for reappointment for another term
of 5 years or up to the age of seventy years, whichever is earlier.
 The reappointment is to be made on the basis of
recommendation of the selection committee.

51. Removal of president or members(rule 13)
 Has been adjudged an insolvent.
 If any conviction of an offence,
 Physically or mentally incapable of acting as a president or member,
or
 Has acquired such financial or other interest as is likely to affect
prejudicially his function as the president or member, or
 Has so abused his position as to render his continuance in office
prejudicial to public interest, or
 Remains absent in three consecutive sittings except for reasons
beyond his control.

52. WHO CAN FILE A COMPLAINT?
 The Consumer Protection Act itself provides a list of persons who
can file a complaint under the Act which is described hereunder-
 Firstly a Consumer
 Secondly, Any voluntary Association Registered under the Companies Act,
1956, or under any other law for the time being in force
 Thirdly the Central government or the State Government
 Fourthly one or more consumers, where there are numerous Consumers
having the same interest.

53. Besides The above list the following can also file a consumer
complaint:
•Any person who is a beneficiary of the goods/services
•Legal representatives of deceased consumers
•Legal hers of the deceased consumer
•Husband of the consumer
•Relative of the consumer
WHO CAN FILE A COMPLAINT?

54. Time frame within which a complaint can be filed
 Section 24A of the Act provides that a consumer dispute can
be filed within two years from the date on which the cause
of action arises.
 The point of time when cause of action arises is an
important factor in determining the time period available to
file a complaint. There are no set rules to decide such time.
It depends on the facts and circumstances of each case.
 The complaint should be filed within 2 years from the date of
cause of action.

55.  Appeals are require to be filed within 30 days from the date
of receipt of the court's order.
 It may be noted that these time frames are not absolute
limitations. If the Consumer Forum is satisfied that there was
sufficient cause for not filing the complaint within the
prescribed period, it can entertain a complaint beyond
limitation time. However the Forum must record the reasons
for condensation of delay.

56. Procedure to file a Consumer Complaint
Under the Consumer Protection Act, 1986
1. One may send a notice to the opposite party mentioning a time limit to settle the
grievance though it is not compulsory.
2. Prepare a complaint with the required details (as given below).
3. Get the complaint affidavit notarized through a notary.
4. Make required number of photocopies after notarizing .
5. Prepare a bank draft from a nationalized Bank to pay court fee.
6. Submit the complaint and court fee to the receiving clerk in the consumer court who
will give you the date for admission hearing and complaint reference number
7. On admission hearing, you would be informed whether or not your matter is admitted.
If admitted you will be given the date for next hearing.
8. The court will send a notice with your complaint copy to the opposite party seeking
reply within 30 days, and asking it to attend the hearing.
9. The hearings will continue till the matter is decided.
10. A copy of the court order will be communicated to all the parties by registered post.

57. Checklist Before Making Your Complaint
1. A cause-title i.e. The Complaint should, if possible, have a heading
2. Your name, description and address
3. The name, description and address of the opposite party or parties
4. Facts about the complaint and when and where it arose
5. How the opposite parties are liable to be proceeded against and why they are answerable
6. or accountable to this petition.
7. Copies of documents in support of the allegations contained in the petition.
8. Complainants are advised to keep copies of the complaint/petition and all furnished
9. documents for their records. A list of documents should be furnished along with the
10. complaint, duly signed by you.
11. You would also need to state how the case falls within the jurisdiction of the forum /
12. commission – whether the opposite party resides or carried on business r has a branch
13. office or personally works for gain within the jurisdiction of the forum or whether the cause
14. of action (damaged goods or deficient service) arose within the forum‘s jurisdiction.
15. You are also entitled to claim the cost of your complaint from the opposite party. Hence
16. include that amount in your complaint.
17. According to the Consumer Protection Act, 1986, you don‘t need a lawyer to file the
18. petition or argue the case as you can do it yourself.