Consumer Protection Act Important Definitions and Case Laws

1. 2
CONSUMER PROTECTION ACT-
1986

2. CONSUMER PROTECTION ACT-1986
Important
Definitions
Rights of a
Consumer
Responsibilitie
s of a
Consumer
Central Consumer
Protection Council
State Consumer
Protection
Councils
District Consumer
Protection
Councils
Consumer Dispute
Redressal
SCOPE &OBJECTIVE

3. Objectives & Importance of the Act
 The Consumer Protection Act was implemented in order to provide
better protection to the rights of the consumers. Prior to the
implementation of this Act, there was no special act for protecting the
consumers and the only remedy available to the consumers was under
the Law of Torts i.e filing a civil suit for damages against the shopkeeper
or the service provider. This act is based on the doctrine of Caveat
Emptor which means that it is the responsibility of the buyer to
identify the defects in the good.
There are various objectives which are sought to be protected under
the Consumer Protection Act such as-
 To promote and protect all the six rights of the consumers which will be
discussed later.
 To provide simple and speedy disposal to the cases by providing quasi-
judicial machinery for the redressal of consumer disputes.
 The act also aims to provide inexpensive redressal to the issues of the
consumer.
 A consumer dispute redressal forum called state commission has been
set up in order to settle the disputes of each and every consumer in all
the states of the country.

4. Scope of the Act
 Short title, extent, commencement and
application.—(1 ) This Act may be called the
Consumer Protection Act, 1986.
 (2) It extends to the whole of India except the State of
Jammu and Kashmir.
 (3) It shall come into force on such date as the
Central Government may, by notification, appoint and
different dates may be appointed for different States
and for different provisions of this Act.
 (4) Save as otherwise expressly provided by the
Central Government by notification, this Act shall
apply to all goods and services.

5. Important Definitions
 Who is a 'Consumer' under the 2019 Act?
 As per Section 2(7) of the 2019 Act, consumer is any
person who buys goods or avails any service for a
consideration and includes any user except for the
person who has availed such services or goods for
the purpose of resale or commercial use. The
explanation to the definition specifically states that the
expression "buys any goods" and "hires or avails any
services" includes all online transactions
conducted through electronic means or direct
selling or teleshopping or multi-level marketing.
Online transactions is an exclusive feature of this act
and added keeping in mind the growing e-commerce
business and advancement in technology.

6.  Old Definition under 1986 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, or under any system of
deferred payment and includes any user of such goods 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 is made with the approval of such person, but does not
include a person who obtains such goods for resale or for any
commercial purpose; or
 (ii) hires or avails of any services for a consideration which has been
paid or promised or partly paid and partly promised, or under any
system of deferred payment and includes any beneficiary of such
services other than the person who 'hires or avails of the services for
consideration paid or promised, or partly paid and partly promised, or
under any system of deferred payment, when such services are availed
of with the approval of the first mentioned person but does not include
a person who avails of such services for any commercial
purposes;
 Explanation.— For the purposes of this clause, “commercial purpose”
does not include use by a person of goods bought and used by him and
services availed by him exclusively for the purposes of earning his
livelihood by means of self-employment;

7. Important Case Law
 1. Dinesh Bhagat v. Bajaj Auto Ltd 1992
 In the case of Dinesh Bhagat v. Bajaj Auto Ltd., one person purchased a
scooter and immediately gave it to his friend. Since then, the friend was using that
scooter and upon finding a fault with it, he filed a complaint against the seller. The
seller contended that the friend of the buyer was not eligible to file a complaint
under the Consumer Protection Act 1986, since he was not a consumer.
 The Delhi State Commission was faced with a question of law- is the meaning of
consumer restricted to only the ‘buyer’ It was finally held that since the friend was
using the scooter with the consent of the buyer, he was a legitimate consumer
under the scope of the Act.
 2. S.P. Goel v. Collector of Stamps(1995) III CPR 684 (SC)
 To understand what constitutes ‘hiring of servicice’ and whether a Government
employee, in his regular course of work, can be said to provide a service, as
‘service’ is understood under the Consumer Protection Act 1986, one can see the
case of S.P. Goel v. Collector of Stamps.
 Here, the complainant contended that a document had not been registered by the
Sub-Registrar, for more than six years. The complainant sought compensation
from the Sub Registrar and Collector and claimed to have undergone harassment
at their hands. The National Commission held that the complainant was not a
‘consumer’ under the Act as this situation did not involve the complainant giving
any consideration or ‘hiring of service’ because the government employee was
simply doing the duty allotted to him as a part of the State mechanism.

8.  3. Karnataka Power Transmission Corporation
v. Ashok Iron Works Private Limited
AIR2009SC1905
 In the case of, Karnataka Power Transmission
Corporation v. Ashok Iron Works Private
Limitedthe question that arose was – whether
corporate bodies can be sued under the
Consumer Protection Act 1986. In this case, the
Supreme Court gave a wider interpretation of the
word ‘Person’ under Section 2(1)(m) of the Act by
including Corporate Bodies into its purview.


9. Definition
 What is an 'Unfair Trade Practice' under the 2019 Act?
 Section 2(47) of the Consumer Protection Act, 2019 defines
'unfair trade practice'. The definition of 'unfair trade practice' has
been broadened to include practices such as:
 manufacturing or offering spurious goods for sale or adopting
deceptive practices for providing service,
 not issuing proper cash memo or bill for the services rendered
and the good sold,
 refusing to withdraw, take back or discontinue defective goods
and services and refund the consideration taken thereof within
the time period stipulated in the bill or within 30 days if there is
no such provision in the bill,
 disclosing personal information of the consumer to any other
person not in accordance with the prevailing laws.
 The repealed Act of 1986 did not include online misleading
advertisements in the definition of unfair trade practice that were
added in the 2019 Act.

10.  In simple terms, an unfair trade practice[13] essentially refers to a
situation where the consumer may have been injured on account of
the seller indulging in corruption, misrepresentation, hiding of
significant information about the product sold, etc.
 ‘Injury to the consumer’ is a crucial aspect and needs to be
established, to prove that unfair trade practice has been committed. The
injury has to be an outcome of the products purchased or service
availed.
 To understand this further, one can look at the instance of re Glaxo Ltd
and Capsulation services Ltd. In this case, the allegation was that
Glaxo packaged a drug with its own brand name printed in prominence
and the name of the actual company manufacturing that drug was
mentioned in extremely small space.
The intention was to pass off that product as if it were created by Glaxo
Ltd. It was held that in the absence of any ‘injury’, even if the practice
was unfair in nature, it cannot be taken as an ‘unfair trade practice’
under the Consumer Protection Act 1986.
Unfair Trade Practice cannot have said to occur in a situation
where there is a genuine mistake committed by the seller which
lacks fraudulent intent, or where the respondent can prove that he
did due diligence and took sufficient precautions on his part, to
avoid that error.

11. Who can file a Consumer
Complaint?(Complainant)
 As per Section 2(b) and Section 12 of the Consumer Protection Act 1986, the following
categories of people can register a complaint if other criteria are met –
 a consumer
 any voluntary consumer association registered under the Companies Act, 1956 or under any
other law for the time being in force
 the Central Government or any State Government
 one or more consumers, where there are numerous consumers having the same interest.
 The individuals who benefit from the goods and services, even if they are not direct buyers,
will be considered consumers and have a right to file a complaint, under this Act.
 In the case of Spring Meadows Hospital v. Harjot Ahluwalia 1998, it was said that the
parents of a minor child can register a complaint under the Act since they are availing a
service in the hospital.
 Punjab National Bank, Bombay v. K.B. Shetty 1991 (2) CPR 633
Given, the patriarchal culture of our nation where women have limited access to education
and awareness of their legal rights, husbands have the authority to register and prosecute a
complaint on behalf of their wife, under the Consumer Protection Act.

12. Recent Amendments
 With the advent of the Consumer Protection Act
2019, two new concepts have been introduced as
grounds for registering a complaint. They are both
linked to Unfair Trade Practice. They are –
 Unfair Contract – the complainant can challenge
a contract that is heavily favouring the seller and
is drafted in such a way that it is bound to
disadvantage the consumer.
 Product Liability – As per Section 2(35) of CPA
2019, product liability entails holding the
manufacturer liable for any defect or damage
present in the goods that have harmed the
consumer. Before 2019 Act, there was no specific
law to address this issue.

13. Concept of Unfair Contract
 The 2019 Act has also introduced the concept of unfair contract.
'Unfair Contract' is defined under Section 2(46) and it refers to
any contract between a consumer and a manufacturer or service
provider or trader whose terms brings about a significant change
in the consumer rights under the Act. These terms are namely
such as:
 requirement of excessive security deposits by the consumer in
for facilitating the performance of obligations under the contract;
 imposing penalty for breach of contract on the consumer which is
not in proportion with the loss suffered due to such breach;
 not accepting early debt repayment along with the applicable
penalty;
 allowing one of the parties to terminate the contract without any
reasonable cause or unilaterally;
 entitling one party to assign the contract to the detriment of the
consumer and without his consent;
 imposing unreasonable condition, obligation or charge on the
consumer that puts him in a disadvantageous position;

14. Product Liability
 Product Liability is one of the remarkable and significant steps incorporated in the
2019 Act. An entire chapter under the Act is dedicated to deal with this concept.
 A complainant can bring a product liability action against any product
manufacturer or service provider or a seller in case any harm is suffered by him
due to a defective product or service.
 A product manufacturer will be held liable under Section 84 of the Act in case
the product has a manufacturing defect, defective in design, does not follow the
manufacturing specifications, does not conform to implied warranty and does not
contain adequate instructions for proper usage of the product.
 Section 85 of the Act discusses the liability of the service provider in a product
liability action. To be liable under this section, the service provided shall be
deficient, faulty, inadequate or imperfect, an act or negligence withholding any
information responsible for the harm caused, without adequate warnings and
instructions and without conformation to express warranty or contractual terms.
 A product seller will be liable in a product liability action if there is exercise of
substantial control over manufacturing, testing, designing, labelling or packaging
of the product. There was substantial alteration or modification responsible for
the harm caused. The product seller made express warranty that does not
conform to the warranty made by the manufacturer. The product seller failed to
take reasonable care in maintaining, assembling or inspecting the product.

15. Exceptions to Product Liability
 There are certain exceptions to product liability action
as well. These exceptions are discussed in Section
87 of the 2019 Act. Any consumer who himself
misuses, alters or modifies the product and suffers
harm as a result, cannot file a product liability
claim.2 A consumer cannot bring product liability
action in case the product manufacturer has given
adequate warnings for use of the product, the product
purchased was used as a part of another product and
the end use caused damage, the product was
supposed to be used under an expert's supervision or
the product was used under alcohol influence.3 A
product manufacturer will not be liable for not warning
about any danger that is commonly known or obvious.