Unit 8 The Consumer Protection Act, 1986: Structure

Legal Aspects of Business Unit 8
Sikkim Manipal University Page No. 192

Unit 8 The Consumer Protection Act, 1986
Structure:
8.1 Introduction
Objectives
8.2 Rights of Consumers
8.3 Consumer Complaint
8.4 Unfair Trade Practices
8.5 Restrictive Trade Practices
8.6 Consumer Disputes Redressal Agencies
8.7 Consumer Protection Councils
Self Assessment Questions I
8.8 Summary
8.9 Terminal Questions
8.10 Answers to SAQs and TQs
8.1 Introduction
Most of the manufacturers and traders have been adopting unfair trade
practices for the purpose of promoting sale, use of supply of any goods, or
for the provision of any services. Unfair practices like false and misleading
descriptions about the nature and quality of the goods, exaggerated
statements about their power and potency, false weights and measurements
etc., have been causing loss or injury to consumers of such goods and
services. A number of Acts were enacted by the Government to protect the
interests of consumers. For instance, Prevention of Food Adulteration Act,
Essential Commodities Act, Sales of Goods Act, Standards of Weights and
Measures Act, Monopolies and Restrictive Trade Practices Act, Indian
Standard Institution (certification of marks) Act etc. were passed by the
Government for the purpose of protecting the interests of the consumers.
But these Acts failed to provide the needed protection to the interests of the
consumers. To provide for better protection of the interests of the
consumers, and to save the consumers from the evils of unfair trade
practices, the Government of India enacted the Consumer Protection Act in
1986. Most of the defects in the Act were removed by amendments to the
Act in 1991, 1993 and 2001.
Objectives:
After studying this unit, you will be able to:
Explain the objectives of Consumer Protection Act.
Explain the unfair trade practices and restrictive trade practices.
Explain the role of Consumer Disputes Redressal Agencies.
Explain the functions of Consumer Protection Councils.
8.2 Rights of Consumer or Objectives of the Act
The Consumer Protection Act, 1986 seeks to provide for better protection of
the interests of consumers. This Act seeks, inter alia, to promote and protect
the basic rights of consumers such as:
Right of Protection to Life and Property: The Right to be protected
against marketing of goods which are hazardous to life and property.
Right to be informed: The Right to be informed about quality, quantity,
potency, purity, standard and price of goods to protect the consumers
against unfair trade practices.
Right to choose: The Right to be assured, wherever possible, access to a
variety of goods at competitive prices.
Right to be heard: The Right to be heard and to be assured that
consumers interests will receive due consideration at appropriate forums.
Right to Redress: The Right to seek Redressal against unfair trade
practices or unscrupulous exploitation of consumers, and
Right to Education: The Right to consumer education.
This is based on the basic rights of consumers as defined by the
International Organization of Consumers (IOCU) viz. Right to safety, to
information, of choice, to be heard, to redressal, to consumer education, to
healthy environment and basic needs.
These objects are being promoted and protected by the Consumer
Protection Councils established at the Central and State level. The Act
seeks to provide speedy and simple redressal to consumer disputes. For
this purpose a quasi-judicial machinery is being set up at the District, State,
and Central level. These quasi-judicial bodies will observe the principles of
natural justice. These have been empowered to give reliefs of a specific
nature and to award compensation to consumers. Penalties for non-
compliance of the orders given by the quasi-judicial bodies have also been
provided. The remedies under this Act are additional supplemental
remedies.
Sec. 3 of the Consumer Protection Act states that provision of this Act shall
be in addition and not in derogation of the provisions of any other law or Act
for the time being in force.
Advantages of seeking relief under the Consumer Protection Act 1986.
Following are the most important advantages of seeking relief before a
Consumer Forum instead of approaching Civil Court. While evaluating the
comparative benefits we may also consider the remedy available to
consumers under the MRTP Act, 1969 against restrictive trade practices
and unfair trade practices:
Firstly administration of justice under the Consumer Protection Act is totally
free. Consumer Courts do not levy court fee in respect of legal proceedings.
Secondly consumer courts are expected to delivery speedy justice. Despite
criticism on this aspect some of which is justified, one agrees that Consumer
Courts certainly score over the Civil Courts.
You can be your own lawyer before consumer courts. Though appearance
of lawyer is not prohibited consumer courts do not encourage appearance of
lawyers and extensive long winded arguments.
Procedural simplicity and amiable atmosphere prevailing in consumer courts
is more encouraging to any ordinary litigant as compared to lengthy and
procedure oriented civil court proceedings.
While the provisions of Restrictive Trade Practices and Unfair trade
practices cannot be invoked against Central Govt., State Govt., and public
sector organisations, the provisions C.P. Act, 1986 can be invoked against
Govt. run organisations such as railways, post office, air line, telephone
boards, electricity boards, insurance companies, banks. Further Consumer
Forum is vested with quasi criminal powers/provisions u.s. 27 of the Act.
Definitions:
Consumer: 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 a system of deferred payment, or (ii) Hires any services
for a consideration which has been paid or promised, or partly paid and
partly promised, or under a system of deferred payment i.e., in respect of
hire-purchase, transactions, [Sec. 2(d)].
Thus, consumer is a person who (i) buys any goods for a consideration, or
(ii) hires or avails any services for a consideration. In addition to buyer(s) of
goods or hirer(s) or user(s) of services, any beneficiary of such services,
using the goods/services with the approval of purchaser or hirer or user
would also be a deemed a Consumer under the Act. The widow of the
deceased Policy holder was held as consumer under the Act by the State
Commission of A.P. in the case of A vs. LIC of India. The consideration
may be either paid or promised, or partly paid and partly promised or under
any system of deferred payment. The Act thus covers transactions for the
supply of goods and rendering of services.
Buyer of goods for consideration: The Act, unlike the Sale of Goods Act,
does not insist on money consideration only. Transactions of transfer of
services, or barter, or exchange will come within the purview of the Act. The
user of such goods, with the approval of the buyer of goods, is also a
consumer as per the Act. But according to Section 2(d) of the Act, the term
consumer does not include a person who obtains such goods for resale or
for any commercial purpose. Thus a purchaser of goods for reselling them
or a purchaser of a taxi for plying the same on hire, a purchaser of a V.C.R.
for running a video library, or purchaser of machinery for his commercial
establishment is not a consumer. However, according to Consumer
Protection (Amended) Act 1993, a person who purchases tools or
machinery under self-employment scheme is also a consumer.
Hirer of services for consideration: Any person who hires services for a
consideration is a consumer. Consumer, not only means merely one who
hires services for consideration, but also includes a person who is a
beneficiary of such services. For example, the user of a telephone, even
though he is not himself the subscriber is a consumer under the Act.
Services include all kinds of professional services, be it the routine services
of a barber or the technical services of a highly qualified person. For
example, supply of electricity has been held to be a service and not sale of
goods. The services must be of commercial nature in the sense that they
must be on payment. The payments may be in cash or kind. It may be
made either at once, or partly at once, or partly on credit. The services may
be rendered wholly or partly on credit. However, free services or personal
service under a contract have been excluded from the protective spell of the
Consumer Protection Act.
Union of India Vs. Mrs. S. Prakash: It was held that the subscriber of
telephone is a consumer as the rental charges paid to the Central
Government is the consideration for the services rendered by the Tele-
Communication Department, District Manager, Telephones, Patna Vs. Lalith
Kumar Bajla (1989).
Mumbai Grahak Panchayat, Vs. Andhra Pradesh Scooters Ltd. The
complainant made an advance deposit of Rs.500 with the A.P. Scooters
Ltd., booking a scooter. The complaint was not given the refund of the
deposit when he demanded the same as per his contract with the opposite
party. It was held that the complainant was a consumer, and was entitled
to relief asked by him.
Ganapathi Vs. Postmaster, Karnataka State: In this case, the remitter of
T.M.O.,was held to be a consumer and was awarded a compensation.
Cosmopolitan Hospitals Vs. Smt. V.P. Nairs: The National Commission
held, that a patient is a consumer and the medical assistance was a service.
The Medical Officers service was not a personal service so as to constitute
an exception to the application of the Consumer Protection Act.
Who are not Consumers?
The following persons are not consumers as per the Consumer Protect Act.
(a) A person who purchased goods for resale.
(b) A person who purchased goods for commercial purpose
(c) A person who obtains services without consideration
(d) A person who obtains services under a contract of personal service
The National Commission, in various cases, had decided that the following
are not consumers:
Tax-payers to municipality
Contractors
Applicants for jobs
Persons who filed suits in courts, etc.
Consumer Dispute: According to Section 2(1)(e) of the Consumer
Protection Act, Consumer Dispute means a dispute where the person
against whom a complaint has been made denies or disputes the
allegations contained in the complaint.
Defect: 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 or has been
undertaken to be performed by a person in pursuance of a contract or
otherwise in relation to any service.
From the above definition, it is clear that non-fulfilment of any of the
standards or requirements laid down by or under any law for the time being
in force or as claimed by the trader in relation to any goods would fall under
the ambit of defect.
Three types of defects are envisaged (i) manufacturing defect, (ii) design
defect (iii) instruction defect.
Manufacturing defect: A product is said to have manufacturing defect
when it is not built according to specification and is consequently unsafe.
For example, there may be negligence on the part of an employee in
assembling a part or tightening a nut or a latent defect (hidden flaw) in the
raw material out of which the product is made.
Design defect: It appears there is no clear standard with reference to
standards prescribed by Government or industry, if any, but courts may
liberally interpret the provision to test the complaint from the angle of
reasonable care in designing a product. Some American Courts have held
that a product is defectively designed if the product is more dangerous than
the benefits that accrue on account of product design in the eyes of an
ordinary consumer. For instance, under Indian conditions if a moped
manufacturer does not provide a Saree guard to protect against the
possibility of an average woman meeting an accident when loose and of her
saree gets in contact with running wheels of moped may be considered as
design defect. It is not unreasonable to argue that reasonable and prudent
manufacturer should have anticipated or foreseen such a possibility in the
Indian context as large number of even working women wear sarees in
India.
Instruction defect: When a manufacturer fails to provide adequate warning
of possible dangers associated with the Product Manual, instruction booklet
or on package/label regarding safe use of the product. A drug manufacturer
is expected to warn against side effects. It is not a valid defence to argue
that manufacturer was not aware of the danger.
Following types of evidence is generally relied upon by complainants to
establish defect in product:
a) Expert opinion
b) manufacturers record
c) Government and Industry Standards
d) Post accident changes
e) Report of Governmental and other agencies
f) Past record
(a) Expert Opinion: Complainant hires a technical expert to testify about
the defective characteristics of a product. A manufacturer has to retain
highly qualified experts to rebut the findings of complainants expert and
also educate defence lawyer so well that he can the bluff of
complainants expert.
(b) Manufacturers records: If manufacturers own employees expressed
concern about product safety it can be extremely persuasive that
product defect existed.
(c) Government and Industry Standard: Evidence that manufacturer has
failed to meet government or industry standards can be compelling proof
of existence of defect and when such standards are mandatory it also
amounts to automatic findings of negligence.
(d) Post accident changes: Post accident changes may be considered as
evidence that original designs were deficient. Though this is a
contentious factor as to whether such an evidence is admissible a jury
may be influenced by the same.
(e) Report of Government and the other agencies: Generally factual
findings of an official investigation forms admissible evidence.
(f) Past record: Complainant may show that past record of the product
proves his claim. Manufacturer has the obligation of proving that other
accidents were not similar.
Who is liable?
Who is liable to pay compensation is indeed an important question. The
liability extends from manufacturer to retailer or in other words to everyone
in the chain of distribution. Even an occasional seller may be held liable for
his own negligence to the extent he should have known or discovered that
the product was dangerous to users. In most states in USA strict liability
applies only to manufacturers.
Therefore, contravention of any of the provisions of enactments such as the
Drugs & Cosmetics Act, 1950, Standards of Weights & Measures Act, 1976,
the Prevention of Food Adulteration Act, 1955, the Indian Standards
Institution (Certification Marks) Act, 1952 etc. or any rules framed under any
such enactment or contravention of the conditions or implied warranties
under the Sale of Goods Act, 1930 in relation to any goods would also be
termed as a defect under the Act. Fault, imperfection or shortcoming in
quality, quantity, potency, purity or standard as claimed by the trader in any
manner whatsoever in relation to goods is to be determined with reference
to the warrants or guarantees expressly given by a trader.
Deficiency: 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 [Section 2(1)(g)].
The definition of deficiency also has two parts to it like the definition of
defect pertaining to services for which standards are prescribed by the law
and services for which express warranties or guarantees are given by the
persons concerned, say, traders, etc.
Goods: Goods means goods as defined in the Sale of Goods Act, 1930
[Section 2(1)9i)]. As per Section 2(7) of the Sale of Goods Act, 1930
Goods means every kind of movable property other than actionable claims
and money; and includes stock & shares, growing crops, grass and things
attached to or forming part of the land which are agreed to be severed
before sale or under the contract or sale. Therefore, most consumer
products would come under the purview of this definition.
Manufacturer: (i) Manufacturer means a person makes or manufactures
any goods or (ii) parts thereof, or ii. does not make or manufacture any
goods but assembles parts their of made of manufactured by himself, or iii,
puts or cause 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. [Sec. 20(j)].
Service: Service means Service of any description which is made
available to potential users and includes the provisions of facilities in
connection with banking, financing, insurance, transport, processing, supply
of electrical or other energy, boarding or lodging or both, house
construction, entertainment, amusement or other information [Sec.2(O)].
The expression Service includes in its scope provision of facility in
connection with telephone provided by Telecommunication Department and
houses and plots by Housing & Development Board.
Free services and personal services under a control have been excluded
from the protective spell of the Act. Thus services must be of commercial
nature in the sense that they must be on payment. The payment may be in
cash or kind. It may be made either at once or partly at once or partly later
i.e., on credit. For services rendered without consideration the complaint
cannot be maintained in forum. For example, a medical service rendered by
Government hospitals will not come within the scope of Consumer
Protection Act.
In Consumer Unity and Trust Society Vs. State of Rajasthan (1989), the
National Commission while hearing an appeal from the State of Rajasthan,
held that complaints against Government hospitals cannot entertained under
the Act on the ground that a person receiving treatment in such hospital is
not a consumer as the patient does not higher the services of the hospital;
moreover, the treatment provided is free of charge, and therefore, it does
not amount to service.
In the case of Cosmopolitan Hospitals Vs. Smt. Vasantha P Nair, (1991) and
Cosmopolitan Hospitals Vs. Smt. V.P. Santha (1992) the National
Commission considered at length whether service rendered by doctors in
private hospitals for consideration would come under the purview of
`service, whether the medical profession was outside the scope of the
Consumer Protection Act, and whether legal representatives of a deceased
patient could file a complaint against the hospital alleging negligence. The
facts of both cases were similar the widows of the deceased patients
alleged the hospital authorities with negligence in the diagnosis and
treatment in the first case and in the performance of an operation in the
second case.
The contentions or the hospital authorities denying the allegation of
negligence were that (i) the complainants were not consumers under the
Act, and therefore, were not entitled to initiate the proceedings; and (ii) the
treatment rendered in the hospital did not constitute service under the Act.
Their contention was that the Act ensured protection to consumers against
unscrupulous traders selling defective goods or indulging in unfair trade
practice and against deficiency in service relating to commercial
transactions only and that services rendered to a patient by a medical
practitioner, which is a professional service, is of a personal nature and
contracts of personal service being outside the purview of the Act, the
services rendered in hospitals whether by government or private agencies
were not services under the Act.
The National Commission upholding the decision of the State Commission
held that (i) the complainants who were legal representatives of the
deceased were clothed by operation of law with the rights which the
deceased had to initiate action against the hospital on the ground of alleged
deficiency in service and that those rights had not become extinguished by
his death but remained enforceable by his legal representatives. Unless
such a broad and pragmatic view is taken, the intention of the legislature in
enacting the Consumer Protection Act would be defeated. Therefore, the
complainants were consumers and had full locus standi to maintain the
complaint petitions before the Forums.
(ii) The activity carried on by the hospital constituted service under the Act
and did not fall within the exempted category of service rendered under a
contract of personal service. The definition of service as given in Section
2(1)(0) of the Act mentions service of any description made available to
potential users and only exempts service rendered free of charge or
under a contract of personal service from its ambit. Restricting the scope
of the definition to only service relating to commercial transactions would
not be warranted, given the intention of the legislature. Thus, there is no
substance in the contention that service rendered by hospitals and members
of the medical profession for consideration will not constitute service as
defined in the Act because it does not relate to a commercial transaction.
Quoting its own observations in the case of A.C. Modagi Vs. Cross Well
Tailor (1991) the National Commission reiterated that there was a distinction
between contract for service and contract of service. Personal service
stemmed from a master and servant relationship where the master can
order what is to be done and how it shall be done and under which, an
employee could be turned out of service by the master at will, and therefore,
no occasion would arise for the master to complain above the deficiency in
the rendering of service by the employee. Where the hirer of the service is
not in a position to exercise any sort of control or supervision over the work
of the person rendering the service, there would not be any personal
service. In the case of hospitals which provide treatment to patients for
payment, there could be no reason to hold that there was any element of
personal service in such arrangement. The provisions of the consumer
protection act relating to adjudication of consumer disputes and award of
reliefs under Sec.14 fully applied to disputes concerning deficiency in the
service rendered by hospitals and members of the medical profession also.
The following have been held to be services for the purpose of application of
the provisions of the Consumer Protection Act:
Banking services, Insurance services, Railway services, Airline services,
Telephone services, Transport services, Electricity Board services, Private
hospitals services, services of intermediate board, tourist services, services
proved by Universities, postal department services, Registration department
services.
The following services are held to be not covered by the Consumer
Protection Act:
Services provided by Government Hospitals, Service Commission Services,
service of Courts etc.
8.3 Consumer Complaint
Complaint means any allegation in writing made by a complainant that : as
a result of any unfair trade practice or restrictive trade practice, adopted by a
trader, the complainant has suffered loss or damage; the goods mentioned
in the compliant suffer from one or more defects; the services mentioned in
the complainant suffer from deficiency in any respect; a trader has charged
for the goods mentioned in the complainant a price in excess of the price
fixed by or under any law for the time being in force. The complaint is to
made with a view to obtaining any relief provided by or under this Act.
Who can make a Compliant?
A complaint in relation to any goods sold or delivered, or any service
provided may be field with quasi-judicial organs constituted under the
Consumer Protection Act by any of the following:
i) The consumer to whom such goods are sold or delivered or such
service provided;
ii) Any recognized consumers association registered under law, or
iii) The Central or any State Government, and
iv) One or more consumers on behalf of many consumers having same
interest.
Note: Recognized Consumer Association means any voluntary consumer
association registered under the Companies Act, 1956 or any other law for
the time being in force.
To whom the Complaint is to be made: According to the Consumer
Protection (Amendment) Act 1993, a complaint can be made in the following
quasi-judicial agencies in the following manner.
(a) where the value of goods or services and compensation, if any, claimed
does not exceed Rs. 20 lakhs, complaint is to be filed with the District
Forum;
(b) Where the value of goods or services and compensation, if any, claimed
exceeds Rs.20 lakhs, but does not exceed Rs.50 lakhs, complaint is to
be filed with the State Commission.
Where to file a Complaint?
A complaint should be filed in a District Forum (subject to pecuniary
jurisdiction) within the limits of whose jurisdiction all the opposite parties
reside or carry on business, or
Any one of the opposite parties resides or carry on business (with the
permission of District Forum or acquiescence of the opposite party not
residing there) or where the cause of action wholly or in part arises.
How to file a Complaint?
Procedure for filing a complaint are simply and speedy.
a) No fees have been prescribed.
b) Complainant or his authorized agent can present the complaint in
person.
c) Complaint can be sent by post to the appropriate Forum/Commission.
How to draft a Complaint: A complaint should contain the following
information:
a) Name and description and address of the complainant.
b) Name, description and address of the opposite party or parties.
c) The facts relating to complaint and when and where it arose.
d) Documents, if any, in support of the allegation contained in the
complaint.
e) The relief which the complainant is seeking.
The complaint should be signed by the complainant or his authorized agent.
8.4 Unfair Trade Practices
The Consumer Protection Act has adopted the definition of Unfair Trade
Practices as given in the MRTP Act.
Section 36-A of the Monopolies and Restrictive Trade Practices Act, 1969,
amended in 1993 explains what unfair trade practice means. Unfair trade
practice methods are listed in section 36-A. Where the methods listed in
section 36-A are adopted for the purpose of promoting the sale, use or
supply of any goods, or for the provision of any services and thereby some
loss or injury is caused to the consumers of such goods or services, it is an
unfair trade practice. The practices mentioned in section 36-A are grouped
into the following five categories.
1. Misleading Advertisement and False Representation: These include:
(a) Falsely representing that the goods are of a particular standard,
quality, quantity, grade, composition, style or model.
(b) Falsely representing that the services are of a particular standard,
quality or grade
(c) Falsely representing that the re-built, second-hand, renovated,
reconditioned or old goods as new goods.
(d) Representing that the goods or services have sponsorship, approval,
performance, characteristic, accessories, uses or benefits which
such goods or services do not have.
(e) Representing that the seller or the supplier has a sponsorship or
approval or affiliation which he does not have.
(f) Making a false or misleading representation concerning the need,
for, or the usefulness of any goods or services.
(g) Giving to the public any warranty or guarantee of the performance or
length of life of a product which is not based on adequate test.
(h) Making a materially misleading representation to the public
concerning the price at which a product or like products of goods
have been or are ordinarily sold.
(i) Giving false or misleading facts disparaging the goods, services or
trade of another person.
The mode of representation or statement to the public may be by any
method. It will be enough if the statement comes to the knowledge of the
buyer of those goods etc. The representation may appear on the article or
on its wrapper or container or on anything on which the article is mounted.
2. Sale offer of bargain price: This includes advertising for supply, at a
bargain price, goods or services that are not intended to be offered for
supply at the price for a reasonable period or reasonable quantities.
3. Schemes offering Gifts or Prizes: This category includes: (a) offering
gifts or prizes or other items with the intention of not providing them and
conducting promotional contests; (b) the conduct of any contest, lottery or
game of chances, etc.
4. Non-compliance of prescribed Standards: This category includes
cases where goods are sold for use by consumers knowing or having
reason to believe that they do not comply with the standards prescribed by
some competent authority. The prescribed standard may relate to
performance, composition, contents, design, construction, finishing or
packing as are necessary to prevent or reduce the risk of injury to the
person using the goods.
5. Hoarding, destruction or refusal: The fifty and last category of unfair
trade practices includes cases of hoarding, destruction of goods or refusal to
sell goods or services so as to raise the cost of those or similar goods.
Ingredients of Unfair Trade practices:
(a) The trade practices must consist of any of the practices listed as above.
(b) The purpose of such trade practice must be to promote the sale, use or
supply of any goods or provision of any services.
(c) The trade practices must have caused loss or injury to the consumer
whether by Eliminating or restricting competition.
8.5 Restrictive Trade Practice
Sec. 2(nn) of the Consumer Protection Act defines Restrictive Trade
Practice as any trade practice which requires a consumer to buy, hire or
avail of any goods or, as the case may be, services as a condition
precedent for buying, hiring, or availing of other goods or services. While
the restrictive trade practice covered under C.P. Act relates to tie up sales
of slow moving goods with fast moving goods, Sec.2 (0) of MRTP Act as a
wider ambit which covers all practices which prevents distort or restrict
competition and obstructs free flow of goods and services or obstruct free
flow of capital and resources into production.
Restrictive Trade Practices (RTP - under MRTP Act 1969)
Restrictive Trade practices are those trade practices which have the effect
of preventing, distorting or restricting competition in any manner and in
particular acts intended to result in:
1. Obstruction of Capital and Resources into stream of production.
2. Manipulation of price or to abstract production, distribution/supply of
goods or provision of services.
3. Agreement falling within the scope of Sec.33(of the MRTP Act) which
are deemed as Registrable Agreements relating to Restrictive Trade
Practices.

8.6 Consumer Disputes Redressal Agencies
For the purpose of speedy and simple settlement of Consumers disputes
section 9 of the Act, 1986 provides for the establishment of the following
three Consumer Disputes Redressal Agencies.
A Consumer Disputes Redressal Forum to be known as the District Forum
established by the State Government in each district of the State of
notification.
A Consumer Disputes Redressal Commission to be known as State
Commission established by the State Government, with the prior approval of
the Central Government, in the State by notification and
A National Consumer Disputes Redressal Commission to be known as
National Commission established by the Central Government by
Notification.
Thus, the Act envisages a hierarchy of three Redressal Forums: (1) District
Forums, (2) State Commission and (3) National Commission. These are
quasi-judicial bodies.
District Forum:
District Forum means a Consumer Disputes Redressal Forum, established
under Section 9 (2) of the Consumer Protection Act, 1986. This is
established by the State Government in each district of the State by means
of a notification. If reasonable and necessary, the State Government can
establish more than one district forum in a district. As per the amended Act,
1993, permission of the Central Government is not necessary for
establishing a district forum.
Composition of the District Forum: According to section 10 of the Act, each
district forum shall consist of : (i) a person who is, or has been or is qualified
to be a District J udge shall be nominated by the State Government and shall
be the President of the Forum, (ii) a person of eminence in the field of
education, trade, or commerce, law etc., and (iii) a lady social worker.
Appointments to the State Commission shall be made by the State
Government on the recommendation of a Selection Committee consisting of
the President of the State Committee, the Secretary-Law Department of the
State and Secretary in charge of Consumer Affairs in the state.
Every member of the District Forum shall hold office of a term office 5 years
or up to the age of 65 years, whichever is earlier. Of course, a member may
resign by giving a notice in writing to the State Government where upon the
vacancy will be filled up by the State Government. The salary of honorarium
and other allowances payable to the members and their conditions of
service may be prescribed by the State Government. A member shall not
be eligible for re-appointment.
Pecuniary and Territorial J urisdiction of the District Forum: Section 11
provides for the jurisdiction of the District Forum under two criteria:
Pecuniary and Territorial. The district forum enjoys jurisdiction to entertain
complaints where the value of goods or the services and the compensation,
if any, claimed, does not exceed Rs.20 lakhs. A complaint can be filed
either at the place where the opposite party resides or carry on business or
at the place where the cause of action arises. In case of action arises also
at the place where the product is sold.
In the case, Consumer Education and Research Society Vs. Canara Bank,
it was held that a banking company to be proceeded against the district
forum where its branch was located.
Manner of making a Complaint:
A complaint, in relation to any goods sold or delivered, or any service
period, may be filed with a District Forum by any of the following: The
consumer to whom such goods are sold or delivered, or such services
provided, any recognised consumer association, whether the consumer is a
member of such association or not, the Central or the State Governments,
any consumer of consumers on behalf of a number of consumers.
Procedure on Receipt of Complaint: The District Form has to observe the
following procedure as detailed in section 13 of the Act.
i) The first step on receiving a complaint is to refer a copy of the
complaint to the opposite party directing him to give his version of
the case within a period of 30 days. When the opposite party denies
or disputes the allegations contained in the complaint, or omits or
fails to take any action to represent his case within the 30 days or
extended period of 15 days, a dispute arises, the District Form shall
proceed to settle the consumer dispute. After these preliminary
steps, the Forum has to follow the procedure prescribed in section
13 of the Act.
ii) The complaint may relate to the defects of goods. The term defect
means any fault, imperfection or short coming in the quality, quantity,
purity, or standard which is required to be maintained by any law in
force or which the trader claimed that his goods possessed. If the
alleged defect in the goods is such that his goods possessed. If the
alleged defect in the goods is such that it cannot be determined
without proper analysis or test of the goods, the Forum should obtain
a sample of goods from the complainant. The sample of goods
should be protected by a seal. The sample of goods received must
be sent to appropriate laboratory along with a direction that the
goods should be tested or analysed for the alleged defect. The time
allowed for the laboratory is 45 days.
The Direct Form/State Commission may require the complainant to
deposit with it such amount as may be specified towards payment of
fees to the appropriate laboratory for the purpose of carrying out the
necessary analysis or tests [Section 13(1)(d)]. The amount so
deposited shall be remitted by them to the appropriate laboratory to
enable it to carry out the analysis and send the report.
iii) On receipt of the report from the laboratory, the Forum should send
a copy of it to the opposite party along with such remarks, as the
District Forum may feel necessary.
iv) If any party disputes the correctness of the report or the correctness
of the methods of analysis, the Form shall require him to submit his
objections in writing.
v) Before issuing any final order in the matter, the Forum will provide an
opportunity to both parties to present their views about the report.
The Forum shall proceed to settle the dispute on the basis of
allegations, counter allegations and the evidence produced by the
parties in support of their case. Where the opposition party does
nothing in response to the complaint, the matter may be decided on
the basis of the evidence produced by the complainant. The
proceedings of the Forum in compliance with the procedure laid
down by the Act are to be regarded as valid. The validity cannot be
questioned on the ground that the principles of natural justice have
not been complied with.
Limitation Period for filing of Complaint: Section 24A provides that the
District Forum, the State Commission or the National Commission shall not
admit a complaint unless it is filed within one year from the date on which
the cause of action has arisen. However, where the complainant satisfies
the Forum/Commission as the case may be, that he had sufficient cause for
not filling the complaint within one year, such complaint may be entertained
by it after recording the reasons for condoning the delay.
Administrative Control:
Section 24-B provides that the National Commission shall have
administrative control over all the State Commission in the matter of calling
for periodical returns regarding the institution, pendency and disposal of
cases, issuance of instructions regarding adopting of uniform procedure in
hearing of matters, serving copies of documents, translation of judgements
etc. and generally over-seeing the functioning of the State Commission/
District fora to ensure that the objects and purposes of the Act are served
in the best possible manner.
The State Commission shall have administrative control over all the District
fora within its jurisdiction in all the above-referred matters.
Findings of the Forum: If the Forum is convinced that the goods are really
defective, or that the complaint about the service is proved, the Forum shall
have to order the opposite party to do one or more of the following things.
- To remove the defect pointed out by the laboratory from the goods in
question.
- To replace the goods with new goods of a similar description, which
should be free from any defect.
- To return to the complainant the price of the goods, or the charges of
services paid by the complainant.
- To pay such amount as may be awarded compensation to the consumer
for any loss or injury suffered by the consumer due to the negligence of
the opposite party.
- To remove the defects or deficiencies in the services in question.
- To discontinue the unfair trade practice or the restrictive trade practice
or not to repeat them
- Not to offer the hazardous goods for sale.
- To withdraw the hazardous goods from being offered for sale.
- To provide for adequate costs to parties.
The order for the District Forum shall be signed by its president and the
member or members who conducted the proceedings. In case of difference
of opinion, the order of the majority of the members shall be the order of the
Forum.
Enforcement of orders: The orders of District Forum are enforceable in
the manner of an order or decree made by a civil court, in a civil suit. If the
forum is not able to execute its order, it may forward the same to the court
for execution. The court to which the order is sent, shall then execute the
orders as if it were a decree or order sent to it for execution.
Appeal: Any person aggrieved by an order made by the District Forum may
prefer an appeal against such order to the State Commission within a period
of 30 days from the date of the order. The period of 30 days would be
computed from the date of receipt of the order by the applicant. The appeal
to the State Commission is to be made in such form and manner as may be
prescribed. Where no appeal has been preferred, the orders of a District
Forum shall be final. In Kohinor Carpets. Vs. Rajendra Arora, Haryana, it
was held that a penalty become final in the absence of any appeal against it.
Penalties: Every trade or a person against whom complaint is made is
bound to comply with the order of the District Forum. If a trader fails to
comply with the order, he shall be punishable.
- With imprisonment for a minimum duration of one month and maximum
of 3 years, or
- With minimum fine of Rs.2000 and maximum of Rs.10,000 or
- Both, with imprisonment and fine as mentioned above.
Powers of the District Forum: For the purposes of settling the disputes
under Section 13, the District Forums have been vested with the same
powers as are vested in a civil court under the code of Civil Procedure,
1908. Such powers are enjoyed by the Forum in respect of the following
matters.
1. The summoning and enforcing the attendance of any defendant or
witness and examining the witness on oath.
2. The discovery and production of any document or other material object
producible as evidence.
3. The reception of evidence on affidavits.
4. The requisitioning of the report of the concerned analysis or test from
the appropriate laboratory or other relevant source.
5. Issuing of ay commission for the examination of any witness.
6. dismiss a complaint which appears to have been filed frivolously or with
a view to cause vexation, order the complainant to make payment of
cost, not exceeding Rs.10,000 to the (under the Sec.26 of the Act)
opposite party.
7. The authorized officer may seize such books, papers, documents or
commodities as are required for the purpose of this Act.
8. The Officer has a right to exercise power of entry and search of any
premises of the opposite party.
Isaac Mathew Vs. Maruti Udyog Ltd.: A car which was damaged and was
subsequently repaired and supplied as new car was ordered to be replaced
and some compensation for inconvenience was also allowed.
Kailash Kumari Vs. Narandra Electronics: A defective television was
orders to be replaced along with compensation.
Vinod Seth Vs. Rathan Road Lines: The carrier was held liable for loss of
goods and for mental agony.
Bnany Vs. Shenoy, K.S.R.T.C. Karnataka: The passenger who could not
be conveyed to his destination owing to road obstruction was allowed to
recover from the bus operators his ticket money to and from.
State Commission
State Commission is a Consumer Disputes Redressal Commission:
established by the State Government with the prior approval of the Central
Government, in the State notification under Section 9(b) of the Consumer
Protection Act.
Composition of the State Commission: According to section 16(1) of the
Act, each State Commission shall consist of the following:
- A person who is or has been a judge of High Court shall be appointed,
on the recommendation of a Selection Committee, by the State
Government and shall be its president.
- Two other members, who shall be persons of ability, integrity, and
standing. They shall have adequate knowledge or experience of or
have shown capacity in dealing with, problems relating to economics,
law, commerce, accountancy, industry, public affairs or administration.
One of such members shall be a woman.
The provision to this clause states that every appointment made under this
clause shall be made by the State Government on the recommendation of a
Selection Committee consisting of the President of the State Commission,
Secretary Law Department of the State and Secretary in charge of
Consumer Affairs in the State.
Under Section 16(2), the State Government has the power to decide on the
salary or honorarium and other allowances payable to the members of the
State Commission and the other terms and conditions of service.
Every member of the State Commission shall hold office for a term of 5
years or up to the age of 67 years, whichever is earlier and shall not be
eligible for re-appointment.
Pecuniary and Territorial Jurisdiction: According to Section 17 of the
Act, subject to the other provision of this Act, the State Commission shall
have jurisdiction in the following matters.
1. To entertain complaints where the value of the goods or services and
compensation, if any, claimed exceeds Rs. 20 lakhs, but does not
exceed Rs.50 lakhs.
2. To entertain appeal against the orders of any District Forum within the
State, and
3. To call for the records and pass appropriate orders in any consumer
dispute which is pending before and has been decided by any District
Forum within the state.
Therefore, the State Commissions jurisdiction may be original, appellate or
revisional. In respect of (3) above, the State Commission may reverse the
orders passed by the District Forum on any question of fact or law or correct
or error of fact of law made by the Forum.
In respect of the original jurisdiction of the State Commission Section 17
only prescribes pecuniary limits. No territorial limits have been fixed for the
exercise of original jurisdiction under the Act though the provision contained
in Section 11(2) of the Act apply matis mutandis in the matter of entertaining
original complaints by the State Commission has was held National
Commission of Indian Airlines Vs. Consumer Education and Research
Society (1992). Territorial jurisdiction of the State Commission, therefore,
extends to the territorial limit of the State.
In the exercise of its appellate jurisdiction, the State Commission may
entertain appeals only against the orders of any District Forum with the
State. Similar condition also applies in respect of the State Commissions
power to revise orders of the District Forum- only orders of the District
Forum within the State may be subject to revision by the State Commission.
Procedure applicable to State Commission: The procedure prescribed
for the working of District Forums by Sections 12, 14 and rules framed under
these sections, with suitable modifications, is also applicable to State
Commission.
Findings of the State Commission: According to Section 13 of the Act, if
the State Commission is convinced that the goods are really defective or
that the compliant about the service is proved the State Commission shall
issue an order to the opposite party to take one or more of the following
things:
1. To remove the defect pointed out by the appropriate laboratory from the
goods in question.
2. To replace the goods with new goods of similar description which shall
be free from any defect.
3. To return to the complainant the price of goods or the service charges
paid by the complainant.
4. To pay such amount as may be awarded by it as compensation to the
negligence of the opposite party.
Appeal: Any person aggrieved by an order made by the State Commission
may prefer an appeal against such order to the National Commission within
a period of 30 days from the date of the order. The appeal must be made in
such form and manner as may be prescribed. National Commission may,
however, entertain an appeal after the expiry of the said period of 30 days if
it is satisfied that there was sufficient cause for not filing it within that period.
Where no appeal has been preferred, the order of the state commission
shall be final. However, the order of State Commission on appeal made
against the order of a District Forum shall not be entertained by the National
Commission.
Enforcement of Orders: The orders of a State Commission are
enforceable in the manner of an order or decree made by a Civil Court in a
civil suit. If the State Commission is not able to execute its order, it may
forward the same to the civil court for execution.
Penalties: Every trader or a person against whom complaint is made is
bound to comply with the order of the State Commission. If a trader fails
comply with the order, he shall be punishable as under:
- With imprisonment for a minimum period of one month and maximum of
3 years; or
- Both with imprisonment and fine as stated above.
National Commission:
In exercise of the powers conferred under sec 9(c) of The Consumers
Protection Act, the Central Government established a National Consumer
Disputes Redressal Commission to be known as the National Commission
by notification.
Composition of the National Commission: According to section 20(1) of the
Act, the National Commission shall consist of the following:
(a) A person who is or has been a judge of the Supreme Court shall be
appointed by the Central Government in consultation with the Chief
J ustice of India. He shall be its president.
(b) Four other members shall be person of ability, integrity and standing.
They shall have adequate experience of or have shown capacity in
dealing with problems relating to economics, law, commerce,
accountancy, industry, public affairs or administration. One of them
shall be a woman. The Selection Committee shall consist of a J udge of
the Supreme Court to be nominated by the Chief J ustice of India, the
secretary in the Department of Legal Affairs and the Secretary incharge
of consumers Affairs in the Government of India. A sitting judge of the
Supreme Court can be appointed only after consulting the Chief J ustice
of the Supreme Court. Every member of the National Commission shall
hold office for a term of 5 years of upto 70 years of age whichever is
earlier and shall not be eligible for reappointment.
Every appointment made under this clause by the Central Government shall
be made on the recommendation of a Selection Committee consisting of a
J udge of a Supreme Court to be nominated by the Chief J ustice of India, the
Secretary in the Department of Legal Affairs and the Secretary in charge of
Consumer Affairs in the Government of India.
Section 20(2) gives power to Central Government to fix the salary/
honorarium and other allowances payable to the members as well as the
other terms and conditions of their service. Every member of the National
Commission shall hold office for term of five years or up to seventy years of
age, whichever is earlier and shall not be eligible for reappointment.
Jurisdiction of the National Commission: The jurisdiction of the National
Commission shall be as under:
1. It can entertain complaints where the value of goods or service and
compensating, if any, claimed exceeds Rs.50 lakhs.
2. It can entertain appeals against the orders of any State Commission,
and
3. It can call for the records and pass appropriate orders in any consumer
dispute pending before or has been decided by any State Commission.
It can do so where the State Commission has exercised jurisdiction not
vested in it by law or has acted in the exercise of its jurisdiction illegally
or with material irregularity. Therefore, the jurisdiction of the National
Commission could also be categorized as original, appellate and
revision as that of the State Commission.
Procedure applicable to the National Commission: The National
Commission shall, in the disposal of any complaints or of any proceedings
before it, have the powers of a Civil Court. It shall follow such procedure as
may be prescribed by the Central Government. The procedure to be
followed by the National Commission has been prescribed by the Consumer
Protection Rules, 1987 made by the Central Government. The procedure to
be followed is as under:
A complaint containing the following particulars shall be presented by the
complainant in person or by his agent to the National Commission or be
sent by registered post to the National Commission:
a) The name, description and the address of the complainant.
b) The name, description and address of the opposite party or parties.
c) The facts, relating to complaint, and when and where it arose.
d) Documents in support of the allegations contained in the complaint
e) The relief which complainant claims.
Procedure on receipt of complainant: The National Commission on
receipt of a complaint, has to observe the following procedures as outlined
in section 13 of the Act:
A. Refer a copy of the complaint to the opposite party directing him to give
his version of the case within a period of 30 days or such extended
period not exceeding 15 days.
B. Where the opposite party, on receipt of a complaint copy, denies or
disputes the allegation contained in the complaint, the omits or fails to
take any action to represent his case within the time given by the
National Commission, the National Commission shall proceed to settle
the consumer dispute in the manner provided by the Act.
C. If the complaint relates to some defects in the goods, which cannot be
determined without proper analysis or test of the goods, the National
Commission shall obtain a sample of the goods from the complainant
and refer the sample to the appropriate laboratory for analysis or test.
D. The appropriate laboratory has to analyse or test the sample received to
find out whether such goods suffer from any defect alleged in the
complaint, within 45 days of the receipt of the reference or with such
extended period as may be grated by the Commission the laboratory
shall submit its report to the National Commission.
E. On receipt of the report from the appropriate laboratory, the National
Commission shall forward a copy of the report along with such remarks
as the National Commission may feel appropriate to the opposite party.
F. If any of the parties dispute the correctness of the findings of the
laboratory, or disputes the correctness of the methods of analysis or test
adopted by the laboratory, the National Commission shall require the
opposite party or the complaint to state in writing his objections in regard
to the report made by the laboratory.
G. The National Commission, before issuing any final order in the matter,
will provide an opportunity to both parties to present their views about
the report of the laboratory. On the date of hearing, it shall be obligatory
on the parties or their agents to appear before the National Commission.
Where the complainant or his agent fails to appear before the National
Commission on the date of hearing, the National Commission may in its
discretion, either dismiss the complaint for default or decide its merits.
Where the opposite party or its agent fails to appear on the date of
hearing, the National Commission may decide the complaint ex parte.
Findings of the National Commission: If the National Commission is
convinced that the goods were really defective or that the complaint about
the service is proved, it shall order the opposite party to do one or more of
the following things:
- To remove the defect pointed out by the appropriate laboratory from the
goods.
- To replace the goods with new goods of a similar description, which
shall be free from any defect.
- To return to the complainant the price of the goods or the charges for
services paid by the complainant.
- To pay to the complainant a sum of money by way of compensation for
any loss or injury suffered by the consumer due to the negligence of the
opposite party.
- To remove the defects or deficiencies in the services in question.
- To discontinue the unfair trade practice or the restrictive trade practice
or not to repeat them.
- Not to offer the hazardous goods for sale.
- To withdraw the hazardous goods from being offered for sale.
- To provide for adequate costs to parties.
Appeal: An appeal against the orders of the National Commission can lie to
the Supreme Court. An appeal to the Supreme Court can be made within a
period of 30 days from the date of the order of National Commission. The
Supreme Court may permit an appeal even after the expiry of the prescribed
period if there was a sufficient cause for not being able to file an appeal in
time.
Finality of the Orders: Where no appeal has been filed against the order
of the National commission, the same shall be final.
Enforcement of Orders: Every order made by the National Commission
may be enforced in the same manner as a decree or order made by a Civil
Court.
Penalties: Every trader or a person against whom complaint is made is
bound to comply with the order of the National Commission. If a trader or a
person fails to comply with the order he shall be punishable.
- With imprisonment for a minimum period of one month and maximum of
3 years, or
- Both, (with imprisonment and fine as stated above)
According to Section 19 of the Consumers Protection Act, a person
aggrieved by an order of the State Commission can prefer an appeal
against such order to the National Commission within 30 days from the date
of the order in such form and manner as may be prescribed. The procedure
for hearing the appeal is laid down by the Consumer Protection Rules, 1987.
Procedure for hearing an appeal
1. A Memorandum shall be presented by the appellant or his agent to the
National Commission in person or be sent by registered post to the
Commission.
2. The Memorandum shall be in legible hand writing, preferably typed. The
memorandum shall include grounds of appeal without any argument or
narrative. The grounds must be numbered consecutively.
3. The Memorandum shall be accompanied by a certified copy of the order
the State Commission appealed against. It shall also be accompanied
by any of the documents as may be required to support grounds of
objection stated in the Memorandum.
4. The appellant shall submit six copies of the memorandum to the
Commission for office use.
5. On the date of hearing, all the parties or agents must appear before the
National Commission.
6. The appellant shall not, except by leave of the National Commission,
urge or be heard in support of any ground of objection not set forth in the
Memorandum but the National Commission, in deciding the appeal, may
not confine to the grounds of objection set forth in the Memorandum.
Provided that the Commission shall not rest its decision on any other
ground than those specified in the Memorandum unless the party who
may be affected thereby, has been given an opportunity of being heard
by the National Commission.
7. The National commission may, on such terms as it deems fit and at any
stage of the proceedings, adjourn the hearing of the appeal, but not
more than one adjournment shall ordinarily be given and the appeal
should be decided, as far as possible, within 90 days from the first date
of hearing.
8. The order of the National Commission shall be communicated to the
parties concerned free of cost.
Appeal: An appeal to the Supreme Court, against the order of the National
Commission in case of an appeal to it, cannot be made as per law.
An appeal lies to the Supreme Court from an order passed by the National
Commission Order XX(F) of the Supreme Court Rules, 1966 provides the
following procedure for filing of appeals to the Supreme Court:
1. Subject to the provisions of Section 4,5, and 12 of the Limitation Act,
1963, the petition of appeal from the order of the National Commission
shall be presented by an aggrieved person within 30 days from the date
of the order sought to be appealed against. However, in computing the
said period of 30 days, the time required for obtaining a copy of such
order shall be excluded.
2. Petition of appeal shall recite succinctly and clearly all the relevant facts
leading up to the order from which appeal is sought. The appeal petition
shall also set forth in brief, objections to the order appealed from and
other grounds relied upon in support of the appeal. The petition shall
further state the date of the order appealed from as well as the date on
which it was received by the appellant.
3. The petition of appeal shall be accompanied by the following:
(i) an authenticated copy of the order in appeal.
(ii) at least 7 spare sets of petition and the papers filed with it.
4. If the appeal is registered, it is put up for hearing ex-parte before the
Court. The Court may dismiss it either summarily or direct issue of
notice to all concerned parties or make such order as the circumstances
of the case may require.
5. A fixed court fee of Rs.350 shall be paid on the petition of appeal.
For the purpose of settling the disputes, under section 13 of the Consumer
Protection Act, State Commission or National Commission shall have the
same powers as are vested in the Civil Court under the Civil Procedures
Code in the following matters:
1. The summoning and enforcing the attendance of any defendant and
witness and examining the witness on oath.
2. The discovery and production of any document or other material object
producible as evidence.
3. The reception of evidence of affidavits.
4. The requisition of the report of the concerned analysis or test from the
appropriate laboratory or other relevant source.
5. Issuing of any commission for the examination of any witness, and
6. Dismissal of frivolous or vexatious complaints.
Consumer Protection Rules, 1987 framed by the Central Government have
given additional powers to the National Commission and State Commission:
They are:
1. The National Commission or the State Commission shall have power to
require any person:
(a) to produce before and allow to be examined and kept by an officer
of the National commission or the State Commission such books,
accounts documents or commodities in the custody or under the
control of the person so required described in the requisition.
(b) to furnish to an office so specified such information as may be
required for the purpose of this Act.
2. Where during any proceedings under this Act, the National Commission
of the State Commission has any ground to believe that any book,
paper, commodity or document which may be required to be produced in
such proceedings are being or may be destroyed, mutilated, altered,
falsified or secreted, it may be written order authorise any officer to
exercise the power of entry and search of any premises. Such
authorised officer may also seize such books, papers, documents or
commodities as are required for the purpose of this Act.

8.7 Consumer Protection Councils
The objects of the Consumer Protection Act are sought to be promoted and
protected by the consumer protection councils established at the Central
and State levels. The consumer protection council established at Central
level is known as Central Council. The consumer protection council
established at State level is known as State Council.
Central Council
The Central Government has constituted a Central Protection Council by
notification with effect from 1-6-1987. As per the Consumer Protection
Rules the Central Council consists of 150 members. They are:
1. The Minister-in-charge of Department of Civil Supplies in the Central
Government. He shall be the Chairman of the Central Council.
2. The Minister of State or Deputy Minister in the Department of Civil
Supplies in the Central Government. He shall be the Vice-Chairman
of the council.
3. The Minister of Food and Supplies in States.
4. Eight Members of Parliament- Five from the Lok Sabha and three from
Rajya Sabha.
5. The Commissioner of scheduled castes and scheduled tribes.
6. 10 representatives of women
7. 20 representatives of farmers, trade and industries.
8. 15 persons capable of representative consumer interests.
9. 35 representatives of the consumer organization or consumers.
10. The Secretary of the Department of Civil Supplies. He shall be the
Member Secretary of the Central Council.
Procedure of the Central Council: The Central Council shall meet as and
when necessary. At least one meeting of the council shall be held every
year. The Central Council shall meet as at such time and place as the
Chairman may think fit. It shall observe such procedure in regard to the
transaction of its business as may be prescribed. For the purpose of
performing its functions under the Act, the Central Council may constitute
from amongst its members necessary working groups. Every working group
shall perform such functions as are assigned to it by the Central Council.
The findings of such working groups shall be placed before the Central
Council for its consideration. The resolutions passed by the Central Council
shall be recommendatory in nature.
Objects of the Central Council: Section 6 of the Consumers Protection
Act, 1986 lays down the objects of the Central Council. The objects of the
Central Council shall be to promote and protect the right of the consumers.
1. The right to be protected against the marketing of goods which are
hazardous to life and property: For example, adulterated goods are
dangerous to life as well as to property. The consumer is assured by
this Act that if he has been victimized into purchasing goods which have
injured his person or property, he will have simple, speedy and effective
remedy under the hierarchy constituted under the Act. The subject
matter of dangerous goods is generally taken care of under law of Torts.
All such matters can now be taken before the authorities constituted
under the Act. It has become an established principle that a producer
sending goods into the market would be liable to the ultimate user if his
person or property is injured in the normal use of goods.
2. The right to informed about the quality, quantity, potency, purity,
standard and price of goods so as to protect consumer against unfair
trade practices: This is intended to save the consumer from unfair trade
practices like false and misleading descriptions about the nature and
quality of the goods, and exaggerated statements about their power and
potency. In all cases of unfair trade practices or restrictive trade
practices, the consumer would have the option of either apply to
Monopolies Commission under the Monopolies and Restrictive Trade
Practices Act, 1969 or the Redressal Agencies constituted under the
Consumer Protection Act., viz., (a) District Forum, (b) State Commission,
(c) National Commission.
3. The right to be assured, wherever, possible, access to variety of goods
at competitive price: The Central Council constituted under this Act has
been charged with the responsibility or bringing about the organization
of markets and market practices in such a way that all dealers are
supplied with a variety of goods for the benefit of consumer and that the
goods with a variety are being offered at competitive prices. It is only
then that the consumer will have success to variety and will be able to
enjoy the benefit of competitive prices.
4. The right to be heard and to be assured that consumers interest will
receive due consideration at appropriate Forums: The Central Council
is charged with the responsibility of assuring the consumers that they
would be heard of right by the appropriate Forums and the consumers
will receive due attention and consideration from such Forums.
5. The right to seek redressal against unfair trade practices, or
unscrupulous exploitation of consumers: Three redressal agencies have
been established to provide simple and speedy redressal to consumer
disputes. These agencies have been empowered to give relief of
specific nature and to award compensation to consumers. They will
observe the principles of natural justice. Their orders are final unless
appealed.
6. The right to consumer education: The consumer has been given the
right to education by Sec. 6 of the Consumer Protection Act, 1986. The
Central Council has been charged with the responsibility to provide the
people proper education in terms of their remedies under Act. Peoples
awareness is likely to prove a better for putting the trade on sum level of
discipline that of Governments Control.
State Council
The objects of every state council shall be the same as those of the Central
Council. The objects of every State Councils shall be to promote and
protect within the state the rights of consumers as laid in Section 6 of the
Consumer Protection Act.
Section 7 provides for the establishment of State Consumer Protection
Councils by any State Government (by notification) to be known as
Consumer Protection Council for (name of the state). The State Council
shall consist of a Minister-in-charge of Consumer Affairs in the State
Government who shall be its Chairman and such number of other official or
non-official members representing such interests as may be prescribed by
the State Government. The State Council shall meet as and when
necessary but not less than two meetings shall be held every year. The
procedure to be observed in regard to the transaction of its business at such
meetings shall be prescribed by the State Government.
Consumer Protection Council Vs. National Dairy Development Board: The
complainant wanted to know in what way the Dairy Board and using the
imported palm oil. The board was refusing to give the information on the
ground that the disclosure was against the public interest. Without that
information the complainant was to able to make out his case. It was held
that the consumer had the right to the requisite information.
Self Assessment Questions I
1. Three types of defects are.; and .
2. seeks to provide for better protection of the interests of
consumers.
3. .is defined as any trade practice which requires a consumer
to buy, hire or avail of any goods or, as the case may be, services as a
condition precedent for buying, hiring, or availing of other goods or
services.
4. Any person who hires services for a consideration is a.
5. A product is said to have when it is not built according to
specification and is consequently unsafe.
6. A Consumer Disputes Redressal Forum is also known as ..
8.8 Summary
The Consumer Protection Act, 1986 seeks to provide for better
protection of the interests of consumers.
The Act seeks to provide speedy and simple redressal to consumer
disputes. For this purpose a quasi-judicial machinery is being set up at
the District, State, and Central level.
According to Section 2(1)(e) of the Consumer Protection Act, Consumer
Dispute means a dispute where the person against whom a complaint
has been made denies or disputes the allegations contained in the
complaint.
Non-fulfilment of any of the standards or requirements laid down by or
under any law for the time being in force or as claimed by the trader in
relation to any goods would fall under the ambit of defect.
Three types of defects are: (i) manufacturing defect, (ii) design defect (iii)
instruction defect.
Restrictive Trade Practice is defined as any trade practice which
requires a consumer to buy, hire or avail of any goods or, as the case
may be, services as a condition precedent for buying, hiring, or availing
of other goods or services.
For the purpose of speedy and simple settlement of Consumers
disputes, section 9 of the Act, 1986 provides for the establishment of
the following three Consumer Disputes Redressal Agencies.
Consumer Disputes Redressal Forum
Consumer Disputes Redressal Commission
National Consumer Disputes Redressal Commission
8.9 Terminal Questions
1. What are the objectives of Consumer Protection Act, 1986?
2. Who is a Consumer? Who is not a consumer under the Consumer
Protection Act, 1986?
3. What do you mean by Complaint? Who can make a complaint and to
whom a complaint can be made?
4. What do you mean by unfair Trade Practices? State its ingredients and
instances. Support your answer with few decided cases.
5. What are the consumers disputes redressal agencies provided under
the Consumer Protection Act, 1986?
6. What is a District Forum? Explain the procedure to be adopted by the
forum on receipt of a complaint.
Answers to SAQs and TQs
SAQs I
1. Manufacturing defect; design defect ; instruction defect
2. The Consumer Protection Act, 1986
3. Restrictive Trade Practice
4. Consumer
5. Manufacturing defect
6. The District Forum
Answers to TQs:
1. Refer to 8.2
2. Refer to 8.2
3. Refer to 8.3
4. Refer to 8.4
5. Refer to 8.6
6. Refer to 8.6

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Legal Aspects of Business Unit 8

Sikkim Manipal University Page No. 192

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