CONSUMER PROTECTION ACT, 1986 DIGITAL SCHOOL OF LAW
The industrial revolution and the development in the international trade and commerce
has led to the vast expansion of business and trade, as a result of which a variety of
consumer goods have appeared in the market to cater to the needs of the consumers and a
host of services have been made available to the consumers like insurance, transport, etc.
A well organized sector of manufacturers and traders with better knowledge of markets
has come into existence, thereby affecting relationship between traders and consumers
making the principle of sovereignty almost inapplicable.
OBJECTS AND AIM-
The Act was implemented with a mindset to achieve the following:-
1. Right to be protected against marketing of goods which are hazardous to life and
property
2. Right to be informed about quality, quantity, potency ,purity, standard and price
of good and services to protect consumer against unfair trade practices
3. Right to be assured , wherever possible, access to authority of goods at
competitive prices
4. Right to be heard and to be assured that consumer interests will receive due
consideration at appropriate forums
5. Right to seek redressal against unscrupulous customer exploitation and unfair
trade practices
6. Right to consumer education
7. Provide speedy and simple redressal to consumer disputes
IMPORTANT DEFINITIONS( SECTION 2)1, CHAPTER I-
COMPLAINANT[SECTION 2(b)]- means
(i) a consumer
(ii) (ii) any voluntary consumer association registered under the Companies Act,
1956 or under any other law for the time being in force
(iii) the Central Government or any State Government
(iv) one or more consumers, where there are numerous consumers having the same
interest who or which makes a complaint2
COMPLAINT[ SECTION 2(c)]- means any allegation in writing made by a
complainant to obtain relief that
(i) an unfair or restrictive trade practice has been adopted by any trader
(ii) the goods bought by him or agreed to be bought by him suffer from one or
more defects
1
Other defintions
2
Refer case
1
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CONSUMER PROTECTION ACT, 1986 DIGITAL SCHOOL OF LAW
(iii) the services hired or availed of or agreed to be hired or availed of by him suffer
from deficiency in any respects
(iv) a trader has charged for the goods mentioned in the complaint a price in excess
of the price fixed by or under any law for the time being in force or displayed
on the goods or any package containing such goods
(v) goods which will be hazardous to life and safety when used, are being offered
for sale to the public in contravention of the provisions of any law for the time
being in force requiring traders to display information in regard to the contents,
manner and effect of use of such goods
CONSUMER [SECTION 2(d)] - means any person
(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
(ii) hires 1 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 1 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
SERVICES[ SECTION 2(o)]- 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 electrical or other energy,
board or lodging or both, 1[housing construction,] entertainment, amusement or the
purveying of news or other information, but does not include the rendering of any service
free of charge or under a contract of personal service3.
CONSUMER PROTECTION COUNCILS (SECTION 4-8), CHAPTER II-
1) CENTRAL COUNCIL( SECTION 4-6)-
3
Indian Medical Association v/s V.P.SHANTHA 1995
2
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CONSUMER PROTECTION ACT, 1986 DIGITAL SCHOOL OF LAW
The Central Government by notification establish with effect from such date a
council known as CENTRAL CONSUMER PROTECTION COUNCIL consisting
of
Minister incharge of the Consumer Affairs in the Central Government who
shall be the Chairman
Such number of other official or non-official members representing
interests
Who shall meet as and when necessary but at least once every year at such time and place
the Chairman thinks fit.
AIM OF CENTRAL COUNCIL (SECTION 6):
1. Right to be protected against the marketing of goods and services which are
hazardous to life and property
2. 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
3. Right to be assured, wherever possible, access to a variety of goods and services at
competitive prices
4. Right to be heard and to be assured that consumers’ interests will receive due
consideration at appropriate forums
5. Right to seek redressal against unfair trade practices or restrictive trade practices
or unscrupulous exploitation of consumers
6. Right to consumer education
2) STATE COUNCIL( SECTION 7-8)-
The State Government by notification establish with effect from such date a
council known as STATE CONSUMER PROTECTION COUNCIL consisting of
Minister incharge of the Consumer Affairs in the State Government who
shall be the Chairman
Such number of other official or non-official members representing
interests
Such number of other official or non-official members not exceeding 10 as
nominated by Central Government
Who shall meet as and when necessary but not less than 2 every year at such time and
place the Chairman thinks fit to promote and protect the rights of consumers within state.
3) DISTRICT COUNCIL( SECTION 8A,8B)-
The State Government by notification establish for every district a council known
as DISTRICT CONSUMER PROTECTION COUNCIL consisting of
Collector by whatever name is so called who shall be the Chairman
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CONSUMER PROTECTION ACT, 1986 DIGITAL SCHOOL OF LAW
Such number of other official or non-official members representing
interests prescribed by state Government
Who shall meet as and when necessary but not less than 2 every year at such
time and place the Chairman thinks fit to promote and protect the rights of consumers
within district.
CONSUMER DISPUTES REDRESSAL AGENCIES ( SECTION 9-27A),
CHAPTER III-
There shall be established for the purposes of Act, following agencies:-
In each district by State notification a In State by State notification a Consumer
Consumer Disputes Redressal forum Disputes Redressal forum known as State
known as District Forum Commission
National Consumer Disputes Redressal
Commission established by Central
Government by notification
1) DISTRICT FORUMS ( SECTION 10-15)-
COMPOSITION( SECTION 10)
Each District Forum shall consist of:-
A person who is, or has been, or is qualified to be a District Judge4,
who shall be its President
Two other members, one of whom shall be a woman
QUALIFICATIONS to be a member-
4
M.S. CHAWLA V/S STATE OF PUNJAB AIR 2001 SC 1706
4
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CONSUMER PROTECTION ACT, 1986 DIGITAL SCHOOL OF LAW
Be not less than 35 years of age
Possess a Bachelor’s degree from a recognized University
Be persons of ability, integrity, and standing, and have adequate knowledge
and experience of at least 10 years in dealing with problems relating to
economics, law, commerce, accountancy, industry, public affairs or
administration
Person appointed as a member will be DISQUALIFIED if-
Has been convicted and sentenced to imprisonment for an offence which in
the opinion of State Government involves moral turpitude
Is an undischarged solvent
Is of unsound mind and stands so declared by competent court
Has been removed/dismissed from service of the Government or a body
corporate owned or controlled by the Government
In opinion of State Government such financial or other interest as is likely
to affect prejudicially the discharge by him of his functions as a member
Has other disqualifications as may be prescribed by State Government
TENURE OF MEMBER
Shall hold office for a term of 5 years or upto 65years whichever is earlier and is
eligible for re-appointment for another tern of 5 years or upto 65 years whichever
is earlier.
RESIGNATION OF MEMBER
A member may resign his office in writing under his hand addressed to the State
Government and on such resignation being accepted, his office shall become
vacant and may be filled by the appointment of a person possessing any of the
qualifications mentioned above in relation to the category of the member who has
resigned.
SALARY
Or honorarium and other allowance payable to, and the other terms and conditions
of service of the members of the District Forum shall be such as may be prescribed
by the State Government.
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CONSUMER PROTECTION ACT, 1986 DIGITAL SCHOOL OF LAW
JURISDICTION(SECTION 11)
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 lacs.
A complaint shall be instituted in a District Forum within the local limits of whose
jurisdiction
(a) The opposite party or each of the opposite parties, where there are more than one,
at the time of the institution of the complaint, actually and voluntarily resides or
carries on business, has a branch office or personally works for gain
(b) Any of the opposite parties, where there are more than one, at the time of the
institution of the complaint, actually and voluntarily resides, or carries on business or
has a branch office, or personally works for gain, provided that in such case either the
permission of the District Forum is given, or the opposite parties who do not reside, or
carry on business or have a branch office, or personally work for gain, as the case may
be, acquiesce in such institution
(c) The cause of action, wholly or in part, arises.
Any objection regarding territorial jurisdiction should be taken at the earliest opportunity
or same deemed to have been waived.5
IN WHICH MANNER COMPLAINT IS TO BE MADE? ( SECTION 12)
A complaint in relation to any goods sold or delivered or agreed to be sold or delivered or any
service provided or agreed to be provided may be filed with a District Forum by—
(a) the consumer to whom such goods are sold or delivered or agreed to be sold or delivered or such
services provided or agreed to be provided
(b) any recognized consumer association whether the consumer to whom the goods sold or delivered
or agreed to be sold or delivered or services provided or agreed to be provided is a member of such
association or not
(c) one or more consumers, where there are numerous consumers having the same interest, with the
permission of the District Forum, on behalf of, or for the benefit of, all consumers so interested
(d) The Central or the State Government.
On receipt of complaint after been accompanied by prescribed fee to the District
Forum may, by order, allow the complaint to be proceeded (within 21 days from
receipt) or rejected(after being given an opportunity of hearing).
5
KURUKSHETRA UNIVERSITY V/S VINAY PRAKASH VERMA II 1993 CP 647
6
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CONSUMER PROTECTION ACT, 1986 DIGITAL SCHOOL OF LAW
PROCEDURE ON ADMISSION OF COMPLAINT (SECTION 13)
On receipt of a complaint, if it relates to any goods—
Refer a copy of the complaint to the opposite party mentioned in the complaint directing
him to give his version of the case within a period of 30 days or such extended period not
exceeding 15 days as may be
Where the opposite party either denies or disputes the allegations contained in the
complaint, or omits or fails to take any action to represent his case within the time given by
the District Forum, the District Forum shall proceed to settle the consumer dispute
Where the complaint alleges a defect in the goods which cannot be determined without
proper analysis or test of the goods, the District Forum shall obtain a sample of the goods
from the complainant, seal it and authenticate it in the manner prescribed and refer the
sample so sealed to the appropriate laboratory along with a direction that such laboratory
make an analysis or test, whichever may be necessary, with a view to finding out whether
such goods suffer from any defect alleged in the complaint or from any other defect and to
report its findings thereon to the District Forum within a period of 45 days of the receipt of
the reference or within such extended period as may be granted with requisite fees by
complainant
if any of the parties disputes the correctness of the findings of the appropriate laboratory, or
disputes the correctness of the methods of analysis or test adopted by the appropriate
laboratory, the District Forum shall require the opposite party or the complainant to submit
in writing his objections in regard to the report made by the appropriate laboratory wherein
reasonable opportunity to both parties of being heard given as to the correctness or
otherwise of the report made by the appropriate laboratory and also as to the objection made
in relation thereto under clause and issue an appropriate order.
If the complaint relates to any services,—
Refer a copy of such 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 as may be
granted by the District Forum & the opposite party, on receipt of a copy of the complaint
either denies or disputes the allegations contained in the complaint, or omits or fails to take
any action to represent his case within the time given by the District Forum, the District
Forum shall proceed to settle the consumer dispute
No proceedings complying with the procedure laid be questioned in any court on the ground
that the principles of natural justice have not been complied with.
The District Forum shall have the same powers as are vested in a civil court
under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit in
respect of the following matters, namely:
a. the summoning and enforcing the attendance of any defendant or witness
and examining the witness on oath
b. the discovery and production of any document or other material object
producible as evidence
c. the reception of evidence on affidavits
d. the requisitioning of the report of the concerned analysis or test from the
appropriate laboratory or from any other relevant source
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CONSUMER PROTECTION ACT, 1986 DIGITAL SCHOOL OF LAW
e. issuing of any commission for the examination of any witness
f. any other matter which may be prescribed.
Every proceeding before the District Forum shall be deemed to be a judicial
proceeding.6
WHAT HAPPENS AFTER COMPLAINT IS DECIDED UPON (SECTION
14)
If, after the proceeding conducted under section 13, the District Forum is satisfied that the
goods complained against suffer from any of the defects specified in the complaint or that
any of the allegations contained in the complaint about the services are proved, it shall
issue an order to the opposite party directing him to do 1 or more of the following things,
namely
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, or, as the case may be, the charges paid
by the complainant
4. to pay such amount as may be awarded by it as compensation to the consumer
for any loss or injury suffered by the consumer, due to the negligence 7 of the
opposite party
6
REFER CASE
7
S.K. LAKHOTIA V/S NIC LTD. 1994
8
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CONSUMER PROTECTION ACT, 1986 DIGITAL SCHOOL OF LAW
5. to discontinue the unfair trade practice or the restrict trade practice or not to
repeat them
6. not to offer the hazardous goods for sale
7. to withdraw the hazardous goods from being offered for sale
CONSUMER FORUMS HAVE NO JURISDICTION TO PASS INTERIM
ORDERS.8
APPEAL(SECTION 15)9-
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 thirty days from the date
of the order, in such form and manner as may be prescribed, Provided that the State
Commission may entertain an appeal after the expiry of the said period thirty days if it
is satisfied that there was sufficient cause for not filing it within that period.
2) STATE COMMISSION ( SECTION 16-19A)-
COMPOSITION (SECTION 16)
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 to be made only
after consultation with the Chief Justice of the High Court
not less than 2 , and not more than such members and one of whom
shall be a woman
QUALIFICATIONS to be a member-
8
REFER CASE
9
Sufficient cause is taken in liberal interpretation, cause must be bonafide and beyond applicant’s control.
9
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CONSUMER PROTECTION ACT, 1986 DIGITAL SCHOOL OF LAW
Be not less than 35 years of age
Possess a Bachelor’s degree from a recognized University
Be persons of ability, integrity, and standing, and have adequate knowledge and
experience of at least 10 years in dealing with problems relating to economics,
law, commerce, accountancy, industry, public affairs or administration
Not more than 50% of the members shall be from amongst persons having a judicial
background10.
The disqualification terms, salary and appointment of members to be made will be
same as that mentioned above for members of District Forum above mentioned.
TENURE OF MEMBER-
Every member of the State Commission shall hold office for a term of five years or up
to the age of sixty-seven years, whichever is earlier and shall not be eligible for re-
appointment.
JURISDICTION (SECTION 17)
State Commission shall have jurisdiction to entertain complaints
where the value of the goods or services and compensation, if any, claimed
exceeds rupees twenty lakhs but does not exceed rupees one crore
appeals against the orders of any District Forums within the State
to call for the records and pass appropriate orders in any consumer dispute
which is pending before or has been decided by any District Forum within the
10
Shall mean persons having knowledge and experience for atleast a period of 10 years as a presiding officer at the
district level court or any tribunal at equivalent level.
10
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CONSUMER PROTECTION ACT, 1986 DIGITAL SCHOOL OF LAW
State, where it appears to the State Commission that such District Forum has
exercised a jurisdiction not vested in it by law, or has failed to exercise a
jurisdiction so vested or has acted in exercise of its jurisdiction illegally or with
material irregularity.
TRANSFER OF CASES (SECTION 17A)
On application of complainant or of its motion, State Commission may at any stage of
the proceeding, transfer any complaint pending before the District Forum to another
within State if interest of justice so requires.
CIRCUIT BENCHES (SECTION 17B)
State Commission shall ordinarily function in State Capital but may perform its
functions at such other place as state government in consultation with state
commission notify in official gazette from time to time. The bench may be constituted
by President with one or more members as deemed fit. If members of a bench differ
in opinion points shall be decided according to opinion of majority and if opinion is
equally divided then they shall state the points of difference and make a reference to
the President who shall decide finally.
PROCEDURE APPLICABLE TO STATE COMMISSION (SECTION 18)-
Provisions of section 12,13,14 for disposal of complaints by District Forum shall with
such modifications as required be applicable.
11
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CONSUMER PROTECTION ACT, 1986 DIGITAL SCHOOL OF LAW
APPEALS (SECTION 19)11
Any person aggrieved by an order made by the State Commission in exercise of its powers conferred
by section 17 may prefer an appeal against such order to the National Commission within a period of
thirty days from the date of the order in such form and manner as may be prescribed,Provided that the
National Commission may entertain an appeal after the expiry of the said period of thirty days if it is
satisfied that there was sufficient cause for not filing it within that period.
HEARING OF APPEAL(SECTION 19A)-
Appeal should be heard expeditiously as possible and an endeavour to be made to finally
dispose of appeal within a period of 90 days from date of admission.
No adjournment shall be ordinarily granted unless sufficient cause and
resaons are recorded.
3) NATIONAL COMMISSSION( SECTION 20-24B)-
COMPOSITION (SECTION 20)
The National Commission shall consist of
a person who is or has been a Judge of the Supreme Court, to be
appointed by the Central Government, who shall be its President
made after consultation with the Chief Justice of India
four other members, one of whom shall be a woman
11
REFER CASE
12
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CONSUMER PROTECTION ACT, 1986 DIGITAL SCHOOL OF LAW
Qualification and disqualification same as that of members of state
commission.
WHO SHALL APPOINT MEMBERS OF NATIONAL COMMISSION?
Central Government on recommendation of a selection committee consisting of following appoints
member-
1) Person who is judge of Supreme Court to be nominated as Chief Justice of India as Chairman
2) Secretary in Department of Legal Affairs in Government of India as a Member
3) Secretary of the department dealing with consumer affairs in Government of India as Member
SALARY and honorarium is as prescribed by Central Government and is same as
members of State Commission. Though reappointment can be made on basis of
recommendation of selection committee.
JURISDICTION(SECTION 21)-
The National Commission has limited powers12 which shall have jurisdiction-
to entertain complaints where the value of the goods or services and
compensation, if any, claimed exceeds rupees one crore
appeals against the orders of any State Commission
to call for the records and pass appropriate orders in any consumer dispute
which is pending before or has been decided by any State Commission where
it appears to the National Commission that such State Commission has
exercised a jurisdiction not vested in it by law, or has failed to exercise a
jurisdiction so vested, or has acted in the exercise of its jurisdiction illegally
or with material irregularity.13
PROCEDURE APPLICABLE TO STATE COMMISSION ( SECTION 22)-
Provisions of section 12,13,14 for disposal of complaints by District Forum shallwith
such modifications as required be applicable. Without prejudice National Commission
shall have power to review any order made by it when there is error apparent on face
of it.
POWER TO SET ASIDE EXPARTE ORDERS(SECTION 22A) against
opposite party or complainant as the case maybe, the aggrieved party may apply to the
commission to set aside the order in the interest of justice.
12
FOR MORE
13
R.JAIVEL V/S STATE OF TAMILNADU, AIR 2006 MAD 215
13
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CONSUMER PROTECTION ACT, 1986 DIGITAL SCHOOL OF LAW
TRANSFER OF CASE SECTION 22B)
On application of complainant or of its motion, National Commission may at any
stage of the proceeding, transfer any complaint pending before the District Forum
of one state to another district forum of another state or before one state
commission to another if interest of justice so requires.
CIRCUIT BENCHES (SECTION 22C)
National commission shall ordinarily function at New Delhi but Central Government has
notified that it shall perform functions at following other than New Delhi
1. AHMEDABAD
2. CHENNAI
3. LUCKNOW
4. ALLAHABAD
5. HYDERABAD
6. NAGPUR
7. BANGALORE
8. JODHPUR
9. PUNE
10. BHOPAL
11. KOLKATA
VACANCY IN OFFICE OF PRESIDENT( SECTION 22D)-
Of any district, state or national level forum is vacant or President is unable to perform
then function will be performed by senior most member of any of the forums.
14
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CONSUMER PROTECTION ACT, 1986 DIGITAL SCHOOL OF LAW
APPEAL(SECTION 23)-
Any person, aggrieved by an order made by the National Commission in exercise of its power
conferred may prefer an appeal against such order to the Supreme Court within a period of thirty
days from the date of the order: Provided that the Supreme Court may entertain an appeal after
the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not
filing it within that period.
Every order of a District Forum, the State Commission or the National
Commission shall, if no appeal has been preferred against such order under
the provisions of this Act, be final(section 24).
LIMITATION PERIOD(SECTION 24A)14-
The District Forum, the State or the National Commission shall not admit a complaint
unless it is filed within two years from the date on which the cause of action has arisen. A
complaint may be entertained after the period specified if the complainant satisfies the
District Forum, the State or the National Commission, as the case may be, that he had
sufficient cause for not filing the complaint within such period: Provided that no such
complaint shall be entertained unless the National Commission, the State Commission or
the District Forum, as the case may be, records its reasons for condoning such delay.
ADMNISTRATIVE CONTROL15(SECTION 24B)-
The National Commission shall have administrative control over all the State Commission
in the following matters, namely:—
(i) calling for periodical returns regarding the institution, disposal, pendency of cases
(ii) issuance of instructions regarding adoption of uniform procedure in the hearing
of matters, prior service of copies of documents produced by one party to the
opposite parties, furnishing of English translation of judgments written in any
language, speedy grant of copies of documents
(iii) generally overseeing the functioning of the State Commissions or the District Fora
to ensure that the objects and purposes of the Act are best served without in any
way interfering with their quasi-judicial freedom.
The State Commission shall have administrative control over all the District Fora within its
jurisdiction in all matters as of national commission mentioned above.
ENFORCEMENT OF ORDERS OF DISTRICT FORUM, STATE AND
NATIONAL COMMISSION( SECTION 25)-
Where an interim order made under the Act is not complied with, the District forum, state or
national commission as the case be order the property of person not complying with such
14
order toaction
Cause of be attached which
has not been definedshall
in thenot
Actremain
and has toinbeforce for more
interpreted keepingthan 3 months
in view atinthe
the context endit of
which
haswhich
15
non –compliance leads to sale of property and proceeds be awarded as damages as
been used and object of legislation. SHRIKHANDE V/S FERNADES JT 2010(11) SC524
This has to be interpreted widely.
considered fit and pay balance if any to party entitled.
15
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CONSUMER PROTECTION ACT, 1986 DIGITAL SCHOOL OF LAW
DISMISSAL OF FRIVOLOUS COMPLAINTS (SECTION 26)16-
Merely because no court fees is payable for lodging a complaint before the consumer forum
parties have a tendency to misuse the provisions of the Act in respect to matters falling within
its purview. This has to be prevented. Where the complaint is mala fide and opposite party
has to incur expenses for contesting the complaint the redressal fora should saddle the
complainant with the costs not exceeding ten thousand rupees and record reasons in writing
of complaint dismissal.
Where the issue involved a legal issue the complaint can’t be termed frivolous.
PENALTIES (SECTION 27)-
The object is to provide speedy redressal and though this is a penal provision so non
compliance is punishable by way of
(i) imprisonment for a period not less than 1 month extending to 3 years or
(ii) fine not less than two thousand rupees extending to ten thousand rupees
An appeal against order passed under section 27 lies as-
DISTRICT FORUM ORDER
STATE COMMISSION
NATIONAL COMMISSION
SUPREME COURT
16
REFER JUDGEMENT
16
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CONSUMER PROTECTION ACT, 1986 DIGITAL SCHOOL OF LAW
This appeal should be made within 30 days from order date of previous consumer forum,
and with sufficient cause satisfaction after expiry of 30 days by state or national
commission or supreme court.
No suit, prosecution or other legal proceedings shall lie against any consumer forum
member or officer for action taken in good faith.( section 28, chapter IV)
17
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