480 Part VI Other Business Legislations

The Consumer Protection Act, 1986: An Overview

1 • · rtant milestone in the hi st
Th e Consumer Protection Act, 1986, 1s an unhpo t rogressive a d ory of soc'
. I . I . . d' I . e of t e mos p n comp h to.
economic
•I . eg1s auons m In .ia. t 1s on £ guard mtere . st of the consurn ers 1n
•. th re ens·tve
Ieg1s atton enacted by the Parliament to sa e d me into force in April 1 98 e country
6
The !'ct, which was passed in Decem_ber 19~ :al c:actices of manufacturers 7, attelllp~
to give consumers complete protecnon f~do f vparious services. The Act · ,dproducers
. I I ·1 nd prov1 ers o 1s es1
:s::J
,
supp I1ers, who esa ers, reta1 ers, a . . t the consumer. The Act e gI)ed to
make availa~le inexpensive and speedy 1 :ashmir2. The Act was ame::~ds10to19the
whole of India except the Sta~e of Jahmml F rthermore in order to make th C 91
· ertam loop o es. u ' e onsu
an d 1993 for a dd ressmg c f I a comprehensive amendment Iller
Protection Act more effective anddbpurpohse_uto' force from 15 March 2003 Thto the Act
. D b 2002 an roug t m . e rem d
was ma de m ecem er d h' Act is through a three-tier quasi-judicial mech 1_e Y
provid~~ for con~ulll:ers/n : /a:\he district level, State Commissions at the Sta/~ srn,
compnsmg the D1smct . o~u I d . Delhi at the apex level. e eve!
and the National CommisSwn ocate 1Il
I
Salient Features of the Act

I
The salient features of the Act are as follows:
1. The Act applies to all goods and services unless specifically exempted by the Central
Government. .
2. It covers all the sectors-private, public, and co-op~ranve.
3. The provisions of the Act are chiefly compensato_ry m_na~ure.
4. It seeks to confer upon the consumers the follow1?g six nghts: .
~I (a) Right to safety, (b) Right to be informed, (c) Right to cho~se, (d) Right to be heard,
f
(e) Right to seek redressal, and (f) Right to consumer educ~t10n. .
5. The Act also envisages establishment of Consumer Protection Councils at the central,
state, and district levels, whose main objectives are to promote and protect the rights
of consumers.
6. To provide a simple, speedy, and inexpensive redressal of consumer grievances, the
Act envisages three-tier quasi-judicial machinery at the national, state, and district
levels. These are-National Consumer Disputes Redressal Commission known as the
National Commission, State Consumer Disputes Redressal Commissions (known as
I State Commissions) and the District Forums.

r
I'
7. Engagement of an advocate is not mandatory to file a complaint and pursue under the
Consumer Protection Act.
I

I Aim and Objectives of the Act

The Consumer Protection Act was enacted primarily to promote and protect the rights of
consumers in a healthy way. Unlike existing regulations which are punitive or preventive in
natu~e, t~e provisions of this statute are chiefly compensatory in nature. The Act seeks to
provide ~1mple, speedy, and inexpensive redressal to the consumers' grievances, and relief
of a specific n~ture and award of compe?-sation wherever appropriate to the consumer.

Major Concepts
=--~--:-----='------------------'----
Some of th e important terms used in the Consumer Protection Act are briefly introduced here.

.1 This
h' Acth shall be referred to as JUSC
· 'Act , throug hout the present chapter and references to sectt·ons
mThet 1sState
c apter are to
of Jamm · 'The Cons u~er p. rotectton
. Act, 1986' unless otherwise specified. .
2
f Ind ' d h u and Kashmir enJoys a special status under the Article 370 of the Constitut10n
0 ia, an ' ence, exempted from this Act.
 Chapter 21 The Consumer Protection Act,
1986 481
boratory
jate La means a laboratory or organisation that is
roPr. e la
boratofY
! P priat C ual Government,
1pPrO d bY the enGovernment, subject to such guidelines as may be prescribed by
.t()gnise d bY a State ent in this behalf, or
~· .n1s£ GO vernm · · bl" h d b
f ,<0~· al
~- r,ncr torY or orgamsat10n
fi esta
d is"d e d by or under any law for the time-being
) ~e '-"' b 1abora_ maintained, nance or ai e Y the Central Government, or a State
nl'su' ,vbichfor
1 ,e,
is carrying out analysis d or
f test[ of any
. goods with a view to determining
1 ~for _.,,ertt,
r~,er1w ch goo ds suffer from any e ect Section 2(l)(a)].
"'" r1ier s11
,,~e

•r,arit
1
CO"'-,pla rhe Act, 'complainant' means any one of the following.
~ingtO Complainant: Pursuer
of a complaint, a
consumer or any other
, , suiner;taryco nsumer association
f h C registered under Section 25 of the Companies Act '
· 00
. person/institution/
1- 10)'volun 110d r
Section 8 o t e ompames Act, 2013 in present context) or under
authority, eligible
I 1956, (o~es' Registration Act, 1 860 ; t he In d"1an Trust Act, 1908; or any Co-operative
e
1
i1ie soc eAct of any State; to file a complaint
under the Consumer
sc,cieoestral Government or any State Government;
0 Protection Act, 1986.
loiJieCe
ne or inore consumers, where there are numerous consumers having the same
t. sr- and h. I Ih .
intere 'f he death of a consumer, 1s ega eir or representative who or which makes
l- ~caseol _tnt [Section 2(1)(b)].
, c0mP a•

s of Complaint
Groun d . . .. .
I . t' means any allegat10n made m wntmg by a complainant with a view to
{orop_alllany relief provided by or under this Act. The grounds of complaint are as follows:
Complaint: Any
(l\ta~g
allegation made in
writing defect in goods
An unfair trade practice or a restrictive trade practice has b~en adopted by any trader; or
or deficiency in service
: The goods bought by the consumer or agreed to be bought by him/her suffer from one
ot more defects. by a complainant with
a view to obtaining
l. The services hired or availed of, or agreed to be hired or availed of by him suffer from relief.
any deficiency in any respect. .
I. Atrader or service provider has charged for the goods or the service mentioned in the
complaint a price in excess of the price: (a) fixed by or under any law; (b) displayed
on the goods or any package containing such goods; (c) displayed on the price list
exhibited by him under any law; or (d) agreed between the partners.
l. Goods which will be hazardous to life and safety when used, are being offered for sale
to the public (a) in contravention of the provisions of any law requiring the traders to
display information in regard to the contents, manner, and effect of use of such goods;
lb)if the trader could have known with due diligence that the goods are unsafe.
!. Services which are hazardous or likely to be hazardous to life and safety of the public
when used are being offered [Section 2(l)(c)].
Consumer: A person
Consumer who buys any goods
or hires a service for
A1defined d consideration for a
un er the Act, 'consumer' means any person who: purpose other than
I. buysany d · · d 1 "d d commercial one and
goo s for a consideration which has been paid or promise , or part Ypa1 an any user of such goods
~:;ly Promised, or under any system of deferred payment, and includes an_y (other) o r services with the
Paid of such goods other than the person who buys such goods for cons1deranon approval of the buyer
or Promised or partly paid or partly promised, or under any system of deferred or hirer.

_)
182 Part VI Other Business Legislations

payment when such use is made with the approval of such

a person who obtains such goods for resale or for any co Perso~, bur .i
2. hires or avails of any services for a consideration whichn;:nercta( p~no .
1
or partly paid and partly promised, or under any system a; been Pa'd st, 0 \
O
includes any beneficiary of such services other than the pe deferred' Or pr
the services for consideration paid or promised, or partly rso? Who hit Paylll~~
or under any system of deferred payments, when such serv·Paid and Pa es Or a} a,,
d Pr0,u
. d person but does not includIces are availIlly
approval of th e first-ment10ne -i
.1~
such services for any commercial purpose [Section 2(1)(d)). e a Person :t'l/i~
0
a1
Here, 'commercial purpose' does not include use of goods b
services availed by him exclusively for the purpose of earning
self-employment. Is 1
tgh
. t by a co
1velih Oorj blls11~
~qer
The definition of 'consumer' given in the Act makes it clear that . .
person who buys any goods or hires a service for consideration b it IIlcludes n
y ' lr,j
goods or services, when such use is made with the approval of the ~t also any; 0~,~
• Defect (in goods): Any necessary because the goods purchased or services hired by a buy uyer Or hirer. ~ 511;\
fault, imperfection, used by his family members, relatives, and friends. Under the gener:~ a;~ a!so likeJ
orshoncomingin of contract, however, such users of goods or service (beneficiaries) p Inciples of ~l-0
quantity, quality, . or trader of sueh· goo ds on the groun d of privity of coare not entitledtoe1.•-
the supplier
potency, purity, or who buys goods or hires service for any commercial purpose, ot~tracr. Bui, a~
standard of goods, livelihood through self employment, is not a consumer. er than for ea~
, required to be
maintained under any
law or a contract, or
as is claimed by the · Defect in Goods
trader in any manner. 'Defect', according to the Act, means any fault, imperfection or shortcornin .
" Deficiency (in -. \
quantity, potency, purity, or standard (of goods) which is required to be m!: tbequ.Ji~,
under any law or under any contract, express or implied, or as is claimed b :med~~
r service): Any fault, any manner [Section 2(1)(£)]. Y etraderi
imperfection,
shortcoming, or
inadequacy in quality,,
nature, and manner Deficiency in Service
of performance (of a Equivalent to defect in case of goods, the term 'deficiency' is applicable in case of serviQ!,
service), required to It means any fault, imperfection, _shortc~mi~g, or i_nadequacy in_ the quality, natur~ aoo
be maintained under manner of performance (of a service) which 1s reqmred to be mamtained by or under ani
any law, or has been law, or has been undertaken to be performed by a person in pursuance of a contracr ~
undertaken to be otherwise in relation to any service [Section 2(1)(g)].
performed by a person
in pursuance of a
contract or otherwise.
Goods
.C Goods: Things that 'Goods' means goods as defined in the Sale of Goods Act, 1930. Accordingly, 'goods'mean;
' are produced to be every kind of movable property other than actionable claims and money, and incluiks
' sold. stock and shares, growing crops, grass, and things attached to or forming part of the laoo
which are agreed to be severed before sale or under the contract of sale [Section 2(l)li)I,

Manufacturer
'Manufacturer' means a person who

1. makes or manufactures any goods or parts thereof, or h f made~

2. does not make or manufacture any goods but assembles parts t ere~actuJtd if
manufactured by others and claims the end product to be goods manu
himself, or
 Chapter 21 The Consumer Protection Act. 1986 483

t his own mark on any goods made or manufactured by any

ses t o be and c Ia1·ms such goods to be goods made or manufactured by
pu
cl'u c0rer
or JlvfaC ~(1 )(j)].
,., 111 3 ·oJI 1,
: ~e/ tf [Secll
~5'

·Act includes the following:

,.o,·
a
al'' ceor
diflg co che
, ;, a . tered or not;
.A!'' er reg1s .
F '"beth_ 1·ded family;
1
orl11Ju uJ1d " iery; and . . . ' . .
I· , ~in 3cive soc . of persons whether registered under the Societies Reg1strat1on
f ~'°-
p over oetatt0n
otberass [Section 2(1)(1)] .
> f,-el)' g60 or J!Ot
I. ~~• 1

. e Trade Practice . .
111
~rict ctice which requires a consumer to buy, hire, or avail of any Restrictive trade
11 anY trade pr:ay be, services as a condition precedent for buying, hiring, or practice: A business
l. J,,nsor, as ther
be case
goo ds
.
or services
. h h
. Iind sue a manner as to impose on t e consumers agreement, overt or
of ot strictions. It me u es implied one, between
;oihilZed costs or re companies which
d the period agreed to by_ th~ trader i_n the supply of goods or in providing controls prices or the
JelaYbeyo; which is likely to result in nse _of pnce. . . areas in which goods
1 are sold, preventing
· ~e sefl''': 'ractice ~hich requires a con~1mer buy, hire,_ ?r avail any goods or
fair competition from
! 3ny _crad /a condition precedent to buying, hmng, or. availing of other goods or
other companies.
Jt!l"'es (a_ -up sales) [Section 2(1)(n)].
~n•1ces ne

l11'1ice f d . . h. h . . I
. , ns service o any escnptton w 1c 1s made available to potentia users Service: The action
v·: dmeache provision o f fact·1 ·mes
=ce
~mcu1 es
· in· connectton
. I h
· Wit
· h banking, fi nancing,
.
· ·
. insurance, of serving or assisting
n, processing, supply of electnca or ot er energy, ·boarding or lodging or both, someone or the
,nJJlO construction, entertainment, amusement, or the purveying of news or other performance of work
k~mg , . ]
dormacion [Secnon 2(1)(o) • . . or job by one person
~cvice, however, does not mclude the rendenng of any service free of charge or under for another.
,ronrractofpersonal service [Section 2(1)(o)].

irader
-Jraler', in relation to any goods, means a person who sells or distributes any goods for
Trader: A person who
J andincludes the manufacturer thereof, and where such goods are sold or distributed sells or distributes
01packaged form, includes the packer thereof [Section 2(1)(q)]. any goods for sale
and includes the
manufacturer thereof.
'Jnfair Trade Practice
·'
;means a trade practice which, for the purpose of promoting the sale, use, or supply
,_anr_goods, ~r for the provision of any service, adopts any unfair method or unfair or
<tpnve practcce, including any of the following practices:

l ~ebpl ractice of making any statement to the public whether orally or in writing or by
' e repre .
(a) f I sentat1on which
a sdely represents that the goods are of a particular standard, quality, quantity,
gra e com ··
' posmon, style or model

h,
484 Part VI Other Business Legislations

(b) falsely represents that the services are of a particular standard . .

1
(c) falsely represents any re-built, second-hand, renovated, rec~~~: _•ty or &r
111
goods as new goods oned adi
(d) represents that the goods or services have sponsorship, appro • or old
1
characteristics, accessories, uses or benefits which such goods va ' Perfor,,_
or serv · ·••an
have tees dO Ce,
0
(e) represents that the seller or the supplier has a sponsorship or app ot
which such seller or supplier does not have rovat or affi]j .
. I d. . . at10
(f ) ma kes a fa Ise or mis ea mg representatton concernmg the need fo n
of, any goods or services r, or the useful
(g) gives to the public any warranty or guarantee of the performa ness
length of life of a product, or of any goods that is not based onnee, efficacy
proper test thereof an adequat; or
Where a defence is raised to the effect that such warranty or guarant . or
adequate or proper test, the burden of proof of such defence shall lie ee ts based 0
raising such defence on the llerSo~
(h) makes to the public a representation in a form that purports to be ( )
or guarantee of a product or of any goods or services, or (b) a prom~ a Warranty
· · or repair
mamtam, · an amc· Ie or any part t h ereo f or to repeat or comitse to rePace,
I
until it has achieved a specified result, if such purported warranty or nue a service
promise is materially misleading or if there is no reasonable prospe~a~ntee or
warranty, guarantee, or promise will be carried out t t at such
(i) materially misleads the public concerning the price at which a produ .
products or goods or services, have been or are, ordinarily sold or provi~ ~r like
nd
for this purpose, a representation as to price shall be deemed to refer tot~ •a '
at which the product or goods or services has or have been s'old by s 1~ Price
provided by suppliers generally in the relevant market unless it is clearly~ ers _or
at which the product has been sold or services have been provided by the; pnce
by whom or on whose behalf the representation is made erson
(j) gives false or misleading facts disparaging the goods, services, or trade of anoth
person [Section 2(1)(r)]. er
For the purposes of clause (1), a statement shall be deemed to be a statement
made to the public by, and only by, the person who had caused the statementto
be so expressed, made or contained if the statement is
(i) expressed on an article offered or displayed for sale, or on its wrapper or
container, or
(ii) expressed on anything attached to, inserted in, or accompanying, an article
offered or displayed for sale, or on anything on which the article is mounted
for display or sale, or
(iii) contained in or on anything that is sold, sent, delivered, transmitted,
or in any other manner whatsoever made available to a member of the
public. ·
(iv) permits the publication of any advertisement whether in any newspaper or
otherwise, for the sale of supply at a bargain price, of goods or services that
are not intended to be offered for sale or supply at the bargain price, or for
th
a period that is, and in quantities that are, reasonable, having regard to e
nature of the market in which the business is carried on, the nature and size
of business, and the nature of the advertisement.
2. For the purposes of clause (2), 'Bargaining price' means
(a) a price that is stated in any advertisement to be a bargain price, by reference to an
ordinary price or otherwise, or bly
(b) a price that a person who reads, hears, or sees the advertisement, w~uld reason~uct
understand to be a bargain price having regard to the prices at which the pro
advertised or like products are ordinarily sold.
3. An unfair practice . Chapter 21 The Consumer Protection Act-;1986 485
One hi '
(a) th e ienng of 'ft w ch permits
Of c . IS

them as offeredg~ s, prizes, or other items with the intention of not providing Unfair trade practice:
free of charge Whr cr~ating impression that something is being given or offered Any trade practice
. en it i full h . that pro\'idcs or is
transaction as a Whole s Y or partly covered by the amount c arged m the
(b) the conduct of any tbougbt,to provide an
promotmg, · d'u-ecrlycontest
. '. 10 ttery, games· of chance, or skill , for t he purpose of inequitable advantage
business interest. or indirectly, the sale, use or supply of any product or any to one party at the
expense of another.
Withholding from the Partici an . .
J/'.- f e of charge, on its do p ts of any scheme offering gifts, prizes, or other items
re sure, the inf · · I f h • h Th
articipants of the scheme shall be 0 nnation about final resu t o t e sc eme. e
Pf the scheme where such I dee'.11ed to have been informed of the final results
o- the same newspapers inresu h'1tsh are wnh·ma reasonable time pu bl'1sh ed promment · 1y
in 'ts the sale or supply O f w c the schem
. · · 1 d
e was ongmal ya vert1se . · d
4. Perm• d b consum k _goods Intended to be used or are of a kind likely to
be use ' y ers, nowmg or h . ' h d d
1 'th h st d d avmg reason to believe that t e goo s o not
comp Y~• t e an ard s prescribed by competent authority relating to performance,
ompos1t10n, contents es1gn constru t' fi · hin ·
ct d ' . • c ions, n1s g or packaging as are necessary
o prevent or re uce the nsk of ini·ury to the perso '. h d
d' st n usmg t e goo s.
5. Permits ~le bhloafr mg or de ruction of goods, or refuses to sell the goods or to make
1
them ava~ a e or sa e or ~o pro_vi?e any service, if such-hoarding or destruction or
refusal raises or tends to raise or 1s mtended to raise the st of those or other similar
.
goods or services. _ ' co
6_ Manufacture of spunous goods or offering such goods for sale or adopting deceptive
practices in the provision of services.

Rights of Consumer
Consumer interest in the market is the focus, or the art of enlightened marketing mix.
Business and consumerism both aim at the protection of consumer interest-business
ihrough self-regulation and consumerism through self-help. Consumerism invokes
government assistance when business misbehaves and fails to fulfil its responsibilities. To
facilitate this, the Act under Section 6 provides the following six rights of consumers:

L Right to Safety: It is the right of the consumer to be protected against the marketing
of goods and services by unscrupulous sellers, which are potentially hazardous to life
and property. The goods purchased and services availed of should not only meet their
1
immediate needs, but also fulfil long term interests.
- Right to be Informed: This refers to the entitlement of the consumer to be informed
about the quality, quantity, potency, purity, standard, and price of goods so as to
protect the buyer against unfair trade practices. A consumer should insist on getting
all _the information about the product or service before making a choice or a decision.
~is will_ enable him/her to act wisely and responsibly, and al~o enable him to desist
J, ~om falling prey to high pressure arid misleading selling techniques. .
ght to Choose: It is the right of the consumer to be assured, as far as possible, of
access
i - .to a vanety
· of goods and services at competitive· · pnce.
· I n case o f monopo 1·1es,
:brph_es the right to be assurdof satisfactory quality and service at a fair and reason-
4. R.i e Price.

ati~t to be Heard: This implies that consumer's interests will receive due consider-
i vari:
b Usat fora · fora. It also includes the consumer's liberty to be represented in
appropriate
c
· l\igh11 S 0 nst1tuted for consumer welfare.
to seek\ eek Redressal of Grievances: This refers to the privilege of the co~s~er
It also . olmpensation against unfair trade practices or unscrupulous expl01tanon . .
IIlc Udes th e ng
· h t to fair
. settlement of genuine
· gnevances
· o f t h e consumers.
 486 Part VI Other Business Legislations

Consumers can also take the help of consumer organisations .

· In seek·1
their grievances. . . . ng red
6. Right to Consumer Education: This refers to the entitlement of th tess,1
the knowledge and skill to be an informed buyer. Ignorance of c e consumer Of
. f h . I . .
of rural folk is the main cause o t e1r exp 01tat10n. Th onsu111
ey should k to a
ers p cq1-
must exercise' them. OnJY t hen real consumer protection • can be now h· th'eir arii
. Culart're
ac teved r1&hts )
. •nd

Three-tier Grievance-redressal Machinery

In order to provide simple and speedy redressal of consumer grievan
. h . . . d" . ces, Seer·
Consumer Protection Act envisages a t ree-t1er quas1-1u 1c1al machine ton 9
state and district levels. Popularly called as consumer courts the r ryd at the na1 1the
. . , e ressaI iona,
°
comprises the following. rnach· 1
tner-y
1. National Consu~er Disp~tes Re~ressal Commission or the 'National Co .
the apex level. It 1s based m Delhi. ll!rn1ssio ,
2. Consumer Disputes Redressal Commissions or 'State Commissions'. Th n •t
in state capitals. . . . . ese are baled
3. 'District Forums', which are established at the d1stnct level.

A_s on June 15, ~01_3,- there are 35 State _Co?1missions, one in each State
Territory and 629 district forums. The orgamsat1onal setup established und or Union
shown in Figure 21.1. er the CPA~

Figure 21.1 Organisational setup under the CPA

Organisat ional set-u p

Ad, ,so y bcrnes Adjudicative bodies

(Consumer L1rol~cfr:y1 cou·1.::; Is) (Consumer disputes red ressa l agencies)

i i i
Central State District District State National
consumer consumer consumer forum commission commission
protection protection proleclion (629 (35 Sta tes (NCDRC)
council councils councils Districts) and un ion
territories)

District Forum: District Forum

Formally known as
'District Consumer Establishment
Disputes Redressal Section 9(a) of the Act lays down that there shall be established for the purposes of
Forum', first level this Act, a Consumer Disputes Redressal Forum, to be known as the 'District Forum',
dispute redressal established by the State Government-three in each district of the state-by notification.
agency established by
The State Government may, if it deems fit, establish more than one District Forum ma
the State Government
in each district of the
district.
State, empowered to
settle cases, where the
value of compensation Composition
h aded by a
claimed is up to ~20 As envisaged in the law, the District Forum is a three-member benc h, e rher
lakh. serving or retire d d istrict judge, or a person qualified to be one a nd rwo o
 ChaplB' 21 lhecCansumer P,.-caan ..a,. T!afi _,
. a w oman-w h o are econolJljcs law comm.en:c, or public_
.,..bOtJI 1s , '
of b 0- .
- ~oJl
lo of die Act., eac lstnct Fonun shall cnnsist of me following:

f.!~tO
}{P'. · or LA<
w>-> been, or is qualified to be a Dim:ict J udge, who shall be its
~o tS, __
,~ who 5~ be persons of ability, integrity and ~ g , and have
,~ ~ o r experience of, or have shown capacity in dealing~ pmblems
~ oiJlt:!~ 110
·cs, law, commerce, accountancy, ind ustry, public affairs or
; 0 eco [1ll f whom shall be a woman.
O
.. r ·o11, olle under sub-section (1 ) shall be made by the Stare Governmem: on
. tJJlellt . . .
1
cf(IY apl'otll .
dJloon of a selection committee
. - cons!Srinn-of
- - --&
the following:
5t
• · tJllll'° O f the State Comrrus on - Chairman
i!iett'°rresident Department of the State _ Member
I iJic l,aW
I.Mae of the Depanment
dealin
g with consumer - Mcnher
~I :!,CO·-
.-a!V,_ ._ t11<.,...."

,,,1 ifl:!i!S lll the State

f office
[1/111 O th District Forum shall hold office for a tcmi of five years or up to me
!,di ~ of hi \ever is earlier. He shall oot be eligible for re-appointment. However,
f~f65yeafS, w •goc his/her office in writing under his/her hand addressed to the State
0
rnaYres1
~ t-

of engagement
~(l!IS h0 norarium and other allowances payable to, and the other terms and condi-
• of service 0 f the members of the District .Forum shall be such as may be prescribed
11t!3iarr or
,~-.. Stare Government. However, the appomtment of a.member . on whole-time
. basis
bu be made by the State Government on the recommendations of the P~es1d~t of ?1e
lll! Commission taking into cons1deranon such factors as:may be prescnbed mcluding
Ih ark-load of the District Forum.

lsrisdiction
fr District Forum is empowered to settle cases, where the value of compensation claimed
iapro !lO lakh. Also, the district forum can entertain cases where any one of the parties,
011lplainant or defendant, either resides or is doing business.
lk District Forum has the jurisdiction to entertain complaints where the value of the
!Xlls orsen:ices and tbe compensation, if any, claimed does not exceed t20 lakb.
} ,complamc shall be instituted in a District Forum within the local limits of whose
""'"C!JOn

I. the opposi
the ti te parry ?reach of the opposite parties, where there are more than one, at
th
on bume of e msntution of the complaint, actually and voluntarily resides or carries
l 5tness or h b • ·
any 0fth . as a ranch office or personally works ,or gam, or
'
0 s
the corn;J PPD ite Parties, where there are more than one, at tbe time of the institution of
0
ffice or amt, actually and voluntarily resides or carries on business or has a branch
D·15 ' PersonaU ' . b th . .
Or htricc Forurn,s
. Y . Works for gain. However, in such case e1t .d
er e permission of . the
ave a b gtven, or the opposite parties who do not resi e, or carry on business
such 1· ranch offi · tb b · ·
I. • 0stituti ce, or personally work for gam, as e case may e, acqmesce m
~e cause 0 f on'. or
action h . .
'w oily or m part, arises [Section 11].
 488 Part VI Other Business Legislations

The State Commission

Afl State Commission:
Forming the middle tier of the redressal mechanism are the state commissio 0
Formally known each state capital to settle issues between f20 lakh and n crore. These commj n~, ne in
' · f · · f EahS C ssions 1
as 'State Consumer serve as appellate courts for verdicts o district orums. c tate ommission 15• h a so
Disputes Rcdressal by a president or chairman, who is of the rank of a serving or retired High Co ~aded
Commission', and two to four members-one of whom is a woman. The related qualificatio ur;
Judge
functions as middle chairman and other members of the state commission as also its powers and i·u"~ d~r 1the
tier of redressal
. . . h m~
are discussed in detail m the following paragrap s. 0n
mechanism,
established by the
Stllte Government in
the Srate concerned, Composition
empowered to settle Each State Commission shall consist of
cases, where the value
of compensation 1. a person who is or has been a Judge of a High Court, appointed by the S
claimed is between Government, who shall be its President. However, no appointment under this I tare
no lakh and n crore shall be made except after consultation with the Chief Justice of the High Cou: ause
and entertain appeal
2. not less than two and not more than such number of members, as ma b
against any of the
'District Forums'. prescribed, one of whom shall be a woman, who shall have the following qu~liJi'.
cations, namely,
(a) be not less than thirty-five years of age
(b) possess a bachelor's degree from a recognised university, and
(c) be persons of ability, integrity, and standing, and have adequate knowledge d
experience of at least ten years in dealing with problems relating to econom~n
law, commerce, accountancy, industry, public affairs, or administration. cs,

Nonetheless, not more than 50 per cent of the members shall be from amongst persons
having a judicial background.
The expression 'persons having judicial background' shall mean persons having
knowledge and experience for at least a period of ten years as a presiding officer at the
district level court or any tribunal at equivalent level.
Further a person shall be disqualified for appointment as a member if he/she

1. has been convicted and sentenced to imprisonment for an offence, which, in the
opinion of the State Government involves moral turpitude, or
2. is an undischarged insolvent, or
3. is of unsound mind and stands so declared by a competent court, or
4. has been removed or dismissed from the service of the Government or a body corporate
owned or controlled by the Government, or
5. has, in the opinion of the State Government, such financial or other interest as is likely
to affect prejudicially the discharge by him of his functions as a member, or
6. has such other disqualification as may, be prescribed by the State Government
Every appointment referred above shall be made by the State Government on the
recommendation of a selection committee consisting of the following, namely,
(a) President of the State Commission - Chairman
(b) Secretary of the Law Department of the State - Member
(c) Secretary in-charge of the department dealing with consumer - Member
affairs in the State

Salary and honorarium d

The salary or honorarium and other allowances payable to, and the other terms ao
conditions of service of the members of the Stat11 Commission shall be such as maY be
prescribed by the State Government [Section 16(2)].
 Chapter 21 The Consumer p .
rotect,on Act. 1986 489

0ffice S re commission shall hold offic f '

,.,111 of r of the :Cb
ever is e~rlier '. and shall not b: term of five y~ars or up to
t iJleJII~years, w hing contamed m sub-section (3) ~.hie for re?ppomtment.
l fif°! 6t,llldiJlg an~e commencement of the ConsU:U:~son a~pomted as a President
~~if'1ibSi,er before hold such office as President or Protection (Amendment) Act,
1 !lleJ!I
,,a 11,onu·nue to .
[11 [Section 16
(3)] · member, as the case may be, till the
1 av f bis rer
f O l

,
·sdicti011rnrn.ss1on
. shall have the jurisdiction
1
1iireC0

entertain- where the value of the goods or serv,·c d . 'f

io I intS es an compensation 1 any
\. II coJJJP ad eeds UO lakh but does not exceed ~1 cro d ' ,
1 'JJJe exc d f . . re, an
0
cla1 ealsagainst the or ers o any 1stnct Forum Within
. • th e State ,and
.
\ii ap~or the records and pass _appropnate or_der_s ip. any consumer dispute which is
110~ before or has bee~ d_ecided by any ~, stnct Forum within the state where it
~odiJlg the State Commission th at such D,strict Forum has exercised a 1·urisdiction
ears to h f ·1 d · · · · •
apP ested in it by_ la~, _or .as a, e to e~erctse a !ur~sd1ct1on so vested or has acted in
oorv_ its junsd1ct1on illegally or with matenal uregularity [Section 17].
o:erCise on . ·,.

•n the office of the President 1

/icancy 1 . . . 11 ,
.L ffice of the President of the Distnct Forum or of the State Commission as the
fitnweo h hp 'd . b /
be is vacant or w en any sue res, ent 1s, y reason of absence or otherwise
'
pe~form the duties of his/her o~ce, the duties of the office shall be performed b;
:person, who is qualified to be a~p?mted as the President of the District Forum or, as
&case may be, of the State Comm1ss1on, as the State Government may appoint for the
~[Section 18A]. 1

iational Commission ,a
Mlhe apex of the redressal mechanism, stands the five-member National Commission National Commission: ...._
by aperson no less than the rank of a serving or retirecl' Supreme Court judge. Of Formally known as
~fuurother members, two are supposed to have a judicial background, and one of them 'National Consumer
Ill to be a woman.
Disputes Redressal
Commission',
• functions at the
~mposition ·i~
. apex level of
National C · • r]; ' redressal mechanism, 1
omrruss1on shall consist of Iestablished by the
Ia -~ , Central Government,
· tson who is or has been a Judge of the Supreme Court, to be appointed by the ; empo~ered to settle
ntral Go · d h' cases, where the value 1
c~u vernment, who shall be its President. However, 1'0 appomtment un er t 1s
l seshall b
nor less th e made except after consultation with the ChiefJ usttce
· Of Ind'ta .
fof compensation .
claimed is above n
one f an four and not more than such number of mempers as may be prescribed crore and entenain.
na 111~ Whom shall be a woma ho shall have the ,following qualifications, • appeals against
[a) 'oeY, n, w
, any of the 'State
In) not less th h· • Commissions'.
I Possess a b an t irty-five years of age · . d
c) ne pe achelor's degree from a recognised university, an
exile rien
rsons of ability, m• tegnty
. an d stand'mg and have-adequate . knowledge and
•
law,cornce of at least ten years' m . dea1mg. w1•th problems dre 1atmg
. . to. economics,
rnerce ' acco Untancy, m
. dustry, pu bl'1c affairs, or a mm1strat1on
490 Part VI Other Business Legislations

However, not more than 50 per cent of the members shall be from amongst the
having judicial background. Person
The expression 'persons having judicial background' shall mean persons hav·
·d f 'd' ing kn
edge and experience for at Ieast a per10 o ten years as a pres1 mg officer at th . owt
level court or any tribunal at equivalent level. e distric
Further a person shall be disqualified for appointment if he/she

1. has been convicted and sentenced to imprisonment for an offence, which 10

.
opinion of the Central Government involves moral turpitude, or ' thi
2. is an undischarged insolvent, or
3. is of unsound mind and stands so declared by a competent court, or
4. has been removed or dismissed from the service of the Government or a body co
owned or controlled by the Government, or rporate
5. has in the opinion of the Central Government such financial or other inter st
is likely to affect prejudicially the discharge by him/her of his/her functionse as asa
member, or
6. has such other disqualification as may be prescribed by"the Central Government
Every appointment under this clause shall be made by the Central Government
the recommendation of a selection committee consisting of the following, namely, on
(a) a person who is a Judge of the Supreme Court, to be - Chairma
nominated by the' Chief Justice of India n
(b) the Secretary in the Department of Legal Affairs in the - Member
Government of India
(c) Secretary of the Department dealing with Consumer - Member
Affairs in the Government of India

The jurisdiction, powers, and authority of the National Commission may be exercised
by Benches thereof. .
A Bench may be constituted by the chairperson of the Commission, known as the
President, with one or more members as the President may deem fit [Section 20].

Compensation
The salary or honorarium and other allowances payable to and the other terms and
conditions of service of the members of the National Commission shall be such as may be
prescribed by the Central Government.

Term of office
Every member of the National Commission shall hold office for a term of five years or up
to the age of 70 years, whichever is earlier and shall not be eligible for re-appointment.
Notwithstanding, a person appoin!ed as a President or as a member before the commence-
ment of the Consumer Protection (Amendment) Act, 1993, shall continue to hold such
office as President or member, as the case may be, till the completion of his/her term.

Jurisdiction th
Subject to the other provisions of this Act, the National Commission ~hall have e
jurisdiction

1. to entertain
(a) complaints where the value of the goods or ·services and compensation, if anY,
claimed exceeds n crore, and
(b) appeals against the orders of any State Commission, and
 Chapter 21 The Consumer Protection Act. 1986 491

d ss appropriate orders in any consumer dispute which is

rds an pdaecided by any State Commission where it appears to the
-•e recr01ias been such State C ornrruss1on
t "' · · has exercised a 1un · 'sd'1cnon
· not
IO O
c'.II i,e fOre jssion that · a 1uns
f i!ed co exercise · · d"1ction so vested, or h as acted m
· th e
i Co~w, ~r ~as i~legally or with material irregularity [Section 21).
~110~ . ii bf. risd1ct1°n
r l""I0 f j!S JII
,~ ·stO I
tf,eiO
int and the Procedure of Hearin
f8
com Ia . .
f t in any goods or deficiency m service, as the case may be, can
O
I·•
f.l" lll'dinga deec 'h
d' trict forum, e1t erbYht e aggrieved consumer, or a consumer
r' 1te8
· the is
lalll •(ing co h If of the consumers, or a group of aggrieved · consumers or t he
II · '//fl(ion on be a ts. While a d'1stnct · forum can take up cases th at mvo· Ive a
Stale Gover:i:;::f t20 lakh, t~e S~ate Co~i~sions are authorised to take up
0 . up co av f oods and services m quest~on 1s up to n crore. For amounts
00
".,,,nsa0 e the valoe Lo g atter is decided by the National Commission. Besides this, the
~
r,, ,qherthat _vaI'ue' cue rn National Comm1ss1on
d the · · a Iso serve as, appellate authonnes
· · o f th e
~J1111Uss1on~ an .
~~(prsrespectivelY· entitled to deal with the cases shall deal with them in the
1)¢ ne . e forums,
11ie respect'v ,cplained as follows .
1,cd ma[lller e
fP1 w
. Which a Complaint Can Be Made
~a0nerin.
,1
1
. ,
•on to any goods sold or delivered or agreed to be sold or delivered
.
iromplaint ID re ~:ed or agreed to be provided, may be filed with a District Forum, by
~anyservice prov1 , · •,t
er to whom such goods are sold or delivered ~r agreed to be sold or deliv-
1
· dieedconsum
uch service provide d or agree d to b e prov1'ded Y
er :;gru.sed consumers association, whether the .consumer to whom the goods sold
l anyr
or delivered or service prov1"d ed or agree d to b e pro.vi'd'ed;_'·~ a memb er o f sueh associa-
.
tion ornot, or ,
J. one or more consumers, where there are numerous, consumers having the same
mrerest, with the permission of the District Forum, on behalf of, or for the benefit of,
all consumers so interested, or
I. !heCentral or the State Government [Section 12).

irocedure on Receipt of Complaint

Cii rtceiving
litria f a compIamt
. wit
. h respect to a defect in goods or deficiency in service, the
~'•- ? m, first refers the same to the party against whoni \:lie complaint has been filed
111
. '"'&its rep! 'th• . . . •
•Pvcn in ce w, m a month of rece1vmg the complamt. A further grace of 15 days
ITOQcd to den~dm chases. If the defendant does not respond to the forum's notice, it shall
"''· the foru
""'• cietematter on t h e basis · of the facts m
· front·of 1t.
· In cases of defective
·
: ~- If the: ray also refer the samples to appropriate laboratory for an objective
l!aso~forum Wil~ ~n~ant contests the laboratory analysis, it should be in writing. The
~ ableopponu ~c~de the matter on the basis of the evidence in front of it after giving
deerned to~ties to both sides to present their pointsJFor such matters, the district
I, lntJii ave the same powers as of a district court deciding civil cases.
:,. sregard S ,
"llreI , ection 13 st
la) fates to any ates that the District Forum shall, on receipt of a complaint
re er a goods '
direq·1 copy of the c I . . . . .
e... ng him t . omp amt to the opposite party mentioned m the complaint
-.end ed PeriodO give h1' s version
• of the case w1thm
• · a peno · d o f 30 days or such
not exceeding 15 days as may be granted by the District Forum
492 Part VI Other Business Legislations

(b) where the opposite _party on ~eceip~ of a compla~nt referre~ to him, denj
disputes the allegat10ns contamed m the complamt, or omits or fail es or
any action to represent his case within the time giv~n by t~e District F~ to take
District Forum shall proceed to settle the consumer dispute m the manner~•-the
in clauses (c) to (g) , jlecjfied
(c) where the complaint ~lieges a defect in the goods _th~t cannot be deterllli
without proper analysis or test of t?e goods, ~he D1stnct F?ru~ shall obtated
sample of the goods from the complamant, seal 1t and authei;it1cate it in the 111 n a
prescribed, and refer it to the appropriate laboratory along with a direction-th anncr
laboratory makes an analysis with a view to finding out whether such goods at ~he
from any defect alleged in the compla!nt, or suffe~ fr_o m any_other defect, ;r
0
report its findings thereon to the D1stnct Forum w1thm a penod of forty.five d
of the receipt of the reference or within such extended period as may be grana!ds
· · Forum
by t he D1stnct · tc.
(d) before any sample of the goods is referred to any appropriate laboratory und'
clause (c), the District Forum may require the complainant to deposit to the ere~
of the Forum such fees as may be specified, for payment to the appropriat
laboratory for carrying out the necessary analysis or test in relation to the go~
in question ., ..
(e) the District Forum shall remit the amount deposited to its credit under clause (d) to
the appropriate laboratory to enable it to carry out the analysis or test mentioned
in clause (c) and on receipt of the report from the appropriate laboratory, the
District Forum shall forward a copy of the report along with such remarks as the
District Forum may feel appropriate to the opposite party
(f) 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 repon
made by the appropriate laboratory
(g) the District Foniln shall therelifter give a reasonable opportunity to the complainant
as well as the opposite party of being heard 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 (f) and issue an appropriate order under Section 14
2. The District Forum shall, if the complaint received by it under Section 12 relates to
goods in respect of which the procedure specified in sub-section (1) cannot be followed,
or if the complaint relates to any services
(a) refer a copy of such complaint to the opposite party directing him to give his
version of the case within a period of thirty days or such extended period not
exceeding fifteen days as may be granted by the District Forum
(b) where the opposite party, on receipt of a copy of the complaint, referred to it
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
(i) on the basis of evidence brought to its notice by the complainant and ~c
opposite party, where the opposite party denies or disputes the allegaoon
contain~d in the complaint, or
(ii) on the basis of evidence brought to its notice by the complainant wher~ ~e
opp~s_it!! party 01;nits or fails to take any action•to represent his case within
the_time given by the_Forum )
2
3. No proceedmgs complying with the procedure laid down in sub-sections (1) and (al
shall ,be called in question in any court on the ground that the principles of natuf
justice have not been complied with. e
4. For the purposes o{ this section, the District Forum shall have the same powers as ~rg
ve st~d.in a civil coun under the Code of Civil Procedure, 1908 (5 of 1908) while tryin
a suit m respect of the following matters, namely,
 Chapter 21 The Consumer Protection Act, 1986 493

enforcing attendance of ·any defendant or witness and

. g an d h
uJ11111otlln . ess on oat
11ie sjllil1S cbe wi:;,roducrion of any document or other material object producible
1,1 r$,pll •seo"erY an
,1,e di ,e ·dence on affidavits
bl t" 1·deJI 0 f eVI f h
I ase" eptio~ . of the report o t e concerned analysis or test from the
11ie reCquis1t1· on1ngtorr· or from any other re1evant source
(cl <1,e re labora "' h . .
di "' ciate nmussion ror t e exarrunat10n of any witness, and
0
I aPP: P0 £anY co which may be prescribed
01 3
(cl iSS ~~er ;111 ~:~ore the District Forum shall be deemed to be a judicial proceeding
(fl aJIY oeeedlll~ f Sections 193 and 228 of the Indian Penal Code (45 of 1860),
tie!f P~e [ll~an111 ;:rn shall be deemed to_,b~ a civil coun for the purposes of Section
> *;ibJII pistrict F}O{VI of the Code of Cnmmal Procedure 1973 (2 of 1974).
~tbedchapte\ . ant is a consumer referred to in 'suS-~lause (iv) of clause (b) of
195 aJI the colilPfaSincti'on 2 the provisions of Rule 8 of Order I of Schedule I to the
""'ere (l) 0 e • f
i '" sectioJI edure 1908 (5 o 1908) shall applx subject to the modification
0f Civil Proc ther;in to a suit or decree shall be ~onstrued as a reference to a
IP' eference . . F h
1ever/ r th rder of the D1stnct orum t ereon!
tbl tintor eo .
I co!llP a
. of the district forum/relief _provided "
5
finding di'ng conducted under Section 13, the District Forum is satisfied that
th procee £ f h ,, . I . .
:omplained against suff~r dr~m hany o t _~ def~1 ~ specified. in the compldai~t
g.,.,.... of the allegations co?tame m _t e ~om~1amt auout the services are prove , 1t

~-•m
,that any der to the opposite party d1rectmg him to do one or more of the following
lii!S,narnely,
t
. , l
I. to remove the defect pointed out by the appr?pri~-t~ laboratory from the goods in

!. ;::;~:ce the goods with new goods of similar de~cription which shall be free from
any defect • •
l to return to the complainant the price, or, as the case may be, the charges paid by the
complainant
t to pay such amount as may be awarded by it as compensation to the consumer for
any loss or injury suffered due to the negligence of die opposite party
l. to award punitive damages ' ' ·
i. to remove the defects/deficiencies in the services in question
1· 10 discontimie the unfair trade practice or the restrictive trade practice and not to
repeat them
:· not 1.0 offer the hazardous goods for sale ·
ti towuhdraw the hazardous goods from being offered for sale
· :cease the manufacture of hazardous goods and to desist from offering hazardous
II, rv1ces
to pay com .
11 10 pensat1on to consumers not identifiable
\J to sue_corrective advertisement
Provide for d
a equate costs to parties [Section 14).
4PPea/
~y
Persona , ' '
ll:10 d &&rievedb , ,, f .
~I r er to th S Yan order made by the District Forum may pre er an appeal agamst
nsuch
1

sta1
fo: tate Commission within a period of thirty days from the date of the
~Joed eCon,~,~~d manner as may be prescribed [Section lS].
1 --~,u:;sionma h
ays·1·it is sa • fi Y, owever entertain an appea I after th e expiry· ofth e sai"d pen·oo
tis ed that there w;s sufficient cause for. not filing it within that period.
L
==-~
..._:~
494 Part VI Other Business Legislations

Power and Proce dure Before State Commission

h · · sofSect10ns. 12 , 13 , and 14 and the rules
h made
d"fi thereunder
• for thed1.
T e prov1s_10n th e District Forum shall, with sue mo i _c~t1on as may be ne slloia\
of
be complamt by the d"tsp osal of disputes by the State Comm1ss1on [Section 18]. ccssary,
applicable to

Appeal . . . .
. d by an order made by the State Comm1ss1on m exercise of its
An~ per~o~ agg~~:i:use (i) of clause (a) of Section 17 may prefer an appeal again:w,~
con
ordererre
totheyNsu.anona I Commission within a period h of 30 • days
IC from ·the· date of the ordsucn
crlll
d as may be prescribed. T e Nat1ona omm1ss1on may ente11a·
such form an manner "f . . . fi d h h in an
appea I aft er the exp1·ry of the said period of 30. days 1 It 1s satts e t at t ere Was su"nc1en .
cause for not filing it within that period [Sect10n 1 91 · 1
1

Power and Procedure Before the National Commission

The National Commission shall, in the disposal of any complaints or of any praceedings
before it, have 1

1. the powers of a civil court as specified in_ sub-secti~ns (~), (5_), and (6) of Section 13
2. the power to issue an order to the oppos1~e party d1re~tmg him to d~ any one or more
of the things referred to in clauses (a) to (1) of sub-sect10n (1) of section 14,andfollow
such procedure as may be prescribed by the Central Government [Section 22].

Appeal

Any person, aggrieved by an order made by the National Commission in exercise of j~

powers, may prefer an appeal against such order to the Supreme Court within a period of
30 days from the date of the order. However, the Supreme Coun may entertain an appeal
after the expiry of the said period of 30 days if it is satisfied that there was sufficient callS(
for not filing it within that period [Section 23].

Finality of Order

Every order of a District Forum, State Commission, or the National Commission shall, a
has been preferred against such order under the provisions of this Act, be final
no appeal24].
[Section

limitation Period

The Di~trict Forum, the State Commission or the National Commission shall not admit
compl~mt unless it is filed within two years from the date on which the cause of action3
~astharisen.
0 N?twithstanding, a complaint may be entertained after the above period,
if e ~ '."Plamant th satisfies the District Forum, the State Commission or the National
Wit m such periode[Section
C?rnnuh. SS!on, as_ case may24A].
be, that there was sufficient cause for not filing the complaint

h However
S no such c I · h II b . · ion
t e tate C omm1ss100
' . . amp n· ts· a F e entertained unless the National Conuruss for'
th amt
con d onmg
• such delay [Proviso
or e to nct arum,
IS Section 24A].as the case may be ' records its reasons

Administrative Control
1. The National Co • • h
C . . . rnm1ss1on s all have administrative
omm1ss1ons in the following matters, namely, control over all the Staie
 Chapter 21 The Consumer Protection Act, 1986 495
. for periodical returns regarding the institution, disposal, pendency (i.e.
caihO~ decision o~ settlement] of cases ,
11 1
1 3wa ~! rd
of jn~tructlo~s rega ~g adoption of uniform procedure in the hearing
(bl ;s5oa atters, P?or serv~ce. of copies ~f documents produced by one party to the
of Jll site parnes, furnishing ~f English translation of judgments written in any
0pp0 speedy grant of copies of documents
I3ogoage, · the fun f10 · f
oerallY overseeing _c rung O the State Commissions or the District
th
(cl ge ros to ensure t~at ~ obie~s and _Purposes of the Act are best served without
~oro way interfering with their quasi-judicial freedom.
1oa0Y · · h II h d · · ·
c
e 0 nun1ss10~ s a ave a mmistrat1ve controls over all the District Forums
fbe~t~t •urisdiction in all matters referred above [Section 24B]. ·
i with10 its I

ment of Orders by the Forums

ioforce th D. 1. F th
0rder roade by e _1sn: ct orum, e State Commission or the National Commission,
st
(11fl' 'orced by the Di rict Forum, the State Commission or the National Commission
f 1,eeni'e 01 ay be, in
. h 'f ·
t e same manner as I it were a decree or order made by a court
Ji;~:~a;nding therein_a~d it shall be !awful for the ~isn:ict }'.~rum, the State _
Commission,
' National Commisswn ~o _send, m the event of its mab1hty to execute 1t, such order
wcheco urt within the local hm1ts of whose jurisdiction
~che

I, in the case of an order against a company, the registered office of the company is
situated, or
in the case of an order against any other person, the place where the person concerned
L voluntarily resides or carries on business or personally works for gain, is situated, and
thereupon, the court to which the order is so sent, shall execute the order as if it were
3 decree or order sent to it for execution [Section 25).

Dismissal of Frivolous or Vexatious Complaints

Where a complaint instituted before the District Forum, th'e State Commission or, the
National Commission, as the case may be, is found to be frivolous or vexatious, it shall,
for reasons to be recorded in writing, dismiss the complaint and make an order that the
complainant shall pay to the opposite party such cost, not exceeding no,ooo, as may be
specified in the order [Section 26).

Penalties
Where a trader, or a person against whom a co~pl_aint is made, or the complain~nt fails or
omits to comply with any order made by the D1stnct Forum, the State Comm1ss1on, or the
Nab·onal C · · the case may be such a trader, or person, or complainant shall
omm1ss10n, as - , · h fi h' h h II
lie pun·1shable wit
· h a pnson
· term from one month to three.years, or wit a new 1c s a
not be less than "2,000, and not more than n0,000 [Sect1~n 271 · . .
The D1stnct
. · Forum, t he State Commission or the National Comm1ss1on, . as. the case
may be, may 1·f 1t • 1s
• satls
• fi ed that the circumstances of anyh case ·so· reqmre, impose
d ha
se f ·' . fi bOth for a term Iesser t an mm1mum term an t e
ntence o 1mpnsonment or ne, or ' . d • th's section (Proviso to Section 27].
amount lesser than the minimum amount, speci6e m 1

Consumer Protection Councils

-..;.;.
Bes·d
1 d' · I mac h'mery to settle consumers' grievances and
es the three-tier quasi ju icia . up of Consumer Protection Councils at
co I • 'd fOr the setting
th lllp amts, the Act also proVJ es f ent of consumer rights.
eCentre as well as State level for en orcem _
496 Part VI Other Business Legislations

The Central Consumer Protection Council

Establishment
The Central Government may, by notification, establish with ff
specify in such notification, a council to be known as the ect from such d
Council (hereinafter referred to as the Central Council) [Se t·entral Consu111 ate as it
c ion 4(1)] er Pr ~,
• Ot~

Composition
The Central Council shall consist of the following members
, name1y,
1. the Minister in charge of consumer affairs in the Central G
. overnme
Chairman, and nt, Who shall .
2. such number of other official or non-official members repr .
may be prescribed [Section 4(2)]. esentmg such inter
es~~

Meetings of the central council

1. The Central Council shall meet as and when necessary, but at least one .
council shall be held every year. meeting of !ht
2. The Central Council shall meet at such time and place as the Chair
and shall observe such procedure in regard to the transaction of its b:a~ may think fu
prescribed [Section 5]. S10essasmay~

Objects of the Central Council

The objects of the Central Council shall be to promote and protect the rights of ilie
consumers, such as

1. The right to be protected against the marketing of goods and services which are
hazardous to life and property;
2. The right to be informed about the quality, quantity, potency, purity, standard,and
price of goods or services, as the case may be, so as to protect a small consumer agains1
unfair trade practices;
3. The right to be assured, wherever possible, access to a variety of goods and servicesa1
competitive prices; .
4. The right to be heard and to be assured that consumers' interests will receive due
consideration at appropriate forums; .
5. The right to seek redressal against unfair trade practices or restrictive trade pracnm
or unscrupulous exploitation of consumers; and
6. The right to consumer education [Section 6].

State Consumer Protection Councils

Establishment . m·
. . . . h ff f such date as it '
The State Government may by notificat10n, establish wit e ect rom -00 coun1
specify in such notification,' a council. to be known as t h e Consume r Protect!
(hereinafter referred to as the State Council) [Section 7(1)] .

Composition
The State Council shall consist of the following members, namely
 Chapter 21 The Consumer Protection Act, 1986 497

iJl-Charge of consumer affairs in the State Government who shall be its

-~ . ffi' .
Ji' tM'aft f her official or non-o cial members representing such interests as
I· 01sirl111.)llli,er ? ~tby the State Government [Section 7(2)].
soch t,e
ri
preseribe
i Ji19Y
t etin9 5 . shall meet as and when ~ecessary but not less than two meetings shall
~e513te council
·ar r·me
1 and place of
·
meeting
d shall
h be such as the Chairman may think
11ie d yerY ye · uch procedure in regar to t e transaction of its business as may be
t,1 bd ~all observes Government [Section 7(3)].
~,od~d by the State

r
' f the State Council
. cts o · h II b
Obie . f ry State Council. s aI
5 o eve
e to
( )promote
f and protect within the State the
ob1ect
,,e f the consu
<1. mers laid down m c a uses a to ( ) of Section 6 [Section 8].
~(SO

un~e~o~u'.::s~P~r:..:o:...v:....:i.=.s..:..io_n_s_ _ _ _ _ _ _ _ _ _ _ _ _ _ __
Misce II a_:_
~, ~ II
lbeJ!llSCe ane ous provisions of the Consumer Protection Act may be summarised as under.
~I
Protection of Action Taken in Good Faith
prosecution, or other legal proceedings shall lie against the members of the District
-1
Nosw' · · h N . I C . . ffi
Forum, the State Com~mss1ons, or _t at1ona omm1ss1on, or _a~y o cer or p~rson
ol~ acting under the direct10n of the D1stnct Forum, the State Comm1ss1on or the National
C.Omrnission for executing any order made by it or in respect of anything which is in good
faith done or intended to be done by such member, officer or person under this Act or
d1 under any rule or order made thereunder [Sec..:011 28].

1
115 Power to Remove Difficulties
ril!r Uanydifficulty arises in giving effect to the provisions of-this Act, the Central Government
may, by order in the Official Gazette, make such provisions not inconsistent with the
provisions of this Act as appear to it to be necessary or expedient for removing the
irt /11
~culty. However, no such order shall be made after the expiry of a period of two years
nail om the commencement of this Act [Section 29]. '

Power to Make Rules

The ee
carry· ntral Government may, by notification in the Official Gazette, make rules for
mgoutthe ·· · f h A
Cia prov1s1ons contained in the following sections o t e ct.
use (a) of sub · · I b '
.;_ Ci
si · ause (b) of -section (1) of Section 2 regarding 'appropnate a oratory,
oJ ~eillbers to bsub-section
e co · d
(2) of Section 4 regarding 'number of other official or non-official
· · f '
Sub·Sectj nsiste by Central Government and representing interest o consumers
Pr0c on (2) of S · IC ·1 · d h
edure tO b ection 5 regarding time and place of Centra ounc1 meetmg an t e
l!!ay b
. e obbserved
.1..... e Pre scribed
. f· b ·
h by the Chairman in regard to the transaction o its usmess as
"'lion 19 Yt e Central Government
regarding •appeals to National Commission against· the or d er o fS tate
' C ommiss10ns
. . '
498 Part VI Other Business Legislations

Sub-section (2) of Section 20 regarding 'the salary or honorarium and other allow
payable to and the other terms and conditions of service of the members of the Na:Ccs
· · , and
Comnuss1on nat
Section 22 regarding 'power of and procedure applicable to the National Commissio ,
Besides, the State Government may, by notification, make rules for carrying ou~ ·
provisions contained in the following sections of the Act. '
Clause (b) of sub-section (2) and sub-~ection (~) of Section 7, i.e., 'num?er of other offi.
cial or non-official members representmg such mterests as may be prescribed by the Sta
Government, the State Council shall consist', and 't_he tiffi:e and place of State Coun:
meeting and the procedure to be observed by the Chairman m regard to the transaction of
its business' respectively.
Sub-section (3) of Section 10 as regards 'the salary or honorarium and other allowances
payable to, and the other terms and conditions of service of the members of the District
Forum'
Clause (c) of sub-section (1) of Section 13 regarding 'where the ·complainant alleges a•
defect in the goods which cannot be determined without proper analysis or test of the
goods, procedure to be adopted by the District Forum for redressal of complaint'
Sub-section (3) of Section 14 regarding 'the procedure relating to the conduct of the
meetings of the District Forum, its sittings and other matters'
Section 15 regarding 'filing appeal to the State Commission against the order of District
Forum', and
- , fl
Sub-section (2) of Section 16, i.e., as regards 'the salary or honorarium and other allowa~C::S
payable to, and the other terms and conditions of service of, the members of the State
Commission [Section 30].

Laying of Rules and Regulations Before Parliament

Every rule made by the Central Government under this Act shall be laid, as soon ·as possi6le
after it is made, before each House of Parliament, while it is in session, for a total period of
thirty days which may be comprised in one session or in two or more successive sessions,
and if, before the expiry of the session immediately following the session or the successive
sessions aforesaid, both Houses agree in making any modification in the rule or both
Houses agree that the rule should not be made, the rule shall thereafter have effect only
in such modified form or be of no effect, as the case may be, so, however, that any such
modification or annulment shall be ,w ithout prejudice to the validity of anything previously
done under that rule [Section 31].
Moreover, every rule made by a State Government under this Act shall be laid as soon
as may be after it is made, before the State Legislature.

XC
Exercises

I. Objective-type Questions
1. Which of the following services shall not be covered under Consumer Protection Act?
(a) Professional services rendered by a Chartered Accountant engaged by a client
(b) Dignostic test administered by a doctor at AIIMS
(c) Legal advice rendered by a practicing Supreme Court advocate
(d) Medical procedures done by doctors .at Escorts Heart Institute
 ~Pter21 lhe'Gnsurner _
. of the following is not a cons~mer for the Protection Act. 1986 499
~tuch buys any goods for a cons1deratio c ~ o f ~ ,
who
tc
5c, one o uses sue h go ods Wit.h h . n £Or Pnvare
t e approval of th
.
USC or COnsum .
z. (al O11e wh buys goods for commercial Purpose e buyer ptJon only
(bl one whh~ buys some equipment for the Pllrpose of
1cl one w self CinploYnlent
(d) the following can file a complaint under th Co
....011g e ~p
\f)lO ,,...- 5urner rOtect:ion Act?
3. ) a con ral or the State Govemment
(a th Cent "f h
b) e ore consumers I t ere are many cons ha .
I ne or JD urners vmg the
(c)
d) o }JIY of the above COillJ))on interest
I 'manufacturer' means a person who
4_ fhe te~es
01
or manufacturers goods or pans thereof
(a) rnbles parts made or amnufactured by others and lairns
(b) :=self c th e end product to be manufactured by
or causes to put his own mark on any goods rnad
(c) claims such goods to be made or manufactured by ~~nufactured by any other manufacturer
(d)
All of the above

Which is not one of.the salient features of the Consumer Protection Act, , •
5. ) The Act applies to all goods and services unless specifically exem ted
1986
b C di Go
(b)
(a It covers ?1:1 IY private sector • . P Y e entra I vernmenr.
) The prov1s1ons of the Act are chiefly compensatory in nature
f d . .
id) Engagement o a vocate 1s not mandatory to file and pursue a complaint under the Act.
6
_ Those complaint~
compensation can 1s
claimed _be filed with the State Commission where the value of goods or services and the

(a) Up to no lakhs (b) More than no lakhs

(c) More than ~20 lakhs but less than fl crore (d) More than fl crore

7. Which of the following right is not provided by the Consumer Protection Act, 1986 to the consumers?
la) Right to safery (b) Right to be informed
le) Right to seek redressal (d) Right to discipline

8. A complainant not satisfied with the order of the District Forum may prefer an appeal against the order
before the State Commission within how much time from the date of passing the order by the district
forum:
la) 30 days
(c) 60 days (b) 45 days
(d) 90 days
9
- Who among the following is not a consumer?
(a) Insurance company
le) Lottery ticket holder (b) Licensee to run a PCO
(d) All of the above
1
IO. 1be
Co time · for 61 mg
. . 1·rn1t . a comp Iamt
. before th e Di"strict Forum • the State Commission, or the National
I llUnission, as the case may be is
1~\ One Year from the date on'which the cause of acti~n aris_es
I ) Two Years from the date on which the cause of actwn ans_es
(~) "J?iree Years from the date on which the cause of action ~nses
Five Years from the date on which the_cause of action anses
. Review
1 O.uestions . .
Desc rt·be th e salient features of the Consumer Protectwn
i .· tiq . Act, 1986 · Enumerate also the ob1ect1ves of the Act.
.
P a1n 'u n fair
. trade practice' under the Consumer Protection Act.
500 Part VI Other Business Legislations

3. Give the statutory definition of the following terms

(a) Defect (b) Deficiency
(c) Goods (d) Manufacturer
(e) Person (f) Complaint
(g) Complainant
4. Discuss briefly the composition, powers, aIJ.d functions of the District Forum, State Co . .
Commission. fllJnission, and N .
a11ona
5. What is a Central Consumer Protec~ion Council? Discuss its objects.
6. Give a summarised view of the Consumer Protection Act 1986.

11¥2,i
1. (b) · 2. (c) 3. (d) - 4. (d) . 5. (b)
6. (c) 7. (d) 8. (a) 9. (d) 10. (b)

• I

T f' I

1>
 L01 Th e Consumer p .
.,A~Nll'•JG OBJECTIVES . make available chea a rote~on Act, 1986 is designed to
i.v· Act· salient features; aim It applies to all good~ a°: qUJ~k remedy to a small consumer.
fhe · . by the Central Go n semces unless specifically exempted
Ll) 1 an d objectives . . public and ve~ent and covers all the sectors-private
. hts of consumer; restrictive '
compensato cooperanve
h · Th.e prov1s1ons
·• o f th e Act are rather'
i0 2 Rigde practice; unfair trade ry t an prevennve or punitive.
tra . t d
practice; service; ra er 2
L0 It seeks' inter a1·ia, to promote and protect the rights
of
L() Grievance redressal machinery infoconsumers
d .such as--( a ) n•gh t to safety, (b) right to be
3
krme • (c) nght to choose, (d) right to be heard (e) right to
see redressal, and (f) right to consumer educatio~.

KEY TERMS L0 3 For s1mp

· Ie, fast and inexpensive settlement of
I ·nant: Pursuer of a complaint, a consumers' disputes and for matters connected therewith the
eomP a: or any other person/institution/ Act envisa~es three-tier quasi-judicial machinery comprising
::;, eligible to file a complaint under the th~ (I_) National Commission, (II) State Commission and (III)
D1stnct Forums; operating at national, state, and district
(onsUI!ler Protection Act, 19 8 6. leve~s respectively. Besides, to provide better protection of
the mterests of consumers, the Act makes provision for the
Complaint: Any allegation made in wntmg establishment of consumer protection councils at national and
lthet in goods or deficiency in service by a state level and other authorities to promote and protect the
romplainant with a view to obtaining relief. rights of the consumers and increase consumer awareness.
Consumer: A person who buys any goods or
hlrcs a service for consideration for a purpose
which 'goods are ~old, preventing fair competition from other
Oller than commercial one and any user of such
ioodsorservices with the approval of the buyer companies.
•hirer, Service: the action of serving or assisting someone or the
performance of work or job by one person for another.
!I
Defect (in goods): Any fault, imperfection, 1:1
• shoncoming in quantity, quality, potency, Trader: A person who sells or distributes any goods for sale
f'Unty, or standard of goods required to be and includes the manufacturer thereof.
lillnra·med under any law or a ' contract, or as is
daim
ed by the trader in any manner. Unfair trade practice: Any trade practice that provides or
· h ht to provide an inequitable advantage to one party at
Deficiency (''" service): Any fault, imper- 1st oug .
lttio the expense of another.
laturen, shortcom·
d • d equacy m
mg, or ma . qua 1·1ry,
triietj an .manner of performance (of a . • Forum: Formally known as 'District Consumer
D~ stnd R d al Forum' first level dispute redressal agency
liii,orhretuired to be maintained under any
D1spu~es de bre:te State Government in each district of the
1Ptrson ~s een undertaken to be performed by estabhshe Y d settle cases, where the value of compen-
IQ Pursuance of a contract or otherwise.
State empowere to
Goods: Thin . ' cla1·med is up to UO lakh.
sat1on
I . gs that are produced to be sold. . ion: - Formally known 'as 'Stat<: Consumer
!strictive State Commiss Commission', functions as IIllddle ner of
1gr,._ • trade . b . Disputes Redress~ I -blished by the State Government m
~~""1enr, ove ~ra~1ce: A usmess
Pan1es Whic: or 1mphed one, between redressal mechanism, esta
controls prices or the areas in
502 Part VI Other Business Legislations

the State concerned, empowered to settle case~,

5
where the value of compensation claimed _1
between no lakh and n crore and entertain
appeal against any of the 'District Forums'.

National Commission: Formally known

as 'National Consumer Disputes Redressal
Commission', functions at the apex level of
redressaJ mechanism, established by the Central ,
Government, empowered to settle cases, where
~he value of compensation claimed is above H
crore and entertain appeals against any of the
'State Commissions'.