Consumer Protection Act

Consumer Protection Act, 2019

1. Consumer movement and its object.
The consumer movement popularly termed as ‘consumerism’, is not a
recent development as is commonly believed.
Emphasis on consumerism in recent years, has given the impression that
the government protection of the consumers from certain un fair business
practices.
Consumer is a king and has a right to be informed and to be heard.
This movement directed to protect the consumer without any barrier or
boarder. Besides the movement, the laws on consumer have been to educate and
create awareness amongst the general public to define the legal rights and to
provide the legal remedies against the violation of consumer rights.
World consumer rights day is on 15th march of every year because on this
day u. s. president Kennedy declared four consumer rights viz.
1) Right to safety.
2) Right to be informed.
3) Right to choose.
4) Right to be heard.
International organization of consumer union (IOCU) added three more
consumer rights.
a) Right to redress.
b) Right to a healthy environment.
c) Right to consumer education.
In the recent law, the doctrine of caveat emptor (let the buyer beware) was
the rule of law sales, which has been replaced by the ‘caveat vendor’ (lets the
seller be aware).
The consumer forums and commission are authorized to award
compensation for not only the amount lost in purchasing defective material or in
hiring defective services, but also for mental pain and suffering and harassment
caused by the defective goods or services.
The consumer was suffering at the hands of unscrupulous sellers, traders
and manufactures. Hence, consumer law has started moving fast to protect the
interest on consumers. Consumer become more vigilant and right conscious to
improve their standard of life with quality of goods and services they buy or hire.

Objective Or Need Of Consumer Movement.

⮚ Safeguard against malpractices.

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Consumer Protection Act

⮚ Knowledge to the consumer.

⮚ Representation for consumer.
⮚ Publication of unjust practices.
⮚ Encouragement to business community.
⮚ Assistance in legal matters.
⮚ Improving the marketing system.
⮚ To discourage antisocial activities.
⮚ To awaken the government.
The objective of the consumer movement is to secure the interests of the
consumer against all types of unfair trade practices. Consumerism as an effective
and organized movement started in 1960’s in the U.S.A.

2. Aims and objectives of consumer protection Act.

This Act has been aimed at to provide for a better protection of the interest
of the consumer and for that purpose to make provision for establishment of
consumer councils and other authorities for the settlement of consumer’s disputes
and for matters connected there with. The objective of Act is to promote and
protect the rights of consumer such as :-
1) The right to protected against marketing of goods which are hazardous
to life and property.
2) The right to be informed about the quality, potency, purity, standard and
price of goods to protect the consumers against unfair trade practice.
3) The right to be assured wherever possible, access to variety of goods at
compatible prices.
4) The right to be heard and to be assured that consumer interest will
receive due consideration at apparat forms.
5) The right to seek redressal against unfair trade practices or unscrupulous
expiation of consumers.
6) Right to consumer education.

3. Consumer protection (amendment) act, 1993.

The original act was once amended in the year 1991, but was further
amended in the year 1993 to remove the inadequacies of consumer law.
1) To encourage the scope of the act so as to enable the consumers to file
class action complaints where such consumers have a common interest
and to file complaints relating to restrictive trade practices adopted by
a trader.
2) To enable the consumers who are self employed to file complaints
before the redressal agencies where goods bought by them.

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Consumer Protection Act

3) To add ‘services’ relating to housing constructions.

MCHT :- Maharashtra chamber of housing industry.
RERA :- real estate regulatory authority.
4) To provide for constitution of selection committees for the selection of
non-judicial members of various redressal agencies.
5) To increase the monetary jurisdiction of district forum / sate
commission / national commission
6) To impose punishment on the complaints in the case of frivolous or
vexatious complaints.
7) To provide for the limitation period of two years for filing complaints.

4. Consumer protection (amendment) Act, 2002

The provision of the amendment act of 2002 was to brought into a force
w.e.t 15th March, 2003 some of important changed provisions are as under.
1) In section 2(6)- the word complaint includes the legal heir or
representation in case of death of a consumer or the opposite party.
2) Unfair trade practices includes the sale of superior goods or services
and service providers.
3) For the appointment as a member of the district consumer forum,
minimum qualification and disqualification have been prescribed.
4) Provisions have been made for the issuance of any interim order.
5) Power of judicial magistrate have been conferred.

5. Salient features of consumer protection Act.

1) To provide better protection of the consumers

2) To provide education and awareness to the consumers

3) To provide consumer dispute redressal agencies.

4) To provide additional safeguards to the consumers.

5) To provide reliefs against the malpractices of the business community

with regard to services rendered and defects in the quality of goods.

6) To provide the improvement in enforcement of the consumer law

through the consumer protection councils.

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Consumer Protection Act

Consumer Protection Act. 1986

Consumer Protection Act. 2019

Commenced on 24th Dec 1986

Objectives of this Act.

To protect the interest of To establish consumer

consumers in India redressal machinery
(consumer forum)

Applicability of this Act. (sec. 1)

The act is applicable whole of India except the state of J&K.

Rights of consumers

(1) (2) (3) (4) (5) (6)

Right Right Right Right Right Right
to be to be to be to be to seek to seek
educat protect inform heard variety redress
ed ed ed

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Consumer Protection Act

Consumer councils

Basis

Central State District

1.chairman Minister of central Sate Govt. Collector
Govt minister

2.meeting
At least one year At least twice in At least twice in a
year year
3.members
Maximum 150 Maximum 10 As prescribed by
state Govt.

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Consumer Protection Act

Consumer Redressal machineries.

Basis District commission state commission national commission

1. Presiding Judge of district Judge of high National judge

officer court. court. of supreme
court.

5 years or 65 5 years or 67 5 years or 70

2. Tenure age whichever is age whichever is age whichever is
earlier earlier earlier

At least 2 out of At least 4 out of At least 4 out of

3. Members which 1 shall be which 1 shall be which 1 shall be
woman. woman. woman.

4. Maximum age 35 years. 35 years. 35 years.

of members.

5. Pecuniary More than More than 10

Up to Rs.1cr. Rs.1Cr. up to
limit. core.
Rs. 10 crore

6. Territorial
Within district. Within state. Within country.
limit.

Within 30 days Further appeal

district to state. national to
7. Appeal. ----
supreme court.
And 50%
And 50%
amount ordered.
amount ordered

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Consumer Protection Act

The consumer protection Act, 1986

PREAMBLE
An act to provide for better protection of the interest of consumers and for
that purpose to make provision for the establishment of consumer councils and
other authorities for the settlement of consumer’s dispute and for matters
connected therewith.
❖ Objects of the Act : -

It seeks, inter alia, to promote and protect the rights of consumers such as

a) The right to be protected against marketing of goods which hazardous to

life and property

b) The right to be informed about the quality, potency, purity, standard and
price of goods to protect the consumers against unfair trade practice.

c) The right to be assured wherever possible, access to variety of goods at

compatible prices.

d) The right to be heard and to be assured that consumer interest will receive
due consideration at apparat forms.

e) The right to seek redressal against unfair trade practices or unscrupulous

expiation of consumers.

f) Right to consumer education.

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Consumer Protection Act

PRELIMINARY

Person

In respect of goods

Buys any good User /beneficiary of such

for consideration goods with the permission
of buyer

❖ Paid (cash)

❖ Promise (credit)

❖ Partly paid + partly promised

❖ Deferred (installments)

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Consumer Protection Act

Person

In respect of In respect of
services both

Avail any User/beneficiary of Buyers / avails any

service for such service with exclusive for the
consideration the permission of purpose of earning
avails live hood by means
of sell employment

● Paid (cash)
● Promise (credit)
● Partly paid + partly promised
● Deferred (installments)

Exception:- But does not include

any purchase or availment for
commercial purpose.

Commercial purpose:- goods in

large scale for profit motive
+
Direct nexus b/w goods purchased
and profit earned.

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Consumer Protection Act

CONSUMER

❖ Consumer sec. (2)(7) explanation

User of goods with the approval of buyers.

1) Dinesh Bhagat v. Bajaj Auto Ltd.

Facts of the case –
A purchased a scooter which was in B’s possession from the date of
purchase. B had a complaint regarding the scooter. He sued the seller. The seller
pleased that since B did not buy the scooter, he was not a consumer under the act.
The Delhi state commission held that B, the complainant was using it with the
approval of A, the buyer and therefore he was consumer under the Act.

2) Sanjay Krishna Kant v/s m/s Girooy communications & others.

Facts of the case –
A lawyer purchases a computer and printer for his office. The printer
started giving trouble. The lawyer lodge a complaint. In this case printer has not
been purchased by the advocate for commercial purpose or for resale but for the
use in his office to improve efficiency of his office. Therefore, he will be treated
as a consumer and will succeed in his complaint.

Explanation of above case :-

Livelihood – Person buying goods for self-employment is a consumer.

New example :-
Mr. A was running a small typing institute to earn his live hood. He
purchased a photo copy machine canon X for Rs. 7000/-. It provided defective.
He sued the seller who contended that “A” is not a consumer under the act, as he
purchased, the machine for commercial purpose. National commission held that
“A” was constructed as consumer under Act.

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Consumer Protection Act

WHO IS NOT A CONSUMER?

Laxmi engineering works V/S P.S.G. industrial institute.

Facts of the case :-
Supreme court held that if a person purchased a machine to operate it
himself for earning his live hood, he would be a consumer, if such person took
the assistance of one or two persons to assist him in operating the machine, he
would still be a consumer. But if a person purchased a machine and appoint or
engage another person exclusively to operate the machine, then such a person
would not a consumer.

❖ Person even a vailing service is also a consumer.

Example:-
“A” hires an advocate to file a suit for recovery of money from his employer.
He promises to pay fee to advocate after the settlement of the suit. “A” is a
consumer of advocate under the Act.

❖ Beneficiary of services is also a consumer.

Case :- Spring Meadows Hospital V/S Hariot Ahluwalia

Judgement of supreme court :-
The supreme court held that parents who bring the child to hospital and the
child both are consumers

“Consumer”
Consumer means any person, who

1. Buys any good for a consideration.

❖ Consideration has been paid and partly promised.
❖ System of deferred payment.
❖ When such use is made with the approval of such person.
❖ But does not include a person, who obtain such goods for resale or for
any commercial purpose.

2. Hires or avails of any services for consideration.

The term ‘consumer’ defined u/s 2(7), is divided into two parts
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Consumer Protection Act

First – A consumer who purchases goods.

Second – A person who hairs services.
3. Consumer means a person who buys any good for consideration.

4. The sale must be in course of business :-

A sale by one consumer to another consumer, would not be within the
scope of the Act. The Act is trying to protect consumers against traders and
manufactures.

5. Self-employment :- can file a case under consumer protection Act.

COMPLIANT :- S 2(6)

“complaint” means :-
1. A consumer or
2. One or more consumers, where there are numerous consumers having the
same interest.
3. Any voluntary consumer association registered under the companies Act,
1956 or under any other law for the time being in force, or
4. The central government or any state government.
5. In case of death of a consumer, his legal heir or representative, who or which
makes a complaint.
This definition is very suitable in a country like India, where majority of the
people are illiterate, hence power to file a complaint is given to the voluntary
consumer associations. The only restriction lays down under the section in this
regard is that, the association must be registered under the companies Act, 1956
or any other law the time being in force.
However, a consumer association can not file a complaint on behalf of
unspecified or unidentified number of consumers.

COMPLIANT :- S 2(6)

“compliant” means any allegation in writing made by a complainant that,

1. An unfair tread practice or restrictive trade practices, has been adopted by any
trader or service provider.

2. The goods brought bought by him or agreed to be bought by him suffer from
one or more defects

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Consumer Protection Act

3. Service hired or a vailed of; or agreed to be hired or availed of, by him, suffer
from deficiency in any respect.

4. A trade or a service provider, as the case may be, has changed for the goods
mentioned in the complaint, a price in excess of the price.
a) Fixed by or under any law foe the time being in a force.
b) Displayed on goods or any package containing such goods.
c) Displayed on price list exhibited by him by or under any law for the time
being in force.
d) Agreed between parties.

❖ ESSENTIAL ATTRIBUTES OF “COMPLAINT”.

1. The compliant must be in writing.

2. The complaint must be made with a view to obtain any relief under the Act.
3. The complaint must make any of the following allegation against the trader
or manufacturer.
4. The complaint must be made in a manner prescribed under law sec 35.
5. The compliant must be field before appropriate consumer commission
having jurisdiction.

❖ IMPORTANT FEATURES OF COMPLAINT

1. Ordinarily the complaint must contain the name, description and address
of the complainant..
2. It must contain the name, description and address of the trader or
manufacturer.
3. It must state clearly the facts of case. – for example
a) When thing was purchased?
b) For what purpose?
c) When the thing was consumed or used?
d) By whom used?
e) What was the defect in good or deficiency in service?
f) What injury suffered?
g) Lastly, the complaint must mention the relief asked for against the
trader or manufacturer i.e. opposite party.

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Consumer Protection Act

❖ CONSUMER DISPUTE :- SEC. 2(8).

Consumer dispute means, a dispute where the person against whom a

complaint has been made, denies the allegations contained in the complaint.
A consumer dispute would arise when there is a complaint by consumer
and the person against whom the complaint has been made.

❖ DEFECT (DEFECTIVE GOODS) SEC 2(10) :-

Defect means, any fault, imperfection or shortcoming in the quality,
quantity, potency, purity or standard which is required to be maintained by or
under any law for the time being in force, or under any contract express or
implied, or as is claimed by the trader in any manner whatsoever, in relation
to any goods.
Defect means, lack or absence of something essential for completeness.
When there is shortage in the quality of good in their number or weight,
measure it amounts to defect in goods.
There are some enactments e.g. food and drugs adulteration Act.

❖ DEFICIENCY IN SERVICE SEC. 2(11). :-

Deficiency means any fault, implication, shortcoming or inadequacy in the
quality, nature and manner of performance which is required to be maintained
by or under any law for the time being in force or has been undertaken to be
performed by a person in pursuance of a contract or otherwise in relation to
any service.

Examples of defects :-

a) Slandered of cement :-
If the cement supplied is below standard, then the standard prescribed in
the order of supply such supply of cement comes under the category of defects.
Ideal store v/s L.S. salita.

b) Defective gas cylinder and regulator :-

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Consumer Protection Act

Defective gas cylinder and regulator should be changed and for such defect
a compensation can also be claimed. (literary co-operative society ltd.
V.K.N.N. Pillai).

c) Defective auto rickshaw :-

The new auto rickshaw had to be repaired on large number of occasions
during on warranty period. Repairs where done free of charge, the purchaser
had to undergo mental torture, loss of earning and inconvenience. The order
of state commission directing compensation of Rs. 5,000/- was up-held, but
award of interest was dropped. (in the case of Bajaj auto ltd. V. Bharatbhai)

Examples of deficiency of service :-

a) Air journey :-
During the air journey, the food supplied was not good and, in another case,
the flight was delayed treated as a deficiency in service.
1) First case – station manager, Indian airlines v/s V. B. Das.
2) Second case – Indian airlines v/s S. N. Sinha.

b) Sea carrier :-
A sea carrier misdelivered goods. It was held that compensation would be
awarded on the basis of number of packages consigned and not as shown in
the package list. Dilawari exporters v/s Alitalia cargos.

c) Electricity services :-
Electricity disconnected on short notice without any fault was found
illegal. The commission directed for restoration of the connection by the
electricity board, then it is also covered under the ambit of deficiency in
service.

❖ MAIN FEATURES OF THE CASE OF DEFICIENCY IN

SERVICE :-
● Delay in the possession of the flat.
● Use of substandard material in construction of flat.
● Fault or negligence in setting the claim by the insurance company.
● Fault on a part of carrier of goods.
● Disconnection of electric supply on account of arbitrary and excessive billing
or without giving notice.

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Consumer Protection Act

● Bank dishonoring the bank draft or cheque despite sufficient funds in the
account.
● Failure on the part of the courier to delivery cover within stipulated period.
● Unreasonable delay in shifting of telephone.
● Delay by the examining body to publish the result.
Service :- sec. 2(42) of the Act, to mean service of any description which is made
available to potential users. Viz banking, financing, insurance, transport,
processing, supply to electrical or other energy, housing construction,
entertainment.
The term does not include –
● The rendering any service free of charge or
● The rendering of any service under a contract of personal service.

Solicitors and lawyers services :-

In England solicitors have been held liable to compensate their clients
when they have been shown to be negligent, where there was a failure to put up
a defense in respect of which full document evidence was given by the client to
the solicitor. Case :- cook v/s 5 (1996).

❖ UNFAIR TRADE PRACTICE [ SECTION 2(47)].

Comments
According to new section 2(47) unfair trade practice which has been adopted
by the trader for the purpose of
a) Promoting the sale with mala fide intentions / unscrupulous intentions, or
b) Use or supply of any good with intent to cheat or
c) For the provision of any service with unfair method or unfair or deceptive
practice. Besides, the unfair trade practice includes –
1) The misrepresentation about the goods services which mislead the
consumer, or
2) proposed bargain price of goods / brands which are duplicates or
3) offer gifts, prices, any contest, lottery, game, chance or
4) sale of substandard goods knowingly or
5) hoardings or destructive of goods.

Examples :-

1. Advertisement for goods and services :-

An advertisement of medical product ‘select’ which id guaranteed the birth
of male child comes under the preview of ‘unfair trade practices’.

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Consumer Protection Act

2. Affiliation and recognition :-

A dental college which was neither affiliated with university concerned,
nor recognized by the dental college of India, stated in advertisement for
admission to BDS course that it was under the university and DCT.
3. Non replacement of vehicle :-
Where a new car purchased by the customer required repeated repairs
within three months of its purchase, the consumer was held entitled to get
replacement or refund of purchased price of the car. It was farther held that
non-replacement of the vehicle would tantamount to unfair trade practice.

Unfair trade practice.:-

S.2(47) of the act defines an ‘unfair trade practice’ as a trade practice which
adopts any unfair method or unfair or deceptive practice for the purpose of
promoting the sale, use or supply of any good or for providing anu service.

Following are the some trade practices :-

1) Making any statement which falsely represents that goods are of a particular
standard, quality, grade, composition, style or model.

2) Making any statement which falsely represents that services are of a particular
standard, quality or grade.

3) Making any statement which falsely represents any re-built, second hand
renovated or old goods as new goods.

4) Making any statement which represents that goods or services have

sponsorship, approval, performance, characteristics, accessories, uses or
benefits which such goods or services do not have.

5) Making any statement that the seller or the supplier has a sponsorship or
approval of affiliation which such seller or supplier does not have.

6) Making any statement which makes any false or misleading representation

concerning the need for, or usefulness of any good or service.

7) Making any statement which gives to the public any warranty or guarantee of
the performance, efficiency or length of life of a product which is not based
on an adequate or proper test thereof.

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Consumer Protection Act

8) Making any statement to the public which reports to be a warranty or guaranty

of any good or serviced or promise to replacement or repair the goods. If such
purported warranty or guarantee or promise is materially misleading or if there
is no reasonable prospect that such warrantee, guarantee or promise will be
carried out.

9) Making any statement which materially mislead the public regarding the price
at which a product or like products or goods or services have been, or are
ordinarily sold, or provided.

10) Permitting the publication of any advertisement whether in a newspaper or

otherwise for the sale or service that are not intended to be offered for sale, or
support at the bargain price, for a period that is reasonable or in quantities that
are reasonable, having regard to the nature of the market, the size of the
business and the nature of the advertisement.

a) A price that is stated in any advertisement to be a bargain price by reference

to an ordinary price or otherwise or
b) A price that a person who reads, hears, or sees the advertisement would be
reasonably understand to be a bargain price, having regard to the price at
which the product advertised or like products are ordinary sold.

11) Permitting the offering of gifts, prizes or other items with the intension of
not providing them as offered or creating an impression that some thing is
being given or offered free of charge when, in fact, it is fully or partly covered
by the council amount charged in the transaction as a whole.

12) Permitting the conduct of any contest, lottery, game of chance or game of
skill, for the purpose of promoting directly or indirectly the sale use or supply
of any product or any business interest.

13) Manufacturing of spurious goods or offering such goods for sale.

14) Adopting deceptive practices in the provision of services.

❖ Examples of unfair trade practices :-

1) Spurious watches not made by HMT, sold as ‘HMT’ watches.

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Consumer Protection Act

2) Blouse piece sold with the mark ‘Reliance” and ‘Vimal’, creating an
impression on gullible consumers that these were manufactured by reliance
industries India Ltd.

3) Sale by an institute of ‘lucky stones’ with the wording, “let it touch you and
see your feature change”.

4) Advertising sub-standard garments as “export quality garments at throw away

price”.

5) Guaranteeing the mileage of a new scooter at 40km. per liter, when the actual
performance was less than 30km. per liter.

6) Offering free gifts on sewing machine after increasing the actual price of
sewing machines.

❖ Consumer dispute redressal agencies :-

1) A consumer dispute redressal forum is established in every district known as

“district forum”.

2) A consumer dispute redressal commission is setup in every state and known

as “state commission”.

3) A national consumer dispute redressal commission is located in new Delhi

known as the “National commission”.

❖ Restrictive trade practices :-

Restrictive trade practice is defined by sec. 2 (41) of Act to mean a trade
practice which tends to bring about manipulation of price or condition of
delivery or to affect the law of supplies in the market relating to goods or
services in such a manner as to impose unicast costs or restriction on the
consumer the term includes following two trade practices, namely -
a) Delay beyond the period agreed to, by a trader in supplying the goods or
providing the services, which delay has led, or is likely to lead, to rise in
price.
b) Any trade practices which requires a consumer to buy, hire or avail of any
goods or services, as a condition precedent to buying, hiring or availing of
other goods or services

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Consumer Protection Act

Examples.

a) Delivery of new car or shooter, much beyond the agreed date, so that a higher
price may be charged to the purchaser.

b) Accepting advertisement only for two newspapers simultaneously.

c) Compulsory purchase of an antenna with a T.V. set.

d) Forcing school students to purchase uniform cloth only from the school,
purchase text books from the school.

❖ Appropriate laboratory :-

When a consumer is failed under the Act alleging a ‘defect’ in goods, it is

necessary to send such goods to a laboratory for a test report.
As both the complaint and the opposite party may try to obtain ‘favorable
test reports.’ It is provided that such goods can be tested only by an appropriate
laboratory.

Under sec, 2(2) of the Act, an appropriate laboratory is a laboratory or

organization recognized by the state government as per the guidelines prescribed
by central government.

Any laboratory established by or under any law and which is maintained

financed or aided by the central government or state government for carrying out
analysis or test of any goods; with a view to determining whether such goods
suffer from any defect for instance :-

● Indian Agricultural Research Institute, New Delhi.

● Central Rice Institute, Cuttack.

● National Aeronautical Laboratory, Bangalore.

● Central Potato Research Institute, Shimla.

● Electronics Regional Test Laboratory, Mumbai.

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Consumer Protection Act

❖ Define “Goods” :- sec. 2(21)

Goods means every kind of movable property other than actionable claims
and money viz- stock and shares, growing crops and things attached to, or
forming parts of the land.

❖ Manufacturer :-
Sec. 2(24) of the act, manufacturer means a person who –
1. Makes or manufacture any goods or parts thereof, or
2. Dose not make or manufacture any goods but assembles parts thereof made or
manufactures by other.
3. Puts or causes to be put, his own mark on any goods made or manufactured
by other manufactured by other.

Meditation :- Sec. 2 (25)

A process by which a mediater mediates the consumer disputes.

Mediator :- Sec. 2(26)

As referred in Sec 75

❖ Trader :- Sec. 2(45)

A trader covers a person who buys or sells goods and not merely a person
who buys and sells goods (Venkatrao v/s Alma sugar mills)

❖ Person :-
Under sec. 2(31) of the Act, a person is defined to include –

1. An individual
2. A firm whether registered or not,
3. A Hindu undivided family
4. A co-operative society
5. Every other association of person, whether registered under the societies
Regulation Act or not.

CONSUMER PROTECTION COUNCIL (section 3 to 9)

Objects of the council or IOCU (International Organization of Consumer Unions)

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Consumer Protection Act

a) right to be safety.
b) right to be informed.
c) right to be choose.
d) right to be heard.
e) right to be seek redressal.
f) right to consumer education.

State consumer protection council.

Sec. 3 lays down the establishment of a consumer council known as the

‘consumer protection council of Maharashtra’. To be established by the state
government in every state in the country.

▪ The minister in charge of consumer affairs in the state government, who is the
chairman of state council.

▪ Official or non-official members as may be prescribed by rules made by the

state government.

▪ Such member of other official or non-official members, not exceeding ten, as

may be nominated by the central government.

▪ Meetings :-
The sate council meets when necessary, but must hold at least two meetings every
year. The place / time of meeting as per the chairman may think fit.

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Consumer Protection Act

CHAPTER 4

⮚ Consumer dispute - or
⮚ Redressal agencies - or
⮚ Consumer court.
The Act provides for a three-tire pattern of redressal agencies in respect of
consumer disputes. This redressal agencies are lick consumer courts established,
to give relief to consumers. In every district, a redressal agency called the
consumer disputes, redressal commission (district commission) has been
established by the state government.
At the state level, a consumer disputes, redressal commission to be known as
the “state commission” is established by the national level, the Act provides for
the establishment of a national consumer dispute redressal commission / the
national commission by the central government and this is based in new Delhi
(sec. 53).

District commission :-

A person is disqualified from being appointed as a member of a district

forum if :-
a) He has been convicted, sentenced to imprisonment for an offence.

b) He is an undischarged insolvent.

c) He has been removed or dismissed from, the service of the government.

(previously removed from government services)
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Consumer Protection Act

d) He is a affected by pecuniary bias.

e) He may be disqualified as may be prescribed by the state government.

MANNER OF FILING COMPLAINTS IN DISTRICT

COMMISSOON :-

Sec. 35 of the Act, a complaint relating to goods or services may be filed before
a district forum by –
a) The consumer to whom such goods are sold or delivered, or agreed to be sold
or delivered.

b) The consumer to whom service is provided or agreed to be provided.

c) Any recognized consumer association ( registered under the companies Act,

1985).

d) One or more consumers when there are numerous consumers having the same
interest – provided the permission of the district forum has been obtained.

e) Central government or the state Govt. in individual capacity or as a

representative of the interest of consumer in general.

To file a complaint a court fees prescribed by the consumer

protection rules. :-

1. Up to Rs. 1 lakh :- Rs. 100 (unless the complaint is a person who is below
poverty line; in which case no court fees are payable)

2. Rs. 1 lakh – Rs. 5 lakh :- Rs. 200

3. Rs. 5 lakh – Rs. 10 lakh :- Rs. 400

4. Rs. 10 lakh – Rs. 20 lakh :- Rs. 500

Procedure to be followed :-

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Consumer Protection Act

On receipt of complaint, the district forum must pass an order to wards

reject the complaint or to allow the complaint within a period of twenty one days
from the receipt thereof.
Rejection of complaint must be done after giving an opportunity to the
complainant “to be heard” in the matter.

When district forum admitted complaint, it must follow the

procedure laid down sec. 38 of the Act, which mentioned below :-

a) A copy of the complaint is sent to the opposite party within twenty one days
of its admission. Opposite party is called upon to file his version within a
period of thirty days.

b) The complaint comprised to an alleged detect in goods, and such goods require
proper analysis or test, a sample there of is sealed by the district forum and
sent to an appropriate laboratory within the period of forty-five days or
extended as district forum deem fit.

c) Fees of appropriate laboratory must be paid.

d) Copy of laboratory report is to be available to both the parties, so they can file
their objection there to in writing and address oral arguments.

e) After hearing the parties and going through the evidence of both the sides the
district forum may pass any of the orders under sec. 38 of the Act.

Types of orders may be passed. Sec. 39(1)

a) To remove defect in the goods which has been pointed out by an appropriate
laboratory.

b) To replace the goods with new goods of similar description, ensuring that
such goods are free from any defect.

c) To refund the price or charges paid by the complaint to him.

d) To pay compensation to the consumer for the loss or injury suffered by him
due to the negligence of the opposite party.

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Consumer Protection Act

e) If the loss or injury has been caused to a large number of consumers who are
not identifiable , to conveniently to pay some amount as a determination by
the district forum. (not being less than 5% of the value of the goods or
services in question.)

f) To remove the defect in the goods or the deficiency in the services.

g) To discontinue the unfair or restrictive trade practice and not to repeat the
same in the future.

h) Not to offer hazardous goods for sale.

i) To withdraw hazardous goods being offered for sale.

j) To cease manufacturer of hazardous goods and to desist from offering

services which are hazardous in nature.

k) To issue a corrective advertisement to neutralize the effect of a misleading

advertisement.

l) To provide for adequate costs to the parties.

❖ Compensation for physical and mental harassment.

1) Padmasri tobacco co. v/s New Indian Assurance Co Ltd (2000) 2 CPJ 96.

In this case national commission has held that if there is an inordinate delay
in the settlement of an insurance claim, the complaints are entitled to
compensation for the physical and mental harassment.

2) Indian Airlines v/s S. N. Sinha (1992) CPJ 62

When a passenger on a flight found a piece of wire in his mouth when

consuming food served on board the flight, it was held that he was entitled to get
compensation for the inconvenience and mental shock suffered by him.

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Consumer Protection Act

Consumer courts are quite compliant to award damages for harassment,

inconvenience, mental agony etc. in a fit case.

3) N. Prabhakaran v/s Gen. Manager, Southern Railways, Madras (1992) 1 CPJ

323 :-

In this case court held that, compensation is payable for causing physical
discomfort and mental stress to a passenger for not providing cushioned seats in
first class (as stipulated by the railway board).

APPEAL SEC. 41
● Under Sec. 41 if any person who is aggrieved by an order passed. By the
district forum (inferior forum) may file an appeal against it before the superior
forum i.e. state commission within period of Forty-five days from the date of
the order.

● After providing sufficient cause the state commission may entertain such
an appeal even after the expiry of this period.

● Before appeal the appellant must deposit to the state commission; 50% of
the amount ordered to be paid by him by the district forum.

STATE COMMISSION SEC. 42 – 52

❖ The state commission is also empowered to exercise administrative control

0ver all district forum in the following matters namely –

● Calling for periodical returns. Regarding the institution, disposal and

pendency of cases.

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Consumer Protection Act

● Issuing instructions regarding adoption of a uniform procedure when

hearing matters, in the matter of services of documents etc.

Sec. 43 : of the Act, the state commission consists of :-

a) A person who is, or has been, a judge of high court, who is president of the
state commission – this appointment shall be done by the state govt after
consolation with the chief justice of the High court.

b) Members shall not be less than two and more than such number of members
as may be prescribed one member must be woman and who have the following
qualifications, namely :-

1) He is not less than thirty-five years of age.

2) He should be possessing bachelor’s degree from recognized university.
3) He is person of ability, integrity and standing with adequate knowledge
and experience of at least 10 years in dealing with problems relating to
economics, law, accountancy, industry, public affairs or administration.

❖ Disqualification as a member of a state commission if :-

a) If he has been convicted and sentenced to imprisonment for an offence in

the opinion of the state government, in case of moral turpitude.

b) He is an undischarged insolvent.

c) He is unsound mind and declared by a competent court.

d) He has been removed or dismissed from the service of the government or

a body corporate which is owned or controlled by the government.

e) If any financial or other inters affect prejudicially, to discharge him from

his functions as a member.

f) He has such other disqualification as may be prescribed by the state govt.

NATIONAL COMMISSION (SEC. 53 – 73)

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Consumer Protection Act

The national commission located in new Delhi, is the highest redressal

forum established under the Act. It has original, appellate and supervisory
jurisdiction as under –

a) It has jurisdiction to entertain complaints where the value of the goods or

services or the compensation claimed is more than Rs.1crore. this is known
as “original jurisdiction”.

b) It is jurisdiction to entertain appeal against the order of state commission.

(Appellate jurisdiction).

Miscellaneous. (Sec. 94 to 107)

Bar of limitation:-

Justice comes to the person who is vigilant of their rights, not for these who
is slumbers or sleeps.
The law generally provides a prescribed time for instituting legal
proceeding after which it gets time barred.
The consumer protection Act did not contain any provision for the time
barred complaints.
National commission took the step for provision of limitation Act. 1963
shall apply for the consumer complaints. But supreme court disagreed with the
view of national commission and observed that its legislature had not allowed for
the period of limitation then court could not be allowed for applying the provision
of limitation Act by implication. (This provision has been applied by amend the
Sec. 24A by supreme court).
In view of this Sec. 98 was inserted into the Act that complaint shall be file
in the district forum, state commission; or the national commission on within the
cause of action arisen.
However, a complaint may be admitted even after the extinguished of the
prescribed period or limitation period if sufficient causes is shown for not filing
the complaint within the said period. Reason for the condonation of delay to be
recorded in writing Sec. 69(2)

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Consumer Protection Act

“hopelessly state” :- (hopeless statement)

If the complaint filed against a bank after a period of ten years or complaint
filed against educational institute after ten years after the cause of action the
above said petition were dismissed. It is clear that the said claim is “hopelessly
state”.

Case :- New Indian Assurance Co. Ltd. v/s Indra Kumar, (1992) | (PR 210)

Here plaintiff applied for condonation of delay and ground given by the
parties as there is insufficient found and wrong advice given by council that is
why they applied for the condonation of delay. This ground is not sufficient
ground for the same.

Case :- Lata Construction v/s Dr. Rameshchandra Shah (AIR 2000 SC 380)
An agreement for sale of flat not complied with by the builder, here the act
by builder is complained of a continuing nature, every day, during which the
wrong is continued creates a fresh period of limitation.
The supreme court held that the builder’s default is a continuing wrong
and, it remains actionable till the default is made good.

Frivolous or Vexatious complaints

A frivolous complaint means the complaint has been made without any
foundation and without any reasonable or probable cause, with a view of
annoying, oppressing, vexing and harassing the respondent.
A frivolous complaint is “one without a due foundation”.
A complaint which is not wholly false can be treated as a frivolous or
vexatious complaint. But if it is filed with the malicious motive of harassing the
respondent, it can also be a vexatious complaint.

Penalties

Generally, the word penalty means a punishment imposed for breaking a

law rule or order.
OR
Punishment imposed for infringement of rules.

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Consumer Protection Act

Sec. 88 of the Act contains provisions for failure of a person to comply

with order passed by consumer redressal agencies under the Act.
It provides that if any trader, manufacturer or any person against whom a
complaint is made or the complaint himself fails or omits to comply with any
order passed by a district forum, or state commission or the national commission
such a person becomes punishable with imprisonment maximum of 6 months or
with fin which may extends to Rs. 20,00,000

Case :- Sambhawana Builders Aggrieved members v/s Sambhawana Builders

Pvt. Ltd. (1997) | (PR 14).

Enforcement of orders S. 71

Enforcement of order means where a court order is made against an

individual, that individual does not comply, or refuse to comply.
An enforcement order is a further court order effectively ordering a partly
to comply with judgement or order made against them.
If an interim order made under the Act is not complied with the district
forum or the state commission or the national commission may order that the
property of person who has not complied with the order be attached.
Such an attachment can remain in force for a maximum period of three
months, at the end of which, if the non-compliance continues the property which
is attached may be sold.
When any order has been passed under the Act, ordering a party to pay any
amount, and said amount is not paid, then the party is entitled to the amount, may
file an application before the district forum or the state commission or the national
commission as the case may be, which can issue a certificate in respect of such
an amount to the collector of the district. Afterwards collector proceed to recover
the amount mention in the certificate as arrears of land revenue. Sec. 71.

Protection of action taken in good faith.

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Consumer Protection Act

Sec. 98 of the Act, lays down that no suit prosecution or other legal
proceedings will held against the members of the district forum the state
commission or the national commission or any officer or person acting under their
direction for executing any order passes by it or in respect of anything which is
in good faith done, or intended to be done.

Case :- (Birendra Singh v/s State of U.P. AIR. 1981. SC 636)

The supreme court has observed that an honest intent, free from fraud or
fraudulent design is a constant element of the concept of “good faith”.
The quality and quantity of the honesty required for constituting good faith
depends on the context and objects of the Act in which the term is used.

Service of notice

If a notice is required by the Act to be sent, a copy there of may be delivered

by registered post acknowledgement due to partly concerned by speed post or
courier services which are approved by the district forum or state commission or
the national commission.
When an acknowledgement or other receipt to be signed by the addressee
received or the postal article containing the notice is returned with endorsement
of a postal employee or courier service as addressee had refused to take delivery
of the postal article of notice it means the district forum or state commission or
national commission may declare that such a notice was duly served.

Vacancies and defects not to invalidation orders.

None of the Act or proceeding of the district forum or state commission or
the national commission cannot be declared the existence vacancy of the
members without any valid reason or defect thereof (Sec.12).
If there is vacancy in the office of the president of a state commission, this
dose not render the commission nonfunctional or nonoperational. If any order
passed by it, even in the absence of a president, is not void or illegal (Gulzarilal
Agarwal v/s Accounts officer.) 1996, 10 sec.590.

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Consumer Protection Act

Power to remove difficulties

Sec. 21(1) lays down that if any difficulties arises towards effect to the
provision of the Act within a period of two years of its commencement the central
government by order in the official gazette by provision removing such a
difficulty.
However, such a provision cannot be inconsistent with anything contained
in the Act.

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