Consumer Protection Act 1986

Consumer Protection Act has been implemented (1986) or we can bring into
existence to protect the rights of a consumer. It protects the consumer from
exploitation that business practice to make profits which in turn harm the well
being of the consumer and society.

This right help to educate the consumer on the right and responsibilities of being a
consumer and how to seek help or justice when faced exploitation as a consumer. It
teaches the consumer to make right choices and know what is right and what is
wrong.

Redressal Machinery Under Consumer Act

 District Forum: This forum are set by the district of the state concerned in
each district wherein it consists of President and two members of which one
should be a woman and is appointed by the State Government. In this, the
complaining party should not make a complaint more than 20 Lakhs and once
the complaint is filed the goods are sent for testing and if they found defective
the accused party should compensate and if the party is dissatisfied can make
an appeal with state commission within 30 days.
 State Commission: This is set up by each state. It consists of President and two
members. Complains should be at least 20 lakhs and exceed not more than 1
crore. The goods are sent for testing and if found defective are asked for
replacement or compensation. If not satisfied can make an appeal within 30
days in front of the National Commission.
 National Commission: Consist of President and 4 members. The complaint
must exceed an amount of 1 crore. The goods are sent for testing and if found
defective are asked for replacement or compensation
OBJECTIVE OF 3 FORUMS/ RIGHTS OF CONSUMERS:

The objective of 3 forums shall be to promote and protect the rights of the
consumers such as,—
(a) the right to be protected against the marketing of goods and services which
are hazardous to life and property;
(b) 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 the consumer
against unfair trade practices;
(c) the right to be assured, wherever possible, access to a variety of goods and
services at competitive prices;
(d) the right to be heard and to be assured that consumer's interests will receive
due consideration at appropriate forum;
(e) the right to seek redressal against unfair trade practices or restrictive trade
practices or unscrupulous exploitation of consumers; and
(f) the right to consumer education.

Q. Remedies available to consumers are as follows:

(a) Removal of Defects:

If after proper testing the product proves to be defective, then the ‘remove its
defects’ order can be passed by the authority concerned.

(b) Replacement of Goods:

Orders can be passed to replace the defective product by a new non-defective
product of the same type.

(c) Refund of Price:

Orders can be passed to refund the price paid by the complainant for the product.
(d) Award of Compensation:
If because of the negligence of the seller a consumer suffers physical or any other
loss, then compensation for that loss can be demanded for.

(e) Removal of Deficiency in Service:

If there is any deficiency in delivery of service, then orders can be passed to
remove that deficiency. For instance, if an insurance company makes unnecessary
delay in giving final touch to the claim, then under this Act orders can be passed
to immediately finalise the claim.

(f) Discontinuance of Unfair/Restrictive Trade Practice:

If a complaint is filed against unfair/restrictive trade practice, then under the Act
that practice can be banned with immediate effect. For instance, if a gas company
makes it compulsory for a consumer to buy gas stove with the gas connection,
then this type of restrictive trade practice can be checked with immediate effect.

(g) Stopping the Sale of Hazardous Goods:

Products which can prove hazardous for life, their sale can be stopped.

(h) Withdrawal of Hazardous Goods from the Market:

On seeing the serious adverse effects of hazardous goods on the consumers, such
goods can be withdrawn from the market. The objective of doing so that such
products should not be offered for sale.

(i) Payment of Adequate Cost:

In the end, there is a provision in this Act that the trader should pay adequate
cost to the victim concerned.
Consumer Redressal Agencies: District Forum, State Commission and National
Commission

District Forum

The Consumer Disputes Redressal Forum, better known as District Forum is the
first stage of courts at the bottom of the hierarchy of the consumer redressal
courts. The sections 10 to 15 of the Consumer Protection Act, 1986 deal with this
forum.

COMPOSITION (SECTION 10)

Section 10(1) of the Act deals with the composition of the District Forum. The
important aspects of this Act involve:

 There is a President with the qualification of a District judge.

 Apart from the President, there are two other members, one being a
woman.

 These members are to be chosen based on three grounds.They must be at

least 35 years of age, they must have a degree from a recognized university
and they must have at least 10 years of experience in law, economics,
commerce and so on.

The above appointments have certain disqualifications:

 A convict sentenced to imprisonment which breaches moral conduct

according to the State Government

 An insolvent

 A person of an unsound mind according to a competent court

 One removed from a government job or a government controlled corporate

job

 A person with such financial interest that will create a prejudice in his
functions as a member.
Section 10 (1)(a) of the Act prescribes that every appointment mentioned above
will be made by a committee with is composed of:

 The President of the State Commission as the Chairman

 The Secretary of the Law Department of the State as a Member

 The Secretary dealing in consumer affairs in the State as a Member.

 In the absence of the President, the Chief Justice of the High Court may
nominate a sitting judge of the High Court in his place.

Every member of the District Forum need to have the following qualifications:

The term is five years or 65 years, whichever is earlier

Reappointment is possible through the Selection Committee’s recommendation

Resignation can be done with a letter addressed to the State Government

The State Government decides the salary structure of the Forum

JURISDICTION (SECTION 11)

Section 11 of the Consumer Protection Act, 1986 defines the jurisdiction of the
District Forum, explained below:

The value of goods and services and compensation should not exceed 20 lakh
rupees.

Jurisdiction in terms of place can be determined as:

a) The place of residence or carrying out of the business of the opposite party,

b) any party or each party

c) The place where the cause of action wholly or partly arises.

Appeal

Section 15 of the Act grants an appeal against the decision of the District Forum
within 30 days to the State Commission. Also, the appellant must have paid 50
per cent of the compensation decided against him or ₹25000, whichever is less.

Q. Mode of filing Complaint?

A consumer complaint can be filed by one or more consumers, any registered voluntary consumer
association, the Central or State Government, heirs or legal representatives of the consumer. Where the
consumer is a minor, the complaint can be filed by his parent or legal guardian.

1. A Consumer Complaint can be made either in a written manner or in electronic mode to the District
Collector, the Commissioner of regional office or the Central Authority. In the case of violation of
consumer rights, a complainant can approach the District Forum, State Commission or the National
Commission. Also, if the complainant is not satisfied with the order passed by a Consumer Court, he can
file an appeal in the higher Court.

2. The first step before filing a consumer complaint is to determine the territorial and pecuniary
jurisdiction of the complaint. A consumer complaint can be filed in the District Forum if the claims for
goods and services does not exceed Rs 1 Crore. For claims where the value of goods and services is
between Rs. 1 Crore to 10 Crore, the complaint can be filed in the State Commission whereas if the
value of goods and services exceeds Rs 10 Crore, a consumer complaint can be filed in the National
Commission.

3. The next step requires serving a legal or personal notice to the opposite party. After this, a
complainant can file a complaint in the respective consumer redressal forum. The procedure for filing a
consumer complaint is similar for all the District Forums, State Commissions and National Commissions.

Fee for a consumer complaint under Consumer Protection Law

As per the Consumer Protection (twenty-second amendment) Rules, 2018, the fee structure for filing a
consumer complaint has been revised as per the following:

1. Cases of value up to Rs. 5 Lakh- No fee.

2. Cases of the value of Rs. 5 Lakh-10 Lakh- Rs 200

3. Cases of value exceeding Rs 10 Lakh- Rs 400

Q. Process to file a consumer complaint in District Forum?

1. A consumer complaint shall be made in writing to a District Forum. The complaint can be written on a
plain paper and filed by the consumer himself or through an authorized agent.

2. The complaint should be raised through a registered post. It should be filed within 2 years of the date
on which the dispute arose. The complainant is required to file four copies of the complaint and
additional copies for each opposite party.

3. The consumer complaint shall include the details of the complainant and the opposite party along
with the particulars of the dispute and the relief to be sought. Also, copies of relevant documents
required to prove the claim mentioned in the complaint shall be attached to the complaint.

4. It is not necessary to approach an advocate to file a consumer complaint.

5. The fee shall be paid in demand draft to the President, Consumer

A consumer complaint shall consist of the following details:

1. Name and address of the complainant and the opposite party.

2. The date on which the goods were purchased or services availed, details of such goods and services
and the amount paid for the same.

3. The subject of the complaint, whether it was an unfair trade practice, defective goods were supplied,
deficiency in services provided.

4. The bills and receipts of the concerned product or service.

5. The relief to be sought under the Act.

6. Signature of the complainant or his authorized agent.

Online Consumer Complaint

1. A consumer can be filed both offline as well as online manner. A consumer complaint can be filed
online by registering on the website of the national consumer helpline https://consumerhelpline.gov.in/.
A complainant can register himself as a consumer by filling in the required details such as name, email,
contact number, and a password.

2. After registration, the consumer can log in with the help of log-in details and passwords. Then, the
consumer should click on ‘register your complaint’ and should further fill the details regarding the
complaint and upload the required documents. There are different grievance portals in different sectors.

3. Once the complainant registers itself as a consumer, he can also call on the National Consumer
Helpline number 1800-11-4000 or 14404 to register his complaint or send a message on 8130009809.
4. A complainant can also register his grievance through the NCH app, Consumer app or the UMANG
app.

5. The complainant will be provided with a unique id after registering the complainant. With the help of
this unique id, the consumer can track the status of his complaint.

6. The required fee for the consumer complainant can be paid through an online payment gateway.

Procedure for filing complaint

Section 13 of the Act pertains to the procedure for the admission of a consumer
complaint. Procedure for the complaint against an allegedly defective good which
the Forum should implement is as follows:

a) Within 21 days of filing the complaint, the opposite party should receive a copy
to explain his version. The version should be submitted in 30 days, with a
maximum extension of 15 days.

b) When the opposite party either disputes and denies or fails to take action to
represent his case, clause (c) or (g) must be followed

c) If a complaint needs an analysis of the good, a sample can be taken by the

District Forum to be sent to a certain laboratory for testing for the defect. The
report of the findings should be complete in 45 days unless an extension is
granted by the Forum.

d) The complainant may have to pay a fee in order to carry out the process of
sample testing at the said laboratory.

e) This fee will be given to the laboratory and the report with the appropriate
remarks will be forwarded to the opposite party.

f) If one of the parties disputes the findings of the laboratory, the party’s
objections should be submitted in writing.

g) Both parties will be given a reasonable opportunity to be heard by the District

Forum.
Deficiency in services follows a similar procedure, focussing on the evidence
brought to the District Forum.

Powers of District Forums:

In accordance with Section 14 of the Act, the District Forum has the power to
grant damages. This can be in the form of compensation, removing defects or
deficiencies, discontinuing unfair trade practice, withdrawal of hazardous good
for sale and so on.

The District Forums have been given powers to pass verdict which are binding
subject to appeal. After the proceedings conducted if District Forum is satisfied
that the goods complained against suffer from any of the defects specified in the
complaint or that any of allegations contained in the complaint about the services
are proved, it shall issue an order to the opposite party directing him to do one or
more of the following things, namely;

(a) To remove the defect pointed out by the appropriate laboratory from the
goods in question;

(b) To replace the goods with new goods of similar description which shall be free
from any defect;

(c) To return to the complaint the price, or, as the case may be, the charges paid
by the complaint;

(d) To pay such amount as may be awarded by it as compensation to the

consumer for any loss or injury suffered by the consumer, due to the negligence
of the opposite party;

(e) To remove the defects or deficiencies in the services in question;

(f) To discontinue the unfair trade practice or the restrictive trade practice or not
to repeat them;

(g) Not to offer the hazardous goods for sale;

(h) To withdraw the hazardous goods from being offered for sale;
(i) To provide adequate costs to parties.

It may be observed from the above that the purpose of the verdict is not only to
compensate a particular consumer but to stop such dealings in the future to
protect other consumers.

State Commission

State Commission is the second stage of courts from the bottom of the hierarchy.
It is the court that deals with the appeals against the grassroots level consumer
protection agencies.

COMPOSITION(SECTION 16)

Section 16 of the Act deals with the composition of the State Commission.

 There is a President who is or was a judge of the High Court, appointed by

the State Government

 Apart from the President, there are two other members, one being a
woman.

 The number of members in the State Commission cannot be less than 2

 These members are to be chosen based on three grounds. They must be at

least 35 years of age, they must have a bachelor’s degree from a recognized
university and they must have at least 10 years of experience in law,
economics, commerce and so on.

Not more than fifty per cent of the members should have a judicial background.

Disqualifications:

The above appointments have certain disqualifications:

 A convict sentenced to imprisonment which breaches moral conduct

according to the State Government

 An undischarged insolvent
  A person of an unsound mind as declared by a competent court

 One removed from a government job or a government controlled corporate

job

 A person with such financial interest that will create a prejudice in his
functions as a member.

Appointment

Section 16 (1)(a) of the Act prescribes that every appointment mentioned above
will be made by a committee with is composed of:

The President of the State Commission as the Chairman

The Secretary of the Law Department of the State as a Member

The Secretary dealing in consumer affairs in the State as a Member.

In the absence of the President, the Chief Justice of the High Court may nominate
a sitting judge of the High Court in his place.

Every member of the District Forum need to have the following qualifications:

The term is five years or 67 years, whichever is earlier

Reappointment is possible through the Selection Committee’s recommendation

Resignation can be done with a letter addressed to the State Government

JURISDICTION (Section 17)

Section 17(1) of the Consumer Protection Act, 1986 defines the jurisdiction of the
State Commission, explained below:

 The value of goods and services and compensation should be at least 20

lakhs but not exceed 1 crore rupees.

 Appeals against the orders of District Forum are settled here

  If the District Forum has seemingly acted beyond its power or has failed in
its duty, then the National Commission can call for records.

 Jurisdiction in terms of place can be determined as (Section 17(2)):

a) The place of residence or carrying out of the business of the opposite party,

b) any party or each party

c) The place where the cause of action wholly or partly arises.

The State Commission may transfer a complaint to it from the District Forum at
any stage of the proceeding. The State Commission may also outside of its
ordinary place of the capital. These are called Circuit Courts.

As according to Section 18, the State Commission observes the same procedure
as the District Forum under Sections 12, 13 and 14.

Appeal

Section 19 of the Act grants an appeal against the decision of the National
Commission within 30 days to the State Commission. Also, the appellant must
have paid 50 per cent of the compensation decided against him or Rs. 35000,
whichever is less.

National Commission

The National Consumer Disputes Redressal Commission, better known as National

Commission is the highest structure of redressal agencies, subordinate to the
Supreme Court. It is the court that deals with the appeals against the State
Commission. The sections of the Consumer Protection Act, 1986 deal with this
Commission.

COMPOSITION (SECTION 20)

Section 20 of the Act deals with the composition of the National Commission. The
important aspects of this Act involve:
  There is a President who is or was a judge of the Supreme Court, appointed
by the Central Government

 There must be 4 members at least, one being a woman.

 These members are to be chosen based on three grounds. They must be at

least 35 years of age, they must have a bachelor’s degree from a recognized
university and they must have at least 10 years of experience in law,
economics, commerce and so on.

 Not more than fifty per cent of the members should have a judicial
background.

The Central Government determines the remuneration of the members.

The President can choose the Bench of the Commission as one or more

Decisions are of the majority, with the President intervening in case of an equal
division in opinion.

DISQUALIFICATIONS:

The above appointments have certain disqualifications:

 A convict sentenced to imprisonment which breaches moral conduct

according to the Central Government

 An undischarged insolvent

 A person of an unsound mind as declared by a Central court

 One removed from a government job or a government controlled corporate

job

 A person with such financial interest that will create a prejudice in his
functions as a member.
APPOINTMENT

Section 16 1(A) of the Act prescribes that every appointment mentioned above
will be made by a committee with is composed of:

 A judge of the Supreme Court nominated by Chief Justice of India as the

Chairman

 The Secretary in Department of Legal Affairs of the Government of India as

a Member

 The Secretary of the department dealing in consumer affairs in the

Government of India as a Member.

Every member of the District Forum need to have the following qualifications:

The term is five years or 70 years, whichever is earlier

Reappointment is possible through the Selection Committee’s recommendation

Resignation can be done with a letter addressed to the Central Government

JURISDICTION (SECTION 21)

Section 21 of the Consumer Protection Act, 1986 defines the jurisdiction of the
National Commission, explained below:

 The value of goods and services and compensation should exceed 1 crore
rupees

 Appeals against the orders of State Commission are settled here

 If the State Commission has seemingly acted beyond its power or has failed
in its duty, then the National Commission can call for records.

 The National Commission may receive a transfer of a complaint from the

State Commission at any stage of the proceeding in the interest of justice.
This can be on the application of the complainant or its own motion. The
 National Commission may also outside of its ordinary place of the capital of
India, New Delhi. These are called Circuit Benches.

 The National Commission has the power to review any order made by itself
when there seems to be an error on the record, as stated in Section 22.

Appeal

Section 19 of the Act grants an appeal against the decision of the National
Commission within 30 days to the Supreme Court. Also, the appellant must have
paid 50 per cent of the compensation decided against him or Rs. 50000,
whichever is less.

Q. Penalties (Section 27)

Where a trader or a person against whom a complaint is made or the complainant

fails or omits to comply with any order made by the District Forum, the State
Commission or the National Commission, as the case may be, such trader or
person or the complainant shall be punishable with imprisonment for a term
which shall not be less than one month but which may extend to three years, or
with fine which shall not be less than two thousand rupees but which may extend
to ten thousand rupees, or with both :

Provided that the District Forum, the State Commission or the National
Commission, as the case may be, may, if it is satisfied that the circumstances of
any case so require, impose a sentence of imprisonment or fine, or both, for a
term lesser than the minimum term and the amount lesser than the minimum
amount, specified in this section.

Q. Some important definitions under this act are discussed below:

Section 2(b) "complainant" means-

(i) a consumer; or

(ii) any voluntary consumer association registered under Companies Act, 1956 or
under any other law for the time being in force; or
(iii) the Central Government or any State Government;

(iv) one or more consumers, where there are numerous consumers having the
same interest who or which makes a complaint

(v) in case of death of a consumer, his legal heir or representative;

Section 2(d) "consumer" means any person who,-

(i) buys any goods for a consideration which has been paid or promised or partly
paid and partly promised, or under any system of deferred payment and includes
any user of such goods other than the person who buys such goods for
consideration paid or promised or partly paid or partly promised, or under any
system of

(ii) hires or avails of any services for a consideration which has been paid or
promised or partly paid and partly promised, or under any system of deferred
payment and includes any beneficiary of such services other than the person who
hires or avails of the services for consideration paid or promised, or partly paid
and partly promised, or under any system of deferred payment, when such
services are availed of with the approval of the first mentioned person but does
not include a person who avails of such services for any commercial purpose.

Section 2(e)“consumer dispute” means a dispute where the person against

whom a complaint has been made, denies or disputes the allegations contained in
the complaint;

Section 2(f) “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 15 [under any contract, express or
implied, or] as is claimed by the trader in any manner whatsoever in relation to
any goods;

Section2 (g) “deficiency” means any fault, imperfection, shortcoming or

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

Section 2(i) “goods” means every kind of movable property other than actionable
claims and money and includes stock and shares, growing crops, grass and things
attached to or forming part of the land which are agreed to be severed before
sale or under the contract of sale.

Actionable claims and money are not goods and cannot be brought and sold
under this Act.

Section 2 (j) manufacturer" means a person who

(i) makes or manufactures any goods or parts thereof; or

(ii) does not make or manufacture any goods but assembles parts thereof made
or manufactured by others; or

(iii) puts or causes to be put his own mark on any goods made or manufactured by
any other manufacturer;

Section 2 (m) "person" includes,-

(i) a firm whether registered or not;

(ii) a Hindu undivided family;

(iii) a co-operative society;

(iv) every other association of persons whether registered under the Societies
Registration Act, 1860or not;
Section 2 (nnn) "restrictive trade practice" means a trade practice which tends to
bring about manipulation of price or its conditions of delivery or to affect flow of
supplies in the market relating to goods or services in such a manner as to impose
on the consumers unjustified costs or restrictions and shall include

(a) delay beyond the period agreed to by a trader in supply of such goods or in
providing the services which has led or is likely to lead to rise in the price;

(b) any trade practice which requires a consumer to buy, hire or avail of any goods
or, as the case may be, services as condition precedent to buying, hiring or
availing of other goods or services;';

Section 2 (o) "service" means service of any description which is made available
to potential "users and includes, but not limited to, the provision of " facilities in
connection with banking, financing, insurance, transport, processing, supply of
electrical or other energy, board or lodging or both, housing construction,
entertainment, amusement or the purveying of news or other information, but
does not include the rendering of any service free of charge or under a contract of
personal service;

What is Unfair Trade Practice?

An unfair trade practice refers to that malpractice of a trader that is unethical or

fraudulent. These practices cause an inconvenience or grievance to consumers.

An unfair trade practice is defined under Section 2(1)(r) of the Consumer

Protection Act, 1986. According to this definition, it is a trade practice carried out
for the promotion of sale. It is the distribution or utilisation of any good or service
by adopting a deceptive method or practice.
The following practices fall under unfair trade practice:

1. An oral or written statement or visible representation that:

Falsely represents a good or service to be of a particular standard, quality, grade

and so on.

– Falsely represents any re-built, second-hand, reconditioned, renovated or old

goods as new.

– Represents that a good or service has sponsorship, approval, uses, benefits and
so on which they do not have. The same could apply to the seller or service
provider.

Makes a misleading or false representation regarding the need and usefulness of

any good or service.

– Provides to the public any warranty or guarantee of the performance of the

length of the life of the product. A service can be continued till deemed
satisfactory.

– Gives a misleading image of the good, service or trade like the price of the
product.

For the above clauses, any statement made via expression by sellers on the
wrapper or container of the item can qualify for unfair trade practice. The
information of the product is also placed inside the item, attached to the product,
or accompanying it.

2. An advertisement published in any newspaper or other means of

communication to the general public may also result in unfair trade practice if the
price communicated is misleading or a bargain price. This means that an unfair
trade practice would be when a rational individual on reading, hearing or seeing
the advertisement would think to be a bargain price as compared to the product’s
ordinary sale price.

3. Wrongful or deceitful permissions or expressions like:

– Offering gifts, prizes and so on without any intention of actually fulfilling the
expression.

– Putting across a product as free of charge when it is actually not as the cost is
being covered partly or wholly in the transaction amount.

– Conducting games of chance or skill like the lottery in order to promote a

particular product directly or indirectly.

– Not granting participants of a scheme their prize by closing the information

about the final results of the scheme.

4. Allowing the sale of products, having the knowledge or reason to believe that
the product is not up to the standards of a competent authority. This could be in
terms of design, contents, packaging, etc.

5. Permitting the hoarding or destruction of products with the intention of raising

the prices of the goods.

Illustrations of Unfair Trade Practices:

 A dress has been used for 2 months and is now being sold by a seller as a
new dress.
 The battery of a mobile phone is guaranteed to work well for one year
but wears away in a month.
 A geyser that is not ISI approved has an ISI mark.
 A table of Rs. 500 is sold online with Rs. 600 delivery charge, but the
good is claimed by the seller to be free of cost.