CONSUMER PROTECTION ACT, 1986 - THOMAS KUNNIL MA LLB

The Consumer Protection Action [COPRA], which was enacted by the Parliament in 1986, received the assent of the President on 24 December 1986. The Consumer Protection Rules, 1987 were published in the Gazette of India on 15 April 1987. The Act has been amended three times first in 1991, second in 1993 and the third on 17 December 2002. It aims at providing better protection of the interests of the consumers. The Act applies to all goods and services unless expressly exempted by the Central Government by notification. The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force. SALIENT FEATURES OF COPRA 1. What are the rights of the consumers that are being protected by the Act? . The Act seeks to protect the following rights of the consumers:

The Right to Safety - The right to be protected against marketing of goods and services, which are hazardous to life and property. The Right to be Informed - The right to be informed about the quality, quantity, potency, purity, standard and price of the goods or services so as to protect consumers against unfair trade practice. The Right to Choose - The right to be assured access to a variety of goods and services at competitive prices. The Right to be Heard -The right to be heard and to be assured that consumers interests will receive due consideration at appropriate authority. The Right to Redress - The right to seek redressal against unfair trade practices or restrictive trade practices or unscrupulous exploitation of consumers; and The Right to Consumer Education - The right to acquire the knowledge and skills to be an informed consumer.

2. Which are the bodies for the promotion and protection of the rights of the consumer? The Act provides for establishment of Consumer Protection Councils at the District, State and Central levels to promote and protect the rights of the consumers. (a) The Central Consumer Protection Council (known as Central Council) shall be established by the Central government. It consists of a Chairman, who is the Minister in charge of consumer affairs in the Central Government and such number of other official or non-official members representing such interests as may be prescribed [Section 4]. (b) The State Consumer Protection Councils (known as State Councils) shall be established by the State Governments. The State Council consists of a Chairman, who is the Minister in charge of consumer affairs in the State Government and such number of other official or nonofficial members representing such interests as may be prescribed by the State Government and such number of other official or non-official members not exceeding ten, as may be nominated by the Central Government [Section 7]. 1

(c) The District Consumer Protection Council (known as the District Council) shall be established by the State Government for every district. It consists of a Chairman, who is the Collector of District and such number of other official or non-official members representing such interests as may be prescribed by the State Government [Section 8A]. 3. Who is a Consumer? Consumer means [Section 2 (1)(d) Buyer of any goods for a full or partly paid or partly promised on consideration or under any system of deferred payment. User of such goods with the approval of the actual buyer. Hirer of any services for a full or partly paid and partly promised on consideration or under any system of deferred payment. Beneficiary of such services with the approval of such hirer. A person who obtains goods for resale hires or avails any service, or his beneficiary, for any for resale or commercial purpose, except exclusively for earning his livelihood by means of self-employment is excluded from the definition of Consumer

4. What is meant by Service under this Act? Service means [Section 2(1)(o)] (a) Services 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 purveying of news or other information (b) The following are excluded from the definition of service

Any service which is availed free of cost Service of personal nature (contact of service. It denotes a master-servant relationship, in which a servant can be hired or fired at the masters will).

5. What are the grounds for making a Complaint? Complaint [Section 2 (1)(c)] means any allegation in writing made by a complainant that (i) (ii) (iii) (iv) An unfair trade practice or restrictive trade practice has been adopted by any trader or service provider The goods bought by him or agreed to be bought by him suffer from one or more defects Services hired or availed of or agreed to be hired or availed of by him suffer from deficiencies in any respect. a trader or service provider has charged for the goods or for services mentioned in the complaint a price in excess of the price fixed by or under any law for the time being in force or displayed on the goods or any package containing such goods or displayed on the price list exhibited by him and agreed between the parties. Goods which will be hazardous to life and safety when used, are being offered for sale to the public in contravention of the provisions of any standards relating to safety of such goods as required to be complied with, by or under any law for the time being in force or if

(v)

(vi)

the trader could have known with due diligence that the goods so offered are unsafe to the public. Services which are hazardous or likely to be hazardous to life and safety of the public when used, are being offered by the service provider which such person could have known with due diligence to be injurious to life and safety.

6. Who can file a Complaint? A complaint under the Act can be filed by [Section 2(1)(b)]

A consumer or Any recognised consumer association, whether the consumer is a member of such association or not One or more consumers, where there are numerous consumers having the same interest with the permission of the District Forum The Central Government or any State Government or In case of death of a consumer, his legal heir or representative.

7. Where to file a complaint? The Act provides for a three-tier system for the settlement of consumer disputes: (a) District Consumer Disputes Redressal Forum (known as District Forum) (i) (ii) Pecuniary Jurisdiction: Where the value of goods or services and the compensation, if any, claimed does not exceed Rs 20 lakhs [Section 11]. Composition: Its President shall be a person who is, has been, or is qualified to be a District Judge appointed by State Government. Two other members, one of whom shall be a woman, who shall be not less than thirty-five years of age, possess a bachelors degree from a recognised university and shall be persons of ability, integrity and standing, and have adequate knowledge and experience of at least ten years in dealing with problems relating to economic, law, commerce, accountancy, industry, public affairs or administration [Section 10]. Term of office: Every member of District Forum shall hold office for a term of five years or up to the age of sixty-five years whichever is earlier. A member shall be eligible or reappointment for another terms of five years within the specified age limit [Section 10(2)].

(iii)

(b) State Consumer Disputes Redressal Commission (known as State Commission) (i) (ii) Pecuniary Jurisdiction: Where the value of goods or services and the compensation, if any, claimed exceeds Rs 20 lakhs but does not exceed Rs 1 crore [Section 17]. Composition: Its President shall be a person who is or has been a Judge of High Court appointed by the State Government. Two other members, one of whom shall be a woman, who shall be not less than thirty-five years of age, possess a bachelors degree from a recognised university and shall be persons of ability, integrity and standing, and have adequate knowledge and experience of at least ten years in dealing with problems relating to economic, law, commerce, accountancy, industry, public affairs or administration [Section 16]. 3

(iii)

Term of office: Every members of State Commission shall hold office for a term of five years or up to the age of sixty-seven years whichever is earlier. A member shall be eligible or reappointment for another terms of five years within the specified age limit [Section 16(3)]. Circuit Benches: The State Commission shall ordinarily function in the State Capital but may perform its functions at such other place as the State Government may in consultation with the State Commission notify from time to time [Section 17B)].

(iv)

(c) National Consumer Disputes Redressal Commission (known as National Commission) (i) (ii) Pecuniary Jurisdiction: Where the value of goods or services and the compensation, if any, claimed exceeds Rs 1 crore [Section 21]. Composition: Its President shall be a person who is or has been a Judge of Supreme Court appointed by the Central Government. Nor less than four other members and not more than six months and at least one them shall be a woman, who shall be not less than thirty-five years of age, possess a bachelors degree from a recognised university and shall be persons of ability, integrity and standing, and have adequate knowledge and experience of at least ten years in dealing with problems relating to economic, law, commerce, accountancy, industry, public affairs or administration [Section 20]. Term of office: Every members of National Commission shall hold office for a term of five years or up to the age of seventy years whichever is earlier. A member shall be eligible or reappointment for another terms of five years within the specified age limit [Section 20(3)]. Circuit Benches: The National Commission shall ordinarily function at New Delhi but may perform its functions at such other place as the Central Government may in consultation with the National Commission notify from time to time [Section 22C].

(iii)

(iv)

8.

What should be the contents of a Complaint? A complaint should contain the following particulars: The name, description and the address of the complainant. The name, description and address of the opposite party or parties The facts relating to complaint and when and where it arose Documents in support of the allegations contained in the complaint. The relief, which the complainant claims.

[In case of filing of complaint beyond limitation period, please attach a separate application stating reason for delay and praying for condonation of delay]. 9. Is there any Fee for filing a Complaint? Yes. Every complaint filed shall be accompanied with such amount of fee and payable in such manner as may be prescribed [Section 12(2)].

Every complaint shall be accompanied by a fee as specified in the table below in the form of crossed Demand Draft drawn on a nationalised bank or through a crossed Indian Postal Order drawn in favour of the Registrar of the State Commission and payable at the respective place where the State Commission is situated. The concerned District Forum shall deposit the amount of fee so received in the State Government Receipt Account [Rule 9-A]
Sl No. Value of goods or services and the compensation claimed Amount of fee payable

1 2 3 4

Up to one lakh rupees One lakh rupees and above but less than five lakh rupees Five lakh rupees and above but less than ten lakh rupees Ten lakh rupees and above but not exceeding twenty lakh rupees

Rs 100.00 Rs 200.00 Rs 400.00 Rs 500.00

. 10. What is the mode for filing a Complaint? A complaint can be filed in person, through agent/lawyer, or by Registered Post A.D. 11. What is Limitation period for filing a Complaint? A complaint to the District Forum or State Commission or the National Commission within a period of two years from the date on which the cause of action has arisen. The Forum/Commission concerned can condone the delay for recorded reasons [Section 24A]. 12. What is the procedure for filing the appeals? (a) Appeal against order passed by the District Forum to the State Commission or by the State Commission to the National Commission or by the National Commission to the Supreme Court, as he case may be, within a period of thirty days from the date of an order. An appeal may be entertained after the expiry of the said period of thirty days provide the Forum/Commission concerned is satisfied with cause of delay given by the appellant. (b) Procedure for filing an appeal is the same as that of complaint, except that the application should be accompanied by the orders of the District Forum or the State Commission or the National Commission, as the case may be. The reasons for filing the appeal should be clearly specified. 13. Is there a Fee for filing an Appeal.? Yes. An appeal to the State/National Commission or to the Supreme Court can be filed only after depositing certain amount.

An appeal before State Commission can only be filed after the appellant has deposited fifty per cent of the amount that he is required to pay to the complainant in accordance with order of a District Forum or Rs 25,000.00, whichever is less [Proviso to Section 15]. An appeal before National Commission can only be filed after the appellant has deposited fifty per cent of the amount that he is required to pay to the complainant in accordance with order of a State Commission or Rs 35,000.00, whichever is less [Provision to Section 19]. The amount shall be remitted in the form of Demand Draft drawn on a national bank in favour of the Registrar, National Commission payable at Delhi [Rule 14-A]

An appeal before the Supreme Court can only be filed after the appellant has deposited fifty per cent of the amount that he is required to pay to the complainant in accordance with order of a District Forum or Rs 50,000.00, whichever is less [Provisio to Section 23]. The amount shall be remitted in the form of Demand Draft drawn on a national bank in favour of the Registrar, Supreme Court payable at Delhi [Rule 16]

14. How is the Notice served? All notices required to be served under the Act, shall be served in the following manner (Section 28A): by registered post or by speed post or by such courier service as are approved by the Forum/Commission concerned or by any other means of transmission of documents, including FAX 15. What is the Time schedule for disposal of Complaints/Appeals?

Every complaint should be decided within a period of three months from the date of receipt of notice by opposite party, where there is no requirement for testing of sample etc. In the event of such a requirement, the prescribed time is five months. Appeals should be disposed of within a period of ninety days from the date of their admission. Adjournment shall be allowed only when the Forum/Commission records a reason for the same in writing. The Forum shall make such orders as to the cost occasioned by the adjournment If a complaint/appeal is disposed of after the specified period, then the Forum/Commission shall record in writing reasons for the delay.

16. What is the provision for transferring the Complaint from a Forum/Commission to another? In the interest of justice, a transfer of complaint can be ordered either on the application of complainant or on State/National Commissions own motion.

At any stage of proceedings, a State Commission can transfer a consumer complaint pending before the District Forum to another District Forum within the State (Section 17A). The National Commission may, at any stage of proceeding, transfer any complaint pending before the District Forum of one State to a District Forum of another State or before one State Commission to another State Commission (Section 22B).

17. What are types or orders passed by the Forum/Commissions, if the allegations in the complaint about goods/services are proved? The Forum/Commission may issue an order to the opposite party directing him to do one or more of the following things [Section 14]:

To remove the defects in goods To replace the goods To return of the price or charges paid by the complainant To pay compensation for any loss or injury suffered by the complainant due to negligence of the opposite party. 6

To remove the defects or deficiencies in the services in question To discontinue the unfair trade practice or the restrictive trade practice or not to repeat them. Not to offer the hazardous goods for sale To withdraw the hazardous goods from being offered for sale To cease manufacture of hazardous goods and to desist from offering services, which are hazardous in nature. To pay such sum ordered if the loss or injury has been suffered by a large numbers of consumers who are not identifiable conveniently. The amount so payable shall not be less than five per cent of the value of defective goods/services provided. To issue corrective advertisement to neutralise the effect of misleading advertisement at the cost of the opposite party responsible for issuing such misleading advertisement. To provide for adequate costs to parties. Interim Orders: During the pendency of any proceeding before the District Forum or the State/National Commission, if it appears necessary, it may pass such interim order as is just and proper in the facts and circumstances of the case. [Section 13 (3B)]. Review of an order: The National Commission shall have the power to review any order made by it, when thee is an error apparent on the face of record [Section 22 (2)]. Ex parte order: The District Forum or the State/National is empowered to proceed ex parte on the basis of evidence brought to the notice by the complainant where the opposite party omits or fails to take any action to represent his case within the time given by the Forum or Commission [Section 13(2)(b)(ii)]. Setting aside ex parte order: Where the National Commission passes an order ex parte against the opposite party or a complainant, as the case may be, the aggrieved party may apply to the Commission to set aside the said order in the interest of justice [Section 22A]. Punitive damages: The District Forum or State/National Commission shall have he power to grant punitive damages in such circumstances as it deems fit. [Provisio to Section 14(1)(d)].

18. How is the enforcement of orders of Consumer Fora carried out? (a) Enforcement of interim orders: In case of non-compliance of interim orders of he District Forum or State/National Commission [Section 25 (1) and (2)]:

The District Forum or State/National Commission, as the case may be, may order for he attachment of the property of the person not complying with such orders The attached property will remain in force for three months. If the non-compliance continues, the attached property may be sold and out of the proceeds thereof, the District Forum or the State/National Commission, as the case may be, award such damages as it thinks fit to the complainant and shall pay the balance, if any, to the party entitled thereto.

(b) Enforcement of Final Orders: In case of no-compliance of the final orders of the District Forum or the State/National [Section 25(3)]:

 The person entitled to the amount may make an application to the District Forum or the State/National Commission concerned. The District Forum or the State/National Commission concerned may issue a certificate for the said amount to the Collector of District. The Collector of District shall proceed to recover the amount in the same manner as arrears of land revenue. (c) Penalty for non-compliance: In case a trader or a person against whom a complaint is made or the complainant, fails or omits to comply with an order made by the District Forum, the State Commission or the National Commission, as the case may be, such trader or person or complainant shall be punishable [Section 27(1)]: 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 Rs 10,000.00 or with both the above. (d) Appeal against order passed under Section 27: (Penalties), both on facts and law, shall lie An appeal under Section 27

from the order made by the District Forum to the State Commission, from the order made by the State Commission to the National Commission, or from the order made by the National Commission to the Supreme Court. The appeal shall be preferred within a period of thirty days from the date of an order. (e) Powers of the Disputes Redressal Forum or Commission for trying the offences under the Act. The District Forum, the State Commission or the National Commission, as the case may b, shall have the power of a Judicial Magistrate of the First Class for the trial of offence under this Act (Section 27(2) and (3). 19. What are the penalties for frivolous or vexatious complaints? If a complaint instituted before the District Forum, the 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 part such cost, not exceeding Rs 10,000.00, as may be specified in the order [Section 26].