Legal Grp2

NEED FOR CONSUMER PROTECTION ACT IN AN ERA OF
FREE COMPETITION WHERE CONSUMER IS A KING,

THEREFORE, KING NEEDS PROTECTION
SUBMITTED BY: Group 2

Vaishak Anil F002
Divanshu Ahuja F004
Arnav Bahadur F006
Chaitanya Bhupatiraju F008
Shashank Bodkhekar F010
Himanshu Broota F012
Hanish Chhabra F014
Mritunjay Dhamar F016
Harshit Goyal F018
Md Danish Iqubal F020
Table of Contents
Introduction: The Consumer Protection Act and its need...........................................................................3
Need for Consumer Protection Act..................................................................................................... 4
Definitions and important terms......................................................................................................... 4
Rights of Consumers.................................................................................................................... 13
Consumer Responsibilities............................................................................................................. 14
Consumer Complaints Redressal...................................................................................................... 17
Appeal to Supreme Court of India:................................................................................................... 24
Service and Deficiency [Section 2(1)(o) and (g)].................................................................................. 25
International Organizations............................................................................................................. 34
International Comparisons.............................................................................................................. 40
Cases........................................................................................................................................ 45
Bibliography.............................................................................................................................. 50
Introduction: The Consumer Protection Act and its need
When one approaches the market as a consumer, he/she expects value for money, i.e., right quality, right quantity, right
prices, etc. But there may be instances where a consumer is harassed or cheated. There was a need to protect these
consumers and discourage harassment from the unscrupulous suppliers. One might say that in the presence of the Indian
Contract Act, the Sale of Goods Act, the Dangerous Drugs Act, the Agricultural Produce (Grading and Marketing) Act,
the Indian Standards Institution (Certification Marks) Act, the Prevention of Food Adulteration Act, the Standards of
Weights and Measures Act, etc. why do we still need another act in the form of Consumer Protection Act. The reason is
these acts only provide protection to a consumer to a limited extent and requires consumer to initiate action the way of
civil suit involving lengthy legal process which is expensive and time consuming.
The Consumer Protection Act, 1986 was enacted to provide for better protection of the interests of the consumers
and to provide a simpler and quicker access to redressal of consumer grievances the consumers of goods and
services as defined under the Act. The Act envisages a better legal framework within which an ordinary consumer can
fight for his rights and get his grievances redressed. It provides for speedy and inexpensive settlement of disputes within
limited time-frame, as against civil suits which are costly and time-consuming.
The Act is a milestone in the history of socio-economic legislationto meet the long felt necessity of protecting the
common man from such wrongs for which the remedy under the common law for various reasons has become illusory.
The provisions of the Act are in addition to and in derogation of any other law for the time being in force and are
compensatory in nature.
The Act provides for the establishment of Consumer Protection Councils at the Central, State and District levels to
promote and protect the rights of the consumers and a three-tier quasi-judicial machinery at the district, state and
national levels for the settlement of consumer disputes. The composition of these authorities and their territorial and
pecuniary jurisdictions, the procedure to be followed by them in disposing of the complaints and the relief that can be
granted are specifically laid down under the Act. In the light of the experience gained during the initial years of its
enforcement by the consumer courts, the Act has been marginally amended in 1991 and substantially in 1993 and 2002,
with a view to make it more effective in bringing justice to the doorsteps of the consumers.
Need for Consumer Protection Act
i) To Organize Consumers: Indian consumers are scattered over a wide geographical area. They are not well
organized. They have a low power and businessmen exploit consumers. Here we need consumer protection.
ii) Provide Market Information: Majority of the consumers have no information about quality, type, price and other
marketing facilities. Many customers buy without product knowledge and this make them suffer losses.
iii) Importance of Physical Safety: Indian markets are over flooded with products. The products may be adulterated
and may be health hazardous. This may endanger their life and due to this a consumer needs to be protected.
iv) Avoiding Monopoly: Consumer Protection is very important in terms of avoiding monopoly. Monopoly is the
crown of modern market. Most of the organizations, irrespective of various restrictions follow monopoly practice.
Due to this consumers get affected and needs to be protected.
v) Prevention from Malpractices: Business malpractices are rapidly growing in modern market. Businessmen follow
unfair trade practices, restrictive trade practices and monopolistic trade practice and consumer protection plays a
vital role.
vi) Avoiding Pollution: Pollution is very serious issue taken by every country. Pollution affects the mind and health
of not only consumers but also citizens. It is important to avoid pollution to save society at large from pollution.
vii) Misleading Advertisements: Many organizations, deliberately cheat consumers through wrong or misleading
advertisements. This will protect consumers from getting exploited.
viii) Informing Consumers about their Basic Rights: Majority of the consumers are ignorant. They do not know about
consumer rights. Consumer movements inform consumers about their rights and protect their interest and rights.
Definitions and important terms
1. A Consumer as defined under Section 2(d) of the Consumer Protection Act is 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 deferred payment
when such use is made with the approval of such person, but does not include a person who obtains such goods
for resale or for any commercial purpose;
or
ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly prom-
ised, 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;
Explanation: For the purposes of the sub-clause (i), commercial purpose does not include use by a consumer of
goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self-employment.
Example: X Ltd. purchased a computer system from Z. The computer system was giving constant trouble and Z was
not attending it properly. X Ltd. filed a complaint against Z with the National Commission. Z contended that X Ltd.
was not a consumer under the Act because computer system was used for commercial purposes. X Ltd. argued that
computer system was not directly used of commercial purposes rather it was used to facilitate the work of the
company. The Commission rejected the argument on the grounds that the system made part of the assets of the
company, and its expenses were met by it out of business income. Thus the said purchase was a purchase for
commercial purposes and X Ltd. was held not to be a consumer under the Act.
2. A Consumer of Goods should satisfy the following:

i) Goods must be brought for consideration: There must be a sale transaction between a seller and a buyer; the sale
must be of goods; the buying of goods must be for consideration. The terms sale, goods, and consideration have
not been defined in the Consumer Protection Act. The meaning of the terms sale, and goods is to be construed
according to the Sale of Goods Act, and the meaning of the term consideration is to be construed according to
the Indian Contract Act.
ii) Any person who uses goods with the approval of the buyer is a consumer: When a person buys goods, they may
be used by his family members, relatives and friends. Any person who is making actual use of the goods may
come across the defects in goods. Thus, the law construe users of the goods as consumers although they may not
be buyers at the same time. The words with the approval of the buyer in the definition denotes that the user of
the goods should be a rightful user.
Example: A purchased a scooter which was in Bs possession from the date of purchase. B was using it and taking
it to the seller for repairs and service from time to time. Later, B had a complaint regarding the scooter. He sued
the seller. The seller pleaded 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. [Dinesh Bhagat v. Bajaj Auto Ltd. (1992) III CPJ 272]
iii) Any person who obtains the goods for resale or commercial purposes is not a consumer: The term for resale
implies that the goods are brought for selling them, and the expression for commercial purpose is intended to
cover cases other than those of resale of goods. When goods are bought to resell or commercially exploit them,
such buyer or user is not a consumer under the Act.
Examples: A jeep was purchased to run it as a taxi. The question was whether the buyer of the jeep was a
consumer under the Act. The Rajasthan State Commission held that to use the jeep as a taxi with the object to
earn profits was a commercial purpose, and therefore, the buyer/user was not a consumer within the meaning of
the Act. [Smt. Pushpa Meena v. Shah Enterprises (Rajasthan) Ltd. (1991) 1 CPR 229].
iv) Person buying goods for self-employment is a consumer: When goods are bought for commercial purposes and
such purchase satisfy the following criteria:
a) the goods are used by the buyer himself;
b) exclusively for the purpose of earning his livelihood;
c) by means of self-employment,
then such use would not be termed as use for commercial purposes under the Act, and the user is recognised as a
consumer.
Examples:
1. A buys a truck for plying it as a public carrier by himself, A is a consumer.
2. A buys a truck and hires a driver to ply it, A is not a consumer.

3. A has one cloth shop. He starts another business of a photocopier and buys a photocopy machine therefor. He
hasnt bought this machine exclusively for earning livelihood. He is not a consumer under the Act.
4. P, an eye surgeon, purchased a machine from R for the hospital run by him. The machine was found to be a
defective one. R contended that P was not a consumer under the Act as the machine was bought for commercial
purposes. The National Commission rejected this contention and held that P is a medical practitioner, a
professional working by way of self-employment by using his knowledge and skill to earn his livelihood. It was
not proved by any evidence that P is running a huge hospital. Thus, the purchase of machinery is self-
employment. [Rampion Pharmaceuticals v. Dr. Preetam Shah (1997) I CPJ 23 (NCDRC)].
3. A Consumer of Services should satisfy the following:

i) Services are hired or availed of: The term hired has not been defined under the Act. Its Dictionary meaning is -
to procure the use of services at a price. Thus, the term hire has also been used in the sense of avail or use.
Accordingly, it may be understood that consumer means any person who avails or uses any service.
Example: A goes to a doctor to get himself treated for a fracture. Here A is hiring the services of the doctor. Thus,
he is a consumer.
What constitutes hiring has been an issue to be dealt with in many consumer disputes. If it is established that an
act constitutes hiring of service, the transaction falls within the net of the Consumer Protection Act, and vice-
versa.
Example: A landlord neglected and refused to provide the agreed amenities to his tenant. He filed a complaint
against the landlord under the Consumer Protection Act. The National Commission dismissed the complaint
saying that it was a case of lease of immovable property and not of hiring services of the landlord. [Smt.
Laxmiben Laxmichand Shah v. Smt. Sakerben Kanji Chandan [1992] 1 Comp. LJ 177 (NCDRC)].
ii) Consideration must be paid or payable: Consideration is regarded necessary for hiring or availing of services.
However, its payment need not necessarily be immediate. It can be in instalments. For the services provided
without charging anything in return, the person availing the services is not a consumer under the Act.
Examples: 1. A hires an advocate to file a suit for recovery of money from his employer. He promises to pay fee
to the advocate after settlement of the suit. A is a consumer under the Act.
2. A goes to a Doctor to get himself treated for a fracture. The Doctor being his friend charged him nothing for the
treatment. A is not a consumer under the Act.
The Direct and Indirect taxes paid to the State by a citizen is not payment for the services rendered.
Example: T was paying property tax for his house to the local corporation. This corporation was responsible for
proper water supply to the premises under its work area. T raised a consumer dispute over the inadequacy of
water supply by the corporation. The National Commission held that it was not a consumer dispute as water
supply was made by the corporation out of its statutory duty and not by virtue of payment of taxes by T. - Mayor,
Calcutta Municipal Corporation v. Tarapada Chatterjee (1994) 1 CPR 87 (NCDRC).
iii) Beneficiary of services is also a consumer: When a person hires services, he may hire it for himself or for any
other person. In such cases the beneficiary (or user) of these services is also a consumer.
Example: A takes his son B to a doctor for his treatment. Here A is hirer of services of the doctor and B is
beneficiary of these services. For the purpose of the Act, both A and B are consumers.
Note that in case of goods, buyer of goods for commercial purpose ceases to be a consumer under the Act. On the
other hand, a consumer of service for commercial purpose remains a consumer under the Act.
Example: S applied to Electricity Board for electricity connection for a flour mill. There was a delay in releasing
the connection. S made a complaint for deficiency in service. He was held a consumer under the Act. - Shamsher
Khan v. Rajasthan State Electricity Board (1993) II CPR 6 (Raj.).
4. Complaint
i) What constitutes a complaint [Section 2(1)(c)]: Complaint is a statement made in writing to the National
Commission, the State Commission or the District Forum by a person competent to file it, containing the
allegations in detail, and with a view to obtain relief provided under the Act.
ii) Who can file a complaint [Sections 2(b) & 12]: Following are the persons who can file a complaint under the Act
:
a) a consumer; or
b) any voluntary consumer association registered under the Companies Act, 1956 or under any other law for the
time being in force, or
c) the Central Government or any State Government,
d) one or more consumers, where there are numerous consumers having the same interest.
In addition to the above following are also considered as a consumer and hence they may file a complaint:
a) Beneficiary of the goods/services: The definition of consumer itself includes beneficiary of goods and
services.
Example: Where a young child is taken to the hospital by his parents and the child is treated by the doctor, the
parents of such a minor child can file a complaint under the Act - Spring Meadows Hospital v. Harjot
Ahluwalia JT 1998(2) SC 620.
b) Legal representative of the deceased consumer: The Act does not expressly indicate that the LR of a
consumer are also included in its scope. But by operation of law, the legal representatives get clothed with the
rights, status and personality of the deceased. Thus, the expression consumer would include legal
representative of the deceased consumer and he can exercise his right for the purpose of enforcing the cause
of action which has devolved on him.
c) Legal heirs of the deceased consumer: A legal heir of the deceased consumer can well maintain a complaint
under the Act.
d) A relative of consumer: When a consumer signs the original complaint, it can be initiated by his/her relative -
Motibai Dalvi Hospital v. M.I. Govilkar 1992 (1) CPR 408.
e) Insurance company: Where Insurance company pays and settles the claim of the insured and the insured
person transfers his rights in the insured goods to the company, it can file a complaint for the loss caused to
the insured goods by negligence of goods/service providers. For example, when loss is caused to such goods
because of negligence of transport company, the insurance company can file a claim against the transport
company - New India Assurance Company Ltd. v. Green Transport Co. II 1991 CPJ (1) Delhi.
iii) What a complaint must contain [Section 2(1)(c)]: A complaint must contain any of the following allegations:
a) An unfair trade practice or a restrictive trade practice has been adopted by any trader;
Example: A sold a six months old car to B representing it to be a new one. Here B can make a complaint
against A for following an unfair trade practice.
b) The goods bought by him or agreed to be bought by him suffer from one or more defects;
Example: A bought a computer from B. It was not working properly since day one. A can make a complaint
against B for supplying him a defective computer.
c) The services hired or availed of or agreed to be hired or availed of by him suffer from deficiency in any
respect.
Example: A hired services of an advocate to defend himself against his landlord. The advocate did not appear
every time the case was scheduled. A can make a complaint against the advocate.
d) A trader has charged for the goods mentioned in the complaint a price in excess of the price fixed by or under
any law for the time being in force or displayed on the goods or any package containing such goods.
Example: A bought a sack of cement from B who charged him Rs. 100 over and above the reserve price of the
cement declared by the Government. Here A can make a complaint against B.
e) Goods which will be hazardous to life and safety when used, are being offered for sale to the public in
contravention of the provisions of any law for the time being in force requiring traders to display information
in regard to the contents, manner and effect of use of such goods.
Example: A bought a tin of disinfectant powder. It had lid which was to be opened in a specific manner.
Trader did not inform A about this. While opening the lid in ordinary way, some powder flew in the eyes of A
which affected his vision. Here A can make a complaint against the trader.
iv) Time frame within which a complaint can be filed: Section 24A of the Act provides that a consumer dispute can
be filed within two years from the date on which the cause of action arises. The point of time when cause of
action arises is an important factor in determining the time period available to file a complaint. There are no set
rules to decide such time. It depends on the facts and circumstances of each case.
Example:
a) A got his eye operated by B in 1989. He got a certificate of blindness on 18th December, 1989. He was still in
hope of gaining his sight and went from second operation in 1992 and was discharged on 21-1-1992. He filed
a complaint against B on 11-1-1994. B opposed on the ground that more than 2 years were over after 18-12-
1989, thus the complaint is not maintainable. The Commission held that here the cause of action for filing the
complaint would arose after the second operation when A lost entire hope of recovery. Thus the suit is
maintainable - Mukund Lal Ganguly v. Dr. Abhijit Ghosh III 1995 CPJ 64.
It may be noted that these time frames are not absolute limitations. If the Consumer Forum is satisfied that there
was sufficient cause for not filing the complaint within the prescribed period, it can entertain a complaint beyond
limitation time. However, the Forum must record the reasons for condonation of delay.
Example: A deposited some jewellery with a bank. Bank lost it. Bank kept giving her false sense of hope to
retrieve the jewellery, and thus A was put in a state of inaction. Later, when A filed a suit on the Bank, it claimed
that the suit was not maintainable as the limitation time after the cause of action arose has lapsed. The
Commission reprimanded the bank and admitted the case - Agnes DMello v. Canara Bank [1992] I CPJ 335
(NCDRC).
v) Relief available against complaint [Sections 14 and 22]: A complainant can seek any one or more of the
following relief under the Act:
a) to remove the defect pointed out by the appropriate laboratory from the goods in question;
"appropriate laboratory" means a laboratory or organisation
recognised by the Central Government;
recognised by a State Government, subject to such guidelines as may be prescribed by the Central
Government in this behalf; or
any such laboratory or organisation established by or under any law for the time being in force, which is
maintained, financed or aided by the Central Government or a State Government for carrying out analysis
or test of any goods with a view to determining whether such goods suffer from any defect.
b) to replace the goods with new goods of similar description which shall be free from any defect;
c) to return to the complainant the price, or, as the case may be, the charges paid by the complainant;
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 it;
g) not to offer the hazardous goods for sale;
h) to withdraw the hazardous goods from being offered for sale;
i) to provide from adequate costs to complainant.
vi) When a complaint cannot be filed:
a) A complaint on behalf of the public which consists of unidentifiable consumers cannot be filed under the Act.
Example: A complaint was filed based on a newspaper report that passengers travelling by flight No. 1C-401
from Calcutta to Delhi on May 13, 1989 were made to stay at the airport and the flight was delayed by 90
minutes causing great inconvenience to the passengers. It was held that such a general complaint cannot be
entertained. No passenger who boarded that plane came forward or authorised the complainant to make the
complaint - Consumer Education and Research Society, Ahmedabad v. Indian Airlines Corporation, New
Delhi (1992) 1 CPJ 38 NC.
b) A complaint by an individual on behalf of general public is not permitted.
c) An unregistered association cannot file a complaint under the Act.
Example: The complainant was an association formed in the Gulf and was unregistered in India. It was held
that since the petitioner was not a voluntary organization registered under any law in force in India, cannot
come within clause (d) of section 2(1) of the Act and hence cant file a complaint - Gulf Trivendrum air Fare
Forum v. Chairman & Managing Director, Air India 1991 (2) CPR 129.
d) A complaint after expiry of limitation period is not permitted. A complaint cannot be filed after the lapse of
two years from the date on which the cause of action arises unless the Forum is satisfied about the
genuineness of the reason for not filing complaint within the prescribed time.
Example: A supplied defective machinery to B on 12-1-1998. B filed a suit against A on 10-3-2001. It was not
admitted before the Forum for the reason that the time available to make complaint lapsed.
vii) Dismissal of frivolous and vexatious complaints: Since the Act provides for an inexpensive procedure (Court
fees is not charged in consumer complaints under the Act) for filing complaints, there is a possibility that the Act
is misused by people for filing vexations claims. To discourage frivolous and vexatious claims, the Act has
provided that such complaints will be dismissed and the complainant can be charged with the costs not exceeding
Rs. 10,000.
Example: A filed a complaint against B to recover compensation of Rs. 55,99,000 with the motive of indulging in
speculative litigation taking undue advantage of the fact that no court fee was payable under the Consumer
Protection Act. The National Commission held that the complainant has totally failed to make a case against B,
and dismissed the complaint as frivolous and vexatious imposing Rs. 10,000 as costs to A - Brij Mohan Kher v.
Dr. N.H. Banka I 1995 CPJ 99 NC.
5. Unfair Trade Practices
The Act says that, unfair trade practice means a trade practice which, for the purpose of promoting the sale, use or
supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice
including any of the following practices, namely
i) The practice of making any statement, whether orally or in writing or by visible representation which:
a) falsely represents that the goods are of particular standard, quality, quantity, grade, composition, style or
model;
b) falsely represents that the services are of a particular standard, quality or grade;
c) falsely represents any re-built, second-hand, renovated, reconditioned or old goods as new goods;
d) represents that the goods or services have sponsorship, approval performance, characteristics, accessories,
uses or benefits which such goods or services do not have;
e) represents that the seller or the supplier has a sponsorship or approval or affiliation which such seller or
supplier does not have;
f) makes false or misleading statement concerning the need for, or the usefulness of, any goods or services;
g) gives to the public any warranty or guarantee of the performance, efficacy or length of life of a product or of
any goods that is not based on an adequate or proper test thereof;
h) makes to the public a representation in a form that purports to be a warranty or guarantee of a product or of
any goods or services; or a promise to replace, maintain or repair an article or any part thereof or to repeat or
continue a service until it has achieved a specified result, if such purported warranty or guarantee or promise
is materially misleading or if there is no reasonable prospect that such warranty, guarantee or promise will be
carried out;
i) materially misleads the public concerning the price at which a product or like products or goods or services,
have been or are, ordinarily sold or provided, and, for this purpose, a representation as to price shall be
deemed to refer to the price at which the product or goods or services has or have been sold by sellers or
provided by suppliers generally in the relevant market unless it is clearly specified to be the price at which the
product has been sold or services have been provided by the person by whom or on whose behalf other
representation is made;
j) gives false or misleading facts disparaging the goods, services or trade of another person.
Note: A statement is said to be made to public when it is:
a) expressed on an article offered or displayed for sale, or on its wrapper or container; or

b) expressed on anything attached to, inserted in, or accompanying, an article offered or displayed for sale, or on
anything on which the article is mounted for display or sale; or
c) contained in or on anything that is sold, sent, delivered, transmitted or in any other manner whatsoever made
available to a member of the public, by the person who had caused the statement to be so expressed, made or
contained.
d) Permits the publication of any advertisement whether in any newspaper or otherwise, for the sale or supply at
a bargain price, of goods or services that are not intended to be offered for sale or supply at the bargain price,
or for a period that is, and in quantities that are, reasonable, having regard to the nature of the market in
which the business is carried on, the nature and size of business, and the nature of the advertisement.
Note : Bargain price means:
a) a price that is stated in any advertisement to be a bargain price, by reference to an ordinary price or otherwise,
or
b) a price that a person who reads, hears or sees the advertisement, would reasonably understand to be bargain
price having regard to the prices at which the product advertised or like products are ordinarily sold.
ii) Permits the offering of gifts, prizes or other items with the intention of not providing them as offered or creating
impression that something is being given or offered free of charge when it is fully or partly covered by the
amount charged in the transaction as a whole; or the conduct of any contest, lottery, game of chance or skill, for
the purpose of promoting, directly or indirectly, the sale, use or supply of any product or any business interest;
iii) Permits the sale or supply of goods intended to be used, or are of a kind likely to be used, by consumers, knowing
or having reason to believe that the goods do not comply with the standards prescribed by competent authority
relating to performance, composition, contents, design, constructions, finishing or packaging as are necessary to
prevent or reduce the risk of injury to the person using the goods;
iv) Permits the hoarding or destruction of goods, or refuses to sell the goods or to make them available for sale or to
provide any service, if such hoarding or destruction or refusal raises or tends to raise or is intended to raise, the
cost of those or other similar goods or services.
6. Restrictive Trade Practices
Section 2(1) of the Act provides that, restrictive trade practice means any trade practice which requires a consumer
to buy, hire or avail of any goods or, as the case may be, services as a condition prece dent for buying, hiring or
availing of other goods or services.
Example: A, a gas distributor, insists his customers to buy gas stove as a condition to give gas connection. It was held
that it was a restrictive trade practice - Re. Anand Gas RTPE 43/1983 (MRTPC)
7. Goods and Defects

i) Goods: The Consumer Protection Act does not define the term Goods. It says that - goods means goods as
defined in the Sale of Goods Act, 1930. Section 2(7) of the Sale of Goods Act, 1930, defines goods as - 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.
ii) Defect: Section 2(1) (f) of the Act provides that, 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 of the time
being in force under any contract, express or implied or as is claimed by the trader in any manner whatsoever in
relation to any goods.
Example: A supplied white marble to B. Later on the colour of the marble changed. B sued A alleging supply of
defective marble. It was held that A should have expressly told B that the marble would not retain its colour when
polished. In the absence of such assertion, it is deemed that A made B to understand that the marble would retain
its white colour and when the colour changed, it comes within the scope of defect in goods under the Act -
Chitranjan Sahu v. N.C. Jain II (1993) CPJ 1127 (Ori.).
8. Deficiency [Section 2(1)(g)]

Parallel to "Defect" in case of goods, deficiency is relevant in case of services. Accordingly, it is defined to mean 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.
Rights of Consumers
1) Right to safety: It is right to be protected against the marketing of goods and services which are hazardous to life
and property. Unsafe goods may cause death or serious injury to the user due to defective ingredients, defective
design, poor workmanship, or any other reason. At times safety hazards are found due to absence of proper
instructions to use the product.
2) Right to information: It is right to be informed about the quality, quantity, potency, purity, standard and price of
goods or services, with a view to protect the consumer against unfair trade practices.
3) Right to choose: The right to choose can be made meaningful by ensuring access to a variety of goods and
services at competitive prices. Fair and effective competition must be encouraged so as to provide consumers
with the widest range of products and services at the lowest cost.
4) Right to represent: It is right to be heard and to be assured that consumers interests will receive due
consideration at appropriate forums. The Consumer Protection Act, 1986 has well taken care of this right by
making available the instrumentality of Redressal Forums. Every consumer has a right to file complaint and be
heard in that context.
5) Right to redressal: It is a right to seek redressal against unfair trade practices or restrictive trade practices or
unscrupulous exploitation of consumers. When consumers are wronged in a market place transaction, appropriate
and adequate redress must be available. The Act has ensured this right by establishing Consumer Forums and
recognising restrictive and unfair trade practices as a ground to make a complaint.
6) Right to education: The right to consumer education is a right which ensures that consumers are informed about
the practices prevalent in the market and the remedies available to them.
Consumer Responsibilities
The consumer is also enjoined to uphold his/her responsibilities:
1) Critical awareness: The responsibility to be more alert, and questioning about the price and quality of goods and
services we use.
2) Action: The responsibility to assert ourselves, and act to ensure that we get a fair deal. As long as we remain
passive consumers, we will continue to be exploited.
3) Social concern: The responsibility to be aware of the impact of our consumption on other citizens, especially
disadvantaged or powerless groups whether in the local, national or international community.
4) Environmental awareness: The responsibility to understand the environmental consequences of our
consumption. We should recognize our individual and social responsibility to conserve natural resources and
protect the earth for future generations.
5) Solidarity: The responsibility to organize, and come together as consumers to develop the strength to influence,
promote and protect our own interests.
Central Consumer Protection Council
The Consumer Protection Act, 1986 is aimed at providing better protection to the interests of the consumers. To do that
the act has provisions for the establishment of Consumer Protection Councils and other authorities to resolve consumers
disputes.
The Consumer protection act enacts the central government to establish a Central Consumer Protection Council
with Minister in charge of consumer affairs in the Central Government as its Chairman and such number of other official
and non-official members representing such interests as may be prescribed. The present chairman of the council is Ram
Vilas Paswan the major program that the council undertook is Jago Grahak Jago. The Consumers Protection Act 1987
restrict the number of members of the councils to 150 members. The term of the Council is three years.
The Council shall meet when necessary, but the council should meet at least once and meeting of the Council shall be
held at such time and place as the Chairman may think fit.
Objects of the central Council
The objects of the Councils, as per the Act, shall be to promote and protect the rights of the consumers such as:
The right to be protected against the marketing of goods and services which are hazardous to life and property
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;
The right to be assured, wherever possible, access to a variety of goods and services at competitive prices;
The right to be heard and to be assured that consumer's interests will receive consideration at appropriate forums
The right to seek redressal against unfair trade practices or restrictive trade practices or unscrupulous exploitation
of consumers and
The right to consumer education.
State Consumer Protection Council
The Consumer protection act enacts the central government to establish a Central Consumer Protection Council
with Minister in charge of consumer affairs in the state Government as its Chairman and such number of other official and
non-official members. The number of members in the council should not exceed ten. The Council shall meet when
necessary, but the council should meet at least twice and meeting of the Council shall be held at such time and place as
the Chairman may think fit.
Objects of the State Council
The objects of every State Council shall be to promote and protect within the State the rights such as:
The right to be protected against the marketing of goods and services which are hazardous to life and property
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;
The right to be assured, wherever possible, access to a variety of goods and services at competitive prices;
The right to be heard and to be assured that consumer's interests will receive consideration at appropriate forums
The right to seek redressal against unfair trade practices or restrictive trade practices or unscrupulous exploitation
of consumers and
The right to consumer education.
http://ncdrc.nic.in/statelist.html--Addresses of the district consumer dispute redressal commission
District Consumer Protection Council
Consumer protection act enacts the establishment of district consumer protection council in every district to protect and
promote the rights of consumers. The state government shall establish for every district a council to be known as District
Consumer Protection Council. It shall consist of the Collector of the district as its Chairman and such number of other
official and non-official members representing such interests as may be prescribed by the State Government. It shall meet
as and when necessary but at least two meetings shall be held every year. The Chairman shall decide the time and place of
the meeting.
The objects of every District Council shall be to promote and protect within the district the rights of the consumers like
the state and central council.
http://ncdrc.nic.in/districtlist.html--Addresses of the district consumer dispute redressal commission

Consumer Complaints Redressal
Department of consumer affairs has been receiving number of complaints from consumers the products they purchase or
the services they avail. The complaints cover a wide range of subjects like supply of defective products like refrigerators
and T.V sets, use of poor raw materials in construction of buildings and complaint against unfair trade practices.
Consumer Grievance Redressal Cell (CGRC) and Consumer Coordination Council (CCC)
The department had set up Consumer Grievance Redressal Cell in the year 2002 to take of the complaints which fall in
the following categories:
Sale of defective goods or deficient services and charging of higher prices, etc.
General grievances including those received from the Cabinet Secretary and the PMO related to consumer
matters.
Attending to the consumer complaints appearing in the columns of the newspapers to the extent possible.
The complaints regarding replacement of goods, re-installation of telephone/electricity, rectification of wrong bills,
possession of allotted flats, payment of amounts due to the investors on maturity, etc. were forwarded to the Consumer
Coordination Council (CCC) for redressal
CONSUMER DISPUTES REDRESSAL AGENCIES
Establishment of Consumer Disputes Redressal Agencies
The following agencies shall be established under the act:
a) a Consumer Disputes Redressal Forum to be known as the 'District Forum' established by the State Government in each
district of the State by notification. Provided that the State Government may, if it deems fit, establish more than one
District Forum in a district.
(b) a Consumer Disputes Redressal Commission to be known as the 'State Commission' established by the State
Government in the State by notification; and
(c) a National Consumer Disputes Redressal Commission established by the Central Government by notification.
1. Composition of the District Forum
Each district forum shall consist of:
1) President- The president of district commission shall be a person who is or has been, or is qualified to be a Judge
of a District Court , appointed by the State Government.
2) Members- The district commission shall consist of at least two and not more than such number of members, as
may be prescribed, one of whom shall be a woman.
In order to be a member of district commission for consumer disputes redressal, the members should have the
following qualifications-
(i) shall be not less than thirty-five years of age,

(ii) must possess a bachelor's degree from a recognised university,
(iii) shall be a person of ability, integrity and standing, and have adequate knowledge and at least ten years
of experience in dealing with problems relating to commerce, law, economics, accountancy, public affairs,
industry or administration
Term of office- The term of office for a member of District Forum is five years or upto the age of sixty-five
years, whichever is earlier.
Re-appointment- He/she shall be eligible for re-appointment for another term of five years or up to the age of
sixty-five years, whichever is earlier with subject to the fulfilment of condition of qualifications and other
conditions for appointment mentioned above
Salary- The salaries and allowances and other terms and conditions of service of the officers and other members
of district forum shall be such as may be prescribed by the State
Government
2. Jurisdiction of the District Forum- Subject to the other provisions of this Act, the District Commission shall
have jurisdiction
a) Pecuniary Jurisdiction
Complaints where the value of the goods or services and the compensation, if any, claimed does not exceed
rupees twenty lakhs.
b) Territorial Jurisdiction
A complaint shall be instituted in a District Commission within the limits of whose jurisdiction:
a) the opposite party or each of the opposite parties, where there are more than one, at the time of the institution
of the complaint, actually and voluntarily resides or carries on business or has a branch office or personally
works for gain
b) any of the opposite parties, where there are more than one, at the time of the institution of the complaint,
actually and voluntarily resides, or carries on business or has a branch office or personally works for gain,
provided that in such case either the permission of the State Commission is given or the opposite parties who
do not reside or carry on business or have a branch office or personally work for gain, as the case may be,
acquiesce in such institution
c) the cause of action, wholly or in part, arises.
Appeal- An appeal can be made to the State Commission, against an order made by the District Commission in
exercise of its powers, within a period of thirty days from the date of that order. The State Commission may entertain an
appeal after the expiry of the period of thirty days on showing sufficient cause for not filing it within that period.
The Appellant is required to deposit in the prescribed manner fifty per cent of the amount ordered by the District
Commission or rupees twenty-five thousand, whichever is less.
State commission
1. Composition of the State Commission
Each State Commission shall consist of:
1) President- The president of state commission shall be a person who is or has been, or is qualified to be a Judge of
a State Court , appointed by the State Government. The appointment should be made in consultation with the
Chief Justice of High Court.
2) Members- The state commission shall consist of at least two and not more than such number of members, as may
be prescribed, one of whom shall be a woman.
In order to be a member of state commission for consumer disputes redressal, the members should have the following
qualifications-
(i) shall be not less than thirty-five years of age,

(ii) must possess a bachelor's degree from a recognised university,
(iii) shall be a person of ability, integrity and standing, and have adequate knowledge and at least ten years
of experience in dealing with problems relating to commerce, law, economics, accountancy, public affairs,
industry or administration
Term of office- The term of office for a member of state forum is five years or upto the age of sixty-seven years,
whichever is earlier.
sixty-seven years, whichever is earlier with subject to the fulfilment of condition of the qualifications and other
conditions for appointment mentioned above.
of state forum shall be such as may be prescribed by the State
Government.
2. Jurisdiction of the State Commission. Subject to the other provisions of this Act, the State Commission shall
have jurisdiction
Complaints where the value of the goods or services and compensation, if any, claimed exceeds rupees
twenty lakhs but does not exceed rupees one crore comes under the pecuniary jurisdiction of State
Commission
b) Appellate Jurisdiction
Appeals against the orders of any District Forum within the State within a period of thirty days from the date
of order of the District Forum, which may extended by the state commission on showing sufficient cause.
c) Territorial Jurisdiction
A complaint shall be instituted in a State Forum within the local limits of whose jurisdiction-
a) the opposite party or each of the opposite parties, where there are more than one, at the time of the
institution of the complaint, actually and voluntarily resides or carries on business or has a branch office
or personally works for gain
b) any of the opposite parties, where there are more than one, at the time of the institution of the complaint,
actually and voluntarily resides, or carries on business or has a branch office or personally works for gain,
provided that in such case either the permission of the State Commission is given or the opposite parties
who do not reside or carry on business or have a branch office or personally work for gain, as the case
may be, acquiesce in such institution
c) the cause of action, wholly or in part, arises.
Appeal- An appeal can be made to the National Commission against an order made by the State Commission in exercise
of its powers within a period of thirty days from the date of that order. The National Commission may entertain an appeal
after the expiry of the period of thirty days on o showing sufficient cause for not filing it within that period.
The Appellant is required to deposit in the prescribed manner fifty per cent of the amount ordered by the State
Commission or rupees thirty-five thousand, whichever is less.
National commission
1. Composition of the National Commission:
The National Commission shall consist of

1) President- The president of national commission shall be a person who is or has been, or is qualified to be a Judge
of a Supreme Court , appointed by the Central Government. The appointment should be made in consultation
with the Chief Justice of India
2) Members- The national commission shall consist of at least four and not more than such number of members, as
may be prescribed, one of whom shall be a woman.
In order to be a member of national commission for consumer disputes redressal, the members should have the
following qualifications-
a. be not less than thirty-five years of age,

b. possess a bachelor's degree from a recognised university,
c. be persons of ability, integrity and standing, and have adequate knowledge and experience of at
least ten years in dealing with problems relating to economics, law, commerce, accountancy, industry,
public affairs or administration
Term of office- The term of office for a member of national forum is five years or upto the age of seventy years,
whichever is earlier.
seventy years, whichever is earlier with subject to the fulfilment of condition of the qualifications and other
conditions for appointment mentioned above.
of national forum shall be such as may be prescribed by the Central
Government.
2. Jurisdiction of the National Commission. Subject to the other provisions of this Act, the National
Commission shall have jurisdiction
Complaints where the value of the goods or services and compensation, if any, claimed exceeds rupees one
crore.
b) Appellate Jurisdiction
Appeals against the orders of any State Commission within a period of thirty days from the date of order of
the National Forum, which may extended by the national commission on showing sufficient cause.
Appeal - An appeal can be made to the Supreme Court against an order made by the National Commission in exercise of
its powers within a period of thirty days from the date of that order. The Supreme Court may entertain an appeal after the
expiry of the period of thirty days on o showing sufficient cause for not filing it within that period.
The Appellant is required to deposit in the prescribed manner fifty per cent of the amount ordered by the National
Commission or rupees fifty thousand, whichever is less
Powers of The Redressal Agencies
District forum, the state commission and the national commission have been vested with the powers of a civil court under
the code of civil procedure, 1908, while trying a suit in respect of rhe following MATTERS:
1 The summoning and enforcing attendance of any defendant or witness and examining or witness and examining
the witness on oath
2 The discovery and production of any document or other material object producible as evidence
3 The reception of evidence on affidavits
4 The requisitioning of the report of the concerned analysis or test from the appropriate laboratory or from any
other relevant source
5 Issuing of any commission for the examination of aby witness; and
6 Any other matter as may be prescribed
Under the consumer protection rules, 1987 the commissions have POWER- to require ANY person :-
1 To produce before and allow to be examined by an officer of aby of these agencies, such books of accounts,
documents or commodities as may be required and to keep such books, documents under his custody for the
purpose of the Act
2 To furnish such information which may be required for the purposes of the act to any officer specified
3 Search and Seizure: The redressal agencies have the power to pass written orders authorizing the power of entry
and search of any premises where the books, documents and commodities are kept
4 The commissions have the powers to issue remedial orders to the opposite party as necessary
Remedial Orders
According to the Act, where the goods complained against suffer from any of the defects specified in the complaint or any
of the allegations contained in the complaint about the services, are proved.
The state commission/ National Commission may pass one or more of the following orders:
1 To remove the defects pointed out by the appropriate laboratory from the goods in question
2 To replace the goods with new goods of similar description which shall be free from any defect,
3 To return to the complainant the price, or the charges paid by the complainant,
4 To pay such amount as may be awarded by it as compensation to the consumer for any loss or injury suffered by
the consumer due to negligence
5 To remove the deficiencies in services in question
6 To discontinue the unfair trade practice or the restrictive trade practice or not to repeat them,
7 Not to offer the hazardous goods for sale
8 To withdraw the hazardous goods from being offered for sale
Provision for appeal:

An appeal petition can be filed before the State Commission within 30 days from the date of receipt of order, if
aggrieved by the Order issued by the District Forum.
An appeal petition can be filed before the National Commission within 30 days from the date of receipt of Order,
if aggrieved by the Order issued by the State Commission.
An appeal petition may be filed before the Supreme Court of India within 30 days from the date of receipt of
Orders, if aggrieved by the Order issued by the National Commission.
Appeal to Supreme Court of India:
Section 23 of Consumer Protection Act 1986, provides that any person aggrieved by an order of NCDRC, may
prefer an Appeal against such order to Supreme Court of India within a period of 30 days
Any person, aggrieved by an order made by the National Commission in exercise of its powers conferred by sub-
clause (i) of clause (a) of section 21, may prefer an appeal against such order of the Supreme Court within a
period of thirty days from the date of the order:
Provided that the Supreme Court may entertain an appeal after the expiry of the said period of thirty days if it
is satisfied that there was sufficient cause for not filing it within that period.
Provided further that no appeal by a person who is required to pay any amount in terms of an order of the
National Commission shall be entertained by the Supreme Court unless that person has deposited in the
prescribed manner fifty per cent. of that amount or rupees fifty thousand, whichever is less.
KDS Infra Buildcons vs 132 residents of Pune:
132 residents of Pune had collectively paid Rs 1.34 crore as the booking amount for apartments under the
proposed KDS Dham and KDS Angan schemes at Charholi Budruk in 2009-10. But KDS Infra Buildcons sold
the land to a third party.
After the residents found out that they had been cheated, the victims approached the Akhil Bharatiya Grahak
Panchayat (ABGP) who took up the cause and filed a complaint through its adviser, Vijay Sagar, in the National
Consumers Dispute Redressal Commission (NCDRC) on December 31 2012 as the value was above the one crore
mark.
On February 17 2016, the NCDRC directed the builders to refund Rs1,34,28,518 to the victims. An additional
Rs4 lakh compensation was also ordered to be paid within 90 days and, in default, the same would attract 18 per
cent interest per annum till realisation.
M/S KDS Infra Buildcons opposed the order and appealed against it in the SC on January 5, 2017 under Section
23 of the Consumer Protection Act.
The SC bench of justices J Chelameswar, Abhay Manohar Sapre and S Abdul Nazeer, after hearing the counsels
and perusing the records, ordered, We do not see any cogent reason to entertain the appeal. The judgment
impugned does not warrant any interference and the civil appeal is dismissed on the ground of delay as well as on
merits.
On 25 Feb 2017 the Supreme Court snubbed a civil appeal from KDS Infra Buildcons and ordered the builders to
refund investors money, along with 18 per cent interest on the booking amount.
Service and Deficiency [Section 2(1)(o) and (g)]
When a service is found deficient by a consumer, he can make a complaint under the Act. Thus the prime requirement is
that the matter must fall within the definition of service, and it must entail a deficiency as per the norms given by the Act.
What can be termed as a service - Section 2(1)(o) of the Act provides that service means service of any description
which is made available to potential users and includes the provision of facilities in connection with banking, financing,
insurance, transport, processing, supply of electrical or other energy, board or loading 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.
The definition provides a list of eleven sectors to which service may pertain in order to come under the purview of the
Act. The list of these sectors is not an exhaustive one. Service may be of any description and pertain to any sector if it
satisfy the following criteria:
1. Service is made available to the potential users, i.e., service not only to the actual users but also to those who are
capable of using it.
2. It should not be free of charge, e.g., the medical service rendered free of charge in Government hospital is not a
service under the Act;
3. It should not be under a contract of personal service.
When we talk about service under the Consumer Protection Act, we take it as a regular commercial transaction. Thus the
services rendered under the contract of personal service are specifically excluded from the definition.
The expression contract of personal service is not defined under the Act. In common parlance, it means - a contract to
render service in a private capacity to an individual. For example, where a servant enters into an agreement with a master
for employment, or where a landlord agrees to supply water to his tenant, these are the contracts of personal service. The
idea is that under a personal service relationship, a person can discontinue the service at any time according to his will, he
need not approach Consumer Forum to complaint about deficiency in service.
There is a difference between contract of personal service and contract for personal service. In case of contract of
personal service, the service seeker can order or require what is to be done and how it should be done. Like a master can
tell his servant to bring goods from a particular place. But in a contract for personal service, the service seeker can tell
only what is to be done. How the work will be done is at the wish of the performer. Like when a person gives a suit to the
tailor for stitching, he does not tell him which method he should use to stitch it.
Note: That it is contract of personal service is excluded from the definition of service, contract for personal service is
recognised as service under the Act.
It does not make a difference whether the service provider is a Government body or a Private body. Thus even if a
statutory corporation provides a deficient service, it can be made liable under the Act.
Example: A applied for electricity connection for his flour mill to Rajasthan State Electricity Board. The Board delayed in
releasing the connection. It was held deficient in performing service.
Some other sectors/professionals/services which are not specified in the definition of service but which have been
considered by the Consumer Forums as service sectors from time to time are listed below:
Advocates, Airlines, Chartered Accountants, Courier, Chit Fund, Education, Gas Cylinder/LPG, Medical services, Postal
services, Railways, Investment related services, and Telephone services.
Thus, the test is - whether the person against whom the complaint is made performs a service for consideration which is
sought by a potential user.
What is intended to be excluded from the definition of "service" is specified in respect of two services.
Service free of charge

Service under a contract of personal service
The following services are, however, not specified in the abovementioned definition of "service"
Advocates
Airlines
Chartered Accountants
Couriers
Chit Fund
Education
Gas Cylinder/L.P.G.
Medical services
Postal services, Railways, Shares & Debentures
Telephones
Miscellaneous
Lift maintenance
Marriage Hall renting
Maintenance of provident fund account
Registration department
Travel Agency
Granting certified copy of document
Purchase of lottery tickets
Carrier
Grant of subsidy by Central Government to industrial units
Municipal services
What is meant by deficiency in service - Section 2(1)(g) of the Act provides that, 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.
Reading the above definition by breaking it into elements, we get

(a) Deficiency means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of
performance
Examples:
1. A boarded a train. The compartment in which he and his wife travelled was in a bad shape-fans not working,
shutters of windows were not working, rexin of the upper berth was badly torn and there were rusty nails which caused
some injuries to the wife of A. A made a complaint against the railway department. It was held that the complaint
constituted deficiency in service and the compensation of Rs. 1500 was awarded to A - General Manager, South Eastern
Railway v. Anand Prasad Sinha I [1991] CPJ 10 (12) NC.
2. Dr. A treated P under Allopathic system, though he himself was a Homoeopathic practitioner. Later on P
allegated A for wrong treatment. The Commission held it as deficiency in service - Poonam Verma v. Ashwin Patel [1996]
II CPJ 1 SC.
3. A booked a car for B and promised to deliver it within one month of booking. The car was not delivered
even after four months. Here A could be held liable for deficiency in service.
One interesting aspect is that deficiency in service should occur during the happening of performance. Thus it is
crucial to determine when the performance of a service commenced.
Example: A contracted with B to supply, erect and commission cold rolling mill. A supplied the mill, but failed to
erect and commission the mill. B filed a suit alleging deficiency of service on As failure to elect and commission the mill.
The National Commission observed that the deficiency must pertain to performance of service. Since A never started
erecting and commissioning the mill, the question of performance did not arise. Thus the case is not that of deficiency of
service - Jaipur Metals & Electricals Ltd. v. Laxmi Inds. [1991] II CPJ 602 (NC).
(b) Such quality and manner of performance of service should have been required to be maintained by or under any
law for the time being in force or undertaken to be performed by a person in pursuance of a contract or otherwise.
Example : A, the builder, promised under written agreement to provide a flat to B. Subsequently he expressed his
inability to give possession of the flat and entered into a fresh agreement to pay Rs. 9,51,000 to B in place of flat. A didnt
even pay this money. B sued A. The Commission held that since A had not even paid the money as per subsequent
contract, the rights of earlier contract can be involved by B. And that there was a deficiency of service on the part of
builders - Lata Construction v. Dr. Rameshchandra Ramniklal Shah AIR 2000 SC 380 (384).
(c) The deficiency must be in relation to a service - The words ....in relation to any service in the definition signifies
that the deficiency is always in terms of service. Thus if the grievance pertains to a matter which does not fall in the
definition of service, the concept of deficiency would not apply.
Example : A deposited Rs. 100 with B as application fee and executed bond for the purpose of drilling tubewell. B
did not drill the tubewell because it was not feasible. A alleged deficiency in service. It was held that depositing Rs. 100
as application fee and executing a bond does not amount to hiring of services, thus the deficiency of service cannot be
complained of in the matter - Mangilal v. Chairman District Rural Development Agency [1991] 1 CPJ 474 (Raj.)
Deficiency of Services in:

Airlines
In respect of following matters, consumer forums have held that services of airlines were deficient.
Delay in processing refund of unused tickets

Not informing passenger about flight delay
Physical injury disabling the passenger
Injury to waiting passenger in the Airport
Inferior quality of in-flight food
In case of failure to issue boarding cards due to late check-in, however, it was held that there was no deficiency.
Banking Services
In following respects, it was held that there was deficiency in banks services.
Making payment notwithstanding stop-payment instructions

Making unauthorised debit to customers account
Loss of valuables from lockers
Not crediting deposited cheque
Bankers mistake in transferring complainants money to wrong branch
Freezing the operation of the bank account on telephonic instruction of government
On the other hand, in respect of the following matters, it was held that there was no deficiency in banks services
Denial of credit facility

Banks refusal to enhance the sanctioned limits
Banks failure to provide finance to small-scale industry
Banks refusal to extend loan repayment were to be completed within three years, there was deficiency.
Insurance
Life Insurance
At the outset, it may be noted that a nominee being a person appointed by policy holder to whom the policy money is to
be paid in the event of policy holders death, is a beneficiary who avails of services with approval of the policy holder
who hired such services for consideration. Therefore, the nominee is a consumer.
In following respects, the Consumer Forums have held that services of LIC were deficient.
Arbitrary repudiation without communicating reasons and without due application of mind.
Repudiation of claim without inquiry.
General Insurance
In case of general insurance, consumer forums have held that services of the insurance company were deficient in
following respects.
Failure of the insurance company to indemnify the insured for the loss caused by fire despite the undertaking of
the insurance company is deficiency in service.
Delay in making payment of claim under insurance policy is deficiency. In cases of such deficiency, interest @
13.5% may be allowed to the claimant. Further, compensation for financial loss and mental stress may also be
allowed in such cases.
Silent promise and explicit condition of insurance contract is that insured claim must be settled with utmost
expedition, either by way of acceptance or repudiation, say, within a reasonable time frame of about three months.
Any delay beyond such reasonable period would constitute deficiency in service unless the same is cogently
explained by the insurance company.
Delay in settlement of insurance claim due to negligence and delay of the surveyor amounts to deficiency in
service of the insurance company.
Delaying settlement of the claim for long time despite the report submitted by its own appointed surveyors
amounts to deficiency in service.
Repudiation of claim without inquiry.
In the following respects, however, consumer forums have held that there was no deficiency in the service of the general
insurance company.
Mere repudiation of claim does not amount to deficiency.

Repudiation of claim after proper investigation.
Suppression of material facts.
Medical Services
In recent years, hospitals, doctors and surgeons have been facing the complaints of medical negligence. Some of the
grievances for which complaints have been made to consumer forums are as follows.
Doctor creating a misleading impression as gynaec specialist.

Not providing bed after charging for the same.
Negligence of juniors of the doctor leading to damage to the patient could make the doctors liable.
Loss of vision due to negligence of eye surgeon.
However, in respect of complaints made for following matters, it was held that there was no deficiency
Failure of hospital to admit patient in I.C.U.

Loss of voice after heart surgery.
Death of patient due to a cause other than the problem for which he was operated.
Loss of sense after delivery of child by a woman having history of miscarriages.
Motor Vehicle
In respect of the following grievances, consumer forums have held that services of the manufacturer or supplier were
deficient.
Delay in delivery of car

Fixing wrong number plate on vehicle.
Deficiency in repairs and servicing of vehicle.
Railways
In respect of the following grievances, consumer forums have held that railway services were deficient.
Where railway reservation is given to a passenger by an alternative train for the day on which the train does not run, there
is deficiency in service.
Refusal by Railways to give air-conditioned second class birth after confirmation of reservation is deficiency in
service.
Failure of Railway administration to prevent entry of unauthorized persons in reserved compartment is negligence
and therefore deficiency in service.
Allotting birth to VIPs by superseding persons on waiting list is deficiency.
When reservation of seats made by the complainant is erroneously given to others, same indicates gross
negligence of railway booking and reservation staff. Railway must bear vicarious responsibility for such
negligence.
Out of turn allotment of seat to VIP.
Failure to mention name in reservation chart.
Recovering excess fare from passenger.
In the following cases, however, consumer forums have held that there was no deficiency.
Cancellation of trains to ensure safety - no deficiency.

Delay in departure of special train.
Deficiency in service due to circumstances beyond control
In normal course, if the service is found deficient as per the above criteria, it is held deficient and the compensation is
awarded. However there may be abnormal circumstances beyond the control of the person performing service. If such
circumstances prevent a person from rendering service of the desired quality, nature and the manner, such person should
not be penalised for the same.
Example : A undertook to supply water to B for irrigation of crops. Due to power grid failure of the State, A could not get
sufficient power to perform the service. Here A cannot be held liable for deficiency in service.
However, negligence on the part of performer may not be excused under the cover of circumstances beyond control.
Example : A agreed to supply water to B for irrigation of crops. He failed to do so because of a power breakdown due to
burning of transformer. As a result crops damaged. B sued A for providing deficient service. The National Commission
held that it was duty of A to get the transformer repaired immediately. Since he was negligent in doing so, he is liable for
the deficiency in service - Orissa Lift Irrigation Corpn. Ltd. v. Birakishore Raut [1991] 2 CPJ 213 (NC).
Trader and Manufacturer [Section 2(1)(q) and (j)]
1. When a person finds any defect in the goods, be it manufacturing defect, or excessive price, or lack of information
about hazardous nature, or restrictive or unfair trade practice, he can make a complaint against the trader. Thus it is very
important to know who can be termed as a trader under the Act.
1.1 Trader - Section 2(1)(q) of the Act says that trader means any person who
sells or distributes any goods for sale and

includes the manufacturer thereof, and
where such goods are sold or distributed in package form, includes the packer thereof.
Generally speaking trader means any person who carries on a trade. Under the Consumer Protection Act, even a packer
has been included in the definition of trader. Packer means one who packs the goods.
Examples :
1. A got an agency of Indiana products. He sells and distributes these products in North India. He is a trader under
the Act.
2. A manufactures combs. He is a trader under the Act.

3. A provide bottles to pack the perfume manufactured by B. Here A is also a trader under the Act.
Note : Trader is a wider term which includes a manufacturer also.

1.2 Manufacturer - In terms if clause (j) of section 2(1) of the Act, 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 and claims
the end-product to be goods manufactured by himself; or
(iii) puts or causes to be put his own mark on any goods made or manufactured by any other manufacturer and claims
such goods to be goods made or manufactured by himself.
Thus manufacturer is a person who either himself manufactures goods, or assemble any goods manufactured by others, or
puts his own mark or trade mark on the goods manufactured by others.
Examples :
A Ltd. were into manufacturing of Pressure Cookers. B bought a Cooker which burst out while using. B sued A Ltd. for
compensation. Here A Ltd. being manufacturer of the Cooker is liable for the loss.
2. A Ltd. used to buy components and assemble computers therefrom. They were selling them under the brand name
Rotal. B bought a Rotal computer which turned out to be defective. Here B can hold A Ltd. Liable for the loss as they
will be considered manufacturer of Rotal computer under the Act.
3. N bought H-4 Cotton seeds from the market which were labelled as produced and marketed by the Hindustan
Levers Ltd. N established that the seeds were defective. He sued HLL. HLL contended that it did not manufactured the
seeds but had only marketed them, and that some company based in Gujarat produced the same. The Commission held
that in this case HLL comes under the third limb of the definition of manufacturer under the Act. Thus it is liable for the
loss suffered by N - Namdeo Baijrao Raut v. Hindustan Lever Ltd. [1993] 3 CPR 346 (Mah. CDRC).
It may be noted that where a manufacturer despatches any goods or part thereof to any branch office maintained by him,
such branch office shall not be deemed to be the manufacturer even though the parts so despatched to it are assembled at
such branch office and are sold or distributed from such branch office.
Example : A Ltd. based in Delhi was having a branch office in Chennai. It used to sent components of computers to its
Chennai branch which was assembling and selling them. B purchased a computer from Chennai branch which turned out
to be defective. Here A Ltd. is responsible for the loss, and not the Chennai branch.
1.3 Who should be sued by a consumer - manufacturer or seller - Generally when a consumer finds defect in the goods, he
sues the person from whom he bought the goods. Reason being privity of contract.
If the defect is a manufacturing defect, the consumer may sue the manufacturer also along with the seller. This is an
option with the consumer. Thus the manufacturer is a possible party, and not a necessary party.
Example: A was manufacturer of X brand cars and B was a dealer for them. C bought a car from B and found it
defective. Here he may sue B alone, or A and B both.
Charging Excessive Price

2. A complaint may be made against a trader who has charged a price in excess of the price :
(a) fixed by or under any law for the time being in force, or
(b) displayed on the goods, or
(c) displayed on any package containing the goods.

Examples:
1. Government fixed control rate of milk at Rs. 15 per litre in the month of June 2001. A sold it at the rate of Rs. 18
per litre in the same period. Price charged by A are excessive.
2. The price displayed on a one Kg. packet of salt was Rs. 4. Suddenly there was paucity of salt in the market. A
started selling the same @ Rs. 6 per kg. The price charged by A is excessive. It may be noted that when price of an article
is not fixed by law, or when the same is not displayed on goods or on the package containing goods, no complaint can be
made under the Act for excess pricing.
Example: Mahaboobnagar Milk Chilling Centre charged 15 paise extra per half litre of milk supplied in sachets in
comparison to the other varieties of milk. The National Commission held that in the absence of any law requiring an
article to be sold at or below a particular price fixed thereunder, and when there was no declaration of the price on the
packet containing the goods, a case for excessive pricing may not be construed.
International Organizations
Consumers International (CI)
Consumers International (CI) is the world confederation of consumer groups. Founded on 1 April 1960, it has over 250
member organisations in 120 countries. Its head office is based in London, England, with regional officers in Latin
America, Asia Pacific, Middle East and Africa.
World Consumer Rights Day: - World Consumer Rights Day is an annual occasion for celebration and solidarity within
the international consumer movement. Participants observe the day by promoting the basic rights of all consumers,
demanding that those rights are respected and protected, and protesting about the market abuses and social injustices
which undermine them. World Consumer Rights Day is celebrated on 15 March every year.
There are eight basic consumer rights which define and determine their principles.
The right to satisfaction of basic needs - To have access to basic, essential goods and services: adequate food, clothing,
shelter, health care, education, public utilities, water and sanitation.
The right to safety - To be protected against products, production processes and services that are hazardous to health or
life.
The right to be informed - To be given the facts needed to make an informed choice, and to be protected against dishonest
or misleading advertising and labelling.
The right to choose - To be able to select from a range of products and services, offered at competitive prices with an
assurance of satisfactory quality.
The right to be heard - To have consumer interests represented in the making and execution of government policy, and in
the development of products and services.
The right to redress - To receive a fair settlement of just claims, including compensation for misrepresentation, shoddy
goods or unsatisfactory services.
The right to consumer education - To acquire knowledge and skills needed to make informed, confident choices about
goods and services, while being aware of basic consumer rights and responsibilities and how to act on them.
The right to a healthy environment -To live and work in an environment that is non-threatening to the well-being of
present and future generations.
Consumer responsibilities
Critical awareness - consumers must be awakened to be more questioning about the provision of the quality of goods and
services.
Involvement or action - consumers must assert themselves and act to ensure that they get a fair deal.
Social responsibility - consumers must act with social responsibility, with concern and sensitivity to the impact of their
actions on other citizens, in particular, in relation to disadvantaged groups in the community and in relation to the
economic and social realties prevailing.
Ecological responsibility - there must be a heightened sensitivity to the impact of consumer decisions on the physical
environment, which must be developed to a harmonious way, promoting conservation as the most critical factor in
improving the real quality of life for the present and the future.
Solidarity - the best and most effective action is through cooperative efforts through the formation of consumer/citizen
groups who together can have the strength and influence to ensure that adequate attention is given to the consumer
interest.
International Consumer Research & Testing (ICRT)
International Consumer Research & Testing (ICRT) is a global consortium of more than 35 consumer organisations
dedicated to carrying out joint research and testing in the consumer interest.
ICRT members co-operate in a programme of continuous testing on a wide range of popular consumer products such as
digital cameras, mobile phones, TVs, cars, washing machines, dishwashers, vacuum cleaners and light bulbs. In addition,
there are numerous other smaller collaborative tests, on a whole range of consumer products from anti-wrinkle creams to
jogging shoes.
Safety has always been a topic of concern to consumer organisations. ICRT members have played a key role in promoting
higher safety standards for consumer goods. ICRT also facilitates information exchange and testing between members in
areas such as food, health, the environment and financial services.
ICRT conducts more than 50 large joint tests and a number of small joint tests every year. They have around 60
specialised laboratories all over the world for conducting tests on thousands of products. Joint testing helps in cost
savings of around 60% per test for the affluent members and around 90% per test for the less affluent one. These tests
help in the same quality level and research data for the products.
International Consumer Protection and Enforcement Network (ICPEN)
International Consumer Protection and Enforcement Network (ICPEN) is an organization composed of authorities from
more than 60 countries from all over the world. The aim of the organization is to: -
1. Protect consumers economic interests around the world,

2. Share information about cross-border commercial activities that may affect consumer welfare,
3. Encourage global cooperation among law enforcement agencies.
ICPEN helps in resolving cross border dispute and they have defined a path if any consumer has a complaint against a
foreign seller: -
1. If you have a dispute about an online or related transaction with a foreign company, first of all you should try to
resolve it directly with that company.
2. If that does not work, you should visit their specially devised website at http://www.econsumer.gov/, where you
can:
learn about different ways to resolve your problem without taking formal legal action
report your complaint for the information of member consumer enforcement agencies
3. If your complaint concerns a dispute within the European Union, you may seek help at one of the European
Consumer Centres.
4. If your complaint does not have a cross border element, you should take up the case with your national consumer
agency.
Consumer Guidance Society of India (CGSI)
The Consumer Guidance Society of India (CGSI) is the first and foremost consumer body of the country. CGSI was
founded in 1966 by women activists actively champions for the rights of consumers. It aims to protect the rights of
consumers, who find themselves helpless whenever they were supplied with defective goods or services.
CGSI was established as the first consumer organization to demand special Consumer Court for redressal of consumers'
complaints. It is a non-profit, non-political voluntary body that is supported solely by membership subscriptions and
grants from public interest groups or charitable trusts. The Consumer Guidance Society of India is registered Under The
Societies Registration Act No. XXI of 1860.
CGSI Founder
Mrs. Seeta Gupta Social Worker
Mrs. Indira Mazumdar Social Worker
Mrs. SeetaNadkarni Social Worker
Dr.LeelaThorat Doctor
Mrs. Leela Jog Journalist
Mrs. Kamala Mankekar Journalist
Dr. Shanta S. Rao Scientist
Mrs. NaliniTulpule Social Worker
Mrs. ShakuntalaKadam Social Worker
Main objectives of the organization: -
To inform, educate and organize consumers so s to enable them to protect their interests and assert their interests and
assert their rights.
To protect and promote the interests of the consumers of goods and services by whatever lawful means.
To provide a forum for mobilizing public opinion in respect of unfair trade practices and to recommend to the government
for suitable action.
To undertake consumer research to determine the needs of the consumers.
To apprise manufacturers of the need for improving the quality and utility of consumer products.
To promote and popularize the use of goods produced according to recognized standards such as a product with
AGMARK and ISI mark.
To co-operate with and assist various organizations and public authorities both in India and abroad in the formation and
adoption of quality standards for consumer products and services.
To do all such other lawful activities which are conductive to the attainment of any or all the objects of the society
mentioned above.
CONSUMER ACTIVITIES: -
(1) Consumer Education
(2) Holding talks and exhibitions to spread consumer rights awareness among urban poor and rural areas
(3) Consumer Complaints Redressal
(4) Testing of Consumer Products and
(5) Publication of Keemat a bi-monthly news magazine now published for over 20 years having articles of general
consumer awareness, for CGSI members and public.
CGSI has an ambitious target of reaching more and more consumers through its consumer education programs and make
India, a country of aware consumers resulting in flourishing markets with quality products and services Consumer
Education. It holds talks and exhibitions to spread consumer rights awareness among urban poor and rural areas.
Today CGSI programs reach out to more than 20,000 consumers in a year. Now with the help of more and more experts
from various fields, CGSI imparts knowledge about prudent investment, telecom services, food adulteration detection,
medical negligence, mediation, legal Redressal of complaints etc.
To date, CGSI has redressed more than 80% of the thousands of complaints referred to it by consumers. CGSI was the
first to establish formal Consumer Product Testing in India.
CGSI participates in a large number of technical committees and Government decision-making bodies. CGSI is a member
of the Maharashtra State Consumer Protection Council. It received the National Award for Consumer Protection in 1991.
ROLE of Consumer guidance society of India:
Consumer education and guidance: The main purpose of CGSI is to create awareness among the consumers about
their rights and duties. For the same, CGSI provides valuable information and guidance by undertaking following
activities.
Organizes lectures: Arrangements of lectures by eminent scholars.
Publishing of booklets: It publishes monthly magazine, booklets and other literature relating to consumer
education and guidance.
Consumer protection: It encourages aggrieved consumers to come forward and file a complaint against Business
malpractices.
Assisting Government: It helps government to detect cases of black marketing adulteration of food items.
Exerting pressure: It insists on the manufacturer to improve the quality of good as per ISO SPECIFICATION.
Action against advertisers: CGSI has also initiated actions against misleading advertisement.
Consumer representation: As a representative of consumers, CGSI has been nominated on many councils and
committee, CGSI advises the government and other agencies on matters pertaining to consumer welfare. CGSI
has nominated a representative of consumers in following state councils and committees: -
o Council of fair business practices.
o Food and drug administrations.
o Advertising standards council of India.
o Bureau of Indian standards.
o Central pollution control board etc.
Complaint Redressal: CGSI handles consumer complaints and offers legal guidance to those wishing to file suits
in the consumer courts. In cases where there are a number of complaints against a particular party, both sides are
brought together to resolve the issue.
Product testing: AS early as 1977, CGSI established the facility product testing. It first assessed the safety and
performance of domestic pressure stoves and found that two- third of the samples tested failed In safety
parameters. CGSI sent the results to the government and Indian standards institute popularly known as ISI with a
demand for mandatory a compulsory certification. Many other products were tested and reports published in the
societys monthly journal KEEMAT.
Consumer education for Rural consumers: CGSI started a rural project in the villages of Thane and Raigad
districts situated in the state of Maharashtra in the year of 1977. Consumer training was given to people in several
villages.
Latest updates about CGSI: -
1. Consumer grievance rally: On 23rd of May, 2014, CGSI organised a consumer grievance redressal camp in which
the society tried to solve the problems of consumers who marked their presence at the event. The organization,
while addressing the consumers' grievances, asked them to always maintain written communication with any firm
if they want to establish a case of deficient services against the firm. Around 50 people attended the function, who
claimed that they got legal guidance from the society as well as an eye opener on RTI and its usage.
2. Helping consumers through internet: CGSI is all set to initiate Skype talks with tech-savvy consumers. The
NGO's main idea of entertaining complaints through the internet-based communication is to overcome the
constrains of either time or any physical disabilities faced by the consumers. Dr MS Kamath, secretary of CGSI,
while speaking on the issue, said: "CGSI, in order to match with the tech-savvy consumer, has now started Skype
as a new platform to solve complaints of the consumers. From the comfort of his/her home, the consumer can
engage with the legal expert face-to-face. This would in turn increase the confidence level of the consumer."
3. CGSI invites consumers with unresolved complaints: Called Chai Pe Charcha, the CGSI will meet industry
representatives of banking, insurance, housing, medicine and education sectors among others to tell them about
the problems being faced by consumers.
CGSI chairman Sitaram Dixit said, "We are thinking of an out-of-the-box solution. Consumers who are finding it
difficult to have their complaints addressed, we will address it for them. One problem can be faced by multiple
people. We will put the same forth to the industry people for a policy change if possible."
4. CGSI exposes edible oil racket: CGSI, on Monday, unearthed a huge edible oil adulteration racket carried by
several shops. CGSI in a meeting claimed that almost 64% of the loose edible oil (namely sesame oil, coconut oil,
groundnut oil, mustard oil, sunflower oil, cottonseed, soybean, godtel), is mixed with palm oil, thus putting the
consumer's interest at stake.
Dr Sitaram Dixit, chairman, CGSI and Dr MS Kamath, secretary, CGSI, who headed the meeting said that their
team has collected as many as 269 samples that were sent for testing. Of the collected samples, almost 64% tested
positive for adulteration with inexpensive palmolein oil.
Dr Kamat also said that they have raised the issue with the Food and Drug Association and that they have
promised to take the necessary action and urged the state to immediately cancel the GR or at least not to renew it,
when it lapses in October 2014.
International Comparison
The government of almost every country has shown concern to protect the rights and interests of consumers by
implementing different laws, price and distribution controls, regulatory authorities, price fixing standards for
manufacturers and service providers.
In several cases like money and credit market agencies, stock market insurance special organisations have been
constituted authorized to keep a watch and have framed a code of conduct.
In cases like stock market operations huge powers have been given. In countries like U.S.A. there is a strict control on
drugs manufacture and sale as they are crucial for health and well-being of public. Also, there are strict rules for checking
adulteration and there are provisions for severe punishment to defaulters. Many countries have much more strict controls
and codes for safety as compared to India.
Case 1: India
Homeopath ordered to pay dead patients kin Rs 15 lakh
Doc Held Guilty of Negligence for Prescribing Allopathic Drugs
Subject: A homeopathic doctor cannot administer allopathic treatment
Backdrop: Sometimes, homeopathic doctors set up clinics and practise as allopathic medical practioners, even though
this is illegal. M G Rahatgaonkar, president of the Central Mumbai District Forum, recently directed a homeopath to pay
Rs 15 lakh as compensation to the kin of a patient who died after he prescribed allopathic medicine to him.
Case Study: On September 1, 2007, Suryaprakash Rai (27) felt feverish and had a body ache. So he went to Dr S E
Bhusaria homeopath practising at Antop Hillwho administered an injection and prescribed some medicines. The
same night, Rai developed rashes all over his body. The next morning he was rushed to Sion Hospital and admitted there.
Sion hospital doctors said that Rai was suffering from a drug-induced illness. He had petechial rash all over his body
(which is caused by bleeding underneath the skin). He had also developed breathlessness and sub-conjunctival
haemorrhage (bleeding in the eye underneath the conjunctiva), the medical records said. In an attempt to save Rai,
platelets were transfused. However, he died a few hours later.
The post-mortem report showed that Rais lungs, liver, spleen and kidneys had failed. The cause of death was stated as
intrapulmonary haemorrhage due to acute febrile illness in a known case of alleged treatment by a practitioner.
The patients widow, Rani Rai, obtained the post-mortem report under the RTI Act and filed a complaint against Dr
Bhusari in the consumer court. She claimed that her husband was working as an office assistant in a private limited
company, earned Rs 5,000 per month and looked after four peopleincluding a four-year-old child and aged parents.
Dr Bhusari denied there was any negligence on his part. The homeopath admitted having prescribed Paracetamol,
Nimesulide and CPM Tablets for fever, cold and cough. He, however, alleged that Rai had resorted to self-medication by
taking Combiflam without medical advice. Dr Bhusari also blamed Sion Hospital doctors for Rais death and disputed the
medical history given at the time of his admission.
However, the forum did not agree with Dr Bhusari. It noted that Rai had taken Combiflam prior to visiting the
homeopath. Combiflam contains Iburprofen which is a safe drug. On the questioning of the medical history recorded by
the Sion Hospital, the forum observed that a patient who is fighting for his life, would not give a wrong medical history,
as he would always want proper treatment. The medical history recorded at such a time could be equated with a dying
declaration. Hence the medical record of the Sion Hospital could not be simply brushed aside.
Relying on the judgment of the Supreme Court in the case of Poonam Verma v/s Ashwin Patel & Ors., and also that of the
National Commission in the case of P.N. Thakur v/s Hans Charitable Hospital, the Forum observed that ...allopathy and
homeopathy are different. A doctor must not only be qualified... but he must also be registered with the appropriate
Medical Council in order to practice as a doctor. A homeopath would not have knowledge about allopathic medicines and
its drug reactions. So the mere administration of allopathic treatment by a homeopath would be enough proof to establish
negligence.
Dr Rajendra Bengal, a medico-legal expert in forensic medicine, stated that prescribing and administering allopathic
drugs by a homeopathic practitioner constitutes negligence per se irrespective of whether the treatment is correct or not.
He opined that Nimesulide is known to be a toxic drug. The report also stated that Nimesulide is banned in several
countries. The Drug Controller General of India (DCGI) has banned the combination of Nimesulide with Paracetamol. Yet
Dr Bhuari recklessly administered the combination drugs in violation of the DCGIs order, without knowing the
complications of its toxicity.
Accordingly, the Forum held Dr Bhusari guilty of negligence and liable for deficiency in service resulting in Rais death.
Taking into account various factors such as the dependents on Rais income, his age, his income, etc. the Forum held Dr
Bhusari liable to pay a compensation of Rs 15 lakh to Rani Rai and costs of Rs 5,000.
Impact: No amount of money can compensate the loss of a human life. Patients would do well to ensure that they go to
qualified doctors practicing the stream of medicine in which they are qualified and registered.
South Africa
The Consumer Protection Act, No. 68 of 2008 was signed on 24 April 2009. The main objectives of the act were to
provide the following:
Establish national norms and standards to ensure consumer protection;

Promote a fair, accessible and sustainable marketplace for consumer products and services;
Make provision for improved standards of consumer information, to prohibit certain unfair marketing and
business practices;
Promote a consistent legislative and enforcement framework, related to consumer transactions and agreements;
Promote responsible consumer behavior.
The Consumer Protection Act applies to the following:

Every transaction occurring within the Republic of South Africa;
Promotion or supply of any goods and services occurring within the Republic; and
Goods or services that are supplied or performed, in the Republic, in terms of transactions mentioned in the
Act
The Act is not applicable in respect of:
Goods or services promoted or supplied to the state;

Industry-wide exemption being granted to regulatory authorities;
Credit agreements, in terms of the National Credit Act, but not goods or services;
Services under employment contracts;
Agreements giving effect to collective bargaining agreements; and
Agreements giving effect to bargaining agreements (Section 213 of the Labour Relations Act).
The Consumer Protection Act has two (2) implementation dates:
1. Early effective date: Twelve (12) months after signature (April 2010) Chapters 1 and 5, Section 120 (regulations)
will become operational; and
2. General effective date: Eighteen (18) months after signature (October 2010) date on which all provisions of the Act
will be applicable.
Case 2: South Africa

In the matter between: ESKOM HOLDINGS LIMITED (APPELLANT) and DEREK ANTHONY HALSTEAD-CLEAK
(RESPONDENT)
Heard: 13 September 2016
Delivered: 30 September 2016
Backdrop: On 11 August 2013 the respondent, one of a group of four cyclists, came into contact with a low hanging live
power line spanning a footpath they were cycling on. He sustained severe electrical burns and issued a summons against
Eskom for the damages he had suffered
Case Study: The respondents claim is based on (a) Eskoms role as the sole supplier or producer of electricity on the
national grid and its control of all power lines not falling under the control of any local authority or municipality; (b) the
strict liability of Eskom as the producer or supplier of electricity provided for in terms of s 61 of the Act; and in the
alternative (c) delict, in that Eskom negligently and wrongfully caused the respondents damages The parties agreed that
the limited issue pertaining to whether Eskom was liable in terms of s 61 of the Act would be separately adjudicated with
the remaining issues to stand over for later determination, if necessary. It was so ordered in terms of Uniform rule 33(4).
The Gauteng Division of the High Court of South Africa (Pretoria) (to which I shall refer for the sake of convenience as
the high court) found that Eskom was 100 per cent liable for the respondents injuries in terms of the provisions of s 61 of
the Act. The appeal is with the leave of the high court. The high court determined that . . . the wording of Section 61(5)
makes it clear that liability arises not only in respect of consumers as defined in the CPA [the Act] or consumers in the
general sense, but to any natural person . . . . The plaintiff need not, therefore be a consumer in the contractual sense
as defined in order for the Defendant to be liable to him. However, this loses sight of the fact that there should be a
supplier and consumer relationship for Eskom to be strictly liable for harm, as the Acts purpose is to protect consumers.
In this instance the respondent is not a consumer vis--vis Eskom as: (a) the respondent did not enter into any transaction
with Eskom as a supplier or producer of electricity in the ordinary course of Eskoms business; and (b) the respondent
was not utilising the electricity, nor was he a recipient or beneficiary thereof. The supply of unsafe electricity also
presupposes that Eskom sold the electricity in the ordinary course of business for consideration. Similarly, where s 61(1)
(c) provides that inadequate instructions pertaining to any hazard attracts liability, it is restricted to inadequate instructions
to a consumer who has entered into a transaction with Eskom. The respondent and Eskom were not in a consumer,
producer or supplier relationship in respect of the electricity that caused the harm to the respondent
In the result the following order is made. 1 The appeal is upheld with costs. 2 The order of the court below is replaced
with the following: (a) The defendant is not liable to the plaintiff in terms of the provisions of s 61 of the Consumer
Protection Act 68 of 2008. (b) The plaintiffs claim, based on those provisions, is dismissed, with costs, those costs to
include the costs of the pre-trial conference of 19 February 2015 and the costs of the trial that commenced on 23 February
2015. (c) The plaintiffs action is remitted to the trial court for the determination of the remaining issues in the action.
Singapore
The Consumer Protection (Fair Trading) Act (the Act) is a law protecting consumers in Singapore. The Act applies to
consumer transactions, but does not apply to sale of land and houses, employment contracts, and pawn broking. The Act
was primarily formulated to protect consumers against unfair trade practices and to give consumers additional rights in
respect of goods that do not conform to contract.
The main objectives of the act were to provide the following:
1) Consumers right to cancel regulated contracts
Regulated contracts generally refer to direct sales contract, long-term holiday product contracts, time share contracts or
time share related contracts. These contracts are defined in regulation 2 of the Cancellation of Contracts Regulations.
However, regulated contracts are also subject to the further exclusions in regulation 3.
2) Lemon law remedies for the consumer

A seller of a defective product must repair, replace, refund or reduce the price of the defective product (subject to certain
conditions) sold to a consumer. Please refer to this article for more information on the lemon law in Singapore.
3) Suing the supplier for unfair practices

Meaning of unfair practice: It is an unfair practice for a supplier, in relation to a consumer transaction
(a) to do or say anything, or omit to do or say anything, if as a result a consumer might reasonably be deceived or misled;
(b) to make a false claim;
(c) to take advantage of a consumer if the supplier knows or ought reasonably to know that the consumer
(i) is not in a position to protect his own interests; or
(ii) is not reasonably able to understand the character, nature, language or effect of the transaction or any matter
related to the transaction; or
(d) without limiting the generality of paragraphs (a), (b) and (c), to do anything specified in the Second Schedule.
Case 3: Singapore
A sold his car to B. A tells a B that a car has done 100,000 kilometres on it and the true reading covered was 200,000
kilometres. A filed a complaint against B under The Consumer Protection (Fair Trading) Act. Under section 12Q (2) of the
act, the seller was proved guilty of the offence and was liable on conviction to a fine for $5,000 and to imprisonment for a
term of 5 months.
Cases
1. Hotel liable for injury suffered by the guest due to defect designing of rooms.
Backdrop: A unique landmark judgement, where a five star hotel has been held liable to compensate its guest for the
injury suffered due to faulty designing of its bathroom.
Case Study: For accommodating the invitees to his wedding in Goa, Siddhartha Bhimrajka had booked several rooms in
Park Hyatt Goa Resort & Spa, a five-star hotel belonging to Blue Coast Hotels and Resorts.
Amongst the invitees were Vinay Rajpal, a 29-year-old businessman and his wife Ravina. On their arrival on July 7, 2005,
the Rajpals were welcomed by the hotel staff and escorted to room no. 321 on the ground floor. The Rajpals found the
room to be nice and pleasant, but the bathroom appeared to be peculiar. However, they did not say anything and accepted
the room allotted to them.
On July 9, the day of the wedding, the Rajpals attended a pool-side lunch party. Even though alcohol was served, they did
not consume it. After returning to their room, they decided to take a shower. The bathroom had three steps to go down to
the bathing area and there was a handle bar to the right. On the second step, Vinay Rajpal slipped badly and fell on his
face with great force, resulting in fractures of the right mandible and left side of ramus. He was then taken to Apollo
Victor Hospital, where he was administered first aid. After contacting doctors in Mumbai, he was flown by a chartered
flight of Air Ambulance Service and admitted to Jaslok Hospital in Mumbai. He was operated upon the following day and
discharged on July 16. However, his mouth was kept closed upto July 19 and he was unable to do his normal duties for a
period of one year.
Vinay then sent a legal notice to the hotel for compensation, followed up with reminders. The hotel's insurers responded,
contesting the claim and denying any negligence on the part of the hotel.
In September 2007, Vinay filed a consumer complaint before the Goa state commission claiming a compensation of Rs 30
lakhs. He claimed that he had suffered fractures due to a fall because the design of the bathroom was faulty and the
housekeeping personnel had failed to maintain it properly.
The hotel defended itself by pointing out that the same room no. 321 had been in use since the year 2002. Over the years,
several guests had used it without any complaint or accident. Even the Rajpal couple who had checked in on July 7 must
have used the bathroom thrice prior to the incident occurring. No grievance had been made by them regarding its design.
Vinay slipped and fell, but his wife Ravina had not met with such an accident. So, Vinay's fall could not be attributed to
any fault in the design of the bathroom or due to any negligence of the management or its employees. It was merely an
accident. Advocates Farhan Dubash and B D Nazareth appeared for Vinay, while the hotel was represented by Advocates
Rajshekar Rao and D V Patkar. Vinay as the complainant and Mr. Marar, the assistant director of finance who had filed
the reply on behalf of the hotel, were cross-examined. After a detailed hearing, the commission, presided over by Justice
Britto and Member Prabhudesai, passed an order on January 25, 2012, holding the hotel liable to compensate Vinay.
The commission noted that the photographs revealed that it was a sunken bathroom which could be used as a shower as
well as a bathtub, and to reach it, three slanting steps had to be climbed down without proper support. The floor of the
bathroom cum bathtub was made of unpolished natural stone known as 'Tumble Rock', while the steps leading to the
bathroom were made of polished Egyptian marble with a slant towards the bathroom to ensure that excess water does not
accumulate on the steps.
The commission did not agree with the hotel's defense that the bathroom could not be considered faulty as no accident
had occurred to the Rajpals during their first two days of stay. The commission noted that the hand railing was short and
was not available for support while taking the second or third step. It was also inconveniently placed at a low level so that
even a person of average height would have to bend to hold it. Thus, there was no support for getting down the slanting
polished marble steps. The commission concluded that the bathroom had been constructed and maintained disregarding
the safety of the guests.
Negligence means a breach of duty to exercise due care expected of a reasonable prudent person. It is common
knowledge that the slightest wetness on a polished marble floor or on a slanting polished floor is extremely dangerous.
The hotel ought to have foreseen that the faulty designing of the bathroom could lead to an accident, but had been
negligent in this regard, thereby entitling Vijay to claim compensation.
Accordingly, the commission awarded reimbursement of medical expenses and cost of the chartered air ambulance. In
addition, notional loss of income at Rs 3,750 per month for three months was also awarded. For the pain and trauma
which entailed the insertion of titanium plate implants and screws requiring the jaw to be sealed for ten days, the
commission awarded a further compensation of Rs.3 lakhs. Thus, in all a total compensation of Rs 9,33,400 along with
costs of Rs 10,000 was awarded.
2. Insurance firm indicted for unfair trade practices
Subject: Bajaj Allianz insurance indicted for unfair trade practices

Backdrop: Companies often lure consumers with attractive schemes, but later try to renege on their commitment. In a
significant ruling, the Central Mumbai District Forum bench, comprising president Nalin Majithia and Bhavana Pisal,
came down heavily on Bajaj Allianz and directed the insurance company to pay penal and deterrent compensation, which
is rarely, if ever, done.
Case study: Onkar Prasad Dixit, a senior official of Sahara Commercial Corporation, had taken a policy known as Bajaj
Allianz Swarna Vishranti Pension Plan from Bajaj Allianz General Insurance. The policy was taken on July 19, 2004 with
a sum insured of Rs 26 lakh, plus bonus. Although a yearly premium of Rs 6,17,929 was payable, the insurance company
offered a rebate of Rs 18,870, thereby reducing the premium to Rs 5,99,099. This amount had to be paid every year for a
period of five years. Thereafter, the insurance company would pay a monthly pension of Rs 22,944 during the lifetime of
the insured, and on his demise, the amount would be paid to his wife. However, the detailed terms and conditions of the
policy were not furnished to Dixit.
Right from 2004 till August 2009, Dixit kept paying the annual premium. Even though the premium for five years would
total Rs 29,95,295, the insurance company collected Rs 30,20,128, overcharging Rs 24,832. Yet, when Dixit asked the
insurance company to release the benefits, available under the policy, evasive excuses were given to avoid payment.
After persistent follow-up, Bajaj Allianz informed Dixit that the company had made a mistake in stating the benefits
under the policy. The insurance company also claimed that its Swarna Vishranti Pension Plan policies had been
withdrawn after obtaining permission from the Insurance Regulatory Development Authority (IRDA) and hence Dixits
policy automatically stood cancelled. However, the company offered to refund Rs 29,35,599.
Dixit then took the LIC Jeevan Akshay VII policy, and asked Bajaj Allianz to transfer the premium paid by him to LIC.
Even though this was done, there was a difference in the benefits available under the LICs policy, which had a lower
annuity amount, resulting in a loss of Rs 5,78,360 to Dixit. In November 2009, Dixit filed a complaint before the Central
Mumbai District Forum.
The insurance company defended itself by stating the complaint was misconceived because the policy had been
withdrawn after taking IRDAs permission and the premium received had been transferred to the LIC on Dixits request
for another policy. In his order dated January 29 , Nalin Majithia, president of the forum, observed that the insurance
company had failed to produce any proof or documents to show that the IRDA had granted permission for the withdrawal
of the policy. It noted that the insurance company had misled the consumers by offering an attractive policy, but refusing
to honour its commitment, after collecting nearly Rs 30 lakh as premium. The forum indicted Bajaj Allianz of having
indulged in unfair trade practice and held that there was deficiency in service. The forum observed that it was necessary to
award heavy compensation as a deterrent so that such unfair trade practices would not be repeated in the future.
Accordingly, the forum directed the insurance company to pay a penal compensation of Rs 4 lakh to Dixit. The forum
also directed Bajaj Allianz to refund the excess premium of Rs 24,832 overcharged by it. It also directed Bajaj Allianz to
pay Rs 5,78,360 to compensate Dixit for the loss caused by the difference in the annuity amounts between the policy
issued by Bajaj Allianz and that issued by LIC. An interest of 9% per annum on these amounts was also granted and costs
of Rs 10,000 were awarded.
Impact: It is hoped that the new trend of awarding penal or deterrent compensation will gain momentum. This is the only
way to improve the system. Otherwise, service providers will continue to dupe the vast majority of consumers.
3. Arvind Shah (Dr.) v Kamlaben Kushwaha [III (2009) CPJ 121]
Date of Decision: 30.04.2009
The complainant alleged that her deceased son, aged 20 years and otherwise healthy, died as a result of medical
negligence on the part of the appellant doctor (original opposite party) who administered wrong treatment. The State
Commission awarded to the complainant a compensation of Rs. 5 lakh with interest and costs. In appeal, the National
Commission, on consideration of the material on record, came to the conclusion that the two medical prescriptions, which
the doctor sought to deny, could have been written only by him. It also observed that though, in the appeal, the doctor
admitted for the first time to having treated the patient; he did not produce any prescription on record. More important,
the two prescriptions available on record did not mention any of the patient's complaints/symptoms, the doctor's clinical
observations on examining the patient or his diagnosis of the ailment. Even the ordinary vital parameters like temperature,
blood pressure, pulse rate, etc., were not noted. The Commission observed that the Medical Council of India or the State
Medical Council, with one of which the doctor had to be registered to practice modern (allopathic) medicine, required,
through their respective codes of ethics/guidelines/ regulations, to make some minimal record even for outpatients.
Such a record would ordinarily include a summary of the history of illness and current complaints/symptoms of the
patient and clinical observations of the doctor. If the doctor considered none of the above as essential, he would need to at
least record a provisional diagnosis of the patient's ailment in the prescription while advising further diagnostic test(s) or
treatment (medicines/injections). This was one of the primary duties of disclosure owed by a physician of ordinary skills
to his patient. The Commission held that in line with the Apex Court's decision in Samira Kohli v Dr. Prabha Manchanda
[I (2008) CPJ 56 (SC)] regarding need for valid prior consent of the patient for his treatment by a doctor and the doctor's
corresponding duty of disclosure, it was essential for the doctor to write a prescription with such necessary details and
failure to do so would constitute medical negligence. The Commission further observed that if a patient found that the
doctor's treatment did not help ease his felt problem and wanted to consult another, a prescription with such details would
be necessary. On the other hand, a prescription meeting these basic requirements would also assist a doctor in
demonstrating that he had treated his patient with due care, if charged with a wrong/false allegation of negligence by the
patient. While returning a finding of medical negligence against the doctor, the Commission found that the material on
record case was insufficient to attribute the patient's death directly and wholly to the doctor's negligence. Accordingly, it
scaled down the compensation to Rs. 2.5 lakh along with interest.
4. Hotel fined Rs 1.5 lakh for charging Rs 5 above MRP costs

The apex consumer forum has imposed an exemplary cost of Rs 1.56 lakh on a Gujarat-based hotel for charging
customers Rs 5.5 above the Maximum Retail Price (MRP) of a soft drink. The National Consumer Dispute
Redressal Commission (NCDRC) imposed the cost reiterating earlier judicial rulings barring hotels and eateries
from charging above the MRP. The ruling came on a petition filed by a Bharuch-based hotel Nyay Mandir, which
challenged the Gujarat State Commission's order to pay Rs 6,000 as compensation to complainant Ishwar Lal
Jinabhai Desai, who had approached the forum for having been charged Rs 18 for beverage 'Miranda', despite its
MRP being only Rs 12.50.
Asking the hotel to pay Rs 6,000 to the complainant, the forum ordered the hotel to pay an additional Rs 1.50
lakh to the consumer welfare fund. The hotel opposed Desai's plea contending that it took the additional amount
as service charges for various facilities accorded to its customers.
"The petitioner is directed to comply with the State Commission's order within two months from the date of
receipt of the order. The revision petition is accordingly dismissed," the Commission bench of members B N P
Singh and S K Naik said.
Bibliography
www.ncrdc.nic.in
www.prsindia.org
www.consumerresources.in
http://www.timesofindia.com
www.cgsi.org
www.economictimes.com
www.indiankanoon.com
www.dreamweaversindia.com
http://cgsiindia.org
http://www.dnaindia.com/topic/consumer-guidance-society-of-india-cgsi
http://www.consumersinternational.org
https://www.icpen.org
http://www.international-testing.org

Legal Grp2

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Legal Grp2

Uploaded by

Copyright:

Available Formats

NEED FOR CONSUMER PROTECTION ACT IN AN ERA OF

FREE COMPETITION WHERE CONSUMER IS A KING,

SUBMITTED BY: Group 2

Introduction: The Consumer Protection Act and its need

Need for Consumer Protection Act

Definitions and important terms

2. A Consumer of Goods should satisfy the following:

1. A buys a truck for plying it as a public carrier by himself, A is a consumer.

2. A buys a truck and hires a driver to ply it, A is not a consumer.

3. A Consumer of Services should satisfy the following:

5. Unfair Trade Practices

a) expressed on an article offered or displayed for sale, or on its wrapper or container; or

Note : Bargain price means:

6. Restrictive Trade Practices

7. Goods and Defects

8. Deficiency [Section 2(1)(g)]

The consumer is also enjoined to uphold his/her responsibilities:

Objects of the central Council

The right to consumer education.

State Consumer Protection Council

The right to consumer education.

http://ncdrc.nic.in/statelist.html--Addresses of the district consumer dispute redressal commission

District Consumer Protection Council

http://ncdrc.nic.in/districtlist.html--Addresses of the district consumer dispute redressal commission

CONSUMER DISPUTES REDRESSAL AGENCIES

Establishment of Consumer Disputes Redressal Agencies

The following agencies shall be established under the act:

1. Composition of the District Forum

Each district forum shall consist of:

(i) shall be not less than thirty-five years of age,

1. Composition of the State Commission

Each State Commission shall consist of:

(i) shall be not less than thirty-five years of age,

1. Composition of the National Commission:

The National Commission shall consist of

a. be not less than thirty-five years of age,

Powers of The Redressal Agencies

Provision for appeal:

Appeal to Supreme Court of India:

KDS Infra Buildcons vs 132 residents of Pune:

Service and Deficiency [Section 2(1)(o) and (g)]

Service free of charge

Reading the above definition by breaking it into elements, we get

Deficiency of Services in:

Delay in processing refund of unused tickets

Making payment notwithstanding stop-payment instructions

Denial of credit facility

Mere repudiation of claim does not amount to deficiency.

Doctor creating a misleading impression as gynaec specialist.

Failure of hospital to admit patient in I.C.U.

Delay in delivery of car

Cancellation of trains to ensure safety - no deficiency.

Deficiency in service due to circumstances beyond control

sells or distributes any goods for sale and

2. A manufactures combs. He is a trader under the Act.

Note : Trader is a wider term which includes a manufacturer also.

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

Charging Excessive Price

(c) displayed on any package containing the goods.

International Consumer Research & Testing (ICRT)

International Consumer Protection and Enforcement Network (ICPEN)

1. Protect consumers economic interests around the world,

Consumer Guidance Society of India (CGSI)

Mrs. Seeta Gupta Social Worker