CONSUMER PROTECTION ACT, 1986

CHAPTER – 12

CONSUMER PROTECTION ACT,1986

CONCEPTS PARTICULARS NO. OF Q

CONCEPT-1 BASIC CONCEPTS 1

CONCEPT-2 IMPORTANT DEFINATIONS 5

CONCEPT-3 CONSUMER PROTECTION COUNCILS 1

CONCEPT-4 REDRESSAL FORUM UNDER THE ACT 1

CONCEPT-5 REMEDIES & RELIEF 2

CONCEPT-6 APPEAL & PENALTIES 2

CONCEPT-7 IMPORTANT CASE LAWS 4

TOTAL 16

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CONSUMER PROTECTION ACT, 1986

CONSUMER PROTECTION Act-

INTRO WITH OBJECTIVES

(IMP DEFINITIONS) RIGHTS OF CONSUMERS

CONSUMER PROTECTION
COUNCILS
REDRESSAL MACHINERIES
UNDER THE ACT

CENTRAL DISTRICT
DISTRICT
STATE
FORUM

NATIONAL
COMMISSION

POWER OF REDRESSAL
AGENCIES
STATE
COMMISSION

NATURE AND SCOPE OF

APPEAL AND REMEDIES
PENALTIES

CONTRACT OF SERVICE VS
CONTRACT FOR SERVICE

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BIRD’S EYE VIEW

1) Consumer is the real deciding factor for all economic activities. It is now universally accepted that
the extent of consumer protection is a true indicator of the level of progress in a nation.

2) “The Consumer Protection Act 1986 was introduced to protect consumer rights and to redress
consumer complaints and resolve consumer disputes.

3) It is important to note that the Indian Consumer Protection Act is a social welfare legislation and
has been designed to avoid technicalities, procedural delays, procedural requirement, court fees
and costs.

4) It makes provision for the establishment of consumer councils and other authorities for the
settlement of consumers' disputes and for matters connected therewith also. Consumer
Protection Councils are established at the national, state and district level to increase consumer
awareness.

5) To increase the awareness of consumer, there are many consumer organisations and NGOs that
established, such as- (1) Consumer Education And Research Centre (Ahmedabad) (2) Bureau Of
Indian Standard (3) Federation Of Consumer Organisation In Tamilnadu (4) Mumbai Grahak
Panchayat (5) Consumer Voice (New Delhi) (6) Legal Aid Society (Kolkata) (7) Akhil Bhartiya
Grahak Panchayat.

6) The doctrine of ‘Caveat Emptor’ or ‘let the buyer beware’ whichcame into existence in the middle
ages had been replaced by the principle of ‘Consumer Sovereignty or ‘Consumer is the King’.

7) The Consumer Commissions are authorized to impose penalties on trader or person against whom
complaint is made if he fails to comply with the order of the redressal agency. The penalty or
punishment may involve imprisonment for a period not more than 3 years or a fine of not more
than 10 thousand rupees or both.

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CHAPTER – 12

CONSUMER PROTECTION ACT, 1986

CONCEPT 1
BASIC CONCEPTS
Q1: Write a short note on Consumer Protection Act, 1986. What are its objective and scope of
the Act? (V.IMP Q)
OR
Discuss in detail the objects of Consumer Protection Act, 1986?
(CS EXECUTIVE NEW SYLLABUS STUDY SELF TEST Q1)
Ans: Consumer Protection Act, 1986 is an Act of the Parliament of India enacted in 1986 to protect the
interests of consumers in India. It makes provision for the establishment of consumer councils and
other authorities for the settlement of consumers' disputes and for matters connected therewith
also.

OBJECT

According to the preamble, the Consumer Protection Act, 1986 to provide for better protection of
the interests of consumers and for that purpose to make provision for the establishment of
consumer councils and other authorities for the settlement of consumer’s disputes and for matters
connected therewith.
It may be noted that Consumer Protection Act (COPRA) is in addition to and not in derogation of any
other law. (Section 3)

CONCEPT 2
IMPORTANT DEFINATIONS
Q2: Write a short note on Basic Rights of Consumers?
(CS EXECUTIVE OLD SYLLABUS JUNE 2013, DEC 2002)
OR
Discuss Consumer’s Rights under Consumer Protection Act, 1986?
(CS EXECUTIVE NEW SYLLABUS STUDY SELF TEST Q5)
Ans: BASIC RIGHTS OF CONSUMER

The basic rights of consumers that are sought to be promoted and protected are:

I. Right to Safety: It is a right the consumers have the right to be protected against the
marketing of goods and services which are hazardous to life and property, this right is
important for safe and secure life.
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II. Right to Information: It is right to be informed about the quality, quantity, purity, standard
and price of goods or service so as to protect himself against the abusive and unfair practices.
III. Right to Choice: According to this right every consumer has the right to choose the goods or
services of his or her likings. The right to choose means an assurance of availability, ability and
access to a variety of products and services at competitive price and competitive price means
just or fair price.The producer or supplier or retailer should not force the customer to buy a
particular brand only. Consumer should be free to choose the most suitable product from his
point of view.
IV. Right to be Heard or Right to Representation:

It is right to be heard and be assured that consumer’s interest will receive due consideration
at appropriate forums.
V. Right to Seek Redressal:
It is a right to seek redressal against unfair trade practices (UTP) or restrictive trade
practice (RTP) or unscrupulous exploitation of consumer.
VI. Right to Consumer Education:
The right to consumer education is a right which ensures that consumers are informed about
practices prevalent in the market and the remedies available to them.

Right to Safety

BASIC
Right to Information
RIGHTS
OF Right to Choice

CONSU- Right to be Heard or Right to Representation

MER
Right to Seek Redressal

Right to Consumer Education

Q3: Who is consumer? (CS EXECUTIVE NEW SYLLABUS STUDY SELF TEST Q1)
Ans: Section 2(1)(d) - Consumer means any person who -

(a) 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

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approval of such person, but does not include a person who obtains such goods for resale or for
any commercial purpose;
or

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

Consumer means-

Any PERSON who-

or
Buys the “GOODS” Hires the “SERVICES”

And includes And includes

Any UNLAWFUL USER of such Any BENEFICIARY of such

goods (who uses the goods with services
permission of such buyer)

Any person who buys the goods Any person who buys the goods
for - for -

Resale Commercial Commercial

purpose Purpose

Q4: What do you understand by Consideration under CPA, 1986? (SUPER 30 TYPE Q)
Ans: Consumer means any person who buys any goods or hires any services FOR A CONSIDERATION –
 Which has been paid; or
 Promised , or
 Partly paid and partly promised, or
 Under any system of deferred payment (EMI)

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EXAMPLE 1
Ram purchased a scooter which was in Shyam’s possession from the date of purchase. Shyam was
using it and taking it to the seller for repairs and service from time to time. Later on Shyam had a
complaint regarding the scooter. He sued the seller. The seller pleaded that since Shyam did not buy
the scooter, he was not a consumer under the Act. The Delhi State Commission held that Shyam ,
the complainant was using it with the approval of Ram, the buyer, and therefore he was consumer
under the Act.
(Dinesh Bhagat v. Bajaj Auto Ltd)

Q5: Write short notes on the following;-

(a) Complaint
(b) Complainant (CS EXECUTIVE NEW SYLLABUS STUDY SELF TEST Q1)
(CS OLD SYLLABUS DEC 2010)
(c) Restrictive Trade Practice (CS EXECUTIVE OLD SYLLABUS DEC 2016)
(d) Goods & Defect (CS EXECUTIVE OLD SYLLABUS JUNE 2015)
OR
Ram, a tenant entered into an agreement of lease with Shyam, the owner, for ten years.
The lease agreement did not contain the provisions for cleaning, repairing and maintenance
of the leased property. Ram requested to Shyam for providing maintenance services for the
lease property. On refusal, Ram contended that he is a consumer, as he is paying rent of
the leased property but Shyam has not provided the aforesaid services, which should be
treated as the deficiency in service under Consumer Protection Act, 1986. Decide, whether
the contention of Ram is tenable? (CS EXECUTIVE OLD SYLLABUS DEC 2018)
(e) Services & Deficiencies (CS EXECUTIVE OLD SYLLABUS JUNE 2009, 2012)

Ans:
A. COMPLAINT (Sec 2(1)(c)): Complaint means any allegation in writing made, with a view to
obtaining any relief, by a complainant that-

i. An UTP/RTP has been adopted by any trader or service provider;

ii. The goods bought by him or agreed to be bought by him suffer from one or more defects;
iii. the services hired or availed of or agreed to be hired or availed of by him suffer from
deficiency in any respect;
iv. a trader or the service provider, as the case may be, has charged for the goods or for the
services mentioned in the complaint, a price in excess of the price—

 fixed by or under any law for the time being in force; OR

 displayed on the goods or any package containing such goods; OR

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 displayed on the price list exhibited by him by or under any law for the time being in
force; OR
 agreed between the parties.

v. goods which will be hazardous to life and safety when used are being offered for sale to the
public,—
 in contravention of any standards relating to safety of such goods as required to be
complied with, by or under any law for the time being in force;
 if the trader could have known with due diligence that the goods so offered are
unsafe to the public.

vi. services which are hazardous or likely to be hazardous to life and safety of the public
when used, are being offered by the service provider which such person could have known
with due diligence to be injurious to life and safety.

COMPLAINT

It shall contain any 1 or more of following

It shall It shall contain any
allegations:-
always be in 1 or more of the
 Defect in the goods, or relief(s) sought by
There is NO  Deficiency in the service, or consumer.
provision of  Excessive price is charged, or UTP/RTP, or
filing the oral  Hazardous goods are being sold, or
complaint  Hazardous services are being provided. (Sec 14 contains
list of 12 reliefs)

Above list is exhaustive

B. COMPLAINANT (Sec 2(1)(b))

Complainant means

i. a consumer, or
ii. any voluntary consumer association registered under the Companies Act, 2013, or under
any other law for the time being in force; or
iii. the Central Government or any State Government, who or which makes a complaint; or
iv. one or more consumers where there are numerous consumers having the same interest;
v. in case of death of a consumer, his legal heir or representative; who or which makes a
complaint.

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FIVE CATEGORIES OF COMPLAINANTS

A Consumer Voluntary consumer CG or any One or more In case of

Association rgtd State Govt. consumers, where death of a
The Companies Act, there are consumer, his
2013 or under any numerous legal heir or
other law for the consumers having representativ
time being in force the same interest e

Example –
Examples of Voluntary
A passenger travelling by
Association(s) – a particular flight of an
a. Upbhokta Suraksha airlines, can file
Parishad complaint on behalf of
b. Common Cause all passengers, if all the
c. V.O.I.C.E. passengers have same
cause of action (CLASS
d. C.E.R.C.
ACTION)

SECTION 24A provides that COMPLAINT CAN BE FILLED WITHIN max. 2 years from the date
on which the cause of action arises.
When a complaint cannot be filed-
A complaint on behalf of the public which consists of unidentifiable consumers cannot be filed under
the Act.

EXAMPLE –

a) A complaint was filed on the basis of 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 authorized the complainant to make the complaint –
Consumer Education & Research Society, Ahmedabad v. Indian Airlines Corporation, New Delhi .
b) A complaint by an individual on behalf of general public is not permitted – Commissioner of Transport v. Y.R.
Grover
c) A complaint after expiry of limitation period is not permitted and unregistered association can’t file a
complaint.

(C) GOODS & DEFECT

Goods - COPRA does not define the term ‘Goods’. It says that – “Goods” means goods as defined in
the Sales of Goods Act, 1930.

Section 2(7) of the Sale of Goods Act, 1930 Goods means every kind of movable property other
than actionable claims and money; and includes stock and shares, growing crops, grass and things

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attached to or forming part of the land, which are agreed to be severed before sale or under the
contract of sale.

GOODS
means includes

Goods as per Goods Stock and shares Goods imported in

SOGA, 1930 manufactured after their India
in India. allotment

Goods means all type of

movable properties,
MORGAN STANLEY Vs. KARTIK DAS-
except-

S.C. held that the goods includes shares only after

Cash and actionable
their allotment and not before allotment.
claims.

Defect - Defect means any fault, imperfection or shortcoming in the quality, quantity, potency,
purity or standard which is required to be maintained by or under any law for the time being in
force or under any contract, express or implied, or as is claimed by the trader in any manner
whatsoever in relation to any goods. [Section2(1)(f)]
(This is an exhaustive definition)

EXAMPLES:

a) A Pressure Cooker burst and caused injury to the user. It was held to be a manufacturing
defect –
T.T. (P.) Ltd. v. Akhil Bhartiya Grahak Panchayat

b) Where laboratory test report showed that soft drink was not fir for human consumption, it
was held defective – Narayanan Vyankatkrishnan Iyenger v. Shakti Foods

c) Gas cylinder with excessive gas is defective goods – Dayanand A Avasare v. Bharat
Petroleum Corporation Ltd.

d) Ram supplied white marble to Shyam. Later on the colour of the marble changed. Held it
comes within the scope of ‘defect’ in goods under the Act – Chitranjan Sahu v. N.C. Jain.

D. SERVICES & DEFICIENCIES

SERVICE: The term ‘service’ is defined under Section 2(1)(o) as to mean service of any description
which is made available to potential users and includes, but not limited to the provision of facilities in

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connection with banking, financing, insurance, transport, processing, supply of electrical or other
energy, board or lodging or both, housing construction, entertainment, amusement or the purveying
of news or other information, but does not include the rendering of any service free of charge or
under a contract of personal service.

SERVICE

means And includes But does not include

Any service A list of 12

services Service Services
which is made
available to provided FREE provided

potential OF COST under the

 banking, CONTRACT
users
 financing, OF SERVICE
Potential user  insurance,
means the one  transport,
who has capacity  processing, EXAMPLES of contract of
to pay for such  supply of electrical or Services-
service other energy,
 board or lodging or both,  Employer-employee
 housing construction, relationship
entertainment, amusement  Principal-agent relationship
or the purveying of news  Landlord relationship

or other information,

[ In Laxmiben Laxmichand Shah v. Sakerben Kanji Chandan and others]

The Supreme Court held that the tenant entering into lease agreement with the landlord cannot be
considered as consumer under Section 2(1)(d) of the Act. Where there was no provision in the lease
agreement in respect of cleaning, repairing and maintaining the building, the rent paid by tenant is not
the consideration for availing these services and therefore, no question of deficiency in service.

DEFICIENCY means any fault, imperfection, shortcoming or inadequacy in the quality, nature and
manner of performance which is required to be maintained by or under any law for the time being in
force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in
relation to any service [Section 2(1)(g)].

In Divisional Manager, LIC of India v. Bhavanam Srinivas Reddy, the National Commission observed
that default or negligence in regard to settlement of an insurance claim (on allegation of suppression
of material facts, in this particular case) would constitute a deficiency in service on the part of the
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insurance company and it will be perfectly open for the aggrieved consumer to approach the Redressal
Forums to seek appropriate relief.

E. RESTRICTIVE TRADE PRACTICES

Restrictive Trade Practice [Section2(1)(nn)] means a trade practice which tends to bring about
manipulation of price or its conditions of delivery or to affect flow of supplies in the market relating
to goods or services in such a manner as to impose on the consumers unjustified costs or restrictions
and shall include—
a) delay beyond the period agreed to by a trader in supply of such goods or in providing the
services which has led or is likely to lead to rise in the price;
b) any trade practice which requires a consumer to buy, hire or avail of any goods or, as the
case maybe, services as condition precedent to buying, hiring or availing of other goods or
services. (TIE UP SALES)

Q6:.Explain Contract of service v. Contract for services? (4 STAR Q)

OR
Distinguish between the Contract of service and Contract for service?
(CS EXECUTIVE NEW SYLLABUS JUNE 2019)
Ans: Contract of service v. Contract for services

Contract of service Contract for services

It is NOT a service in CPA, 1986. It is a service in CPA, 1986

EXAMPLES of contract of service- Contract for service includes the services

provided on Principal to Principal basis.
i. Employer-employee relationship
ii. Principal-agent relationship EXAMPLES-
iii. Landlord-tenant relationship
i. Client hiring services of an advocate
ii. Patient hiring services of a doctor

Both of above are consumers for the purpose

of CPA.

Note – 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 here:- Advocates, Airlines, Chartered Accountants, courier, Education, Gas/LPG,
Medical, Postal services, Railways, Investment related services, and Telephone services.

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CONCEPT 3
CONSUMER PROTECTION COUNCIL
Q7: Discuss how the interest of the consumers be protected with consumer protection councils?
(IMP Q)
Ans: CONSUMER PROTECTION COUNCILS

The interests of consumers are sought to be promoted and protected under the Act inter alia by
establishment of Consumer Protection Councils at the Central, State and District Levels. Chapter II
of the Consumer Protection Act, 1986 comprising Sections 4 to 8 deals with Consumer protection
Councils.

CENTRAL CONSUMER PROTECTION COUNCILS (SEC 4)

POINT OF NCPC National Level SCPC State Level DCPC District Level
COMPARISON

CONTITUTION Chairman (Minister in Chairman (Minister in Chairman (Collector of

charge of consumer charge of consumer the District) [+] such
affairs in CG) [+] affairs in SG) [+] such number of other official
such number of other number of other and non official members
official and non- official and non- representing such
official members as official members interests as may be
may be prescribed. representing such prescribed by SG.
interests as may be
prescribed by SG [+]
such number of other
official and non-official
members, not
exceeding 10, as may be
nominated by CG.

MIN. MEETINGS Atleast 1 every year Atleast 2 every year Atleast 2 every year

OBJECTIVE The objects of NCPC The objects of SCPC
shall be promote and shall be to promote and
protect the rights of protect within the
the consumers laid state the rights of the
down in Section 6. consumers laid down in
Section 6.
The objects of every
DCPC shall be to promote
and protect within the
district the rights of the
consumers laid down in
Section 6.

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CONCEPT 4
REDRESSAL FORUMS UNDER THE ACT
Q8: Discuss the composition, jurisdiction of the various Forums/Commissions under the Consumer
Protection Act, 1986? (CS EXECUTIVE OLD SYLLABUS JUNE 2017)
OR
Briefly discuss the jurisdiction of the various Forums/Commissions under the Consumer
Protection Act, 1986? (CS EXECUTIVE NEW SYLLABUS STUDY SELF TEST Q2)

Ans: The Act provides for a three-tier quasi-judicial redressal machinery at the District, State and
National level for redressal of consumer disputes and grievances. The District Forum has
jurisdiction to entertain complaints where the value of goods/services complained against and the
compensation, if any claimed, does not exceed Rs.20 lakhs, the State Commission for claims
exceeding Rs.20 lakhs but not exceeding Rs.1 crore; and the National Commission for claims
exceeding Rs.1 crore:

POINT OF DISTRICT FORUM STATE NATIONAL

COMPARISION COMMISSION COMMISSION
CONSTITUTION 1 + President 1P + Min. 2M (1W) 1P + Min 4M (1W)
(Sec 10,16,20) +
Max 50% members Max 50% members
Exact 2 members from judicial
from judicial
(i of whom shall be a woman) background background
(Sec 10) (Sec 16) (Sec 20)

QUALFICATIONS OF A person who is, or has been, or is A person who is, or A person who is,
PRESIDENT qualified to be a district judge. has been, a judge or has been, a
of HC judge of SC
i. Not less than 35 years of age, Same Same
ii. Posses a bachelor’s degree from a
recognised university,
iii. A member shall be person of
ability, integrity and standing,
and have adequate knowledge and
experience of atleast ten years in
dealing with problems relating to
economics, law, commerce,
accountancy, industry, public
affairs or administration.

DISQUALFICATIONS A person shall be disqualified for Same Same

OF MEMBERS & appointment as a member, if he—
PRESIDENT a) has been convicted and sentenced to
imprisonment for an offence which,
SG... CG...
in the opinion of the state
Government involves moral turpitude;

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or
b) is an undischarged insolvent; or
c) is of unsound mind and stands so
declared by a competent court; or
d) has been removed or dismissed from
the service of the Government or a
body corporate owned or controlled
by the Government; or
e) has, in the opinion of the state SG... CG...
Government, such financial or other
interest as is likely to affect
prejudicially the discharge by him of
his functions as a member; or
f) has such other disqualifications as
may be prescribed by the State SG... CG...
Government;

TENURE & AGE Every member (including the president) of 5 years or puto the 5 years or puto
LIMIT district forum shall hold office from a age of 67 years, the age of 70
term of 5 years/upto the age of 65 (earlier) years, (earlier)
years, whichever is earlier.

RE-APPOINTMENT A member shall be eligible for re- Similar Similar

appointment for another term of 5 years (67 yrs) (70 yrs)
or upto the age of 65 years, whichever is
earlier, subject to the condition that he
fulfils the qualifications and other
(Sec. 16) (Sec. 20)
conditions for appointment. [Sec. 10]

PECUNIARY (V+C) upto Rs.20 lacs

JURISDICTION (Sec V= value of goods/service
11,17,21) C= Amt of compensation
(Sec. 11)

POWER OF PASSING Y
INTERIM ORDER Sec. 13 (3B)

REVISIONARY NO
POWERS (To revise
the order of lower
forum)

REVIEW ITS OWN CPA is silent

DECISIONS

PASSING EX-PARTE Y
ORDERS

SETTING ASIDE EX- Y Y

PARTE ORDERS and [Sec. 13(2)(b)(ii)] [Sec 22A]
re-opening of case.

APPLICABILITY OF Y Y Y

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SEC.12,13,14
APPEALS To State Commission (30 days + extn) To S.C. 30 days +
(Sec.15,19,23) Deposit – 50% or 25000 (less) extn (50% or
50,000)
Sec 27A [Appeal on Both Both Both
the Qn of law & Qn
of facts]

Sec. 27 – Penalty & Y Y

imprisonment for not (1m – 3yrs/2,000 – 10,000/both)
complying with orders
Circuit Benches N Y
Power to Transfer N Y
Cases

Time Limit for 3 mnths or 5 mnths from the date of SAME

Disposal of Complaint receipt of notice by opposite party

Time limit for disposal N.A. 90 Days from the date 90 days from the
of appeals of its admission date of its
admission

NOTE – Whenever a consumer court, receives complaint from a consumer it shall forward the copy
of complaint to the opposite party. Thereafter, consumer court should allow atleast 30 days to the
opposite party before first hearing. Moreover, the consumer court can allow extension upto
maximum 15 days to the opposite party on its request. (Sec 12)

Fenner Walter vs. U.O.I. – Supreme Court held that it is not desirable if a sitting judge of High
Court is appointed as president of state commission, because –

 The quality of his services may suffer (Quality of judgement may suffer); and
 Such person will be subject to the disciplinary action by two employers, C.G. and S.G.

NOTE – Being a judge of HC he is an employee of C.G., and, being a president of State Commission
he is an employee of S.G.

CONCEPT 5
REMEDIES & RELIEF UNDER CPA, 1986
Q9: Explain the nature and scope of the remedies under the Act?
(CS EXECUTIVE OLD SYLLABUS DEC 2013),
(CS EXECUTIVE NEW SYLLABUS STUDY SELF TEST Q3)
Ans: Nature and Scope of Remedies under the Act

In terms of Section 14(1) of 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

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services are proved, the District Forum/State Commission/National Commission may pass one or
more of the following orders:
 to remove the defects pointed out by the appropriate laboratory from the goods in
question;
 to replace the goods with new goods of similar description which shall be free from any
defect;
 to return to the complainant the price, or, as the case may be, the charges paid by the
complainant;
 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;
 to remove the defects in goods or deficiencies in the services in question;
 to discontinue the unfair trade practice or the restrictive trade practice or not to repeat
them;
 not to offer the hazardous goods for sale;
 to withdraw the hazardous goods from being offered for sale;
 to cease manufacture of hazardous goods and to desist from offering services which are
hazardous in nature;
 to pay such sum as may be determined by it if it is of the opinion that loss or injury has
been suffered by a large number of consumers who are not identifiable conveniently:
 It is to be noted that the minimum amount of sum so payable shall not be less than five
percent of the value of such defective goods sold or service provided, as the case may be,
to such consumers.
 Further, the amount so obtained shall be credited in favour of such person and utilized in
such manner as may be prescribed.
 to issue corrective advertisement to neutralize the effect of misleading advertisement at
the cost of the opposite party responsible for issuing such misleading advertisement;
 to provide for adequate costs to parties.

The remedies that can be granted by the redressal agencies are therefore, wide enough to cover
removal of defects/deficiency in goods/services, replacing defective goods with new goods,
refunding price/charges paid by the complainant, payment of compensation for loss or damage
suffered, providing costs to parties and issuing prohibitory orders directing the discontinuance of
unfair trade practice, sale of hazardous goods etc.

However, the redressal agencies have not been granted power to order injunctions. Section 14(1)(d)
provides that the redressal agency may order payment of compensation only in the event of
negligence of the opposite party which resulted in loss or damage and not otherwise, i.e. even though

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the complainant has suffered loss or damage, he may not be entitled for compensation if he cannot
prove negligence.

Q10: Mention the relief which a Consumer Dispute Redressal Forum can grant to an aggrieved
consumer? (CS EXECUTIVE OLD SYLLABUS DEC 2007)
Ans: As per Section 14 of the Consumer Protection Act, 1986, where the goods suffer any kind of
defect or deficiency in service, the District Forum, State or National Commission may pass the
following orders:
 To remove the defects.
 To replace the goods.
 To return the price or charges paid by the complainant.
 To pay the compensation amount to the consumer for any loss or injury.
 To remove the defects in goods or deficiencies in the services.
 To discontinue the unfair trade practice or the restrictive trade practice.
 Not to offer hazardous goods for sale.
 To withdraw the hazardous goods from being offered for sale.
 To provide for adequate costs to parties.
 To cease manufacture of hazardous goods and to desist from offering services which are
hazardous in nature.

CONCEPT 6
APPEAL & PENALTIES UNDER CPA, 1986
Q11: Write short notes on appeal in Consumer Protection Act, 1986? (THE LOIN KING TYPE Q)
Ans: Appeal
Section 15 entitles a person aggrieved by an order of the District Forum to prefer an appeal to the
State Commission.

Similarly, any person aggrieved by any original order of the State Commission may prefer an appeal
to the National Commission under Section 19.

Likewise, any person aggrieved by any original order of the National Commission may prefer an
appeal to the Supreme Court, under Section 23.

All such appeals are to be made within 30 days from the date of the order.

However, the concerned Appellate authority may entertain an appeal after the said period of 30
days if it is satisfied that there was sufficient cause for not filling it within the prescribed period.

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The period for 30 days would be computed from the date of receipt of the order by the appellant.

However, an appeal by a person, who is required to pay any amount in terms of an order of the
District Forum/State Commission, shall be entertained by the State Commission/ National
Commission respectively only if the appellant has deposited in the prescribed manner 50% of that
amount or Rs.25,000/Rs.35,000 respectively, whichever is less.

It may be observed that appeals are allowable only against the original orders passed by the
concerned redressal agency.

Appellate orders passed by the State Commission or National Commission (i.e. on appeal against the
orders of the District forum or Sate Commission) cannot be further appealed against, though on
questions of law revision petitions may be filed.

Similarly, the revisional orders passed by the State Commission or the National Commission are not
appealable.

Q12: Write short notes on Penalties in Consumer Protection Act, 1986? (DHAMAAL TYPE Q)
Ans: Penalties
Section 27 provides that failure or omission by a trader or other person against whom a complaint
is made or the complainant to comply with any order of the District Forum, State Commission or the
National Commission shall be punishable with imprisonment for a term which shall not be less than 1
month but which may extend to 3 years, or with fine of not less than Rs.2,000 but which may
extend to Rs.10,000, or with both.

However, on being satisfied that the circumstances of any case so require, the District Forum or
the State Commission or the National Commission may impose a lesser fine or a shorter term of
imprisonment.

Section 27(3) prescribes that all offences under the Act to be tried summarily.

CONCEPT 7
IMPORTANT CASE LAWS\]
Q13: Sohan has a truck which was driven by a driver, Shyam but Shyam did not have valid licence
for driving the truck. The truck was insured with an insurance company. On the way, all of a
sudden the truck started burning. Sohan filed a claim with the insurance company. The
insurance company repudiated the claim on the ground that driver of the said truck did not
have valid driving licence. The truck owner pleaded that the claim is not related to driving of
the truck but the insurance company did not change its earlier decision. Sohan filed a
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complaint with the District Consumers Disputes Redressal Forum. Will Sohansucceed?. Discuss
with reference to decided case, if any. (CS EXEC OLD SYLLABUS DEC 2016).

Ans: In the case of Jitendra Kumar vs. Oriental Insurance Company Ltd. And another, the Supreme
Court has held that where fire has occurred due to mechanical failure and not due to any act or
omission of the driver, the insurance company cannot repudiate the claim because of lack of driving
licence. Thus, Sohan will succeed in his claim.

Q14: Mohan was suffering from serious ailment. He was admitted to a well-known private hospital
in Gurgaon. He was subjected to various tests. Even after diagnosis and subsequent treatment
his condition deteriorated. The doctor advised surgery during which Mohan collapsed and died.
Sushma, his wife preferred a claim for compensation of Rs. 5o Lakh under the Consumer
Protection Act, 1986 for deficiency in service. The hospital authorities contended that
medical profession was being unnecessarily hounded. Is the contention tenable? Refer to
relevant case law laying down guidelines for medical profession.
(CS EXEC OLD SYLLABUS JUNE 2014).
Ans: In Kusum Sharma & Others vs. Batra Hospital & Medical Research Centre & Others, the SC
held that hospital could be charged s guilty if its shown that hospital was negligible in its duties.
However, medical professions are entitled to get protection as long as they perform their
duties.The interest and welfare of the patients have to be paramount for the medical professionals.
In this case, Mohit was given reasonable and standard treatment by the hospital. Even after this he
was expired, then hospital and doctors cannot be held liable as there is no deficiency in service.

Q15: ‘X’, a student, after making payment of Examination for Bachelor of Engineering took
examination; but university failed to conduct examination in time. Consequently evaluation of
answer sheets and declaration of result was also delayed. As a result Mr. ‘X’ could not get
admission in Post-Graduation course of other university. He lost one academic session. Being
aggrieved with the functioning of university, he filed a petition before the State Consumer
Disputes Redressal Commission for compensation, will he succeed? Answer with reference to
leading case. (CS EXECUTIVE OLD SYLLABUS DEC 2018)

Ans: In the case of Alex J. Rebello v. Vice Chancellor, Banglore University and others, the National
Commission has held that the University in conducting examination, evaluating answer sheets and
publishing the result was not performing any service for consideration and a candidate who
appeared for the examination cannot be regarded as a consumer.

In the given case i.e. similar to the above case X will not be regarded as consumer. So he will not
succeed.

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Q16: Fatima, a student took admission in the ‘ABC College’, of a Government approved Private
University. But, later on Fatima joined another college of Government University. She claimed
refund of admission fee from ABC College. The college refused to refund admission fee on the
ground that there is no rule in Private University to refund the admission fee. She filed a
petition before District Consumer Disputes Redressal Forum. Will she succeed? Discuss with
reference to a decided case in this matter. (CS EXECUTIVE NEW SYLLABUS JUNE 2019)

Ans: In Isabella Thoburn College v. Ms. Fatima Effendi the State Commission held that non-refund of
admission fee is not a deficiency of service on the part of the university because admission fee is
consideration for admission and respondent herself voluntarily withdrawing admission from one
university to join another institute cannot claim refund of admission fee.

In this case Fatima will not succeed.

OTHER IMPORTANT CASE LAWS

1. In Ravneet Singh Bagga v. KLM Royal Dutch Airlines (Supreme Court)

OR

The complainant booked a ticked from Delhi to New York by a KLM plane. The airport
authorities in New Delhi did not find any fault in his visa and other documents. However, at
Amsterdam, the airport authorities instituted proceedings of verification because of which the
appellant missed his flight to New York. After reaching New York, the airlines tendered
apology to the appellant for the inconvenience and paid as a goodwill gesture a sum of Rs
2,500. The appellant made a complaint to the National Commission under the Consumer
Protection Act, 1986. Whether the complainant will succeed? Give reasons with the help of
decided case law.
(CS EXECUTIVE NEW SYLLABUS DEC 2018)

Facts: Mr. R.S.B. is travelling from Delhi to New York on KLM Airlines Amsterdam the KLM counter
staff raised suspicious about genuineness of his visa (as photocopy of the photograph was affixed
on the visa) – time taken for verification- passenger couldn’t proceed to New York by the flight for
which he had booked – whether harassment – staff did their best to make complainant reach New
York the same day – and paid Rs. 2500 as goodwill gesture.

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Decision: No deficiency in service. Airlines had acted fairly and in a bonafide manner, keeping in
mind security and safety of passengers and the aircraft – although complainant had been subjected
to harassment but respondents can’t held guild of any deficiency.

2. National Insurance Co. Ltd. v. Seema Malhotra (Supreme Court)

A cheque was issued under a contract of insurance of motor car by the insured for payment of
premium to the policy.
However, cheque was dishonoured for want of funds in the account. Meanwhile, the car met with an
accident and badly damaged, killing the insured owner. The claim for insured amount was repudiated
by the company.

The Supreme Court held that applying the principles envisaged under Section 51, 52 and 54 of
Indian Contract Act, relating to reciprocal promises, insurer need not to perform his part of
promise when the other party fails to perform his part and thus not liable to pay the insured
amount.

3. In Harshad J. Shah v. Life Insurance Corporation of India

The insured (deceased) took out four life policies with double accident benefits, - premium payable
half-yearly. When the third premium fell due, the general agent of the Corporation met the person
and took a bearer cheque towards the premium payable by him in respect of the policies. Although
the cheque was encashed immediately thereafter, it was not deposited with the Corporation for
another three months. In the meantime, the insured met with a fatal accident and died. The
Corporation rejected the widow’s claim for payment of the sum assured on the ground that the
policies had lapsed for non-payment of premium within the grace period.

Decision: The agent had no express authority to receive payment. Nor could it be said that their
was an emplied authority, in view of express prohibition in regulations. Doctrine of apparent
authority under Contract Act can’t be invoked, as no evidence is given by the complainant that LIC
by its conduct induced by policyholder to believe that agents are authorized to receive payment.
(LIC is not liable to pay claim).

4. Lucknow Development Authority v. Roop Kishore Tandon

Failure of a Housing Board to give possession of the flat after receiving the price and after
registering it in favour of the allottee was held to be ‘deficiency in service’.

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5. [Dainik Rail Yatri Sangh (Regd.) v. The General Manager, Northern Railway

Cancellation of train services by the railways due to disturbance involving violence so as to

safeguard the passengers as well as its own property was held by the National Commission (NCDRC)
as not constituting ‘deficiency in service’ on the part of the Railway.

6. Punjab National Bank v. K.B. Shetty

Ornaments kept in the banks locker were found lost though the certificate recorded by the
custodian of the bank on the day the customer operated the locker stated that all lockers operated
during the day have been checked and found properly locked. The National Commission upholding the
decision of the State Commission, held the bank guilty of negligence and therefore, liable to make
good the loss.

7. N. Prabhakaran v. GeneralManager, Southern Railway, Madras

Failure of the Railways to provide cushioned seats in the first class compartments as per
specifications laid down by the Railway Board and to check unauthorized persons from entering and
occupying first class compartments was held to be ‘deficiency’.

8. Union Bank of India v. Seppo Rally OY

The Supreme Court held that delay in payment of an unconditionally guaranteed amount by a bank in
India to a non-resident in Finland in foreign currency cannot be attributed to any deficiency in the
service of the bank when the banks stand is that the delay is caused by the failure of a bank in
Finland, to which the remittance was to have been made under the non-residents instructions to
reply to the Indian Banks valid query in this connection and the RBI took time to grant the
necessary permission to make the remittance.

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