III SEMESTER B.B.A.

EXAMINATION, NOVEMBER/DECEMBER 2015

(Fresh) (CBCS) (Semester Scheme)
(2015-16 & Onwards)
Paper 3.5: BUSINESS REGULATIONS
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SECTION – A
Answer any five sub-questions of the following. Each sub-question carries two marks:-
1)
a) What is counter offer?
A counter offer is a rejection of original offer. It is a new offer which needs
acceptance by the original promisor before a contract is made.

b) Who is a minor?
A minor is someone who is below the age of 18 years. He/she has no legal access to
get into a legal contract or agreement. In case, they get into a contract then it is
considered void.

c) Define Cartel under Competition Act 2002.

Cartel includes an association of producers, sellers, distributors, traders or service
providers who, by agreement amongst themselves, limit control or attempt to control
the production, distribution, sale or price of, or, trade in goods or provision of services.

d) State the two ways in which breach of contract might arise.

 Anticipatory breach
 Actual breach
 Minor breach of contract
 Material breach of contract

e) What is hazardous substance?

The term hazardous substance refers to any product or chemical that has properties
that are explosive, flammable, oxidising, toxic, corrosive or toxic to the environment.
Hazardous substance means any substance or preparation which, by reason of its
chemical or physio-chemical properties or handling, is liable to cause harm to human
beings, other living creatures, plant, micro-organism, property or the environment.

f) Name any two objectives of FEMA.

 To facilitate external trade and payments.
 To promote of an orderly maintenance of the foreign exchange market in India.
g) Define the word ‘information’ as per RTI Act, 2005.
According to the RTI Act 2005, information means any material in form, including
records, documents, memos, emails, opinions, advices, press releases, circulars, orders,
logbooks, contracts, reports, papers, samples, models, data material held in any
electronic form and information relating to any private body which can be accessed by a
public authority under any other law for the time being in force.

SECTION – B
Answer any three questions of the following. Each question carries six marks:-

2) Explain the exceptions to rule ‘No consideration No contract’.

No consideration no contract exceptions. A promise without consideration cannot
create a legal obligation. The general rule is that an agreement made without
consideration is void rule is contained in Section 25 of the Indian Contract Act, which
declares that an agreement made without consideration is void. This means that
consideration is must in all the cases. But this Section provides certain exceptions where
an agreement is valid even without consideration.

Following are the exceptions by which agreements without consideration are valid:-

 Agreement made on account of natural love and affection [Section 25 (1)]: An

agreement without consideration is enforceable if, it is (i) expressed in writing and
(ii) registered under the law for the time being in force for the registration of
documents, and is (iii) made on account of natural love and affection, (iv) between
the parties standing in near relation to each other. The following conditions must be
satisfied for the application of the exception:
o The agreement is in writing
 o It is registered.
o It is made on account of natural love and affection
o It is between parties standing in near relation to each other.
 Agreement to compensate for past voluntary services [Section 25 (2)]: An
agreement without consideration is enforceable, if it is a promise to compensate
wholly, or in part, a person who has already voluntarily done something for the
promiser, or something which the promiser was legally bound to do.
 Agreement to pay time-barred debt [Section 25(3)]: According to this exception, a
promise to pay a time barred debt wholly or in part is enforceable if such promise is
in writing and signed by the debtor or his authorized agent. A time barred debt
cannot be recovered and, therefore, a promise to repay such debt is without
consideration. The following conditions must be satisfied for the application of this
exception:
o He promise should be in writing.
o It should be signed by the promiser or his authorized agent.
o The debt must be time-barred therefor, the limitation period for the recovery of
the debt must have expired.
o There must be an express promise to pay. It may be to pay whole or part of the
debt.
 Completed gift: The gift actually made by a donor and accepted by the done will be
valid even without consideration. So in case of a gift actually made, consideration is
not necessary.
 Contract of agency: Section 185 specifically states that no consideration is necessary
to create an agency. Thus, when a person is .appointed as an agent, his appointment
is valid even if there is no consideration. Although, generally, an agent gets
remuneration by way of commission for the services rendered, but no consideration
is immediately necessary at the time of appointment.
 Remission: UNDER SECTION 63 No consideration is required for an agreement to
receive less then what is due. This is called remission in the law.
 Charity: If a person undertakes a liability on the promise of another to contribute to
charity, then the contract is valid. In this case, the no consideration no contract rule
does not apply. Example: Peter is the trustee of his town’s charity organization. He
wants to build a small pond in the town to enhance greenery and offer the residents
a good place to walk around in the evenings. He raises a charity fund where he
appeals to people to come ahead and contribute to the cause. Many people come
forward as subscribers the fund and agree to pay Peter their share of the amount
once he enters into a contract for constructing the pond. After raising half the
amount, Peter hires contractors for building the pond. However, 10 people back out
at the last moment. Peter files a suit against them for recovery. The Court ordered
the 10 people to pay the amount to Peter since he had undertaken a liability based
 on their promise to pay. Even though there was no consideration, the contract was
valid and enforceable by law.
 Bailment: Section 148 of the Indian Contract Act, 1872, defines bailment as the
delivery of goods from one person to another for some purpose. This delivery is
made upon a contract that post accomplishment of the purpose, the goods will
either be returned or disposed of, according to the directions of the person
delivering them. No consideration is required to effect a contract of bailment.

3) Briefly explain the rights of a consumer under Consumer Protection Act.

As per Consumer Protection Act, 1986, “Consumer” means any person who buys or
avails of any service for a consideration which has been paid or promised or partly paid
and partly promised under any system of deferred payment etc. (for details refer to
Section 2(1)(d) of CP Act, 1986).
The Consumer Protection Act, implemented in 1986, gives easy and fast
compensation to consumer grievances. It safeguards and encourages consumers to
speak against insufficiency and flaws in goods and services. If traders and manufacturers
practice any illegal trade, this act protects their rights as a consumer. The primary
motivation of this forum is to bestow aid to both the parties and eliminate lengthy
lawsuits.
This Protection Act covers all goods and services of all public, private, or cooperative
sectors, except those exempted by the central government. The act provides a platform
for a consumer where they can file their complaint, and the forum takes action against
the concerned supplier and compensation is granted to the consumer for the hassle
he/she has encountered.
According to Section 6 of the Consumer Protection Act, the following rights are available
to consumers:-
 Right to be protected or right to safety: Every consumer has the right to be
protected against the marketing of goods and services which are spurious or
hazardous to life and property.
 Right to be informed: 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 consumers against unfair trade practices.
 Right to be assured/choose: Every consumer has a right to be assured, wherever
possible, access to a variety of goods and services at competitive prices.
 Right to be heard: The right to be heard and to be assured that consumers interest
will receive due consideration at appropriate forums.
 Right to seek redressal: The right to seek redressal against unfair trade practices or
restrictive trade practices or unscrupulous exploitation of consumers.
 Right to consumer education: The responsibility of creating awareness amongst the
consumers has been assigned to the Central Consumer Protection Council.
  Right to Basic Needs: The basic needs mean those goods and services which are
necessary for a dignified living of people. It includes adequate food, clothing, shelter,
energy, sanitation, health care, education and transportation. All the consumers
have the right to fulfil these basic needs.
 Right to healthy environment or quality of life: This right provides the consumers,
protection against environmental pollution so that the quality of life is enhanced.
Not only this, it also stresses the need to protect the environment for the future
generations as well.
 Right to seek compensation- The defines that the consumer has the right to seek
redress against unfair and inhumane practices or exploitation of the consumer

The Responsibilities of the Consumer

 Responsibility to be aware – A consumer has to be mindful of the safety and quality
of products and services before purchasing.
 Responsibility to think independently– Consumer should be well concerned about
what they want and need and therefore make independent choices.
 Responsibility to speak out- Buyer should be fearless to speak out their grievances
and tell traders what they exactly want
 Responsibility to complain- It is the consumer’s responsibility to express and file a
complaint about their dissatisfaction with goods or services in a sincere and fair
manner.
 Responsibility to be an Ethical Consumer- They should be fair and not engage
themselves with any deceptive practice.

4) What are the rights of an unpaid seller?

According to Section 45 of the Sale of Goods Act, the seller of goods is deemed to be an
unpaid seller Unpaid Seller
Unpaid Seller as defined under Sale of Goods Act, 1930, is a person: –
1. To whom the whole price has not been paid or tendered.
2. And where a bill of exchange or other negotiable instruments has been accepted
by him as a condition on which it was received has not been fulfilled by reason of
dishonour of the instrument or otherwise.
RIGHT OF AN UNPAID SELLER AGAINST THE GOODS: An unpaid seller has the following
rights against the goods notwithstanding the fact that the property in the goods has passed
to the buyer:
Right of Lien [Sec. 47 to 49] – Lien is the right of an unpaid seller to retain the goods
in his possession and refuse to deliver them to the buyer until the full payment of
the price is made to him, or the price is offered to him.
Right of stoppage of goods in transit [Sec. 50 to 52] –The right of stoppage in transit
means the right of stopping further transit of the goods while they are with a carrier
for the purpose of transmission to the buyer, resuming possession of them and
retaining possession until payment or tender of the price. The right of stoppage can
be exercised only when the following conditions are satisfied:
o The seller should be an unpaid seller;
o The buyer must have become insolvent;
o The seller must have parted with the possession of the goods; and
o The goods must be in the course of transit.
Right of Resale [Sec. 54] –If the buyer fails to pay or offer the price within a
reasonable time, the unpaid seller has the right to resell the goods in the following
circumstances:
o Where the goods are of a perishable nature;
o Where the unpaid seller has exercised his right of lien or of stoppage in
transit and gives notice to the buyer of his intention to resell the goods;
o Where the seller expressly reserve his right of resale.

RIGHTS OF AN UNPAID SELLER AGAINST THE BUYER PERSONALLY: On breach of the

contract of sale due to seller’s default, the buyer has the following remedies (i.e., rights)
against the seller.
Suit for price [Sec. 55] –the property has passed to the buyer, and the buyer
wrongfully neglects or refuses to pay, the seller can sue him for the price.
Suit for damages [Sec. 56] –Where the buyer wrongfully neglects or refuses to
accept and pay for the goods, the seller may sue him for damages for non-
acceptance.
Suit for repudiation [Sec. 60] –The repudiation of the contract of sale by the seller
before the date of delivery entitles the buyer to treat the contract as rescinded and
sue the seller for damages for the breach.
Suit for interest [Sec. 61(2)] –In case of breach of contract on the part of the buyer,
while filing a suit for the price, the seller may sue the buyer for interest from the
date of the tender of the goods or from the date on which the price was payable.

5) Bring out the salient features of RTE.

The Right to Education Act 2009, also known as the RTE Act 2009, was enacted by the
Parliament of India on 4 August 2009. It describes modalities of the importance of free
 and compulsory education for children aged between 6-14 years in India under Article
21 (A) of the Constitution of India. This act came into effect on 1 April 2010 and made
India one of the 135 countries to have made education a fundamental right for every
child. It prescribes minimum norms for elementary schools, prohibits unrecognised
schools from practice and advocates against donation fees and interviews of children at
the time of admission. The Right to Education Act keeps a check on all neighbourhoods
through regular surveys and identifies children who are eligible for receiving education
but do not have the means to.
The salient features of the RTE Act are:-
 Compulsory and free education for all: It is obligatory for the Government to provide
free and compulsory elementary education to each and every child, in a neighbourhood
school within 1 km, up to class 8 in India. No child is liable to pay fees or any other
charges that may prevent him or her from pursuing and completing elementary
education. Free education also includes the provisions of textbooks, uniforms, stationery
items and special educational material for children with disabilities in order to reduce
the burden of school expenses.
 The benchmark mandate: The Right to Education Act lays down norms and standards
relating to Pupil-Teacher-Ratios (number of children per teacher), classrooms, separate
toilets for girls and boys, drinking water facility, number of school-working days, working
hours of teachers, etc. Each and every elementary school (Primary school + Middle
School) in India has to comply with these set of norms to maintain a minimum standard
set by the Right to Education Act.
 Special provisions for special cases: The Right to Education Act mandates that an out of
school child should be admitted to an age appropriate class and provided with special
training to enable the child to come up to age appropriate learning level.
 Quantity and quality of teachers: The Right to Education Act provides for rational
deployment of teachers by ensuring that the specified Pupil-Teacher-Ratio is maintained
in every school with no urban-rural imbalance whatsoever. It also mandates appointing
appropriately trained teachers i.e. teachers with the requisite entry and academic
qualifications.
 Zero tolerance against discrimination and harassment: The Right to Education Act 2009
prohibits all kinds of physical punishment and mental harassment, discrimination based
on gender, caste, class and religion, screening procedures for admission of children
capitation fee, private tuition centres, and functioning of unrecognised schools.
 Ensuring all round development of children: The Right to Education Act 2009 provides
for development of curriculum, which would ensure the all-round development of every
child. Build a child’s knowledge, human potential and talent.
 Improving learning outcomes to minimise detention: The Right to Education Act
mandates that no child can be held back or expelled from school till Class 8. To improve
performances of children in schools, the Right to Education Act introduced the
Continuous Comprehensive Evaluation (CCE) system in 2009 to ensure grade
 appropriate learning outcomes in schools. Another reason why this system was initiated
was to evaluate every aspect of the child during their time in school so that gaps could
be identified and worked on well in time.
 Monitoring compliance of RTE norms: School Management Committees (SMCs) play a
crucial role in strengthening participatory democracy and governance in elementary
education. All schools covered under the Right to Education Act 2009 are obligated to
constitute a School Management Committee comprising of a head teacher, local elected
representative, parents, community members etc. The committees have been
empowered to monitor the functioning of schools and to prepare school development
plan.
 Right to Education Act is justiciable: The Right to Education Act is justiciable and is
backed by a Grievance Redressal (GR) mechanism that allows people to take action
against non-compliance of provisions of the Right to Education Act 2009.
 Creating inclusive spaces for all: The Right to Education Act 2009 mandates for all
private schools to reserve 25 per cent of their seats for children belonging to socially
disadvantaged and economically weaker sections. This provision of the Act is aimed at
boosting social inclusion to provide for a more just and equal nation.

6) List out the penalties imposed for contravention under FEMA.

Contravention is the breach of provisions and norms under the Foreign Exchange
Management Act, or FEMA 1999.
Contravention: Contravention is a breach of the provisions of the Foreign Exchange
Management Act (FEMA), 1999 and
rules/regulations/notifications/orders/directions/circulars issued thereunder.

THE PENALTIES IMPOSED FOR CONTRAVENTION UNDER FEMA.

Penalties [Section 13]: If any person contravenes any provision of FEMA, he shall be liable
to a penalty as stated below:
If amount is quantifiable: Penalty up to thrice the sum involved in such
contravention.
If amount is not quantifiable: Penalty up to ` 2 lakhs.
Continuing Contravention: - In case of continuing contravention additional penalty
up to 5,000 per day can be imposed.
o Confiscation: - Adjudicating Authority can also order confiscation of any currency,
security or any other money or property in respect of which the contravention has
taken place.
o Direction: - Adjudicating Authority can also direct that foreign exchange holdings of
any person committing the contraventions shall be brought back into India or shall
be retained outside India as per directions.
 SECTION – C
Answer any three questions of the following. Each question carries fourteen marks

7. Define Acceptance. What are the legal rules governing a Valid Acceptance?
The Indian Contract Act 1872 defines acceptance in Section 2(b) as “When the
person to whom the proposal has been made signifies his assent thereto, the offer is
said to be accepted. Thus the proposal when accepted becomes a promise.”
Under Section 2(B) of Contract Act, "when a person to whom the proposal is made
expresses his assent, so the proposal is said to be accepted. Proposal when accepted
becomes a promise, e.g. “A” offer “B” to sell his house for Rs.10 lack, “B” agrees to
purchase the house for Rs.10 lack, and this is acceptance.
Acceptance is defined as when the person to whom the proposal is made signifies his
assent thereto, the proposal is said to be accepted. A proposal when accepted becomes
a promise.
ESSENTIALS OF A VALID ACCEPTANCE
Acceptance must be communicated –The definition of acceptance clearly requires that
the assent must be signified. To signify means to communicate. If the acceptance is not
communicated to the offeror, no contract is created.
Acceptance must be absolute and unqualified –Acceptance of a proposal with
conditions, variations and reservations is no acceptance at all. Acceptance with
variations is a counter proposal and there is no contract unless this counter proposal is
accepted by the original proposer.
Acceptance can be express or implied –is express when it is communicated by words,
spoken or written. If the proposer prescribes any mode of acceptance, the offeree must
follow the same mode. Acceptance is implied when it is to be gathered from the
surrounding circumstances or the conduct of the parties. For example, in an auction sale
if the highest bidder strikes a hammer on the table, it is treated as an implied
acceptance.
Acceptance by a definite person –Where an offer is made to a particular person, he
alone must accept the proposal. Acceptance by anybody else invalidates the offer. If the
offer is made to world at large, one person must accept the offer. It is only then that a
contract is made. The general offer is closed as soon as it is accepted by a definite
person.
Acceptance must be through prescribed or reasonable mode –If the acceptance is not
according to the mode prescribed, or some usual and reasonable mode, the offeror may
intimate to the offeree, within reasonable time that the acceptance is not according to
the mode prescribed and may insist that the acceptance must be in the prescribed mode
only.
Mere mental acceptance is no acceptance –No contract is formed if the offeree remains
silent and does nothing to show that he has accepted the offer. A mere mental
determination to accept unaccompanied by any external indication will not be sufficient.
 Acceptance when offer is inforce –Acceptance must be made before the offer lapses. If
any time limit is prescribed, the offer must be accepted before the expiry of the time. If
no time limit is prescribed, the offer must be accepted within reasonable time.
Acceptance must be preceded by offer –Offer must precede acceptance. Without offer,
there is no acceptance.

8. Explain the nature and scope of Business Law.

Business Law is a wide term and embraces all legal principles concerning business
transactions. It is also known as the ‘Commercial Law’, ‘Law Merchant’ or ‘Mercantile
Law’.
Business Law consists of those legal rules, which govern and regulate the business
activities, transactions and trade. It also encompasses the law relating to regulation of
business associations and other incidental matters.
Definition: According to S R Davar, business law “means that branch of law which is
applicable to or concerned with trade and commerce in connection with various
mercantile or business transactions”.
SOURCES OF BUSINESS LAW
 English Mercantile Law: This is the most important source of the Indian mercantile law.
The principal source of English Mercantile law is the common law of England. It also
takes important references from “Lex Mercatoria” a Latin expression for a body of
trading principles used by the merchant throughout Europe in the medieval. Meaning
literally ‘law merchant’, it evolved as a system of customs and best practice, which was
enforced through a system of merchant courts along with main trade routes. It
functioned as the international law of commerce.
The English Mercantile law constitutes the foundation on which the superstructure of
the Indian Mercantile law has been built and is supplemented by:-
 Common law: It refers to a system of law based upon English customs usages
and traditions which were developed over centuries by the English Courts. It is
unwritten and its principles are applied whenever subsequent disputes of similar
nature arise.
 Equity: It refers to that branch of English law which developed separately from
the Common law. It is based upon concepts of justice developed by the judges
whose decisions became precedents. These precedents now constitute Equity
law.
 Statute Law: The Statute law refers to the laid down in the acts of parliament. It
is superior to and overrides any rule of the common law of equity.
 Case Law: It is built up on previous judicial decisions i.e., on the principle that
what has been decided in an earlier case is binding in a similar future case, unless
there is a change in the circumstances.
 Statutory Law: Statutory law is written law set down by the legislature or other
governing authority such as the executive branch of the government in response to the
 need to clarify the functioning of the government, improve civil order to codify existing
law, or for an individual or company to obtain special treatment.
 Judicial Decisions: The past judicial decisions of courts are important sources of law.
Sometimes there is no statutory provision which can answer a legal question raised in a
law suit. In such cases the court will look into the previous court decisions on similar
matters to find the relevant law.
 Customs and Usages: Customs and usages of a trade play an important role in business
dealings of that trade. Customs and usages established by long use and constantly put
into practice become binding on the parties entering into commercial transactions.
NATURE OF BUSINESS LAW
The nature of business law depends on the location of the business and its area of activities.
Apart from these two conditions governance authority also affects the nature of the law.
The main areas included under the business law are:
Starting a business
Taking over/ buying a business
Managing a business
 Starting a Business: The business laws are applicable to all types of business
organizations. There are certain rules for each business entities including corporations,
limited liability, partnership and more. You will need to hire a business lawyer for
starting a business. The hire lawyer can help you with intellectual property law which
includes patents, copyrights, trademarks and other intangible assets. Along with
intangible assets the lawyer will look after the business like consumer protection law,
licensing and permits.
 Taking Over/ Buying a Business: When it comes to buying or taking over an existing
business the company need a lawyer to deal with contracts, employment laws, real
estate laws and consequences after the breach of contract.
 Managing a Business: Running a business is not an easy task as there are several aspects
that are involved in managing a business. The government of the country create and
enforce the federal laws on the business. To deal with all of these aspects the company
needs a business lawyer.
SCOPE OF BUSINESS LAW
The following legislation enacted by Indian Legislature from time to time is covered in the
Indian Business Laws:
a) The Indian Contract Act, 1872.
b) The Negotiable Instruments Act, 1881.
c) The Sale of Goods Act, 1930.
d) The Indian Partnership Act, 1932.
e) The Insurance Act, 1972.
f) The Arbitration & Conciliation Act, 1996.
g) The Law of Insolvency.
h) Law Relating to Carriage of Goods.
9. Explain the essentials of a Valid Contract.
A contract is an agreement enforceable by law, which offers personal rights and
imposes personal obligations, which the law protects and enforces against the parties to
the agreement. Only an enforceable agreement can be called a contract.
Section 10 of the Act defines “All agreements are contracts if they are made by the
free consent of parties competent to contract, for a lawful consideration and a lawful
object, and are not hereby expressly declared to be void”.
ESSENTIAL ELEMENTS OF A VALID CONTRACT

The following are the essential elements of a contract, arrived at on the basis of a combined
reading of Section 2(H) and Section 10 of the Indian Contract Act:
 Offer and Acceptance: There must be a ‘lawful offer’ and ‘lawful acceptance’ of the
offer, thus resulting in an agreement. For example: If X offers to sell his Maruti Car to
Y for Rs. 2,25,000 and Y agrees to pay X Rs. 2,25,000 for the Maruti Car. Here X is
called the offeror or promisor and Y is the offeree or promisee.
 Free Consent: The contracting parties must give their consent freely. It must not be
given due to coercion, undue influence, fraud, misrepresentation or mistake. The
absence of free consent would affect the legal enforceability of a contract.
 Capacity of the parties: The parties making the contract must be legally competent
in the sense that each must be of the age of majority, of a sound mind, and not
 expressly disqualified from contracting (Section 11). An agreement by incompetent
parties shall be a legal nullity.
 Lawful Consideration: An agreement to be enforceable by law must be supported
by consideration. Without consideration, a contract is regarded as a nudum pactum.
Each of the contracting parties must give as well as get something. Moreover, the
consideration must be lawful.
 Lawful object: The object of the agreement must be lawful. It is considered unlawful
if it is (i) illegal (ii) immoral, (iii) fraudulent, (iv) of a nature that, if permitted, it would
defeat the provisions of any law, (v) causes injury to the person or property of
another, or (vi) opposed to public policy.
 Not expressly declared void: The agreement must not have been declared void by
any law in force in India. The Act has itself declared void certain types of agreements
such as those in restraint of marriage, or trade, or legal proceedings as well as
wagering agreements.
 Intention to create legal relations: There must be an intention among the parties
that the agreement should be attached by legal consequences and create legal
obligations.
 Legal formalities: The agreement must comply with the necessary formalities as to
writing, registration, stamping etc. if any required in order to make it enforceable by
law.
 Possibility of performance: The act contemplated in the agreement should be
capable of performance. Agreement to perform an impossible act cannot be
enforced. For example, A promises to share with B 50 percent of the treasure,
provided the treasure is created by magic. Such an agreement cannot be enforced
because of impossibility of performance.
 Certainty of terms: The terms of the agreement must be certain. Vague or uncertain
terms make the agreement unenforceable.

10. Discuss the role of Central Government to prevent and control environmental
pollution.
Role of Central Government in Preventing and Controlling Environmental Pollution
 Subject to the provisions of this Act, the Central Government shall have the power to
take all such measures as it deems necessary or expedient for the purpose of
protecting and improving the quality of the environment and preventing controlling
and abating environmental pollution.
 In particular, and without prejudice to the generality of the provisions of sub-section
(1), such measures may include measures with respect to all or any of the following
matters, namely:-
 Co-ordination of actions by the State Governments, officers and other authorities-
 Under this Act, or the rules made thereunder, or
  Under any other law for the time being in force which is relatable to the
objects of this Act.
 Planning and execution of a nation-wide programme for the prevention, control and
abatement of environmental pollution.
 Laying down standards for the quality of environment in its various aspects.
 Laying down standards for emission or discharge of environmental pollutants from
various sources whatsoever;
 Provided that different standards for emission or discharge may be laid down under
this clause from different sources having regard to the quality or composition of the
emission or discharge of environmental pollutants from such sources;
 Restriction of areas in which any industries, operations or processes or class of
industries, operations or processes shall not be carried out or shall be carried out
subject to certain safeguards.
 Laying down procedures and safeguards for the prevention of accidents which may
cause environmental pollution and remedial measures for such accidents.
 Laying down procedures and safeguards for the handling of hazardous substances.
Examination of such manufacturing processes, materials and substances as are likely
to cause environmental pollution.
 Carrying out and sponsoring investigations and research relating to problems of
environmental pollution.
 Inspection of any premises, plant, equipment, machinery, manufacturing or other
processes, materials or substances and giving, by order, of such directions to such
authorities, officers or persons as it may consider necessary to take steps for the
prevention, control and abatement of environmental pollution.
 Establishment or recognition of environmental laboratories and institutes to carry
out the functions entrusted to such environmental laboratories and institutes under
this Act.
 Collection and dissemination of information in respect of matters relating to
environmental pollution.
 Preparation of manuals, codes or guides relating to the prevention, control and
abatement of environmental pollution.
 Such other matters as the Central Government deems necessary or expedient for
the purpose of securing the effective implementation of the provisions of this Act.

11. Explain the Constitution and functions of various Consumer Dispute Redressal
Agencies.
“Redressal’ means a remedy for the loss suffered by consumers like us.
The word ‘REDRESSAL’ means a ‘REMEDY’. These Forums (Courts) award
compensation to the consumer if the manufacturer or the trader or the service giver is
at fault. So, anyone who has suffered a loss can claim compensation, i.e., some
amount of money based on the loss incurred by the consumer. For example, if the
 manufacturer does not give a new handset, the manufacturer can be compelled to
repay the money and also in some cases special amount of money for the
inconvenience caused due to the faulty product.

CONSUMER DISPUTE REDRESSAL AGENCIES

DISTRICT CONSUMER DISPUTES REDRESSAL FORUMS (DCDRF)
STATE CONSUMER DISPUTES REDRESSAL COMMISSION (SCDRC)
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION (NCDRC)

DISTRICT FORUM: The District Consumer disputes Redressal Forum (DCDRF) which is also
known as the ‘District Forum’, is established by the concerned State Government in each
District of the State. The State Government may establish more than one District Forum in a
district. It is a district level Court that deals with cases valuing up to twenty lakhs. The
Consumer Disputes Redressal Forum, better known as District Forum is the first stage of
courts at the bottom of the hierarchy of the consumer redressal courts. The sections 10 to
15 of the Consumer Protection Act, 1986 deal with this forum.
The Section 10(1) of the Act deals with the composition of the District Forum. The
important aspects of this Act involve:
o There is a President with the qualification of a District judge.
o Apart from the President, there are two other members, one being a woman.
o These members are to be chosen based on three grounds. They must be at least 35
years of age, they must have a degree from a recognized university and they must
have at least 10 years of experience in law, economics, and commerce and so on.
Section 10 1(A) of the Act prescribes that every appointment mentioned above will be made
by a committee with is composed of:
o The President of the State Commission as the Chairman
o The Secretary of the Law Department of the State as a Member
o The Secretary dealing in consumer affairs in the State as a Member.
In the absence of the President, the Chief Justice of the High Court may nominate a sitting
judge of the High Court in his place.
Functions:
Section 11 of the Consumer Protection Act, 1986 defines the jurisdiction of the District
Forum, explained below:
o The value of goods and services and compensation should not exceed 20 lakh rupees.
o Jurisdiction in terms of place can be determined as:
a) The place of residence or carrying out of the business of the opposite party,
b) any party or each party
c) The place where the cause of action wholly or partly arises.
 In accordance with Section 14 of the Act, the District Forum has the power to grant
damages. This can be in the form of compensation, removing defects or deficiencies,
discontinuing unfair trade practice, withdrawal of hazardous good for sale and so on.
 Section 15 of the Act grants an appeal against the decision of the District Forum within
30 days to the State Commission. Also, the appellant must have paid 50 per cent of the
compensation decided against him or ₹25000, whichever is less.
 Section 13 of the Act pertains to the procedure for the admission of a consumer
complaint. Procedure for the complaint against an allegedly defective good which the
Forum should implement is as follows:
a. Within 21 days of filing the complaint, the opposite party should receive a
copy to explain his version. The version should be submitted in 30 days, with
a maximum extension of 15 days.
b. When the opposite party either disputes and denies or fails to take action to
represent his case, clause (c) or (g) must be followed
c. If a complaint needs an analysis of the good, a sample can be taken by the
District Forum to be sent to a certain laboratory for testing for the defect.
The report of the findings should be complete in 45 days unless an extension
is granted by the Forum.
d. The complainant may have to pay a fee in order to carry out the process of
sample testing at the said laboratory.
e. This fee will be given to the laboratory and the report with the appropriate
remarks will be forwarded to the opposite party.
f. If one of the parties disputes the findings of the laboratory, the party’s
objections should be submitted in writing.
g. Both parties will be given a reasonable opportunity to be heard by the
District Forum.
h. Deficiency in services follows a similar procedure, focussing on the evidence
brought to the District Forum.
i. If the complainant fails to appear on the date of the hearing, the Forum may
either dismiss the complaint or act on its discretion.

STATE COMMISSION: The State Consumer Disputes Redressal Commission (SCDRC) which
is also known as ‘State Commission’, is established by the State Government concerned in
the State. It is a State level Court for the redressal of consumer’s disputes. It decides cases
exceeding rupees twenty lakhs but not exceeding rupees one crore.
The Sections 16, 17, 18 and 19 of the Consumer Protection Act, 1986 deal with this
Commission.
The Section 16 of the Act deals with the composition of the State Commission. The
important aspects of this Act involve:
o There is a President who is or was a judge of the High Court, appointed by the State
Government
o Apart from the President, there are two other members, one being a woman.
o The number of members in the State Commission cannot be less than 2
 o These members are to be chosen based on three grounds. They must be at least 35
years of age, they must have a bachelor’s degree from a recognized university and
they must have at least 10 years of experience in law, economics, and commerce
and so on.
o Not more than fifty per cent of the members should have a judicial background.
o The State Government determines the remuneration of the members.
o The President can choose the size of the Commission as one or more
o Decisions are of the majority, with the President intervening in case of an equal
division in opinion.
Section 16 1(A) of the Act prescribes that every appointment mentioned above will be made
by a committee with is composed of:
o The President of the State Commission as the Chairman
o The Secretary of the Law Department of the State as a Member
o The Secretary dealing in consumer affairs in the State as a Member.
o In the absence of the President, the Chief Justice of the High Court may nominate a
sitting judge of the High Court in his place.
Functions
Section 17(1) of the Consumer Protection Act, 1986 defines the jurisdiction of the State
Commission, explained below:
 The value of goods and services and compensation should be at least 20 lakhs but not
exceed 1 crore rupees.
 Appeals against the orders of District Forum are settled here
 If the District Forum has seemingly acted beyond its power or has failed in its duty, then
the National Commission can call for records.

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

 The place of residence or carrying out of the business of the opposite party,
 Any party or each party
 The place where the cause of action wholly or partly arises.

 The State Commission may transfer a complaint to it from the District Forum at any
stage of the proceeding. The State Commission may also outside of its ordinary place of
the capital. These are called Circuit Courts.
 As according to Section 18, the State Commission observes the same procedure as the
District Forum under Sections 12, 13 and 14.
 Section 19 of the Act grants an appeal against the decision of the National Commission
within 30 days to the State Commission. Also, the appellant must have paid 50 per cent
of the compensation decided against him or Rs. 35000, whichever is less.
NATIONAL COMMISSION: The National Consumer Disputes Redressal Commission (NCDRC))
which is also known as ‘National Commission’ is established by the Central Government.
Consumer’s disputes exceeding rupees one crore. The sections of the Consumer Protection
Act, 1986 deal with this Commission.
The Section 20 of the Act deals with the composition of the National Commission. The
important aspects of this Act involve:
o There is a President who is or was a judge of the Supreme Court, appointed by the
Central Government
o There must be 4 members at least, one being a woman.
o These members are to be chosen based on three grounds. They must be at least 35
years of age, they must have a bachelor’s degree from a recognized university and
they must have at least 10 years of experience in law, economics, and commerce
and so on.
o Not more than fifty per cent of the members should have a judicial background.
o The Central Government determines the remuneration of the members.
o The President can choose the Bench of the Commission as one or more
o Decisions are of the majority, with the President intervening in case of an equal
division in opinion.
Section 16 1(A) of the Act prescribes that every appointment mentioned above will be made
by a committee with is composed of:
o A judge of the Supreme Court nominated by Chief Justice of India as the Chairman
o The Secretary in Department of Legal Affairs of the Government of India as a Member
o The Secretary of the department dealing in consumer affairs in the Government of
India as a Member.
FUNCTIONS
 Section 21 of the Consumer Protection Act, 1986 defines the jurisdiction of the National
Commission, explained below:
o The value of goods and services and compensation should exceed 1 crore rupees
o Appeals against the orders of State Commission are settled here
o If the State Commission has seemingly acted beyond its power or has failed in its duty,
then the National Commission can call for records.
 The National Commission may receive a transfer of a complaint from the State
Commission at any stage of the proceeding in the interest of justice. This can be on the
application of the complainant or its own motion. The National Commission may also
outside of its ordinary place of the capital of India, New Delhi. These are called Circuit
Benches.
 The National Commission has the power to review any order made by itself when there
seems to be an error on the record, as stated in Section 22.
 Section 19 of the Act grants an appeal against the decision of the National Commission
within 30 days to the Supreme Court. Also, the appellant must have paid 50 per cent of
the compensation decided against him or Rs. 50000, whichever is less.