1

LEGAL ASPECTS
OF BUSINESS
UNIT -IV
SALE OF GOODS ACT 1930

Goods-Classification of Goods-Contract of Sale-Sales and Agreement to Sell-

Conditions and Warranties -Performance of Contract of Sale-Doctrine of Caveat
Emptor” - Rights of Unpaid Seller.

UNIT -V
CONSUMER PROTECTION ACT, 1986

Introduction- Objectives of the Act-Definitions-Deficiency in services-Role of

Central and State Consumer Protection Council - Consumer Disputes Redressal
Agencies: District Forum, State Commission and National Commission:
Jurisdiction - Composition - Appeal.
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THE SALE OF GOODS ACT 1930

Contracts or agreements related to the sale of goods are governed under the Sale of
Goods Act 1930. This act came into effect on the 1st of July 1930 in the whole of India
except the state of Jammu and Kashmir.

Buyer

As per the sec 2(1) of the Act, a buyer is someone who buys or has agreed to buy
goods. Since a sale constitutes a contract between two parties, a buyer is one of the
parties to the contract.

Seller

The Act defines seller in sec 2(13). A seller is someone who sells or has agreed to
sell goods. For a sales contract to come into existence, both the buyers and seller must be
defined by the Act. These two terms represent the two parties of a sales contract.

A faint difference between the definition of buyer and seller established by the Act
and the colloquial meaning of buyer and seller is that as per the act, even the person who
agrees to buy or sell is qualified as a buyer or a seller. The actual transfer of goods
doesn’t have to take place for the identification of the two parties of a sales contract.

Goods

One of the most crucial terms to define is the goods that are to be included in the
contract for sale. The Act defines the term “Goods” in its sec 2(7) as all types of movable
property. The sec 2(7) of the Act goes as follows:

“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 will be
considered goods”

Types of Goods

1. Existing Goods

The goods that are referred to in the contract of sale are termed as existing goods if
they are present (in existence) at the time of the contract. In sec 6 of the Act, the existing
goods are those goods which are in the legal possession or are owned by the seller at the
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time of the formulation of the contract of sale. The existing goods are further of the
following types:

A) Specific Goods

According to the sec 2(14) of the Act, these are those goods that are “identified
and agreed upon” when the contract of sale is formed. For example, you want to sell your
mobile phone online. You put an advertisement with its picture and information. A buyer
agrees to the sale and a contract is formed. The mobile, in this case, is specific good.

B) Ascertained Goods:

This is a type not defined by the law but by the judicial interpretation. This term is
used for specific goods which have been selected from a larger set of goods.

For example, you have 500 apples. Out of these 500 apples, you decide to sell
200 apples. To sell these 200 apples, you will need to separate them from the 500 (larger
set). Thus you specify 200 apples from a larger group of unspecified apples. These 200
apples are now the ascertained goods.

C) Unascertained Goods:

These are the goods that have not been specifically identified but have rather been
left to be selected from a larger group. For example, from your 500 apples, you decide to
sell 200 apples but you don’t specify which ones you want to sell. A seller will have the
liberty to choose any 200 apples from the lot. These are thus the unascertained goods.

2. Future Goods

In sec 2(6) of the Act, future goods have been defined as the goods that will either
be manufactured or produced or acquired by the seller at the time the contract of sale is
made. The contract for the sale of future goods will never have the actual sale in it, it will
always be an agreement to sell.

For example, you have an apple orchard with apples in it. You agree to sell 1000
apples to a buyer after the apples ripe. This is a sale that has to occur in the future but the
goods have been identified already and the agreement made. Such goods are known as
future goods.
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3. Contingent Goods

Contingent goods are actually a subtype of future goods in the sense that in
contingent goods the actual sale is to be done in the future. These goods are part of a sale
contract that has some contingency clause in it. For example, if you sell your apples from
your orchard when the trees are yet to produce apples, the apples are a contingent good.
This sale is dependent on the condition that the trees are able to produce apples, which
may not happen.

III. Delivery

The delivery of goods signifies the voluntary transfer of possession from one
person to another. The objective or the end result of any such process which results in the
goods coming into the possession of the buyer is a delivery process. The delivery could
occur even when the goods are transferred to a person other than the buyer but who is
authorized to hold the goods on behalf of the buyer.

There are various forms of delivery as follows:

Actual Delivery:

If the goods are physically given into the possession of the buyer, the delivery is
an actual delivery.

Constructive delivery:

The transfer of goods can be done even when the transfer is effected without a
change in the possession or custody of the goods. For example, a case of the delivery by
attornment or acknowledgment will be a constructive delivery. If you pick up a parcel on
behalf of your friend and agree to hold on to it for him, it is a constructive delivery.

Symbolic delivery:

This kind of delivery involves the delivery of a thing in token of a transfer of some
other thing. For example, the key of the godowns with the goods in it, when handed over
to the buyer will constitute a symbolic delivery.

IV. The Document of Title to Goods

From the Sec 2(4) of the act, we can say that this “includes the bill of lading, dock-
warrant, warehouse keeper’s certificate, railway receipt, multimodal transport document,
warrant or order for the delivery of goods and any other document used in the ordinary
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course of business as proof of the possession or control of goods or authorizing or

purporting to authorize, either by endorsement or by delivery, the possessor of the
document to transfer or receive goods thereby represented.”

V. Mercantile Agent [Section 2(9)]

Mercantile agent is someone who has authority in the customary course of

business, either to sell or consign goods under the contract on behalf of the one or both of
the parties. Examples include auctioneers, brokers, factors etc.

VI. Property [Section 2(11)]

In the Act, property means ‘ownership’ or the general property i.e. all ownership
right of the goods. A sale constitutes the transfer of ownership of goods by the seller to
the buyer or an agreement of the same.

VII. Insolvent [Section 2(8)]

The Act defines an insolvent person as someone who ceases to pay his debts in the
ordinary course of business or cannot pay his debts as they become due, whether he has
committed an act of insolvency or not.

VIII. Price [Section 2(10)]

In the Act, the price is defined as the money consideration for a sale of goods.

IX. Quality of Goods

In Sec 2(12) of the Act, the quality of goods is referred to as their state or
condition

SALE AND AGREEMENT OF SALE (SECTION 4)

A contract is a formal or verbal agreement that is enforceable by law. Every

contract must have an agreement but every agreement is not a contract. The section 4(1)
of the Sale of Goods Act, 1930 states that – ‘A contract of sale of goods is a contract
whereby the seller either transfers or agrees to transfer the property in goods to the
buyer for a decided price.’

In Section 4(4) of the Act, it is maintained that for an agreement of sale to become
a sale, the time has to elapse or the conditions have to be fulfilled subject to which the
property in the goods is to be is to be transferred.
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Sale

Here the property in goods is transferred at once to the buyer from the seller. The
Section 4(3) of the Act says that “where under a contract of sale the property in the
goods is transferred from the seller to the buyer, the contract is then known as a sale.”
A sale is carried out on deliverable goods. Goods are said to be in a deliverable state
when they are in such a condition that the buyer would, under the contract, be bound to
take delivery of them [Section 2(3)].

The transfer of goods may be affected directly, after the fulfillment of a contingency or to
a party authorized by the seller.

Agreement To Sell

We saw that in a sale the property in the goods is transferred from the seller to the
buyer. However, in an agreement to sell, the ownership of the property in goods is not
transferred immediately. The objective of the agreement is to transfer the goods at a
future date, once some contingent clauses in the agreement or certain conditions are
satisfied.

The Act in Section 4(3), defines what an agreement to sell is. The section 4(3) of
the sale of Goods Act defines it as, “where the transfer of the property in the goods is to
take place at a future time or subject to some condition thereafter to be fulfilled, the
contract is called an agreement to sell.”

Elements of A Contract Of Sale

From the Sale of Goods Act, 1930, we see that certain elements must co-exist for a
contract of sale to be constituted. they are as follows:

 The presence of two parties is a must. As is the case with a contract, there must be
at least two parties in the contract of sale. One shall become the seller and the
other a buyer.
 The clauses therein present in the contract of sale must limit their scope to only the
movable property. This “movable property” may constitute existing goods, goods
in the possession or the ownership of the seller or future goods.
 One of the important elements is the consideration of price. A price in value
(currency and not in kind) has to be paid or promised. The price consideration or
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the actual payment could be partly in kind and partly in money but never in kind
alone.
 The ownership of the property of goods must change from the seller to the buyer.
In the contract of sale, like we saw in the elements of a contract, an offer has to be
made and then accepted. The offer is made by a seller and then accepted by the
buyer.
 The contract of sale may be absolute or conditional.
 The other essential elements of a contract, that we have already seen must also be
present here. The crucial elements of a contract like competency of parties, the
legality of object and consideration etc. have to be present like in any other
contract.

DIFFERENCE BETWEEN SALE AND AGREEMENT TO SELL

BASIS FOR SALE AGREEMENT TO SELL

COMPARISON

Meaning When in a contract of sale, When in a contract of sale

the exchange of goods for
money consideration takes
place immediately, it is
known as Sale.
the parties to contract agree
to exchange the goods for a
price at a future specified
date is known as an
Agreement to Sell.

Nature Absolute Conditional

Type of Contract Executed Contract Executory Contract

Transfer of risk Yes No

Title In sale, the title of goods In an agreement to sell, the

transfers to the buyer with title of goods remains with
the transfer of goods. the seller as there is no
transfer of goods.

Right to sell Buyer Seller

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Consequences of Responsibility of buyer Responsibility of seller

subsequent loss or
damage to the goods

Tax VAT is charged at the time No tax is levied.

of sale.

Suit for breach of The buyer can claim Here the buyer has the right
contract by the seller damages from the seller and to claim damages only.
proprietary remedy from
the party to whom the
goods are sold.

Right of unpaid seller Right to sue for the price. Right to sue for damages.

CONTIDION AND WARRANTY

Conditions

“A condition is a stipulation essential to the main purpose of the contract, the

breach of which gives the right to repudiate the contract and to claim damages”. (Sec
12 (2)).

Say ‘X’ wants to purchase a car from ‘Y’, which can have a mileage of 20 km/lt.
‘Y’ pointing at a particular vehicle says “This car will suit you.” Later ‘X’ buys the car
but finds out later on that this car only has a top mileage of 15 km/ liter. This amounts to
a breach of condition because the seller made the stipulation which forms the essence of
the contract. In this case, the mileage was a stipulation that was essential to the main
purpose of the contract and hence its breach is a breach of condition.

Warranty

“A warranty is a stipulation collateral to the main purpose of the said contract.

The breach of warranty gives rise to a claim for damages does give a right to reject the
goods or treat the contract as repudiated”. (Sec 12(3)).

A man buys a particular car, which is warranted to be quite to drive and very
comfortable. It turns out that after some days the car starts to make a very unpleasant
noise every time it is operated. Also sitting inside it is also not very comfortable.
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Thus the buyer’s only remedy is to claim damages. This is not a breach of the
condition but rather a breach of warranty, because the stipulation made by the seller was
only a collateral one.

IMPLIED CONDITIONS

Conditions and Warranties may be either express or implied. The implied

conditions and warranties are those which are presumed by law to be present in the
contract though they have not been put into it in expressed words. Implied conditions are
dealt with in Sections 14 to 17 of the Sale of Goods Act, 1930. Unless otherwise agreed,
the law incorporates into a contract of a sale of goods the following implied conditions:

Condition As To Title

In every contract of sale, the first implied condition on the part of the seller is that:
in case of a sale, he has a right to sell the goods, and in the case of an agreement to sell,
he will have the right to sell the goods at the time when the property is to pass. Buyer is
entitled to reject the goods and to recover the price if the title turns out to be defective.
[Section 14(a)].

Let us try to understand this with the help of an example. Let us say that person A
bought a tractor from another person B. The person B had no title to the tractor. Person A
then goes on to use the tractor for three months. Three months later, the legal owner of
the tractor spots it and demands it back from A. In this, the law holds that A is bound
within the law to hand over the tractor to the real owner of the tractor. A has the right to
sue B, for the recovery of the purchase price.

Condition As To Description

If there is a contract of sale of goods by description, a default implied condition is

that these goods must correspond with this description. The buyer is not bound to accept
and pay for the goods which are not in accordance with the description of goods. [Section
(15)]

Let us consider an example. Suppose a ship was contracted to be sold as “copper-

fastened vessel” but actually it was only partly copper-fastened. This means that the
goods did not correspond to the description and hence they can be returned or if the buyer
took the goods, he could claim damages for breach.
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Sale By Sample

In a contract of sale by sample, there is an implied condition that:

 The bulk shall correspond with the sample in the quality;

 The buyer shall have or shall be given a reasonable opportunity/chance of
comparing the bulk with the sample, and the goods shall be free from any
defect that may render them unmerchantable, which would not be apparent
on a reasonable examination of the sample. [Section (17)]

For example, a company sells certain belts made up of a special material by

sample for the Indian Army. The belts are found to be made up of plastic of cheaper
quality, not discoverable by ordinary inspection. In this case, the buyer is entitled to the
refund of the price plus damages.

Sale By Sample As Well As By Description

Where the goods are sold by a sample as well as by description the implied
condition is that the bulk of the goods supplied must correspond both with the sample and
the description. In case the goods correspond with the sample but do not tally with the
description or vice versa, the buyer can repudiate the contract. [Section 15]

For example, A agrees to sell a certain oil described as refined rapeseed oil to B,
warranted only equal to sample. The goods that A tenders are found to be equal to the
sample but containing a mixture of hemp oil. In such a case B can reject the goods.

Condition As To Quality Or Fitness

Generally, there is no implied condition as to the quality or fitness of the goods

that are sold for a particular purpose. However, the condition as to the reasonable fitness
of goods for a particular purpose may be implied on the part of the seller for which the
buyer wants them. Following are the conditions to be satisfied:

If the buyer had made known to the seller the purpose of his purchase and the buyer
relied on the seller’s skill and judgment, and seller’s business to supply goods of that
description. [Section 16]

For example, A purchases a hot water bottle from a chemist. The bottle burst and
injured A’s wife. A breach of condition as to the fitness was thus committed. Hence A is
liable for a refund of the price and also the damages.
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Condition As To Merchantability

This is implied only where the sale is by description and the goods should be of
‘merchantable quality’ i.e. the goods must be such as are reasonably saleable under the
description by which they are known in the market. [Section 16(2)]

For example, A purchases a certain quantity of black yarn from B who is a dealer
in yarn. A finds the black yarn to be damaged by the white ants. Thus the condition as to
merchantability has been broken and A is entitled to reject it as unmerchantable.

Conditions As To Wholesomeness

In the case of eatables and provisions, there is another implied condition that the
goods shall be wholesome, in addition to the implied condition as to merchantability.

For example, A supplies B with milk. The milk contains bacteria and B’s wife
consumes the milk and is diagnosed with a disease. She later succumbs to the disease.
Hence, there was a breach of condition as to the fitness of the supplies and A was liable
to pay damages to B in this case.

Express Conditions

An express condition is any stipulation, essential to the main function of the

contract, which is put in the contract at the will of the two parties.

Implied Warranties

In case the buyer is content is content with his right to damages or can’t reject the
goods, a condition (implied or express) may reach to the level of a warranty. Implied
Warranties are disclosed in Section 14 and 16 of the Sale of Goods Act, 1930 and are the
warranties which the law implies into the contract. In case the parties don’t want any of
the implied warranties to be included, they will have to expressly mention that in the
contract. Implied Warranties are as follows.

EXPRESS AND IMPLIED WARRANTIES

Warranty as to Undisturbed Possession Well once you buy the goods, they
shouldn’t be taken away from you. This warranty means that the buyer should have and
enjoy quiet possession of the goods after having gotten the possession of the goods. If he
is disturbed in his possession, he is entitled to sue the seller for the breach of the
warranty.
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For example, A buys a laptop from B. After the purchase, A spends some money
on its repair and uses it for some time. Unknown to the parties, it turns out that the laptop
was stolen and was taken from A and delivered to its rightful owner. B shall be held
responsible for a breach and A is entitled to damages of not only the price but also the
cost of repairs.

Warranty As To Non-Existence Of Encumbrances

This is an implied warranty which maintains that the goods are free from any
encumbrance or charge from any third party who has not been introduced or known to the
buyer at or before the time of the contract of sale is entered into.

For example, a person A pledges his computer to another person B against a loan
of Rs. 30,000. “A” also promises B that A will produce the laptop and give it to B the
next day. Later that day, A goes on to sell the laptop to C who is unaware of the course of
dealings between A and B. In this case, C can ask A to clear the loan immediately or
clear the loan by himself or herself and then proceed to file a suit against A for the
recovery of the money spent including the interest.

Disclosure Of Dangerous Nature Of Goods

In case the goods are inherently dangerous or they are likely to be dangerous to the
buyer and the buyer is ignorant or unaware of the danger, an implied warranty on the part
of the seller emerges. The seller must warn the buyer duly about the dangerous nature of
the goods if any. In case of a breach of this warranty, the seller will be liable in damages.

For example, a person X purchases a bottle of disinfectant from a person Y. Y

knows that the cap of the bottle is defective or cheap and if opened by a novice without
care, it may spill and result in partial burning or other damages of the person. When X
opens the bottle, he is injured. In this case, X is liable in damages to Y as Y should have
been duly warned of the probable danger.

Warranty As To Qualify Or Fitness By Usage Of Trade

An implied warranty as to the quality or the fitness for a particular purpose may be
annexed by the usage of the trade. For example, consider the following example:

A drug was sold through an auction and according to the usage of trade. It was to
disclose in advance any sea-damage, otherwise, it will be taken as a breach of warranty if
no such disclosure has been made and the goods found to be defective.
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This concludes the topic of the Implied Warranties. We can say that any warranty
that is not expressed becomes an implied warranty. Let us now understand the Express
Warranties.

Express Warranties

Warranty is a stipulation collateral to the main purpose of the contract, the breach
of which gives rise to a claim for damages but not to a right to reject the goods and treat
the contract as repudiated. [Section 12(3)]

Warranties that are inserted into the contract at the will and knowledge of the
parties are said to be expressed warranties or the Express Warranties.

PERFORMANCE OF CONTRACT OF SALE

Performance of contract of sale means delivery of goods by seller and acceptance of

delivery of goods and payment for the same by buyer.

• Seller’s main duty:-

Is to deliver the goods to the buyer

• Buyer’s main duty:-

 To accept the goods and pay the price to the seller as per the terms of the contract
 The parties are free to provide any terms in their contract regarding time, place,
delivery, payment of goods and so on. But if the parties are silent and no terms are
mentioned in the contract then rules contained in the sale of goods act will be
applicable.

Meaning of Delivery

Voluntary transfer of possession from one person to another

Types of Delivery:-

1. Actual Delivery

It means actual physical delivery of the goods to the buyer or his authorized agent
by the seller or his authorized agent.
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2. Symbolic Delivery

When goods are not physically delivered but the means of obtaining possession of
goods is delivered to buyer. Symbol is used for delivery.

Example: Handing over of keys of godown where goods are safely kept etc.

3. Constructive Delivery

Third party is involved in delivery. Seller doesn’t deliver the goods directly.

Example: Seller à Warehouseman/ warehouse keeper à Buyer

Rules relating to delivery of Goods:

1. Payment and delivery are concurrent (performed at the same time)

Payment and delivery are concurrent, which means both should be performed at
the same time unless otherwise agreed.

Example: Cash sale (this is not applicable for credit sale)

2. Delivery may be actual, symbolic or constructive

3. Effect of part delivery

If the order placed is so big and delivery of goods takes place in parts so when buyer
accepts the part delivery then that means, buyer is giving the acceptance to the whole
delivery.

4. Buyer to apply for delivery

Buyer should ask the seller to deliver the goods.

5. Place of delivery

Place of delivery should be specified by the parties, in case when no agreement is

there/ parties are silent about it then place of contract will be considered as place of
delivery.

Example: If place of contract is factory then place of delivery will also be

considered as factory.
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6. Time for delivery of goods

Delivery should be done within specified time. If no time is specified then delivery
should be completed within a reasonable time.

7. Goods in possession of third party

If goods are in possession of third party like warehouseman/ warehouse keeper then seller
needs to acknowledge the sale to third person like warehouseman who will then deliver
the goods to buyer.

8. Expenses of delivery

Seller will borne all the expenses to bring the product to deliverable state and for
obtaining the delivery, buyer will borne all the expenses.

9. Delivery of wrong quantity- either short/ excess/ mixed delivery

a) Short Delivery

Received amount is less than the ordered quantity.

Example: Ordered 100 quantity from seller à Received 90 quantity

In this case, buyer has below mentioned options:

i) Reject the goods

ii) Accept the goods- But if he accepts the goods so delivered then he is bound to

pay for them at the contract price.

b) Excess Delivery

Received amount is more than the ordered quantity.

Example: Ordered 100 quantity from sellerà Received 110 quantity

In this case, buyer has below mentioned options:

i) Reject the whole goods

ii) Accept the whole goods

iii) Accept the contracted quantity of goods i.e 100 and reject the rest i.e 10
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c) Mixed Delivery

It means goods delivered have the goods of different description as well then
contracted for.

Example: Ordered 100 quantity from sellerà Received 50 quantity matches to the
specified description during the contract and 50 quantity does not match with the
description

In this case, buyer has below mentioned options:

i) Reject the whole goods

ii) Accept the contracted goods and reject the rest- If the buyer accepts the whole
goods then he can’t sue the seller for delivering the mixed goods

10. Instalment Deliveries

If parties agree to get the goods in instalments then buyer is bound to accept the delivery
thereof by instalments. Parties are not bound to deliver the goods in instalments unless
agreed.

11. Delivery to the carrier/ courier company

If seller gives the goods to carrier/ courier company to deliver the same to the buyer then

that does not means that goods are delivered to buyer, it will be considered in transit
unless delivered to the buyer actually.

12. Buyer has the right to examine the goods

After examining, if buyer is satisfied then buyer can keep the goods.

After examining, if buyer is not satisfied then buyer can reject the goods.

THE DOCTRINE OF CAVEAT EMPTOR

The doctrine of Caveat Emptor is an integral part of the Sale of Goods Act. It
translates to “let the buyer beware”. This means it lays the responsibility of their choice
on the buyer themselves.

It is specifically defined in Section 16 of the act “there is no implied warranty or

condition as to the quality or the fitness for any particular purpose of goods supplied
under such a contract of sale“
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A seller makes his goods available in the open market. The buyer previews all his
options and then accordingly makes his choice. Now let’s assume that the product turns
out to be defective or of inferior quality.

This doctrine says that the seller will not be responsible for this. The buyer himself is
responsible for the choice he made.

So the doctrine attempts to make the buyer more conscious of his choices. It is the duty of
the buyer to check the quality and the usefulness of the product he is purchasing. If the
product turns out to be defective or does not live up to its potential the seller will not be
responsible for this.

Let us see an example. A bought a horse from B. A wanted to enter the horse in a race.
Turns out the horse was not capable of running a race on account of being lame. But A
did not inform B of his intentions. So B will not be responsible for the defects of the
horse. The Doctrine of Caveat Emptor will apply.

However, the buyer can shift the responsibility to the seller if the three following
conditions are fulfilled.

 If the buyer shares with the seller his purpose for the purchase
 The buyer relies on the knowledge and/or technical expertise of the seller
and the seller sells such goods

Exceptions to the Doctrine of Caveat Emptor

The doctrine of caveat emptor has certain specific exceptions. Let us take a brief look at
these exceptions.

1] Fitness of Product for the Buyer’s Purpose

When the buyer informs the seller of his purpose of buying the goods, it is implied
that he is relying on the seller’s judgment. It is the duty of the seller then to ensure the
goods match their desired usage.

Say for example A goes to B to buy a bicycle. He informs B he wants to use the cycle for
mountain trekking. If B sells him an ordinary bicycle that is incapable of fulfilling A’s
purpose the seller will be responsible. Another example is the case study of Priest v. Last.
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2] Goods Purchased under Brand Name

When the buyer buys a product under a trade name or a branded product the seller
cannot be held responsible for the usefulness or quality of the product. So there is no
implied condition that the goods will be fit for the purpose the buyer intended.

3] Goods sold by Description

When the buyer buys the goods based only on the description there will be an
exception. If the goods do not match the description then in such a case the seller will be
responsible for the goods.

4] Goods of Merchantable Quality

Section 16 (2) deals with the exception of merchantable quality. The sections state
that the seller who is selling goods by description has a duty of providing goods of
merchantable quality, i.e. capable of passing the market standards.

So if the goods are not of marketable quality then the buyer will not be the one
who is responsible. It will be the seller’s responsibility. However if the buyer has had a
reasonable chance to examine the product, then this exception will not apply.

5] Sale by Sample

If the buyer buys his goods after examining a sample then the rule of Doctrine of
Caveat Emptor will not apply. If the rest of the goods do not resemble the sample, the
buyer cannot be held responsible. In this case, the seller will be the one responsible.

For example, A places an order for 50 toy cars with B. He checks one sample
where the car is red. The rest of the cars turn out orange. Here the doctrine will not apply
and B will be responsible.

6] Sale by Description and Sample

If the sale is done via a sample as well as a description of the product, the buyer
will not be responsible if the goods do not resemble the sample and/or the description.
Then the responsibility will fall squarely on the seller.

7] Usage of Trade

There is an implied condition or warranty about the quality or the fitness of

goods/products. But if a seller deviated from this then the rules of caveat emptor cease to
apply.
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For example, A bought goods from B in an auction of the contents of a ship. But
B did not inform A the contents were sea damaged, and so the rules of the doctrine will
not apply here.

8] Fraud or Misrepresentation by the Seller

This is another important exception. If the seller obtains the consent of the buyer
by fraud then caveat emptor will not apply. Also if the seller conceals any material
defects of the goods which are later discovered on closer examination then again the
buyer will not be responsible. In both cases, the seller will be the guilty party.

RIGHTS OF UNPAID SELLER

According to section 45(1) of the Sale of Goods Act, 1930, a seller of goods is
called an “unpaid seller”, when:

 The price has not been paid or tendered, or

 A bill of exchange or other negotiable instruments (like a cheque) that was
received as conditional payment has been dishonoured.

Section 45(2) expands the definition of a seller to include anyone in a position of a seller
(for example, the agent of the seller to whom the bill of lading is endorsed, or a consignor
or agent who has paid or is directly responsible for the price).

Example :

X sold some goods to Y for Rs 10,000. Y paid Rs 9,900 but failed to pay the balanc e of
Rs 100. X becomes an unpaid seller.

Example 2:

X sold some goods to Y for Rs 5,000 on a cheque for the price as a conditional payment.
On presentation, the bank dishonoured the cheque. Here also, X becomes an unpaid
seller.
 20

I. Rights against goods.

 21

II. Rights against the buyer personally.

I. Rights Against Goods

Section 46 of the Sale of Goods Act addresses the rights of an unpaid seller whose
property in the goods has not yet been transferred to the buyer. The unpaid seller has the
following 3 + 1 = 4 rights:

 Right of lien
 Right of stoppage of goods in transit
 Right to resale the goods

Withholding delivery (When the possession of the goods has not passed to the buyer, the
unpaid seller has an additional right of withholding delivery besides the three rights
outlined above.)

Here’s more about these four rights one by one.

1. What Is the Right of Lien

The right of lien means the right to keep possession of the goods until the seller receives
the due price.

Section 47 of the Sale of Goods Act provides that an unpaid seller (as agent or bailee of
the buyer) in possession of the goods has the right to keep possession of the goods until
payment or tender of the price in the following cases:

 Where the goods have been sold with no stipulation to credit, or

 Where the goods have been sold on credit, but the term of credit has expired, or
 Where the buyer becomes insolvent.

In Grice vs Richardson (1877), the sellers had delivered a portion of the three bags of tea
under a contract of sale but had not been paid for the rest. Therefore, they could keep
them until the buyer paid the price.

Termination of Lien

 The unpaid seller of the goods loses his right of lien in the following cases:
 When he delivers the goods to a carrier or other bailee for delivery to the buyer
without reserving the right of disposal of the goods, or
 When the buyer or his agent lawfully gets possession of the goods, or
 When the seller waives his right of lien, or
 22

 When the buyer disposes of the goods by sale or in any other manner with the
consent of the seller, or

Where a document of title to goods has been issued or lawfully transferred to any
person as buyer or owner of the goods, and the buyer then transfers the document by sale
to someone taking it in good faith and for consideration.

2. What Is Right to Stoppage of Goods in Transit

The unpaid seller delivered the goods to the carrier for transmission to the buyer,
and in the meantime, the buyer becomes insolvent, then the seller has the right to stop and
retain the goods in transit. Thus, the unpaid seller resumes possession of the goods as
long as it is in transit.

The unpaid seller can exercise the right of stoppage in transit only if he fulfils the
following conditions:

 The seller must have parted with the possession of goods, i.e., the goods must not
be in the seller’s possession.
 The goods must be in transit.
 The buyer must have become insolvent.
 Duration of Transit

As per section 51 of the Sale of Goods Act, the goods are in transit when they are
delivered to a carrier or bailee for transmission to the buyer and until the buyer or his
agents, on his behalf, take the delivery of those goods.

 The unpaid seller loses the right to stoppage in transit in the following cases:
 When the goods reach the destination, or
 If the buyer or his agent on his behalf receives the goods before they reach their
destination, or
 If the carrier or other bailee admits to the buyer or his agent that he has the goods
on his behalf and continues to possess them after the items arrive at the designated
destination, the transit is complete, or
 If the carrier or other bailee wrongfully refuses to deliver the goods to the buyer or
his agent on his behalf, or
 If they deliver part of the product to the buyer or his agent, the unpaid seller may
hold the rest of the shipment in transit if the portion transfer does not enable the
buyer to relinquish possession of the goods, or
 If the seller has consented to the sub-sale or other disposition with the buyer.
 23

Section 52 of the Sale of Goods Act provides that the unpaid seller may exercise his right
of stoppage in transit either:

 By taking the actual position of the goods, or

 By giving notice of his claim to the carrier or other bailee under whose possession
the goods are.

3. What Is the Right to Resale the Goods

As per section 46(1) of the Sale of Goods Act, under the following circumstances,
the unpaid seller may resell the goods, if the goods are:

Of a perishable nature, or When the unpaid seller exercised his right to lien or stoppage in
transit and gave notice to the buyer of his intention to resale.

4. What Is Withholding Delivery

As per section 46(2) of the Sale of Goods Act, where the property in goods has not
passed to the buyer, the unpaid seller has, besides other remedies, a right to withhold the
delivery.

II. Rights Against the Buyer Personally

It is also known as the seller’s remedy for the breach of a contract of sale. These
rights are as follows:

 Suit for price

 Suit for damages for non-acceptance
 Suit for damages for repudiation of the contract
 Suit for interest

1. Suit for Price

As per section 55 of the Sale of Goods Act, if the property in the goods has passed
to the buyer and he neglects or refuses to pay for it according to the contract, the seller
may sue him for the price of the goods.

2. Suit for Damages for Non-acceptance

As per section 56 of the Sale of Goods Act, where the buyer wrongfully neglects
or refuses to accept the goods and pay for the goods, the seller may sue him for damages
for non-acceptance of the goods. For the measure of damages, section 73 of the Indian
Contract Act, 1872 applies.
 24

3. Suit for Damages for Repudiation of the Contract

As per section 60 of the Sale of Goods Act, if the buyer repudiates the contract
before the due date for delivery, the seller may treat the contract as subsisting (maintain,
survive, keep active) and wait until the due date of delivery or treat the contract as
rescinded (revoke, cancel) and seek damages for the breach.

4. Suit for Interest

As per section 61(2) of the Sale of Goods Act, a seller may sue the buyer for
interest or special damages in the event of a breach of contract while suing for an amount
owed to him.

CONSUMER PROTECTION ACT 1986

Who is a consumer?

According to Sec-2(1)(d) of the Act, a consumer is a person who purchases any

goods or services or hires or avails the services of some person for his own personal use
and not for manufacturing or resale of that good. For instance, a person purchasing wheat
flour for his own personal use is a consumer but a person purchasing wheat flour for
baking bread which he is going to sell in his bakery shape is not a consumer.

Rights and Duties of a Consumer

The Consumer Protection Act has recognised six rights of a consumer which are :

 Right to Safety
 Right to Information
 Right to Choose
 Right to be heard
 Right to Redressal
 Right to Consumer Education.

Right to Safety

 This right refers to as the right to be protected against the marketing of goods and
services which are hazardous to life and property of the consumers.
 This right has a very wide scope of application, for instance, this right is available
in the areas of electrical appliances, healthcare, automobile, pharmaceuticals,
housing, travel etc.
 25

 Nowadays, each and every field has an office for researchers who research and
experiment and launch new products and appliances accordingly.
 Most of these products are not tested by the producers which prove to be harmful
to the consumer.
 Therefore, after the implementation of this act, there is a mandate for each and
every field to get all their products which are a danger to the life to be carefully
tested and validated before launching it to the market.

Right to Information
 It refers to the right of a consumer to be informed of the quality, quantity, potency,
purity, standard and price of the goods and services being sold by the shopkeeper.
 This right is given to the consumer in order to protect them from the various unfair
trade practices conducted by the seller in order to earn more profits.
 Therefore, it is an obligation on the seller to provide the consumer with all the
relevant information of the product he wishes to purchase.

Right to Choose
 It is defined in the act as the right to be assured, wherever possible, to have access
to a variety of goods and services at competitive prices.
 It is very common to find one product being sold at different possible prices by
different sellers.
 This reflects the age of market competition which is found in almost all the
countries. Therefore it is the right of all the consumers to purchase any product at
any price which according to him is the best.
 A consumer cannot be forced to purchase a product of some particular brand or
quality.

Right to be heard
 It is referred to as the right to be heard and to be assured that consumers’ interests
will receive due consideration at appropriate forums.
 This right was introduced for a consumer in order to ensure that all the complaints
and issues of the consumers are heard duly under the appropriate authority.
 This is because of this right that almost all the big selling companies have a
separate department known as the customer service to help the consumers in case
of any dispute or any complaint regarding the quality or quantity of the product.
Right to seek Redressal
 26

 If any consumer has been exploited by the seller or faced any unfair trade practices
he can seek redressal i.e. compensation or damages under this right.
 This right ensures that all the issues of the consumers are dealt with and justice is
done to him.
 A proper redressal mechanism has been set up by the government of India such as
the consumer courts and forums at district and national level which is discussed
later in this article.

Right to Consumer Education

 It is the right of each and every person who is a citizen of India to have knowledge
about all the laws and policies relating to the consumer.
 Therefore it is made sure the material regarding the consumer-related laws is
easily available all over India but there is still a major part of the population who
is not aware of his laws and rights.
 This is the reason many awareness programmes have been organized by the
government of India such as ‘jago grahak Jago’ and the camps organized by
various lawyers in the remote areas of the country.

Duties of a consumer
Every consumer right comes with the opposite duty. Right of one consumer is the duty of
the others. Accordingly, there are various duties such as:-

 On purchasing of goods or hiring of any services, it is the duty of the consumer to

pay for the same.
 While purchasing something it is his duty to check weights, balances, prices etc.
and also to give a careful reading to the labels.
 It is the duty of the consumer to update him self about the various consumer
protection schemes.
 Duty to be careful while purchasing and not to fall in the trap of misleading
information and advertisements.
 It is the duty of the consumer to not purchase anything from the black markets.
 It is the duty of the consumer to be aware of his rights and duties and also
spreading the awareness of the same among others.
 It is the consumers’ duty to file a complaint if the goods which he purchased are
defective.
 27

 Each and every consumer should secure the bills of the goods purchased or the
services availed so that if in the future he finds the goods or services to be
defective he can easily file a complaint against the same and can prove it.

Major definitions
Complaint

According to Sec-2(1)(c) any allegation made by the consumer regarding any

restrictive or unfair trade practice which the traders have adopted such as goods bought
by a consumer are defective, services hired or availed by him suffer some deficiency,
trader has charged an excessive price of the goods mentioned in the complaint, goods or
services which are hazardous to the life and property of the consumer has been offered
for sale to the public by the trader or the service provider.

Consumer Dispute

According to Sec-2(1)(e) of the act it is a situation when a person denies the

allegations filed against him in a complaint.

Person

According to Sec-2(1)(m) of the act the word person includes a registered or

unregistered firm, a Hindu undivided family, co-operative society and any other
association which is registered as a person under the Societies Registration Act of 1860.

Service

According to Sec-2(1)(o) service means any description or any facility which is

provided to the potential users and is not rendered free of charge or under a contract of
personal service.

Defect

According to Sec-2 (f) “defect” means any fault, imperfection or shortcoming in

the quality, quantity, potency, purity or standard which is required to be maintained by or
under any law for the time being in force or[under any contract, express or implied, or] as
is claimed by the trader in any manner whatsoever in relation to any goods”

Deficiency

According to Sec-2 (g) “deficiency” means any fault, imperfection, shortcoming

or inadequacy in the quality, nature and manner of performance which is required to be
 28

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”

CONSUMER REDRESSAL AGENCY (Three Tier System )

District Forum:

 These for a are set by the district of the state concerned in each district wherein it
consists of President and two members of which one should be a woman and is
appointed by the State Government.
 In this, the complaining party should not make a complaint more than 20 Lakhs
and once the complaint is filed the goods are sent for testing and if they found
defective the accused party should compensate and if the party is dissatisfied can
make an appeal with state commission within 30 days.

State Commission:

 This is set up by each state It consists of President and two members. Complains
should be at least 20 lacs and exceed not more than 1 crore.
 The goods are sent for testing and if found defective are asked for replacement or
compensation. If not satisfied can make an appeal within 30 days in front of the
National Commission.

National Commission:

 Consist of President and 4 members. The complaint must exceed an amount of 1

crore.
 The goods are sent for testing and if found defective are asked for replacement or
compensation

District Consumer Disputes Redressal Forum

Every district has a District Consumer Disputes Redressal Forum. According to Sec-
11 of this act, this forum has the jurisdiction to entertain complaints and disputes only
where the value of the goods or services and the value of the compensation claimed does
not exceed Rs 20 Lakhs. The District Forum shall have the same powers as that of a civil
court in the following matters:

 In the summoning and enforcing of attendance of any defendant or witness

 29

 In examining the witness on an oath

 In receiving the evidence on affidavit
 In any other matter which may be prescribed
 Demanding of the report of concerned analysis or test from the appropriate
laboratory or from any other authorized relevant source.
 In discovering and producing any document or other material objects which are
producible as evidence in the forum.
 The District forum shall consist of a President i.e. the head of the commission who
is or has been or is qualified to be a district judge and two other members
possessing a bachelors degree from a recognized university and one of them shall
be a woman.
 The members of a commission shall be the persons of ability, integrity and
standing and have adequate knowledge and experience regarding the field of a
consumer. Each and every member of the district forum shall either hold the office
for a term of 5 years or up to the age of 65 years, whichever is earlier.

State Consumer Disputes Redressal Commission

 Each and every State has a State Commission. According to Sec-17 of the act, the
pecuniary jurisdiction of a State Commission for entertaining complaints or issues
where the value of goods or services and the value of the compensation claimed
exceeds Rs. 20 Lakhs but is less than Rs. 1 crore.
 The State Commission shall consist of a President and the other two members. The
President shall be a person who is or has been qualified to be a Judge of High
Court and the other two members shall be possessing a bachelors degree from a
recognized university. Out of two members, one shall be a woman.
 The members of a commission shall be the persons of ability, integrity and
standing and have adequate knowledge and experience regarding the field of a
consumer. Each and every member of the district forum shall either hold the office
for a term of 5 years or up to the age of 67 years, whichever is earlier.
 30

National Consumer Disputes Redressal Commission

The National Commission was instituted in 1988. It is headed by a sitting or
retired Judge of the Supreme Court of India. The present President of the commission is
Justice R.K. Agrawal who is a former Judge of the Supreme Court of India. According to
Sec-21 of the act, the pecuniary jurisdiction of a National Commission for entertaining
complaints or issues where the value of goods or services and the value of the
compensation claimed is more than Rs. 1 crore.

The National Commission has been constituted with various powers such as:

 It has the powers of administrative control over all the State Commissions. It can
call all the State Commissions or any one of them for periodical returns regarding
the institution, disposal and pendency of cases.
 It can adopt a uniform procedure in the hearing of the matters.
 It can provide a speedy grant of copies of documents to the parties.
 It also has a general power of overseeing the functioning of the State Commissions
and the District Forums.
 It has the power of providing prior service of the copies of the documents
produced by one party to the opposite parties.
 In addition to the President of the commission, it shall consist of 4 other members,
out of which at least one shall be a woman. All of these members shall fulfil the
following conditions to be able to qualify as a member in the National
Commission:
 Their age should not be less than 35 years of age.
 They shall be possessing a bachelors degree from a recognized university.
 They shall be a person of ability, integrity and standing and have adequate
knowledge and experience regarding the field of a consumer.
 Every member of the commission shall hold office for a term of 5 years or up to
the age of 70 years whichever is earlier.

Who can file a complaint?

According to sec-2(1)(b) a complainant can be a person who is:
 31

 A consumer, or
 Any voluntary consumer association registered under the Companies Act of
1956 or under any other law for the time being in force, or
 The Central Government or any State Government, who or which makes a
complaint, or
 One or more consumers, where there is more than one consumer they shall
have the same interest for filing a collective complaint, or
 In the case of death of a consumer, his legal heir or representative who or
which makes a complaint.

How to file a Complaint?

 The very first step before filing a complaint the aggrieved party should do is to
send a notice to the service provider from whom the goods were purchased or the
service was availed informing him about the defects in the goods or the deficiency
in the service or unfair practice.
 This notice is sent to the trader or the aggrieved party in order to see if that
company or trader is willing to give the compensation or offer any other remedy.
If in case the trader or service provider is not willing to provide with any remedy,
the aggrieved party shall go ahead with filing a formal complaint.

 The next step is to file a formal complaint under the Consumer Protection Act of
1986. Here the aggrieved party does not need to hire a lawyer in order to file a
complaint. He can file the complaint on his own. The aggrieved party just need to
write down the following contents on a plain paper:

 Name, description and the address of the complainant and of the opposite party or
parties
 Facts relating to the complaint and time and venue where it arose
All the possible documents in support of the allegations contained in the complaint
 The relief or the remedy claimed by the complainant
 32

 The complaint should consist of signatures of the complainant or his authorized

agent
 The next step after the drafting of the complaint is to choose the appropriate
authority under whom the complaint is to be filed.
 The complainant shall choose the authority according to pecuniary jurisdiction of
his complaint i.e. the total value of the goods or services and the compensation
claimed by him.
 It is to be noted here that the complainant can also file an online complaint on
www.consumerhelpline.gov.in

National Consumer Day

 National Consumer Day is observed in India on 24 December as the Consumer

Protection Act was enacted on this day in 1986.

World Consumer Rights Day

 On 15 March 1962, President John F Kennedy while addressing the US Congress

raised the issue of consumer rights.
 He was the first world leader to do so, and the consumer movement now marks 15
March every year as a means of raising global awareness about consumer rights.

What is the time limit for filing a complaint?

A complaint has to be filed within two years from the date on which the
cause of action/ deficiency in service/defect in goods arises. However, a complaint
may also be filed after two years, if the complainant satisfies the District Forum
that he/she has sufficient reasons for not filing the complaint within such period.

What is the provision for appeal?

 Aggrieved by the Order issued by the District Forum, appeal petition may
be filed before the State Commission within 30 days from the date of
receipt of Order.

 Aggrieved by the Order issued by the State Commission, appeal petition

may be filed before the National Commission within 30 days from the date
of receipt of Order.
 33

 Aggrieved by the Order issued by the National Commission, appeal petition

may be filed before the Supreme Court of India within 30 days from the
date of receipt of Orders.

 Then finally Supreme Court judgement is final

CONSUMER PROTECTION COUNCILS

Chapter II of Consumer Protection Act 2019 provides for composition of

Consumer Protection Councils at central, state and district level by the respective
governments in order to promote and protect the interest of Consumers.

Central Consumer Protection Council

Central Consumer Protection Councils is constituted by central government at

National level. Sections 3, 4 and 5 of the Act deals with composition and object of
Central Consumer Protection Council Composition of Central Consumer
Protection Councils

Section-3

 The Central Government shall, by notification, establish with effect from

such date as it may specify in that notification, the Central Consumer
Protection Council to be known as the Central Council.
 The Central Council shall be an advisory council and consist of the
following members,

namely:—

 The Minister-in-charge of the Department of Consumer Affairs in the

Central Government, who shall be the Chairperson; and
 Such number of other official or non-official members representing such
interests as may be prescribed.
 As regard to Section 3(2)(b) dealing with number of other official or non-
official members representing such interests as may be prescribed, the
Consumer Protection Rules-1987 provides the members for Central
Consumer Protection Councils.
 34

According to Rule 3 of Consumer Protection Rules-1987 the Central Consumer

Protection Councils shall consists of following:

 The Minister in-charge of Consumer Affairs in the Central Government who

shall be the Chairman of the Central Council;
 the Minister of State (where he is not holding independent charge) or Deputy
Minister in charge of Consumer Affairs in the Central Government who
shall be the Vice-Chairman of the Central Council;
 the Minister in-charge of Consumer Affairs of two of the States from each
region as mentioned in Schedule I to be changed by rotation on expiration of
the term of the Council on each occasion; (ca) an administrator (whether
designated as administrator or Lieutenant Governor), of a Union Territory,
to represent a Union Territory, as mentioned in Schedule II, to be changed
by rotation on expiration of the term of the Council on each occasion;
 Two Members of Parliament—one from the Lok Sabha and one from the
Rajya Sabha;
 Representatives of the Central Government Departments and autonomous
organisation concerned with consumer interests—not exceeding five;
 The Registrar, National Consumer Disputes Redressal Commission, New
Delhi
 representatives of consumer organisations from amongst the Indian members
of the International Organization, namely, Consumer International – not
exceeding six, to be nominated by the Central Government; (ga)
representatives with proven expertise and experience who are capable of
representing consumer interests, drawn from amongst consumer
organisations, consumer activists, women, farmers, trade and industry – not
exceeding five, one from each of the regions specified in schedule annexed
to these rules;
 The Secretaries in-charge of Consumer Affairs in the States to be nominated
by the Central Government – not exceeding three; 3
 The Secretary in-charge of Consumer Affairs in the Central Government
shall be the member secretary of the Central Council.
 The term of the Council shall be three years.
 35

 Any member may, by writing under his hand to the Chairman of the Central
Council, resign from the Council. The vacancies so caused or otherwise,
shall be filled from the same category by the Central Government and such
person shall hold office so long as the member whose place he fills would
have been entitled to hold office, if the vacancy had not occurred.
 For the purpose of monitoring the implementation of the recommendations
of the Central Council and to suggest the working of the Council, the Central
Government may constitute from amongst the members of the Council, a
Standing Working Group, under the chairmanship of the Member Secretary
of the Council. The Standing Working Group shall consist of not exceeding
30 members and shall meet as and when considered necessary by the Central
Government.

Procedure of Central Consumer Protection Councils

 Section 4 of the 2019 Act deals with procedure of the working of Central
Consumer Protection Councils
 Section 4- (1) The Central Council shall meet as and when necessary, but at
least one meeting of the Council shall be held every year.
 The Central Council shall meet at such time and place as the Chairperson
may think fit and shall observe such procedure in regard to the transaction of
its business as may be prescribed.

Rule 4 of Consumer Protection Rules further provides:

 The Central Council shall observe the following procedure in regard to the
transaction of its business,-
 The meeting of the Central Council shall be presided over by the Chairman.
In the absence of the Chairman, the Vice-Chairman shall preside over the
meeting of the Central Council. In the absence of the Chairman and the
Vice-Chairman, the Central Council shall elect a member to preside over
that meeting of the Council.
 Each meeting of the Central Council shall be called by giving, not less than
ten days from the date of issue, notice in writing to every member.
 36

 Every notice of a meeting of the Central Council shall specify the place and
the day and hour of the meeting and shall contain statement of business to be
transacted thereat.
 No proceedings of the Central Council shall be invalid merely by reasons of
existence of any vacancy in or any defect in the constitution of the Council.
 For the purpose of performing its functions under the Act, the Central
Council may constitute from amongst its members, such working groups as
it may deem necessary and every working group so constituted shall perform
such functions as are assigned to it by the Central Council.
 The findings of such working groups shall be placed before the Central
Council for its consideration.
 The non-official members shall be entitled to first class or second Air-
Conditioned by all trains (including Rajdhani Express) to and fro Railway
fare or actual mode of travel whichever is less. Outstation non-official
members shall be entitled to a daily allowance of one hundred rupees per
day for attending the meetings of the Central Councilor any working group.
Local non-official members shall be paid actual conveyance, hire charges
subject to a ceiling of Rs. 75.00 per day irrespective of the classification of
the city. Members of Parliament shall be entitled to travelling and daily
allowances at such rates as are admissible to such members.
 The resolution passed by the Central Council shall be recommendatory in
nature.

Objective of Central Consumer Protection Councils

 Section 5 of Consumer Protection Act 2019 deals with objective of Central

Protection Council It provides:
 The objects of the Central Council shall be to render advice on promotion
and protection of the consumers' rights under this Act.5
 The objects of the Central Council shall be to promote and protect the rights
of the consumers such as,
 the right to be protected against the marketing of goods which are hazardous
to life and property,
 37

 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 or
services, as the case may be, at competitive prices;
 The right to be heard and to be assured that consumers interests will receive
due consideration at appropriate forums;
 The right to seek redressal against unfair trade practices or restrictive trade
practices or unscrupulous exploitation of consumers, and (
 f) The right to consumer education The Central Council is specially saddled
with certain duties to protect and promote the interest of the consumers. But
the significant drawback in the legislation is the tooth less ness of the
Central as well as the State Council. The resolutions of the Council are only
of recommendatory nature. Again, the Councils cannot file a complaint
before the consumer forums even if the consumer's rights, the protection of
which falls within the domain of the council, are in jeopardy. Even the
Central or the State Government cannot file a complaint on behalf of the
aggrieved consumer.
 His (consumer's) remedy lies in filing complaint before the consumer forum.
A consumer forum cannot dispose of a complaint without hearing the
complainant and it is also obligatory on the part of the consumer forums to
take into account the allegations levelled by the complainant against the
opposite party.
 The National Commission in the case of Distt. Manager, Telephones v. Dr.
Tarun Bharthari
 (1991) has held that the consumer forum can grant reliefs which are even not
prayed for by the complainant.

State Consumer Protection Council

Section 6 and section 7 of Consumer Protection Act 2019 deals with composition
and objective of State Consumer Protection Council.
 38

Composition of State Consumer Protection Council

 Section 6(1) Every State Government shall, by notification, establish with

effect from such date as it may specify in such notification, a State
Consumer Protection Council for such State to be known as the State
Council.
 (2) The State Council shall be an advisory council and consist of the
following members,
 namely:—
 The Minister-in-charge of Consumer Affairs in the State Government who
shall be the Chairperson;
 Such number of other official or non-official members representing such
interests as may be prescribed;
 Such number of other official or non-official members, not exceeding ten, as
may be nominated by the Central Government.

Procedure of State Consumer Protection Council

 Section 6(3) and (4) of the Act deals with Procedure of State Consumer
Protection Council It provides as:
 Section 6 (3) The State Council shall meet as and when necessary but not
less than two meetings shall be held every year
 Section 6 (4) The State Council shall meet at such time and place as the
Chairperson may think fit and shall observe such procedure in regard to the
transaction of its business, as may be prescribed.
 Apart from these procedures the state governments are authorized to make
rules regulation the procedure of working of concerned State Consumer
Protection Council.

Objective of State Consumer Protection Council

 Section 7 deals with objective of State Consumer Protection Council which

provides: The objects of every State Council shall be to render advice on
promotion and protection of consumer rights under this Act within the State.
 In other words the objective of State Consumer Protection Council shall be
same as that of Central Consumer Protection Council.
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District Consumer Protection Council

 Composition of District Consumer Protection Council

 Section 8(1) and (2) deals with composition of District Consumer Protection
Council. It provides:
 Section 8 (1) The State Government shall, by notification, establish for every
District with effect from such date as it may specify in such notification, a
District Consumer Protection Council to be known as the District Council.
 (2) The District Council shall be an advisory council and consist of the
following members,
 namely:—
 The Collector of the district (by whatever name called), who shall be the
Chairperson; and
 Such number of other official and non-official members representing such
interests as may be prescribed.

Procedure of District Consumer Protection Council

 Section 8(3)(4) deals with Procedure of District Consumer Protection

Council. It provides: Section 8(3) The District Council shall meet as and
when necessary but not less than two meetings shall be held every year.
 Section 8(4) The District Council shall meet at such time and place within
the district as the
 Chairperson may think fit and shall observe such procedure in regard to the
transaction of its business as may be prescribed

Objective of District Consumer Protection Council

 Section 9 of the Act deals with the Objective of District Consumer

Protection Council It provides:
 The objects of every District Council shall be to render advice on promotion
and protection of consumer rights under this Act within the district.
 In other words the objective of District Consumer Protection Council shall
be same as that of Central Consumer Protection Council.