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Presentation

by
S.V. Rama Krishna, Advocate
on
Consumer Protection
Act, 1986
Consumer Protection
• Consumer protection can be traced back to the
provisions of Monopolies and Restrictive
Trade Practices Act, 1969
• In 1984 Unfair Trade Practices were covered
in the Act.
• MRTP Commission has wide powers to deal
with unfair and restrictive trade practices.
Legal framework prior to Consumer
Protection Act, 1986
• Torts
• Indian Contract Act, 1872
• Sale of Goods Act, 1930
• Dangerous Drugs Act, 1930
• Agricultural Produce (Grading & Marketing) Act,
1937
• Drugs and Cosmetics Act, 1940
• The Indian Standards Institution (Certification
Marks) Act, 1952
• Prevention of Food Adulteration Act, 1954
• Drugs and Magic Remedies (Objectionable
Advertisements) Act, 1954
• Essential Commodities Act, 1955
• The Standards of Weights and Measures Act, 1976
• Trade and Merchandise Marks Act, 1972
• Prevention of Black Marketing and Maintenance of
Supplies of Essential Commodities Act, 1980
Remedies prior to CPA
• Civil Courts
• Lengthy legal procedures
• Costs by way of filing fee, advocate fee etc.
• Time consuming in settling the cases
• Vexatious litigation by way of adjournments and appeals
• MRTP – Headquartered at Delhi and not reachable to
small towns and villages.
Reasons for consumer
exploitation
• Demand – supply gap causing shortages in
economy
• Monopolies
• Restricted competition
• False advertisements
• Over-pricing
• Exaggerated claims
Basic Rights of Consumers
• To satisfy basic needs
• Safety in using the goods
• Standard of service agreed upon
• Proper information about the goods
• Choice in purchase
• To be heard in case of complaints
• To seek redressal of grievances
• Consumer education
• Healthy environment
Consumer Protection Act, 1986
(contains 31 sections divided into IV
chapters)
• Received assent of the President on
24.12.1986 and published in Gazette of
India on 26.12.1986. Provisions of Chapters
I,II and IV came into effect from 15.4.1987.
• Twice amended in 1993 (w.e.f. 18.6.1993)
and in 2002 (w.e.f. 15.3.2003)
Philosophy behind the Act
• Seeks to protect interests and rights of consumers
• Aims to provide simple, quick and easy remedy
to consumers
• Providing three-tier quasi-judicial framework at
District Level, State Level and National Level
Redressal For a with distinct jurisdictions and
appellate powers.
Preamble of CPA, 1986
• An Act to provide for the better protection
of the interest of consumers and for that
purpose to make provision for the
establishment of consumer councils and
other authorities for the settlement of
consumers’ disputes and for matters
connected therewith.
Important definitions in the Act
Who is a “consumer”?

• According to Section 2 (d) of the Act, “consumer” means
any person who, -
• (d) “consumer” means any person who,—
• (i) buys any goods for a consideration which has been
paid or promised or partly paid and partly promised, or
under any system of deferred payment and includes any
user of such goods other than the person who buys such
goods for consideration paid or promised or partly paid or
partly promised, or under any system of deferred payment
when such use is made with the approval of such person,
but does not include a person who obtains such goods for
resale or for any commercial purpose; or

• (ii) hires or avails of any services for a consideration which has
been paid or promised or partly paid and partly prom-ised, or
under any system of deferred payment and includes any
beneficiary of such services other than the person who hires or
avails of the services for consideration paid or promised, or partly
paid and partly promised, or under any system of deferred
payment, when such services are availed of with the approval of
the first mentioned person but does not include a person who
avails of such services for any commercial purpose.
• Explanation.—For the purposes of this clause, “commercial
purpose” does not include use by a person of goods bought and
used by him and services availed by him exclusively for the
purposes of earning his livelihood by means of self-employment;
What is a “complaint”?

• Sec. 2 (c ) : “complaint” means any allegation in writing made by a
complainant that—

• (i) an unfair trade practice or a restrictive trade practice has been adopted
by any trader or service provider;

• (ii) the goods bought by him or agreed to be bought by him] suffer from
one or more defects;

• (iii) the services hired or availed of or agreed to be hired or availed of by
him] suffer from deficiency in any respect;
• (iv) a trader or the service provider, as the case may be, has
charged for the goods or for the services mentioned in the
complaint, a price in excess of the price—
• (a) fixed by or under any law for the time being in force;

• (b) displayed on the goods or any package containing such
goods;

• (c) displayed on the price list exhibited by him by or under
any law for the time being in force;

• (d) agreed between the parties;
• (v) goods which will be hazardous to life and safety when
used are being offered for sale to the public,—
• (A) in contravention of any standards relating to safety
of such goods as required to be complied with, by or under
any law for the time being in force;
• (B) if the trader could have known with due
diligence that the goods so offered are unsafe to the public;
• (vi) services which are hazardous or likely to be hazardous to
life and safety of the public when used, are being offered by the
service provider which such person could have known with due
diligence to be injurious to life and safety;
• with a view to obtaining any relief provided by or under this
Act;
What is “defect” in goods?
• 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 in services ”
• Sec. 2 (g) “deficiency” means any fault,
imperfection, shortcoming or inadequacy in the
quality, nature and manner of performance which
is required to be maintained by or under any law
for the time being in force or has been undertaken
to be performed by a person in pursuance of a
contract or otherwise in relation to any service;
Consumer Protection Councils
• Three tier Councils –
• Sec. 4: The Central Consumer Protection Council
(Chairman – Minister in-charge of “consumer affairs” in
the Central Govt. and such number of members as may be
prescribed.
• Sec. 7: The State Consumer Protection Councils
(Chairman - Minister in-charge of “consumer affairs” in
the State Govt. and such number of official and non-
official members…
• Sec.8A: The District Consumer Protection Council
(Chairman – Collector of the District by whatever name
called and such other no. of members as may be
prescribed).
Objects of the Central Council.
Sec. 6. The objects of the Central Council shall be to promote and protect the
rights of the consumer such as,—
• (a) the right to be protected against the marketing of goods and
services which are hazardous to life and property;
• (b) 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;
• (c) the right to be assured, wherever possible, access to a variety of
goods and services at competitive prices;
• (d) the right to be heard and to be assured that consumers’ interests
will receive due consideration at appropriate forums;
• (e) 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.
Consumer Dispute Redressal Fora

• Three-tier mechanism at –
• (i) District Level (District Forum)
• (ii) State Level (State Commission)
• (iii) National Level (National
Commission)
Jurisdiction of District Forum
• According to Section 11, a District Forum has
jurisdiction to entertain complaints where the
value of the goods or services and the
compensation, if any, claimed does not exceed
Rs.20 lakhs;
• Within the local limits of of the District Forum
where the opposite party resides or carries on
business or has branch office or personally works
for gain
Jurisdiction of State Commission
• According to Section 17, State Commission
can entertain complaints where the value
exceeds Rs.20 lakhs but does not exceed
Rs.1 crore;
• Appeals against orders of District Forum
within the State.
Jurisdiction of National
Commission
• According to Section 21, the National
Commission can entertain complaints where
the value exceeds Rs.1 crore;
• Appeals against orders of State
Commission
Finality of Orders
• 24. Every order of a District Forum, the
State Commission or the National
Commission shall, if no appeal has been
preferred against such order under the
provisions of this Act, be final.
Appeals
• To State Commission against orders of District
Forum within 30 days together with 50% of
amount ordered or Rs.25000 whichever is less.
• To National Commission against orders of State
Commission within 30 days together with 50% of
amount ordered or Rs.35000 whichever is less.
• To Supreme Court against orders of National
Commission together with 50% of amount ordered
or Rs.50000 whichever is less.
Limitation
• 24A.(1) The District Forum, the State Commission or the National
Commission shall not admit a complaint unless it is filed within two
years from the date on which the cause of action has arisen.
• (2) Notwithstanding anything contained in sub-section (1), a
complaint may be entertained after the period specified in sub-
section (1), if the complainant satisfies the District Forum, the State
Commission or the National Commission, as the case may be, that
he had sufficient cause for not filing the complaint within such
period:
• Provided that no such complaint shall be entertained unless the
National Commission, the State Commission or the District Forum,
as the case may be, records its reasons for condoning such delay.
Penalties
• Sec. 27: For failure to comply with the orders passed by District
Forum or State Commission or National Commission, the penalties
shall be :

• (i) Imprisonment for a term which shall not be less than one month
but which may extend to three years, or

• (ii) Fine which shall not be less than Rs.2000 but which may extend
to Rs.10000, or

• (iii) With both
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