Objective of the Act

1 Better protection of interest of consumers

2 Protection of rights of consumers

1. Right of Choice

2. Right to safety

3. Right to be Informed

4. Right to be Heard

5. Right to Redress, and

6. Right to Consumer Education

3 Consumer protection councils

- Established the central and state level councils

4 Quasi-judicial machinery for speedy Redressal of consumer disputes

Quick decision to support and solve the problem of consumers.

 Definitions (Sec.2)
1. Appropriate laboratory

“appropriate laboratory” means a laboratory or organisation—

(i) recognized by the Central Government;

(ii) recognized by a State Government, subject to such guidelines as may be prescribed by the Central Government in this behalf; or

(iii) any such laboratory or organisation established by or under any law for the time being in force, which is maintained, financed or aided by the Central
Government or a State Government for carrying out analysis or test of any goods with a view to determining whether such goods suffer from any defect;

2. Complainant

“complainant” means—

(i) a consumer; or

(ii) any voluntary consumer association registered under the Companies Act, 1956 (1 of 1956) or under any other law for the time being in force; or

(iii) the Central Government or any State Government; or

(iv) one or more consumers, where there are numerous consumers having the same interest;]

(v) in case of death of a consumer, his legal heir or representative;] who or which makes a complaint
 “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

(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;]
 Consumer
“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,

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
promised, or under any system of deferred payment and includes any beneficiary of such services other than the
person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or
under any system of deferred payment

 Consumer Dispute
“consumer dispute” means a dispute where the person against whom a complaint has been made, denies or disputes
the allegations contained in the complaint;
 Defect

“defect” means any fault, imperfection or shortcoming in the quality, quantity, purity or standard which
is required to be maintained

 Deficiency

“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;

 District Forum

“District Forum” means a Consumer Disputes Redressal Forum established under clause (a) of section
9;
 Goods

“Goods” means goods as defined in the Sale of Goods Act, as “every kind of movable property other
than actionable claims and money.

 Manufacturer

“Manufacturer” means a person who—

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

(ii) does not make or manufacture any goods but assembles parts thereof made or manufactured by
others; or

(iii) puts or causes to be put his own mark on any goods made or manufactured by any other
manufacturer
 National Commission

“National Commission” means the National Consumer Disputes Redressal Commission established
under clause (c) of section 9;

 Person

“Person” includes,—

(i) a firm whether registered or not;

(ii) a Hindu undivided family;

(iii) a co-operative society;

(iv) every other association of persons whether registered under the Societies Registration Act,
1860 (21 of 1860) or not;
 Spurious goods and services

“Spurious goods and services" mean such goods and services which are claimed to be genuine but they
are actually not so

 State Commission

“State Commission” means a Consumer Disputes Redressal Commission established in a State under
clause (b) of section 9;

 Trader

“Trader” in relation to any goods means a person who sells or distributes any goods for sale and
includes the manufacturer thereof, and where such goods are sold or distributed in package form,
includes the packer thereof
5.2 CONSUMER PROTECTION COUNCIL
 The Central Consumer Protection Consumer

 Establishment: the central government shall establish, by notification, the council is

known as the central consumer protection council.

 Membership: according to rule 3 of the consumer protection rules, 1987, the central
council consist of following 150 members namely,

1. Minister in-charge of consumer affairs in central Gov. – Chairman

2. Minister of state or Deputy minister of civil supplier – vice- chairman

3. Minister of food & civil suppliers

4. 8 member of Parliament, 5 from lok sabha, 3 from Rajya sabha

5. Commissioner for scheduled castes & schedule tribes

6. Representatives of central government departments- <20

7. Representative of consumer organization- >35

8. Representative of women- >10

9. Representative of farmers, trade and industries- <20

10. Capable person of representing consumer intrested- <15

11. Secretary of civil supplier shall be member secretary of central council

 Procedure For Meetings Of The Central Council

• Meeting at least once in a year.

• Convenient place and time.
 Objects of the central council

1. Right to be protected against hazardous goods and services.

2. Right to be informed about the quality, quantity, purity etc.

3. Right to be assured

4. Right to be heard

5. Right to seek redressal

6. Right to consumer education

 The state consumer protection councils.

 ESTABLISHMENT: The State Government shall, by notification, establish with

effect from such date as it may specify in such notification, a council to be known as
the consumer protection council.

 MEMBERSHIP: The Council shall consist of the following members, namely

■ 1)The chairman (minister in charge of consumer affairs)

■ 2)Official and Non Official members.

■ 3)Members not exceeding 10(Nominated by the central government)

 Meetings : the state council shall meet as and when necessary but not less than 2
meetings shall be held every year.

 Time and place : the state council shall meet at such a time and place as the chairman
may think fit and shall observe such procedure in regard to the transaction of its
business (prescribed by state government)

 Objects of the state council : the object of every state council shall be promoted and
protect within the state the rights of the consumers. Sec 6
 The District Consumer Protection Council

■ The state government shall establish for every district by notification, a council to
be known as district consumer protection with effect from such date as it may
specify in such notification .
■ It consist of following members namely

1) Collector of the District

2) Other official and Non official members.

It shall meet as and when necessary but not less than 2 meetings shall be held
every year.
 Redressal Forums have been established at three different levels :-
-"District Forum" by State Government. At least one in each district or in certain cases one

District Forum may cover 2 or more districts.

-"State Commission" by State Government.

- "National Commission" by Central Government.

The establishment of these forums has provided an alternative remedy to the jurisdiction

of the civil courts.

 District Forum entertains the cases where the value of claim is upto Rs.20 Lakh.
 State Commission entertains the cases where the value of claim is upto Rs. 1 Crore

 State Commission has power to settle the appeals made against the order of the District
Forums.

 State Commission may call for the records and pass appropriate orders in any consumer
dispute which is pending before or has been decided by any District Forum within the State.

 Being the highest Consumer Forum, the National Commission may entertain all the matters
where the value of claim exceeds 1 Crore. The National Commission also has the appellate
and revisional jurisdiction.
 DISTRICT FORUM

This shall consist of :

1. a person who is, or has been, or is qualified to be a District judge, its President

2. two other members shall be persons of:

• ability, integrity and standing and

• have adequate knowledge or experience or

• have shown capacity, in dealing with problems relating to

economics, law, commerce, accountancy, industry, public affairs or administration, one of

whom shall be a woman.

 JURISDICTION OF THE DISTRICT FORUM

The District Forum shall have jurisdiction to entertain complaints where the value of services and

compensation claimed does not exceed Rupees Five Lakhs.

Manner in which complaint shall be made

A complaint may be filed with a District Forum by –

1.the consumer to whom such service is provided or is agreed to be provided;

2.any recognized consumer association, whether the consumer to whom the service is provided or is

agreed to be provided is a member of such association or not ;

3.one or more consumers, where there are numerous consumers having the same interest, with the

permission of the district forum, on behalf of or for the benefit of all consumers so interested
 Procedure on receipt of Complaint
The District Forum shall on receipt of a complaint -
1. Refer a copy of such complaint to the opposite party directing him to give his version of the case
within a period of 30 days or such extended period not exceeding 15 days as may be granted by the
District Forum ;
2. Where the opposite party, on receipt of a copy of the complaint, denies or disputes the allegations
contained in the complaint, or omits or fails to take any action to represent his case within the time given
by the District Forum, the District Forum shall proceed to settle the consumer dispute,
(i) On the basis of evidence brought to his notice by the complainant and the opposite party, where the
opposite denies or disputes the allegations contained in the complaint ; or
(ii) On the basis of evidence brought to its notice by the complainant where the opposite party omits or
fails to take any action to represent his case within the time given by the Forum ;
days if it requires analysis or testing of the goods.
(iii) Where the complainant or his authorized agent fails to appear before the District Forum on such day,
the District Forum may in its discretion either dismiss the complaint in default or if a substantial
portion of the evidence of the complainant has already been recorded, decide it on merits.
Where the opposite party or its authorized agent fails to appear on the day of hearing, the District
Forum may decide the complaint ex-parte.(in the interest of one side only)
(iv) Where any party to a complaint to whom time has been granted fails to produce his evidence or to
cause the attendance of his witnesses or to perform any other act necessary to the further progress of
the complaint, for which time has been allowed, the District Forum may notwithstanding such
default :-
(a) If the parties are present, proceed to decide the complaint forthwith ; or
(b) if the parties or any of them is absent, proceed as mentioned above in (b) (iii) ;
(v) The District Forum may, on such terms as it may think fit at any stage, adjourn the hearing of the
complaint but not more than one adjournment shall ordinarily be given and the complaint should be
decided within 90 days from the date of notice received by the opposite party where complaint does not
require analysis or testing of the goods and within 150 days if analysis is required.
 Findings of the District Forum
If, after the proceedings, the District Forum is satisfied that any of the allegations contained in the
complaint about the services are proved, it shall issue an order to the opposite party directing him to do one
or more of the following things :
 To return to the complainant the charges paid.
 Pay such amount as may be awarded by it as compensation to the consumer for any loss or injury
suffered by the consumer due to the negligence of the opposite party.
 To remove the deficiency in the services in question.
 To provide for adequate costs to parties.

Appeal against orders of the Dist. Forum

 Any person aggrieved by an order made by the District Forum may appeal against such order to the
State Commission within a period of 30 days from the date of the order.
 The State Commission may entertain an appeal after 30 days if it is satisfied that there was sufficient
cause for not filing it within that period.
 STATE COMMISSION
It shall consist of -
1.a person who is or has been a Judge of a High Court , who shall be its President ;
2. two other members ( as for District Forum).
Jurisdiction of the State Commission

The State Commission has jurisdiction to entertain -

3. Complaints where the value of services and compensation claimed exceeds rupees 20 lakhs but does
not exceed rupees 1 Crore;
2. Appeals against the orders of any District Forum within the state ;
3. Revision petitions against the District Forum.
Procedure to be followed by State Commission
Same as for District Forum.
Procedure for hearing appeals

The State Commission may, on such terms as it may think fit and at any stage, adjourn the

hearing of appeal, but not more than one adjournment shall ordinarily be given and the appeal

should be decided within 90 days from the first date of hearing.

Appeals against orders of State Commission

Any person aggrieved by an order made by the State Commission may appeal against such

order to the National Commission within a period of 30 days. The National Commission may

entertain an appeal after 30 days if it is satisfied that there was sufficient cause for not filing it

within that period

 NATIONAL COMMISSION
This shall consist of -
1. a person who is or has been a Judge of the Supreme Court, who shall be its President. (No
appointment under this clause shall be made except after consultation with the Chief Justice of
India) .
2. 4 other members ( qualifications : As for District Forum /State Commission ).
Jurisdiction of the National Commission
The National Commission shall have jurisdiction -
(a) to entertain
(i) complaints where the value of services and compensation claimed exceeds rupees 1 Crore; and
(ii) appeals against the orders of any State Commission.
(b) to entertain revision petition against the State Commission.
Procedure to be followed by the National Commission
A complaint containing the following particulars shall be presented by the complainant in person or by his
agent to the National Commission or be sent by registered post, addressed to the National Commission :-
1. The name, description and the address of the complainant;
2. The name, description and address of the opposite party or parties, as the case may be, so far as they can be
ascertained ;
3. The facts relating to the complaint and when and where it arose ;
4. Documents in support of the allegations contained in the complaint ;
5. The relief which the complainant claims.
The remaining procedure and the procedure for hearing the appeal is similar to that for State Commission.
Appeal against orders of the National Commission
Any person, aggrieved by an order made by the National Commission, may appeal against such order to the Supreme
Court within a period of 30 days from the date of the order. The Supreme Court may entertain an appeal after 30 days
if it is satisfied that there was sufficient cause for not filing it within that period.
Limitation Period
The District Forum , the State Commission or the National Commission shall not admit a complaint unless it is filed
within 2 years from the date on which the cause of action has arisen. In case there are sufficient grounds for not filing
the complaint within such period, extension may be granted.
Dismissal of frivolous or vexatious complaints
Where a complaint instituted before the District Forum, the State Commission or the National
Commission, as the case may be, is found to be frivolous or vexatious, it shall, for reasons to be recorded
in writing, dismiss the complaint and make an order that the complainant shall pay to the opposite party
such cost, not exceeding 10,000 rupees, as may be specified in the order.

Penalties
Where a person against whom a complaint is made or the complainant fails or omits to comply with any
order made by the District Forum, the State Commission or the National Commission, as the case may be,
such person or complainant shall be punishable with imprisonment for a term which shall not be less than
one month but which may extend to three years, or with fine which shall not be less than 2,000 rupees but
which may extend to 10,000 rupees or with both. In exceptional circumstances the penalties may be
reduced further
5.4 Unfair Trade Practices
 Unfair trade practices [sec. 2(1) (r)]

It means trade practices which a trader, for the purpose of promoting the sale, use or supply of
any goods or for the provision of any service, adopts any unfair method or unfair or deceptive
practice.

The unfair trade practice means a trade practice which, adopts any unfair method or deceptive
practice.

Unfair trade practice is not only related to goods but also to services rendered.

Example: Collecting service charges during free guarantee period or collecting repair and
service charges but not repairing the goods sold is unfair trade practice and deficiency of
service.
■ The practice making false statements
■ False offer of bargain price
■ Schemes offering gifts or prizes
■ Withholding any schemes
■ Sale or Supply of Goods
■ Hoarding, destruction or refusal
■ Manufacturing or sale of spurious goods
 The practices included are:

1) The practice of making any statement,

 Falsely represents that the goods are of particular standard, quality, quantity, grade,
composition, style or model.

 Falsely represents that the services are of particular standard, quality or grade.

 Falsely represents any rebuilt, second hand, renovated, or old goods as new goods.

 Represents that the goods or services have sponsorship, approval, performance,

characteristic, accessories, uses or benefits which such goods or services do not have.

 Represents that the seller or the supplier has sponsorship or approval or affiliation which
such seller or supplier does not have.
 Make a false or misleading representation concerning the needs for , or the usefulness
of, any goods or services.

 Gives to the public any warranty or guarantee of the performance or length of life of a
product or of any goods that is not based on an adequate or proper test thereof.

 Materially misleading the public concerning the price at which a product or like
products or goods or services, have been or are ordinarily sold or provided.
 2) False offer of bargain price [section 2(1)(r)(2)]:
 A price that is stated in any advertisement to be a bargain price by reference to ordinary price or
otherwise

 A price that a person who reads, hears or sees the advertisement would reasonably understand to be a
bargain price having regard to the prices at which like products are sold.

3) Schemes offering gifts or prizes [section 2(1)(r)(3)]:

 Offering gifts or prizes or other items with the intention of not providing them and conducting
promotional contests.

 Creating an impression that something is being given free of charge when it is fully or partly covered by
the amount charged in the transaction.

 Conducting of any contest, lottery or game of chances etc for the purpose of promoting-directly or
indirectly- the sale, use or supply of any product or any business interest.
 4. Withholding any schemes [sec 2(1)(r)(3A)]:

■ Withholding from the participants of any scheme offering gifts, prizes or other items free of
charge, on its closure the information about final result of scheme.

■ The participants of a scheme shall be deemed to have been informed of the final results of the
scheme where such results are within a reasonable time published prominently in the same
newspapers in which the scheme was originally published.

5. Sale or Supply of goods:

■ A trader permits the sale or supply of goods intended to be used or are of a kind likely to be
used by consumers.

■ The prescribed standard may relate to performance, composition, contents, design, packaging
etc. as are necessary to prevent or reduce the risk of injury to the person using the goods.
 6) Hoarding, destruction or refusal [sec 2(1)(r)(5)]:
 Hoarding, destruction or refusal to sell the goods which raises or tends to raise the cost

of those or other similar goods or services shall amount to an unfair trade practice.

7) Manufacturing or sale of spurious goods [section 2(1)(r)(6):

 Spurious goods and services means such goods and services which are claimed to be
genuine but are not so.
 Who is trader?
A trader is a person who ---

 Sells goods or

 Distributes any goods for sale

 Manufacturer of goods for sale

 Packer of goods who sells or distributes goods in package form [Sec. 2 (1) (q)].

 A middleman who brings together the buyer and seller and receives commission for the
service rendered is not a trader.
 Who is manufacturer?
A manufacturer is a person who ---

 Makes or manufactures any goods or parts thereof or

 Assembles parts of the goods made or manufactured by others or

 Puts his own mark on any goods made or manufactured by any other manufacturer.

 Where a manufacturer dispatches any goods or parts thereof to any branch office maintained
by his such branch office is not the manufacturer.

Branch Office
Branch office means any establishment described as a branch by the opposite party.

Any establishment carrying on either the same or substantially the same activity carried on by
the head office the establishment.
Restrictive Trade Practice
 DEFINITION Sec. 2 (1) (nn)
“A trade practice which tends to bring about manipulation of price, or its conditions of delivery or to affect flow

of supplies in the market relating to goods or services in such a manner as to impose on the consumers unjustified

costs or restrictions”

Consumers Need Protection Against

 Price fixing or output restraint i.e delivery/flow of supplies to impose unjustified costs/restrictions on
consumers.

 Collusive tendering; market fixing territorially among competing suppliers, depriving consumers of free
choice, fair competition.

 Supplying only to particular distributors or on condition of sale only within a territory.

 Delaying in supplying goods/services leading to rise in price.

 Requiring a consumer to buy/hire any goods or services as a pre-condition for buying/hiring other goods or
services.
5.5 Information Technology Act, 2000
 Information Technology Act, 2000

 Introduction:

■ The modern age is the age of computers, new communication system, and
digital technology. Information stored in electronic form has many advantages.

■ International trade through the medium of e-commerce has been growing

rapidly in the past few years and many countries have switched over from
traditional paper based commerce to e-commerce.
 Exceptions:
 The Act does not apply to-

a) A negotiable instrument(other than a cheque)

as defined in the Negotiable Instrument Act,1881

b) a trust as defined in the Indian Trusts Act, 1882

c) any contract for the sale or conveyance of immovable property or any interest in

such property;

d) any such class of documents or transactions as may be notified by the central

Government in the official Gazatte

 Definitions:

 Access
 Electronic form
 Computer
 Electronic record
 Computer network
 Function
 Computer resource
 Information
 Computer system
 Intermediary
 Data

 Digital Signature
 Cont..

 Authentication of electronic records (sec. 3)

• Asymmetric crypto system

• Electronic record

• Digital signature

• Hash function
■ Access: It means gaining entry into, instructing or communicating with the logical, arithmatical
or memory function resources of a computer, computer system or network.
■ Addresee: It means a person who is intended by the originator to receive the electronic record
but does not include any intermediary.
■ Affixing digital signature: with its grammatical variations and cognate expressions means
adoption of any methodology or procedure by a person for the purpose of authenticaating an
electronic record by means of digital signature.
■ Asymetric crypto system: It means a system of a secure key pair consisting of a private key for
creating a digital signature and a public key to verify the digital signature.
■ Certification practice statement: It means a statement issued by a certifying authority to specify
the practices that the certifying authority employs in issuing digital signature certificates.
■ Computer:
■ Computer Network:
■ Computer Resource:
■ Data:
■ Electronic Form: Any information received, generated, stored and sent in media ,
magnetic optical, computer memory etc.
■ Electronic Record:
■ Function: Logic, control, arithmetic function , process, storage etc.
■ Information:
■ Intermediary : any person on behalf on other person receive, store and transmit the
electronic message.
■ Key Pair: public and private key where a public key can check the digital signature
created by private key.
■ Originator: A person who originate the message.
■ Secure System:
■ Subscriber: a person on whose name, the digital signature certificate is issused.
 Digital Signature (Sec.3)

 Authentication of electronic records

Authentication is a process used to confirm the identify of a person or to

prove the integrity of information.

Message authentication involves determining its sources and verifying that

it has not been modified or replaced in transit.
The authentication shall be effected to the use of:
• Asymmetric crypto system

• Electronic record

• Digital signature

• Hash function

Algorithm that translates one set of bits into another such a way that,

I. A message yields the same results every time executed by same message
as input.

II. It is computationally infeasible for a message to be derived results.

III. It is computationally infeasible to find two different message that produce

same algorithm.
 Electronic Governance

 Legal recognition of electronic records

(a) rendered or made available in an electronic form

(b) accessible so as to be usable for a subsequent reference.

 Legal recognition of digital signatures.

 Use of electronic records and digital signatures in Government and its agencies.

 Retention of electronic records.

 Publication of rule, regulation, etc., in Electronic Gazette.

 Sections 6,7 and 8 not to confer right to insist document should be accepted in electronic
form.

 Power to make rules by Central Government in respect of digital signature

a) the type of digital signature;

b) the manner and format in which the digital signature shall be affixed;

c) the manner or procedure which facilitates identification of the person affixing the digital
signature;

d) control processes and procedures to ensure adequate integrity, security and

confidentiality of electronic records or payments;

e) any other matter which is necessary to give legal effect to digital signatures