Consumer Disputes Redressal

Mechanism in India
By Group 06
Nayan Gupta PGP10215
Priya Kumari PGP10223
Rohit PGP10226
Sheena Rathore PGP10231
Siddharth Gautam PGP10233
Tanvi Karguppikar PGP10242
Introduction

Consumer protection is a group of laws and organizations designed to ensure the rights of consumers as well
as fair trade competition and the free flow of truthful information in the marketplace. The laws are designed to
prevent businesses that engage in fraud or specified unfair practices from gaining an advantage over
competitors; they may also provide additional protection for the weak and those unable to take care of
themselves.

In India, Consumer Protection Act of 1986 is the law governing consumer protection. Under this law, separate
consumer tribunals have been set up throughout India in each and every district in which a consumer
[complaint can be filed by both the consumer of a goods as well as of the services] can file his complaint on a
simple paper without paying any court fees and his complaint will be decided by the Presiding Officer of the
District Level. Appeal could be filed to the State Consumer Disputes Redressal Commissions and after that to
the National Consumer Disputes Redressal Commission (NCDRC).

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Introduction Cont..

 The procedures in these tribunals are relatively

less formal and more people friendly
 They take less time to decide upon a consumer
dispute when compared to the years long time
taken by the traditional Indian Judiciary
 In recent years, many effective judgments have
been passed by some state and National
Consumer Forums

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Grievance Redressal Mechanism

The Grievance redressal mechanism of an organization is the gauge to measure

its efficiency and effectiveness

It provides important feedback on the working of the Organization

The main purpose of a Grievance Policy is to place an appropriate mechanism

whereby the Customer who believes (s) that he/ she has been wronged by any
act of the Company is afforded a fair opportunity to redress his/ her Grievance

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Grievance
Redressal
System

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Consumer Disputes in India

 Consumer dispute means dispute where the person against whom a complaint has been made,
denies or disputes the allegation contained in the complaint
 Before reviewing the consumer redressal forums, it is important to know the different types of
consumer disputes
 A consumer can approach consumer forum for redressal of following types of disputes
 Electricity consumption and Bills
 Medical Facilities
 Hospitals
 Insurance
 Builders and Developers
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Types of Disputes Contd..

 Banking Services
 Telecommunication Companies
 Any other service provider
 Phone Manufacturers (Nokia, Samsung, L.G. etc.)
 Defect in goods
 Auto Companies
 Deficiency in service
 Hotel and Restaurants
 Sale and purchase of consumables and any
 Airlines (Jet Airways, Air India, Indigo)
other goods
 Travel Agencies

The above mentioned list is not exhaustive. The categorization of disputes will depend upon the facts. It is
essential that public authorities have a place and play an active role in consumer policy and justice

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Consumer Courts in India

In India, under the Consumer Protection Act, 1986, consumer courts have been established for the redressal of
consumer grievances. Consumer Court is the name given to special purpose courts, mainly in India, that deal
with cases regarding consumer disputes and grievances. These are judiciary set ups by the government to
protect the consumer rights. If any consumer is cheated by the seller he/she can approach the redressal forum
to seek justice. Their main function is to maintain the fair practices by the sellers towards consumers.

The central government is given the responsibility to create and maintain the National Consumer Disputes
Redressal Commission in New Delhi. The state government is given the responsibility to create a State
Consumer Disputes Redressal Commission at the state level and a District Consumer Disputes Redressal
Forum at the district level. 

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Three-tier
Grievance
Redressal
Machinery
and Forums 

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National Consumer Disputes Redressal Commission
 The National Commission was constituted in the year 1988.
 The National Consumer Court must ordinarily be functioning in New Delhi
 It is presided over by a person who is currently or has been in the past a judge of the Supreme Court
 The President of the National Consumer Disputes Redressal Commission (NCDRC) is appointed by the Central Government after
consultation with the Chief Justice of India
 The National Consumer Commission has a minimum of four other members and is appointed by a committee chaired by a Supreme Court
judge as recommended by the Chief Justice of India
 Members of the NCDRC can have a term of up to five years or up to 70 years, whichever is earlier
 If your complaint seeks more than one crore rupees of compensation from a company, then the National Consumer Commission has the
pecuniary jurisdiction over your complaint
 It is empowered to issue instructions regarding
(1) Adoption of uniform procedure in the hearing of the matters;
(2) Prior service of copies of documents produced by one party to the opposite parties;
(3) Speedy grant of copies of documents; and
(4) Generally overseeing the functioning of the State Commissions or the District Forums to ensure that the objects and purposes of the
Act are best served without in any way interfering with their quasi-judicial freedom 10
State Consumer Disputes Redressal Mechanism
 Under the Consumer Protection Act, 1986 a State Consumer Disputes Redressal Commission shall be set up by the
State Government for the respective State
 At present there are 35 State Commissions functioning in different States
 The President of the State Consumer Commission shall be or should have been a High Court judge and should be
appointed only after consultation with the Chief Justice of the High Court with the state’s jurisdiction
 The remaining members of the commission are appointed by a committee with the President of the State Consumer
Court as its chairman, and they can have a term of up to five years or up to 67 years, whichever is earlier
 The State Consumer Disputes Redressal Commission deals with a pecuniary jurisdiction of only those complaints
where the compensation sought is higher than twenty lakhs but lesser than one crore
 The State Consumer Forum usually hears cases of three types:
1. Appeals from District Consumer Forums
2. Cases against companies that operate an office or a branch in the state.
3. Cases where the actual reason why you are filing the complaint (such as the signing of an agreement or
payment of a bill) partially or fully occurred within the state 11
District Consumer Disputes Redressal Mechanism

 Under the Act, the State Government shall establish a District Forum in each district of the State
 Presently, there are 659 District Forums functioning in different States
 The President and members are directly/indirectly appointed by the state government and he shall be
eligible to be a district judge
 All members of the court can have a term of up to five years or up to 65 years, whichever is earlier
 The District Consumer Forum cannot conduct a hearing without the President and at least one other
member
 This consumer court deals with complaints where the compensation sought is less than twenty lakhs
 This limit is commonly known as the 'pecuniary jurisdiction' of the District Consumer Disputes Redressal
Forum

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 District Consumer Disputes Redressal Mechanism

 A District Consumer Forum can hear cases for any company that operates an office or a branch in the district
 It can also hear cases provided the actual reason why you are filing the complaint (such as sale or
maintenance service that led to the defect) partially or fully occurred within the district
 The District Consumer Forum can order the company to take the following actions once it hears the
complaint and decides that the company is at fault:

1. Correct deficiencies in the product to what they claim 5. Pay compensation for damages/ costs/ inconveniences
2. Repair defect free of charges 6. Withdraw the sale of the product altogether
3. Replace the product with similar or superior product 7. Discontinue or not repeat any unfair trade practice or
4. Issue a full refund of the price the restrictive trade practice

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Cases pertaining to Consumer Grievance Redressal
1. Arvind Shah (Dr.) vs Kamlaben Kushwaha-

In this case, the complainant alleged that his son died due to the administration of a wrong treatment by the doctor. The
State Commission upholding negligence provided a compensation of five lakh rupees.
In appeal, the National Commission observed that the two prescriptions that were available on record neither contained
any description of the symptoms that the patient was experiencing nor did it have any preliminary vital information that a
doctor is mandated to check, as per the guidelines and regulation of the Medical Council of India or the concerned State
Medical Council, like body temperature, blood pressure, pulse rate, prior medical history et cetera. If further tests were
required for the diagnosis, such was also mandated to be mentioned. The commission, following the case of Samira
Kohli v Dr Prabha Manchanda [I (2008) CPJ 56 (SC)], held that failure to put such essentials in the prescription
amounted to medical negligence. The Commission also noted that availability of such essentials, clinical observations
and consent of the patient, point towards the care and diligence of the doctor and act as evidence against frivolous cases
of medical negligence.
However, due to lack of available evidence that attributed the death of the patient directly to the negligence, the National
Commission reduced the compensation to two and a half lakhs along with the interest thereon.
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Cases pertaining to Consumer Grievance Redressal
2. Indian Medical Association vs V.P. Shantha and others –
In deciding this case of deficiency of medical service, the court held that the services rendered by a medical professional
fall within the ambit of ‘services’ under the section 2(1)(o) of the Act. It rejected the contention that a medical practitioner,
being a professional and falling under the scope of Indian Medical Council Act, stands excluded from the CPA.
Moreover, it held that provision of a token fee (for the hospital administrative purposes) would not include an otherwise
free service within the ambit of the definition of services. Also, the cost of the services paid by the employer or the
insurance company would be deemed similar to paying for the service by the consumer itself.

3. Karnataka Power Transmission Corporation v Ashok Iron Works Private Limited –

The Supreme court, in this case, held that a corporate body is included in the meaning of ‘person’ in section 2(1)(m) of the
CPA. It reiterated the position of Lord Watson in Dilworth v. Commissioner of Stamps that the word “includes” is
generally used to enlarge the meaning of the word but can alternatively be used to say “mean and include”, in which case
what follows is an exhaustive explanation. The interpretation depends on the text, context, and objective of the Act. It was
held that the section never intended to exclude juristic persons from its purview and the definition is inclusive in nature.
It also reiterated its own position in Southern Petrochemical Industries that the word “supply” is not the same as “sale”
and in the context of electricity, it would be a provision of service as under section 2 (1)(d)(ii) of the Act. 15
 Cases pertaining to Consumer Grievance Redressal
4. Sehgal School of Competition vs Dalbir Singh –
To seek admission in a medical coaching center, the petitioner, in this case, was made to deposit a lump sum fee for two years within the first six
months. When the petitioner left the course midway on account of deficiency in the services, the coaching center refused to refund the remaining
amount. The State Tribunal, following the view of the apex court and the National Commission, held that no educational institution shall collect
lump sum fee for the duration of the entire course and if one does, such extra fee should be returned in case the student drops out due to deficiency.
It noted that any clause in a contract contrary to this is invalid due to lack of equal bargaining power and contravention of the principles of natural
justice.
The court was also of the opinion that additional compensation should be granted for the mental agony caused due to approaching the legal forum.
However, since such was not asked in the petition, it could not be granted.

5. V.N. Shrikhande vs Anita Sena Fernandes –

The petitioner alleged negligence by a medical practitioner, claiming that he left a mass of gauge in her abdomen during a procedure to remove
stones from the gallbladder. However, the petition was raised nine years after the procedure when the petitioner underwent a second operation, in
another hospital, to remove the mass.
The Supreme Court recognized that in cases of medical negligence no straightforward formulae is present to determine when the cause of action
has accrued. The court, following ‘Discovery Rule’ evolved by the courts in the United States, stated that in the case where the effect of the
negligence is obvious, the cause of action is deemed to have arisen at the time of negligence. However, in case the effect of negligence is dormant,
the cause of action arises when the patient figures out about the negligence with reasonable diligence. The court noted that the petitioner had been
experiencing pain and discomfort since the time of the operation for which she continued to take painkillers for nine years without consulting the
doctor. In the light of this and the fact that she herself was an experienced nurse who can reasonably be expected to possess more knowledge than a
layman, the court set aside the Commission’s order and dismissed the complaint. 16
Recent News on Consumer Protection Bill, 2019

 The Parliament passed the Consumer Protection Bill, 2019 on 06.08.2019 to replace the Consumer
Protection Act, 1986 
 The 2019 Act has been enacted for the providing timely and effective administration and settlement of
consumer disputes and related matters
 It expands the scope of the definition of Consumer so as to include the consumers involved in online
transactions and it now squarely covers the E-commerce businesses within its ambit
 It has widened the definition of Unfair Trade practices, introduced the concept of ‘Unfair Contract’ and
‘Product Liability’
 The 2019 Act has proposed to establish Central Consumer Protection Authority (“CPA”)
 Key changes brought in Consumer Redressal Forums include – Territorial Jurisdiction, Pecuniary
Jurisdiction, Alternate Dispute Resolution, E-complaints
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Thank You