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Consumer Protection Act, 1986

GOODS & SERVICES
 Objects of the Act
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Right to be protected against marketing of goods which
are hazardous to life and property.

Right to be informed about the quality, potency,

standard, and price of goods to protect the consumer
against unfair trade practices.

Right to be heard and to be assured that customers’

interests will receive due consideration at appropriate
forums.
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Right to seek redressal against unscrupulous

exploitation of consumers.

Right to consumer education.

Consumer protection councils – Central & State.

 Definitions
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Appropriate laboratory: It is recognized by Central &
State governments, which carries out analysis or test
of any goods with a view to determining whether such
goods suffer from any defect.

Complainant: One or more consumer or any voluntary

consumer association registered under the Companies
Act or the Central or any State Government who or
which makes a complaint.

Complaint: Any allegation in writing made by a

complainant with a view to obtaining any relief
provided by under this Act.
Consumer:

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Any person, who –

(i) buys any goods for a consideration which has been

paid or promised or partly paid or promised, or under
any system of deferred payment.
(ii) hires or avails of any service for a consideration
which has been paid or promised or partly paid or
promised, or under any system of deferred payment.
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For (i) ‘Consumer’ also includes any user other than

buyer himself. It must involve some consideration.
‘Consumer’ does not include resale or commercial use
of obtained goods.

For (ii) ‘Consumer’ includes any beneficiary of services

other than the person who hires or avails such services.
Consumer dispute – complaint denied or challenged
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Defect – fault, imperfection, or shortcoming in the

quality, potency, purity, or standard

Deficiency – fault, imperfection, or inadequacy in the

quality, nature and manner of performance

District Forum – Consumer Disputes Redressal

Forum
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National Commission – National Consumer Disputes

Redressal Commission

Person – includes a firm, a HUF, a cooperative society.

State Commission – Consumer Disputes Redressal

Forum
Service: It includes, provision of facilities in
connection with banking,
9 financing, insurance,
transport, processing, electrical or other energy
supply, boarding & lodging, house construction
and plots by Housing & Development Board,
entertainment and amusement, and telephone
connection and facility by Telecom Department.
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‘Service’ however does not include the rendering of any
service free of charge or under a contract of personal
service.

Spurious – goods & services which are claimed to be

genuine but they are actually not so.

Trader – a person who sells, distributes,

manufacturers, or a packer of any goods for sale.
 Who is not a Consumer?
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A person obtaining goods for “resale” or for any
“commercial purpose”; or
Buys goods without Consideration; or
Hires or avails any services without
Consideration; or
Uses the goods without approval of the person
who has bought goods for consideration; or
Is beneficiary of services w/o consent of the
person who has hired the services for
consideration; or
Obtains service under a contract of personal
service.
 Resale and Commercial Purpose
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When the goods are re-sold in original condition as

bought, it is a resale.
When the goods are not purchased for immediate
final consumption, but for transfer, it is resale.
A person buying the goods for resale or commercial
purpose, even if for consideration, is NOT a
consumer.
Mr. A bought a TV set from an electronics store for
using it at home. The TV was defective. Is Mr. A a
consumer? 13

Mr. A is a consumer as he buys a good for a

consideration.
Bhavesh bought a pressure cooker. In the first use
itself while his wife was using it, the pressure
cooker burst, hurting her. Is Bhavesh a consumer?
Is his wife a consumer?
Bhavesh is the consumer. His wife is also a
consumer as per the provision: ‘…and includes any
user of goods other than the buyer for
consideration’.
Anand runs a laundry shop and he bought a
washing machine. The same was installed in his
shop. The machine was14defective right from the
day it was delivered. Is Anand a consumer?
Anand is not a consumer as he is using the
machine for consumer purpose.
Balu is a distributor for computer accessories. He
bought 100 pen-drives for selling to other
computer vendors. Is Balu a consumer?
Balu is not a consumer as he has obtained
accessories for resale.
Anil bought cycles for the purpose of hiring to
tourists visiting the area.
15 Sunil was a tourist who
had hired a cycle. The cycles were defective. The
handle of the cycle broke, injuring Sunil. Are Anil
and Sunil consumers?
Anil is not a consumer. However, Sunil is a
consumer as he availed service of hiring from Anil.
Mr. Patel bought a laptop and gifted it to his son,
Amit. Amit is a consultant who uses the laptop for
his business. Are Mr. Patel and Amit consumers?
Mr. Patel was a consumer when he bought the
laptop. However, Amit is not a consumer as he is
using it for commercial purpose.
 Special Note on ‘Commercial
Purpose’
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Not buying for one’s own use is not necessarily

buying for commercial purpose.
 For example, a purchaser of a cooler is a
consumer, even if the cooler is installed at a bus-
stand for the use of public free of charge.
 In a case, where a lady purchased a Xerox
machine for the purpose of earning her
livelihood, was held that it was not for
commercial purpose and that she was a
consumer.
The Court should therefore be satisfied that there
is NO large-scale commercial activity.
For example, Plying of a taxi is purchase of a taxi
for commercial purpose.17
Commercial purpose is commerce, mercantile,
having profit as the main aim.
There should be profit or loss from further
disposal.
Commercial purpose include all business activities.
In other words, where there is no profit motive or
business gain, the purchase of goods is not for
commercial purpose.
Extent of Consumer Protection
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While other legislation may be either punitive or
preventive, the CPA compensates the consumer.
The CPA gives the consumer an additional
remedy besides those which may be available
under existing laws.
The CPA is a benevolent piece of legislation to
protect a large body of consumers from
exploitation.
 Consumer Dispute
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On a complaint before the Consumer Redressal

Forums against a person, who denies or disputes the
allegations contained in the complaint a consumer
dispute arises [Sec. 2(1) (c)].
Separate allegations may form separate disputes
requiring separate finding on each dispute.
 Who can be a 20Complainant?
A Consumer; or
Any voluntary consumer association registered
under the Companies Act; or
The Central or State Government; or
One or more consumers, where there are
numerous consumers having the same interest;
or
In case of death of consumer – his legal heir or
representative.
 What is a Complaint?
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A complaint is any allegation in writing by a

complainant that –
An “unfair trade practice” or a “restrictive
trade practice” has been adopted by any
trader or service provider;
The goods bought or agreed to be bought suffer
from one or more “defects”.
The services hired or availed or agree to be
hired or availed suffer from “deficiency” in
any respect.
A trader or the service 22
provider has charged for
the goods or services mentioned in the
complaint, “a price in excess” of the price
fixed or displayed;
Goods which will be “hazardous to life and
safety” when used are being offered for sale to
the public in contravention to any stipulated
standards;
Services which are hazardous to life and safety
when used are being offered by service provider.
 Unfair Trade Practice
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For which a trader, for promoting sale, use or supply
of any goods or provision of services, adopts any
unfair method or deceptive practice.
Includes:
A) The practice of making any statement, orally,
written, or visually anything false or misleading.
B) Permits the publication of any advertisement in
any newspaper or otherwise, for sale or supply at a
bargain price of goods/ services that are not
intended to be offered for sale or supply at the
bargain price.
 Restrictive Trade Practices
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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 cost or restrictions.
 Defects and Deficiency
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Defect means any fault, imperfection, or

shortcoming in the quality, quantity, potency, purity
or standard which is required to be maintained by
the trader under any law.
It is for the complainant to establish that the goods
mentioned in the complaint suffer from one or more
defects.
Deficiency means any fault, imperfection,
shortcoming, or inadequacy
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in the quality, nature
and manner of performance which is required to be
maintained by or under the law.
It is for the complainant to establish that services
mentioned in the complaint suffer from deficiency
in any respect.
Examples: Lack of facilities by Housing
Board is deficiency. Non-allotment of
shares is not deficiency in service. Failure
of insurance company to settle claim
without sufficient cause is deficiency.
Failure of Railways to provide cushioned
seats in 1st class is deficiency of service.