CONSUMER

PROTECTION
ACT, 1986
 OBJECTS
1. Right to be protected against marketing of goods which are
hazardous to life and property;
2. Right to be informed about the quality, quantity, potency, purity,
standard and price of goods to protect the consumer against unfair
trade practices;
3. Right to be assured, wherever possible, access to variety of goods
at competitive prices;
4. Right to be heard and to be assured that customers’ interests will
receive due consideration at appropriate forums;
5. Right to seek redressal against unfair trade practices or
unscrupulous exploitation of consumers; and
6. Right to consumer education.
Objects are sought to be promoted and protected by Consumer
Protection Councils to be established at Central and State levels.

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 Cases…
• Anand runs a laundry shop. He bought a washing machine
from an electronics shop for using in his shop. The
machine was installed in his shop. The machine was
defective right from the time it was delivered. Is Anand a
consumer?
• Balu is a distributor for computer accessories. He bought
100 pen drives from the manufacturers for selling to other
vendors. Is Balu a consumer?
• Arvind bought cycles for the purpose of hiring out to
tourists visiting the area. Santosh was a tourist who had
hired a cycle. The cycles were defective. The handle of the
cycle broke, including Santosh. Are Arvind & Santosh
Consumers?
• Baman bought a laptop and gifted it to his son, Suman.
Suman is a tax consultant and uses the laptop for his
business. Are Baman and Suman Consumers?

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 CONSUMER
A Consumer is a person who-
1. Buys any “goods” for any consideration; or
2. Hires or avails of any “service” for a
consideration;
3. “uses the goods” with the approval of the
person who has bought the goods for
consideration;
4. “is beneficiary of services” with the approval of
the person who has hired the services for
consideration.
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 • Abhijeet bought a pressure cooker for using at
home. He had paid only 30% of the price while
buying it. The remaining 70% was to be paid a
week later. The pressure cooker was defective.
It burst in the second use. Is Abhijit a
consumer?
• A manufacturer of pens was distributing his
pens free to the visitors to an exhibition. The
pens were defective and leaking. The pens
spoilt the clothes of several persons. Sweta is
one of the persons who has spoilt her clothes. Is
she a consumer?

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 Who is not a consumer?

• A person is not a consumer if-

• He obtains the goods for “resale” or any “commercial
purpose” or;
• Buys goods without consideration; or
• Hires or avails of any services without consideration, or
• He obtains service under a contract of personal service.
• He avails of services for any commercial purpose.
 What is consumer Dispute?

• On a complaint before the consumers redressal

Forums against a person, who Denis or
disputes the allegations contained in the
complaint a consumer dispute arises.
 Who can be a complainant?

• Complainant before the consumer redressal forums can

be;
• A consumer ; or
• The central Government or any state Government; or
• One or more consumers, where there are numerous
consumers having the same interest ; or
• In case of death of a consumer, his legal heir or
representative.
 What is complaint?

A complaint is any allegation in waiting made by a complainant that –

1) An “unfair trade practice” or a “restrictive trade practice” has been
adopted by any trader or service provider;
2) The goods bought by him or agreed to be bought by him, suffer
from one or more “defects”;
3) The service hired or availed of or agreed to be hired or availed of
by him suffer from ”deficiency” in any respect;
 Continue……..

4) A trade or the service provider 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 on any package containing
such goods;
(c) agreed between the parties;
Continue……..

(5) goods which will be “hazardous to life and safety” when

used are being offered for sale to the public-
- 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 .
 Types of different complaints

• Unfair Trade practice

• Restrictive Trade Practice
• Defects
• Deficiency
• Excessive Price
• Hazardous Goods
 Unfair Trade Practice
• The Unfair trade practice means a trade practice which, for the
purpose of promoting the sale, use of supply of any goods or
the provision of any services, a trader adopts any unfair method
or deceptive practice.
• Unfair trade practice in not only related to goods but also to
services rendered.
• It includes following practices,
(1)Making statement
(2)Publication
(3)Gifts and Prizes
(4)Withholding any scheme
(5)Sale or supply of goods
(6)Hording of goods
 • Horlicks Hidden Wealth Prize –

the HMM ltd. Manufactured and marketed

Horlicks. In September 1985, it advertised a
scheme called the “Hidden Wealth Prize Offer”
for the buyers in Delhi. A lucky purchaser of a
bottle of Horlicks could find a coupon inside the
bottle. The coupon indicated the prize.

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 Verdict … HMM Case

Not a case of lottery… draws of lots or that a price

was charged for participation in the draw… the
fact that some bottles of Horlicks contained a
slip of paper which entitled the buyer to a prize
is not a lottery in the ordinary sense of the word.

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 UNFAIR TRADE PRACTICE
• A television ad promoting Ujala liquid blue showed that
2-3 drops of Ujala were adequate to bring about striking
whiteness in clothes, while several spoons of other
brands were required.
– Provision on unfair trade practices was introduced in the MRTP Act
in 1984. the same is now available through the CPA
– UFT include every kind of Misrep. In relation to quality of product
and service.
– Ad is commercial speech and protected under The Fundamental
Right
– Comparative ad and disparaging others goods is allowed so long as
it is based on objective fact.
– Co.s use schemes, contests, games for promotion. It is not UFT
– It is an unfair trade practice to claim to be giving something free
while it is not the case.

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 Restrictive Trade Practice
• Delay beyond the period agreed to by a
trader in supply of such goods or in
providing the services which has led or is
likely to lead to rise in the price
• Any trade practice which requires a
consumer to buy, hire or avail of any
goods or, as the case may be, service as
condition precedent to buying, hiring or
availing or other goods or services.
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 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.
 Excessive Price
• It is for complainant to establish that the trader has
charged for goods mentioned in the complaint, a price in
excess of the price-
• (a) fixed by or under any law for the time being in force; or
• (b) displayed on goods; or
• (c) displayed on any package containing such goods.
 Hazardous goods

• In respect of goods which are hazardous to life

and safety, traders shall display information
regarding the contents, manner and effect of
use of such goods. Such goods offered for sale
without such display or caution can be a case of
complaint.
CONSUMER
PROTECTION
COUNCILS
❖ SEC.4 : THE CENTRAL CONSUMER
PROTECTION COUNCIL.
(1) The Central Government may, by notification, establish with effect
from such date as it may specify in such notification, a Council to be
known as the Central Consumer Protection Council (hereinafter referred
to as the Central Council).

(2) The Central Council shall consist of the following members,

namely :-
(a) The Minister in charge of Consumer Affairs in the Central
Government, who shall be its Chairman, and
(b) Such number of other official or non-official members
representing such interests as may be prescribed.
❖ SEC.5 : PROCEDURE FOR MEETINGS
OF THE CENTRAL COUNCIL.
(1) The Central Council shall meet as and when
necessary, but at least one meeting of the Council shall be
held every year.

(2) The Central Council shall meet at such time and

place as the Chairman may think fit and shall observe such
procedure in regard to the transaction of its business as may
be prescribed.
❖ SEC.6 : OBJECTS OF THE CENTRAL
COUNCIL.
The objects of the Central Council shall be to promote and protect the
rights of the consumers 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 redressed against unfair trade practices or

restrictive trade practices or unscrupulous exploitation of consumers; and

(f) the right to consumer education.

❖ SEC.7 : THE STATE CONSUMER
PROTECTION COUNCILS.
(1) The State Government may, 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 for ............. (hereinafter
referred to as the State Council).
(2) The State Council shall consist of the following members, namely :-
(a) the Minister in-charge of consumer affairs in the State
Government who shall be its Chairman;
(b) such number of other official or non-official members
representing such interest as may be prescribed by the State
Government.
(3) The State Council shall meet as and when necessary but not less
than two meetings shall be held every year.
(4) The State Council shall meet at such time and place as the Chairman
may think fit and shall observe such procedure in regard to the
transaction of its business as may be prescribed by the State
Government.
❖ SEC.8: OBJECTS OF THE
STATE COUNCIL.
The objects of every State Council shall be to
promote and protect within the State the rights of the
consumers laid down in clauses (a) to (f) of section 6.

❖ SEC.8A: THE DISTRICT

CONSUMER PROTECTION COUNSIL.
(1) The State Government shall establish for
every district, by notification a council to be known as
the District Consumer Protection Council with effect
from such date as it may specify in such notification.
contd.....
(2) The District Consumer Protection Council (hereinafter referred
to as the District Council) shall consist of the following members,
namely:-
(a) the Collector of the district (by whatever name called),
who shall be its Chairman; and
(b) such number of other official and non-official members
representing such interests as may be prescribed by the State
Government.
(3) The District Council shall meet as and when necessary but not
less than two meetings shall be held every year.

(4) The district council shall meet as such time and place within the
district as the Chairman may think fit and shall observe such
procedure in regard to the transaction of its business as may be
prescribed by the State Government.
❖ SEC.8B: Objects of the District
Council

The objects of every District Council shall be to

promote and protect within the district the rights of the
consumers laid down in clauses (a) to (f) of section 6.
CONSU
MER
DISPUT
ES
REDRES
SAL
AGENCI
ES
 Redressal Forums

To carry out the purposes and objects of the Act,

following agencies are established as CDRA:
• District Forum
• State Commission
• National Commission
 DISTRICT FORUM

Competition:
Each district forum shall consist of
(i) President Qualification as a district judge,
(ii)2 other members, of whom one shall be a woman:
-qualification
i) not less than 35years of age
ii) bachelor degree from recognized university
iii) experience of law, accounts, commerce, etc.
 Disqualification:
A person cannot become a member if he is,
a) convicted or sentenced for imprisonment
b) is insolvent
c) of unsound mind
d) dismissed from government service

Appointment:
For appointment of above posts, there is a selection
committee consisting of:
• Chairman of state commission
• Secretary of law department
• Secretary in charge of consumer affairs
Jurisdiction:
Forum will entertain the complaints for goods and
services for the compensation not exceeding
Rs.20lakhs in amount,
A complaint shall be filed in the local limits where
opposite party resides or carries on business.

Power of district forum:

District forum has same powers as are vested with
city civil court namely:
- summoning for attendance of parties.
- examining the witness on oath.
- compelling to produce documents
- questioning laboratory report or test, etc.
Findings of District forum:
- Removal of defect in goods
- Replacement of goods
- Refund of excess price
- Payment of compensation
- Removal of deficiency in services
- Discontinue RTP and UTP, etc.

Appeal:
Am aggrieved person dissatisfied with the other of
district forum may appeal to state commission within
30days from the date of order.
 STATE COMMISSION

Competition:
State commission shall consist of:
a) President- qualification- Judge of high court
b) 2 other members, one shall be a woman
Qualification-
i. Not less than 35years of age
ii. Bachelor degree from recognized
university
iii. Experience of law, commerce, industry,
etc.
Disqualification-
A person cannot become a member if he is,
i. Convicted or sentenced for imprisonment
ii. Is insolvent
iii. Of unsound mind
iv. Dismissed from government services

Appointment:
-> chairman of state commission
-> secretary of law department
-> secretary in charge of consumer affairs.
Jurisdiction:

Forum will entertain the complaints for goods and

services for the compensation not exceeding
Rs.20lakhs to Rs.1 crore in amount.
Power of state commission:
- The jurisdiction and power are in the hand of Bench.
- A Bench shall consist of president and member.
- The decision is taken on the basis of majority

Appeal-
State commission will try to dispose of the appeal
made to it within 90days of admission, without
adjournment.
 NATIONAL COMMISSION

Competition:
It shall consist of the following,
a) President- qualification – Judge of Supreme court
b) 4 other members – qualification
i. Not less than 35years of age
ii. Bachelor degree from recognized university
iii. Experience of ‘law , commerce, industry, etc.
Disqualification:
A person cannot become a member if he is:
i. Convicted or sentenced for imprisonment
ii.Is insolvent
iii.Of unsound mind
iv.Dismissed from government services

Appointment:
- Chairman i.e. Judge of Supreme Court
- Secretary of legal affairs
- Secretary of consumer affairs
Jurisdiction:

National commission shall entertain the complaint for

goods and services for the compensation exceeding Rs.1
crore in value.
→ It shall entertain the appeals against the order of state
commission.
→ It shall entertain those complaints which are kept pending
by state commission.
Power:
- The jurisdiction and power are in the hands of a
Bench
- A Bench shall consist of President and members.
- The decision taken on the basis of majority.

Appeal:
An aggrieved person not satisfied with the order of
National Commission may appeal in Supreme Court
within 30days from the date of order.
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