CONSUMER PROTECTION ACT 1986

1. CONSUMER PROTECTION ACT 1986 PRESENTATION BY: Kratika Saxena MBA: MM 3rd sem

2. AN INTRODUCTION A consumer is defined as someone who acquires goods or services for direct use or ownership rather than for resale or use in production and manufacturing.Consumer interests can also be protected by promoting competition in the markets which directly and indirectly serve consumers, consistent with economic efficiency.Consumer protection can also be asserted via non-government organizations and individuals as consumer activism.

3. Consumer protection consists 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 market place.The laws are designed to prevent businesses that engage in fraud or specified unfair practices from gaining an advantage over competitors and may provide additional protection for the weak and those unable to take care of themselves. consumer protection laws are a form of government regulation which aim to protect the rights of consumers. For example, a government may require businesses to disclose detailed information about products—particularly in areas where safety or public health is an issue, such as food. consumer protection is linked to the idea of "consumer rights" (that consumers have various rights as consumers), and to the formation of consumer organizations, which help consumers make better choices in the market place and get help with consumer complaints.Other organizations that promote consumer protection include government organizations and self-regulating business organizations such as consumer protection agencies and organizations, the federal trade commission, ombudsmen, better business bureaus, etc.

4. The act came into effect first on December 24, 1986 after being passed by the Indian Parliament and signed by the President of India. It was modified later on and the modifications came into effect on march 15, 2003.For all legal purposes, you can read the bare act as published in theNCDRC website. The act is applicable in all states in India except in Jammu and Kashmir. The act makes provisions to include both tangible goods and intangible services (henceforth referred to as product) purchased from a trader or service provider (henceforth referred to as company). The act can apply to any consumer who uses the product for non-commercial activities, the only exception being use of it to earn his livelihood. In other words, the act excludes commercial customers fully, but includes individual domestic customers, groups of domestic customers, societies and not-for-profit organizations.

5. Section 2(1)(o) in The Consumer Protection Act, 1986 • Central Government Act Section 2(1)(o) in The Consumer Protection Act, 1986 (o) " service" means service of any description which is made available to potential users and includes the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, 1[ housing construction,] enter- 1. Ins. by Act 50 of 1993, s. 2 (w. e. f. 18- 6- 1993 ). tainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service .

6. Section 2(1)(d)(ii) in The Consumer Protection Act, 1986 • Central Government Act Section 2(1)(d)(ii) in The Consumer Protection Act, 1986 (ii) 2[ hires or avails of] any services for a conside- ration which has been paid or promised or partly paid and part by promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who 2[ 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. 1[ Explanation.-- For the purposes of sub- clause (i)," commercial purpose" does not include use by a consumer of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self- employment .

7. WHAT IS A COMPLAINT? “Complaint” means any allegation in writing made by a compliant 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 services hired or availed of or agreed to be hired or availed off by him suffer from deficiency in any respect; 4) A trader or 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 .5) Goods which will be hazardous to life and safety when used are being offered for the sale to the public:

8. a) in contravention of any standards relating to safety of such goods as required to be compiled 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;6) Service which are hazardous or likely to be hazardous to the 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. 7) Any person who buys goods or avails services for consideration. 8) Consideration may be fully paid, partially paid or fully promised to be paid or partially promised to be paid.9) Any body who uses the goods or services with the consent of the consumer .10) Legal heir of consumer in case death of consumer.11) Does not include any person who buys goods for resale or commercial purpose and services for commercial purpose.12) However any person who buys goods for commercial use but exclusively for his livelihood by means of self employment is a consumer.

9. Section 27 in The Consumer Protection Act, 1986 • Central Government Act Section 27 in The Consumer Protection Act, 1986 27. Penalties. Where a trader or a person against whom a complaint is made 3[ 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 trader or person 3[ 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 two thousand rupees but which may extend to ten thousand rupees, or with both: Provided that the District Forum, the State Commission or the National Commission, as the case may be, may, if it is satisfied that the circumstances of any case so require, impose a sentence of imprisonment or fine, or both, for a term lesser than the minimum term and the amount lesser than the minimum amount, specified in this section. CHAP MISCELLANEOUS CHAPTER IV MISCELLANEOUS .

10. Section 12 in The Consumer Protection Act, 1986 • Central Government Act Section 12 in The Consumer Protection Act, 1986 12. 2[ Manner in which complaint shall be made. A complaint, in relation to any goods sold or delivered or agreed to be sold or delivered or any service provided or agreed to be provided may be filed with a District Forum by-- (a) the consumer to whom such goods are sold or delivered or agreed to be sold or delivered or such service provided or agreed to be provided; (b) any recognised consumer association whether the consumer to whom the goods sold or delivered or agreed to be sold or deli- vered or service provided or agreed to be provided is a member of such association or not; (c) 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; or (d) the Central or the State Government. Explanation.-- For the purposes of this section," recognised con- sumer association" means any voluntary consumer association registered under the Companies Act, 1956 (1 of 1956 ) or any other law for the time being in force .

11. FILING OF COMPLAINTS The fee for filing the complaint for the district forum is as under -s.No. Value of goods/service and compensation 1) Upto 1 lakh Rupees.2) Rupees 1 lakh and above but less than 5 lakh Rupees.3) Rupees 5 lakh and above but less than 10 lakh Rupees.4) Rupees 10 lakh and above but less than 20 lakh Rupees.The fees shall be paid by cross demand draft drawn on a nationalized bank or through crossed Indian postal order drawn in favour of the Registrar of the State Commission and payable at the place of the State Commission (w.e.f. 5.3.2004.)

12. FILING OF COMPLAINTS A complaint may be filed by :a) The consumer to whom the goods are sold or services are provided. b) Any recognised consumer association .c) One or more consumers with same interest.d) The Central Government or State Government.APPEALShall be filed within thirty days.Delay in filing appeal may be condoned if there is sufficient cause.LIMITATION PERIODWithin two years from the date on which the cause of action has arisen.

13. PENALITIES Where a trader or 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, such trader or person (or complainant) shall be punishable with imprisonment for a term which shall not be less than 1 month but which may extend to 3 years or with fine which shall not be less than 2000 rupees but which may extend to 10000 rupees, or with both.

14. The salient features of the Act are: 1) It covers all the sectors whether private, public, and cooperative or any person. The provisions of the act are compensatory as well as preventive and punitive in nature and the act applies to all goods covered by sale of goods act and services unless specifically exempted by the central government;2) It enshrines the following rights of consumers:(a) Right to be protected against the marketing of goods and services which are hazardous to life and property; (b) Right to be informed about the quality, quantity, potency, purity, standard and price of goods or services so as to protect the consumers against unfair trade practices; (c) Right to be assured, wherever possible, access to a variety of goods and services at competitive prices; (d) Right to be heard and to be assured that consumers’ interests will receive due consideration at the appropriate fora; (e) Right to seek redressal against unfair trade practices or unscrupulous exploitation of consumers; (f) Right to consumer education;

15. The salient features of the Act are: 3) The act also envisages establishment of consumer protection councils at the central, state and district levels, whose main objectives are to promote and protect the rights of consumers; to provide a simple, speedy and inexpensive redressal of consumer grievances, the act envisages a three-tier quasi-judicial machinery at the national, state and district levels. These are: National consumer disputes redressal commission known as national commission, state consumer disputes redressal commissions known as state commissions and district consumer disputes redressal forum known as district forum. 4) The provisions of this act are in addition to and not in derogation of the provisions of any other law for the time being in force.

16. Consumer Protection Act of 1986 - Summary The act in itself is rosy and seems omnipotent to promote consumerism in India. The law states that the consumer courts have the authority similar to that of a judicial magistrate of the first class in attaching properties and arresting persons in case any of its verdicts are violated or not adhered. but in practice, the law and the consumer court system suffer from the following drawbacks: 1) Seldom do companies pay heed to the consumer court. Their reports, orders and summons are very commonly ignored. as a result, most consumer cases drag on unnecessarily without any outcome.2) Seldom do companies adhere to the verdict. as a result once the verdict comes, proceedings to execute the verdict take even more time of the complainant.3) Consumer courts are not known to be devoid of corruption, like other courts in our country.

17. 4) Consumer courts are overwhelmed and underfunded. the government paints very rosy statistics that 84% of cases in national consumer commission, 77% of cases in state commission and 91% of cases in district consumer forums are disposed. however, it does not tell you how long it takes to dispose a case, nor how many cases are disposed in the favor of the consumer. we would have to assume a very large amount of time and a very low percentage as answers.5) According to the supreme court there are 3.5 crore pending cases in the Indian courts today. statistically, it could take 350 to 500 years to dispose of the cases pending in India. add to this the fact that our government is inefficient in appointing presidents for district forums, and creating, encouraging and relishing bureaucratic delays, you would be extremely lucky if you can get your case disposed in 5 years.However, we do still encourage you to file complaints at the various consumer courts as per the provisions of the consumer protection act of 1986, as although a slow one, we think of it as a start on India's progress towards consumerism. Finally, we encourage you to seek other measures to fight against anti-consumer companies .

18. Section 21(b) in The Consumer Protection Act, 1986 • Central Government Act Section 21(b) in The Consumer Protection Act, 1986 (b) to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any State Commission where it appears to the National Commission that such State Commission has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity .

19. Section 2(1)(d) in The Consumer Protection Act, 1986 • Central Government Act Section 2(1)(d) in The Consumer Protection Act, 1986 (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) 2[ hires or avails of] any services for a conside- ration which has been paid or promised or partly paid and part by promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who 2[ 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. 1[ Explanation.-- For the purposes of sub- clause (i)," commercial .

20. Section 14 in The Consumer Protection Act, 1986 • Central Government Act Section 14 in The ConsumerProtectionAct, 1986 14. Finding of the District Forum. (1) If, after the proceeding conducted under section 13, the District Forum is satisfied that the goods complained against suffer from any of the defects specified in the complaint or 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 2[ do] one or more of the following things, namely:-- (a) to remove the defect pointed out by the appropriate laboratory from the goods in question; (b) to replace the goods with new goods of similar description which shall be free from any defect; (c) to return to the complainant the price, or, as the case may be, the charges paid by the complainant; 1. Ins. by Act 50 of 1993, s. 11, (w. e. f. 18- 6- 1993 ). 2 Subs. by s. 12, ibid (w. e. f. 18- 6- 1993 ). (d) to 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 .

21. Section 3 in The Consumer Protection Act, 1986 • Central Government Act Section 3 in The ConsumerProtectionAct, 1986 3. Act not in derogation of any other law. The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force. CHAP CONSUMERPROTECTION COUNCILS CHAPTER II CONSUMERPROTECTION COUNCILS .

22. CASE LAWS ON THIS ACT • In B. Raghunath Vs Trans India Tourism (1996) the complainant had suffered a loss of Rs. 5,000/-, according to his own statement. He claimed compensation of Rs. 5,00,000. It was evident that he had purposely boosted his claim to bring the matter within the pecuniary jurisdiction of the State Commission. The complaint was returned bt the State Commission for presentation in proper District Forum with necessary correction.

23. NON-SPEAKING ORDER CAN BE SET ASIDE • In S.D.O. Telephone Vs. Rama Shankar Pandey (1997) the District Forum, Handoi, allowed the complaint and directed that the telephone bills of the complainant be revised on the basis of average consumption and awarded Rs. 200/- compensation to the complainant. No reasons were given for such order. • The State Commission held that the order of the District Forum should be a speaking one. It should give, however briefly, the essential facts and material, considered by it as well as the reasons for the conclusion. Else the order becomes arbitrary in the eyes of law. • The order of the District Forum was set aside and the case was sent back to the District forum for re-consideration in accordance with law after notice to the parties.

24. BIBLIOGRAPHY • http://www.ncdrc.nic.in/1_1.html • http://en.wikipedia.org/wiki/Consumer_Protection_Act_of_1986 • http://agmarknet.nic.in/amrscheme/amrstandconsu.htm

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