CONSUMER PROTECTION ACT

PRESENTED BY :-

RADHIKA AGRAWAL

SHALENDRA MALVIYA

SHALEEN SINGH

WHY PROTECT THE CONSUMERS?

Reasons for Enacting the Act

• Collective Bargaining

Sellers Lobby; Forming cartels; Artificially keeping prices high!!!!

• Multiple Laws

India Contract Act; Sale of Goods Act; Essential Commodities Act

• Hurdles in the Litigation

Going to regular court; Expensive & Time Consuming

• Remedy

Punishment in the form of Punitive & Deterrent measure

An Act for the better protection of the interests of consumers and forthat purpose to make provisions for the establishment of consumercouncils and other authorities for the settlement of consumers'disputes and for matters connected therewith.

Short title, extent and application:

(1). This Act is called the Consumer Protection Act, 1986.

(2). It extends to the whole of India except the State of Jammu and Kashmir.

(3). Save as otherwise expressly provided by the Central Government by notification, this Act applies to all goods and services.

Hence… There was

The act was passed in:

The act was amended in 1991, 1993 and 2002The act was amended in 2002 and the amendments came into force w.e.f. 15th March 2003

‘CONSUMER IS THE KING OF THE MARKET’

“Sellers market” is now “Buyers market”

&

With industrial development leading to the influx of variousgoods and services in the market; Consumers have to beprotected!

CONSUMER PROTECTION ACT 1986

The Act provides for better protection of the interests of

Consumers and for that purpose to make provision for the

establishment of Consumer Councils and other authorities

for the settlement of consumer disputes and for matters

connected therewith.

Consumer RightsSafety

Education

Choose Information

Redressal

Heard

Objectives of CPA, 1986

WHO IS A CONSUMER? SEC.2 (1) (D)• Person buys any goods from a “business seller” for a

consideration (consumption or private use) which has beenpaid or will be paid or is promised to be paid.

Illustration:

Mr. A bought a TV set from an electronics store for using it at home. The TV was defective. Is Mr. A a consumer?

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

Bhavesh bought a pressure cooker for his wife. In the first use itself,the pressure cooker burst, hurting her. Is Bhavesh a consumer? Is hiswife a consumer?

Bhavesh is the consumer. His wife is also a consumer.

• When goods are bought for commercial purposes and such purchase satisfy the following criteria :• The goods are used by the buyer himself;

• Exclusively for the purpose of earning his livelihood;

• By means of self-employment,

then such use would not be termed as use for commercial purposes under the Act, and the user is recognized as a consumer.

Illustration:

A person purchases a Photostat machine to run a Xerox shop. He is recognized as a consumer under the act.

WHO IS A CONSUMER? SEC.2 (1) (D)

• Person hires or avails any service for a consideration which has been paid or will be paid.

Illustration:

A goes to a doctor to get treated for cold. Here A is hiring the service of the doctor, hence he is the ‘consumer’

In the above case, had the doctor been A’s friend and didn’t charge anything, he wouldn’t have been a ‘consumer’

When X hires an advocate to file a suit in the court and he promises to pay him the fee charged after the case is done and dusted, then X is a ‘consumer’

WHO IS A CONSUMER? SEC.2 (1) (D)

• Person who is the beneficiary of the service is also a ‘consumer’

The beneficial use is made with the approval of person who hired the service.

Illustration:

A nominee under an insurance policy

R takes his wife S to a Doctor. The doctor charged a fee which was paid by R. Here R is the ‘consumer’ and S is the ‘beneficiary’

WHO IS A CONSUMER? SEC.2 (1) (D)

• It does not include a person who obtains goods for resale or any commercial purpose

Illustration:

A jeep was purchased to run it as a taxi. The question was whether the buyer of the jeep was a consumer under the Act. The Rajasthan State Commission held that to use the jeep as a taxi with the object to earn profits was a commercial purpose, and therefore, the buyer/user was not a consumer within the meaning of the Act. [Smt. Pushpa Meena v. Shah Enterprises (Rajasthan) Ltd. (1991) 1 CPR 229].

WHO IS A CONSUMER? SEC.2 (1) (D)

WHO IS NOT A CONSUMER?

• An individual who has obtained goods or services for commercial purpose

without consideration under a contract of personal service.

Ex:

Tax payers to municipality.

Applicants for jobs.

Contractors

COMPLAINT!

• An aggrieved consumer seeks redressal under the Act through the instrumentality of complaint.

• It does not mean that the consumer can complain against his each and every problem. The Act has provided certain grounds on which complaint can be made.

• Goods have defects.

• Services have deficiency.

• Price charged higher than that is mentioned in the package

• An unfair and restrictive trade practice has been adopted

WHAT CONSTITUTES A COMPLAINT?

• Complaint is a statement made in writing to the National Commission, the State Commission or the District Forum by a person competent to file it, containing the allegations in detail, and with a view to obtain relief provided under the Act.

WHO CAN MAKE A COMPLAINT?

Complaint can be registered at any Quasi Judicial Organs underthe CPA,1993 by the following:

• Consumer.

• Consumer Association.

• Central or State government.

• Consumer group with the same interest (with permission of Consumer Forum)

COMPLAINT GROUNDS:

• An ‘unfair trade practice’ or a ‘restricted trade practice’ has been adopted by

any trader or service provider

Illustration:

• Kanta Bhakta purchased a pair of bangles and a single bangle from a jeweller in Dadar. They weredeclared to be of 22 carat gold purity and accordingly she was charged for gold of 22 carat purityplus an additional amount as making charges. After the purchase, the bangles were kept in herlocker. Both during Diwali 2010 and at the marriage of a relative, her daughter used the bangles. Bycoincidence, the complainant came across the X-ray gold testing facility of Tanishq Jewellers whowere offering to check the purity of gold through an X-ray test which was non-destructive. Out ofsheer curiosity, she had the bangles tested and to her utter disbelief, found out that they were ofless than 17 carat purity and not 22 carat, as had been represented at the time of the sale. Shakenby this discovery, she immediately visited the jeweller from whom she had bought the bangles alongwith the cash memo. He refused to accept her claim and her efforts to reason with him were in vain.With the help of Legal Cell, drafted a complaint for her to file in the Consumer Court. A notice wassent to the jeweller giving him a last chance to settle the matter before the Consumer Court wasmoved.

• "The jeweller rushed to settle the matter with me and the complaint was resolved to mysatisfaction."

COMPLAINT GROUNDS:

• The goods bought by him or agreed to be bought by him suffer from one or more defects

Illustration:

• Kailash Vasdev purchased a 30 ltr. Morphy Richards Microwave Oven on September 12, 2010. During February 2011, one of the safety locks on the door snapped. It was sent to the Delhi service centre for repairs. After continuous follow up, the door was not replaced as the service centre said that it was not available and nothing could be done until the part was received from the company. Frustrated by this casual approach to the resolution of his grievance, he complained to the CFBP during April 2011.

"The damaged Microwave Oven has been replaced by the company. This would not have happened without your intervention. Thank you for your response and interest taken in the matter."

COMPLAINT GROUNDS:

• The services hired or availed of or agreed to be hired or availed of by him suffer from deficiency in any respect.

Illustration:

A hired services of an advocate to defend himself against his

landlord. The advocate did not appear every time the case was

scheduled. A can make a complaint against the advocate.

COMPLAINT GROUNDS:

• A trader has charged for the goods mentioned in the complaint a price in excess of the price fixed by or under any law for the time being in force or displayed on the goods or any package containing such goods.

Illustration:

A bought a sack of cement from B who charged him Rs. 100 over and above the

reserve price of the cement declared by the Government. Here A can make a

complaint against B.

COMPLAINT GROUNDS:

• Goods which will be hazardous to life and safety when used, are being offered for sale to the public in contravention of the provisions of any law for the time being in force requiring traders to display information in regard to the contents, manner and effect of use of such goods.

Illustration:

A bought a tin of disinfectant powder. It had lid which was to be opened in a

specific manner. Trader did not inform. A about this. While opening the lid in

ordinary way, some powder flew in the eyes of A which affected his vision. Here A

can make a complaint against the trader.

TIME FRAME WITHIN WHICH A COMPLAINT CAN BE FILED–

• Section 24A of the Act provides that a consumer dispute can be filed within two years from the date on which the cause of action arises.

• The point of time when cause of action arises is an important factor in determining the time period available to file a com-plaint. There are no set rules to decide such time. It depends on the facts and circumstances of each case.

Illustration:A got his eye operated by B in 1989. He got a certificate of blindness on 18th December, 1989. He was still

in hope of gaining his sight and went from second operation in 1992 and was discharged on 21-1-1992. He fileda complaint against B on 11-1-1994. B opposed on the ground that more than 2 years were over after 18-12-1989, thus the complaint is not maintainable. The Commission held that here the cause of action for filing thecomplaint would arose after the second operation when A lost entire hope of recovery. Thus the suit ismaintainable

• Time frames are not absolute limitations. If the Consumer Forum is satisfied that there was sufficient cause for not filing the complaint within the prescribed period, it can entertain a complaint beyond limitation time. However the Forum must record the reasons for condonation of delay.

Illustration:

A deposited some jewelry with a bank. Bank lost it. Bank kept giving her false sense of hope to retrieve the jewelry, and thus A was put in a state of inaction. Later on when A filed a suit on the Bank, it claimed that the suit was not maintainable as the limitation time after the cause of action arose has lapsed.

RELIEF AVAILABLE AGAINST COMPLAINT [SECTIONS 14 AND 22]:

A complainant can seek any one or more of the following relief under the Act:

• to remove the defect pointed out by the appropriate laboratory from the goods in question;

• to replace the goods with new goods of similar description which shall be free from any defect;

• to return to the complainant the price, or, as the case may be, the charges paid by the complainant;

• 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;

• to remove the defects or deficiencies in the services in question;

• to discontinue the unfair trade practice or the restrictive trade practice or not to repeat it;

UNFAIR TRADE PRACTICES

• The Act says that, “unfair trade practice” means a tradepractice which, for the purpose of promoting the sale, useor supply of any goods or for the provision of any service,adopts any unfair method or unfair or deceptive practiceincluding any of the following practices, namely

RESTRICTIVE AND UNFAIR TRADE PRACTICES

These are unfair trade practices that reduces competition.

It is of two types:

• Holding of contests and schemes.

• Disparaging (Giving false and misleading facts about) the product of

competitors.

• Hoarding and Destruction of goods.

• Not confirming to prescribed standard.

CONSUMER PROTECTION COUNCILS

Objectives –

Protect consumers against marketing of hazardous goods and services

Ensure that consumers are informed about the quality, quantity, potency,

purity, standard and price of goods or services

Ensure that consumers have access to variety of goods of services at

competitive prices

To ensure that consumers are heard and their interest receives due

consideration at appropriate forums

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3-Tier Redressal AgencyThe aims and objectives of the Act are achieved by the constitution and creation of 3-tier judicial machinery depending upon the amount of loss involved

District Forum

State Commission and

National Consumer Disputes

redressal Commission.

NATIONAL COMMISSION

STATE COMMISSION

DISTRICT FORUM

JURISDICTION

Forum / Commission Where the value of the goods or services and the compensation, if any claimed,

District Forum Does not exceed Rs. 20 lakhs

State Commission Rs. 20 lakhs and above but not exceeding One Crore

National Commission Above One Crore

Besides, State and National Commission have appellate jurisdiction also.

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Power or right of a legal or political agency to exercise its authority over a person ,subject matter, or territory.

FILING OF COMPLAINTS

A complaint may be filed by:

The consumer to whom the goods are sold or services

are provided

Any recognised consumer association

One or more consumers with same interest

The central government or state government

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FILING OF COMPLAINTS The Fee for filing the Complaint for the STATE COMMISSION is as under:

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FILING OF COMPLAINTS

The Fee for filing the Complaint for the district forum is as under

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MODE OF PAYMENT

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 SATE COMMISSION AND PAYABLE

AT THE PLACE OF THE STATE

COMMISSION (W.E.F. 5.3.2004.)

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Information Required for a Complaint

Name and full address of complainant

Name and full address of opposite party

Description of goods and services

Quality and quantity

Price

Date & proof of purchase

Nature of deception

Type of redressal requested

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LIMITATION PERIOD

Within two years from the date on

which the cause of action has arisen.

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Penalty Under Section 27 CPA

• According to CPA ,where a trader or

the complainant fails to comply with

an order made by the relevant

consumer forum , such person is

liable to a punishment with

imprisonment for a term which is not

less than 1 month but which may

extend to 3 years or with fine of not

less than 2000 INR but which may

extend to 10000 INR with both

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LIMITATION

The District Forum, the State

Commission or the National

Commission shall not admit a

complaint unless it is filed

within two years from the date

on which cause of action has arisen.

REMEDIES WITH WHICH CONSUMERS ARE PROVIDED

DEPENDING ON THE NATURE OF CASE , CONSUMER

COURT MAY GIVE THE ORDER FOR ONE OR MORE

REMEDIES WHICH ARE AS UNDER:

* REMOVAL OF DEFECTS/DEFICIENCY FROM GOODS

*REPLACEMENT OF GOODS

* REFUND OF PRICE

* COMPENSATION FOR ANY LOSS OR DAMAGE

ORDER OF DISCONTINUING UNFAIR/RESTRICTED

TRADE PRACTICE

* ORDER FOR STOPPING THE MARKETING OF HAZARDOUS GOODS

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National Consumer Helpline

You may call on the following toll free number

1800-11-4000(from MTNL or BSNL)

for guidance and information

on consumer issues

ADMISSION OF COMPLAINT - GOODS

• Reference of complaint to opposite party.

• Denial of allegation etc. by the opposite party

• Reference of sample to the laboratory if defect cannot be determined without

proper analysis or test of goods

• Deposit of fees

• Remission of fees to laboratory and forwarding of report to opposing party

• Objections by any of the parties

• Reasonable opportunity to parties of being heard and issue of order.

ADMISSION OF COMPLAINT - SERVICES

• Reference of claim to opposite party

• Denial etc. of allegations by the opposite party

• Settlement of dispute:

- Ex-parte where the opposite party denies or disputes the allegations

- Ex-parte where the opposite party omits or fails to take any action to

represent the case within the given time

- If the complainant fails to appear on the date of hearing

Proceedings of district forum final

Death of complainant

Time period of redressal [3Months &/or 5Months]

THE STATE COMMISSION

• A judge of the high court, appointed by the state government, acts as the President

• Entertained if value of goods or services and compensation exceeds 20 lakhs

• Calls for records if it feels that the district forum has

• (i) Exercised a jurisdiction not vested in the law

• (ii) Has failed to exercise a jurisdiction so vested

• (iii) Acted in exercise of it’s jurisdiction illegally or with material irregularity

EXAMPLE OF REDRESSAL (1)

Manoj Kumar vs LIC filed in Delhi Consumer Forum

• Mr. Manoj Kumar had approached the District Consumer Disputes Redressal Forum complaining that when he went to

LIC to deposit the premium for 2009 of the policy which was purchased in the name of his minor daughter in May

2008 and was to mature in May 2017, he got to know about the policy that had lapsed because of non-payment of

the last premium. But in fact, he was paying all the premiums very regularly.

• Following this he approached the LIC and showed them the receipt by which he had paid the premium for 2008.

• However, the officials ignored the matter and refused to listen to his complaint. He also mentioned, very importantly

that even a legal notice of March 19, 2010 did not bring out any favourable response from the LIC.

MANOJ KUMAR VS LIC CONTD…

Verdict

• The Forum presided by Mr. Rakesh Kapoor instructed Life Insurance

Corporation of India to pay compensation of Rs 60,000 to Kumar for mental

suffering that he underwent due to the company’s reckless ignorance and

directed it to revive the policy of Rs 1 lakh.

EXAMPLE OF REDRESSAL (2)

Sunil Kumar Nair v The General Manager, International Airport Authority of India and Another (1996) I CPR 361 (Tamil Nadu CDRC)

• The complainant stated he was at the Madras International Airport to board a flight

to the US. Suddenly, the victim got hit by a heavy iron rod on his foot. The iron rod

fell from the scanning machine. He alleged negligence on the part of the Airways.

• The Tamil Nadu State Commission held the airways liable for failure to maintain the

machine properly and awarded the victim a compensation of Rs.30000.

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