Consumer Protection Act,
1986
THE ACT
 Objective of the Act is to provide better protection of consumers’
interest.
 It attempts to redress consumer grievances in a speedy and inexpensive manner.
 By: A 3-tier adjudicative machinery, set up at the District, State, and
National levels.
 The Act was amended in 1991, 1993, and 2002.
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ORGANISATIONAL SET UP
ADVISORY BODIES
(Consumer Protection Councils)
Central
Consumer
Protection
Council
State
Consumer
Protection
Councils
District
Consumer
Protection
Councils
ORGANISATIONAL SET UP
ADJUDICATIVE BODIES
(Consumer Disputes Redressal Agencies)
District
Forum
(616)
State
Commission
(35)
National
Commission
(NCDRC)
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CONSUMER RIGHTS
 Right to safety: Protection against marketing of hazardous goods
and services.
 Right to information: About the quality, quantity, potency, purity,
standard, and price of goods or services, so as to protect him against
unfair trade practices.
 Right to be choose: To be assured that, wherever possible,
consumer has access to a variety of goods and services at
competitive prices.
 Right to be heard: Hearing at appropriate grievance-redressal
forum.
 Right to redressal: Redressal against UTP, RTP exploitation.
 Right to consumer education.
RIGHT TO INFORMATION – CASE
 Ozair Hussain vs. Union of India (2002, Delhi)
 Petitioner claimed to be an animal welfare volunteer and a member of
several animal welfare organisations.
 He also stated to be a conscientious objector to be consumption and use
of animals and their derivatives for food, cosmetics and drugs.
 The petition highlighted that more than 60% of people of this country
are vegetarians and over 50% of them are illiterate and large number of
them cannot read or write English.
 It was urged that there should be complete disclosure of
•
Constituents of cosmetics and food products and
•
Such products should bear an easily recognisable symbol conveying the origin
or ingredients of the products, whether vegetarian or non-vegetarian,
•
So that both literate or illiterate consumers can make an informed choice
before selecting the products.
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RIGHT TO INFORMATION – CASE
 Petitioner also stated that Articles 19(1)(a), 21, 25 of the Constitution
as also the Preamble to the Constitution mandates disclosure of
information.
 Questions before the HC:
• Whether or not a consumer of cosmetics, drugs and food articles has a
constitutionally guaranteed right to full disclosure of the ingredients
thereof clearly specified on the product or label or wrapper in writing;
• Whether or not packages of non-vegetarian products should bear a
symbol giving their non-vegetarian origin; and
• Whether or not a package of vegetarian product should also bear a
symbol.
RIGHT TO INFORMATION – CASE
 HC opined:
• Article 19(1)(a) of the Constitution guarantees to all citizens freedom of
speech and expression. At the same time, it permits State to make any law
in so far as such law imposes reasonable restrictions on the exercise of the
rights conferred by the Article.
• Right to hold opinions and to receive information and ideas without
interference is concomitant to the right to freedom of speech and
expression which includes right to free flow of information.
• Right to freedom of speech and expression includes freedom to seek,
receive and impart information of ideas. Freedom to hold opinions, ideas,
beliefs and freedom of thought, etc., which is also enshrined in Preamble
to the Constitution, is part of freedom of speech and expression.
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RIGHT TO INFORMATION – CASE
 HC opined:
• In so far as cosmetics are concerned, the same must be treated at par with
articles/packages of food for the purposes of disclosure of their
ingredients.
 Directions given by HC:
• Where a cosmetic or a drug other than life saving drug, as the case may
be, contains ingredients of non-vegetarian origin, the package shall carry
a label bearing a red colour symbol on the principal display panel just
close in proximity to name or brand name of the drug or cosmetic.
• Similarly, the above product with vegetarian ingredients shall carry a label
bearing a green colour symbol.
• When it carries both, a declaration shall be made in writing on the
package.
CONSUMERS’ DUTIES AND RESPONSIBILITIES
 Duty to buy only safe and standard products.
 Duty to gather product information.
 Duty to obtain proof of purchase.
 Duty to organise, speak, and participate.
 Duty to lodge a complaint.
 Duty not to lodge a frivolous or vexatious complaint.
 Duty to take up class-action cases.
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COMPLAINT
 Sec 2(1)(b): Who is a complainant?
• A Consumer
• Any voluntary consumer association registered under the Companies Act
• The Central Government or any State Government
• One or more consumers on behalf of numerous consumers (‘Class Action’)
• Legal heir or representative of the deceased consumer
CONSUMER
 Sec 2(1)(d): Consumer means any person• One who buys any goods for consideration irrespective of whether
payment is actually made (fully or partly) or deferred.
• One who uses any goods for personal consumption
• Does not include a person who buys for re-sale or commercial purpose.
• One who hires or avails of any service, irrespective of whether payment is
actually made (fully or partly) or deferred.
 Note: Buying or using the goods or availing services exclusively for
earning livelihood, by means of self-employment, is not a
‘commercial purpose’.
 Person includes a firm, HUF, Co-op society, AOP
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GROUNDS OF COMPLAINTS
 U/s 2(1)(c), Complaint means an allegation in writing made by a
complainant about:
•
Defect in goods
•
Deficiency in service
•
Excess price charged (above - that fixed by law; or MRP; or displayed on a
price list; or agreed price)
•
Unfair trade practice (UTP)
•
Restrictive trade practice (RTP)
•
Offering of hazardous or unsafe goods
•
Offering of hazardous services
 Thus, 3 requirements for a complaint:
•
It must be in writing
•
It must be made by the complainant as defined earlier
•
It must allege one of the above things
DEFECT, DEFICIENCY
 Defect in goods
• Any fault, imperfection or shortcoming in the quality, quantity, potency,
purity or standard
• Which is required to be maintained by or under any law or under any
contract, express or implied, or as is claimed by the trader in any manner
whatsoever in relation to any goods.
 Deficiency in service
• 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 or has been
agreed to be performed in pursuance of a contract or otherwise in
relation to any service.
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GOODS, SERVICES
 Goods are as defined in the Sale of Goods Act.
 Manufacturer means
• One who manufactures any good or part thereof
• Does not manufacture, but assembles
• Puts his own mark on goods manufactured by others – Bajaj Electrical
 Service includes banking, financing, insurance, transport, processing,
supply of electrical or other energy, boarding/ lodging, housing
construction, entertainment, amusement or the purveying of news or
other information
• Does not include the rendering of any service free of charge or under a
contract of personal service
 Trader is one who is seller or distributor and includes manufacturer
and packer.
UNFAIR TRADE PRACTICE
 Adopting any unfair method or deceptive practice for promoting sale
of goods or provision of service, including –
• Misleading advertisements or false claims.
• Advertisements falsely offering goods or services at bargain price.
• Offering pseudo-gifts and conducting sales contests.
• Supply of unsafe or hazardous goods.
• Hoarding or destruction of goods or refusal to sell.
• Withholding of information from participants of sale promotion scheme.
• Manufacturing or offering of spurious goods/ deceptive practice in
providing service.
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RESTRICTIVE TRADE PRACTICE
 A trade practice, which tends to –
• Bring about manipulation of price, or
• Manipulation of conditions of delivery, or
• Affect flow of supplies in the market in a manner
• As to impose on consumers unjustified costs or restrictions.
• It includes:
 Tie-up sale i.e. a practice requiring consumer to buy or hire etc. goods or
services with buying of services or goods as a precondition
 Delay in supply of goods/ services, leading to price rise.
DISPUTE REDRESSAL
 Consumer disputes are redressed at 3 levels each with different
threshold:
• District Consumer Disputes Redressal Forum (‘District Forum’) President +
2 Members
• State Consumer Disputes Redressal Commission (‘State Commission’)
President + 2 or more Members
• National Consumer Disputes Redressal Commission (‘National
Commission’) President + 4 or more Members
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WHERE TO FILE A COMPLAINT?
 District Forum, having territorial jurisdiction, if claim is upto Rs. 20
lakhs.
 State Commission, having territorial jurisdiction, if claim exceeds Rs.
20 lakhs, but not Rs. 1 crore. (https://kscdrc.kar.nic.in/)
 National Commission, if claim exceeds Rs. 1 crore.
(http://ncdrc.nic.in/)
 Territorial Jurisdiction is decided at the time of institution of claim:
• Opposite party or each of them resides/carries on business/has a branch
office/works for gain;
• Any of the parties resides/carries on business/has a branch office/works
for gain, and otherwise acquiesce in such institution, or DF/SC/NC has
permitted; or
 Cause of action arises.
 ‘Claim’ includes the value of goods/services and compensation.
PROCEDURE FOR FILING A COMPLAINT
 Written complaint
 To be filed by complainant or his authorised agent
 Either in person or by registered post
 Full facts and cause of complaint
 Supporting documents (cash memo, warranty card, etc.)
 Relief sought
 No advocate necessary
 Prescribed fee to be paid
 Complaint can be admitted or rejected by DF within 21 days
 Parties will be heard before on the findings of the lab
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HEARING OF COMPLAINT
 Notice to the opposite party, within 21 days of admission of complaint.
 His version to be given within 30 days
 Reference to appropriate laboratory, in case of defective goods; report to
be submitted within 45 days
 Copy of test report is provided to the complainant
 Reasonable opportunity of hearing to both parties
 Ex parte order in the absence of either party
 Proceedings not to be questioned by any court on the ground of
principles of natural justice
 Expeditious hearing; disposal within 3 months (5 months in case of
laboratory test)
 Ordinarily, no adjournment
 Reasons for adjournment/delay in disposal to be recorded and cost to
be awarded
RELIEF
 DF may grant relief directing the opposite party to:
• Remove the defect or replace the goods
• Return the price or charges paid by complainant or other amounts
awarded by the DF
• Remove the deficiencies in service
• Discontinue UTP or RTP and not to repeat them
• Not to offer hazardous goods and withdraw them from market and cease
manufacture
• Issue corrective advertisements
 Order of DF may be appealed to the State Commission and that of
latter to National Commission and finally to SC.
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TIME LIMITS
 Hearing of complaint
• Within 3 months, where the case does not require product testing/
analysis, from the date of receipt of notice by OP
• 5 months, if it requires test/analysis
 Filing of complaint
• 2 Years from the date of cause of action.
• The delay can be condoned by DF, SC or NC, for sufficient cause – reasons
to be recorded
 Appeal
• Appeal to State Commission/ National Commission/ Supreme Court
within 30 days from order of the lower forum
FRIVOLOUS OR VEXATIOUS COMPLAINT
 Dismissal, by DF, State Commission or NC
 Reasons to be recorded
 Cost upto Rs. 10,000/-, to be paid to the opposite party
 Penalties: Non-compliance of any order is a punishable offence
• Imprisonment (1 month to 3 years)
• Fine (Rs. 2000 to Rs. 10,000)
• Or both
 DF/FC/NC have powers of Judicial Magistrate, 1st Class for trial of
offences
 Offences to be tried summarily.
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CASES
 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.
 Arvind Shah vs. Kamlaben Kushwaha:
• 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.
• However, the NC on examination found that the doctor was not
completely negligent and reduced the compensation to 2.5 lacs
CASES
 Om Prakash v. Reliance General Insurance (SC):
• Appellant insured his truck with the Respondent.
• The vehicle was stolen on 23.03.2010; FIR was lodged on 24.03.2010;
claim petition with the company was filed on 31.03.2010.
• On lodging the insurance claim, the Investigator appointed by the
Respondent confirmed the fact of theft and consequently, the Corporate
Claims Manager approved an amount of Rs.7,85,000/-.
• When after several attempts and reminders to obtain the claim failed, the
Appellant served a legal notice. The company claimed breach of insurance
contract saying immediate information of theft was not given. His case at
DF, State and National was rejected.
• SC allowed the claim stating that the truck owner was assisting the police
in tracing the truck and as is normal, immediately did not approach
insurance company.
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