b.consumer Protection Act (1)

7/28/2019 b.consumer Protection Act (1)

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THE CONSUMER PROTECTION ACT

The Consumer Protection Act was enacted in 1986. Amendments

were made in 2002. The Act applies to the whole of India except

the State of Jammu and Kashmir.

An Act to provide for the better protection of the interest of the

consumers. Establishment of Consumer Councils and other

authorities for the settlement of consumers disputes.

Objects and Reasons

Inter alia- to promote and protect.

a) the right to be protected against marketing of goods which are

hazardous to life and property.

b) the right to be informed about the quality, quantity, potency,

purity, standard and price of goods to protect the consumer against

unfair trade practice

c) the right to be assured, wherever possible, access to an authority

of goods at competitive price.

d) the right to be heard and to be assured that consumers interests

will receive due consideration at appropriate forum.

e) the right to seek redressal against unscrupulous exploitation of

consumer.

f) the right to consumer education.

It would be imperative to know some of the important definitions

in the Act.


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Consumer means any person who-

1) buys any goods for a consideration which has been paid or

promised or partly paid and partly promised, or under any systemof 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

2) hires or avails of any services for a consideration which hasbeen paid or promised or under any system of deferred payment

and includes any beneficiary of such services other than the person

who hires or avails of the services or consideration paid or

promised, or partly paid and partly promised, or under any system

of deferred payments, when such services are availed of with the

approval of the first mentioned person but does not include a

person who avails of such services for any commercial purpose

Consumer Dispute means a dispute where the person against

whom a compliant has been made, denies or disputes the

allegations contained in the complaint

Complaint means any allegation in writing made by a

complainant that-

i) an unfair trade practice or a restrictive trade practice adopted byany trader or service provider

ii) the goods bought by him or agreed to be bought by him suffers

from one or more defect


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person in pursuance of a contract or otherwise in relation to any

service.

The aims and objectives of the Act are achieved by the constitution

and creation if District Forum, State Commission and NationalConsumer Disputes Redressal Commission. These agencies are

created to look into the grievance of a consumer and as far as

possible to set right the deficiency either in the goods or the

services.

Consumer Disputes Redressal Forums are established by the

State Government in each District of the State. Each District

Forum shall consist of a person who is or has been or is qualifiedto be a District Judge who shall be its President two other

members, one of whom shall be a woman possessing a bachelors

degree from a recognized university, be a person of ability,

integrity and standing and have adequate knowledge and

experience of at least ten years in dealing with problems related to

economics, law, commerce, accountancy, industry, public affairs

or administration.

Every member of the District Forum shall hold office for a term of

5 years or up to the age of 65 years which ever is earlier.

Subject to the other provisions of the Act a District forum shall

have jurisdiction to entertain complaints where the value of the

goods or services and the compensation, if any, claimed does not

exceed Rs.20 Lakhs.

A District Forum shall have the powers -

a) to remove the defect pointed out by the appropriate laboratory

from the goods in question


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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

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

Each State Commission shall consist of a person who is or has

been a Judge of a High Court who shall be its President. Not lessthan 2 and not more than such number of members as may be

prescribed, and one of whom shall be a woman, who shall have

similar qualifications as required to be appointed as members of a

District Forum.

Every member of the State Commission shall hold office for a term

of 5 years or up to the age of 67 years which ever is earlier.

Each State Commission shall have jurisdiction to entertain

complaints where the value of the goods or services and

compensation, if any, claimed exceeds Rs. 20 Lakhs but does not

exceed Rs.1 Crore and appeals against the orders of any District

Forum within the State.

For the purpose of filing an appeal, the appellant shall deposit

fifty percent of the amount or rupees thirty five thousand

whichever is less.

The National Commission shall consist of a person who is or has

been a Judge of the Supreme Court, shall be its President. Not less

than 4 and not more than such number of members as may be

prescribed and one of whom shall be a woman with similar


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qualifications as required in the case of appointment as a member

to a District Forum or a State Commission.

Every member of the National commission shall hold office for a

term of 5 years or up to the age of 70 years which ever is earlier.

The National Commission shall have jurisdiction to entertain

complaints where the value of the goods or services and

compensation, if any, the claim exceeds Rs. 1 Crore and appeals

against the orders of any State Commission.

For the purpose of filing an appeal, the appellant shall deposit

fifty percent of the amount or rupees fifty thousand whicheveris less.

Both the State Commission and the National Commission shall

have powers to carry out all the functions of a District Forum as

mentioned supra.

Every order of a District Forum, State Commission or NationalCommission, shall, if no appeal has been preferred against such

orders under the provisions of this Act, shall be final.

The District Forum, State Commission or the National

Commission shall not admit a complaint unless it is filed within 2

years from the date on which the cause of action has arisen.

Where a trader or a person against whom a complaint is made fails

or omits to comply with any order made by the District Forum, theState Commission, the National Commission, as the case may be,

such trader or person shall be punished 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 be not less than 2,000/- Rs. but

which may extend to 10,000/-Rs., or with both.


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Notwithstanding anything contained in the Code of Criminal

Procedure, 1973, the District Forum or the State Commission or

the National Commission, as the case may be, shall have the power

of a Judicial Magistrate of the first class for the trial of offencesunder this Act.

Development of Consumer Protection Movement in

International Sphere

The increase in the volume of the International Trade and

Commerce has promoted the inter-governmental co-operation. The

expanding role of transnational corporations in the production,distribution and promotion of goods and services have raised a

number of issues which call for international co-ordination.

Many developing countries face the problem of well coordinated

public distribution system. The majority of the consumers are of

low income group and they face non availability of food products

and basic commodities of life of acceptable quality at a reasonable

price.

A consumer protection in developing countries is more of a

necessity rather than of a matter of academic discussion.

How Does The Act Help

1) Physical safety of consumers

2) Protection of economic interest of consumers

3) Consumers access to information needed to make informed

choice

4) Measures enabling consumers to obtain redress


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5) Distribution of essential goods and services

6) Satisfactory production and performance of standard

7) Adequate business practices and informative marketing

Consumer Education is a must as it helps in-

1) Critical awareness

2) Active consumer involvement

3) Imbibing social responsibility

4) Realizing ecological responsibility

5) Solidarity of consumers

The Sale of Goods Act, 1930 contained general provisions as to

conditions and warranties and covered such aspects as, sale bysample, sale by description, implied conditions as to quality or

fitness. But soon it was realized that these provisions were not

adequate in protecting the consumer against the unscrupulous,

greedy and dishonest sellers. The so called guarantees proved to be

mere paper guarantees confined only to the manufacturing defect,

if any, so proved and accepted by the manufacturer himself.

Warranties were subject to the principle ofcaveat emptoror let the

buyer beware.

It was, therefore, necessary that a Forum be created where a

consumer not satisfied with the quality of goods supplied or

services rendered may ventilate his grievance and a machine

devised to afford him adequate protection.


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The Consumer Protection Act, can be described as a magnificent

project heralding a new era and revolutionizing the entire field of

consumer protection, education and guidance.

Its greatest attraction is its convenient channel of justice throughsimple, unfettered, non-cumbersome procedure- no court fees, no

need of a lawyer, can make a complaint on a plain paper and so on.

The Act is aimed at quick disposal.

Concept of Consumer Sovereignty

In a free market economy, producers have to adjust to changingpreferences.

The long skirt manufacturer must adjust to mini-skirt or risk going

out of business!!!

In other words give people what they want instead of what a

particular group (manufacturer) thinks they ought to want.

Purpose of Consumer Law

Law is a set of rules that control the affairs and relationship within

a community. Law is a body of rules or regulation which the

people have established to make it easier to live with one another.

In recent times the consumer protection and consumer movement

has emerged as one of the most important development in business

and law. By gaining a working knowledge of the law, it becomespossible for the consumers to better conduct their affairs and

protect their interests.

Today there are so many products for sale that the consumer

cannot understand much of the items put for sale and he may


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require considerable technical ability and education to evaluate the

products and he must depend on workable laws and legal

procedures for protection against shoddy workmanship,

carelessness, hidden defects, other product flaws, various flaws

and swindles practiced by the sellers and misleadingadvertisements.

Another aspect of consumer protection is the problem of claiming

compensation against the large producer where the goods or

services are defective. Litigation is expensive and troublesome to

the small consumer.

So, policy has been to encourage producers to adopt codes ofpractice where under legitimate complaints are promptly dealt

with, encourage small claims and arbitration procedures to solve

dispute expeditiously, inexpensively and relatively informally.

Purpose of Consumer Act

Growth of science and technology, large scale industrialization and

huge population has led to the emergence of modern complexsociety. The chief characteristic of such a society is a large scale

production of various goods by different establishments and the

desire of people to acquire and use or consume those goods.

There are double standards when it comes to consumer who is a

producer and supplier of goods and services. This is the root cause

of manifold problems. It is to suppress and control the exploitative

tendencies of man that various kinds of control such as moral,

ethical, religious, social, legal etc., have operated from time totime.

In India, the problem of exploitation of the people by the people or

even the Government is not a new problem.


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The politician, in the name of serving the country, is seen

exploiting the society,

The administrator, small or big, in the name of advancing the

countrys economic well-being, is seen exploiting its resources,

The seller of goods and services is seen exploiting the customers

and so on.

The desire for rapid material advancement and economic

prosperity has commercialized our life on a gigantic scale. The

most painful casualty of this is the near total collapse of the

nations character and moral fabric.

For making huge profits or becoming rich overnight, all sorts of

abominable means and methods of malpractices are being adopted

by the traders, businessmen, employers, producers and sellers etc.,

at the cost of the consumers interest.

Thus, marketing of goods injurious to health and life, deception of

the consumer through unfair trade practices such as, substandardquality, adulteration, non-supply of correct quantity, excess pricing

etc., are rampant in our society. The plight of the consumer is bad

because of his ignorance, illiteracy and weak economic position.

To tolerate the evil is to spoil the good.

In modern times, law has become a potent instrument through

which the task of nipping the evils afflicting the society is carried

out.

There are various laws which have direct or indirect bearing on

interests of the consumer viz., Civil Procedure Code, Torts, Indian

Penal Code, Negotiable Instruments Act, and Right to Information

Act and so on.


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pulses been artificially coloured? Has starch been added to milk to

give it thickness? Is the grocer trying to palm off vanaspati as pure

ghee?

How to test? for eg. to tell whether starch has been added to milkor curd, perform the following test- add a drop of iodine solution to

a little of the sample , if the colour turns blue it is an indication that

starch has been added.

Consumer Resistance

Consumer resistance is one of the steps of collective self

protection. The birth of the co-operative movement in theScandinavian Countries was the direct result of economic pressures

the exploitation to which the worker and consumer were subjected.

The consumers were forced to enter the field of collective buying,

processing and distribution much to the chagrin of those, who, at

one time thought that their superiority and mastery was

unquestioned. It was not only the refusal to buy but a constructive

step of collective self protection.

Fish prices brought down An out-burst took place in West

Bengal in late 1960s when the price of fish sky rocketed. This

being their staple food, the consumers decided to go on a No buy

campaign within two days, the price came down.

In New Delhi the price of coffee was raised from 50 paisa to 55

paisa in a restaurant. The residents strongly objected and as there

was no justification for the rise, they went on No buy also they

collectively started vending coffee on pavements, forcing therestaurant to bring down the price.


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Laws for the protection of consumers

With a view to protect the interest of the consumers various

legislative steps have been taken and the courts have also beentrying to provide appropriate remedies in common law by

developing various principles of law to suit the needs of the times.

Other methods of protecting the consumer are-

1) Judicial Activism

2) Public Interest Litigation

3) Legal Aid Authorities

Judicial Activism- In one of the land mark judgments of the

Supreme Court of India in the case of S.P.Gupta v/s Union of India

the Honble court held- where the contest is between those who

are socially and economically unequal, the judicial process mayprove disastrous from the point of view of social justice, if the

judge adopts a merely passive or negative role and does not adopt

a positive and creative approach. The Judiciary cannot remain a

mere bystander or spectator but it must become an active

participant in the judicial process ready to use law in the service

of social justice through a proactive and goal oriented approach.

Public Interest Litigation- In the case referred to supra theHonble court further held- it may, therefore, now be taken as

well established that where a legal wrong or a legal injury is

caused to a person or to a determinate class of persons by reason

of violation of any constitutional or legal right or any burden is

imposed in contravention of any constitutional or legal provision


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or without authority of law or any such wrong or legal injury or

illegal burden is threatened and such person is by reason of

poverty, helplessness, disability or socially or economically

disadvantaged position, unable to approach the court for relief,

any member of the public can maintain an application for anappropriate direction, order or writ.

The technical rules of locus standi are relaxed through public

interest litigation system.

PIL is an extremely functional instrument for purposes of

consumer protection. The poor, the deprived and the suffering

consumers get justice without involving themselves in themachinery of the law. The courts help the social reformers thereby

removing any strain and stress on the consumer.

Legal Aid Authorities- Under section 4 (d) of the Legal Services

Authorities Act, 1987, the National Legal Services Authority

(called as Central Authority) is bound, subject to the directions of

the Central Government to take necessary steps by way of socialjustice litigation with regard to consumer protection,

environmental protection or any other matter of special concern to

the weaker section of the society.

This is a statutory recognition of PIL. However, the Central

Authority will be guided by the Central Government in the filing

of Social Interest Litigation. In PIL and SIL, the aim is to protect

the public interest at large rather than individual interest.

Protection of community interest will alleviate the suffering ofindividual citizens also.

Thus consumer protection is many sided. The chances of obtaining

of consumer justice today are much more then they existed a

decade or two ago.


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How the Indian Penal Code helps the consumer- Chapter XIII

of the Code relates to the offences dealing with Weights and

Measures. Sections 264-267 provide for the punishment of variousoffences relating to weights and measures. The Code provides for

punishment for fraudulently using any instrument for weighing

which he knows to be false, with a punishment of imprisonment

which may extend to one year or with fine or with both.

Sections 272 & 273 of the Code deal with the offences relating to

the adulteration of food or drinks.

Sections 274-276 deals with the offences relating to the

adulteration of drugs.

Sections 277 & 278 provide for the offences relating to public

health and safety.

Section 486 of the Code relates to offences against counterfeiting.

Recognition of rights of consumers- The consumers in general

and the Indian consumers in particular are disorganized, dispersed

and at a disadvantage. The economic urge of commercialization

dominates business activities. In order to convert the contribution

of science into service of mankind every idea and invention need

to be treated on the anvil of production of feasibility and consumer

utility. The issue is to harmonize the unavoidable need with the

inevitable evil.

Consumer protection has reference to widening range of the

activities of the Government and independent organizations that

are designed to protect individuals form practices of both business

and the Government which infringe upon the rights of consumers.


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6) Right to consumer education

7) Right to healthy environment

8) Right to basic needs

Rights of consumers under the Constitution of India- The

Welfare State owes certain obligations. This throws up the

question of the rights of the consumer. Does he enjoy any rights

including the fundamental rights under the Constitution? Or the

consumer has no link with the constitution?. One might say, what

has the consumer to do with the Constitution or the Constitutionwith the consumer? The two are knitted together. They cannot be

separated. The Constitution is as close to the consumer as to

citizen. After all a consumer is a citizen also. The welfare of a

consumer is no less important than that of a citizen.

Consumer Rights to Healthy Environment- This is an aspect of

right to life. After all who is a consumer? The answer is obvious,one who consumes, one who makes use of various products and

by-products. Therefore, the consumer cannot be divorced from the

environment around him. The surroundings in which he lives and

works are vital for him. He cannot help but consume what is

around him. It is necessary that surroundings and environment

must be healthy. It is asine qua non.

In conclusion we may say that today consumer is the King and the

providers of goods and services are no longer in a dictatorialposition.

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b.consumer Protection Act (1)

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