Consumer Protection Act, 1986 (2)

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    SAURABH JAIN

    CONSUMER PROTECTION

    ACT, 1986

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    Objective2

    An Act to provide for better protection of theinterests of consumers and for that purpose to make

    provision for the establishment of consumer councilsand other authorities for the settlement of consum-ers' disputes and for matters connected therewith.

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    WHO IS A CONSUMER?

    Two kinds of consumer under the Act

    Consumer of goods

    buys or agrees to buy goods

    any user of such goods

    Consumer of services

    hires or avails any services

    any beneficiary of such service

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    Remedies

    a) To remove the defect

    b) To replace the goods with new goods of similardescription which shall be free from any defects

    c) To return the complainant the priced) To pay compensation for the loss or injury suffered

    due to negligence of the opposite party

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    Complaint5

    "complaint" means any allegation in writing made by acomplainant that

    an unfair trade practice or a restrictive trade practice hasbeen adopted by any trader or service provider;

    the goods bought by him or agreed to be bought by him;

    suffer from one or more defects; the services hired or availed of or agreed to be hired or

    availed of by him suffer from deficiency in any respect; a trader or service provider, as the case may be, has

    charged for the goods or for the service mentioned in thecomplaint a price in excess of the price.

    goods which will be hazardous to life and safety whenused or being offered for sale to the public.

    services which are hazardous or likely to be hazardous tolife and safety of the public when used.

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    Consumer Dispute6

    "consumer dispute" means a dispute where theperson against whom a complaint has been made,

    denies or disputes the allegations contained in thecomplaint.

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    Who can be a complainant

    i) A consumer

    ii) Any voluntary consumer association undercompanies act 1956

    iii) The Central govt. or the State govt.iv) One or more consumers with same interests.

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    CONSUMERS NEED PROTECTION AGAINST

    Unfair trade practice

    Restrictive trade practice

    Defects

    Deficiencies

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    UNFAIR TRADE PRACTICE

    Adopting unfair methods or deception to promote sale, use or

    supply of goods or services e.g.

    Misleading public about price (e.g. bargain price when it is not so).

    Charging above MRP printed.

    Misleading public about anothers goods or services.

    Falsely claiming a sponsorship, approval or affiliation.

    Offering misleading warranty or guarantee.

    CONSUMERS NEED PROTECTION

    AGAINST

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    CONSUMERS NEED PROTECTION AGAINST

    RESTRICTIVE TRADE PRACTICE

    Price fixing or output restraint re: delivery/flow of supplies toimpose unjustified costs/restrictions on consumers.

    Collusive tendering; market fixing territorially among

    competing suppliers, depriving consumers of free choice, fair

    competition.

    Supplying only to particular distributors or on condition of sale

    only within a territory.

    Delaying in supplying goods/services leading to rise in price. Requiring a consumer to buy/hire any goods or services as a

    pre-condition for buying/hiring other goods or services.

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    CONSUMERS NEED PROTECTION AGAINST

    DEFECTS

    Any fault, imperfection or shortcoming in the quality, quantity, potency,

    purity or standard which is required to be maintained by or under any law

    for the time being in force or under any contract express or implied or as is

    claimed by the trader in any manner whatsoever in relation to any goods.

    DEFICIENCY

    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.

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    CONSUMER'S RIGHTS

    Right to safety against hazardous goods and services

    Right to be informed about quality, quantity, purity,

    standard, price

    Right to choose from a variety at competitive prices

    Right to be heard

    Right to seek redressal

    Right to consumer education

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    FORUM & JURISDICTION

    Consumer Disputes Redressal Forums (District

    Forum): it consists of a president(should be a person who is

    qualified to be a district judge) and 2 members

    Claims less than or equal Rs.20 lacs. Consumer Disputes Redressal Commissions (State

    Commission)

    Claim more than Rs.20 lacs & less than Rs.1 crore & appeals.

    National Consumer Disputes RedressalCommission (National Commission)

    Claim equal to or more then Rs.1 crore & appeals

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    ESSENTIAL INFORMATION IN THE APPLICATION

    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 prayed for

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    BENEFITS & RELIEFS

    Benefit

    Disposal within 90 days

    No adjournment shall ordinarily be granted - Speedy trial

    Relief Removal of defects in goods or deficiency in services.

    Replacement of defective goods.

    Refund against defective goods or deficient services. Compensation.

    Prohibition on sale of hazardous goods.

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    Unfair trade practices

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    Unfair trade practices [sec. 2(1) (r)]

    It means trade practices which a trader, for thepurpose of promoting the sale, use or supply of anygoods or for the provision of any service, adopts anyunfair method or unfair or deceptive practice.

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    The practices included are:

    (1)The practice of making any statement, whether orally or inwriting or by visible representation which-

    Falsely represents that the goods are of particular standard,quality, quantity, grade, composition, style or model;

    Falsely represents that the services are of particular standard,quality or grade; Falsely represents any rebuilt, second hand, renovated, or old

    goods as new goods; Represents that the goods or services have sponsorship,

    approval, performance, characteristic, accessories, uses orbenefits which such goods or services do not have;

    Represents that the seller or the supplier has sponsorship orapproval or affiliation which such seller or supplier does nothave;

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    Make a false or misleading representationconcerning the needs for , or the usefulness of, anygoods or services;

    Gives to the public any warranty or guarantee of

    the performance or length of life of a product or ofany goods that is not based on an adequate orproper test thereof.

    Materially misleading the public concerning the

    price at which a product or like products or goodsor services, have been or are ordinarily sold orprovided.

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    Unfair trade practices - contd

    2. False offer of bargain price [section 2(1)(r)(2):

    A price that is stated in any advertisement to be a bargainprice by reference to ordinary price or otherwise

    A price that a person who reads, hears or sees theadvertisement would reasonably understand to be a bargainprice having regard to the prices at which like products aresold.

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    Contd

    3.Schemes offering gifts or prizes [section 2(1)(r)(3)]

    Offering gifts or prizes or other items with the intentionof not providing them and conducting promotionalcontests.

    Creating an impression that something is being givenfree of charge when it is fully or partly covered by theamount charged in the transaction.

    Conducting of any contest, lottery or game of chances etcfor the purpose of promoting-directly or indirectly- thesale, use or supply of any product or any businessinterest.

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    Contd

    4. Withholding any schemes [sec 2(1)(r)(3A)]

    Withholding from the participants of any schemeoffering gifts, prizes or other items free of charge,

    on its closure the information about final result ofscheme. The participants of a scheme shall bedeemed to have been informed of the final resultsof the scheme where such results are within areasonable time published prominently in thesame newspapers in which the scheme wasoriginally published.

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    Contd

    5.Non compliance of prescribed standards [sec 2(1)(r)(4):The prescribed standard may relate to performance,

    composition, contents, design, packaging etc as arenecessary to prevent or reduce the risk of injury to theperson using the goods.

    6.Hoarding, destruction or refusal [sec 2(1)(r)(5):Hoarding, destruction or refusal to sell the goods which

    raises or tends to raise the cost of those or other similargoods or services shall amount to an unfair trade practice.

    7. Manufacturing or sale of spurious goods [section

    2(1)(r)(6):Spurious goods and services means such goods andservices which are claimed to be genuine but are not so.

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    RESTRICTIVE TRADE

    PRACTICE

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    DEFINITION Sec. 2 (1) (nn)

    A trade practice which tends to bring aboutmanipulation of price, or its conditions of delivery orto affect flow of supplies in the market relating togoods or services in such a manner as to impose onthe consumers unjustified costs or restrictions

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    CONSUMERS NEED PROTECTION AGAINST

    Price fixing or output restraint i.e delivery/flow of supplies to

    impose unjustified costs/restrictions on consumers.

    Collusive tendering; market fixing territorially amongcompeting suppliers, depriving consumers of free choice, fair

    competition.

    Supplying only to particular distributors or on condition of sale

    only within a territory.

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    Delaying in supplying goods/services leading to

    rise in price.

    Requiring a consumer to buy/hire any goods orservices as a pre-condition for buying/hiring

    other goods or services.

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    DEFECT Sec 2 (1) (f)

    Any fault, imperfection or shortcoming in the quality,quantity, potency, or standard which is required to

    be maintained by or under any law for the time beingin force, or under any contract, express or implied oras is claimed by the trader in any manner whatsoeverin relation to any goods