PGP-FW-06/08 (A-2)

Our Team

Abhijit Nirmal – 2

Amit Singh – 4

Ankur Ranawat – 6

Apurva Prasad – 8

Ashraf Ansari – 10

Dhiraj Yadav – 12

Girish Jain – 14

Hoshedar Major – 16

Jeetendra Samtani – 18

Hardik Patel – 20

ACKNOWLEDGEMENT

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This is with great pleasure that we take this

opportunity to work on our project of Consumer

Protection Act, 1986 which has not only

allowed us to know the basic fundamentals but

has also laid down for us a platform to

understand the application end of the

subject(topic). Also, we would like to thank our

mentor Prof. Anant Amdekar who has been our

inspiration throughout for his support and regular

guidance which has also benefited us to have a

thorough understanding of law and its

implications.

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TABLE OF CONTENTS

SR. NO. PARTICULARS PAGE NO.1. Prefatory Items 2-4

1.1 Our Team 21.2 Acknowledgement 31.3 Table of Contents 4

2. Introduction 53. Consumerism: conceptual consideration 74. Rights & Responsibilities 105. Definitions 136. Objective of Consumer Protection Act 167. Scope of the Act 178. Consumer Protection Council 189. Deficiency 2410. FAQs 3711. Amendments 4812. Cases 4913. Articles 5514. Conclusion 5715. Bibliography

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Introduction

The Consumer Protection Act, 1986 was enacted “to provide for better

protection of the interests of the consumers” – the consumers of goods’ and

services’ as defined under the Act. The Act “is a milestone in the history of socio-

economic legislation…to meet the long felt necessity of protecting the common man

from such wrongs for which the remedy under the common law for various reasons

has become illusory.” The legislation, no doubt, has the unique distinction of being

the only one in the country made exclusively for the consumers to protect their

interests against ‘defective goods’ and ‘deficient services’, even though a plethora of

existing legislations do have provisions to deal with consumer rights in different

degrees on specified matters. The Act envisages a better legal framework within

which an ordinary consumer can fight for his rights and get his grievances

redressed. It provides for speedy and inexpensive settlement of disputes within

limited time-frame, as against civil suits which are costly and time-consuming. The

provisions of the Act are in addition to and in derogation of any other law for the time

being in force and are compensatory in nature.

The Act provides for the establishment of Consumer Protection Councils at the

Central, State and District levels “to promote and protect the rights of the

consumers” and a three-tier quasi-judicial machinery at the district, state and

national levels for “the settlement of consumer disputes”. The composition of these

authorities and their territorial and pecuniary jurisdictions, the procedure to be

followed by them in disposing of the complaints and the relief that can be granted

are specifically laid down under the Act. In the light of the experience gained during

the initial years of its enforcement by the consumer courts, the Act has been

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marginally amended in 1991 and substantially in 1993 and 2002, with a view to

make it more effective in bringing justice to the doorsteps of the consumers.

The consumer movement in India is as old as trade and commerce. In Kautilya's

Arthashastra, there are references to the concept of consumer protection against

exploitation by the trade and industry, short weigh and measures, adulteration and

punishment for these offences. However, there was no organised and systematic

movement actually safeguarding the interests of the consumers. Prior to

independence, the main laws under which the consumer interests were considered

were the Indian Penal Code, Agricultural Production, Grading and Marketing Act,

1937, Drugs and Cosmetics Act, 1940. Even though different parts of India exhibited

different levels of awareness, in general, the level of awareness was pretty low.

An average Indian consumer is noted for his patience and tolerance. Perhaps

because of these two traditional traits and due to the influence of the Mahabharata,

the Ramayana and the Bhagavad Gita, he considered the receipt of defective goods

and services as an act of fate or unfavorable planetary position in his horoscope.

When a new television or refrigerator purchased by him turns out to be defective

from day one, he takes it reticently, blaming it on his fate or as the consequence of

the wrongs committed by him in his previous birth. Very often he is exploited, put to

avoidable inconveniences and suffers financial loss. It is rather paradoxical that the

customer is advertised as the "king" by the seller and service provider; but in actual

practice treated as a slave or servant. Goods are purchased by him along with the

label "Items once sold by us will never be received back under any circumstances

whatsoever." This unethical, illegal and unilateral declaration has to be viewed in the

light of the practice in developed countries where the seller declares, "In case you

are not fully satisfied with our product, you can bring the same to us within a month

for either replacement or return of your money." This will clearly indicate the level of

consumer consciousness. However, things are changing - slowly but steadily - and

the momentum has increased considerably since the establishment of consumer

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courts and due to the efforts of a number of consumer organisations and the media.

The next millennium will witness a high degree of consumer awareness and the

concepts of "comparative costs", "consumer preference/ resistance/ abstinence" and

"consumer choice" will become vital aspects of the economy.

Consumerism: conceptual consideration

In the good olden days the principle of ‘Caveat emptor’, which meant buyer

beware governed the relationship between seller and the buyer. In the era of open

markets buyer and seller came face to face, seller exhibited his goods, and buyer

thoroughly examined them and then purchased them. It was assumed that he would

use all care and skill while entering into transaction.

The maxim relieved the seller of the obligation to make disclosure about the

quality of the product. In addition, the personal relation between the buyer and seller

was one of the major factors in their relations. But with the growth of trade and its

globalization he rule no more holds true. It is now impossible for the buyer to

examine the goods before hand and most of the transactions are concluded by

correspondence. Further on account of complex structure of the modern goods, it is

only the producer/seller who can assure the quality of goods. With manufacturing

activity becoming more organized, the producers/sellers are becoming more strong

and organised whereas the buyers are still weak and unorganized. In the age of

revolutionized information technology and with the emergence of e-commerce

related innovations he consumers are further deprived to a great extent. As a result

buyer is being misled, duped and deceived day in and day out.

Mahatma Gandhi, the father of nation, attached great importance to what he

described as the “poor consumer”, who according to him should be the principal

beneficiary of the consumer movement.

“A Consumer is the most important visitor on our premises. He is not

dependent on us we are on him. He is not an interruption to our work; he is the

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purpose of it. We are not doing a favour to a consumer by giving him an opportunity.

He is doing us a favour by giving an opportunity to serve him.”

Inspite of these views consumerism is still in its infancy in our country, thanks

to the sellers market and the government monopoly in most services. Consumer

awareness is low due to the apathy and lack of education among the masses. No

one has told them about their rights- to be informed about product quality, price,

protection against unsafe products, access to variety of goods at competitive prices,

consumer education etc. What consumerism lacks here are education and

information resources, testing facilities, competent leadership, price control

mechanism, and adequate quasi-judicial machinery. The providers of goods and

services have been reluctant to give due consideration to consumer interest

protection.

In present situation, consumer protection, though as old as consumer

exploitation, has assumed greater importance and relevance. Consumerism is a

recent and universal phenomenon. It is a social movement. Consumerism is all

about protection of the interests of the consumers. According to McMillan dictionary

“Consumerism is concerned with protecting consumers from all organistations with

which there is exchanged relationship. It encompasses the set of activities of

government, business, independent organizations and concerned consumers that

are designed to protect the rights of consumers”. The Chamber’s Dictionary (1993)

defines Consumerism as the protection of the interests of the buyers of goods and

services against defective or dangerous goods etc. “ Consumerism is a movement

or policies aimed at regulating the products or services, methods or standards of

manufacturers, sellers and advertisers in the interest of buyers, such regulation may

be institutional, statutory or embodied in a voluntary code occupied by a particular

industry or it may result more indirectly from the influence of consumers

organizations.

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As commonly understood consumerism refers to wide range of activities of

government, business and independent organizations designed to protect rights of

the consumers. Consumerism is a process through which the consumers seek

redress, restitution and remedy for their dissatisfaction and frustration with the help

of their all organized or unorganized efforts and activities. It is, in-fact a social

movement seeking to protect rights of consumers in relation to the producers of

goods and providers of services. In-fact consumerism today is an all- pervasive term

meaning nothing more than people’s search for getting better value for their money.

Consumer is the focal point of any business. Consumer’s satisfaction will benefit not

only business but government and society as well. So consumerism should not be

considered as consumers’ war against business. It is a collective consciousness on

the part of consumers, business, government and civil society to enhance

consumers’ satisfaction and social welfare which will in turn benefit all of them and

finally make the society a better place to live in .

There are various components of consumerism. First and foremost is self-protection

by consumers. Consumer must be aware of his rights, raise voice against

exploitation and seek redressal of his grievances. Consumers’ consciousness

determines the effectiveness of consumerism. It is the duty of the consumer to

identity this rights and to protect them. Voluntary Consumer Organisations engaged

in organizing consumers and encouraging them to safeguard their interests in

another important element of consumer movement. The success of consumerism

lies in the realisation of the business that there is no substitute for voluntary self-

regulations. Little attention from the business will not only serve consumers interest

but will also benefit them. Some business in India have come together to adopt a

code of conduct for regulating their own activities. Regulation of business through

legislation is one of the important means of protecting the consumers. Consumerism

has over the time developed into a sound force designed to aid and protect the

consumer by exerting legal, moral and economic pressure pn producers and

providers in some of he developed countries.

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Rights & Responsibilities

Right of Consumer

Over the years consumer rights have become more comprehensive, and are

recognized by consumer organizations around the world, Consumer Protection Act,

1986. also recognizes these rights. Section 6 of the act focuses on upholding these

rights:

The Right to Basic Needs: ascertains basic goods and services, which

guarantee survival. It includes adequate food, clothing, shelter, health care,

education and sanitation.

The Right to Safety: assures protection against products, production

processes and services, which are hazardous to health or life. It includes

concern for consumers' long-term interests as well as their immediate

requirements.

The Right to be informed: means being given the facts needed to make an

informed choice or decision. Consumers must be provided with adequate

information enabling them to act wisely and responsibly. They must also be

protected from misleading or inaccurate publicity material, whether included in

advertising, labeling, packaging or by other means.

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The Right to be heard: means the right to advocate consumers' interests

with a view to their receiving full and sympathetic consideration in the

formulation and execution of economic and other policies. It includes the right

of representation in governmental and other policy-making bodies, as well as

in the development of products and services before they are produced or set

up.

The Right to Choose: enables access to a variety of products and services

at competitive prices and, in the case of monopolies, to have an assurance of

satisfactory quality and service at a fair price.

The Right to Seek Redressal: meaning a fair settlement of just claims. It

includes the right to receive compensation for misrepresentation, for shoddy

goods or unsatisfactory services and the availability of acceptable forms of

legal aid or redress for small claims where necessary.

The Right to Consumer Education: to acquire the knowledge and skills to

be an informed consumer throughout life. The right to consumer education

incorporates the right to the knowledge and skills needed for taking action to

influence factors, which affect consumer decision.

The Right to a Healthy Environment: as in the right to a physical

environment that will enhance the quality of life. It includes protection against

environmental dangers over which the individual has no control. It

acknowledges the need to protect and improve the environment for present

and future generations.

Consumer responsibilities

The consumer is also enjoined to uphold his/her responsibilities:

Critical awareness: The responsibility to be more alert, and questioning

about the price and quality of goods and services we use.

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Action: The responsibility to assert ourselves, and act to ensure that we get a

fair deal. As long as we remain passive consumers, we will continue to be

exploited.

Social concern: The responsibility to be aware of the impact of our

consumption on other citizens, especially disadvantaged or powerless groups

whether in the local, national or international community.

Environmental awareness: The responsibility to understand the

environmental consequences of our consumption. We should recognize our

individual and social responsibility to conserve natural resources and protect

the earth for future generations.

Solidarity: The responsibility to organize, and come together as consumers

to develop the strength to influence, promote and protect our own interests.

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Important Definitions

Goods: "Goods" means goods as defined in the Sale of Goods Act, 1930 (section

2(7) of Sale of Goods Act, 1930).According to the Sale of Goods Act, 1930. "goods"

means every kind of movable property other than actionable claims and money, and

includes stock and shares, growing crops, grass, and this attached to or forming part

of the land which are agreed to be severed before sale or under the contract of sale.

Service [Section 2(1)(0)]: "Service" means service of nay description which is

made available to potential users and includes, but not limited to, the provision of

facilities in connection with banking, financing, insurance, transport, processing,

supply of electrical or other energy, boarding or lodging or both, housing

construction, entertainment, 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;

Restrictive Trade Practice [Section 2(1)(nn)]: "Restrictive trade practice" as per

clause (nn) means any trade practice which requires a consumer to buy, hire or avail

of any goods or, as the case may be, services as a condition precedent for buying,

hiring or availing of other goods or services;

Defect [Section 2(1)(f)]: "Defect" means 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.

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Deficiency [Section 2(1)(g)]: Parallel to "Defect" in case of goods, deficiency is

relevant in case of services. Accordingly, it is defined to mean 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.

Unfair Trade Practice [ Section 2(1)(r)]: "Unfair trade practice" the detailed

definition is given in the Consumer Protection Act, 1986 as amended by the

Consumer Protection (Amendment) Act. 1993. It is defined to mean a trade practice

which, for the purpose of promoting the sale, use or supply of any goods or for the

provision of any service, adopts any unfair method or unfair or deceptive practice

including any of the following practices, namely :-

(a) False or misleading representation,

(b) Bargain sale,

(c) Offering of gifts, prize, etc. and considering contents or lottery,

(d) Non compliance of product safety standard,

(e) Hoarding or destruction of goods.

The Act may be consulted before filing a complaint for unfair trade practice.

Complainant [ Section 2(1)(b)]: means any of the following and having made a

complaint -

i. A consumer: or

ii. Any voluntary consumer association registered under the Companies Act,

1956 or under any other law for the time being in force: or

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iii. The central government or any State government: or

iv. One or more consumers, where there are numerous consumers having the

same interest: or

v. In case of death of a consumer: his legal heir or representative.

Complaint [ Section 2(1)(c)]: means any allegation in writing made by a complaint

that –

i. An unfair trade practice or a restrictive trade practice has been adopted by

any trader or service provider;

ii. Goods bought by him or agreed to be bought by him suffer from one or more

defects ;

iii. Services hired or availed of or agreed to be hired or availed of by him suffer

from deficiency in any respect ;

iv. A trader or the 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 –

v. Goods which will be hazardous to life and safety when used are being

offered for sale to the public –

vi. Services which are hazardous or likely to be hazardous to 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;

with a view to obtaining any relief provided by or under this act.

Consumer Dispute [Section 2(1)(c)]: means a dispute where a person against

whom a complaint has been made denies or disputes the allegations contained in

the complaint.

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Objective of the Consumers Protection Act, 1986

According to the preamble , the act is to provide for the better protection of the

interest of consumers an for that purpose to make provisions of the establishment

of consumers councils and others authorities for the settlement of consumers

interest herewith . The basic rights of the consumers that are sought to be promoted

and protected are;

1. The right to be protected against marketing of goods and services which arte

hazardous to life and property.

2. the right to be informed about the quality , quality , potency , purity , standard

and price of the goods, or service as to protect the consumers against the

unfair trade practices

3. The right to be assured, whenever possible, access to variety of goods and

service at competitive price.

4. the right to be hearted an to be assured that consumers interest will receive

sue consideration at appropriate forums

5. the right to seek redressal against unfair trade practice or restrictive trade

practices or unscrupulous exploitation of consumer ; and

6. The right to consumer education.

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This is base on the basic right of consumers as defined by the international

organization of consumers ( IOCU) via ., The right of safety , to information of

choice, to be hearted, to redressed, to consumers education, to healthy, to healthy

environment and to basic needs .

Scope of the Act

The act extent to the whole of India expects the state of Jammu and Kashmir and

applies to all goods a service unless otherwise notified by the central government.

The act received the president’s accent on 24.12.1986. However, all provisions of

the act expect those relating to establishment, composition, jurisdiction, etc. of the

consumer’s dispute agencies (which came into force on 1.7.1987) came into force

on 15.4.1987.

The right under the act to seek relief before the forum would not be deprived to

any aggrieved consumers only by reason of the date of accrual of cause of action

being prior to the date of coming into force of chapter III . So long as the cause of

action was not barred under the general laws of limitation as on the date of

institution of the consumer dispute any redressed agency, it would be tenable under

the act.

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Consumer protection council

The interests of the consumers are sought to be promoted and protected under the

Act inter alias by establishment of consumers protection councils at the central and

state levels. chapter II so the consumer protection Act ,1986 comprising section 4

to section 6 deals with consumers protection councils.

Central consumer’s protection council

Section 4 empowers the central government to establish a council to be known s

the central consumer protection council consisting of Minster in charge of

consumers affairs In the central government , as its chairman , and such number

of other officials or non – official members representing such its chairman , and

such number of other officials or non – officials member representing such

interest as may be prescribed . However, the Consumers Protection Rules 1987

restrict the number of members of the councils to 150 members

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Section 5 of the Act requires the central councils shall meet as a when necessary.

But at least once in every year. The procedure in this regards to transaction of its

business at the meeting is given in Rule 4 of the Rules.

State consumers protection council

Section 7 provides for the establishment (by notification) to be known as consumers

protection council for (name of the state). the state council shall consist of a Minster

in charge of consumers affairs in the state government as its chairman and such

number of other officials or non – officials members representing such interest as

may be prescribed by the state government . The state councils shall meet as and

when necessary but not less than two meeting shall be held every year. The

procedure to be observed in regards to the transaction of its business at such

meeting shall be prescribed by the state government.

District Consumer protection Council

Section 8-A provides for the establishment (by notification) for every district a council

to be known as district consumer protection council consisting of a collector of the

district who will be the chairman and number of other officials and non officials

members representing such interests. The district council shall meet as and when

necessary but not less than two meetings in a year as prescribed by state

government.

The objects of the district council shall be to promote and protect within the district

the rights of the consumers laid down in clauses (a) to (f) of section 6.

Redressal Machinery under the ACT;

The Act provides for a three –tier quasi judicial redressal machinery at the district,

state and national level to redressal of consumers dispute and grievances. The

district from has jurisdiction to entertain complaint where the value of goods /

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services complained against and the compensation. If the claimed. is less than Rs

20 lakhs , the state commission for claims exceeding Rs 20 lakhs but not exceeding

Rs 1 crores and the national commission for the claims exceeding Rs 1 crores.

(National commission also have the jurisdiction to entertain appeals against the

orders of any state commission {section 21} )

Broad review of CPA would show that its provisions may be classified into two broad

categories.

Substantive provisions

Procedural provisions

Substantive provisions

The important provisions, such as, consumer, defect, deficiency, restrictive trade

practice, service and unfair trade practice cover substantive part of CPA.

Procedural provisions

The provisions of CPA other than above substantive provisions are procedural

provisions.

Jurisdiction of Consumer Forums

The provisions regarding jurisdiction of various Consumer Dispute Redressal

Forums and their jurisdiction may be summarized as follows.

(a) District Forum

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Pecuniary jurisdiction

Section 11(1) of CPA deals with pecuniary jurisdiction. It provides that the

District Forum has the jurisdiction to entertain complaints where the value of

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

rupees twenty lakhs. The complaint involving claims exceeding rupees twenty

lakhs cannot be entertained by the District Forum.

The pecuniary jurisdiction depends upon the amount of relief claimed and not

upon the value of the subject-matter, nor upon the relief allowed by the

Forum.

Territorial jurisdiction

Section 11(2) deals with territorial jurisdiction of the District Forum. It provides

that a complaint shall be instituted in a District Forum within the local limits of

whose jurisdiction:-

(a) The opposite party or each of the opposite parties at the time of

institution of the complaint actually and voluntarily resides, carries on

business, has a branch office or personally works for gain.

(b) Where there are more than one opposite parties, any of the

opposite parties at the time of institution of the complaint actually and

voluntarily resides, carries on business, has a branch office or

personally works for gain.

Provided that in such case, either the permission of the District

Forum is given, or the opposite parties who do not reside, or

carry on business or have a branch office, or personally work

for gain, as the case may be, acquiesce in such institution; or

(c) The place where the cause of action, wholly or in part, arises

(section 11).

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(b) State Commission

Original jurisdiction

Under section 17(a)(I) of CPA, the State Commission can entertain

complaints where the value of the goods or services and compensation, if

any, claimed exceed twenty lakes of rupees but does not exceed rupees 1

crore the matter can be heard by the state commission.

Appellate jurisdiction

Under section 17(a) (ii) of CPA, the State Commission has jurisdiction to

entertain appeals against the order of any District Forum within the State.

According to section 15 of CPA, any person aggrieved by an order made by

the District Forum may prefer an appeal against such order to the State

Commission within a period of thirty days from the date of order. However,

the State Commission may entertain an appeal after the expiry of the said

period of thirty days if it is satisfied that there was sufficient cause for not filing

it within that period.

Revisional jurisdiction

Under clause (b) of section 17 of CPA, the State Commission has jurisdiction

to call for the records and pass appropriate orders in any consumer dispute

which is pending before or has been decided by any District Forum within the

State, where it appears to the State Commission that such District Forum has

exercised jurisdiction not vested in it by law, or has acted in exercise of its

jurisdiction illegally or with material irregularity.

(c) National Commission

Original jurisdiction

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Under section 21(a) (I) of CPA, the National Commission can entertain

complaints where the value of the goods or services and compensation, if

any, claimed, exceeds hundred lakhs of rupees. The pecuniary jurisdiction

depends upon the amount of relief claimed and not upon the value of the

subject-matter.

Appellate jurisdiction

Section 21(a) (ii) of CPA provides that the National Commission shall have

jurisdiction to entertain appeals against the order of any State Commission.

According to section 19, an appeal can lie to the National Commission only

against the order made by the State Commission in exercise of its power

under its original jurisdiction. The appeal may be preferred within a period of

thirty days from the date of the order of the State Commission. However, the

National Commission may entertain an appeal after the expiry of the said

period of thirty days, if it is satisfied that there was sufficient cause for not

filing it within that period. The appeal should be decided as far as possible,

within ninety days from the date of hearing.

Revisional jurisdiction

The jurisdiction of the National Commission in revision has been laid down in

section 21(b) of CPA. This is limited to consumer disputes wherein a State

Commission

has exercised a jurisdiction not vested in it by law, or

has failed to exercise jurisdiction so vested, or

Has acted in the exercise of its jurisdiction illegally or with material

irregularity.

The National Commission can exercise its power in revisions only under

these situations.

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Appeal to Supreme Court

Under Section 23, any person, aggrieved by an order made by the National

Commission in exercise of its powers conferred by sub-clause (i) of clause (a) of

section 21, may prefer an appeal against such order to the Supreme Court within a

period of thirty days from the date of the order:

Provided that the Supreme Court may entertain an appeal after the expiry of the

period of thirty days if it is satisfied that there was sufficient cause for not filing it

within that period. No appeal by a person who is required to pay any amount in

terms of an order of the national commission shall be entertained by the Supreme

Court unless that person has deposited in the prescribed manner 50% of that

amount or Rs. 50,000/- whichever is less.

Deficiency in various kinds of services

Deficiency basically is concerned with the loop holes in a particular kind of service or

in any form or another. A review of the case laws shows how the consumer forums

have decided whether or not there was deficiency in the services rendered by

airlines, banks, couriers, electric companies, housing, etc. A summary of the

decisions may be reviewed as follows.

Airlines

In respect of following matters, consumer forums have held that services of

airlines were deficient.

Delay in processing refund of unused tickets

Not informing passenger about flight delay

Physical injury disabling the passenger

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Injury to waiting passenger in the Airport

Inferior quality of in-flight food

In case of failure to issue boarding cards due to late check-in, however, it was

held that there was no deficiency.

Banking Services

In following respects, it was held that there was deficiency in bank’s

services.

Making payment notwithstanding stop-payment instructions

Making unauthorised debit to customer’s account

Loss of valuables from lockers

Not crediting deposited cheque

Banker’s mistake in transferring complainant’s money to wrong branch

Freezing the operation of the bank account on telephonic instruction of

government

On the other hand, in respect of the following matters, it was held that there

was no deficiency in bank’s services

Denial of credit facility

Bank’s refusal to enhance the sanctioned limits

Bank’s failure to provide finance to small-scale industry

Bank’s refusal to extend loan repayment

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Courier Service

In respect of the following matters, complaints were allowed by reason of

deficiency in services of Courier Company.

Non-delivery by stipulated time

Loss of documents sent by courier

Electricity

Supply of electric energy is included in the definition of "service" under

section 2(1) (o) of CPA. Therefore, a person who uses electrical energy by

paying its price is a consumer who can invoke jurisdiction of Consumer

Forums. However, disputes relating to rates of tariff for power consumption

are not within jurisdiction of consumer forums.

In the following respects, consumer forums have held that services of

electricity Supply Company were deficient.

Disconnecting power supply before the dates specified for payment of

inflated bills at short notice entitles the complainant to a larger

compensation than that awarded by the State Commission..

Arbitrary disconnection of electric supply without notice amounts to

deficiency in service..

Following acts of the electricity company have been held to result in

deficiency in service.

(a) Excess billing due to defective meters.

(b) Not preparing and serving bills according to billing cycle

resulting in heavy arrears.

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(c) Raising bill for arrears without details regarding the period to

which arrears relate.

(d) Serving bill on Sunday and demanding payment within three

days under threat of disconnection.

Housing Construction Service

In respect of Deficiency in housing construction and building activity,

consumer forums have held that services were deficient in the following

matters.

Housing Board not providing roads, schools, parks, etc. as promised

under the housing scheme.

Delay of Housing Board in completing installation of light and handing

over possession of flat to the allottee who has paid full price of the flat.

Housing Board using sub-standard material in construction of flats

resulting in leaking roof, cracking wall or sub-standard flooring.

Delay in giving possession at the agreed time so (which also makes

the builder liable for giving possession as also interest and cost).

Failure of the Housing Board to give possession of the plot allotted to

complainant and its arbitrary cancellation without notice.

Failure to provide amenities mentioned in brochure, such as, health

club, swimming pool, playground, jogging trail, mini golf club, etc.

alongwith plot for the farm house.

Failure of builder in commencing construction within three years when

according to the agreement between the builder and complainant, flats

were to be completed within three years, there was deficiency.

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Insurance

Life Insurance

At the outset, it may be noted that a nominee being a person appointed by

policy holder to whom the policy money is to be paid in the event of policy

holder’s death, is a beneficiary who avails of services with approval of the

policy holder who hired such services for consideration. Therefore, the

nominee is a consumer.

In following respects, the Consumer Forums have held that services of LIC

were deficient.

Arbitrary repudiation without communicating reasons and without due

application of mind.

Repudiation of claim without inquiry.

General Insurance

In case of general insurance, consumer forums have held that services of the

insurance company were deficient in following respects.

Failure of the insurance company to indemnify the insured for the loss

caused by fire despite the undertaking of the insurance company is

deficiency in service.

Delay in making payment of claim under insurance policy is deficiency.

In cases of such deficiency, interest @ 13.5% may be allowed to the

claimant. Further, compensation for financial loss and mental stress

may also be allowed in such cases.

Silent promise and explicit condition of insurance contract is that

insured claim must be settled with utmost expedition, either by way of

acceptance or repudiation, say, within a reasonable time frame of

about three months.

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Any delay beyond such reasonable period would constitute deficiency

in service unless the same is cogently explained by the insurance

company.

Delay in settlement of insurance claim due to negligence and delay of

the surveyor amounts to deficiency in service of the insurance

company.

Delaying settlement of the claim for long time despite the report

submitted by its own appointed surveyors amounts to deficiency in

service.

Repudiation of claim without inquiry.

In the following respects, however, consumer forums have held that there

was no deficiency in the service of the general insurance company.

Mere repudiation of claim does not amount to deficiency.

Repudiation of claim after proper investigation.

Suppression of material facts.

L.P.G. Gas Cylinder

Rechecking of gas cylinder is mandatory under the statutory regulations for

supply of cooking gas cylinder. In one case, gas cylinder was supplied without

rechecking the same at the time of delivery. When the cylinder was

connected to stove, it burst. Upon the complainant seeking compensation, it

was held that there was clear deficiency in service due to failure to recheck

the cylinder.

Medical Services

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In recent years, hospitals, doctors and surgeons have been facing the

complaints of medical negligence. Some of the grievances for which

complaints have been made to consumer forums are as follows.

Doctor creating a misleading impression as gynaec specialist.

Not providing bed after charging for the same.

Negligence of juniors of the doctor leading to damage to the patient

could make the doctors liable.

Loss of vision due to negligence of eye surgeon.

However, in respect of complaints made for following matters, it was held that

there was no deficiency

Failure of hospital to admit patient in I.C.U.

Loss of voice after heart surgery.

Death of patient due to a cause other than the problem for which he

was operated.

Loss of sense after delivery of child by a woman having history of

miscarriages.

Motor Vehicle

In respect of the following grievances, consumer forums have held that

services of the manufacturer or supplier were deficient.

Delay in delivery of car.

Fixing wrong number plate on vehicle.

Deficiency in repairs and servicing of vehicle.

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Postal Service

In respect of the following grievances, consumer forums have held that postal

services were deficient.

Delay in delivery of telegraphic M.O.

Misdelivery of money order to a different person.

Misdelivery of envelop back to sender.

Omission to post the article entrusted to postal clerk for franking and

despatch.

Delay in payment of NSC.

Non-intimation by Post Office about return of registered letter due to

wrong address.

Delay in delivery of telegraphs.

Railways

In respect of the following grievances, consumer forums have held that

railway services were deficient.

Where railway reservation is given to a passenger by an alternative

train for the day on which the train does not run, there is deficiency in

service.

Refusal by Railways to give air-conditioned second class birth after

confirmation of reservation is deficiency in service.

Failure of Railway administration to prevent entry of unauthorised

persons in reserved compartment is negligence and therefore

deficiency in service.

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Allotting birth to VIPs by superseding persons on waiting list is

deficiency.

When reservation of seats made by the complainant is erroneously

given to others, same indicates gross negligence of railway booking

and reservation staff. Railway must bear vicarious responsibility for

such negligence.

Out of turn allotment of seat to VIP.

Failure to mention name in reservation chart.

Recovering excess fare from passenger.

In the following cases, however, consumer forums have held that there

was no deficiency.

Cancellation of trains to ensure safety - no deficiency.

Delay in departure of special train.

Telephone Service

In the following respects, consumer forums have held that services of the

telephone company were deficient.

Overbilling of telephone is deficiency in service particularly when the

bill is only for local calls and is four to five times the average bill without

proper explanation.

Disconnection of telephone on the ground of non-payment of bill

without intimation to subscriber constitutes deficiency in service.

Disconnection of telephone, telex without notice would be arbitrary,

unreasonable and violative of the principles of natural justice.

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Disconnection of telephone for non-payment of the bill which was

proved inflated.

University and Education

Two important propositions considered by consumer forums in respect

of university and education are whether education is covered by the

definition of "service" and whether a student can be regarded a

"consumer". There is a divergence of views on both these as is evident

from the following.

Education is service

Even though education is not expressly mentioned in the definition of

service, when the same is imparted for consideration, there is no

logical reason to exclude the same from the definition of service which

is wide and inclusive definition.

Educational services by schools cannot be considered as "personal

services" and therefore, fall within the definition of "service" under

section 2(1)(o) of CPA.

Education is not service

While conducting public examinations, evaluating answer books,

announcing exam results and re-checking of marks on application for

revaluation, University or the Board does not perform any service for

hire as contemplated by CPA.

Definition of "service" in CPA makes it clear that the relationship of

teacher and student of an educational institution is not a service on

hire because student is not a consumer. The very concept of "contract"

cannot be forced into CPA so far as education, teacher and students

are concerned. Hence, education does not come within the scope of

CPA.

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Student is consumer

Student is essentially a consumer of services of an educational

institution. Therefore, college cannot refuse to refund fees collected by

it when the college did not allow the student to avail of college

education.

Student is not consumer

A candidate who appears for examination cannot be regarded as a

person had hired or availed of services of university or Board for

consideration.

In the following respects, consumer forums have held that educational

services were deficient.

Allotment of same roll number to complainant and some other student.

Ten years’ delay in issuing degree certificate.

Service

This term is very widely and inclusively defined in section 2(1)of CPA as follows.

"Service" means service of any description which is made available to

potential users and includes provision of facilities in connection with banking,

financing, insurance, transport, processing, supply of electrical or other

energy, board or lodging or both, housing construction, entertainment,

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.

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What is "service”?

Service of any description is covered under CPA and includes services such as

banking, financing, insurance, transport, processing, housing construction, supply of

electrical energy, entertainment, amusement, board or lodging etc.

The categories of the service specified in the definition, however, appear to be

illustrative since the mentioned of specified categories of services follow, the word

"includes" in the above definition.

What is intended to be excluded from the definition of "service" is specified in

respect of two services.

Service free of charge

Service under a contract of personal service

The following services are, however, not specified in the abovementioned definition

of "service"

Advocates

Airlines

Chartered Accountants

Couriers

Chit Fund

Education

Gas Cylinder/L.P.G.

Medical services

Postal services, Railways, Shares & Debentures

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Telephones

Miscellaneous

— Lift maintenance

— Marriage Hall renting

— Maintenance of provident fund account

— Registration department

— Travel Agency

— Granting certified copy of document

— Purchase of lottery tickets

— Carrier

— Grant of subsidy by Central Government to industrial units

— Municipal services

Are services of Medical Practitioners Covered By CPA?

In the landmark judgment of the Supreme Court in Indian Medical Association V P

Shantha (AIR 1996 SC 550), the Supreme Court has examined various offshoots of

the abovementioned question. The Supreme Court examined, in particular, the

connotation of "service" as defined in section 2(1)(o) of CPA and "deficiency" in

terms of section 2(1)(g) of CPA. On the basis of exhaustive discussion, the Supreme

Court came to following conclusions:

Services rendered by medical practitioners are covered by the expression

"service" as defined in section 2(1) (o). [Since there is no employer-employee

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relationship between a doctor and patient, services of medical practitioners do

not fall in the exclusionary part of section 2(1)(o).]

Services of doctors and hospitals which are rendered free of any charge to

every person do not fall within ambit of "service" as defined in section 2(1)(o).

Mere fact that the doctor receives salary from the hospital administration or by

a charge on the consolidated fund would not change the conclusion that the

services are rendered free of charge.

Services rendered by doctors and hospitals who render free service to poor

patients and charge fees to others would nevertheless fall within the ambit of

"service" as defined in section 2(1)(o), irrespective of the fact that a part of the

service is rendered free of charge.

The fact that insurance company bears the charges of medical treatment

under medi-care policy or that the employer bears such charges as a part of

conditions of service does not mean that the services are rendered free of

charge.

Medical practitioners rendering service to patients by way of consultation,

diagnosis and treatment, both medicinal and surgical, fall within the ambit of

service as defined in section 2(1))(o) except where the doctor renders the

service free of charge to every patient or under a contract of personal service.

The expression ‘contract of personal service’ in section 2(1)(o) includes the

employment of a medical officer for the purpose of rendering medical service

to the employer. Thus, the service rendered by a medical officer to his

employer would be outside the purview of ‘service’ as defined in section 2(1)

(o).

In view of the definition of "deficiency" in section 2(1)(g), medical practitioners

are not excluded from the ambit of CPA.

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Members of the Consumer Disputes Redressal Agencies are in a position to

deal with issues which may arise before them in proceedings arising out of

complaints about the deficiency in service rendered by medical practitioners.

Procedure of adjudication by Consumers Forums are not unsuitable to decide

complaint against medical practitioners.

Penalties

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, as the case may be, such trader or person

[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.

FAQ’S

Q1) How is my right as a consumer protected under the Consumer Protection

Act?

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Ans: The rights of the consumers are invoked in the Indian legal system through the

mechanism provided in the Consumer Protection Act (CPA). The CPA provides for

establishment of Consumer Protection Councils - Advisory and

recommendation bodies. The Consumer Protection Councils exist at the National,

State and District Levels. They are basically advisory bodies who meet at least 3

times a year to discuss and review consumer protection measures and issues. Two-

thirds of the members of these councils are non-official, including representatives of

women and consumer organisations.

Q2.) What is the method of filing a complaint?

Ans: A complaint shall be instituted in the District Forum within the local limits of

whose jurisdiction the opposite party (or any one of the opposite parties where there

are more than one) or the defendant actually and voluntarily resides or carries on

business, or has a branch office or personally works for gain at the time of institution

of the complaint, provided that the other opposite party/parties' acquiescence in such

institution or the permission of the Forum is obtained in respect of such opposite

parties; or the cause of action arises, wholly or in part.

Q3) What is the method of settling a complaint?

Ans: On receipt of a complaint, a copy of the complaint is to be referred to the

opposite party, directing him to give his version of the case within 30 days. This

period may be extended by another 15 days. If the opposite party admits the

allegations contained in the complaint, the complaint will be decided on the basis of

materials on the record.

Q4.) What happens if the opposite party denies the allegation?

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Ans: Where the opposite party denies or disputes the allegations or omits or fails to

take any action to represent his case within the time provided, the dispute will be

settled in the following manner:-

1). In case of dispute relating to any goods: Where the complaint alleges a

defect in the goods which cannot be determined without proper analysis or

test of the goods, a sample of the goods shall be obtained from the complainant,

sealed and authenticated in the manner prescribed for, referring to the appropriate

laboratory for the purpose of any analysis or test whichever may be necessary, so

as to find out whether such goods suffer from any other defect. The appropriate

laboratory would be required to report its finding to the referring authority, i.e. the

District Forum or the State Commission within a period of forty-five days from the

receipt of the reference or within such extended period as may be granted by these

agencies.

The District Forum/State Commission may require the complainant to deposit

with it such amount as may be specified towards payment of fees to the appropriate

laboratory for carrying out the tests. On receipt of the report, a copy thereof is to be

sent by District Forum/State Commission to the opposite party along with its own

remarks.

In case any of the parties disputes the correctness of the methods of analysis/test

adopted by the appropriate laboratory, the concerned party will be required to submit

his objections in writing. After giving both the parties a reasonable opportunity of

being heard and to present their objections, if any, the District Forum/Slate

Commission shall pass appropriate orders.

Q5) How is the dispute settled in the case of services?

Ans: In case of dispute relating to goods not requiring testing or analysis or relating

to services: Where the opposite party denies or disputes the allegations contained in

the complaint within the time given by the District Forum/State Commission, it shall

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dispose of the complaint on the basis of evidence tendered by the parties. In case of

failure by the opposite party to represent his case within the prescribed time, the

complaint shall be disposed of on the basis of evidence tendered by the

complainant.

Q6) What is the time period within which a complaint must be filed?

Ans: 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 the

cause of action has arisen. However, where the complainant satisfies the District

Forum/State Commission, that he had sufficient cause for not filing the complaint

within two years, such complaint may be entertained by it after recording the

reasons for condoning the delay.

Any person aggrieved by an order made by the Forum may prefer an appeal

to the State Commission in the prescribed form and manner. Similarly, any person

aggrieved by any original order of the State Commission may prefer an appeal to the

National Commission in the prescribed form and manner. Any person aggrieved by

any original order of the National Commission may prefer an appeal to the Supreme

Court.

All such appeals are to be made within thirty days from the date of the order

provided that the concerned Appellate authority may entertain an appeal after the

said period of thirty days if it is satisfied that there was sufficient cause for not filing it

within that period. The period of 30 days is to be computed from the date of receipt

of the order by the appellant.

Where no appeal has been preferred against any of the orders of the

authorities, such orders would be final. The District Forum, State Commission or

National Commission may enforce respective orders as if it were a decree or order

made by a Court and in the event of their inability to execute the same, they may

send the order to the Court for execution by it as if it were a Court decree or order.

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Q7) What are the remedies that are granted under the Consumer Protection

Act?

Ans: The District Forum/State Commission/National Commission may pass one or

more of the following orders to grant relief to the aggrieved consumer:

To remove the defects pointed out by the appropriate laboratory from 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 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 them.

Not to offer the hazardous goods for sale.

To withdraw the hazardous goods from being offered for sale.

To provide for adequate costs to parties.

Q8) Who can file a complaint and What are the issues to consider when filing a

complaint?

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Ans: Any person who can be termed as a consumer under the Act can make a

complaint. The following are the persons who can file a complaint under the Act :

A consumer; or

Any voluntary consumer association registered under the Companies

Act, 1956 or under any other law for the time being in force, or

The Central Government or any State Government,

One or more consumers, where there are numerous consumers

having the same interest.

Issues to consider when filing a Consumer complaint

You would have to check where the jurisdiction would lie and then ascertain

the value of the claim. You will have to file your complaint depending upon the

amount of money or compensation you want from the opposite party for the deficient

service he has provided you or for the defective product that you have been sold. It

is important to note that most Judges in these courts will be able to tell if you are

unnecessarily filing a complaint & are just trying to make a quick buck.

Q9) Where do I file my complaint and How many Consumer Courts are there in

India?

Ans: Pecuniary Jurisdiction

In cases where the value of goods and services involved is less than Rs.

20 Lakhs in value, you will have to file the complaint in The District

Forum constituted in the specified districts of a State.

In cases where the value of goods and services involved is more than

Rs. 20 Lakhs in value but does not exceed Rs 1 crore you will have to

43

file the complaint with The State Commission constituted in the capital

cities of the different states

In cases where the value of goods and services involved is more than

1 crore in value then you can file a complaint with The National

Commission which has been constituted only in New Delhi.

Territorial Jurisdiction.

The jurisdiction of the complaint is determined by the facts of the

case and where the cause of action arises. Further, when you file a

complaint, the area in which the opposite party resides or carries on his work

or business will also have to be taken into consideration by you. This means

that if you are filing a complaint against a service provider for a sum below 20

lakhs you would have to approach the District Forum in the jurisdiction where

the cause of action arose. If the matter is above 20 lakhs but below 1 crore

then it would be filed in the State Commission within which State the trader/

service provider/ manufacturer is located in the state in which the trader

resides or works in. These two factors will have to be kept in mind while filing

your complaint.

Consumer Courts Consumer Forums

There are consumer forums at the District, State and National level. At

present, there are 569 District Consumer Forums, 33 State Commissions &

the highest body which is the National Consumer Disputes Redressal

Commission (NCDRC) having its office at Janpath Bhawan, A Wing, 5th

Floor, Janpath , New Delhi.

The District Forum consist of one president and two other members

(one of whom is to be a woman).The president of the Forum is a person who

is, or has been qualified to be a District Judge, and other members are

persons of ability, integrity and standing, and have adequate knowledge or

44

experience of, or have shown capacity in dealing with, problems relating to

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

administration. They can hear the case involving amount of Rs. Twenty Lacs.

It is situated in the District head quarters.

State Commissions A State Commission has jurisdiction in whole of

the State for which it is constituted. It can hear the cases involving the amount

more than rupees twenty lacs and up to rupees one crore. It has also

jurisdiction to hear appeal against the orders of District Forum of that

particular State. It is situated in the capital of the State.

State Commission consists of a president and two members one of

whom is to be a woman.President is a person who is or has been a Judge of

a High Court, and the members, are persons of ability, integrity and standing

and have adequate knowledge or experience of, or have shown capacity in

dealing with, problems relating to economics, law, commerce, accountancy,

industry, public affairs or administration.

The National Commission consists of a president, and four other

members (one of whom is to be a woman).The president should be the one

who is or has been a Judge of the Supreme Court, and the members should

be the persons of ability, integrity and standing and have adequate

knowledge or experience of, or have shown capacity in dealing with,

problems relating to economics, law, commerce, accountancy, industry,

public affairs or administration.

Q10) Do other Courts (District Courts/High Courts) accept consumer

disputes?

Ans: The jurisdiction of other courts to hear consumer disputes is not excluded. This

is because the Parliament of India felt it was necessary to have an efficient &

convenient mechanism to address and resolve the various consumer complaints

45

across the country. As a result it created a three-tier remedial machinery for the

inexpensive and quick disposal of consumer complaints. As these forums only deal

with consumer complaints/issues and nothing else, all their time can be devoted to

addressing consumers complaints.

Q11) What do I put in my Complaint? Is there a fee for filing a Complaint? Is

there any time limit for filing a Complaint?

Ans: Your complaint has to be clear, definite and precise. All your facts and

documentation must be in order. You will have to include -

A cause-title.

The complaint should, if possible have a heading.

The name, description and address of the complainant. (your name).

The name, description and address of the opposite party or parties as the

case may be, so far as they can be ascertained.

The facts relating to the complaint and when and where it arose.

How the opposite parties are liable to be proceeded against and why are

they answerable or accountable to this petition.

Copies of documents in support of the allegations contained in the petition.

Complainants are advised to keep copies of the complaint / petition and all

furnished documents for their records. A list of documents should also be

furnished along with the complaint, duly signed by you.

You would also need to state how the case falls within the jurisdiction of the

tribunal-whether the opposite party resides or carries on business or has a

branch office or personally works for gain within the jurisdiction of the forum

or whether the cause of action (damaged goods or deficient service) arose

within the Forum’s jurisdiction.

(i) You are also entitled to claim the costs of your complaint from the opposite

party. Hence include that amount in your complaint.

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Q12)Is There A Fee For Filing A Complaint ?

Ans: Under the original un-amended Act of 1986, no requirement of

payment of Court-fee or any other formal procedure of Court was

contemplated. However, after the amendment of 2002, there is a nominal

fee you may have to pay for filing a complaint. For example in the District

Forum located in Delhi the fee structure is as follows –

1. Up to 1 Lakh – Rs.100

2. 1 Lakh & above but less that 5 Lakhs – Rs.200

3. 5 Lakhs & above but less that 10 Lakhs – Rs.400

4. 10 Lakhs & above but less that 20 Lakhs – Rs. 500

You will have to pay the specified fee in the form of a crossed demand draft

drawn on a nationalized bank or through a crossed Indian Postal Order in

Favour of the Registrar of the State Commission & payable where it is

situated. The concerned District Forum shall deposit the amount so received.

Q13) Is There Any Time Limit For Filing A Complaint ?

Ans: Yes, the time limit is within two years from the date on which the cause of

action arises. This would mean two years from the day the deficiency in service or

defect in goods has arisen/detected.

Q14) Can This Time Limit Ever Be Extended ?

Ans: Yes ,But only under certain Circumstances. If the time limit expires but you are

still able to satisfy the Forum or Commission about the reasonableness in the delay,

your complaint can still be taken up. However, the delay for every single day has to

be explained

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Q15) Do I have to be there myself to file a Complaint? Can more than one

consumer file a single Common Complaint?

Ans: Not necessarily, you can present your petition in person or by an authorized

representative. You may also send the complaint/petition by Registered Post. It is

good to send some extra Copies and to keep an extra one for yourself as well. You

will also need to give a copy to the opposite party.

Q16) Can more than one consumer file a single Common Complaint?

Ans: Yes, consumers having the same problem can join together and file a single

complaint. This can be done by enclosing a petition with the complaint for joining

together and filing a complaint. This petition should just state that since the facts and

circumstances relating to the complaint are the same and also since the same relief

is to be claimed for all the petitioners they may be allowed to join together and file a

single complaint.

Q17) How do I inform The Opposite Party about the complaint?

Ans: A notice is required to be sent to the opposite party. This can be done by

registered post which is to be delivered to the address where the opposite party

resides, works or carries on his business.

Q18) Can I Approach The Consumer Courts If I bought the Goods or Services

for Commercial Purposes?

Ans: No, the Consumer Courts are only meant for the ordinary consumers who have

bought goods & services for their own use or needs. Those who buy the

goods/services for commercial purposes or resale purposes are excluded from

the act. Consumer forum is not meant for businesses ,firms and Industries but for

the common man/consumer looking for quick & effective justice

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Q19). What are my legal rights?

Ans: Firstly the consumer has a right to be protected from defective goods &

service. You have a right to be informed about and the right to choose from a

variety of goods and services. The consumer also has a right to be heard and to

seek redressal in case of a deficiency or defect in the goods or services purchased.

It is important for all consumers to know their rights and to be able to be exercise

them freely. Therefore you are entitled to approach a consumer court for justice.

Q20) Can I argue and present my complaint in Court myself?

Ans: Yes, You do not have to be a lawyer to argue before consumer courts or

for that matter any civil Court. However if the matter is a complicated one it is

always advisable to engage someone including a lawyer with necessary

experience in such matters. By a series of judgments, the Courts have granted a

party to the proceeding before the District Forum/State Commission the right to

authorize a person of his choice to represent him and also to examine and cross-

examine the witnesses, address the Court and take part in the proceedings as the

case may be.

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2002 AMENDMENTS - AT A GLANCE

1) Creation of Benches of National commission and State Commission as well as

holding of these commissions;

2) Period within which the complaints are to be admitted, notices are to be issued to

opposite party and the complaints are to be decided, prescribed; similar provisions

also made in respect of appeals;

3) No adjournment to be ordinarily allowed without speaking order giving reasons;

4) Pecuniary limits of jurisdictions of the consumer disputes redressal agencies

enhanced so that the District Forum are able to deal with complaints involving value

of goods or services and claims compensations up to Rs. 20 Lakhs (against Rs 5

lakhs at present), fixing the pecuniary limit of jurisdiction of state commission from

Rs 20 lakhs up to Rs 1 crore (as against above Rs 5 lakhs up to Rs 20 lakhs at

present)

5) Provision made for depositing, either fifty per cent. Of the amount of

compensations or fine for the amounts mentioned below whichever are less, before

admission of appeal, namely:-

(a) Rs 25,000 in case of appeal to a State Commission from the District Forum;

(b) Rs 35,000 in case of appeal to the National Commission from State Commission;

and

(c) Rs 50,000 in case of appeal to the Supreme Court from the National Commission

(6) Services availed for commercial purposes from the purview of the consumer

disputes redressal agencies, excluded;

(7) Provisions of the Act extended to services providers indulging in unfair or

restrictive trade practices or offering services which are hazardous;

(8) Sale of spurious goods or services brought within the meaning of unfair trade

practices;

(9) Express conferment of the powers of Judicial Magistrate of the first class on the

consumer disputes redressal agencies with a view of trying offences under the Act;

50

Cases & Judgements under CPA

1. Kodaikkanal Township and others placed an order with a distributor of Maruti

cars, in accordance with the rate contract entered into between the distributor and

the company. The distributor agreed to deliver the vehicle within 3 to 5 weeks from

the time of payment of full amount. The delivery was affected after about 8 months

and at that time, an additional sum of about Rs. 41000 was demanded and was paid

under protest by the Kodaikkanal Township. The additional amount was as a result

of the increase in price which took place in the meanwhile. The complaint was filed

with the district forum on the ground that it was not liable to pay the increased price

on account of delay in the supply of the vehicle which was to be delivered at the

price in accordance with the rate contract entered into. Further he claimed that on

account of delay, he had to get his old vehicle repaired for use and on which he

spent Rs. 21000. Therefore, he claimed about Rs. 62000.

The claim was resisted by both the distributor and the manufacturer of the

vehicle. Their contention was that the delivery mentioned in the invoice was only

approximate and tentative and the time was not the essence of the contract. The

terms of the contract clearly stipulated that the price of the vehicle was to be the one

prevailing on the date of delivery. The district forum passed an order giving direction

to the distributors and the manufactures to refund jointly or severally of Rs. 41000,

the excess amount deposited under protest by the compliant. It however dismissed

his other claims.

The distributors and the manufacture of Maruti car proffered an appeal

against the order of the District Forum. But the state Commission dismissed the

appeal. There upon, they went in for a revision appeal before the National

Commission.

The National Commission, with out going into the merits of the case,

expressed their opinion that his compliant was not maintainable under the Act. If it

all, it could be covered under s.2(1)(c)(iv)of the Act but the price of Maruti Car was

51

not fixed by or under any law. Even the standard of Weight and Measures Rule did

not apply in this case. The rate contract between DGS and D and the manufacture

was a contractual and not a statuary price. The National Commission opined that

even if the leader had charged excess price, the compliant is not maintainable under

the Act. Therefore, the national Commission accepted both the revision petition of

the dealer and the manufacturer of Maruti cars.

[Maruti Udyog Ltd. vs. Kodaikkanal Township and others (1993)1 Comp L J

217 (NCDRC)]

2. An Institute purchased five computer machines from a company and entered

into a maintenance contract under which, all repairs and replacements of the

hardware were the responsibility of the company supplying computers. After some

time, the computers stopped working. The Institute approached the suppliers for the

repairs. The company estimated the cost of repairs at about Rs. 56000, which the

institute was asked to bear. The company’s contention was that computers got

damaged due to sudden high voltage spike and this was an act of god and hence

they were not liable.

The state commission came to a conclusion after examining all evidence and the

averments of the parties that

1. the cause of damage to the machines was sudden and high voltage spike;

2. certain parts of the machine damaged were covered by the contract of

maintenance and therefore liable to be repaired and replaced by the

computer-supplier;

3. The computer supplier did not give instructions to the complainant about

installing devices to prevent damage due to high voltage spikes.

The commission ordered the computer supplier to make the machines operational

as there was negligence on his part as he failed to caution the complainant about

the damages to the machines in the absence of installation devices, and he was

bound by the contract of maintenance.

[Pragati computers (p) ltd. VS. Madras Institute of Development Studies]

52

3. A vehicle was purchased by the complainant from an authorized dealer developed

trouble which continued despite being repaired during the warranty period. The State

Commission held that even where goods were purchased for commercial purpose, if

there is a warranty for its maintenance the purchaser becomes a consumer in

respect of the service rendered or to be rendered by the manufacturer of the supplier

during the warranty period.

Joseph Mathew Thomas and Co. V Maruti Udyog Ltd. 92005) III CPJ 657

(Kerala - Scdrc)

4. The deposit of a cheque made by the complainant, an account holder with the

appellant bank, was returned dishonored on the ground that "payment was stopped

by the drawer". His request to the bank for return of the cheque was not heeded by

the bank. He filed a complaint. The State Commission held that when disputes had

arisen about the genuineness of the cheque and on the instructions of the police,

which was making the investigation, the cheque had been retained by the bank, the

failure to return such a cheque would not amount to a deficiency in service of the

bank, which was only acting as a collecting agent.

Canara Bank Vs Kalastine III (2005) CPJ 68 [Tamil Nadu - SCDRC]

5. The complainant deposited certain amount with a society. As the deposited

amount was not returned, a complaint was filed by him before the District Forum,

which held the president and treasurer, as liable to restitute the amount to the

complainant. The State Commission held that though the treasurer and the president

of the society had convassed for the deposit of the amount with the society, it would

not mean that they were the recipients of the deposit. There was no agreement

between the complainant and the appellant-treasurer for the refund of the amount by

the latter. The registered society, with which the deposit was made, was alone liable

to refund the amount and it had also not been impleaded in the complaint. Therefore

the appellant in the capacity of the treasurer of the society could not be held

personally liable for the refund of the amount so deposited.

53

Prajakta Karkare Vs Vithal Madhavrao Kaslilar III (2005) CPJ 148 [Chattisgarh -

SCDRC]

6. Finance Company and its subsidiary duped investors by disappearing with their

contributions. On their complaints, properties of the finance company were sold in

auction and the proceedings were kept in bank for distribution to investing public. As

only much after the filing of the complaint by the investors, TRO approved the State

Commission for release of funds from the bank towards the tax arrears of the

subsidiary; the commission dismissed the department's claim as the first priority is

hapless consumers in country.

TRO Vs Himachal Gramin Sanchayatta Ltd. 146 Taxman 6 SCDRC HP

7. Teacher had complained to the Consumer Forum that her salary had not been

credited to her account. The State Forum held that this is a matter to be raised

before the Appropriate Forum which is State Administrative Tribunal and the

Teacher's complaint did not constitute a Consumer dispute.

FAO, Basic Education V. Madhuri Srivastav (2005) CPJ UP SC DRC.

8. The bank had adjusted an amount received by its client in the course of business

transaction, towards its existing loan liability, without its concurrence. The client had

given guarantee for a third party which was in force and there was an existing loan

liability to it and therefore it exercised its right of lien in appropriating the amount

towards the aforesaid loan liability. The bank's action was justified under section 171

of the Indian Contract Act,1872, and if the bank exercised its right, it could not be

taken as deficiency in service under section 2(1)(g) of the Consumer Protection Act,

1986.

Laser Arts Vs Samarth Sahakari Bank Ltd. II (2005) CPJ 246 (Maharashtra -

SCDRC)

54

9. The respondent bank declined to honour the cheques owing to the inability to

compare the signature of the appellant written in Sanskrit language with that

appearing in the account-opening form. On the insistence of the bank officials the

appellant signed the cheques in Hindi which also were not accepted. It was held by

the State Forum that to deprive the consumer of his constitutional right of mentioning

the amount in the cheque in Hindi amounts to gross deficiency in service and

violation of Official Languages Act. Therefore, the appeal was allowed with

compensation and costs.

S.N. Panigrahi Vs Andhra Bank II (2005) CPJ 316 [Delhi-SCDRC)

10. The appellant was asked to pay compensation on account of mental agony and

harassment the complainant-respondent suffered for disconnection of his mobile

phone which cannot be denied on the ground that the consumer happened to be a

chairman of a school it would not mean that he would be entitled to compensation

for loss of business by way of disconnection of mobile telephone. The compensation

allowed by District Forum was reduced in appeal.

Bhari Cellular Ltd. Vs Blue Bells Model School II (2005) CPJ 103 [Delhi-SCDRC]

11. Consumer complained to the District Forum regarding the delay in delivery of

vehicles. Forum directed the dealer to refund the booking amount along with

interest. The state forum held that the responsibility of the dealer is limited to collect

and pass on the booking amount to the manufacturer and no liability can be fastened

on the dealer.

Sainik Automobiles vs. Maheshchand Gupta (2005) CPJ 88-UP SCD (RC).

12. Complainant was allotted a residential plot on payment of deposit but plot was

not delivered by the respondent. District Forum dismissed the complaint treating it

breach of contract between two parties which did not give rise to deficiency in

service. However, the state forum held that respondent had undertaken to allot

residential plots to needy persons under Urban Land Disposal Rules 1974 and the

dispute is covered by the Act.

55

Mohan Ram vs. Nagar Palika Churu 2005 CPJ84 Raj. SCDRC.

13. An agent opened accounts with the appellant finance company in the names of

other persons and deposited the entire account. However, the company did not

refund the amount. It was held that though the amount was deposited by the agent,

the deposits were themselves in the name of other persons, who were the actual

account holders. Payment could be made only on the demand by the account

holders, during their lifetime. The agent was not the beneficiary; he could be treated

only as an agent of the account holders. An agent is not a consumer. The Forum

held that the payment could be made only to the account holders and not to be the

complainant, as he was not a consumer. Complaint was dismissed.

Maharashtra Group Finance Co. Ltd. Vs Sunil Kumar Agarwal 1 (2005) CPJ 35

[Dehradun-SCDRC]

14. The complainant insured 4 pigs with one insurance company and paid premium

to the bank for being paid to the insurance company. The bank remitted the premium

to another Company. That Company contended that since it did not insure the

impugned pigs, it was not liable to pay any compensation. Insurance Company No.1

contended that since it had never received any premium amount from the

complainant for any insurance cover, it owed no liability to him. It was held that the

mistake was solely of the bank in not remitting the amount of premium to company

No.1, which had rightly repudiated the claim as it had not received the premium

amount. The bank not only committed the deficiency in service but had also insisted

that the complainant prefer the claim before company No.2, which was not the

insurer.

Durg Rajnandgaon Gramin Bank Vs Oriental Insurance Company Ltd. 1 (2005)

CPJ 25 [Raipur-SCDRC]

56

Articles

SC issues notice on Coca Cola plea

(23-02-07) Source: Economic Times

NEW DELHI: The Supreme Court on Friday issued notice to one Sita Devi on an

appeal by aerated drinks major Coca-Cola against a consumer court order awarding

Rs 27,000 as compensation to her after she claimed to have found fungus in the

company's cola drink.

A bench comprising B N Agrawal and Justice P P Naolekar issued notice to Sita

Devi asking her to respond to Hindustan Coca-Cola Beverages Ltd's petition

challenging the National Consumer Disputes Redressal Commission (NCDRC)

order.

The company contended that the bottles sent for analysis were not manufactured or

sold by it and did not contain the mandatory details like batch number, date of

manufacture and maximum retail price usually printed on every bottle.

Pointing out that the sample was not tested as per the procedure prescribed under

the Prevention of Food Adulteration Act, Coca-Cola counsels E C Agarwala and

Gopal Jain stated that the analysis report was flawed and could not be relied upon

for the purpose of giving compensation.

It also contended that the Consumer Protection Act had lacunae as it does not

specify the laboratory in which a sample was to be tested, thus leading to

inconsistencies in testing procedures. A sample should be analysed only by a

specified and authenticated lab, it pleaded.

Sita Devi had filed a case in a district forum against Coca-Cola and its Jaipur-based

distributor Ajay Sales and suppliers seeking damages to the tune of Rs 50,130 for

negligence and deficiency in service.

But the consumer court awarded her a compensation of Rs 27,000 after the Central

Public Health Laboratory in Jaipur held that the sample was adulterated and unfit for

human consumption.

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Bank fined Rs 10 lakh for harassing man over credit card dues

(23-02-07) Source: Times News Network

NEW DELHI: Showing little mercy for banks which take to insensitive and illegal

tactics for recovery of credit card dues, the State Consumer Commission has

slapped an exemplary fine of Rs 10 lakh on Standard Chartered Bank for harassing

a Chittaranjan Park resident and raising an illegal bill for Rs 28,000.

Commission president Justice J D Kapoor also directed all other banks and financial

institutions to refrain from such practices and directed SHOs of Delhi Police to

register a criminal case against the chief executive officers (CEOs) of concerned

banks and financial institutions if consumers complain about threats or abuse by

their loan goons.

"If in future, we receive any such complaint, the CEO of the concerned bank or

finance company shall face punishment as provided under Section 27 of the

Consumer Protection Act, 1986, a minimum sentence of one month imprisonment or

fine or both," thundered Justice Kapoor.

"We, through this order, direct all the banks or financial institutions who provide

loans and credit cards, not to resort to methods which are illegal and have no legal

back-up and not to use abusive and threatening languages on telephone and not to

visit residence of a consumer for recovery of loan and not to use force or musclemen

for repossessing vehicles," said Justice Kapoor.

Pulling up Standard Chartered Bank for harassing Vibhu Bhakru, a Delhi High Court

advocate living in CR Park, for over an year by sending goons to his house and

issuing threats on phones to the extent that he would be abducted if the dues were

not paid, the commission said: "The conduct of the bank amounts to the grossest

kind of deficiency in service, unfair trade practice and flagrant breach of terms of the

contract," said Justice Kapoor.

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Conclusion

Undoubtedly Consumer Protection Act is benevolent piece social legislation, which

protects large number of consumers from exploitation. The people in this country are

very much aware that consumer courts are helping the needy and delivering speedy

justice to them. The consumer courts are less expensive. People have now started

feeling that they are in a position to declare “Sellers be aware”, whereas earlier

consumers were at the receiving end and were told “Buyers beware”

The issues relating to consumer welfare affects everyone since everyone is a

consumer in one way or the other. Ensuring consumer welfare is the responsibility of

the government. Accepting this, policies have been framed and the Consumer

Protection Act, 1986, was introduced. A separate Department of Consumer Affairs

was also created in the Central and State Governments to exclusively focus on

ensuring the rights of consumers as enshrined in the Act. This Act has been

regarded as the most progressive, comprehensive and unique piece of legislation. In

the last international conference on consumer protection held in Malaysia in 1997,

the Indian Consumer Protection Act was described as one "which has set in motion

a revolution in the fields of consumer rights, the parallel of which has not been seen

anywhere else in the world."

The special feature of this Act is to provide speedy and inexpensive redressal to the

grievance of the consumer and provide him relief of a specific nature and award

compensation wherever appropriate. The aim of the Act is also to ensure the rights

of the consumer, viz. the right of choice, safety, information, redressal, public

hearing and consumer education.

The Act defines the consumer as one who purchases goods and services for his/her

use. The user of such goods and service with the permission of the buyer is also a

59

consumer. However, a person is not a consumer if he purchases goods and services

for resale purpose.

The most important feature of the Act is the provision for setting up three-tier quasi-

judicial machinery popularly known as "consumer courts" at national, state and

district levels. The apex court, National Commission functions in Delhi. Every State

Government has a State Commission. The third tier is in each district and is called

district forum. As on January 1999, there are 543 district fora. All these courts have

handled nearly 13 lakh cases of which about 10 lakhs cases have been disposed of.

The disposal of 77 per cent of the cases is not a mean achievement. However, it

should be noted that only 27 per cent of the total cases have been disposed of within

the prescribed period of 90 days or 150 days (where testing is required). This fact

really causes concern for the Government and the consumers in general. The

National Commission has identified the reasons for the slow disposal and have

come out with suggestions for amending the Act with a view to improving the

disposal rate within the time limit prescribed in the Act. The Government has been

contemplating a number of amendments to the Act and these amendments will be

brought out in the next session of Parliament.

The growing interdependence of the world economy and international

character of many business practices have contributed to the development of

universal emphasis on consumer rights protection and promotion. Consumers,

clients and customers’ world over, are demanding value for money in the form of

quality goods and better services. Modern technological developments have no

doubt made a great impact on the quality, availability and safety of goods and

services. But the fact of life is that the consumers are still victims of immoral and

exploitative practices. Exploitation of consumers assumes numerous forms such as

adulteration of food, fake drugs, dubious hire purchase plans, high prices, poor

quality, deficient services, deceptive advertisements, hazardous products, black

marketing and many more. In addition, with revolution in information technology

newer kinds of challenges are thrown on the consumer like cyber crimes, plastic

money etc. which affect the consumer in even bigger way. ‘Consumer is sovereign’

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and ‘Customer is the king’ are nothing more than myths in the present scenario

particularly in the developing societies. However, it has been realized and rightly so

that the consumer protection is a socio-economic programme to be persued by the

government as well as the business as the satisfaction of the consumers is in the

interest of both. In this context, the government, however, has a primary

responsibility to protect the consumers’ interests and rights through appropriate

policy measures, legal structure and administrative framework.

The efficient and effective programme of Consumer Protection is of special

significance to all of us because we all are consumers. Even a manufacturer to

provider of a service is a consumer of some other goods or services. If both the

producers/providers and consumers realize the need for co-existence, adulterated

products, fake goods and other deficiencies in services would become a thing of the

past. The active involvement and participation from all quarters i.e. the central and

state governments, the educational Institutions, the NGO’s, the print and electronic

media and the adoption and observance of a voluntary code of conduct by the trade

and industry and the citizens’ charter by the service providers is necessary to see

that the consumers get their due. The need of the hour is for total commitment to the

consumer cause and social responsiveness to consumer needs. This should,

however, proceed in a harmonious manner so that our society becomes a better

place for all of us to live in.

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Bibliography & Webliography

Mrs.Meena Shah – Judge, Consumer Court

Mr.Kamle – Registrar, Consumer Dispute Redressal Forum,

Mumbai Suburban Dist.

The Consumer Protection Act, 1986 BARE ACT

Consumer Protection in India, Reflections – S.S.Singh & Sapna

Chadhah

Consumer Protection Act – P.V.V. Satyanarayamurthy

Consumer and the Market – Sheetal Kapoor

Environment and Consumer – Pranab Banerji

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