Unit 4
Consumer Protection Act 1984

4.1 Consumer Protection Act - Main Provisions

Introduction to Consumer Protection

A consumer is the one who assumes to be treated like a King as they bring business to the seller. Previously “consumer was requested to beware” but these days fingers have been pointed to seller “let seller be beware” as due to policies introduced, authorities’ laws, consumer protection, NGO and the increased competition in the market.

Consumer Protection is a term given to an exercise wherein we need to protect the consumer from the unfair practice, teaching them about their rights and responsibilities and also redressing their grievances.

In today’s world, the protection of the consumer is regarded to be of utmost importance. All around the world, mechanisms have been pondered upon in order to uphold the satisfaction of the consumer.

The main objectives of the Consumer Protection Act are:

(a) Providing better and all-round protection to consumer.

(b) Providing machinery for the speedy redressal of the grievances.

(c) Creating framework for customers to seek redressal.

(d) Providing rights to consumers.

(e) Safeguarding rights of Consumers.

Other objectives can be:

• To ensure fair, competitive and responsible markets that work well for consumers and promote ethical business practices.
• To promote and protect economic interest of consumers.
• To improve access to information that consumers require, to make knowledgeable choices according to their individual needs.
• To protect buyer from hazards.

REASON FOR ENACTING CONSUMER PROTECTION ACT

The enactment of Consumer Protection Act succeeded in bringing pressure on business firms as well as government to correct business conduct which may additionally be unfair and against the interests of consumers at large. The enactment of COPRA has led to the setting up of separate departments of Consumer Affairs in central and state governments to spread information about legal process which people can use. This information is spread through posters and advertisements on tv channels.

The Consumers were the worst affected out of a trade cycle procedure as they could be effortlessly duped by the sellers or producers of products. Before the enactment of this act the consumers were easy targets as victims of the producers in the following ways-

1. Non-awareness regarding the market price of a particular product: A consumer who's no longer used to the duping techniques of sellers could be easily fooled by means of some clever sellers making easy money through demanding higher price for the same exact being sold at a much cheaper rate somewhere else. The price of a commodity in a perfectly competitive market is bound to be the same everywhere, sellers demanding higher fees will lose customers. But people who are not aware of the prevailing market price of the commodity they want to buy might be fooled.

2. Quality of the product- The quality of the good is a very important fact affecting the price of the commodity. If the quality is not equivalent to the price asked for the good, then the buyer's interests will be toyed with towards which the government should be considerate towards.

3. Adulteration of goods: To protect the consumer's rights from being hampered severely stringent steps must be taken in order to protect the goods from being tampered with through adulteration. Adulteration might have an effect on health due to the harmful substances mixed to get the desired apparent appearance.

4. Forum for the redressal of the grievances of the consumers: The act also helped in establishing a permanent forum where the aggrieved consumers could lodge cases against sellers and goods sold.

Who is a Consumer? [Sec 2(1)(d)]

A "consumer" means any person who

1. Buys any goods for a consideration. Any user of such goods when 1 such use is made with the approval of a person who buys goods for consideration.

2. Hires or avails of any services for a consideration. Any beneficiary of such services when such services are availed of with the approval of the person who hires or avails of any services for a consideration.

3. But does not include a person who avails of such services for any commercial purpose. (Commercial purpose does not include purchase of goods or hiring of services for earning livelihood by means of self. employment.)

Consideration has been paid or promised or partly paid and partly promised, or under any system of deferred payment. There has to be a sale transaction for consideration.

• Who is not a Consumer?

A person is not a consumer if he -

1. Buys any goods without a consideration. Any user of such goods when such use is made without the approval of person who buys goods for consideration.

2. Hires or avails of any services without a consideration. Any beneficiary of such services for consideration when such services are availed of, without the approval of the person who hires such services for consideration.

3. Obtains the goods for resale or commercial purpose.

4. Obtains the service under a contract of personal service.

• Who is a Person? [Sec. 2(1)(m)]

• A person includes -
• A firm whether registered or not
• A Hindu undivided family
• A Co-operative society

Every other association of persons whether registered under the Societies Registration Act, 1860 or not,

The definition of a "person" is inclusive. It includes both individual and legal person. Any company or association or body of individuals whether registered or not, means a "person".

• What are Goods? [Sec. 2(1)(i)]

"Goods" means goods as defined in the Sale of Goods Act, 1930. The meaning of the word "goods" under the Consumer Protection Act is the same as defined under the Sale of Goods Act, 1930. Goods mean every kind of movable property other than actionable claims and money. It includes stock and shares, growing crops, grass and things attached to or forming part of the land, which are agreed to be severed before sale or under the contract of sale.

• What is Service? [Sec. 2(1)(o)]

"Service" means service of any description which is made available to potential users and includes, but not limited to, the provisions of facilities In connection with banking, financing insurance, transport, processing supply of electricity 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.

4.2 Consumer Disputes, Consumer Disputes Redressal Agencies

"Consumer dispute" means a dispute with the person against whom a complaint has been made, denies or disputes the allegation contained in the complaint.

In order to get a remedy on the Consumer Protection Act a person by himself has no locus standi under the Consumer Protection Act. A person has to be a consumer as per the definition of consumer given under the Act. There has to be a dispute between the consumer and the trader, many tax or service provider against whom he has a complaint and he seeks his relief provided under the Consumer Protection Act.

According to Section 2 (1) (b) complainant means

1. a consumer; or
2. Any voluntary consumer association registered under the Companies Act or under any other law for the time being in force; or
3. The Central Government or any State Government, who or which makes a complaint
4. One or more consumers, where there are numerous consumers having the same interest.

CONSUMER PROTECTION COUNCIL AND REDRESSAL AGENCIES

• The Central Consumer Protection Council

(1) The Central Government may, by notification, establish with effect from such date as it may specify in such notification, a council to be known as the Central Consumer Protection Council (hereinafter referred to as the Central Council). (2) The Central Council shall consist of the following members, namely, -

(a) the Minister in charge of 1[consumer affairs] in the Central Government, who shall be its Chairman, and

(b) such number of other official or non-official members representing such interests as may be prescribed.

• Procedure for meetings of the Central Council

(1) The Central Council shall meet as and when necessary, but 1[at least one meeting] of the council shall be held every year.

(2) The Central Council shall meet at such time and place as the Chairman may think fit and shall observe such procedure in regard to the transaction of its business as may be prescribed.

• Objects of the Central Council The objects of the Central Council shall be to promote and protect the rights of the consumers such as-

(a) the right to be protected against the marketing of goods 2[and services] which are hazardous to life and property;

(b) the right to be informed about the quality, quantity, potency, purity, standard and price of goods 1[or services, as the case may be], so as to protect the consumer against unfair trade practices;

(c) the right to be assured, wherever possible, access to a variety of goods and services at competitive prices;

(d) the right to be heard and to be assured that consumers' interests will receive due consideration at appropriate forums;

(e) the right to seek redressal against unfair trade practices 1[or restrictive trade practices] or unscrupulous exploitation of consumers; and

(f) the right to consumer education.

• The State Consumer Protection Councils

(1) The State Government may, by notification, establish with effect from such date as it may specify in such notification, a council to be known as the Consumer Protection Council (hereinafter referred to as the State Council).

(2) The State Council shall consist of the following members, namely, -

(a) the Minister in-charge of consumer affairs in the State Government who shall be its Chairman;

(b) such number of other official or non-official members representing such interests as may be prescribed by the State Government.

(3) The State Council shall meet as and when necessary but not less than two meetings shall be held every year.

(4) The State Council shall meet at such time and place as the Chairman may think fit and shall observe such procedure in regard to the transaction of its business as may be prescribed by the State Government.

• Objects of the State Council

The objects of every State Council shall be to promote and protect within the State the rights of the consumers laid down in clauses (a) to (f) of section 6.

• The District Protection Council (Sec. 8A)

the State Government shall establish for every district a district consumer protection council. It shall consist of the following members namely:

(a) the collector of the district, who shall be its chairman, and

(b) search number of other official and non-official members representing such interest as may be prescribed by the State Government.

The District Council shall meet as and when necessary but not less than two meetings shall be held every year. the District Council shall meet at such time and place within the district as the chairman may think fit and shall observe search procedure in regard to the transaction of its business as may be prescribed by the State Government.

• Three Tier Consumer Grievances Machinery under the Consumer Protection Act!

1. District Forum:

District forum consists of a president and two other members. The president can be a retired or working judge of District Court. They are appointed by using state government. The complaints for goods or services worth Rs 20 lakhs or less can be filed in this agency. The agency sends the goods for testing in laboratory if required and gives decisions on the basis of facts and laboratory report. If the aggrieved party is not cosy by the jurisdiction of the district forum then they can file an appeal against the judgment in State Commission inside 30 days by depositing Rs 25000 or 50% of the penalty amount whichever is less.

2. State Commission:

It consists of a president and two other members. The president must be a retired or working decide of high court. They all are appointed by state government. The complaints for the goods really worth more than Rs 20 lakhs and less than Rs 1 crore can be filed in State Commission on receiving complaint the State commission contacts the party against whom the complaint is filed and sends the goods for testing in laboratory if required. In case the aggrieved party is not satisfied with the judgment then they can file an appeal in National Commission within 30 days by depositing Rs 3500 or 50% of penalty amount whichever is less.

3. National Commission:

The national commission consists of a president and four members one of whom shall be a woman. They are appointed by Central Government. The complaint can be filed in National Commission if the value of goods exceeds Rs 1 crore.

If aggrieved party is not satisfied with the judgment then they can file a grievance in Supreme Court within 30 days.

4.3 MRTP Act – Meaning, Scope, Importance, Main Provisions

Meaning of MRTP Act

An Act to provide that the operation of the economic system does not result in the concentration of economic power to the common detriment, for the control of monopolies, for the prohibition of monopolistic and restrictive trade practices and for matters connected therewith or incidental thereto.

Scope of the Act

The MRTP Act extends to the whole of India except Jammu and Kashmir.

Unless the Central Government otherwise directs, this act shall not apply to:

1. Any undertaking owned or controlled by the Government Company,
2. Any undertaking owned or controlled by the Government,
3. Any undertaking owned or controlled by a corporation (not being a company established by or under any Central, Provincial or State Act,
4. Any trade union or other association of workmen or employees formed for their own reasonable protection as such workmen or employees,
5. Any undertaking engaged in an industry, the management of which has been taken over by any person or body of persons under powers by the Central Government,
6. Any undertaking owned by a co-operative society formed and registered under any Central, Provincial or state Act,
7. Any financial institution.

Objective/Features/Importance of the Act

The Monopolistic and Restrictive Trade Practices Act, 1969, was enacted

1. To ensure that the operation of the economic system does not result in the concentration of economic power in hands of few,
2. To provide for the control of monopolies, and
3. To prohibit monopolistic and restrictive trade practices.

Main Provisions under the Act

The main administrative body under the Act is the MRTP Commission. The MRTP Act lays down provisions detailing the terms of office, conditions of service of members, and the appointment of directors. The Commission is a quasi-judicial body, and investigates complaints into monopolistic and restrictive trade practices.

It is important to first understand the salient features that govern the Act in order to truly understand the scope of their applicability and the practical difficulties that arose in their implementation. Following are the concepts addressed under the Act –

• Command and Control Approach – The Act made it mandatory for enterprises having assets exceeding Rs. 20 crores to take approval of the Central Government before any kind of corporate restructuring or takeover. The criterion for identifying the dominant undertakings was also fixed. Enterprises having assets of more than Rs. 1 crore were automatically considered as dominant.
• Monopolistic Trade Practices – MTPs as covered under the Chapter IV of the MRTP Act are the activities undertaken by Big Business Houses by abusing their market position that hamper or eliminate healthy competition in the market. Such practices are anti-consumer-welfare.
• Restrictive Trade Practices– RTPs are activities that block the flow of capital or profits in the market. Some firms tend to control the supply of goods or products in the market either by restricting production or controlling the delivery. MRTPA discourages and prevents the firms from indulging in RTPs.
• Unfair Trade Practices – UTP is basically an act of false, deceptive, misleading or distorted representation of facts pertaining to goods and services by the firms. Section 36-A of the MRTPA prohibits firms from indulging in Unfair Trade Practices (UTPs). This provision was inserted by the landmark 1984 Amendment to the MRTPA.

Section 5. Establishment and Constitution of the Commission

(1) For the purposes of this Act, the Central Government shall establish 50[by notification] a Commission to be known as the Monopolies and Restrictive Trade Practices Commission which shall consist of a Chairman and not less than two and not more than eight other Members, to be appointed by the Central Government.

(2) The Chairman of the Commission shall be a person who is or has been or is qualified to be, a judge of the Supreme Court or of a High Court and the Members thereof shall be persons of ability, integrity and standing who 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.

(3) Before appointing any person as a Member of the Commission, the Central Government shall satisfy itself that the person does not and will not have any such financial or other interest as is likely to affect prejudicially his functions as such Member.

Section 6. Terms of office, conditions of service, etc., of members

(1) Every Member shall hold office for such period, not exceeding five years, as may be specified by the Central Government in the notification made under sub-section (1) of Section 5, but shall be eligible for reappointment:

Provided that no Member shall hold office as such for a total period exceeding ten years, or after he has attained the age of sixty-five years, whichever is earlier.

(2) Notwithstanding anything contained in sub-section (1), a Member may

(a) by writing under his hand and addressed to the Central Government resign his office at any time;

(b) be removed from his office in accordance with the provisions of Section 7.

(3) A casual vacancy caused by the resignation or removal of the Chairman or any other Member of the Commission under sub-section (2) or otherwise shall be filed by fresh appointment.

51[(3-A) Where any such casual vacancy occurs in the office of the Chairman of the Commission the senior most Member of the Commission, holding office for the time being, shall discharge the functions of the Chairman until a person appointed to fill such vacancy assumes the office of the Chairman of the Commission.

(3-B) When the Chairman of the Commission is unable to discharge the functions owing to absence, illness or any other cause, the senior most Member of the Commission, if authorised so to do by the Chairman in writing, shall discharge the functions of the Chairman until the day on which the Chairman resumes the charge of his functions.]

(4) No act or proceeding of the Commission shall be invalid by reason only of the existing of any vacancy among its Members or any defect in the Constitution thereof.

(5) The Chairman of the Commission and other Members shall receive such remuneration and other allowances and shall be governed by such conditions of service as may be prescribed:

Provided that the remuneration of the Chairman or any other Member shall not be varied to his disadvantage after his appointment.

(6) In the case of a difference of opinion among the Members of the Commission, the opinion of the majority shall prevail and the opinion or orders of the Commission shall be expressed in terms of the views of the majority.

(7) The Chairman of the Commission and 52[every other Member] shall, before entering upon his office, make and subscribe to an oath of office and of secrecy in such form, in such manner and before such authority as may be prescribed.

(8) 53[The Chairman or any Member] ceasing to hold office as such shall not hold any appointment in, or be connected with the management or administration of, any industry or undertaking to which this Act applies for a period of five years from the date on which he ceases to hold such office.

Section 7. Removal of members from office in certain circumstances.

7. Removal of members from office in certain circumstances. (1) The Central Government may remove from office any Member who

(a) has been adjudged an insolvent, or

(b) has been convicted of an offence which, in the opinion of the Central Government, involves moral turpitude, or

(c) has become physically or mentally incapable of acting as such Member, or

(d) has acquired such financial or other interest as is likely to affect prejudicially his functions as a Member, or

(e) has so abused his position as to render his continuance in office prejudicial to the public interest.

(2) Notwithstanding anything contained in sub-section (1), no Member shall be removed from his office on the ground specified in clause (d) or clause (e) of that sub-section unless the Supreme Court, on a reference being made to it in this behalf by the Central Government, has, on an inquiry held by it in accordance with such procedure as it may specify in this behalf, reported that the Member ought, on such grounds, to be removed.

Section 8. Appointment of Director General, etc., and staff of the Commission

54[(1) The Central Government may, by notification, appoint a Director General of Investigation and Registration, and as many Additional, Joint, Deputy or Assistant Director Generals of Investigation and Registration, as it may think fit, for making investigation for the purposes of this Act and for maintaining a Register of Agreements subject to registration under this Act and for performing such other functions as are, or may be, provided by, or under, this Act.

(2) The Director General may, by written order, authorise one of the Additional, Joint, Deputy or Assistant Director Generals to function as the Registrar of Agreements subject to registration under this Act.

(3) Every person authorised to function as the Registrar of Agreements and every Additional, Joint, Deputy or Assistant Director General shall exercise his powers, and discharge his functions, subject to the general control, supervision and direction of the Director General.

(4) The Central Government may provide the staff of the Commission and may, in addition, make provisions for the conditions of service of the Director General, Additional, Joint, Deputy or Assistant Director General and of the Members of the staff of the Commission.

(5) The conditions of service of the Director General or any Additional, Joint, Deputy or Assistant Director General or of any Member of the staff of the Commission shall not be varied to his disadvantage after his appointment.]

References

1. https://www.casemine.com/act/in/5a979ddb4a93263ca60b7535
2. http://www.helplinelaw.com/civil-litigation-and-others/MRTP/mrtp-act-monopolistic-and-restrictive-trade-practice-under-mrtp-act-1969.html
3. http://www.bareactslive.com/ACA/ACT755.HTM