UNIT 5
THE CONSUMER PROTECTION ACT, 1986
INTRODUCTION
A consumer is the one who assumes to be treated like a King as they carry business to the vendor. Previously “consumer was requested to beware” but lately fingers are pointed to seller “let seller be beware” as thanks to policies introduced, authorities laws, consumer protection, NGO and thus the increased competition within the market.
Consumer Protection may be a term given to a exercise wherein we'd like to guard 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 round the world, mechanisms are pondered upon so as to uphold the satisfaction of the consumer.
The Consumer Protection Act was passed in 1986 and it came into force from I July, 1987. the most objectives of the Act are to supply better and every one round protection to consumers and effective safeguards against differing types of exploitation like defective goods, deficient services and unfair trade practices. It also makes provisions for easy , speedy and cheap machinery for redressed of consumer's grievances.
SALIENT FEATURES-
THE MAIN OBJECTIVES OF THE CONSUMER PROTECTION ACT-
1. CONSUMER:
WHO MAY BE A CONSUMER
The Consumer Protection Act says that consumer means a person who:
(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of credit , and includes any user of such goods aside from the one that buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of credit when such use is formed with the approval of such person, but doesn't include an individual who obtains such goods for resale or for any commercial purpose; or
(ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of credit , and includes any beneficiary of such services aside from the one that hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the primary mentioned person;
Examples:
1. A jeep was purchased to run it as a taxi. The question was whether the customer of the jeep was a consumer under the Act. The Rajasthan State Commission held that to use the jeep as a taxi with the thing to earn profits was a billboard purpose, and therefore, the consumer/user wasn't a consumer within the meaning of the Act.
CONSUMER OF SERVICES - an individual may be a consumer of services if he satisfy the subsequent criteria:
SERVICES ARE HIRED OR AVAILED OF - The term ‘hired’ has not been defined under the Act. Its Dictionary meaning is - to acquire the utilization of services at a price. Thus the term ‘hire’ has also been utilized in the sense of ‘avail’ or ‘use’. Accordingly it's going to be understood that consumer means a person who avails or uses any service.
Example:
A goes to a doctor to urge himself treated for a fracture. Here A is hiring the services of the doctor. Thus he's a consumer.
What constitutes hiring has been a problem to be addressed in many consumer disputes. If it's established that a specific act constitutes hiring of service, the transaction falls within internet of the consumer Protection Act, and vice-versa.
Examples:
A passenger getting railway reservation after payment is hiring service for consideration.
A landlord neglected and refused to supply the agreed amenities to his tenant. He filed a complaint against the landlord under the consumer.
2. COMPLAINANT:
An aggrieved consumer seeks redressed under the Act through the instrumentality of complaint. It doesn't mean that the consumer can complain against his each and each problem. The Act has provided certain grounds on which complaint are often made. Similarly, relief against these complaints is often granted within the set pattern.
WHAT CONSTITUTES A COMPLAINT [SECTION 2(1) (C)]
Complaint may be a statement made in writing to the National Commission, the State Commission or the District Forum by an individual competent to file it, containing the allegations intimately , and with a view to get relief provided under the Act.
WHO CAN FILE A COMPLAINT [SECTIONS 2(B) & 12]
At the outset it's clear that an individual who are often termed as a consumer under the Act can make a complaint. To be specific on this ac¬count, following are the persons who can file a complaint under the Act :
a) a consumer; or
b) any voluntary consumer association registered under the businesses Act, 1956 or under any other law for the nonce effective
c) the Central Government or any government ,
d) one or more consumers, where there are numerous consumers having an equivalent interest.
WHAT A COMPLAINT MUST CONTAIN [SECTION 2(1)(C)]
A complaint must contain any of the subsequent allegations:
a) An unfair trade practice or a restrictive trade practice has been adopted by any trader.
Example: A sold a six months old car to B representing it to be a replacement one. Here B can make a complaint against A for following an unfair trade practice.
b) The goods bought by him or agreed to be bought by him suffer from one or more defects.
Example : A bought a computer from B. it had been not work¬ing properly since day one. A can make a complaint against B for supplying him a defective computer.
c) The services hired or availed of or agreed to be hired or availed of by him suffer from deficiency in any respect.
Example : A hired services of an advocate to defend himself against his landlord. The advocate didn't appear whenever the case was scheduled. A can make a complaint against the advocate.
d) A trader has charged for the products mentioned within the complaint a price in more than the worth fixed by or under any law for the time being effective or displayed on the products or any package containing such goods.
Example : A bought a sack of cement from B who charged him Rs. 100 over and above the reserve price of the cement declared by the government.. Here A can make a complaint against B.
WHEN A COMPLAINT CAN'T BE FILED
A complaint on behalf of the general public which consists of unidentifiable consumers can't be filed under the Act.
Example: A complaint was filed on the idea of a newspaper report that passengers travelling by flight from Calcutta to Delhi on May 13, 1989 were made to remain at the airport and therefore the flight was delayed by 90 minutes causing great inconvenience to the passengers. it had been held that such a general complaint can't be entertained.
No passenger who boarded that plane came forward or authorized the complainant to form the complaint -
a) A complaint by a private on behalf of general public isn't permitted.
b) An unregistered association cannot file a complaint under the Act.
Example : The complainant was an association formed within the Gulf and was unregistered in India. it had been held that since the peti¬tioner wasn't a voluntary organization registered under any law effective in India, cannot come within clause (d) of section 2(1) of the Act and hence can’t file a complaint.
a) A complaint after expiry of limitation period isn't permitted. A complaint can't be filed after the lapse of two years from the date on which the explanation for action arise unless the Forum is satisfied about the genuineness of the rationale for not filing complaint within the prescribed time.
Example : A supplied defective machinery to B on 12-1-1998. B filed a suit against A on 10-3-2001. it had been not admitted before the Forum for the rationale that the time available to form complaint lapsed.
b) Dismissal of frivolous and vexatious complaints - Since the Act provides for a cheap procedure (Court fees isn't charged in consumer).
3. DEFECT - SECTION 2(1)(F)
The Act provides that, “defect” means any fault, imperfection or shortcoming within the quality, quantity, potency, purity or standard which is required to be maintained by or under any law of the nonce effective under any contract, express or implied or as is claimed by the trader in any manner whatsoever in reference to any goods.
This is an exhaustive definition. It means the Act recognizes only those defects which are covered by the definition. Any sort of defect not mentioned here won't be entertained by Consumer Forums. Moreover the defect has got to be in reference to goods only, i.e., if an item doesn't fall within the definition of ‘Goods’, no defect are often complained therein. However, the coverage of this definition is extremely wide.
Examples:
1.A autoclave burst and caused injury to the user. it had been held to be a producing defect
2. Failure to handover registration book along side jeep purchased by complainant may be a defect.
3. Where laboratory test report showed that beverage wasn't fit human consumption, it had been held defective
4. Rape seed oil adulterated with toxic substances, which led to paralysis of limbs and other disabilities, has been considered as defective
5. Electric household appliances which aren't in accordance with the standards prescribed by ISI, being unsafe are defective
6. Gas Cylinder with excessive gas is flawed goods
7. Development of cracks of half inch to 3 and a half inch in walls and mosaic floor during a flat after occupation from a Housing Board
8. A supplied white marble to B. afterward the color of the marble changed. B sued a alleging supply of defective marble. it had been held that A should have expressly told B that the marble wouldn't retain its colour when polished. within the absence of such assertion, it's deemed that A made B to know that the marble would retain its white colour and when the color changed, it comes within the scope of ‘defect’ in goods under the Act
9. A sold a stolen car to B. B wanted to sue A for defect within the title of the car. Here B cannot sue A under the consumer Protection Act because the defect in title of products wouldn't constitute defective goods as defined under the Act.
4. SERVICE AND DEFICIENCY [SECTION 2(1)(O) AND (G)]
When a service is found deficient by a consumer, he can make a complaint under the Act. Thus the prime requirement is that the matter must fall within the definition of service, and it must entail a deficiency as per the norms given by the Act.
WHAT ARE OFTEN TERMED AS A SERVICE - SECTION 2(1) (O)
The Act provides that “service” means service of any description which is made available to potential users and includes the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or loading or both, housing construction, entertainment, amusement or the purveying of news or other information, but doesn't include the rendering of any service free of charge or under a contract of private service.
The definition provides a list of eleven sectors to which service may pertain so as to come under the purview of the Act. The list of those sectors isn't an exhaustive one. Service could also be of any description and pertain to any sector if it satisfy the subsequent criteria:
1. service is formed available to the potential users, i.e., service not only to the particular users but also to those that are capable of using it.
2. it shouldn't be freed from charge, e.g., the medical service rendered freed from charge in Government hospital isn't a service under the Act;
3. it shouldn't be under a contract of private service.
When we mention ‘service’ under the consumer Protection Act, we take it as a daily commercial transaction. Thus the services rendered under the contract of private service are specifically excluded from the definition.
The expression ‘contract of private service’ isn't defined under the Act. In common parlance, it means - a contract to render service during a private capacity to an individual. for instance , where a servant enters into an agreement with a master for employment, or where a landlord agrees to provide water to his tenant, these are the contracts of personal service. the thought is that under a private service relationship, an individual can discontinue the service at any time consistent with his will, he needn't approach Consumer Forum to complaint about deficiency in commission .
There is a difference between ‘contract of private service’ and ‘contract for personal service’. Just in case of ‘contract of private service’, the service seeker can order or require what's to be done and the way it should be done. sort of a master can tell his servant to bring goods from a specific place. But during a ‘contract for private service’, the service seeker can tell only what's to be done. How the work is going to be done is at the wish of the performer. Like when an individual gives a suit to the tailor for stitching, he doesn't tell him which method he should use to stitch it.
Note: That it's ‘contract of private service’ is excluded from the definition of service, ‘contract for private service’ is recognized as service under the Act.
It doesn't make a difference whether the service provider may be a Government body or a personal body. Thus albeit a statutory corporation provides a deficient service, it are often made liable under the Act.
Example:
A applied for electricity connection for his mill to Rajasthan State Electricity Board. The Board delayed in releasing the connection. it had been held deficient in performing service.
Some other sectors/professionals/services which aren't laid out in the definition of service but which are considered by the consumer Forums as service sectors from time to time are listed below: Advocates, Airlines, Chartered Accountants, Courier, Chit Fund, Education, Gas Cylinder/LPG, Medical services, Postal services, Railways, Investment related services, and Telephone services.
Thus, the test is - whether the person against whom the complaint is formed performs a service for consideration which is sought by a possible user.
5. DEFICIENCY
WHAT IS MEANT BY “DEFICIENCY” IN SERVICE - SECTION 2(1) (G)
The Act provides that, “deficiency” means any fault, imperfection, shortcoming or inadequacy within the quality, nature and manner of performance which is required to be maintained by or under any law for the time being effective or has been undertaken to be performed by an individual in pursuance of a contract or otherwise in reference to any service.
Reading the above definition by breaking it into elements, we get
(a) “Deficiency” means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance
Examples:
1. A boarded a train. The compartment during which he and his wife travelled was during a bad shape-fans not working, shutters of windows weren't working, rexin of the upper was badly torn and there have been rusty nails which caused some injuries to the wife of A. A made a complaint against the railway department. it had been held that the complaint constituted ‘deficiency in service’ and therefore the compensation of Rs. 1500 was awarded to A
2. Dr. A treated P under Allopathic system, though he himself was a Homoeopathic practitioner. Afterward for wrong treatment. The Commission held it as deficiency in commission -
3. A booked a car for B and promised to deliver it within one month of booking. The car wasn't delivered even after four months. Here A might be held responsible for deficiency in commission.
6. UNFAIR TRADE PRACTICE
Unfair trade practice refers to the utilization of varied deceptive, fraudulent, or unethical methods to get business. Unfair trade practices include misrepresentation, false advertising or representation of an honest or service, tied selling, false free prize or gift offers, deceptive pricing, and noncompliance with manufacturing standards. Such acts are regarded unlawful by statute via Consumer Protection Law, which exposes recourse for consumers by way of way of compensatory or exemplary damages . An unfair trade practice is usually mentioned as a “deceptive trade practice” or an “unfair business practice.”
Understanding Unfair Trade Practices
Unfair trade practices are commonly seen within the purchase of things and services by consumers, tenancy, insurance claims and settlements, and debt collection. Most states’ unfair trade practices statutes were originally enacted between the 1960s and 1970s. Since then many nations have adopted these laws to stop unfair alternate practices. Consumers who are victimized should examine the unfair trade practice statute in their nation to work out whether or not they have a explanation for action.
Unfair trade practices are usually seen within the purchase of products and services with the help of consumers, tenancy, insurance claims and settlements, and debt collection.
In the us , unfair trade practices are addressed in Section 5(a) of the Federal Trade Commission Act, which prohibits “unfair or deceptive acts or practices in or affecting commerce.” It applies to all or any individuals engaged in commerce, inclusive of banks, and sets the legal standard for unfair trade practices, which can be deemed unfair, deceptive, or both. Below are lists of unfair and deceptive practices as per the rule:
UNFAIR PRACTICES-
a) An act is unfair when it meets the subsequent criteria:
b) It causes or is probably going to cause widespread injury to consumers.
c) It can't be reasonably avoided by way of consumers.
d) It isn't outweighed by countervailing benefits to consumers or to the competition.
e) Deceptive Practices
f) An act or practice is deceptive when it meets the subsequent criteria:
g) A representation, omission, or practice misleads or is probably going to mislead the consumer.
h) A consumer’s interpretation of the representation, omission, or exercise is taken into account reasonable under the circumstances.
i) The misleading representation, omission, or practice is material.
7. RESTRICTIVE TRADE PRACTICE
A restrictive trade practice is defined under Section 2(1) of the consumer Protection Act, 1986. The section covers all the price related deceit that the traders may indulge in to maximize their profits.
Restrictive trade practices are targeted at the consumers who are burdened with restriction and unjustified costs through the practices of the trader. The trader manipulates the worth or the conditions of delivery of the merchandise which ends up in restrictive trade practice. This affects the availability of products and services within the market and includes:
a) A likely or definite rise within the price of a commodity thanks to the delay of the trader to supply the great or service.
b) A compulsion to get, hire or avail any good or service so as to get the other good or service.
Example Restrictive Trade Practices:
A trader accumulates his stock of food grains so as to extend the worth of the grains within the market in order that he can sell it at a better price.
In order to shop for a television from trader X, one must buy a table first.
DIFFERENCE BETWEEN UNFAIR TRADE PRACTICE AND RESTRICTIVE TRADE PRACTICE:
An unfair trade practice is that the deceitful and misleading representation of products and services which portrays a false image of the merchandise. Information regarding utility, quality and standard, style etc. of products and services could also be twisted under this practice.
Restrictive Trade Practice, however, is when traders attempt to change the flow of cash within the market so as to maximize their profits and to realize a whip hand within the market competition. Here, independent sellers hike their collective profits by limiting supply by controlling selling prices or the costs of purchased inputs. This is often the first difference in unfair trade practice and restrictive trade practice.
An unfair trade practice is defined under Section 2(1)(r) of the consumer Protection Act, 1986, whereas, Restrictive trade practice is defined under Section 2(1)(nnn).
This is the elemental difference between the two, unfair trade practices being a broader concept.
This statute is regarded as the 'Magna Carta' in the field of consumer protection for checking unfair trade practices, ‘defects in goods’ and ‘deficiencies in services’ as far as India is concerned. It has led to the establishment of a widespread network of consumer forums and appellate courts all over India. It has significantly impacted how businesses approach consumer complaints and have empowered consumers to a greater extent
Consumer Protection Council:
Consumer Protection Councils are established at the national, state and district level to increase consumer awareness.
Various Consumer Organizations
To increase the awareness of consumers, there are many consumer organizations and NGOs that have been established.
CONSUMER GUIDANCE SOCIETY OF INDIA (CGSI) was THE FIRST CONSUMER ORGANISATION ESTABLISHED IN INDIA IN 1966.
It was followed by many others such as
(1) Consumer Education And Research Centre (Gujarat).
(2) Bureau Of Indian Standards.
(3) Federation Of Consumer Organisation In Tamil Nadu.
(4) Mumbai Grahak Panchayat.
(5) Consumer Voice (New Delhi).
(6) Legal Aid Society (Kolkata).
(7) Akhil Bhartiya Grahak Panchayat.
(8) The Consumers Eye India.
(9) United India Consumer's Association.
HOW TO FILE A CONSUMER COMPLAINT?
Before formally filing a Consumer Complaint, it's desired that the consumer gives notice to the other party of the very fact of any deficiency in commission or of unfair trade practice etc to ascertain if the trader is willing to form good the loss suffered by either replacing the commodity or returning the worth of the acquisition . If yes, the difficulty resolves then and there. But if the trader refuses or neglects here that the consumers must approach the consumer Court.
STEP 1: initially identify the Jurisdiction of the Forum where the complaint is to be filed. This issue must be identified from two angles of jurisdiction i.e. Territorial and Pecuniary.
The Consumer has got to take into consideration both the territorial and pecuniary jurisdiction of the tribunal in mind before filing his complaint and has got to choose the right forum.
Territorial Jurisdiction of the consumer Forums :-
A complaint shall be instituted during a District Forum or State Commission or National within the local limits of whose jurisdiction,—
a) The other party resides or caries on business or features a branch office or personally works for gain, or
b) If there are quite one opposite aprty, then anybody of the other parties resides, or carries on business or features a branch office, or personally works for gain,
Provided that in such case the permission of either District Forum, State Commission or National Commission because the case could also be , or the other parties who don't reside in such place or keep it up business or have a branch office or personally works for gain because the case could also be , must be obtained , or
c) The explanation for action arose.
PECUNIARY JURISDICTION OF CONSUMER FORUMS
1. District Forum: Upto Rs. 20 Lakhs
2. State Commissions: Rs. 20 Lakhs to Rs. 1 Crores
3. National Commission: Exceeding Rs. 1 Crores
Step 1: you'll be required to pay a prescribed fee along side your complaint before the District Forum, State Commission & the National Commission because the case could also be.
Step 2: Then you've got to draft your complaint stating facts necessary to determine a explanation for action.
Step 3: At the top of the complaint you've got to place your signatures. just in case the other person is permitted to file the complaint then complaint has got to be accompanied with authorization letter.
Step 4: Don’t forget to say the name, description and address of the complainant and therefore the name, description, address of the other party or parties against whom relief is claimed.
Step 5: Copies of all the documents supporting your allegations. during this you'll placed on record the copy of the bill of the products bought, warranty and guarantee documents and also a replica of the written complaint and see made to the trader requesting him to rectify the merchandise .
Step 6: you'll also invite compensation costs which should be specifically alleged within the complaint. Besides compensation, a consumer also can invite the refunds, damages, litigation costs, and interest amount. you want to give the breakup of amount claimed under different heads but do remember to say compensation or other relief as per the pecuniary value of the forums.
Step 7: Explain in your complaint on how the case falls within the jurisdiction of this forum.
Step 8: Complaint must clearly state on what relief is sought against the other party.
Step 9: The Act provides for limitation period of two years from the date of explanation for action. just in case there's delay in filing the complaint, please explain the delay which may be are often condoned by the Tribunal.
Step 10: you're also required to file an affidavit along side the complaint that facts stated within the complaint are true and proper.
Step 11: The complainant can present the complaint face to face or by his/her authorized representative without engaging any advocate. The complaint are often sent by registered mail . A minimum of 5 copies of the complaint is to be filed within the forum. Besides this you've got to file additional copies for every opposite party.
Consumer must be more conscious of the malpractices followed by the trader and will get up for his or her rights. With this text , an endeavor is formed to teach the consumers to file their complaints and of taking action against the Unscrupulous traders who thinks that consumers can do nothing if any wrong is caused to them. allow us to be all Vigilant of the standard and quantity of products supplied to us by the traders.
RELIEFS TO CONSUMER-
Consumer courts may grant one or more of the subsequent reliefs:-
A) Repair of defective goods.
B) Replacement of defective goods.
C) Refund of price purchased the defective goods or service.
D) Removal of deficiency in commission.
E) Refund of additional money charge.
F) Withdrawal of products hazardous to life and safety.
G) Compensation for the loss or injury suffered by the consumer thanks to negligence of the other party.
H) Adequate cost of filing and pursuing the complaint.
I) Grant of exemplary damages. Their grievances in an efficient and straight forward manner.
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 is often a retired or working judge of District Court. they're appointed by using government . The complaints for goods or services worth Rs 20 lakhs or less are often filed during this agency. The agency sends the products for testing in laboratory if required and provides decisions on the idea of facts and laboratory report. If the aggrieved party isn't cozy by the jurisdiction of the district forum then they will file an appeal against the judgment in State Commission inside 30 days by depositing Rs 25000 or 50% of the penalty amount whichever is a smaller amount.
2. State Commission:
It consists of a president and two other members. The president must be a retired or working decide of Supreme Court. All of them are appointed by government . The complaints for the products really worth quite Rs 20 lakhs and fewer than Rs 1 crore are often filed in State Commission on receiving complaint the State commission contacts the party against whom the complaint is filed and sends the products for testing in laboratory if required. just in case the aggrieved party isn't satisfied with the judgment then they will file an appeal in National Commission within 30 days by depositing Rs 3500 or 50% of penalty amount whichever is a smaller amount .
3. National Commission:
The national commission consists of a president and 4 members one among whom shall be a lady. They’re appointed by Central Government. The complaint is often filed in National Commission if the worth of products exceeds Rs 1 crore.
If aggrieved party isn't satisfied with the judgment then they will file a grievance in Supreme Court within 30 days.
Basis | District | State Commission | National Commission |
Composition | It consists of a president and two other members. | It consists of a president and two other members. | It consists of a president and four other members. |
Who can be a President | A working or retired judge of District Court. | A working or retired judge of High Court. | A working or retired judge of Supreme Court. |
Appointment of President | The president is appointed by the state government on the recommendation of the selection committee. | The president is appointed by the state government after consultation with the chief justice of the High Court. | The president is appointed by the central government after consultation with the chief justice of India, |
Jurisdiction | In 1986, it had jurisdiction to entertain complaints where the value of goods or services does not exceed Rs 5, 00,000 but now the limit is raised to 20 lakhs. | In 1986, it had jurisdiction to entertain complaints when the value of goods or services exceeds Rs 5,00,000 and does not exceed Rs 20,00,000 but now it is raised to more than Rs 20,00,000 and up to Rs1 crore. | In 1986, it had jurisdiction to entertain complaints where the value of goods or services exceeds Rs 20 lakhs but now the limit is raised and it entertains the complaints of goods or services where the value exceeds Rs 1 crore. |
Appeal against orders | Any person who is aggrieved by the order of District Forum can appeal against such order to State Commission within 30 days and by depositing Rs 25000 or 50% of the penalty amount whichever is less. | Any person who is aggrieved by the order of State Commission can appeal against such order to National Commission within 30 days and by depositing Rs 35000 or 50% of penalty amount whichever is less. | Any person who is aggrieved by the order of the National Commission can appeal against such order to Supreme Court within 30 days and by depositing 50% of penalty amount but only cases where value of goods or services exceeds Rs 1 crore can file appeal in Supreme Court. |
