Consumer Protection Act -1986

Introduction

Caveat emptor rule ( let the buyer beware) in sale of goods act of 1930, sprout the root of consumer interest protection. United nations passed resolution of consume protection in april 1985 In India 1986 was the enactment of consumer protection act Aimed at providing simple, quick, and cheaper protection of consumers interest

 The law relating to consumer protection is

contained in the consumer protection Act ,1986.The Act applies to all goods and services .The central government may however by notification published in the official Gazette exempt any goods or services(sec.1

objectives

Better protection of interests of consumers

Protection of rights of consumers -Right to be protected against marketing of goods or services which are hazardous to life and property - To be informed about the quality, quantity, potency, purity, standard and price of goods or services so as to protect the consumers against unfair trade practices

-The right to be assured, where ever possible,

access to goods and services at competitive prices - The right to be heard and to be assured that consumers interest will receive due consideration at appropriate forums - The right to seek redresses against unfair trade practices or restrictive trade practices or unscrupulous exploitation of consumers

- Right to consumer education

Consumer protection councils

Quasi-judicial machinery for speedy redressal of consumer disputes

-quasi-judicial machinery at the district ,State and central levels

-(To give reliefs of a specific nature )
-(To award, wherever appropriate, compensation to consumer)

Penalties for non-compliance of the orders given by the quasi-judicial bodies have also been provided

Scope of the Act

Applies to whole of the state Exept the state of Jammu and Kashmir Applies to all type of goods and services, public utilities & public sector undertakings All types of complains relating to goods ,unfair trade practice Remedies under this act is same as those in other laws. A suit pending in civil court cannot be heard in consumer court

Consumer forums have the power to adjudicate disputes, but they do nat have trappings of a court The consumer court powers are limited

Unfair trade practices

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

It means trade practices which a trader, 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.

The practices included are:

(1)The practice of making any statement, whether orally or in writing or by visible representation which Falsely represents that the goods are of particular standard, quality, quantity, grade, composition, style or model; Falsely represents that the services are of particular standard, quality or grade;

Falsely represents any rebuilt, second hand, renovated, or old goods as new goods; Represents that the goods or services have sponsorship, approval, performance, characteristic, accessories, uses or benefits which such goods or services do not have; Represents that the seller or the supplier has sponsorship or approval or affiliation which such seller or supplier does not have;

Make a false or misleading representation concerning the needs for , or the usefulness of, any goods or services; Gives to the public any warranty or guarantee of the performance or length of life of a product or of any goods that is not based on an adequate or proper test thereof.

Materially misleading the public concerning the price at which a product or like products or goods or services, have been or are ordinarily sold or provided.

Unfair trade practices - contd

2. False offer of bargain price [section 2(1)(r)(2):
A price that is stated in any advertisement to be a bargain price by reference to ordinary price or otherwise A price that a person who reads, hears or sees the advertisement would reasonably understand to be a bargain price having regard to the prices at which like products are sold.

Contd
3. Schemes offering gifts or prizes [section 2(1)(r)(3)]
Offering gifts or prizes or other items with the intention of not providing them and conducting promotional contests. Creating an impression that something is being given free of charge when it is fully or partly covered by the amount charged in the transaction. Conducting of any contest, lottery or game of chances etc for the purpose of promoting-directly or indirectlythe sale, use or supply of any product or any business interest.

Contd
Society for Civil Rights vs Colgate Palmolive Eg: A scheme sponsored by Colgate Palmolive (India) Ltd induced the contestants to buy a minimum of 2 Trigard toothbrushes to be able to participate in the contest. The early bird prizes to be awarded for entries received early had nothing to do with any skill. It was held not to be in public interest.

Contd
4. Withholding any schemes [sec 2(1)(r)(3A)]
Withholding from the participants of any scheme offering gifts, prizes or other items free of charge, on its closure the information about final result of scheme. The participants of a scheme shall be deemed to have been informed of the final results of the scheme where such results are within a reasonable time published prominently in the same newspapers in which the scheme was originally published.

Contd
5.

Non compliance of prescribed standards [sec 2(1)(r)(4): The prescribed standard may relate to performance, composition, contents, design, packaging etc as are necessary to prevent or reduce the risk of injury to the person using the goods.

CONTD
6.

Hoarding, destruction or refusal [sec 2(1)(r)(5): Hoarding, destruction or refusal to sell the goods which raises or tends to raise the cost of those or other similar goods or services shall amount to an unfair trade practice.

Contd
7. Manufacturing or sale of spurious goods [section 2(1)(r)(6): Spurious goods and services means such goods and services which are claimed to be genuine but are not so.

RESTRICTIVE TRADE PRACTICE

DEFINITION Sec. 2 (1) (nn)

A trade practice which tends to bring about manipulation of price, or its conditions of delivery or to affect flow of supplies in the market relating to goods or services in such a manner as to impose on the consumers unjustified costs or restrictions

CONSUMERS NEED PROTECTION AGAINST

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

supplies to impose unjustified costs/restrictions on consumers.

Collusive tendering; market fixing territorially among

competing suppliers, depriving consumers of free choice, fair competition.

Supplying only to particular distributors or on

condition of sale only within a territory.

 Delaying in supplying goods/services

leading to rise in price.

Requiring a consumer to buy/hire any goods or services as a pre-condition for buying/hiring other goods or services.

DEFECT Sec 2 (1) (f)

Any fault, imperfection or shortcoming in the quality, quantity, potency, or standard which is required to be maintained by or under any law for the time 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

CONSUMER PROTECTION Central Level COUNCILS State Level

Central Consumer Protection Council

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

Consists of..
the Minister in charge of consumer affairs in the Central Government, who shall be its Chairman such number of other official or nonofficial members representing such interests as may be prescribed

Procedure for meetings of the Central Council

The Central Council shall meet as and when necessary, but at least one meeting of the council shall be held every year 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

State and district Consumer Protection Councils

Objects of the central council(Sec.6)

a) The right to be protected against the marketing of goods and services which are hazardous to life and property. b) The right to be assured ,where ever possible ,access to a variety of goods and services at competitive price

c) The right to consumer education. d) The right to be heard and to be assured that consumer interests will receive due consideration at appropriate forums. e) The right to be informed about the quality ,quantity,potency,purity,standard and price of goods or services so as to protect the consumer against unfair trade practices.

The state consumer protection councils(Sec.7and 8)

Members : Chairman:-The minister in charge of consumer affairs of the state government. Such number of other official or nonofficial members representing such interests as may be prescribed by the state government.

Meetings:Number of meetings:-Not less then 2 meetings every year Time and place:- Depends on the chairman Objective:To promote and protect within the states The rights of the consumer as laid down in Sec(6)

The district consumer protection council

Members:District collector is the Chairman Other official and non-official members are appointed by the state government

Meetings:Number of meetings:- not less then 2 meetings Time and place:- as decided by the chairman Objective:To protect and preserve the right of the consumer within the district laid down under the Sec(6).

Nature and scope of remedies & State commission

Nature and scope of remedies Under the Act (sec. 14)

In case the goods complained against suffer from any of the allegations contained in the complaint about the services are proved, the district forum/the state commission may pass one or more of the following orders;

To remove the defects pointed out by the appropriate laboratory from all the goods in question. To replace the goods of similar description which shall be free from defect. To discontinue the unfair trade practice or restrictive trade practice or not to remove them. To withdraw the hazardous goods from being offered for sale. In the case of misleading advertisements the other party has to pay the cost of the corrective advertisements.

State commission ( secs 16,17,17A and 17B)

Composition (sec. 16) The state commission should consist the following; A. President; He shall be a person who is or was a judge of the high court. His appointment can be made only after consultation with the chief justice of high court B. Members; there shall not be less than two or not more than the number specified, one of them should be a woman.

The members should have the following qualifications; 1.Not less than the age of 35. 2.the person should possess a bachelor degree from any recognized university.

 The

consumer to whom the goods are sold or delivered, or agreed to be sold or delivered , or the service has been provided, or agreed to be provided Any recognized consumer association, regardless of whether the consumer is a member of such association or not.

 One

or more consumer , where there are numerous consumer having the same interest with permission of the district forum on behalf of or for the benefit of all consumer so interested. The state or central govt. either its individual capacity or as a representative of the interest of the consumer in general.

PROCEDURE ON RECEIPT OF COMPLAINTS

COMPLAINT

WHERE LABORATORY TESTING IS POSSIBLE OR REQUIRED.

COMPLAINT

RELATED TO SERVICE, I.E, WHERE LABORATORY TESTING IS NOT POSSIBLE.

Disqualification for appointment as member of the state commission

It is same those for a district forum. Selection commission for appointment is also similar to that of district forum. Appointment of state commission is done by the state government on recommendation of the president of the state commission depending on the work load.

Continued..
Subsection (1B) of section 16, the jurisdiction, power and authority of the state commission may be exercised thereof. State commission consist of the president and one or more members. Decisions are taken on the basis of majority.

Jurisdiction of state commission

1)

2)

Monetary jurisdiction Deals with complaints only for which the value does not exceed 1crore. Appellate jurisdiction It can entertain appeals against any order district forum within the state. No appeal by anyone who has been required to pay any amount by order of district forum shall be entertained unless he deposited 50% of the amount or 25000 which ever is less.

Continued..
3)

Supervisory jurisdiction Can ask for records or pass an order for any pending dispute in the district forum within the state.

Territorial jurisdiction of the state commission can be invoked in the same grounds as that of the district forum under section 11(2)

Continued..
Transfer of cases On the application of a complainant, or of its own motion, may at any stage of the of the proceeding transfer any complaints pending before the district to another district forum within the state. Circuit benches State commission ordinarily functions in the state capital, but may be required to perform its functions at any other place as the state government may, in consultation with the state commission, notify in the official gazette.

Continued..
Tenure the term of office of a member is mostly 5 years or 65 years of age. Which ever is earlier.

National commission
Section 9 empowers the central government to establish national consumer disputes Redressal Commission.

Composition
1)

2)

President He has to be a person who is or has been the Judge of the Supreme Court. His appointment shall be made by the Central Government in consultation by the Chief Justice of India. Members There shall be not less than 4 and not more than such a number of members as may be prescribed, processing the qualifications as are prescribed for a member of the State Commission.

Appointment
Appointment is done by the Central Govt. on recommendation of selection committee consisting of a judge of the Supreme Court nominated by the Chief Justice of India who shall act as chairman; the Secretary in the Dept of Legal Affairs and Secretary in the Dept dealing with consumer affairs, as members. The President and every member shall give an undertaking that he does have and will not have any such financial or other interest as is likely to affect prejudicially his functions as such member.

Tenure
Every member of the national commission shall hold the office for 5 years or up to the age of seventy years, whichever is earlier. A member shall be eligible for reappointment for another term of 5 years or up to the age of seventy years, whichever is earlier. The reappointment is to be made on the basis of recommendation of the selection committee.

Removal of president or members(rule 13)

Has

been adjudged an insolvent. If any conviction of an offence, Physically or mentally incapable of acting as a president or member, or Has acquired such financial or other interest as is likely to affect prejudicially his function as the president or member, or

 Has

so abused his position as to render his continuance in office prejudicial to public interest, or
absent in three consecutive sittings except for reasons beyond his control.

Remains

COMPLAINTS & WHO CAN FILE A COMPLAINT?

Complaint
A complaint is any allegation in writing made by a complainant that, an unfair trade practice or a restrictive trade practice has been adopted by any trader. Under sec2(1)c of consumer protection act, A complaint must be made with a view to obtaining any relief provided.

WHO CAN FILE A COMPLAINT?

A consumer can file a complaint under the Act , Who is a Consumer?
A Consumer under the Act is:" One who buys any goods, hires and service/services for a consideration which has been paid or promised or partly paid and partly paid and partly promised under any system of deferred payment."

A consumer means a person belonging to the following categories: i) one who hires or avails of any service or services for a consideration, which has been paid or promised or partly paid and partly promised, or under any system of deferred payment. ii) Any voluntary consumer association registered under the Companies Act or any other law for the time being in force.

Cont

iii) Class action complaints - one or more consumers, where there are numerous consumers having the same interest.
iv) The Central Government v) The State Government or Union Territory Administrations.

TIME FRAME WITHIN WHICH A COMPLAINT CAN BE FILED

Time frame within which a complaint can be filed

Section 24A of the Act provides that a consumer dispute can be filed within two years from the date on which the cause of action arises. The point of time when cause of action arises is an important factor in determining the time period available to file a complaint. There are no set rules to decide such time. It depends on the facts and circumstances of each case.

The complaint should be filed within 2 years from the date of cause of action. Appeals are require to be filed within 30 days from the date of receipt of the court's order.

It may be noted that these time frames are not absolute limitations. If the Consumer Forum is satisfied that there was sufficient cause for not filing the complaint within the prescribed period, it can entertain a complaint beyond limitation time. However the Forum must record the reasons for condensation of delay.