CONSUMER PROTECTION ACT

• A consumer is a person who consumes or uses any goods or services.

• Goods may be consumables like wheat flour, salt, sugar, fruit etc. or durable items
like television, refrigerator, toaster, mixer, bicycle etc.
• Services refer to items like electricity, cooking gas, telephone, transportation, film
show etc.
• Normally, it is the consumption or use of goods and services that makes the
person to be called as ‘consumer’.
• But in the eyes of law, both the person who buys any goods or hires any service for
consideration (price) and the one who uses such goods and services with the
approval of the buyer are termed as consumers.
• For example, when your father buys apple for you and you consume them, your
father as well as yourself are treated as consumers.
• However, a person who buys goods for resale (like wholesaler, retailer, etc.) or for
any commercial purpose is not treated as consumer.
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Under the Consumer Protection Act 1986, the word Consumer has been defined
separately for the purpose of goods and services.

• For the purpose of goods, a consumer means

(i) one who buys any goods for consideration; and

(ii) any user of such goods other than the person who actually buys it, provided
such use is made with the approval of the buyer.

– (The expression ‘consumer’ does not include a person who obtains such goods
for resale or for any commercial purpose.)

• For the purpose of services, a consumer means

(i) one who hires any service or services for consideration; and

(ii) any beneficiary of such service(s) provided the service is availed with the
approval of such person.
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Concept of Consumer Protection:

• Consumer protection means safeguarding the interest and rights of consumers.

• In other words, it refers to the measures adopted for the protection of consumers from
unscrupulous and unethical malpractices by the business and to provide them speedy
redressal of their grievances.

The most common business malpractices leading to consumer exploitation are given below.

– Sale of adulterated goods i.e., adding something inferior to the product being sold.

– Sale of spurious goods i.e., selling something of little value instead of the real
product.

– Sale of sub-standard goods i.e., sale of goods which do not confirm to prescribed
quality standards.

– Sale of duplicate goods.

– Use of false weights and measures leading to underweight.

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– Hoarding and black-marketing leading to scarcity and rise in price.

– Charging more than the Maximum Retail Price (MRP) fixed for the product.

– Supply of defective goods.

– Misleading advertisements i.e., advertisements falsely claiming a product or

service to be of superior quality, grade or standard.

– Supply of inferior services i.e., quality of service lower than the quality agreed
upon.

The above instances show the exploitation of consumers in the context of goods and
services.

• In a democratic nation like India, should we allow this to happen?

• So the measures adopted by the government or non-government organizations

(NGOs) for safeguarding the interests of the consumers constitute consumer
protection
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Examples of Consumer Exploitation in India

1. The after sales service provider of the television set charged Rs 200 as service
charge though he repaired the set within the warranty period.

2. The tickets issued to different passengers on the same day for the same journey
showed the same seat number.

3. Penalty of Rs. 50 was charged by SBI after issuing the cheque book to the customer
showing that the balance available in the account was less than the minimum
required balance for issue of cheque book.

4. The supply of cooking gas cylinder to the consumers is found to be underweight.

 CONSUMER PROTECTION ACT

Need for Consumer Protection:

The necessity of adopting measures to protect the interest of consumers arises mainly
due to the helpless position of the consumers. There is no denying fact that the
consumers have the basic right to be protected from the loss or injury caused on
account of defective goods and deficiency of services.
a. Social Responsibility: The business must be guided by certain social and ethical
norms. It is the moral responsibility of the business to serve the interest of
consumers. Keeping in line with this principle, it is the duty of producers and
traders to provide right quality and quantity of goods at fair prices to the
consumers.
b. Increasing Awareness: The consumers are becoming more mature and conscious
of their rights against the malpractices by the business. There are many consumer
organizations and associations who are making efforts to build consumer
awareness, taking up their cases at various levels and helping them to enforce
their rights.
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c. Consumer Satisfaction: Father of the Nation Mahatma Gandhi had once given a call
to manufactures and traders to “treat your consumers as god”. Consumers’
satisfaction is the key to success of business. Hence, the businessmen should take
every step to serve the interests of consumers by providing them quality goods and
services at reasonable price.

d. Principle of Social Justice: Exploitation of consumers is against the directive

principles of state policy as laid down in the Constitution of India. Keeping in line with
this principle, it is expected from the manufacturers, traders and service providers to
refrain from malpractices and take care of consumers’ interest.

e. Principle of Trusteeship: According to Gandhian philosophy, manufactures and

producers are not the real owners of the business. Resources are supplied by the
society. They are merely the trustees of the resources and, therefore, they should use
such resources effectively for the benefit of the society, which includes the consumers.
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f. Survival and Growth of Business: The business has to serve consumer interests for
their own survival and growth. On account of globalization and increased competition,
any business organization which indulges in malpractices or fails to provide improved
services to their ultimate consumer shall find it difficult to continue. Hence, they must
in their own long run interest, become consumer oriented.
Rights of Consumers:
John F, Kennedy, the former USAPresident, in his message to consumer had given six
rights to consumers. These rights are
(i) right to safety,
(ii) right to be informed,
(iii) right to choose,
(iv) right to be heard,
(v) right to redress and
(vi) right to represent.
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These rights had paved the way for organized consumer movement in the USA and
later it spread all over the world.
In India, the Consumer Protection Act, 1986 has also provided for the same rights to
consumers. Let us have a brief idea about these rights of consumers.
(a) Right to Safety:
• It is the right of the consumers to be protected against goods and services which
are hazardous to health or life. For example, defective vehicles could lead to
serious accidents.
• The same is true of electrical appliances with sub-standard material. Only recently,
there were mass protests and boycott of soft drinks due to presence of hazardous
pesticides beyond permissible limits.
• Thus, right to safety is an important right available to the consumer which ensures
that the manufacturers shall not produce and sell sub-standard and dangerous
products.
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(b) Right to be Informed

• The right to be informed is an important component of consumer protection. The
consumer must be provided with adequate and accurate information about
quality, quantity, purity, standard and the price of the goods and services.
• Now-a-days the manufacturers provide detailed information about the contents of
the product, its quantity, date of manufacturing, date of expiry, maximum retail
price, precautions to be taken, etc. on the label and package of the product.
• Such information helps the consumers in their buying decision and use of the
product.
(c) Right to Choose
• The right to choose provides that the consumer must be assured, whenever
possible, access to a variety of goods and services at competitive prices. If the
market has enough varieties of products at highly competitive prices, the buyers
have an opportunity of wide selection.
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• However, incase of monopolies like railways, postal service and electricity supply
etc. it implies a right to be assured of satisfactory quality of service at a fair price.
(d) Right to be Heard
• The rights to safety, information and choice will be frivolous without the right to
be heard. This right has three interpretations.
• Broadly speaking, this right means that consumers have a right to be consulted by
Government and public bodies when decisions and policies are made affecting
consumer interests.
• Also, consumers have a right to be heard by manufactures, dealers and advertisers
about their opinion on production, marketing decisions and any grievances of the
consumers.
• Now-a-days, most of the top manufacturers and firms have set up consumer
service cells to attend to consumers 'complaints and take appropriate steps for
their redressal.
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Thirdly, consumers have the right to be heard in legal proceedings in law courts
dealing with consumer complaints.

(e) Right to Seek Redressal

• The consumers have been given the right of redressal of their grievances relating
to the performance, grade, quality etc. of the goods and services. If required, the
product must be repaired / replaced by the seller/ manufacturer.

• The Consumer Protection Act has duly provides for a fair settlement of genuine
grievances of the consumers. It has also set up a proper mechanism for their
redressal at district, state and national levels.

(f) Right to Consumer Education

• It means the right to receive knowledge and skill to become informed consumer. In
this direction the consumer associations, educational institutions and the policy
makers can play an important part.
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They are expected to impart information and knowledge about

• the relevant laws which are aimed at preventing unfair trade practices,

• the ways and means which dishonest traders and producers may adopt to deceive
the consumers,

• insistence on a bill or receipt at the time of purchase, and

• the procedure to be followed by consumers while making complaints. Effective

consumer education leads to an increased level of consumer awareness and help
them to enforce their rights more effectively, and protect themselves against
fraudulent, deceitful and grossly misleading advertisement, labeling, etc.
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Responsibilities of the Consumers:

1. Be quality conscious

2. Beware of misleading advertisements

3. Responsibility to inspect a variety of goods before making selection

4. Collect proof of transaction

5. Consumers must be aware of their rights

6. Complaint for genuine grievances

7. Proper use of product/services

• Apart from the responsibility enumerated above, the consumers should be

conscious of their duty towards other consumers, society and ecology and make
responsible choice.

• In other words, their purchases and consumption should not lead to waste of
natural resources and energy and environmental pollution.
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Ways and Means of Consumer Protection:

(a) Lok Adalat: Lok Adalats are the effective and economical system for quick redressal
of the public grievances. The aggrieved party can directly approach the adalats with
his grievance, and his issues are discussed on the spot and decisions are taken
immediately. The consumers may take the advantage of this system to solve their
problems.

(b) Public Interest Litigation: Public Interest Litigation (PIL) is a scheme under which
any person can move to the court of law in the interest of the society. It involves
efforts to provide legal remedy to un-represented groups and interests.

(c) Redressal Forums and Consumer Protection Councils: Under the Consumer
Protection Act 1986, a judicial system has been set up to deal with the consumer
grievances and disputes at district level, state level and national level.
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These are known as

– District Forum,

– State Consumer Disputes Redressal Commission (State Commission) and

– National Consumer Disputes Redressal Commission (National Commission).

• Any individual consumer or association of consumers can lodge a complaint with

the District, State or National level forum, depending on the value goods and claim
for compensation.

• The main objective of these forums is to provide for a simple, speedy and
inexpensive redressal of consumers’ grievances. The Act as amended in 2002 also
provides for setting up of Consumer Protection Council at district, state and
national level for promotion and protection of the rights of the consumers as laid
down in Section 6 of the Act.
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(d) Awareness Programme: To increase the level of awareness among the consumers
the Government of India has initiated various publicity measures. It regularly brings
out journals, brochures, booklets and various posters depicting the rights and
responsibilities of consumers, redressal machineries etc.

(e) Consumer Organisations: Consumer organisations have been active all over the
world to promote and protect consumer interests. A number of such organisations
have also been set up in recent years in different parts of India.

(f) Consumer Welfare Fund: The government has created a consumer welfare fund for
providing financial assistance to strengthen the voluntary consumer movement in the
country particularly in rural areas.

• This fund is mainly used for setting up facilities for training and research in
consumer education, complaint handling, counseling and guidance mechanisms,
product testing labs, and so on.
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(g) Legislative Measures: A number of laws have been enacted in India to safeguard
the interest of consumers and protect them from unscrupulous and unethical
practices of the businessmen. Some of these Acts are as follows:

1) Drug Control Act, 1950

2) Agricultural Products (Grading and Marketing) Act, 1937

3) Industries (Development and Regulation) Act, 1951

4) Prevention of Food Adulteration Act, 1954

5) Essential Commodities Act, 1955

6) The Standards of Weights and Measures Act, 1956

7) Monopolies and Restrictive Trade Practices Act, 1969

8) Prevention of Black-marketing and Maintenance of Essential Supplies Act,

1980

9) Bureau of Indian Standards Act, 1986

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Consumer Protection Act 1986:

• The Consumer Protection Act was passed in 1986 and it came into force from 1 July
1987. The main objectives of the Act are to provide better and all-round protection to
consumers and effective safeguards against different types of exploitation such as
defective goods, deficient services and unfair trade practices. It also makes provisions
for a simple, speedy and inexpensive machinery for redressal of consumers’ grievances.

Salient Features of Consumer Protection Act 1986:

1. It applies to all goods, services and unfair trade practices unless specifically exempted
by the Central Government.

2. It covers all sectors whether private, public or co-operative.

3. It provides for establishment of consumer protection councils at the central, state and
district levels to promote and protect the rights of consumers and a three tier quasi-
judicial machinery to deal with consumer grievances and disputes.

4. It provides a statutory recognition to the six rights of consumers.

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Goods and Services covered under Consumer Protection Act 1986

• The term ‘goods’ under this Act has the same meaning as under the sale of goods
Act.

• Accordingly it covers all types of movable property other than money and includes
stocks and shares, growing crops, etc.

• The term ‘service’ means service of any description made available to potential
users and includes banking, financing, housing construction, insurance,
entertainment, transport, supply of electrical and other energy, boarding and
lodging, amusement, etc.

• The services of doctors, engineers, architects, lawyers etc. are included under the
provisions of Consumer Protection Act.
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Filing of Complaints:

• For redressal of consumer grievances a complaint must be filed with the

appropriate forum.

Who can file a complaint?

The following persons can file a complaint under Consumer Protection Act 1986:
1) a consumer;
2) any recognized voluntary consumer association whether the consumer is a
member
3) of that association or not;
4) the Central or any State Government; and
5) one or more consumers where these are numerous consumers having same
interest.
6) Legal heir or representative in case of death of a consumer.
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What Complaints can be filed?

A consumer can file a complaint relating to any one or more of the following:

a) an unfair trade practice or a restrictive trade practice adopted by any trader or

service provider;

b) goods bought by him or agreed to be bought by him suffer from one or more
defect; services hired or availed of, or agreed to be hired or availed of, suffer from
deficiency in any respect;

c) price charged in excess of the price

(i) fixed by or under the law for the time being in force,

(ii) displayed on the goods or the package,

(iii) displayed in the price list, or (iv) agreed between the parties; and

d) goods or services which are hazardous or likely to be hazardous to life and safety
when used.
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Where to file a complaint?

• If the value of goods and services and the compensation claimed does not exceed Rs.
20 lakh, the complaint can be filed in the District Forum;

• if it exceeds Rs. 20 lakh but does not exceed Rs. One crore, the complaint can be filed
before the State Commission; and

• if it exceeds Rs. One crore, the complaint can be filed before the National Commission.

How to file a complaint?

• A complaint can be made in person or by any authorized agent or by post. The

complaint can be written on a plain paper duly supported by documentary evidence in
support of the allegation contained in the complaint. The complaint should clearly
specify the relief sought.

• It should also contain the nature, description and address of the complainant as well as
the opposite party, and so also the facts relating to the complaint and when and where
it arose.
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What are the reliefs available to consumers?

• Depending on the nature of complaint the and relief sought by the consumer, and
the facts of the case, the Redressal Forum/Commission may order one or more of
the following reliefs:

a) Removal of defects from the goods or deficiencies in services in question.

b) Replacement of the defective goods.

c) Refund of the price paid.

d) Award of compensation for loss or injury suffered.

e) Discontinuance of unfair trade practices or restrictive trade practice or not to

repeat them.

f) Withdrawal of hazardous or dangerous goods from being offered for sale.

g) Provision of adequate costs to aggrieved parties.

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Time limit for filing the case

• The consumer can file the complaint within two years from the date on which the
cause of action had arisen.

• However, it may be admitted even after the lapse of two years if sufficient cause is
shown for the delay.

Time limit for deciding the case

• Every complaint must be disposed off as speedily as possible within a period of

three months from the date of notice received by the opposite party.

• Where the complaint requires laboratory testing of goods this period is extended
to five months.
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Machinery for Settlement of Grievances:
• The judicial machinery set up under the Consumer Protection Act, 1986 consists of
consumer courts (forums) at the district, state and national levels.
These are known as
– District forum,
– State Consumer Disputes Redressal Commission (State Commission) and
– National Consumer Disputes Redressal Commission (National Commission)
separately.
1. District Forum
This is established by the state governments in each of its districts.
• Composition: The district forums consist of a Chairman and two other members
one of whom shall be a woman. The district forums are headed by the person of
the rank of a District Judge.
• Jurisdiction: A written complaint can be filed before the District Consumer forum
where the value of goods or services and the compensation claimed does not
exceed Rs. 20 lakh.
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• Appeal: If a consumer is not satisfied by the decision of the District forum, he can
challenge the same before the State Commission, within 30 days of the order.
2. State Commission
This is established by the state governments in their respective states.
• Composition: The State Commission consists of a President and not less then two
and not more than such number of members as may be prescribed, one of whom
shall be a women. The Commission is headed by a person of the level of High
Court judge.
• Jurisdiction: A written complaint can be filed before the State Commission where
the value of goods or services and the compensation claimed exceeds Rs. 20 lakh
but does not exceed Rs. One crore.
• Appeal: In case the aggrieved party is not satisfied with the order of the State
Commission he can appeal to the National Commission within 30 days of passing
of the order.
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3. National Commission

The National commission was constituted in 1988 by the central government. It is the

apex body in the three tier judicial machinery set up by the government for redressal
of consumer grievances. Its office is situated at Janpath Bhawan (Old Indian Oil
Bhawan), A Wing, 5th Floor, Janpath, New Delhi.

• Composition: It consists of a President and not less than four and not more than
such members as may be prescribed, one of whom shall be a woman. The National
Commission is headed by a sitting or retired judge of the Supreme Court.

• Jurisdiction: All complaints pertaining to those goods or services and

compensation whose value is more than Rs. one crore can be filed directly before
the National Commission.

• Appeal: An appeal can be filed against the order of the National Commission to
the Supreme Court within 30 days from the date of order passed.
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Relief available to Consumers:

• Removal of Defects: If the consumer after conducting a proper test by using the
product finds the product to be defective then the authority can pass an order of
removing the defects in the output.
• Replacement of goods
• Refund of the price paid by the consumer while purchasing the product.
• Award of Consumption: A consumer can demand compensation from the trader
or service provider if because of his negligence the consumer has suffered some
physical or any other loss.
• Removal of deficiency in Service: The authority can pass order for removal of the
deficiency if any in delivery of the service, for instance, if the consumer had
applied for a loan and has fulfilled all the formalities but the bank is making
unnecessary delay in sanctioning the loan, the court can pass orders to sanction
the loan.
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• Discontinuance of Unfair / Restrictive Trade Practices: If a complaint is filed by the

consumer against any unfair trade practices in the market, the authority can order
an immediate withdrawal of such practice and can also pass an order of banning
such practices.

• Stopping of sale of hazardous goods

• Withdrawal of hazardous goods from the market

• Payment of the adequate cost.