Consumer Protection Act, 1986

As per the preamble to the Consumer Protection Act, “An Act to provide for better protection of the interests of consumers and for that purpose to make provision for the establishment of consumer councils and other authorities for the settlement of consumers’ disputes and for matters connected therewith.”

• Genesis of Consumer Protection Act
  
• Features of Consumer Protection Act
  
• Objectives of Consumer Protection Act
  
• Applicability of Consumer Protection Act
  
• Terms used in Consumer Protection Act
  
• Rights of Consumer

The Indian Consumer Protection Act, 1986 is legislation enacted by the Government of India to protect the rights of consumers in India. It provides a framework for the protection of consumers against unfair trade practices and provides a mechanism for the resolution of consumer disputes.

The act establishes Consumer Dispute Redressal Agencies at the district, state and national levels to hear and resolve consumer complaints. It also provides for penalties and fines for manufacturers and service providers found to have engaged in unfair trade practices.

In conclusion, the Indian Consumer Protection Act, 1986 is an important piece of legislation aimed at protecting the rights of consumers in India and providing a mechanism for the resolution of consumer disputes.

Genesis of Consumer Protection Act

Human values were cherished and ethical practices were followed in the ancient world. In India, the increase in industrialization and economic development has increased the volume of consumption of goods and services.

We can say that the industrial revolution and a shift in population from rural areas to urban areas gave plenty of scope for malpractice. The consumers’ interests were highlighted by media, social activists, and various business concerns.

Various legislations such as The Sale of Goods Act, 1930; the Essential Commodities Act, 1955; the Prevention of Food Adulteration Act, 1954; the Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act, 1980;

The Standards of Weights and Measures Act, 1956; Agricultural Products and Grading and Marketing Act (AGMARK), 1937; Indian Standards Bureau Certification Act, 1952; the MRTP Act, 1969 have failed to provide any effective protection to the consumers because of their lack of effective implementation.

For instance, in spite of the Food Adulteration Act in India, large-scale deaths were reported due to adulterated food. It was observed that many manufacturers indulged in making false claims.

Various attempts have been made for guarding the interest of consumers till 1986. In 1986, the Government of India enacted legislation. The Consumer Protection Act safeguards the interest of consumers. This act was designed after studying various consumer protection laws and provisions in the UK, USA, Australia, and New Zealand. This Act was amended in 1991, 1993, and 2002.

Features of Consumer Protection Act

The main features of the Act are as follows:

• Applies to all the goods and services (unless exempted by Central Government)
  
  
• Covers all public, private, or cooperative sectors
  
  
• Establishes consumer protection councils at central and state levels
  
  
• Provides many rights to consumers such as the right to safety, information, choice, representation, education, etc.
  
  
• Provides safety to consumers regarding defective products, dissatisfactory services, and unfair trade practices
  

Objectives of Consumer Protection Act

The objectives of the Consumer Protection Act are as follows:

• Protecting the interests of consumers.
  
  
• Establishing consumer councils and other authorities
  
  
• Settling consumers’ disputes and other related matters by empowering the consumer councils and other authorities
  
  
• Creating legal mechanisms that are within the easy reach of consumers
  
  
• Generating awareness among consumers about their rights and responsibilities

Applicability of Consumer Protection Act

Consumer Protection Act applies to the whole of India except for the state of Jammu and Kashmir.

Terms used in Consumer Protection Act

Some of the terms used in the consumer protection act are explained as follows:

Complaint

Complaint means any allegation made in writing by a complainant for the following matters with a view to obtaining relief against it:

• An unfair trade practice and restrictive trade practice which is adopted by a trader.
  
• Goods brought that are defective.
  
• Services hired that contain deficiency.

Consumer

A consumer is a person who buys goods for a consideration that has been paid or will be payable. It also includes a user of those goods other than the buyer of such goods for a consideration that has been paid or payable by the buyer.

Consumer means any of the following persons:

• A person who buys any goods for a consideration which has been paid or promised partly paid and partly promised or under any system of deferred payment i.e. in respect of the hire-purchase transaction. The term includes any other user of such goods when such use is made with the approval of the buyer.
  
  The expression “consumer”, however, does not include a person who obtains such goods for resale or for any commercial purpose.
  
  
• A person who 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 deferred payment. The term includes any other beneficiary of such services with the approval of the first-mentioned person.

Contract of Service

A contract of service means providing of service or making an agreement whether in writing or verbal, expressed or implied which is made available to the ultimate users and includes the provision of facilities such as banking, insurance, transport, health, entertainment, amusement, board, processing, etc. but does not include any service of personal nature or any free of charge service.

Consumer Dispute

A consumer dispute refers to a dispute in which a person against whom a complaint has been made by another person denies or refuses or disputes the allegation contained in the complaint made against him.

Restrictive Trade Practice

Restrictive trade practice implies any of those trade practices in which the buyers and the consumers are forced to buy, avail or hire goods or services as the case may be as a condition precedent of buying, availing, or hiring the other commodities or services.

Defect and Deficiency

• Defect: It means any problem, fault, shortcoming, or any bad quality, potency, standard, or purity of any goods which is required to be ensured under any law for the time being in force and which is stated as good, pure, and appropriate by the trade in any manner.
  
  
• Deficiency: It means any fault, shortcoming, or any poor quality, potency, standard, or purity of any service which is required to be ensured under any law for the time being in force and which is stated as good, pure, and appropriate by the trade in any manner.

Figure differentiates between defect and deficiency:

Consumer Protection

Consumer protection refers to those laws or organizations that are designed the safeguard consumers and to make provisions for the rights of the consumers as well as for fair trade practices and Competition in the market.

The laws or groups of laws are enacted to prevent those businesses that are engaged in fraud or specified unfair practices.

Rights of Consumer

In today’s scenario, many businesses are doing unfair trade practices and fraud with consumers. The uninformed consumer is tested on the grounds of quality, quantity, and purity. For this, the government of India and various other organizations have enacted certain rights in the favour of consumers so that they can safeguard themselves against unfair traders.

These rights are described as follows:

Right to Safety

This right protects the consumers from the hazardous products that are provided by the traders. The consumer has a right to protect himself from the marketing of goods and services that are hazardous to life and property. This right is for the long-term interest of the consumer.

For example, if a pressure cooker company makes a defective cooker then it is dangerous for the consumer as it can lead to a serious accident.

Right to Information

It is the duty of the trader to inform the consumer about the product. But the law has given a special and the most helpful right for the consumer namely the right to information.

According to this right, the consumer has a full right to get information about the quality, purity, standard, and correct price for the goods or services. It will help him to protect himself against unfair trade practices.

Right to Choice

The right to choose means that the consumer has a right to buy or hire the product or service of his own choice. It can only be possible if there is availability, ability, and access to the goods and services. It also helps the consumers to go into competitive markets and pricing.

The producer or the trader cannot force the consumer to buy a particular product or hire a particular service. It is the right of the consumer to select his own liking of products and services.

Right to be Heard

This right gives the consumer the facility of being heard in case of any unfair practice. He can represent himself against the fraud conducted by the trader against him.

Right to Seek Redressal

In case the consumer is exploited or fraud has been done with the consumer due to unfair trade practices, then the consumer has a right to represent himself and to claim compensation for the loss or damage caused to him.

This right to claim damage is known as the right to seek redressal. In this right, the consumer can claim the damages caused by replacing the product or by repairing the defect in the goods or services.

Right to Consumer Education

According to this right, the consumer must be educated about the goods or the service. If the consumer is literate he can easily identify the goods and the defects in them. Various organizations are opened in the country in order to educate consumers so that awareness among consumers will increase.

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Consumer Protection Councils

The central council was formed by the central government by its notification established from time to time. The central council consists of the following members:

• The Chairman is the minister in charge of consumer affairs in the Central Government.
  
  
• Other officials and non-official members who represent the interest and as may be prescribed.

• Objectives of Consumer Protection Council
  
• State Consumer Protection Council
  
• District Consumer Protection Council
  
• Redressal Machinery
  
• Jurisdiction
  
• District Forum
  
• State Commission
  
• National Commission
  
• Nature and Scope of Remedies
  
• Appeals and Limitation
  
• Applicability of Arbitration Act

Objectives of Consumer Protection Council

Following are the objectives of the consumer protection councils:

• To protect the consumers from the goods and services which are hazardous to their life and property
  
  
• To inform the consumers about the quality, quantity, purity, and standard of the goods and service
  
  
• To provide the right to be heard and the right to seek redressal
  
  
• To educate the consumer about the products and services

State Consumer Protection Council

The state council was formed by the state government by its notification established from time to time as may be specified.

The state council consists of the following members:

• The Chairman, who is the minister in charge of consumer affairs in the State Government
  
  
• Other officials and non-official members who represent the interest and as may be prescribed

District Consumer Protection Council

The state government establishes a district consumer protection council in every district from time to time by notification.

It consists of the following members:

• The Collector of the district is the chairman
  
• The Collector of the district is the chairman

Redressal Machinery

The act provides for the redressal machinery in a three-tier concept which is defined as follows:

National Consumer Disputes Redressal Commission

The National Redressal Commission takes the cases in which the value of goods or services along with the claim or compensation is greater than  ₹1 crore.

State Consumer Disputes Redressal Commission

State Consumer Disputes Redressal Commission: The State Redressal Commission takes the cases in which the value of goods or services along with the claim or compensation is greater than ₹20 lacks but less than ₹1 crore.

District Consumer Disputes Redressal Commission

The District Redressal Commission takes cases in which the value of goods or services along with the claim or compensation is less than ₹20 lacks.

Jurisdiction

Jurisdiction may be defined as the certain area or certain persons for which a government authority or body has regulatory or judicial authority. For example, the Nagar Palika Parishad has the jurisdiction of the city.

Jurisdiction can be on:

• Area in which the authority resides
  
• People on which the authority can execute the power
  
• Subject matter which is related to the law

The figure shows the types of jurisdiction:

District Forum

The District Redressal Commission takes cases in which the value of goods or services along with the claim or compensation is less than ₹20 lakhs.

Composition of District Forum

The district forum consists of:

• President, who shall be the person who has been or who is qualified to be a district judge appointed by the state government
  
  
• Two more members in which one member shall be a woman not exceeding the age of 35 years, who possess the degree of bachelor’s from a recognized university and also have experience of at least 10 years in dealing the problem related to accountancy, commerce, economics, public affairs, etc.

Duration

A member appointed for the above posts shall continue to be there for a maximum period of 5 years or till the age of 65 years whichever is earlier. However, he or she can be re-elected or appointed further for a period not exceeding 5 years.

The figure shows the composition of the district forum:

State Commission

The State Redressal Commission can take up cases in which the value of goods or services along with the claim or compensation is greater than ₹20 lacks but less than ₹1 crore.

Composition of State Commission

The state commission consists of:

• President, who shall be the person who has been or who is qualified to be a high court judge appointed by the state government.
  
  
• Two more members in which one member shall as be a woman not exceeding the age of 35 years, who possess the degree of bachelor’s from a recognized university and also has experience of at least 10 years in dealing the problem related to accountancy, commerce, economics, public affairs, etc.

Duration

A member appointed for the above posts shall continue to be there for a maximum period of 5 years or till the age of 67 years whichever is earlier. However, he or she can be re-elected or appointed further for a period not exceeding 5 years.

National Commission

The National Redressal Commission takes the cases in which the value of goods or services along with the claim or compensation is greater than ₹1 crore.

Composition of National Commission

The national commission consists of:

• President, who shall be the person who has been or who is qualified to be a supreme court judge appointed by the central government.
  
  
• Not less than four more members, one member shall be a woman not exceeding the age of 35 years, who possess the degree of bachelor’s from a recognized university and also have experience of at least 10 years in dealing the problem related to accountancy, commerce, economic, public affairs, etc.

Duration

A member appointed for the above posts shall continue to be there for a maximum period of 5 years or till the age of 70 years, whichever is earlier. However, he or she can be re-elected or appointed further for a period not exceeding 5 years.

Nature and Scope of Remedies

The consumer has been given the power under the act to make a complaint regarding the fraud done by the trader and for any other unfair trade practice. Following is the list of remedies available to the consumer against the malpractices done by the traders:

• If there is any defect in the goods or the service which the consumer uses then he/she has a remedy of removing the defects in the goods free of cost, without paying any charge for it.
  
  
• If the defect is not treatable then the defective goods must be replaced by the trader.
  
  
• For any damage caused to the consumer due to the goods, they can also claim compensation against it.
  
  
• If any complaint is filed against any trader and the same has been found guilty then the trader must be restricted from doing any unfair trade practice and must discontinue his practice or business.
  
  
• The trader should pay an adequate amount of compensation to the consumer for the damages caused to him

The figure shows the different options of remedies available to the consumers:

Filing a Complaint

First of all the jurisdiction of the complaint is to be identified. If the claim or compensation is less than 20 lakh, it must be presented to the district commission. If the claim is above 20 lacks but less than 1 crore, it must be presented to the state-level commission. If the claim is more than 1 crore, then the National Commission must be seen.

Procedure for Admission of Complaint

A prescribed fee is there for filing the complaint which depends on the amount of compensation. These are as follows:

Upto 1 lakh ₹100/-

1 lakh to 5 lacks ₹ 200/-

5 lakh to 10 lacks ₹ 400/-

10 lakh to 20 lacks ₹ 500/-

Since there is no compulsory requirement for any lawyer or legal representative, the consumer can file a case against the trader in the Commission. The complaint can be sent by registered post. A minimum of 5 copies must be sent to the commission. You must keep one copy with you before sending the complaint copy to the Commission.

Power of District Forum

The district forum has the following powers against a trader who is at:

• The forum can give orders to correct the deficiency caused by the product.
  
  
• The forum can give orders to repair the defect caused by the product.
  
  
• The forum can give orders to replace the product.
  
  
• The forum can order the trader to pay compensation to the consumer for the loss caused.
  
  
• The forum can order and issue corrective advertisements for an earlier misrepresentation.

Relief Available to Consumer

The relief available to the consumer is as follows:

• If there is any defect in the goods or the service which the consumer uses, then he has a remedy of removing the defects in the goods free of cost, without paying any charge for it.
  
  
• If the defect is not treatable then the defective goods must be replaced by the trader.
  
  
• For any damage caused to the consumer due to the goods, he can also claim compensation against it.
  
  
• If any complaint is filed against any trader and the same has been found guilty, then the trader must be restricted for any unfair trade practice and must discontinue his practice or business.
  
  
• The trader should pay an adequate amount of compensation to the consumer for the damages caused to him

Appeals and Limitation

• Appeal: An appeal against the order of the district forum can be filed at the state level and at the state level at the national level. The decision at the national level can also be challenged in the Supreme Court. However, the appeal against the order can only be filed within 30 days from the date of passing the order by the appropriate authority.
  
  
• Limitations: The appeal or the complaint against the trader must be filed at the earliest by the consumer but not later than a period of two years. The complaint is not valid after two years from the time when the cause first arose.

However, in some exceptional cases, an appeal can be accepted if the complainant has a reason to satisfy the court that the delay was justified.

Applicability of Arbitration Act

Arbitration is a procedure in which two or more parties who are in dispute, by an agreement goes to one or more arbitrator who makes a binding decision that is applicable to all the parties on the basis of their knowledge and experience.

In the case of consumer protection, the concept of arbitration can be applied. The aggrieved party can instead of going to the court of commission go to the arbitrator against the other party in agreement with that party and sort out the matter on the basis of the decisions of the arbitrator. The act of arbitration is thus applicable to both parties.