Legal Aspects Of Business Consumer Protection Act, 1986

Group 8 Section B Subir Bhargava 113 Ankit Sethi 115 to edit Master subtitle style Click 117 Shreya Sharma 127
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Roopali Gandhi 116 Arjun Chawla

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Enacted to provide for the better protection of the interest of consumer Act applies to whole of India except Jammu and Kashmir The act was amended in 2002 and the amendments came into force w.e.f. 15th March 2003.

CONSUMER PROTECTION ACT, 1986

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Consumer

Mahatma Gandhi, the father of nation, attached great importance to what he described as the poor consumer, who according to him should be the principal beneficiary of the consumer movement.

A Consumer is the most important visitor on our premises. He is not dependent on us we are on him. He is not an interruption to our work; he is the purpose of it. We are not doing a favour to a consumer by giving him an opportunity. He is doing us a favour by giving an opportunity to serve him.

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In spite of these views consumerism is still in its infancy in our country, thanks to the sellers market and the government monopoly in most services. Consumer awareness is low due to the apathy and lack of education among the masses. No one has told them about their rights to be informed about product quality, price, protection against unsafe products, access to variety of goods at competitive prices, consumer education etc. What consumerism lacks here is education and information resources, testing facilities, competent leadership and price control mechanism. The providers of goods and services have been reluctant to give due consideration to consumer interest protection.

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CONSUMERS NEED PROTECTION AGAINST

Unfair trade practice Restrictive trade practice Defects Deficiencies

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CONSUMERS NEED PROTECTION AGAINST

UNFAIR TRADE PRACTICE

Adopting unfair methods or deception to promote sale, use or supply of goods or services e.g.

Misleading public about price (e.g. bargain price when it is not so).

Charging above MRP printed. Misleading public about anothers goods or services. Falsely claiming a sponsorship, approval or affiliation. Offering misleading warranty or guarantee.
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CONSUMERS NEED PROTECTION AGAINST

RESTRICTIVE TRADE PRACTICE

Price fixing or output restraint re: 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 condition of sale only within a territory. or on

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
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CONSUMERS NEED PROTECTION AGAINST

DEFECTS

Any fault, imperfection or shortcoming in potency, purity or standard which is required under any law for the time being in force express or implied or as is claimed by the whatsoever in relation to any goods.

the quality, quantity, to be maintained by or or under any contract trader in any manner

DEFICIENCY

Any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has 3/10/13 been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service.

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WHAT IS A COMPLAINT?
Complaint means any allegation in writing made my a compliant that : I. An unfair trade practice or a restrictive trade practice has been adopted by any trader or service provider; II. The goods bought by him or agreed to be bought by him suffer from one or more defects ; III. The services hired or availed of or agreed to be hired or availed off by him suffer from deficiency in any respect;
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WHAT IS A COMPLAINT?
IV.

A trader or service provider as the case may be has charged for the goods or for the services mentioned in the complaint, a price in excess of the price
a) b) c)

d)

fixed by or under any law for the time being in force; displayed on the goods or any package containing such goods; displayed on the price list exhibited by him by or under any law for the time being in force; agreed between the parties .
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WHAT IS A COMPLAINT?
V.

Goods which will be hazardous to life and safety when used are being offered for sale to the public
a)

b)

In contravention of any standards relating to safety of such goods as required to be compiled with, by or under any law for the time being in force; If the trader could have known with due diligence that the goods so offered are unsafe to the public;
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WHAT IS A COMPLAINT?
VI.

Service which are hazardous or likely t be hazardous to the life and safety of the public when used, are being offered by the service provider which such person could have known with due diligence to be injurious to life and safety.

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WHO IS A CONSUMER?

Two kinds of consumer under the Act

Consumer of goods
buys any

or agrees to buy goods

user of such goods

Consumer of services
hires any

or avails any services

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beneficiary of such service

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WHO IS A CONSUMER ?

Any person who consideration

buys

goods

or

avails

services

for

Consideration may be fully paid, partially paid or fully promised to be paid or partially promised to be paid Any body who uses the goods or services with the consent of the consumer

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WHO IS A CONSUMER ?

Legal heir of consumer in case death of consumer Does not include any person who buys goods for resale or commercial purpose and services for commercial purpose However any person who buys goods for commercial use but exclusively for his livelihood by means of self employment is a consumer.
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WHAT IS A DEFECT ?

Fault Imperfection Shortcoming

In the

Quality Quantity Potency Purity Standards Or

Which is required to be maintained by or under any law for the time being in force
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WHAT IS A DEFICIENCY ?

Fault Imperfection Shortcoming Or Inadequacy

In the

Quality Standard and Manner of performance

Which is required to be maintained by or under any law for the time being in force
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WHAT IS A SERVICE?
Service means service of any description, which is made available to potential users and includes, but not limited to the provisions of the facilities in connection with 1) banking 2) financing 3) insurance 4) transport 5) processing 6) supply of electrical or other energy 7) boarding or lodging or both 8) house construction 9) entertainment 10) amusement or 11) the purveying or new or other information But does not include the rendering of any service free of charge or under a contract of personal service

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Objectives of the Act

The purpose of the Act is to provide for the establishment of the Commission :

To prevent practices having adverse effect on competition; To promote and sustain competition in markets; To protect the interests of consumers and To ensure freedom of trade carried on by other participants in the markets

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Important Features of the C.P. Act

This may be summed up as under:

The Act applies to all goods and services unless specifically exempted by the Central Government. It covers all the sectors private, public and cooperative. The provisions of the Act are compensatory in nature. It provides adjudicatory authorities, which are simple, speedy and less expensive. It also provides for Consumer Protection Councils at the National, State and District levels.

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Consumer Rights under the Act

The Act enshrines the following rights:

The right to be protected against the marketing of goods which are hazardous to life and property; The right to be informed about the quality, quantity, potency, purity, standard and price of goods so as to protect the consumer against unfair trade practices; The right to be assured, wherever possible access to variety of goods at competitive prices; The right to be heard; The right to seek redressal against unfair trade practices or unscrupulous exploitation of consumer; and The right to consumer education.

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CONSUMER DISPUTE REDRESSAL AGENCIES

1)

A Consumer Dispute Redressal Forum at the District level. A Consumer Dispute Redressal Commission at the State level. A National Consumer Dispute Commission at national level. Redressal

2)

3)

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FORUM & JURISDICTION

Forum / Commission Where the value of the goods or services and the compensation, if any claimed, District Forum State Commission Does not exceed Rs. 20 lakhs Rs. 20 lakhs and above but not exceeding One Crore

National Commission Above One Crore Besides, State and National Commission have appellate jurisdiction also.
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ESSENTIAL INFORMATION IN THE APPLICATION

Name and full address of complainant Name and full address of opposite party Description of goods and services Quality and quantity Price Date & proof of purchase Nature of deception Type of redressal prayed for
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FILING OF COMPLAINTS
A complaint may be filed by
a)

The consumer to whom the goods are sold or services are provided Any recognised consumer association One or more consumers with same interest The central government or state government

b)

c)

d)

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FILING OF COMPLAINTS
The Fee for filing the Complaint for the district forum is as under
Sr. No. 1) 2) 3) Value of Goods / Service and Compensation Upto Rs. 1 lakh rupees Rs. 1 Lakh and above but less than Rs.5 lakhs Rs. 5 Lakhs and above but less than Rs. 10 lakhs Amount of Fees Rs. 100 Rs. 200 Rs. 400

4)

Rs. 10 lakhs and above but less than Rs. 20 lakhs

The fees shall be paid by Cross demand Draft drawn on a nationalized bank or through crossed Indian postal order drawn in favour of the Registrar of the Sate Commission and payable at the place of the State Commission (w.e.f. 5.3.2004.) 2626

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POWER OF CIVIL COURT TO DISTRICT FORUM

The District Forum shall have the powers of Civil Court while trying a suit in respect of the following matters ;
a)

The summoning and enforcing attendance of any defendant or witness and examining the witness on oath. The discovery and production of any document or other material object producible as evidence. The reception of evidence on affidavit The requisition of the report of the concerned analysis or test from the appropriate laboratory of from any other relevant source. Any other matter which may be prescribed.
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b)

c) d)

e)

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BENEFITS & RELIEFS TO THE COMPLAINANT ?

IF THE COMPLAINT IS PROVED, THE FORUM SHALL ORDER
a)

b)

c)

d)

e)

to remove defect pointed out by the appropriate laboratory from the goods in question; to replace the goods with new goods of similar description which shall be free from any defect; to return to the complainant the price, or , as the case may be, the charges paid by the complainant; to pay such amount as may be awarded by it as compensation to the consumer for any loss or injury suffered by the consumer due to negligence of the opposite party; To remove the defect in goods or deficiency in the services in question.
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RELIEF TO THE COMPLAINANT ?

f)

g) h)

to discontinue the unfair trade practice or the restrictive trade practice or not to repeat them; not to offer hazardous goods for sale; to withdraw the hazardous goods from being offered for sale;
ha) to cease manufacture of hazardous goods and to desist from offering services which are hazardous in nature; hb) to pay such sum as may be determined by it, if it is of the opinion that loss or injury has been suffered by a large number of consumers who are not identifiable conveniently.

hc) to issue corrective advertisements to neutralize the effect of misleading advertisement at the cost of the opposite party responsible for issuing such misleading advertisement;

i)

To provide for adequate cost to parties.

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APPEAL

shall be filed within thirty days. Delay in filing appeal may be condoned if there is sufficient cause.

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LIMITATION PERIOD
Within two years from the date on which the cause of action has arisen.

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DISMISSAL OF FRIVOLOUS OR VEXATIOUS COMPLAINTS

Where a complaint instituted before the District Forum, the State Commission or the National Commission, is found to be frivolous or vexatious, it shall, for reasons to be recorded in writing, dismiss the complaint and make an order that the complainant shall pay to the opposite party such Cost, not exceeding ten thousand rupees, as may specified in the order.
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PENALTIES
Where a trader or a person against whom a complaint is made (or the complainant) fails or omits to comply with any order made by the District Forum, the State Commission or the National Commission, such trader or person (or complainant) shall be punishable with imprisonment for a term which shall not be less than one month but which may extend to three years or with fine which shall not be less than two thousand rupees but which may extend to ten thousand rupees, or with both.
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A person may be consumer of goods, or services. When I purchase a fan, a gas stove or a refrigerator, I could be the consumer of goods. When I open a bank account, take an insurance policy, get my car repaired, I could be the consumer of services. The consumer protection Act, 1986 tries to help a consumer when for example, the goods purchased are defective or the services rendered to him are subject to so deficiency. Prior to the consumer Protection Act, 1986 for any consumer complaint one had to go to an ordinary Civil Court. He had to engage a lawyer, pay the necessary fee, and be harassed for years or decades before any outcome, positive or negative, was there in that litigation. Under the Consumer Protection Act, no Court fee has to be paid and the decision on the complaint is much quicker, as the Court can evolve a summary procedure in disposing off the complaint.

NOTE ON CONSUMER PROTECTION ACT, 1986

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CASE LAWS ON THE ACT.

PECUNIARY JURISDICTION
In Krishan Dass Chaurasia V. State Bank of India (1995) the total claim in a complaint did not exceed Rs. 1,00,000/-. It was held that the matter was not within the jurisdiction of the State Commission and such a claim was rejected by the State Commission. The Complainant could seek the remedy from the District Forum. Therefore, jurisdiction, which is vested in a district Forum cannot be created for State Commission by merely exaggeration of a claim. In B. Raghunath Vs Trans India Tourism (1996) the complainant had suffered a loss of Rs. 5,000/-, according to his own statement. He claimed compensation of Rs. 5,00,000. It was evident that he had purposely boosted his claim to bring the matter within the pecuniary jurisdiction of the State Commission. The complaint was returned bt the State Commission for presentation in proper District Forum with necessary correction.

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CASE LAWS ON THE ACT.

NO ACTION WHERE NO TERRITORIAL JURISDICTION
In J. K. Synthethetics Vs. Smt. Anita Bhargava (1993) the registered office of the Opposite Party was situated at Kanpur. Payment was made through Bank in Delhi. The complaint filed in Calcutta was held to be outside the territorial jurisdiction of the District Forum. The Order passed by the Calcutta District Forum was set aside in Appeal

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CASE LAWS ON THE ACT.

EVIDENCE THROUGH AFFIDAVITS IS LEGAL & SUFFICIENT EVIDENCE.

In Union of India Vs. Ramswaroop Chandil (1998) the complainant? Respondent had a circular ticket in his possession during journey which was locked in his box. He was not allowed to break open the lock and produce the ticket and was forced to pay excess charge for four persons. The District Forum awarded compensation in his favour for refund of fare and excess charge and for inconvenience, humiliation and Advocates fee, etc. In appeal by the Railway Authorities it was pleaded that the complainant had not produced any witness to support his claim. Dismissing the appeal it was held that he had narrated his case in the affidavit and the same was not rebutted by the Opposite party. It was held that the evidence by affidavit was legal and sufficient to support the complainants case.

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CASE LAWS ON THE ACT.

AFFIDAVITS PERMITTED TO DETERMINE DEFICIENCY IN SERVICE AS WELL AS DAMAGES.

The Consumer Protection Act contemplates speedy disposal of complaints, which are required to be disposed off within 90 days of service of notice to Opposite Party. The Consumer Protection Act, therefore, does not contemplate regular trial as is usually done in civil suits. In Prem Prakash Mehra Vs. Oriental Insurance Co. Ltd., (1995) it has been held that the parties can be called upon tom lead evidence on affidavits not only on question of deficiency in service but also on subject of determination of damages. This in consonance with the objective of the Consumer Protection Act, for speedy disposal of cases.
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CASE LAWS ON THE ACT.

NON-SPEAKING ORDER CAN BE SET ASIDE

In S.D.O. Telephone Vs. Rama Shankar Pandey (1997) the District Forum, Handoi, allowed the complaint and directed that the telephone bills of the complainant be revised on the basis of average consumption and awarded Rs. 200/- compensation to the complainant. No reasons were given for such order. The State Commission held that the order of the District Forum should be a speaking one. It should give, however briefly, the essential facts and material, considered by it as well as the reasons for the conclusion. Else the order becomes arbitrary in the eyes of law. The order of the District Forum was set aside and the case was sent back to the District forum for re-consideration in accordance with law after notice to the parties. 3/10/13

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CASE LAWS ON THE ACT.

REMAND WHEN ORDER SIGNED BY PRESIDENT ONLY

In S. Ravisankar Vs. Aslo Steel Ltd., the order of the District forum was signed only by the President of the Forum. No other member had signed it. Section 14 requires that every order shall be conducted/signed by the President and at least one member. The present order was held to be invalid, and the matter was remanded to the District Forum.
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CASE LAWS ON THE ACT.

PRESIDENT SITTING SINGLY

It has been held by the National Commission that the orders passed by the President of the State Commission sitting singly without the junction of any other member is contrary to Section 14(2) of the Consumer Protection Act, 1986. Such an order is invalid (Raj kumar Mangla Vs. R.S. Singh (1995)

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CASE LAWS ON THE ACT.

PRESIDENT SITTING SINGLY

In Haryana Urban Development Authority Vs. Avtar Krishan Ambedkar (1998) the revision petition was filed against the order of the President of the District Forum, Gurgaon dated 11.7. 1997, which was passed by the President sitting singly, i.e. without associating any of the two companion members. It was held that Section 14(2) requires that all proceedings shall be conducted by the President of District Forum and at least one member thereof sitting together. It was held that the President sitting singly was acting without jurisdiction. The said order was set aside and the case was referred back to the District Forum for fresh decision in accordance with law.
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CASE LAWS ON THE ACT.

PREGNANCY NO GROUND FOR CONDONATION OF DELAY

In Registrar, University of Pune Vs. Mrs. Puja Pravin Wagh (1999) the complainant filed a complaint 3 1/2 months after the expiry of the limitation period of 2 years against the University of Pune for the wrong declaration of result. The reason for delay in filing the complaint given by the complainant was her pregnancy. The District Forum condoned the delay and awarded compensation of Rs. 2,5000/- to the complainant. On appeal it was held that the fact of pregnancy was no justification for the delay. The complaint being time barred the order of the District Forum was set aside.

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CASE LAWS ON THE ACT.

DAMAGES

In Charan Singh Vs. Healing Touch Hospital (2000) it has been held by the Supreme Court that while quantifying damages, Consumer Forums are required to make an attempt to serve the ends of justice so that compensation is awarded, in an established case, which not only serves the purpose of recompensing the individual, but which also at the same time, aims to bring about a qualitative change in the attitude of the service provider. Indeed, calculation of damages depends on the facts and circumstances of each case. No hard and fast rule can be laid down for universal application. While awarding compensation, a Consumer Forum has to take into account all relevant factors and assess compensation on the basis of accepted legal principles, on moderation.
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CASE LAWS ON THE ACT.

DAMAGES

In Patel Roadways Ltd. Vs. Birla Yahama Ltd. AIR 2000 the Supreme Court has held that Consumer Forums have jurisdiction to entertain complaints against carriers regarding loss of or damage to goods entrusted to carrier for transportation. In Provident Fund Commissioner Vs. Shiv Kumar Joshi (2000) the Supreme Court has held that an employee, who is a member of the Employees Provident Fund Scheme, is a consumer and duties performed by the Regional Provident Fund Commissioner under such scheme is service and thus, in case of delay in release of provident fund, complaint for deficiency in service, is maintainable.
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Consumer Protection: Implications for Good Governance

An effective, efficient and fair implementation of the Consumer Protection Act is one of the conditions precedent for promoting the culture of good governance and thereby ensuring the better promotion and protection of the rights of the consumers. If the rights of the consumers in relation to the quality of goods and services are assured and taken care of then there will be no cause for complaints. This situation would certainly create an atmosphere wherein the clients, customers and consumers would feel satisfied with the things needed most to them.

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Concluding Remarks

The efficient and effective programme of Consumer Protection is of special significance to all of us because we all are consumers. Even a manufacturer or provider of a service is a consumer of some other goods or services. If both the producers/providers and consumers realize the need for coexistence, adulterated products, spurious goods and other deficiencies in services would become a thing of the past. The active involvement and participation from all quarters i.e. the central and state governments, the educational Institutions, the NGOs, the print and electronic media and the adoption and observance of a voluntary code of conduct by the trade and industry and the citizens charter by the service providers is necessary to see that the consumers get their due. The need of the hour is for total commitment to the consumer cause and social responsiveness to consumer needs. 3/10/13 This should, however, proceed in a harmonious manner so that our society becomes a better place for all of us to live in.