The Consumer Protection Act, 1986

The Consumer Protection Act, 1986 came into

effect from 15.04.1987 except chapter 3rd
(regarding Consumer Disputes Redress Agencies)
which came into effect from 01.07.1987. The Act
was enacted to provide for better protection of
interests of consumers through establishment of
consumer councils and other authorities for the
settlement of consumers’ disputes.
 Objectives Of The Act
The Act, inter alia, seeks to promote and protect the rights
of consumers such as ------
1. Right to be protected against marketing of goods which
are hazardous to life and property;
2. Right to be informed about the quality, quantity,
potency, purity, standard and price of goods to protect
the consumer against unfair trade practices;
3. Right to be assured, wherever possible, access to variety
of goods at competitive prices;
4. Right to be heard and to be assured that customers’
interests will receive due consideration at appropriate
forums;
5. Right to seek redresses against unfair trade practices or
unscrupulous exploitation of consumers; and
6. Right to consumer education.
 Contd..
The objects are sought to be promoted and protected by the
Consumer Protection Councils to be established at the Central and
State levels.

The Act applies to all goods and services, except if otherwise

provided by the Central Government by Notification. To provide
speedy and simple redresses of consumer disputes, quasi-judicial
machinery is set up at the District, State and Central levels. The
three-tier system of quasi-judicial bodies will observe the
principles of natural justice and are empowered to give reliefs of a
specific nature and to award, wherever appropriate, compensation
to consumers. Penalties for noncompliance of the orders given by
the quasi judicial bodies have also been provided.
 Contd..
Thus a thrive of the Consumer Protection Act is to serve the
interests of the consumers. Consumer education and redresses of
consumer grievances are the two aspects of the Act. It makes good
the loss a consumer suffers and increases the feeling of
responsibility of the manufacturer, trader, supplier or
businessman.
 
In the case of Lucknow Development Authority Vs M.K. Gupta the
Supreme Court held that the provisions of the Act have to be
construed in favor of the consumer to achieve the purpose of
enactment as it is social benefit oriented legislation. The primary
duty of the Court while construing the provisions of such an Act is
to adopt a constructive approach, subject to that it should not do
violence to the language of the provisions and be not contrary to
attempted objective of the enactment.
 Contd..
Complainant means -a consumer; or any voluntary
consumer association registered under the Companies Act,
1956 or under any other law for the time being in force; or the
Central Government or any State Government, who or which
makes a complaint; one or more consumers, where there are
numerous consumers having the same interest, who or which
makes a complaint, in case of death of a consumer, his legal
heir or representative.

Complaint means-any allegation in writing made by a

complainant with a view to obtaining any relief provided
by or under this Act. This allegation in writing must be
that-
 Contd..
1) an unfair trade practice or a restrictive trade practice has been
adopted by any trader or service provider;
2) the goods bought by him or agreed to be bought by him suffer
from one or more defects;
3) the services hired or availed of or agreed to be hired or availed
of by him suffer from deficiency in any respect;
4) a trader or the 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. fixed by or under any law for the time being in force;
b. displayed on the goods or any package containing such goods;
c. displayed on the price list exhibited by him by or under any law
for the time being in force;
d. agreed between the parties;
 Contd..
5) goods which will be hazardous to life and safety when
used are being offered for sale to the public-
a. in contravention of any standards relating to safety of such
goods as required to be complied with, by or under any law
for the time being in force;
b. if the trader could have known with due diligence that the
goods so offered are unsafe to the public;

6) services which are hazardous or likely to be hazardous to

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.
 A Consumer is a person who

1. buys any ‘goods’ for a consideration; or

hires or avails of any “service” for a consideration;
2. “uses the goods” with the approval of the person who
has bought the goods for consideration;
3. “is beneficiary of services” with the approval of the
person who has hired the services for consideration.
 What is a Consumer Dispute?

On a complaint before the Consumers

Redresses Forums against a person, who
denies or disputes the allegations contained
in the complaint a consumer dispute arises.
Separate allegations may form separate
disputes requiring separate finding on each
dispute.
 Unfair Trade Practice:

Means a trade practices which, for the purpose of

promoting the sale, use or supply of any goods or
for the provision of any service, a trader adopts any
unfair method or deceptive practice. Unfair trade
practice is not only related to goods but also to
services rendered. Collecting service charges during
free guarantee period or collecting repair and
service charges but not repairing the goods sold is
unfair trade practice and deficiency of service
 Restrictive Trade Practice

RTP is one 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.
 Deficiency:

Deficiency means 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 been undertaken to be performed by a
person in pursuance of a contract or otherwise in relation to any
service..
Ex: Failure of insurance company to settle claim without sufficient
cause is deficiency.
Failure of Railways to provide cushioned seats in 1st Class is
deficiency of service.
 Defect:

It means any fault, imperfection or shortcoming in the quality,

potency, purity or standard which is required to be maintained by
or under any law for the time being in force under any contract,
express or implied or as is claimed by the trader in any manner
whatsoever in relation to any goods;
 Consumer Protection Councils

Sections 4 to 8 of the Act provide for establishment

and objectives of Consumer Protection Councils.
 1) Central Consumer Protection Council:

The Central Government shall constitute Central Consumer

Protection Council to promote and protect the rights of the
consumers. The term of the council is three years. The
Minister in charge of Consumer Affairs in the Central
Government, who shall be the Chairman of the Central
Council and such number of other official or non-official
members representing such interests not exceeding 150.
Objectives:
1. The right to be protected against the marketing of goods and
services which are hazardous to life and property;
2. The right to be informed about the quality, quantity, potency,
purity, standard and price of goods or services, as the case may
be so, as to protect the consumer against unfair trade practices;
3. The right to be assured, wherever possible, access to a variety
of goods and services at competitive prices;
4. The right to be heard and to be assured that the consumers’
interests will receive due consideration will receive due
consideration at appropriate forums;
5. The right to seek redressal against unfair trade practices or
restrictive trade practices or unscrupulous exploitation of
consumers; and
6. The right to consumer education.
 2) State
StateConsumer Protection
Consumer Protection Council: Council:

Each State Government shall establish a Council consist

of the Minister in charge of Consumer Affairs in the State
Government as its Chairman; such number of other
official or non-official members representing such
interests as may be prescribed by the State Government;
and such number of other official or non-official
members, not exceeding ten, as may be nominated by the
Central Government.

The objectives of every State Council shall be the same as

the objects of the Central Council to promote and protect
within the State the rights of the consumers.
3)The District Consumer Protection Council:

The State Government shall establish for every district, a

District Consumer Protection Council. It shall consist of the
Collector of the district, who shall be its Chairman; and such
number of other official and non-official members
representing such interests as may be prescribed by the
State Government.
The objects of every district council shall be the same as the
objects of the Central Council to promote and protect within
the district the rights of the consumers.
 Consumer Dispute Redressal Agencies

Redressal Forums:
In order to carry out the purposes and objects of the Act, the following
agencies are established as Consumer Dispute Redressal Agencies.
(Sections 9 to 27).
1. District Forum: A Consumer Dispute forum is established in each
district of the State by the State Government by notification in the
official gazette for redressal of consumer disputes. The State
government may, if it deems fit, establish more than one district forums
in a particular district.
2. State Commission: The commission is established by the State
Government by notification in the official gazette for redressal of
consumer disputes.
3. National Commission: Such commission is established by the Central
Government by notification in the official gazette for redressal of
consumer disputes.
A three tier system of Consumer Disputes
Redresses Agencies in the Districts, States and the
Centre is envisaged by Sec.9 of the Act. The District
Forum is at the base level. Next in hierarchy is
State Commission. Both District Forums and State
Commission are constituted in each state. At
National or Central level and at the top of
hierarchy is National Commission. The object of
setting up these Forums is to provide inexpensive
litigation without much of legal technicalities and
formalities.
 Contd..

The functions of the Commissions are quasi judicial

in nature. Though it has powers of a Civil Court,
strictly speaking it is not a civil court.
Final appeal from orders of National Commission
lies to Supreme Court.
 District Forum

Each State Government shall establish in each district a Consumer

Redressal Forum, known as a District Forum. Each District Forum
shall consist of –

President: A person who is, or has been, or is qualified to be a

District Judge shall be a President of District Forum

Member: A District Forum shall have two other members who

shall have the following qualifications, namely:
a) Be not less than thirty five years of age
b) Possess a bachelor’s degree from a recognized
university
c) Be persons of ability, integrity and standing and have
adequate knowledge and experience of atleast ten
years in dealing with problems relating to economic,
law, commerce, accountancy, industry, public affairs
or administration. One of the two members shall be
a woman.
Every appointment shall be made by the State
Government on the recommendation of a Selection
Committee consisting of the following namely:
a) The President of the State Commission-Chairman
b) Secretary, Law Department of the State-Member
c) Secretary in charge of the department dealing with
consumer affairs in the State-Members.
Jurisdiction: The District Forum shall have jurisdiction to entertain
complaints where the value of goods and services and the
compensation, if any, claimed does not exceed Rs.20 lakhs. A
complaint shall be filed in district forum within the local limits of
whose jurisdiction the opposite party (i.e., the person who
answers complaint or claim) reside or carry on business or the
cause of action has arisen.
The complaint may be filed by any of the following:
a) The consumer concerned.
b) Any recognized consumer association,
c) One or more consumers for the benefit of all consumers
d) The Central or State Government
Powers:
a) The summoning and enforcing attendance of any defendant or
witness and examining the witness on oath:
b) The discovery and production of any document or other
material object producible as evidence;
c) The reception of evidence on affidavits;
d) The requisitioning of the report of the concerned analysis or
test from the appropriate laboratory or from any other relevant
source;
e) Issuing of any commission for the examination of any witness;
and
f) Any other matter which may be prescribed.
 State Commission

Each State Commission shall consist of a person who is or has

been a judge of a High Court, appointed by the State
Government, who shall be its President: However, no
appointment under this Clause shall be made except after
consultation with Chief Justice of the High Court.
Not less than two and not more than such number of
members as may be prescribed, one of whom shall be a
woman, who shall have the following qualifications namely:-
a) Be not less than 35 years of age,
b) Possess a bachelor’s degree from a recognized university;
and
c) Be person of ability, integrity and standing and have
adequate knowledge and experience of at least 10 years in
dealing with problems relating to economics, law,
commerce, accountancy, industry, public affairs or
administration.

However not more than 50 percent of the members shall be

from amongst persons having a judicial background.
Every appointment shall be made by the State
Government on the recommendation of a Selection
Committee consisting of the following members, namely:-
 
I. President of the State Commission……….Chairman
II. Secretary of the Law Department of the State……
Member
III. Secretary in charge of the Department dealing with
Consumer Affairs in the State….Member.
 Jurisdiction:

The State Commission shall have the jurisdiction:

To entertain:
 
1) To entertain:

a) Complaints where the value of the goods or services and

compensation, if any, claimed exceeds rupees 20 lakhs but does
not exceed rupees one crore; and
b) Appeals against the orders of any District Forum within the
state, and
 
2) To call for the records and pass appropriate orders in
any consumer dispute which is pending before or has
been decided by any District Forum within the state,
where it appears to the State Commission that such
District Forum has exercised a jurisdiction not vested
in it by law, or has failed to exercise a jurisdiction
illegally or with material irregularity.
 National Commission

The National Commission shall consist of-

a) A person who is or has been a judge of the Supreme Court,

to be appointed by the Central Government, who shall be
its President. However, no appointment under this Clause
shall be made except after consultation with the Chief
Justice of India:
b) Not less than four and not more than such number of
members, as may be prescribed and one whom shall be a
woman who shall have the following qualifications,
namely:-

a) Be not less than 35 years of age;

b) Possess a bachelor’s degree from a recognized
university; and
c) Be persons of ability, integrity and standing and have
adequate knowledge and experience of at least 10
years in dealing with problems relating to economics,
law, commerce, accountancy, industry, public affairs or
administration.
However, not more than 50% of the members shall
be from amongst the persons having a judicial
background.

Judicial background means persons having

knowledge and experience for at least a period of 10
years as a presiding officer at the district level court
or any tribunal at equivalent level;
Every appointment referred to above shall be made
by the Central Government on the
recommendation of a selection committee
consisting of the following namely-

A person who is a judge of the Supreme Court to be

nominated by the Chief Justice of India…Chairman
The Secretary in the Department of Legal Affairs in the
Government of India….Member
Secretary of the Department dealing with Consumer
affairs in the Government of India….Member
The jurisdiction, powers and authority of National
Commission may be exercised by Benches thereof.
A Bench may be constituted by the President with one
or more members as the President may deem fit.
Jurisdiction:
A. To entertain
(i) complaints where the value of the goods or services and
compensation, if any, claimed exceeds one crore and
(ii) appeals against the orders of any State Commission; and

B. To call for the records and pass appropriate orders in any

consumer dispute which is pending before or has been
decided by any State Commission where it appears to the
National Commission that such State Commission
(ii) has exercised a jurisdiction not vested in it by law, or
(ii) has failed to exercise a jurisdiction so vested, or
(iii) has acted in the exercise of its jurisdiction illegally or with
material irregularity.
 
Every order of a District Forum, the State Commission or
the National Commission shall, if no appeal has been
preferred against such order under the provisions of this
Act, be final.