Consumer Protection Act, 1986

Historical Background

Consumer is the pivot of all production and progress of a nation. Unfortunately, Indian consumers are mostly illiterate and unorganized. They have little capacity or purchase goods or services on fair rates and terms. They are generally bluffed and befooled by the traders who are organized and commit frauds in open market. For the industrial development of the country, Sri Jawharlal Nehru initiated the restricted import policy to offer facilities to Indian industrialists in the interest of rapid development of Indian industries. But the Indian industrialists rather committed frauds with the Indian consumers by producing sub-standard products. Now as the central government has opened the gates of world market to Indian traders. Indian traders are making hue and cry as they are unable to compete with the foreign industrialists and traders. To protect the interests of Indian consumers, the former Prime Minister, Rajiv Gandhi initiated the Consumer Protection Act, 1986.

Statement of Objects

The Consumer Protection Bill, 1986 seeks to provide better protection of interests of the consumers and for that purpose to make provision for establishment of consumer councils and other authorities for the settlement of consumer’s disputes and for matters connected therewith.

It seeks to promote and protect the rights of consumers, such as:

  • The right to be protected against marketing of goods where are hazardous to life and property.
  • The right to be informed about the quality, quantity, potency, purity, standard and price of goods to protect the consumer against unfair trade practices.
  • The right to be assured, wherever possible, access of variety of goods at competitive prices.
  • The right to be heard and to be assured that consumers’ interests will receive due consideration at appropriate forums.
  • The right to seek redressed against unfair trade practices or unscrupulous exploitation of consumers, and
  • The right to consumer education.

To provide steady and simple redressal to consumers’ disputes, a quasi-judicial machinery is sought to be set up at the district, state and central levels. The quasi-judicial bodies will observe the principles of natural justices and have been empowered to give relieves of a specific nature and to award wherever appropriate compensation to consumers. Penalties for non-compliance of the orders given by the quasi-judicial bodies have also been provided.

Salient features of the Consumer Protection Act, 1986

The salient features of the Act are as follows:

1) The Act provides speedy redressal to consumer Redressal Forum in every district, a commission at the State level and the National commission at the Centre. The Forum in the District will have original jurisdiction to redress complaints up to claim of Rs. 1lakh (after amendment up to 10 lakhs). The National Commission can entertain any claim for damages above Rs. 10 lakhs (after amendment above 20 lakhs). The State Commission will be vested with appropriate Appellate and Revisional powers.

2) To promote voluntary consumer movement and to ensure involvement of consumers. The Bill provides for the establishment of Consumer Protection Councils in centre and the states. These Councils will have both non-official and official members. The objects of the Council will be to promote and protect the rights of the consumers.

3) It shall apply to all goods and classes of goods or all services or classes of services except those which are specially exempted by notification by the central government.

4) The provisions of the Bill shall be in additional to and not in derogation of any other law for the time being in force.

5) Necessary penal and punitive provisions have been corporate to ensure that the proposed legislation is effective in protecting consumers.

6) The complain can be filed by a consumer or an organization being a society registered under the Societies Registration Act, or a company registered under the Companies Act, representing consumers or by the central or state government.

7) The complaint can be field on account of any unfair trade practices resulting in loss or damage, defect in the goods, deficiency in the services, prices charged in excess of the prices fixed by or under any law or displayed on the goods/packets

Definition of Consumers

Consumer, under section 2(1) (d) of the Consumer Protection Act, 1986, means one who pays money for goods or services. In other words, a consumer is a specific person who pays money either for purchase of some goods or some service of other persons, individual or corporate body. The definition under section 2(1) (d) (i) do not include a person who obtains such goods for resale or for any commercial purposes. But “Commercial purpose” under sub-clause (i) above does not include use by a consumer of goods bought and used by him exclusively for purpose of earning his livelihood, by means of self-employment.

Service: Service Means of any description which is made available to potential users and includes the provision of facilities in connection with banking, financing, insurance, transport, processing supply of electrical or other energy, boarding or lodging or both, housing construction, entertainments, amusement or the news or other information, but does not include the rendering of any service free of charge or under a contract of personal service.

Consumer Disputes

Consumer dispute is a dispute which arises out of a denial of allegation complained in a complain by the person against whom such complaint has been made. For definition of the term ‘Complaint’, it is an allegation in writing made by a consumer or a voluntary consumer association duly registered or by the central government or the state government. Disputes means a claim made by one part and denied by the other.

Consumer Protection Councils

Central Council and State Councils

The Consumer Protection Act, 1986 sought to provide better protection to the interests of the consumes and for that purposes made provision for the establishment of Consumer Protection Councils and other authorities for resolving consumers’ disputes. The Consumer Protection Councils would be set p at national and state levels. (Section 6of Consumer Protection Act)

The objects of the Central Consumers Protection Council and State Consumers Protection Councils are to promote and protect the rights of the consumers, such as:

  • The right to be protected against marketing of goods and services which are hazardous to life and property.
  • 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.
  • The right to be assured wherever possible, access to a variety of goods and services at competitive prices.
  • The right to be heard and to be assured that consumers’ interest will receive due consideration at appropriate forum.
  • The right to seek redressal against unfair trade practices or restrictive trade practices or unscrupulous exploitation of consumers, and
  • The right to consumer education.

The objects of State Consumer Protection Council are to promote and protect within the state the rights of the consumers.

Complaint

What it is?

Complaint means any allegation made in writing by the complainant that-

  • As a result of any unfair trade practice adopted by any trade, he has suffered loss or damage.
  • The goods mentioned in the complaint suffer from one or more defects.
  • The services mentioned in the complaint suffer from deficiency in any respect, and
  • Price in excess of price fixed by or under any law for the time in force or displayed on the goods or any package containing such goods has been charged by a trader. The purpose of the complaint is to seek curtain relief.

Procedure on receipt of Complaint

It has been provided in Section 13 of the Act that the District Forum shall on receipt of a complaint, if it relates to any goods, refer a copy of complaint to the opposite party mentioned in the complaint directing him to give his version of case within a period of 30 days or such extended period not exceeding 15 days as may be granted by the District Forum. Where the opposite party denies or disputes allegation or omits or fails to take any action with in the time given, the District Forum shall proceed to settle the dispute.

Where the complaint alleges a defect in the goods which cannot be determined without proper analysis or test of the goods, the District Forum shall obtain sample of the goods from the complainant seal it and authenticate it in the manner prescribed and refer the sample so sealed to the appropriate laboratory along with a direction that such laboratory make analysis or test, whichever may be necessary with a view to finding out whether such goods suffer from any defect alleged in the complaint or suffer from any defect and to report its finding thereon to the District forum within a time period of 45 days of the receipt of the reference or within such extended period as may be granted by the District Forum.

Before any sample of the goods is referred to any appropriate laboratory, the District Forum may require the complaint to deposit to the credit of the Forum such fees as may be specified for payment to the laboratory for carrying out the necessary analysis or test in relation to the goods in question.

The District Forum shall remit the amount so deposited to its credit to the appropriate laboratory to enable it to carry out the analysis or test mentioned above and on receipt of the report from the appropriate laboratory, the District forum shall forward a copy of the receipt along with the remarks as the District Forum may feel appropriate to the positive party.

It any of the parties disputes the correctness of the findings of the appropriate laboratory or disputes the correctness of the methods of analysis or test adopted by the laboratory, the District forum shall require the opposite part or the complainant to submit in writing his objectives in regard to the report made by the appropriate laboratory. The District Forum thereafter shall give a reasonable opportunity to both the parties of being heard on the point of correctness or otherwise of the report and also as to the objection made in relation thereto and issue an appropriate order.

If the complaint received by it relates to goods in respect of which the procedure specified above cannot be followed, or if the complaint relates to any services, the District Forum shall refer a copy of such complaint to the opposite part directing him to give the version of the case within a period of 30 days or such extended period not exceeding 15 days as may be granted by the District Forum.

Where the opposite party denies or disputes the allegation or omits or fails to take any action to represent his case with in the time given by the District Forum, the District Forum shall proceed to settle the disputes on the basis of the evidence brought to the notice by the complainant and the opposite party. No proceeding complying with the procedure mentioned above shall be called in question on the ground that the principles of natural justice have not been complied with.

Penalty under the Consumer Protection Act, 1986

Section 27 of Consumer Protection Act, 1986 provides for penalties that, where a trader or a persons 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, as the case may be, 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 Rs. 2000/- but which may extend to Rs. 10000/- or with both. But the District Forum, the State Commission or the National Commission, as the case may be, if it is satisfied that the circumstances of the case so require, impose a sentence of imprisonment or fine, or both for a term lesser than the minimum term and the amount lesser than the minimum amount, specified in this section.