UNIT IV-CHAP 1 - CONSUMER PROTECTION ACT 1986

INTRODUCTION
Consumer Protection Act has came into force from 24-12-1986. The Central government enacted this act in 1986 for the protection of consumers. The act applies to all goods & services. The act was amended in the year 2002, & it came into force from March 15th 2003. AIMS & OBJECTIVES OF THE ACT

I.

BETTER PROTECTION OF INTEREST OF CONSUMERS: The act seeks to provide for better

protection of the interests of consumers. For this purpose the act makes provision for the establishment of consumer protection councils & other authorities for settlement of consumer disputes.

I.

PROTECTION OF RIGHTS OF CONSUMERS: The act recognises 6 consumer rights which are

based on the pronouncement made in 1964 by John F. Kennedy former president of USA. They are:

1. Right to safety: Consumers have a right to be protected against marketing of goods or services
which are hazardous to life & property.Eg. Adulterated food is dangerous to life, adulterated cement is dangerous to life & property. 2. Right to information: Consumers have right to be informed about the quality, quantity, potency, purity standard & price of goods or services so as to protect consumers against unfair trade practices. Right to obtain adequate information enables the consumer to take intelligent decision at the time of purchasing any goods or hiring any services. It should be the responsibility of the producer to ensure that goods meet reasonable demand of durability, utility & reliability & are suited for the purpose for which they are intended.

3. Right to Choose: Consumers have a right to be assured where ever possible access to goods &
services at competitive prices. The objective is to provide consumers with the greatest range of choice among products & services at lowest price. 4. Right to be Heard: Consumers have right to be heard & to be assured that consumers interest will receive due consideration at appropriate forums. 5. Right to seek Redressal: Consumers have a right to seek redressal against unfair trade practices or restrictive trade practices or unscrupulous exploitation of consumers. 6. Right to consumer education: Information about the consumer products in the market & for the proper functioning of the legal system it is necessary that the knowledge of the availability of the legal remedy should be explained advertised & circulated so that people become conscious of their rights. People should be informed that they should buy products certified by ISI mark. [Indian Standard Institute now known as Bureau of Indian Standard] & AGMARK [Agricultural marketing an organisation which certifies quality of food & products]. III CONSUMER PROTECTION COUNCILS: The interest of consumers are sought to be protected & promoted by establishment of consumer protection councils at central & state levels. They are advisory bodies. IV QUASI JUDICIAL MACHINERY FOR REDRESSAL OF CONSUMER DISPUTES: The act seeks to provide speedy & simple redressal to consumer disputes. For this purpose quasi judicial machinery is set up at district, state & national levels. These quasi judicial bodies are supposed to observe principles of natural justice & are empowered to Give relief of specific nature. To award compensation to consumer where ever appropriate. Impose penalties for non compliance of orders issued by these quasi judicial bodies.
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A common consumer is not in a position to approach civil court. Quick, cheap & speedy justice to his complaints is required. The act provides a more accessible & speedily legal avenue for consumers. No lawyers. Judgement to be delivered in 90days. CONSUMER PROTECTION COUNCILS (SECTIONS 4 -8) The interest of the consumers are sought to be promoted & protected under the act by establishment of consumer protection councils at central, state & district levels. They are advisory bodies. Basis District consumer protection council (Sec 8A & 8B) Established by state govt by notification for every district Collector of the district State consumer protection council (sec 7&8) By state govt by notification for every state Minister in charge of consumer affairsin the state govt Prescribed by state govt Central consumer protection council (sec 4 to 6) By central govt by notification. Minister in charge of consumer affairs- in the central govt 150 members

1. Establishment 2. Chairman

3. Official or Non official members 4. Term of the council 5. Meetings

Prescribed by state govt

It may meet as & when required but not less then 2 meetings every year

It may meet as & when required but not less then 2 meetings every year Decided chairman Refer rights by

3 years It may meet as & when required but At least 1 meeting in 1 year Decided by chairman

6. Place & Time 7. Objectives

Decided by chairman

Refer consumer rights

consumer

Refer consumer rights

QUASI REDRESSAL MACHINERY FOR SETTLEMENT OF CONSUMER DISPUTES/CONSUMER COURTS

Basis 1. Establishme nt 2. President District forum Sec 10 to 15 By state govt in each district by notification in the official gazette Judge of district court State commission Sec 16 to 19 By state govt in each state by notification in the official gazette Judge of high court appointed by state govt in consultation with chief justice of high court National commission Sec 20 to 24 By central govt by notification in official gazette Judge of supreme court appointed by central govt in consultation with chief justice of supreme court
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(CONSUMER PROTECTION ACT 1986)

3. Members

2 members of which 1 shall be woman Not less than 35 years Bachelors degree from recognised university Be a person of ability, integrity& standing, knowledge & experience of at least 10 years in dealing problems relating to economics, law, commerce, accountancy, industry, public administration 5 years of service or 65 years age which ever is earlier Prescribed by state govt (a) Convicted & sentenced to imprisonment for offence involving moral turpitude (b) Is an Undischarged insolvent (c) Dismissed or removed from service of govt or body corporate owned or controlled by govt (e) Has financial or any interest likely to affect prejudicially discharge of his functions as member (f) Is of Unsound mind (g) Any other disqualification prescribed by state govt. (a) President of state commission as chairman (b) Secretary, law dept of state as member (c) secretary in charge dept of consumer affairs in state as member

4. Age 5. Qualificatio n 6. Experience

Not less than 2 members of which 1 shall be woman Not less than 35 years Bachelors degree from recognised university Same as forum district

Not less than 4 members of which 1 shall be woman Not less than 35 years Bachelors degree from recognised university Same as district forum

7. Term of office

5 years of service or 67 years of age which ever is earlier Prescribed by state govt Same as forum district

5 years of service or 70years of age which ever is earlier Prescribed by central govt Same as district forum

8. Salary & other allowances 9. Disqualifications for membership

(g) Any other disqualification prescribed by central govt

10. Selection committee members

Same as forum

district

>Judge of supreme court nominated by chief justice of India as chairman >Secretary in dept of legal affairs in govt of India as member >Secretary of dept of consumer affairs in govt of India as member

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JURISDICT ION a) Monetar y jurisdict ion b) Territorial jurisdiction

Entertain complaints if value of goods or services is not exceeding 20lakhs Complaint can be filed in that district forum where a) Opposite party resides or carries on business at the time of institution of complaint (or) b) Any of the opposite parties reside or carry on their business at the time of institution of compliant with permission of district forum (or) c) Cause of action arises

Entertain complaints if value of goods or services exceeds 20lakhs but do not exceed 1crore Complaint can be filed in that state commission where a) Opposite party resides or carries on business at the time of institution of complaint (or) b) Any of the opposite parties reside or carry on their business at the time of institution of complaint with permission of state commission (or) c) Cause of action arises

>Entertain complaints if value of goods or services exceed 1crore

c) Appellate d) Revisional/ superviso ry

>entertain appeals against the Orders of district forum. >To call for records and pass appropriate orders in any consumer dispute pending before district forum Any person aggrieved by an order given by state commission can appeal to national commission within 30days from date of order

>Entertain appeals against the orders of state commission. >To call for records & pass appropriate orders in any consumer dispute pending before state commission Any person aggrieved by an order given by national commission can appeal to supreme court within 30days from date of order -

12. Appeal

Any person aggrieved by an order given by district forum can appeal to state commission with in 30days from date of order

HOW TO FILE A COMPLAINT? A Complaint shall be presented by the complainant or by his authorized agent in person or sent by registered post addressed to the concerned Consumer Redressal Forum. Complaint should be signed by the complainant or his authorized agent. Prescribed Fee for filing a complaint shall be deposited before the consumer redressal forum.
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CONTENTS OF THE COMPLAINT 1. Name, description & address of complainant. 2. Name, description & address of opposite party. 3. Facts relating to the complaint about the date & place where it arose. 4. Enclose the documents in support of allegations contained in the complaint. 5. The relief which the complainant claims. FEES FOR FILING COMPLAINT Any body filing a complaint in district forum will have to pay fee in proportion to the compensation he seeks in his complaint in the form of crossed demand drafty drawn on a nationalized bank Value of goods Amount of & services fee Up to 1 lakh Rs 100 1lakh-5lakhs Rs 200 5lakh-10lakhs Rs 400 10lakh-20lakhs Rs 500 Note: No fees is charged for filing complaint in state & national commission PROCEDURE FOR SETTLEMENT OF DISPUTES BY DISTRICT FORUM / STATE COMMISION / NATIONAL COMMISION
I. COMPLAINT RELATING TO GOODS

1. On receipt of complaint District forum will take 21 days to decide about the admissibility of complaint. 2. District forum/SC/NC will refer a copy of complaint to opposite party & direct him to give his version with in 30days. This period can be extended not exceeding 15days as may be granted by district forum/SC/NC. 3. If the opposite party denies the allegation or fails to take any action to represent his case within the time given then the dispute arises & is settled as follows: (a) District forum/SC/NC shall obtain sample of goods from complaint, seal it, authenticate & refer the Sample to appropriate laboratory for testing. The laboratory shall submit report of testing to district forum/SC/NC with in 45days of the receipt or with in such extended period granted by district forum /SC/NC. Before any sample of goods is referred to laboratory consumer can be asked by district forum/SC/NC to deposit/pay fees to laboratory for carrying out testing of goods. On receiving the report from laboratory, district forum/SC/NC will forward the copy of report to opposite party. (b). If any of the parties disputes the correctness of the report or correctness of the method of analysis/testing then district forum/SC/NC shall require them to submit objections in writing. (c). District forum/SC/NC shall give reasonable opportunity to both the parties complainant & opposite party of being heard as to the correctness of report given by laboratory & also to the objections. Thereafter appropriate order will be issued by district forum/SC/NC. II COMPLAINT RELATING TO SERVICES

1. Refer points 1, 2 of complaint relating to goods. 2. If the opposite party denies the allegation or fails to take any action to represent his case
Within the time given then the dispute arises.District forum/state commission/national Commission shall proceed to settle the dispute as follows: a) On the basis of evidence brought to its notice by complainant & the opposite party where opposite party denies the allegations contained in the complaint. b) On the basis of evidence brought to its notice by the complainant where the opposite party fails to take any action to represent his case with in the time limit given.
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c) Where the complainant fails to appear on the date of hearing before the district forum/SC/NC then
it may either dismiss the complaint for default or decide it on merits. If the opposite party fails to appear on the date of hearing then district forum/SC/NC may decide the complaint ex-parte. POWERS OF DISTRICT FORUM / STATE COMMISSION / NATIONAL COMMISSION

1. Summoning & enforcing attendance of any defendant or witness & examining the witness on oath.
2. Discovery & production of any document or other material object producible as evidence. 3. Reception of evidence on affidavit. 4. Requisitioning of the report of the concerned analysis or test from appropriate laboratory or from any other relevant source. 5. Issuing of any commission for examination of any witness. 6. To produce or examine books of accounts, documents, commodities in the custody of person. 7. To authorise any officer to search any premises & seize books, papers, documents etc which are likely to be destroyed, altered, falsified or secreted. 8. Any other matter which may be prescribed. FINDINGS/JUDGEMENT BY DISTRICT FORUM/STATE/NATIONAL COMMISSION OR RELIEF AVAILABLE TO CONSUMERS It is for the consumer to establish with evidence that defects in goods & deficiency in service exists. District forum/SC/NC after conducting the proceedings is satisfied that the goods complained against suffer from any defect specified in the complaint or that any of the allegations contained in the complaint about the services are proved then it shall issue an order to the opposite party directing him to take one or more of the following steps within a reasonable period. 1. To remove the defect from the goods pointed out by appropriate laboratory. 2. To replace the goods with new goods of similar description which shall be free from any defect. 3. To return the price & charges to complainant. 4. To pay compensation to consumer for any loss or injury. 5. Suffered due to negligence of opposite party. 6. To remove defect or deficiency in the service in question. 7. To withdraw hazardous goods from sale. 8. Not to offer hazardous goods for sale 9. To cease manufacture of hazardous goods & to desist from offering services hazardous in nature 10. To issue corrective advertisement to neutralize the affect of misleading advertisement at the cost of the opposite party responsible for issuing such misleading advertisement 11. To provide for adequate costs to parties. Every proceeding referred to above shall be conducted by president of district forum/SC/NC & at least on member sitting together. Every order made by district forum/SC/NC shall be signed by president & the members/member who conducted the proceedings. If any of them differ on any points then they shall state in writing the point/points in which they differ & opinion of the majority shall be the order of district forum/SC/NC. PERIOD OF SETTLEMENT OF DISPUTES: Every complaint shall be heard as expeditiously as possible & endeavour shall be made to decide the complaint a) With in a period of 3 months from date of receipt of notice by opposite party if no testing & analysis of goods is required b) With in a period of 5 months if testing & analysis of goods is required. PENALTIES Where a trader or a person against whom a complaint is made fails or omits to comply with any order mode by district forum, SC or NC shall be punishable with imprisonment for a term which shall not be less than 1month but which may extend to 3years or with fine which shall not be less than Rs 2000 which may extend to Rs 10000 or with both. DISMISSAL OF FRIVOLOUS COMPLAINTS: Where a complaint instituted before district forum/SC/NC is found to be false then it shall dismiss the complaint & order the complainant to pay Rs.10000 to opposite party. CASE: Oriental Insurance Co.Ltd vs. Ravi Inder singh Bhalla
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Ravi filed a suit on insurance company to recover a claim of Rs.90000 on the Ground that his car met with an accident. The insurance company rejected the claim for an accident which never took place.Ravi could not prove the Accident & he was asked to pay Rs.2500 to the company for filing Frivolous complaint DEFINITIONS

1. CONSUMER DISPUTE: means a dispute where the person against whom a complaint has been
made, denies or disputes the allegations contained in the complaint. 2. DEFECT: means any fault, imperfection or shortcoming in the quality, quantity, potency, purity or standard which is required to be maintained by or under any law for the time being in force or under any contract, express or implied, or as is claimed by the trader in any manner whatsoever in relation to any goods. Case: Abhaya Kumar panda vs. bajaj auto ltd Abhaya purchased bajaj auto trailer manufactured by respondent. the vehicle suffered from major manufacturing defect. National commission held that manufacturer should not have sold such defective vehicle & ordered for replacement of the vehicle by new auto trailer Case: Jasbir singh vs. mahindra ford India ltd: Jasbir of Chandigarh purchased brand new car from car dealer Oriental ford, sector 26 Chandigarh.Afew days after delivery of car it was discovered that car was old one involved in an accident but had been repaired & repainted. on the order of redressal commission an inspection of car was done & it was ascertained that car actually met with accident. The commission ordered to refund Rs 700181 along with interest of 18% & 5000 as damages to complainant. 3. DEFECIENCY: 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. Case: Arnab sarkar vs. seema travels Sarkar & 14 others engaged travel agency for visiting kulu manali & Delhi during pooja holidays. However the trip turned out to be disaster. The travel agent changed the itinerary, deviated from the programme & failed to provide adequate accommodation. On the ground of deficiency of service district forum awarded compensation o Rs.5000 which was reduced to Rs.500 by state commission. Setting this aside national commission said compensation awarded by district forum was very conservative. It observed that it was the responsibility of tour operator to ensure that holiday package was as good as promised. If a holiday was ruined by breach of contract on the part of tour operator damages could be recovered 4. RESTRICTIVE TRADE PRACTICES It is a trade practice 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 so as to impose unjustified costs/restrictions on consumers. It includes a) Collusive tendering (market fixing territorially among competing suppliers, depriving consumers of free choice & fair competition). b) Supplying only to particular distributors or on condition of sale only within a territory. c) Delaying in supplying goods/services leading to rise in price. d) Requiring a consumer to buy/hire any goods or services as a pre-condition for buying/hiring other goods or services. Example: when a supplier puts a condition that Gas connection will be given only when gas stove is purchased from him.

5. CONSUMER means any person who buys any goods for a consideration, hires or avails of any services for a consideration, Uses such goods with the approval of person who has bought such goods for consideration.
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Is beneficiary of services with the approval of person who has hired the services for consideration. Who buys goods or avails services for the purpose of livelihood by means of self employment Consumer does not include a person who obtains goods for resale or for any commercial purpose. Case: Kody Elcot ltd vs. Dr.C.P Gupta Gupta was running a nursing home & clinic. He bought medical equipment worth 3.85 lakhs but it started giving problem.Gupta filed complaint in luck now state commission & manufacturer was proved guilty so he appealed to National commission. Again he was proved guilty.Held Gupta is a consumer by means of self employment. 6 .COMPLAINT: means a written allegation made by a complainant that an unfair trade practice or a restrictive trade practice has been adopted by any trader or service provider. the goods bought by him or agreed to be bought by him suffer from one or more defects. the services hired or availed of or agreed to be hired or availed of by him suffer from deficiency in any respect. a trader or service provider, as the case may be, has charged for the goods or for the service mentioned in the complaint a price in excess of the price.

8. SERVICE: As per sec2 (1) (o) It means (a) service of any description which is made available to
potential users.(b) It includes provision of facilities in connection with Banking, Insurance, Transport, Processing, Electricity, Boarding & Lodging, and House construction, Telephone provided by Tele communication department, Houses & plots by Housing & Developments boards. (c) includes only such services which are commercial in nature & rendered against payment(d) It does not include any service free of charge or under a contract of personal service.Eg.Medical treatment in government hospitals, Services by Tutor, Lawyer or Municipality. The supreme court of India in its latest judgment included medical profession in the term services. It includes only those medical services which are provided against payment & does not include the services which are free of charge Case: Harjot Ahluwalia vs. spring meadows hospitals An unqualified Nurse gave wrong injection to minor child & he suffered irreparable brain damage. The child had to live helpless life for ever. The doctor & nurse were found negligent & compensation of 12.5 lakhs plus 5lakhs to parents was awarded 8. UNFAIR TRADE PRACTICES: It includes (a) Falsely represents that the goods are of particular standard, quality, quantity grade, style or model. (b) Falsely represents that the services are of particular standards, quality or grade. (c) Falsely represents any rebuilt, second hand, renovated or old goods as new goods. (d) Represents that the goods or services have sponsorship approval, characteristics, uses, accessories which they dont have. (e) Represents that the seller has sponsorship or approval or affiliation which he does not have. (f) Makes a false representation about the usefulness of any goods or services. (g) Gives to the public any warranty or guarantee of the performance, efficiency or length of product that is not based on proper test. (h) False promise to replace, maintain or repair any article (i) Misleading the public concerning the price at which the goods or services have been sold or provided for. (j) Gives false or misleading facts disparaging the goods or services of another person. (k) A trader permits the publication of any advertisement in newspaper for the sale at bargain price of goods or services but are not intended to be offered for sale at bargain price (l) Offering gifts, prizes or other items free with the intention of not providing them. (m) Conduct of lottery, game of chance or skill for the purpose of promoting sales. (n) A trader permits hoarding or destruction of goods or refuses to sell goods or to make them available for sale. (o) Manufacture of dangerous goods or their sale adopting deceptive practices in provision of services.

9. COMPLAINANT: means
Consumer
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Voluntary consumer association registered under companies act 1956 or any other Law. Central or state government One or more of consumers where there are numerous consumers having same interest. In case of death of consumer then his Legal representative.

10. APPROPRIATE LABORATORY: It means laboratory/organization > Recognized by central government. > Recognized by state government subject to guidelines prescribeby central government. > maintained, financed or aided by central or state government. The laboratory must be established for carrying out analysis or test of goods to determine whether goods suffer from any defect.

COPYRIGHT 1. Information required for obtaining copyright The Details of the Applicant For individuals and non-corporate entities a. Name b. Address c. Citizenship For corporate entities, the following additional information is required: a. Country of incorporation b. The nature of entity (e.g., private limited company, public listed company) 2. Documents required for obtaining copyright a. Three Copies of the Work b. Application for Registration of Copyright along with Statement of Particulars and Statement of Further Particulars (Form-IV) along with prescribed fee. c. Copyright Notice sent Under Certificate of Posting d. Power of Attorney (Authorizing to represent the Copyright Owner at Copyright Office) e. If the work is a Computer programme, in addition to the above 3 Copies of the Work in CD or Floppy Diskette must be provided. Steps involved in getting copyright registration certificate a. The application with complete details is filed with Registrar for copyright by filling form No.4 prescribed for the purpose. b. Thereafter, the application is examined and objections, if any, are raised. c. The certificate is issued by the copyright office after the objections, if any, are removed to the satisfaction of the department. TRADEMARK Application for search: Any person desiring to get a mark registered as trademark must apply in Form TM-54 to cause a search to ascertain whether any other trade mark similar to desired one is already registered. If search reveals that desired mark does not resemble an existing mark an application for registration may be made by applicant Application for registration: An application must be filed in writing with Registrar u/s 18 with prescribed fee 1. Information required for obtaining Trademark 1. Name of the Trademark/Service Mark to be registered 2. Full Names, Address, Nationality and Nature of the Business of the Applicant
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3. Full Name & Nationality of the Proprietor/Partners of the Applicant firm. 4. Date of first use of the Trademark/Service Mark in India, if any or whether it is proposed to be used. 5. List of goods/services and classes or services according to the International classification. 6. Translation of the Non-English word appearing on the mark. 7 Exact meaning of the mark, if any in the foreign language other then the English language. 8. Priority under the Paris convention can now be claimed in India. Details of Convention priority, if any first filed country, filing number and date. 2. Documents required for obtaining Trademark 1 Power of Attorney signed by the applicant & in the case of corporate body, by the Director or Legal representative of the company on a stamp paper of Rs.20 (power of Attorney need not be Legalized or Notarized. 2. Twenty prints or label. For words marks/ labels are not required. 3. Soft copy of the Mark, Logo or Label to be registered (Preferably in JPEG, JPG or GIF file formats) 4. Certified copy of the application which is the basis of the Convention priority (if applicable) may be filed within (3) three months from the Indian filing date. 4. If a right of priority is to be claimed based on an application filed in a Convention country within the last (6) six months, the filing date and a certificate by the registering authority of that country Documents to be submitted when a complaint is to be lodged in consumer Forum (District Forum). This is established by state Government in each district by notification in official Gazette. It will entertain complaints if the value of goods or services & compensation does not exceed Rs.20 lakhs. The complaint can be filed under following circumstances 1. Defect in goods 2. Deficiency in services 3. Charging of excess price for goods or services 4. When goods & services are hazardous to life & property Documents required: 1. Complaint in original form 2. verified Affidavit 3. Copies of supporting documents like cash memo, receipts, agreements etc Complaint should be accompanied by necessary documents 1. Required copies: 4 +Sufficient additional sets for each Opposite Parties. 2. Limitation: Complaint is to be filed within two years. 3. Pecuniary Jurisdiction: up to Rs.20 lakhs. 4. Court Fee: Value of goods & services Up to 1 lakh 1lakh-5lakhs Amount of fee Rs 100 Rs 200
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5lakhs-10lakhs 10lakhs-20lakhs

Rs 400 Rs 500

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