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Consumer Protection Act, 1986 An Analysis

History of Consumer Protection Movement in India:

The Consumer Protection Act, 1986 was enacted as a result of widespread consumer protection movement. On the basis of the report of the Secretary General on Consumer Protection dated 27.5.1983, the United Nations Economic and Social Council recommended that the world Governments should develop, strengthen and implement a consumer protection policy taking into consideration of guidelines set out therein. The Governments were to further provide adequate infrastructure including the bodies as well as financial facilities to develop, implement and monitor consumer protection policies.

The introduction of new products in the developing countries was to be assessed in relation to the local conditions having regard to the existing production, distribution and consumption patterns of the country or region concerned. With reference to the consumer movement and international obligations for protection of the rights of the consumer provision has been made in the said Act with the object of interpreting the relevant law in a rational manner and for achieving the objective set forth in the Act. The interpretation should be in a rational manner so as to achieve the object of the 1986 Act and not in a technical manner.

Aims and Objects of the Act:

The Act is dedicated as its preamble shows that 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 consumer disputes and other connected matters. In the statement of objects and reasons it is said that the Act seeks to provide speedy and simple redressal to consumer disputes.

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 justice and have been empowered to give reliefs of a specific nature and to award, whereas appropriate, compensation to consumers penalties for non-compliance of orders given by the quasi-judicial bodies have also been provided.

Definitions:

Complainant (Sec. 2(b)): means

  1. A consumer
  2. Any Voluntary Consumer Association registered under the Companies Act, 1956; or under any other law for the time being in force.
  3. The Central Government or any State Government who or which make a complaint.
  4. One or more consumers, where there are numerous consumers having the same interest.


Complaint (Sec. 2(1) (c)):

means any allegation in writing made by a complainant.

Consumer (Sec. 2(1) (d)): means any person who:

  1. Buys any goods for a consideration which have been paid or promised or partly paid and partly promised.
  2. Hires or avails of any services for a consideration. Sec. 2(1) (d) of the Consumer Protection Act 1986 in two parts, one in reference to a consumer who purchases goods and the second in reference to a person who hires service.

Consumer dispute (Sec. 2(1) (e):

means a dispute where the person against whom a complaint has been made, denies or disputes the allegations contained in the complaint.

Defect (Sec. 2(1)(f)):

means any fault, imperfection, short coming 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 as is claimed by the trader in any manner what so ever in relation to any goods.


Deficiency (Sec. 2(1)(g)):

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.


Restrictive Trade Practice (Sec. 2(1) (n)):

means any trade practice which requires a consumer to buy, hire or avail of any goods or as the case may be, services as a condition precedent for buying, hiring or availing of others goods or services.

Service (Sec. 2(1) (o)):

means service 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; board or lodging or both (housing construction) entertainment amusement or the purveying a news or other information, but does not include the rendering of any service free of charge or under a contract of personal service.

Unfair Trade Practice (Sec. 2(1) (r)):

means a trade practice which for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or deceptive practices.

Consumer Protection Councils:

  1. Central Consumer Protection Council (Sec. 4).
  2. State Consumer Protection Council (Sec. 7-8).

Central Consumer Protection Council shall consist of the following members namely:

  1. The Minister incharge of consumer affairs in the Central Government who shall be its chairman.
  2. Such members of other official or non-official members representing such interests as may be prescribed. The membership has been thus left to the rule - making power of the Government. The consumers protection rules were promulgated in 1987. The membership of the council is given in Sec. 3 of the Rules. It is to be composed of 150 members.
Procedure of Central Council has to observe the procedure in regard to the transaction of its business partly as prescribed by Sec. 5 and partly by rules.

Object of the Central Council:

(Sec.6) The object of the Central Council shall be to promote and protect the rights of the consumers.
  1. The right to be protected against marketing of goods and services which are hazardous to life and property; (Sec. 6(a)).
  2. The right to be informed about the quality, quantity, potency, purity, standard and price of the goods or services, as the case may be, so as to protect the consumer against unfair trade practices; (Sec. 6(b)).
  3. The right to be assured, wherever possible, of access to a variety of goods and services at competitive prices; (Sec. 6(c)).
  4. The right to be heard and to be assured that consumers interests will receive due consideration at appropriate forums; (Sec. 6(d)).
  5. The right to seek redressal against unfair trade practices or restrictive trade practices or unscrupulous exploitation of consumers; (Sec. 6(e)).
  6. The right to consumer education. (Sec. 6 (f))

State Consumer Protection Councils: (Sec. 7)

The State Government may by notification, establish with effect from such date as it may specify in such notification, a council to be known as the Consumer Protection Council referred to as the State Council. The State Council shall consist of the following members namely:
  1. The minister-incharge of consumer affairs in the State Government who shall be its chairman.
  2. Such member of other officials or non-official members representing such interests as may be prescribed by the State Government.
The State Council shall meet as and when necessary but not less than two meeting shall be held every year.

Objects of the State Council: (Sec. 8)

The objects of every State Council shall be to promote and protect within the State the rights of consumers laid down in clauses (a) to (f) of Section 6.

Consumer Disputes Redressal Agencies (Sec. 9)

  1. District Forums: established by State Government.
  2. State Commission.
  3. National Commission - established by Central Government.

Composition of the District Forums: (Sec. 10) Each District Forum consist of

  1. A person who is, or has been or is qualified to be a District Judge, who shall be its president.
  2. Two other members, who shall be persons of ability, integrity, and standing and have adequate knowledge or experiment of or law shown capacity in dealing with, problems relating to economics, law, commerce, accountancy, industry, public affairs or administration, one of whom shall be a woman.
Every member of the District Forum shall hold office for action of five years or up to the age of 65 years whichever is earlier and shall not be eligible for re-appointment. The salary or honorarium and other allowances as may be prescribed by the State Government.

Jurisdiction of the District Forum:

(Sec. 11) District Forums enjoy jurisdiction to entertain complaints where the value the goods or services and the compensation, if any, claimed does not exceed Rs. 5 lakhs.

The Territorial Jurisdiction: For the purpose of complaints;

  1. Complaint may be filed at the place where the opposite party or each of the opposite parties actually or voluntarily resides or carries on business or has a branch office or personally work for gain.
  2. At the place where any of the opposite parties falls in the above category provided that in reference to others either permission of the district forum is taken or they have acquiesced in the matter.
  3. At the place where the cause of action wholly or in part arises.

State Commission: (Sec. 16)

The commission which have to be constituted at State levels have to consist of the following members:

  1. A person who is or has been a Judge of a High Court. He will be the president of the commission.
  2. Two other members, who shall be persons of ability, integrity and standing and have adequate knowledge or experience of or have shown capacity in dealing with problems relating to economics, law, commerce, accountancy, industry, public affairs or administration. One of them has to be women.

Jurisdiction (Sec. 17)

  1. To certain complaints where the value of the goods or services and compensation, if any, claimed exceeds Rs.5 lakhs but does not exceed Rs. 20 lakhs.
  2. To entertain appeals against the orders of any District Forum within the State.
  3. 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.

National Commission: (Sec. 20)

Composition - (Sec. 20)

  1. 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.
  2. Four other members who shall be persons of ability, integrity and standing and have adequate knowledge or experience of or have shown capacity in dealing with problems relating to economics, law, commerce, accountancy, industry, public affairs or administration. One of them has to be women.

Jurisdiction: (Sec. 21)

  1. (Original Jurisdiction): To entertain;

    (i) Complaints where the value of the goods or services and compensation if any claimed exceed rupees 20 lakhs;
    (ii) Appeals against the order of any State Commission.
     
  2. (Appellate Jurisdiction)

    To calls 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 has exercised a jurisdiction not vested in it by law or has failed to exercise a jurisdiction so vested, or has acted in exercise of its jurisdiction illegally or with material irregularity.
     
  3. (Supervisory Jurisdiction). (Original, Appellate, Review and Revision).

    Power and Procedure applicable to the National Commission: (Sec. 22) The National Commission shall, in the disposal of any complaints or any proceedings before it have;
    (a) The power of a Civil Court as specified in Sub-Section (4), (5) and (6) of Sec. 13.
    (b) The power to issue an order to the opposite party directing him to do any one or more of the things referred to in clauses (a) to (i) of Sub-Section 1 of Section 14. And follow such procedure as may be prescribed by the Central Government.

Appeals (Sec. 23):

From any decision of the National Commission an appeal to the Supreme Court. Thirty day’s time from the date of the order is allowed for the purpose. The Supreme Court may permit an appeal even after the expiry of the prescribed period if there was a sufficient cause for not being able to file an appeal within time.

Finality of Orders (Sec.24):

Where no appeal has been preferred, the order of a District Forum, the State Commission or National Commission shall not admit a complaint unless it is filed within two years from the date on which the cause of action has arisen.

Period of Limitation (Sec. 24-A (1)):

  1. The District Forum, The State Commission or National Commission shall not admit a complaint unless it is filed within two years from the date on which the cause of action has arisen.
  2. A complaint may be entertained after the period specified in Sub-Section (1), if the complainant satisfies the District Forum, State Commission and National Commission as the case may be that he had sufficient cause for not filing the complaint within such period.

Enforcement of Orders (Sec.25): By the forum, State and National Commission. Every orders made by the District Forum, the State or National Commission may be enforced by the District Forum, State or National Commission as the case may be, in the same manner as if it were a decree or order made by a Court in a suit pending therein and it shall be careful for the District Forum, State or National Commission to send in the event of its liability to execute it, such order to the Court within the local limits of whose jurisdiction;
  1. In the case of an order against a company the registered office of the company is situated.
  2. In the case of an order against any other person, the place where the person concerned voluntarily resides or carries on business or personally works for gain, is situated and thereupon, the Court to which the order is so sent, shall execute the order as if it were a decree or order sent to it for execution.

Dismissal of Frivolous or Vexations Complaints (Sec. 26):

Where a complaint instituted before the District Forum, the State or National Commission, as the case may be if 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 be specified in the order.

Penalties (Sec. 27):

Where a trader or a person against whom a complaint is made fails or omits to comply with any order made by the District Forum, State or National Commission as the case may be such trader or person 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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