PGP-FW-06/08 (A-2)

Our Team
 Abhijit Nirmal – 2

 Amit Singh – 4

 Ankur Ranawat – 6

 Apurva Prasad – 8

 Ashraf Ansari – 10

 Dhiraj Yadav – 12

 Girish Jain – 14

 Hoshedar Major – 16

 Jeetendra Samtani – 18

 Hardik Patel – 20

ACKNOWLEDGEMENT

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This is with great pleasure that we take this
opportunity to work on our project of Consumer
Protection Act, 1986 which has not only
allowed us to know the basic fundamentals but
has also laid down for us a platform to
understand the application end of the
subject(topic). Also, we would like to thank our
mentor Prof. Anant Amdekar who has been our
inspiration throughout for his support and
regular guidance which has also benefited us to
have a thorough understanding of law and its
implications.

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 TABLE OF CONTENTS

SR. NO. PARTICULARS PAGE NO.

1. Prefatory Items 2-4
1.1 Our Team 2
1.2 Acknowledgement 3
1.3 Table of Contents 4
2. Introduction 5
3. Consumerism: conceptual consideration 7
4. Rights & Responsibilities 10
5. Definitions 13
6. Objective of Consumer Protection Act 16
7. Scope of the Act 17
8. Consumer Protection Council 18
9. Deficiency 24
10. FAQs 37
11. Amendments 48
12. Cases 49
13. Articles 55
14. Conclusion 57
15. Bibliography

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Introduction

The Consumer Protection Act, 1986 was enacted “to provide for better
protection of the interests of the consumers” – the consumers of goods’ and
services’ as defined under the Act. The Act “is a milestone in the history of socio-
economic legislation…to meet the long felt necessity of protecting the common man
from such wrongs for which the remedy under the common law for various reasons
has become illusory.” The legislation, no doubt, has the unique distinction of being
the only one in the country made exclusively for the consumers to protect their
interests against ‘defective goods’ and ‘deficient services’, even though a plethora of
existing legislations do have provisions to deal with consumer rights in different
degrees on specified matters. The Act envisages a better legal framework within
which an ordinary consumer can fight for his rights and get his grievances
redressed. It provides for speedy and inexpensive settlement of disputes within
limited time-frame, as against civil suits which are costly and time-consuming. The
provisions of the Act are in addition to and in derogation of any other law for the time
being in force and are compensatory in nature.

The Act provides for the establishment of Consumer Protection Councils at the
Central, State and District levels “to promote and protect the rights of the
consumers” and a three-tier quasi-judicial machinery at the district, state and
national levels for “the settlement of consumer disputes”. The composition of these
authorities and their territorial and pecuniary jurisdictions, the procedure to be
followed by them in disposing of the complaints and the relief that can be granted
are specifically laid down under the Act. In the light of the experience gained during
the initial years of its enforcement by the consumer courts, the Act has been

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marginally amended in 1991 and substantially in 1993 and 2002, with a view to
make it more effective in bringing justice to the doorsteps of the consumers.

The consumer movement in India is as old as trade and commerce. In Kautilya's

Arthashastra, there are references to the concept of consumer protection against
exploitation by the trade and industry, short weigh and measures, adulteration and
punishment for these offences. However, there was no organised and systematic
movement actually safeguarding the interests of the consumers. Prior to
independence, the main laws under which the consumer interests were considered
were the Indian Penal Code, Agricultural Production, Grading and Marketing Act,
1937, Drugs and Cosmetics Act, 1940. Even though different parts of India exhibited
different levels of awareness, in general, the level of awareness was pretty low.

An average Indian consumer is noted for his patience and tolerance. Perhaps
because of these two traditional traits and due to the influence of the Mahabharata,
the Ramayana and the Bhagavad Gita, he considered the receipt of defective goods
and services as an act of fate or unfavorable planetary position in his horoscope.
When a new television or refrigerator purchased by him turns out to be defective
from day one, he takes it reticently, blaming it on his fate or as the consequence of
the wrongs committed by him in his previous birth. Very often he is exploited, put to
avoidable inconveniences and suffers financial loss. It is rather paradoxical that the
customer is advertised as the "king" by the seller and service provider; but in actual
practice treated as a slave or servant. Goods are purchased by him along with the
label "Items once sold by us will never be received back under any circumstances
whatsoever." This unethical, illegal and unilateral declaration has to be viewed in the
light of the practice in developed countries where the seller declares, "In case you
are not fully satisfied with our product, you can bring the same to us within a month
for either replacement or return of your money." This will clearly indicate the level of
consumer consciousness. However, things are changing - slowly but steadily - and
the momentum has increased considerably since the establishment of consumer

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courts and due to the efforts of a number of consumer organisations and the media.
The next millennium will witness a high degree of consumer awareness and the
concepts of "comparative costs", "consumer preference/ resistance/ abstinence" and
"consumer choice" will become vital aspects of the economy.
Consumerism: conceptual consideration

In the good olden days the principle of ‘Caveat emptor’, which meant buyer
beware governed the relationship between seller and the buyer. In the era of open
markets buyer and seller came face to face, seller exhibited his goods, and buyer
thoroughly examined them and then purchased them. It was assumed that he would
use all care and skill while entering into transaction.

The maxim relieved the seller of the obligation to make disclosure about the
quality of the product. In addition, the personal relation between the buyer and seller
was one of the major factors in their relations. But with the growth of trade and its
globalization he rule no more holds true. It is now impossible for the buyer to
examine the goods before hand and most of the transactions are concluded by
correspondence. Further on account of complex structure of the modern goods, it is
only the producer/seller who can assure the quality of goods. With manufacturing
activity becoming more organized, the producers/sellers are becoming more strong
and organised whereas the buyers are still weak and unorganized. In the age of
revolutionized information technology and with the emergence of e-commerce
related innovations he consumers are further deprived to a great extent. As a result
buyer is being misled, duped and deceived day in and day out.

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

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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.”

Inspite 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 are education and
information resources, testing facilities, competent leadership, price control
mechanism, and adequate quasi-judicial machinery. The providers of goods and
services have been reluctant to give due consideration to consumer interest
protection.

In present situation, consumer protection, though as old as consumer

exploitation, has assumed greater importance and relevance. Consumerism is a
recent and universal phenomenon. It is a social movement. Consumerism is all
about protection of the interests of the consumers. According to McMillan dictionary
“Consumerism is concerned with protecting consumers from all organistations with
which there is exchanged relationship. It encompasses the set of activities of
government, business, independent organizations and concerned consumers that
are designed to protect the rights of consumers”. The Chamber’s Dictionary (1993)
defines Consumerism as the protection of the interests of the buyers of goods and
services against defective or dangerous goods etc. “ Consumerism is a movement
or policies aimed at regulating the products or services, methods or standards of
manufacturers, sellers and advertisers in the interest of buyers, such regulation may
be institutional, statutory or embodied in a voluntary code occupied by a particular
industry or it may result more indirectly from the influence of consumers
organizations.

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 As commonly understood consumerism refers to wide range of activities of
government, business and independent organizations designed to protect rights of
the consumers. Consumerism is a process through which the consumers seek
redress, restitution and remedy for their dissatisfaction and frustration with the help
of their all organized or unorganized efforts and activities. It is, in-fact a social
movement seeking to protect rights of consumers in relation to the producers of
goods and providers of services. In-fact consumerism today is an all- pervasive term
meaning nothing more than people’s search for getting better value for their money.
Consumer is the focal point of any business. Consumer’s satisfaction will benefit not
only business but government and society as well. So consumerism should not be
considered as consumers’ war against business. It is a collective consciousness on
the part of consumers, business, government and civil society to enhance
consumers’ satisfaction and social welfare which will in turn benefit all of them and
finally make the society a better place to live in .
There are various components of consumerism. First and foremost is self-protection
by consumers. Consumer must be aware of his rights, raise voice against
exploitation and seek redressal of his grievances. Consumers’ consciousness
determines the effectiveness of consumerism. It is the duty of the consumer to
identity this rights and to protect them. Voluntary Consumer Organisations engaged
in organizing consumers and encouraging them to safeguard their interests in
another important element of consumer movement. The success of consumerism
lies in the realisation of the business that there is no substitute for voluntary self-
regulations. Little attention from the business will not only serve consumers interest
but will also benefit them. Some business in India have come together to adopt a
code of conduct for regulating their own activities. Regulation of business through
legislation is one of the important means of protecting the consumers. Consumerism
has over the time developed into a sound force designed to aid and protect the
consumer by exerting legal, moral and economic pressure pn producers and
providers in some of he developed countries.

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.

Rights & Responsibilities

Right of Consumer

Over the years consumer rights have become more comprehensive, and are
recognized by consumer organizations around the world, Consumer Protection Act,
1986. also recognizes these rights. Section 6 of the act focuses on upholding these
rights:

• The Right to Basic Needs: ascertains basic goods and services, which
guarantee survival. It includes adequate food, clothing, shelter, health care,
education and sanitation.

• The Right to Safety: assures protection against products, production

processes and services, which are hazardous to health or life. It includes
concern for consumers' long-term interests as well as their immediate
requirements.

• The Right to be informed: means being given the facts needed to make an
informed choice or decision. Consumers must be provided with adequate
information enabling them to act wisely and responsibly. They must also be
protected from misleading or inaccurate publicity material, whether included in
advertising, labeling, packaging or by other means.

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 • The Right to be heard: means the right to advocate consumers' interests
with a view to their receiving full and sympathetic consideration in the
formulation and execution of economic and other policies. It includes the right
of representation in governmental and other policy-making bodies, as well as
in the development of products and services before they are produced or set
up.

• The Right to Choose: enables access to a variety of products and services

at competitive prices and, in the case of monopolies, to have an assurance of
satisfactory quality and service at a fair price.

• The Right to Seek Redressal: meaning a fair settlement of just claims. It

includes the right to receive compensation for misrepresentation, for shoddy
goods or unsatisfactory services and the availability of acceptable forms of
legal aid or redress for small claims where necessary.

• The Right to Consumer Education: to acquire the knowledge and skills to

be an informed consumer throughout life. The right to consumer education
incorporates the right to the knowledge and skills needed for taking action to
influence factors, which affect consumer decision.

• The Right to a Healthy Environment: as in the right to a physical

environment that will enhance the quality of life. It includes protection against
environmental dangers over which the individual has no control. It
acknowledges the need to protect and improve the environment for present
and future generations.

Consumer responsibilities

The consumer is also enjoined to uphold his/her responsibilities:

• Critical awareness: The responsibility to be more alert, and questioning

about the price and quality of goods and services we use.

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• Action: The responsibility to assert ourselves, and act to ensure that we get a
fair deal. As long as we remain passive consumers, we will continue to be
exploited.
• Social concern: The responsibility to be aware of the impact of our
consumption on other citizens, especially disadvantaged or powerless groups
whether in the local, national or international community.
• Environmental awareness: The responsibility to understand the
environmental consequences of our consumption. We should recognize our
individual and social responsibility to conserve natural resources and protect
the earth for future generations.
• Solidarity: The responsibility to organize, and come together as consumers
to develop the strength to influence, promote and protect our own interests.

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Important Definitions

Goods: "Goods" means goods as defined in the Sale of Goods Act, 1930 (section
2(7) of Sale of Goods Act, 1930).According to the Sale of Goods Act, 1930. "goods"
means every kind of movable property other than actionable claims and money, and
includes stock and shares, growing crops, grass, and this attached to or forming part
of the land which are agreed to be severed before sale or under the contract of sale.

Service [Section 2(1)(0)]: "Service" means service of nay description which is

made available to potential users and includes, but not limited to, 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, entertainment, amusement or the purveying of news or other
information, but does not include the rendering of any service free of charge or
under a contract of personal service;

Restrictive Trade Practice [Section 2(1)(nn)]: "Restrictive trade practice" as per

clause (nn) 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 other goods or services;

Defect [Section 2(1)(f)]: "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.

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Deficiency [Section 2(1)(g)]: Parallel to "Defect" in case of goods, deficiency is
relevant in case of services. Accordingly, it is defined to mean 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.

Unfair Trade Practice [ Section 2(1)(r)]: "Unfair trade practice" the detailed
definition is given in the Consumer Protection Act, 1986 as amended by the
Consumer Protection (Amendment) Act. 1993. It is defined to mean 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 unfair or deceptive practice
including any of the following practices, namely :-

(a) False or misleading representation,

(b) Bargain sale,

(c) Offering of gifts, prize, etc. and considering contents or lottery,

(d) Non compliance of product safety standard,

(e) Hoarding or destruction of goods.

The Act may be consulted before filing a complaint for unfair trade practice.

Complainant [ Section 2(1)(b)]: means any of the following and having made a
complaint -

i. A consumer: or
ii. Any voluntary consumer association registered under the Companies Act,
1956 or under any other law for the time being in force: or

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 iii. The central government or any State government: or
iv. One or more consumers, where there are numerous consumers having the
same interest: or
v. In case of death of a consumer: his legal heir or representative.

Complaint [ Section 2(1)(c)]: means any allegation in writing made by a complaint

that –

i. An unfair trade practice or a restrictive trade practice has been adopted by

any trader or service provider;
ii. Goods bought by him or agreed to be bought by him suffer from one or more
defects ;
iii. Services hired or availed of or agreed to be hired or availed of by him suffer
from deficiency in any respect ;
iv. 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 –
v. Goods which will be hazardous to life and safety when used are being
offered for sale to the public –
vi. 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;
with a view to obtaining any relief provided by or under this act.

Consumer Dispute [Section 2(1)(c)]: means a dispute where a person against

whom a complaint has been made denies or disputes the allegations contained in
the complaint.

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Objective of the Consumers Protection Act, 1986

According to the preamble , the act is to provide for the better protection of the
interest of consumers an for that purpose to make provisions of the establishment
of consumers councils and others authorities for the settlement of consumers
interest herewith . The basic rights of the consumers that are sought to be promoted
and protected are;

1. The right to be protected against marketing of goods and services which arte
hazardous to life and property.
2. the right to be informed about the quality , quality , potency , purity , standard
and price of the goods, or service as to protect the consumers against the
unfair trade practices
3. The right to be assured, whenever possible, access to variety of goods and
service at competitive price.
4. the right to be hearted an to be assured that consumers interest will receive
sue consideration at appropriate forums
5. the right to seek redressal against unfair trade practice or restrictive trade
practices or unscrupulous exploitation of consumer ; and
6. The right to consumer education.

This is base on the basic right of consumers as defined by the international

organization of consumers ( IOCU) via ., The right of safety , to information of
choice, to be hearted, to redressed, to consumers education, to healthy, to healthy
environment and to basic needs .

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Scope of the Act

The act extent to the whole of India expects the state of Jammu and Kashmir and
applies to all goods a service unless otherwise notified by the central government.
The act received the president’s accent on 24.12.1986. However, all provisions of
the act expect those relating to establishment, composition, jurisdiction, etc. of the
consumer’s dispute agencies (which came into force on 1.7.1987) came into force
on 15.4.1987.

The right under the act to seek relief before the forum would not be deprived to
any aggrieved consumers only by reason of the date of accrual of cause of action
being prior to the date of coming into force of chapter III . So long as the cause of
action was not barred under the general laws of limitation as on the date of
institution of the consumer dispute any redressed agency, it would be tenable under
the act.

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 Consumer protection council

The interests of the consumers are sought to be promoted and protected under the
Act inter alias by establishment of consumers protection councils at the central and
state levels. chapter II so the consumer protection Act ,1986 comprising section 4
to section 6 deals with consumers protection councils.

Central consumer’s protection council

Section 4 empowers the central government to establish a council to be known s

the central consumer protection council consisting of Minster in charge of
consumers affairs In the central government , as its chairman , and such number
of other officials or non – official members representing such its chairman , and
such number of other officials or non – officials member representing such
interest as may be prescribed . However, the Consumers Protection Rules 1987
restrict the number of members of the councils to 150 members

Section 5 of the Act requires the central councils shall meet as a when necessary.
But at least once in every year. The procedure in this regards to transaction of its
business at the meeting is given in Rule 4 of the Rules.

State consumers protection council

Section 7 provides for the establishment (by notification) to be known as consumers

protection council for (name of the state). the state council shall consist of a Minster
in charge of consumers affairs in the state government as its chairman and such
number of other officials or non – officials members representing such interest as
may be prescribed by the state government . The state councils shall meet as and

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when necessary but not less than two meeting shall be held every year. The
procedure to be observed in regards to the transaction of its business at such
meeting shall be prescribed by the state government.

District Consumer protection Council

Section 8-A provides for the establishment (by notification) for every district a council
to be known as district consumer protection council consisting of a collector of the
district who will be the chairman and number of other officials and non officials
members representing such interests. The district council shall meet as and when
necessary but not less than two meetings in a year as prescribed by state
government.

The objects of the district council shall be to promote and protect within the district
the rights of the consumers laid down in clauses (a) to (f) of section 6.

Redressal Machinery under the ACT;

The Act provides for a three –tier quasi judicial redressal machinery at the district,
state and national level to redressal of consumers dispute and grievances. The
district from has jurisdiction to entertain complaint where the value of goods /
services complained against and the compensation. If the claimed. is less than Rs
20 lakhs , the state commission for claims exceeding Rs 20 lakhs but not exceeding
Rs 1 crores and the national commission for the claims exceeding Rs 1 crores.
(National commission also have the jurisdiction to entertain appeals against the
orders of any state commission {section 21} )

Broad review of CPA would show that its provisions may be classified into two broad
categories.

• Substantive provisions
• Procedural provisions

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Substantive provisions

The important provisions, such as, consumer, defect, deficiency, restrictive trade
practice, service and unfair trade practice cover substantive part of CPA.

Procedural provisions

The provisions of CPA other than above substantive provisions are procedural
provisions.

Jurisdiction of Consumer Forums

The provisions regarding jurisdiction of various Consumer Dispute Redressal

Forums and their jurisdiction may be summarized as follows.

(a) District Forum

• Pecuniary jurisdiction

Section 11(1) of CPA deals with pecuniary jurisdiction. It provides that the
District Forum has the jurisdiction to entertain complaints where the value of
the goods or services and the compensation, if any, claimed does not exceed
rupees twenty lakhs. The complaint involving claims exceeding rupees twenty
lakhs cannot be entertained by the District Forum.

The pecuniary jurisdiction depends upon the amount of relief claimed and not
upon the value of the subject-matter, nor upon the relief allowed by the
Forum.

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 • Territorial jurisdiction

Section 11(2) deals with territorial jurisdiction of the District Forum. It provides
that a complaint shall be instituted in a District Forum within the local limits of
whose jurisdiction:-

(a) The opposite party or each of the opposite parties at the time of
institution of the complaint actually and voluntarily resides, carries on
business, has a branch office or personally works for gain.

(b) Where there are more than one opposite parties, any of the
opposite parties at the time of institution of the complaint actually and
voluntarily resides, carries on business, has a branch office or
personally works for gain.

• Provided that in such case, either the permission of the District

Forum is given, or the opposite parties who do not reside, or
carry on business or have a branch office, or personally work
for gain, as the case may be, acquiesce in such institution; or

(c) The place where the cause of action, wholly or in part, arises
(section 11).

(b) State Commission

• Original jurisdiction

Under section 17(a)(I) of CPA, the State Commission can entertain

complaints where the value of the goods or services and compensation, if
any, claimed exceed twenty lakes of rupees but does not exceed rupees 1
crore the matter can be heard by the state commission.

• Appellate jurisdiction

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 Under section 17(a) (ii) of CPA, the State Commission has jurisdiction to
entertain appeals against the order of any District Forum within the State.
According to section 15 of CPA, any person aggrieved by an order made by
the District Forum may prefer an appeal against such order to the State
Commission within a period of thirty days from the date of order. However, the
State Commission may entertain an appeal after the expiry of the said period
of thirty days if it is satisfied that there was sufficient cause for not filing it
within that period.

• Revisional jurisdiction

Under clause (b) of section 17 of CPA, the State Commission has jurisdiction
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 jurisdiction not vested in it by law, or has acted in exercise of its
jurisdiction illegally or with material irregularity.

(c) National Commission

• Original jurisdiction

Under section 21(a) (I) of CPA, the National Commission can entertain
complaints where the value of the goods or services and compensation, if
any, claimed, exceeds hundred lakhs of rupees. The pecuniary jurisdiction
depends upon the amount of relief claimed and not upon the value of the
subject-matter.

• Appellate jurisdiction

Section 21(a) (ii) of CPA provides that the National Commission shall have
jurisdiction to entertain appeals against the order of any State Commission.
According to section 19, an appeal can lie to the National Commission only

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 against the order made by the State Commission in exercise of its power
under its original jurisdiction. The appeal may be preferred within a period of
thirty days from the date of the order of the State Commission. However, the
National Commission may entertain an appeal after the expiry of the said
period of thirty days, if it is satisfied that there was sufficient cause for not
filing it within that period. The appeal should be decided as far as possible,
within ninety days from the date of hearing.

Revisional jurisdiction

The jurisdiction of the National Commission in revision has been laid down in
section 21(b) of CPA. This is limited to consumer disputes wherein a State
Commission

 has exercised a jurisdiction not vested in it by law, or

 has failed to exercise jurisdiction so vested, or
 Has acted in the exercise of its jurisdiction illegally or with material
irregularity.

The National Commission can exercise its power in revisions only under
these situations.

Appeal to Supreme Court

Under Section 23, any person, aggrieved by an order made by the National
Commission in exercise of its powers conferred by sub-clause (i) of clause (a) of
section 21, may prefer an appeal against such order to the Supreme Court within a
period of thirty days from the date of the order:

Provided that the Supreme Court may entertain an appeal after the expiry of the
period of thirty days if it is satisfied that there was sufficient cause for not filing it
within that period. No appeal by a person who is required to pay any amount in
terms of an order of the national commission shall be entertained by the Supreme

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Court unless that person has deposited in the prescribed manner 50% of that
amount or Rs. 50,000/- whichever is less.

Deficiency in various kinds of services

Deficiency basically is concerned with the loop holes in a particular kind of service or
in any form or another. A review of the case laws shows how the consumer forums
have decided whether or not there was deficiency in the services rendered by
airlines, banks, couriers, electric companies, housing, etc. A summary of the
decisions may be reviewed as follows.

Airlines

In respect of following matters, consumer forums have held that services of

airlines were deficient.

 Delay in processing refund of unused tickets

 Not informing passenger about flight delay
 Physical injury disabling the passenger
 Injury to waiting passenger in the Airport
 Inferior quality of in-flight food

In case of failure to issue boarding cards due to late check-in, however, it was
held that there was no deficiency.

Banking Services

In following respects, it was held that there was deficiency in bank’s

services.

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  Making payment notwithstanding stop-payment instructions
 Making unauthorised debit to customer’s account
 Loss of valuables from lockers
 Not crediting deposited cheque
 Banker’s mistake in transferring complainant’s money to wrong branch
 Freezing the operation of the bank account on telephonic instruction of
government

On the other hand, in respect of the following matters, it was held that there
was no deficiency in bank’s services

 Denial of credit facility

 Bank’s refusal to enhance the sanctioned limits
 Bank’s failure to provide finance to small-scale industry
 Bank’s refusal to extend loan repayment

Courier Service

In respect of the following matters, complaints were allowed by reason of

deficiency in services of Courier Company.

 Non-delivery by stipulated time

 Loss of documents sent by courier

Electricity

Supply of electric energy is included in the definition of "service" under

section 2(1) (o) of CPA. Therefore, a person who uses electrical energy by
paying its price is a consumer who can invoke jurisdiction of Consumer
Forums. However, disputes relating to rates of tariff for power consumption
are not within jurisdiction of consumer forums.

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 In the following respects, consumer forums have held that services of
electricity Supply Company were deficient.

 Disconnecting power supply before the dates specified for payment of

inflated bills at short notice entitles the complainant to a larger
compensation than that awarded by the State Commission..
 Arbitrary disconnection of electric supply without notice amounts to
deficiency in service..
 Following acts of the electricity company have been held to result in
deficiency in service.

(a) Excess billing due to defective meters.

(b) Not preparing and serving bills according to billing cycle

resulting in heavy arrears.

(c) Raising bill for arrears without details regarding the period to
which arrears relate.

(d) Serving bill on Sunday and demanding payment within three

days under threat of disconnection.

Housing Construction Service

In respect of Deficiency in housing construction and building activity,

consumer forums have held that services were deficient in the following
matters.

 Housing Board not providing roads, schools, parks, etc. as promised

under the housing scheme.
 Delay of Housing Board in completing installation of light and handing
over possession of flat to the allottee who has paid full price of the flat.
 Housing Board using sub-standard material in construction of flats
resulting in leaking roof, cracking wall or sub-standard flooring.

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  Delay in giving possession at the agreed time so (which also makes
the builder liable for giving possession as also interest and cost).
 Failure of the Housing Board to give possession of the plot allotted to
complainant and its arbitrary cancellation without notice.
 Failure to provide amenities mentioned in brochure, such as, health
club, swimming pool, playground, jogging trail, mini golf club, etc.
alongwith plot for the farm house.
 Failure of builder in commencing construction within three years when
according to the agreement between the builder and complainant, flats
were to be completed within three years, there was deficiency.

Insurance

Life Insurance

At the outset, it may be noted that a nominee being a person appointed by

policy holder to whom the policy money is to be paid in the event of policy
holder’s death, is a beneficiary who avails of services with approval of the
policy holder who hired such services for consideration. Therefore, the
nominee is a consumer.

In following respects, the Consumer Forums have held that services of LIC
were deficient.

 Arbitrary repudiation without communicating reasons and without due

application of mind.
 Repudiation of claim without inquiry.

General Insurance

In case of general insurance, consumer forums have held that services of the
insurance company were deficient in following respects.

27
  Failure of the insurance company to indemnify the insured for the loss
caused by fire despite the undertaking of the insurance company is
deficiency in service.
 Delay in making payment of claim under insurance policy is deficiency.
In cases of such deficiency, interest @ 13.5% may be allowed to the
claimant. Further, compensation for financial loss and mental stress
may also be allowed in such cases.
 Silent promise and explicit condition of insurance contract is that
insured claim must be settled with utmost expedition, either by way of
acceptance or repudiation, say, within a reasonable time frame of
about three months.
 Any delay beyond such reasonable period would constitute deficiency
in service unless the same is cogently explained by the insurance
company.
 Delay in settlement of insurance claim due to negligence and delay of
the surveyor amounts to deficiency in service of the insurance
company.
 Delaying settlement of the claim for long time despite the report
submitted by its own appointed surveyors amounts to deficiency in
service.
 Repudiation of claim without inquiry.

In the following respects, however, consumer forums have held that there was
no deficiency in the service of the general insurance company.

 Mere repudiation of claim does not amount to deficiency.

 Repudiation of claim after proper investigation.
 Suppression of material facts.

L.P.G. Gas Cylinder

28
 Rechecking of gas cylinder is mandatory under the statutory regulations for
supply of cooking gas cylinder. In one case, gas cylinder was supplied without
rechecking the same at the time of delivery. When the cylinder was connected
to stove, it burst. Upon the complainant seeking compensation, it was held
that there was clear deficiency in service due to failure to recheck the
cylinder.

Medical Services

In recent years, hospitals, doctors and surgeons have been facing the
complaints of medical negligence. Some of the grievances for which
complaints have been made to consumer forums are as follows.

 Doctor creating a misleading impression as gynaec specialist.

 Not providing bed after charging for the same.
 Negligence of juniors of the doctor leading to damage to the patient
could make the doctors liable.
 Loss of vision due to negligence of eye surgeon.

However, in respect of complaints made for following matters, it was held that
there was no deficiency

 Failure of hospital to admit patient in I.C.U.

 Loss of voice after heart surgery.
 Death of patient due to a cause other than the problem for which he
was operated.
 Loss of sense after delivery of child by a woman having history of
miscarriages.

Motor Vehicle

29
 In respect of the following grievances, consumer forums have held that
services of the manufacturer or supplier were deficient.

 Delay in delivery of car.

 Fixing wrong number plate on vehicle.
 Deficiency in repairs and servicing of vehicle.

Postal Service

In respect of the following grievances, consumer forums have held that postal
services were deficient.

 Delay in delivery of telegraphic M.O.

 Misdelivery of money order to a different person.
 Misdelivery of envelop back to sender.
 Omission to post the article entrusted to postal clerk for franking and
despatch.
 Delay in payment of NSC.
 Non-intimation by Post Office about return of registered letter due to
wrong address.
 Delay in delivery of telegraphs.

Railways

In respect of the following grievances, consumer forums have held that

railway services were deficient.

 Where railway reservation is given to a passenger by an alternative

train for the day on which the train does not run, there is deficiency in
service.
 Refusal by Railways to give air-conditioned second class birth after
confirmation of reservation is deficiency in service.

30
  Failure of Railway administration to prevent entry of unauthorised
persons in reserved compartment is negligence and therefore
deficiency in service.
 Allotting birth to VIPs by superseding persons on waiting list is
deficiency.
 When reservation of seats made by the complainant is erroneously
given to others, same indicates gross negligence of railway booking
and reservation staff. Railway must bear vicarious responsibility for
such negligence.
 Out of turn allotment of seat to VIP.
 Failure to mention name in reservation chart.
 Recovering excess fare from passenger.

In the following cases, however, consumer forums have held that there
was no deficiency.

 Cancellation of trains to ensure safety - no deficiency.

 Delay in departure of special train.

Telephone Service

In the following respects, consumer forums have held that services of the
telephone company were deficient.

 Overbilling of telephone is deficiency in service particularly when the

bill is only for local calls and is four to five times the average bill without
proper explanation.
 Disconnection of telephone on the ground of non-payment of bill
without intimation to subscriber constitutes deficiency in service.
Disconnection of telephone, telex without notice would be arbitrary,
unreasonable and violative of the principles of natural justice.
 Disconnection of telephone for non-payment of the bill which was
proved inflated.

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University and Education

 Two important propositions considered by consumer forums in respect

of university and education are whether education is covered by the
definition of "service" and whether a student can be regarded a
"consumer". There is a divergence of views on both these as is evident
from the following.

Education is service

 Even though education is not expressly mentioned in the definition of

service, when the same is imparted for consideration, there is no
logical reason to exclude the same from the definition of service which
is wide and inclusive definition.
 Educational services by schools cannot be considered as "personal
services" and therefore, fall within the definition of "service" under
section 2(1)(o) of CPA.

Education is not service

 While conducting public examinations, evaluating answer books,

announcing exam results and re-checking of marks on application for
revaluation, University or the Board does not perform any service for
hire as contemplated by CPA.
 Definition of "service" in CPA makes it clear that the relationship of
teacher and student of an educational institution is not a service on
hire because student is not a consumer. The very concept of "contract"
cannot be forced into CPA so far as education, teacher and students
are concerned. Hence, education does not come within the scope of
CPA.

32
Student is consumer

 Student is essentially a consumer of services of an educational

institution. Therefore, college cannot refuse to refund fees collected by
it when the college did not allow the student to avail of college
education.

Student is not consumer

 A candidate who appears for examination cannot be regarded as a

person had hired or availed of services of university or Board for
consideration.

In the following respects, consumer forums have held that educational

services were deficient.

 Allotment of same roll number to complainant and some other student.

 Ten years’ delay in issuing degree certificate.

Service

This term is very widely and inclusively defined in section 2(1)of CPA as follows.

"Service" means service of any description which is made available to

potential users and includes 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 of news or other information, but does not
include the rendering of any service free of charge or under a contract of
personal service.

What is "service”?

33
Service of any description is covered under CPA and includes services such as
banking, financing, insurance, transport, processing, housing construction, supply of
electrical energy, entertainment, amusement, board or lodging etc.

The categories of the service specified in the definition, however, appear to be

illustrative since the mentioned of specified categories of services follow, the word
"includes" in the above definition.

What is intended to be excluded from the definition of "service" is specified in

respect of two services.

• Service free of charge

• Service under a contract of personal service

The following services are, however, not specified in the abovementioned definition
of "service"

• Advocates
• Airlines
• Chartered Accountants
• Couriers
• Chit Fund
• Education
• Gas Cylinder/L.P.G.
• Medical services
• Postal services, Railways, Shares & Debentures
• Telephones
• Miscellaneous
— Lift maintenance
— Marriage Hall renting
— Maintenance of provident fund account
— Registration department

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 — Travel Agency
— Granting certified copy of document
— Purchase of lottery tickets
— Carrier
— Grant of subsidy by Central Government to industrial units
— Municipal services

Are services of Medical Practitioners Covered By CPA?

In the landmark judgment of the Supreme Court in Indian Medical Association V P

Shantha (AIR 1996 SC 550), the Supreme Court has examined various offshoots of
the abovementioned question. The Supreme Court examined, in particular, the
connotation of "service" as defined in section 2(1)(o) of CPA and "deficiency" in
terms of section 2(1)(g) of CPA. On the basis of exhaustive discussion, the Supreme
Court came to following conclusions:

• Services rendered by medical practitioners are covered by the expression

"service" as defined in section 2(1) (o). [Since there is no employer-employee
relationship between a doctor and patient, services of medical practitioners do
not fall in the exclusionary part of section 2(1)(o).]
• Services of doctors and hospitals which are rendered free of any charge to
every person do not fall within ambit of "service" as defined in section 2(1)(o).
• Mere fact that the doctor receives salary from the hospital administration or by
a charge on the consolidated fund would not change the conclusion that the
services are rendered free of charge.
• Services rendered by doctors and hospitals who render free service to poor
patients and charge fees to others would nevertheless fall within the ambit of
"service" as defined in section 2(1)(o), irrespective of the fact that a part of the
service is rendered free of charge.
• The fact that insurance company bears the charges of medical treatment
under medi-care policy or that the employer bears such charges as a part of

35
 conditions of service does not mean that the services are rendered free of
charge.
• Medical practitioners rendering service to patients by way of consultation,
diagnosis and treatment, both medicinal and surgical, fall within the ambit of
service as defined in section 2(1))(o) except where the doctor renders the
service free of charge to every patient or under a contract of personal service.
• The expression ‘contract of personal service’ in section 2(1)(o) includes the
employment of a medical officer for the purpose of rendering medical service
to the employer. Thus, the service rendered by a medical officer to his
employer would be outside the purview of ‘service’ as defined in section
2(1)(o).
• In view of the definition of "deficiency" in section 2(1)(g), medical practitioners
are not excluded from the ambit of CPA.
• Members of the Consumer Disputes Redressal Agencies are in a position to
deal with issues which may arise before them in proceedings arising out of
complaints about the deficiency in service rendered by medical practitioners.
• Procedure of adjudication by Consumers Forums are not unsuitable to decide
complaint against medical practitioners.

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, 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 two thousand rupees but which may extend to ten thousand rupees,
or with both.

36
FAQ’S

Q1) How is my right as a consumer protected under the Consumer Protection

Act?

Ans: The rights of the consumers are invoked in the Indian legal system through the
mechanism provided in the Consumer Protection Act (CPA). The CPA provides for
establishment of Consumer Protection Councils - Advisory and
recommendation bodies. The Consumer Protection Councils exist at the National,
State and District Levels. They are basically advisory bodies who meet at least 3
times a year to discuss and review consumer protection measures and issues. Two-
thirds of the members of these councils are non-official, including representatives of
women and consumer organisations.

Q2.) What is the method of filing a complaint?

Ans: A complaint shall be instituted in the District Forum within the local limits of
whose jurisdiction the opposite party (or any one of the opposite parties where there
are more than one) or the defendant actually and voluntarily resides or carries on
business, or has a branch office or personally works for gain at the time of institution
of the complaint, provided that the other opposite party/parties' acquiescence in such
institution or the permission of the Forum is obtained in respect of such opposite
parties; or the cause of action arises, wholly or in part.

37
Q3) What is the method of settling a complaint?

Ans: On receipt of a complaint, a copy of the complaint is to be referred to the

opposite party, directing him to give his version of the case within 30 days. This
period may be extended by another 15 days. If the opposite party admits the
allegations contained in the complaint, the complaint will be decided on the basis of
materials on the record.

Q4.) What happens if the opposite party denies the allegation?

Ans: Where the opposite party denies or disputes the allegations or omits or fails to
take any action to represent his case within the time provided, the dispute will be
settled in the following manner:-

1). In case of dispute relating to any goods: Where the complaint alleges a
defect in the goods which cannot be determined without proper analysis or
test of the goods, a sample of the goods shall be obtained from the complainant,
sealed and authenticated in the manner prescribed for, referring to the appropriate
laboratory for the purpose of any analysis or test whichever may be necessary, so as
to find out whether such goods suffer from any other defect. The appropriate
laboratory would be required to report its finding to the referring authority, i.e. the
District Forum or the State Commission within a period of forty-five days from the
receipt of the reference or within such extended period as may be granted by these
agencies.

The District Forum/State Commission may require the complainant to deposit

with it such amount as may be specified towards payment of fees to the appropriate
laboratory for carrying out the tests. On receipt of the report, a copy thereof is to be
sent by District Forum/State Commission to the opposite party along with its own
remarks.
In case any of the parties disputes the correctness of the methods of analysis/test

38
adopted by the appropriate laboratory, the concerned party will be required to submit
his objections in writing. After giving both the parties a reasonable opportunity of
being heard and to present their objections, if any, the District Forum/Slate
Commission shall pass appropriate orders.

Q5) How is the dispute settled in the case of services?

Ans: In case of dispute relating to goods not requiring testing or analysis or relating
to services: Where the opposite party denies or disputes the allegations contained in
the complaint within the time given by the District Forum/State Commission, it shall
dispose of the complaint on the basis of evidence tendered by the parties. In case of
failure by the opposite party to represent his case within the prescribed time, the
complaint shall be disposed of on the basis of evidence tendered by the
complainant.

Q6) What is the time period within which a complaint must be filed?
Ans: The District Forum, the State Commission, or the 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. However, where the complainant satisfies the District
Forum/State Commission, that he had sufficient cause for not filing the complaint
within two years, such complaint may be entertained by it after recording the
reasons for condoning the delay.

Any person aggrieved by an order made by the Forum may prefer an appeal
to the State Commission in the prescribed form and manner. Similarly, any person
aggrieved by any original order of the State Commission may prefer an appeal to the
National Commission in the prescribed form and manner. Any person aggrieved by
any original order of the National Commission may prefer an appeal to the Supreme
Court.

39
All such appeals are to be made within thirty days from the date of the order
provided that the concerned Appellate authority may entertain an appeal after the
said period of thirty days if it is satisfied that there was sufficient cause for not filing it
within that period. The period of 30 days is to be computed from the date of receipt
of the order by the appellant.

Where no appeal has been preferred against any of the orders of the
authorities, such orders would be final. The District Forum, State Commission or
National Commission may enforce respective orders as if it were a decree or order
made by a Court and in the event of their inability to execute the same, they may
send the order to the Court for execution by it as if it were a Court decree or order.

Q7) What are the remedies that are granted under the Consumer Protection
Act?
Ans: The District Forum/State Commission/National Commission may pass one or
more of the following orders to grant relief to the aggrieved consumer:

• To remove the defects pointed out by the appropriate laboratory from 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 defects or deficiencies in the services in question.
• To discontinue the unfair trade practice or the restrictive trade practice or not
to repeat them.
• Not to offer the hazardous goods for sale.

40
 • To withdraw the hazardous goods from being offered for sale.
• To provide for adequate costs to parties.

Q8) Who can file a complaint and What are the issues to consider when filing a
complaint?

Ans: Any person who can be termed as a consumer under the Act can make a
complaint. The following are the persons who can file a complaint under the Act :

• 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,
• One or more consumers, where there are numerous consumers
having the same interest.

Issues to consider when filing a Consumer complaint

You would have to check where the jurisdiction would lie and then ascertain
the value of the claim. You will have to file your complaint depending upon the
amount of money or compensation you want from the opposite party for the deficient
service he has provided you or for the defective product that you have been sold. It
is important to note that most Judges in these courts will be able to tell if you are
unnecessarily filing a complaint & are just trying to make a quick buck.

Q9) Where do I file my complaint and How many Consumer Courts are there in
India?

Ans: Pecuniary Jurisdiction

41
 • In cases where the value of goods and services involved is less than Rs.
20 Lakhs in value, you will have to file the complaint in The District
Forum constituted in the specified districts of a State.
• In cases where the value of goods and services involved is more than
Rs. 20 Lakhs in value but does not exceed Rs 1 crore you will have to
file the complaint with The State Commission constituted in the capital
cities of the different states
• In cases where the value of goods and services involved is more than 1
crore in value then you can file a complaint with The National
Commission which has been constituted only in New Delhi.

Territorial Jurisdiction.

The jurisdiction of the complaint is determined by the facts of the

case and where the cause of action arises. Further, when you file a complaint,
the area in which the opposite party resides or carries on his work or business
will also have to be taken into consideration by you. This means that if you
are filing a complaint against a service provider for a sum below 20 lakhs you
would have to approach the District Forum in the jurisdiction where the cause
of action arose. If the matter is above 20 lakhs but below 1 crore then it would
be filed in the State Commission within which State the trader/ service
provider/ manufacturer is located in the state in which the trader resides or
works in. These two factors will have to be kept in mind while filing your
complaint.

Consumer Courts Consumer Forums

There are consumer forums at the District, State and National level. At
present, there are 569 District Consumer Forums, 33 State Commissions &
the highest body which is the National Consumer Disputes Redressal
Commission (NCDRC) having its office at Janpath Bhawan, A Wing, 5th
Floor, Janpath , New Delhi.

42
 The District Forum consist of one president and two other members
(one of whom is to be a woman).The president of the Forum is a person who
is, or has been qualified to be a District Judge, and other members are
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. They can hear the case involving amount of Rs. Twenty Lacs.
It is situated in the District head quarters.

State Commissions A State Commission has jurisdiction in whole of

the State for which it is constituted. It can hear the cases involving the amount
more than rupees twenty lacs and up to rupees one crore. It has also
jurisdiction to hear appeal against the orders of District Forum of that
particular State. It is situated in the capital of the State.

State Commission consists of a president and two members one of

whom is to be a woman.President is a person who is or has been a Judge of
a High Court, and the members, are 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.

The National Commission consists of a president, and four other

members (one of whom is to be a woman).The president should be the one
who is or has been a Judge of the Supreme Court, and the members should
be the 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.

Q10) Do other Courts (District Courts/High Courts) accept consumer

43
disputes?
Ans: The jurisdiction of other courts to hear consumer disputes is not excluded. This
is because the Parliament of India felt it was necessary to have an efficient &
convenient mechanism to address and resolve the various consumer complaints
across the country. As a result it created a three-tier remedial machinery for the
inexpensive and quick disposal of consumer complaints. As these forums only deal
with consumer complaints/issues and nothing else, all their time can be devoted to
addressing consumers complaints.

Q11) What do I put in my Complaint? Is there a fee for filing a Complaint? Is

there any time limit for filing a Complaint?
Ans: Your complaint has to be clear, definite and precise. All your facts and
documentation must be in order. You will have to include -

• A cause-title.
• The complaint should, if possible have a heading.
• The name, description and address of the complainant. (your name).
• The name, description and address of the opposite party or parties as the
case may be, so far as they can be ascertained.
• The facts relating to the complaint and when and where it arose.
• How the opposite parties are liable to be proceeded against and why are
they answerable or accountable to this petition.
• Copies of documents in support of the allegations contained in the petition.
Complainants are advised to keep copies of the complaint / petition and all
furnished documents for their records. A list of documents should also be
furnished along with the complaint, duly signed by you.
• You would also need to state how the case falls within the jurisdiction of the
tribunal-whether the opposite party resides or carries on business or has a
branch office or personally works for gain within the jurisdiction of the forum
or whether the cause of action (damaged goods or deficient service) arose
within the Forum’s jurisdiction.

44
 (i) You are also entitled to claim the costs of your complaint from the opposite
party. Hence include that amount in your complaint.

Q12)Is There A Fee For Filing A Complaint ?

Ans: Under the original un-amended Act of 1986, no requirement of

payment of Court-fee or any other formal procedure of Court was
contemplated. However, after the amendment of 2002, there is a nominal
fee you may have to pay for filing a complaint. For example in the District
Forum located in Delhi the fee structure is as follows –

1. Up to 1 Lakh – Rs.100
2. 1 Lakh & above but less that 5 Lakhs – Rs.200
3. 5 Lakhs & above but less that 10 Lakhs – Rs.400
4. 10 Lakhs & above but less that 20 Lakhs – Rs. 500

You will have to pay the specified fee in the form of a crossed demand draft
drawn on a nationalized bank or through a crossed Indian Postal Order in
Favour of the Registrar of the State Commission & payable where it is
situated. The concerned District Forum shall deposit the amount so received.

Q13) Is There Any Time Limit For Filing A Complaint ?

Ans: Yes, the time limit is within two years from the date on which the cause of
action arises. This would mean two years from the day the deficiency in service or
defect in goods has arisen/detected.

Q14) Can This Time Limit Ever Be Extended ?

Ans: Yes ,But only under certain Circumstances. If the time limit expires but you are
still able to satisfy the Forum or Commission about the reasonableness in the delay,

45
your complaint can still be taken up. However, the delay for every single day has to
be explained

Q15) Do I have to be there myself to file a Complaint? Can more than one
consumer file a single Common Complaint?
Ans: Not necessarily, you can present your petition in person or by an authorized
representative. You may also send the complaint/petition by Registered Post. It is
good to send some extra Copies and to keep an extra one for yourself as well. You
will also need to give a copy to the opposite party.

Q16) Can more than one consumer file a single Common Complaint?
Ans: Yes, consumers having the same problem can join together and file a single
complaint. This can be done by enclosing a petition with the complaint for joining
together and filing a complaint. This petition should just state that since the facts and
circumstances relating to the complaint are the same and also since the same relief
is to be claimed for all the petitioners they may be allowed to join together and file a
single complaint.

Q17) How do I inform The Opposite Party about the complaint?

Ans: A notice is required to be sent to the opposite party. This can be done by
registered post which is to be delivered to the address where the opposite party
resides, works or carries on his business.

Q18) Can I Approach The Consumer Courts If I bought the Goods or Services
for Commercial Purposes?

46
Ans: No, the Consumer Courts are only meant for the ordinary consumers who have
bought goods & services for their own use or needs. Those who buy the
goods/services for commercial purposes or resale purposes are excluded from
the act. Consumer forum is not meant for businesses ,firms and Industries but for
the common man/consumer looking for quick & effective justice

Q19). What are my legal rights?

Ans: Firstly the consumer has a right to be protected from defective goods &
service. You have a right to be informed about and the right to choose from a variety
of goods and services. The consumer also has a right to be heard and to seek
redressal in case of a deficiency or defect in the goods or services purchased. It is
important for all consumers to know their rights and to be able to be exercise them
freely. Therefore you are entitled to approach a consumer court for justice.

Q20) Can I argue and present my complaint in Court myself?

Ans: Yes, You do not have to be a lawyer to argue before consumer courts or for
that matter any civil Court. However if the matter is a complicated one it is always
advisable to engage someone including a lawyer with necessary experience in
such matters. By a series of judgments, the Courts have granted a party to the
proceeding before the District Forum/State Commission the right to authorize a
person of his choice to represent him and also to examine and cross-examine the
witnesses, address the Court and take part in the proceedings as the case may be.

47
2002 AMENDMENTS - AT A GLANCE

1) Creation of Benches of National commission and State Commission as well as

holding of these commissions;
2) Period within which the complaints are to be admitted, notices are to be issued to
opposite party and the complaints are to be decided, prescribed; similar provisions
also made in respect of appeals;
3) No adjournment to be ordinarily allowed without speaking order giving reasons;
4) Pecuniary limits of jurisdictions of the consumer disputes redressal agencies
enhanced so that the District Forum are able to deal with complaints involving value
of goods or services and claims compensations up to Rs. 20 Lakhs (against Rs 5
lakhs at present), fixing the pecuniary limit of jurisdiction of state commission from
Rs 20 lakhs up to Rs 1 crore (as against above Rs 5 lakhs up to Rs 20 lakhs at
present)
5) Provision made for depositing, either fifty per cent. Of the amount of
compensations or fine for the amounts mentioned below whichever are less, before
admission of appeal, namely:-
(a) Rs 25,000 in case of appeal to a State Commission from the District Forum;
(b) Rs 35,000 in case of appeal to the National Commission from State Commission;
and
(c) Rs 50,000 in case of appeal to the Supreme Court from the National Commission
(6) Services availed for commercial purposes from the purview of the consumer
disputes redressal agencies, excluded;
(7) Provisions of the Act extended to services providers indulging in unfair or
restrictive trade practices or offering services which are hazardous;
(8) Sale of spurious goods or services brought within the meaning of unfair trade
practices;

48
(9) Express conferment of the powers of Judicial Magistrate of the first class on the
consumer disputes redressal agencies with a view of trying offences under the Act;

Cases & Judgements under CPA

1. Kodaikkanal Township and others placed an order with a distributor of Maruti

cars, in accordance with the rate contract entered into between the distributor and
the company. The distributor agreed to deliver the vehicle within 3 to 5 weeks from
the time of payment of full amount. The delivery was affected after about 8 months
and at that time, an additional sum of about Rs. 41000 was demanded and was paid
under protest by the Kodaikkanal Township. The additional amount was as a result
of the increase in price which took place in the meanwhile. The complaint was filed
with the district forum on the ground that it was not liable to pay the increased price
on account of delay in the supply of the vehicle which was to be delivered at the
price in accordance with the rate contract entered into. Further he claimed that on
account of delay, he had to get his old vehicle repaired for use and on which he
spent Rs. 21000. Therefore, he claimed about Rs. 62000.
The claim was resisted by both the distributor and the manufacturer of the
vehicle. Their contention was that the delivery mentioned in the invoice was only
approximate and tentative and the time was not the essence of the contract. The
terms of the contract clearly stipulated that the price of the vehicle was to be the one
prevailing on the date of delivery. The district forum passed an order giving direction
to the distributors and the manufactures to refund jointly or severally of Rs. 41000,
the excess amount deposited under protest by the compliant. It however dismissed
his other claims.
The distributors and the manufacture of Maruti car proffered an appeal
against the order of the District Forum. But the state Commission dismissed the
appeal. There upon, they went in for a revision appeal before the National
Commission.

49
 The National Commission, with out going into the merits of the case,
expressed their opinion that his compliant was not maintainable under the Act. If it
all, it could be covered under s.2(1)(c)(iv)of the Act but the price of Maruti Car was
not fixed by or under any law. Even the standard of Weight and Measures Rule did
not apply in this case. The rate contract between DGS and D and the manufacture
was a contractual and not a statuary price. The National Commission opined that
even if the leader had charged excess price, the compliant is not maintainable under
the Act. Therefore, the national Commission accepted both the revision petition of
the dealer and the manufacturer of Maruti cars.
[Maruti Udyog Ltd. vs. Kodaikkanal Township and others (1993)1 Comp L J 217
(NCDRC)]

2. An Institute purchased five computer machines from a company and entered

into a maintenance contract under which, all repairs and replacements of the
hardware were the responsibility of the company supplying computers. After some
time, the computers stopped working. The Institute approached the suppliers for the
repairs. The company estimated the cost of repairs at about Rs. 56000, which the
institute was asked to bear. The company’s contention was that computers got
damaged due to sudden high voltage spike and this was an act of god and hence
they were not liable.
The state commission came to a conclusion after examining all evidence and the
averments of the parties that
1. the cause of damage to the machines was sudden and high voltage spike;
2. certain parts of the machine damaged were covered by the contract of
maintenance and therefore liable to be repaired and replaced by the
computer-supplier;
3. The computer supplier did not give instructions to the complainant about
installing devices to prevent damage due to high voltage spikes.
The commission ordered the computer supplier to make the machines operational
as there was negligence on his part as he failed to caution the complainant about

50
the damages to the machines in the absence of installation devices, and he was
bound by the contract of maintenance.
[Pragati computers (p) ltd. VS. Madras Institute of Development Studies]

3. A vehicle was purchased by the complainant from an authorized dealer developed

trouble which continued despite being repaired during the warranty period. The State
Commission held that even where goods were purchased for commercial purpose, if
there is a warranty for its maintenance the purchaser becomes a consumer in
respect of the service rendered or to be rendered by the manufacturer of the supplier
during the warranty period.

Joseph Mathew Thomas and Co. V Maruti Udyog Ltd. 92005) III CPJ 657
(Kerala - Scdrc)

4. The deposit of a cheque made by the complainant, an account holder with the
appellant bank, was returned dishonored on the ground that "payment was stopped
by the drawer". His request to the bank for return of the cheque was not heeded by
the bank. He filed a complaint. The State Commission held that when disputes had
arisen about the genuineness of the cheque and on the instructions of the police,
which was making the investigation, the cheque had been retained by the bank, the
failure to return such a cheque would not amount to a deficiency in service of the
bank, which was only acting as a collecting agent.

Canara Bank Vs Kalastine III (2005) CPJ 68 [Tamil Nadu - SCDRC]

5. The complainant deposited certain amount with a society. As the deposited

amount was not returned, a complaint was filed by him before the District Forum,
which held the president and treasurer, as liable to restitute the amount to the
complainant. The State Commission held that though the treasurer and the president
of the society had convassed for the deposit of the amount with the society, it would
not mean that they were the recipients of the deposit. There was no agreement
between the complainant and the appellant-treasurer for the refund of the amount by

51
the latter. The registered society, with which the deposit was made, was alone liable
to refund the amount and it had also not been impleaded in the complaint. Therefore
the appellant in the capacity of the treasurer of the society could not be held
personally liable for the refund of the amount so deposited.

Prajakta Karkare Vs Vithal Madhavrao Kaslilar III (2005) CPJ 148 [Chattisgarh -
SCDRC]

6. Finance Company and its subsidiary duped investors by disappearing with their
contributions. On their complaints, properties of the finance company were sold in
auction and the proceedings were kept in bank for distribution to investing public. As
only much after the filing of the complaint by the investors, TRO approved the State
Commission for release of funds from the bank towards the tax arrears of the
subsidiary; the commission dismissed the department's claim as the first priority is
hapless consumers in country.
TRO Vs Himachal Gramin Sanchayatta Ltd. 146 Taxman 6 SCDRC HP

7. Teacher had complained to the Consumer Forum that her salary had not been
credited to her account. The State Forum held that this is a matter to be raised
before the Appropriate Forum which is State Administrative Tribunal and the
Teacher's complaint did not constitute a Consumer dispute.
FAO, Basic Education V. Madhuri Srivastav (2005) CPJ UP SC DRC.

8. The bank had adjusted an amount received by its client in the course of business
transaction, towards its existing loan liability, without its concurrence. The client had
given guarantee for a third party which was in force and there was an existing loan
liability to it and therefore it exercised its right of lien in appropriating the amount
towards the aforesaid loan liability. The bank's action was justified under section 171
of the Indian Contract Act,1872, and if the bank exercised its right, it could not be
taken as deficiency in service under section 2(1)(g) of the Consumer Protection Act,
1986.

52
Laser Arts Vs Samarth Sahakari Bank Ltd. II (2005) CPJ 246 (Maharashtra -
SCDRC)

9. The respondent bank declined to honour the cheques owing to the inability to
compare the signature of the appellant written in Sanskrit language with that
appearing in the account-opening form. On the insistence of the bank officials the
appellant signed the cheques in Hindi which also were not accepted. It was held by
the State Forum that to deprive the consumer of his constitutional right of mentioning
the amount in the cheque in Hindi amounts to gross deficiency in service and
violation of Official Languages Act. Therefore, the appeal was allowed with
compensation and costs.
S.N. Panigrahi Vs Andhra Bank II (2005) CPJ 316 [Delhi-SCDRC)

10. The appellant was asked to pay compensation on account of mental agony and
harassment the complainant-respondent suffered for disconnection of his mobile
phone which cannot be denied on the ground that the consumer happened to be a
chairman of a school it would not mean that he would be entitled to compensation
for loss of business by way of disconnection of mobile telephone. The compensation
allowed by District Forum was reduced in appeal.
Bhari Cellular Ltd. Vs Blue Bells Model School II (2005) CPJ 103 [Delhi-SCDRC]

11. Consumer complained to the District Forum regarding the delay in delivery of
vehicles. Forum directed the dealer to refund the booking amount along with
interest. The state forum held that the responsibility of the dealer is limited to collect
and pass on the booking amount to the manufacturer and no liability can be fastened
on the dealer.
Sainik Automobiles vs. Maheshchand Gupta (2005) CPJ 88-UP SCD (RC).

12. Complainant was allotted a residential plot on payment of deposit but plot was
not delivered by the respondent. District Forum dismissed the complaint treating it

53
breach of contract between two parties which did not give rise to deficiency in
service. However, the state forum held that respondent had undertaken to allot
residential plots to needy persons under Urban Land Disposal Rules 1974 and the
dispute is covered by the Act.
Mohan Ram vs. Nagar Palika Churu 2005 CPJ84 Raj. SCDRC.

13. An agent opened accounts with the appellant finance company in the names of
other persons and deposited the entire account. However, the company did not
refund the amount. It was held that though the amount was deposited by the agent,
the deposits were themselves in the name of other persons, who were the actual
account holders. Payment could be made only on the demand by the account
holders, during their lifetime. The agent was not the beneficiary; he could be treated
only as an agent of the account holders. An agent is not a consumer. The Forum
held that the payment could be made only to the account holders and not to be the
complainant, as he was not a consumer. Complaint was dismissed.
Maharashtra Group Finance Co. Ltd. Vs Sunil Kumar Agarwal 1 (2005) CPJ 35
[Dehradun-SCDRC]

14. The complainant insured 4 pigs with one insurance company and paid premium
to the bank for being paid to the insurance company. The bank remitted the premium
to another Company. That Company contended that since it did not insure the
impugned pigs, it was not liable to pay any compensation. Insurance Company No.1
contended that since it had never received any premium amount from the
complainant for any insurance cover, it owed no liability to him. It was held that the
mistake was solely of the bank in not remitting the amount of premium to company
No.1, which had rightly repudiated the claim as it had not received the premium
amount. The bank not only committed the deficiency in service but had also insisted
that the complainant prefer the claim before company No.2, which was not the
insurer.
Durg Rajnandgaon Gramin Bank Vs Oriental Insurance Company Ltd. 1 (2005)
CPJ 25 [Raipur-SCDRC]

54
Articles

SC issues notice on Coca Cola plea

(23-02-07) Source: Economic Times
NEW DELHI: The Supreme Court on Friday issued notice to one Sita Devi on an
appeal by aerated drinks major Coca-Cola against a consumer court order awarding
Rs 27,000 as compensation to her after she claimed to have found fungus in the
company's cola drink.
A bench comprising B N Agrawal and Justice P P Naolekar issued notice to Sita Devi
asking her to respond to Hindustan Coca-Cola Beverages Ltd's petition challenging
the National Consumer Disputes Redressal Commission (NCDRC) order.
The company contended that the bottles sent for analysis were not manufactured or
sold by it and did not contain the mandatory details like batch number, date of
manufacture and maximum retail price usually printed on every bottle.
Pointing out that the sample was not tested as per the procedure prescribed under
the Prevention of Food Adulteration Act, Coca-Cola counsels E C Agarwala and
Gopal Jain stated that the analysis report was flawed and could not be relied upon
for the purpose of giving compensation.
It also contended that the Consumer Protection Act had lacunae as it does not
specify the laboratory in which a sample was to be tested, thus leading to
inconsistencies in testing procedures. A sample should be analysed only by a
specified and authenticated lab, it pleaded.
Sita Devi had filed a case in a district forum against Coca-Cola and its Jaipur-based
distributor Ajay Sales and suppliers seeking damages to the tune of Rs 50,130 for
negligence and deficiency in service.

55
But the consumer court awarded her a compensation of Rs 27,000 after the Central
Public Health Laboratory in Jaipur held that the sample was adulterated and unfit for
human consumption.

Bank fined Rs 10 lakh for harassing man over credit card dues
(23-02-07) Source: Times News Network
NEW DELHI: Showing little mercy for banks which take to insensitive and illegal
tactics for recovery of credit card dues, the State Consumer Commission has
slapped an exemplary fine of Rs 10 lakh on Standard Chartered Bank for harassing
a Chittaranjan Park resident and raising an illegal bill for Rs 28,000.

Commission president Justice J D Kapoor also directed all other banks and financial
institutions to refrain from such practices and directed SHOs of Delhi Police to
register a criminal case against the chief executive officers (CEOs) of concerned
banks and financial institutions if consumers complain about threats or abuse by
their loan goons.

"If in future, we receive any such complaint, the CEO of the concerned bank or
finance company shall face punishment as provided under Section 27 of the
Consumer Protection Act, 1986, a minimum sentence of one month imprisonment or
fine or both," thundered Justice Kapoor.

"We, through this order, direct all the banks or financial institutions who provide
loans and credit cards, not to resort to methods which are illegal and have no legal
back-up and not to use abusive and threatening languages on telephone and not to
visit residence of a consumer for recovery of loan and not to use force or musclemen
for repossessing vehicles," said Justice Kapoor.

56
Pulling up Standard Chartered Bank for harassing Vibhu Bhakru, a Delhi High Court
advocate living in CR Park, for over an year by sending goons to his house and
issuing threats on phones to the extent that he would be abducted if the dues were
not paid, the commission said: "The conduct of the bank amounts to the grossest
kind of deficiency in service, unfair trade practice and flagrant breach of terms of the
contract," said Justice Kapoor.

Conclusion

Undoubtedly Consumer Protection Act is benevolent piece social legislation, which

protects large number of consumers from exploitation. The people in this country are
very much aware that consumer courts are helping the needy and delivering speedy
justice to them. The consumer courts are less expensive. People have now started
feeling that they are in a position to declare “Sellers be aware”, whereas earlier
consumers were at the receiving end and were told “Buyers beware”

The issues relating to consumer welfare affects everyone since everyone is a

consumer in one way or the other. Ensuring consumer welfare is the responsibility of
the government. Accepting this, policies have been framed and the Consumer
Protection Act, 1986, was introduced. A separate Department of Consumer Affairs
was also created in the Central and State Governments to exclusively focus on
ensuring the rights of consumers as enshrined in the Act. This Act has been
regarded as the most progressive, comprehensive and unique piece of legislation. In
the last international conference on consumer protection held in Malaysia in 1997,
the Indian Consumer Protection Act was described as one "which has set in motion
a revolution in the fields of consumer rights, the parallel of which has not been seen
anywhere else in the world."
The special feature of this Act is to provide speedy and inexpensive redressal to the
grievance of the consumer and provide him relief of a specific nature and award
compensation wherever appropriate. The aim of the Act is also to ensure the rights

57
of the consumer, viz. the right of choice, safety, information, redressal, public hearing
and consumer education.

The Act defines the consumer as one who purchases goods and services for his/her
use. The user of such goods and service with the permission of the buyer is also a
consumer. However, a person is not a consumer if he purchases goods and services
for resale purpose.
The most important feature of the Act is the provision for setting up three-tier quasi-
judicial machinery popularly known as "consumer courts" at national, state and
district levels. The apex court, National Commission functions in Delhi. Every State
Government has a State Commission. The third tier is in each district and is called
district forum. As on January 1999, there are 543 district fora. All these courts have
handled nearly 13 lakh cases of which about 10 lakhs cases have been disposed of.
The disposal of 77 per cent of the cases is not a mean achievement. However, it
should be noted that only 27 per cent of the total cases have been disposed of within
the prescribed period of 90 days or 150 days (where testing is required). This fact
really causes concern for the Government and the consumers in general. The
National Commission has identified the reasons for the slow disposal and have
come out with suggestions for amending the Act with a view to improving the
disposal rate within the time limit prescribed in the Act. The Government has been
contemplating a number of amendments to the Act and these amendments will be
brought out in the next session of Parliament.

The growing interdependence of the world economy and international

character of many business practices have contributed to the development of
universal emphasis on consumer rights protection and promotion. Consumers,
clients and customers’ world over, are demanding value for money in the form of
quality goods and better services. Modern technological developments have no
doubt made a great impact on the quality, availability and safety of goods and
services. But the fact of life is that the consumers are still victims of immoral and
exploitative practices. Exploitation of consumers assumes numerous forms such as

58
adulteration of food, fake drugs, dubious hire purchase plans, high prices, poor
quality, deficient services, deceptive advertisements, hazardous products, black
marketing and many more. In addition, with revolution in information technology
newer kinds of challenges are thrown on the consumer like cyber crimes, plastic
money etc. which affect the consumer in even bigger way. ‘Consumer is sovereign’
and ‘Customer is the king’ are nothing more than myths in the present scenario
particularly in the developing societies. However, it has been realized and rightly so
that the consumer protection is a socio-economic programme to be persued by the
government as well as the business as the satisfaction of the consumers is in the
interest of both. In this context, the government, however, has a primary
responsibility to protect the consumers’ interests and rights through appropriate
policy measures, legal structure and administrative framework.

The efficient and effective programme of Consumer Protection is of special

significance to all of us because we all are consumers. Even a manufacturer to
provider of a service is a consumer of some other goods or services. If both the
producers/providers and consumers realize the need for co-existence, adulterated
products, fake 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 NGO’s, 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. This should,
however, proceed in a harmonious manner so that our society becomes a better
place for all of us to live in.

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Bibliography & Webliography

 Mrs.Meena Shah – Judge, Consumer Court

 Mr.Kamle – Registrar, Consumer Dispute Redressal Forum,

Mumbai Suburban Dist.

 The Consumer Protection Act, 1986 BARE ACT

 Consumer Protection in India, Reflections – S.S.Singh & Sapna

Chadhah

 Consumer Protection Act – P.V.V. Satyanarayamurthy

 Consumer and the Market – Sheetal Kapoor

 Environment and Consumer – Pranab Banerji

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