Kristu Jyoti College of Management and Technology
Department of Management studies
Intellectual Property Rights and Industrial Laws
STUDY MATERIAL
Module V | BBA | 5th Semester
Christin Mathew
Intellectual Property Rights and Industrial Laws
Module V
The consumer protection Act,1986
A consumer is one that buys goods for consumption and not for resale or commercial purpose.
The consumer is an individual who pays some amount of money for the thing required to
consume goods and services. As such, consumers play a vital role in the economic system of a
capitalist economy.
Section. 2 (1) (d)of the Consumer Protection Act, 1956, defines ”consumer” as any person who
buys any goods for a consideration, who pays or will pay. Hires or avails any service for a
consideration for which he has paid or will pay. However, it does not include a person obtaining
goods for resale or any commercial purpose.
“A customer is the most important visitor on our premises. He is not dependent on us. We
are dependent on him. He is not an interruption in our work – he is the purpose of
it. We are not doing him a favor by serving him. He is doing us a favor by giving us the
opportunity to serve him.
– Mahatma Gandhi”
Consumer Protection Act, 1986
The Consumer Protection Act, implemented in 1986, gives easy and fast compensation to
consumer grievances. It safeguards and encourages consumers to speak against insufficiency and
flaws in goods and services. This Protection Act covers all goods and services of all public,
private, or cooperative sectors, except those exempted by the central government. The act
provides a platform for a consumer where they can file their complaint and the forum takes
action against the concerned supplier and compensation is granted to the consumer for the hassle
he/she has encountered.
Salient Features of Consumer Protection Act, 1986
1. The salient features of Consumer Protection Act (CPA), 1986 are as follows
2. It applies to all goods, services and unfair trade practices unless specifically exempted by the
Central Government.
3. It covers all sectors-private, public or co-operative.
4. It provides for establishment of consumer protection councils at the central, state and district
levels to promote and protect the rights of consumers and a three-tier quasi-judicial machinery to
deal with consumer's grievances and disputes.
5. It provides a statutory recognition to the six rights of consumers.
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Aims & Objective of Consumer Protection Act, 1986
The principal objective of the Consumer Protection Act is to grant shield for the improved
safeguard to consumers. Unlike prevailing laws, which are disciplinary or precautionary in nature,
the provisions of this Act are compensatory in nature. The act is aimed to afford simple, quick and
economical redressal to the consumers’ grievances, and reliefs of a particular nature and award of
damages wherever appropriate to the consumer. This act provides following rights to consumer.
The Rights of the Consumer
Right to Safety- Before buying, a consumer can insist on the quality and guarantee of the
goods. They should ideally purchase a certified product like ISI or AGMARK.
Right to Choose- Consumer should have the right to choose from a variety of goods and
in a competitive price
Right to be informed- The buyers should be informed with all the necessary details of
the product, make her/him act wise, and change the buying decision.
Right to Consumer Education- Consumer should be aware of his/her rights and avoid
exploitation. Ignorance can cost them more.
Right to be heard- This means the consumer will get due attention to express their
grievances at a suitable forum.
Right to seek compensation- It defines that the consumer has the right to seek redress
against unfair and inhumane practices or exploitation of the consumer.
The Responsibilities of the Consumer
Responsibility to be aware – A consumer has to be mindful of the safety and quality of
products and services before purchasing.
Responsibility to think independently– Consumer should be well concerned about what
they want and need and therefore make independent choices.
Responsibility to speak out- Buyer should be fearless to speak out their grievances and
tell traders what they exactly want
Responsibility to complain- its consumer responsibility to express and file a complaint
about their dissatisfaction with goods or services in a sincere and fair manner.
Responsibility to be an Ethical Consumer- They should be fair and not engage
themselves with any deceptive practice.
Compliant
According to 2(1) [c] a compliant means any allegation in writing regarding
a) An unfair Trade practice adopted by any trader
b) The goods bought by the consumer suffers from one or more defects
c) The service hired or availed by the consumer suffer from any defects
d) Price charged in excess of price fixed
e) Goods or services which will be dangerous to health
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Unfair Trade practice
“unfair trade practice” 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 unfair or
deceptive practice including any of the following practices, namely:—
The practice of making any statement, whether orally or in writing or by visible representation
which,—
(i) falsely represents that the goods are of a particular standard, quality, quantity, grade,
composition, style or model;
(ii) falsely represents that the services are of a particular standard, quality or grade;
(iii) falsely represents any re-built, second-hand, renovated, reconditioned or old goods as new
goods;
(iv) represents that the goods or services have sponsorship, approval, performance,
characteristics, accessories, uses or benefits which such goods or services do not have;
(v) represents that the seller or the supplier has a sponsorship or approval or affiliation which
such seller or supplier does not have;
(vi) makes a false or misleading representation concerning the need for, or the usefulness of, any
goods or services;
(vii) gives to the public any warranty or guarantee of the performance, efficacy or length of life
of a product or of any goods that is not based on an adequate or proper test thereof:
How to File a Complaint
Within stipulated time of purchasing the product or services, the complaint should be
filled.
In the complaint, the consumer should mention the details of the problem. This can be an
exchange or replacement of the product, compensation for mental or physical torture.
However, the declaration needs to be reasonable.
All the relevant receipts, bills should be kept and attached to the complaint letter.
A written complaint should be then sent to the consumer forum via email, registered post,
fax or hand-delivered. Acknowledgement is important and should not be forgotten to
receive.
The complaint can be in any preferred language.
The hiring of a lawyer not required.
All the documents sent and received should be kept.
Consumer Dispute Redressal Commission
The Act provides for setting up of a Consumer Dispute Redressal Commission (CDRC),
which shall be set up at the district, state and national level (Commissions). The CDRC is
empowered to resolve complaints with respect to unfair and restrictive trade practices,
defective goods and services, overcharging and goods which are a hazardous to life and
safety.
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Central Consumer Protection Authority
The Act introduces the establishment of a Central Consumer Protection Authority
(CCPA) by the central government. The CCPA is a regulatory authority and shall be
empowered to impose penalties, recall goods, cause withdrawal of services, provide
refunds7 and investigate into matters.
Redressal Agencies
Redressal agencies for consumer disputes/Types of Consumer
Redressal Forums:-
- "District Forum" by State Government. At least one in each district or in certain cases one
District Forum may cover 2 or more districts.
- "State Commission" by State Government.
- "National Commission" (National Consumer Disputes Redressal Commission) by Central
Government.
Consumer Protection Act, 1956, sets up a Redressal Agency in the form of a District Forum,
State Commission and National Commission to achieve the aims and objectives of this Act.
1.District Forum
1. District Forum consists of a person who is qualified or qualifies as a District Judge
as its President.
2. The forum should consist of at least one female member among the other members
of the forum.
3. Every member of the District Forum, holds office for a term of 5 years or up to the
age of 65 years whichever is earlier.
4. It has the jurisdiction to entertain complaints, where the value of the goods or
services and the compensation claimed does not exceed Rs.20 Lacs.
Power of a District Forum
1. Remove any defect detected by the appropriate laboratory from the goods in testing.
2. Replace the defective goods with new goods free of any defect.
3. Pay the consumer for any loss or injury suffered to him due to negligence of
defaulting party.
4. Furthermore, compensate the complainant for any expense of redressal.
After the proceedings, the District Forum is satisfied that any of the allegations contained in the
complaint about the services are proved, it shall issue an order to the opposite party directing him
to do one or more of the following things :
1. To return to the complainant the charges paid.
2. 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 the negligence of the opposite party.
3. To remove the deficiency in the services in question.
4. To provide for adequate costs to parties.
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2.State Commission
1. The State government issues a notification for establishing a State Commission.
2. Where the value of compensation for goods or services claimed exceeds Rs. 20 Lacs
but does not exceed Rs.1 Crore.
3. Additionally, State Commission can entertain an appeal against the orders of any
District Forum within the State.
Procedure to be followed by State Commission
Same as for District Forum.
Procedure for hearing appeals
The State Commission may, on such terms as it may think fit and at any stage, adjourn the
hearing of appeal, but not more than one adjournment shall ordinarily be given and the appeal
should be decided within 90 days from the first date of hearing.
Appeals against orders of State Commission
Any person aggrieved by an order made by the State Commission may appeal against such order
to the National Commission within a period of 30 days. The National Commission may entertain
an appeal after 30 days if it is satisfied that there was sufficient cause for not filing it within that
period
3.National Commission
1. National Commission qualifies a person who is or has been a Judge of the Supreme
Court as the President.
2. The forum should consists of at least 4 members but not more than the number of
members prescribed. Of these number of members, one member has to be woman.
3. Every member of the National commission holds office for a term of 5 years or up to
the age of 70 years, which ever is earlier.
4. It has jurisdiction to entertain complaints, where the value of goods or services and
compensation, claimed exceeds Rs. 1 Crore.
5. Moreover, it can entertain appeals against the orders of any State Commission.
Procedure to be followed by the National Commission
A complaint containing the following particulars shall be presented by the complainant in person
or by his agent to the National Commission or be sent by registered post, addressed to the
National Commission :-
1. the name, description and the address of the complainant;
2. the name, description and address of the opposite party or parties, as the case may be, so far as
they can be ascertained ;
3. the facts relating to the complaint and when and where it arose ;
4. documents in support of the allegations contained in the complaint ;
5. the relief which the complainant claims.
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The remaining procedure and the procedure for hearing the appeal is similar to that for State
Commission.
Appeal against orders of the National Commission
Any person, aggrieved by an order made by the National Commission, may appeal against such
order to the Supreme Court within a period of 30 days from the date of the order. The Supreme
Court may entertain an appeal after 30 days if it is satisfied that there was sufficient cause for not
filing it within that period.
Penalties
Where 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 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 2,000 rupees but which may extend to 10,000 rupees or with both. In
exceptional circumstances the penalties may be reduced further.
Consumer Protection Councils
District Consumer Protection Council
District Consumer Protection Council shall consists of;
1. The Collector of the district, as the Chairman of the council,
2. Any number of other official and non-official members as the State Government
prescribes,
3. The District Council meets at least twice in every year,
4. Additionally, the State Government also prescribes its various procedures.
State Consumer Protection Council
State Consumer Protection Council consists of;
1. A Minister of the State government in-charge of consumer affairs as the Chairman,
2. Any number of other official and non-official members as the State Government
prescribes,
3. The State Council meets at least twice every year.
4. Additionally, the State Government also prescribes its various procedures.
Central Consumer Protection Council
Central Consumer Protection Council consists of;
1. A Minister of the Central Government in-charge of Consumer Affairs as the
Chairman,
2. Any number of other official and non-official members as the Central Government
prescribes,
3. The Central Council shall meet at least once a year.
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