consumer protection mba

7/28/2019 Consumer Protection MBA

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CONSUMER PROTECTIONACT, 1986

( With amendments of the Act effectedfrom 15.3.2003

and rules from 5.3.2004)


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CONSUMER PROTECTIONACT, 1986

Enacted to provide for the better protectionof the interest of consumer

Act applies to whole of India except Jammu

and Kashmir

Chapter I, II and IV came into force on15.4.1987. Chapter III came into force on1.7.1987

The act was amended in 2002 and theamendments came into force w.e.f. 15thMarch 2003.


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WHAT IS A COMPLAINT?

Complaintmeans any allegation inwriting made my a compliant that :I. An unfair trade practice or a restrictive

trade practice has been adopted by anytrader or service provider;II. The goods bought by him or agreed to be

bought by him suffer from one or moredefects ;

III. The services hired or availed of or agreedto be hired or availed off by him sufferfrom deficiency in any respect;


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IV. A trader or service provider as the case maybe has charged for the goods or for theservices mentioned in the complaint, a pricein excess of the price

a) fixed by or under any law for the time beingin force;

b) displayed on the goods or any packagecontaining such goods;

c) displayed on the price list exhibited by himby or under any law for the time being inforce;

d) agreed between the parties .


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V. Goods which will be hazardous to lifeand safety when used are being offeredfor sale to the public

a) In contravention of any standardsrelating to safety of such goods asrequired to be compiled with, by orunder any law for the time being inforce;

b) If the trader could have known with duediligence that the goods so offered areunsafe to the public;


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VI. Service which are hazardous or likely tbe hazardous to the life and safety ofthe public when used, are being

offered by the service provider whichsuch person could have known withdue diligence to be injurious to life andsafety.


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WHO IS A CONSUMER ?

Legal heir of consumer in case death ofconsumer

Does not include any person who buysgoods for resale or commercial purposeand services for commercial purpose

However any person who buys goods for

commercial use but exclusively for hislivelihood by means of self employmentis a consumer.


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WHAT IS A DEFECT ?

Fault

Imperfection

Shortcoming

In the

Quality

Quantity

Potency

Purity Or

Standards

Which is required to be maintained by orunder any law for the time being in force


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WHAT IS A DEFICIENCY ?

Fault

Imperfection

Shortcoming Or Inadequacy

In the

Quality

Standard and Manner of

performance

Which is required to be maintained by orunder any law for the time being in force


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WHAT IS A SERVICE?

Service means service of any description, which ismade available to potential users and includes, but notlimited to the provisions of the facilities in connectionwith1) banking 2) financing 3) insurance 4) transport5) processing 6) supply of electrical or other energy7) boarding or lodging or both 8) house construction9) entertainment 10) amusement or

11) the purveying or new or other information

But does not include the rendering of any service free ofcharge or under a contract of personal service


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CONSUMER DISPUTEREDRESSAL AGENCIES

1) A Consumer Dispute Redressal Forum at theDistrict level.

2) A Consumer Dispute Redressal Commission atthe State level.

3) A National Consumer Dispute RedressalCommission at national level.


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CONSUMER DISPUTESREDRESSAL AGENCIES

Redressal Forums.

District Forums - a ConsumerDisputes Redressal Forum to be knownas the "District Forum" established bythe State Government in each district

of the State by notification:


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Each District Forum shall consist of,

a person who is, or has been, or isqualified to be a District Judge, who shallbe its President;

two other members, one of whom shallbe a woman, who shall have thefollowing qualifications, namely

Continued


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be not less than thirty-five years of age,

possess a bachelor's degree from arecognised university,

be persons of ability, integrity andstanding, and have adequate knowledgeand experience of at least ten years in

dealing with problems relating toeconomics, law, commerce,accountancy, industry, public affairs oradministration:

Continued


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HOLDING OF OFFICE BY A MEMBER OFTHE DISTRICT FORUMSEC 10(2)

Every member shall hold the office for theterm of 5 years-: up to age of 65 years.

A member shall be eligible for re-appointment for another-:5 years.

The salary of the members of districtforum shall be prescribed by the state

government. The appointment shall be whole-time on

the recommendation of the president ofthe state government.


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JURISDICTION OF DISTRICTFORUM [sec11]

Monetary Claim should not

exceed twenty lakhs.

Is based on the reliefclaimed by thecomplainant .

Territorial At a place where

each or opposite

parties reside or, They carry on the

business or,

At a place where

cause of action arise.

If 2 or more district forums have jurisdiction on,a complaint can be filled in


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Jurisdiction of the DistrictForum.

The District Forum shall have

jurisdiction to entertain complaintswhere the value of the goods orservices and the compensation, if any,claimed ''does not exceed rupees

twenty lakhs.


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JURISDICTION

Forum / Commission Where the value of the goods orservices and the compensation, ifany claimed,

District Forum Does not exceed Rs. 20 lakhs

State Commission Rs. 20 lakhs and above but notexceeding One Crore

National Commission Above One Crore

Besides, State and National Commission have appellatejurisdiction also.


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FILING OF COMPLAINTS

A complaint may be filed by

a) The consumer to whom the goods are sold

or services are provided

b) Any recognised consumer association

c) One or more consumers with same interest

d) The central government or state government


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FILING OF COMPLAINTS

The Fee for filing the Complaint for the district forum is as under

Sr.No.

Value of Goods / Service and Compensation Amountof Fees

1) Upto Rs. 1 lakh rupees Rs. 100

2) Rs. 1 Lakh and above but less than Rs.5 lakhs Rs. 200

3) Rs. 5 Lakhs and above but less than Rs. 10 lakhs Rs. 400

4) Rs. 10 lakhs and above but less than Rs. 20 lakhs

The fees shall be paid by Cross demand Draft drawn on a nationalized

bank or through crossed Indian postal order drawn in favour of the

Registrar of the Sate Commission and payable at the place of the State

Commission (w.e.f. 5.3.2004.)


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PROCEDURE ON ADMISSION OFCOMPLAINTSEC13

DISTRICT FORUM-:on admission of a complaintit relates to any goods.

Refer a copy of the admitted complaint, within21 days from the date of its admission to theopposite party directing him to give his saywithin a period of 30 days or extended periodnot exceeding 15 days.

The opposite party shall give his say within the

stipulated time, if he fails to do so, the districtforum shall proceed to settle the dispute.


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If there is a defect in the goods-which cannot bedetermined without proper analysis, the districtforum shall obtain a sample of the goods from

the complaint.

Refer the sample to the appropriate laboratory.

It shall report its findings within 45 days of the

receipt of the reference.

Before any sample test-:district forum require

the complaint to the credit of the forum suchfees as may be specified.


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District forum shall remit the amountdeposited to the appropriate laboratoryto carry out the analysis.

District forum shall forward a copy ofthe report along with remarks to theopposite party.

If any parties have disputes regardingcorrectness it shall give in writing tothe district forum.

District forum shall give reasonableopportunity to both the party.


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Every complaint shall be accompaniedby the prescribed amount of fee.

It shall be decided with 21 days fromthe date on which the complaint wasreceived (admissibility).


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POWER OF CIVIL COURT TODISTRICT FORUM

The District Forum shall have the powers of Civil Court

while trying a suit in respect of the following matters ;

a) The summoning and enforcing attendance of anydefendant or witness and examining the witness on oath.

b) The discovery and production of any document or othermaterial object producible as evidence.

c) The reception of evidence on affidavit

d) The requisition of the report of the concerned analysis or

test from the appropriate laboratory of from any otherrelevant source.

e) Any other matter which may be prescribed.


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RELIEF TO THE COMPLAINANT ?

IF THE COMPLAINT IS PROVED THE FORUM SHALLORDER

a) to remove defect pointed out by the appropriate laboratoryfrom the goods in question;

b) to replace the goods with new goods of similar descriptionwhich shall be free from any defect;

c) to return to the complainant the price, or , as the case maybe, the charges paid by the complainant;

d) to pay such amount as may be awarded by it as

compensation to the consumer for any loss or injury sufferedby the consumer due to negligence of the opposite party;

e) To remove the defect in goods or deficiency in the servicesin question.


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RELIEF TO THE COMPLAINANT ?

f) to discontinue the unfair trade practice or the restrictivetrade practice or not to repeat them;

g) not to offer hazardous goods for sale;h) to withdraw the hazardous goods from being offered for

sale;ha) to cease manufacture of hazardous goods and to desist fromoffering services which are hazardous in nature;

hb) to pay such sum as may be determined by it, if it is of theopinion that loss or injury has been suffered by a largenumber of consumers who are not identifiable conveniently.

hc) to issue corrective advertisements to neutralize the effect ofmisleading advertisement at the cost of the opposite party

responsible for issuing such misleading advertisement;i) To provide for adequate cost to parties.


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APPEAL

shall be filed within thirty days.

Delay in filing appeal may becondoned if there is sufficient cause.


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PROVISION RELATING TO APPEALS TO THESTATE COMMISSION

It shall make an appeal within aperiod of 30 days.

He can make an appeal after theexpiry of 30 days if there was ansufficient cause.

No appeal shall be entertainment

unless the appellant deposit 50% ofthe amount or 25000 which is less.


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LIMITATION PERIOD

Within two years from the date on

which the cause of action has arisen.


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STATE COMMISSION

Composition of the state commission A person who is or has been a judge of a

high court, appointed by the state

government who shall be its president. Not less than 2, members, and one of

who shall be a woman, qualification. Not less than 35 years of age.

Posses a bachelors degree.

Have adequate knowledge of at least 10years in economics, law, commerce,industry public.


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50% of the members shall be havingjudicial back ground.

Disqualification.


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JURISDICTION OF STATECOMMISSION [sec 17]

JURISDITION OF STATECOMMISSION

monetary appellate

Supervisory

revisional


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Complaints where the value of thegoods or service exceeds rupees 20lakhs but does not exceed rupees onecrore.

Appeals against the orders of anydistrict forum with in the state.

If it appears to the state govt. that thedistrict forum has failed to excuse itsjurisdiction illegally it will call for the

records and pass appropriate orders.


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Tettortorial jurisdicate

The opposite party or each of the

party resides. They actually and voluntarily resides

or carries on business.

The cause of action arose.


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PROVISION RELATING TOTRANSFER OF CASES

Transfer of cases (sec 17-A)-:thestate council may at any stagetransfer any complaint pending

before the district forum to anotherdistrict to another district forumwithin the state.

Circuit benches-:the state council

ordinarily function in the state capitalbut may perform its function at suchother as the state governmentnotifies.


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PROVISION RELATING TO APPEALS TO THESTATE COMMISSION

It shall make an appeal within aperiod of 30 days.

He can make an appeal after theexpiry of 30 days if there was ansufficient cause.

No appeal shall be entertainment

unless the appellant deposit 50% ofthe amount or 25000 which is less.


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PROVISION RELATING TOSALARY

The salary and other terms andconditions of the members of thestate commission shall be prescribed

by the state government. It shall hold the office for the term of 5

years up to the age of 67 years.

Any member may give the registration tothe state government.


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PRESIDENT AND MEMBERSOF THE NATIONAL COUNCIL

The president shall be entitled to salary,

allowance as are available to a sitting judge ofthe state council shall receive a consolidatedhonorarium of 10,000 per month per day ofsitting.

The president and the members shall be entitled

to traveling and daily allowances on official tour. They shall also be entitled to conveyance

allowance of 150 Rs. Per day of its sitting or sumof 1500 per month.


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TERMS AND CONDITIONS OF THEPRESIDENT AND MEMBERS

Before appointment -:national councilhave to take an undertaking that he willnot have any such finance or other

interest. Every member shall hold for the term of

5 years or up to the age of 70 years.

Resignation shall be given to the centralgovernment

Casual vacancy or resignation shall befilled by fresh appointment.


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When president is unable to dischargethe functions owing to absence, illness,

he shall discharge the function of thepresident until the new president isappointed.

The president or any member cease tohold the office after his

PROVISIONS RELATING TO APPEALS


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PROVISIONS RELATING TO APPEALSTO THE NATIONAL COMMISSION [sec19]

It may prefer an appeal against suchorder of state council within a periodof 30 days.

No appeal by a person, who isrequired to pay an amount or unlessthe appellant has deposited 50% of

the amount or Rs. 35,000 which isless.


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DISMISSAL OF FRIVOLOUS ORVEXATIOUS COMPLAINTS

Where a complaint instituted before theDistrict Forum, the State Commission orthe National Commission, is found to be

frivolous or vexatious, it shall, forreasons to be recorded in writing, dismissthe complaint and make an order that thecomplainant shall pay to the opposite

party such Cost, not exceeding tenthousand rupees, as may specified in theorder.


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PENALTIES

Where a trader or a person against whom acomplaint is made (or the complainant) fails oromits to comply with any order made by theDistrict Forum, the State Commission or theNational Commission, such trader or person (orcomplainant) shall be punishable withimprisonment for a term which shall not be lessthan one month but which may extend to three

years or with fine which shall not be less thantwo thousand rupees but which may extend toten thousand rupees, or with both.


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NATIONAL COMMISSION ----TERMS ANDCONDITIONS OF THE PRESIDENT AND MEMBERS

Before appointment -:nationalcommission have to take an undertakingthat he will not have any such finance or

other interest. Every member shall hold for the term of

5 years or up to the age of 70 years.

Resignation shall be given to the centralgovernment

Casual vacancy or resignation shall befilled by fresh appointment.


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When president is unable to dischargethe functions owing to absence, illness,

he shall discharge the function of thepresident until the new president isappointed.

The president or any member cease tohold the office after his

PROVISIONS RELATING TO APPEALS


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PROVISIONS RELATING TO APPEALSTO THE NATIONAL COMMISSION [sec19]

It may prefer an appeal against suchorder of state council within a periodof 30 days.

No appeal by a person, who isrequired to pay an amount or unlessthe appellant has deposited 50% of

the amount or Rs. 35,000 which isless.

HEARING OF APPEAL [ 19


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HEARING OF APPEAL [sec19-A]

An appeal filed before the statecommission or national commissionshall be heard as expeditiously as

possible and family disposed of theappeal within a period of 90 days.


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NOTE ON CONSUMERPROTECTION ACT, 1986

A person may be consumer of goods, or services. When Ipurchase a fan, a gas stove or a refrigerator, I could be theconsumer of goods.

When I open a bank account, take an insurance policy, get mycar repaired, I could be the consumer of services.

The consumer protection Act, 1986 tries to help a consumerwhen for example, the goods purchased are defective or theservices rendered to him are subject to so deficiency.

Prior to the consumer Protection Act, 1986 for any consumercomplaint one had to go to an ordinary Civil Court. He had toengage a lawyer, pay the necessary fee, and be harassed for

years or decades before any outcome, positive or negative, wasthere in that litigation.

Under the Consumer Protection Act, no Court fee has to be paidand the decision on the complaint is much quicker, as the Courtcan evolve a summary procedure in disposing off the complaint.


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CASE LAWS ON THE ACT.PECUNIARY JURISDICTION

In Krishan Dass Chaurasia V. State Bank of India (1995)the total claim in a complaint did not exceed Rs. 1,00,000/-. Itwas held that the matter was not within the jurisdiction of theState Commission and such a claim was rejected by the State

Commission. The Complainant could seek the remedy from theDistrict Forum. Therefore, jurisdiction, which is vested in adistrict Forum cannot be created for State Commission by merelyexaggeration of a claim.

In B. Raghunath Vs Trans India Tourism (1996) thecomplainant had suffered a loss of Rs. 5,000/-, according to his

own statement. He claimed compensation of Rs. 5,00,000. Itwas evident that he had purposely boosted his claim to bring thematter within the pecuniary jurisdiction of the State Commission.

The complaint was returned bt the State Commission forpresentation in proper District Forum with necessary correction.


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CASE LAWS ON THE ACT.NO ACTION WHERE NO TERRITORIAL

JURISDICTION

In J. K. Synthethetics Vs. Smt. Anita Bhargava (1993)

the registered office of the Opposite Party was situated at

Kanpur. Payment was made through Bank in Delhi.

The complaint filed in Calcutta was held to be outside the

territorial jurisdiction of the District Forum. The Order passed

by the Calcutta District Forum was set aside in Appeal


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CASE LAWS ON THE ACT.

EVIDENCE THROUGH AFFIDAVITS IS LEGAL &SUFFICIENT EVIDENCE.

In Union of India Vs. Ramswaroop Chandil (1998) thecomplainant? Respondent had a circular ticket in his possessionduring journey which was locked in his box. He was not allowed

to break open the lock and produce the ticket and was forced topay excess charge for four persons. The District Forum awardedcompensation in his favour for refund of fare and excess chargeand for inconvenience, humiliation and Advocates fee, etc.

In appeal by the Railway Authorities it was pleaded that thecomplainant had not produced any witness to support his claim.

Dismissing the appeal it was held that he had narrated his casein the affidavit and the same was not rebutted by the Oppositeparty.

It was held that the evidence by affidavit was legal andsufficient to support the complainants case.


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CASE LAWS ON THE ACT.AFFIDAVITS PERMITTED TO DETERMINE DEFICIENCY

IN SERVICE AS WELL AS DAMAGES.

The Consumer Protection Act contemplates speedydisposal of complaints, which are required to be disposedoff within 90 days of service of notice to Opposite Party.The Consumer Protection Act, therefore, does notcontemplate regular trial as is usually done in civil suits.

In Prem Prakash Mehra Vs. Oriental Insurance Co.Ltd., (1995) it has been held that the parties can becalled upon tom lead evidence on affidavits not only on

question of deficiency in service but also on subject ofdetermination of damages. This in consonance with theobjective of the Consumer Protection Act, for speedydisposal of cases.


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NON-SPEAKING ORDER CAN BE SET ASIDE In S.D.O. Telephone Vs. Rama Shankar Pandey (1997)

the District Forum, Handoi, allowed the complaint and directedthat the telephone bills of the complainant be revised on thebasis of average consumption and awarded Rs. 200/-

compensation to the complainant. No reasons were given forsuch order.

The State Commission held that the order of the District Forumshould be a speaking one. It should give, however briefly, theessential facts and material, considered by it as well as thereasons for the conclusion. Else the order becomes arbitrary inthe eyes of law.

The order of the District Forum was set aside and the case wassent back to the District forum for re-consideration in accordance

with law after notice to the parties.


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REMAND WHEN ORDER SIGNED BY

PRESIDENT ONLY In S. Ravisankar Vs. Aslo Steel Ltd., the

order of the District forum was signed only bythe President of the Forum. No other memberhad signed it.

Section 14 requires that every order shall be

conducted/signed by the President and at leastone member. The present order was held to beinvalid, and the matter was remanded to theDistrict Forum.


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PRESIDENT SITTING SINGLY It has been held by the National Commission

that the orders passed by the President of theState Commission sitting singly without thejunction of any other member is contrary toSection 14(2) of the Consumer Protection Act,1986. Such an order is invalid (Raj kumarMangla Vs. R.S. Singh (1995)


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PRESIDENT SITTING SINGLY In Haryana Urban Development Authority Vs.

Avtar Krishan Ambedkar (1998) the revisionpetition was filed against the order of the President of

the District Forum, Gurgaon dated 11.7. 1997, whichwas passed by the President sitting singly, i.e. withoutassociating any of the two companion members.

It was held that Section 14(2) requires that allproceedings shall be conducted by the President ofDistrict Forum and at least one member thereof sitting

together. It was held that the President sitting singlywas acting without jurisdiction. The said order was setaside and the case was referred back to the DistrictForum for fresh decision in accordance with law.


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PREGNANCY NO GROUND FORCONDONATION OF DELAY

In Registrar, University of Pune Vs. Mrs. PujaPravin Wagh (1999) the complainant filed a

complaint 3 1/2 months after the expiry of thelimitation period of 2 years against the University ofPune for the wrong declaration of result. The reason fordelay in filing the complaint given by the complainantwas her pregnancy. The District Forum condoned thedelay and awarded compensation of Rs. 2,5000/- to thecomplainant. On appeal it was held that the fact ofpregnancy was no justification for the delay. Thecomplaint being time barred the order of the DistrictForum was set aside.


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DAMAGES In Charan Singh Vs. Healing Touch Hospital (2000)

it has been held by the Supreme Court that whilequantifying damages, Consumer Forums are required tomake an attempt to serve the ends of justice so thatcompensation is awarded, in an established case, whichnot only serves the purpose of recompensing theindividual, but which also at the same time, aims to bringabout a qualitative change in the attitude of the serviceprovider. Indeed, calculation of damages depends on the

facts and circumstances of each case. No hard and fastrule can be laid down for universal application. Whileawarding compensation, a Consumer Forum has to takeinto account all relevant factors and assess compensationon the basis of accepted legal principles, on moderation.


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DAMAGES In Patel Roadways Ltd. Vs. Birla Yahama Ltd. AIR

2000 the Supreme Court has held that Consumer Forumshave jurisdiction to entertain complaints against carriersregarding loss of or damage to goods entrusted to carrierfor transportation.

In Provident Fund Commissioner Vs. Shiv KumarJoshi (2000) the Supreme Court has held that anemployee, who is a member of the EmployeesProvidentFund Scheme, is a consumer and duties performed by the

Regional Provident Fund Commissioner under such schemeis service and thus, in case of delay in release ofprovident fund, complaint for deficiency in service, ismaintainable.

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