The Consumer Protection Act 1986

Dharmesh mishra (DM-05-019)

Imran(DM-05-044)
Rupali jaiswal(DM-05-050)
Vidwan (DM-05-067)
Abdul(DM-05-53)
Need for consumer protection act
in an era where consumer is the king
"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
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 us opportunity to serve him”

- Mahatma
Gandhi
 Introduction
 The consumer protection act was passed in the year 1986 by the parliament of
India
 The main object of this law is to protect the consumer from the unfair trade
practices by the traders.
 This law came into force from 15th April, 1987 and extends to whole of India except
the state of Jammu and Kashmir.
 This law has given very clear definitions of goods, services, consumers, unfair
trade practices etc.,,
 Consumer according to [section 2(1)(d)] “consumer means any person who buys
any goods for consideration which has been paid or promised or partly paid and
partly promised or under any system of deferred payments”.
 Goods according to [section 2(7)] “Goods means every kind movable property other
than actionable claims and money, and includes stocks and shares, growing crops
grass and things attached to or forming part of land which are agreed to be served
for the purpose of sale.
 Unfair trade practices according to sec 2(1)(r) defines the following trade
practices as unfair trade practices.
 a) falsely representing that the goods are of a particular standard, quality,
grade, style, model, and composition when they are not so.
 b) falsely representing the second hand, renovated, reconditioned and old
goods as new goods.
 c) representing that the goods or services have the sponsorship, approval,
characteristics accessories, of a foreign company where there is no such
sponsorship or collaboration.
 d) making of false or misleading representation about the uses, benefits
durability, efficiency, etc of the goods.
 e) giving the guarantee or warranty of the performance, efficiency or length
of a product or any goods which is not based on any adequate test or
experience.
 f) permitting the publication of any advertisement in any newspaper or
otherwise for the sale of goods or services at a bargain price or discount
etc.. Without any intention to do so.
 Restrictive trade practices According to sec2(1) the restrictive trade
practice means, any trade practice which requires a consumer to
buy, hire or avail any of goods or services as the case may be, as a
condition precedent of buying hiring or availing of other goods or
services.
 Example: A gas agency forcing a consumer to buy stove supplied
by them compulsorily to get gas connection from their agency or
company
Rights of consumers
 The consumer protection act 1986 has granted six rights to the
consumer against the unfair trade practices of the traders

 Right to Protection
 Right of Information
 Right of Choice
 Right of Hearing
 Right of Redressal
 Right of Education
Consumer protection councils
 Central consumer protection
council sec (4) central
government nominates the
members
 The cabinet minister in charge of
consumer affairs as its chairman
 The members shall be from
Loksabha, Rajyasabha,
commissioner of scheduled
castes and tribes department,
representatives of consumer
associations, farmer
associations, traders
associations, traders
associations and women's
associations
 state consumer protection
council sec (7) state
government nominates all
these members
 The state council will have the
minister of the state cabinet in
charge of consumer affairs as
its chairman
 The members shall be from
state council, consumer
associations, traders and
industrial associations,
women's organizations
Consumers redressal agencies

 FORUM & JURISDICTION

 Consumer Disputes Redressal Forums(District
 Forum)
 Claims less than or equal Rs.20 lacs.

 Consumer Disputes Redressal Commissions(State

 Commission)
 Claim more than Rs.20 lacs & less than Rs.1 crore & appeals.

 National Consumer Disputes Redressal Commission(National

Commission)
 Claim equal to Rs.1 crore & appeals
Case study
KishoreLal vs chairman,
Employees State Insurance
Corporation (ESIC).
Case facts
 In a recent order of the Supreme Court of India, Employees State
Insurance hospitals have also been included in the ambit of justice
given by Consumer Courts.
 Lal, a workman covered under ESIC, took his wife to an ESIC
hospital for complications arising out of diabetes. She was admitted in
hospital, but her condition deteriorated prompting Lal to transfer her
to a private hospital.
 There it was known that both the diagnosis and treatment given to her
was incorrect. Lal took his grievance to the district forum at Sonepat
alleging deficiency of service.
 The forum held that the services rendered by the ESIC were
gratuitous in nature and hence not covered under CPA and dismissed
the case.
 When Lal took the matter to the State and National Commissions, the
forums agreed that the ESIC service was not covered under the Act.
Decision
 Lal then took the matter to the Supreme Court by way of a Special
Leave Petition (SLP).
 He stated that as a person who contributed to the ESIC via his
employer’s payment of the relevant fee, coupled with some
deduction from his own salary, the services rendered by the ESIC
were not ‘free of charge’ but arose out of consideration paid by him.
 The ESIC on the other hand argued that the services rendered by
the organization were free of charge, as the consumer did not pay
any money for the treatment, and hence fell within the exception of
the Consumer Protection Act, which states that free services were
outside the purview of the Act.
 It was further argued that under the ESIC Act, all disputes arising
from services rendered to ESIC beneficiaries were to be
adjudicated by the ESIC Courts and the consumer court thus had
no jurisdiction to hear disputes regarding the same.
Order from the supreme court
 It was further argued that under the ESIC Act, all disputes arising
from services rendered to ESIC beneficiaries were to be
adjudicated by the ESIC Courts and the consumer court thus had
no jurisdiction to hear disputes regarding the same.
 The court held that when an employee gets the benefits of a service
that arises from his employment, such service is part of his terms of
employment and cannot be labeled ‘free’.
 The SC held that the ESIC Act did not envisage cases of medical
negligence being filed before it and the CPA was the act to which
any consumer could turn for relief of his grievances.
 The matter was remanded back to the district forum, Sonepat for
fresh determination of the case on merits.
 Can a company file a complaint under the Consumer Protection
Act(CPA)? And would it be entitled to get the same reliefs as an
individual?
 Karnataka Power Transmission Corporation
v/s consumer
 Can a Company claim compensation for mental tension and
harassment?
 Synco Textiles Pvt Ltd Vs Greaves Cotton & Co. Ltd (1991) CPJ
499
 The National Commission observed the main determinants of
character of a transaction – whether it is for a commercial purpose
or not are immediate purpose as distinct from the ultimate purpose
 Buyers of goods or commodities for self consumption were held to
be consumers.
 A purchase of goods could be said to be for a commercial purpose
only if two conditions were satisfied, namely
 A) The goods must have been purchased for being used in some
profit making activity on a large scale
 B) There should be close and direct nexus between the purchase of
goods and the profit-making activity.
 Isaac Mathew v/s maruthi udyog LTD;

 In the case , a maruthi car was repaired, renovated and sold as a

new one. The district forum declared it as an unfair trade and
ordered to be replaced

 Kailash kumari v/s Narendra Electronics;

 In this case, kailash kumari purchased a T.V set from Narendra

Electronics which was defective she asked for a replacement but
the shop manager refused to. So kailash kumari went to the district
forum. It was ordered that the T.V set must be replaced and the
compensation must be paid for the stress the party has gone
through
How does International consumer protection differ
from Indian consumer protection?
 Indian CPA cases
Case#1
 Redressal filed against: Indian Airlines
 Issue: not allowing passenger to board
the flight despite the fact that the
passenger had flight tickets booked
 Compensation: Rs. 10,000
Case#2
 Redressal filed against: United Breweries
Ltd
 Issue: presence of protein impurity in
beer
 Compensation: Rs. 5,000
Case#3
 Redressal filed against: Shoe crafts
 Issue: Sale of faulty camera from the grey
market with mismatch in serial number on
guarantee card
 Compensation: Rs.3033
 Foreign CPA cases
 Redressal filed against: SlimAmerica, Inc
 Issue: false advertising claims about a
health product (dieting, slimming)
 Compensation: $8.3 million (Rs.32.3
crores)
Case#2
 Redressal filed against:Christiana
Hospital
 Issue: wrong medication leading to
death of patient
 Compensation:$1.6 million (Rs.6.2
crores)
Case#3
 Redressal filed against: Trans Union
 Issue: misrepresentation of identity and
inappropriate credit record upload
 Compensation:$ 800,000 (Rs.3.1 crores)
Deceptive Advertising

 An advertisement which is potentially misleading or literally

false is deceptive.
 Potentially misleading ads are difficult to evaluate because
miscomprehension may often occur.
◦ Miscomprehension is a problem for firms because the
audience does not understand the message being
delivered.
Deception
Jago Grahak Jago
An Advertisement issued by the
Government of India in public interest

What made the government spread

awareness about the consumer law?

• Rising cases of duping of consumers

•Political interest of ruling party
•Common consensus in Parliament
Relief that may be granted under the
ACT
 To remove the defect pointed out by the appropriate laboratory from
the goods in question
 To replace the goods with new goods of similar descriptions 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
the negligence of the opposite party
 To discontinue the unfair trade practices or the restrictive trade
practice or not to repeat them.
 Not to offer the hazarodus goods for sale
 To withdraw the hazardous goods being offered for sale
Drawbacks of the existing system

 Inadequate awareness
 Burden on law and order machinery - additional load
 Delays in the judicial system
 Deficiency in existing laws
Punishment not enough
Loopholes - bonafide belief by re-seller
 No Nodal agency to exclusively deal with the Issue.
 No Single window for investigation/enforcement
Recommendations
 Make the forums more consumer friendly
 Regular product testing
 Free legal counseling
 Conduct workshops in schools, colleges, village panchayats and in offices
 Encourage consumer clubs
 Research on issues on consumer concern
 Publish regular articles on current scenarios to keep the consumer updated with malicious
practices
 Levy heavy charges on those found guilty under the consumer protection act.
 Strict norms for advertisements and their promises
 Regular check on authenticity of the claims made in the advertisements
 The brand ambassadors should be equally held liable if the brand they promote fails to keep up
with its claims.
 Rolling back of distributed banned goods
 Compensation for product side effects
 Routine inspection of plant, storage, manufacturing, logistics and distribution and upload of
data for public usage
 MIS information upload for public usage
 Real sales info, bad product report, quality check results about product uploaded for public
usage
Open house
Thank you