Consumer Protection Act 1986 - Summary

Consumer Protection Act, 1986

Key Amendments

• Amendments were made via the Consumer Protection (Amendment) Act, 2002.

• Rajya Sabha passed the Act on 11.4.2002, Lok Sabha on 30.7.2002 (with amendments), and Rajya Sabha again on 22.11.2002.

• President of India gave assent on 17.12.2002, with notification issued on 18.12.2002.

• The Act came into force on 15.3.2003.

Act Overview

• An Act to protect the interests of consumers.

• Aims to establish consumer councils and authorities for settling disputes.

• Applies to the whole of India except the State of Jammu and Kashmir.

• The Act applies to all goods and services unless otherwise provided by the Central Government.

Key Definitions

• Appropriate laboratory: A laboratory recognized by the Central or State Government, or established under any law, for analyzing goods for defects.

• Branch office: An establishment described as a branch or carrying on the same activity as the head office.

• Complainant: Includes a consumer, voluntary consumer association, the Central or State Government, multiple consumers with the same interest, or a legal heir in case of a consumer's death.

• Complaint: An allegation in writing regarding unfair trade practices, defective goods, deficient services, overcharging, or hazardous goods/services.

• Consumer: A person who buys goods or hires services for consideration, including users with approval, but excluding those who obtain goods for resale or commercial purposes. Commercial purpose excludes self-employment for livelihood.

• Consumer dispute: A dispute where the allegations in a complaint are denied.

• Defect: Any fault, imperfection, or shortcoming in the quality, quantity, potency, purity, or standard of goods.

• Deficiency: Any fault, imperfection, shortcoming, or inadequacy in the quality, nature, and manner of performance of a service.

• District Forum: A Consumer Disputes Redressal Forum established under section 9(a).

• Goods: As defined in the Sale of Goods Act, 1930.

• Manufacturer: A person who makes, manufactures, or assembles goods, or puts their own mark on goods made by others.

• Member: Includes the President and members of the National Commission, State Commission, or District Forum.

• National Commission: The National Consumer Disputes Redressal Commission established under section 9(c).

• Notification: A notification published in the Official Gazette.

• Person: Includes a firm, Hindu undivided family, co-operative society, or association of persons.

• Prescribed: Prescribed by rules made by the State or Central Government.

• Regulation: Regulations made by the National Commission.

• Restrictive trade practice: A trade practice that manipulates prices, delivery conditions, or affects the flow of supplies, imposing unjustified costs or restrictions on consumers.

• Service: Service of any description made available to potential users, including banking, financing, insurance, transport, etc., but excluding free or personal services.

• Spurious goods and services: Goods and services claimed to be genuine but are not.

• State Commission: A Consumer Disputes Redressal Commission established under section 9(b).

• Trader: A person who sells or distributes goods for sale, including the manufacturer and packer.

• Unfair trade practice: A trade practice that adopts unfair or deceptive methods to promote the sale, use, or supply of goods or services, including false representation and misleading advertisements.

Consumer Protection Councils

Central Consumer Protection Council

• Established by the Central Government.

• Consists of the Minister in charge of consumer affairs (Chairman) and other members.

• Meets at least once a year.

• Objects: To promote and protect consumer rights, including protection against hazardous goods/services, information about quality/price, access to a variety of goods/services, redressal against unfair practices, and consumer education.

State Consumer Protection Councils

• Established by the State Government.

• Consists of the Minister in charge of consumer affairs (Chairman) and other members.

• Meets at least twice a year.

• Objects: To promote and protect the same consumer rights as the Central Council within the State.

District Consumer Protection Councils

• Established for every district by the State Government.

• Consists of the Collector of the district (Chairman) and other members.

• Meets at least twice a year.

• Objects: To promote and protect consumer rights within the district.

Consumer Disputes Redressal Agencies

• District Forum: Established by the State Government in each district.

• State Commission: Established by the State Government.

• National Commission: Established by the Central Government.

District Forum Composition

• President: A person who is or has been or is qualified to be a District Judge.

• Two other members, one of whom shall be a woman, meeting specific qualifications.

District Forum Jurisdiction

• Entertain complaints where the value of goods/services and compensation claimed does not exceed $20 <br>ewline lakhs$.

• Complaints instituted within the local limits of jurisdiction, where the opposite party resides, carries on business, or where the cause of action arises.

Complaint Process

• Complaints can be filed by consumers, recognized consumer associations, multiple consumers with the same interest, or the Central/State Government.

• The District Forum may allow or reject the complaint, with an opportunity for the complainant to be heard.

• If a defect is alleged, the Forum may obtain a sample for analysis by an appropriate laboratory.

District Forum Orders

• If satisfied, the District Forum may order the opposite party to:

  • Remove the defect.

  • Replace the goods.

  • Return the price/charges.

  • Pay compensation.

  • Discontinue unfair trade practices.

• Orders must be signed by the President and at least one member.

Appeals

• Appeals against District Forum orders may be filed with the State Commission within thirty days.

• The State Commission may require a deposit of 50% of the amount ordered or $25,000$, whichever is less.

State Commission Composition

• President: A Judge or former Judge of a High Court.

• At least two members, one of whom shall be a woman, meeting specific qualifications.

State Commission Jurisdiction

• To entertain complaints where the value exceeds $20 <br>ewline lakhs$ but does not exceed $1 <br>ewline crore$.

• To hear appeals against District Forum orders.

National Commission Composition

• President: A Judge or former Judge of the Supreme Court.

• Not less than four members, one of whom shall be a woman, meeting specific qualifications.

National Commission Jurisdiction

• To entertain complaints where the value exceeds $1 <br>ewline crore$.

• To hear appeals against State Commission orders.

Appeals to Supreme Court

• Appeals against orders of the National Commission may be filed with the Supreme Court within thirty days.

• The Supreme Court may require a deposit of 50% of the amount ordered or $50,000$, whichever is less.

Miscellaneous

Limitation Period

• 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.

Penalties

• Failure to comply with orders may result in imprisonment (one month to three years) or fines (two thousand to ten thousand rupees), or both.

Protection of Action Taken in Good Faith

• No legal proceedings against members or officers acting in good faith.

Different

Key Amendments: Amendments via Consumer Protection (Amendment) Act, 2002; came into force on 15.3.2003. Act Overview: Protects consumer interests, establishes councils/authorities for dispute settlement. Applies to all of India except Jammu and Kashmir; covers all goods/services unless specified. Key Definitions: Complainant includes consumer, associations, government, or legal heir. Complaint is an allegation of unfair practices, defective goods, deficient services, or overcharging. Consumer buys goods/hires services for consideration, excluding resale/commercial purposes (except self-employment for livelihood). Key terms defined: defect, deficiency, restrictive/unfair trade practice, service, etc. Consumer Protection Councils: Central, State, and District Councils - Objectives: To protect consumer rights, including safety, information, choice, redressal, and education. Consumer Disputes Redressal Agencies: Includes District Forum, State Commission, and National Commission. District Forum: Composition: President (District Judge) and two members. Jurisdiction: Claims up to $20 <br> ewline lakhs$. Complaint Process: Filed by consumers, associations, or government; includes product analysis if defects alleged. Orders: Can include defect removal, replacement, refunds, compensation, and practice discontinuation. Appeals: To State Commission within 30 days with a deposit. State Commission: Composition: President (High Court Judge) and at least two members. Jurisdiction: Claims between $20 <br> </p><p>Key Amendments: Amendments via Consumer Protection (Amendment) Act, 2002; came into force on 15.3.2003. Act Overview: Protects consumer interests, establishes councils/authorities for dispute settlement. Applies to all of India except Jammu and Kashmir; covers all goods/services unless specified. Key Definitions: Complainant includes consumer, associations, government, or legal heir. Complaint is an allegation of unfair practices, defective goods, deficient services, or overcharging. Consumer buys goods/hires services for consideration, excluding resale/commercial purposes (except self-employment for livelihood). Key terms defined: defect, deficiency, restrictive/unfair trade practice, service, etc. Consumer Protection Councils: Central, State, and District Councils - Objectives: To protect consumer rights, including safety, information, choice, redressal, and education. Consumer Disputes Redressal Agencies: Includes District Forum, State Commission, and National Commission. District Forum: Composition: President (District Judge) and two members. Jurisdiction: Claims up to$20 lakhs$. Complaint Process: Filed by consumers, associations, or government; includes product analysis if defects alleged. Orders: Can include defect removal, replacement, refunds, compensation, and practice discontinuation. Appeals: To State Commission within 30 days with a deposit. State Commission: Composition: President (High Court Judge) and at least two members. Jurisdiction: Claims between$20 lakhs$and$1 crore$; hears appeals from District Forum. National Commission: Composition: President (Supreme Court Judge) and at least four members. Jurisdiction: Claims exceeding$1 crore$; hears appeals from State Commission. Appeals to Supreme Court: Appeals against National Commission orders within 30 days with a deposit. Miscellaneous: Limitation Period - Complaints must be filed within two years of the cause of action. Penalties - Non-compliance can result in imprisonment or fines. Protection of Action Taken in Good Faith - Legal protection for actions taken in</p><p>lakhs$ and $1 <br> ewline crore$; hears appeals from District Forum. National Commission: Composition: President (Supreme Court Judge) and at least four members. Jurisdiction: Claims exceeding $1 <br> ewline crore$; hears appeals from State Commission. Appeals to Supreme Court: Appeals against National Commission orders within 30 days with a deposit. Miscellaneous: Limitation Period - Complaints must be filed within two years of the cause of action. Penalties - Non-compliance can result in imprisonment or fines. Protection of Action Taken in Good Faith - Legal protection for actions taken in