BUSINESS

ENVIRONMENT &
LEGAL ASPECTS OF
BUSINESS(KMBN201)
UNIT - V
Consumer Protection Act
Objectives of the Act
1 .The Consumer Protection Bill, seeks to provide for better protection of the
interests ofconsumers and for the purpose, to make provision for the establishment
of Consumer councils and other authorities for the settlement of consumer disputes
and for matter connected therewith.
2. It seeks, inter alia, to promote and protect the rights of consumers such as-

(a) The right to be protected against marketing of goods which are hazardous to
life and property;
(b) The right to be informed about the quality, quantity, potency, purity, standard
and price of goods to protect the consumer against unfair trade practices;
(c) The right to be assured, wherever possible, access to an authority of goods at
competitive prices;
(d) The right to be heard and to be assured that consumers interests will receive
due consideration at appropriate forums;
(e) The right to seek redressal against unfair trade practices or unscrupulous
exploitation of consumers; and
(f) right to consumer education.

3. These objects are sought to be promoted and protected by the Consumer Protection
Council to be established at the Central and State level.
4. To provide speedy and simple reprisal to consumer disputes, quasi-judicial
machinery is sought to be setup at the district, State and Central levels.
5. The Bill seeks to achieve the above objects.

Definitions
In this Act, unless the context otherwise requires, -

(a) "Appropriate laboratory" means a laboratory or organization – recognized by

the Central Government; recognized by a State Government, or any such laboratory
or organization established by or under any law for the time being in force, which is
maintained, financed or aided by the Central Government or a State Government for

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 carrying out analysis or test of any goods with a view to determining whether such
goods suffer from any defect;

(aa) "Branch office" means – any establishment described as a branch by the

opposite party; or any establishment carrying on either the same or substantially the same
activity as that carried on by the head office of the establishment;

(b) "complainant" means - a consumer; or any voluntary consumer association

registered under the Companies Act, 1956 (1 of 1956), or under any other law for the time
being in force; or the Central Government or any State Government who or which makes a
complaint; one or more consumers, where there are numerous consumers having the same
interest;

(c) "complaint" means any allegation in writing made by a complainant that –an
unfair trade practice or a restrictive trade practice has been adopted by any trader; the goods
bought by him or agreed to be bought by him suffer from one or more defects; the services
hired or availed of or agreed to be hired or availed of by him suffer from deficiency in any
respect.

(a) "consumer" means any person who, - buys any goods for a consideration which has
been paid or promised or partly paid and partly promised, or under any system of
deferred payment and includes any user of such goods other than the person who buys
such goods for consideration paid or promised or partly paid or partly promised, or
under any system of deferred payment when such use is made with the approval of
such person, but does not include a person who obtains such goods for resale or for
any commercial purpose.

(b) "Consumer dispute" means a dispute where the person against whom a
complaint has been made, denies or disputes the allegations contained in the
complaint;

(c) "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;

(d) "Deficiency" means 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;

(e) "District Forum" means a Consumer Disputes Redressal Forum established

under clause (a) of section 9;

(f) "Goods" means goods as defined in the Sale of Goods Act, 1930 (3 of 1930), as I
have discussed above.

(g) "manufacturer" means a person who – makes or manufactures any goods or parts
thereof; or does not make or manufacture any goods but assembles parts thereof made
or manufactured by others and claims the end-product to be goods manufactured by

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 himself; or puts or causes to be put his own mark on any goods made or manufactured
by any other manufacturer and claims such goods to be goods made or manufactured
by himself.

(jj) "Member" includes the President and a member of the National Commission or
a State Commission or a District Forum, as the case may be;

(h) "National Commission" means the National Consumer

Disputes Redressal Commission established under clause (c) of section 9;

(i) "Notification" means a notification published in the Official Gazette;

(j) "Person" includes, - a firm whether registered or not; a Hindu undivided family;
a co-operative society; every other association of persons whether registered under the
Societies Registration Act, 1860 (21 of 1860) or not;
(d) "Prescribed" means prescribed by rules made by the State Government, or as the
case may be, by the Central Government under this Act;

(nn) "restrictive trade practice" 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;

(e) "Service" means service of any description which is made available to potential
users.

Consumer Protection Councils

 District Forum: These forums are set by the district of the state concerned in each
district wherein it consists of President and two members of which one should be a
woman and is appointed by the State Government. In this, the complaining party should
not make a complaint more than 20 Lacs and once the complaint is filed the goods are
sent for testing and if they found defective the accused party should compensate and if the
party is dissatisfied can make an appeal with state commission within 30 days.

 State Commission: This is set up by each state. It consists of President and two
members. Complains should be at least 20 lacs and exceed not more than 1 crore. The
goods are sent for testing and if found defective are asked for replacement or
compensation. If not satisfied can make an appeal within 30 days in front of the National
Commission.

 National Commission: Consist of President and 4 members. The complaint must exceed
an amount of 1 crore. The goods are sent for testing and if found defective are asked for
replacement or compensation
State Consumer Protection Council
The Consumer Protection Act, 1986 (Amended in 2002) makes provision for the set up of
State Consumer Protection Councils at the state level so as to promote and protect the right of
the Consumers Under the Act, establishment of the State Government shall by notification,
establish with effect from such date as it may specify in such notification, a Council to be
known as the State Consumer Protection Council [Section 7(1)]. Constitution The State

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 Consumer Protection Council shall consist the following members, namely

 The Minister in charge of consumer affairs in the State Government who will be its
Chairman.
 Such member of other officials or nonofficial members representing such interest as may
be prescribed by the State Government.
 Such number of other official or nonofficial members, not exceeding as may be nominated
by the Central Government. [Section 7(2) amended in 2002, w.e.f. 15-3-03].
 The council shall meet as and when necessary but not less than two meetings shall be held
every year.
 The meeting of the Council shall be held at such time and place as the Chairman may think
fit.
 The terms of the State Council shall be three years.
District Consumer Protection Council
In order to promote and protect the rights of the consumers at the district level, provisions
have been made in the Consumer Protection Act, 1986 Vide Act, No. 62 of 2002 (w.e.f. (5 -3-
2003) for the establishment of District Consumer protection council at the district level. The
State Government shall establish for every district, by notification, a Council to be known as
the District Consumer Protection Council with effect from such date as it may specify in such
notification [Section 8(1)].The District Consumer Protection Council shall consist of the
following members, namely
 The Collector of the district, who shall be its Chairman, and
 Such member of other official and nonofficial members representing such interests as may
be prescribed by the State Government. [Section 8A (2)].
 The Council shall meet as and when necessary but not less than two meetings shall be held
every year.
 The Council shall meet as such time and place within the District as the Chairman may
think fit.

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