MODULE - 4 THE CONSUMER PROTECTION ACT 1986

 The Consumer Protection Act was enacted in 1986 to provide better protection to the interests of the
consumers.
 The primary object of the act is the establishment of Consumer Councils and other authorities for the
settlement of consumer’s disputes.

Definition of Terms:

1. Complainant: The person who can make a complaint before a Consumer Redressal Forum may be:
a) A consumer
b) Any voluntary consumer association registered under the companies act 1956
c) The central or state government
d) One or more consumers where there are numerous consumers having the same interest
e) In case of death of a consumer, his legal heir or representative.

2. Complaint: It means a written allegation by a complainant that:

a) An unfair trade practice or a restrictive trade practice has been adopted by any trader
b) The goods bought by him or agreed to be bought by him suffer from one or more defects
c) The services hired or availed or agreed to be hired or availed of by him suffer from
deficiency in any respect
d) A trader has charged for the goods mentioned in the complaint, a price in excess of the price
fixed by or under any law for the time being in force or displayed on the goods or any
package containing such goods

3. Consumer: A consumer means:

a) 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.
b) Any person who hires or avails any services for a consideration which has been paid or
promised or partly paid and partly promised, or under any system of deferred payment.
c) It does not include a person who buys goods or services for any commercial purpose.

4. Consumer dispute: it means dispute, where the person against whom a complaint has been made, denies
or dispute the allegation contained in the complaint.

5. Defect: it means any fault, imperfection or shortcoming in the quality, quantity or standard which is required
to be maintained under any law for the time being force, or under any contract in relation to any goods.

6. Deficiency: it 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.

7. Services: it means service of any description which is made available to potential users and includes the
provision of facilities in-connection with banking, financing, insurance, transport, processing, supply of
electrical or other energy, board or lodging or both, housing construction, entertainment, or the purveying
of news or other information but does not include the rendering of any service free of charge.

8. Goods: Goods means “every kinds of movable property other than actionable claim and money and includes
stock and shares, growing crops etc.,

9. Unfair trade practices: it means a trade practice which, for the purpose of promoting the sale, or supply of
any goods or for the provision of any services, adopts any unfair method or deceptive practice.
 It includes any of the following:
a) Falsely represents that the goods are of a particular standard, quality, quantity, grade, composition,
style or model
b) Falsely represents that the services are of a particular standard, quality or grade
c) Falsely represents any re-built, second hand, renovated old goods as new goods
d) Represents that the goods or services have sponsorship, approval, performance, characteristics,
accessories or benefits which such goods or services do not have.
e) Misleading representation concerning the need for or the usefulness of any goods or services

10. Restrictive trade practices: Restrictive trade practices are targeted at the consumers who are burdened
with restriction and unjustified costs through the practices of the trader. The trader manipulates the
price or the conditions of delivery of the product which results in restrictive trade practice. It include
any trade practice which requires a consumer to buy, hire or avail of any goods or services as a
condition precedent for buying or availing of other goods.

Rights of Consumers:

According to Section 6 of the Consumer Protection Act, the following rights are available to consumers:

1. Right to be protected or right to safety: Every consumer has the right to be protected against the
marketing of goods and services which are hazardous to life and property.
2. Right to be informed: The right to be informed about the quality, quantity, purity, standard and price of
goods or services so as to protect the consumers against unfair trade practices.
3. Right to choose: Every consumer has a right to be assured, wherever possible, access to a variety of goods
and services at competitive prices.
4. Right to be heard: The right to be heard and to be assured that consumers interest will receive due
consideration at appropriate forums.
5. Right to seek Redressal: The right to seek redressal against unfair trade practices or restrictive trade
practices or exploitation of consumers.
6. Right to consumer education: The responsibility of creating awareness amongst the consumers has been
assigned to the Central Consumer Protection Council.
7. Right to basic needs: The basic needs mean those goods and services which are necessary for a dignified
living of people. It includes adequate food, clothing, shelter, energy, sanitation, health care, education and
transportation. All the consumers have the right to fulfil these basic needs.
8. Right to healthy environment or quality of life: This right provides the consumers protection against
environmental pollution so that the quality of life is enhanced.

Consumer Protection Councils:

The Consumer Protection Councils are established at Central Level, State Level and District Level. These
councils work towards the promotion and protection of the rights of the consumers. They take necessary steps
for consumer education and protecting consumers from exploitation.

1. Central Consumer Protection Council

 The Central Government shall, by notification, establish a council to be known as the Central
Consumer Protection Council (hereinafter referred to as the Central Council).
 The Central Council shall consist of the following members, namely:
a) The Minister-in-charge of Consumer Affairs in the Central Government, who shall be its Chairman &
 b) Such number of other official or non-official members representing such interest as may be
prescribed by the central government.
 The central council shall meet as and when necessary, but at least one meeting shall be held every year.
 The central council shall meet at such time and place as the chairman may think fit.

2. State Consumer Protection Council

 The State Government shall, by notification, establish a council to be known as the State
Consumer Protection Council (hereinafter referred to as the State Council).
 The State Council shall consist of the following members, namely:
a) The Minister-in-charge of Consumer Affairs in the State Government, who shall be its Chairman,
b) Such number of other official or non-official members representing such interests as may be
prescribed by the State Government.
c) Such number of other official or non-official members, not exceeding 10, as may be nominated by
the Central Government.
 The State Council shall meet as and when necessary but not less than 2 meetings shall be held
every year.
 The procedure to be observed in regard to the transaction of its business at such meetings shall
prescribed by the State Government.
 The state council shall meet at such time and place as the chairman may think fit.

3. District Consumer Protection Council

 The State Government shall establish for every district, by notification, a council to be known as the
District Consumer Protection Council (hereinafter referred to as the District Council).
 The District Council shall consist of the following members, namely:
a) The Collector of the District who shall be its chairman.
b) Such number of other official or non-official members representing such interests as may be
prescribed by the State Government.
 The District Council shall meet as and when necessary but not less than 2 meetings shall be
held every year.
 The procedure to be observed in regard to the transaction of its business at such meetings
shall prescribed by the State Government.

Consumer Disputes Redressal Agencies:

Consumer Protection Act, 1986 has set up a three-tier quasi-judicial redressal agencies at District level,
State level and National level for redressal of consumer disputes and grievances. Accordingly section 9
provides for the establishment of the following agencies:

1. District forum (Consumer Disputes Redressal Forum)

2. State commission (State Consumer Disputes Redressal Commission)
3. National commission (National Consumer Disputes Redressal Commission)

District Forum:

 Consumer Disputes Redressal Forum to be known as the “District Forum” established in each district of the
state by notification by the state government.
 The District Forum shall have jurisdiction to entertain complaints where the value of goods and services
complained and the compensation claimed, if any, is less than Rs.20 Lakhs
Composition of District Forum:

According to Section 10 (1), each District Forum shall consist of the following:

 A person who is qualified to be a District Judge, shall be its president.

 There shall be two other members, one of whom shall be a woman. A member must have the
following qualifications:
a) Be not less than 35 years of age.
b) Possess a bachelor's degree from a recognized university.
c) Must be a person of ability, integrity and standing and have adequate knowledge and experience
of at least 10 years in dealing with problems relating to economics, law, commerce, accountancy,
industry, public affairs, or administration.

Terms and Conditions of the Members of the District Forum

 Every member of the District Forum shall hold office for a term of five years or up to the age of 65
years whichever is earlier.

State Commission

 State Consumer Disputes Redressal Commission (SCDRC) to be known as “State Commission”. This is also
to be established by notification by the State Government.
 The State Commission shall have jurisdiction for such complaints and claims if the value thereof is
exceeding Rs.20 Lakhs but not exceeding Rs.1 Crore.

Composition of State Commission:

According to Section 16 (1), each State Commission shall consist of the following:

 A person who is or has been a judge of the High Court, appointed by the state government, who shall be
its president.
 Two members who shall be person of ability, integrity and standing and have adequate knowledge or
experience of at least 10 years in dealing with problems relating to economics, law, commerce,
accountancy, industry, public affairs, or administration, one of whom shall be a women.

Terms and conditions of the members of the state commission:

 Every member of the state commission shall hold office for a term of five years or up to the age of
sixty-seven years, whichever is earlier.

National Commission

 National Consumer Disputes Redressal Commission (NCDRC) to be known as “National Commission”. This is
to be established by the Central Government by notification.
 The National Commission shall have jurisdiction for complaints and claims of the value exceeding Rs.1 Crore.

Composition of National Commission

Section 20 (1) provides that the National Commission shall consists of:

 He shall be a person who is or has been judge of the Supreme Court, to be appointed by the
Central Government (in-consultation with the Chief Justice of India) shall be its president.
 Four members one of them shall be a woman possessing the qualifications as are prescribed for a
member of the State Commission.