Consumer Protection Act INTRODUCTION

Consumer rights are an integral part of our lives like the consumerist way of life. We have all made use of them at some point in our daily lives. Market resources and influences are growing by the day and so is the awareness of ones consumer rights. These rights are well defined and there are agencies like the Government, consumer courts and voluntary organizations that work towards safeguarding. While we like to know about our rights and make full use of them, consumer responsibility is an area which is still not demarcated and it is hard to spell out that all the responsibility is that a consumer is supposed to shoulder. Consumer rotection !ct, "#$% is an important !ct in the history of the consumer movement in the country. The !ct was made to provide for the better protection and promotion of consumer rights through the establishment of consumer councils and &uasi'(udicial machinery. )t is mile stone in the history of socio'economic legislation and directed towards public welfare and public benefits. The C ! was passed by the *ok +abha on ,th -ecember "#$% and .a(ya +abha on "/th -ecember, "#$% and assented to by the president in the Gazette of )ndia. 01tra art ))2 +ection " dated 3%."3."#$%.and at "'"3 called, 4the C ! "#$% 5!ct 6o.%% of "#$%7 and the preamble states that, An Act provide for better protection of the interest of the consumers and for that purpose to make provisions for the establishment of consumer councils and other authorities for the settlement of consumer s dispute and for matters connected there!ith"# 8nder the !ct, consumer disputes redressal agencies have been set up through out the country with the -istrict 9orum at the -istrict level, +tate Commission at the +tate level and 6ational Commission at national level to provide simple, ine1pensive and speedy (ustice to the consumer with complaints against defective goods, deficient services and unfair and restrictive trade practices". The *aw relating to consumer protection in )ndia is at recent origin and is developing slowly, day by day, with the pronouncement of orders passed by the commissions constituted under the !ct all over )ndia and the 6ational

P. K. Majumdar: Law of Consumer Protection in India , 5Th edition 200 .

Commission3. :owever the presence of some protective *aws for the benefits of consumer in the ancient culture cannot be denied;. $AC%&ROUND )n the early years when welfare legislatures like the consumer protection !ct did not e1ist, the ma1im Caveat emptor 5let the buyer beware7 governed the market deals. We find the seeds of consumer protection during the Mughal times< and especially during the time of =hil(is. )t is said that +ultan Ala-ud-Din Khilji 5"3#% !.-. to ";"% !.-.7 had introduced strict price control measures based on production costs ,. :e had also established separate shopping centers in -elhi for 5"7 grain, 537 cloth, sugar, dried fruits, herbs, butter, and oil, 5;7 horses, slaves, and cattle, and 5<7 miscellaneous commodities. The supply of grain was ensured by collecting ta1 in kind in the production areas and keeping it in the royal storehouses. :oardings of grain were forbidden. 0lsewhere the growers were ordered to sell their grains for cash in their fields at fi1ed prices and were not allowed to take any grain home for private sale. The market controller, the state intelligence officer, and the +ultan>s secret agents, each submitted independent reports on these shopping centers to the +ultan. 0ven a minor violation of the rules was not tolerated%. The shopping center for cloth, known as the sara-i-adl, was established near one of the royal palaces on the inner side of the ?ada'un'Gate. !ll goods, including foreign imports, were first taken there and their price fi1ed. 0very merchant was registered with the commerce ministry and had to sign a bond guaranteeing a regular supply to the goods in which they traded. The :indu Multani merchants were advanced money by the treasury to import rare commodities for the sara-i-adl, some price were subsidized. Costly fabrics and lu1ury goods could be sold only to those who have obtained permits from the Government. The prices of cattle were also fi1ed and unscrupulous merchants were deprived of their trading rights @. The shopping center for general commodities was under the direct control of the commerce ministry. !la'ud'-in>s Minister of commerce was also the +uperintendent of weights and Measure and the Controller of the Commercial transactions. :e was assisted by +uperintendent for each commodity. rices and weight and measure were che&ued by sending the children employed in the royal pigeon'house to buy petty articles $.The prices

I!1""#$ CP% 50" &', 1""5!1$ CP% 1. (. P. Tiwari, CP) !1$ 1""*. # %.+.,ar-ar !1"52$: Mu.ha/ )dministration, Ca/cutta. 5 ,.).).0i12i !1"34$5 The wonder that was India, 2o/.2, London ,id.wic- 6 %ac-son, 7. 3. * i8id., 7. ". 4 id., 3 id.,

fi1ed for the -elhi market were also applied in the provincial capitals and towns. -uring the ?ritish regime 5"@%,'"#<@7 #, also known as the Colonial Era, Government>s economic polices in )ndia were concerned more with protecting and promoting the ?ritish interests than with advancing the welfare of the native population. The administration>s primary per' occupation was with maintaining law and order, ta1 collection and defence "/. !ccordingly much of the legalisation enacted during the ?ritish regime was primarily aimed at serving the colonial rulers intend of the natives. There were, however, some pieces of legislation which protected the overall public interest through not necessarily the consumer interest. "" these were2 the )ndian rominent among enal code, "$%/, the sale of Goods act, "#;/, the

dangerous drugs act, "#;/ and the drugs and cosmetics act, "#</. )n a sense, the sale of good act, and the principles of the law of torts were more for the protection of the trader than the consumer"3. T'( PO)T*IND(ND(NC( )C(NARIO The struggle for )ndia>s independence was over by ", th !ugust, "#<@. :owever, the attainment of independence was not an end in itself. -ue to the increased emphasis on industrialization during the second five year plan, there was tremendous growth and establishment of heavy industries. !s a result there was a considerable amount of migration of rural population to the urban areas in search of employment, as )ndia is characterized by a vast amount of disguised unemployment in the agricultural sector. Growing urbanization due to heavy industrialization resulted in proliferation of human needs'of basic necessaries and also of lu1uries. -ue to the shortage of certain necessaries and even their non'availability at reasonable rates with growing menace of adulteration, it was found necessary to empower the Government to control their production, &uality, supply, and distribution. Therefore the decade of "#,/s, right from the very beginning, saw the enactment of a number of laws to safeguard the interests of the consumers from various angles. The enactment of the ?anking Companies !ct,"#<# 5later called The Banking Regulation Act7 to amend and consolidate the *aw related to banking matters as well as the Industries(De elo!"ent and Regulation#Act,$%&$ to implement the Industrial 'olic( Resolution o) $%*+ were among the earliest stapes taken by the 6ational Government in )ndia in the direction of consumer protection.

"

%.+.Pande9 !1""2$: Constitutiona/ Law of India, )//aha8ad: Centra/ Law ).enc9, 77.1:1*. &haram Kumar and Me.hnath &esai !eds$ !1"32$: The Cam8rid.e ;conomic <istro9 of India,2o/.2, <9der8ad: (rient Lon.man, 7."#4. 11 &.+.,araf !1""0$: Law of Consumer Protection of India, 'om8a9: +.M. Tri7athi, 7.1 . 12 id.,
10

With the continuous industrialization and urbanization, environmental problems also came more to the forefront, but seldom got any worth while attention of )ndian planners and policy makers till the fateful incident of ?hopal in "#$<. Thus the ?hopal catastrophe, perhaps for the first time, focused considerable attention on the industrialization and hazards, business environmental pollution, Government responsibility

accountability. The 8nion Carbide tragedy also highlighted the potential risks to the lives of the citizens or consumers from the operations transnational corporations in foreign lands. No! !ith the openin+ up of the &lobal ,arket and economics and pro+ressive removal of international trade barrierst!o phenomenons have been !itnessed !ith" 9irst, there is influ1 of foreign brands and franchises. +econd, within )ndia, there is increasing competition among manufacturers which has benefited consumers in the form of improvement in &uality of goods and resources. Thus in turn has witnessed more and more legislations aimed at regulating the manufacturing and trading activities and providing protection to consumers at large. 6ow the ma1im caveat emptor has been replaced by, 4let the seller bewareA. !s a result of this change in scenario business has now come to be substantially regulated by Government and !uthorities in favour of consumers. )nspite of various provisions providing protection to the consumer and providing for stringent action against adulterated and substandard articles in the different enactments like Criminal rocedure Code, "#/$, )ndian Contract !ct, "#@3, +ales of Goods !ct, "#;/, )ndian enal Code "$%/, +tandard of Weights and Measures !ct, "#@% and Motor Behicle !ct,"#$$, very little could be achieved in the area of consumer protection. Though Monopolies and .estrictive Trade ractices !ct, "#%# and prevention of 9ood !dulteration !ct, "#,< have provided relief to consumers, yet it becomes necessary to protect consumers from e1ploitation and to save them from adulteration and substandard goods and services and to safe guard their interests. )n order to provide for better protection of the interest of the consumers the Consumer rotection ?ill, "#$% was introduced in the *ok +abha on -ecember ,th "#$%. The C ! "#$% was enacted to provide for better protection of the interest of consumer and for the purpose to make provisions for establishment of Consumers Councils and other authorities for settlement of consumer>s dispute and for matters connected therewith. The C ! is only one of the several *aws framed to protect consumers from unfair and undesirable practices of business community such law

became necessary due to growing frustration of consumers with substandard &uality of goods, unsatisfactory services and unfair business trade practices. The !ct is a social welfare legislation enacted to provide for the better protection of the interest of the consumers and different redressal forums have been established under the said !ct for settlement of consumer>s disputes. The legislature hereby enacted such legislation for speedy solution of disputes of the consumers for the benefit of people at large. The people to allow those forums to function as far as possible without avoidable interdiction by the :igh Court. The consumer legislation is a beneficiary piece of legislation and the legislature in order to help the consumers has not prescribed any court fee to be affi1ed on the complaint. ?ut it is e1pected from the complainant that they should come before the .edressal !gencies with clean hands and that the relief claimed by them are not inflated. Cn a strict reading of the provisions of the !ct as a whole it would be seen that in enacting the statute the interaction of the .i/ .ii/ arliament was to provide protection and relief to four categories of consumers2 Persons !ho have suffered loss or dama+e as a result of an0 Persons !ho have purchased +oods for !hich the trader has unfair trade practice adopted b0 an0 trader" char+ed a price in e1cess of the price fi1ed b0 or under an0 la! for the time bein+ in force- or displa0ed on the +oods or an0 packa+e containin+ such +oods" .iii/ .iv/ Persons !ho have purchased +oods for consideration !hich Persons !ho have hired an0 services for consideration !hen are found suffer from one or more defects" the services provided are found to suffer from deficienc0 in an0 respect" O$2(CTI3( The provision of the !ct in the light of its preamble reads as2 4!n !ct to provide better protection of the interest of consumersD for the settlement of consumer dispute and for matters connected therewithA. The word E!rotection> furnishes the key to the mind of the makers of the act";. )ts provision has to be interpreted in favour of the consumer, in such a manner as to provide ma1imum relief to him. The primary duty of the court, while constructing provisions of the !ct is to adopt a constructive approach. )t should not do violence to the provisions and should also not be contrary to attempted ob(ective of the !ct"<. This !ct has not been frame to provide a loophole and e1cuses to well

1 1#

Luc-now &e2e/o7ment )uthorit9 2. M.K. =u7ta, !1""#$ 1 ,C% 10 at 110 Id at 110

organized traders, producers", and big business houses and manufactures on technical grounds. R(4I(5 UND(R T'( CON)U,(R PROT(CTION ACT .eliefs provided under the !ct, "#$% are as follows2 .I/ )P(CI5IC R(4I(5) The !ct allows consumers to file complaints on five specific grounds. The !ct does not allow complaints to frame their reliefs as they do not wish nor does it leave it to the Consumer -isputes .edressal !gencies 5C-.!s7 to work out remedies according to their discretion. The reliefs possible are indicated in !rticle "< of the !ct. Cne can find below the reliefs obtainable in the case of each of the items of complaint listed in !rticle 35"7 5c7. D(5(CT) IN &OOD) There are several remedies in respect of this2 *Removal of the defect pointed out b0 the laborator0 .a/6 *Removal of defect in respect of +oods not sent to laborator0 anal0sis .e/6 *Replacement of +oods .d/6 *Return of price .c/" )n respect of fungible goods the removal of defect will not be of any use to the complainant. ?ut however the order will be operative in future as regards the same goods and would serve the interest of all consumers. Clause 5a7 being restricted to defects pointed out by the laboratories, Clause 5e7 provides the relief in respect of other goods not sent to the laboratory. )t is true that the word 4goodsA is not found in that Clause. The clause should normally read as 4to remove the defects in the goods or deficiencies in the services in &uestionA. ?ut it can be understood only as such, since one can gather from the definition of the word 4defectA in Clause 35"75f7 that it relates only to goods. +imilarly 4deficiencyA is only in respect of service FClause 35"7 5g7. The complainant should, therefore, take care not to use the word 4defect> for 4deficiencyA or vice'versa. D(5ICI(NC7 IN )(R3IC( The reliefs are2 *Return of char+es paid .c/6 *Removal of the deficienc0 .e/" .emoval of deficiency in not always possible once service has been rendered. 0ven if possible, it is no usually desired by the consumer, who had a bad e1perience, to resort to the same person for service. O3(R*PRICIN& O5 ARTIC4()

15

id., at 110

.eturn of the price against return of the article or reimbursement of the e1cess price. UN5AIR TRAD( PRACTIC( AND R()TRICTI3( TRAD( PRACTIC( The reliefs are2 *To discontinue them or not to repeat them .f/6 8nfair trade practice and restrictive trade practice are defined in the !ct with great precision. These words should be used only in cases contemplated in the definitions of those words, not in case of other grounds of complaint like defect in goods or overt'pricing, because the reliefs in such case are different.

'A8ARDOU) &OOD) The reliefs are2 *Not to offer the ha9ardous +oods for sale .+/6 *To !ithdra! the ha9ardous +oods from bein+ offered for sale .h/6 )t is thus seen that for each ground of complaint there is one or more reliefs available which can be asked for alternatively or cumulatively. )t is for the complainant to decide and to frame properly the reliefs with indication of the respective clauses. .II/ &(N(RA4 R(4I(5 O5 CO,P(N)ATION Compensation may be asked in all cases, 6egligence in case of defects in goods, though not fre&uent, may however happen. Therefore, compensation will be a welcome relief to the consumer in addition to the other which he possesses. )t is in respect of service that compensation will play a big role. )n this connection it is to be stated that negligence is very close to deficiency which arises in consumer will get only return of charges, !hereas if there is ne+li+ence- he !ill +et compensation in addition" Compensation has to be specificall0 asked for and the acts of ne+li+ence pointed out" Once ne+li+ence is proved- the amount of compensation has to be determined" As per the Act it is for loss or in:ur0 suffered" The complaint has- therefore- to +ive details of the loss and estimate it in terms to be established" The correctness of the estimate has also to be established" The complainant can start b0 an affidavit" If the demand appears reasonable the same have to be adduced- failin+ !hich the CDRA concerned !ill determine itself the amount" *astly how and to what e1tent loss or in(ury is attributable to

negligence is also to be shown and proved e1cept in cases of res i!sa lo,uitur, where the fact is elo&uent by itself. Whereas the e1tent of other reliefs is determined by the !ct itself this one is left to the appreciation of the C-.!s. Re+ardin+ the assessment of compensation b0 CDRAs there are t!o methods; &lobal assessment to the best of the :ud+ment of the ad:udicatin+ bod0 !hich consists at least of there persons or computation of dama+es !ith the help lf some 0ardsticks" The second course appears to be more accurate. ?ut the yardsticks are not easy to determine properly and may lead some times to grace errors. The preference of the C-.!s is now for global assessment.

,(ANIN& AND )COP( O5 CON)U,(R AND C"P"A"

!s the preamble of C ! "#$% reflectG this socio'economic *aw was enacted to provide for the better protection of the interest of consumers and for that purpose the C ! "#$% seeks to provide speedy and simple redressal to consumer dispute. )n Charan -ingh . /ealing Touch /os!ital "% the :on>ble +upreme Court has made important observations on the ob(ect of the act. )"<.=/d of the act defined consumer as Consumer# means an0 person !ho' 5i7 ?uys any goods for a consideration which has been paid or promised or partly paid and party 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 person, but does not include with the approval of self person, but does not include a person who obtains such goods for resale or for any commercial purpose or 5ii7 H:ires for avails ofI any services for a consideration which has been paid promised or partly paid or partly promised or under any system of differed payment and includes any beneficiary of such services other than the person. Fhires or avails of J the services for consideration paid or promised or partly paid or partly promised, under any system of differed payment, when such services are availed or with the approval the first mentioned person. The !ord >consumer as has been defined in the Act means an0 person !ho bu0s an0 +oods for consideration- but does not include a person !ho obtain such +oods for resale or for an0 commercial
1*

)I0 2000 ,C 1 3.

purpose" Thus a person !ho purchases +oods for an0 commercial purpose- does not fall !ithin the definition of !ord consumer" &oin+ b0 plain dictionar0 meanin+ of the !ords used in the definition of consumer it is clear that this Act intends to restrict the benefits to ordinar0 consumers purchasin+ +oods either for their o!n consumption or even for use in small ventures !hich the0 have embarked upon in order to make a livin+ and to den0 the benefit of the Act to persons purchasin+ en+a+ed on a lar+e scale" )cope The definition has two parts. The first part in clause 5"7 deals with buyer and user of goods. The 3nd part covers the hirers and beneficiary of services. CON)U,(R RI&'T) Consumers in the advanced countries, obviously, are much more conscious of their rights than in countries like )ndia. )n "#%3, resident 0ohn 1. Kenned(, and in "#%,, resident 0ohnson emphasized the consumer rights and gave an impetus to consumerism in the 8.+.! and other countries. Important consumer ri+hts include; =" Ri+ht a+ainst e1ploitation b0 unfair trade practices" <" Ri+ht to protection of health and safet0 from the +oods and services the consumers bu0 or are offered free" ?" Ri+ht to be informed of the @ualit0 and performance standardsin+redients of the product- operational re@uirements- freshness or the product- possible adverse side effects and other relevant facts concernin+ the product or service" A" Ri+ht to be heard if there is an0 +rievance or su++estions" B" Ri+ht to +et +enuine +rievances redressed" C" Ri+ht to choose the best from a variet0 of offers" D" Ri+ht to ph0sical environment that !ill protect and enhance the @ualit0 of life" (1ploitation of Consumers Consumers are, however, by and large, practically denied most of these rights. They are e1ploited by a large number of restrictive and unfair trade practices. ! situation has developed in science is e1tensively applied to marketing to ruthlessly, e1ploit the consumers by stimulating the weak points and soft corners of their mind. Misleading, false or deceptive +oods either for the purpose of resale or for the purpose of bein+ used in profit makin+ activit0

advertisements are &uite common.

Many a time the advertisements

deliberately give only half truths so as to give a different impression than is the actual fact. Thus, advertisements may, be misleading because things that should be said have not been said, or, because advertisements are composed or purposefully presented in such a way as to mislead. CON)U,(R PROT(CTION 5or effective consumer protection- a practical response on the part of three parties- for e1ample- the business- the +overnment and the consumers- is essential" 9irstly, the business, comprising the producers and all the elements of the distribution channels, has to pay due regard to consumer rights. The producer has an inescapable responsibility to ensure efficiency in production and the &uality of output. :e should also resist the temptation to charge e1orbitant prices in a seller>s market. Many a time, the imperfections on the supply side, like hoarding and black marketing, mercilessly gouge the consumer. :ence, a socially responsible producer should see to it that whatever is produced reaches the ultimate consumer in time and at reasonable prices. +econdly, the Government has to come to the rescue of the helpless consumer to prevent him from being mislead, duped, cheated and e1ploited. )t should also take special care of the vulnerable sections. Governments should establish or maintain legal andKor administrative measures to enable or, as appropriate, relevant organizations to obtain redress through formal or informal procedures that are e1peditious, fair, ine1pensive and accessible. +uch procedures should take particular account of the needs of low'income consumers. Thirdly, consumers should accept consumerism as a means of asserting and en(oying their rights. Consumerism should succeed in making the business and the government more responsive to the rights of the consumers. Consumerism is a social force to 5i7 make the business more honest, efficient, responsive and responsible, and 5ii7 pressurize the government to adopt the necessary measures to protect consumer interests by guaranteeing their legitimate rights. CON)U,(R PROT(CTION AND CON)U,(RI), IN INDIA light of the )ndian Consumer !n e1amination of the important problems facing the )ndian consumer would make clear the need for more effective government intervention and consumer movement to safeguard consumer rights. The following factors make the plight of the )ndian consumer miserable.

". )hort suppl0 of man0 +oods and services- especiall0 of essential items- is a ver0 serious problem afflictin+ the Indian consumer" The demand'supply imbalance has produced all the associated corruption, evils of profiteering, hoarding and and black'marketing, towards nepotism, irresponsiveness arrogance

consumers. !lthough the situation has improved as a result of the increase in competition due to liberalization, it is still far from satisfactory. 3. The Indian consumer is also the victim of lack of effective or !orkable competition" 4Competition among sellers, even though imperfect, may be regarded as effective or workable if it offers buyers real alternatives sufficient to enable them, by shifting their purchases form one seller to another, substantially to influence &uality, service, and price. 0ffective competition depends also upon the general availability of essential informationG buyers cannot influence the behaviour of sellers unless alternatives are known. )t re&uires the presence in the market of several sellers, each of them possessing the capacity to survive and grow, and the preservation of conditions which keep alive the threat of potential competition among sellers is thus to be found in the availability of buyers of genuine alternatives in policy among their sources of supply"@.A ;. ,an0 products !ith !hich consumers in advanced countries are @uite familiar are still ne! to a ver0 lar+e se+ment of the Indian consumers. The unfamiliarity of the consumers with product features makes the sale of substandard, inferior or even defective products easier in )ndia than in advanced countries. <. Due to lo! literac0 levels and unsatisfactor0 information flo!sthe Indian consumers- b0 and lar+e- are not conscious of all their ri+hts" This encourages irresponsible and unscrupulous business attitudes and tactics. ,. It has been said that the le+al process in India is comparativel0 time*consumin+ and cumbersome" This discourages the consumers from seeking the .edressal of their grievance by means of the (udicial process. %. Consumerism in India is not !ell or+ani9ed and developed . @. Thou+h the public sector had not been developed and e1panded to serve the public interest b0 providin+ effective competition to the private sector- increasin+ productionimprovin+ distribution- etc"- it failed to produce benefits that !ere commensurate !ith the investment"
14

%oe/ &ean. Mana.eria/ ;conomics, +ew &e/hi: Prentice:<a//

$. Thou+h there are a number of la!s to safe+uard the interests of consumers- the0 are not effectivel0 implemented and enforced to achieve the ob:ectives" The above factors are effective +tate intervention and consumerism to ensure the rights of consumers. &overnment ,easures )n )ndia, the Government has taken a number of measures to protect consumer interests. The various Government measures may be classified into 5i7 statutory regulation of private business, and 5ii7 development of the public sector. )tatutor0 Re+ulation; Government of )ndia has armed itself with a number of statutory weapons to control the production, supply, distribution, price and &uality of a large number of goods and services. )t is empowered to regulate the terms and conditions of sale, the nature of trade and commerce, etc. There is a feeling that, 4unlike in the West, the Government in )ndia has a large number of controls on industry and is, therefore, in a position to respond more swiftly and effectively than western Governments. ) some ways our bureaucracy has perfected the art of assuming the guardianship of all interests of the consumers and the vulnerable sections.A &ro!th of Public )ector; There had been a significant growth and e1pansion of the public sector in )ndia. Cne of the most important ob(ectives of the public sector was the enhancement of consumer welfare by increasing production, improving efficiency in production, improving efficiency in production and supply, making available goods and services at fair prices, curbing private monopolies and reducing market imperfections, improving the distribution system, and so on. The public sector, in fact, is e1pected to implement the societal marketing concept. There is, however, a general feeling that the public sector in )ndia has still a long way to go to realize these ob(ectives. )t has established monopolies or near'monopolies in public utilities, whose performance is far from satisfactory.

4(&A4 PRO3I)ION CON)U,(R PROT(CTION ACT- =EFC

PR(A,$4( 4!n !ct to provide for better protection of the interests of consumers and for that purpose to make provision for the establishment of consumer councils and other authorities for the settlement of consumersL disputes and for matters connected therewithA ?e it enacted by )ndia as follows2 =" )'ORT TIT4((GT(NTCO,,(NC(,(NT AND APP4ICATION 5"7 This !ct may be called the Consumer =ashmir"$. 5;7 )t shall come into force on such date " as the Central Government may, by notification appoint and different dates may be appointed for
13

arliament in the Thirty'seventh Mear of the .epublic of

rotection !ct, "#$%.

537 )t e1tends to the whole of )ndia e1cept the +tate of Nammu and

The provisions of Chapters ), )) and )B of this !ct have come into force in the whole of )ndia

e1cept the +tate of Nammu and =ashmir on ",'<'"#$@2 vide 6otification 6o. +.C. ;#/ 507, dated ",th !pril, "#$@, published in the Gazette of )ndia, "#$@, 01tra. t. )), +ec. 5ii7. The rovisions of Chapter ))) of this !ct have come into force in the whole of )ndia e1cept the +tate of Nammu and =ashmir on "'@'"#$@2 vide 6otification, 6o. +.C. ,%$ 507, dated "/th Nune, "#$@, published in the Gazette of )ndia, "#$@, 01tra. t. )), +ec. ; 5ii7.

different

+tates

and

for

different

provisions

of

this

!ct.

5<7 +ave as otherwise e1pressly provided by the Central Government by notification, this !ct shall apply to all goods and services. <" Definitions" 5"7 )n this !ct, unless the conte1t otherwise re&uires,'
"#

F5a7 HAppropriate laborator0H means a laboratory or organization' G

5i7 .ecognized by the Central Government may be prescribed by the Central Government in this behalfG or

5ii7 .ecognized by a +tate Government, sub(ect to such guidelines as 5iii7 !ny 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 +tate Government for carrying out analysis or test of any goods with a view to determining whether such goods suffer from any defectGJ

5b7 HComplainantH means ' 5i7 ! consumerG or 5ii7 !ny voluntary consumer association registered under the companies !ct, "#,% 5" of "#,%7, or under any other law for the time being in forceG or 5iii7 The Central Government or any +tate Government, who or which makes a complaintG
3/

F5iv7 Cne or more consumers where there are numerous consumers F5v7 in case of death of a consumer, his legal heir or

having the same interestGJ

3"

representative.Jwho or which makes a complaintG 5c7 HComplaintII means any allegation in writing made by a complainant that' F5i7 !n unfair trade practice or a restrictive trade practice has been adopted by BFany trader or service providerGJJ 5ii733FThe goods bought by him or agreed to be bought by himJ suffer from one or more defectsG 5iii7
3;

F+ervice hired or availed of or agreed to be hired or availed of by

himJ suffer from deficiency in any respectG

1"

+ubstituted by !ct ,/ of "##;, sec. 3 for clause 5a7 w.e.f. "$'%'"##;. )ns. by !ct %3 of 3//3, sec.3 5w.e.f. ",';'3//;7.

20

Ins" b0 Act C< of <JJ<- sec"< .!"e"f" =B*?*<JJ?/" +ubs. by !ct ,/ of "##;, sec. 3, for Othe goods mentioned in the complaintO 5w.e.f. "$'%' "##;7. 3; +ubs. by !ct ,/ of "##;, sec. 3, for Othe services mentioned in the complaintO 5w.e.f. "$'%' "##;7.
21 22

5iv7 Fa trader or the service provider, as the case may be, has charged for the goods or for the service mentioned in the complaint, a price in e1cess of the price in e1cess of the price' 5a7 fi1ed by or under any law for the time being in forceG 5b7 displayed on the goods or any package containing such goodsG 5c7 displayed on the price list e1hibited by him by or under any law for the time being in forceG 5d7 agreed between the partiesG
3<

F5v7 goods which will be hazardous to life and safety when used are

being offered for sale to the public2 5!7 in contravention of any standards relating to safety of such goods as re&uired to be complied with, by or under any law for the time being in forceG 5?7 if the trader could have known with due diligence that the goods so offered are unsafe to the publicGJ
3,

F5vi7 service which are hazardous or likely to be hazardous to life and

safety of the public when used, are being offered by the service provider which such person could have known with due diligence to be in(urious to life and safety.J 5d7 HConsumerH means any person who, ' 5i7?uys 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 purposeG or

5ii73%F:ires or avails ofJ any services 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 beneficiary of such services other then the person who Fhires or avails ofJ the services for consideration paid or promised, or partly paid and partly promised, or
)ns. by !ct ,/ of "##;, sec.3 5w.r.e.f. "$'%'"##;7 and subs. by !ct %3 of 3//3, sec. for sub' clause O5v7 goods which will be hazardous to life and safety when used, are being offered for sale to the public in contravention of the provisions of any law for the time being in force re&uiring traders to display information in regard to the contents, manner and effect of use of such goods,O 5w.e.f. ",';'3//;7.
2#

+ub'clause 5vi7 along with sub'clause 5iv7 and 5v7 subs. 9or the earlier clauses 5iv7 and 5v7 by !ct %3 of 3//3, sec. 3 5w.e.f. ",';'3//;7. "". +ubs. ?y !ct ,/ of "##;, sec.3, for OhiresO 5w.r.e.f. "$'%'"##;7.
25 2*

+ubs. ?y !ct ,/ of "##;, sec.3, for OhiresO 5w.r.e.f. "$'%'"##;7.

under any system of deferred payment, when such services are availed of with the approval of the first mentioned person Fbut does not include a person who avails of such services for any commercial purposeJG
3@

F01planation. 9or the purposes of this sub'clause Ocommercial

purposeO does not include use by a consumer of goods bought and used by him and services availed by him e1clusively for the purposes of earning his livelihood, by means of self'employmentGJ 5e7 HConsumer disputeII means a dispute where the person against whom a complaint has been made, denies or disputes the allegations contained in the complaintG 5f7 HDefectH means any fault, imperfection or short coming in the &uality, &uantity, potency, purity or standard which is re&uired to be maintained by or under any law for the time being in force or
3$

Funder any contract

e1press or implied orJ as is claimed by the trader in any manner whatsoever in relation to any goodsG 5g7 O-eficiencyO means any fault, imperfection, shortcoming or inade&uacy in the &uality, nature and manner of performance which is re&uired 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" (stablishment of Consumer Disputes Redressal A+encies" There shall be established for the purpose of this !ct, the following agencies, namely2 5a7 ! Consumer Disputes Redressal 5orum to be kno!n as the HDistrict 5orumH establishment by the +tate Government each district of the +tate by notification2
;/ 3#

FP P PJ in

F rovided that the +tate Government may if it deems fit, establish

more then one -istrict 9orum in a district.J 5b7 ! Consumer Disputes Redressal Commission to be kno!n as the H)tate CommissionH established by the +tate Government =FPPPJ in the +tate by notificationG and 5c7 ! National Consumer Disputes redressal Commission established by the Central Government by notification.

24

!dded by !ct %3 of 3//3, sec.3, 5w.e.f. ",';'"##;7.

+ubs. by !ct %3 of 3//3, sec.3, for O01planation.' for the purposes of sub'clause 5i7, O commercial purposeO does not include use by a consumer of goods bought and used by him e1clusively for the purpose of earning his livelihood, by means of self'employment2O 5w.e.f. ",';'3//;7. 2" The words Lwith prior approval of the Central GovernmentO Cmitted by !ct ,/ of "##;. +ec. @ 5w. r. e. f. "$th Nune "##;7.
23

Ins. 89 )ct 50 of 1"" . ,ec. 4 !w. r. e. f. 13th %une 1"" $.

=J" Composition of the district forum

;"

F5"/ (ach District 5orum shall consist of *

5a7 ! person who is, or who has been or is &ualified to be , a District 2ud+e, who shall be its residentG
;3

F5b7 t!o other members- one of !hom shall be a !oman- who

shall have the following &ualifications, namely2 5i7 be not less than thirt0*five 0ears of age, 5ii7 posses a bachelorIs de+ree from a reco+ni9ed universit0 , 5iii7 be persons of ability, integrity and standing, and have ade&uate knowledge and e1perience of at least ten 0ears in dealin+ !ith problems relatin+ to economics- la!- commerce- accountanc0industr0- public affairs or administration2 rovided that a person shall be dis&ualified for appointment as member if he' 5a7 has been convicted and sentenced to imprisonment for an offence which, in the opinion of the +tate Government, involves moral turpitudeG or 5b7 is an undischar+ed insolventG or 5c7 is of unsound mind and stands so declared by a competent courtG or 5d7 has been removed or dismissed from the service of the &ovt" or a body corporate owned or controlled by the GovernmentG or 5e7 has, in the opinion of the +tate Government, such financial or other interest as is likel0 to affect pre:udiciall0 the dischar+e b0 him of his functions as a memberG or 5f7 has such other dis&ualifications as may be prescribed by the +tate Government.J
;;

F5"'!7 (ver0 appointment under sub*section .=/ shall be made

b0 the )tate &overnment on the recommendation of selection Committee consistin+ of the follo!in+ namel0; 5i7 The resident of the +tate Commission' Chairman, 5ii7 +ecretary, *aw -epartment of the +tate' Member, 5iii7 +ecretary, incharge, of the -epartment dealing with Consumer affairs in the +tate' Member.J

+ubs. by !ct 6o. ,/ of "##; sec. $, for sub'section 5"7 5w. r. e. f. "$'%'"##;7

2 +ubs. by !ct %3 of 3//3, sec. %, for clause O5b7 two other members, who shall be persons of ability, integrity and standing, and have ade&uate knowledge or e1perience of , or have shown capacity in dealing with, problems relating to economics, law, commerce, accountancy, industry, public affairs or administration, one of whom shall be a womanO 5w. e. f. ",';'3//37.

)nserted by !ct ,/ of "##;, sec.$ 5w.e.f. "$'%'"##;7.

;<

F rovided that where the resident of the +tate Commission is, by

reason of absence or otherwise, unable to act as Chairman of the +election Committee, the +tate Government may refer the matter to the Chief 2ustice of the 'i+h Court for nominatin+ a sittin+ 2ud+e of that 'i+h Court to act as Chairman" J
;,

F537 0very member of the -istrict 9orum shall hold office for a term of

five 0ears or up to the a+e of si1t0*five 0earsK !hichever is earlier2 rovided that a member shall be eli+ible for re*appointment for another term of five 0ears or up to the a+e of si1t0*five 0ears!hichever is earlier, sub(ect to the condition that he fulfils the &ualifications and other conditions for appointment mentioned in clause 5b7 of sub'section 5"7 and such reappointment is also made on the basis of the recommendation of the +election Committee 2 rovided 9urther that a member ma0 resi+n his office in !ritin+ under his hand addressed to the )tate &overnment and on such resignation being accepted, his office shall become vacant and may be filled by appointment of a person possessing any of the &ualifications mentioned in sub'section 5"7 in relation to the category of the member who is re&uired to be appointed under the provisions of sub'section 5"!7 in place of the person who has resigned rovided !lso that a person appointed as the member, before the commencement of the Consumer 2 resident or as a rotection

5!mendment7 !ct, 3//3, shall continue to hold such office as resident or member, as the case may be, till the completion of his term. J 5;7 The salar0 or honorarium and other allowances payable to, and the other terms and conditions of service of the members of the
#

)nserted by !ct %3 of 3//3, sec.% 5w. e. f. ",';'3//;7. +ubs. by !ct %3 of 3//3, sec.%, for sub'section O537 0very member of the -istrict 9orum

shall hold office for a term of five years or up to the age of %, years, whichever is earlier, and shall not be eligble for re'appointment2

rovided that a member may resign his office in writing under his hand addressed to the +tate Government and on such resignation being accepted, his office shall become vacant and may be filled by the appointment of a person possessing any of the &ualification mentioned in sub'section 5"7 in relation to the category of the member who has resigned.O 5w. e. f. ",';'3//;7.

-istrict 9orum shall be such as ma0 be prescribed b0 the )tate &overnment2 F rovided that the appointment of a member on whole'time basis shall be made by the +tate Government on the recommendation of the resident of the +tate Commission taking into consideration such factors as may be prescribed including the work load of the -istrict 9orum.J ==" 2urisdiction of the district forum" 5"7 +ub(ect to other provisions of this !ct, the -istrict 9orum shall have (urisdiction to entertain complaints !here the value of the +oods or services and the Compensation if an0- claimed e1ceed rupees t!ent0 lakhsM
?C

Ldoes not "

537 ! complaint shall be instituted in a -istrict 9orum within the local limits of whose (urisdiction, ' 5a7 The opposite part0 or each of the opposite parties- !here there are more than one- at the time of the institution of the complaint- actuall0 and voluntaril0 resides or or 5b7 An0 of the opposite parties !here there are more then oneat the time of the institution of the complaint- actuall0 and voluntaril0 resides- or
;# ;@

Fcarries on

business or has a branch office, orJ personally works for gainG

Fcarries on business or has a branch officeJ,

or personally works for gain, provided that in such case either the permission of the -istrict 9orum is given, or the opposite parties who do not reside, or institutionG
;#

Fcarry on business or have a branch officeJ, or or

personally works for gain, as the case may be, ac&uiesce in such

5c7 The cause of action- !holl0 or in part arises" =<" ,anner in !hich complaint shall be made "

.=/ ! complaint in relation to any goods sold or delivered or agreed to

+ubstituted by !ct ,/ of "##;, sec.# for Ois less than rupees one lakhO5w. e. f. "$'%'"##;7 and again subs. by !ct %3 of 3//3, sec. @, for Odoes not e1ceed rupees five lakhsO 5w. e. f. ",';'3//;7
*

+ubs. by !ct ,/ of "##;, sec.# for Ocarries on business orO 5w. r. e. f. "$'%'"##;7.

be sold or delivered or any service provided or agreed to be provided, may be filed with a -istrict 9orum, by' 5a7 the consumer to !hom such +oods are sold or delivered or agreed to be sold or delivered or such service provided or agreed to be providedG 5b7 an0 reco+ni9ed consumer association whether the consumer to whom the goods sold or delivered or agreed to be sold or delivered or service provided or agreed to be provided is a member of such association 5c7 one or more or consumers!here notG there are or numerous

consumers having the same interest, with the permission of the -istrict 9orum, on behalf of, or for the benefit of, all consumers so interestedG or 5d7 the Central &overnment or the )tate &overnment- as the case may be, either in its individual capacity or as a representative of interests of the consumers in general. .</ 0very complaint filed under sub'section 5"7 shall be accompanied with such amount of fee and payable in such manner as may be prescribed. .?/ Cn receipt of a complaint made under sub'section 5"7, the -istrict 9orum may, by order, allow the complaint to be proceeded with or re(ected2 rovided that a complaint shall not be re(ected under this sub' section unless an opportunity of being heard has been given to the complainant2 rovided 9urther that the admissibility of the complaint shall ordinarily be decided within twenty'one days from the date on which the complaint was received . .A/ Where a complaint is allowed to be proceeded with under sub'section 5;7 the -istrict 9orum may proceed with the complaint in the manner provided under this !ct 2

rovided that where a complaint has been admitted by the -istrict 9orum, it shall not be transferred to any other court or tribunal or any authority set up by or under any other law for the time being in force. 01planation2 9or the purposes of this section, Orecognized consumer associationO means any voluntary consumer association registered under the Companies !ct, "#,% 5" of "#,%7, or any other law for the time being in force.J

?F

=?" PROC(DUR( ON R(C(IPT O5 CO,P4AINT

?E

.=/ The District 5orum shall- on receipt of a complaint- if it '

relates to an0 +oods-

5a7 refer a copy of the complaint to the opposite party mentioned in the complaint directing him to give his version of the case !ithin a period of thirt0 da0s or such e1tended period not e1ceedin+ fifteen G 5b7 where the opposite party on receipt of a complaint referred to him under clause 5a7 denies or disputes the allegations contained in the complaint, or omits or fails to take any action to represent his case within the time given by the -istrict 9orum, the -istrict 9orum shall proceed to settle the consumer dispute in the manner specified in clauses 5c7 to 5g7 G 5c7 where the complaint alleges a defect in the goods which cannot be determined without proper analysis or test of the goods, the -istrict 9orum shall obtain a sample of the goods from the complainant, seal it and authenticate it in the manner prescribed and refer the sample so sealed to the appropriate laborator0 alon+ !ith a direction that such laborator0 make an anal0sis or test !hichever ma0 be necessar0- with a view to finding out whether such goods suffer from any defect alleged in the complaint or from any other defect and to report its findings thereon to the -istrict 9orum !ithin a period of fort0*five da0s of the receipt of the reference or within such e1tended G 5d7 before any sample of the goods is referred to any appropriate laboratory under clause 5c7, the -istrict 9orum may re@uire the complainant to deposit to the credit of the 5orum such fees as ma0 be specified- for pa0ment to the appropriate laborator0 for carr0in+ out the necessar0 anal0sis or test in relation to the +oods in @uestionG 5e7 the -istrict 9orum shall remit the amount deposited to its credit under clause .d/ to the appropriate laborator0 to enable it to carry out the analysis or test mentioned in clause 5c7 and on receipt of the report from the appropriate laboratory, the -istrict 9orum shall forward a copy of the report along with such remarks as the -istrict 9orum may feel appropriate to the opposite party
+ubs. by !ct %3 of 3//3, sec. #, for O rocedure on receipt of a complaintO 5w. e. f. ",';' 3//;7.
3 "

da0s

as

may

be

granted

by

the

-istrict

9orum

period

as

may

be

granted

by

the

-istrict

9orum

+ubs. by !ct %3 of 3//3, sec. #, for Oon receipt of a complaintO 5w. e. f. ",';'3//;7.

5f7 if any of the parties disputes the correctness of the findings of the appropriate laboratory, or disputes the correctness of the methods of analysis or test adopted by the appropriate laboratory, the District 5orum shall re@uire the opposite part0 or the complainant to submit in !ritin+ his ob:ections in re+ard to the report made b0 the appropriate laborator0 6 5g7 the -istrict 9orum shall thereafter give a reasonable opportunity to the complainant as well as the opposite party of being heard as to the correctness or otherwise of the report made by the appropriate laboratory and also as to the ob(ection made in relation thereto under clause 5f7 and issue an appropriate order under section =A . .
AJ

.</ The District 5orum shall- if the complaint received b0 it

under section =< relates to +oods in respect of !hich the procedure specified in sub*section .=/ cannot be follo!ed- or if the complaint relates to an0 services , ' 5a7 refer a copy of such complaint to the opposite party directing him to give his version of the case !ithin a period of thirt0 da0s or such e1tended period not e1ceedin+ fifteen da0s as may be granted by the -istrict 9orum G 5b7 where the opposite party, on receipt of a copy of the complaint, referred to him under clause 5a7 denies or disputes the allegations contained in the complaint, or omits or fails to take any action to represent his case within the time given by the -istrict 9orum, the -istrict 9orum shall proceed to settle the consumer dispute, ' 5i7 on the basis of evidence brou+ht to its notice b0 the complainant and the opposite part0- !here the opposite part0 denies or disputes the alle+ations contained in the complaint , or 5ii7 on the basis of evidence brou+ht to its notice b0 the complainant !here the opposite part0 omits or falls to take an0 action to represent his case !ithin the time +iven b0 the 5orum.
<"

5;7 6o proceedings complying with the procedure laid down in sub'

sections 5"7 and 537 shall be called in &uestion in any court on the
+ubs. by !ct %3 of 3//3, sec. #, for clause O5a7 refer a copy of the complaint to the opposite party mentioned in the complaint directing him to give his version of the case within a period of thirty days or such e1tended period not e1ceeding fifteen days as may be granted by the -istrict 9orumGO5w. e. f. ",';'3//;7. #1 +ubs. by !ct %3 of 3//3, sec. #, for Ocomplaint receivedO 5w. e. f. ",';'3//;7.
#0

ground that the principles of natural (ustice have not been complied with.
<3

5<7 5or purposes of this section- the District 5orum shall have

the same po!ers as are vested in a civil court under the Code of Civil Procedure- =EJF .B of =EJF/- !hile tr0in+ a suit in respect of the follo!in+ matters- namel0 or !itness and e1amining the witness on oathG 5ii7 the discover0 and production of an0 document or other material ob(ect producible as evidenceG 5iii7 the reception of evidence on affidavitsG 5iv7 the re&uisitioning of the report of the concerned analysis or test from the appropriate laboratory or from any other relevant sourceG 5v7 issuin+ of an0 commission for the e1amination of an0 !itnessG and 5vi7 any other matter which may be prescribed.
<;

2'

5i7 the summonin+ and enforcin+ attendance of an0 defendant

5,7 0very proceeding before the -istrict 9orum shall be deemed to be

a (udicial proceeding within the meaning of sections "#; and 33$ of the )ndian enal Code 5<, of "$%/7, and the -istrict 9orum shall be deemed to be a civil court for the purposes of section "#, and Chapter QQB) of the Code of Criminal rocedure, "#@; 53 of "#@<7.
<<

5%7 Where the complainant is a consumer referred to in sub'clause

5iv7 of clause 5b7 of sub'section 5"7 of section 3, the provisions of rule $ of Crder ) of the 9irst +chedule to the Code of Civil rocedure, "#/$ 5, of "#/$7 shall apply sub(ect to the modification that every reference therein to a suit or decree shall be construed as a reference to a complaint or the order of the -istrict 9orum thereon. =A" N5INDIN& O5 T'( DI)TRICT 5ORU, "

5"7 )f, after the proceeding conducted under section ";, the -istrict 9orum is satisfied that the goods complained against suffer from any of the defects specified in the complaint or that any of the allegations contained in the complaint about the services are proved, it shall issue an order to the opposite party directing him to the following things, namely laborator0 from the goods in &uestion
+ubs. by !ct %3 of 3//3, sec. #, for Oon the basis of evdenceO 5w. e. f. ",';'3//;7. )ns. by !ct %3 of 3//3, sec. # 5w. e. f. ",';'3//;7. ## )ns. by !ct ,/ of "##;, sec. "" 5w. e. f. "$'%'"##;7.
#2 # #5

<,

5do7 one or more of 2 G

5a7 to remove the defect pointed out b0 the appropriate

+ubs. for 4takeA by the Consumer 5!mendment 7 !ct, "##; 5w.e.f. "$'%'"##;7

5b7 to replace the +oods !ith ne! +oods of similar description which shall be free from any defect the charges paid by the complainant 5d7 to pa0 such amount as ma0 be a!arded b0 it G G as G 5c7 to return to the complainant the price, or, as the case may be,

compensation to the consumer for any loss or in(ury suffered by the consumer due to the negligence of the opposite party
<%

5e7 to remove the defects or deficiencies in the services in

&uestionG 5f7 to discontinue the unfair trade practice or the restrictive trade practice or not to repeat them 5g7 not to offer the ha9ardous +oods for sale saleG 5i7 to provide
<@

G G

5h7 to !ithdra! the ha9ardous +oods from bein+ offered for

537 0very proceeding referred to in sub'section 5"7 shall be conducted together 2

by the resident of the -istrict 9orum and at least one member thereof sitting rovided that where the member, for any reason, is unable to conduct the proceeding till it is completed, the resident and the other member shall conduct such proceeding de novo. 53!7 0very order made by the -istrict 9orum under sub'section 5"7 shall be signed by its resident and the member or members who 2 conducted the proceeding

rovided that where the proceeding is conducted by the resident and one member and they differ on any point or points, they shall state the point or points on which they differ and refer the same to the other member for hearing on such point or points and the opinion of the ma(ority shall be the order of the -istrict 9orum. 5;7 +ub(ect to the foregoing provisions, the procedure relating to the conduct of the meetings of the -istrict 9orum, its sittings and other matters shall be such as may be prescribed by the +tate Government. =B" APP(A4 An0 person a++rieved b0 an order made b0 the District 5orum ma0 prefer an appeal a+ainst such order to the )tate 2 Commission !ithin a period of thirt0 da0s from the date of the order, in such form and manner as may be prescribed rovided that the +tate Commission may entertain an appeal after the
#*

)ns. by the Consumer rotection 5!mendment7!ct of "##;, 5w. e. f. "$'%'"##;7. +ubs. by !ct ;< of "##", sec.3, for sub'section 537 5w. r. e. f. ",'%'"##"7.

#4

e1piry of the said period of thirty days if it is satisfied that there was sufficient cause for not filing it within that period. =C" CO,PO)ITION O5 T'( )TAT( CO,,I))ION* 0ach +tate Commission shall consist of R 5a7 a person who is or has been a 2ud+e of a 'i+h Court, appointed by
<$

the

+tate

Government,

who

shall

be

its

resident

5 rovided that no appointment under this clause shall be made e1cept

after consultation with the Chief Nustice of the :igh Court7G 5b7 t!o other members- who shall be persons of ability, integrity and standing and have ade&uate knowledge or e1perience of, or have shown capacity in dealing with problems relating to economics, law, commerce, accountancy, industry, public affairs or administration, one of !hom
<#

shall be a !oman

5 rovided that every appointment made under this clause shall be 2' , , .
,/

made by the +tate Government on the recommendation of a selection committee consisting of the following, namely 5i7 resident of the +tate Commission R Chairman 5ii7 +ecretary of the *aw -epartment of the +tate R Member the +tate R Member7 other terms and conditions of service Government.
,"

5iii7 +ecretary, incharge of -epartment dealing with consumer affairs in 537 The salary or honorarium and other allowances payable to, and the 5PPP7 of the members of the +tate Commission shall be such as may be prescribed by the +tate 5;7 (ver0 member of the )tate Commission shall hold office for

a term of five 0ears or up to the a+e of si1t0*seven 0ears#3

)ns. by the Consumer rotection 5!mendment7 !ct of "##;, 5w. e. f. "$'%'"##;7.

#"

,u8s. 89 )ct *2 of 2002, sec. 12, for c/auses >!8$ two other mem8er, who sha// 8e 7ersons of a8i/it9, inte.rit9 and standin. and ha2e ade?uate -now/ed.e or e@7erience of, or ha2e shown ca7acit9 in dea/in. with, 7ro8/ems re/atin. to economics /aw, commerce, accountanc9, industr9, 7u8/ic affairs or administration, one of whom sha// 8e a woman: Pro2ided that e2er9 a77ointment made under this c/ause sha// 8e made 89 the ,tate =o2ernment of the recommendation of a se/ection committee consistin. of the fo//owin., name/9:: !i$ President of the ,tate Commission :Chairman !ii$ ,ecretar9 of the Law &e7artment of the ,tate :Mem8er !iii$ ,ecretar9, inchar.e of &e7artment dea/in. with consumer affairs in the ,tate:Mem8er !w. e .f. 15: :200 $.
The words O5including tenure of office7O omitted by !ct ,/ of "##;, sec. "; 5w. e. f. "$'%' "##;7. 51 +ubs. by !ct ,/ of "##;, sec. "; 5w.e.f. "$'%'"##;7 and again subs by !ct %3 of 3//3, +ec. "3, for sub'section O5;7 0very member of the +tate Commission shall hold office for a term of five years or up to the age of si1ty'seven years, whichever is earlier and shall not be eligible for re'appointment.O and sub'section O5<7 notwithstanding anything contained in sub'section 5;7, a person appointed as a resident or as a member before the Commencement of the Consumer rotection 5!mendment7 !ct, "##; 5,/ of "##;7, shall continue to hold such office as resident or member, as the case me be, till the completion of his term.O 5w.e.f. ",';' 3//;7.
50

!hichever

is

earlier

and

shall

not

be

eli+ible

for

re*

appointment" 5<7 6otwithstanding anything contained in sub'section 5;7, a person appointed as a resident or as a member before the commencement of the Consumer rotection 5!mendment7 !ct, "##;, shall continue to hold such office as
B<

resident or member, as the case may be, till the " ' '
B?

completion J of his term. =D" 2URI)DICTION O5 T'( )TAT( CO,,I))ION have (urisdiction 5a7 to entertain compensation, if any, claimed e1ceeds rupees does ; 5ii7 appeals a+ainst the orders of an0 District 5orum !ithin the )tateG and 5b7 to call for the records and pass appropriate orders in an0 consumer dispute !hich is pendin+ before or has been decided b0 an0 District 5orum !ithin the )tate !here it appears to the )tate Commission that such -istrict 9orum has e1ercised a (urisdiction not vested in it by law, or has failed to e1ercise a (urisdiction so vested or has acted in e1ercise of its (urisdiction illegally or with material irregularity. =E" Appeals An0 person a++rieved b0 an order made b0 the )tate Commission in e1ercise of its po!ers conferred b0 sub*clause .i/ of clause .a/ of section =D ma0 prefer an appeal a+ainst such order to the National Commission !ithin a period of thirt0 da0s from the date of the order in such form and manner as ma0 be prescribed 2 rovided that the 6ational Commission may entertain an appeal after the e1piry of the said period of thirty days if it is satisfied that there was
,<

+ub(ect to the other provisions of this !ct, the +tate Commission shall

5i7 complaints where the value of the goods or services and .t!ent0 lakhs but CROR( and not e1ceed rupees ON(

sufficient

cause

for

not

filing

it

within

that

period2

rovided 9urther that no appeal b0 a person- !ho is re@uired

to pa0 an0 amount in terms of an order of the )tate

+ection "@ re'numbered as sub'section 5"7 thereof by !ct %3 of 3//3, sec."; 5w.e.f. ",';' 3//;7.
52

+ubs. by !ct %3 of 3//3, sec. ";, for Oe1ceeds rupees five lakhs but does not e1ceed rupees twenty lakhsO 5w.e.f. ",';'3//;7. 5# )ns. by !ct %3 of 3//3, +ec. "% 5w.e.f. ",';'3//;7.
5

Commission- shall be entertained b0 the National Commission unless the appellant has deposited in the prescribed manner fift0 per cent- of the amount or rupees thirt0*five thousand!hichever is less.J =EA" 'earin+ of appeal
,,

F"#!. :earing of appeal.'

!n appeal filed before the +tate Commission or the 6ational Commission shall be heard as e1peditiously as possible and an endeavor shall be made to finally dispose of the appeal !ithin a period of ninet0 da0s from the date of its admission 2 rovided that no ad(ournment shall be ordinarily granted by the +tate Commission or the 6ational Commission, as the case may be, unless sufficient cause is shown and the reasons for grant of ad(ournment have been recorded that in the writing +tate by such or Commission2 the 6ational rovided 9urther Commission

Commission, as the case may be, shall make such orders as to the costs occasioned by the ad(ournment as maybe provided in the regulations made under this !ct2 rovided !lso that in the event of an appeal being disposed of after the period so specified, the +tate Commission or, the 6ational Commission, as the case may be, shall record in writing the reasons for the same at the time of disposing of the said appeal.J <J" Composition of the National Commission 5"7 The 6ational Commission shall consist of' 5a7 a person who is or has been a 2ud+e of the )upreme Court, to be appointed by the Central Government, who shall be its resident2
=

F rovided that no appointment under this clause shall be made e1cept GJ F5b7 not less than four- and not more than such number of

after consultation with the Chief Nustice of )ndia

<

members- as ma0 be prescribed- and one of !hom shall be a !oman, who shall have the following &ualifications, namely2' 5i7 be not less than thirt0*five 0ears of age and 5iii7 be persons of ability, integrity and standing and have ade&uate knowledge and e1perience of at least ten 0ears in dealing with G 5ii7 possess a bachelorIs de+ree from a reco+ni9ed universit0 G

55

)ns. by !ct %3 of 3//3, +ec. "@ 5w.e.f. ",';'3//;7.

problems

relating

to

economics,

law,

commerce,

accountancy,

industry, public affairs or administration2 Provided that not more than fift0 per cent- of the members shall be from amon+st the persons havin+ a :udicial . back+round

01planation.''9or the purposes of this clause, the e1pression Opersons having (udicial backgroundO shall mean persons having knowledge and e1perience for at least a period of ten years as a presiding officer at the he' 5a7 has been convicted and sentenced to imprisonment for an offence which, in the opinion of the Central Government, involves moral turpitudeG or 5b7 is an undischarged insolventG or 5c7 is of unsound mind and stands so declared by a competent courtG or 5d7 has been removed or dismissed from the service of the Government or a body corporate owned or controlled by the GovernmentG or 5e7 has, in the opinion of the Central Government, such financial or other interest as is likely to affect pre(udicially the discharge by him of his functions as a memberG or 5f7 has such other dis&ualifications as may be prescribed by the Central Government2 rovided also that every appointment under this clause shall be made by ). Central Government on the recommendation of a +election Committee consisting the following, namely <=" 2URI)DICTION O5 T'( NATIONA4 CO,,I))ION +ub(ect to the other provisions of this !ct, the 6ational Commission shall have (urisdiction ' 5a7 to entertain ' 5i7 complaints where the value of the goods or services and compensation, if any, claimed e1ceeds rupees
BC

district

level

court

or

any

tribunal

at

e&uivalent

level2

rovided further that a person shall be dis&ualified for appointment, if

2'

(one crore)6 and

5ii7 appeals a+ainst the orders of an0 )tate CommissionG and 5b7 to call for the records and pass appropriate orders in an0 consumer dispute !hich is pendin+ before or has been decided b0 an0 )tate Commission where it appears to the 6ational Commission that such +tate Commission has e1ercised a (urisdiction not vested in it by law, or has failed to e1ercise a (urisdiction so
5*

+ubs. by !ct %3 of 3//3, +ec. "# for Orupees twenty lakhsO 5w. e. f. ",';'3//;7.

vested, or has acted in the e1ercise of its (urisdiction illegally or with material irregularity.
BD

<<" POO(R O5 AND PROC(DUR( APP4ICA$4( TO T'( NATIONA4 CO,,I))ION The 6ational Commission shall, in the disposal of any complaints or any proceedings before it, have 5%7 of section "; ' G 5a7 the powers of a civil court as specified in sub'sections 5<7, 5,7 and 5b7 the power to issue an order to the opposite party directing, him to do any one or more of the things referred to in clauses 5a7 to 5i7 of sub' section 5"7 of section"<, and follow such procedure as may be prescribed by the Central Government7.

<?"

APP(A4 !ny person aggrieved by an order made by the 6ational Commission in e1ercise of its power conferred by sub'clause 5i7 of clause 5a7 of section 3", may prefer an appeal a+ainst such order to the )upreme Court !ithin a period of thirt0 da0s from the date of the order 2 rovided that the +upreme Court may entertain an appeal after the e1piry of the said period of thirty days if it is satisfied that there was sufficient cause for not filing it within that period.
,$

F rovided further that no appeal by a person who is re&uired to pay

any amount in terms of an order of the 6ational Commission shall be entertained by the +upreme Court unless that person had deposited in the prescribed manner fifty per cent. of that amount or rupees fifty thousand, whichever is less.J <A" 5INA4IT7 O5 ORD(R) 0very order of a -istrict 9orum, +tate Commission or the 6ational Commission shall, if no appeal has been preferred against such order under the provisions of this !ct, be final

54

)ns. by !ct ,/ of "##;, +ec. "$ 5w.e.f. "$'%' "##;7 and subs. by !ct %3 of 3//3, +ec 3/ for section O33. ower of and procedure applicable to the 6ational Commission.' The 6ational Commission shall, in the disposal of any complaints or any proceedings before it, have' 5a7 the powers of a civil court as specified in sub'section 5<7, 5,7 and 5%7 of section ";G 5b7 the power to issue an order to the opposite party directing him to do any one or more of the things referred to in clauses 5a7 to 5i7 of sub'section 5"7 of section "<, and follow such procedure as may be prescribed by the Central Government.O 5w.e.f. ",';' 3//;7..
53

)ns. by !ct %3 of 3//3, +ec. 3" 5w.e.f. ",';'3//;7.

BE

.<AA" 4I,ITATION P(RIOD 5"7 The -istrict 9orum, the +tate Commission or the 6ational Commission shall not admit a complaint unless it is filed !ithin t!o 0ears from the date on !hich the cause of action has arisen" 537 6otwithstanding anything contained in sub'section 5"7, a complaint may be entertained after the period specified in sub'section 5"7, if the complainant satisfies the -istrict 9orum, the +tate Commission or the 6ational Commission, as the case may be, that he had sufficient cause for not filing the complaint within such period2 rovided that no such complaint shall be entertained unless the 6ational Commission, the +tate Commission or the -istrict 9orum, as the case may be, records its reasons for condoning such delay.

C'AN&IN& )C(NARIO O5 CON)U,(R ,O3(,(NT IN INDIA; PRO$4(,) AND PRO)P(CT)

The Consumer rotection !ct, "#$%, a milestone in the history of socio'economic legislation in )ndia, has considerably consolidated the process of consumer protection and has given rise, during the past few years, to new consumer (urisprudence. The Act introduced a three* tier @uasi*:udicial consumer disputes redressal mechanisms at the district)tate and national levels for dispensin+ ine1pensive and time*bound consumer :ustice" Though passed in "#$%, its effective implementation started only in "##/ when the institutions envisaged under the !ct were established by and large throughout the country, thereby enabling a large number of consumers and organizations to approach these 9orums for the redressal of their grievances. This has contributed to the growth of consumer organizations, the emergence of specialized consumer law reporters and a much higher profile for consumer protection in )ndia than ever before. 0ver since "##/ when the consumer protection mechanisms started functioning actively, certain remarkable changes have been witnessed in the )ndian legal system. These changes were, however, preceded by a considerable number of problems associated'first with the establishment%/ and then with the smooth functioning of these mechanisms%".

)ns. by !ct ,/ of "##;, +ec. "# 5w. r. e. f. "$'%'"##;7. Common cause v.8nion of )ndia SCrs., "##"537C .,3;5+C7 *1 Gur(eet +ingh5"##%72 The *aw of Consumer rotection in )ndia2Nustic With .each, 6ew -elhi2 -eep S -eep ublication.
5" *0

.I/

PRO,IN(NT

D(3(4OP,(NT)

IN

T'(

AR(NA

O5

CON)U,(R

PROT(CTION IN INDIA

There are at least three prominent developments in the arena of consumer protection in )ndia. These are25a7 )ncreased amount of business self'regulationG5b7 Growth and development of social action litigation is-2- is consumer protectionG and 5c7 0mergence of environmental litigation before the consumer 9orums. The increasing ambit and amplitude of the Consu"er 'rotection Act, $%+3 has compelled the public as well as the private sector to regulate itself in the interest of consumers. The impact is accordingly visible in case of airlines, banks, education, insurance industry, railways, roadways and telecommunications. Cn the other hand, self' regulation by the private sector has primarily been reflected in their >?usiness 6orms> and ECodes of 0thics>%3. )f you go the market you will now find that if any consumer says he will complain, the article sold is replaced, though in the cash memo it is mentioned that goods sold will not be taken back. ! sense of fright has now come. The manufacturers do not want a bad name for their products. The moment a complaint is filed before a state commission, they offer to replace the article. Thus there is now a greater demand for accountability on the part of both public as well as the private sector. ! significant number of decisions by the consumer forums against the corporate sector has brought home the clear message that consumers are not going to tolerate the unethical practices and irresponsible behaviour of the public or private corporate sector any more. .II/ PRO)P(CT) O5 CON)U,(R ,O3(,(NT IN INDIA !fter discussing the three prominent developments in the arena of consumer protection, ) now turn to the problems and prospects of the consumer movement in the coming years. !s a matter of fact, three ma(or problems are confronting the consumer protagonists in )ndia. The first problem concerns active functionin+ of the Consumer 5orums throu+hout the countr0" 6ot with standing the fact that these 9orums have now been established, by and large, throughout the country, consumer activists and organizations have been repeatedly voicing their grievances against the smooth functioning of these 9orums. They argue that these 5orums have also started behavin+ like Civil Courts and are likel0 to have mountin+ arrears soon" In addition*2

these

5orums

still

lack basic infrastructural

A'usiness +orms B )nd ACodes (f ;thicsB of the )d2ertisin. ,tandards Counci/ of India !),CI$, )ssociation Cham8er of Commerce and Industr9 of India!),,(C<)M$,Cederation of Indian Cham8ers of Commerce and Industr9!CICCI$.

facilities" The members sit onl0 part*time and EJ da0s decision* makin+ re@uirement is not strictl0 adhered to" There are also e+o and status problems bet!een :udicial members and the members !ith non*:udicial back+round" Another si+nificant problem is that the sta0 orders from the 'i+h Courts have be+un to hold up a lar+e number of cases filed before the Consumer 5orums- thereb0 den0in+ the benefits of speed0 and ine1pensive redressal machiner0 promised under the Consumer protection Act- =EFC" The second problem concerns the applicabilit0 of the Consumer protection Act- =EFC to various services" !s is evident, ever since the implementation of the "#$% !ct, whereas there has hardly been any significant case in which the Egoods> has been vehemently contested, there is a voluminous amount of case law which involved determination of the meaning, definition, and ambit of the term Eservice>. )ection<.=/.o/of the =EFC Act cate+ori9es certain specific t0pes of services !hich- inter alia- include bankin+financin+insurancetransportamusement and entertainment" The definition of the term Eservice> had already been kept very wide and now with the inclusion of the two terms Ehousing and construction> by the Consu"er 'rotection (A"end"ent# !ct, "##;, it has been further widened. Onl0 t!o t0pes of services have been kept out of the ambit of the =EFC Act" The0 are services rendered free of char+e and services rendered under a contract of personal serviceC?" The non'mentioning of services like education, health, housing, had posts and given telegraphs these services and an telecommunications presumably

impression of their e1clusion from the ambit of this legislation. !t the initial stages, therefore, these services contested the (urisdiction of the "#$% !ct, thereby claiming complete immunity from their governance by it. The Consumer 9orums, however, have appreciably stood the test of time and have brought all these services within the ambit of the "#$% !ct. ,akin+ consumers a!are of their ri+hts and takin+ consumer movement to the rural India is the third and perhaps the most important problem and a challen+e before the consumer or+ani9ations. !s is well known, most consumers are still ignorant of their rights, much less of being assertive about them %<.

=urjeet ,in.h !1""#$ : D The Conce7t of Contract of Persona/ ,er2ice under The Consumer Protection )ct, 1"3*.E In : Consumer Protection 6 Trade Practices %ourna/, Fo/. 2, +o. !March$ 77 51:5* *# Push7a =irimaji !1"" $: DMost Consumers I.norant of 0i.hts.E In : The Tri8une !22 (ct.$ 5 7 12

Though the Government appears to be serious of this issue %,, much however depends upon the consumer organizations. They have still to cover a very long distance so far as taking the movement to rural areas is concerned. )n conclusion, it would argue that consumer protection movement has got a bright future in )ndia. ! part from Governmental seriousness in the matter, consumer activists, organizations, and other voluntary associations have also to play their part in the furtherance of consumer movement. !bove all, the consumers have to be aware of their rights and should assert them selves in the market place.

*5

D=o2ernment )im Protection of Consumers.E In The Tri8une !1#th &ec.$ 7 4