Dr Sakuntala Misra National Rehabilitation University, Lucknow

Faculty of Law

(Consumer Protection Act 1986)

Assignment on:
“Analysis of Consumer Protection Act ”

By :
Shailesh kumar
9th semester
Roll no:164140060

Under the guidance of:

Mr. Bhanu Pratap
Singh

INDEX

S.NO TITLE PA TEACHER’S

. GE SIGN.
 NO.
1 Introduction 1
2 Importance of consumer 3
protection act
3 The state consumer protection 3
council
4 Power of Distict Forum 4
5 Cases under consumer protection 5
6 Conclusion 7
7 Bibliography 8
8
9
10

Acknowledgement

This project is as result of dedicated effort. It gives me immense pleasure to prepare this project report
on “Analysis of Consumer Protection Act”
I Would like to thank our project guide Mr. Bhanu Pratap Singh for consultative help and
constructive suggestion on the matter in this project . I would like to thanks our parents and our
colleagues who have helped me in making this project a successful one.

Thanks

Introduction

History of Consumer Protection Act:

In spite of phelothara of laws to check supply of substandard products, check profiteering and pursuing
the industry and trade to take care of the consumers much could not be achieved. It is because of
economic law of demand and supply. When demand is more than the supply naturally consumer is
neglected as was the case in India till the middle of 80’s; it was sellers market, actually there was no
marketing because consumer was coming to seller rather the opposite which is the trend in countries of
West, and Japan where the position is just the opposite as they have to compete with each other to
attract customers for all types of goods and services.

In India consumer had to buy what was offered and he had no choice even if the price was high, the
quality and service was poor and terms of sales were unattractive and sometimes even unreasonable
compared to situation prevailing in free economy countries. In USA or Japan or Europe consumers are
not required to book a car or LPG gas for cooking or scooter by making a deposit with the company
rather the manufacturer offers credit to the buyer. Now that has started in India too in case of certain
consumer durables where competition is severe. But there is also a matter of culture and business
ethics.

The Indian industry and trade completely ignored the consumer even in the matter of after sales
service or keeping to their promise to repair or replacement. Consumers often felt helpless because our
laws are very complicated, costly and time consuming and requires an advocate to plead the case.

It was felt wise to get a thing repaired by incurring extra cost rather than endless requesting for
company engineer to look into it. When these problems started growing with the enlargement of
market for consumer durables, consumers and government woke up. In 1986 the Consumer Protection
Act was passed “to provide for the better protection of the interest of consumers and for that purpose
to make provisions for the establishment of consumer’s councils and other authorities for the
settlement of the consumers disputes and for matters connected therewith”.

Thus the basic objectives of the Act are:

 To provide better protection to consumers, and

 to establish suitable machinery specially consumer councils to settle disputes.
As the Act could not fully protect consumers after seven years in force the Act was thoroughly
revised in 1993 which became effective from 18th June 1993. The most important change was to
protect users of services.

Definition:

The Act tried to protect consumers not only of goods but also of services. Consumers in the Act
(Section 2) 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 buyes 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; or
 hires or avails of 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 than the person who hires or avails of the services for consideration paid or
 promised, or partly paid and partly promised, or under any system of deferred payment, when such
services are availed of with the approval of the first mentioned person.

The definition has clarified following:

 The Act applies both to goods and services.

 The provisions of the Act are applicable even when part payment has been made and rest is
promised to be paid later.
 The Act protects not only buyer but user in the case of goods and any beneficiary in case of
services.
As Act has covered both goods and services the defect and deficiencies have elaborately been
defined. Defect which is in relation to goods “means any defaults, imperfection or short coming in
the quality, quantity, potency, purity or standards 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
trader in any manner what so ever in relation to any goods; Deficiency related to service “means
any faults, imperfection, short coming 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 undertaking to be performed by a person in pursuance of a contract or otherwise in
relation to any services”.

Under the deficiency clause many medical practitioners, insurance companies have been penalized for
deficient services and forced them to provide better service in future.

The coverage of services is very wide and it includes “services of any description which is made
available to potential users and includes the provision of facilities in connection with banking, financ -
ing, insurance, transport, processing, supply of electrical or other energy, “board or lodging or both,
housing construction, entertainment, amusement or the surveyance of news or other information, but
does not include the rendering of any service free of charge or under a contract of personal service”.

Though the term service includes a large number of services it has not mentioned educational service
(which has become very much commercialized and large number of students are virtually cheated by
misrepresentation, but consultancy is included in the definition of services).

The dispute can arise for unfair and restrictive trade practices also, hence they have also been defined
in the Act. The restrictive trade practices “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”.

It in simple words means that if one buys goods or service and asked to buy some other good or
service also as a precondition of a deal it is restrictive trade practice and is not permitted.

Importance of Consumer Protection:

 To shape Consumers- Indian customers are not well-organised, and vendors exploit them easily.
 Impart Market Information- Most of the consumer is clueless, and have no information about
the product they are buying and this might cause them losses.
 Physical Safety- Some products are adulterated and can hamper consumer health. So, they need to
be protected.
 Avert Monopoly- Irrespective of different restriction many organisation follows monopoly
practice and consumers gets influenced and should be protected.
 Malpractices- Company pursues biased trade practices, and unlawful trade practices and this
protection plays a crucial role.
 Misleading advertisement- Many enterprises, intentionally trick consumers through incorrect or
deceptive advertisements. This act will shield consumers from getting exploited.
 Education Consumers about their Basic Rights- Most consumers ignore or do not know about
their rights. The Consumer Protect Act educates them and secures their rights and interests

The State Consumer Protection Council:

Till the Act was modified in 1993 services were not included in the objective but now both goods and
services are included in the objectives of the Council and consumer has to be protected against defects,
deficiency and unfair and restrictive trade practice. In each State Consumer Protection council has
been established by notification of the Central Government. It has same functions at state level as
Central Council at national level. The Minister in-charge of consumer affairs in the State Govern ment
shall be the chairman and such other number of members (officials and non-officials) as may be
decided from time to time by the State Government.

Consumer Disputes Redressal Agencies:

The main purpose of Consumer Protection Act is to provide redressal forum to consumers. For this
purpose following set up has been provided.

 District Forum in each district at least one forum will be established but the State Govern ment can
establish more than one forum in a district.
 State Commission for redressal of disputes at State level.
 National Consumer Disputes Redressal Commission at all India level.

Role and Powers of District Forums:

The Act has laid down in detail the qualifications for the President and members of the District Forum.
The jurisdiction of the District Forum is within the local limits of the district. The complaint can be
filed to the Forum by the consumer to whom such goods are sold or delivered or agreed to be sold or
delivered or such services provided or agreed to be provided.

The complaint can also be filed by central or state government or by a group of consumers. Thus it is
not necessary that complaint is filed by effected person but matter can be taken by others also as
defined in Section 12.

Procedure of complaint has also been laid down in detail. The District Forums have been given powers
of civil courts for summoning and enforcing the attendance and evidence on affidavit, discovery and
production of any documents, issuing of any commission for the examination of any witness. The
proceedings before the Forum “shall be deemed to be a judicial proceedings within the meaning of
various sections of the Indian Penal Code.

Powers of District Forums:

The District Forums have been given powers to ass verdict which are binding subject to appeal. After
the proceedings conducted if District Forum is satisfied that the goods complained against suffer from
any of the defects specified in the complaint or that any of allegations contained in the complaint about
the services are proved, it shall issue an order to the opposite party directing him to do one or more of
the following things, namely;

 To remove the defect pointed out by the appropriate laboratory from the goods in question;
 To replace the goods with new goods of similar description which shall be free from any defect;
 To return to the complaint the price, or, as the case may be, the charges paid by the complaint;
 To pay such amount as may be awarded by it as compensation to the consumer for any loss or
injury suffered by the consumer, due to the negligence of the opposite party;
 To remove the defects or deficiencies in the services in question;
 To discontinue the unfair trade practice or the restrictive trade practice or not to repeat them;
 Not to offer the hazardous goods for sale;
 To withdraw the hazardous goods from being offered for sale;
 To provide adequate costs to parties.
It may be observed from the above that the purpose of the verdict is not only to compensate a
particular consumer but to stop such dealings in the future to protect other consumers.
Appeal to State Commission: Any person aggrieved by an order of the District Forum has been
given the right to appeal to the State Commission within a period of thirty days from the date of
order.

Appeal to National Commission: Second appeal is allowed before the National Commission within
30 days of order of State Commission but the National Commission can extend the period for appeal
beyond 30 days.

Appeal to Supreme Court: Third appeal is permitted to Supreme Court within 30 days of the order of
National Commission.

Thus ample opportunity has been provided for justice and fair play but if someone does not comply
with the order of District Forum, State Commission or National Commission there are provisions for
strict punishment, including imprisonment. “Such trader or person or complainant shall be punishable
with imprisonment for a term which shall be punishable with imprisonment for a term which shall not
be less than one month but which may extend to three years or with fine which shall not be less than
two thousand rupees but which may extend to ten thousand rupees or both”.

Evaluation of Consumer Protection:

Before Consumer Protection Act was passed in 1986 there was none to hear complaints of consumers.
The District Forums and State and National Commissions have been taking the com plaints very
seriously and in many cases have ordered severe punishment both in case of goods and services. The
definition of defects, deficiency, restrictive and unfair trade practices is so wide that every
dissatisfaction of consumer is covered and if he is deceived in any manner he can approach the law.

The judgments of the forums and commissions have encouraged the consumers to approach more
frequently to these bodies. But with the increase in the number of cases there are inordinate delays in
listening to complaints and passing the orders. Further, with the passage of time it is becoming almost
necessary to engage a lawyer though not required in law. This is making the system costly.
Actually the protection cannot be by law alone but proper business culture and competition in the
system is needed. With the increased competition and globalization consumer is cared better by
MNC’s and gradually Indian companies are also taking que from them. However, as yet sales after
service is far from satisfactory, sometimes even in case of well reputed companies.

While in foreign countries suppliers replace the product without any question to maintain their
reputation but Indian manufacturers try to find out all types of excuses. Similarly, service providers
including GIC and LIC have not satisfied the consumers and users were forced to approach the District
Forums for redressal of their complaints.

In certain cases considerable punishment has been awarded but there is much to learn from foreign
companies who withdraw their product if found defective even without complaint. It has been reported
in Economic. Times of 21st September, 2000 that “Honda Motor Co. today became the latest big
Japanese manufacturer to recall potentially defective products, amounting half a million cars in Japan.
The recall would cost 2.6 billion yen (Dollar 24 million): Similarly Continental General Tire is
expected to announce the recall of about 80,000 tyres on the Navigator sport utility vehicles made by
Ford Motor Co. over the fear of chunks of trade may come off (Economic Times 20th Sep. 2000).
Firestone announced the recall of 6.5 million 15 inch tyres amid growing reports they can shred and
cause deadly accidents. The cost of withdrawal will be 400-500 million Dolars.

In India such things do not happen because there is no consumer movement of the type in USA. But it
is certain that after passing of Consumer Protection Act things have started improving and more and
more consumers are coming forward with their complaints. It has been reported in March 2001 that
there is move to further strengthen the law so that delays in disposal of cases is reduced.

But even now many producers are not conscious of their duty towards quality, therefore, it has been
proposed to amend Consumer Protection Act and add critical product liability clause under which
errant suppliers would have to compensate consumer monetarily replacing the substandard product.

Cases under Consumer Protection Act:

Since Consumer Protection Act was passed in 1986, there has been large number of cases both with
regard to goods and services which shows increasing awareness of consumers of their rights. Actually
with the redressal of complaints by Consumer Forums, the consumers have awakened about their
rights, there is increasing number of cases which Consumer Forums are not able to cope and number
of pending cases are increasing. The forums have received cases of various types. It is not possible to
cover large number of cases but following are illustrations to point out how consumers are protected
under the Act.

Unfair Service Practice:

Consumer Protection Act does not allow unfair service practice in the similar manner as unfair trade
practices. A private hospital advertised that an artificial tooth can be fixed for Rs. 50 Amit Soni aged
24 years wanted a sturdy artificial tooth fixed that would serve the purpose of a natural tooth and went
to the hospital. He paid Rs. 50 to the doctor for fixing the tooth and Rs. 1500 as ‘donation’ for the
hospital as demanded by the doctor.

Doctor fixed the tooth after getting payment of Rs. 1550/- but the tooth came off within two hours of
implant because it was not implanted but was fixed “using Quickfix and Fevicol” to fix the artificial
tooth in the gums as per Mr. Amit Soni. He went to the doctor again with the tooth and got it refixed.
But it came off again. He again went to the hospital and demanded back his money but doctor refused
to refund.

In order to get back his money and compensation for agony Mr. Soni complained in consumer court
and charged the hospital with deficiency of service. He demanded a refund of Rs. 1500 plus Rs. 4 lakh
as compensation for his mental agony and harassment plus interest at the rate of 24%.

When court called the doctor he did not turn up in consumer court and the case was taken up exparte.
The court held that “there is no denying the fact that the advertisement stated an artificial tooth would
be fixed for Rs. 50 and a full denture for Rs. 1000. However, a receipt of Rs. 1500 was issued to the
complaint”.

The Bench pointed out that “the contention of the complaint that he was forced to pay Rs. 1500 which
is contrary to the rates indicated in the advertisements and the artificial tooth came off after two hours
is not refuted by the respondents”. The court, therefore, ruled that “the respondent by making the
complaint pay Rs. 1500 in the form of donation and by fixing an artificial tooth that came off in
two hours are not only guilty of unfair trade practices and deficiency in services, but also
negligence”.

Conclusion

The Act is a welcome move as it seems to cover the lacunae of the old Act and it is being introduced
during a crucial phase wherein consumers and their rights need to be protected as the global markets
are becoming more and more consumer-centric. The Act vests more power on the District
Commission, State Commission while also revising their respective pecuniary jurisdictions thereby
reducing the workload of the National Commission. With the implementation of the provisions of the
Act, the popular phrase 'buyer beware' might be replaced to 'seller beware' or 'manufacturer
beware' in case they are found in contravention of the Act considering the protection that is being
offered to the consumers.

Bibliography
 https://www.yourarticlelibrary.com/consumer-behaviour/consumer-protection/consumer-
protection-act-history-definition-forums-and-evaluation/64207
 https://www.mondaq.com/india/dodd-frank-consumer-protection-act/969026/an-overview-
of-the-changes-to-be-introduced-by-the-consumer-protection-act-2019
 http://lawtimesjournal.in/the-history-of-consumer-protection/
 https://www.legalbites.in/history-development-of-consumer-protection-laws/