Consumer Protection Act, 1986

• Introduction: Who are Consumers?

• From what they should be protected ?
• Unfair trade practices (over-charging, cartel)
• Ex: Goods (fake, adulterated, defective, hazardous, uncompetitive price, )
• Ex: Services (deficiencies); Post purchase services
• How to protect them ?
• Definition: An Act 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 consumers'
disputes and for matters connected therewith
 Consumer Protection Act, 1986
• Application: applies to all goods & services

• Establishment of network of consumer forums and appellate courts

• District, State & National level consumer forums

• Consumer organisations: Bureau of Indian Standards; Legal Aid

Society; Akhil Bharatiya Grahak Panchayat; Consumer Voice
 Consumer Protection Act, 1986
• Complaint: allegation in writing made by a complainant that any of
the following -
• an unfair trade practice or a restrictive trade practice
• Expl: Unfair trade practice means a trade practice which, for the purpose of promoting
the sale, use or supply of any goods or for the provision of any service, adopts any unfair
method or unfair or deceptive practice including false promise reg its quality, usefulness
etc; representing a second hand/ renovated goods as new; selling unapproved goods;
• Expl: Restrictive trade practice means any trade practice which requires a consumer to
buy, hire or avail of any goods or, as the case may be, services as a condition precedent
for buying, hiring or availing of other goods or services

• For ex: A car dealer demands the customer he has to avail the Car insurance from the
dealer only if he has to buy the car
 Consumer Protection Act, 1986
• Goods bought suffer from any defect
• Service suffer from any deficiency
• Price charged is in excess of price fixed under any law or displayed on the
goods/ package of goods
• goods which will be hazardous to life and safety when used
• Consumer: any person who -
• buys any goods for a consideration (does not include someone who buys for
resale or commercial use, other than self employment)
• For ex: If Mr. A buys a good for resale to his customers, he is not a consumer
under this Act but Mr. B who is a lawyer buys something which he uses for his
professional conduct, he would be considered a Consumer under the Act
• Hires/ avails of any service for consideration
 Consumer Protection Act, 1986
• Central Consumer Protection Council:
• Members: Minister in charge of Consumer Affairs in the Central Govt
(Chairman); other members
• Object: promote & protect rights of consumers

• State Consumer Protection Council:

• Members: Minister in charge of Consumer Affairs in the State Govt.
(Chairman); other members
• Object: promote & protect rights of consumers within the State
 Consumer Protection Act, 1986
• Consumer Disputes Redressal Agencies:
• District Forums in every district (headed by a President who is qualified to be
a District Judge and having two other members) – has power to award
compensation upto Rs. 5 lakhs

• State Commission in every state (headed by a President who is/was a High

Court Judge and having two other members) - has power to award
compensation more than Rs. 5 lakhs but upto Rs. 20 lakhs

• National Consumer Disputes Redressal Commission (headed by a President

who is/was a Supreme Court Judge and having four other members) – power
to award compensation more than Rs. 20 lakhs
 Consumer Protection Act, 1986
• Appeal against order of the Forums:
• District Forums: a person not satisfied with Dist Forum order may appeal to
State Commission within 30 days from the date of order

• State Commission: a person not satisfied with State Commission order may
appeal to National Commission within 30 days from the date of order

• National Commission: a person not satisfied with National Commission order

may appeal to Supreme Court within 30 days from the date of order
 Consumer Protection Act, 1986

• Finality of Order: Order of every forum would be treated as final, if

no appeal made
• Limitation of Order: No forum would entertain a complaint unless it
is filed within 2 years from the cause of action. Only if the forum is
satisfied with the cause of delay, they may accept such delayed
complaint even after 2 years [ex: Lead poisoning in children due to
exposure to toxic lead in toys, which may become medically evident
after few months/ years of exposure]
 Consumer Protection Act, 1986

• Penalty: If a trader/ person against whom complaint is made fails to

comply with order passed by Forum/ Commission, penalty of
imprisonment (up to 3 years) and/or fine (up to Rs. 10,000) would be
imposed
• Frivolous complaint: if complaint is found to be frivolous (i.e.
complaint made without any substance) or vexatious (i.e. complaint
made to cause annoyance to the defendant), complaint would be
dismissed and complainant may need to pay the cost to opposing
party, up to Rs. 10,000