PRACTICE UNDER CONSUMER PROTECTION ACT, 1986 – PART- I

[Mr. M. GOVINDARAJAN]

INTRODUCTION:

Consumer is the king now a day. He is having his own choice to purchase goods of any brand and avail services as he liked. The development of technology in communication field helps him a lot to know more about the products and services. In the earlier days the consumer is to take the risk of selection of a product. If any defect was there he could not claim any relief or damages or compensation. The position is now in reverse after the enactment of the Consumer Protection Act, 1986. The said is to provide better protection of the interests of the consumers and for that purpose to make provision for the establishment of consumer councils and other authorities for the settlement of consumers’ disputes and matters connected therewith. This is one of the best areas for the professionals to practice and to appear before the Consumer Forums on behalf of their clients. The article is of two parts. In the first part the pre requisite information that is needed for practice is discussed. In the second part the procedure to appear before the Consumer forum will be discussed.

CONSUMER DISPUTES REDRESSAL AGENCIES:

Sec. 9 of the Act deals with the establishment of Consumer Disputes Redressal Agencies as detailed below:

• District Consumer Disputes Redressal Forum – (‘District Forum’ for short) – established by respective State Government in each District;

• State Consumer Disputes Redressal Commission – (‘State Commission’ for short) – established by respective State Government – one for each State;

• National Consumer Disputes Redressal Commission (‘National Commission’ for short) – established by Central Government – one at New Delhi;

DEFINITIONS:

We have to consider the definition of certain terms which will have effect in filing a complaint. The definitions of the following terms are considered most important:

• Consumer – Sec. 2(d);

• Complainant – Sec. 2(b);

• Complaint – Sec. 2©;

• Consumer dispute – Sec. 2(e);

• Defect- Sec. 2(f);

• Deficiency – Sec. 2(g);

• Person – Sec. 2(m);

• Restrictive trade practice – 2(nnn);

• Service –Sec. 2(o);

• Unfair trade practice – Sec. 2®;

Consumer:

This definition consists of two parts- one for the purchase of goods and the other for availing services.

 

GOODS

SERVICES

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

Consumer means any person who- hires or avails of any services for a consideration which- has been paid; or promised to pay; 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 or promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person; but does not include a person who avails of such services for any commercial purpose.

Explanation to this section defines the terms ‘commercial purpose’ which does not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood by means of self employment.

Complainant:

A complainant may be the following who are which makes a complaint-

• a consumer; or

• any voluntary consumer association registered under the Companies Act, 1956 or under any other law for the time being in force; or

• the Central Government or any State Government, who or which makes a complaint;

• one or more consumers, where there are numerous consumers having the same interest;

• in case of death of a consumer, his legal heir or representative.

Complaint:

Before the enactment of Competition Act, 2002 the Consumer is having option to file a complaint before the Consumer Forum for defects in goods or deficiency in service and also to file a complaint before the MRTP Commission for unfair trade practice and restrictive trade practice in respect to the consumer. After enactment of Competition Act, 2002 the MRTP Act was repealed and the Consumer Forum is given more power to enquire the Unfair Trade practices and Restrictive Trade Practices. Sec. 2© defines the term complaint which means any allegation in writing made by a complainant that-

• an unfair trade practice or a restrictive trade practice has been adopted by any trader or service provider;

• the goods bought by him or agreed to be bought by him suffer from one or more defects;

• the services hired or availed of or agreed to be hired or availed of by him suffer from deficiency in any respect;

• a trader or the service provider, as the case may be, has charged for the goods or for the services mentioned in the complaint, a price in excess of the price-

  • fixed by or under any law for the time being in force;

  • displayed on the goods or any package containing such goods;

  • displayed on the price list exhibited by him or under any law for the time being in force;

  • agreed between the parties.

• Goods which will be hazardous to life and safety when used are being offered for sale to the public-

  • in contravention of any standards relating to safety of such goods as required to be complied with, by or under any law for the time being in force;

  • if the trader could have known with due diligence of that the goods so offered are unsafe to the public.

• Services 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 injurious to life and safety.

Consumer Dispute:

Before filing a complaint before the Consumer forum there should be a consumer dispute. Consumer dispute means a dispute where the person against whom a complaint has been made, denies or disputes the allegations contained in the complaint. According to this definition the consumer while discovering a defect in the goods he should first make a complaint in writing to the seller for rectifying the defect. If the seller does not rectify or refuse to rectify the defect, a dispute then arises, which is the base for filing complaint before consumer forum.

Defect:

‘Defect’ means any-

• fault,

• imperfection or shortcoming in the quality, quantity, potency, purity or standard which is-

• required to be maintained by or under any law for the time being in force;or

• under any contract, expressed or implied; or

• as is claimed by the trader in any manner

whatsoever in relation to any goods.

Deficiency:

‘Deficiency’ means any –

• fault,

• imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is-

• required to be maintained by or under any law for the time being in force; or

• has been undertaken to be performed by a person in pursuance of a contract or otherwise

in relation to any service.

Person:

The definition of ‘person’ is highly required since the definition of consumer is a person. Person includes-

• a firm whether registered or not;

• a Hindu Undivided Family;

• a co-operative society;

• every other association of persons whether registered under the Societies Registration Act or not.

Restrictive Trade Practice:

‘Restrictive Trade Practice’ means a trade practice which tends to bring about manipulation of price or its conditions of delivery or to affect flow of supplies in the market relating to goods or services in such a manner as to impose on the consumers unjustified costs or restrictions and shall include-

• delay beyond the period agreed to by a trader in supply of such goods or in providing the services which has led or is likely to lead to rise in the price;

• any trade practice which requires a consumer to buy, hire or avail of any goods or, as the case may be, services as condition precedent to buying, hiring or availing of other goods or services.

Service:

Service means service of any description which is made available to potential users and includes, but not limited to the provision of facilities in connection with-

• banking,

• financing insurance,

• transport,

• processing,

• supply of electrical or other energy;

• board or lodging or both,

• housing construction,

• entertainment,

• amusement; or

• purveying of news of other information

but does not include the rendering of any service free of charge or under a contract of personal service.

 

In this ‘a contact of personal service’ has to be distinguished from a ‘contract for personal service’. In the absence of relationship of master and servant between the patient and the medical practitioner, the service rendered by a medical practitioner to the patient cannot be regarded as services rendered under ‘a contract of personal service’. It is a ‘contract for personal service’. Wherever there is relationship like that of master and servant it is a ‘contract of personal service’ and is excluded from the purview of the Act.

Unfair Trade Practice:

‘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 any of the following practices, namely-

1. the practice of making any statement, whether orally or in writing or by visible representation which-

   1. falsely represents that the goods are of a particular standard, quality, quantity, grade, composition, style or model;

   2. falsely represents that the services are of a particular standard, quality or grade;

   3. falsely represents any re-built, second-hand, renovated, reconditioned or old goods as new goods;

   4. represents that the goods or service have sponsorship, approval, performance, characteristics, accessories, uses or benefits which such goods or services do not have;

   5. represents that the seller or the supplier has a sponsorship or approval or affiliation which such seller or supplier does not have;

   6. makes a false or misleading representation concerning the need for, or the usefulness of, any goods or services;

   7. gives to the public any warranty or guarantee of the performance, efficacy or length of life of a product or of any goods that is not based on an adequate or proper test thereof:

Provided that where a defence is raised to the effect that such warranty or guarantee is based on adequate or proper test, the burden of proof of such defence shall be on the person raising such defence;

8. makes to the public a representation in a form that purports to be-

   1. a warranty or guarantee of a product or of any goods or services; or

   2. a promise to replace, maintain or repair an article or any part thereof or to repeat or continue a service until it has achieved a specified result,

if such purported warranty or guarantee or promise is materially misleading or if there is no reasonable prospect that such warranty, guarantee or promise will be carried out;

9. materially misleads the public concerning the price at which a product or like products or goods or services, have been or are, ordinarily sold or provided, and, for this purpose, a representation as to price shall be deemed to refer to the price at which the product or goods or services has or have been sold by sellers or provided by suppliers generally in the relevant market unless it is clearly specified to be the price at which the product has been sold or services have been provided by the person by whom or on whose behalf the representation is made;

10. gives false or misleading facts disparaging the goods, services or trade of another person.

Explanation – for the purposes of clause (q), a statement that is-

1. expressed on an article offered or displayed for sale, or on its wrapper or container; or

2. expressed on anything attached to, inserted in, or accompanying, an article offered or displayed for sale, or on anything on which the article is mounted for display or sale; or

3. contained in or on anything that is sold, sent, delivered, transmitted or in any other manner whatsoever made available to a member of the public,

shall be deemed to be a statement made to the public by, and only by, the person who had caused the statement to be so expressed, made or contained;

2. permits the publication of any advertisement whether in any newspaper or otherwise, for the sale or supply at a bargain price, of goods or services that are not intended to be offered for sale or supply at the bargain price; or for a period that is, and in quantities that are, reasonable, having regard to the nature of the market in which the business is carried on, the nature and size of business, and the nature of the advertisement.

Explanation – for the purpose of clause (2), ‘bargaining price’ means-

1. a price that is stated in any advertisement to be a bargain price, by reference to any ordinary price or otherwise, or

2. a price that a person who reads, hears or sees the advertisement, would reasonable understand to be a bargain price having regard to the prices at which the product advertised or like products are ordinarily sold;

3. permits-

   1. the offering of gifts, prizes or other items with the intention of not providing them as offered or creating impression that something is being given or offered free of charge when it is fully or partly covered by the amount charged in the transaction as a whole;

   2. the conduct of any contest, lottery, game of chance or skill, for the purpose of promoting, directly or indirectly, the sale, use or supply of any product or any business interest;

(3A) withholding from the participants of any scheme offering gifts, prizes or other items free of charge, on its closure the information about the final products of the scheme.

 

Explanation – For the purpose of this sub-clause, the participants of a scheme shall be deemed to have been informed of the final results of the scheme where such results are within a reasonable time published, prominently in the same newspapers in which the scheme was originally advertised.

4. permits the sale or supply of goods intended to be used, or are of a kind likely to be used, by consumers, knowing or having reason to believe that the goods do not comply with the standards prescribed by competent authority relating to performance, composition, contents, design, constructions, finishing or packing as are necessary to prevent or reduce the risk of injury to the person using the goods;

5. permits the hoarding or destruction of goods, or refuses to sell the goods or to make them available for sale or to provide any service, if such hoarding or destruction or refusal raises or tends to raise or is intended to raise, the cost of other similar goods or services

Many cases have been filed before MRTP Commission on unfair trade practice and landmark orders have been issued by MRTP Commission. After the transfer of the same to the Consumer Protection Act, much case has not been filed in this aspect because consumers are not having much awareness on ‘unfair trade practices’.

Whether it is a special law?

Section 3 of the Act provides that the provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.

Thus the remedy under this Act is in addition to the provisions of any other law for the time being in force. The provisions of this Act give the consumer an additional remedy besides those that may be available under the existing laws. Even though it shall not derogate the provisions of the existing laws the Supreme Court in many cases held that the Consumer Protection Act is a beneficiary act to the consumers and so it can prevail over the provisions of other Act.

The following table gives about the Consumer Forums constituted under the Consumer Protection Act:

 

 

PARTICULARS	DISTRICT FORUM	STATE COMMISISON	NATIONAL COMMISSION
1. Composition	President – District Judge; Members 2 – one woman	President- High Court Judge; Members – Not less than 2 and not more than as may be prescribed and one of who shall be a woman;	President – Supreme Court Judge; Members – Not less than 4 and not more than as may be prescribed and one of whom shall be a woman;
2. Pecuniary jurisdiction	The value of goods or services and the compensation, if any claimed does not exceeds Rs.20 lakhs;	The value of goods or services and compensation, if any claimed exceeds Rs.20 lakhs but does not exceed Rs. 1 crore.	The value of goods or services and compensation, if any claimed exceeds Rs. 1 crore.
3. Territorial jurisdiction	(a) the opposite party or each of the opposite parties, where there are more than one, at the time of institution of the complaint, actually and voluntarily resides or carries on business or has a branch office or personally works for gain, or (b) any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or carries on business or has a branch office, or personally works for gain, provided that in such case either the permission of the District Forum is given, or the opposite parties who do not reside, or carry on business or have a branch office, or personally work for gain, as the case may be, acquiesce in such institution, or © the cause of action wholly or in part, arises.	(a) the opposite party or each of the opposite parties, where there are more than one, at the time of institution of the complaint, actually and voluntarily resides or carries on business or has a branch office or personally works for gain, or (b) any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or carries on business or has a branch office, or personally works for gain, provided that in such case either the permission of the State Commission is given, or the opposite parties who do not reside, or carry on business or have a branch office, or personally work for gain, as the case may be, acquiesce in such institution, or © the cause of action wholly or in part, arises.	All over India

APPEAL:

The Act provides only one appeal. Revision petition may be filed against the appeal order.

 

Original Jurisdiction	Appellate Jurisdiction	Revisionary Jurisdiction
District Forum	State Commission	National Commission
State Commission	National Commission	Supreme Court of India
National Commission	Supreme Court of India

In Part II of this Article the procedure of dealing with the complaint will be discussed in detail.