Question 7

Elaborately explain the essential features of the consumer protection act 1986. Also briefly
discuss unfair trade practice and restrictive trade practice as discussed under consumer protection
Act?
(i)Features of Consumer Protection Act 1986
1. This Act is applicable on both goods and services. Goods are manufactured by the
manufacturer and consumer buys them from manufacturer or seller. Services include transport,
electricity, water; roads, etc. are under this Act.
2. Consumer Redressal Forum-Under Consumer Protection Act, the three judicial systems has
been set up to provide relief to consumers. In this system, consumer forums have been set up at
various levels which are functioning to safeguard the interests of consumers.
Under this system, many forums and commissions have been set up at various levels where
consumers can lodge their complaints.
I.

II.

III.

At district level there is District Consumer Dispute Redressal Forum. It is headed by a

judicial officer equivalent to Session Judge. He is assisted by two members. Cases
involve compensation upto 20 lakhs are entertained in this forum.
At state level there is State Consumer Dispute Redressal Commission. It is headed by
a judicial officer equivalent to High Court Judge. He is also assisted by two members.
Here cases involve compensation of 20 lakhs to one crore are entertained.
At national level there is National Consumer Dispute Redressal Commission. It is
headed by a Judge of Supreme Court. He is assisted by four members.

Here cases involve compensation above one crore are entertained.

1. National Commission has jurisdiction for appeals coming up against orders of State
Commission.
2. Supreme Court is the final deciding authority.
3. Under this Act there is provision to settle the complaint within three months of filing it. If
the complaint needs laboratory testing, the period is extended to five months.
4. In Consumer Protection Act, clause VI defines the rights of the consumer which have been
already discussed in the previous chapter.
5. There is no fee for lodging a complaint. Even poor people can get justice.
6. The clause II of this Act has defined some terms used by Consumer Protection Act like:
I. Defect-it is any fault or shortcoming in quality, quantity, purity, potency, or standard fixed

by the government. II. Deficiency-it is any fault, shortcoming or imperfection in quality or

performance.
IV.
V.

Unfair Trade Practice-it is unfair and deceptive procedure used to promote sale or
supply of goods and services like lottery, chit fund, conducting competitions, etc.
IV. Restricted trade practices.

(ii) Unfair Trade Practice and Restrictive Trade Practice

According to the provisions of the Consumer Protection Act, 1986 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
the practice of making any statement, whether orally or in writing or by visible representation
which falsely represents that the goods are of a particular standard, quality, quantity, grade,
composition, style or model; falsely represents that the services are of a particular standard,
quality or grade; falsely represents any re-built, second-hand, renovated, reconditioned or old
goods as new goods; makes a false or misleading representation concerning the need for, or the
usefulness of, any goods or services etc. 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. Bargaining price has been
defined as a price that is stated in any advertisement to be a bargain price, by reference to an
ordinary price or otherwise, or a price that a person who reads, hears or sees the advertisement,
would reasonably understand to be a bargain price having regard to the prices at which the
product advertised or like products are ordinarily sold.
The Act defines restrictive trade practice as a trade practice which tends to bring about
manipulation of price or 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 services as condition to
buying, hiring or availing of other goods or services.