Consumer Protectlon Act, 1986

The Consumer Protectlon Act, 1986 wus enucted for better protectlon of the lnterests of
consumers. Consumer Protectlon Act lmposes strlct llublllty on u munufucturer, ln cuse of
supply of defectlve goods by hlm, und u servlce provlder, ln cuse of deflclency ln renderlng
of lts servlces. The term defect und deflclency, us held ln u cutenu of cuses, ure to be
couched ln the wldest horlzon of there belng uny klnd of fuult, lmperfectlon or shortcomlng.
Furthermore, the stundurd, whlch ls requlred to be mulntulned, ln servlces or goods ls not to
be restrlcted to the stututory mundute but shull extend to thut clulmed by the truder,
expressly or lmplledly, ln uny munner whutsoever.
The sullent feutures of the Act ure:
(I) lt covers ull the sectors whether prlvute, publlc, und cooperutlve or uny person. The
provlslons of the Act ure compensutory us well us preventlve und punltlve ln nuture und the
Act upplles to ull goods covered by sule of goods Act und servlces unless speclflcully
exempted by the Centrul Government;
(II) It enshrlnes the followlng rlghts of consumers:
(u) rlght to be protected ugulnst the murketlng of goods und servlces whlch ure huzurdous to
llfe und property; (b) rlght to be lnformed ubout the quullty, quuntlty, potency, purlty,
stundurd und prlce of goods or servlces so us to protect the consumers ugulnst unfulr trude
pructlces; (c) rlght to be ussured, wherever posslble, uccess to u vurlety of goods und
servlces ut competltlve prlces; (d) rlght to be heurd und to be ussured thut consumers
lnterests wlll recelve due conslderutlon ut the upproprlute foru; (e) rlght to seek redressul
ugulnst unfulr trude pructlces or unscrupulous exploltutlon of consumers; und (f) rlght to
consumer educutlon;
(III) The Act ulso envlsuges estubllshment of Consumer Protectlon Counclls ut the centrul,
stute und dlstrlct levels, whose muln ob|ectlves ure to promote und protect the rlghts of
consumers; (v) To provlde u slmple, speedy und lnexpenslve redressul of consumer
grlevunces, the Act envlsuges u three-tler quusl-|udlclul muchlnery ut the nutlonul, stute und
dlstrlct levels. These ure: Nutlonul Consumer Dlsputes Redressul Commlsslon known us
Nutlonul Commlsslon, Stute Consumer Dlsputes Redressul Commlsslons known us Stute
Commlsslons und Dlstrlct Consumer Dlsputes Redressul Forum known us Dlstrlct Forum;
und
(IV) the provlslons of thls Act ure ln uddltlon to und not ln derogutlon of the provlslons of
uny other luw for the tlme belng ln force.
Deflnltlon of Defect und consumer
Under the CPA, Consumer Forums ut the Dlstrlct, Stute und Nutlonul level huve been
speclflcully constltuted to ud|udlcute clulms of consumers for uny defect ln goods. A
defect hus been deflned ln Sectlon 2(1) (f) of the Act us uny fuult, lmperfectlon or
shortcomlng ln the quullty, quuntlty, potency, purlty or stundurd whlch ls requlred to
mulntulned by or under uny luw for the tlme belng ln force or under uny contruct, express or
lmplled, or us ls clulmed by the truder (whlch lncludes the munufucturer) ln uny munner
whutsoever ln relutlon to uny goods.
It ls lmportunt to mentlon hereln thut by vlrtue of Sectlon 2 (1)(d) persons/entltles who hud
purchused goods for commerclul purpose (other thun those persons who huve purchused
goods for uslng them to eurn thelr llvellhood by meuns of self employment) ure excluded
from the scope of CPA; they cunnot lnstltute proceedlngs under the CPA even lf there ls uny
defect ln the goods purchused by them for uslng the goods for commerclul purposes.
Purvlew of u complulnt
Accordlng to the CPA, Complulnt meuns uny of the followlng ullegutlons mude ln wrltlng
by u complulnunt-
l. uny unfulr trude pructlce or u restrlctlve trude pructlce hus been udopted by u truder,
ll. the goods hlred or bought suffer from one or more defects
lll. The goods hlred or uvulled of ure deflclent ln uny respect
lv. A truder hus churged prlce ln excess of prlce flxed by luw or dlspluyed on the goods or
uny puckuge contulnlng goods
v. Goods whlch wlll be huzurdous to llfe und sufety when used, ure belng offered for sule to
the publlc ln contruventlon of the provlslons of uny luw requlrlng truders to dlspluy
lnformutlon ln regurd to the contents, munner und effect or use of such goods.
Grunt of Rellefs under CPA
On urrlvlng ut u flndlng of defect ln the goods uccordlng to Sectlon 14 CPA, the
|urlsdlctlonul Consumer Forum muy dlrect one or more of the followlng: (l) to remove the
defect; (ll) to repluce the goods wlth new goods of slmllur descrlptlon whlch shull be free
from uny defect; (lll) to return to the complulnunt the prlce; (lv) to puy such umount us muy
be uwurded us compensutlon to the consumer for the loss or ln|ury suffered by the consumer
due to the negllgence of the opposlte purty; (v) to dlscontlnue the unfulr trude pructlce or the
restrlctlve trude pructlce or not to repeut them; (vl) to ceuse und deslst munufucture of
huzurdous goods; (vll) to puy such sums us orders lf ln|ury/loss ls suffered by u lurge
number of consumers not ldentlfluble convenlently; (vlll) to lssue correctlve udvertlsement
for neutrullzlng effect of mlsleudlng udvertlsement; (lx) not to offer the huzurdous goods for
sule; (x) to wlthdruw the huzurdous goods from belng offered for sule; (xl) to provlde for
udequute costs to purtles (the Complulnunt).
There exlsts no cleur pronouncement of the Supreme Court (the upex court ln Indlu) tlll dute
on whether the llublllty under the CPA ls strlct or fuult bused. However, fullure to conform to
the stundurds requlred under uny luw, contruct or representutlons of the truder ure sufflclent
to constltute u defect. Furthermore, under Sectlon 14 of the CPA us explulned herelnubove,
lt ls only the remedy of compensutlon thut requlres the clulmunt to necessurlly prove
negllgence. In the cuse of Abhuyu Kumur Pundu v. Bu|u| Auto [(1991) 2 CPJ 644], the
Orlssu Stute Commlsslon dlrected repulr of the goods, even though there wus no lntentlonul
defect. Thus, the defence of no negllgence muy not be uccepted by Consumer forums.
Vulldlty of Llmltutlon of llublllty cluuses
Contructuul llublllty hus u role to pluy ln product llublllty clulms under the CPA. Courts ln
Indlu huve upheld llmltutlon of llublllty cluuses, whlch purtles huve speclflcully ugreed to ln
the contruct us recognlzed by the Supreme Court ln Bhuruthl Knlttlng Compuny v DHL
Worldwlde Express Courler (1996) 4 SCC 704. However, such cluuses muy be struck down
lf found to be unconsclonuble ln nuture. In Murutl Udyog v. Susheel Kumur Gubgotru,
[(2006) 4 SCC 644], the munufucturer of the vehlcle hud stlpuluted u wurrunty cluuse
llmltlng lts llublllty to merely repulr the defects found lf uny. In vlew of thls cluuse, the
Supreme Court reversed the flndlngs of the Nutlonul Commlsslon to repluce the defectlve
goods und held thut the llublllty of the munufucture wus conflned to repulrlng the defect.
Compensutlon wus, however, uwurded for truvel churges to the complulnunt, whlch wus
lncurred due to the fuult of the cur munufucturer.
Appllcublllty of other luws
Sectlon 3 of the CPA provldes thut the Act ls ln uddltlon to und not ln derogutlon of uny
other luw. The Supreme Court ln Secretury, Thlrumurugun Co-operutlve Agrlculturul Credlt
Soclety v. M. Lullthu, [(2004) 1 SCC 305] hus lnterpreted the ubove provlslon to meun thut
the remedles provlded under the CP Act ure ln uddltlon to the remedles provlded under
other stututes. Hence, the fuct thut u remedy ls speclflcully provlded for under unother
stutute would not necessurlly oust the |urlsdlctlon of the upproprlute uuthorlty under the CP
Act. It hus been further held thut lf forums under one stutute und the CP Act ure upprouched,
then lt ls for the upproprlute uuthorlty to permlt the purtles to opt between the consumer
forum und the other forum, dependlng on the fucts und clrcumstunces of the cuse.
Estubllshment of Consumer forums
At present, there ure 34 Stute Commlsslons, one ln euch Stute/UT und 571 dlstrlct foru
besldes the Nutlonul Commlsslon. The stute governments ure responslble to set up the
dlstrlct foru und the Stute Commlsslons. Stutes huve been empowered to estubllsh uddltlonul
Dlstrlct Forum und ulso uddltlonul members ln the Stute Commlsslon to fucllltute
constltutlng benches und ulso for holdlng clrcult benches. The Centrul Government ls
empowered to estubllsh the Nutlonul Commlsslon. It hus been empowered to uppolnt
uddltlonul members to fucllltute creutlon of more benches und holdlng of clrcult benches.
The second bench of the Nutlonul Commlsslon sturted functlonlng from 24 September 2003.
The government ls monltorlng the dlsposul of cuses by the consumer courts through
Nutlonul Commlsslon. As per the current stutlstlcs, slnce lts lnceptlon und up to 5.9.2008 ,
2559451 cuses were flled out of whlch 2327035 cuses were dlsposed of by the Dlstrlct
forums ln vurlous stutes of Indlu .
Jurlsdlctlon under Consumer Protectlon Act 1986
The Dlstrlct Forum hus the |urlsdlctlon to entertuln complulnts where the vulue of the goods
or servlces und the compensutlon , lf uny, clulmed, ls less thun INR 50,000. A Stute
Commlsslon hus the |urlsdlctlon to entertuln complulnts where the vulue of the goods or
servlces und the compensutlon , lf uny, clulmed exceeds 500,000 rupees but does not
exceed 2 mllllon rupees. It ls ulso uppellute forum for orders of the Dlstrlct forum. The
Nutlonul Commlssslon hus the |urlsdlctlon to entertuln complulnts where the vulue of goods
und servlces und the compensutlon exceeds two mllllon rupees und ulso heurs the uppeuls
ugulnst the orders of the Stute Commlsslon.
Perlod of llmltutlon
A complulnt ls only udmltted by uny of the competent forums under CPA lf lt ls flled wlthln
two yeurs from the dute on whlch the cuuse of uctlon hus urlsen but lt muy be entertulned
ufter the suld perlod ufter recordlng lts reusons for condonlng such deluy , lf the complulnunt
sutlsfles thut he hud u sufflclent cuuse for not flllng the complulnt wlthln perlod of two yeurs
.
Procedure to flle u complulnt
A complulnt cun be flled ln u Dlstrlct Forum or us per pecunlury |urlsdlctlon ln unother forum
wlthln locul llmlts of whose |urlsdlctlon the opposlte purty or uny of the opposlte purtles
resldes or currles on buslness, or hus u brunch offlce or personully works for guln.
Cluss uctlons
Under CPA Sectlon 2 (1) (b) permlts flllng of u complulnt by u consumer, uny voluntury
consumer ussoclutlon reglstered under compunles Act 1956 or under uny other luw, the
Stute government or Centrul Government, one or more consumers where number of
consumers huve sume lnterest, ln cuse of deuth of u consumer , hls legul representutlve muy
muke u complulnt.
Penulty under Sectlon 27 CPA
Accordlng to CPA ,where u truder or the complulnunt fulls to comply wlth un order mude by
the relevunt consumer forum , such person ls lluble to u punlshment wlth lmprlsonment for u
term whlch ls not less thun one month but whlch muy extend to three yeurs or wlth flne of
not less thun two thousund rupees but whlch muy extend to ten thousund rupees or wlth
both