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V Until the enactment of Consumer Protection Act, 1986, there was no specific
legislation to compensate the consumer for the wrongs done to them.

V The manufacturers and traders reigned supreme for want of effective consumer
protection legislation.

V A need was felt to educate the consumers about their rights and to establish
consumer redressal forums for providing inexpensive and summary relief.

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V Prior to the CPA, the consumer had to claim remedy under tort of negligence.

V The essentials of negligence are as follows:

V That the defendant owed duty of care;

V The defendant made a breach of that duty;
V The plaintiff suffered damage as a consequence thereof.

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, (1932) AC 562

V A purchased a bottle of ginger beer from a retailer for the appellant, a lady friend.
Some of the contents were poured in a tumbler and she consumed the same. When
the remaining contents of the bottle were poured into her tumble., the
decomposed body of a snail floated out with her ginger beer. The appellant alleged
that she seriously suffered in her health in consequence of having drunk a part of
the contaminated contents.The bottle was dark opaque glass and closed with a
metal cap, so that the contents could not be ascertained by inspection. She brought
an action against the manufacturer for damage.

V One of the defences pleaded by the defendants was that he did not owe any duty of
care towards the plaintiff.

V The House of Lords held that the manufacturer owed her a duty to take care that
the bottle did not contain any noxious matter, and that he would be liable on the
breach of the duty.

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V Another defence pleaded by the defendant was that the plaintiff was a stranger to
the contract and her action was not maintainable i.e. privity of contract fallacy.

V What does it mean?

V If A undertook some contractual obligation towards B and the breach of such

obligation by A resulted in damage to C , then C could not sue A even in tort
because there was no contractual relation between A and C.

V The House of Lords rejected the application of this fallacy and allowed the
consumer of drink an action in tort against the manufacturer, between whom there
was no contract.

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V According to Section 4 of the Sale of Goods Act, 1930, a contract of sale means ´a
contract whereby the seller transfers or agrees to transfer the property in the
goods to the buyer for a price.µ

V Section 16 of the Sale of Goods Act, 1930, cautions ´the buyer be awareµ.

V It declares that there is no implied condition or warranty as to quality or fitness for

any particular purpose which the buyer may have in his contemplation.

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V  
  

  

 
If goods turn out be defective or do not suit his purpose, he has no
one to blame but himself. The seller has no obligation to disclose the defects in the
goods of which he may be cognizant.

V The matter would be different if there has been fraud or misrepresentation.

V

  (1890) 24 QBD 650

A tailor bought by sample some cloth for making liveries. This fact, however, was not
brought to the notice of seller. Held, the seller is not liable for damages. Liveries
could not be made out of the cloth purchased.

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V 
   

V . Fitness for buyer·s purpose [Sec. 16(1)]

V . Condition as to merchantability [Sec. 16(2)]

V u. Good sold by sample as well as description [Sec. 15(1)]

V D. Goods sold by sample [Sec.17]

V a. Condition as to quality or fitness annexed by usage or custom of trade

V @. Where consent of buyer has been obtained by fraud or where seller knowingly
conceals defects not discoverable on reasonable examination

V . Misrepresentation by seller

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V The Consumer Protection Act, 1986 aims at helping a consumer in getting quicker
redressal of his complaints through specially established fora, instead of filing a suit
in a civil court.

V No Court fee is required to be paid for filing a complaint.

V One need not engage a lawyer for the purpose, and

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§  
  

V The Consumer Protection Act, 1986 is intended to provide for better protection of
the interests of consumers.

V The following are the main objects of the Act.

V Protection of interests of consumer;

V Protection of rights of consumer;
V -stablishment of Consumer Protection Councils;
V -stablishment of Consumer Dispute Redressal Agencies.

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V The CPA is designed to protect the common man from wrongs for which the
remedy under the ordinary law had become illusory.

V In r 
G 
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"#$ , (1994) 1 SCC 243, the
Supreme Court held that:

´the importance of the Act lies in promoting the welfare of the society in as much
as it attempts to remove the helplessness of a consumer which he faces against
powerful business described as a network of rackets or a society in which
producers have secured power to rob the rest, and the might of public bodies
which are degenerating into storehouses of inaction.µ

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V 

 
%
  : A consumer has a right to be protected
against the marketing of goods and services which are hazardous to life and
property.

V   


: A consumer must be informed about the quality, quantity,
potency, purity, standard and price of goods or services so as to protect him against
unfair trade practices like false description, exaggerated claims etc.

V    variety of goods or services at competitive prices.

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V   
: A consumer has the right to be heard and to be assured
that his interests will receive due consideration at appropriate redressal forums.

V    

: A consumer has the right to seek redressal against
unfair trade practices or unscrupulous exploitation of consumers.

V   
 
 
: A consumer has a right to education about
the remedies available under the Act. The responsibility of creating awareness
amongst the consumers has been assigned to the Central Consumer Protection
Council.

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V To achieve the objects enshrined in the Act, provision has been made to establish
Consumer Protection Councils at the Central and State levels.

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V The Act provides for the establishment of a three tier, quasi-judicial machinery at
district, state and central levels to deal with consumer disputes and grievances.

V These bodies are not required to observe the basic rules of natural justice and are
not bound by any rules involving complicated or elaborate procedures.

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V !
 
Sec. 2 (1) (d)

V The Consumer Protection Act provides for the protection of interests of

consumers.

V According to Sec. 2 (d) of the Act, a ´Consumerµ has been defined in two parts as
follows:

V   any person who buys goods for consideration and

any person who uses goods with the approval of the purchaser

V   any person who hires any service for a consideration and

 any beneficiary of such services provided the service is availed with the
approval of the person who had hired the service for a consideration.

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V The first part of Section 2 (1)(d) deals with goods and the second with services.

V Moreover, the consideration for either the goods or service may be either paid, or
promised, or partly paid or promised under a system of deferred payments.

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:

The consumer must be a person who has purchased the goods, or hired or availed
the service for a consideration.The consideration may be in terms of money or
exchange of goods or service.

V G
 
:

The term ¶consumer· shall include those who use the goods or avail the services as
a beneficiary with the approval of a purchaser or hirer for a consideration.

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V A person purchasing goods or hiring services for resale or for a commercial

purpose shall be outside the purview of definition of a consumer.

V Section 2 (1)(d) has clarified the term commercial purpose does not include the use
by a consumer of goods for consumption or private use, or exclusively for the
purpose of earning his livelihood by means of self employment.

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V Whether the purchase is for  

 is a question of fact to be
decided on the facts and circumstances of each case.

V In !

&! 
§r', a car purchased for director·s use is not
deemed to be for the private profit making activity of the company.The complainant
was a consumer and he could bring an action for the defective car under the
Consumer Protection Act.
V
V In 

  
r# , it has been held that if a computer
purchased for personal use is used by a contractor in his office, the computer is
used for a commercial purpose and if the computer does not work properly, the
complainant cannot be treated as a consumer.

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V The Consumer Protection Act has been amended in 1993.

V According to the amendment, ´Commercial Purposeµ does not include use by a

consumer of goods bought and used by him exclusively for the purpose of earning
the livelihood by means of self employment.

V Thus a person purchasing a taxi or a sewing machine for earning livelihood by

means of self-employment will be considered to be a consumer.

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r (1992) 1 CPC 140

The purchase of a photocopier by a lady for earning her livelihood has been held to
be not for a commercial purpose.

V èrr#


 

, 1993 CPJ 174

The purchase of a computer by a large commercial organisation has been held to be

for a commercial purpose.

V
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r (1993)

-ven where goods are purchased for commercial purpose, if there is a warranty for
its maintenance, the purchaser will be regarded as consumer.

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V There must be a contract between a consumer and a business seller.

V But under the comprehensive definition of consumer, even a member of the family
may be treated as a consumer under the Act, in the case of an action by a member
of the family for any deficiency in service.

V In such a case, the concerned trade cannot claim the absence of privity of contract.

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" è è
& ! 
#! ,
(1998)

If due to the fault of a Nursing Home, brain damage is caused to a child, nursing
home shall be liable for that under the CPA. Both parents and the child would be
entitled to compensation because parents are consumers as they hire the services
and the child is a consumer as he is beneficiary of the service.

V 


# 

r (1993)

The purchase of a tractor for agriculture purpose is not a commercial purpose.

V "
( "è

&, (1992)
During warranty period, the manufacturer or dealer has to render free service
though goods may have been purchased for a commercial purpose.

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V It means a written allegation by a complainant that:

V . an ´unfair trade practiceµ or a ´restrictive trade practiceµ has been provided by

any trade or service provider;

V . the goods bought by him or agreed to be bought by him, suffer form one or
more ¶defects·;

V . the service hired or availed or agreed to be hired or availed by him suffer from
´deficiencyµ in any respect;

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V . A trader or the service provider has charged for the goods or for the service
mentioned in the complaint, a ´price in excessµ 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 established by him or under any law for the time being
in force;

. agreed between the parties;

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V . goods which will be hazardous to life and safety when used, are being offered for
sale to the public;

. in contravention of nay 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 that the goods so offered are
unsafe to the public;

V . services which are hazardous or are 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.

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The complaint to be accompanied by court fee as may be prescribed. It may be

admitted or rejected within 21 days.

V 



  
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On admission of a complaint the District Forum shall refer a copy of the complaint
to the opposite party within 21 days directing him to give version of the case within
30 days. Such period may be extended by 15 days by the District Forum.

The District Forum shall have the same powers as are vested in a civil court.

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V According to Sec. 2(1)(r), the term ¶unfair trade practice· shall have the same
meaning as in Section 36A of the Monopolies and Restrictive Trade Practices Act,
1969.

V It is said to occur when a trade adopts any unfair method or deceptive practice of
the purpose of promoting the sale, supply or use of any goods or for the provision
of nay services.

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V The following 
 
 have been declared as




.

V .



"
!

 [Sec. 2(1) (r) (1)]

This includes false representation as to standards of goods, standards of services,

making of false representation as to sponsorship, approval, misleading
representation concerning the need for usefulness of any goods or services,
misrepresentation as to price etc.

V !

 
.

+

 

(1995) 1 CPJ 141
Pondicherry

The fact about disaffiliation of the educational institution was not conveyed to the
candidates seeking admission to a programme. It was held to be unfair trade
practice.

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 [Sec. 2(1) (r) (2)]

V  

 
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, (1987)

Giving off season discount on fans on the basis of their future prices and not the
present prices, has been held to be an unfair trade practices.

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% [Sec. 2(1) (r) (3)]

V / 

 [Sec. 2(1) (r) (3A)]

V 
   

 




 [Sec.
2(1) (r) (4)]

V è 

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   [Sec. 2(1) (r) (5)]

V "



 
   [Sec. 2(1) (r) (6)]

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V Defect means ´any fault, imperfection or shortcoming in the quality, quantity,
potency or standard 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
the trader in any manner whatsoever in relation to any goods.µ

V Fault, imperfection or shortcoming as claimed by the trader is to be determined

with reference to the warranties or guarantees expressly given by the trader.

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V . If the Limca bottles purchased contain contaminated matter and the guests
consuming the same vomiting. The buyer can be awarded refund of price and also
compensation for the same.

V . A person purchased one Prestige Pressure Cooker.The cooker burst causing

injuries to the complainant·s wife. The opposite party was directed to pay
compensation to the buyer of the pressure cooker.

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V 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.µ

V  



V If there is considerable delay in the running of a train without any justifiable reason,
it amounts to deficiency in service for which railways can be made liable under
CPA.

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V In (

 
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, (1997), a passenger trying to cross from
one compartment to another fell down and dies as the passage was not properly
guarded with grills, it amounted to deficiency in services for which the Railways
were held liable.

V Similarly, if reserved accommodation is not made available to a passenger, this also

amounts to deficiency in service.

V When a car parked in a parking area is stolen, it amounts to deficiency in service,

and the person in-charge of the parking lot can be made liable for such loss.

V If Airlines cancel a flight without notice to the passengers, or the flight leaves before
time, or an air passenger is charged excess fare, or a passenger suffers due to the
negligence of Airline, he can sue for deficiency in service.

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V It was held by the Supreme Court that medical services are covered under the
purview of the CPA. A patient aggrieved by the medical treatment can file a
complaint as a consumer. However, if the services are rendered free of charge or
under a contract of personal service are not covered under the CPA.

V Insurance Service is also covered under the CPA. A beneficiary of group insurance is
a consumer. An insurance company is liable for the proximate consequences of the
risk covered under an insurance policy.

V Banking Services are also covered under the CPA. A bank can be held liable for
wrongful dishonour of a cheque, or for making payment of a cheque, whose
payment has been stopped.

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V The following Fora or redressal agencies have been set up under the Consumer
Protection Act:

V 
 
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V It consists of the President, who is or has been or is qualified to be a District Judge,

and two other members, one of whom shall be a woman. (Sec. 10)

V It has jurisdiction to entertain complaints, where the value of the goods or services
and the compensation, if any, claimed does not exceed Rs. 20 Lakhs. (Section 11)

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(Sec. 11)

V The complaint shall be instituted in a District Forum within the local limits of
whose jurisdiction:

V . the opposite party or opposite parties actually and voluntarily reside or carry on
business or has a branch office, or works for gain; or

V . the cause of action, wholly or in part, arises.

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V If the District Forum is satisfied that the goods complained against suffer from any
defect or any of the allegateries about the services are proved, it shall order the
opposite party:

V To remove the defects in the goods, or replace the goods, or refund the price, or
pay compensation, or

V To remove the defects in the goods, deficiency in services in question, or award

compensation, and

V May provide for adequate costs to the parties.

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V 
  

 -D

V -very proceeding shall be conducted by the President and at least one member of
forum.

V -very order made by the District Forums shall be signed by the President and the
member or members who conduct the proceedings.

V ! -a

V Any person aggrieved by the order of the District Forum may prefer an appeal
against such order to the State Commission within a period of 30 days from the
date of the order. The period of limitation of 30 days begins from the date the order
of the District Forum is communicatedw

V 50% of the decreed amount or Rs. 25, 000/- whichever is less, has to be deposited
before making an appeal.

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V  

V -ach State Commission shall consist of its President, who is or has been a judge of
the High Court and at least two other members, one of such members shall be a
woman. (Sec. 16)

V The State Commission shall have the power to entertain complaints where the
value of the goods or services and compensation, if any claimed exceeds Rs. 20
Lakhs, but does not exceed Rs. one Crore. (Sec. 17)

V It can hear appeals against the orders of any District Forum within the State.

V It can also call for the records, and pass appropriate orders in any consumer
dispute, which is pending before or has been decided by any District Forum within
the State.

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V Appeals against the order of the State Commission can be preferred to the
National Commission, where the value of the goods or services and compensation,
if any, claimed exceeds Rs. 20 lacs but does not exceed Rs. one Crore.

V 50% of the decreed amount or Rs. 35, 000/- whichever is less have to be deposited
before making an appeal.

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V The National Commission shall consist of its President, who is or has been a judge
of the Supreme Court, and at least four other members, one of whom shall be a
woman. (Sec. 20)

V It can entertain complaints where the value of the goods, or services, and
compensation, if any, claimed exceed Rs. One Crore. (Sec. 21)

V It can also entertain appeals against the orders of any State Commission. (Sec.21)

V It can also call for records and pass appropriate orders in any consumer dispute
which is pending or has been decided by any State Commission. (Sec. 21)

V The powers and procedure applicable to the National Commission is to be the

same as of the District Forum under sections 13 and 14 of the Act. (Sec. 22)

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V An appeal against the orders of the National Commission shall lie to the Supreme
Court.The appellant is to deposit 50% of the decreed amount or Rs. 50,000
whichever is lower, before making an appeal.

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V Where no appeal has been filed against the order of the District Forum, State
Commission or National Commission, the same shall be final.

V r

 

 
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V The District Forum, the State Commission or the National Commission shall not
admit a complaint unless it is filed within two years from the date on which the
cause of action has arisen.

V 


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-a

V -very order made by the District Forum, the State Commission or the National
Commission may be enforced by the District Forum, or the State Commission or
the National Commission, as the case may be, in the same manner as a 




made by a civil court.

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V Where the complaint is found to be frivolous or vexatious, it shall, for reasons to be

recorded in writing, be dismissed. In such a case, there can also be an order that the
complainant shall pay costs upto Rs. 10,000/- to the opposite party.

V 
 -

V -very person who fails to comply with the order of the District Forum, the State
Commission or the National Commission, as the case may be, shall be punishable
with imprisonment for a minimum duration of one month and maximum of 3 years
or with the minimum fine of Rs. 2,000/- and maximum of Rs. 1,000/- or with both
imprisonment and fine.

V Appeal is now permitted after the Amendment Act, 2002 against the order imposing
penalty under Section 27. (Sec. 27-A)

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Thank You!

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