CONSUMER PROTECTION ACT
❖ What is Consumer?
• Consumer refers to any individuals or households that use goods and services generated within the
economy.
• Consumer is defined as someone who acquires goods or services for direct use or ownership rather
than for resale or use in production and manufacturing.
❖ Why protect the consumers?
Reasons for Enacting the Act -
• Collective Bargaining-
Sellers Lobby; Forming cartels; Artificially keeping prices high.
• Multiple Laws-
India Contract Act; Sale of Goods Act; Essential Commodities Act.
• Hurdles in the Litigation-
Going to regular court, Expensive & Time Consuming.
• Remedy-
Punishment in the form of Punitive & Deterrent measure.
❖ CONSUMER PROTECTION ACT
• The Consumer Protection Act, 1986 was enacted for better protection of the interests of
consumers.
• The provisions of the Act came into force with effect from 15- 4-87.
• Consumer Protection Act imposes strict liability on a manufacturer, in case of supply of defective
goods by him, and a service provider, in case of deficiency in rendering of its services.
❖ HISTORY OF CONSUMER PROTECTION ACT
The act was passed in Lok Sabha on 9th December,1986 and it came into force from 1 July 1987.
Rajya Sabha passed on 10th December 1986 and assented by the President of India on 24th
December 1986 and was published in the Gazette of India on 26th December 1986.
❖ FEATURES OF CONSUMER PROTECTION ACT
• It applies to all goods, services and unfair trade practices unless specifically exempted by the
Central Government.
• It covers all sectors whether private, public, or co-operative.
• It provides for establishment of consumer protection councils at the central, state and district
levels to promote and protect the rights of consumers and a three-tier quasihelical machinery to
deal with consumer grievances and disputes.
❖ OBJECTIVES
• To protect the consumer from abuse.
• To provide a venue for grievance /redress.
• To ensure a better quality of living by improving the quality of consumer products & services.
❖ IMPORTANCE OF CONSUMER PROTECTION ACT
Importance from Consumer’s Point of view:
• Unorganized Consumers-In developing countries like India, consumers are not organized. There are
very few consumer organizations which are working to protect the interest of consumers. Consumer
protection provides power and rights to these originations as these organizations can file a case
behalf of customer.
• Consumer Ignorance-It spreads awareness so that consumer can know about the various redressal
agencies where they can approach to protect their interests.
• Widespread Exploitation of Consumer’s-There is lot of exploitation of consumers as businessmen
use various unfair trade practices to cheat and exploit consumers. Consumer protection provides
safeguard to consumers from such exploitation.
Importance from Businessmen’s Point of View:
• Businessman Uses Society’s Resources- Businessmen use the resources of society. They earned
profit by supplying goods and services to the members of society. They must use these resources for
the benefits of consumers.
• Social Responsibilities-A businessman has social obligations towards customer. It is responsibility
of businessmen to provide quality goods at reasonable price. Consumer protection guides
businessman to provide social responsibilities.
• Government Intervention-If businessman want to avoid intervention of govt. then they should not
involve in unfair trade practices. Businessman should voluntarily involve in the activities which
protect the interest of consumer.
• Consumer is the Purpose of Business-The basic purpose of the business is to create more and more
customers and retain them and businessmen can create more customers only by satisfying the
customers and protecting the interest of consumers.
❖ SCOPE OF CONSUMER PROTECTION ACT
• Requirements to performance, composition, contents, design, construction, finish, packaging of a
consumer product
• Requirements as to kind, class, grade, dimensions, weights, material
• Requirements as to the methods of sampling, tests and codes used to check the quality of the
products
• Requirements as to precautions in storage, transporting and packaging
• Requirements that a consumer product be marked with or accompanied by clear and adequate
safety warnings or instructions, or requirements respecting the form of warning or instructions.
❖ NEEDS OF CONSUMER PROTECTION ACT
The necessity of adopting measures to protect the interest of consumers arises mainly due to the
helpless position of the consumers.
• Social Responsibility-It is the moral responsibility of the business to serve the interest of
consumers. Keeping in line with this principle, it is the duty of producers and traders to provide right
quality and quantity of goods at fair prices to the consumers.
• Increasing Awareness-The consumers are becoming more mature and conscious of their rights
against the malpractices by the business. There are many consumer organizations and associations
who are making efforts to build consumer awareness.
• Consumer Satisfaction-Father of the Nation Mahatma Gandhi had once given a call to
manufactures and traders to “treat your consumers as god”. Consumers’ satisfaction is the key to
success of business. Hence, the businessmen should take every step to serve the interests of
consumers by providing them quality goods and services at reasonable price.
• Survival and Growth of Business-The business must serve consumer interests for their own survival
and growth. On account of globalization and increased competition, any business organization which
indulges in malpractices or fails to provide improved services to their ultimate consumer shall find it
difficult to continue.
• Principle of Trusteeship-Resources are supplied by the society. They are merely the trustees of the
resources and, therefore, they should use such resources effectively for the benefit of the society,
which includes the consumers.
❖ RIGHTS OF CONSUMER
• Right to Safety: To be protected against the marketing of goods or the provision of services that
are hazardous to health and life.
• Right to Information: To be protected against dishonest or misleading advertising or labeling and
the right to be given the facts and information needed to make an informed choice.
• Right to Choose: To choose products at competitive prices with an assurance of satisfactory
quality.
• Right to representation: To express consumer interests in the making and execution of
government policies.
• Right to Seek Redress: To be compensated for misrepresentation, shoddy goods, or unsatisfactory
services.
• Right to Consumer Education: To acquire the knowledge and skills necessary to be an informed
customer
• Right to Basic Needs: which guarantee survival, adequate food, clothing, shelter, health care,
education, and sanitation
• Right to health environment: To live and work in an environment which is neither threatening nor
dangerous and which permits a life of dignity and well-being.
❖ CONSUMER REPONSBILITY
• Consumer must exercise his right-The consumer must select the product according to his
preferences, he must file a complaint if he is not satisfied with the quality of product.
• Cautious Consumer-The consumer should not blindly believe on the words of seller. He must insist
on getting full information on quality,quantity,utility,price etc
• Consumer must be quality-conscious-According to this, consumer himself stops compromising the
quality of product. While purchasing the goods or services consumer must look for quality marks
such as ISI mark,Agmark,ISO,Wool Mark etc.
• Insist on cash memo- To file a complaint the consumer needs the evidence of purchase, and cash
memo is the evidence or proof that consumer has paid for the good or service.
• Filling complaints for the redressal of genuine grievances The consumer must file a complaint
even for a small loss. This awareness among consumers will make the sellers more conscious to
supply quality product.
❖ Three tier consumer grievances machinery under the Consumer Protection Act,1986 and
their Jurisdiction
• District Forum
• State Forum
• National Forum
DISRICT FORUM-It consists of a president and two other members. The president can be a retired or
working judge of District Court. They are appointed by state govt. In 1986,it had jurisdiction to
entertain complaints where the value of goods or services does not exceeds Rs.5,00,000 but now the
limit is raised to Rs.20lakh. The agency sends the goods for testing in lab. If the aggrieved party is not
satisfied by the judgment of district forum then they can file an appeal in State Commission within
30 days by depositing 25000 or 50% of penalty amount whichever is less.
STATE FORUM-It consists of a president and two other members. The president must be a retired or
working judge of high court. They all are appointed by state govt. In 1986, it had a jurisdiction to
entertain complaints when the value of goods or services exceeds Rs.5lakh but now the limit is
raised up to Rs.1crore.The State Commission sends the goods for testing in lab if required. If the
upset party is not satisfied with the judgment, then they can file an appeal in National Commission
within 30 days by depositing Rs.3500 or 50% of penalty amount whichever is less.
NATIONAL FORUM-It consists of a president and four members one of whom shall be women. They
are appointed by Central Govt. In 1986, it had jurisdiction to entertain complaints where the value of
goods or services exceeds Rs.20lakh but now exceeds Rs.1crore. The National Commission sends the
goods if required. If aggrieved party is not satisfied with the judgment, then they can file a complaint
in Supreme Court within 30 days.
