CONSUMER PROTECTION ACT

A] DEFINES

Who is a Consumer
Section 2(7 ) of the Consumer Protection Act says that consumer means any person who—

(i) buys any goods for a consideration which has been paid or promised 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; or

(ii ) hires or avails of any services for a consideration which has been paid or promised 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 and partly promised, or under any system of deferred payment, when such
services are availed of with the approval of the first mentioned person;

Explanation.—for the purposes of the sub-clause (i), “commercial purpose” does not include use by
a consumer of goods bought and used by him exclusively for the purpose of earning his livelihood,
by means of self-employment.

Consumer of Goods - The provision reveals that a person claiming himself as a consumer of goods
should satisfy that—

 THE GOODS ARE BOUGHT FOR CONSIDERATION – There must be a sale transaction between a
seller and a buyer; The sale must be of goods; the buying of goods must be for consideration. The
terms sale, goods, and consideration have not been defined in the Consumer Protection Act. The
meaning of the terms ‘sale’, and ‘goods’ is to be construed according to the Sale of Goods Act, and
the meaning of the term ‘consideration’ is to be construed according to the Indian Contract Act

.  ANY PERSON WHO USE THE GOODS WITH THE APPROVAL OF THE BUYER IS A CONSUMER - When
a person buys goods, they may be used by his family members, relatives and friends. Any person
who is making actual use of the goods may come across the defects in goods. Thus the users of the
goods as consumers although they may not be buyers at the same time. The words “with the
approval of the buyer” in the definition denote that the user of the goods should be a rightful user.

CASE OF DINESH BHAGWAT VS BAJAJ AUTO LTD.

A purchased a scooter which was in B’s possession from the date of purchase. B was using it and
taking it to the seller for repairs and service from time to time. Later on B had a complaint regarding
the scooter. He sued the seller. The seller pleaded that since B did not buy the scooter, he was not a
consumer under the Act. The Delhi State Commission held that B, the complainant was using it with
the approval of A, the buyer, and therefore he was consumer under the Act.

Consumer of services - A person is a consumer of services if he satisfy the following criteria: 

SERVICES ARE HIRED OR AVAILED OF - The term ‘hired’ has not been defined under the Act. Its
Dictionary meaning is - to procure the use of services at a price. Thus the term ‘hire’ has also been
used in the sense of ‘avail’ or ‘use’. Accordingly it may be understood that consumer means any
person who avails or uses any service. Example: ‘A’ goes to a doctor to get himself treated for a
fracture. Here ‘A’ is hiring the services of the doctor. Thus he is a consumer.

CASE OF Smt. Laxmiben Laxmichand Shah vs. Smt. Sakerben Kanji Chandan

A landlord neglected and refused to provide the agreed amenities to his tenant. He filed a
complaint against the landlord under the Consumer Protection Act. The National Commission
dismissed the complaint saying that it was a case of lease of immovable property and not of hiring
services of the landlord.

ECOMMERCE READ SECTION 2(16) INTERNET

CONSUMER DISPUTES 2[8]

As per sec. 2(8) of the Consumer Protection Act, 2019, ‘consumer dispute’ means a dispute where
the person against whom a complaint has been made, denies or disputes the allegations contained
in the complaint. A reading of sec. 2(6) of the Consumer Protection Act, 2019 which define
‘complaint’ reveals that consumer disputes may arise due to the following reasons:
1. (a) unfair contact, (b) unfair trade practice, or (c) restrictive trade practice on the
part of the trader;
2. goods being defective;
3. services being deficient;
4. excessive price being charged;
5. failure to inform about risk in case of hazardous goods, etc.
6. providing hazardous services; and
7. a claim of product liability action in favour of the consumer.
The unfair contracts and product liability are the two new grounds added under the
Consumer Protection Act, 2019.

ADVERTISEMENT 2[1]

PRODUCT 2[33]

UNFAIR TRADE PRACTICE FROM BARE ACT

RESTRICTIVE TRADE PRATICE

Section 2(41) of the Consumer Protection Act, 2019 provides, that “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.

Second part of sec. 2(41) gives two examples of restrictive trade practice:

1. 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;
2. 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 for buying, hiring or availing of other goods or services.

The first example is where the consumer has to pay –

1. the price of goods as on the date of delivery, or

2. remuneration for service as on the date on which the service is provided, and because of the delay
on the part of the trader, there is a rise in the price or remuneration. The second example is called
‘bundling’ of goods or services. That means unless some goods are purchased, the buyer cannot buy
some other goods. Similarly, unless some service is not taken the consumer cannot get some other
service. Bundling imposes upon the consumer some goods or service, which he does not need, or in
which he is not interested.

RIGHTS OF CONSUMER SEC 2[9]

Right to Safety : [9i ] It is the right of the consumers to be protected against marketing goods and
services which are hazardous to health or life. For example, defective vehicles could lead to serious
accidents. The same is true of electrical appliances with substandard material. Only recently, there
were mass protests and boycott of soft drinks due to presence of hazardous pesticides beyond
permissible limits. Thus, right to safety is an important right available to the consumer which ensures
that the manufacturers shall not produce and sell sub-standard and dangerous products

Right to be Informed [9ii]: The right to be informed is an important component of consumer

protection. The consumer must be provided with adequate and accurate information about quality,
quantity, purity, standard and the price of the goods and services. Now-a-days the manufacturers
provide detailed information about the contents of the product, its quantity, date of manufacturing,
date of expiry, maximum retail price, precautions to be taken, etc. on the label and package of the
product. Such information helps the consumers in their buying decision and use of the product.

Right to Choose : The right to choose provides that the consumer must be assured, whenever
possible, access to a variety of goods and services at competitive prices. If the market has enough
varieties of products at highly competitive prices, the buyers have an opportunity of wide selection.
However, incase of monopolies like railways, postal service and electricity supply etc. it implies a
right to be assured of satisfactory quality of service at a fair price.

Right to be Heard : The rights to safety, information and choice will be frivolous without the right to
be heard. This right has three interpretations. Broadly speaking, this right means that consumers
have a right to be consulted by Government and public bodies when decisions and policies are made
affecting consumer interests. Also, consumers have a right to be heard by manufactures, dealers and
advertisers about their opinion on production, marketing decisions and any grievances of the
consumers. Now-a-days, most of the top manufacturers and firms have set up consumer service cells
to attend to consumers’ complaints and take appropriate steps for their redressal. Thirdly,
consumers have the right to be heard in legal proceedings in law courts dealing with consumer
complaints.

Right to Seek Redressal : The consumers have been given the right of redressal of their grievances
relating to the performance, grade, quality etc. of the goods and services. If required, the product
must be repaired / replaced by the seller/ manufacturer. The Consumer Protection Act has duly
provides for a fair settlement of genuine grievances of the consumers. It has also set up a proper
mechanism for their redressal at district, state and national levels
Right to Consumer education It means the right to acquire the knowledge and skill to be
an informed consumer throughout life. Ignorance of consumers, particularly of rural
consumers, is mainly responsible for their exploitation.

DUTIES /RESPONSIBILITY OF A CONSUMER

RESPONSIBILITY / DUTY TO BE AWARE- Before purchasing goods and services, consumers have
a duty to research their safety and quality. Every consumer has a duty to obtain and hold
onto the proof of purchase and other paperwork associated with the purchase of durable
goods. To put a stop to adulteration and corrupt practices of the manufacturers and traders, it is the
duty of every consumer to be conscious of the quality of product they buy. They should look for the
standard quality certification marks like ISI, Agmark, FPO, Woolmark, Eco-mark, Hallmark etc. while
making the purchases

Proof of Transactions: The second responsibility of every consumer is that the proof of purchase and
documents relating to purchase of durable goods should be invariably obtained and preserved. For
example, it is important to get a cash memo on purchase of goods You should remember that in case
you have to make any complaint about defects in goods, the proof of purchase will enable you to
establish your claim for repair or replacement of the goods. Similarly, durable consumer goods like
TV, refrigerator, etc. carry warranty /guarantee cards issued by the dealers. The cards entitle you to
get the service for repairs and replacement of parts, free of cost during a certain period after
purchase.

Responsibility to complain It is the duty of the customer to express and file a serious and
reasonable complaint about their dissatisfaction with products or services. Consumers are
also reminded to keep in mind that they shouldn’t make claims that are unreasonably huge
when they file complaints and ask for reimbursement for loss or harm. Consumers are
regularly compelled to exercise their legal right to legal recourse. Consumers have
occasionally asked for big quantities of money for no apparent reason. This is regarded as
being careless behaviour that ought to be avoided.

Responsibility to be an ethical consumer Consumers should act honestly and refrain

from using any deceptive tactics. Some customers misuse the product, especially when it is
still under warranty, because they think they will be able to get it fixed at that time. They are
not treated fairly in this predicament. They should constantly use the products properly.

In addition to the duties mentioned above, customers also have a few more obligations.
They are required to abide by the conditions of the contracts made with producers, traders,
and service providers. They should pay on promptly for items made with credit. They must
not tamper with equipment used for services, such as water and electricity meters, bus and
train seats, etc. They should remember that only if they are prepared to take responsibility
can they exercise their rights.

NEED AND SALIENT FEATURES OF CPA

The Consumer Protection Act of 2019 was enacted to address evolving consumer needs,
especially in the digital age, and to enhance consumer protection in India. It replaced the
Consumer Protection Act of 1986, which had become outdated and needed to be updated
to address modern issues like e-commerce, online transactions, and emerging unfair trade
practices. The new Act aimed to strengthen consumer rights, provide effective dispute
redressal mechanisms, and regulate online transactions.

The consumer protection act of 2019 was in acted by the Indian legislature to deal with the
matters relating to violation of consumers, rights unfair trade practises, misleading
advertisements and all those circumstances which are prejudicial to the consumers
right .Intention of the Parliament behind enacting this act was to include provisions for E
consumers due to development of technology, buying and selling of goods and services
online have considerably increased during the last few years.

This act seeks to provide better protection of rights and interest of the consumers by
establishing consumer protection councils to settle disputes In case of any dispute arises
and to provide adequate compensation to the consumers In the case, their rights have been
infringed. It further provide speedy and effective disposal of consume a complaint through
alternate dispute resolution mechanisms. The act also promotes consumers education in
order to educate consumers about their rights responsibilities and also addressing their
grievances .

SALIENT FEATURES

It aims at providing overall (holistic) protection to the consumers, eve better than the
protection provided by the 1986 Act.

The Act is applicable to all goods and services, unless explicitly stated by the Central
Government. The Act excludes free services and contracts of personal services.

The 2019 Act expressly includes e-Commerce transactions and makes special provisions in
respect of the same.

. The Act covers both public and private sector suppliers of goods and services, including the
government agencies.
The 2019 Act has introduced the concept of product liability and brings within its scope, the
product manufacturer, product service provider and product seller, for any claim for
compensation.

. The Act provides redressal of consumer grievances in a simple and inexpensive way. The
Act provides for a simple procedure for filing grievances. The complaint can be made in a
simple form, where the name and address of aggrieved party and opposing party are duly
mentioned. The complaint can be written in form of a letter to the Redressal Forum. It is not
obligatory for the parties to engage advocate. The Act allows the complainant or authorized
agent to appear before the Redressal Forum. The 2019 Act provides for e-filing of
complaints,

The most important aspect of the Act is that it has a set time frame for settlement. 10.
Consumers having common interests and grievances can collectively file complaint, under
‘class action’ provided under the Act.

The 2019 Act provides for mediation as an Alternate Dispute Resolution mechanism, making
the process of dispute adjudication simpler and quicker. This will help with the speedier
resolution of disputes and reduce pressure on consumer courts, who already have numerous
cases pending before them.

The Act provides for formation of Consumer Protection Councils to promote the consumer
protection and consumer rights. It is important to note that these councils do not have any
legal authority under the Act and merely facilitate addressable of consumer grievances.

. Therefore, the new Act proposes the establishment of a regulatory authority known as the
Central Consumer Protection Authority (CCPA), with wide powers of enforcement. The
CCPA will have an investigation wing, headed by a DirectorGeneral, which may conduct
inquiry or investigation into consumer law violations.

. The Act protects consumer against defective and hazardous goods, deficient and
inappropriate services, and restrictive trade practices and unfair trade practices like hoarding,
black marketing, insider trading, monopolies etc. The Act covers unfair trade and restrictive
trade practices.

7. The 2019 Act also makes provisions against misleading advertisements. It also impose
liabilities on the persons who endorse misleading advertisements, such as brand ambassadors.
The new Act introduces penal liabilities.

. The Act is considered as a progressive instance of social welfare legislation. The Act has
fortified consumer movement in India. The Act is one of its kinds, as it pertains to market and
seeks redressal of complaints arising out the market interactions.

. The Act is customer-oriented and safeguards the interests of the consumers against unjust
and exploitative business practices like selling of defective goods, rendering poor services
etc.

ONLINE DISPUTE RESOLUTION

ODR is a generic term for technology-supported methods of resolving disputes. ODR differs from the
traditional legal process because it enables parties to resolve conflicts virtually using structured,
technology-supported systems. Online Dispute Resolution (ODR) of consumer disputes refers to the
use of technology, primarily the internet, to facilitate the resolution of disagreements between
consumers and businesses. It's a digital alternative to traditional court proceedings or in-person
dispute resolution methods.

The rise of e-commerce and online transactions has led to an increase in consumer disputes.
Traditional court systems can be slow, expensive, and inconvenient, especially for lower-value or
cross-border complaints. ODR offers a more accessible and efficient solution. Many e-commerce
platforms (like Amazon and Flipkart) have their own internal ODR systems to address customer
complaints

BENEFITS

1. Cost-Effectiveness

 ODR does away with the necessity of physical appearances, cutting down on legal costs,
travel expenses, and court fees. It is especially useful for small companies, new ventures,
and low-income groups who find conventional litigation too costly.

 It is especially useful for small companies, new ventures, and low-income groups who find
conventional litigation too costly.

2. Time-Saving

 Conventional court cases take months or even years, whereas ODR drastically shortens
resolution time.

 E-commerce disputes, consumer grievances, and financial disputes can be settled in days or
weeks via ODR.

3. Increased Accessibility & Convenience

 Parties can take part from any location globally, making ODR well-suited for cross-border
conflicts.
  It ensures 24/7 access and enables users to participate at their convenience.

4. Confidentiality & Data Security

 While public court records are not confidential, ODR maintains privacy in dispute resolution.

 Business data, together with personal information, find protection from unauthorised access
through secure websites.

5. Reduced Court Workload

 By addressing low-value and high-volume cases like consumer grievances,

telecommunication grievances, and minor financial disputes, ODR lightens the load on
conventional judicial mechanisms.

LIMITATIONS

1. Digital Divide: Digital access through the internet remains a challenge, mainly in rural areas
and nations that are still developing.

2. Legal Recognition & Enforcement: Jurisdictions across the board need clarity about the rules
governing the enforcement of ODR awards. Several jurisdictions are uncertain about
accepting ODR awards and AI-generated judgments with electronic arbitration contracts.

3. Lack of Trust & Awareness: Numerous individuals still cling to conventional court
proceedings, fearing that ODR is not transparent. Better education about the legitimacy and
efficiency of ODR is needed for businesses and consumers.

4. Security & Privacy Concerns: Hacking, data breaches, and identity theft threaten online legal
proceedings. Platforms must use strong encryption, multi-factor authentication, and data
protection law compliance.

The adoption of ODR in India is quickly advancing because of government backing, legal-tech
startups, and digital platforms. Two main sectors, consumer protection and consumer protection,
are adopting ODR as an efficient method to handle disputes in the banking and e-commerce
industries.

NITI Aayog’ s ODR Initiative – The government of India has strongly supported ODR as a means of
enhancing access to justice. E-commerce & Banking Sectors – Online platforms such as Amazon,
Flipkart, and large banks have effectively embraced ODR to resolve disputes.

PRODUCT LIABILITY
DEFINE IT –

Liability of a Product Manufacturer

The 2019 Act, under Section 2(36), contains a wide definition of ‘product manufacturer’, to
include every party connected with the sale process within the scope of the definition.
Under the 2019 Act, a ‘product manufacturer’ has been defined to mean a person
who: (a) makes any product or parts thereof; or (b) assembles parts thereof made by
others; or (c) puts or causes to be put his own mark on any product made by any other
person; or (d) makes a product and sells, distributes, leases, installs, prepares, packages,
labels, markets, repairs, maintains such product or is otherwise involved in placing such
product for commercial purpose; or (e) designs, produces, fabricates, constructs or re-
manufactures any product before its sale; or (f) being a product seller of a product, is also a
manufacturer of such product.
Section 84 of the Act enumerates the situations where a product manufacturer shall be
liable in a claim for compensation under a product liability action for a harm caused by a
defective product manufactured by the product manufacturer. The situations are as under:
(a) The product contains a manufacturing defect;
(b) The product is defective in design;
(c) The product does not conform to the manufacturing specifications;
(d) A claim for compensation against a product manufacturer would also lie when the
product does not conform to an express warranty. It is pertinent to note that under the
2019 Act, if the product does not conform to an express warranty, a product liability action
would lie against the product manufacturer regardless of the product manufacturer not
being negligent or fraudulent in making the express warranty of the product;
(e) Similarly, a product liability action will lie against the manufacturer if the manufactured
product fails to contain adequate instructions on correct usage to prevent any harm or any
warning regarding improper or incorrect usage.
II. Liability of a Product Service Provider
A product service provider under the 2019 Act is defined to mean a person who provides a
service in respect of any product.[5] The definition of a product service provider has been
specifically added to the 2019 Act so as to cover services such as maintenance or repair
where the service and the product are inherently related, and the service has a direct
bearing upon the performance of the product.
Section 85 of the Act enumerates the instances under which a product service provider shall
be liable in a product liability action for a harm caused by a defective product serviced by
the product service provider. The instances are as under:
(a) If the service provided by it was faulty, imperfect, deficient or inadequate in quality,
nature or manner of performance. The same must be judged based on the requirement by
or under any law for the time being in force, or pursuant to any contract.
(b) A product service provider shall also be liable if there was an act of omission or
commission or negligence or conscious withholding of any information, which caused the
harm.
(c) Liability will also be fastened on the product service provider if it does not issue
adequate instructions or warnings to prevent any harm.
(d) Similarly, a product service provider shall be liable in a product liability action if the
service did not conform to express warranty or the terms and conditions of the
contract.III. Liability of a Product Seller
A product seller under the 2019 Act is defined to mean any person who, in the course of
business, imports, sells, distributes, leases, installs, prepares, packages, labels, markets,
repairs, maintains, or otherwise is involved in placing such product for commercial purpose
and includes (a) a manufacturer who is also a product seller; or (b) a service provider.
) if the product seller had exercised substantial control over the designing, testing,
manufacturing, packaging or labelling of a product that caused harm.
(b) if product seller alters or modifies the product and such alteration or modification
becomes the substantial factor in causing the harm.
(c) if product seller has made an express warranty of a product, independent of any express
warranty made by a manufacturer and such product failed to conform to the express
warranty made by the product seller which caused the harm.
(d) if a product has been sold by the product seller and the identity of the product
manufacturer of such product is not known, or if known, the service of notice or process or
warrant cannot be effected on the product manufacturer or the product manufacturer is
not subject to the law, which is in force in India or the order, if any, passed or to be passed
cannot be enforced against the product manufacturer.
(e) if the product seller fails to exercise reasonable care in assembling, inspecting or
maintaining such product or if it does not pass on the warnings or instructions of the
product manufacturer regarding the dangers involved or proper usage of the product while
selling such product and such failure was the proximate cause of the harm.