G.F.G.C.

BANGARU THIRUPATHI BUSINESS REGULATION

Consumer Protection Act 1986

Definitions of the terms – Consumer, Consumer Dispute, Defect, Deficiency; Unfair
Trade Practices and Services – Definition & types; Rights of Consumer under the Act,
Consumer Redressal Agencies – District Forum, State Commission and National
Commission.
INTRODUCTION
• Consumer Protection Act 1986 was enacted for superior protection of the interest of
consumers. The provision of the Act came into force from 15-04-1987. Consumer
Protection Act forced strict liability on a manufacturer in case of the supply of faulty
goods by him and strict liability on a service provider in case of shortage in rendering his
services.
• To safeguard the interests and rights of consumers, quasi-judicial machinery is sought to
be set up at the district, state and central levels. This Act applies to the whole of India
except the state of Jammu and Kashmir. This Act was replaced by the ‘Consumer
Protection Act 2019’ which came into force on 24th July 2020.
What is the Consumer?
• Consumer refers to persons or households that use goods and services generated within
the economy. The consumer is defined as someone who obtains goods or services for
direct use or possession rather than for exchange, resale or use in production and
manufacturing.
• For example:
• When your mother buys apples for you and consumes them, your mother and yourself are
treated as consumers.
Consumer Dispute
• “Consumer dispute" means a dispute where the person against whom a complaint has
been made, denies or disputes the allegations contained in the complaint.
• Types of Consumer Complaints
1. E-commerce complaints. ...
2. Complaints about misleading advertisements. ...
3. Complaints about unfair trade practices. ...
4. Complaints about restrictive trade practices. ...
5. Complaints about defective goods. ...
6. Complaints about spurious goods. ...
7. Charging above the MRP (Maximum Retail Price) ...
8. Complaints about food.

Defect
• The term ‘defect’ is defined under Section 2 (10) of Consumer Protection Act, 2019 as
“any fault, imperfection or shortcoming in the quality, quantity, potency, purity or
standard which is required to be maintained by or under and 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 or products and the expression ‘defective’
shall be construed accordingly.”
Deficiency

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G.F.G.C. BANGARU THIRUPATHI BUSINESS REGULATION

• Section 2 (11) of Consumer Protection Act, 2019 defines Deficiency of Service as “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 and includes (a) any act of negligence or omission or
commission by such person to the consumer and (b) deliberate withholding of relevant
information by such person to the consumer.”
Unfair Trade Practices
• Indulging in illegal or illicit means to promote a product or service by misleading the
public into making the product appear of a good quality when it is of a low quality is
unfair trade practices. For instance, including a fake ingredient, fake advertisement, not
complying with the health standard of the consumers.
Concept of Consumer Protection
• Consumer protection means protecting the rights and interests of consumers. In other
words, it refers to the measures taken to protect consumers from unprincipled and
unethical misconduct by the business and provide them quick redressal of their
grievances.
Features of Consumer Protection Act, 1986
1. It applies to all goods, services and inequitable trade practices unless specified and
exempted by the Central Government
2. It covers all sectors, private, public or co-operative
3. It provides the establishment or setting up of consumer protection councils at the district,
state and central levels to encourage and protect the rights of consumers and three-tier
quasi-judicial machinery to deal with consumer grievances and disputes
Objectives of Consumer Protection
1. To protect the consumer from abuse
2. To provide a venue for grievances/compensation
3. To ensure a superior quality of living by upgrading consumer products and services
4. Protecting the consumer against immoral and unfair activities of the traders
Rights of the Consumer
1. Right to Safety – To be secured against the marketing of goods on delivering dangerous
services to health and life
2. Right to Information – To be protected against dishonest or misleading advertising or
labelling and the right to be given the facts and figures needed to make an informed
choice
3. Right to Choice –To choose products at competitive prices with an assurance of
satisfactory quality
4. Right to Representation – To express consumer interests in the making and execution of
government policies
5. Right to Seek Redress – To be compensated for misrepresentation, shoddy goods or
unsatisfactory services
6. Right to Consumer Education –To Acquire the Knowledge and skills necessary to be
an informed customer
7. Right to Basic Needs – This Guarantees adequate food, shelter, health care, clothing,
education and sanitation
Consumer Complaint Mechanism

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G.F.G.C. BANGARU THIRUPATHI BUSINESS REGULATION

• The consumers have the liberty to go the Consumer Courts in case of deficiency in
services as laid downed under the Act. The new Consumer Protection Act, 2019 has
opened the option of filing consumer complaint electronically. The procedure to register
consumer complaint is made simple by allowing the State and District Consumer Forums
for reviewing the applications and advising appropriate method such as mediation.
• The Consumer Court in India is subdivided into three levels of courts, the National Level,
the State Level and the District Level, depending on the gravity of the matter the
consumer may approach as per the valuation of matter for redressal and adjudication of
disputes. The next step after recognizing the matter of dispute is to understand the
pecuniary jurisdiction of the concerned case as follows:
Redressal Agencies or Three-Tier Grievances Machinery
• There are three tier Consumer Grievances machinery under the Consumer Protection
Act, 1986 and their jurisdiction.
• District Forum – The value of goods or compensation claim does not exceed Rs. 20
lakh.
• State Forum – The value of goods or compensation is more than Rs. 20 lakh but does
not exceed one crore.
• National Forum – It takes up all the cases exceeding the value of Rs. 1 crore.
• 1. District Forum:
• District forum 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 government. The
complaints for goods or services worth Rs 20 lakhs or less can be filed in this agency.
• The agency sends the goods for testing in laboratory if required and gives decisions on
the basis of facts and laboratory report. If the aggrieved party is not satisfied by the
jurisdiction of the district forum then they can file an appeal against the judgment in State
Commission within 30 days by depositing Rs 25000 or 50% of the penalty amount
whichever is less.
• 2. State Commission:
• 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 government. The complaints
for the goods worth more than Rs 20 lakhs and less than Rs 1 crore can be filed in State
Commission on receiving complaint the State commission contacts the party against
whom the complaint is filed and sends the goods for testing in laboratory if required.
• In case the aggrieved party is not satisfied with the judgment then they can file an appeal
in National Commission within 30 days by depositing Rs 35000 or 50% of penalty
amount whichever is less.
3. National Commission
• The national commission consists of a president and four members one of whom shall be
a woman. They are appointed by Central Government. The complaint can be filed in
National Commission if the value of goods exceeds Rs 1 crore. On receiving the
complaint the National Commission informs the party against whom complaint is filed
and sends the goods for testing if required and gives judgment?

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G.F.G.C. BANGARU THIRUPATHI BUSINESS REGULATION

• If aggrieved party is not satisfied with the judgment then they can file a complaint in
Supreme Court within 30 days.

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Compiled By, Sunil Kumar S. Assistant Professor