Module 4

Consumer protection Act 1986

Syllabus
Definition of the terms – consumer, consumer Dispute, Defect,
Deficiency, Unfair Trade Practices and Services, Right of Consumer
under the Act, Consumer Redressal Agencies – District Forum,
State Commission and National Commission.

Definition
→ Consumer
According to Section 2(7) “consumer” means any person who-
(1) buys any goods for a consideration which has bees paid or partly paid and partly
promised, does not include a person who obtains such goods for resale or for any
commercial purpose; or
(2) hires or avails of any service for consideration which has been paid or promised or
partly paid and partly promised.
→ Consumer Dispute
According to Section 2(1)(e) “A dispute where a consumer makes a complaint against
a seller or service provider, and the seller or provider denies or refuses the complaint”.
Examples: If you buy a washing machine and it stops working in 2 days, and the
company refuses to repair or replace it—even after you complain—this becomes a
consumer dispute.
→ Defect
According to Section 2(1)(f) "Defect" means any fault, imperfection or shortcoming in
the quality, quantity, potency, purity or standard of the goods which is required to be
maintained by or under any law or as claimed by the trader or manufacturer.
Examples: A mobile phone that doesn't switch on after purchase has a defect. A
packet of biscuits with fungus inside has a defect in purity.
→ Unfair Trade Practice
 According to Section 2(1)(r) "Unfair trade practice" means a trade practice which, for
the purpose of promoting the sale, use or supply of any goods or for the provision of
any service, adopts any unfair method or deceptive practice.
Examples: Advertising a phone as waterproof when it is not, not giving the free gift
promised in the ad, Charging more than the printed MRP.

Objectives of Consumer Protection Act, 1986

1. Protect Consumer Rights
The Act ensures that consumers are protected against:
• Defective products
• Poor services
• Unfair trade practices

It legally recognizes consumer rights, such as the right to safety, information, choice,
and redressal.
2. Provide a Simple and Speedy Complaint Process
Before this Act, legal cases took a long time in regular courts. The Act created
Consumer Forums (District, State, and National) where consumers can:
• File complaints easily
• Get fast and low-cost justice

3. Promote and Protect Consumer Interests

The Act focuses on fair treatment of consumers by ensuring businesses:
• Deliver quality goods and services
• Do not cheat or exploit customers
• Follow ethical trade practices

4. Educate and Make Consumers Aware

Many consumers don’t know their rights. The Act encourages awareness through:
• Campaigns like "Jago Grahak Jago"
• Consumer education in schools and media So that consumers can make
informed choices and raise their voices.
5. Stop Unfair Trade Practices
The Act aims to stop sellers and businesses from using:
• False advertisements
• Overcharging
 • Selling fake or harmful products
• It holds them legally accountable for such practices.

6. Establish Consumer Dispute Redressal Agencies

The Act sets up a three-tier system to resolve consumer complaints:
• District Forum (for local cases)
• State Commission
• National Commission

These bodies help ensure fair and quick solutions for consumers.

Rights of Consumers – Under Consumer Protection Act, 1986

1. Right to Safety
Consumers have the right to be protected against goods and services that are harmful
to life or health.
Example: Electrical appliances must be safe and properly tested.

2. Right to be Informed
Consumers must get complete and correct information about the product or service
— such as:
Price, Quality, Quantity, Ingredients, Expiry date
Example: Food items should show all ingredients and expiry date on the lab

3. Right to Choose
Consumers have the right to select from a variety of goods and services at competitive
prices, without being forced.
Example: You should not be forced to buy a product as part of a package.

4. Right to be Heard
Consumers have the right to express their complaints and be heard in decision-making
processes related to consumer issues.
Example: You can file a complaint in a consumer forum if a product or service is faulty.

5. Right to Seek Redressal

Consumers have the right to get compensation or justice if they are cheated or
harmed.
Example: If a company sells you a defective product, you can demand a refund or
replacement
6. Right to Consumer Education
Consumers have the right to learn about their rights and responsibilities through
education and awareness programs.
Example: Campaigns like "Jago Grahak Jago" educate consumers about their rights.

1. District Forum
➢ Meaning
The District Forum is the first level consumer court established in every district under
the Consumer Protection Act, 1986. It is designed to provide consumers with a quick,
accessible, and inexpensive way to resolve disputes related to goods and services.
➢ Jurisdiction
✓ It can entertain complaints where the value of goods or services and
compensation claimed is up to ₹1 crore (as per recent amendments).
✓ It handles cases involving:
✓ Defective or faulty goods
✓ Deficiency in services
✓ Unfair or deceptive trade practices
✓ Overcharging or misleading advertisements
➢ Composition
The District Forum is headed by a Presiding Officer, who is a person qualified to be a
District Judge or has equivalent legal expertise. There are also two other members,
one of whom should have knowledge or experience in consumer affairs, economics,
law, commerce, or public affairs.
➢ Powers and Functions
The Forum has the power to:
•
Order the refund of the price paid by the consumer
• Direct replacement of goods
• Award compensation for any loss or injury caused by defective goods or
deficient services
• Direct the removal of defects or deficiencies
• Issue orders to discontinue unfair trade practices or restrictive trade practices
• The District Forum can summon parties, ask for evidence, and pass binding
decisions.
➢ Procedure
The complaint process is simple and informal; no strict procedural laws like in regular
courts apply.
The Forum aims to provide speedy justice usually within 3 months for complaints that
do not require analysis or testing of goods, and within 5 months if such investigation
is needed.
➢ Importance
The District Forum brings justice closer to the consumer, avoiding expensive and
lengthy litigation.
It empowers ordinary consumers to protect their rights effectively without the need
for legal experts.

2. State Consumer Disputes Redressal Commission (State Commission)

➢ Meaning
The State Commission is the second level consumer court established at the state level
to address consumer disputes and appeals.
➢ Jurisdiction
• It handles complaints where the value of goods or services and compensation
claimed is more than ₹1 crore but up to ₹10 crore (as per recent amendments).
• It also hears appeals against the decisions/orders of the District Forums within
the state.
• Has the authority to entertain complaints directly if the District Forum’s
jurisdiction is not applicable.
➢ Composition
The State Commission consists of:
• A Presiding Officer who is a person qualified to be a High Court judge.
• Two other members with experience in fields like law, commerce, economics,
or public affairs.
• The Presiding Officer must be at least 35 years old and have relevant judicial
experience.
➢ Powers and Functions
The State Commission has the power to:
• Hear appeals against District Forum orders.
• Pass orders for refund, replacement, compensation, or removal of
defects/deficiencies.
• Issue orders to stop unfair trade practices.
• Review and enforce consumer rights at the state level.
• It can also review evidence and summon witnesses like a court.

➢ Procedure
 • Similar to the District Forum but with more formal judicial procedures since it
handles appeals and higher-value cases.
• Aims to provide timely redressal, though cases may take longer than at the
district level.
➢ Importance
• The State Commission ensures justice at a higher level for consumers with larger
claims.
• It provides a platform for consumers to challenge unfair decisions of District
Forums.
• Helps maintain consistency in consumer protection within the state.

3. National Consumer Disputes Redressal Commission (National Commission)

➢ Meaning
The National Commission is the highest-level consumer court in India, established at
the national level to handle consumer disputes and appeals.
➢ Jurisdiction
• It deals with cases where the value of goods or services and compensation
claimed exceeds ₹10 crore (according to recent amendments).
• It hears appeals against the orders of the State Commissions.
• It can also entertain complaints involving questions of law or matters of great
importance affecting consumers nationwide.
➢ Composition
The National Commission consists of:
• A President who is a retired judge of the Supreme Court of India.
• Members who are experts in fields like law, commerce, economics, or public
affairs.
• Members are appointed by the central government.
➢ Powers and Functions
• The National Commission has the power to:
• Hear appeals against decisions of State Commissions.
• Pass orders for refunds, replacements, compensation, and removal of defects
or deficiencies.
• Issue directions to stop unfair trade practices.
• Review consumer laws and policies, and recommend improvements.
• It acts like a quasi-judicial body with powers similar to a civil court.

➢ Procedure
• Handles complex and high-value cases, so procedures are more formal than
District Forums or State Commissions.
 • Can entertain cases involving multiple states or those affecting the entire
country.
➢ Importance
• The National Commission is the final authority on consumer disputes before
approaching the Supreme Court.
• It protects consumer rights on a national scale and ensures uniform application
of consumer laws.
• It plays a crucial role in consumer policy development and legal reforms.
 Important MCQs from Consumer Protection Act, 1986

1. The Consumer Protection Act was enacted in the year:

A) 1985

B) 1986

C) 1987

D) 1991

(Answer:) B) 1986

2. Who is a consumer under the Consumer Protection Act, 1986?

A) A person who buys goods for resale

B) A person who hires services for personal use

C) A person who manufactures goods

D) A person who exports goods

(Answer:) B) A person who hires services for personal use

3. Which of the following is NOT a consumer right under the Act?

A) Right to Safety

B) Right to Vote

C) Right to Information

D) Right to Redressal

(Answer:) B) Right to Vote

4. What is the monetary jurisdiction of the District Forum (as per amendments)?

A) Up to Rs.10 lakh

B) Rs.10 lakh to Rs.1 crore

C) Up to Rs.1 crore

D) Above Rs.10 crore (Answer:)

C) Up to Rs.1 crore
5. Who can file a complaint under the Consumer Protection Act?

A) Only government officials

B) Any consumer or registered consumer organization

C) Only the seller

D) Only the court

(Answer:) B) Any consumer or registered consumer organization

6. The Consumer Protection Act, 1986 applies to:

A) Only private companies

B) Only government services

C) All goods and services (unless exempted)

D) Only goods, not services

(Answer:) C) All goods and services (unless exempted)

7. Appeals from the State Commission are made to:

A) High Court

B) Supreme Court

C) District Forum

D) National Commission

(Answer:) D) National Commission

8. The 'Right to be Heard' means:

A) Right to argue in Parliament

B) Right to file a case and be considered in decision-making

C) Right to speak on television

D) Right to be on jury

(Answer:) B) Right to file a case and be considered in decision-making

9. Who heads the National Consumer Disputes Redressal Commission?

A) District Magistrate

B) High Court Judge

C) Retired Supreme Court Judge

D) Consumer Minister

(Answer:) C) Retired Supreme Court Judge

10. The motto of the consumer awareness campaign in India is:

A) Save the Customer

B) Grahak Suraksha

C) Jago Grahak Jago

D) Grahak Bachao

(Answer:) C) Jago Grahak Jago