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E2-E3
Finance
Consumer Protection Act 1986
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Background
• Under sale of goods Act the principle is ‘Buyer be aware’
i.e., buyer is supposed to take care before buying goods.
• Buyer could be easily misled and duped.
• Common consumer is neither knowledgeable nor well
informed.
• He needs support and protection from unscrupulous
sellers.
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Objects of the Act
• To provide for better protection of interest of consumers.
By providing
– Advisory bodies
– Adjudicatory bodies
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Rights of the consumers
• Act is intended to protect the following rights of the
consumers:
• Protection from marketing of the goods and
services which are hazardous to life and
property
• To be informed about the quality, quantity,
purity, standard and price of the goods or
services so the consumers are protected from
unfair trade practices
• To have access to variety of the goods and
services at competitive prices
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Rights of the consumers (contd.)
• To be heard and to be assured that consumers’ will
receive due consideration.
• To stop unfair trade practices, restrictive trade practices
and exploitation of consumers.
• Right to consumer education.
• Right to speedy and simple redressal to consumer
disputes.
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Complaint
• Complaint means any allegation made by a complainant
in writing that ;
– An unfair trade practice or restrictive trade practice
has been adopted
– The goods bought or agreed to be bought or services
hired or availed or agreed to be hired or availed
suffer from deficiency
– He has been charged a price in excess of the price
– Goods which are hazardous to life and safety being
offered for sale without information
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Definitions
• Consumer : Any person who (1) buys any goods for
a consideration (2) hires or avails of any services for
a consideration.
• Deficiency : Means any fault, imperfection or
shortcoming in quality, quantity, potency, purity or
standard that is required to be maintained.
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Definitions
• Restrictive trade practice : Any trade which tends to
bring about manipulation of price or its conditions of
delivery or to affect flow of supplies in the market in
such a manner as to impose unjustified costs or
restrictions.
• Unfair trade practice : a trade practice which for the
purpose of promoting the sale adopts any unfair
method or unfair or deceptive practice.
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Definitions
• Service : Means service of any description made
available to potential users and includes but not
limited to services in connection with banking,
financing, insurance, transport, supply of electrical
engineering, boarding or lodging, housing
construction, entertainment , amusement etc.,
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Telephone services
• Facilities provided by Telecom departmental
undertakings and also private firms providing cellular
services, WLL mobile and other services are covered in
the definition of service
• Common forms of deficiencies : Excess billing, wrongful
disconnection without any valid reason or notice,
refusing telephone services on flimsy grounds, delay in
shifting, faulty services / instruments etc.,
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Who can file a complaint
• Any consumer to whom such service is provided
• Any recognized consumer association
• One or more consumers where there are numerous
consumers having the same interest
• Central or state government either in its individual
capacity or as a representative of interest of consumers
in general
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Court Fee to be paid
Commission Value / Claim Fee (Rs.)
District Forum <Rs. 1 Lakh 100
“ Rs. 1 Lakh < 5 lakh 200
“ Rs.5 Lakh < 10 Lakh 400
“ Rs.10 Lakh < 20 Lakh 500
State Forum Rs.20 Lakh < 50 Lakh 2000
“ Rs. 50 Lakh < 1 Crore 4000
National Commn > Rs. 1 Crore 5000
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Redressal agencies
• Act envisages a three tier (quasi judicial) grievance
redressal system
– District Forum
– State Commission
– National Commission
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District forum
• Established in each district consisting of a President and
two members
• Jurisdiction : (1) where cause of action arose (2) Where
one of the opposite party actually resides or carries on
business or has a branch office (3) where value of goods
or services and compensation claimed is up to Rs. 20
lakhs.
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Procedure
• Complaint can be sent by post or personally filed. No
specific format prescribed for filing complaint
• Complaint to be filed within two years from the date on
which the cause of action arose
• On receipt of the complaint, forum will decide on
admissibility of the complaint within 21 days, if admitted,
copy of the complaint will be sent to opposite party within
21 days to furnish his version within 30 days.
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Procedure
• The district forum shall settle consumer disputes within 3
months if no testing / analysis is required or else 5
months.
• District forum shall be deemed to be civil court. And
hence shall have the same powers in summoning and
enforcing attendance of witness, defendants, securing
production of any record, material object as evidence
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Procedure
• Interim orders during the pendency of any proceedings
can be passed
• Cost of adjournment shall be recovered
• Ex-parte orders can be passed
• Punitive damages and general damages can be granted
• If the complaint is found to be playful , may order the
complainant to pay costs not exceeding Rs. 10,000/-
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State Commission
• State commission consists of a president and two other
members, one of whom should be a woman.
• Appointed by the state Govt. concerned
• President should be either a sitting or former judge of a
High court.
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State Commission
• Jurisdiction :
– Original : where the value of goods/services and
compensation exceed 20 lakhs but not more than
100 lakhs
– Appellate : entertain appeal against the orders of
the district forum within the state
– Revisional : call for records and pass appropriate
orders in any dispute pending before the district
forum
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National commission
• National commission consists of a president and four
other members, one of whom should be a woman.
• President is appointed by the Central Govt. in
consultation of the Chief Justice of India.
• President should be either a sitting or former judge of a
Supreme court.
• Other members are appointed on recommendation of a
selection committee.
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National commission
• Entertains complaints where the value of goods and
compensation claimed exceeds 100 lakhs
• Entertains appeals against the original orders of the
state commission
• Can call for records and pass appropriate orders in any
dispute which is pending in any state commission
• Can transfer any complaint pending before one state
commission to another state commission, in the interest
of justice
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Appeals
• Appeal against the order of national commission in case
of original jurisdiction lies with supreme court
• No provision for appeal against the orders of commission
in its Revisional or appellate jurisdiction. In such cases
only remedy is writ in High Court or SLP in Supreme
court
• Consumer dispute redressal agencies are subject to
judicial review (writ jurisdiction)
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Enforcement and penalties
• Can order attachment of property
• Recovery of amount as arrears of land revenue
• Penalty of imprisonment up to three years and fine
up to Rs. 10,000 for disobeying orders.
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