The Consumer Protection Act, 1986 (CPA) is an Act that provides for effective protection of interests of consumers and as such makes provision for the establishment of consumer councils and other authorities that help in settlement of consumer disputes and matters connected therewith.
The CPA seeks to protect the interests of individual consumers by prescribing specific remedies to make good the loss or damage caused to consumers as a result of unfair trade practices.
Unlike the law of torts which is not codified in India, there are certain legislations that have been formulated for the protection of interests of consumers. Some of the significant enactments that are aimed at protection of such interests of the consumers include the Sale of Goods Act, 1930, the Agricultural Produce (Grading and Marketing) Act, 1937, the Drugs and Cosmetics Act, 1940, the Indian Standards Institution (Certification Marks) Act, 1952, the Food Safety and Standards Act, 2006, the Essential Commodities Act, 1955, the legal Metrology Act, 2009, etc.
These legislations contain regulatory provisions contravention of which, in most cases, attract civil liability. Earlier, the aggrieved consumer had no remedy but to initiate action by way of a civil suit, a lengthy and expensive process which caused undue harassment to the consumers. As a consequence, the cost and time involved was disproportionate to the compensation claimed and granted to the aggrieved consumer.
The CPA provides for quick and easy remedy to consumers under a three-tier quasi-judicial redressal agency at the District, State and National levels. The CPA has been amended from time to time to extend its coverage and scope and to enhance the powers of the redressal machinery.
Broadly speaking, the CPA seeks to protect the following basic rights of consumers:
- Right against the marketing of goods and services which are hazardous to life and property;
- Right to be informed about the quality, quantity, potency, purity, standard and price of goods or services;
- Right to choice, wherever possible through access, to a variety of goods and services at competitive prices;
- Right to be heard and to be assured that consumers' interests will receive due consideration at appropriate forums;
- Right to seek redressal against unfair trade practices or restrictive trade practices or unscrupulous exploitation of consumers;
- Right to consumer education; and
- Right to clean and healthy environment.
Who is a consumer?
Section 2(d) of the CPA defines "consumer" as a person who:
"(a) 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 a 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;
(b) Hires or avails of any services for 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 a 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 but does not include a person who avails of such services for any commercial purpose. It may, however, be noted that "commercial purpose" does not include use by a person of goods bought and services exclusively for the purposes of earning his livelihood by means of self-employment."
From the above definition, it can be observed that:
- The goods or services must have been purchased or hired or availed of for a consideration which has been paid in full or in part or under a system of deferred payment, i.e., in respect of hire-purchase transactions;
- The goods purchased should not be meant for resale or for a commercial purpose. Goods purchased by a dealer in the ordinary course of his business and those which are in the course of his business to supply would be deemed to be for re-sale;
- In addition to the purchaser(s) of goods, or hirer(s) or user(s) of services, any beneficiary of such services, a user of goods/services with the approval of the purchaser or hirer or user would also be deemed to be a "consumer" under the Act.
Consumer Protection Council
The interests of consumers are sought to be protected and promoted under the Act inter alia by establishment of Consumer Protection Councils at the District, State and National levels.
Redressal Machinery under the Act
The Act provides for a three-tier quasi-judicial redressal mechanism at the District, State and National levels for redressal of consumer disputes and grievances, namely:
National Consumer Disputes Redressal Commission (commonly known as National Commission)
It has jurisdiction to entertain complaints where the value of goods/services complained against and the compensation, if any claimed, exceeds Rs10,000,000 (Indian Rupees 10 Million).
State Consumer Disputes Redressal Commission (commonly known as State Commission)
It has jurisdiction to entertain complaints where the value of goods/services complained against and the compensation, if any claimed, exceeds Rs 2,000,000 (Indian Rupees 2 Million) but less than Rs 10,000,000 (Indian Rupees 10 Million).
District Consumer Disputes Redressal Forum (commonly known as District Forum)
It has jurisdiction to entertain complaints where the value of goods/services complained against and the compensation, if any claimed, is less than Rs 2,000,000 (Indian Rupees Two Million).
Applicability of the Law of Limitation
The District Forum, the State Commission and/or the National Commission shall not admit a complaint unless it is filed within two years from the date on which the cause of action has arisen. However, where the complainant satisfies the Forum/Commission, as the case may be, that he has sufficient cause for not filing the complaint within two years, such a complaint may be entertained by such Forum/ Commission after recording the reasons for condoning the delay.
Remedies under the CPA
Depending on the facts and circumstances, the redressal forums may issue orders for one or more of the following relief(s):
- Removal of defects from the goods;
- Replacement of the goods;
- Refund of the price paid;
- Award of compensation for the loss or injury suffered;
- Withdrawal of the hazardous goods from being offered for sale; or
- Award for adequate costs to parties.
- Removal of defects or deficiencies in the services;
Discontinuance of unfair trade practices or restrictive trade practices or direction not to repeat them;
Vinay Vaish, Joint Managing Partner Vaish Associates
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