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UNIT 4
CONSUMER PROTECTION ACT
Introduction
Consumer Protection Act was passed in 1986. Then many amendments were made to meet the need of the time. And later due to growth of internet, digital technology, new marketing and distribution methods, advertisement, ecommerce, there was need of completely new Act providing more strict provisions. The Indian Parliament, on 9 August 2019, passed the landmark Consumer Protection Bill, 2019 which aims to provide the timely and effective administration and settlement of consumer disputes. It includes some new provisions as to
- New definition of consumer include online purchasing.
- Definition of goods include food.
- Provisions covering 'endorsement' of goods and services.
- Definition of 'electronic service provider'.
- Provisions for 'product liability' and 'product liability action 'for goods and services.
- Wide definition of 'unfair trade practice
- New definition of 'harm'.
- Central Consumer Protection Authority.
- Changes in pecuniary jurisdiction. 10.Civil and Criminal jurisdiction. 11.Electronically filing of complaint. 12.Mediation. 13.More powers to District Commission. 14.Offences and Penalties.
- Difference Between Act of 1986 and
(iii) the consideration has been paid or promised or partly paid and partly promised, or under any system of deferred payment; and (iv) the user of the goods may also be a consumer when such use is made with the approval of the buyer.
4. 2(8) consumer disputes
"Consumer dispute" means a dispute where the person against whom a complaint has been made, denies or disputes the allegations contained in the complaint
5. 2(9) Consumer Rights
6. 2(28) "misleading advertisement"
"Misleading advertisement" in relation to any product or service, means an advertisement, which— (i) falsely describes such product or service; or (ii) gives a false guarantee to, or is likely to mislead the consumers as to the nature, substance, quantity or quality of such product or service; or (iii) conveys an express or implied representation which, if made by the manufacturer or seller or service provider thereof, would constitute an unfair trade practice; or (iv) deliberately conceals important information;
7. 2(47) "unfair trade practice"
"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 unfair or deceptive practice including any of the following practices, namely: — (i) making any statement, whether orally or in writing or by visible representation including by means of electronic record, which— (a) falsely represents that the goods are of a particular standard quality, quantity, grade, composition, style or model; (b) falsely represents that the services are of a particular standard, quality or grade (c) falsely represents any re-built, second-hand, renovated, reconditioned or old goods as new goods; (d) represents that the goods or services have sponsorship, approval, performance, characteristics, accessories, uses or benefits which such goods or services do not have; (e) represents that the seller or the supplier has a sponsorship or approval or affiliation which such seller or supplier does not have; (f) makes a false or misleading representation concerning the need for, or the usefulness of, any goods or services; (g) gives to the public any warranty or guarantee of the performance, efficacy or length of
life of a product or of any goods that is not based on an adequate or proper test thereof. Provided that where a defence is raised to the effect that such warranty or guarantee is based on adequate or proper test, the burden of proof of such defence shall lie on the person raising such defence. h) makes to the public a representation in a form that purports to be— (A) a warranty or guarantee of a product or of any goods or services; or (B) a promise to replace, maintain or repair an article or any part thereof or to repeat or continue a service until it has achieved a specified result, if such purported warranty or guarantee or promise is materially misleading or if there is no reasonable prospect that such warranty, guarantee or promise will be carried out; (i) materially misleads the public concerning the price at which a product or like products or goods or services, have been or are, ordinarily sold or provided, and, for this purpose, a representation as to price shall be deemed to refer to the price at which the product or goods or services has or have been sold by sellers or provided by suppliers generally in the relevant market unless it is clearly (j) gives false or misleading facts disparaging the goods, services or trade of another person. (ii) permitting the publication of any advertisement, whether in any newspaper or otherwise, including by way of electronic record, for the sale or supply at a bargain price of goods or services that are not intended to be offered for sale or supply at the bargain price, or for a period that is, and in quantities that are, reasonable, having regard to the nature of the market in which the business is carried on, the nature and size of business. (iii) permitting— (a) the offering of gifts, prizes or other items with the intention of not providing them as offered or creating impression that something is being given or offered free of charge when it is fully or partly covered by the amount charged, in the transaction as a whole; (b) the conduct of any contest, lottery, game of chance or skill, for the purpose of promoting, directly or indirectly, the sale, use or supply of any product or any business interest, except such contest, lottery, game of chance or skill as may be prescribed; (c) withholding from the participants of any scheme offering gifts, prizes or other items free of charge on its closure, the information about final results of the scheme. (iv) permitting the sale or supply of goods intended to be used, or are of a kind likely to be used by consumers, knowing or having reason to believe that the goods do not comply with the standards prescribed by the competent authority relating to performance, composition, contents, design, constructions, finishing or packaging as are necessary to prevent or reduce the risk of injury to the person using the goods; (v) permitting the hoarding or destruction of goods, or refusal to sell the goods or to make them available for sale or to provide any service, if such hoarding or destruction or refusal raises or tends to raise or is intended to raise, the cost of those or other similar goods or services; (vi) manufacturing of spurious goods or offering such goods for sale or adopting deceptive practices in the provision of services; (vii) not issuing bill or cash memo or receipt for the goods sold or services rendered in such manner as may be prescribed.
(c) he 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; or (d) the product has been sold by him and the identity of product manufacturer of such product is not known, or if known, the service of notice or process or warrant cannot be affected on him or he 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 him; (e) he failed to exercise reasonable care in assembling, inspecting or maintaining such product or he did 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.
- Exceptions to product liability action S. A product liability action cannot be brought against the product seller if, at the time of harm, the product was misused, altered, or modified. In any product liability action based on the failure to provide adequate warnings or instructions, the product manufacturer shall not be liable, if— (a) the product was purchased by an employer for use at the workplace and the product manufacturer had provided warnings or instructions to such employer (b)The product was sold as a component or material to be used in another product and necessary warnings or instructions were given by the product manufacturer to the purchaser of such component or material, but the harm was caused to the complainant by use of the end product in which such component or material was used; c) the product was one which was legally meant to be used or dispensed only by or under the supervision of an expert or a class of experts and the product manufacturer had employed reasonable means to give the warnings or instructions for usage of such product to such expert or class of experts; or (d) the complainant, while using such product, was under the influence of alcohol or any prescription drug which had not been prescribed by a medical practitioner. (e) A product manufacturer shall not be liable for failure to instruct or warn about a danger which is obvious or commonly known to the user or consumer of such product or which, such user or consumer, ought to have known, taking into account the characteristics of such product.
CONSUMER DISPUTE REDRESSAL FORUM
Three Levels – District, State, National
- District Commission Who will establish?? S.28 State Government Where? In each district of a State, the State Government may, if it deems fit, establish more than one District Commission in a district. Composition Qualification – 29 The Central Government may, by notification make rules to provide for the qualifications, method of recruitment, procedure for appointment, term of office, resignation and removal of the President and members of the District Commission. Salaries and Allowances- 30 The State Government may, by notification, make rules to provide for salaries an allowances and other terms and conditions of service of the President, and members of the District Commission. Jurisdiction of District Commission – 34 The District Commission shall have jurisdiction to entertain complaints where the value of the goods or services paid as consideration does not exceed one crore rupees. Institution of Complain
Where the complaint relates to any goods, the District Commission shall, — (a) refer a copy of the admitted complaint, within twenty-one days from the date of its admission to the opposite party directing him to give his version of the case within a period of thirty days or such extended period not exceeding fifteen days as may be granted by it. (b) If the opposite party on receipt of a complaint denies or disputes the allegations contained in the complaint, or omits or fails to take any action to represent his case within the time given by the District Commission, proceed to settle the consumer dispute in the manner. (c) If the complaint alleges a defect in the goods which cannot be determined without proper analysis or test of the goods, obtain a sample of the goods from the complainant, seal it and authenticate it in the manner as may be prescribed and refer the sample so sealed to the appropriate laboratory. (d) The Laboratory shall report its findings to the District Commission within a period of forty- five days of the receipt of the reference or within such extended period as may be granted by it. Correctness of the Report If any of the parties disputes the correctness of the findings of the laboratory, or disputes the correctness of the methods of analysis or test then the opposite party or the complainant to submit in writing his objections with regard to the report made by the appropriate laboratory. Opportunity of being heard The Commission shall give a reasonable opportunity to the complainant as well as the opposite party of being heard as to the correctness of the report. Procedure for services The District Commission shall, if the complaint admitted relates to goods in respect of which the procedure specified in sub-section (2) cannot be followed, or if the complaint relates to any services- a. Refer a copy of such complaint to the opposite party directing him to give his version of the case within a period of thirty days or such extended period not exceeding fifteen days as may be granted by the District Commission b. if the opposite party, on receipt of a copy of the complaint, denies or disputes the allegations contained in the complaint, or omits or fails to take any action to represent his case within the time given by the District Commission, it shall proceed to settle the consumer dispute: (i) on the basis of evidence brought to its notice by the complainant and the opposite party, if the opposite party denies or disputes the allegations contained in the complaint. (ii) ex parte on the basis of evidence brought to its notice by the complainant, where the opposite party omits or fails to take any action to represent his case within the time given by the Commission. c. No proceedings complying with the procedure shall be called in question in any court on the ground that the principles of natural justice have not been complied with. d. Every complaint shall be heard by the District Commission on the basis of affidavit and documentary evidence placed on record.
e. Every complaint shall be disposed of within a period of three months from the date of receipt of notice by opposite party where the complaint does not require analysis or testing of commodities and within five months if it requires analysis or testing of commodities. Interim Order Where during the pendency of any proceeding before the District Commission, if it appears necessary, it may pass such interim order as is just and proper in the facts and circumstances of the case. Power of District Commission Findings of the Commissions - Where the District Commission is satisfied that the goods complained against suffer from any of the defects specified in the complaint or that any of the allegations contained in the complaint about the services or any unfair trade practices, or claims for compensation under product liability are proved, it shall issue an order to the opposite party directing him to do one or more of the following, namely- a. To remove the defect b. To replace the goods with new goods c. To return to the complainant the price or the charges paid by the complainant along interest on such price or charges d. To pay compensation to the consumer for any loss or injury suffered by the consumer due to the negligence of the opposite party. e. To pay such amount as compensation in a product liability action f. To remove the deficiencies in the services in question g. To discontinue the unfair trade practice or restrictive trade practice and not to repeat them h. Not to offer the hazardous or unsafe goods for sale i. To withdraw the hazardous goods from being offered for sale j. To cease manufacture of hazardous goods and to desist from offering services which are hazardous in nature. k. To pay such sum as may be determined by it, if it is of the opinion that loss or injury has been suffered by a large number of consumers. • Provided that the minimum amount of sum so payable shall not be less than twenty-five per cent of the value of such defective goods sold or service provided, as the case may be to such consumers l. To issue corrective advertisement m. To provide for adequate costs to parties n. To cease and desist from issuing a misleading advertisement. Review of Orders- 40
(ii) complaints against unfair contracts, where the value of goods or services paid as consideration does not exceed ten crore rupees; (iii)appeals against the orders of a District (b) to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any District Commission within the State, where it appears to the State Commission that such District Commission has • exercised a jurisdiction not vested in it by law, or • has failed to exercise a jurisdiction so vested Jurisdiction to be exercised by Bench The jurisdiction, powers and authority of the State Commission may be exercised by Benches. Composition of Bench. A Bench may be constituted by the President with one or more members as the President may deem fit. Provided that the senior-most member shall preside over the Bench. In case of difference of opinion Where the members of a Bench differ in opinion on any point, the points shall be decided according to the opinion of the majority. If there is a majority, but if the members are equally divided, they shall state the point or points on which they differ, and make a reference to the President who shall either hear the point or points himself or refer the case for hearing on such point or points by one or more of the other members and such point or points shall be decided according to the opinion of the majority of the members who have heard the case, including those who first heard it. Provided that the President or the other members, as the case may be, shall give opinion on the point or points so referred within a period of one month from the date of such reference. Place of Institution of Complaint (a) the opposite party or each of the opposite parties, where there are more than one, at the time of the institution of the complaint, ordinarily resides or carries on business or has a branch office or personally works for gain; or (b) any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides, or carries on business or has a branch office or personally works for gain, provided in such case, the permission of the State Commission is given; or (c) the cause of action, wholly or in part, arises; or Transfer of Cases - 48 How? - On the application of the complainant or of its own motion Who? - The State Commission When? - At any stage of the proceeding, transfer any complaint pending before a District Commission to another District Commission within the State if the interest of justice so requires. Procedure- 49 The provisions relating to complaints under section 3 5, 3 6, 3 7, 3 8 and 3 9 shall, with such modifications as may be necessary, be applicable to the disposal of complaints by the State Commission.
Review - 50 Who? -The State Commission shall have the power to review any of the order passed by it. Grounds: - there is an error apparent on the face of the record, How?? - On its own motion • On an application made by any of the parties • Limitation= within thirty days of such order. Appeal - 51 Who? - Any person aggrieved by an order made by the State Commission. Where? National Commission Limitation: Thirty days from the date of the order. Provided that the National Commission shall not entertain the appeal after the expiry of the said period of thirty days unless it is satisfied that there was sufficient cause for not filing it within that period. Provided further that no appeal by a person, who is required to pay any amount in terms of an order of the State Commission, shall be entertained by the National Commission unless the appellant has deposited 50% of that amount. Ground of Appeal An appeal shall lie to the National Commission from any order passed in appeal by any State Commission, if the National Commission is satisfied that the case involves a substantial question of law. In an appeal involving a question of law, the memorandum of appeal shall precisely state the substantial question of law involved in the appeal. Where the National Commission is satisfied that a substantial question of law is involved in any case, it shall formulate that question and hear the appeal on that question. An appeal may lie to the National Commission under this section from an order passed ex parte by the State Commission. Hearing of Appeal - 52 An appeal filed before the State Commission or the National Commission, as the case may be, shall be heard as expeditiously as possible and every endeavour shall be made to dispose of the appeal within a period of ninety days from the date of its admission. In the event of an appeal being disposed of after the period so specified, the State Commission or the National Commission, as the case may be, shall record in writing the reasons for the same at the time of disposing of the said appeal. Adjournment No adjournment shall ordinarily be granted by the State Commission or the National Commission, as the case may be, unless sufficient cause is shown and the reasons for grant of adjournment have been recorded in writing by such Commission. • Provided further that the State Commission or the
National Commission that: • State Commission has exercised a jurisdiction not vested in it by law, or • has failed to exercise a jurisdiction so vested, or • has acted in the exercise of its jurisdiction illegally or with material irregularity. Exercise of power The jurisdiction, powers and authority of the National Commission may be exercised by Benches. Bench may be constituted by the President with one or more members as he may deem fit. Provided that the senior-most member of the Bench shall preside over the Bench. Difference of opinion Where the members of a Bench differ in opinion on any point, the points shall be decided according to the opinion of the majority, If there is a majority, but if the members are equally divided, they shall state the point or points on which they differ, and make a reference to the President who shall either hear the point or points himself or refer the case for hearing on such point or points by one or more of the other members and such point or points shall be decided according to the opinion of the majority of the members who have heard the case, including those who first heard it. Provided that the President or the other member, as the case may be, shall give opinion on the point or points so referred within a period of two months from the date of such reference. Procedure - 59 The provisions relating to complaints under section S.35, 36, 37, 38 and 39 shall, with such modifications as may be considered necessary, be applicable to the disposal of complaints by the National Commission. The National Commission may also declare any terms of contract, which is unfair to any consumer to be null and void. Review - 60 Who? - The National Commission shall have the power to review any of the order passed by it Ground- If there is an error apparent on the face of the record, How? - Either of its own motion or on an application made by any of the parties Limitation: thirty days of such order. set aside ex-parte order- Where an order is passed by the National Commission ex parte, the aggrieved party may make an application to the Commission for setting aside such order. Transfer of cases - 62 How? - On the application of the complainant or on its own motion, Who? - the National Commission may, When? - at any stage of the proceeding, in the interest of justice, What? - transfer any complaint pending before the District Commission of one State to a District Commission of another State or before one State Commission to another State Commission. Experts to Assist - 66
Where the National Commission or the State Commission, on an application by a complainant or otherwise, is of the opinion that it involves the larger interest of consumers, it may direct any individual or organisation or expert to assist the National Commission or the State Commission, as the case may be. Appeal - 67 Any person, aggrieved by an order made by the National Commission may prefer an appeal against such order to the Supreme Court within a period of thirty days from the date of the order. Provided that the Supreme Court may entertain an appeal after the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not filing it within that period. Provided further that no appeal by a person who is required to pay any amount in terms of an order of the National Commission shall be entertained by the Supreme Court unless that person has Finality of orders - 68 Every order of a District Commission or the State Commission or the National Commission, as the case may be, shall, if no appeal has been preferred against such order under the provisions of this Act, be final. Limitation Period - 69 The District Commission, the State Commission 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. Delay can be condoned on giving sufficient reasons however reasons con condonation shall be recorded in writing. Administrative Control - 70 For better protection of the interests of consumers and for that purpose, shall have administrative control over all the State Commissions in the following matters, namely: — (a) monitoring performance of the State Commissions in terms of their disposal by calling for periodical returns regarding the institution, disposal and pendency of cases; (b) investigating into any allegations against the President and members of a State Commission and submitting inquiry report to the State Government concerned along with copy (c) issuance of instructions regarding adoption of uniform procedure in the hearing of matters. (d) overseeing the functioning of the State Commission or the District Commission.
- There shall be a monitoring cell to be constituted by the President of the National Commission to oversee the functioning of the State Commissions from the administrative point of view.
- The State Commission shall have administrative control over all the District Commissions within Enforcement of Orders - 71 Every order made by a District Commission, State Commission or the National Commission shall be enforced by it in the same manner as if it were a decree made by a Court in a suit before it and the provisions of Order XXI of the First Schedule to the Code of Civil Procedure, 1908 Penalty for non-compliance of orders -
How? - On the recommendation of a selection committee consisting of the President and a member of that Commission. Qualification etc The qualifications and experience required for empanelment as mediator, the procedure for empanelment, the manner of training for empanelled mediators, the fee payable to empanelled mediator, the terms and conditions for empanelment, the code of conduct for empanelled mediators, the grounds on which, and the manner in which, empanelled mediators shall be removed or empanelment shall be cancelled and other matters relating thereto, shall be such as may be specified by regulations. Term of Mediators The panel of mediators prepared shall be valid for a period of five years, and the empanelled mediators shall be eligible to be considered for re-empanelment for another term, subject to such conditions as may be specified by regulations. Nomination of Panel - 76 The District Commission, the State Commission or the National Commission shall, while nominating any person from the panel of mediators, consider his suitability for resolving the consumer dispute involved. Duty of Mediator - 77 It shall be the duty of the mediator to disclose— (a) any personal, professional or financial interest in the outcome of the consumer dispute; (b) the circumstances which may give rise to a justifiable doubt as to his independence or impartiality; and (c) such other facts as may be specified by regulations Procedure for Mediation - 79 Place of Mediation - The mediation shall be held in the consumer mediation cell attached to the District Commission, the State Commission or the National Commission, as the case may be. Procedure to be followed during mediation Where a consumer dispute is referred for mediation by the District Commission or the State Commission or the National Commission, as the case may be, the mediator nominated by such Commission shall have regard to the rights and obligations of the parties the usages of trade, if any, the circumstances giving rise to the consumer dispute and such other relevant factors, as he may deem necessary and shall be guided by the principles of natural justice while carrying out mediation. Settlement through Mediation - 80 Pursuant to mediation, if an agreement is reached between the parties with respect to all of the issues involved in the consumer dispute or with respect to only some of the issues, the terms of such agreement shall be reduced to writing accordingly, and signed by the parties to such dispute or their authorised representatives. Settlement Report: The mediator shall prepare a settlement report of the settlement and forward the signed agreement along with such report to the concerned Commission
In case of no agreement Where no agreement is reached between the parties within the specified time or the mediator is of the opinion that settlement is not possible, he shall prepare his report accordingly and submit the same to the concerned Commission. Recording Settlement and Passing of Order - 81 The District Commission or the State Commission or the National Commission, as the case may be, shall, within seven days of the receipt of the settlement report, pass suitable order recording such settlement of consumer dispute and dispose of the matter accordingly. Where the consumer dispute is settled only in part, the District Commission or the State Commission or the National Commission, as the case may be, shall record settlement of the issues which have been so settled and continue to hear other issues involved in such consumer dispute. Case where dispute cannot be settled through mediation. Where the consumer dispute could not be settled by mediation, the District Commission or the State Commission or the National Commission, as the case may be, shall continue to hear all the issues involved in such consumer dispute
