A Brief study on Consumer Protection and Law

 

                                                                                                                                                                                By Subhojyoti Acharya

Vth Year. BA.LLB.(Hons), Dept. of Law, Calcutta University.

 

ABSTRACT

                                                                          

This paper aims to define Consumer Protection Act, 1986 as amended in 2002 along with relevant laws and explanations thereto. This paper also deals with relevant sectors where amendments have taken place and also the major loopholes, which were still left out unattended. The paper tried to cover all common FAQs (Frequently Asked Questions) with regard to basic rights and remedies of a consumer. A sample of complaint petition is hereby presented in order to provide a clear idea regarding the process and procedure of a consumer court.

 

I.  Introduction-

 

                        THE CONSUMER PROTECTION ACT, 1986, a basic focus-

 

The Consumer Protection Act, 1986 (68 of 1986) is a milestone in the history of socio-economic legislation in the country. The main objective of the new law is to provide for the better protection of the consumers unlike existing laws, which are punitive or preventive in nature. The Act intends to provide simple, speedy & inexpensive redresses to the consumer's grievances.

 

 In India various Acts intended to protect the consumers against different forms of exploitation were enacted, such as, the Indian Penal Code, I860; Indian Contract Act, 1872; Drugs Control Act, 1950; Industries (Development and Regulation) Act, 1951; Indian Standards Institution (certification marks) Act, 1952; Drug and Magic Remedies (Objectionable Advertisement) Acts, 1954; Prevention of Food Adulteration Act, 1954; Essential commodities Act, 1955; Trade and Merchandise Marks Act, 1958; Hire purchase Act, 1972; Cigarettes (Regulation of Production, Supply and Distribution) Act, 1975; Prevention of Black marketing and Maintenance of Supplies of Essential Commodities Act, 1980: Essential commodities (Special Provisions) Act, 1981; Multi-State Cooperative Societies Act, 1984; Standard of Weights and Measures (Enforcement) Act, 1985; and Narcotic Drugs and Psychotropic Substances Act, 1985. Some significant consumer protection enactments of pre-independence time are the Sale of Goods Act, 1930; Agriculture Produce (Grading and Marketing) Act, 1837 and Drugs and Cosmetics Act, 1940.

 

II. A brief historical background about the enactment the Act -

The Consumer Protection Act, 1986 (here in after to be referred to as the ‘Act’)   is one of the benevolent social legislation intended to protect the large body of consumers from exploitation.  The Act has come as a panacea for consumers all over the country and   has assumed the shape of practically the most important legislation enacted in the country during the last few years.  It has become the vehicle for   enabling   people to secure speedy and in-expensive redressal of their grievances.  With the enactment of this law, consumers now feel that they are in a position to declare “sellers be aware” whereas previously the consumers were   at the receiving end and generally told “buyers be aware”.            

III. Extent and coverage of the Act -

      The C.P. Act applies to all goods and services, excluding goods purchased for resale or for commercial purpose & services rendered free of charge & under contract of personal service.

The provisions of this Act cover ‘Products’ as well as ‘Services’.  The products are those which are manufactured or produced and sold to consumers through wholesalers and retailers.  The services are of the nature of transport, telephones, electricity, constructions, banking, insurance, medical treatment etc. etc.  The services are, by and large; include those provided by professionals such as Doctors, Engineers, Architects, and Lawyers etc.

IV. Procedures and practices of this Act-

A written complaint, as amended by Consumer Protection (Amendment) Act, 2002, can be filed before the District Consumer Forum (upto Rupees twenty lakhs), State Commission (upto Rupees  One crore), National Commission ( above  Rupees One crore)   in relation to a product or in respect of a service, but does not include rendering of any service free of cost or under a contract of personal service.  The service can be of any description, the illustrations given above are  only indicative and  not   exhaustive.

             The Consumer Protection Act is an alternative and cheapest remedy already available to the aggrieved persons/consumers by way of civil suit. In the complaint/appeal/petition submitted under the Act, a consumer is not required   to pay any court fees or even process fee.  

             Proceedings are summary in nature and endeavour is made to grant relief to the parties in the quickest possible time keeping in mind the spirit of the Act, which provides for disposal of the cases within possible time schedule prescribed under the Act. 

            If a consumer is not satisfied by the decision of the District Forum, he can challenge the same before the State Commission and against the order of the State Commission a consumer can come to the National Commission. 

In order to attain the objects of the Consumer Protection Act, the National Commission has also been conferred with the powers of administrative control over all the State Commissions by calling for periodical returns regarding the institution, disposal and pendency of cases.  National Commission is empowered to issue instructions regarding, (1) adoption of uniform procedure in the hearing of the matters; (2) prior service of copies of documents produced by one party to the opposite parties; (3) speedy grant of copies of documents; and (4) generally over-seeing the functioning of the State Commissions or the District Forums to ensure that the objects and purposes of the Act are best served without in any way interfering with their quasi-judicial freedom

V. Some commonly related FAQ’s-

A. Who is a Consumer?

      A consumer is any person who buys any goods for a consideration and user of such goods where the use is with the approval of a buyer, any person who hires/avails of any service for a consideration & any beneficiary of such services, where such services are availed of with the approval of the person hiring the service. The consumer need not have made full payment. Goods mean any movable property and also include share, but do not include any actionable claims. Service of any description is covered under C.P.Act & includes Banking, financing, insurance, transport, processing, housing, construction, supply of electrical energy, entertainment, amusement, board and lodging, among others.

B. Who can file a complaint?

  A complaint on a plain paper either handwritten or typed, can be filed by a consumer, a registered consumer organization, central or State Government & one or more consumers, where there are numerous consumers having the same interest. No stamp or court fee is needed.

C. Consumers can make complaints against which of the things?

A) Any unfair trade practice or restrictive trade practice adopted by the trader.
B) Defective goods.
C) Deficiency in service.
D) Excess price charged by the trader.
E) Unlawful goods sale, which is hazardous to life and safety when used.

D. Where to file a complaint?

      The Consumer Protection Act has provided for a three tier system popularly known as "Consumer Courts" :-

A)    District Forum: For claims up to Rs.20 lakhs.
B) State Commission: For claims above Rs.20 lakhs but less than Rs.1 crore.
C) National Commission: For claims above Rs. 1 crore.  

The nature of complaint must be clearly mentioned as well as the relief sought by the consumer. It must be filed in quadruplicate in District Forum or State Commission (as the case may be) if there is only one opposite party. Otherwise, additional copies are required to be filed. Generally complaint should be decided within 90 days from the date of notice issued to the opposite party. Where a sample of any goods is required to be tested, a complaint is required to be disposed off within 150 days.

E. What are the reliefs available to consumers?

 Consumer courts may grant one or more of the following reliefs :-

A) Repair of defective goods.
B) Replacement of defective goods.
C) Refund of price paid for the defective goods or service.
D) Removal of deficiency in service.
E) Refund of extra money charge.
F) Withdrawal of goods hazardous to life and safety.
G) Compensation for the loss or injury suffered by the consumer due to 
       negligence of the opposite party.
H) Adequate cost of filing and pursuing the complaint.
I) Grant of punitive damages.

F. What Is The Legislation That Ensures All These Rights?

 
It is the Consumer Protection Act, 1986. The act seeks to promote and protects the interest of consumers against deficiencies and defects in goods or services. It also seeks to secure the rights of a consumer against unfair or restrictive trade practices, which may be practiced by manufacturers and traders. There are various levels of ad judicatory authorities that are set up under the Act, which provide a forum for consumers to seek redressal of their grievances in an effective and simple manner.

G. What Are The Other Advantages To The Consumer Under This Law?

 The consumer under this law is not required to deposit advalorem court fees, which earlier used to deter consumers from approaching the Courts. The rigors of court procedures have been dispensed with and replaced with simple procedures as compared to the normal courts, which helps in quicker redressal of grievances. The provisions of the Act are compensatory in nature.


H. What Is The Role Of CORE & Other Consumer Organizations Under The Act?

 
The Act makes provisions where the machinery under the Act can be set in motion by the consumer organizations involved in consumer awareness movements in the country. The Act provides “recognized consumer associations” can move the agencies. The organization can take up the case of the consumer and it is not necessary for you to be a member of the organization.

VI. Amendments to the Consumer Protection Act-

In the previous issue of Express Healthcare Management, some of the amendments to Consumer Protection Act were covered. In this issue we cover amendments made from Section 10 to section 25.

The Consumer Protection Act, 1986 was last amended in 1993. Subsequently in view of experience gained in operation of the Act, major changes are now being made to bring into force Consumer Protection (Amendment) Act, 2002. The amendments will be brought onto force by issue of notification in the Official Gazette.

Effects of amendments, a general study-
The amendments to section 10 provide minimum age of thirty-five years, minimum qualification of graduation and minimum experience of ten years for members of the District Forum. It also provides disqualification for the office of member. A new proviso to sub-section (1A) is inserted to provide that where the President of the State Commission is, by reason of absence or otherwise, unable to act as Chairman of the Selection Committee, the State Government may refer the matter to the Chief Justice of the High Court who shall nominate a sitting Judge of that High Court to act as a Chairman to avoid delay in selection. It also amends sub-section (2) to provide for reappointment of Presidents and Members to enable utilization of their experiences for a longer period. It also provides that persons already holding office of President or Member will continue to hold such office till the completion of their term. It further amends sub-section (3) to provide that the State Government shall appoint a member on whole-time basis on the recommendations of the President of the State Commission taking into consideration the workload and other factors as may be prescribed. Amendment to section 11 enhances the jurisdiction of the District Forum to entertain complaints where the value of the goods or services and the compensation claimed does not exceed rupees twenty lakhs. This will be more convenient for the complainants and also reduce the number of complaints filed with the State Commission and National Commission.

Section 12 is substituted to provide that every complaint filed with the District Forum shall be accompanied with such amount of fee as may be prescribed. It also provides that he admissibility of the complaint shall ordinarily be decided within twenty-one days from the date on which the complaint is received and that once admitted a complaint shall not be transferred to any other Court or Tribunal.

This will help to quicken disposal of complaints. The amendments to section 13 require the District Forum to refer a copy of the admitted complaint within twenty-one days from the date of its admission to the opposite party to give his version within the prescribed time. It also explicit the provision for ex parte order as well as dismissal of complaint on non-appearance of complainant.

It includes a new sub-section (3A) to provide that complaint shall be heard as expeditiously as possible and Endeavour made to decide the complaints within the prescribed period. Adjournments would ordinarily not be granted, and if granted for reasons to be recorded in writing by the forum, an order as to the costs occasioned by the adjournment would also be made by the forum. It is also provided that in the event of a complaint being disposed of after the period so specified, the District Forum shall record in writing, the reasons for the same at the time of disposing of the said complaint.

It further includes a new sub-section (3B) to enable the District Forum to pass interim orders where required. It also includes a new sub-section (7) for the substitution of parties in accordance with the provisions of Order XXII of the First Schedule to the Code of Civil Procedure, 1908 in the event of death of the complainant or opposite party.

These amendments will facilitate quicker disposal of cases, enable complaints to get immediate relief where required, and streamline procedures. The amendments to section 14 empower the District Forum if it is satisfied that the allegations contained in the complaint are proved, also to issue orders directing the opposite party, inter alia, to pay punitive damages, cease manufacture of hazardous goods and desist from offering services which are hazardous in nature, pay such sum not less than five per cent of the value of defective goods sold or services provided where loss or injury has been suffered by a large number of consumer who are not conveniently identifiable, and to issue corrective advertisement to neutralize the effect of misleading advertisement.

VII. Some major loopholes of the Act still left unplugged by the 2002 Amendments-

A critical study-

1) The main problem regarding the above empowerment and the relevant provision is the fact that the Gazette notification for the conferment of First Class Magistrate’s powers to the Consumer Forums or Commissions is still not issued. Thus it is practically impossible for the Forums or Commissions to exercise this power conferred by the Act.

2) Another lacuna present in the amended Act is the relatively softer approach adopted by the Act towards the judgment debtor in its certain provisions. The amendment of 2002 has not done anything concrete to fill this lacuna. For instance, S. 24 of the Consumer Protection Act, 1986, which reads as follows:-

S.24: Finality of order:-
Every order of a District Forum, State Commission or the National Commission shall, if no appeal has been preferred against such order under the provisions of this Act, be final.Thus this provision implies that non- preferment of appeal renders the order final. Conversely, preferring an appeal means that order is not final. Hence once an appeal is preferred by the judgment debtor, he gets a stay against the execution and thus there cannot be any execution. 

The judgment debtors have certainly misused this provision of the Act. It is a general pattern that judgment debtors just buy time before the Forum or Commission stating that appeal has been preferred. Even if the appeal is not admitted and may take quite some time for the purpose, even if the required bank guarantee is yet not given and the stay is still not granted, the consumer cannot get the execution of the original order done. Thus justice still eludes the hapless consumer while the seller (judgment debtor) more often than not manages to get adjournment. The Act is silent regarding a ‘stay order’. Even the Amendment Act of 2002 disappoints in this regard. This Section urgently calls for amendment substituting the words “appeal preferred” with the words stay granted.

3) Another important confusion is created by the amended S.25 of the Act that reads as under:

S.25: Enforcement of orders by the Forum, the State Commission or the National Commission:-
(A)
where an interim order made under this Act, is not complied with the District Forum or the State Commission or the National Commission, as the case may be, may order the property of the person, not complying with such order to be attached.

(B)  No attachment made under sub-section (1) shall remain in force for more than three months at the end of which, if the non-compliance continues, the property attached may be sold and out of the proceeds thereof, the District Forum, or the State Commission or the National Commission may award such damages as it thinks fit to the complainant and shall pay the balance, if any, to the party entitled thereto. 

(C)  Where any amount is due from any person under an order made by a District Forum, State Commission or the National Commission, as the case may be, the person entitled to the amount may make an application to the District Forum, the State Commission or the National Commission, as the case may be, and such District Forum or the State Commission or the National Commission may issue a certificate for the said amount to the Collector of the district (by whatever name called) and the Collector shall proceed to recover the amount in the same manner as arrears of land revenue.

If we carefully give a perusal to the above provisions of the above section, we find that by virtue of S.25 (1) the provision of attachment is against the interim order and not the final order. But looking at the pattern of judgments, it can be clearly discerned that generally attachments are aimed at awarding compensation to the aggrieved party, mostly the consumers. Compensations are usually awarded as part of the final order and the interim order almost never awards compensation. Interim orders aim at compelling or restraining any agency for the commission or omission of some act but these interim orders are seldom used by the Forums or Commissions to attach or seal the property of any business person, manufacturer, banks, medical establishments, etc. for the simple reason that the Forums/ Commissions are not aware if there will be any compensation order against them at the conclusion of the proceedings before Consumer Protection Agencies. Since no recovery proceeding is provided under the Act, there cannot be any assessment of the dues and thus no interim attachment order. Thus a more practically feasible approach would be to replace the word interim order with all orders.

(D) Also S. 25 (3) provides for issuance of a certificate to the Collector for recovery of the amount due from any concerned person. The consumers have to contact the Collector for recovery of their dues because there is no further provision as to what is the role of Consumer Forums/ Commissions after that. After a long wait for the order from the Forum, the hapless consumers still have to undergo the rigor of going to the collector for the realization of the dues. There is no clarity regarding who is responsible for the follow up with the revenue department and the stipulated time limit thereto. Thus the concerned provision of S. 25 (3) should provide for the revenue department to send the arrears to the Forum itself for reimbursement to the consumer.

Thus an amendment is required to take care of the afore-mentioned problem.
However while critiquing certain provisions of the Act, at the same time it is necessary to point out certain other provisions which are the product of the 2002 Amendments and have plugged many loopholes by their progressive wording. These provisions brought about by the amendment have gone a long way in doing away the perennial problems of delay.

1) Amendment to Section 11 enhances the jurisdiction of the District Forum to entertain complaints where the value of the goods or services and the compensation claimed does not exceed rupees twenty lakhs. This will be more convenient for the complainants and also reduce the number of complaints filed with the State Commission and National Commission.

2) Section 12 is substituted to provide that every complaint filed with the District Forum shall be accompanied with such amount of fee as may be prescribed. It also provides that the admissibility of the complaint shall ordinarily be decided within twenty-one days from the date on which the complaint is received and that once admitted a complaint shall not be transferred to any other Court or Tribunal. This will help to quicken disposal of complaints.

3) The amendments to section 13 require the District Forum to refer a copy of the admitted complaint within twenty-one days from the date of its admission to the opposite party to give his version within the prescribed time. It also provides the much needed provision for ex parte order as well as dismissal of complaint on non-appearance of complainant.

It includes a new sub-section (3A) to provide that complaint shall be heard as expeditiously as possible and endeavour made to decide the complaints within the prescribed period. Adjournments would ordinarily not be granted, and if granted for reasons to be recorded in writing by the forum, an order as to the costs occasioned by the adjournment would also be made by the forum. It is also provided that in the event of a complaint being disposed of after the period so specified, the District Forum shall record in writing, the reasons for the same at the time of disposing of the said complaint.

It further includes a new sub-section (3B) to enable the District Forum to pass interim orders where required. It also includes a new sub-section (7) for the substitution of parties in accordance with the provisions of Order XXII of the First Schedule to the Code of Civil Procedure, 1908 in the event of death of the complainant or opposite party.

These amendments will facilitate quicker disposal of cases, enable complaints to get immediate relief where required to the hapless consumers. The procedural delays will be done away with.

4) New section 19A provides that endeavour shall be made to dispose of appeals filed before the State Commission or the National Commission within ninety days from the date of admission.

These are just some of the useful amendments and the afore-mentioned list is definitely not exhaustive. In fact all the amendments made to the Consumer Protection Act by the 2002 Amendments aim at furthering the efficiency of the Act and doing away with procedural delays which render the consumers disillusioned and dissatisfied. These Amendments have been fruitful in providing ‘protection’ to the consumers in the real sense of the term and served the purpose of the Act. It is hoped that further amendments would aim at even more efficiency and render the position of the consumers much stronger in this era of globalization and privatization where the sudden unchecked advent of Multi National Companies has to be balanced with the protection of the rights of the consumers by the legislature and the judiciary.

XI. Acknowledgements-

In order to complete this paper successfully I sincerely thank Shri Manabendra Mandal, the Director of Socio Legal Aid Research and Training Center.

 I also like to thank Mrs Suganti Iyer whose work on amendments of consumer protection has helped me a lot. A special thanks goes to Mr. S.S. Singh and Mrs Sapna Chadah (IIPA) whose paper on Consumer Protection inspired me to great extent. I would also like to acknowledge the work and contribution of V. Balakrishna Eradi, The First President of NCDRC. (National Consumer Disputes  Redressal Commission).

 

X. Bibliography & Online References-

To complete this paper, I have referred to below mentioned books and online websites.

A.     Consumer Protection, Law and Practice by Dr. V.K.Agarwal.

B.      National Consumer Disputes  Redressal Commission.

C.      Consumer Online Resource & Empowerment Agency.

D.       Legal Service India.com

E.      advantageconsumer.com

F.      Health care Management

G.     State Consumer Protection Council, Govt. of West Bengal.

H.      Consumer Protection Act, 1986 by R.K. Bangia.