Consumer Protection Act, 1986

Consumer Protection Act, 1986
Need for Consumer Protection Meaning of Consumer Different redressal Forums for Consumers, Rights of Consumers, Unfair Trade Practices, and Procedure for Filing Complaints




EXTENT AND COVERAGE OF CONSUMER PROTECTION ACT

-The Act applies to all goods and services unless specifically exempted by the Central Government.
-It covers all the sectors whether private, public or cooperative.
-The provisions of the Act are compensatory in nature.
-The provisions of this Act are in addition to and not in derogation of the provisions of any other law for the time being in force.
-The Act envisages establishment of Consumer Protection Councils at the Central and State levels, whose main objects will be to promote and protect the rights of the consumers.

Need for Consumer Protection
The consumer protection Act, 1986, provides for the better protection of consumers. Unlike existing laws which are punitive or preventive in nature, the provisions of this Act are compensatory in nature. The act is intended to provide simple, speedy and inexpensive redressal to the consumers' grievances, award relief and compensation wherever appropriate to the consumer. The act has been amended in 1993 both to extend its coverage and scope and to enhance the powers of the redressal machinery.

Meaning of Consumer

WHO IS CONSUMER?
All of us are consumers of goods and services. For the purpose of the Consumer Protection Act, the word "Consumer" has been defined separately for "goods" and "services".
(A) For the purpose of "goods", a consumer means a person belonging to the following categories:
One who buys or agrees to buy any goods for a consideration which has been paid or promised or partly paid and partly promised or under any system of deferred payment;
It includes any user of such goods other than the person who actualy buys goods and such use is made with the approval of the purchaser.
Note : A person is not a consumer if he purchases goods for commercial or resale purposes. However, the word "commercial" does not include use by consumer of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self employment.

(B) For the purpose of "services", a "consumer" means a person belonging to the following categories:
One who hires or avails of any service or services for a consideration which has been paid or promised or partly paid and partly promised or under any system of deferred payment.
It includes any beneficiary of such service other than the one who actually hires or avails of the service for consideration and such services are availed with the approval of such person.

RIGHTS ENJOYED BY CONSUMER
1-Right to be protected against the marketing of goods and service that is hazardous to life and property.
2-Right to be informed about the quality, quantity, potency, purity, standard and price of goods or services so as to protect the consumer against unfair trade practices.
3-Right to choice wherever possible , access to a variety of goods and services at competitive prices.
4-Right to be heard and to be assured that consumers' interests will receive due consideration at appropriate forums;
5-Right to seek redressal against unfair trade practices unscrupulous exploitation of consumers.
6-Right to consumer education.
7-Right to clean and healthy environment.

Different redressal Forums for Consumers
The Act envisages a three- tier quasi-judicial machinery at the National, State and District levels.

National Consumer Disputes Redressal Commission - known as "National Commission" deals with complaints involving costs and compensation higher than Rs. One Crore.

State Consumer Disputes Redressal Commissions - known as "State Commission, deals with complaints involving costs and compensation higher than Rs. Twenty Lakhs and less than Rs. One Crore.

District Consumer Disputes Redressal Forums - known as "District Forum, deals with complaints involving costs and compensation less than Rs. Twenty Lakhs.

JURISDICTION
If the cost of goods or services and compensation asked for is up to rupees twenty lakh ,then the complaint can be filed in the District Forum which has been notified by the State Governmentfor the district where the cause of action has arisen or where the opposite party resides. A complaint can also be filed at a place where the branch office of the opposite party is located.
If the cost of goods or services and compensation asked for is more than rupees twenty lakh , but less than rupees one crore then the complaint can be filed before the State Commission notified by the State Government or Union Territory Concerned.
If the cost of goods or services and compensation asked for exceed rupees one crore then the complaint can be filed before the National Commission at New Delhi

COMPOSITION

Each District Forum shall consist of -
(a) A person who is, or who has been or is qualified to be, a District Judge, who shall be its President;

(b) two other members, one of whom shall be a woman, who shall have the following qualifications, namely:-
(i)be not less than thirty-five years of age,

(ii) posses a bachelor's degree from a recognized university,

(iii) be persons of ability, integrity and standing, and have adequate knowledge and experience of at least ten years in dealing with problems relating to economics, law, commerce, accountancy, industry, public affairs or administration:

Each State Commission shall consist of -

(a) a person who is or has been a Judge of a High Court, appointed by the State Government, who shall be its President : Provided that no appointment under this clause shall be made except after consultation with the Chief Justice of the High Court;

(b) two other members, who shall be persons of ability, integrity and standing and have adequate knowledge or experience of, or have shown capacity in dealing with problems relating to economics, law, commerce, accountancy, industry, public affairs or administration, one of whom shall be a woman :

The National Commission shall consist of-

(a) a person who is or has been a Judge of the Supreme Court, to be appointed by the Central Government, who shall be its President:1[Provided that no appointment under this clause shall be made except after consultation with the Chief Justice of India;

(b) not less than four, and not more than such number of members, as may be prescribed, and one of whom shall be a woman, who shall have the following qualifications, namely:-

(i) be not less than thirty-five years of age;

(ii) possess a bachelor's degree from a recognized university; and

(iii) be persons of ability, integrity and standing and have adequate knowledge and experience of at least ten years in dealing with problems relating to economics, law, commerce, accountancy, industry, public affairs or administration:

RELIEF AVAILABLE TO CONSUMER
Depending on the facts and circumstances, the Redressal Forums may give order for one or more of the following relief.
1-Removal of defects from the goods,
2-Replacement of the goods;
3-Refund of the price paid;
4-Award of compensation for the loss or injury suffered;
5-Removal of defects or deficiencies in the services;
6-Discontinuance of unfair trade practices or restrictive trade practices or direction not
to repeat them;
7-Withdrawal of the hazardous goods from being offered to sale; or
8-Award for adequate costs to parties

LIMITATION
The District Forum, the State Commission or the National Commission shall not admit a complaint unless it is filed within two years from the date on which cause of action has arisen

Unfair Trade Practices
unfair trade practice" the detailed definition is given in the Consumer Protection Act, 1986 as amended by the Consumer Protection (Amendment) Act. 1993. It 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 :-
(a) false or misleading representation,
(b) bargain price
(c) offering of gifts, prize, contest etc.
(d) non compliance of product safety standard.
(e) hoarding or destruction of goods.

Procedure for Filing Complaints
Procedures for filing complaints and seeking redressal are simple. There is no fee for filing a complaint before the District Forum, the State Commission or the National Commission. ( A stamp paper is also not required). Three to five copies of the complaint on plain paper are required to be submitted by the complainant or his authorized agent in person or could be sent by post to the appropriate Forum / Commission.

A complaint should contain the following information:-
(a) The name, description and the address of the complainant.
(b) The name , description and address of the opposite party or parties, as the case may be, as far as they can be ascertained;
(c) The facts relating to complaint and when and where it arose;
(d) Documents, if any, in support of the allegations contained in the complaint.
(e) The relief which the complainant is seeking.
The complaint should be signed by the complainant or his authorized agent.
The complaint is to be filed within two years from the date on which cause of action has arisen.

Special Contracts

Basic Elements of Law Relating to Agency, Guarantee and Pledge



Contract of indemnity Sec124

A contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person, is called a ‘contract of indem­nity’.
Illustration - A contracts to indemnify B against the consequences of any proceedings which C may take against B in respect of a certain sum of 200 rupees. This is a contract of indemnity.



Contract of guarantee sec126

A “contract of guarantee” is a contract to perform the promise, or discharge the liability, of a third person in case of his default.
The person who gives the guarantee is called the “surety”; [Person giving guarantee is also called as ‘guarantor’. However, Contract Act uses the word ‘surety’ which is same as ‘guarantor’].
The person in respect of whose default the guarantee is given is called the “principal debtor”,
The person to whom the guarantee is given is called the “creditor”.

RULES
1-A guarantee may be either oral or written.
2-Three parties are involved in contract of guarantee. Contract between any two of them is not a ‘contract of guarantee’.
3-Primary liability is of the principal debtor. Liability of surety is secondary and arises when Principal Debtor fails to fulfill his commitments. However, this is so when surety gives guarantee at the request of principal debtor. If the surety gives guarantee on his own, then it will be contract of indemnity. In such case, surety has all primary liabilities.

CONSIDERATION FOR GUARANTEE
Anything done, or any promise made, for the benefit of the principal debtor, may be sufficient consideration to the surety for giving the guarantee.
Illustrations
(a) B requests A to sell and deliver to him goods on credit. A agrees to do so, provided C will guarantee the payment of the price of the goods. C promises to guarantee the payment in consideration of A’s promise to deliver the goods. This is sufficient consideration for C’s promise.
(b) A sells and delivers goods to B. C afterwards requests A to forbear to sue B for the debt for a year, and promises that if he does so, C will pay for them in default of payment by B. A agrees to forbear as requested. This is a sufficient considera­tion for C’s promise.
(c) A sells and delivers goods to B. C afterwards, without consideration, agrees to pay for them in default of B. The agree­ment is void.

Bailment sec148

Bailment is another type of special contract. Since it is a ‘contract’, naturally all basic requirements of contract are applicable. - - Bailment means act of delivering goods for a specified purpose on trust. The goods are to be returned after the purpose is over. In bailment, possession of goods is transferred, but property i.e. ownership is not transferred.

A “bailment” is the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions of the person delivering them. Bailment can be only of ‘goods’.

As per Sale of Goods Act, ‘goods’ means every kind of movable property other than money and actionable claim. - - Thus, keeping money in bank account is not ‘bailment’. Asking a person to look after your house or farm during your absence is not ‘bailment’, as house or farm is not a movable property

Bailment of pledges
Pledge is special kind of bailment, where delivery of goods is for purpose of security for payment of a debt or performance of a promise. Pledge is bailment for security.
Common example is keeping gold with bank/money lender to obtain loan. Since pledge is bailment, all provisions applicable to bailment apply to pledge also. In addition, some specific provisions apply to pledge. The bailment of goods as security for payment of a debt or performance of a promise is called “pledge”.
The bailor is in this case called the “pawnor”. The bailee is called the “pawnee” sec172

Contract of Agency -
Agency is a special type of contract. The concept of agency was developed as one man cannot possibly do every transaction himself. Hence, he should have opportunity or facility to transact business through others like an agent.

The principles of contract of agency are –
(a) Excepting matters of a personal nature, what a person can do himself, he can also do it through agent (e.g. a person cannot marry through an agent, as it is a matter of personal nature)
(b) A person acting through an agent is acting himself, i.e. act of agent is act of Principal. - - Since agency is a contract, all usual requirements of a valid contract are applicable to agency contract also, except to the extent excluded in the Act. One important distinction is that, no consideration is necessary to create an agency.
contd

AGENT AND PRINCIPAL DEFINED - An “agent” is a person employed to do any act for another or to represent another in dealings with third persons. The person for whom such act is done, or who is so represented, is called the “principal” [section 182].

WHO MAY EMPLOY AGENT - Any person who is of the age of majority according to the law to which he is subject, and who is of sound mind, may employ an agent. [section 183]. - - Thus, any person competent to contract can appoint an agent.

WHO MAY BE AN AGENT - As between the principal and third persons any person may become an agent, but no person who is not of the age of majority and of sound mind can become an agent, so as to be responsible to his principal according to the provisions in that behalf herein contained. [section 184]. - -
The significance is that a Principal can appoint a minor or person of unsound mind as agent. In such case, the Principal will be responsible to third parties. However, the agent, who is a minor or of unsound mind, cannot be responsible to Principal. Thus, Principal will be liable to third parties for acts done by Agent, but agent will not be responsible to Principal for his (i.e. Agent’s) acts.

CONSIDERATION NOT NECESSARY - No consideration is necessary to create an agency. [section 185]. Thus, payment of agency commission is not essential to hold appointment of Agent as valid.

DUTIES OF AGENT
AGENT’S DUTY TO PRINCIPAL - An agent has following duties towards principal. *
1. Conducting principal’s business as per his directions
2. Carry out work with normal skill and diligence
3. Render proper accounts
4. Agent’s duty to communicate with principal
5. Not to deal on his own account, in business of agency
6. Agent’s duty to pay sums received for principal
7. Agent’s duty on termination of agency by principal’s death or insanity

REMUNERATION TO AGENT - Consideration is not necessary for creation of agency. However, if there is an agreement, an agent is entitled to get remuneration as per contract.

RIGHTS & DUTIES OF PRINCIPAL
RIGHTS OF PRINCIPAL –
1. Recover damages from agent if he disregards directions of Principal
2. Obtain accounts from Agent
3. Recover moneys collected by Agent on behalf of Principal
4. Obtain details of secret profit made by agent and recover it from him
5.Forfeit remuneration of Agent if he misconducts the business.

DUTIES OF PRINCIPAL –
1. Pay remuneration to agent as agreed
2. Indemnify agent for lawful acts done by him as agent
3. Indemnify Agent for all acts done by him in good faith
4. Indemnify agent if he suffers loss due to neglect or lack of skill of Principal.

TERMINATION OF AGENCY
1. An agency is terminated by the principal revoking his au­thority;
2. or by the agent renouncing the business of the agency;
3. or by the business of the agency being completed;
4. or by either the principal or agent dying or becoming of unsound mind;
5. or by the principal being adjudicated an insolvent under the provisions of any Act for the time being in force for the relief of insol­vent debtors.

In following cases, an agency cannot be revoked –
1. Agency coupled with interest
2. Agent has already exercised his authority
3. Agent has incurred personal liability.