1

INTRODUCTION

Consumer rights are an integral part of our lives like the consumerist way of life. We have all made use of the mat some point in our daily lives. Market resources and influences are growing by the day and so is the awareness of ones consumer rights. These rights are well defined and there are agencies like the Government, consumer courts and voluntary organizations that work towards safeguarding. While we like to know about our rights and make full use of them, consumer responsibility is an area which is still not demarcated and it is hard to spell out that all the responsibility is that a consumer is supposed to shoulder. Consumer Protection Act, 1986 is an important Act in the history of the consumer movement in the country. The Act was made to provide for the better protection and promotion of consumer rights through the establishment of consumer councils and quasi-judicial machinery. It is mile stone in the history of socio-economic legislation and directed towards public welfare and public benefits.

The CPA was passed by the Lok Sabha on 5thDecember 1986 and Rajya Sabha on 10th December, 1986 and assented to by the president in the Gazette of India. Extra Part II: Section 1 dated 26.12.1986.andat PP 1-12 called, ´the CPA 1986 (Act No.66 of 1986) and the preamble states that, An Act provide for better protection of the interest of the consumers and for that purpose to make provisions for the establishment of consumer councils and other authorities for the settlement of consumers dispute and for matters connected therewith.Under the Act, consumer disputes redressal agencies have been set up through out the country with the District Forum at the District level, State Commission at the State level and National Commission at national level to provide simple , inexpensive and speedy justice to the consumer with complaints against defective goods, deficient services and unfair and restrictive trade practices

2

The Law relating to consumer protection in India is at recent origin and is developing slowly, day by day, with the pronouncement of orders passed by the commissions constituted under the Act all over India and the National Commission However the presence of some protective Laws for the benefits of consumer in the ancient culture cannot be denied.

3

M EANING

As the preamble of CPA 1986 reflect; this socio-economic Law was enacted to provide for the better protection of the interest of consumers and for that purpose the CPA 1986 seeks to provide speedy and simple redressal to consumer dispute. In Charan Singh v. Healing Touch Hospital the Honorable Supreme Court has made important observations on the object of the act.

DEFINITION

S.2(1)d of the act defined consumer as ´Consumerµ means any person who-(i) Buys any goods for a consideration which has been paid or promised or partly paid and party promised or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when person, but does not include with the approval of self person, but does not include a person who obtains such goods for resale or for any commercial purpose or(ii) {Hires for avails of} any services for a consideration which has been paid promised or partly paid or partly promised or under any system of differed payment and includes any beneficiary of such services other than the person. [hires or avails of ] the services for consideration paid or promised or partly paid or partly promised, under any system of differed payment, when such services are availed or with the approval the first mentioned person.

4

OBJECTIVES

1) To assist countries in achieving or maintaining adequate protection for their population as consumers;

2) To facilitate production and distribution patterns responsive to the needs and desires of consumers;

3) To encourage high levels of ethical conduct for those engaged in the production and distribution of goods and services to consumers;

4) To assist countries in curbing abusive business practices by all enterprises at the national and international levels which adversely affect consumers .

5) To facilitate the development of independent consumer groups .

6) To further international cooperation in the field of consumer protection .

7) To encourage the development of market conditions which provide consumers with greater choice at lower prices.

FEATURES

Following are the features of the Act are:1. The Act aims to provide better and all-round protection toconsumers.2. In terms of geographical application, it applies to the whole of India except

the State of Jammu and Kashmir3. It applies to all goods and services unless otherwise expressly notified by

the Central Government.4. It is indeed a very unique and highly progressive piece of social welfare

legislation and is acclaimed as the magna carta of Indian consumers. The Act has made the consumer movement really Going and more powerful,

5

broad-based and effective and people oriented. In fact, the Act and its Amendment in 1993 have brought fresh hopes to the beleaguered Indian consumer. This is the only law which directly pertains to market place and seeks to redress complaints arising from it. Even prior to 1986, there were in force a number of laws which could be interpreted in favour of the consumers. But, this Act is most powerful piece of legislation the consumer has had before 1986. Its provisions are very comprehensive and highly efficacious. In fact, it provides more effective protection to consumers than any corresponding legislation in force even in countries which are considered to be much more advanced.5) It provides effective safeguards to the consumers against different types of exploitation such as defective goods, unsatisfactory (or deficient) services and unfair trade practice.

IMPLICATIONS OF CONSUMER PROTECTION ACT

The Consumer Protection Act , 2008, (No 68 of 2008) was signed into law on 24 April 2009. The Act sets out the minimum requirements to ensure adequate consumer protection in South Africa. This Act constitutes an overarching framework for consumer protection, and all other laws which provides for consumer protection (usually within a particular sector) will need to be read with this Act to ensure a common standard of protection.

All suppliers of goods and services will need to take note of the new measures and ensure that they are able to comply once the Act becomes effective.

Chapters 1 and 5 of this Act, section 120 and any other provision authorising the Minister to make regulations became effective one year after the signing of the Act by the President, which was 24 April 2010.

The Consumer Protection Act, 2008 came into effect on 31 March 2011.

The Minister of Trade and Industry has given notice on 14 March 2011 in the Government Gazette that the Consumer Protection Act application to municipalities, other than high capacity municipalities, will be deferred until further notice. This will have the implication that consumers cannot apply the protection of the Act to transactions with these municipalities.The Minister also gave notice on 27 June 2011 in the Government Gazette on the following exemptions:

6

banks will be exempt from section 14 of the Act which deals with the expiry and renewal of fixed term agreements; the Pension Fund Industry will be exempt from certain sections of the Act for a period of 18 months from 1 April 2011;

the Collective Investment Scheme Industry will be exempt from certain sections of the Act for a period of 18 months from 1 April 2011;

the Security Services Industry will be exempt from certain sections of the Act indefinitely.

CONSUMER RIGHTS

The importance of consumer rights lies in their enforceability, which in turn depends largely on level of consumer education and awareness. In other words, it is not enough to have dynamic consumer laws in the country. There must be an equal thrust on education of all citizens on the consumer rights available to them and the mechanisms through which these rights, if violated can be redressed.The rights of consumer which are being sought to be promoted and protected through the legislative mandate available under the Consumer Protection Act, 1986 inter- alia include:

1) The Right to Safety - The right to be

7

protected against marketing of goods and services, which are hazardous to life and property.

2) The Right to be Informed - The right to be informed about the quality, quantity, purity, standard and price of the goods or services so as to protect consumers against unfair trade practice.

3) The Right to Choose - The right to be assured access to a variety of goods and services at competitive prices

4) The Right to be Heard -The right to be heard and to be assured that consumers’ interests will receive due consideration at appropriate authority.

5) The Right to Redress - The right to seek redressal against unfair trade practices or restrictive trade practices or unscrupulous exploitation of consumers.

6) The Right to Consumer Education - The right to acquire the knowledge and skills to be an informed consumer.

8

Important Aspects of C.P. Act

CONSUMER

- Any person who buys goods or avails services for consideration

- Consideration may be fully paid, partially paid or fully promised to be paid or partially promised to be paid

- Any body who uses the goods or services with the consent of the consumer.

Complainant- a Consumer;- any Voluntary Consumer Association;- the Central Government;- the State Governments or Union Territory Administration;- one or more consumers , where there are numerous

consumers having the same interest and- in case of death of a consumer, his legal heir or representative.

COMPLAINT

- An allegation in writing by a complainant that:

- An unfair or restrictive trade practice is practised by trader or service provider

- Goods bought or to be bought or services hired or to be hired suffered from any deficiency

- Trader or service provider has charged excess price

- Goods and services are hazardous or are likely to be hazardous to life and safety.

CONSUMER DISPUTE REDRESSAL AGENCIES

9

Under Section 9 of the Act consumer can file a complaint before the District forum.District forum is headed by District judge, he has jurisdiction over the district.State Commission is headed by Judge of High Court, he has jurisdiction over the whole State.National Commission is headed by Chief Justice of India, he has jurisdiction over the entire Nation.

FILE TO TH E COMPLAINT In District Forum if the cost of goods or services and compensation asked for is up to Rs. 20 Lakhs and cause of action arose there or where the Opposite Party resides or runs their business or has a branch office;In State Commission if the cost of goods or services and compensation asked for is more than Rs. 20 Lakhs and less than Rs. 1 Crore and cause of action arose there or where the Opposite Party resides or runs their business or has a branch office;In National Commission if the cost of goods or services and compensation asked for is more than Rs. 1 Crore and cause of action arose there or where the Opposite Party resides or runs their business or has a branch office.

Fee for Complaint

10

The Fee for filing the Complaint for the district forum is as underSr. No. Value of Goods/Service and Compensation Amount

of Fees

1) Upto Rs. 1 lakh rupees Rs. 100

2) Rs. 1 Lakh and above but less than Rs.5 lakhs Rs. 200

3) Rs. 5 Lakhs and above but less than Rs. 10 lakhs Rs. 400

4) Rs. 10 lakhs and above but less than Rs. 20 lakhs Rs. 500

The fees shall be paid by Cross demand Draft drawn on a nationalized bank or through crossed Indian postal order drawn in favor of the Registrar of the Sate Commission and payable at the place of the State Commission .

PROCEDURE FOR FILE A COMPLAINT

11

i. Send a notice to the Opposite Party giving him time limit to settle your

grievance.

ii. Prepare the consumer complaint in the required format

iii. Get the complaint affidavit notarized through a notary.

iv. Make required number of photocopies after notarizing. [4+ no. of Opposite

Parties]

v. Prepare a bank draft from a nationalized bank to pay court fee.

vi. Submit the complaint and court fee to the receiving clerk in the consumer

court who will give you the date for admission hearing and complaint

reference number.

APPEALS

If you are not satisfied with the judgement from the District consumer forum,

12

you can appeal to the State and then to the National commission within 30 days of receiving the order. In short from:

- District Forum to State Commission

- State Commission to National Commission

- National Commission to Supreme Court

LIMITATION PERIOD

- Section 24A of the Act provides that a consumer dispute can be filed within 2 years from the date on which the cause of action arises.

-Appeals are required to be filed within 30 days from the date of receipt of the court’s order.

RELIEF AVAILABLE TO CONSUMER

i. Replacement of defective goods

ii. Refund of price paid for defective good/services

iii. Removal of deficiency in service

iv. Refund of extra money charge

v. Withdrawal of goods hazardous to life

vi. Compensation for the loss due to negligence of opposite party.

13

PENALTIES

Penalty under Section 27 CPA

A trader or the complainant fails to comply with an order made by the relevant consumer forum is liable for punishment(s):

I. Imprisonment- 1 month to 3 Yrs.

II. Fine – Rs.2000\- to Rs.10,000\-

CASE STUDIES

Reebok dealer ordered to pay compensation

(Reebok Dealer vs Harpreet Kanwar )

CHANDIGARH: Consumer Court has ordered a Reebok shoe dealer to pay Rs 5, 000 as compensation to Harpreet Kanwar for not entertaining her request to change her shoes, which were of smaller size even after a long wait of eight months, she claimed.

It is notable that Harpreet, a residence of Sector 44, purchased one pair of shoes of particular design and size UK 9 from Reebok Outlet on July 7 in 2008 but when she opened the shoe box, the pair of

14

shoes which she had purchased was not found therein and instead a wrong size of pair of shoes.

This girl reported this to the manager of the outlet, who asked her to visit the outlet on July 22 to exchange it. The complainant had visited the showroom a number of times to exchange the shoes but he failed to do the same and every time took an excuse of non-availability of stock. Moreover, he also did not issue any exchange slip.When the dealer delayed the matter for about eight months, the complainant filed a complaint against him in Consumer Court on March 6 this year. This is admitted by the dealer that the complainant had visited his premises three to four times but she could not be given the exact pair due to the unavailability of the stock. However, she was also requested to get back the money of Rs 1,797, the price of the shoe pair, which she refused flatly.

It is also claimed that the complainant had purchased the shoes for her morning walks and physical exercise to keep her physically fit but due to the careless delay of the showroom manager, she could not do so as a result her weight increased and her health deteriorated, which caused her great mentally and physically harassment.

After hearing the both sides of the argument, the Consumer Court directed the trader to refund the amount of Rs1,794, the price of the shoes and also pay to the complainant a sum of Rs5,000 as compensation within 30 days of receipt of a copy of the order, failing which the entire amount will carry interest at the rate of 12 per cent per annum since the date of filing of the case. The dealer would also be liable to pay the litigation cost of Rs 1,100

SCHOOL GETS RAP FOR RETAINING FEES

CHANDIGARH: Terming the act of KBDAV School, Sector 7, Chandigarh, unjustified in retaining the total fees of a student who had decided not to pursue his studies at the institute, UT district consumer disputes reprisal forum directed it to refund the admission fee after deducting administrative charges and processing charges.

The forum observed, "In our opinion, educational schools or institutions cannot be permitted to behave like business establishments that work with a profit motive. The respondent school is an education institution/school and cannot act like a commercial establishment and there is no justification on the part of the respondent in retaining the substantial fees paid by a student, who decides not to pursue his/her studies in the said school/institution."

Complainant Ainesh Chandra, who had field an application through his father Arun Chandra, a resident of Nayagaon, alleged that he took admission in Class VI in the school for the session 2010-11 and deposited admission fee of Rs 15,900 on February 17 this year.

He was told that classes would start on April 7. He also appeared in the test for admission at St John’s School, Sector 26, Chandigarh, the result of which was declared on March 25 and he was successful.

15

After considering his options, he decided to take admission in St John?s School and deposited a fee of Rs 11,135. Thereafter, he surrendered the seat in the respondent school before the start of the classes and sought a refund. He contacted DAV a number of times and on May 12, they handed over a cheque for Rs 3,000 against the deposit of Rs 15,900.

In their written reply, the respondent stated that the deposit of fee was towards admission and tuition fee for three months, which was non-refundable in view of rules mentioned on page 30 of the school diary.

Further, the rules regarding non-refund of fees and other charges were duly displayed on the notice board, which were never challenged by the complainant.

It was pleaded by the respondent that caution money of Rs 3,000 was refunded to the complainant after making deductions according to school rules.

The consumer forum stated that in its view, the respondents could deduct some amount towards processing fee and administrative charges and the balance amount should be refunded.

"Therefore, we are of the view that the respondent was unjustified in its act by retaining the total fees of Rs 15,900 of the complainant. The respondents should have, at the most, deducted a sum of Rs 1,000 only, towards processing fee and administrative charges, which they have incurred at the time of admission of the complainant," the forum stated.

The forum directed the respondent to refund Rs 11,900 (after deducting Rs 1,000 as service/processing/administrative charges and Rs 3000 which has already been refunded to the complainant) along with litigation costs of Rs 5,500.

CONCLUSION

Consumer protection act was implemented to protect the consumers from unfair trade practices of organizations to protect the interests of consumers.

Consumer protection act solves the disputes of consumers and to provide safety to consumers, the purpose behind this act is to protect consumers and various authorities have been established to protect the rights of consumers.

16

ACKNOWLEDGEMENT

The satisfaction that accompanies the successful completion of any task would

be incomplete without mentioning the names of people who made it possible,

whose constant guidance and encouragement crowns all efforts with our

success. It is a matter of immense pleasure that we take this opportunity to

express my heartfelt gratitude to Miss Baljinder Kaur for the invaluable

ideas, assistance and encouragement that they provided during my study. We

also wish to express my thanks to them for their helpful reviews, comments

and continual support on my studies.

We shall always visualize their encouraging gesture, competent guidance,

constant inspiration and indefatigable zest to learn more and more.

The completion of this dissertation would not have been possible without the

help and encouragement of my professional acquaintances. We would like to

thank all the people who have helped me in one way or another to complete

my report.

A seminar is a major milestone during the study period of students. It was an

opportunity to prove our caliber.

Finally, I also wish to thank all guest faculties and non-teaching staffs for

supporting me during my whole work.

Rohit Mahajan

Sr. No. Contents Page no.

1 Introduction 1

2 Meaning & definition 3

3 Objectives 4

4 Features 5

5 Implication 6

6 Consumer Rights 7

7 Important Aspects 9

8 Consumer Dispute Redressal Agencies 10

9 Fee For Complaint 11

10 Procedure For file A Complaint 12

11 Appeals 13

12 Penalties 14

13 Case Studies 15

14 Conclusion 18

15 Bibliography 19

A

SEMINAR REPORT

ON

Consumer Protection Act 1986

In partial fulfillment of requirement For the degree of MASTER OF COMMERCE BATCH 2014-15

Submitted to: Submitted by: Miss.Baljinder kaur Rohit Mahajan Roll no:1439

19

Bibliography

Websites Visited:www.scribed.comwww.timesofindia.com

www.slideshare.net

www.ncdrc.nic.in/1_1.html

http://en.m.wikipedia.org/wiki/consumer_protection_act,_1986