Consumer Protection Act2

8/8/2019 Consumer Protection Act2

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` Any person (firm, HUF, co-operative, association) who

buys any goods or hires any service (fully or partly

paid for).

` NOT goods or services obtained for resale or for any

commercial purpose (except self-employment).

` NOT any service free of charge or under a contract of

personal service.


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` Two kinds of consumer under the Act

Consumer of goods [Sec 2(1)(d)-I]

x buys or agrees to buy goods

x any user of such goods with the consent of buyer

Consumer of services [Sec 2(1)(d)-II]

x hires or avails any services

x any beneficiary of such service with the consent of availer


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Amendments

Amendments in the year 1993

Amendments in the year 2002


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` Exclusive courts for consumer disputes in all districts,

state and national capitals.

` 6 consumer rights specified.

` Consumer Protection Councils from national to state

and district levels.

` Covers private, public, cooperative sectors.


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Government of West Bengal's Infrastructure for Consumer Protection

Inspectors of Legal Metrology in Subdivisions

Assistant Controller of District

LEGAL METROLOGY DIRECTORATE

CONTROLLER

JOINT CONTROLLER

Deputy Controllers

CONSUMER DISPUTES REDRESSAL FORA

STATE COMMISSION

DISTRICT FORA

17+2+2

CONSUMER WELFARE OFFICER

Assistant Director of District & some Subdivisions

CONSUMER AFFAIRS & FAIR BUSINESS PRACTICES DIRECTORATE

(unique in India)

DIRECTOR

JOINT & DEPUTY DIRECTOR

CONSUMER AFFAIRS DEPARTMENT(the only State Government having this)

State Consumer Protection Council

District Consumer Protection Council


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District Forum

Value and compensation claimed Fee

Upto Rs 1 Lakh Rs 100 Rs 1 lakh & above but < Rs 5 lakh Rs 200

Rs 5 lakh & above but < Rs 10 lakh Rs 400

Rs 10 lakh & above but < Rs 20 lakh Rs 500


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1. Right to SAFETY against hazardous goods and services

2. Right to be INFORMED about quality, quantity, purity,

standard, price3. Right to CHOOSE from a variety at competitive prices

4. Right to BE HEARD

5. Right to seek REDRESSAL

6. Right to CONSUMER EDUCATION


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Unfair trade practice

Restrictive tradepractice

Defects

Deficiencies


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UNFAIR TRADE PRACTICE

Adopting unfair methods to promote sale, use or supply of

goods or services e.g.

Misleading public about price.

Charging above MRP printed.

Misleading public about anothers goods or services.

Offering misleading warranty or guarantee.

Contd.


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RESTRICTIVE TRADE PRACTICE

y Depriving consumers of free choice, fair competition.

y Supplying only to particular distributors or on condition of

sale only within a territory.

y Delaying in supplying goods/services leading to rise in

price.

y Requiring a consumer to buy/hire any goods or servicesas a pre-condition for buying/hiring other goods or

services.


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` DEFECTS

Any fault, imperfection or shortcoming in the quality,

quantity, purity or standard which is required to bemaintained by or under any law for the time being in force

or under any contract express or implied or as is claimed by

the trader in any manner whatsoever in relation to any

goods.


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DEFICIENCY

Any fault, imperfection, shortcoming or inadequacy in the

quality, nature and manner of performance which isrequired to be maintained by or under any law for the

time being in force or has been undertaken to be

performed by a person in pursuance of a contract or

otherwise in relation to any service.


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Removal of defects in goods or deficiency in services.

Replacement of defective goods. Refund against defective goods or deficient services.

Compensation.

Prohibition on sale of hazardous goods.


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` Consumer Disputes Redressal Forums (District Forum)

Claims less than or equal Rs.20 lacs.

` Consumer Disputes Redressal Commissions (State Commission)

Claim more than Rs.20 lacs & less than Rs.1 crore.

` National Consumer Disputes Redressal Commission (National

Commission) Claim equal to Rs.1 crore.


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NATIONAL COMMISSION

STATE COMMISSION

DISTRICT FORUM/DISTRICT

COURT


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` Who can file a complaint [Sec 12(1)]:-

Consumer [Sec 2(1)(d)]

Consumer Association

Central Government/State Government

Group ofConsumers having common complain

` Where to file a complaint

` How to file a complaint

` What constitutes a complaint?

` Procedure for filing the appeal


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Name and full address of complainant.

Name and full address of opposite party.

Description of goods and services.

Quality and quantity.

Price.

Date & proof of purchase.


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` Procedure followed by District Forum on admission of

complaint :

Section 13(1): Procedure on admission of complaint if it relates

to any goods which require Laboratory Testing.

Section 13(2): Procedure on admission of complaint if it relates

to any services which do not require Laboratory Testing


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Section 13(3A) & (3B) : Every complaint shall be heard as

expeditiously as possible and endeavor shall be made to decide

the complaint within a period ofthree months from the date of

receipt of notice by opposite party where the complaint does

not require analysis or testing of commodities and within fivemonths ifit requires analysis or testing of commodities.

Section 13(3A) & (3B) : Where during the pendency of any

proceeding before the District Forum, it appears to it necessary, itmay pass such interim order as is just and proper in the facts and

circumstances of the case


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Complainants (Petitioner):

1. Jagrut Nagrik, Gujarat

2. Pradeep Kumar Thakur, Delhi

3. Awaz

Opposite Parties(Respondents):

1. RBI, Mumbai

2. HSBC Ltd, Mumbai

3. American Express BankLtd, Gurgaon

4. Citibank, Chennai

5. Standard Chartered BankCredit Card Division, NewDelhiJudges:

1. Honble Mr. Justice M. B. Shah, President

2. Honble Mrs. Rajyalakshmi Rao, Member

3. Honble Mr. Anupam Dasgupta, Member


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Following complaints of a lot of consumers regarding hefty interest rates in caseof credit card dues, the consumer protection organizations Jagrut nagrik andAwaz filed a case againt HSBC, CitiBank, American Express, Standard CharteredBank and RBI contending that various commercial banks are indulging in unfairtrade practice by charging usurious interest on the loans advanced by the Banksas well as on the amounts payable under credit cards.

It is pointed out that:

1. On credit cards, the banks are charging interest roughly at the rate of36% per annum

2. Banks are charging various financial charges, such as, late payment feeof Rs.200/- to Rs.500/- despite the decision of the Apex Court that penalinterest cannot be capitalized and no interest can be charged on penalty

3. The banks are charging transaction fee of 2.5% for cash advanceagainst credit card, ATM, etc. - this is over and above the interest at the rate of2.95% per month on credit facility

4. Late fee of 30% of the minimum due is being charged up to Rs.500/-per month, if the credit card bill is not paid by the due date


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1. The complainants have no legal standing to file this complaint. Complainants No.1and 2 are not voluntary consumer organizations registered under the provisions ofthe Companies Act, 1956.

2. Under the Consumer Protection Act, 1986, the Consumer fora have no jurisdiction

to determine the fixing of rates of interest on credit cards by the banks contrary tothe directives of the RBI under the statutory provisions.

3. The Consumer Protection Act, 1986 does not provide for interference by theNational Commission in the functioning of the regulator (RBI).

4. As long as the banks are functioning within the four corners of the statutoryguidelines under the Banking Regulation Act, 1949, there is no cause of actionavailable to even assert a plea of unfair trade practice or any deficiency in service.

5. The credit card operations are in the nature of high risk unsecured lending andhence there is justification of a higher rate of interest


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1.

Whether the Reserve Bank of India (hereinafter referred to as the RBI) is requiredto issue any circular or guidelines prohibiting the Banks / Non-Banking FinancialInstitutions / money lenders from charging interest above a specific rate?

2.

Whether banks can charge the credit card users interest at rates rangingfrom 36% to 49% per annum if there is any delay or default in paymentwithin the time specified?

3.

Whether interest at the above-stated rates amounts to chargingusurious rates of interest?


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Under Section 2(1) (d) (ii), a voluntary consumer associationcan file a complaint under CPA.

At the outset, it is made clear that a complaint under theConsumer Protection Act, 1986 to curb unfair tradepractice(s) adopted by the banks is maintainable.

One of the objects and reasons of the Consumer ProtectionAct, 1986 is, the right to be informed about the quality,quantity, potency, purity, standard and price of goods toprotect the consumer against unfair trade practice.

2(1) (r) unfair trade practice" means a trade practice which,for the purpose of promoting the sale, use or supply of anygoods or for the provision of any service, adopts any unfairmethod or unfair or deceptive practice


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Thereafter, section 2(1)(o) reads as under:

2(1)(o) "service" means service of any description which is madeavail-able to potential users and includes, but not limited to, theprovision of facilities in connection with banking, financing,

insurance, transport, processing, supply of electrical or otherenergy, board or lodging or both, housing construction,entertainment, amusement or the purveying of news or otherinformation, but does not include the rendering of any service freeof charge or under a contract of personal service;

The aforesaid sub-section would establish beyond doubt that if theservice provided by the bank in connection with banking facilitiesis deficient, then it would be service as contemplated under theAct and any dispute pertaining to such service would be governedunder the Consumer Protection Act, 1986.


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` Hence, if there is any unfair trade practice on the part of

banks, the provisions of the Consumer Protection Act, 1986

would be applicable and the banks can be directed, as

provided under sec.14(1)(f), to discontinue such unfairtrade practice and not to repeat them. Hence, to contend

that a complaint under Consumer Protection Act, 1986

against the banks is not maintainable, is of no substance.


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Charging of interest at rates in excess of 30% p. a. from thecredit card holders by banks for the formers failure to makefull payment on the due date or paying the minimum amountdue, is an unfair trade practice.

Penal interest can be charged only once for one period ofdefault and shall not be capitalized.

Charging of interest with monthly rests is also an unfair trade

practice.

Hence, the banks are directed not to indulge in the aforesaidunfair trade practices or repeat them.


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REGIONAL PROVIDENT FUND

COMMISSIONER v. SHIV KUMAR JOSHI


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Whether the provisions of the Consumer Protection Act, 1986

can he invoked against the Provident Fund Commissioner by a

member of the Employees' Provident Funds Scheme ? It has to

be ascertained as to whether any such member is a "consumer"and the duties performed by the Provident Fund Commissioner

under the relevant scheme are a "service" within the meaning of

the Act. If it is held that such member is a "consumer" and the

facilities provided are"

services"

, it has to be further consideredas to whether the delayed payment of the provident fund to a

member-employee amounts to deficiency of service under the

Act.


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Respondent (Shivkumar Joshi) applied to the Regional

Provident Fund Commissioner for the payment of his

provident fund on July 15, 1992.

The appellant's area inspector had personally gone to

the factory(where the respondent was employed) on

and obtained the verification application. The claim of

the respondent was settled on August 24, 1992.


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The respondent filed a complaint before the District Consumer

Disputes Redressal Forum, Faridabad (hereinafter referred to as

"the District Forum"), on alleging deficiency in service of the

appellant and claimed damages to the tune of Rs. 65,000 along

with costs for the alleged delay in payment of his provident fund.

The appellant raised a preliminary objection regarding the

jurisdiction of the District Forum on the ground that the

respondent was not a "consumer" and the facilities provided bythe scheme were not a "service". The District Forum, vide its

order dated November directed the appellant to pay interest at

18 per cent. on delayed payment and costs of Rs. 1,000.


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Not satisfied with the order of the District Forum, the appellant filed anappeal before the State Consumer Disputes Redressal Commission, Haryana

at Chandigarh (hereinafter referred to as "the State Commission") under

section 15 of the Act. The appeal was dismissed by the State Commission.

The revision filed before the National Consumer Disputes Redressal

Commission, New Delhi (herein-after referred to as "the National

Commission"), was dismissed, vide the order impugned in this appeal.

Taking as through the Employees' Provident Funds Scheme Shri N. N.

Goswamy, senior advocate, appearing for the appellant, submitted that the

said scheme could not be held to be a "service" within the meaning of

section 2(1)(o) and respondent No. 1 a "consumer" within the meaning of

section 2(1)(d) of the Act. It was urged that as the Provident Fund

Commissioner was the custodian of the funds passed to him and the

contribution to the Scheme was not for consideration, the Act was not

applicable.


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` A. S. Nambiar, Senior Advocate (Hemant Sharma and

Ms. Sushma Suri), for the appellant.

None appeared for the respondent.

` JUDGMENT

The judgment of the court was delivered by

R. P. SETHI J in favour of Shiv Kumar Joshi(respondent).


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THINGSWE MUST KNOW AS ACONSUMER


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To safeguard their interest consumers must check:

` In any packaged material, the MONTH & YEAROF MANUFACTURE,NETQUANTITY orWEIGHT& M.R.P.

` Check whether you are gettingRIGHT GOODS ATTHE RIGHT PRICE.

` Dont pay more than M.R.P.

` If imported, it must carry the NAME & ADDRESSOF IMPORTER WITH VALIDREGISTRATION.

` ISI Logo for purchase of appliances, electrical goods etc.


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` http://www.vakilno1.com/bareacts/employeepfact/s2.

htm (Section 2(1)(o) and Section 2(1)(d)

` http://www.wikipedia.com


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THANK YOU

Consumer Protection Act2

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Transcript of Consumer Protection Act2