LAM

REPORT
Consumer Protection
Act
GROUP-7
DEVENDRA SINGH RATHORE
SHASHI RANJAN SHARMA
RISHI NATH BHARGAVA
VAIBHAV SINGH
SHAILY OSTA
 CONSUMER PROTECTION ACT

The Consumer Protection Act, 1986, was enacted to provide a simpler

and quicker redressal to consumer grievances. The Act seeks to
promote and protect the interest of consumers against deficiencies and
defects in goods or services. It also seeks to secure the rights of a
consumer against unfair trade practices, which may be practiced by
manufacturers and traders.
The agenda of a consumer forum is to provide relief to both parties and
discourage long litigation. In a process called 'informal adjudication',
forum officials mediate between the two parties and urge compromise.

The Act applies to all goods and services unless specifically exempted
by the Union Government and covers all sectors, whether private,
public, or cooperative. This Act has provided a machinery whereby
consumers can file their complaints. These complaints will then be
heard by consumer forums with special powers so that action can be
taken against erring suppliers and possible compensation is awarded to
the consumer for the hardships he/she has undergone.

The consumer, under this law, is not required to deposit huge court
fees, which earlier used to deter consumers from approaching the
courts. The rigors of court procedures have been 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.
RIGHTS OF CONSUMERS:-

1. Right to be protected against marketing of goods and services that

are hazardous to life and property
2. Right to be informed about the quality, quantity, standard, and price
of goods or services so as to protect the consumer against unfair
trade practices
3. Right to receive assured access, wherever possible, 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.
6. Right to consumer education.

WHO IS A CONSUMER:-

(a) Buys any goods for a consideration which has been paid or
promised or partly paid and partly promised, or under any
system of deferred payment and includes any user of such goods
other than the person who buys such goods for a consideration
paid or promised or partly paid or partly promised, or under any
system of deferred payment, when such use is made with the
approval of such person, but does not include a person who
obtains such goods for resale or for any commercial purpose
(b) Hires or avails of any services for consideration which has been
paid or promised or partly paid and partly promised, or under
any system of deferred payment and includes any beneficiary of
such services other than the person who hires or avails of the
services for a consideration paid or promised, or partly paid and
partly promised, or under any system of deferred payment, when
such services are availed of with the approval of the first
mentioned person but does not include a person who avails of
such services for any commercial purpose.

DEFECTS IN GOODS:-
Section 2(1) (f) of the Act provides that, “defect” means any fault,
imperfection or shortcoming in the quality, quantity, potency, purity or
standard which is required to be maintained by or under any law of the
time being in force under any contract, express or implied or as is
claimed by the trader in any manner whatsoever in relation to any
goods.
This is an exhaustive definition. It means that the Act recognises only
those defects which are covered by the definition. Any type of defect
not mentioned here will not be entertained by Consumer Forums.
Moreover the defect has to be in relation to goods only, i.e., if an item
does not fall within the definition of ‘Goods’, no defect can be
complained therein. However, the coverage of this definition is very
wide.

DEFICIENCY IN SERVICES:-
Section 2(1) (g) of the Act provides that, “deficiency” means any fault,
imperfection, shortcoming or inadequacy in the quality, nature and
manner of performance which is required 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. It means any fault, imperfection, shortcoming
or inadequacy in the quality, nature and manner of performance. One
interesting aspect is that deficiency in service should occur during the
happening of performance. Thus it is crucial to determine when the
performance of a service commenced.

FORUM:-

 A District forum established by the State Government in each

district of the State by its notification.
 A State Commission established by the State Government in each
state by its notification.
 A National Commission established by Central Government by
notification.

EXAMPLES:-

Karnataka Power Transmission Corporation v Ashok Iron Works

Private Limited
The Supreme court, in this case, held that a corporate body is included
in the meaning of ‘person’ in section 2(1) (m) of the CPA. It reiterated
the position of Lord Watson in Dilworth v. Commissioner of
Stamps that the word “includes” is generally used to enlarge the
meaning of the word but can alternatively be used to say “mean and
include”, in which case what follows is an exhaustive explanation. The
interpretation depends on the text, context, and objective of the Act. It
was held that the section never intended to exclude juristic persons
from its purview and the definition is inclusive in nature.
It also reiterated its own position in Southern Petrochemical
Industries that the word “supply” is not the same as “sale” and in the
context of electricity, it would be a provision of service as under
section 2 (1)(d)(ii) of the Act.

V.N.Shrikhande vs Anita Sena Fernandes

The petitioner alleged negligence by a medical practitioner, claiming
that he left a mass of gauge in her abdomen during a procedure to
remove stones from the gallbladder. However, the petition was raised
nine years after the procedure when the petitioner underwent a second
operation, in another hospital, to remove the mass.

The Supreme Court recognized that in cases of medical negligence no

straightforward formulae is present to determine when the cause of
action has accrued. The court, following ‘Discovery Rule’ evolved by
the courts in the United States, stated that in the case where the effect
of the negligence is obvious, the cause of action is deemed to have
arisen at the time of negligence. However, in case the effect of
negligence is dormant, the cause of action arises when the patient
figures out about the negligence with reasonable diligence. The court
noted that the petitioner had been experiencing pain and discomfort
since the time of the operation for which she continued to take
painkillers for nine years without consulting the doctor. In the light of
this and the fact that she herself was an experienced nurse who can
reasonably be expected to possess more knowledge than a layman, the
court set aside the Commission’s order and dismissed the complaint.
Sapient Corporation Employees Provident Fund Trust v HDFC &
Ors.
In a complaint against HDFC for debiting money without the
permission of the holder, the National Commission noted that payment
was done in compliances with the order of a statutory authority and
only after giving the complainant due notice of the same. The
Commission stated that there is a need to guard against the possibility
of frivolous complaints from being filed due to the absence of any
court fees. For this reason, holding that the complaint lacked
seriousness and was filed without sufficient grounds, the Commission
imposed a fine of twenty-five thousand on the complainant under
section 26 of the Act.

Delhi Development Authority v D.C. Sharma

In the case of an accidental double allotment of a plot by the Delhi
Development Authority, the State Commission refused to accept the
defence that the plot had not been provided to the complainant only for
his failure to pay the cost. It was found from the records that the plot
had been allocated to another person. It, therefore, ordered the Delhi
Development Authority to either provide another plot of the same
description to the appellant under the same conditions or pay the
escalated price of the plot.
The National Commission dismissed the revision petition for lack of
infirmity in the State Commission’s judgment and ordered the payment
of five lakhs for indulging in unfair trade practices and unduly
harassing the respondent for more than eighteen years.
Indian Medical Association v V.P. Shantha and others
In deciding this case of deficiency of medical service, the court held
that the services rendered by a medical professional fall within the
ambit of ‘services’ under the section 2(1) (o) of the Act. It rejected the
contention that a medical practitioner, being a professional and falling
under the scope of Indian Medical Council Act, stands excluded from
the CPA.
Moreover, it held that provision of a token fee (for the hospital
administrative purposes) would not include an otherwise free service
within the ambit of the definition of services. Also, the cost of the
services paid by the employer or the insurance company would be
deemed similar to paying for the service by the consumer itself.

ARBITRATION:-

Arbitration is an ADR (alternative dispute resolution) method where

the disputing parties involved present their disagreement to one
arbitrator or a panel of private, independent and qualified third party
“arbitrators.” The arbitrator(s) determine the outcome of the case.
While it may be less expensive and more accessible than trial, the
arbitration process has well-defined disadvantages. Some of
disadvantages include the risk losing, formal or semi-formal rules of
procedure and evidence, as well as the potential loss of control over
the decision after transfer by the parties of decision-making authority
to the arbitrator. By employing arbitration, the parties lose their ability
to participate directly in the process. In addition, parties in arbitration
are confined by traditional legal remedies that do not encompass
creative, innovative, or forward-looking solutions to business disputes.
CONCILIATION:-
Conciliation is an alternative out-of-court dispute resolution
instrument. It is a voluntary, flexible, confidential, and interest based
process. The parties seek to reach an amicable dispute settlement with
the assistance of the conciliator, who acts as a neutral third party.
Conciliation is a voluntary proceeding, where the parties involved are
free to agree and attempt to resolve their dispute by conciliation. The
process is flexible, allowing parties to define the time, structure and
content of the conciliation proceedings. These proceedings are rarely
public. They are interest-based, as the conciliator will when proposing
a settlement, not only take into account the parties' legal positions, but
also their; commercial, financial and / or personal interests.

WHO CAN BE APPOINTED AS ARBITATOR:-

Generally, anyone can call himself an arbitrator, as there are no
certifications or qualifications. Many retired or former judges hold
themselves out as arbitrators. The only general requirement is that both
parties agree to the person. However, in many fields the arbitrators
traditionally chosen are experts in the business or field of law
involved. In labor and employment law there are professional
arbitrators who have practiced arbitration for many years and have
gained the confidence of other professionals.
WHEN ARBITRATOR COULD BE REMOVED:-

 He becomes de jure or de facto unable to perform his functions or

for other reasons fails to act without undue delay; and
 He withdraws from his office or the parties agree to the termination
of his mandate.

Section 15 provides additional circumstances under which the mandate

of an arbitrator shall terminate. These include-
 Where the arbitrator withdraws from office for any reason; or
 By or pursuant to agreement of the parties.

ARBITRATION AWARD:-

An arbitration award is the award granted by the arbitrator in their

decision. This award can be money one party has to pay to the other
party. It can also be a non-financial award, such as stopping a certain
business practice or adding an employment incentive. An arbitration
award can be made for payment of a sum of money, declaration upon
any matter to be determined in the arbitration proceedings, injunctive
relief, specific performance of a contract and for rectification, setting
aside or cancellation of a deed or other document.