THE CONSUMER PROTECTION ACT

THE CONSUMER PROTECTION ACT, 1986
(68 of 1986)

[24th December, 1986]

An Act to provide for better protection of the interests of consumers and for that purpose to make provision for the establishment of consumer councils and other authorities for the settlement of consumers' disputes and for matters connected therewith.
BE it enacted by Parliament in the Thirty-seventh Year of the Republic of India as follows:-

CHAPTER 1
PRELIMINARY

1. Short title, extent, commencement and application.

(1) This Act may be called the Consumer Protection Act, 1986.

(2) It extends to the whole of India except the State of Jammu and Kashmir.

(3) It shall come into force on such date' as the Central Government may, by notification, appoint and different dates may be appointed for different States and for different provisions of this Act.

(4) Save as otherwise expressly provided by the Central Government by notification, this Act shall apply to all goods and services.

2. Definitions.

(1) In this Act, unless the context otherwise requires,- ²[(a) "appropriate laboratory" means a laboratory or organisation-

(i) recognised by the Central Government;

(ii) recognised by a State Government, subject to such guidelines as may be

prescribed by the Central Government in this behalf; or

(iii) any such laboratory or organisation established by or under any law for the time being in force, which is maintained ,financed or aided by the Central Government or a State Government for carrying out analysis or test of any goods with a view to determining whether such goods suffer from any defect;

³[(aa) "branch office" means----

(i) any establishment described as a branch by the opposite party; or

(ii) any establishment carrying on either the same or substantially the same activity as that carried on by the head office of the establishment;]

1. The provisions of Chapters I, II and IV of this Act have come into force in the whole of India except the State of Jammu and Kashmir on 15-4-1987: vide Notification No. S.O. 390 (E,), dated 15th April, 1987, published in the Gazette of India, 1987, Extra., Pt. II, See. 3 (ii).

The provisions of Chapter III of this Act have come into force in the whole of India except the State of Jammu and Kashmir on 1-7-1987: vide Notification, No. S.O. 568(E), dated 10th June, 1987, published in the Gazette of India, 1987, Extra., Pt. II, Sec. 3(ii).

2. Subs. by Act 50 of 1993, sec. 2 (w.e.f. 18-6-1993).

3. Ins. by Act 50 of 1993, sec. 2 (w.e.f. 18-6-1993).

(b) "complainant" means-

(i) a consumer; or

(ii) any voluntary consumer association registered under the Companies Act, 1956 (1 of 1956) or under any other law for the time being in force; or

(iii) the Central Government or any State Government;

¹[(iv) one or more consumers, where there are numerous consumers having the same interest;]

who or which makes a complaint;

²[(i) an unfair trade practice or a restrictive trade practice has been adopted by any trader;]

(ii) '[the goods bought by him or agreed to be bought by him] suffer from one or more defects;

(iii) '[the services hired or availed of or agreed to be hired or availed of by him] suffer from deficiency in any respect;

(iv) a trader has charged for the goods mentioned in the complaint a price in excess of the price fixed by or under any law for the time being in force or displayed on the goods or any package containing such goods;

³[(v) goods which will be hazardous to life and safety when used, are being offered for sale to the public in contravention of the provisions of any law for the time being in force requiring traders to display information in regard to the contents, manner and effect of use of such goods,]

with a view to obtaining any relief provided by or under this Act;

(d) "consumer' means any person who-

(i) 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 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; or

(ii) ⁴[hires or avails of] any services 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 beneficiary of such services other than the person

Who ⁴[hires or avails of] the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment,

1. Ins. by Act 50 of 1993, see. 2 (w.e.f. 18-6-1993).

2. Subs. by Act 50 of 1993, see. 2 (w.e.f. 18-6-1993).

3. Ins. by Act 50 of 1993, see. 2 (w.e.f. 18-6-1993).

4. Subs. by Act 50 of 1993, spc. 2 (w.e.f 18-6-1993).

when such services are availed of with the approval of the first mentioned person;¹[Explanation.-For the purposes of sub-clause (i), "commercial purpose" does not include use by a consumer of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self-employment;]

(e) "consumer dispute" means a dispute where the person against whom a complaint has been made, denies or disputes the allegations contained in the complaint;

(f) "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 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;

(g) "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;

(h) "District Forum" means a Consumer Disputes Redressal Forum established under clause (a) of section 9;

(i) "goods" means goods as defined in the Sale of Goods Act, 1930;

(j) "manufacturer 5' means a person who--

(i) makes or manufactures any goods or parts thereof or

(ii) does not make or manufacture any goods but assembles parts there of made or manufactured by others and claims the end-product to be goods manufactured by himself; or

(iii) puts or causes to be put his own mark on any goods made or manufactured by any other manufacturer and claims such goods to be goods made or manufactured by himself.

Explanation.-Where a manufacturer despatches any goods or part there of to any branch office maintained by him, such branch office shall not be deemed to be the manufacturer even though the parts so despatched to it are assembled at such branch office and are sold or distributed from such branch office;

¹[(jj) "member" includes the President and a member of the National Commission or a State Commission or a District Forum, as the case may be.,]

(k) "National Commission" means the National Consumer Disputes Redressal Commission established under clause (c) of section 9;

(1) "notification" means a notification published in the Official Gazette;

(m) "person" includes,

(i) a firm whether registered or not;

1. Ins. by Act 50 of 1993, sec. 2 18-6-1993).

2. Ins. by Act 50 of 1993, sec. 2 (w.e.f. 18-6-1993).

3. Ins. by Act 50 of 1993, sec. 2 (w.e.f. 18-6-1993).

(ii) a Hindu undivided family;

(iii) a co-operative society;

(iv) every other association of persons whether registered under the Societies Registration Act, 1860 (21 of 1860) or not;

(n) "prescribed" means prescribed by rules made by the State Government, or as the case may be, by the Central Government under this Act;¹[(nn) "restrictive trade practice" means any trade practice which requires a consumer to buy, hire or avail of any goods or, as the case may be, services as a condition precedent for buying, hiring or availing of other goods or services;]

(o) "service" means service of any description which is made available to potential users and includes the provision of facilities in connection with banking, financing insurance, transport, processing, supply of electrical or other energy, board 6r lodging or both, '[housing construction] entertainment, amusement, or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service.,

(p) "State Commission" means a Consumer Disputes Redressal Commission established in a State under clause (b) of section 9;

(q) "trader" in relation to any goods means a person who sells or distributes any goods for sale and includes the manufacturer thereof, and where such goods are sold or distributed in package form, includes the packer thereof;

³(r) "unfair trade practice" 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;-
(1) the practice of making any statement ,whether or all or in writing or by visible representation which,-

(i) falsely represents that the goods are of a particular standard, quality, .quantity, grade, composition, style or model;

(ii) falsely represents that the services are of a particular standard, quality or grade;

(iii) falsely represents any re-built, second-hand, renovated, reconditioned or old goods as new goods;

(iv) represents that the goods or services have sponsorship, approval, performance, characteristics, accessories, uses or benefits which such goods or services do not have.

(v) represents that the seller or the supplier has a sponsorship or approval or affiliation which such seller or supplier does not have;

(vi) makes a false or misleading representation concerning the need for, or the usefulness of,-any goods or services;

1. Ins. by Act 50 of 1993, sec. 2 (w.e.f 18-6-1993).

2. Ins. by Act 50 of 1993, sec. 2 (w.e.f 18-6-1993).

3.Subs. by Act 50 of 1993, sec. 2 (w.e.f. 18-6-1993).

(vii) gives to the public any warranty or guarantee of the performance, efficacy or length of life of a product or of any goods that is not based on an adequate or proper test thereof.
Provided that where a defence is raised to the effect that such warranty or guarantee is based on adequate or proper test, the burden of proof of such defence shall lie on the person raising such defence;

(viii) makes to the public a representation in a form that purports to be-
a warranty or guarantee of a product or of any goods or services; or a promise to replace, maintain or repair an article or any part there of or to repeat or continue a service until it has achieved a specified result, if such purported warranty or guarantee or promise is materially misleading or if there is no reasonable prospect that such warranty, guarantee or promise will be carried out;

(ix) materially misleads the public concerning the price at which-a product or like products or goods or services, have been or are, ordinarily sold or provided, and, for this purpose, a representation as to price shall be deemed to refer to the price at which the product or goods or services has or have been sold by sellers or provided by suppliers generally in the relevant market unless it is clearly specified to be the price at which the product has been sold or services have been provided by the person by whom or on whose behalf the representation is made;

(x) gives false or misleading facts disparaging the goods, services or trade of another person.

Explanation.-For the purposes of clause (1), a statement that is-
(a) expressed on an article offered or displayed for sale, or on its wrapper or container; or
(b) expressed on anything attached to, inserted in, or accompanying, an article offered or displayed for sale, or on anything on which the article is mounted for display or sale., or
(c) contained in or on anything that is sold, sent, delivered, transmitted or in any other manner whatsoever made available to a member of the public, shall be deemed to be a statement made to the public by, and only by, the person who had caused the statement to be so expressed, made or contained;

(2) permits the publication of any advertisement whether in any newspaper or otherwise, for the sale or supply at a bargain price, of goods or services that are not intended to be offered for sale or supply at the bargain price, or for a period that is, and in quantities that are, reasonable, having regard to the nature of the market in which the business is carried on, the nature and size of business, and the nature of the advertisement.
Explanation.-For the purpose of clause (2), "bargaining price" means-
(a) a price that is stated in any advertisement to be a bargain price, by reference to an ordinary price or otherwise, or
(b) a price that a person who reads, hears or sees the advertisement, would reasonably under stand to be a bargain price having regard to the prices at which the product advertised or like products are ordinarily sold;

(3) permits--

(a) the offering of gifts, prizes or other items with the intention of not providing them as offered or creating impression that something is being given or offered free of charge when it is fully or partly covered by the amount charged in the transaction as a whole;
(b) the conduct of any contest, lottery, game of chance or skill, for the purpose of promoting, directly or indirectly, the sale, use or supply of any product or any business interest;

(4) permits the sale or supply of goods intended to be used, or are of a kind likely to be used, by consumers, knowing or having reason to believe that the goods do not comply with the standards prescribed by competent authority relating to performance, composition, contents, design, constructions, finishing or packaging as are necessary to prevent or reduce the risk of injury to the person using the goods;

(5) permits the hoarding or destruction of goods, or refuses to sell the goods or to make them available for sale or to provide any service, if such hoarding or destruction or refusal raises or tends to raise or is intended to raise, the cost of those or other similar goods or services.]

(2) Any reference in this Act to any other Act or provision thereof which is not in force in any area to which this Act applies shall be construed to have a reference to the corresponding Act or provision thereof in force in such area.

COMMENTS

(i) The student is a consumer of service of educational institute; Sushant Yuvaraj Rode v. Shri Ramdeobaba Engineering College, 1993 (III) CPR 624.

(ii) A person who receives medical treatment in a Government hospital is not a consumer under the Act. Consumer Unity & Trust Society v. State of Rajasthan, (1991) 1 CPR 241. However, the State commission of Orissa held that a patient is a Consumer being the beneficiary of services in as much as the State Government is paying the consideration amount in the form of salary to the doctors and hospital staff; Smt. Sukanti Behera v. Dr. Sashi Bhusan Rath, II (1993) CPJ 633.

(iii) A licensee to run a phone is not a consumer; Techno combine Associates v; Union of lndia, I (1 994) CPJ 481: 1994 (I) CPR 298.

(iv) A lottery ticket holder is not "consumer" within the ambit of the definition of "consumer" under the Act; Jagdish Chand v. Director, Sikkim State Lottery, 1994 (I) CPR 213.

(v) Applicant who merely applies for allotment of shares is not a consumer; H. G Bhatia v. ABC computers, Pvt. Ltd., 1994 (I) CPR 316.

(vi) The beneficial consumer jurisdiction cannot be extended to lotteries and wagering transactions or consequential rights flowing from void contracts; Jadish Chand v. Director, Sikkim State Lotteries, 1994 (I) CPR 213.

(vii) If somebody does not perform his part of the contract, it amounts to deficiency in service; Smt. Ramala Roy v. Rabindra Nath Sen, 1994 (I) CPR 66.

(viii) The agreement for hypothecation does not create the ownership right, and as such no complaint can be maintained for deficiency in service; Jayantial Keshavlal Chauhan v. The National Insurance Co. Ltd., 1994 (I) CPR 390.

(ix) Undue delay in declaration of examination result is obviously deficiency in service; Secretary, Board of school Education, Haryana v. Mukesh Chand, 1994 (I) CPR 269.

(x) When there is default or negligence in regard to service that will constitute deficiency in service on the part of the opposite party and it is perfectly open to the aggrieved consumer to seek appropriate relief under the Act; S.K Lakhotia v. National Insurance Co. Ltd., 1994 (I) CPR 43.

(xi) Discriminatory service or arbitrary action, is a "deficiency"; Orissa State Housing Board v. Biswanath Misra, II (1994) CPJ 377: 1994 (I) CPR 78.

(xii) The repudiation of the claim by the Insurance Company on the ground that the driver was not holding a valid driving licensee at the time of the accident could not be termed as deficiency in service or negligence on the part of the Insurance Company within the meaning of section 2 (g) of the Act; New India Assurance Co. Ltd. v. Smt. Pushpa Yashwant Ghatge, 1996 NCJ 195.

(xiii) Medical services are covered under the definition of "service". Service includes rendering of consultation, diagnosis and treatment, both medical and surgical.' Indian Medical Association v. VP. Shantha, 1995 SCALE 273.

(xiv) "Contract of personal service" has to be distinguished from a "contract for personal service". In the absence of relationship of master and servant between the patient and the medical practitioner, the service rendered by a medical practitioner to the patient cannot be regarded as service rendered under a contract of personal service. It is "contract for personal services". Wherever, there is relationship like that of master and servant it is a "contract of personal service" and is excluded from the purview of the Act; Indian Medical Association v. V. P. Shantha, 1995 SCALE 273.

3. Act not in derogation of any other law.

The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force-.

COMMENTS

(i) The remedy provided under the Act is in addition to the provisions of any other, law for the time being in force. The provisions of this Act give the consumer an additional remedy besides those that may be available under other existing laws; the Consumer & Citizens Forum v. Karnataka Power Corporation, 1994 (I) CPR 130.

(ii) When a case is pending in a court in which full evidence is to be recorded the Forums constituted under the Consumer Protection Act, 1986 should not entertain the complaint with respect to the same cause of action; Hanuman Prasad v. The New India Assurance Co. Ltd., I (1994) CPJ 1 (NC).

(iii) It is nowhere laid down that whenever the examination and cross-examination is involved, the proper forum for adjudication of the dispute is only Civil Court; S.K Lakhotia v. National Insurance Co. Ltd., 1994 (I) CPR 43.

(iv) It is authoritatively settled that the arbitration clause is not a bar to the entertainment of the complaint by the Redressal Agency constituted under the Act, even if the arbitration provision has been laid down in a statute; Ram Nath v. Improvement Trust, Bathinda, 1994 (I) CPR 357.

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