PROJECT- LAW OF TORT

ON
TOPIC

CONSUMER PROTECTIOON ACT

Submitted By
SHABIR CHOUDHARY
REG NO GU16R0026
1rd SEMESTER
COURSE:BALLB

GLOCAL LAW SCHOOL

CONTENTS
Table of cases

Books

Other

Introduction

Consumer Protection In India.

The Constitution of India and Socio-Economic Justice.

The Constitution of India and Socio-Economic Justice.

Objectives of the Act.

Important Features of the C.P. Act.

Consumer Rights under the Act.

Other Important Aspects of C.P. Act.

Who can file a Complaint?

Where to file a Complaint ?

Reliefs Available to Consumers.

TABLE OF CASES
Ghaziabad Development Authority vs Balbir Singh, AIR 2004 SCW 2362.

Dr. J.J.Merchant and ors Vs. Srinath Chaturvedi, III, (2002) CPJ 8 (SC).
TABLE OF ABBTREVIATION
All. E. R………………………………………………………….……… All England Report

A.I. R ………………………………………………………………….……AII India Reporter

A P………………………………………………………………………………… Apex Court

A,L.J……………………………………………………..…..…………Allahabad Law Journal

Edn……………………………………………………………………………..………..Edition

F.C…………………………………………………………………………….…Federal Cases

H.L……………………………………………………………………………..House of Lords

I.P.C………………………………………………………………………....Indian Penal Code

K.B ……………………………………………………………..………………..King’s Bench

L.J………………………………………………………………………………….Lord Justice

Mod.Rep……………………………………………………………...………..Modern Reports

P.C………………………………………………………………....……………..Privy Council

S.A………………………………………………………………………..…….Second Appeal

SCC…………………………………………………………………...… Supreme Court Cases

Sec……………………………………………………………...……………………… Section

S.C.J ……………………………………………………….……………Supreme Court Cases

T.L.R………………………………………………………….…………….Time Law Reports

V/S……………………………………………………………………………………….Versus

Y.R………………………………………………………………...…….Yearly Reports (Law)

INTRODUCTION
The growing interdependence of the world economy and inter- national
character of many business practices have contributed to the development of universal
emphasis on consumer rights protection and promotion. Consumers, clients and customers
world over, are demanding value for money in the form of quality goods and better services.
Modern technological developments have no doubt made a great impact on the quality,
availability and safety of goods and services. But the fact of life is that the consumers are still
victims of unscrupulous and exploitative practices. Exploitation of consumers assumes
numerous forms such as adulteration of food, spurious drugs, dubious hire purchase plans,
high prices, poor quality, deficient services, deceptive advertisements, hazardous products,
black marketing and many more. In addition, with revolution in information technology
newer kinds of challenges are thrown on the consumer like cyber crimes, plastic money etc.,
which affect the consumer in even bigger way. ‘Consumer is sovereign’ and ‘customer is the
king’ are nothing more than myths in the present scenario particularly in the developing
societies. However, it has been realised and rightly so that the Consumer protection is a
socio- economic programme to be perused by the government as well as the business as the
satisfaction of the consumers is in the interest of both. In this context, the government,
however, has a primary responsibility to protect the consumers’ interests and rights through
appropriate policy measures, legal structure and administrative framework.
It may be mentioned at the outset that any one interested in the task of consumer
protection movement has to be well versed in various laws and not merely with the Consumer
Protection Act, 1986. He should have knowledge of laws relating to Contract, Tort, Railways,
Telegraphs, Telephones, Post, Air Travel, Insurance, Electricity, Water, Housing, Medicine,
Banking, Finance, Engineering, Motor Vehicles, Hotel Industry, Entertainment, Cooperative
Societies, Tourism Agencies, Sales Tax, Central Excise, Limitation, Transport etc. There is
no limit to subjects, which may come before a Consumer Forum / Commission for decision.
In addition, one should also be well versed with the laws relating to unfair trade practice and
restrictive trade practices. Be it as it may. Except for the Monopolies and Restrictive Trade
Practices (MRTP) Act (now repealed) all the other Acts were mainly punitive and preventive
in nature. The consumer could not seek remedy or redressal against the offending trader or
manufacturer and negligent, careless providers of services. However the MRTP Commission
enabled the consumer to approach it in case of complaints. Inspite of these Acts the
consumers did not have any effective mechanism or institutional arrangement for the speedy
redressal of their grievances and also the lack of effective popular movement isolated the
consumer and his plight only increased. Seeing the pressure mounting from various consumer
protection groups and the consumer themselves the Parliament enacted the Consumer
Protection Act in 1986.
Consumer Protection In India

Historically consumer welfare dates back to the Vedic Age. Four broad types of criminal
offences were prominent in the ancient period: adulteration of food stuff, charging of excess
prices, fabrication of weights and measures, and sale of forbidden articles. For these offences
statutory measures were recommended from time to time by the leading texts of the time.1

 Manusmriti advocated severe punishment for unfair business practices

 To deal with faulty weights and measures the manusmriti provided that all weights
and measures must be duly marked by the king and should be re-examined every six
months. •
 Manusmriti explains that it was obligatory on the king to fix the rates for the purchase
and sale of all marketable goods and the fixation of price by the king was to be made
public.
 In Kautilya’s Arthashastra consumer protection occupies a prominent place. It
describes the role of the State in regulating trade and its duty to prevent crimes against
consumers.
 To protect the customer from the excessive prices charged by the traders, it was
provided that the state declares the rates for the purchase and sale of all marketable
commodities in order to protect the customers from arbitrary exploitation by the
traders.
 Adulteration was recognized as an offence in Arthashastra and punishment for same
was specified. Adulteration of grains, oil, medicine, perfumes, salt, sugar attracted
severe penalty.
 Traders who during the purchase and sale raised the price or secured an extra profit of
five percent beyond the limit fixed by the state were heavily fined. • If the merchants
conspired to raise the prices of the commodities at their own will they were severely
dealt with.
 Arthashastra expresses two other key areas concerning consumers- regulation
concerning sale of animal flesh; and obligation of professionals like artisans,
craftsmen, washermen, weavers, goldsmith, actors and physicians.2

1
State of Karnataka v. Parmjit singh AIR 2006 SC 1408
2
Consumers‟ Awareness about Rights and Grievance Redressal, by Dr. Durga Surekha, 2010, page 8-9
  The British regime was only concerned with protecting and promoting British
interests rather than welfare of Indians. However, Britishers introduced a number of
Acts like Indian Contract Act, 1872, Sales of Goods Act, 1930 etc. to protect
consumers. However, these legal measures mainly led to litigation with little relief to
consumers.
 Mahatma Gandhi, the Father of the Nation attached great importance to what he described
as the poor consumer, who according to him should be the principal beneficiary of the
consumer movement.

The Constitution of India and Socio-Economic Justice

The Constitution of India includes different provisions in the Fundamental Rights and
Directive Principles of State Policy, which lay emphasis on expansion of public enterprise,
avoid concentration of economic power in few hands and restriction of private monopolies,
safeguarding the interests of the consumers of manufactured goods and producers of raw
materials etc. to further the concept of welfare state. Thus consumer justice is a part of social
and economic justice enshrined in the Constitution3. Following the Constitutional mandate, a
number of laws have been enacted to protect the consumers. Some important ones are:

 Drugs Control Act, 1950;

 Prevention of Food Adulteration Act, 1954;
 Drug and Magic Remedies (Objectionable Advertisements) Act, 1954;
 Essential Commodities Act, 1955;
 Export Quality Control and Inspection Act, 1963;
 Monopolies and Restrictive Trade Practices Act, 1969;
 Standard of Weights and Measures Act, 1976;
 Prevention of Black-marketing and Maintenance of Supplies of Essential
Commodities Act, 1980.

Objectives of the Act

The purpose of the Act is to provide for the establishment of the Commission

3
Department of Consumer Affairs, Annual Report, 2011-12, p.51
  · To prevent practices having adverse effect on competition; ·
 To promote and sustain competition in markets4; ·
 To protect the interests of consumers and ·
 To ensure freedom of trade carried on by other participants in the markets, in India

The major focus of the Act is on the following areas:

 Prohibition of anti competitive agreements;

 Prohibition against abuse of dominant position; ·
 Regulation of combinations; ·
 Advocacy of competition policy.

The legislative intention behind this Act is to clear all hurdles in promoting competition
among business units whether of domestic or foreign origin. The Consumer Protection Act of
1986 was enacted with an objective to provide better protection of the interests of the
Consumers, to make provision for the establishment of Consumer Councils and other
authorities for the settlement of consumer disputes. This is indeed a very unique and highly
progressive piece of Social Welfare Legislation. The provisions of this Act are intended to
provide effective and efficient safeguards to the consumers against various types of
exploitations and unfair dealings. Unlike other laws, which are basically punitive or
preventive in nature, the provisions of the Act are compensatory. It is a matter of great
satisfaction that we can legitimately boast that we now have in our country a statute, which
provides more effective protection to the consumers than any corresponding legislation in
force in countries, which are considered to be much more advanced and industrialised. CPA
has been in operation for about 18 years. A number of deficiencies and shortcoming in
respect of its operation have come to light thereby requiring amendments thrice, still leaving
scope for further improvements. Despite all this it is a handy weapon for consumers to ensure
accountability of producers of goods and providers of services. In the International
Conference on Consumer Protection held in Malaysia in 1997, the Indian Consumer
Protection Act was described as one “which has set in motion a revolution in the field of
consumer rights, the parallel of which has not been seen anywhere else in the world”.

4
Charan Singh Vs Healing Touch Hospital and ors. (2000) 7 SCC 668
Consumer Protection: Implications for Good Governance.
An effective, efficient and fair implementation of the Consumer Protection Act is one
of the conditions precedent for promoting the culture of good governance and thereby
ensuring the better promotion and protection of the rights of the consumers. If the rights of
the consumers in relation to the quality of goods and services are assured and taken care of
then there will be no cause for complaints. This situation would certainly create an
atmosphere wherein the clients, customers and consumers would feel satisfied with the things
needed most to them.
The judgement of the Supreme Court in Lucknow Development Authority Vs.
M.K.Gupta5 may be cited as an illustration. In the instant case the Supreme Court while
establishing the jurisdiction of the Consumer Disputes Redressal Agencies created under the
Consumer Protection Act emphasised that the service provided by a private body or a
statutory or public authority are within the jurisdiction of the Consumer Protection Act. In
this context, the Supreme Court also laid down that any defect or deficiency in such service
would be treated as unfair trade practice and would amount to denial of service.

Indian Medical Association Vs. V.P. Shantha and Ors6, deserves high appreciation
with a view to giving real meaning to the accountability of professionals. In Charan Singh’s
judgment12 the observation of the Supreme Court to the effect that “the Consumer Forums
while quantifying damages are required to make an attempt to serve the ends of justice so that
compensation is awarded, in an established case, which not only serve the purpose of
recompensing the individual, but which also at the same time, aims to bring about a
qualitative change in the attitude of the service provider”. It may, in addition, be pointed out,
in view of the number of complaints brought before the Consumer Forums and Commissions,
that the number of complaints in regard to the quality of public services are more than
complaints dealing with defects in goods. Keeping in view the changing economic scenario,
the number of complaints in regard to the deficiencies in services would certainly increase in
the future. Therefore, the Consumer Forums and Commissions established under the
Consumer Protection Act, need to be given extra attention to ensure its efficient, effective,
fair and inexpensive functioning.

Important Features of the C.P. Act

5
(1994) 1SCC 243, See also Ghaziabad Development Authority vs Balbir Singh, AIR 2004 SCW 2362.
6
AIR 1996 SC 550, See also Dr. J.J.Merchant and ors Vs. Srinath Chaturvedi, III, (2002) CPJ 8 (SC).
 This may be summed up as under:

 - The Act applies to all goods and services unless specifically exempted by the
Central Government. –
 It covers all the sectors –
 private, public and cooperative. –
 The provisions of the Act are compensatory in nature. –
 It provides adjudicatory authorities, which are simple, speedy and less expensive. –
 It also provides for Consumer Protection Councils at the National, State and District
levels. 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.

Consumer Rights under the Act

The Act enshrines the following rights:

 The right to be protected against the marketing of goods which are hazardous to life
and property; 7
 The right to be informed about the quality, quantity, potency, purity, standard and
price of goods so as to protect the consumer against unfair trade practices;
 The right to be assured, wherever possible access to variety of goods at competitive
prices;¾
 The right to be heard;
 The right to seek redressal against unfair trade practices or unscrupulous exploitation
of consumer; and
 The right to consumer education.

The Act provides for the establishment of the Consumer Protection Councils at the National,
State and District levels. The objectives of these councils are to help the respective
governments in adopting and reviewing policies for promoting and protecting the rights of
the consumers. The composition of these consumer councils are broad based 8. The citizens
and organisations representing different interest groups having implications for consumer’s
rights protection are members of these councils. One may like to add, that the Consumer
Councils are required to be constituted on public- private partnership basis for better feed

7
Consumers‟ Awareness about Rights and Grievance Redressal, by Dr. Durga Surekha, 2010, page 8-9
8
General Assembly Resolution 39/ 85
back and thereby review of the policy in the area of consumer’s rights protection9. The main
objective of these councils is to promote and protect rights and interests of consumers in the
society.10
It also provides for Consumer Disputes Redressal Adjudicatory bodies established at
three levels i.e. District, State and National. They are known as District Forums, State
Commissions and National Commission. District Forum is composed of President and two
members (one member is woman)11. Every member of the District Forum shall hold office
for a term of five years or upto the age of 65 years, whichever is earlier and shall be eligible
for reappointment. Now graduation is the minimum educational qualification for a member.
The State Commission is presided over by Retired High Court Judge. The National
Commission is presided over by the retired Supreme Court Judge. The District Forum can
adjudicate on the matter upto Rs. 20 lakhs, State Commission upto one crore and National
Commission above Rs. one crore. The proceedings before these adjudicatory bodies are
regulated in accordance with the principles of natural justice.12 At present 571 District Fora
and 35 State Commissions are functioning all over the country besides the National
Commission. Now State Commissions and National Commission have started sitting in
Circuit Benches. It may, however, be highlighted that there are 253 Vacancies of the
Presidents and Members of the Forums in the entire Country.

Other Important Aspects of C.P. Act

Who is a Complainant13?

 Consumer.
 Any voluntary organisation representing consumers registered under Companies
Act/Societies Act.
 Central Government.
 State Government or Union Territory.

What Constitute a Complaint?

 A complaint may be made in writing under the following circumstances:

9
Department of Consumer Affairs, Annual Report, 2011-12, p.51
10
Ibid
11
Avtar singh, Introduction To The Law of Torts , lexis Nexis 3rd Edition p 247
12
Ibid
13
26th Report of Standing Committee on Food, Consumer Affairs on Consumer Protection (Amdt.) Bill, 2011,
pp.1-2
  Loss or damage is caused to the consumer due to unfair or restrictive trade practice of
a trader or service provider;
 The article purchased by a consumer is defective14;
 the services availed of by a consumer suffer from any deficiency;
 a trader or service provider, as the case may be, has charged for the goods or for the
service mentioned in the complaint a price in excess of the stipulated price;
 Goods or services, which will be hazardous to life and safety, when used, are being
offered for sale to the public.

Who can file a Complaint?

 Any consumer;
 Any voluntary consumer association;
 Central Government or any State Government;
 One or more consumers, where there are numerous consumers having same interest
 In case of death of a consumer, his legal heir or representative.

Where to file a Complaint ?

1. District Forum:
 Each District has a District Forum.
 District Forum consists of three members.
 Out of the three, one is President, who is or has been or is qualified to be a District
Judge.
 One of the members shall be a woman.
 It entertains complaints where the value of claim is up to ` 20 Lakhs.
2. State Commission:
 Each state has one State Commission.
 It consists of a President, who is or has been a Judge of a High Court and two other
members, one of whom shall be a woman.
 Complaints can be filed in State Commission where the value of claim is above ` 20
Lakhs upto ` one Crore.
 Appeals against the Orders of the District Forums can also be filed in the State
Commission.

14
Op.cit Report of the Working Group, p.24
 3. National Commission:
 The National Commission is located in Delhi.
 It consists of a President who is or has been a Judge of the Supreme Court and not
less than four other members, one of whom shall be a woman15.
 Complaints for value of claim exceeding rupees one crore can be filed in the
National Commission.
 It takes appeals against Orders passed by the State Commissions.
 The Orders of this Commission can only be challenged in the Supreme Court.

Reliefs Available to Consumers

Removal of defects from the goods; - Replacement of the goods; - Refund of the price
paid; - Award of compensation for the loss or injury suffered; - Discontinue and not to repeat
unfair trade practice or restrictive trade practice; - not to offer hazardous goods for sale; - to
withdraw hazardous goods from sale; - to cease manufacture of hazardous goods and desist
from offering services which are hazardous in nature; - if the loss or injury has been suffered
by a large number of consumers who are not identifiable conveniently, to pay such sum (not
less than 5% of the value of such defective goods or services provided) which shall be
determined by Forum; - to issue corrective advertisement to neutralise the effect of
misleading advertisement; - to provide adequate costs to parties.16

Highlights of the Consumer Protection (Amendment) Act, 2002 as notified on 15th March
2003 - In case of death of a consumer, his legal heir or representative – a new sub-clause (1)
under Section 2 of the Principal Act. - Exclusion of a person who avails of such service for
any commercial purpose from the category of the consumer. However, the “Commercial
purpose” does not include use by a person of goods bought and used by him and services
availed by him exclusively for the purpose of earning his livelihood by means of self-
employment. - “Spurious goods and services” in the form of new clause after clause under
Section 2 of the Principal Act. - With a view to promote and protect within the district the
rights of the consumer laid down under the Principal Act “establishment of the District

15
Avtar singh, Introduction To The Law of Torts , lexis Nexis 3 rd Edition p 325

16
Avtar singh, Introduction To The Law of Torts , lexis Nexis 3rd Edition p 315
Consumer Protection Council17” under the Chairmanship of the District Collector, insertion
of new Sections 8A and 8B; is proposed. - Qualifications including academic and also
disqualifications for members. - Re-appointment of a member for another term of five years
or up to the age of sixty-five years, which ever is earlier. - Substitution of new Section for
Section 12 dealing with the manner in which complaint shall be made. - Provisions dealing
with adjournment – “ no adjournment shall be ordinarily granted”. Proviso to the new sub-
clause (3A) under Section 13 of the Principal Act. - Power to make “interim order” new sub-
clause (3B) of Section 13. - Power to grant “punitive damages” new proviso to clause (d) of
Sub-Section (1) of Section 14. - Power to issue “corrective advertisement” to neutralize the
effect of misleading advertisement at the cost of the opposite party, new clause (nc) under
Sub-Section (1) of Section 14. - Benches of the State Commission may be constituted by the
President of the State Commission with one or more members. - Insertion of new Section
17A authorising the State Commission, on the application of the complainant or of its own
motion, to transfer any complaint pending before the District Forum to another District
Forum within the State in the interest of justice. - Creation of benches of the National
Commission. - Power of the National Commission to review its own order, when there is an
error apparent on the face of record. - Provision in regard to the execution of orders of the
District Forum, the State Commission or the National Commission. - All offences under the
Consumer Protection Act may be tried summarily, notwithstanding anything contained in the
code of Criminal Procedure, 1973. The District Forum, the State Commission or the National
Commission shall have the power of a Judicial Magistrate of the first class for the trial of
offences. - New Section 28-A dealing with the procedure for service of notice.

17
20th Report of Standing Committee on Food, Consumer Affairs on Consumer Protection (Amdt.) Bill, 2002,
pp.1-4
Conclusion
The prospect of the consumer justice system in our country appears to be bright in
view of the proactive policy, schemes / programmes adopted by the Government. However,
the present drive and direction need to be supplemented by adopting different channels of
redressal. And there is a dire need for the State Governments to give deserving priority to
Consumer welfare and gear up themselves to meet the challenges thrown up by market
economy. Involvement of trade and industry, civil society organizations and above all
consumer themselves are vital for betterment of consumer welfare in the years to come.
The efficient and effective programme of Consumer Protection is of special
significance to all of us because we all are consumers. Even a manufacturer or provider of a
service is a consumer of some other goods or services. If both the producers/ providers and
consumers realize the need for co-existence, adulterated products, spurious goods and other
deficiencies in services would become a thing of the past. The active involvement and
participation from all quarters i.e. the central and state governments, the educational
Institutions, the NGO’s, the print and electronic media and the adoption and observance of a
voluntary code of conduct by the trade and industry and the citizen’s charter by the service
providers is necessary to see that the consumers get their due. The need of the hour is for
total commitment to the consumer cause and social responsiveness to consumer needs. This
should, however, proceed in a harmonious manner so that our society becomes a better place
for all of us to live in.
BIBLIOGRAPHY

BOOKS

1.Law of TORTS ,S.P. Singh, Sixth Edition 2012, Univarsal Law Publishing Co
2.Law of TORTS, Dr.R,K Bangia, 23rd Edition 2013, Allahabad Law Publisher

3.Winfied & Jolowise TORTS, 18rd Edition

4.The Law of TORTS, Ratanlal & Dhirajlal, 26rd Edition 2012

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