THE CONSUMER PROTECTION ACT, 1986

Following is the full Consumer Protection Act of 1986 which I got from an official document on KSCDRC, thanks to a reader who sent the link to the doc. It also has the amendments of 2002 and includes comments. This can be useful to search and check for specific definitions of consumer, goods, service, defect, deficiency etc as provided in the act. And for those who have the legal stomach!

Or go here if you want to know how to file consumer court complaint in India (specific to Bangalore).

THE CONSUMER PROTECTION ACT, 1986

[68 of 1986, dt. 24.12.1986]

[As amended vide Consumer Protection (Amendment) Act, 2002]

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-I

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 &

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 Notifications, this Act shall apply to all goods and services.

2. Definitions

(1) In this Act, unless the context otherwise requires,-

¹[(a) “appropriate laboratory” means a laboratory or organization –

recognized by the Central Government;

ii) recognized 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 organization 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;

²[(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;

(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[(v) in case of death of a consumer, his legal heir or representative.]

³[(i) an unfair trade practice or a restrictive trade practice has been adopted by ⁴(any trader or service provider;)]

(ii) ³[the goods bought by him or agreed to be bought by him] suffer from one or more defect;

(iii) ³[the services hired or availed of or agreed to be hired or availed of by him] suffer from deficiency in any respect;

________________________________________________________________________

1. Substituted by Act 50 of 1993, w.e.f. 18.06.1993

2. Inserted by Act 50 of 1993, w.e.f. 18.06.1993

⁵(iv) a trader or the service provider, as the case may be, has charged for the goods or for the services mentioned in the complaint, a price in excess of the price –

a) fixed by or under any law for the time being in force;

b) displayed on the goods or any package containing such goods;

c) displayed on the price list exhibited by him by or under any law for the time being in force;

d) agreed between the parties;

(v) goods which will be hazardous to life and safety when used are being offered for sale to the public, –

(A) in contravention of any standards relating to safety of such goods as required to be complied with, by or under any law for the time being in force;

(B) if the trader could have known with due diligence that the goods so offered are unsafe to the public;

(vi) services which are hazardous or likely to be hazardous to life and safety of the public when used, are being offered by the service provider which such person could have known with due diligence to be injurious to life and safety.]

(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) ¹[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

_______________________________________________________________________________

1. Inserted by Act 50 of 1993, w.e.f. 18.06.1993.

2. Inserted vide Consumer Protection (Amendment) Act, 2002.

3. Substituted by Act 50 of 1993, w.e.f. 18.06.1993.

4. Substituted for “any trader” vide Consumer Protection (Amendment) Act, 2002.

5. Substituted, ibid.

who ¹[hires or avails of] the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payments, when such services are availed of with the approval of the first-mentioned person ²[but does not include a person who avails of such services for any commercial purpose];

³[Explanation: For the purposes of this clause, “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;]

(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 ⁴[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 (3 of 1930);

³[(j) “manufacturer” means a person who –

(i) makes or manufactures any goods or part thereof; or

(ii) does not make or manufacture any goods but assembles parts thereof made or manufactured by others; or

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

Explanation: Where a manufacturer dispatches any goods or part thereof to any branch office maintained by him, such branch office shall not be deemed to be the manufacturer even though the parts so dispatched to it are assembled at such branch office and are sold or distributed from such branch office.

⁴[(j) “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;

(l) “notification” means a notification published in the Official Gazette;

(m) “person” includes –

(i) a firm whether registered or not;

(ii) a Hindu undivided family;

(iii) a co-operative society;

(iv) every other association of persons whether registered under the Societies Registration Act, 1860 (22 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) “regulation” means the regulations made by the National Commission under this Act;

(nnn) “restrictive trade practice” means a trade practice which tends to bring about manipulation of price or its conditions of delivery or to affect flow of supplies in the market relating to goods or services in such a manner as to impose on the consumers unjustified costs or restrictions and shall include –

(a) delay beyond the period agreed to by a trader in supply of such goods or in providing the services which has led or is likely to lead to rise in the price;

(b) any trade practice which requires a consumer to buy, hire or avail of any goods or, as the case may be, services as condition precedent to buying, hiring or availing of other goods or services.]

(o) “service” means service of any description which is made available to potential ²[users and includes, but not limited to, the provision of] facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, ³[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;

________________________________________________________________________

1. Substituted by Act 50 of 1993, w.e.f. 18.06.1993.

2. Inserted vide Consumer Protection (Amendment) Aact, 2002.

3. Substituted, ibid.

4. Inserted by Act 50 of 1993.

⁴[(oo) “spurious goods and services” mean such goods and services which are claimed to be genuine but they are actually not so.]

(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;

⁵[(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 orally or in writing or by visible representation

(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;

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;

(vii) gives to the public any warranty or guarantee of the performance, efficacy or length of the life of a product or of any goods that is not based on an adequate or proper test thereof;

________________________________________________________________________

1. Substituted vide Consumer Protection (Amendment) Act, 2002.

2. Substituted for “users and includes the provision of”, abid.

3. Inserted by Act 50 of 1993, w.e.f. 18.06.1993.

4. Inserted vide Consumer Protection (Amendment) Act, 2002.

5. Substituted by Act 50 of 1993, w.e.f. 18.06.1993.

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

(i) a warranty or guarantee of a product or of any goods or services; or

(ii) a promise to replace, maintain or repair an article or any part thereof 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 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 of 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 purposes 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 understand 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, games of chance or skill, for the purpose of promoting, directly or indirectly, the sale, use or supply of any product or any business interest;

¹[(3A) withholding from the participants of any scheme offering gifts, prizes or other items free of charge, on its closure the information about final results of the scheme.

Explanation: For the purposes of this sub-clause, the participants of a scheme shall be deemed to have been informed of the final results of the scheme where such results are within a reasonable time published, prominently in the same newspapers in which the scheme was originally advertised.]

(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.

¹[(6) manufacture of spurious goods or offering such goods for sale or adopting deceptive practices in the provision of services.

________________________________________________________________________

1. Inserted vide Consumer Protection (Amendment) Act, 2002.

(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

Sec. 2(1)(a)

Laboratory, a derivative from the Latin Laborariosus, means a room or building fitted out for scientific experiments, research, teaching, or the manufacture of drugs and chemicals.

Sec. 2(1)(b)

The definition under sec. 2(1)(b) includes three categories, first being “consumer” as defined under the Act; secondly, any voluntary consumer association registered under the Companies Act, 1956 or under any other law, and thirdly, either the Central or the State Government. Thus a complainant must either be a consumer of goods or services, barring voluntary consumer associations and the government whether the State or Central. – Inderjit Kumar v. Haryana State Electricity Board (1991) 1 CPJ 115.

Sec. 2(1)(c)

Where a cause of action has already been adjudicated upon, the same cause of action cannot be agitated once again before a court of law or other adjudicating forum. Such a principle is enunciated to obviate multiplicity of litigation. Though all the provisions of Code of Civil Procedure are not having their application while a case is being governed by consumer forum yet the sound principles of law and procedure embodied under Code of Civil Procedure are followed by the forums. – Branch Manager, LIC of India v. Smt. Zareena Sulaiman 1995 (1) CPJ 4.

Sec. 2(1)(d)

In order to satisfy the requirement of sec. 2(1)(d) there must have been transaction of buying goods for consideration. The transaction of sale and purchase must be complete transaction. The person who only enters into an agreement for purchasing the goods does not fall in the scope of said definition. Under clause (II) of Sec. 2(d) in order to become a consumer a person has to satisfy the three conditions: (I) the service should have been rendered to him, (II) the service should have been hired by him, (III) he should have paid the consideration for hiring the service, in accordance with the manner laid down under sec. 2(1)(d)(II) of the Act.

Consumer Protection Act does not define the term “goods” definition of which is imported from the Sale of Goods Act, S.2(7) of which defines goods “as every kind of moveable property other than actionable claims and money; and includes stock and shares, growing crop, grass and things attached to or forming part of land which are agreed to be severed before sale or under the contract of sale”.

Thus the goods means every kind of moveable property except actionable claim and money. If the shares and stock which represent the proprietary interest in the property of a company are considered to be movable properties, there is no ground to exclude the debentures because debenture is a transferable movable property. Hence the holders of the debentures are entitled to get the benefit of the Consumer Protection Act. – Kartik Magenlal Padia v. Pratap Rajasthan Special Steel Ltd. 1992 (1) CPR 222.

Where services are rendered at a government hospital on payment of charges and also free of charges, the free service also comes under “service’ as defined in Sec. 2(1)(o) of the Act and the person availing of such service is “consumer” within the meaning of the Act, entitled to file complaint thereunder. – Sukhwarsha Rani v. General Hospital, through its Medical Superintendent & Others 2000 (1) CPR 337 (Chd-UTCDRC), following Indian Medical Association v. V.P. Shanta 1995 (3) CPR 412 (SC)

A customer of a bank is a consumer within the meaning of s. 2(1)(d) entitled to seek compensation, and the bank is liable for deficiency in service. – Vimal Chandra Grover v. Bank of India (2002) 110 Comp. Cas. 499 (SC).

Sc. 2(1)(e)

In case the appellant and the respondent enter into contract and according to the terms of the contract appellant has to supply some iron rods to the respondent at a fixed rate and quantity, the matter is purely one of the description of breach of contract. In no way it amounts to consumer dispute as envisaged by the Consumer Protection Act. The complainant in the instant case must approach the civil court. – Suraj Steel Hazaribagh v. R.P. Sharma 1991 (1) CPR 331.

In case the respondent does not pay to the petitioner the amount due by way of pension and the petitioner has served the respondent such dispute, as the petitioner is not a consumer, would not amount to consumer dispute. – Ch. Veerabhadraya v. Secretary, Andhra Pradesh Residential Educational Institutions Society 1992 (3) CPJ 3.

Where the claim of insurance is repudiated by the opposite party, that would amount to consumer dispute as defined under s. 2(1)(e) of the Act. – N.G.Rao v. Divisional Manager, National Insurance Co. Ltd. 1993 (2) CPJ 641.

Sec. 2(1)(f)

There are two aspects regarding quality, quantity, potency, purity or standard as mentioned in the definition. First, the same may either be required to be maintained by any law or rules for the time being in force. Secondly, where there is no such statutory mandate, then in the alternative what is claimed by the trader in relation to any such goods. The term “defect” is defined as regards the standard required to be maintained by law or in the alternative as claimed by trader expressly or impliedly in any manner whatsoever. – Chaman Singh v. German Remedies 1992 (1) CPR 603.

It is not necessary under the Act that there must be any manufacturing defect in the vehicle sold to the purchaser. It is enough that there are defects as defined in s. 2(1)(b) as 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 as is claimed by the trader in any manner whatsoever in relation to any goods.

Sec. 2(1)(g)

Deficiency like any fault, imperfection, shortcoming or inadequacy in the quality, nature, and manner of performance, which is required to be maintained under any law or which have been undertaken to be performed must be shown and proved. When the potential consumer performs his part of contract but the other party does not accept the offer or may refuse to grant the services, the question of deficiency in service arises only when the Commission concludes that non-extending service is itself a deficiency. – Gujarat Electricity Board v. Suleman Mithabhai 1993 (2) CPR 294.

Sec. 2(1)(i)

As per s. 2(1)(i) goods means goods as defined in Sale of Goods Act, 1930. Sec. 2(7) of the Sale of Goods Act defines goods as –

“Goods means every kind of moveable property other than actionable claims and money and includes stocks and shares, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before sale or under contract of sale.

The expression “sale of goods” is a composite expression consisting of various ingredients or elements. Thus, there are the elements of a bargain or contract of sale, payment or promise of payment of price, the delivery of goods and the actual passing of the title and each one of them is essential to a transaction of sale, though the sale is not completed or concluded unless the purchaser becomes the owner of the property. – Poppat Lal Shah v. State of Madras AIR 1953 SC 274.

Sec. 2 (1)(j)

Sec. 2(1)(j) defines the word “trader” which include manufacturer. In case vehicle has any defect it is the liability of the manufacturer but where excess price is recovered it is only the dealer to bear the liability for it is his own act and not that of the manufacturer. – Mahindra & Mahindra Ltd. v. Raj Motors 1992 (2) CPR 518.

Sec. 2(1)(m)

The word “person” has to be given its plain meaning unless it leads to absurdity or is susceptible of another meaning and if no such alternative construction is possible, the ordinary rule of literal construction must be adopted. Definition of the term person under sec. 2(1)(m) is not exhaustive. Sec. 3(42)of General Clauses Act, 1897 defines “person” as person shall include any company or association or body of individuals, whether incorporated or not”, hence within the term “person” even a company falls. – Rambal Engineering Products (P) Ltd. v. Patel Roadways Ltd. 1994 (1) CPR 559.

Sec. 2(1)(o)

The word “service” has to be construed in the context of the definition of the words “consumers”, “restrictive trade practices” and “unfair trade practices” as also the nature of constitution, the powers and the summary adjudicatory procedures prescribed under the Act and the need to read the provisions in such a way which would promote its constitutionality than expose the provisions to be susceptible to the attack of unconstitutionality. Therefore, the words “consumers” and “service” defined under sec. 2(1)(d) and (o) respectively should be construed to comprehend consumer of services of commercial and trade oriented nature only in the context of an unfair trade or restrictive trade practice and not otherwise. – Dr. C.S. Subramanian v. Kumarasamy (1994) 2 CTJ 294.

Where services are rendered at a government hospital on payment of charges and also free of charges, the free service also comes under “service” as defined in sec. 2(1)(o) of the Act and the person availing of such service is “consumer” within the meaning of the Act, entitled to file complaint thereunder. – Sukhwarsha Rani v. General Hospital, through its Medical Superintendent & Others 2000 (1) CPR 337 (Chd-UTCDRC), following Indian Medical Association v. V.P. Shanta 1995 (3) CPR 412 (SC).

Sec. 2(1)(q)

The definition of “complaint” and “consumer” makes it apparent that basic privity of contract is between the consumer buying the goods for consideration and the trader selling them either as a seller or distributor of the goods. It can well be imagined that purchaser does not even know who the manufacturer is. In such cases the trader becomes the necessary party and in case of filing of complaint various relief may be claimed against him as laid down under the Act. It is not the requirement of the Act nor the Rules framed thereunder that simultaneous with the trader, manufacturer as well must be made a party in case the goods so sold suffer any defect. – Chaudhary Automobiles v. Anil Kumar 1991 (1) CPR 470.

Trader is respecting goods and not respecting service which is made clear by the definition itself laying down trader in relation to any goods is a person selling or distributing goods for sale and within it is included the manufacturer of the goods and in case the goods are sold or distributed in package, packer of the goods. – H.K. Purohit v. Jodhpur University 1992 (2) CPR 530.

Sec. 2(1)(r)

Where the fee is charged but no service rendered or service is to be provided not at present but in future and which has no relation with the present, that may amount to unfair trade practice. – Champaben Babulal v. C.U.Shah Medical Center 1992 (3) CPJ 388.

Where a trader intentionally delays the delivery of any goods to the consumer, because of which consumer suffers, it shall amount to “unfair trade practice”. – Om Prakash v. Asst. Engineer, Haryana Agro Industries Corporation Ltd. 1994 (2) CPJ 1.

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

The provisions of the Act are in addition and not in derogation of the provisions of any other law for the time being in force. Manifestly, provisions of the Act grant additional remedy to the consumers but where the remedy itself is barred by some provisions of some other Act then the remedy which the consumer prays cannot be granted by the various forums constituted under the Act. – Presidency Post Master v. Dr. V.Shanker Rao 1993(2) CPJ 141.

Where the additional rights and remedies are granted to the consumers by the act itself, courts are not to interpret the same in such a manner as to cut and abridge the scope thereof. Rights and remedies under the Act cannot be curbed either by statutory arbitration provision contained in an earlier law or by some arbitration agreement entered into by the parties themselves. If that is not so, not only the scope of the Act would be entailed but by introducing arbitration clause whole of the Act would be rendered inapplicable. – Jagdamba Rice Mills v. Union of India 1991 (1) CPJ 273.

CHAPTER II

CONSUMER PROTECTION COUNCILS

4. The Central Consumer Protection Council

(1) The Central Government ¹[shall, by notification, establish with effect from such date as it may specify in such notification, a council to be known as the Central Consumer Protection Council (hereinafter referred to as the Central Council).

(2) The Central Council shall consist of the following members, namely,-

(a) the Minister in charge of ²[consumer affairs] in the Central Government, who shall be its Chairman, and

(b) such number of other official or non-official members representing such interests as may be prescribed.

5. Procedure for meetings of the Central Council

(1) The Central Council shall meet as and when necessary, but ²[at least one meeting] of the council shall be held every year.

(2) The Central Council shall meet at such time and place as the Chairman may think fit and shall observe such procedure in regard to the transaction of its business as may be prescribed.

6. Objects of the Central Council

The objects of the Central Council shall be to promote and protect the rights of the consumers such as –

(a) the right to be protected against the marketing of goods ³[and services] which are hazardous to life and property;

(b) the right to be informed about the quality, quantity, potency, purity, standard and price of goods ²[ or services, as the case may be], so as to protect the consumer against unfair trade practices;

________________________________________________________________________

1.Substituted for “may” vide Consumer Protection(Amendment)Act, 2002.

2. Substituted by Act 50 of 1993, w.e.f. 18.06.1993.

3. Inserted by Act 50 of 1993, w.e.f. 18.06.1993.

(d) the right to be heard and to be assured that consumers’ interests will receive due consideration at appropriate forums;

(e) the right to seek Redressal against unfair trade practices ¹[or restrictive trade practices] or unscrupulous exploitation of consumers; and

(f) the right to consumer education.

7. The State Consumer Protection Councils

(1) The State Government ¹[shall], by notification, establish with effect from such date as it may specify in such notification, a council to be known as the Consumer Protection Council (hereinafter referred to as the State Council).

²[(2) The State Council shall consist of the following members, namely, –

(a) the Minister in-charge of consumer affairs in the State Government who shall be its Chairman;

(b) such number of other official or non-official members representing such interests as may be prescribed by the State Government.

³[(c) such number of other official or non-official members, not exceeding ten, as may be nominated by the Central Government.]

(3) The State Council shall meet as and when necessary but not less than two meetings shall be held every year.

(4) The State Council shall meet at such time and place as the Chairman may think fit and shall observe such procedure in regard to the transaction of its business as may be prescribed by the State Government.

8. Objects of the State Council

The objects of every State Council shall be to promote and protect within the State the rights of the consumers laid down in clauses (a) to (f) of section 6.

³[8A. The District Consumer Protection Council

(1) The State Government shall establish for every district, by notification, a council to be known as the District Consumer Protection Council with effect from such date as it may specify in such notification.

(2) The District Consumer Protection Council (hereinafter referred to as the District Council) shall consist of the following members, namely:-

(a) the Collector of the District (by whatever name called), who shall be its Chairman; and

(b) such number of other official and non-official members representing such interests as may be prescribed by the State Government.

(3) The District Council shall meet as and when necessary but not less than two meetings shall be held every year.

(4) The District Council shall meet as such time and place within the district as the Chairman may think fit and shall observe such procedure in regard to the transaction of its business as may be prescribed by the State Government.

8B. Objects of the District Council

The objects of every District Council shall be to promote and protect within the district the rights of the consumers laid down in clauses (a) to (f) of section 6.]

CHAPTER III

CONSUMER DISPUTES REDRESSAL AGENCIES

9. Establishment of Consumer Disputes Redressal Agencies

There shall be established for the purposes of this Act, the following agencies, namely, –

(a) a Consumer Disputes Redressal Forum to be known as the “District Forum” established by the State Government ¹[***] in each District of the State by notification:

²[PROVIDED that the State Government may, if it deems fit, establish more than one District Forum in a District;

(b) a Consumer Disputes Redressal Commission to be known as the “State Commission” established by the State Government ¹[***] in the State by notification; and

________________________________________________________________________

1. Substituted for “may” vide Consumer Protection (Amendment) Act, 2002.

2. Substituted by Act 50 of 1993, w.e.f. 18.06.1993.

3. Inserted vide Consumer Protection (Amendment) Act, 2002.

COMMENTS

Though District Forum, State Commissions and National Commissions appointed under the Act are conferred with some of the powers of a civil court, yet they in no sense can be termed as court. They are quasi-judicial tribunals existing to provide speedy and inexpensive remedies to the aggrieved consumers in case of disputes which may take place between the consumers and supplier of goods and service. While approaching the Redressal agencies, it is not required to pay court fee or to follow the rigid procedure of a court nor is it needed that the complaint be moved by the complainant himself for his cause, it may be presented by any recognized consumers’ association. In the case of a complaint wherein large number of consumers are interested, the moving of the complaint can be by one or more of them and even the Central Government or the State Government are authorized to approach the Redressal agencies on behalf of the consumer. – Laxmi Engineering works V. P.S.G. Industrial Institute 1995 (2) CPJ (1).

10. Composition of the District Forum

³[(1) Each District Forum shall consist of –

(a) a person who is, or has been, or is qualified to be a District Judge, who shall be its President;

⁴[(b) two other members, one of whom shall be a woman, who shall have the following qualifications, namely; –

(i) be not less than thirty-five years of age,

(ii) possess a bachelor’s degree from a recognized university,

(iii) be persons of ability, integrity and standing, and have adequate knowledge and experience of at least ten years in dealing with problems relating to economics, law,

Commerce, accountancy, industry, public affairs or administration:

PROVIDED that a person shall be disqualified for appointment as member if he –

(a) has been convicted and sentenced to imprisonment for an offence which, in the opinion of the State Government, involves moral turpitude; or

(b) is an undischarged insolvent; or

________________________________________________________________________

1. Omitted by Act 50 of 1993, w.e.f. 18.06.1993.

2. Inserted by Act 50 of 1993, w.e.f. 18.06.1993.

3. Substituted by Act 50 of 1993, w.e.f. 18.06.1993.

4. Substituted vide Consumer Protection (Amendment) Act, 2002.

(d) has been removed or dismissed from the service of the Government or a body corporate owned or controlled by the Government; or

(e) has, in the opinion of the State Government, such financial or other interest as is likely to affect prejudicially the discharge by him of his functions as a member; or

(f) has such other disqualifications as may be prescribed by the State Government.]

¹[(1A) Every appointment under sub-section (1) shall be made by the State Government on the recommendation of a selection committee consisting of the following, namely, –

(i) the President of the State Commission – Chairman,

(ii) Secretary, Law Department of the State – Member,

(iii) Secretary in-charge of the Department dealing with consumer affairs in the State-Member:

²[PROVIDED that where the President of the State Commission is, by reason of absence or otherwise, unable to act as Chairman of the Selection Committee, the State Government may refer the matter to the Chief Justice of the High Court for nominating a sitting Judge of that High Court to act as Chairman.]

³[(2) Every member of the District Forum shall hold office for a term of five years or up to the age of sixty-five years, whichever is earlier:

PROVIDED that a member shall be eligible for re-appointment for another term of five years or up to the age of sixty-five years, whichever is earlier, subject to the condition that he fulfils the qualifications and other conditions for appointment mentioned in clause (b) of sub-section (1) and such reappointment is also made on the basis of the recommendation of the Selection Committee:

PROVIDED FURTHER that a member may resign his office in writing under his hand addressed to the State Government and on such resignation being accepted, his office shall become vacant and may be filled by appointment of a person possessing any of the qualifications mentioned in sub-section (1) in relation to the category of the member who is required to be appointed under the provisions of sub-section (1A) in place of the person who has resigned:

_____________________________________________________________________

1. Inserted by Act 50 of 1993, w.e.f. 18.06.1993.

2. Inserted vide Consumer Protection (Amendment) Act, 2002.

3. Substituted, ibid.

PROVIDED ALSO that a person appointed as the President or as a member, before the commencement of the Consumer Protection (Amendment) Act, 2002, shall continue to hold such office as President or member, as the case may be, till the completion of his term.]

(3) The salary or honorarium and other allowances payable to, and the other terms & conditions of service of the members of the District Forum shall be such as may be prescribed by the State Government:

¹[PROVIDED that the appointment of a member on whole-time basis shall be made by the State Government on the recommendation of the President of the State Commission taking into consideration such factors as may be prescribed including the work load of the District Forum.]

COMMENTS

Sec. 10 empowers the State Government to nominate a person to act as the President of the District Forum provided he is or has been or is qualified to be a District Judge. But where there is no nomination of the president of the District Forum by the State Government, it would not mean that District Judge would automatically become the President of the District Forum. Appointment of the District Judge as President of the Forum is not persona grata. – Sudha Industries, Dal Mill Owner v. 1^st Additional District and Sessions Judge 1992 (1) CPR 767.

Remedy lies under art. 226 of the Constitution of India to move the High Court so that “mandamus” is issued, where the officer concerned does not act in accordance with law or has acted in excess of his jurisdiction. – Nirmal Taneja v. Calcutta District Forum 1992 (2) CPJ 591.

11. Jurisdiction of the District Forum

(1) Subject to the other provisions of this Act, the District Forum shall have jurisdiction to entertain complaints where the value of the goods or services and the compensation, if any, claimed ²[does not exceed rupees ³(twenty lakhs)].

(2) A complaint shall be instituted in a District Forum within the local limits of whose jurisdiction –

(a) the opposite party or each of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or ²[carries on business, or has a branch office or] personally works for gain; or

(b) any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or ²[carries on business, or has a branch office or personally works for gain:

PROVIDED that in such case either the permission of the District Forum is given, or the opposite parties who do not reside, or ²[carry on business, or have a branch office, or personally work for gain, as the case may be, acquiesce in such institution; or

COMMENTS

While entertaining complaints, District Forum and the State Commission must not entertain the complaints meant solely to cause harassment to the opponent more so when the entertainment of the writ petition by the High Court is with restraint. – A.V. George Kutty v. State of Kerala AIR 1994 Ker 19. In case a writ of certiorari is moved it is within the power of the High Court to enter into the question to see if the authority entertaining the matter was empowered to entertain that as such and to take decision upon the question pertaining to initial lack of jurisdiction. – Calcutta Metropolitan Development Authority v. Union of India AIR 1993 Cal. 4.

In case the matter involves complicated question of law and facts, matter must be heard by the civil court and not by Consumer Forum. – Ghanshyambhai Bahecharbhai Patel v. New India Assurance Co. 1993 (1) CPR 571.

Pendency of criminal case on the same issue does not bar jurisdiction of the Forum to entertain a complaint under Consumer Protection Act alleging negligence or deficiency in service as subjudice, the subject-matter and parties being different, and the decision of the criminal court not being binding on the Forum and vice versa. – Smt. Anuradha Kapil v. Dr. Suresh 2001 (1) CPR 336 (MP-SCDRC).

Questions requiring consideration of voluminous evidence and examination of expert witnesses cannot be entertained by the Forum. – Smt. Supriti Modak v. Dr. Gokul Ch. Modak 2001 (2) CPJ 219 (WB-SCDRC).

¹[12. Manner in which complaint shall be made

(1) A complaint in relation to any goods sold or delivered or agreed to be sold or delivered or any service provided or agreed to be provided, may be filed with a District Forum, by –

(a) the consumer to whom such goods are sold or delivered or agreed to be sold or delivered or such service provided or agreed to be provided;

________________________________________________________________________

1. Inserted vide Consumer Protection (Amendment) Act, 2002.

2. Substituted by Act 50 of 1993, w.e.f. 18.06.1993.

3. Substituted for “five lakhs” vide Consumer Protection (Amendment) Act, 2002.

(b) any recognized consumer association whether the consumer to whom the goods sold or delivered or agreed to be sold or delivered or service provided or agreed to be provided is a member of such association or not; or

(c) one or more consumers, where there are numerous consumers having the same interest, with the permission of the District Forum, on behalf of, or for the benefit of, all consumers so interested; or

(d) the Central Government or the State Government, as the case may be, either in its individual capacity or as a representative of interests of the consumers in general.

(2) Every complaint filed under sub-section (1) shall be accompanied with such amount of fee and payable in such manner as may be prescribed.

(3) On receipt of a complaint made under sub-section (1), the District Forum may, by order, allow the complaint to be proceeded with or rejected:

PROVIDED that a complaint shall be rejected under this sub-section unless an opportunity of being heard has been given to the complainant:

PROVIDED FURTHER that the admissibility of the complaint shall ordinarily be decided within twenty-one days from the date on which the complaint was received.

(4) Where a complaint is allowed to be proceeded with under sub-section (3), the District Forum may proceed with the complaint in the manner provided under this Act.

PROVIDED that where a complaint has been admitted by the District Forum, it shall not be transferred to any other court or tribunal or any authority set-up by or under any other law for the time being in force.

Explanation: For the purposes of this section, “recognized consumer association” means any voluntary consumer association registered under the Companies Act, 1956 (1 of 1956), or any other law for the time being in force.]

COMMENTS

It is not the requirement that drafting of the complaint must be like that of a plaint to be moved in Civil Court. A complaint is with the simple purpose of conveying why, how and on what basis damages have been claimed. In case of claim for some special damages, necessary particulars are essentially to be served to the opposite party. – Nagar Palika Nigam v. Ravikant Pandey 1991 (1)

________________________________________________________________________

1. Substituted vide Consumer Protection (Amendment) Act, 2002.

CPJ 400. In case the Consumers Forum detects some deficiency in service from the fact placed in the complaint, though such deficiency is not specially formulated in the complaint by the complainant, as the Consumer Forum is meant to protect the interest of the aggrieved, it would be well within its jurisdiction to take cognizance suo motu of any deficiency in service so noticed by them or to take cognizance of any unjust reduction in the amount that is payable to the complainant. It must at the same time not be forgotten that the opponent is given the opportunity of defence and justify its action. – United India Insurance Co. Ltd. v. Mohan Lal & Sons 1992 (1) CPR 364.

13. ¹[Procedure on admission of complaint]

(1) The District Forum shall, ²[on admission of a complaint,] if it relates to any goods –

³[(a) refer a copy of the admitted complaint, within twenty-one days from the date of its admission to the opposite party mentioned in the complaint directing him to give his version of the case within a period of thirty days or such extended period not exceeding fifteen days as may be granted by the District Forum;]

(b) where the opposite party on receipt of a complaint referred to him under clause (a) denies or disputes the allegations contained in the complaint, or omits or fails to take any action to represent his case within the time given by the District Forum, the District Forum shall proceed to settle the consumer dispute in the manner specified in clauses (c) to (g);

(c) where the complaint alleges a defect in the goods which cannot be determined without proper analysis or test of the goods, the District Forum shall obtain a sample of the goods from the complainant, seal it and authenticate it in the manner prescribed and refer the sample so sealed to the appropriate laboratory along with a direction that such laboratory make an analysis with a view to finding out whether such goods suffer from any defect alleged in the complaint or suffer from any other defect and to report its findings thereon to the District Forum within a period of forty-five days of the receipt of the reference or within such extended period as may be granted by the District Forum;

(d) before any sample of the goods is referred to any appropriate laboratory under clause (c), the District Forum may require the complainant to deposit to the credit of the Forum such fees as may be specified, for payment to the appropriate laboratory for carrying out the necessary analysis or test in relation to the goods in question;

________________________________________________________________________

1. Substituted vide Consumer Protection (Amendment) Act, 2002.

2. Substituted for “on receipt of a complaint”, ibid.

3. Substituted, ibid.

(e) the District Forum shall remit the amount deposited to its credit under clause (d) to the appropriate laboratory to enable it to carry out the analysis or test mentioned in clause (c) and on receipt of the report from the appropriate laboratory, the District Forum shall forward a copy of the report along with such remarks as the District Forum may feel appropriate to the opposite party;

(f) if any of the parties disputes the correctness of the findings of the appropriate laboratory, or disputes the correctness of the methods of analysis or test adopted by the appropriate laboratory, the District Forum shall require the opposite party or the complainant to submit in writing his objections in regard to the report made by the appropriate laboratory;

(g) the District Forum shall thereafter give a reasonable opportunity to the complainant as well as the opposite party of being heard as to the correctness or otherwise of the report made by the appropriate laboratory and also as to be objection made in relation thereto under clause (f) and issue an appropriate order under section 14.

(2) The District Forum shall, if the ¹[complaints admitted] by it under section 12 relates to goods in respect of which the procedure specified in sub-section (1) cannot be followed, or if the complaint relates to any services, –

(a) refer a copy of such complaint to the opposite party directing him to give his version of the case within a period of thirty days or such extended period not exceeding fifteen days as may be granted by the District Forum;

(b) where the opposite party, on receipt of a copy of the complaint, referred to him under clause (a) denies or disputes the allegations contained in the complaint, or omits or fails to take any action to represent his case within the time given by the District Forum, the District Forum shall proceed to settle the consumer dispute, –

(i) on the basis of evidence brought to its notice by the complainant and the opposite party, where the opposite party denies or disputes the allegation contained in the complaint, or

(ii) ²[ex parte] on the basis of evidence brought to its notice by the complainant where the opposite party omits or fails to take any action to represent his case within the time given by the Forum.

²[(c) where the complainant fails to appear on the date of hearing before the District Forum, the District Forum may either dismiss the complaint for default or decide it on merits.

________________________________________________________________________

1.Substituted for “complaint received” vide Consumer Protection (Amendment) Act, 2002

2. Inserted ibid.

(3) No proceedings complying with the procedure laid down in sub-sections (1) and (2) shall be called in question in any court on the ground that the principles of natural justice have not been complied with.

¹[(3A) Every complaint shall be heard as expeditiously as possible and endeavour shall be made to decide the complaint within a period of three months from the date of receipt of notice by opposite party where the complaint does not require analysis or testing of commodities and within five months if it requires analysis or testing of commodities:

PROVIDED that no adjournment shall be ordinarily granted by the District Forum unless sufficient cause is shown and the reasons for grant of adjournment have been recorded in writing by the Forum:

PROVIDED FURTHER that the District Forum shall make such orders as to the costs occasioned by the adjournment as may be provided in the regulations made under this Act:

PROVIDED ALSO that in the event of a complaint being disposed of after the period so specified, the District Forum shall record in writing, the reasons for the same at the time of disposing of the said complaint.

(3B) Where during the pendency of any proceeding before the District Forum, it appears to it necessary, it may pass such interim order as is just and proper in the facts and circumstances of the case.]

(4) For the purposes of this section, the District Forum shall have the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit in respect of the following matters, namely, –

(i) the summoning and enforcing attendance of any defendant or witness and examining the witness on oath;

(ii) the discovery and production of any document or other material object producible as evidence;

(iii) the reception of evidence on affidavits;

(iv) the requisitioning of the report of the concerned analysis or test from the appropriate laboratory or from any other relevant source;

(v) issuing of any commission for the examination of any

witness; and

(vi) any other matter which may be prescribed.

(5) Every proceeding before the District Forum shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 of the Indian Penal Code (45 of 1860), and the District Forum shall be deemed to be a civil court for the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974).

²[(6) Where the complainant is a consumer referred to in sub-clause (iv) of clause (b) of sub-section (1) of section 2, the provisions of Rule 8 of Order I of Schedule I to the Code of Civil Procedure, 1908 (5 of 1908) shall apply subject to the modification that every reference therein to a suit or decree shall be construed as a reference to a complaint or the order of the District Forum thereon.]

¹[(7) In the event of death of a complainant who is a consumer or of the opposite party against whom the complaint has been filed, the provisions of Order XXII of the First Schedule to the Code of Civil Procedure, 1908 (5 of 1908) shall apply subject to the modification that every reference therein to the plaintiff and the defendant shall be construed as reference to a complainant or the opposite party, as the case may be.]

COMMENTS

Sec. 13 mentions the procedure the District Forum has to follow in case a complaint is moved before it. Sub-s. (4) of the said section confers the similar powers with the District Forum as are vested in the civil court under Code of Civil Procedure, 1908, as regards: (1) summoning and enforcing attendance of any defendant or witness and examining the witness on oath, (2) the discovery and production of any document or other material objects producible as evidence, (3) the reception of evidence on affidavits, (4) the requisitioning of the report of the concerned analysis or test from the appropriate laboratory or from any other relevant source, (5) issuing of any commission for the examination of any witness, and (6) any other matter which may be prescribed. Sec. 18 permits the application of the above provisions of the Code of Civil Procedure to the State Commission and in case of non-compliance with the Order of the Commission, Commission is given the power to impose sentence of imprisonment or of fine by s.27 of Consumer Protection Act. – Dhami Dhar v. Air Mauritius 1992 (1) CPR 500.

Provision of 30 days time with provision for extension by 15 days as provided in s.13(2)(a) for filing reply to complaint is not mandatory, but directory.

The provision is procedural in nature. It is also clear that with a view to achieve the object of the enactment, that there may be speedy disposal of such cases, that it has been provided that reply is to be filed within 30 days and the extension of time may not exceed 15 days. This provision envisages that proceedings may not be prolonged for a very long time without the opposite party having filed his reply. No penal consequences have however been provided incase extension of time exceeds 15 days. Therefore, it could not be said that any substantive right accrued in favour of the appellant or there was any kind of

________________________________________________________________________

1. Inserted vide Consumer Protection (Amendment) Act, 2002.

2. Inserted by Act 50 of 1993, w.e.f. 18.06.1993.

bar of limitation in filing of the reply within extended time though beyond 45 days in all. The reply is not necessarily to be rejected. All facts and circumstances of the case must be taken into account. – Topline Shoes Ltd. V. Corporation Bank (2002) 111 Comp. Cas. 515 (SC).

On a question whether a second complainant would be maintainable in the event of dismissal of the first complaint, the Supreme Court observed that justice cannot be denied by the rule of technicality. It held that the Code of Civil Procedure can be applied to proceedings under the Consumer Protection Act only to a limited extent, and the Act being enacted for protection of consumers, the interest of justice cannot be defeated by a rule of technicality. – New India Assurance Co. v. Srinivasan (2000) 2 CPR 27 (SC).

14. Finding of the District Forum

(1) If, after the proceeding conducted under section 13, the District Forum is satisfied that the goods complained against suffer from any of the defects specified in the complaint or that any of the allegations contained in the complaint about the services are proved, it shall issue an order to the opposite party directing him to ¹[do] one or more of the following things, namely, –

(a) to remove the defect pointed out by the appropriate laboratory from the goods in question;

(b) to replace the goods with new goods of similar description which shall be free from any defect.

(d) to pay such amount as may be awarded by it as compensation to the consumer for any loss or injury suffered by the consumer due to the negligence of the opposite party;

¹[PROVIDED that the District Forum shall have the power to grant punitive damages in such circumstances as it deems fit.]

²[(e) to remove the defects¹[in goods]or deficiencies in the services in question;

(f) to discontinue the unfair trade practice or the restrictive trade practice or not to repeat them;

(g) not to offer the hazardous goods for sale;

(h) to withdraw the hazardous goods from being offered for sale;

________________________________________________________________________

1. Substituted by Act 50 of 1993, w.e.f. 18.06.1993

¹[(ha) to cease manufacture of hazardous goods and to desist from offering services which are hazardous in nature;

(hb) to pay such sum as may be determined by it if it is of the opinion that loss or injury has been suffered by a large number of consumers who are not identifiable conveniently:

PROVIDED that the minimum amount of sum so payable shall not be less than five per cent of the value of such defective goods sold or service provided, as the case may be, to such consumers:

PROVIDED FURTHER that the amount so obtained shall be credited in favour of such person and utilized in such manner as may be prescribed;

(hc) to issue corrective advertisement to neutralize the effect of misleading advertisement at the cost of the opposite party responsible for issuing such misleading advertisement.]

(i) to provide for adequate costs to parties]

³[(2) Every proceeding referred to in sub-section (1) shall be conducted by the President of the District Forum and at least one member thereof sitting together:

⁴[PROVIDED that where a member, for any reason, is unable to conduct a proceeding till it is completed, the President and the other member shall continue the proceeding from the stage at which it was last heard by the previous member.]

(2A) Every order made by the District Forum under sub-section (1) shall be signed by its President and the member or members who conducted the proceeding:

PROVIDED that where the proceeding is conducted by the President and one member and they differ on any point or points, they shall state the point or points on which they differ and refer the same to the other member for hearing on such point or points and the opinion of the majority shall be the order of the District Forum.

(3) Subject to the foregoing provisions, the procedure relating to the conduct of the members of the District Forum, its sittings and other matters shall be such as may be prescribed by the State Government.

________________________________________________________________________

1. Inserted vide Consumer Protection (Amendment) Act, 2002.

2. Inserted by Act 50 of 1993, w.e.f. 18.06.1993.

3. Substituted by Act 34 of 1991, w.e.f. 15.06.1991.

4. Substituted vide Consumer Protection (Amendment) Act, 2002.

COMMENTS

Award of compensation must be based upon the quantification of damages and not arbitrarily where the opposite party is negligent and the negligence results in loss or injury which the consumer suffers, the compensation is awarded. Compensation has to be quantified on a rational basis after considering the material that may be produced before the adjudicating forum showing the extent of injury suffered and the manner in which and the extent to which the monetary loss had been caused to the complaint. – Devanand Gehlot v. Rajasthan Patrika Ltd. 1991 (1) CPR 526.

Where the District Forum or the State Commission reaches the satisfaction that the goods are defective as mentioned in the complaint or the service is deficient as alleged, then and only then an order directing the opposite party to do one or more of the specified things in s. 14 can be made. In case the allegations or any of them as made in the complaint are proved, the District Forum or State Commission is to record the finding to that effect. The decision must clearly mention the allegation and the evidentiary material supporting it and whether the allegation is established or not. Though the Redressal agencies under the Act are not civil court in strict sense yet they are quasi judicial in nature and every order quasi judicial in nature must be supported by reasons telling how the forum drew the conclusion more so where there is the provision for appeal. – State Bank of India v. Dharmadas Pal 1995 (1) CPR 832.

Sub-s. (3) suggests that the power to make rules has been made subject to sub-sections (1), (2) and (2A). Accordingly, rules can be made in exercise of the said power only in a manner which is consistent with the said sub-sections. Otherwise, the rules would be ultra-vires and void to the extent the same are inconsistent with the said sub-sections. – Murali Udyog Ltd. v. V.K. Jain (1991) 1 CPR 162 (NC).

15. Appeal

Any person aggrieved by an order made by the District Forum may prefer an appeal against such order to the State Commission within a period of thirty days from the date of the order, in such form and manner as may be prescribed:

PROVIDED that the State Commission may entertain an appeal after the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not finding it within that period:

¹[PROVIDED FURTHER that no appeal by a person, who is required to pay any amount in terms of an order of the District Forum, shall be entertained by the State Commission unless the appellant has deposited in the prescribed manner fifty per cent of that amount or twenty-five thousand rupees, whichever is less].

COMMENTS

The High Court is not a statutory, appellate or revisional authority under the provisions of the Act. An order made by the District Forum is appealable under s. 15 only before the State Commission. An order passed by the State Commission is appealable only before the National Commission under s. 19 and the order of the National Commission could be challenged in appeal only before the Supreme Court under s. 23. – K.V. Padmanabhan v. Consumer Dispute Redressal Forum, Ernakulam AIR 1992 Ker 179.

Application for condonation of delay in filing appeal not accompanying the delayed appeal was held not fatal by the Supreme Court in State of M.P. v. Pradeep Kumar (2000) 7 SCC 372. In respect of application for condonation of delay by the

16. Composition of the State Commission

(1) Each State Commission shall consist of –

(a) a person who is or has been a Judge of a High Court, appointed by the State Government, who shall be its President:

¹[PROVIDED that no appointment under this clause shall be made except after consultation with the Chief Justice of the High Court.

²[(b) not less than two, and not more than such number of members, as may be prescribed, and one of whom shall be a woman, who shall have the following qualifications, namely:-

(i) be not less than thirty-five years of age;

(ii) possess a bachelor’s degree from a recognized university,&

(iii) be persons of ability, integrity and standing, and have adequate knowledge and experience of at least ten years in dealing with problems relating to economics, law, commerce, accountancy, industry, public affairs or administration:

PROVIDED that not more than fifty per cent of the members shall be from amongst persons having a judicial background.

Explanation: For the purposes of this clause, the expression “persons having judicial background” shall mean persons having knowledge and experience for at least a period of ten years as a presiding officer at the district level court or any tribunal at equivalent level:

PROVIDED FURTHER that a person shall be disqualified for appointment as a member if he –

________________________________________________________________________

1. Inserted vide Consumer Protection (Amendment) Act, 2002.

department, it was held that departmental delay was not a sufficient cause for condoning the delay. – Jyotsna Arvind Kumar Shah v. Bombay Hospital Trust (1999) III CPJ 1 (SC).

(a) has been convicted and sentenced to imprisonment for an offence which, in the opinion of the state Government, involves moral turpitude; or

(b) is an undischarged insolvent; or

(d) has been removed or dismissed from the service of the Government of a body corporate owned or controlled by the Government; or

(e) has, in the opinion of the State Government, such financial or other interest, as is likely to affect prejudicially the discharge by him of his functions as a member; or

(f) has such other disqualifications as may be prescribed by the State Government.]

³[(1A) Every appointment under sub-section (1), shall be made by the State Government on the recommendation of a Selection Committee consisting of the following members, namely: –

(i) President of the State Commission – Chairman;

(ii) Secretary of the Law Department of the State – Member;

(iii) Secretary in-charge of the Department dealing with Consumer Affairs in the State – Member;

PROVIDED that where the President of the State Commission is, by reason of absence or otherwise, unable to act as Chairman of the Selection Committee, the State Government may refer the matter to the Chief Justice of the High Court for nominating a sitting Judge of that High Court to act as Chairman.

(1B) (i)The jurisdiction, powers and authority of the State Commission may be exercised by Benches thereof.

(ii) A Bench may be constituted by the President with one or more members as the President may deem fit.

(iii) If the members of a Bench differ in opinion on any point, the points shall be decided according to the opinion of the majority, if there is a majority, but if the members are equally divided, they shall state the point or points on which they differ, and make a reference to the President who shall either hear the point or points himself or refer the case for hearing on such point or points by one or more or the other members and such point or points shall be decided according to the opinion of the majority of the members who have heard the case, including those who first heard it.]

________________________________________________________________________

1. Inserted by Act 50 of 1993, w.e.f. 18.06.1993.

2. Substituted vide Insurance (Amendment) Act, 2002.

3. Inserted, ibid.

(2) The salary or honorarium and other allowances payable to, and the other terms and conditions of service of the members of the State Commission shall be such as may be prescribed by the State Government:

²[(3) Every member of the State Commission shall hold office for a term of five years or up to the age of sixty-seven years, whichever is earlier:

PROVIDED that a member shall be eligible for re-appointment for another term of five years or up to the age of sixty-seven years, whichever is earlier, subject to the condition that he fulfils the qualifications and other conditions for appointment mentioned in clause (b) of sub-section (1) and such re-appointment is made on the basis of the recommendation of the Selection Committee.

PROVIDED FURTHER that a person appointed as a President of the State Commission shall also be eligible for re-appointment in the manner provided in clause (a) of sub-section (1) of this section:

PROVIDED ALSO that a member may resign his office in writing under this hand addressed to the State Government and on such resignation being accepted, his office shall become vacant and may be filled by appointment of a person possessing any of the qualifications mentioned in sub-section (1) in relation to the category of the member who is required to be appoint under the provisions of sub-section (1A) in place of the person who has resigned.

(4) Notwithstanding anything contained in sub-section (3), a person appointed as the President or as a member, before the commencement of the Consumer Protection

(Amendment) Act, 2002, shall continue to hold such office as President or member, as the case may be, till the completion of his term.]

17. Jurisdiction of the State Commission

¹[(1)] Subject to the other provisions of this Act, the State Commission shall have jurisdiction –

(a) to entertain –

(i) complaints where the value of the goods or services and compensation, if any, claimed exceeds rupees ²[twenty lakhs but does not exceed rupees one crore;] and

________________________________________________________________________

1. Inserted vide Consumer Protection (Amendment) Act, 2002.

2. Substituted, ibid.

(ii) appeals against the orders of any District Forum within the State; and

(b) to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any District Forum within the State where it appears to the State Commission that such District Forum has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested or has acted in exercise on its jurisdiction illegally or with material irregularity.

³[(2) A complaint shall be instituted in a State Commission within the limits of whose jurisdiction, –

(a) the opposite party or each of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or carries on business or has a branch office or personally works for again; or

(b) any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides, or carries on business or has a branch office or personally works for gain, provided that in such case either the permission of the State Commission is given or the opposite parties who do not reside or carry on business or have a branch office or personally works for gain, as the case may be, acquiesce in such institution; or

COMMENTS

Within the scope of s. 17(a)(i) two situations are contemplated first being when there is no claim for compensation. In such a case, the determining factor for conferring jurisdiction is the value of goods and services which should exceed Rs.1 Lakh (now five lakhs but does not exceed Rs.20 Lakhs)⁴. Second situation is where the compensation is specifically claimed in the complaint then both the value of the goods and service and the said claim must exceed the pecuniary jurisdiction of Rs.1 Lakh (now five lakhs but does not exceed rupees 20 lakhs) so as to exclude the jurisdiction of District Forum. – Dr. B.S. Gaba v. Steel Authority of India Ltd. 1991 (1) CPJ 631.

The State Commission has no jurisdiction to set aside an ex-parte by it as long as it is reasoned order. If the law does not permit the setting aside of the ex-parte order, the order of State Commission setting aside the ex-parte order cannot be sustained, as there is

________________________________________________________________________

1. Existing section renumbered as sub-section (1) thereof, vide C.P. (Amdt.) Act, 2002.

2. Substituted for “five lakhs but does not exceed rupees twenty lakhs”, ibid.

3. Inserted, ibid.

4. Now twenty lakhs but does not exceed rupees one crore (Refer Section 17(1)(a)(i)

no provision in the Consumer Protection Act empowering the State Commission to set aside an ex-parte order. – Jyotsna Arvind Kumar Shah v. Bombay Hospital Trust (1999) III CPJ 1 (SC).

¹[17A. Transfer of cases

On the application of the complainant or of its own motion, the State Commission may, at any stage of the proceeding, transfer any complaint pending before the District Forum to another District Forum within the State if the interest of justice so requires.

17B. Circuit Benches

The State Commission shall ordinarily function in the State Capital but may perform its functions at such other place as the State Government may, in consultation with the State Commission, notify in the Official Gazette, from time to time.]

18. Procedure applicable to State Commission

²[The provisions of sections 12, 13 and 14 and the rules made thereunder] for the disposal of complaint by the District Forum shall, with such modification as may be necessary, be applicable to the disposal of disputes by the State Commission.

COMMENTS

Section 13 prescribes the procedure to be followed by the District Forum after receiving the complaint. Sub-sections (1) and (2) of section 13 deal with the manner of dealing with the complaint. Sub-section (4) of section 13 vests in the District Forum certain power exercised by a Civil Court under the Code of Civil Procedure, 1908. These are the powers which a Civil Court exercises while trying a suit for the purpose of summoning, enforcing and examining witnesses; for discovery or production of any document; for receiving evidence on affidavits; for requisitioning report of the concerned analysis or test; and for issuing any commission for examination of any witness. These provisions have now been made applicable to the State Commission in terms of section 18. Thus, by virtue of the said sections, the State Commission is empowered with judicial functions and all the trappings of a Court. – Dharni Dhar v. Air Mauritius (1992) 1 CPR 500 (Del).

³[18A. xxx]

19. Appeals

Any person aggrieved by an order made by the State Commission in exercise of its powers conferred by sub-clause (i) of clause (a) of section 17 may prefer an appeal against such order to the National Commission within a period of thirty days from the date of Order in such form and manner as may be prescribed:

PROVIDED that the National Commission may entertain an Appeal after the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not filing it within that period:

⁴[PROVIDED FURTHER that no appeal by a person, who is required to pay any amount in terms of an order of the State Commission, shall be entertained by the National Commission unless the appellant has deposited in the prescribed manner fifty per cent of the amount or rupees thirty-five thousand, whichever is less.]

COMMENTS

Any person aggrieved by an order made by the State Commission in exercise of its power conferred by s.17(a)(i) may prefer an appeal against such order to the National Commission. Such appellate power is conferred only against the substantive orders of the State Commission made in its original jurisdiction on a complaint directly preferred before it. As the appellate powers under s. 19 are limited against the exercise of jurisdiction by the State Commission u/s. 17(a)(i) only; for that where the Sate Commission imposed a penalty u/s. 27, such an order would not be appealable. – Kohinoor Carpets v. Rajendra Arora 1991 (2) CPJ 429.

¹[19A. Hearing of appeal

An appeal filed before the State Commission or the National Commission shall be heard as expeditiously as possible and an endeavour shall be made to finally dispose of the appeal within a period of ninety days from the date of its admission:

PROVIDED that no adjournment shall be ordinarily granted by the State Commission or the National Commission, as the case may be, unless sufficient cause is shown and the reasons for grant of adjournment have been recorded in writing by such Commission:

PROVIDED FURTHER that the State Commission or the National Commission, as the case may be, shall make such orders as to the costs occasioned by the adjournment as may be provided in the regulations made under this Act:

PROVIDED ALSO that in the event of an appeal being disposed of after the period so specified, the State Commission or, the National Commission, as the case may be shall record in writing the reasons for the same at the time of disposing of the said appeal.]

________________________________________________________________________

1. Inserted vide Consumer Protection (Amendment) Act, 2002

2. Substituted by Act 50 of 1993, w.e.f. 18.06.1993.

3. Omitted vide Consumer Protection (Amendment) Act, 2002.

4. Inserted, ibid.

20. Composition of the National Commission

(1) The national Commission shall consist of –

(a) a person who is or has been a Judge of the Supreme Court, to be appointed by the Central Government, who shall be its President:

²[PROVIDED that no appointment under this clause shall be made except after consultation with the Chief Justice of India;]

³[(b) not less than four, and not more than such number of members, as may be prescribed, and one of whom shall be a woman, who shall have the following qualifications, namely:

(i) be not less than thirty-five years of age;

(ii) possess a bachelor’s degree from a recognized University; and

(iii) be persons of ability, integrity and standing and have adequate knowledge and experience of at least 10 years in dealing with problems relating to economics, law, commerce, accountancy, industry, public affairs or administration:

PROVIDED that not more than fifty per cent of the members shall be from amongst the persons having a judicial background.

PROVIDED FURTHER that a person shall be disqualified for appointment if he –

(a) has been convicted and sentenced to imprisonment for an offence which, in the opinion of the Central Government, involves moral turpitude; or

(b) is an un-discharged insolvent; or

(d) has been removed or dismissed from the service of the Government or a body corporate owned or controlled by the Government; or

(e) has, in the opinion of the Central Government, such financial or other interest as is likely to affect prejudicially the discharge by him of his functions as a member; or

________________________________________________________________________

1. Inserted vide Consumer Protection (Amendment) Act, 2002.

2. Inserted by Act 50 of 1993, w.e.f. 18.06.1993

3. Substituted vide Consumer Protection (Amendment) Act, 2002.

(f) has such other disqualifications as may be prescribed by the Central Government:

PROVIDED ALSO that every appointment under this clause shall be made by the Central Government on the recommendation of a Selection Committee consisting of the following, namely:

(a) a person who is a Judge of the Supreme Court, to be nominated by the Chief Justice of India — Chairman

the Secretary in the Department of Legal Affairs in the Government of India— Member

¹[(1A) (i) The jurisdiction, powers and authority of the National Commission may be exercised by Benches thereof.

(ii) A Bench may be constituted by the President with one or more members as the President may deem fit.

(2) The salary or honorarium and other allowances payable to and the other terms and conditions of service of the members of the National Commission shall be such as may be prescribed by the Central Government.

²[(3) Every member of the National Commission shall hold office for a term of five years or up to the age of seventy years, whichever is earlier:

PROVIDED that a member shall be eligible for re-appointment for another term of five years or up to the age of seventy years, whichever is earlier, subject to the condition that he fulfils the qualifications and other conditions for appointment mentioned in clause (b) of sub-section (1) and such re-appointment is made on the basis of the recommendation of the Selection Committee:

________________________________________________________________________

1. Inserted vide Consumer Protection (Amendment) Act, 2002.

2. Substituted vide Consumer Protection (Amendment) Act, 2002.

PROVIDED FURTHER that a person appointed as a President of the National Commission shall also be eligible for re-appointment in the manner provided in clause (a) of sub-section (1):

PROVIDED ALSO that a member may resign his office in writing under his hand addressed to the Central Government and on such resignation being accepted, his office shall become vacant and may be filled by appointment of a person possessing any of the qualifications mentioned in sub-section (1) in relation to the category of the member who is required to be appointed under the provisions of sub-section (1A) in place of the person who has resigned.

(4) Notwithstanding anything contained in sub-section (3), a person appointed as a President or as a member before the commencement of the Consumer Protection (Amendment) Act, 2002 shall continue to hold such office as President or member, as the case may be, till the completion of his term.]

21. Jurisdiction of the National Commission

Subject to the other provisions of this Act, the national Commission shall have jurisdiction –

(a) to entertain –

(i) complaints where the value of the goods or services and compensation, if any, claimed exceeds rupees ¹[one crore]; and

(ii) appeals against the Orders of any State Commission; and

(b) to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any State Commission where it appears to the National Commission that such State Commission has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity.

COMMENTS

Where the subject matter of a complaint is already pending before the ordinary civil court, a concurrent adjudication as regards that subject-matter would not be entertained by Commission under the Act. – Special Machines v. Punjab National Bank 1991 (2) CPJ 78. The jurisdiction of the National Commission in revision is limited to consumer disputes wherein a State Commission has exercised a jurisdiction not vested in it by law or has failed to exercise jurisdiction so vested or has acted in the exercise of its jurisdiction illegally or with material irregularity. – The District Manager, Telephones v. Niti Saran 1991 (1) CPJ 48.

²[22. Power and procedure applicable to the National Commission

(1) The provisions of sections 12, 13 and 14 and the rules made thereunder for the disposal of complaints by the District Forum shall, with such modifications as may be considered necessary by the Commission, be applicable to the disposal of disputes by the National Commission.

(2) Without prejudice to the provisions contained in sub-section (1), the National Commission shall have the power to review any order made by it, when there is an error apparent on the face of record.

22A. Power to set aside ex parte orders

Where an order is passed by the National Commission ex parte against the Opposite party or a complainant, as the case may be, the aggrieved party may apply to the Commission to set aside the said Order in the interest of Justice.

22B. Transfer of cases

On the application of the complainant or of its own motion, the National Commission may, at any stage of the proceeding, in the interest of justice, transfer any complaint pending before the District Forum of one State to a District Forum of another State or before one State Commission to another State Commission.

22C. Circuit Benches

The National Commission shall ordinarily function at New Delhi and perform its functions at such other place as the Central Government may, in consultation with the National Commission, notify in the Official Gazette, from time to time.

22D. Vacancy in the office of President

When the office of President of a District Forum, State Commission, or of the National Commission, as the case may be, is vacant or a person occupying such office is, by reason of absence or otherwise, unable to perform the duties of his office, these shall be performed by the senior-most member of the District Forum, the State Commission or of the National Commission, as the case may be:

PROVIDED that where a retired Judge of a High Court is a member of the National Commission, such member or where the number of such members is more than one, the senior-most person among such members, shall preside over the National Commission in the absence of President of that Commission.]

________________________________________________________________________

1. Substituted for “twenty lakhs”, vide Consumer Protection (Amendment) Act, 2002.

2. Substituted, ibid.

23. Appeal

Any person, aggrieved by an order made by the National Commission in exercise of its powers conferred by sub-clause (i) of clause (a) of section 21, may prefer an appeal against such order to the Supreme Court within a period of thirty days from the date of the Order.

PROVIDED that the Supreme Court may entertain an appeal after the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not filing it within that period:

¹[PROVIDED FURTHER that no appeal by a person who is required to pay any amount in terms of an order of the National Commission shall be entertained by the Supreme Court unless that person had deposited in the prescribed manner fifty per cent of that amount or rupees fifty thousand, whichever is less.]

COMMENTS

An Appeal lies against the order of the National Commission to the Supreme Court “within a period of thirty days from the date of the Order”. The expression “date of the order” means “date of the knowledge of the order” was communicated to the appellant. – Marrikkar (Motors) Ltd. v. Mrs. Mary Pauloe 1991 (2) SPR 251. The appellate powers herein are in express terms confined only where there is exercising of jurisdiction that is conferred by s. 21 (a)(i) pertaining to the original complaints laid before the National Commission where the value of the goods and services and the compensation if any exceeds Rs.10 Lakhs (now 20 Lakhs¹). No other order that the

National Commission might have made, could be appealed against. It concludes whenever the National Commission also chooses to act under sec. 27 and a penalty is imposed, the same cannot be made the subject-matter of any right to substantial appeal against it. – Kohinoor Carpets v. Rajendra Arora 1991 (2) CPJ 429.

24. Finality of order

Every order of a District Forum, State Commission or the National Commission shall, if no appeal has been preferred against such order under the provisions of this Act, be final.

COMMENTS

Where the civil court prevents the cause of action being agitated on account of its having become barred for limitation raising of that cause of action cannot be permitted before the consumer forum as where the limitation period gets expired, with that expiry are settled the rights and obligations of the parties to the dispute.

________________________________________________________________________

1. Inserted vide Consumer Protection (Amendment) Act, 2002.

²[24A. Limitation period

(1) The District Forum, the State Commission or the National Commission shall not admit a complaint unless it is filed within two years from the date on which the cause of action has arisen.

(2) Notwithstanding anything contained in sub-section (1), a complaint may be entertained after the period specified in sub-section (1), if the complainant satisfies the District Forum, the State Commission or the National Commission, as the case may be, that he had sufficient cause for not filing the complaint within such period:

PROVIDED that no such complaint shall be entertained unless the National Commission, the State Commission or the District Forum, as the case may be, records its reasons for condoning such delay.

COMMENTS

Civil rights as vested in the parties are determined before the forums constituted under the Act and the characteristics of a civil court are conferred upon them and as the complaint being in the nature of a civil suit, provisions of the Limitation Act are attracted to the proceedings under the Act. – Prabhat Bag Factory v. United India Insurance Co. Ltd. 1991 (2) CPJ 327. Before taking steps towards entertaining and adjudication of claims under the Act it is for the consumer forum to decide if cause of action is alive as regards the claim raised before it and where that is not so, the forum would not proceed further on the ground of the action being time barred. – Manick Chand Srenik Kumar Bansilal v. Telecommunication, Karnataka Grade 1992 (3) CPJ 28.

The plea of limitation can be considered at any stage of the proceedings. Where the National Commission did not consider the plea of limitation on the ground that there was no point in considering it at that stage it was held not proper by the Supreme Court in Kerala Agro Machinery Corporation Ltd. v. Bijoy Kumar Roy & Ors. (2002) 110 Comp. Cas. 527 (SC).

24B. Administrative control

(1) The National Commission shall have administrative control over all the State Commissions in the following matters, namely, –

(i) calling for periodical returns regarding the institution, disposal, pendency of cases;

(ii) issuance of instructions regarding adoption of uniform procedure in the hearing of matters, prior service of copies of documents

________________________________________________________________________

1. Now Rs. One crore vide Consumer Protection (Amendment) Act, 2002.

2. Inserted by Act 50 of 1993, w.e.f. 18.06.1993.

produced by one party to the opposite parties, furnishing of English translation of judgements written in any language, speedy grant of copies of documents;

(iii) generally overseeing the functioning of the State Commissions or the District Fora to ensure that the objects and purposes of the Act are best served without in any way interfering with their quasi-judicial freedom.

(2) The State Commission shall have administrative controls over all the District Fora within its jurisdiction in all matters referred to in sub-section (1).]

¹[25. Enforcement of orders of the District Forum, the State Commission or the National Commission

(1) Where an interim order made under this Act, is not complied with the District Forum or the State Commission or the National Commission, as the case may be, may order the property of the person, not complying with such order to be attached.

(2) No attachment made under sub-section (1) shall remain in force for more than three months at the end of which, if the non-compliance continues, the property attached may be sold and out of the proceeds thereof, the District Forum or the State Commission or the National Commission may award such damages as it thinks fit to the complainant and shall pay the balance, if any, to the party entitled thereto.

(3) Where any amount is due from any person under an order made by a District Forum, State Commission or the National Commission, as the case may be, the person entitled to the amount may make an application to the District Forum, the State Commission or the National Commission, as the case may be, and such District Forum or the State Commission or the National Commission may issue a Certificate for the said amount to the Collector of the District (by whatever name called) and the Collector shall proceed to recover the amount in the same manner as arrears of land revenue.]

COMMENTS

An order passed by the District Forum, State Commission or the National Commission may be enforced by the District Forum, State Commission or National Commission, as the case may be, in the same manner as if it were a decree or order made by a court in a suit pending therein and it shall be lawful for the District Forum, State Commission or National Commission to send, in the event of its inability to execute it, such order to the court within the local limits of whose jurisdiction, the registered office of the company is situated or in the case of an order against any other person, the place, where the person concerned voluntarily resides or carries on business or personally works for gain.

²[26. Dismissal of frivolous or vexatious complaints

Where a complaint instituted before the District Forum, the State Commission or, as the case may be, the National Commission, is found to be frivolous or vexatious, it shall, for reasons to be recorded in writing, dismiss the complaint and make an order that the complainant shall pay to the opposite party such cost, not exceeding ten thousand rupees, as may be specified in the order.

COMMENTS

A consumer is exempted from paying any court fee but that does not mean that the consumer can ask for any amount in the name of damages. To check this approach of making exaggerated claims, the Commission may be required to pass orders directing such complainants to pay costs. – Labh Shanker Jiverambhai v. Managing Director, Reliance Industries 1992 (2) CPJ 461.

27. Penalties

¹[(1)] Where a trader or a person against whom a complaint is made ²[or the complainant] fails or omits to comply with any order made by the District Forum, the State Commission or the National Commission, as the case may be, such trader or person ²[or the complainant] shall be punishable with imprisonment for a term which shall not be less than one month but which may extend to three years, or with fine which shall not be less than two thousand rupees but which may extend to ten thousand rupees, or with both:

³[xxx]

⁴[(2) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), the District Forum or the State Commission or the National Commission, as the case may be, shall have the power of a Judicial Magistrate of the first class for the trial of offences under this Act, and on such conferment of powers, the District Forum or the State Commission or the National Commission, as the case may be, on whom the powers are so conferred, shall be deemed to be a Judicial Magistrate of the first class for the purpose of the Code of Criminal Procedure, 1973.

(3) All offences under this Act may be tried summarily by the District Forum or the State Commission or the National Commission, as the case may be.]

COMMENTS

Prior to the imposition of penalty within the meaning of sec. 27, the person concerned must be given an opportunity of being heard in the matter of penalty

________________________________________________________________________

1. Substituted vide Consumer Protection (Amendment) Act, 2002.

2. Substituted by Act 50 of 1993, w.e.f. 18.06.1993.

that may be inflicted against him. The question of infliction of penalty is not to be brought into consideration at the moment the complaint petition is being disposed of. At the most at the time of disposing of the complaint it can be said that in case there is non-compliance with such order, action under sec. 27 would be initiated. – Union of India v. Chairman, Madras Provisional Consumer Association 1992 (2) CPJ 524.

In case the order of the District Forum as regards payment of amount is not complied with and the compliance is made later on, it is proper to impose the fine only and not substantial sentence under sec. 27. – Raymond Synthetics Ltd. v. Babu Lal Khemka 1993 (1) CPJ 559.

⁴[27A. Appeal against order passed under section 27

(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, (2 of 1974), an appeal under section 27, both on facts and on law, shall lie from;

(a) the order made by the District Forum to the State Commission;

(b) the order made by the State Commission to the National Commission; and

(2) Except as aforesaid, no appeal shall lie to any court from any order of a District Forum or a State Commission or the National Commission,

(3) Every appeal under this section shall be preferred within a period of thirty days from the date of an order of a District Forum or a State Commission or, as the case may be, the National Commission:

PROVIDED that the State Commission or the National Commission or the Supreme Court, as the case may be, may entertain an appeal after the expiry of the said period of thirty days, if, is satisfied that the appellant had sufficient cause for not preferring the appeal within the period of thirty days.]

CHAPTER IV

MISCELLANEOUS

28. Protection of action taken in good faith

No suit, prosecution or other legal proceedings shall lie against the members of the District Forum, the State Commissions or the National

________________________________________________________________________

1. Existing section renumbered as sub-section (1) thereof vide C.P. (Amdt.) Act, 2002.

2. Inserted by Act 50 of 1993, w.e.f. 18.06.1993.

3. Proviso omitted vide Consumer Protection (Amendment) Act, 2002.

4. Inserted, ibid.

Commission or any officer or person acting under the direction of the District Forum, the State Commission or the National Commission for executing any order made by it or in respect of anything which is in good faith done or intended to be done by such member, officer or person under this Act or under any rule or order made thereunder.

COMMENTS

A thing shall be deemed to be done in good faith where it is in fact done honestly whether negligently or not. The question of good faith is one of the fact. The concerned person should show that the belief impugned in the statement had a rational basis and not a just simple belief and therefore simple or actual belief is not enough. – State of Orissa v. Bhagaban Barik AIR 1987 SC 1265.

It is necessary to establish that what is complained of is something which the Act requires should be done or should be omitted to be done. There must be a compliance or intended compliance with the provisions of the Act before the protection can be claimed. The section cannot cover a case of breach of the Act however honest the conduct be otherwise. – State of Gujarat v. Kansara Manilal Dhiklal AIR 1964 SC 1893. The burden of establishing malafide lies heavily on the person who makes such allegation and the court cannot permit such person to side-track the issue and escape the burden of establishing hostility and or malus animus. – S.N. Patil v. Mahesh Madhav AIR 1987 SC 294.

¹[28A. Service of Notice, etc.

(1) All notices, required by this Act to be served, shall be served in the manner hereinafter mentioned in sub-section (2).

(2) The service of notices may be made by delivering or transmitting a copy thereof by registered post acknowledgement due addressed to opposite party against whom complaint is made or to the complainant by speed post or by such courier service as are approved by the District Forum, the State Commission or the National Commission, as the case may be, or by any other means of transmission of documents (including FAX message).

(3) When an acknowledgement or any other receipt purporting to be signed by the opposite party or his agent or by the complainant is received by the District Forum, the State Commission or the National Commission, as the case may be, or postal article containing the notice is received back by such District Forum, State Commission or the National Commission, with an endorsement purporting to have been made by a postal employee or by any person authorized by the courier service to the effect that the opposite party or his agent or complainant had refused to take delivery of the postal article containing the

________________________________________________________________________

1. Inserted vide Consumer Protection (Amendment) Act, 2002.

notice or had refused to accept the notice by any other means specified in sub-section (2) when tendered or transmitted to him, the District Forum or the State Commission or the National Commission, as the case may be, shall declare that the notice had been duly served on the opposite party or to the complainant.

PROVIDED that where the notice was properly addressed, pre-paid and duly sent by registered post acknowledgement due, a declaration referred to in this sub-section shall be made notwithstanding the fact that the acknowledgement has been lost or mislaid, or for any other reason, has not been received by the District Forum, the State Commission or the National Commission, as the case may be, within thirty days from the date of issue of notice.

(4) All notices required to be served on an opposite party or to complainant shall be deemed to be sufficiently served, if addressed in the case of the opposite party to the place where business or profession is carried and in case of complainant, the place where such person actually and voluntarily resides.]

29. Power to remove difficulties

(1) If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order in the Official Gazette, make such provisions not inconsistent with the provisions of this Act as appear to it to be necessary or expedient for removing the difficulty:

PROVIDED that no such order shall be made after the expiry of a period of two years from the commencement of this Act.

(2) Every order made under this section shall, as soon as may be after it is made, be laid before each House of Parliament.

¹[(3) If any difficulty arises in giving effect to the provisions of the Consumer Protection (Amendment) Act, 2002, the Central Government may, by order, do anything not inconsistent with such provisions for the purpose of removing the difficulty:

PROVIDED that no such order shall be made after the expiry of a period of two years from the commencement of the Consumer Protection (Amendment) Act, 2002.

(4) Every order made under sub-section (3) shall be laid before each House of Parliament.]

²[29A. Vacancies or defects in appointment not to invalidate orders

No act or proceeding of the District Forum, the State Commission or the National Commission shall be invalid by reason only of the existence of any vacancy amongst its members or any defect in the constitution thereof.]

³[30. Power to make rules

(1) The Central Government may, by notification, make rules for carrying out the provisions contained in clause (a) of sub-section (1)of section 2, clause (b) of sub-section (2) of section 4, sub-section (2) of section 5, sub-section (2) of section 12, clause (vi) of sub-section (4) of section 13, clause (hb) of sub-section (1) of section 14, section 19, clause (b) of sub-section (1) and sub-section (2) of section 20, section 22 and section 23 of this Act.

(2) The State Government may, by notification, make rules for carrying out the provisions contained in clause (b) of sub-section (2) and sub-section (4) of section 7, clause (b) of sub-section (2) and sub-section (4) of section 8A, clause (b) of sub-section (1) and sub-section (3) of section 10, clause (c) of sub-section (1) of section 13, clause (hb) of sub-section (1) and sub-section (3) of section 14, section 15 and clause (b) of sub-section (1) and sub-section (2) of section 16 of this Act.]

¹[30A. Power of the National Commission to make regulations

(1) The National Commission may, with the previous approval of the Central Government, by notification, make regulations not inconsistent with this Act to provide for all matters for which provision is necessary or expedient for the purpose of giving effect to the provisions of this Act.

(2) In particular and without prejudice to the generality of the foregoing power, such regulations may make provisions for the cost of adjournment of any proceeding before the District Forum, the State Commission or the National Commission, as the case may be, which a party may be ordered to pay.]

²[31. Rules and regulations to be laid before each House of Parliament

(1) Every rule and every regulation made under this Act shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making and modification in the rule or regulation or both Houses agree that the rule or regulation should not be made, the rule or regulation shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule or regulation.

________________________________________________________________________

1. Inserted vide Consumer Protection (Amendment) Act, 2002.

2. Inserted by Act 34 of 1991, w.e.f. 15.06.1991.

3. Substituted vide Consumer Protection (Amendment) Act, 2002.

(2) Every rule made by a State Government under this Act shall be laid, as soon as may be after it is made, before the State Legislature.]

________________________________________________________________________

1. Inserted vide Consumer Protection (Amendment) Act, 2002.

2. Substituted, ibid.

COMMENTS

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