Business Law unit- 4 - Consumer Protection Act The Consumer Protection Act, 1986, Definition of Unfair Trade practices, Restrictive Trade Practices, Consumer Dispute, Rights of Consumers, Consumer Protection Councils.

1. BUSINESS
LAW
UNIT-III-B
PRESENTED BY
K.BALASRI PRASAD
B.Sc(KU), M.B.A(OU), NET(UGC)
ASSOCIATE PROFESSOR IN MANAGEMENT

2. The Consumer Protection Act, 1986:
Consumer Protection Act was passed in the
year 1986. Came into force from 15th April,
1987.
 The main object of this law is to protect the
consumers of goods and services from the
unfair practices by the traders.
 It has also constituted Consumer Redressal
Forums and Commissions at district level,
state level and national level for the settlement
of consumer disputes.

3. Definition of Consumer:
“ Any person who hires or avails
any services for consideration
which has been paid or promised
or partly paid and partly promised
or under any system of deferred
payments and includes any
beneficiary of such services other
than the hirer.”

4. Definition of Consumer Covers:-
1. One who buys or agrees to buy goods for a consideration
for personal use
2. One who uses such goods with permission of buyer of
goods.
3. One who obtains goods on hire purchase or lease
4. One who hires or avails of any services for a consideration.
5. One who uses the services with permission of person who
has hired the services.
6. One who obtains services on deferred payment basis i.e.,
hire purchase or lease.
7. One who buys goods or hires services exclusively for
purpose of earning livelihood.

5. Definition of Goods:
“ Goods means every kind of movable
property other than actionable claims
and money, and includes stocks and
shares, growing crops and things
attached to or forming part of land
which are agreed to be served for the
purpose of sale.”

6. Definition of Services:
“ Services means service of any
description which is made available to
the potential users. It includes the
provision of facilities in connection
with banking, financing, insurance,
transportation, processing, supply of
electrical or other energy etc.”

7. Definition of Unfair Trade practices:
1. Falsely representing that the goods are of
particular standard, quality, grade, style,
model and composition when they are not
so.
2. Falsely representing the second hand,
renovated, reconditioned and old goods as
new goods.
3. Representing that the goods or services have
the sponsorship, approval, accessories of a
foreign company where there is no such
collaboration.

8. 4. Making of false or misleading representation
about the uses, benefits, durability, efficiency
etc., of the goods.
5. Giving any guarantee or warranty of the
performance, efficiency of length of a product
or any goods which is not based on any
adequate test or experience.
6. Permitting the publication of any
advertisement in any newspaper or otherwise
for the sale of goods or services at a bargain
price or discount etc,. without any intention to
do so.

9. Restrictive Trade Practices:
According to section2(1), any trade practice
which requires a consumer to buy, hire or
avail of any goods or services as the case
may be, as a condition precedent for buying.
Hiring or availing of other goods or
services.
Example: A gas agency forcing a consumer
to buy gas stove supplied by them
compulsorily to get gas connection from
their agency or company.

10. Definition of Complainant: Complainant is
defined in section 2(1)(b) and means,
1. A consumer; or
2. Any voluntary consumer’s association registered
under the Companies Act, 1956 or under any other
law for the time being in force; or
3. The central government or any state government; or
4. One or more consumers, where there are numerous
consumers having the same interest.
5. In case of death of a consumer, his legal heir or
representative.

11. Definition of Complaint: According to Section
2(1)(c), Complaint means any allegation in
writing made by a complainant that,
1. An unfair trade practice or a restrictive trade
practice has been adopted by any trader or
service provider;
2. the goods bought or agreed to be bought
suffer from one or more defects;
3. The services hired or availed or agreed to be
hired or availed suffer from deficiency in any
respect;

12. 4. a trader or the service provider has
charged for the goods or for the services
mentioned in the complaint, a price in
excess of the price.
5. Goods and services which will be
hazardous to life and safety when used
are being offered for sale to the public.

13. Definition of Consumer Dispute:
Section2(1)(e)
A dispute occurs when the person against
whom a complaint has been made, denies
or disputes the allegations contained in
the complaint.
If the person against whom complaint is
made agrees to the complaint, there is no
consumer dispute.

14. Definition of Defect/Deficiency: Any
fault, imperfection or shortcoming in
the quality, quantity, purity or
standard which is required to be
maintained by or under any law in
force or as is claimed by the trader in
any manner in relation to any
goods/Service.

15. Rights of Consumers:
1. Right of Protection: Consumers can sue the
traders for any losses suffered for human life or
property.
2. Right to Information: The Consumers are having
the right to be informed about the quality, quantity,
purity, standard and price of goods or services sold.
This information should be printed on the packing
of the product.
3. Right of Assurance: The Consumers can demand
the Right to be assured access to the goods and
services where ever possible before delivering
them.

16. 4. Right of Hearing: Whenever the Consumers
suffers any loss or damage, he/she will have
the Right to be heard and to be assured that
consumer’s interest will receive due
consideration at appropriate forums at district
level, State level and National level.
5. Right of Redressal: Whenever the consumers
suffers any monetary loss, he/she can exercise
Right to seek Redressal against unfair
practices and restrictive trade practices or
exploitation of consumers by traders.

17. 6.Right of Education: The Consumers
should be supplied with manuals etc.,
with products regarding the users,
operations, safety etc., in using the
products to satisfy this right of educating
the consumer.

18. Consumer Protection Councils:
A. Central Consumer Protection Council:
Establishment: The Central Government shall by notification
establish a Central Protection Council consisting of the
following members:
(i) The minister in-charge of Consumer affairs in the Central
Government as the chairman.
(ii) The minister of state or Deputy minister as Vice Chairman.
(iii)The ministers in-charge of Consumer affairs in states.
(iv)Eight members of parliament – Five from the Lok sabha
and three from the Rajya sabha.
(v) The secretary of the National Commission for SC’s and
ST’s.

19. (vi) Representatives of the Central Government Departments
and autonomous organizations concerned with consumer
interests, not exceedingly twenty.
(vii) Representatives of the Consumer Organizations or
Consumers – not less than thirty five
(viii) Representatives of Women – not less than ten.
(ix) Representative of farmers, trade and industries – not
exceeding twenty.
(x) Persons capable of representing consumer interest not
specified above- not exceeding fifteen.
(xi) The secretary in-charge of the Consumer affairs in the
Central Government shall be the Member Secretary of the
Central Council.
The term of the Council shall be 3 years.

20. Procedure for meetings of the Central Council:
(1) The Central Council shall meet as and when
necessary, but 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 fir and shall
observe such procedure in regard to the transaction
of its business may be prescribed.

21. Objectives of the Central Council:
The objectives of the Central Council shall be to
promote and protect the rights of the
consumers such as,
(1)The right to be protected against the
marketing of goods and services which are
hazardous to life and property.
(2) the right to be informed about the quality,
purity, standard and price of goods or
services, as the case may be so as to protect
the consumer against unfair trade practices.

22. (3) the right to be assured access to a
variety of goods and services at a
competitive prices.
(4) the right to be heard and to be assured
that consumer’s interests will receive due
consideration at appropriate forums
(5) The right to seek Redressal against
unfair trade practices or restrictive trade
practices or exploitation of consumers
(6) the right to consumer education

23. B. State Consumer Protection Council:
(1)The State Government may, 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 or State
Council
(2)The State Council shall consist of the following
members:
(a) the minister in-charge of consumer affairs in the
State Government who shall be its Chairman;
(b) such number of other official and non-official
members representing such interest as may be
prescribed by State Government

24. (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.
Objectives of the State Council: The objectives 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.

25. C. 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.
(2)The District Consumer Protection Council ( District
Council) shall consist of the following members;
(a) the Collector of the District, who shall be its
Chairman
(b) such number of other official and non-official
members representing such interests as may be
prescribed by the State Government.

26. (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 as may be prescribed by the State
Government.
Objectives of the State Council: The objectives 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.