Consumer Protection Act 1986.ppt

UNIT – V
CONSUMER
PROTECTION ACT, 1986

CONSUMER PROTECTION ACT, 1986
Law relating to ‘Consumer Protection’ is contained in this Act.
Enacted to meet the long felt necessity of protecting the
consumers from getting cheated by unscrupulous suppliers of
goods and services.
Remedy under various existing law like Sale of Goods Act,
Prevention of Food Adulteration Act, Standards of Weights and
Measures Act, Dangerous Drugs Act, etc., has become illusory.
Require the aggrieved consumer to initiate action by way of a
Civil suit involving expensive and time consuming legal process.

Consumer Protection Act, 1986 attempts to provide an
inexpensive, simpler, and quicker access to redressal of
consumer grievances.
Consumers can file their complaints against defective goods or
deficient services with Consumer Forums, namely, the District
Forum at the District level, State Commission at the State level
and National Commission at the National level.
There is no need to engage a lawyer to present the case and
there is a time limit for disposal of a case.
Aims to protect the interests of consumers by recognizing them
in the form of rights.

Various rights of consumers recognized to be promoted and
protected by the Consumer Protection Councils are as follows:
 Right to Safety – To be protected against the sale of goods and
services which are hazardous to life and property.
 Right to Information – Informed about quality, quantity, weight
& price of goods, so they are not cheated by unfair trade
practices.
 Right to Choose – Assured access to a variety of goods and
services at the competitive price.
 Right to be Heard – Heard & assured that their interest will
receive due consideration at appropriate forums.
 Right to seek redressal against exploitation – To seek legal
redressal against unfair or restrictive trade practices.
 Right to Consumer Education – Access to consumer
education. Unless consumers are aware of their rights and
remedies, protection of their interest shall remain a myth.

Consumer Protection Act, 1986 was amended in 1991, 1993
and 2002 to make it more effective and purposeful.
Consumer Protection (Amendment) Act, 2002 appears to be a
milestone.
It has strengthened the procedures and has conferred more
powers on the consumer disputes redressal agencies.
Amendment Act, 2002 is expected to greatly facilitate the
working of the redressal agencies and help in achieving speedy
settlement of disputes.

Scope and Applicability of the Act:
 This Act extends to the whole of India except the state of
Jammu and Kashmir.
 Applies to all goods and services except those notified by the
Central Govt. (Sec. 1).
 As such the provisions of the Act grant additional remedy to the
consumers.
Definition of Consumer [Sec. 2(1)(d)]:
 A “consumer” means any person who buys any goods for a
consideration which has been paid or promised or partly paid &
partly promised, or under any system of deferred payment, and
includes any person who uses such goods with approval of the
buyer. It does not include a person who buys goods for resale
or for any commercial purpose.

It may be observed that the aforestated definition of the term
‘Consumer’ is in two parts:
 Consumer of goods
 Consumer of services
 Consumer of Goods:
Important features of the definition of ‘Consumer of goods’ may
be stated as follows:
 Buying goods for consideration:
Buying of goods must be for consideration, which may be paid
immediately or promised to be paid later – even in installments.
Consideration may be in terms of money or other goods &
services.

 User of goods with the approval of the buyer:
The term ‘Consumer’ includes any person who uses goods with
the permission of the buyer though he is himself not a buyer.
 Goods should not be purchased for resale or for any
commercial purpose:
The term ‘Consumer’ does not include a person who buys goods
for ‘resale’ or for any ‘commercial purpose’.
 Person buying goods for self employment is a consumer:
When the goods are bought and used by the buyer himself,
exclusively for the purpose of earning his livelihood, by means of
self employment, then such buyer/user is also recognized as a
consumer under the Act.

 Consumer of Services:
A person is a ‘Consumer of Service’ if he satisfies the following
criteria:
 Hiring of Services for Consideration:
There must be a transaction of hiring or availing of service for
consideration.
Payment of consideration need not necessarily be immediate.
 Beneficiary of service is also a ‘Consumer’:
A beneficiary of services is also regarded as a ‘Consumer’
provided the beneficial use is made with the approval of the
person who hired the service.
 Service should not be availed for any commercial purpose:
The term ‘Consumer of Service’ does not include a person who
avails service for any ‘Commercial purpose’.

 Important Definitions:
 Service [Sec. 2(1)(q):
“Service” means service of any description which is made
available to potential users & includes provision of facilities in
connection with banking, financing, insurance, transport,
processing, supply of electrical or other energy, boarding or
lodging or both, housing construction, entertainment,
amusement or the purveying of news or other information.
 Complaint:
“Complaint” is an allegation made in writing to the National
Commission, the State Commission or the District Forum, by a
person competent to file it with a view to obtaining relief
provided under the Act.

 Unfair trade practice: [Sec. 2(1)(r)]
“Unfair trade practice” means a trade practice which use or
supply of any goods or for the provision of any services, adopts
any unfair method or unfair or deceptive practice.
 Restrictive trade practice: [Sec. 2(1)(nnn)
“Restrictive trade practice” means a trade practice which
tends to bring about manipulation of price and 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.

 Defect: [Sec. 2(l)(f)]
“Defect” means any fault, imperfection, or shortcoming in
quality, quantity, potency, purity, or standard which is required to
be maintained by or under any law for the time being in force or
under any contract, express or implied, or as claimed by the
trader in any manner whatsoever in relation to any goods.
 Deficiency: [Sec. 2(l)(g)]
“Deficiency” means any fault, imperfection, shortcoming or
inadequacy in quality, nature & 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.

 Consumer Redressal Machineries & Forums:
Consumer Protection Act, 1986 provides for a three-tier
remedial machinery for speedy redressal of consumer disputes.
According to Sec.9, following agencies shall be established:
 Consumer Disputes Redressal Forum to be Known as “District
Forum”.
 State Consumer Disputes Redressal Commission (SCDRC) to
be known as “State Commission”.
 National Consumer Disputes Redressal Commission (NCDRC)
to be known as “National Commission”.
Prime Objective is to relieve the conventional courts of their
burden which is ever increasing and delaying the disposal of
suits due to technicalities.
They are manned by qualified persons and have vested with
considerable powers.

 District Forum:
Established by the State Govt. in each district of the state.
State Govt. establish more than one District Forum in a district.
Appointing Authority [Sec. 10(1-A)] – Every appointment of
the President & Members of District Forum shall be made by
State Government on recommendations of selection committee.
Term of Office [Sec. 10(2)] – Every member of the District
Forum shall hold office for a term of 5 years or upto the age of
65 years, whichever is earlier.

District Forum shall have jurisdiction to entertain complaints
where the value of goods or services and the compensation
claimed does not exceed Rs. 20 Lakhs.
When a claim exceeds this limit, the matter is beyond the
jurisdiction of the Forum.
Procedure to be followed by the District Forum on admission of
a complaint can be discussed under the following two heads:
 Where laboratory test is required to determine defects in goods.
 Where no laboratory test is required to determine the defects in
goods or the complaint relates to services.

 State Commission:
Established by the State Govt. in the State by notification.
After District Forum, State Commission is next in the hierarchy
of Consumer Disputes Redressal Agencies under the Act.
Appointing Authority [Sec. 16(1-A)] – Every appointment of
the President & Members of State Commission are similar to
the procedure in District Forum.
Term of Office [Sec. 10(2)] – Every member of the State
Commission shall hold office for a term of 5 years or upto the
age of 67 years, whichever is earlier.
State Commission shall have jurisdiction to entertain complaints
where the value of goods or services & compensation claimed
exceeds Rs. 20 Lakhs, but does not exceed Rs. 1 Crore.

 National Commission:
Top most layer in the three level hierarchy of the Consumer
Disputes Redressal Agencies.
The National Commission shall consist of:
 A person who is or has been a judge of Supreme Court, to be
appointed by Central Govt., who shall be its president. But no
such appointment shall be made except after consultation with
the Chief Justice of India.
 Atleast four other members or such higher number of members
as may be prescribed, and one of the whom shall be a woman.
Term of office [Sec. 20(3)] – Every member of the National
Commission shall hold office for a term of 5 years or upto the
age of 70 years, whichever is earlier.

Appointing Authority – Appointment of members of the NC is
made by the Central Govt. on recommendation of a selection
committee consist of the following:
 A person who is a judge of the Supreme Court, to be nominated
by the Chief Justice of India – chairman.
 Secretary in Dept. of Legal Affairs in the Govt. of India - member.
 Secretary of Dept. dealing with consumer affairs in Govt. of India
– Member.
NC shall have jurisdiction to entertain complaints where value of
goods or services & compensation claimed exceeds Rs. 1 Crore.
Territorial jurisdiction of the NC is whole of India except the state
of Jammu & Kashmir.
NC has power to call for the records & pass appropriate orders in
any consumer dispute which is pending before or has been
decided by any State Commission.

CYBER LAWS
Generally applied to broad area of activities & technologies
associated with the use of computers & communication.
IT enables the corporate management to have access to timely,
accurate and relevant data, with the use of computers,
communication, telephone, internet, etc.
Helps in informed decision-making, minimizes the response time
& enables better coordination in the organization resulting in
reduced costs or increased profits.

CYBER LAWS
 Information Technology Act, 2000:
Law relating to “Information Technology” is contained in IT Act,
2000 which came into force on 17th October, 2000.
It is the First Cyber Law in India.
Act has been designed to boost e-commerce, e-transactions &
similar activities associated with commerce & Trade.
Also facilitate e-Governance by means of reliable electronic goods.
IT Act provides for the use & acceptance of electronic records &
digital signatures in the Govt. Offices.
To prevent possible misuse arising out of the transactions & other
dealings concluded over electronic medium, IT Act also provides
for a regulatory regime to supervise the certifying Authorities
issuing Digital Signature Certificate.

CYBER LAWS
E-Commerce refers to the business transacted electronically.
Refers to trading of goods over the Internet.
It is on-line sale & purchase of goods & services for value by
using Internet technologies, such as internet processing, e-mail,
& World Wide Web (WWW) or just web browsing.
During the six years of post IT Act period, the increase in
e-commerce is taking place at a slow rate mainly because the IT
Act is silent on all aspects of payment.

CYBER LAWS
E-Governance refers to the application of IT to the processes of
Govt. functioning in order to bring about Simple, Moral,
Accountable, Responsive & Transparent (SMART) Governance.
Involves electronic filing of documents with the Govt. agencies &
creating a network of e-services & e-administration.
E-Governance is fast catching up and more & more Govt.
processes are going online resulting in less bureaucracy, more
transparency and openness.
Companies will be able to file any form, application or any other
document in electronic form & get licenses/certificates online.

CYBER LAWS
 Scheme of the IT Act, 2000:
IT Act, 2000 consists of 13 chapters divided into 94 Sections.
Chapters I to VIII are mostly digital signature related.
Chapters IX to XIII are regarding penalties, offences, etc.
Act has four schedules on consequential amendments in respect
of certain other acts.
I schedule makes amendments to Indian penal Code, 1860.
II schedule makes amendments to Indian Evidence Act, 1872 to
provide necessary changes in various provisions which deal with
offences relating to documents & paper based transactions.
III schedule makes amendments to Bankers’ Books Evidence Act,
1891 to give legal purity for books of account maintained in the
electronic form by the banks.
IV schedule makes amendments to the RBI Act, 1934 to facilitate
electronic fund transfers between financial institutions & banks.

CYBER LAWS
 Exceptions [Sec. 1(4)]:
Provisions of IT Act, 2000 shall not apply to the following documents:
 Execution of a Negotiable Instrument under N.I Act, 1881.
 Execution of Power of Attorney under Powers of Attorney Act, 1882.
 Creation of a Trust under Indian Trusts Act, 1882.
 Execution of a ‘will’ under the Indian Succession Act, 1925 including
any other testamentary disposition by whatever name called.
 Entering into a contract for sale or conveyance of immovable property
or any interest in such property.
 Execution of such class of documents or transactions as may be
notified by Central Govt. in Official Gazette.
Reason for excluding such documents are required to be
authenticated only by the handwritten signatures.
These require special attestation and/or registration formalities.

CYBER LAWS
 Cyber crimes:
Crime or an offence is “a legal wrong that can be followed by
criminal proceedings which may result into punishment”.
A crime may be said to be any conduct accompanied by act or
omission prohibited by law & consequential breach of which is
visited by penal consequences.
Cyber crime is the latest & perhaps the most complicated
problem in the cyber world.
“ cyber crime may be said to be those species, of which, genus
is the conventional crime, & where either the computer is an
object or subject of the conduct constituting crime”.

CYBER LAWS
 Definition – Cyber Crime:
“ Any criminal activity that uses a computer either as an
instrumentality, target or a means for perpetuating further crimes
comes within the field of cyber crime”.
A generalized definition of Cyber crime may be “unlawful acts
wherein the computer is either a tool or target or both”.
Computer as a target – Using a computer to attack other
computers. E.g., Hacking, Virus/worm attacks, DOS attack etc.
Computer as a weapon – Using a computer to commit real
world crimes. E.g., Cyber Terrorism, IPR violations, Credit card
frauds, etc.

CYBER LAWS
 Cyber Terrorism:
Cyber Crime & Cyber Terrorism is both crimes of Cyber world.
Cyber Terrorism is a premeditated use of disruptive activities or
threat and with intention to further social, ideological, religious,
political or similar objectives, or to threaten any person in
furtherance of such objectives.
 Cyber Criminal:
Any person who commits an illegal act with a guilty intention or
commits a crime is called an offender or a criminal.
Any person commits a Cyber Crime is known as Cyber Criminal.
Cyber criminals may be children & adolescents aged between
6-18 years & may be professionals hackers or crackers,
discontented employees, cheaters or even psychic persons.

CYBER LAWS
 Reasons for Cyber Crime:
Computers are vulnerable so rule of law is required to protect &
safeguard them against Cyber Crime.
The reasons for vulnerability of computers may be said to be:
 Capacity to store data in comparatively small space.
 Easy to access.
 Complex.
 negligence.
 Loss of evidence.

CYBER LAWS
 Categories or Classifications of Cyber Criminals:
Cyber criminals constitute of various groups/category. They are:
 Children & Adolescents between age group of 6 – 18 years:
Criminal behavior pattern in children is seen to explore things.
 Organized Hackers:
Mostly organized together to fulfill certain objectives.
 Professional Hackers/Crackers:
Mostly employed to cut the site of rivals & get credible, reliable &
valuable information.
Employed to crack the system of employer basically as measure.
 Discontented employees:
Dismissed by their employer or dissatisfied with their employer.

CYBER LAWS
 Mode & Manner of Committing Cyber Crime:
Unauthorized access to computer systems or networks/hacking.
Theft of information contained in electronic form.
Email bombing – Sending large numbers of mails to the victim.
Data diddling – Altering raw data just before computer process.
Salami attacks – Prevailing in financial institutions or committing
financial crimes & alteration is small & it normally go unnoticed.
Denial of Service attack – flooded with more requests.
Virus / Worm attacks – affects the data on a computer, either by
altering or deleting it.
Logic bombs – created to do something only when a certain
event occurs.

CYBER LAWS
Trojan Attacks – gains control over another’s system by
representing itself as an authorized programme. E.g., Trojan is
through e-mail.
Internet time thefts – done by gaining access to the login ID and
the password.
Web jacking – gains access & control over website of another.
E-mail and Internet Relay Chat crimes
Pornography – describing or showing sexual acts & include
pornographic websites.
Forgery – currency notes, postage & revenue stamps, mark
sheets etc can be forged using printers and scanners.
IPR violations – include software piracy, copyright violation,
trademark violations, theft of computer source code, patent
violations, etc.
Cyber terrorism

CYBER LAWS
Banking / Credit Card related crimes
E-commerce / investment Frauds – Investors are attracted to
invest in this fraudulent scheme.
Sale of illegal articles – include trade of narcotics, weapons and
wildlife etc.
Online gambling
Defamation – understood as the intentional infringement of
another person’s right to his good name.
Cyber stacking – involves following a persons movements
across the Internet by posting messages & threatening.
Pedophiles – earns teens trust & gradually seduce them into
sexual or indecent acts.
Theft of computer system (Hardware)
Breach of privacy and confidentiality

INTELLECTUAL PROPERTY RIGHTS
IPR Make individuals to avail the results of their new ideas &
creation of new products.
In the absence of such protection, there would be no incentive for
them to create new things and ideas.
Rights were only limited to tangible products, but now it is also
possible to patent an idea or a process.
 Patents:
A Patent is a govt. license that gives the holder exclusive rights to
use, manufacture & sell a new process, design or a new invention
for a non-renewable limited time period (20 years in India) without
interference or violation by other parties.

Usually granted to the designer/inventor of the item if the patent
is applied for and approved before knowledge of the design
becomes part of the public domain.
A Patentable invention can be new product, a new process, a
new apparatus & a new use of a known product.
Cannot be obtained for something that is known or an obvious
modification of what is known.
Owner of a patent can sell the property.
A Patent granted in one state/country cannot be enforced in
another state/country, unless it is also registered in that state
country.
Objective of the claim is to cover what a competitor might try to
do having seen the invention, possibly by applying it in a
different way.

 Copyright:
The legal right granted to an author, composer, playwright,
publisher, or distributor to exclusive publication, production, sale
or distribution of a literary, musical, dramatic, or to artistic work.
Copyright is the legal ownership of a ‘work’.
Written text, program source code, graphics images, sculpture,
music, sound recording, motion picture, pantomime,
choreograph & architecture.

 Trade Marks:
A Trade Mark is a visual symbol in the form of a word, device,
brand, ticket, heading, label, etc.
Applied to articles of commerce with a view to indicate to the
purchasing public that they are the goods manufactured by a
particular person as distinguished from similar goods
manufactured by other persons.

 Intellectual Property:
Intellectual Property refers to creations of the mind; inventions,
literary and artistic works, and symbols, names, and images
used in commerce.
 Intellectual Property Rights:
IPR are legal rights, which result from intellectual activity in the
industrial, scientific, literary and artistic fields.
IPR are like any other property rights – they allow the creator, or
owner, of a patent, trademark, or copyright to benefit from his or
her own work or investment.

 IPR in India:
India has defined the establishment of statutory, administrative
and judicial framework for protecting the IPR in Indian territory.
In 1999, Govt. has passed the important legislation in relation to
the protection of IPR on the terms of them world practices.
It consists of:
 The Patents (Amendment) Act, 1999 which was passed on 10th
March, 1999 for amending the Patents Act of 1970 which in turns
facilitate to establish the mail box system for filing patents &
accords with exclusive marketing rights for time period of 5 years.

 The Trade marks Bill, 1999 was passed for replacing the Trade
& Merchandize Marks Act, 1958.
 The Copyright (Amendment) Act, 1999 was passed for
replacing Indian Copyright Act, 1957.
 The Sui generis legislation was approved & was named as the
Geographical Indications of Goods (Registration& Protection)
Bill, 1999.
 The Industrial Designs Bill, 1999 was passed for replacing the
Designs Act, 1911.
 The Patents (Second Amendment) Bill, 1999 was introduced for
further amending Patents Act 1970 & making it compliance with
TRIPS ( Trade-related aspects of Intellectual Property Rights).

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