Consumer Protection Act 1986 Reasons for Enacting the Act Consumer Rights who is consumer User of Goods with the approval of Buyer Beneficiary of Services is also a Consumer Person buying goods for self-employment is Consumer Livelihood who is manufacturer what is service who is complainant what is complaint Consumer Dispute Defect Deficiency Consumer Courts in India Essential Remedies Available to Consumers under Indian Consumer Protections Act 1986

1. Consumer Protection
Act 1986
Presentation by
Adv. Urwi Keche

2. Consumer Protection Act 1986
An Act to provide for the better protection of the interests of
consumers and for that purpose to make provisions for the
establishment of consumer councils and other authorities for the
settlement of consumers’ disputes and for the matters connected
therewith. Published in the gazette of India on 26th December 1986.
Reasons for Enacting the Act
• Collective Bargaining – Sellers Lobby, Forming Cartels, Artificially
keeping prices high.
• Multiple Laws – Indian Contract Act, Sale of Goods Act, Essential
Commodities Act
• Hurdles in the Litigation – Going to regular court, Expensive &
Time Consuming
• Remedy – Punishment in the form of Punitive & Deterrent
Measure.
• Consumer Problems - Competition in the market, Misleading
Advertisement, Availability of inferior quality of goods and services.

3. Consumer Rights
1. Right to Safety – A consumer has a right to be
protected against goods and services which are injurious
to health and life.
2. Right to be informed – A consumer has a right to be
informed about the ingredients, quantity, quality, purity,
standard or grade, date of manufacture and price of the
goods he intends to buy.
3. Right to choose – A consumer has the freedom to
choose the goods needed from a variety of products
4. Right to be Heard – A consumer has a right to file a
complaint and to be heard by manufacturers, dealers,
advertisers, Government and public bodies in case of
dissatisfaction with a good or service.
5. Right to seek Redressal - If a consumer has a
complaint or grievance due to unfair trade practices like
charging higher price, selling of poor quality or unsafe
products and so on, he as a right to get relief.
6. Right to Consumer Education – Consumer education
empowers consumers to exercise their consumer rights.

4. Consumer – Section 2(1)(d)
Consumer means any person who
• 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
• Which such use is made with the approval of such 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
• (Hires or avails of) any services for a consideration which has
been paid or promised or partly paid or partly promised, or under
any system of deferred payment
• and includes any beneficiary of such services other than the
person who (hires or avails of) the services for a consideration
which has been paid or promised or partly paid or partly
promised, or under any system of deferred payment when such
services are availed of with the approval of the first mentioned
person
• but does not include a person who avails of such services for any
commercial purpose

6. User of Goods with the approval of Buyer
Dinesh Bhagat v. Bajaj Auto Ltd.
A purchased a scooter which was in B’s possession from the date of purchase. B
had a complaint regarding the scoter. He sued the seller. The seller pleaded that
since B did not buy the scooter, he was not consumer under the Act. The Delhi
State Commission held B, the complainant was using it with the approval of A, the
buyer and therefore he was consumer under Act.
Beneficiary of Services is also a Consumer
Spring Meadows Hospital v Harjot Ahluwalia - The Supreme Court held that
parents who bring the child to hospital and the child, both are consumers.
A Narasamma v LIC of India – It was held that the widow being the beneficiary
of services is a “Consumer” under the Act and is entitled to be compensated for
the loss suffered by her due to negligence of the LIC.

7. LIVELIHOOD:
Person buying goods for self-employment is Consumer
Mr. A was running a small typing institute to earn his
livelihood. He purchased a photocopy machine canon X
for Rs. 7200. It proved defective. He sued the seller who
contended that “A” is not a consumer under the Act as he
purchased the photocopier for commercial use. National
Commission held that A was construed as consumer
under the Act.
Bhupendra Jang Bahadur Guna v Reginnal Manager
and Others
A person purchased a tractor primarily to till his own
land, and let out the tractor on hire during the idle time to
till the lands of others.
NCRDC held that above situation would not amount to
commercial use.

8. Sanjay Krishna Kan v M/s Grooy Communications & Others
A lawyer purchased a computer and printer for his office. The printer started giving trouble. The lawyer
lodges a complaint. In this case printer has not been purchased by the advocate for any commercial purpose
or for resale but for use in his office to improve efficiency of his office. Therefore he will be treated as
consumer and will succeed in his complaint.
Laxmi Engineering Works v P.S.G. Industrial Institute
• Supreme Court held that if a person purchased a machine to operate it himself for earning his livelihood,
he would be a consumer.
• If such person took the assistance of one or two persons to assist him in operating machine, he would
still be a consumer.
• But if a person purchases a machine and appoint or engage another person exclusively to operate the
machine, then such person would not be a consumer.
Person even Availing Services is also a Consumer
“A” hires an advocate to file a suit for recovery of money from his employer. He promise to pay fee to the
advocate after settlement of the suit. “A” is a consumer of advocate, under the Act.

9. Manufacturer – Sec. 2(1)(i)
“Manufacturer” means a person
• Makes or manufactures any goods or parts
thereof; or
• Does not make or manufactures any goods but
assembles parts there from made or
manufactured by others and claims the end
product to be goods manufactured by himself;
• Puts or causes to be put his own marks on any
goods made or manufactured by any other
manufacturer
• Includes
• A firm, registered or not
• A Hindu undivided family
• A co-operative society
• Every other association registered as person under the
Societies Registration Act 1860

10. Service
Section 2(1)(r)
• “Service” means service of any description,
which is made available to the potential users
and includes, but not limited to the provisions
of the facilities in the connection with
• 1. Banking | 2. Financing | 3. Insurance |
4 Transport | 5. Processing | 6. Supply of
electrical or other energy | 7. Boarding or
lodging or both | 8. House Construction | 9.
Entertainment | 10. Amusement or |
11. The purveying r new or other information
• But does not include the rendering of any
service free of charge or under a contract of
personal service.

11. Complainant
Section 2(1)(b)
Privity of Contract | Locus Standi
• A consumer, or
• Any voluntary consumer association
registered under the Companies Act, 1956,
or under any other law for the time being in
force; or
• The Central Government or any State
Government, who or which makes a
complaint;
• One or more consumers, where there are
numerous consumers having the same
interest,
• In the case of death of a consumer, his legal
heir or representative who or which make a
complaint.

12. Complaint – Section 2(1)(c)
Limitation – Complaint can be filed within the period of maximum 2 years from the date of cause of action arises.
• An unfair trade practice or a restrictive trade practice has been adopted by any trader or service provider
• The goods, bought by him, or agreed to be bought by him, suffer one or more defects;
• The services hired or availed of agreed to be hired or availed of by him, suffer from deficiency in any
respect
• A trader has changed for the goods mentioned in the complaint, a price in excess of the price fixed by, or
under any law for the time being in force or displayed on the goods or any package containing such goods,
with a view to obtaining any relief provided by or under this act
• Goods which will be hazardous to life and safety when used, are being offered for sale to public in
contravention of the provisions of any law for the time being in force requiring traders to display
information in regard to the content, manner and effect of use of such goods.
• 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; with a view to obtaining any relief provided by or under this act.

13. Consumer Dispute
Defect
Deficiency
• Consumer Dispute – Section 2(1)(c) -
A dispute, where the person, against
whom, a complaint has been made, denies
or disputes the allegations contained in
the complaint.
• Defect – Section 2 (1) (f) - Fault,
Imperfection, Shortcoming in the Quality,
Quantity, Potency, Purity or Standard
• Deficiency – Section 2(1)(g) - Fault,
Imperfection, Shortcoming or Inadequacy
in the Quality, Standard and Manner of
Performance.

14. If a consumer is exploited by any seller, he can file
a case against the seller on his own and does not
require a lawyer to fight his case for him. The
consumer is also not required to pay any court
fee apart from a nominal fee depending on the
type of court and the claim amount.
Consumer Courts in India
• District Consumer Disputes Redressal Forum
(DCDRF) is a district Level court. It deals
with cases valuing up to INR 20 Lakh
• State Consumer Disputes Redressal
Commission (SCDRC) is a state-level court. It
takes up cases valuing less that INR 1 Crore
• National Consumer Disputes Redressal
Commission in India (NCDRC) is a national
level court. It deals with amount more than
INR 1 Crore. It is the highest court of appeal
in the matters related to consumer disputes in
India. The presiding Judges in NCDRC are
retired judges of the Supreme Court.

15. 9 Essential Remedies Available to Consumers under
Indian Consumer Protections Act 1986
Under this Act, the remedies available to consumers are as follows:
(a) Removal of Defects: If after proper testing the product proves
to be defective, then the ‘remove its defects’ order can be passed by
the authority concerned.
(b) Replacement of Goods: Orders can be passed to replace the
defective product by a new non-defective product of the same type.
(c) Refund of Price: Orders can be passed to refund the price paid
by the complainant for the product.
(d) Award of Compensation: If because of the negligence of the
seller a consumer suffers physical or any other loss, then
compensation for that loss can be demanded for.

16. (e) Removal of Deficiency in Service: If there is any deficiency in delivery of service, then orders can be
passed to remove that deficiency. For instance, if an insurance company makes unnecessary delay in giving final
touch to the claim, then under this Act orders can be passed to immediately finalise the claim.
(f) Discontinuance of Unfair/Restrictive Trade Practice: If a complaint is filed against unfair/restrictive
trade practice, then under the Act that practice can be banned with immediate effect. For instance, if a gas
company makes it compulsory for a consumer to buy gas stove with the gas connection, then this type of
restrictive trade practice can be checked with immediate effect.
(g) Stopping the Sale of Hazardous Goods: Products which can prove hazardous for life, their sale can be
stopped.
(h) Withdrawal of Hazardous Goods from the Market: On seeing the serious adverse effects of hazardous
goods on the consumers, such goods can be withdrawn from the market. The objective of doing so that such
products should not be offered for sale.
(i) Payment of Adequate Cost: In the end, there is a provision in this Act that the trader should pay adequate
cost to the victim concerned.

17. Examples –
1. Whether a Railway passenger is consumer? Y
2. Whether subscriber of telephone are consumer? Y
3. A window of a deceased policy holder, is consumer? Y
4. Whether tenant is a consumer or not, when no provision
regarding cleaning, repairing & maintain the building? N
5. A boy is wrongly diagnostic, whether family of boy is
consumer? Y
6. A company purchasing 50 laptops for its office premises, some
of which are subsequently found defective? N
7. A company purchasing water cooler for its factory premises,
which subsequently found defective? Y
8. A person booked a Honda Car Though Dealer, before deliver
he is consumer or not? Y
9. A company purchasing 4 A.C.(s) for its guest house, some of
which are subsequently found defective? Y
10. A company purchasing food for its employees, which is found
to be defective. Y

18. 1. A nursing home purchasing CT scan machine (and charging Rs. 5000 per patient for a CT scan) and
subsequently the machine developed some manufacturing defects. N
2. A person buying one motor vehicle and running it as taxi, and himself acting as driver. Subsequently the
vehicle developed some manufacturing defects. Y
3. A person buying 40 motor vehicles and running them as taxis. Subsequently some of the vehicles
developed manufacturing defects. N
4. A person taking taking 20 telephone connections for his STD/ISD shop. Subsequently some of the
connection not working. N
5. A person hiring the services of a transport company for shifting his domestic items? Y
6. A company purchasing 50 A.C. for its office premises, some of which are subsequently found defective?
N
7. A manufacturing company hiring the services of a transport company for transportation of its
manufactured goods from Noida to Mumbai? N
8. A company purchasing 50 exhaust fans for its factory premises, some of which are subsequently found
defective? N
9. A person purchasing refrigerator/ washing machine worth Rs. 10,000 for his home, which is subsequently
found defective? Y

19. 1. A person buy photocopy machine and engage few person
to person to operate it, whether owner is consumer or not?
N
2. Beneficiary of Bank Guarantee. Y
3. A company purchasing plant and machinery worth Rs. 50
Cr. Which is subsequently found defective. N
4. Allottees’ of house by house board. Y
5. A person obtaining water from a government agency and
paying water bill for the water supply. Y
6. A person paid water tax and availing services. N
7. A charitable trust has purchased machinery for its
diagnostic center, when only 10% patients are provided free
services and charges are levied on remaining patients. N
8. Person buying goods for manufacture of another product.
N
9. A government hospital where no fee is charged for
consultation and treatment, but only taken registration fee is
charged. Patient is? N