Consumer Protection Act & India

Transcription

1 28 Consumer Protection Act & India 5 Introduction Research Paper - Commerce The act came into effect first on December 24, 1986 after being passed by the Indian Parliament and signed by the President of India. It was modified later on and the modifications came into effect on March 15, For all legal purposes, you can read the bare act as published in the NCDRC website. The act is applicable in all states in India except in Jammu and Kashmir. The act makes provisions to include both tangible goods and intangible services (henceforth referred to as product) purchased from a trader or service provider (henceforth referred to as company). The act can apply to any consumer who uses the product for noncommercial activities, the only exception being use of it to earn his livelihood. In other words, the act excludes commercial customers fully, but includes individual domestic customers, groups of domestic customers, societies and not-for-profit organizations. The industrial revolution and the development in the international trade and commerce has led to the vast expansion of business and trade, as a result of which a variety of consumer goods have appeared in the market to cater to the needs of the consumers and a host of services have been made available to the consumers like insurance, transport, electricity, housing, entertainment, finance and banking. A well organized sector of manufacturers and traders with better knowledge of markets has come into existence, thereby affecting the relationship between the traders and the consumers making the principle of consumer sovereignty almost inapplicable. Mohiuddn Basit Waseem Head, Dept of Commerce, Sir Sayyed College, Aurangabad

2 29 Consumer Protection Councils The act provisions the central and state government to create councils at the central, state and district level to promote consumerism. These consumer protection councils have very little statutory powers and as such any direct benefit you can get as a consumer from these councils is low to none. Apart from a few exceptions, most of these councils today have been reduced to white elephant groups and groups for politicians, bureaucrats and netas to park their chamchas in! Nevertheless, although rare, there are still a handful of consumer protection councils in India that actively promote consumer protection activities. Consumer Disputes Redressal Agencies This section of the act provides for the creation of consumer courts. The central government is given the responsibility to create and maintain the National Consumer Disputes Redressal Commission in New Delhi. The state government is given the responsibility to create a State Consumer Disputes Redressal Commission at the state level and a District Consumer Disputes Redressal Forum at the district level. The statutory powers and jurisdiction of the three are summarized here. Amount Compensation Seek Up to Rs. 20 Lakh of You Court President Other Members District Consumer Disputes Must be qualified to be a Two other members; Redressal Forum District Judge. one must be a woman Rs. 20 Lakh to Rs. 1 State Consumer Disputes Must be a person who is or has At least two other Crore Redressal Commission been a Judge of a High Court. members. National Higher than Rs. 1 Crore Disputes Commission Consumer Must be a person who is or has At least four other Redressal been a Judge of the Supreme members. Court You cannot file a complaint in a consumer court if two years have elapsed after the cause of action (such as payment of a bill or the incident that started the dispute with the company)

3 30 District Consumer Disputes Redressal Forum The forum President and members are directly / indirectly appointed by the state government and he shall be eligible to be a district judge. All members of the court can have a term of up to five years or up to 65 years, whichever is earlier. The District Consumer Forum cannot conduct a hearing without the President and at least one other member. This consumer court deals with complaints where the compensation sought is less than twenty lakhs. This limit is commonly known as the pecuniary jurisdiction of the District Consumer Disputes Redressal Forum. For more details on how to file a complaint with a District Consumer Court, please refer to our article about filing complaints in consumer courts. A District Consumer Forum can hear cases for any company that operates an office or a branch in the district. It can also hear cases provided the actual reason why you are filing the complaint (such as sale or maintenance service that led to the defect) partially or fully occurred within the district. For this same reason, it is VERY IMPORTANT that you do not do business with any company that does not have local representation or one that makes you sign an agreement regarding the jurisdiction of the dispute. State Consumer Disputes Redressal Commission The law provides that the State Consumer Commission function in the state capital, but the government has the powers to move it as needed. The President of the State Consumer Commission shall be or should have been a High Court judge and should be appointed only after consultation with the Chief Justice of the High Court with the states jurisdiction. The remaining members of the commission are appointed by a committee with the President of the State Consumer Court as its chairman, and they can have a term of up to five years or up to 67 years, whichever is earlier. The State Consumer Disputes Redressal Commission deals with a pecuniary jurisdiction of only those complaints where the compensation sought is higher than twenty lakhs but lesser than one crore. For more details on how to file a complaint with a State Consumer Court, please refer to our article about filing complaints in consumer courts. The State Consumer Forum usually hears cases of three types: 1. Appeals from District Consumer Forums 2. Cases against companies that operates an office or a branch in the state.

4 31 3. Cases where the actual reason why you are filing the complaint (such as signing of an agreement or payment of a bill) partially or fully occurred within the state. The State Consumer Court also has the powers to transfer a case from one District Consumer Forum to another Forum provided there is such a request or it is in the interest of the law. If you are not satisfied by the verdict from the State Consumer Court, you can appeal in the National Consumer Disputes Redressal Commission, within a period of 30 days. If a verdict has been given against the company, it can appeal only after depositing 50% of the compensation to be paid to you or Rs.35000/-, whichever is lesser. National Consumer Disputes Redressal Commission The National Consumer Court must ordinarily be functioning in New Delhi and is presided over by a person who is currently or has been in the past a judge of the Supreme Court. The President of the National Consumer Disputes Redressal Commission (NCDRC) is appointed by the Central Government after consultation with the Chief Justice of India. The National Consumer Commission has a minimum of four other members and is appointed by a committee chaired by a Supreme Court judge as recommended by the Chief Justice of India. Members of the NCDRC can have a term of up to five years or up to 70 years, whichever is earlier. If your complaint seeks more than one crore rupees of compensation from a company, then the National Consumer Commission has the pecuniary jurisdiction over your complaint. For more details on how to file a complaint with the National Consumer Court, please refer to our article about filing complaints in consumer courts. The National Consumer Court handles five types of complaints: * Complaints that has been sought or need to be transferred from one State Consumer Commission to another in the interest of justice. * Appeals from State Consumer Disputes Redressal Commissions * Consumer complaints that occurred in India, except in the State of Jammu and Kashmir * Cases from State Consumer Commissions where there has been accusations or proof of material irregularity or illegal activities * Cases where ex-parte (where verdicts have been passed in the absence of

5 32 either parties) orders have to be set aside. Consumer Protection Act of 1986 The act in itself is rosy and seems omnipotent to promote consumerism in India. The law states that the consumer courts have the authority similar to that of a Judicial Magistrate of the first class in attaching properties and arresting persons in case any of its verdicts are violated or not adhered. But in practice, the law and the consumer court system suffer from the following drawbacks: * Seldom do companies pay heed to the consumer court. Their reports, orders and summons are very commonly ignored. As a result, most consumer cases drag on unnecessarily without any outcome. * Seldom do companies adhere to the verdict. As a result once the verdict comes, proceedings to execute the verdict take even more time of the complainant. * Consumer courts are not known to be devoid of corruption, like other courts in our country. * Consumer courts are overwhelmed and underfunded. The government paints very rosy statistics that 84% of cases in National Consumer Commission, 77% of cases in State Commission and 91% of cases in District Consumer Forums are disposed. However, it does not tell you how long it takes to dispose a case, nor how many cases are disposed in the favor of the consumer. We would have to assume a very large amount of time and a very low percentage as answers. * According to the Supreme Court there are 3.5 crore pending cases in the Indian courts today. Statistically, it could take 350 to 500 years to dispose of the cases pending in India. Add to this the fact that our government is inefficient in appointing Presidents for District Forums, and creating, encouraging and relishing bureaucratic delays, you would be extremely lucky if you can get your case disposed in 5 years. STATEMENT OF OBJECTS AND REASONS The Consumer Protection Bill, 1986 seeks to provide for better protection of the interests of consumers and for the purpose, to make provision for the establishment of Consumer councils and other authorities for the settlement of consumer disputes and for matter connected therewith. 2. It seeks, inter alia, to promote and protect the rights of consumers such as-

6 33 (a) the right to be protected against marketing of goods which are hazardous to life and property; (b) the right to be informed about the quality, quantity, potency, purity, standard and price of goods to protect the consumer against unfair trade practices; (c) the right to be assured, wherever possible, access to an authority of goods at competitive prices; (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 or unscrupulous exploitation of consumers; and1 (f) right to consumer education. 3. These objects are sought to be promoted and protected by the Consumer Protection Council to be established at the Central and State level. 4. To provide speedy and simple redressal to consumer disputes, a quasi-judicial machinery is sought to be setup at the district, State and Central levels. These quasi-judicial bodies will observe the principles of natural justice and have been empowered to give relief of a specific nature and to award, wherever appropriate, compensation to consumers. Penalties for noncompliance of the orders given by the quasi-judicial bodies have also been provided. 5. The Bill seeks to achieve the above objects. ACT 68 OF 1986 The Consumer Protection Bill, 1986 was passed by both the Houses of Parliament and it received the assent of the President on 24th December, It came on the Statutes Book as the Consumer Protection Act, 1986 (68 of 1986). LIST OF AMENDING ACTS 1. The Consumer Protection (Amendment) Act, 1991 (34 of 1991). 2. The Consumer Protection (Amendment) Act, 1993 (50 of 1993). 3. The Consumer Protection (Amendment) Act, 2002 (62 of 2002). THE CONSUMER PROTECTION ACT, 1986 (68 of 1986) [24th December, 198"6)

7 34 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. Conclusion The Consumer Protection Act 1987 (1987 c. 43) is an Act of the Parliament of the United Kingdom that made important changes to the consumer law of the United Kingdom. Part 1 implemented European Community (EC) Directive 85/374/EEC, the product liability directive, by introducing a regime of strict liability for damage arising from defective products. Part 2 created government powers to regulate the safety of consumer products through Statutory Instruments. Part 3 defined a criminal offence of giving a misleading price indication. The Act was notable in that it was the first occasion that the UK government implemented an EC directive through an Act of Parliament rather than an order under the European Communities Act 1972 Reference 1 Giliker, P. & Beckwith, S. (2004). Tort (2nd ed.). London: Sweet & Maxwell. pp ISBN Hodges, C. (1998). Development risks: Unanswered questions. Modern Law Review 61 (4): Mildred, M. & Howells, G. (1998). Comments on Development risks: Unanswered questions. Modern Law Review 61 (4): Nelson-Jones, R. & Stewart, P. (1987). Product Liability: New Law Under the Consumer Protection Act, London: Fourmat Publishing. ISBN Owles, D. (1988). The Unsafe Product: Manager s Guide to the Consumer Protection Act, London: Kogan Page. ISBN Shears, P. et al. (2001). Food for thought - What mad cows have wrought with respect to food safety regulation in the EU and UK. British Food Journal 103 (1): van Gerven, W. (2000). Cases, Materials and Texts on National, Supranational and International Tort Law. Oxford: Hart Publishing. pp. pp ISBN