Consumer Protection Act, 1986 along with Commentary
(Act, No. 68 of 1986)
(24th December, 1986)
Preamble
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 and Kashmir.
(3) It shall come into force on such date1as 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 notification, this Act shall apply to all goods and services.
Footnote:
1. The provisions of Chapters I, II and IV of this Act have come into force in the whole of India except the State of Jammu and Kashmir on 15-4-1987: vide Notification No. S.O. 390 (E), dated 15th April, 1987, published in the Gazette of India, 1987, Extra., Pt. II, Sec. 3 (ii). The provisions of Chapter III of this Act have come into force in the whole of India except the State of Jammu and Kashmir on 1-7-1987: vide Notification, No. S.O. 568 (E), dated 10th June, 1987, published in the Gazette of India, 1987, Extra., Pt. II, Sec. 3 (ii).
2. Definitions
(1) In this Act, unless the context otherwise requires,--
1[(a) "appropriate laboratory" means a laboratory or organisation--
(i) recognised by the Central Government;
(ii) recognised 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 organisation 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; or
2[(iv) one or more consumers, where there are numerous consumers having the same interest;]
3[(v) in case of death of a consumer, his legal heir or representative;]
who or which makes a complaint;
(c) "complaint" means any allegation in writing made by a complainant that--
4[(i) an unfair trade practice or a restrictive trade practice has been adopted by 5[any trader or service provider];]
(ii) 6[the goods bought by him or agreed to be bought by him] suffer from one or more defects;
(iii) 7[the services hired or availed of or agreed to be hired or availed of by him] suffer from deficiency in any respect;
8[(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;]
9[(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;]
10[(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;with a view to obtaining any relief provided by or under this Act;
Commentary
Complaint – Res Judicata – In this case, the Complainant sought relief which were identical to the reliefs claimed by her in her earlier complainant. It was held that principle of constructive res judicata applied in this case. The complaint was accordingly dismissed as not maintainable by District Forum. Reliance Industries Ltd. and another vs. Neera Maheshwari, 2006 (3) CPJ 67.
Motor Vehicles Act, 1988 – Complaint – Maintainability – In this case, the question before the Commission was whether the Consumer Forum can adjudicate a matter when a similar claim is pending before the Motor accident Claims Tribunal. It was held that in such circumstances, the complaint was liable to be dismissed. Geetu Sapra and others vs. B.L. Kapur Memorial Hospital and others, 2002 (3) CPJ 286 (NC), 2004 (16) CCC 481.
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(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) 11[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 who 11[hires or avails of] the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person 12[but does not include a person who avails of such services for any commercial purpose];
13[Explanation.-For the purposes of this clause,"commecial purpose" does not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood by means of self-employment;]
Commentary
Commercial purpose – In this case, the Forum directed refund of security deposit by the complainant for the purchase of raw material for manufacturing purpose in his industry. In revision, the question before the National Commission was whether the transaction was a purely commercial transaction or not. It was observed that whether a particular transaction was purely commercial or not was a matter of fact which depended upon the evidence. In the instant case, no evidence was laid on that aspect. Revision application was accordingly dismissed. Steel Authority of India Ltd. vs. Anurag Tubes Pvt. Ltd., 2003 (1) CPR 111, 2003 (1) CPJ 137 (NC).
Commercial purpose- In this case, the electric line was to be used for commercial purpose in the Hotel. There was failure on the part of the OP in providing the electric line. On a complaint before the Forum, it was held that electric line for installation whereof the amount was deposited by the complainant was to be utilized for commercial purpose by the Hotel. Therefore, the complainant was not a consumer. Complaint held not maintainable. Hotel Corp of India Ltd. vs. Delhi Vidyut Board and others, 2006 (3) CPJ 409]
Commercial purpose- In this case, the machine purchased for commercial purpose and a manufacturing defect was noticed during warranty period. It was held that the complainant was a consumer and the OP was liable to compensate purchaser by either repairing goods, replacing them or refunding the amount. Jindal Drilling and Industries Ltd. vs. Indocon Engineers Pvt. Ltd. and another, 2006 (3) CPJ 264, 2000 (116) ELT 297
Housing – Collaboration/joint venture agreement – In this case, the complaint alleging deficiency of service on the ground that possession of the property was not delivered was dismissed by the District fourm. However, the State Commission reversed the order of the District Forum and directed the Opposite Party to hand over the possession of the property. In revision, it was held that the agreement between the parties was a joint venture agreement and there was no element of hiring of services by the complainant. Therefore, the complainant was not a ‘Consumers’. The order of the State Commission was accordingly set aside. [Darisa Builders Pvt. Ltd. vs. Pacoal Jose Cordo, 2007 (4) CPJ 345]
Insurance Company –Loss of consignment – In this case, the question before the Court was whether the insurer was a consumer. The insurer compensated the consignor for loss of goods during the transit. In turn, the consignor assigned and transferred to the insurer, all his rights against the carrier to recover compensation for the loss. It was held that notwithstanding such assignment, the insurer was not a beneficiary of the service hired by the consignor from the carrier. Hence, the insurer was not a consumer and could not maintain a complaint against the carrier of the goods. Even the addition of the consignor as the co-complainant, did not enable the insurer to maintain such a complaint. Oberoi Forwarding Agency vs. New India Assurance Co. Ltd., 2000 (2) SCC 407.
Prospective investor- In this case, the question before the Court was whether a prospective investor was a consumer within the provisions of section 2(1)(d) of the Act. It was held that an application for allotment of shares did not constitute goods. In order to satisfy the requirement of above definition of consumer, it is clear that there must be transaction of buying goods for...
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