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Consumer Protection Law in India

 

This article summarizes the Consumer Protection Act, 1986 of India in simple words. Please note that this article is NOT legal advice. There is no guarantee on its accuracy and we shall not be responsible for any damages due to any reliance placed on this article.

Consumer Protection Act 1986 - An Introduction

Consumer Protection Councils

Consumer Disputes Redressal Agencies

District Consumer Disputes Redressal Forum

State Consumer Disputes Redressal Commission

National Consumer Disputes Redressal Commission

Consumer Protection Act of 1986 - Summary

Consumer Protection Act 1986 - An Introduction

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, 2003. 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 non-commercial 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.

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 of Compensation You SeekCourtPresidentOther Members
Up to Rs. 20 LakhDistrict Consumer Disputes Redressal ForumMust be qualified to be a District Judge.Two other members; one must be a woman
Rs. 20 Lakh to Rs. 1 CroreState Consumer Disputes Redressal CommissionMust be a person who is or has been a Judge of a High Court.At least two other members.
Higher than Rs. 1 CroreNational Consumer Disputes Redressal CommissionMust be a person who is or has been a Judge of the Supreme CourtAt least four other members.

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)

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.

The law provides that the District Consumer Disputes Redressal Forum has the same powers as a civil court under Code of Civil Procedure 1908, but you may be surprised as to how much of this power in law books actually manifests when put to practice.

The District Consumer Forum can order the company to take the following actions once it hears the complaint and decides that the company is at fault:

  • Correct deficiencies in the product to what they claim
  • Repair defect free of charges
  • Replace product with similar or superior product
  • Issue a full refund of the price
  • Pay compensation for damages / costs / inconveniences
  • Withdraw the sale of the product altogether
  • Discontinue or not repeat any unfair trade practice or the restrictive trade practice
  • Issue corrective advertisement for any earlier misrepresentation

If you are not satisfied with the verdict from the District Consumer Court, you can appeal in the State 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.25000/-, whichever is lesser.

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.
  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 either parties) orders have to be set aside.

If you are not satisfied by the verdict from the National Consumer Court, you can appeal in the Supreme Court, 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.50000/-, whichever is lesser.

Consumer Protection Act of 1986 - Summary

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.

However, we do still encourage you to file complaints at the various consumer courts as per the provisions of the Consumer Protection Act of 1986, as although a slow one, we think of it as a start on India's progress towards consumerism. Finally, we encourage you to seek other measures to fight against anti-consumer companies as explained in the following articles.

  • Filing complaints in consumer courts.
  • What can I do besides filing a complaint in the consumer court?
  • Why should you visit the Consumerdaddy.com website?
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