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1. Objects & Reasons
2. Definitions and Scope
3. Illustrative cases: Deficiency in service
3.3. Educational institutions
3.5. Housing construction
3.7. Medical profession
3.8. Legal profession
3.11. Other cases
4. Consumer Protection Councils
4.1. Central Consumer Protection Council
4.2. State Consumer Protection Council
5. Consumer Disputes Redressal Agencies
5.1. District Forum
5.2. State Commission
5.3. National Commission
5.4. Miscellaneous Provisions
The Consumer Protection Act, 1986 received the assent of the President on Dec. 24, 1986, but came into force on 15th April, 19871 The objects of this legislation can be divided into two parts.
The first part seeks to promote and protect the rights of consumers, viz., (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 have, wherever possible, access to 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; and (f) right to consumer education.
The second part aims at helping the consumers in getting quicker or speedy redressal of their grievances through specially established quasi-judicial agencies instead of filing a suit in civil court. No court fee is required for filing the complaint nor there is any need to engage a lawyer, and the consumer redressal agencies can evolve summary procedure by observing the rules of natural justice in disposing of the complaint.
The Consumer Protection Act, 1986 contains only 31 sections, covering a large ground in the jurisprudence of consumer protection rights. The simple procedure coupled with freedom from the rigours of law of evidence have made it a landmark legislation of the country. The Supreme Court in the case of Lucknow Development Authority v. M.K. Gupta,2 observed that the importance of the Act lies in promoting welfare of the society by enabling the consumer to participate directly in the market economy. It attempts to remove the helplessness of a consumer which he faces against powerful business, described as network of rackets or a society in which producers have secured power to rob the rest and the might of public bodies which are degenerating into storehouse of inaction where papers do not move from one desk to another as a matter of duty and responsibility but for extraneous considerations leaving the common man helpless, bewildered and shocked.
The Act undoubtedly aims at removing injustices and wrongs met by consumers who are now equipped with a legal weapon to fight against these evils.
It is common for a statute to contain a provision that certain words and phrases shall bear the particular meanings. The purpose of a definition clause is
1 . In view of the Notification published by the Central Govt., Chapters I, II and IV came into force w.e.f. April 15, 1987 and Chapter III from July 1, 1987. See also, E. Elhence v. Rahomal Nahar Singh (P) Ltd., 1991 CPD 347 (MC) where it was held "the mere fact that the date of accrual of the cause of action was prior to the date of coming into force of Chapter III is totally irrelevant and it will operate to deprive the aggrieved consumer of his right under the Act to seek relief before the statutory redressal forum. See further Umedilal v. K.K. Nagpal, 1991 CPR 34 (Raj); Ramkali v. Delhi Administration, 1991 CPJ (Del).
2. (1994) 1 SC 243.
to (a) provide a key to the proper interpretation of the enactment and (b) shorten the language of the enacting part of the statute to avoid repetition of the same words contained in the definition. When a word is defined in the statute, it shall be understood in the sense defined unless there is anything repugnant in the context.1 It is, therefore, necessary to analyse some of these key terms or phrases used in the Act to explain and elaborate on their legal significance in the context of their interpretation.
Section 2(l)(b) defines complainant. It means:
(i) a consumer; or
(ii) any voluntary consumer association registered under the Companies Act, 1956 or under any other law for the time being in force; or
(iii) the Central Government or any State Government; or
(iv) one or more consumers, where there are numerous consumers having the same interest; who or which makes a complaint.
(v) in case of death of a consumer, his legal heir or representative.
Complainant literally means a person who has some grievance or injury and makes an allegation against another. But the word "complainant" under section 2(l)(b) has a wider connotation than its literal meaning. It includes not only a `consumer' who has some grievance or injury but also any voluntary consumer association registered under any law, the Central Government or State Government or one or more consumers, (where there are numerous consumers having the same interest) who or which makes the complaint. Thus, any one of the four can be a complainant. It should therefore be noted that a person seeking redress before the Consumer Redressal. Forum (under section 12 i.e., District Forum, under section 17 i.e., State Commission, or under section 21 i.e., National Commission) must come within any of the said four categories; otherwise he has no locus standi to proceed with his case.
The word `complaint' literally means a grievance, distress, dissatisfaction, objection, wrong or injury. But in the context of Consumer Protection Act, 1986, the term complaint has specified meaning and is limited by the definition given in section 2(1)(c), by which it means any allegation by the complainant in writing with a view to obtaining any relief in regard to the following matters:
(i) an unfair trade practice or a restrictive trade practice has been adopted by any trader;
(ii) the goods bought by him or agreed to be bought by him suffer from one or more defects;
(iii) the services hired or availed of or agreed to be hired or availed of by him suffer from deficiency in any respect;
(iv) a trader has charged 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;
1. See, Pappathi Ammal v. Nallu Pillai, MANU/TN/0200/1963 : AIR 1964 Mad 173 (FB); H.S. Shukla v. A.D. Divakar, AIR 1957 SC 121.
(v) goods which will be hazardous to life and safety when used, are being offered for sale to the public in contravention of the provisions of any law for the time being in force requiring traders to display information in regard to the contents, manner and effect of use of such goods.
It is thus clear that the expression `complaint' means "an allegation by a complainant pertaining to either the goods or the services, which he has bought or hired.1" It may be pointed out here that the expression complaint as defined in section 2(1)(c) of the Consumer Protection Act does not have the same meaning as the term `complaint' defined in section 2(d) of the Criminal Procedure Code. However the term `complaint' as contemplated in the Consumer Protection Act is equivalent to a `plaint' of a civil suit. A civil suit is instituted by presenting a plaint in the Court; whereas a case is instituted by presenting a complaint in the consumer redressal forum. The complaint under the Consumer Protection Act must contain allegation in writing with a view to obtaining relief only in relation to the following matters, viz., (i) unfair trade practice or restricted trade practice adopted by any trader, (ii) defects in the goods bought, (iii) deficiency in services hired, (iv) charging of price in excess of the price fixed by or under the law or displayed on goods or package, (v) goods hazardous to life and property without giving any information as required by the provisions of any law.
Thus the complaint can be only in relation to the five matters mentioned above. Let us therefore, discuss the above five matters.
(i) Unfair Trade Practice or Restrictive Trade Practice.The twin concept of `unfair trade practice' or `restrictive trade practice' have been inserted by the Amendment Act, 1993 which are discussed below.
(a) Unfair trade practice.The expression `unfair trade practice' has been defined in section 2(l)(r) of the Consumer Protection Act. It means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice including any of the following practices mentioned in footnote.2
1. Prof Inderjit v. Haryana State Electricity Board, 1991 CPJ 115 (Haryana).
2. (1) The practice of making any statement, whether orally or in writing or by visible representation which,
(i) falsely represents that the goods are of a particular standard, quality, quantity, grade, composition, style or model;
(ii) falsely represents that the services are of a particular standard, quality or grade;
(iii) falsely represents any rebuilt, secondhand, renovated, reconditioned or old goods as new goods;
(iv) represents that the goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits which such goods or services do not have;
(v) represents that the seller or the supplier has a sponsorship or approval or affiliation which such seller or supplier does not have;
(vi) makes a false or misleading representation concerning the need for, or the usefulness of, any goods or services;
(vii) gives to the public any warranty or guarantee of the performance, efficacy or length of life of a product or of any goods that is not based on an adequate or proper test thereof.
(viii) makes to the public a representation in a form that purports to be
(i) a warranty or guarantee of a product or of any goods or services; or
(ii) a promise to replace, maintain or repair an article or any part thereof or to repeat or continue a service until it has achieved a specified result, if such purported warranty or guarantee or promise is materially misleading or if there is no reasonable prospect that such warranty, guarantee or promise will be carried out,
(ix) materially misleads the public concerning the price at which a products or goods or services have been or are, ordinarily sold or provided, and, for this purpose, a representation as to price shall be deemed to refer to the price at which the product or goods or services has or have been sold by sellers or provided by suppliers generally in the relevant market unless it is clearly specified to be the price at which the product has been sold or services have been provided by the person by whom or on whose behalf the representation is made;
(x) gives false, misleading facts disparaging the goods services or trade of another persons.
ExplanationFor the purposes of clause (I), a statement that is
(a) expressed on an article offered or displayed for sale, or on its wrapper or container; or
(b) expressed on anything attached to, inserted in, or accompanying, an article offered or displayed for sale, or on anything on which the article is mounted for display or sale; or
(c) contained in or on anything that is sold, sent, delivered, transmitted or in any other manner whatsoever made available to a member of the public shall be deemed to be a statement made to the public by and only by the person who had caused the statement to be so expressed, made or contained;
(2) permits the publication of any advertisement whether in any newspaper or otherwise, for the sale or supply at a bargain price, of goods or a services that are not intended to be offered for sale or supply at the bargain price, or for a period that is, and in quantities that are, reasonable, having regard to the nature of the market in which the business is carried on, the nature and size of business, and the nature of advertisement.
Explanation.For the purpose of clause (3), "bargaining price" means...
(a) a price that is stated in any advertisement to be a bargain price, by reference to an ordinary price or otherwise, or
(b) a price that a person who reads, hears or sees the advertisement, would reasonably understand to be a bargain price having regard to the price at which the product advertised or like products are ordinarily sold;
(a) the offering of gifts, prizes or other items with the intention of not providing them as offered or creating impression that something is being given or offered free of charge when it is fully or partly covered by the amount charged in the transaction as a whole,
(b) the conduct of any contest, lottery, game of chance or skill, for the purpose of promoting, directly or indirectly, the sale, use or supply of any product or any business interest;
(4) permits the sale or supply of goods intended to be used, or are of a kind likely to be used, by consumers, knowing or having reason to believe that the goods do not comply with the standards prescribed by competent authority relating to performance, composition, contents, design, constructions, finishing or packaging as are necessary to prevent or reduce the risk of injury to the person using the goods;
(5) permits the hoarding or destruction of goods, or refuses to sell the goods or to make them available for sale or to provide any service, if such hoarding or destruction or refusal raises or tends to raise or intended to raise, the cost of those or other similar goods or services.
The expression `unfair trade practice' apply to both goods and services. In the case of Mantora Oil Products (P) Ltd. v. Oriental Insurance Co.1, the National Commission held that "from the very terms of the definition of the expression
1. 1991 CPJ 323 (NC).
`unfair trade practice' contained in section 36A of the M.R.T.P. Act, which has been made applicable to the Consumer Protection Act by section 2(1)(r), it is absolutely clear that it applies not merely to sale or supply of any goods but also to the provisions of any service.
But what is `unfair trade practice' in relation to goods and services under section 2(l)(r), has been beautifully stated in the case of Godrej and Boyce Mfg. Co. Ltd. (in re:),1 where Luthra J., observed: "It is apparent from a plain reading of the aforesaid definition that unfair trade practice consists of making any statement, whether orally or in writing, or by visible representation in respect of any particular standard, quality or grade of goods, or which amounts to warranty or guarantee of a product. There is unfair trade practice, if aforesaid such statement or representation is wrong or false or the warranty or guarantee is not based on any adequate or proper test. Therefore, the unfair trade practice is completed as soon as the aforesaid statement is made.
Thus, in the case of D.G., Inv. & Reg. v. Kalaimajal Subha,2 a registered society engaged in enrolling members by payment of Rs. 4000 each with an assurance that it would mature to Rs. 16 lakhs in 19 years. It assumed that the land would appreciate atleast 75 times in 19 years. Held, it amounted to unfair trade practice. In another case of Godfrey Phillips Ltd. (in re:),3 where a misleading impression was created by a cigarette company that cigarettes manufactured by the said company under the brand name `Oxford' ensured a quality corresponding to the foreign-made cigarettes and that there was a manufacturing collaboration with the foreign company, it was held to be an unfair trade practice. Similarly, a registered society claiming to be a non-profit making educational institution gave promise of post-graduate degrees from New York and other universities in the United States. It was held that false and misleading representation were made to extract money from prospective students, and therefore it amounted to unfair trade practice.4
(b) Restrictive trade practice.`Restrictive trade practice' has been defined in section 2(l)(m). It means any trade practice which requires a consumer to buy, hire or avail of any goods or, as the case may be, services as a condition precedent for buying, hiring or availing of other goods or services.
Thus, in the case of Modern Suiting Ltd. (in re:),5 the offering of equity shares linked to debenture was held to be prima facie a restrictive trade practice in the nature of a tieup. Similarly, insisting that a consumer should buy a gas stove with the release of gas connection amounts to restrictive trade practice or sale of a back view mirror with the delivery of motorcycle is restrictive trade practice.
1. (1991) 7 Comp Cas 224.
2. (1988) 64 Comp Cas 807.
4. D.G., Inv. & Reg. v. Management Profession Association, (1988) 63 Comp Cas 673. See also, B.R. Rao v. A.M. Ltd., 1991 CPJ 562 (AP) where a trader falsely represented orally or by visible representation any rebuilt, renovated or reconditioned goods as new goods, it amounted to unfair trade practice.
5. Buddhist Mission Dental College v. Students, 2000 CPJ (NC): (1987) 61 Comp Cas 404.
(ii) `Goods' suffer from defects.The word `goods' has not been defined in the Consumer Protection Act. Section 2(l)(i) of the Act simply states that `goods' means as defined in the Sales of Goods Act, 1930. According to section 2(7) of the Sale of Goods Act, 1930, `goods' means every kind of movable property other than actionable claims and money; and includes stock and shares, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale.
The above definition has a very extensive meaning. Goods include every kind of movable property other than money and actionable claims. Things like goodwill, copyright trade mark, patents, water etc. are all goods. Things forming part of or attached to land may be sold as goods provided they are agreed to be severed under the contract. A court decree can also be sold as goods.1 Goods also include shares and stock. But money and actionable claims are excluded from the definition of goods.2
(a) Condition & Warranty.A condition is a stipulation essential to the main purpose of the contract, the breach of which gives rise to a right to treat the contract as repudiated; whereas a warranty is a stipulation collateral to the main purpose of the contract, the breach of which gives rise to a claim for damages but not to a right to reject the goods and treat the contract as repudiated.
(b) Defects in Goods.The term `defects' has been defined in section 2(1)(f) of the C.P.A. It provides defect' means any fault, imperfection or shortcoming in the quality, quantity, potency purity or standard which is required to be maintained by or under any law for the time being in force or as is claimed by the traders in any manner whatsoever in relation to any goods.
The term `defect' in goods means lack or absence of something essential for its completeness.3 It has been held if there is a shortage in the quantity of goods, it amounts to defect in goods. Similarly, if the seller fails to deliver the goods which he agreed to sell, it will be treated as defect.4 However, a person cannot be compensated for defect in goods in case of those goods which are safe when used by normal people, but which cause injury when used by abnormally sensitive or allergic persons.
(iii) Deficiency in `Service'.There has to be a `service' in order to succeed in an action on the `deficiency in service'. The terms `service' has been defined in section 2(i)(o). It means "service of any description which is made available to potential users and includes the 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,
1. Vithaldas v. Jagjivan, MANU/MH/0096/1938 : AIR 1939 Bom 84.
2. What about human organs & tissues which can be sold subject to statutory restriction. Bodily product, such as hair, blood, urine, and genetic materials have developed their own market. Human hair are sold for wig making and bones for skeltons. See cases : For hairR. v. Herberg, (1960) 25 Ju Cr L 363; For bloodR. v. Rothery, 1976 RTR 478; For UrineR. v. Welsh, 1914 RTR 478, see also Avtar Singh Principles of Mercantile Law, 6th Edn., 1996.
3. Tate v. Luther, 1897 IQB 502; see also Dr. B.S. Gaba v. Steel Authority of India, 1991 CPJ 631 (Har.)
4. Genl. Co-op. Gp. Housing Society v. J.K. Cement Works, 1991 CPJ 550 (Del).
amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service."
After passing of the Act, question arose whether `professional' services (like medical) have also been included in the above definition of `service'. It was held by the Supreme Court that the words `potential users' mentioned in the definition were employed to emphasise services which are in public use and thereby to cover all professions.1 It would thus mean that the word `service' also includes all kinds of professional service, except those which have been specifically excluded from the definition of `Service', viz., (a) where the service is rendered `free of charge' and (b) where it is `under a contract of personal service'.
(a) Free of charge.The expression `free of charge' in section 2(1)(o) means when any organisation or person who renders service without any charge whatsoever to every person availing of the service would not fall within the ambit of `service', and, consequently, would be exempted from liability. The payment of a token amount for registration purposes would, however, not alter the position. But where an organisation or person charges from rich persons and, not from poor persons, for the services rendered, that service would not be treated as `free of charge.' In other words, the service should be free to every person.
(b) Contract of personal service. This kind of service is also an exception and therefore exempted from liability under the Act. The expression `contract of personal service' can not be properly understood unless the distinction between `contract of service' and `contract for service', is explained.
The courts in several cases in India,2 as well as in England3 have clarified that the terms `contract for service' implies a contract whereby one party undertakes to render service to another in the performance of which he is not subject to detailed direction, control or supervision; whereas a `contract of service' implies a relationship of master and servant and involves an obligation to obey orders in the work to be performed. Thus, whenever there is a relationship of employer and employee and the services rendered by the employee to the employer in pursuance of the contract of employment, it will fall within the ambit of `contract of service'. The word `personal' added as an adjective to the word `service' in the expression "contract of personal service" under section 2(1)(o) has created difficulty in its interpretation. It may mean that the contract is exclusively for private service where the rendering of service is absolutely discretionary. To this category comes the service of advocates to their clients, private tutors, etc.4 In
1. Indian Medical Assn. v. V.P. Shantha, MANU/SC/0836/1995 : (1995) 6 SCC 651.
2. Ibid.; See also V.P. Nair v. C. Hospital (P) Ltd., (1991) 2 CPJ; Bhushan v. R. Agarwal, 1991 CPJ 149 (Har); K. Rangaswamy v. Jaya Vittal, 1991 CPJ 685 (Kant).
3. Collins v. H. County Council, 1947 KB 598; Simmons v. Health Laundry Co., (1910) 1 KB 543.
4. Bushan v. Rakesh Agarwal, 1991 CPJ 149 (Har); see also K. Rangaswamy v. Jaya Vittal, 1991 CPJ 685 (Karn) where it was held by the Karnataka State Commission that the service offered by an advocate to his client is one under a contract of personal service. It cannot be service within the meaning of clause (O). Hence, the client will not be a consumer within the meaning of section 2 (d) of the Act.
another case of Dr. D.S. Sidhu v. Secretary to Central Govt.1, the complainant got his pant stitched on payment of stitching charges, but the pant was found not fit to be worn. The National Commission held that it was not a case of contract of service and observed that "it is clear that personal service stem from a master and servant relationship which is totally different from lawyerclient relationship or other professional or technical relationship. The reason for excluding such `personal' service under the Act is obvious. Such an employee can be turned out of service by the master at will, and, therefore, no occasion can arise for the master to complain about the deficiency in the rendering of service by the employee. Applying the above test to the present case it will be clear that the petitioner was not in a position to exercise any sort of control or supervision over the work of the respondent. The respondent was independent of any supervision or control of the petitioner while he (i.e., respondent) was cutting the cloth for stitching the pant or was stitching it. While doing his work the respondent was bound to obey any direction given by the petitioner about the design of the pant but not further. Thus the services rendered by the respondent was in the course of his profession and the service was not rendered by him under any contract of personal service."
Another opinion on this point is that the expression "contract of personal service" in section 2(1)(o) of the Act cannot be confined to contracts for employment of domestic servants only. The expression `personal service' has a well known legal connotation and has been construed in the context of the right to seek enforcement of such a contract under the Specific Relief Act. For that purpose a contract of personal service has been held to cover a civil servant, the managing agents of a company and a professor in the University. There can be a contract of personal service if there is relationship of master and servant between a doctor and the person availing of his services. Therefore, the service rendered by a Medical Officer to his employer under the contract of employment would be outside the purview of `service' as defined in section 2(1)(o) of the Act.2
Thus, on the basis of above discussion it is clear that the words `service' includes all kinds of professional service, be it the routine service of a barber or the technical service of a highly qualified person. But it does not include the service rendered free of charge or `under a contract of personal service'. Thus, a person will be liable for the deficiency in service except in those cases where the service has been rendered free of charge or `under a contract of personal service'. It is, therefore, necessary to know the meaning of the expressions `deficiency in service'.
(c) Deficiency.The term `deficiency' in service has been defined in section 2(1)(g) of the Consumer Protection Act, 1986. It means any fault, imperfection, shortcoming or inadequacy in the quality, nature and 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. Thus, fault or negligence in
1. (1991) 2 CPJ 90 (Har): (1991) 2 CPJ 586 (NC).
2. Avtar Singh Principles of Mercantile Law, Sixth Edn., 1996, p. 665.
settling the claim by the insurance company constitutes deficiency1; or where the Housing Board inspite of recovering full price failed to hand over possession within reasonable period, it was held to be a deficiency in service2; or illegal shifting3 or disconnection4 of telephone has been held to be deficiency in service; or where a dealer of cars, inspite of receiving full price, fails to deliver the car within the stipulated period, it was held to be a deficiency in service5. It may also be pointed out here that if in a composite contract where the goods have been sold along with an obligation to render aftersale service, a complaint about deficiency in after sale service would be maintainable in the same manner as if the buyer had hired services for a consideration even if those services are supposed to be free.6 The cases on `deficiency in service' in respect of `Airlines, Banks, Educational Societies, Electricity, Housing Construction, Insurance, Legal Profession, Medical Profession, Railways, Telephones etc. have been discussed in detail in the subsequent pages of this chapter.
(iv) Trader charged price in excess.The term `price' has not been defined in the Consumer Protection Act, 1986. It has been defined in section 2(10) of the Sales of Goods Act, which provides that price means "the money consideration for a sale of goods." However, a complaint can be made by the complainant under section 2(1)(c)(iv) where a trader has charged 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.
Thus, a complaint can be made against a trader where he has charged price in excess of the price fixed by or under any law or displayed on the goods or any package containing such goods.7 But what about those goods where the price has neither been fixed by or under the law nor displayed on the goods or package. Thus, if the goods are not packaged or sold loose from the package and the trader has charged price in excess, there appears to be no remedy under the Act. An important case on this point is the case of Manager, Milk Chilling Centre v. Mahboobnagar Citizens' Council.8 The facts were that in the State of Andhra Pradesh there was no law fixing the price at which different varieties of milk were to be sold, and there was no mention of the price on the sachets containing the milk sold to the customers in Mahboobnagar because of the exemption granted under the Standards of Weights and Measures (Packaged Commodities) Rules, 1977. It was held by the National Commission that "in the absence of any law requiring an article to be sold at or below a particular price fixed thereunder
1. Umedilal v. United India Assurance Co., 1991 CPJ 3 (NC).
2. Kanhaiyalal Mathur v. Rajasthan Housing Board, 1991 CPJ 37 (NC); see also, S. Chadha v. D.D.A., 1991 CPJ 409 (Del); G. Bhanudas v. Chairman, B.D.A., 1991 CPJ 624 (Karn).
3. Commercial Officer, Telecom v. Bihar State Warehousing, Corp., 1991 CPJ 42.
4. N.J. Irani v. G.M., M.T.N.L., Maharashtra, 1991 CPJ (NC).
5. V. Gopalakrishana v. Sanchetti Motors (P) Ltd., 1992 CPR 57 (TN).
6. Punjab Water Supply & Sewage Board v. Udaipur Cement Works, 1995 Supp 4 SCC 117.
7. See, M.O.H.E. Maricar v. J.K. Thomas, (1991) 2 CPJ 30 (TN).
8. 1991 CPJ 219 (NC).
and when there is no declaration of price on the packet containing the goods or on the goods themselves, the Act does not contemplate that a redressal forum constituted under its provisions should undertake an investigation of the reasonableness of the price fixation made by a manufacturer, producer or dealer. The provision of section 14 of the Act do not contemplate any such relief being granted by a redressal forum.
Similarly, the correctness or otherwise of bus fare cannot be questioned before the consumer forum. This was held by the Karnataka State Commission in the case of Dr. S.P.T. Rao v. M.D., Karnataka State Road Transport Corp.,1 in the following words:
"The `fixation of fare is a matter to be decided by the State Transport Authority subject to the rules made by the Government according to section 67 of the Motor Vehicles Act, 1939. The correctness or otherwise of the bus fare fixed by the S.T.A., cannot be questioned before this Forum and it cannot be decided by the Commission. Charges in respect of the service cannot be questioned under the Act. It is only excess charges paid in respect of goods alone contrary to the fare fixed under any law, that can be ordered to be refunded by this commission. Hence we are clearly of the view that we cannot grant any relief to the complainant under the Act."
(v) Goods hazardous to life & safety.The last ground for which the complaint can be made has been inserted in section 2(1)(c)(v) by the Amendment Act, 1993 which provides that the goods which will be hazardous to life and safety when used, are being offered for sale to the public in contravention of the provisions of any law for the time being in force requiring traders to display information in regard to the contents, manner and effect of use of such goods.
As has already been stated, the consumer has a right to be protected against the marketing of goods which are hazardous to life and property, viz. liquor or cigarettes or adulterated food is dangerous to life or weak cement is danger to life and property, both. Accordingly, every trader has been required to display information in regard to the contents, manner and effect of use of such goods. If a trader sells hazardous goods without displaying the aforesaid information as required by the provisions of any law, a complaint can be made against him for redressal before consumer forum.
It is relevant to point out here that the subject-matter of hazardous or dangerous goods has also been dealt with in the case of Donoghue v. Stevensons2 and Sons, under the law of tort. Now such matters can also be taken up before the consumer forums constituted under the Consumer Protection Act, 1986.
Consumer is the most important person for whom the Consumer Protection Act, 1986 has been enacted. The entire Act revolves round the consumer and is
1. 1991 CPJ 641 (Kan).
2. 1932 AC 562.
designed to protect his interest. The first question therefore is: who is a consumer? The term consumer has been defined under section 2(1)(d) of the Act.
It provides that "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) 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 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 the first mentioned person.
Explanation: For the purposes of subclause (i), "commercial purpose" does not include use by a consumer of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self-employment.
If we analyse the concept of `consumer' under section 2(1)(d)(i) and under section 2(1)(d)(ii), it would appear that there are two distinct types of consumersfirstly, those who buy any goods for consideration and, secondly, those who hire any services for consideration. It may be noted that the definition under section 2(1)(d)(i) extends the concept of consideration not merely to one actually paid, but one which is merely promised or partly paid or partly promised and includes within its ambit every system of deferred payments. The further amplitude given by this provision, which is particularly noticeable, is the fact that a consumer is not merely the one, who originally buys goods, but further includes any user of such goods, when such use is made with the approval of the original purchaser. Similarly section 2(1)(d)(ii) includes not only the actual hirer of the services but also any beneficiary of such services, if they are availed with the approval of the first mentioned person.
It would thus be seen that the definition under section 2(1)(d) gives an altogether new legal colour and scope to the term `consumer', which stands crystallised by this exhaustive definition. The legislature deliberately extends it to persons who may have had no privity of contract with the original trader, manufacturer or the person who had hired out the services. On the other hand, the definition limits the scope on the context of purchaser of goods, by excluding from its wide range those persons who buy such goods for resale or for any commercial purpose, and thus expressly denies them the benefits of the Act. Thus the Act introduces a new concept and class of consumers, and gives them a very precise legal connotation. The word `consumer' herein becomes a legal term of art having a meaning different and distinct from the one used in loose common parlance. This is the significant development of the Act and a concept radically different to the earlier and ordinary existing laws in the field.1
In U.T. Chandigarh Administration v. Amarjeet Singh,2 it is held that with reference to a public auction of existing sites, the purchaser is not a "consumer", the owner is not a "trader" or "service provider" and the grievance does not relate to any matter in regard to which a complaint can be filed.
In Sujit Kumar Banerjee v. Rameshwaran,3 the agreement between the parties was an agreement for construction of a residential building and delivery of an agreed percentage of the constructed area to the land owners and not a joint venture agreement. Thus, it is held that the appellant is a consumer and the respondents are "service providers" and the complaint of the appellant is maintainable.
The two distinct types of consumer under section 2(1)(d)(i) those who buy goods for consideration and (ii) those who hire any services for consideration, are discussed below.
(i) Those who buy goods for consideration [Section 2(1)(d)(i)].Under this category three kinds of persons are treated as consumers, viz., (a) person buying goods for consideration and consideration having been paid in full or promised or partly paid or partly promised, (b) person buying goods under any system of deferred payment, (c) any user of such goods which has been purchased as aforesaid under (a) or (b) when such use is made with the approval of the buyer. It may also be noted that the Act does not insist on money considerations only. Therefore transactions of barter or exchange or transfer for services will come within the purview of the Act.
Thus, in Akhil Bhartiya Grahak Panchayat v. Megnna Metals,4 the complainant purchased one prestige pressure cooker from the opposite party. In spite of special gasket release system for safety the cooker burst which resulted in damage to the right hand of the complainant's wife. The opposite party was held liable to pay compensation of Rs. 1 lakh plus reimbursement of the medical bills although wife was the user of goods and not the buyer, but she used the goods with the approval of the buyer.
In Motor Sales and Service v. Renji Sabastian,5 the facts were that the complainant booked a motor cycleHero Honda, for consideration. His turn was ignored by the dealer. The dealer was directed to give him the vehicle at the price on the day of his turn and, in addition, he was also directed to pay compensation of Rs. 500.
1. Jagdamba Rice Mills v. Union of India, 1991 CPJ 273 (283284) (Har); see also, L.D.A. v. M.K. Gupta, 1994 SCC 243.
2. MANU/SC/0389/2009 : AIR 2009 SC 1607
3. MANU/SC/7790/2008 : AIR 2009 SC 1188.
4. I (1994) CPJ 113.
5. 1991 CPR 158 (Ker). See also Mohan Sharma v. C.B. Co., 1 (1994) CPJ 453; M.G. Panchayat v. Lohia Machines, 1991 CPJ 26 (NC); Jaidev Prasad v. Auto Tractors, 1991 CPJ 34 (NC); Bharat Tractors v. Ramchandra, 1991 CPR 50; Chaudhary Automobiles v. Anil Kumar, 1991 CPJ 104; J.D. Sharma v. Maruti Udyog Ltd., 1991 CPJ 126 (Har); Alankar Cycle Mart v. V.R. Srinivasa, 1991 CPJ 238 (Kant); A.R. Chadha v. H.K. Ahuja, 1991 CPJ 434 (Del): where it was held that the original manufacturer is not a necessary party in a complaint against the trader for supply of defective goods.
It may also be pointed out here that a person who obtains or buys goods for resale or for any commercial purpose is not a consumer within the meaning of section 2(l)(d)(i).
(a) Those who buy goods for resale or commercial purpose.As pointed out above, a person who obtains or buys goods for resale or for any commercial purpose is not a consumer within the meaning of section 2(1)(d)(i). Such persons have been excluded from the purview of this Act. Thus, a purchaser of Taxi for plying it on hire1, or a purchaser of prototype setting machine for commercial purposes,2 or a purchaser of BPL VCR for running a video parlour,3 or purchaser of machines for setting up an oxygen plant4 or purchaser of an off-set printing machine for commercial purpose,5 or a purchaser of goods for reselling them6, were not held to be consumers under section 2(1)(d)(i), and therefore, they could not get any relief under this Act. The terms `resale' and `commercial purpose' have not been defined under the Act. In A.K. Panda v. Bajaj Auto Ltd.,7 the Orissa State Commission held that "the word commerce is always connected with trade or business. Since that word `resale' is used, `commercial' is something other than resale. It means trade or business the object of which is to make profit. But where primary object is not to earn profit but to earn livelihood by hard toil and giving sweat and blood, it cannot be said to be commerce or commercial purpose." It appears that there are two essential ingredients of the term `commercial purpose': (a) the goods must have been purchased in some profit making activity on largescale and (b) there should be a direct and close nexus between the purchase of goods and the profit making activity.8 Now, after the amendment Act of 1993, the scope of `commercial purpose' has become narrower because the goods purchased and used for self employment has been excluded from the concept of `commercial purpose'.
(b) Amendment in section 2(1)(d)(i) in 1993.An explanation has been added to section 2(1)(d)(i) which reads as follows:
"Explanation.For the purposes of subclause (i), `commercial purpose' does not include use by a consumer of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self-employment."9
1. Western India State Motors v. Sobhagmal, 1991 CPJ 44 (NC).
2. Sterocraft v. Monotype India Ltd., 1991 CPJ III (NC).
3. Astt. Manager, BPL v. S.R. Tushar, 1991 CPJ 155.
4. K.C. Jain v. General Elec. Co., 1991 CPR 286.
5. Oswal Fine Arts v. H.M.T. Madras, 1991 CPJ 330 (NC); see also, Prestige Stores v. Sharma Industries, 1991 CPR 217 (NC); Getanjali Cement Pvt. Ltd. v. Applied Industrial Products, 1991 CPJ 332 where the complainant got a mini cement plant erected for manufacturing cement, but there was inordinate delay in its erection and therefore complainant suffered heavy losses. Held, complainant is not a consumer because the erection of the plant was for commercial production of cement; See also, Jaheed Hussain v. Shah and Lohia Auto Pvt. Ltd., 1991 (1) CPJ 56.
6. Lohia Sterling Ltd. v. Zenith Computer Ltd., 1991 CPJ 145 (NC) where Zenith Computer system was purchased for resale. Held, the purchaser was not a consumer.
7. (1992) CPJ 88 (NC).
8. See Annat Raj Agencies v. T.E.L. Co., 1 (1996) CPJ 268 (Del) where the company purchased a car for private use of its Director. The car had serious defects. The complainant claimed the refund of price with interest or in the alternative the replacement of car. Held, car was not purchased for profit making, and there was no nexus between the purchase of the car and profit making activity of the company. The complainant was held to be a consumer and entitled to relief under the Act.
9. Ins. by Act 50 of 1993 (w.e.f. 1861993).
Thus, where a person purchases a sewing machine, or a taxi, or an autorickshaw, or a photostat machine or any other goods which are to be used by him exclusively for the purpose of earning his livelihood by means of self employment, that will not be considered as `commercial purpose', and such persons will be a consumers under this Act. In the case of Hindustan Motors Ltd. v. N.P. Tamankar,1 it was held by the National Commission that the purchaser of car who himself plies it as a Taxi as a means of self-employment for earning his livelihood, is a consumer and is entitled to relief under the Act. The explanation added to section 2(1)(d)(i) in 1993 is merely classificatory in nature and hence applicable to all pending proceedings.2
(ii) Those who hire services for consideration [Section: 2 (1)(d)(ii)].The second category of consumer is `user of services'. Under this category three kinds of persons are treated as consumers viz., (a) any person who hires any services for consideration and consideration having been paid in full or promised or partly paid and partly promised; (b) any person hiring any services under any system of deferred payment, and (c) any beneficiary of such services which have been hired as aforesaid under (a) and (b) when such services are availed of with the approval of the person hiring the services. Thus, three kinds of persons are treated as `consumers' under section 2(1)(d)(ii). But what is "service" has been defined under section 2(1)(o):
(a) What is service?.According to section 2(1)(o), service means service of any description which is made available to potential users and includes the 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, but does not include the rendering of any service free of charge or under a contract of personal service.
What is `service' has been discussed in great detail under the heading `complaint'. However, on the basis of above definition, it is clear that services must be of commercial nature in the sense that they must be on payment, which may be either in cash or kind and which may be made either at once or partly at once and partly on credit. It may also be noted that the word `service' would include all kinds of professional service, be it the routine services of a barber or the technical services of a highly qualified person. The Supreme Court has observed that the words " potential users" in section 2(l)(o) do not have the effect of excluding medical services from the purview of the word "service". It seems that the words "potential users" were employed to emphasise services which are in public use and thereby to cover all public profession.3 Thus, to enable a consumer to bring an action before a consumer forum, it is necessary that he must have hired or availed the services for consideration, and that there was some deficiency in service. What is deficiency in service has been defined in section 2(1)(g).
1. (1996) CPJ 313 (NC).
2. Laxmi Engg. v. P.S.G. Industrial Institute, MANU/SC/0271/1995 : (1995) 3 SCC 583.
3. Indian Medical Association v. V.P. Shantha, MANU/SC/0836/1995 : (1995) 6 SCC 651.
Deficiency in Service [Section 2(1)(g)].According to section 2(1)(g), deficiency means any fault, imperfection, shortcoming or inadequacy in the quality, nature and 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.1
Flight departure before time.In Chief Commercial Officer, Indian Airlines v. P. Lalchand,2 the complainant purchased the ticket from the Indian Airlines. The time of departure was mentioned as 10.45 a.m., but the plane left at 9.20 a. m. and the complainant, who reached the airport at 9.45 a.m. missed the flight. The District Forum held the opposite party as guilty of deficiency in service.3
Cancellation of flight.In Satish Bagdoria v. Airdoot International,4 the complainant purchased a ticket from the respondents, but the flight was cancelled and the complainant was not informed. The Forum held the respondent liable to refund the price of the ticket and pay compensation of Rs. 5000 alongwith costs of Rs. 1000.5
Food served in airlines.In Indian Airlines v. S.N. Sinha,6 food was served to the passenger-complainant by the Airlines. While chewing, his gum was injured because of a piece of metallic wire in the food. The National Commission awarded compensation of Rs. 2000 for the same.7
Dishonouring of Bank Draft/Cheque.In N.R. Nair v. Branch Manager, State Bank of India,8 a bank draft was dishonoured because it did not bear the signatures of two officials of the issuing bank. The Consumer Forum held it to be
1. See Deficiency in service under the heading `Complainant', discussed in detail (supra). See H.T. dated 8-8-2002, p. 7. NCDRC held, court staff can be sued for deficient services.
2. III (1995) CPJ 134.
3. Similarly, in Indian Airlines v. R.K. Upadhyay, 1 (1991) CPJ 206 the complainant alleged delay in flight from Lucknow to Delhi and also lack of medical facilities to his wife. Consequently she died next day. Indian Airlines staff was found not negligent and hence no compensation was awarded under sec. 14(a)(d) of the CPA, 1986; see also, S. Kumar v. Air India, II (1991) CPJ 72; Indian Airlines v. B.B. Dey, 1992 CPJ 183 (NC).
4. III (1996) CPJ 96 (Chand. SCDRC)
5. See also Chander Shekhar v. Chairman, Indian Airlines, III (1995) CPJ 95, where cancellation of flight from Bangalore to Mangalore due to sudden strike by the technical and engineering staff of the Indian Airlines was held to be not a deficiency in service as there was no negligence on their part. The complaint was, therefore, dismissed.
6. 1992 CPJ 62 (NC).
7. See also R.P. Jain v. Sahara India Airlines, III (1995) CPJ 212 (Del SCDRC) where by an oversight chicken curry was served to a vegetarian airlines passenger, but there was no complaint of vomiting or food poisoning. His religious sentiments were hurt. The opposite party tendered apology. The mistake was neither malicious nor physical injury was caused to the complainant. No compensation was allowed by the Forum. See also, Indian Airlines v. I. Ahir, I (1996) CPJ 326 (NC).
8. I (1991) CPJ 648.
a case of deficiency in service. Similarly, in Sankar v. Vijaya Bank1 it was held that dishonouring of cheque without justification amounts to deficiency in service, and the bank was held liable to pay compensation for the same.
Payment despite `Stop Payment'.In Harjivandas v. Manager, Dena Bank,2 the complainant issued a cheque of Rs. 1 Lakh in favour of a co-operative society, and thereafter instructed the bank to stop the payment, but the bank honoured the cheque. It was held to be a deficiency in service, and the complainant was held entitled to compensation of Rs. 1 lakh alongwith interest @ 18 % p.a. from the bank.
The imparting of education by an educational institution for a consideration falls within the ambit of `service' under the Consumer Protection Act, and if there is deficiency in service, the institution shall be liable to compensate the loss to the consumer (student).3 Education is not merely industry but the mother of industries.4
Defective meter.In Gita Rani Chakroborty v. S.S.B., W.B.S.E.B.,5 the defective electricity meter was not replaced inspite of repeated reminders by the complainant. It was held to be a case of negligence and deficiency in service, and compensation of Rs. 1000 was awarded to the complainant for harassment and mental pain caused to him.6
Disruption of electricity.In Haryana S.E.B. v. T.R. Poultry Farm,7 an electric transformer got burnt and the same was not replaced for 25 days, whereby the electric supply to the poultry farm got disrupted. Consequently, 3080 birds in the poultry farm died. The State Commission found it to be a case of negligence and deficiency in service and allowed compensation of Rs. 75,000 to the complainant for the loss of birds. On appeal, the National Commission affirmed the order of
1. I (1996) CPJ (Kant SCDRC).
2. II (1997) CPJ (Guj SCDRC); see also, Bal Krishnan v. Canara Bank, III (1995) CPJ 218; Vimal C. Grover v. Bank of India, MANU/SC/0316/2000 : AIR 2000 SC 2181, where it was held that client was a consumer when he gets overdraft facility from a bank. Bank could not sell shares within reasonable time occasioning loss to client. Service rendered by bank is deficient.
3. See M. Ravindranath's case (Kerala) decided by National Commission and reported in `Hindu' on 3rd Feb., 2002; Madbubrata v. R.K. Panda, 1991 CPR 395 (Ori): City Edn. CalcuttaThe Statesman, dt. Oct. 10, 1991; Tilak Raj v. Haryana School Education Board, 1992 CPJ 76; M.D. University v. Shakuntla Choudhary, 1992 CPJ 33 (Har); A.P. Graies v. Principal, Bharti Vidyapith College of Engg., 1992 CPJ 105 (Mah).
4. Federal School Teachers Association Australia v. State of Victoria, (1929) 41 CLR 569; see also, University of Delhi v. Ramnath, MANU/SC/0143/1963 : AIR 1963 SC 1873.
5. I (1997) CPJ 450 (WB) SCDRC.
6. See also Raj S.E.B. v. Mohd. Yusuf, III 1995 CPJ 433 (Raj SCDRC), where there was supply of electricity and the meter installed had totally stopped. This meter remained defective for 3 years. It was held that a bill on the basis of average consumption could not be raised. The Forum recommended that disciplinary action be taken against the Asstt. Engineer concerned.
7. II (1996) CPJ 15 (NC).
the State Commission and also awarded a cost of Rs. 2000 to the complainantrespondent.1
Fluctuations in Voltage.In Escon Pvt. Ltd. v. Karnataka Electricity Board2 it was held that when an electric supply company fails to supply electric energy at a particular voltage causing loss to the complainant, it amounts to deficiency in the supply of energy, no matter whether the energy is being supplied for commercial purpose or not. It was further stated by the court that if electricity is supplied for commercial purpose, the complainant is not a consumer under section 2(1)(d)(ii) of the Act, but maintenance of electricity connection at minimum charges is a service, and even if supply of energy is for commercial purpose, complainant is a consumer within the meaning of section 2(l)(d)(ii) of the Act.
But mere fluctuation in the voltage by itself will not be treated as `deficiency in service' without proof of negligence.3
In Kanhaiyalal Mathur v. Rajasthan Housing Board,4 the Board, in spite of recovering full price, failed to hand over possession of the house within reasonable period. It was held by the National Commission that the service rendered by the Board5 suffered from `deficiency'.
Insurance claims.In Umedilal v. United India Assurance Co.,6 it was held that fault or negligence in settling the claim by the insurance company constitutes deficiency. But where the insurance company rejected a claim after investigation on the ground that the claim was false, it was held by the Forum that such a controversy between the parties could not be decided by the Forum7. However, when the policy of insurance becomes inoperative due to the act of the State, any dispute between the insured and the insurer as to the amount payable to the insured due to the policy becoming prematurely inoperative cannot be construed
1. See also Haryana S.E.B. v. Naresh Kumar, II (1996) CPJ (NC), where illegal disconnection of electric supply without prior notice and which was restored after two months under the orders of the State Commission, was held to be deficiency in service. The Board was held liable to compensate the losses suffered by the complainant due to closure of mill during this period.
2. 1991 CPJ 450 (Kant); see also Vani Talkies v. Karnataka Electricity Board, 1990 CPJ 226 (Kant).
3. See Karnataka Elec. Board v. Karnataka Citizens Forum, 1991 CPJ 97 (Kant), N.D.M.C. v. S.P. Singha, 1991 CPJ 560 (Del). In this case the complainant's VCR got damaged due to supply of high voltage electricity from the junction box. But the claim was rejected. See also, Travancore Oxygen Ltd. v. Kerala S.E.B., 1 (1997) CPJ 17 (NC).
4. 1991 CPJ 37 (NC).
5. See also S. Chandra v. U.P. Avas Evam Vikas Parishad, 1991 CPJ 258; K. Biyani v. Rajasthan Housing Board, 1991 CPJ 603 (Raj); G. Bhanudas v. Chairman, Bangalore Dev. Authority, 1991 CPJ 624 (Kant); Sneh Chadha v. D.D.A., 1991 CPJ 409 (Del).
6. 1991 CPJ 3 (NC).
7. Janata Machine Tools v. Oriental Ins. Co. Ltd., 1 (1991) CPJ 234.
as deficiency in service.1 In an important case of National Insurance Co. v. P.P. Sahani,2 the complainant-respondent got his flat in a multi-storey building insured with the insurance company. The entire building was sealed by the Chief Fire Officer due to fire on the 11th floor of the building. As a consequence the complainant could not get rent of his flat for about 9 months and, therefore, claimed compensation from the insurance company. The National Commission held that the loss of rent of the respondent's flat was a proximate and not remote consequence of fire in the building and, therefore, confirmed the order of the State Commission. The insurance company was held liable.
The controversy3 whether the medical services should or should not be covered by the expression `service' as defined in section 2(1)(o) has been set at rest by the Supreme Court in the case of Indian Medical Association v. V.P. Shantha,4 by holding that section 14(1)(d) indicates that the compensation to be awarded is for loss or injury suffered by the consumer due to the negligence of the opposite party. A determination about deficiency in service for the purpose of section 2(1)(g) has, therefore, to be made by applying the same as is applied in an action for damages for negligence. In view of the definition of 'deficiency' as contained in section 2(1)(g), medical practitioners must be included within the ambit of the Act and the service rendered by them is covered under section 2(1)(o).
Thus, a patient aggrieved by any deficiency in treatment, from both private clinics and Government Hospitals, are entitled to seek damages under the Consumer Protection Act. The position as emerged in this case is as follows(1) Service rendered to patient by a medical practitioner by way of consultation, diagnosis and treatment, both medical and surgical, would come within the ambit of `service' under section 2(1)(o). But where the medical service is rendered (a) free of charge or (b) under a contract of personal service,5 that will not fall within the ambit of `service' under section 2(1)(o). The expression `contract of personal service' means the services rendered by an employee to his employer under the contract of personal service. Therefore, the service rendered by a medical officer to his employer under the contract of employment would be outside the purview of `service' as defined in section 2(1)(o), of the Act. The expression `free of charge' in
1. L.I.C. v. Dr. S. Singh, 1992 CPJ 165 NC.
2. II (1997) CPJ 3 (NC).
3. See V.P. Nair v. V.P. Nair, 1 (1991) CPJ 685 where it was held that patient is a consumer and medical assistance was a service. But in S.S. Subramaniam v. Kumaraswamy, 1994 CPJ 509, it was held that medical service is outside the ambit of CPA.
4. III (1995) CPJ 1 (SC): MANU/SC/0836/1995 : AIR 1996 SC 550.
5. There is a distinction between a `contract of service and a' contract for service. A `contract for service' implies a contract whereby one party undertakes to render services (e.g., technical or professional services) to or for another in performance of which he is not subject to detailed direction and control but uses his own knowledge and discretion in the exercise of professional or technical skill. A 'contract' of service' is a relationship of Master and Servant and involves an obligation to obey orders in the work to be performed and as to its mode and manner of performance.
section 2(1)(o) means the medical practitioners, private hospitals/nursing homes and Government hospitals/nursing homes (hereinafter called doctors and hospitals) who render service without any charge to every person availing of the service. They would not fall within the ambit of `service' under section 2(1)(o). It may be noted that the services rendered by the doctors and hospitals, where charges are required to be paid by persons availing of services, but certain category of persons who cannot afford to pay are rendered service free of charge, would also fall within ambit of the expression `service' under section 2(1)(o) irrespective of the fact that part of the service is rendered free of charge. A few cases on `deficiency in service' and `free service' may be mentioned.
Thus, where a pair of scissors was left in the stomach of the patient during operation who died later on1, or where the Uterus of a lady aged forty years was removed without justification2, or where a patient had some difficulty in passing urine and his penis was cut off without any justification3, the surgeons were held liable to compensate the complainants as they were found to be negligent i.e., deficient in service.
In an important case of Harjot Ahluwalia v. Spring Meadows Hospital4, the facts were that Harjot Ahluwalia, the complainant, a minor and the only child of his parents, had high fever and was taken to Spring Meadows Hospital, New Delhi. There he was administered certain medicines, and intravenous chloroquine injection by an unqualified nurse and without prior test. Immediately thereafter, the child suffered cardiac arrest. No oxygen was given as the oxygen was not available in the hospital. The child suffered irreparable brain damage, and consequently went into a vegetable state for the rest of his life. In a landmark judgment, the Supreme Court upheld the decision of National Commission5 where the hospital's negligence was established and it was directed to pay compensation of Rs. 12.50 lacs to the minor child for brain damage and Rs. 5 lacs to the parents. It is important to note that the Supreme Court, in this case, held that the parents of the child were consumers having hired the services, and the child was `a consumer' as the beneficiary of such services.6
In a very recent case of Sri P. Sudhakar v. Gowri Gopal Hospital (Lawyers update Feb. 2012 at p. 20) the facts were that Ujwal, a boy of 14 years was operated for appendicitis on 20-9-1997. The operation was successful and his general condition was good throughout the day. At about 10 p.m., after an injection, his condition suddenly worsened. He was put on ventilator and eventually died on 25-9-1997. It was found by the commission that Fancuran injection was given by the nurse, who had mistaken it for an analgesic. She N.C.D.R. commission held the hospital jointly and severally liable to pay a compensation of Rs. 4 lakhs to the complainant.
There are two more decisions of the Supreme Court on doctor's duty to maintain secrecy and Homeopath practicing allopathy, which need mention. It is the general duty of the doctor to maintain secrecyabout his patients. But where the disclosure of confidentiality was in the interest of others to save their life from future health risk, no breach of duty was committed i.e., if the fact was not disclosed by the Hospital, the fiance of the complainant would have been infected with HIV (+) after her marriage with the complainant. This was held by the Supreme Court in the case of Dr. Tokugha v. Apollo Hospital Enterprises Ltd. The right of privacy of the appellant was subject to the right of life of the fiance
1. Nihal Kaur v. Director, PGI, Chandigarh, III (1996) CPJ 112 (Chand. SCDRC).
2. Lakshmi Rajan v. Malar Hospital Ltd., III (1998) CPJ 586 (TN SCDRC).
3. C. Sivakumar v. Dr. John Arthur, III (1998) CPJ 436 (TN SCDRC).
4. II (1997) CPJ 98 (NC): MANU/SC/1014/1998 : AIR 1998 SC 1801.
5. II (1997) CPJ 98 (NC).
6. MANU/SC/1014/1998 : AIR 1998 SC 1801 (1803).
(lady) to whom the information was disclosed1. In another case of Poonam Verma v. Ashwin Patel,2 the complainant's husband was administered allopathic drugs by a registered Homeopath and also intravenous glucose drip without ascertaining the level of blood sugar. His condition worsened and later on he died. The Court held that (1) the registered Homeopath trespassed into prohibited field by giving allopathic treatment and was liable to be prosecuted under section 15(3) of the Medical Council Act, 1956 and that (2) his conduct also amounted to actionable negligence for not taking due care, for which, he is liable to pay compensation amounting to Rs. 3 lacs.
Free services in hospitals and nursing homes.As discussed above, where medical services are rendered free of charge to every body, and not to a few, that will be excluded or will not fall within the ambit of the definition under section 2(1)(o) and the doctors/hospital will not be liable under the Consumer Protection Act, 1986. Thus in Paramjit Kaur v. State of Punjab3, the complainant was operated in Government hospital free of charge for family planning, but, later on, she gave birth to a female child. The complainant alleged negligence in the performance of operation. The complaint was dismissed as the medical services in the Government hospital were offered free of charge to every body. Similarly, in the case of Addl. Director, C.G.H.S. v. Dr. R.L. Bhutani, the complainant, a retired Government Servant, paid Rs. 9 p.m. towards the Central Government Health Scheme. He and his wife were beneficiaries of CGHS. His wife was suffering from some ailment for which surgery was performed but, instead of improvement, she became paralytic. The National Commission held that services under CGHS are rendered free of charge to every body and under the contract of service; such services are excluded from section 2(1)(o) and the complainant was not a consumer within the meaning of section 2(1)(d). Hence complaint was dismissed. The Court also held that the payment of Rs. 9 p.m. was only regarding administrative charges and not for treatment.
It is important to note here that the complainants in the above two cases, could not get any relief under the provisions of the Consumer Protection Act, 1986, but in such kinds of cases the relief was available in the law of tort if they would have filed suits for damages for the tort of negligence in the civil court. Section 3 of the Consumer Protection Act, 1986 provides that the provision of the Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force. Thus, the provisions of the Consumer Protection Act, 1986 give the consumer an additional remedy besides those that may be available under other existing laws.4
The Karnataka State Commission in the case of K. Rangaswamy v. Jaya Vittal,5 has held that the service offered by an advocate to his client is one under a
1. III (1998) CPJ 436 (TN SCDRC).
2. II (1996) CPJ 1 (SC): MANU/SC/0530/1996 : AIR 1996 SC 2111.
3. II (1997) CPJ 394 (Punj SCDRC).
4. Consumer & Citizens Forum v. Karnataka Power Corporation, 1994 (I) CPR 130.
5. 1991 CPJ 685 (Karn); see also Bushan v. Rakesh Agarwal, 1991 CPJ 149 (Har).
contract of personal service. It cannot be service within the meaning of clause (o). Hence, the client will not be a consumer within the meaning of section 2(d) of the Act. But the National Commission in the case of R.R. Pal Gupta v. Ranjana,1 has observed that nonappearance of a lawyer in a court or tribunal, after being engaged and having charged his fee could itself be deficiency in service on his part.
Passenger's death.In Union of India v. Nathmal Hansaria2, the facts were that Kabita Hansaria, the daughter of the complainants, fell down while passing through interconnecting passage in the Tinsukhia Mail train and died. The interconnecting passage was not protected by any grill. The State Commission awarded compensation of Rs. 2 lacs for death of Kabita and Rs. 25,000 for mental agony etc., to the parents on account of deficiency in service. On appeal, the National Commission upheld the decision of the State Commission and also held that the death was accidental and not by railway accident and that the jurisdiction of the consumer fora was not barred under sections 13 and 15 of the Railway Claims Tribunal Act, 1987.
Reserved accommodation not available.In Anil Gupta v. G.M., Northern Railway,3 the complainant got two berths reserved in IInd Class AC, on certain day, but when he reached the station, the berths were not available. It was held to be deficiency in service by the railways, and compensation of Rs. 2000 was awarded for the mental agony and discomfort caused due to nonavailability of berths.
Departure of train late by 10 hours.In Union of India v. K.N. Jena,4 the complainant got two berths reserved in Gauhati Express from Cuttack to Bangalore to take his son for treatment there. The train was to leave Cuttack at 10.30 p.m. on 9-6-90, but it started at 9 a.m. on 10-6-90. The Railways' authorities failed to disclose the reasons for the delay. It was held to be a deficiency in service and each of the complainants was awarded compensation of Rs. 500 for the inconvenience and expenses for hiring a lodging room.
Platform without light.In G.M.N. Rlys. v. R.P. Singh,5 the complainant travelled in a train from Muzaffarpur to Turkey. When the train reached Turkey railway station, he tried to alight from the train in the darkness, but the train started without a whistle. He fell down and his legs were cut off by the wheels
1. Revision petition No. 1051 of 2001 & Judgment delivered by Justice Wadhwa, (President) N.C.D.R.C. on 3rd Oct., 2001; see also Kumari Poonam v. Phool Chand, MANU/UP/0004/1995 : AIR 1995 All 5, where an advocate's clerk, to whom the brief was entrusted for filing, did not file and consequently the period of limitations expired, the clerk was held liable under the Consumer Protection Act for rendering a deficient service due to the fact that he renders service for consideration. See also liability of an advocate under law of tort in the chapter on `Negligence'.
2. I (1991) CPJ 308.
3. II (1991) CPJ 308.
4. III (1997) CPJ 198 (Ori SCDRC).
5. III (1998) CPJ 442 (Bih SCDRC).
of the train. It was held to be deficiency in service and the railway was held liable.
Telephone disconnection.In Distt. Engineer, Telecom v. Dr. T.N. Sharma,1 the complainant paid the dues of the telephone bill after the due date. Twenty two days after this payment, the telephone was disconnected without any notice or reminder on phone. The disconnection continued for 15 days. Holding it to be a deficiency in service, the District Forum awarded Rs. 800 as economic loss and Rs. 2000 as compensation for mental distress, agony and loss of reputation.
In U.C. Patnaik v. Rajkishore,2 disconnection of telephone for unrevealed outstanding arrears amounts to deficiency in service. Accordingly, disconnection was ordered for restoration without any reconnection charge within 15 days, failing which for each day of default the complainant was to be paid compensation of Rs. 30 per day.
In Konarak Gas v. C.G.M. Telecom Department,3 the materials on record prima facie indicated that there was a dispute regarding telephone bills and there was no prohibition for the Telecom department to refer the dispute to arbitration, disconnection of telephone was held to be a deficiency in service.
Delayed installation of telephone.In Telephone Department, Jalandhar v. Om Prakash,4 there was undue delay in the installation of telephone. After installation of the phone, there was further delay in making the telephone operative. It was held to be deficiency in service and the telephone department was held liable. Similarly in the Mahanagar Telephone Nigam v. V. Karkare,5 where telephone complaint remains unattended for over six months, it was held to be a deficiency in service and the telephone department was held liable although the complainant was the user and not the subscriber of the telephone. In another case, the telephone of the complainant remained out of order for around five weeks in spite of the complaint during this period. The National Commission awarded Rs. 20,000 as compensation and Rs. 2000 as litigation cost for the deficiency in service.6
A student is considered as consumer of service of educational institution7 and, therefore undue delay in declaration of examination result is a deficiency in service.8 A pensioner is a consumer and, therefore, the amount claimed by him on medical treatment was reimbursed to him alongwith compensation and litigations cost.1 A licencee of the parking area was held liable for the car of the
1. 1995 CPJ 225.
2. 1992 CPR 107 (TN).
3. 1992 CPR 22 (Ori).
4. III (1996) CPJ 479 (Punj SCDRC)
5. II (1991) CPJ 655.
6. H.K.L. Bombay v. B.S.N.L. (Punjab), N.C., reported in Hindustan Times, Feb., 11, 2002, p. 1
7. S.Y. Rode v. Shri R. Engg. College, 1993 (III) CPR 624.
8. Secretary, Board of School Education, Haryana v. M. Chand, 1994 (1) CPR 269.
complainant stolen from the parking area2; Failure on the part of post office to carry a speed post message within the expected time is in the nature of a deficient service.3 It was held that if somebody does not perform his part of contract, it amounts to deficiency in service.4 On the other hand, a licensee to run a telephone is not a consumer5; a person who merely applies for allotment of shares is not a consumer;6 the beneficial consumer jurisdiction cannot be extended to lotteries and wagering transactions or any consequential right flowing from void contracts.7
A lottery ticket holder is, therefore, not a `consumer', within the ambit of the definition of consumer under the Act;8 the agreement for hypothecation does not create the ownership right, and as such no complaint can be entertained or maintained for deficiency in service.9
Provisions of C.P.A. are additional.Section 3 of the Consumer Protection Act, 1986 provides that "the provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force." Thus, in Maharishi Dayanand University v. Shakuntala Chaudhry,10 where the result of the complainant was declared by the respondent University by giving wrong particulars in her result, it was held by the State Commission that section 27 of the M.D. University Act, which grants immunity from a legal action for the acts done in good faith by its officials, is no bar against remedies available to the complainant under the Consumer Protection Act. Hence the complainant was awarded compensation of Rs. 500.
Another worth mentioning case is that of C. & C. Forum v. Karnataka Power Corporation,11 where it was held that the remedy provided under the Act is in addition to the provisions of any other law for the time being in force. The provisions of this Act give the consumer an additional remedy besides those that may be available under any other existing laws.
Alternative Remedy.In Ram Nath v. Improvement Trust Bathinda12, it has been held that the arbitration clause in not a bar to the entertainment of the complaint by the redressal agency constituted under the Act, even if the arbitration provision has been laid down in a statute. Similarly in the case of Commercial Officer v. Bihar State Warehousing Corporation1, the Consumer Forum
1. Director of Pension, Rajasthan Govt. v. G.K. Joshi, 2002 CPJ (AC).
2. Airport Authority of India v. A. Kumar, 1997 (I) CPJ 247 (Del SCDRC).
3. Superintendent of Post Offices v. Grahak Parishad, 1991 (II) CPJ 490 (Guj).
4. R. Roy v. R.N. Sen, (1994) I CPR 66.
5. Technocombine Associates v. Union of India, 1994 (I) CPJ 481.
6. H.G. Bhatia v. ABC Computers Pvt. Ltd., 1994 (I) CPR 316.
7. J. Chand v. Sikkim State Lotteries, 1994 (I) CPR 213.
9. J.K. Chauhan v. National Ins. Co. Ltd., 1994 (I) CPR 390.
10. 1992 CPC 41
11. 1994 (I) CPR 130.
12. 1994 (I) CPR 357.
held that the existence of alternative remedy under the Arbitration Act, 1940 does not debar a consumer to have redress under the Consumer Protection Act, 1986.
Jurisdiction of Consumer Forum Barred.The jurisdiction of the Consumer Forum is barred in the following matters:
(i) When a case is pending in a civil court, the consumer forums constituted under the Consumer Protection Act, 1986 should not entertain the complaint with respect to the same cause of action.2
(ii) Section 15 of the Railway Claims Tribunal Act, 1987, provides that "no court or other authority shall have, or be entitled to exercise any jurisdiction, powers or authority in relation to the matters referred to in subsection (1) of section 13.3 Thus, section 15 of the R.C.T.A., 1987 completely ousts the jurisdiction of the court and other authority in all the matters referred to in section 13(1) of the Act. A question arose whether the jurisdiction of the Consumer Forum is also ousted particularly when section 3 of the Consumer Protection Act, 1986 provides that the provisions of the Act are in addition to, and not in derogation of any another law for the time being in force. This question was considered in the case of Nathmal Ashok Kumar v. Western Railway,4 where Justice Lodha observed: The words "any other law for the time being in force" mean any other law which was in force on the date when the Consumer Protection Act, 1986, became operative. The Consumer Protection Act was enacted on 24-12-1986 but it was enforced with effect from April 15, 1987. The Railway Claim Tribunal Act was enacted on December 23, 1987, but it was enforced w.e.f. Nov. 8, 1989. Accordingly, the provisions of the R.C.T.A., 1887 were not "for the time being in force" on 15-4-1987 when Consumer Protection Act became operative. The Railway Claims Tribunal Act, 1987, is independent of the Consumer Protection Act, 1986, and being a later statute, the consumer redressal agencies cannot encroach upon the jurisdiction of the Railway Claims Tribunal established under the R.C.T.
1. 1994 (I) CPR 357.
2. I (1991) CPJ 42; Hanuman Prasad v. New India Ins. Co., (1994) I CPJ 1 (NC), where the National Commission observed: It is nowhere laid down that whenever the examination and cross-examination is involved, the proper forum for adjudication of the dispute is only civil court.
3. Section 13, Railway Claims Tribunal Act, 1987 provides: "Jurisdiction, Powers and authority of Claims Tribunal ... (1) The Claim Tribunal shall exercise, on and from the appointed day, all such jurisdiction, powers and authority as were exercisable immediately before that day by any civil court or a claims Commissioner appointed under the provisions of the Railways Act. (a) relating to the responsibility of the railway administrations as carriers under Chapter vii of Railways Act in respect of claims for (i) compensation for loss, destruction, damage, deterioration or nondelivery or animals or goods entrusted to a railway administration for carriage by railway; (ii) compensation payable under section 82A of the Railways Act or the rules made thereunder; and (b) in respect of the claims for refund of fares or part thereof or refund of any freight paid in respect of animals or goods entrusted to a railway administration to be carried by railway. (2) The provision of the Railways Act and rules made thereunder shall, so far as may be applicable to the inquiring into or determining any claims by the claims tribunal under this Act.
4. 1991 CPJ 618 Raj 81.
Similarly, in the case of Bhanwarlal v. Station Supdt. Railway1, Rahur, there was inordinate delay in transit resulting in deterioration of the goods and loss to the claimant. It was held by the Rajasthan State Commission that "the provisions of section 3 are of no help to the complainant as section 15 of the Railway Claims Tribunal Act completely bars the jurisdiction of the court or the authority in relation to matters referred to in section 13(1) of the said Act. The redressal Forums have no jurisdiction to entertain, try and hear the complaints relating to the matters enumerated in subsection (1) of section 13 of the Act of 1987".
Thus, the conclusion boils down to this: Section 3 of the Consumer Protection Act, 1986 cannot be of any avail, for section 13 of R.C.T. Act, 1987, completely ousts the jurisdiction of the court and any other authority in respect of those matters enumerated in section 13(1) of the R.C.T. Act, 1987.2 Similarly where the complainant has chosen M.R.T.P forum for seeking relief of his grievances, he can not invoke the jurisdiction of the District Forum in respect of the same matter.3
In Chapter II of the Act, provisions have been made to establish Consumer Protection Councils at the Central as well as State levels by the respective governments in order to promote and protect the interest of Consumers. The composition, objects etc. of these councils are discussed as under.
Section 4 of the Consumer Protection Act, 1986 requires the Central Government to establish by notification a Council to be known as the Central Consumer Protection Council (hereinafter referred to as Central Council).
The Central Council shall consist of the following members:
(a) the Minister-in-charge of the Consumer affairs in the Central Government, who shall be its Chairman; and
(b) such number of other official or non-official members representing such interests as may be prescribed.
The appointment of official and nonofficial members have thus been left to the rule making power of the Government. Accordingly, Central Government issued a notification containing a set of rules in 1987.4 Rule 3 of the Consumer Protection Rules, 1987, deals with the constitution of Central Council. It provides that the Central Council shall consist of the following 150 members:
1. (1991) 2 CPJ 248 Raj.
2. It is important to note that in certain cases of railways which do not fall within the ambit of sec. 13(1) of R.C.T. Act, 1987, the consumer forums still have jurisdiction and can award compensation etc. for "deficiency in service: For example, see, Union of India v. Nathmal Hansaria, I (1997) CPJ 308; Anil Gupta v. G.M. Northern Railways, II (1991) CPJ 308; Union of India v. K.N. Jena, III (1997) CPJ 198 (Ori SCDRC) G.M.N. Rlys. v. R.P. Singh, II (1998) CPJ 4442 (Bihar SCDRC) etc., discussed supra.
3. Byford v. Ramesh Taneja, 1991 CPJ 586 Del.
4. In exercise of powers conferred by sec. 30(1) of the CPA, 1986 the Central Government issued a set of rules. See G.S.R. 398(E) of April 15, 1987, which have been published in the Gazette of India, Extra., Pt. II of April 15, 1987.
It provides that the Central Council shall consists of the following members not exceeding 35, namely;
The Minister-in-charge of Consumer Affairs in the Central Government shall be the Chairman of the Central Council.
the Minister of State (Where he is not holding independent charge) on Deputy Minister in-charge of Consumer Affairs in the Central Government, shall be the Vice-Chairman of the Central Council.
The Minister in-charge of Consumer Affairs of two of the States from each region as mentioned in Schedule I to be changed by rotation on expiration of the term of the Council on each occasion;
An administrator (whether designated as administrator or Lieutenant Governor), of a Union Territory, to represent a Union Territory, as mentioned in Schedule II, to be changed by rotation on expiration of the term of the Council on each occasion;
Two Members of Parliamentone from the Lok Sabha and one from the Rajya Sabha;
Representatives of the Central Government Departments and autonomous organisation concerned with consumer interestsnot exceeding five;
The Registrar, National Consumer Disputes Redressal Commission, New Delhi;
Representatives of Consumer Organisations from amongst the Indian members of the International Organisation, namely, Consumer International not exceeding six, to be nominated by the Central Government;
Representatives with proven expertise and experience who are capable of representing consumer interests, drawn from amongst consumer organisatons, consumer activists, woman farmers, trade and industrynot exceeding five, one from each of the regions specified in Schedule annexed to these rules;
The Secretaries in-charge of Consumer Affairs in the States to be nominated by the Central Governmentnot exceeding three;
The Secretary in-charge of Consumer Affairs in the Central Government shall be the Member-Secretary of the Central Council.
Term of the Council.The term of the Council is three years.1 However, any member may resign by submitting his written resignation to the Chairman of the Council. The vacancy so caused or otherwise, shall be filled in from the same category by the Central Government. Such person shall hold office so long as the member whose place he fills would have been entitled to hold office i.e., for the remaining period.
Procedure of the Central Council.The Central Council shall observe the specified procedure in regard to the transactions of its business.2
1. Rule 3, Consumer Protection Rules, 1987.
2. Rule 4, of the Consumer Protection Rules, 1987.
The meeting of the Central Council shall be presided over by the Chairman. In the absence of the Chairman, the ViceChairman shall preside. However, in the absence of the Chairman and the ViceChairman, the Central Council shall elect a member to preside over that meeting of the council.
Each meeting of the council shall be called by giving ten days' notice to the members. Every notice shall specify the place and the day and hour of the meeting and shall contain statement of business to be transacted thereat.
Its proceedings shall not be invalid because of any vacancy or any defect in the constitution of the council.
The council is authorised to constitute working groups from amongst its members and every working group so constituted shall perform such functions as are assigned to it by the Central Council. The findings of such working groups shall be placed before the Council for its consideration.
The resolution passed by the council are of recommendatory nature.
The Council may hold meetings as and when necessary but it must hold at least one meeting in a year. The council shall meet at such time and place as the Chairman may think fit.1
Objects of the Central Council.According to section 6 of the Act, the objects of the Central Council shall be to promote and protect the rights of the consumers such as, (a) the right to be protected against the 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 or services, as the case may be, so as to protect the consumer against unfair trade practices; (c) the right to be assured, wherever possible, access to a variety of goods or services, as the case may be, 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 restrictive trade practices or unscrupulous exploitation of consumers; and (f) the right to consumer education.
Thus, section 6 enumerates the above objects of the Central Council and clearly indicates recognition of the rights of the consumers. The Central Council is specially saddled with certain duties to protect and promote the interest of the consumers. But the significant drawback in the legislation is the toothlessness of the Central as well as the State Councils. The resolutions of the Council are only of recommendatory nature. Again, the Councils cannot file a complaint before the consumer forums even if the consumer's rights, the protection of which falls within the domain of the council, are in jeopardy. Even the Central or the State Government cannot file a complaint on behalf of the aggrieved consumer.2 His (consumer's) remedy lies in filing complaint before the consumer forum. A consumer forum cannot dispose of a complaint without hearing the complainant and it is also obligatory on the part of the consumer forums to take into account the allegations levelled by the complainant against the opposite party. The National Commission in the case of Distt. Manager, Telephones v. Dr. Tarun Bharthari,3 has held that the consumer forum can grant reliefs which are even not prayed for by the complainant.
1. Section 5 of the CPA, 1986.
2. See clause (c) Sec. 12 of the CPA.
3. 1991 CPR 171 (NC).
Section 7 of the Consumer Protection Act authorises the State Governments to establish the State Consumer Protection Councils in their respective States. Rules as to composition etc. are to be formulated by the State Government. The objects of the State Councils1 are the same as that of the Central Council which have been enumerated in section 6 of the Act.
As has been seen, the Consumer Protection Councils are only recommendatory bodies and are toothless. These Councils cannot give any relief to a consumer if he has any complaint or dispute2 in relation to the goods bought or services hired. The only agency which can give relief to a consumer under the Consumer Protection Act is the consumer disputes redressal forum. This Forum has been created to render cheaper and quicker justice to the consumers because, prior to the Consumer Protection Act justice or remedy available to the Consumer in the Civil Courts was very expensive and dilatory. Under section 9 of the Consumer Protection Act, 1986, the following consumer disputes redressal agencies, have been established:
1. A Consumer Disputes Redressal Forum to be known as "District Forum". This forum is established by the State Government.
2. A Consumer Disputes Redressal Commission to be known as the "State Commission." This is also established by the State Government.
3. A National Consumer Disputes Redressal Commission, i.e., National Commission. This is established by the Central Government.
The Act thus establishes a hierarchy of three redressal forums:
(i) District Forums
(ii) State Commissions.
(iii) National Commission.
Composition of District Forum (Section 10) The District Forum shall consist of the following:
(a) A person who is or has been or is qualified to be a District Judge, who shall be its President.
(b) two other members, one of whom shall be a woman, who shall have the following qualifications, namely:
(i) be not less than thirty-five years of age,
(ii) possess a bachelor's degree from a recongnised university,
(iii) be persons of ability, integrity and standing, and have adequate knowledge and experience of at least ten years in dealing with problems relating to economics, law commerce, accountancy, industry, public affairs or administration:
1. Section 8 of the CPA.
2. Section 2(10)(e) `consumer disputes' means a dispute where the person against whom a complaint has been made, denies or disputes the allegations contained in the complaint.
Provided that a persons shall be disqualified for appointment as a member, if he
(a) has been convicted and sentenced to imprisonment for an offence which, in the opinion of the State Government, involves moral turpitude; or
(b) is an undischarged insolvent; or
(c) is of unsound mind and stands so declared by a competent court; or
(d) has been removed or dismissed from the service of the Government or a body corporate owned or controlled by the Government; or
(e) has, in the opinion of the State Government, such financial or other interest as is likely to affect prejudicially the discharge by him of his functions as a member; or
(f) has such other disqualifications as may be prescribed by the State Government.
Procedure of Appointment.Every appointment as mentioned above shall be made by the State Government on the recommendation of a Selection Committee. This committee shall consist of the following:1
(i) President of the State Commission;
(ii) Secretary of the Law Department of the State;
(iii) Secretary in-charge of the Department dealing with Consumer Affairs in the State.
Terms & Conditions of Office.The members of the District Forum shall hold office for a term of five years or up to the age of 65 years whichever is earlier and shall not be eligible for reappointment. However, a member may resign his office before the expiry of the term, and the Government on accepting his resignation may fill the vacancy from among persons who belong to that category.2
The salary or honorarium and other allowances payable to, and the other terms and conditions of service of the members of the District Forum shall be such as may be prescribed by the State Government.3
Jurisdiction of District Forum (Section 11)
Pecuniary Jurisdiction.The District Forum shall have jurisdiction to entertain complaints where the value of the goods or services and the compensation, if any, claimed does not exceed rupees twenty lakhs.4
Territorial Jurisdiction.A complaint shall be instituted in a District Forum within the local limits of whose jurisdiction.
1. Ins. by Act 50 of 1993, sec. 8 (w.e.f. 18-6-95).
2. Section 11(2) of the CPA.
3. Section 11(3) of the CPA.
4. In the case of B.S. Gaba v. Steel Authority of India Ltd., 1991 CPJ 631 (Har), it was held that pecuniary jurisdiction depends upon the amount of relief claimed, and not upon the value of goods or services, nor upon the relief allowed by the Forum. See also Frock Haji Ismail Saya v. Gava Bhai Bhesania, (1991) 2 CPJ 452 Guj; Akhil Bhartiya Grahak Panchayat v. Chairman, Life Ins. Corp., 1991 CPJ 171 Mah. In this case the claim was for Rs. 3,67,000 but Commission allowed Rs. 20,000 only.
(a) the opposite party or each of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or carries on business or has a branch office or personally works for gain,1 or
(b) any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides, or carries on business or has branch office, or personally works for gain, provided that in such case either the permission of the District Forum is given, or the opposite parties who do not reside, or carry on business or have a branch office, or personally work for gain as the case may be acquiesce in such institution; or
(c) the cause of action, wholly or in part, arises.2
Thus, a complaint can be filed either at the place where the opposite party resides or where each or whole number of the opposite parties reside or carry on business or at the place where the cause of action arises. It has been held by the Rajasthan State Commission that the District Forum can entertain a common cause petition for award of compensation of Rs. 20,000 to each person who suffered from jaundice and also rupees one lakh to the parents of every deceased person.3 It has also been held that in the case of manufactured goods, apart from the place of manufacture, the cause of action arises also at the place where the goods are marketed.4 It may also be noted that objections regarding territorial jurisdiction should be taken at the earliest opportunity or the same deemed to have been waited.5
Who can file complaint (Section 12)
A complaint6 in relation to any goods sold or delivered or agreed to be sold or delivered or any service provided or agreed to be provided may be filed with the District Forum by any of the following:
(a) the consumer7 to whom such goods are sold or delivered or agreed to be sold or delivered or such service provided or agreed to be provided;
(b) any recognised consumer association whether the consumer to whom the goods sold or delivered or agreed to be sold or delivered or service
1. The objections regarding territorial jurisdiction should be taken at the earliest opportunity or the same will be deemed to have been waived; Kurukshetra University v. Vinay Prakash Verma, II (1993) CPJ 647; See also, Indian Airlines Corp. v. Consumer Education and Research Society, (1992) 1 CPR 4 (NC) where it has been specifically held that in the case of a company or corporation, complaint would lie at the principal place of business or at the place of subordinate office.
2. In Union of India v. K.K. Bhatt, 1991 (II) CPJ 474 (Del), the ticket money was paid at Delhi for a journey from Bombay to Delhi. It was held that the Delhi Forum had jurisdiction because payment there constituted part of the cause of action. In M.O. Hasan v. J.K. Thomas, (1991) 1 CPR 650 Mad, where a car was booked at Pondicherry but delivery was effected at Madras, the Forum had jurisdiction at Madras.
3. Upbhokta Sanrakshan Samiti v. Pub. Health Engg. Deptt., 1991 (II) CPJ 321 (Raj), where the disease was caused by the supply of contaminated water.
4. State of Punjab v. Nanak Chand, MANU/SC/0120/1984 : (1984) 3 SCC 512; Tulsi Enterprises v. A.P. State Consumer Commission, MANU/AP/0055/1991 : AIR 1991 AP 326; M.D.A. v. Union of India, AIR 1993 Cal 4.
5. Kurukshetra University v. V.P. Verma, 1993 (II) CPJ 647.
6. Complaint is defined in sec. 2(1) (c) of the Act and has been discussed in detail, supra.
7. The term `consumer' is defined in sec. 2(1)(d) and has been discussed in great detail under the heading `consumer', supra.
provided or agreed to be provided is a member of such association or not;
(c) one or more consumers, where there are numerous consumers having the same interest, with the permission of the District Forum, on behalf of, or for the benefit of, all consumers so interested; or
(d) the Central or the State Government.
For the purpose of above provisions, "recognised consumer association" means any voluntary consumer association registered under the Companies Act, 1956 or any other law for the time being in force.
Grounds of Making complaint.It is important to note that the above persons or bodies, who are termed as complainant,1 can file the complaint in relation to goods bought or services hired etc. in the consumer redressal forum only on the grounds that (a) there was a loss or damage due to unfair or restrictive trade practice adopted by the trader; (ii) the goods suffer from one or more defects; (iii) services suffer from deficiency; (iv) the trader charged for the goods an excess of price; or (v) the sale of hazardous goods in contravention of the provisions of law.2
Procedure on admission of complaint (Section 13)
The District Forum has to observe the procedure as mentioned in section 13 of the Consumer Protection Act. On admission of a complaint, the District Forum shall
(a) refer a copy of the admitted complaint, within twenty-one days from the date of its admission to the opposite party mentioned in the complaint directing him to give his version of the case within a period of thirty days or such extended period not exceeding fifteen days as may be granted by the District Forum.
(b) where the opposite party on receipt of a complaint referred to him denies or disputes the allegations contained in the complaint, or omits or fails to take any action to represent his case within the time given by the District Forum, the District Forum shall proceed to settle the consumer dispute in the following manner:
(i) Where the complaint alleges a defect in the goods which cannot be determined without proper analysis or test of the goods, the District Forum shall obtain a sample of the goods from the complainant, seal it and authenticate it in the manner prescribed and refer the sample so sealed to the appropriate laboratory along with a direction that such laboratory make an analysis or test, whichever may be necessary, with a view to finding out whether such goods suffer from any defect alleged in the complaint or from any other defect and to report its finding thereon to the District Forum within a period of forty-five days of the receipt of the reference or within such extended period as may be granted by the District Forum;
1. Complainant is defined in sec. 2(1)(b).
2. These five points (i) to (v) have been discussed in great detail under the heading `complainant', supra.
(ii) before any sample of the goods is referred to any appropriate laboratory, the District Forum may require the complainant to deposit to the credit of the Forum such fees as may be specified, for payment to the appropriate laboratory for carrying out the necessary analysis or test in relation to the goods in question;
(iii) the District Forum shall remit the amount so deposited to its credit to the appropriate laboratory to enable it to carry out the analysis or test mentioned above and on receipt of the report from the appropriate laboratory, the District Forum shall forward a copy of the report along with such remarks as the District Forum may feel appropriate to the opposite party;
(iv) If any of the parties disputes the correctness of the findings of the appropriate laboratory, or disputes the correctness of the methods of analysis or test adopted by the appropriate laboratory, the District Forum shall require the opposite party or the complainant to submit in writing his objections in regard to the report made by the appropriate laboratory;
(v) the District Forum shall thereafter give a reasonable opportunity to the complainant as well as the opposite party of being heard as to the correctness or otherwise of the report made by the appropriate laboratory and also as to the objection made in relation thereto and issue an appropriate order under section 14.
Where the complaints admitted by the District Forum under section 12 relates to goods in respect of which the procedure specified in sub-section (1) cannot be followed, or if the complaint relates to any services,
(a) refer a copy of such complaint to the opposite party directing him to give his version of the case within a period of thirty days or such extended period not exceeding fifteen days as may be granted by the District Forum;
(b) where the opposite party, on receipt of a copy of the complaint, referred to him denies or disputes the allegations contained in the complaint, or omits or fails to take any action to represent his case within the time given by the District Forum, the District Forum shall proceed to settle the consumer dispute
(i) on the basis of evidence brought to its notice by the complainant and the opposite party, where the opposite party denies or disputes the allegations contained in the complaint, or
(ii) ex-parte on the basis of evidence brought to its notice by the complainant where the opposite party omits or fails to take any action to represent his case within the time given by the Forum;
(c) where the complainant fails to appear on the date of hearing before the District Forum, the District Forum may either dismiss the complaint for default or decided it on merits.
Section 13(3) provides that no proceedings complying with the procedure laid down therein shall be called in question in any court on the ground that the principles of natural justice have not been complied with.
Section 13(3A) provides that every complaint shall be heard as expeditiously as possible and endeavour shall be made to decide the complaint within a period of three months from the date of receipt of notice by opposite party where the complaint does not require analysis or testing of commodities and within five months, if it requires analysis or testing of commodites. However, no adjournment shall be ordinarily granted by the District Forum unless sufficient cause is shown and the reasons for grant of adjournment have been recorded in writing by the Forum.
Further the District Forum shall make such orders as to the costs occasioned by the adjournment as may be provided in the regulations made under this Act. Also in the event of a complaint being disposed of after the period so specified, the District Forum shall record in writing, the reasons for the same at the time of disposing of the said complaint.
Interim relief.Consumer forums have no power to grant any interim relief or even an adinterim relief. They can grant only a final relief. They also do not have the power to review their own orders.1
Findings of the District Forum and Relief (Section 14)
If, after conducting the proceedings under section 13, the District Forum is convinced that the goods were really defective or that the complaint about the service is proved, it shall order the opposite party to do one or more of the followings things:
(a) to remove the defects which have been pointed out by the laboratory.
(b) to replace the goods with new goods of similar description which shall be free from any defect;2
(c) to return to the complainant the price of the goods or charges for the services;3
(d) to pay to the consumer a sum of money by way of compensation for any loss or injury suffered by the consumer due to the negligence of the opposite party.4 The District Forum shall have the power to grant punitive damages in such circumstances as it deems fit;
1. Rajasthan State Industrial Development Corp. v. Premier Paints, (1991) I CPR 614 NC.
2. In Kailash Kumari v. N. Electronics, (1991) II CPJ 27 N.C., a defective Television was ordered to be replaced alongwith compensation. The National Commission also said the forum is competent to measure the amount of compensation even if the party has supplied no particulars; see also Issac Mathew v. Maruti Udyog Ltd., (1991) 11 CPJ 75 Ker; Dynavision Ltd. v. Sudhakar Karanth, (1991) II CPJ 398 Ker, where Korean Picture Tube was replaced by Philips Picture Tube and also compensation of Rs. 2000 was allowed.
3. See Bhamy v. Shenoy, 1991 CPJ 133 Kan, where a passenger Could not be conveyed to his destination owing to road obstruction was allowed to recover from the bus operator his ticket money to and fro; In Bharat Tractors v. R.C. Pandey, (1991) I CPJ 152 NC excess price charged for a tractor was ordered to be refunded.
4. See M.L. Sharma v. Chief Administrator, HUDA, (1991), where, for allotment of plots on behalf of Haryana Urban Development Authority, the application was not sent by the bank to the authority with the result that the complainant missed the allotment. The Forum held that an application received by an authorised agent was as good as that received by the organisation, and the application being valid, the complainant was entitled to an allotment. In an other case of Chetun Kumari v. D.D.A., 1991 (II) CPJ 606 Delhi, the D.D.A. posted a letter of allotment in
(e) to remove the defects is goods or deficiencies in the services in question;
(f) to discontinue the unfair trade practice or the restrictive trade practice or not to repeat them;
(g) not to offer the hazardous goods for sale;
(h) to withdraw the hazardous goods from being offered for sale;
(i) to cease manufacture of hazardous goods and to desist from offering services which are hazardous in nature;
(j) to pay such sum as may be determined by it, if it is of the opinion that loss or injury has been suffered by a large number of consumers who are not identifiable conveniently;
(k) to issue corrective advertisement to neutralize the effect of misleading advertisement at the cost of the opposite party responsible for issuing such misleading advertisement;
(l) to provide for adequate costs to parties.
The Amendment Acts of 1993 and 2002 added some of the abovenoted clauses, in order to confer greater powers on the consumer forum in respect of its findings. But it must be noted that the authorities under the Act have to confine themselves to the above reliefs. No other relief can be allowed. Thus, in Dealwell Engg. Works v. V.V. Choudhary,1 where materials contracted to be supplied was in fact not supplied constituted a breach of contract by nonperformance. It was held to be a breach of contract and not a consumer dispute. Section 14 comes into play only when the goods actually supplied are defective etc. and not when there is no supply because in that case there is no question of a defective supply. In another case of Rajasthan State Industrial Corp. v. Premier Paints,2 a contractor failed to erect and commission the equipment in terms of his contract. It was held by the National Commission that a breach of contract of this kind was not remediable under the Act. It was not a case of deficiency in service. The matter should go under the law of contract to Civil Court. Similarly in N.K. Goyle v. Registrar, IIT,3 where an educational institution, I.I.T., failed to bring about a promised improvement in the strength and design of helmets, has been held not to be a commercial service and hence outside the purview of the Act. In an important case of Jewellers Narandas & Sons v. Oriental Ins. Co. Ltd.,4 the facts were that a consignment of gold was lost due to invasion of the country to which it was sent. The insurance company was not held liable a wrong name resulting in delay in delivery. It was not allowed to cancel the allotment for late payment. Similarly, in C.L. Jaganath v. B.D.A., 1991 (II) CPJ 88 Karn, the B.D.A. was required to reimburse the complainant for loss of registration expenses when the plot allotted and registered to him turned out to be under litigation. He was provided a new plot. See also, Saralamma v. B.D.A., 1991 (II) CPJ 390 Karn. In Consumer Unity & T. Society v. Union of India, 1991 CPR 21 New Delhi, it was held that adulteration is a defect in goods entitling sufferers to a continuous relief till complete recovery.
1. (1995) 84 Comp Cas 724 AP.
2. (1991) 2 CPJ 599 NC.
3. (1991) 2 CPJ 614 Bom.
4. 1995 Supp 4 SCC 117.
because there was no deficiency on its part. It was held by the Supreme Court that the National Commission was right in holding that the insured had a remedy to approach the Civil Court.
Conduct of proceedings & Quorum.The Consumer Protection Act provides that every proceeding referred to in section 14(1) shall be conducted by the President of the District Forum and at least one member thereof sitting together. However, if the member, for any reason, is unable to conduct the proceedings till it is completed, the President and the other member shall conduct such proceedings by continuing it from the stage at which it was last heard by the previous member.1 Every order made by the District Forum shall be signed by the President and the member or members who conducted the proceeding. But where the proceeding is conducted by the President and one member and they differ on any point or points, they shall state the point or points on which they differ and refer the same to the other member for hearing on such point or points and the opinion of the majority shall be the order of the District Forum.2 It may also be noted that the procedure relating to the conduct of the meetings of the District Forum, its sittings and other matters shall be such as may be prescribed by the State Government.3
The Quorum.It is evident from the provisions contained in section 14(2) and 14(2)(A) that the proceedings are to be conducted by the President of the District Forum and at least one member thereof sitting together. Thus, the President and at least one sitting member of the District Forum constitute the Quorum.4
It means neither the President sitting alone nor the two members sitting together in the absence of President, can conduct the proceedings for want of quorum. Hence any order passed by the President alone or by the two members in the absence of the President, shall be invalid. In Gulzari Lal Agarwal v. Accounts Officer,5 the Supreme Court quashed the order of the National Commission holding the order passed by only two Members of the State Commission as void in view of the absence of the President of the State Commission.
The Central Government6 took note of the above decision of the Supreme Court and amended the Consumer Protection Rules in 1987 (which came into force on 27th Jan., 1907) to provide for the functioning of the National Commission even if its President is nonfunctional owing to absence, illness or
1. Section 14(2), Consumer Protection Act, 1986.
2. Section 14(2A), Consumer Protection Act, 1986.
3. Section 14(3), Consumer Protection Act, 1986.
4. If there is no quorum, it may be adjourned by the Reader of the court or a member or President sitting singly. See, Sawhney Export House v. Air France, (1986) I CPJ Del.
5. 1996 (II) CPJ (SC). In the instant case, the West Bengal Consumer Protection Rules, 1987 shall govern the proceedings. According to Rule 6, subrule (9) where any vacancy occurs in the office of the President of the State Commission, the senior-most (in order of appointment) Member holding office for the time being, shall discharge the function of the President until a person is appointed to fill such vacancy. This rule is made to make the State Commission functional even when the President is nonfunctional. See also, Mohd. Abdullah v. Abid Quadir, (1997) I CPJ 181 (UP SCDRC).
6. In the case of State Commission or District Forum, the State Government has got the power to amend the rules.
otherwise. In such a situation it has now been provided by the Consumer Protection (Amendment) Rules, 1997 that:
(a) the senior-most member of the National Commission with judicial background, if authorised so to do by the President in writing, shall discharge the functions of the President until the day on which the President resumes the charge of his functions;
(b) in the above circumstances, the proceeding of the National commission shall be conducted by the Senior most member and at least two members thereof sitting together;
(c) Every order shall be signed by the Seniormost member (in the absence of President) and two members who conducted the proceedings. If there is any difference of opinion among themselves the opinion of the majority shall be the order of the National Commission.
Appeals (Section 15)
Any person aggrieved by an order made by the District Forum may prefer an appeal against such order to the State Commission within a period of thirty days from the date of the order, in such form and manner as may be prescribed.1 The State Commission may, however, entertain an appeal after the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not filing it within that period. Further that no appeal by a person, who is required to pay any amount it terms of an order of the District Forum, shall be entertained by the State Commission unless the appellant has deposites in the prescribed manner fifty per cent. of that amount or twenty-five thousands rupees, whichever is less. A case worth mentioning on this point is of Delhi Development Authority v. I.S. Narula,2 where certified copy of the order was received by the appellant on 13-7-1994. The appeal was filed on 27-9-1994. The delay was stated to be due to public holidays on 14th and 15th August, 1994, strike in Tis Hazari Courts and procedural delay in obtaining sanction of D.D.A. for filing the appeal. The Supreme Court while condoning the delay for sufficient cause, observed that the power of condonation should be exercised liberally.3
Ex parte Order.If the opposite party fails to appear on the date of hearing, the District Forum may proceed and pass an ex parte order. The District Forum can set aside the ex parte order if sufficient cause is shown for not appearing in the case. In Maya Mitra v. K.P. Equipments,4 it has been held that the District Forum, which has the right to pass an ex parte order has also the power to set aside the same provided sufficient cause is shown and the prayer is made early, without any undue delay.
But in Janak Mehta v. Allabahad Bank,5 the State Commission of J&K held that one of the methods adopted to prolong the proceedings was, firstly, to allow the
1. Limitation period of 30 days begins from the date of communication of the order.
2. 1995 (III) CPJ 333; See also, Vice Chairman, D.D.A. v. O.P. Gupta, 1995 (III) CPJ 18 (NC); Exec. Engineer, Elec. Board v. Santosh Kumar, I (1996) CPJ 332 (MP SCDRC).
3. See also Collector of Land Acquisition v. Katiji, MANU/SC/0161/1988 : AIR 1988 SC 897.
4. (1996) I CPJ 330 (WB SCDRC); See also, Gupta Enterprises v. Shakuntala Gupta, II (1991) CPJ 493.
5. (1996) I CPJ 149 (J&K SCDRC).
case to proceed ex parte, and then waste further time in getting the ex parte order set aside, in enquiries and in recording evidences. It was said that the Civil Procedure Code applicable to Consumer Protection Act applies to a limited extent. Therefore, the District Forum has no power to set aside an ex parte order.
The above decision in Janak Mehta's case, it appears, has not been correctly decided. The correct position is that an ex parte order may not be set aside if the opposite party is trying to unnecessarily waste the time, but it can be set aside if the opposite party has genuine reasons for not appearing in the case.
Dismissal of complaint in default.In Kamlesh Bansal v. Balaji Land Traders,1 the complainant failed to appear on the date fixed by the District Forum for ex parte evidence. Within 23 days of dismissal of complaint, the complainant applied for restoration. It was rejected on the ground that the District Forum could not restore the complaint. The Delhi State Commission held that the Commission, while exercising appellate jurisdiction, can set aside the order of the District Forum dismissing the said application for restoring the complaint.
Appeal against interlocutory order.No appeal lies against an interlocutory order passed by a District Forum. However, in the case of Jaipur Stock Exchange Ltd. v. C.P. Mehta2, it has been held that the State Commission under section 17(b) of the Act has jurisdiction to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by a District Forum within the State, where it appears that such District Forum has exercised a jurisdiction not vested in it by law, or has acted in exercise of its jurisdiction illegally or with material irregularity. As such an appeal, which has been filed inadvertently against an interlocutory order, can be treated as a revision.
Composition (Section 16)
The State Commission shall consist of the following members:
(a) A person who is or has been a Judge of a High Court. His appointment is made by the State Government after consultation with the Chief Justice of the High Court. He will be the President of the Commission.
(b) Two other members, who shall be persons of ability, integrity and standing and have adequate knowledge or experience of or have shown capacity in dealing with problems relating to economics, law, commerce, accountancy, industry, public affairs or administration, one of whom shall be a woman. The appointment of these members shall be made by the State Government on the recommendation of the Selection Committee consisting of the following:
(i) President of the State Commission. Chairman
(ii) Secretary of the Law Department of State. Member
(iii) Secretary in-charge of Department dealing Member with Consumer Affairs in the State.
1. 1995 (III) CPJ 510 (Del SCDRC).
2. (1991) 2 CPJ 51 Raj.
Salary & Terms of the Office.The salary or honorarium and other allowances payable to, and the other terms and conditions of service of the members of the State Commission shall be such as may be prescribed by the State Government.1
Every member of the State Commission shall hold office for a term of five years or up to the age of sixty seven years, whichever is earlier and shall be eligible for reappointment.2
Jurisdiction (Section 17)
The State Commission shall have jurisdiction in the following matters:
(a) (i) To entertain complaints where the value of the goods or services and compensation, if any, claimed exceeds rupees twenty lakhs but does not exceed rupees one crore3; and
(ii) to entertain appeals against the orders of any District Forum within the State.
(b) To call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any District Forum within the State. Such power can be exercised only where it appears to the State Commission that the District Forum has exercised a jurisdiction which is not vested in it by law, or has failed to exercise a jurisdiction so vested or has acted in exercise of its jurisdiction illegally or with material irregularity.4
Procedure (Section 18)
The provisions of sections 12, 13 and 14 and the rules made thereunder for the disposal of complaints by the District Forum shall, with such modifications as may be necessary, be applicable to the disposal of disputes by the State Commission.
Appeals (Section 19)
Any person aggrieved by an order made by the State Commission in exercise of its powers conferred by section 17(a) above, may prefer an appeal against such order to the National Commission within a period of thirty days from the date of the order5 in such form and manner as may be prescribed.
Hearing of appeal (Section 19A)6 An appeal filed before the State Commission or the National Commission shall be heard as expeditiously as possible and an endeavour shall be made to
1. Section 16(2), Consumer Protection Act, 1986.
2. Section 16(3), Consumer Protection Act, 1986.
3. In Akhil Bharatiya Grahak Panchayat v. L.I.C., (1991) I CPJ 171 Mah, it was held that the basis of jurisdiction is not the amount awarded but the amount claimed. It may also be noted that there is no power of reviewing earlier orders. See Usha Rani Gupta v. G.M., (1991) 2 CPJ 87; See also Girja Prasad Tikkiwal v. Rana Deo Saini, 1991 (II) CPJ 335 (Raj).
4. Even where the appeal is not maintainable, the State Commission can still treat and decide the same as revision in exercise of its power under section 17(b) of the Act, See, C.R. Kataria, T.D.M. v. Consumer Disputes Redressal Distt. Forum, 1991 (II) CPJ 682.
5. It has been interpreted to mean thirty days from the date of delivery of the order to the party. See, Housing Board v. Housing Board Colony Welfare Assn., MANU/SC/0014/1996 : (1995) 5 SCC 672.
6. Ins. by Act 62 of 2002, sec. 17 (w.e.f. 15-3-2003).
finally dispose of the appeal within a period of ninety days from the date of its admission:
Provided that no adjournment shall be ordinarily granted by the State Commission or the National Commission, as the case may be, unless sufficient cause is shown and the reasons for grant of adjournment have been recorded in writing by such Commission:
Provided further that the State Commission or the National Commission, as the case may be, shall make such orders as to the costs occasioned by the adjournment as may be provided in the regulations made under this Act:
Provided also that in the event of an appeal being disposed of after the period so specified, the State Commission or the National Commission, as the case may be, shall record in writing the reasons for the same at the time of disposing of the said appeal.
Composition of National Commission (Section 20) The National Commission shall consist of the following persons:
(a) A person who is or has been a judge of the Supreme Court. He shall be appointed by the Central Government after consultation with the Chief Justice of India.1 He shall be its President.
(b) not less than four, and not more than such number of members, as may be prescribed, and one of whom shall be a woman, who shall have the following qualifications, namely:
(i) be not less than thirty-five years of age;
(ii) possess a bachelor's degree from a recognized university; and
(iii) be person of ability, integrity and standing and have adequate knowledge and experience of at least ten years in dealing with problems relating to economics, law, commerce, accountancy, industry, public affairs or administration:
Provided that not more than fifty per cent. of the members shall be from amongst the persons having a judicial background
Explanation.For the purposes of this clause, the expression "persons having judicial background" shall mean persons having knowledge and experience for at least a period of ten years as a presiding officer at the district level court or any tribunal at equivalent level:
Provided further that a person shall be disqualified for appointment, if he
(a) has been convicted and sentenced to imprisonment for an offence which, in the opinion of the Central Government, involves moral turpitude; or
(b) is an undischarged insolvent; or
(c) is of unsound mind and stands so declared by a competent court; or filled by appointment of a person possessing any of the qualifications mentioned in sub-section (1) in relation to the category of the member who is required to be appointed under the provisions of sub-section (1A) in place of the person who has resigned.
1. Ins. by Amendment Act 50 of 1993 (w.e.f. 18-6-1993).
Jurisdiction of National Commission (Section 21)
The jurisdiction of the National Commission is as under:
(1) The original jurisdiction of the National commission is to entertain complaints where the value of the goods or services and compensation, if any, claimedt exceeds rupees one crore.
(2) The appellate jurisdiction is to entertain appeals against the orders of any State Commission.
(3) The supervisory jurisdiction of the National Commission is to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any State Commission, where it appears to the National Commission that the State Commission has exercised jurisdiction not vested in it or has failed to exercise a jurisdiction so vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity.1
Powers and Procedure of National Commission (Section 22)
The powers and procedure of the National Commission shall be the same as applicable to a District Forum under Sections 13 and 14 of the Act. This means that the working procedure of the National Commission is the same as that of the District Forum under section 13(4), (5) and (6). It has also the power to issue an order to the opposite party directing him to do any one or more of the things referred to in clauses (a) to (i) of sub-section (1) of section 14.
22A. Power to set aside ex-parte orders.Where an order is passed by the National Commission ex-parte against the opposite party or a complainant, as the case may be, the aggrieved party may apply to the Commission to set aside the said order in the interest of justice.
22B. Transfer of cases.On the application of the complainant or of its own motion, the National Commission may, at any stage of the proceeding, in the interest of justice, transfer any complaint pending before the District Forum of one State to a District Forum of another State or before one State Commission to another State Commission.
22C. Circuit Benches.The National Commission shall ordinarily function at New Delhi and perform its functions at such other place as the Central Government may, in consultation with the National Commission, notify in the Official Gazette, from time-to-time.
1. The National Commission pointed out that its revisional jurisdiction is limited to dispute where there has been wrongful, illegal and improper exercise of jurisdiction or failure to exercise jurisdiction (Tele. Distt. Manager v. Kalyanpur Cement Ltd., 1991 (II) CPJ 286 NC; see also Union of India v. Nitesh Agarwal, 1991 CPR 23 Jaipur; J.J. Fashions v. National Ins. Co., 1991 CPR 442 NC.
The Central Government has notified that the National Commission shall perform its functions at the following places other than New Delhi:
Vide S.O. 974(E), dated 31st August, 2004, published in the Gaztte of India, Extra, Pt. II, Sec. 3(ii), dated 31st August, 2004.
22D. Vacancy in the office of the President.When the office of President of a District Forum, State Commission, or of the National Commission, as the case may be, is vacant or a person occupying such office is, by reason of absence or otherwise, unable to perform the duties of his office, these shall be performed by the senior-most member of the District Forum, the State Commission or of the National Commission, as the case may be:
Provided that where a retired Judge of a High Court is a member of the National Commission, such member or where the number of such members is more than one, the senior-most person amongst such members, shall preside over the National Commission in the absence of President of that Commission.
Appeal (Section 23)
An appeal lies to the Supreme Court against the order of the National Commission. The appeal should be made to the Supreme Court within 30 days from the date of the order of the National Commission. However, the Supreme Court may allow an appeal even after the expiry of the prescribed period of 30 days if it is satisfied that there was sufficient cause for not filing the appeal within the aforesaid time limit.
Finality of Order (Section 24)
Every order of a District Forum, the State Commission or the National Commission shall be final if no appeal has been preferred against such order.
Limitation Period (24A)
Section 24A has been added by the Amendment Act, 1993. It prescribes the period of limitation for filing the complaint as under:
(1) The District Forum, the State Commission or the National Commission shall not admit a complaint unless it is filed within two years from the date on which the cause of action has arisen.
(2) A complaint may, however, be entertained even after the expiry of two years if the complainant satisfies that he had sufficient cause for not filing the complaint within such period. In such a case the reasons for condoning the delay should be recorded.
Prior to the Amendment Act, 1993, the limitation period for filing the complaint was in accordance with the provisions of Limitation Act.1
Administrative Control by National Commission (Section 24B)
The National Commission shall have administrative control over all the State Commissions in matters relating to records of institution of cases and their disposal, uniformity of procedure, and overseeing their functioning. Similarly, State Commission shall have administrative control over all the District Forums within its jurisdiction in the aforesaid matters.
Enforcement of Orders (Section 25)
The amended provisions as to enforcement of orders of the District Forum, the State Commission or the National Commission are as mentioned below.
(1) Where an interim order made under the Act is not complied with, the Forum or Commission, as the case may be, may order for attachment of the property of the person not complying.
(2) No attachment made in view of the provision noted above shall remain in force for more than three months, at the end of which, if the non-compliance continues, the property attached may be sold and out of the proceeds, damages may be paid to the complainant.
(3) Where any amount is due from any person under an order of the Forum or a Commission, the person entitled to the amount may make an application and the Forum or the Commission, as the case may be, may issue a certificate for the said amount to the Collector of the district and the Collector shall proceed to recover the amount in the same manner as arrears of land revenue.
In Raheemunissa v. District Consumer Forum, Ongole,2 it was contended by the petitioner that the District Forum has no jurisdiction to entertain the execution petition for cancellation of the sale deed in favour of the writ petitioner. The court held that section 25(3) shows that the collector has to proceed to recover the amount on the basis of a certificate issued by the District Forum on an application made by the person entitled to the said amount. Thus, an application for enforcement of a final order has to made before the District Forum and thereupon it is for the District Forum to make the necessary enquiry and issue the certificate as contemplated under section 25(3) of the Act where any amount found to be due from any person under an order made by it. Hence, there is absolutely no reason to held that an execution petition cannot be maintained before the District Forum.
1. See S. Kumar v. Managing Director, Air India, 1991 (II) CPJ 72, where it was held that the Limitation Act was applicable in the case and the complainant was barred by limitation; See also, Sterocraft v. Monotype India Ltd., (1991) I CPJ III; K.S. Hegde v. Chief Manager, PNB, 1996 (II) CPJ (Karn SCDRC).
2. MANU/AP/0857/2008 : AIR 2009 AP 100.
Dismissal of frivolous or vexatious complaints (Section 26)
Where a complaint instituted before the District Forum, the State Commission or, as the case may be, the National Commission, is found to be frivolous, it shall dismiss the complaint and make an order that the complainant shall pay to the opposite party such cost, not exceeding ten thousand rupees, as may be specified in the order.
Penalties (Section 27)
Where a trader or a person against whom a complaint is made or the complainant fails or omits to comply with any order made by the District Forum, the State Commission or the National Commission, as the case may be, such trader or person or complainant shall be punishable as under:
(a) with fine not less than Rs. 2000 and not more than Rs. 10,000; or
(b) with imprisonment for a minimum period of one month and maximum period of 3 years; or
(c) with both i.e., imprisonment and fine as mentioned above.
Protection of action taken in good faith (Sec. 28)
The members of District Forums, State Commissions and National Commission and officers acting under their directions are protected against any suit, prosecution or other legal proceedings for any order made in good faith.
Power to remove difficulties (Section 29)
Section 29 gives power to the Central Government to remove difficulties in the implementation of the provisions of the Act. This power could be exercised within a period of two years from the date of the commencement of the Act. That period having already expired, the power has ceased to be effective. It may, however, be noted that every order made by the Central Government under this section shall, as soon as possible, be laid before each House of Parliament.\
If any difficulty arises in giving effect to the provisions of the Consumer Protection (Amendment) Act, 2002, the Central Government may, by order, do anything not inconsistent with such provisions for the purpose of removing the difficulty. However, no such order shall be made after the expiry of a period of two years from the commencement of the Consumer Protection (Amendment) Act, 2002.
Every order made under sub-section (3) shall be laid before each House of Parliament.
Vacancies or defects in appointment not to invalidate orders (Section 29A)
Section 29A provides that no act or proceeding of the District Forum, the State Commission or the National Commission shall be invalid by reason of the existence of any vacancy amongst its members or any defect in their constitution.
Powers to make rules (Sections 30, 30A and 31)
Section 30 empowers the Central and State Governments to make rules in their respective spheres of power. Section 30A provides that the National Commission may, with the previous approval of the Central Government, make regulations not inconsistent with the Act to provide for all matters for which provision is necessary or expedient for the purpose of giving effect to the provisions of the Act. Section 31 requires that every rule made by the Central Government under this Act, shall be laid, as soon as possible, before each House of Parliament who may approve, modify or annul the rule. Similarly, every rule made by the State Governments under this Act shall be laid, as soon as possible, before the State Legislature.
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