BASICS OF CONSUMER PROTECTION ACT

The Consumer Protection Act, 1986 (COPRA) was an Act of the Parliament of India enacted
in 1986 to protect the interests of consumers in India. It was replaced by the Consumer
Protection Act, 2019. It was made for the establishment of consumer councils and other
authorities for the settlement of consumer's grievances and matters connected with it. The act
was passed in Assembly in October 1986 and came into force on December 24, 1986. The
statute on the right was made before this COPRA act.

Objectives of consumer protection act

1. To Provide better and all round protection to consumer.

2. To Provide machinery for the speedy redressal of the grievances. (Consumer Forums)
3. To Create framework for consumers to seek redressal.
4. To Provide rights to consumers.
5. To Safeguard rights of Consumers.

Scope of Consumer Protection Act

This Protection Act covers entire goods and services of all sectors that are public, private, or
cooperative sectors, except those exempted by the central government. The act provides a
floor for a consumer where one can file their complaint against the product and the forum
takes an action against the concerned supplier and compensation is granted to the consumer
for the inconvenience he/she has encountered.
MEANING OF CONSUMER OF GOODS

According to section 2(d) of the Consumer Protection Act, 1986 enacted by the Parliament of
India on 24th December,1986, for the protection of the interest and to safeguard the rights of
the consumers,

"consumer" means any person who, buys any goods for a consideration which has been paid
or promised or partly paid and partly promised, or under any system of deferred payment, 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.

The provision reveals that a person claiming himself as a consumer of goods should satisfy
that—

1. The goods are bought for consideration - There must be a sale transaction between a seller
and a buyer; the sale must be of goods; the buying of goods must be for consideration. The
terms sale, goods, and consideration have not been defined in the Consumer Protection
Act. The meaning of the terms ‘sale’, and ‘goods’ is to be construed according to the Sale
of Goods Act, and the meaning of the term ‘consideration’ is to be construed according to
the Indian Contract Act.
2. Any person who uses the goods with the approval of the buyer is a consumer - When a
person who buys goods, they may be used by his family members, relatives and friends.
Any person who is making actual use of the goods may come across the defects in goods.
Thus, the law construe users of the goods as consumers although they may not be buyers at
the same time. The words “with the approval of the buyer” in the definition denotes that
the user of the goods should be a rightful user.
Example: A purchased a scooter which was in B’s possession from the date of purchase. B
was using it and taking it to the seller for repairs and service from time to time. Later on B
had a complaint regarding the scooter. He sued the seller. The seller pleaded that since B
did not buy the scooter, he was not a consumer under the Act. The Delhi State Commission
 held that B, the complainant was using it with the approval of A, the buyer, and therefore
he was consumer under the Act. [Dinesh Bhagat v.  Bajaj Auto Ltd. (1992) III CPJ 272]
Note : This is an exception to the general rule of law that a stranger to a contract cannot
sue.

3. Any person who obtains the goods for ‘resale’ or commercial purposes’ is not a
consumer - The term ‘for resale’ implies that the goods are brought for the purpose of
selling them, and the expression ‘for commercial purpose’ is intended to cover cases other
than those of resale of goods. When goods are bought to resell or commercially exploit
them, such buyer or user is not a consumer under the Act.
Examples: A jeep was purchased to run it as a taxi. The question was whether the buyer of
the jeep was a consumer under the Act. The Rajasthan State Commission held that to use
the jeep as a taxi with the object to earn profits was a commercial purpose, and therefore,
the buyer/user was not a consumer within the meaning of the Act. [Smt. Pushpa
Meena v. Shah Enterprises (Rajasthan) Ltd. (1991) 1 CPR 229].
One thing is plain and clear from the decided cases that what is important to decide is -
Whether a particular good is used for commercial purposes. If it is the buyer/user is not a
consumer, and if it is not - the buyer/user is a consumer.

4. Person buying goods for self-employment is a consumer - When goods are bought for
commercial purposes and such purchase satisfy the following criteria :
       -   the goods are used by the buyer himself;
       -   exclusively for the purpose of earning his livelihood;
       -   by means of self-employment,
then such use would not be termed as use for commercial purposes under the Act, and the
user is recognized as a consumer.
Examples:
     1.   A buys a truck for plying it as a public carrier by himself, A is a consumer.
     2.   A buys a truck and hires a driver to ply it, A is not a consumer.
     3.   A has one cloth shop. He starts another business of a photocopier and buys a
photocopy machine therefore. He hasn’t bought this machine exclusively for the
purpose of earning livelihood. He is not a consumer under the Act.
 4. A buys a truck, ply it himself and hires a cleaner who accompany him all the time
and at times drives also when A is busy otherwise, A is a consumer.

Note: That this is an exception to the rule that a buyer of commercial goods is not a
consumer under the Act.
MEANING OF CONSUMER OF SERVICES –

"consumer" means any person who, 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 of
the first mentioned person.

A person is a consumer of services if he satisfies the following criteria:

1. Services are hired or availed of - The term ‘hired’ has not been defined under the Act. Its
Dictionary meaning is - to procure the use of services at a price. Thus, the term ‘hire’ has
also been used in the sense of ‘avail’ or ‘use’. Accordingly, it may be understood that
consumer means any person who avails or uses any service.
Example:
o A goes to a doctor to get himself treated for a fracture. Here A is hiring the services
of the doctor. Thus, he is a consumer.
o A passenger getting railway reservation after payment is hiring service for
consideration.
o A landlord neglected and refused to provide the agreed amenities to his tenant. He
filed a complaint against the landlord under the Consumer protection act .

2. Consideration must be paid or payable - Consideration is regarded necessary for hiring or

availing of services. However, its payment need not necessarily be immediate. It can be in
instalments. For the services provided without charging anything in return, the person
availing the services is not a consumer under the Act.
Examples:
o A hires an advocate to file a suit for recovery of money from his employer. He
promises to pay fee to the advocate after settlement of the suit. A is a consumer under
the Act.
 o A goes to a Doctor to get himself treated for a fracture. The Doctor being his friend
charged him nothing for the treatment. A is not a consumer under the Act.
o The Direct and Indirect taxes paid to the State by a citizen is not payment for the
services rendered

3. Beneficiary of services is also a consumer - When a person hires services, he may hire it
for himself or for any other person. In such cases the beneficiary (or user) of these services
is also a consumer.
Example: A takes his son B to a doctor for his treatment. Here A is hirer of services of the
doctor and B is beneficiary of these services. For the purpose of the Act, both A and B are
consumers.

Note that in case of goods, buyer of goods for commercial purpose ceases to be a consumer
under the Act. On the other hand, a consumer of service for commercial purpose remains a
consumer under the Act.

Example: S applied to Electricity Board for electricity connection for a flour mill. There was a
delay in releasing the connection. S made a complaint for deficiency in service. He was held a
consumer under the Act. - Shamsher Khan v. Rajasthan State Electricity Board (1993) II CPR
6 (Raj.).
RIGHTS OF CONSUMER

The Consumer Protection Act provides for six rights of consumers. The consumer protection
councils set up under the Act are intended to promote and protect the various rights of
consumers. These rights include the following:

1. Right to Safety: The consumer has a right to be protected against goods and services which
are hazardous to life and health. For instance, electrical appliances which are manufactured
with substandard products or do not conform to the safety norms might cause serious injury.
Thus, consumers are educated that they should use electrical appliances which are ISI marked
as this would be an assurance of such products meeting quality specifications.

2. Right to be Informed: The consumer has a right to have complete information about the
product he intends to buy including its ingredients, date of manufacture, price, quantity,
directions for use, etc. It is because of this reason that the legal framework in India requires
the manufactures to provide such information on the package and label of the product.

3. Right to Choose: The consumer has the freedom to choose from a variety of products at
competitive prices. This implies that the marketers should offer a wide variety of products in
terms of quality, brand, prices, size, etc. and allow the consumer to make a choice from
amongst these.

4. Right to be Heard: The consumer has a right to file a complaint and to be heard in case of
dissatisfaction with a good or a service. It is because of this reason that many enlightened
business firms have set up their own consumer service and grievance cells. Many consumer
organisations are also working towards this direction and helping consumers in redressal of
their grievances.

5. Right to seek Redressal: The consumer has a right to get relief in case the product or
service falls short of his expectations. The Consumer Protection Act provides a number of
reliefs to the consumers including replacement of the product, removal of defect in the
product, compensation paid for any loss or injury suffered by the consumer, etc.

6. Right to Consumer Education: The consumer has a right to acquire knowledge and to be
a well-informed consumer throughout life. He should be aware about his rights and the reliefs
available to him in case of a product or service falling short of his expectations. Many
consumer organisations and some enlightened businesses are taking an active part in educating
consumers in this respect.

The Consumer Protection Act by conferring these rights on the consumers empowers them to
fight against any unscrupulous, exploitative and unfair trade practices adopted by sellers.
Consumer rights, by themselves, cannot be effective in achieving the objective of consumer
protection. Consumer protection can, in effect, be achieved only when the consumers also
understand their responsibilities.
DUTIES/ RESPONSIBILITIES OF CONSUMERS

A consumer should keep in mind the following responsibilities while purchasing, using and
consuming goods and services—

1. Be aware about various goods and services available in the market so that an intelligent
and wise choice can be made.
2. Buy only standardised goods as they provide quality assurance. Thus, look for ISI mark on
electrical goods, FPO mark on food products, Hallmark on jewellery, etc.
3. Learn about the risks associated with products and services, follow manufacturer’s
instructions and use the products safely.
4. Read labels carefully so as to have information about prices, net weight, manufacturing
and expiry dates, etc.
5. Assert yourself to ensure that you get a fair deal.
6. Be honest in your dealings. Choose only from legal goods and services and discourage
unscrupulous practices like black-marketing, hoarding, etc.
7. Ask for a cash memo on purchase of goods or services. This would serve as a proof of the
purchase made.
8. File a complaint in an appropriate consumer forum in case of a shortcoming in the quality
of goods purchased or services availed. Do not fail to take an action even when the amount
involved is small.
9. Form consumer societies which would play an active part in educating consumers and
safeguarding their interests.
10. Respect the environment. Avoid waste, littering and contributing to pollution.

A consumers’ awareness about his rights and responsibilities is just one of the ways in which
the objective of consumer protection can be achieved.
DEFECT IN GOODS

A consumer can make complaint when he come across defective goods. Here it is required to
understand what are the items which can be considered as ‘goods’ and what constitutes
‘defect’ under the Act.

Meaning of Goods

 The Consumer Protection Act does not define the term ‘Goods’ It says that - “goods”
means goods as defined in the Sale of Goods Act, 1930.
 Section 2(7) of the Sale of Goods Act, 1930, defines ‘goods’ as - “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 definition reveals that—
o Goods must be movable;
o Things attached to or forming part of land which can be severed satisfy the
movability criteria;
o Actionable claim and Money have been specifically excluded from definition of
goods.

Meaning of Defect

Section 2(1)(f) of the Act provides that, “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 of the time being in force under any contract, express or
implied or as is claimed by the trader in any manner whatsoever in relation to any goods.

This is an exhaustive definition. It means that the Act recognizes only those defects which are
covered by the definition. Any type of defect not mentioned here will not be entertained by
Consumer Forums. Moreover, the defect has to be in relation to goods only, i.e., if an item
does not fall within the definition of ‘Goods’, no defect can be complained therein. However,
the coverage of this definition is very wide.
Examples of defects in goods:

 A Pressure Cooker burst and caused injury to the user. It was held to be a manufacturing
defect - T.T. (P.) Ltd. v. Akhil Bhartiya Grahak Panchayat II [1996] CPJ 239 NC.
 Failure to handover registration book along with jeep purchased by complainant is a
defect. [Ramesh Chandra v. Commercial Tax Officer [1993] 3 CPR 182 (Ori.).
 Where laboratory test report showed that soft drink was not fit for human consumption, it
was held defective - Narayanan Vyankatkrishnan Iyengar v. Shakti Foods [1994] 2 CPJ
652 (Mah.).
 Rape seed oil adulterated with toxic substances, which led to paralysis of limbs and other
disabilities, has been considered as defective - Barsad Ali v. MD West Bengal Essential
Commodities Supply Corporation Ltd. (1993) 1 CPR 217 WB.
 Electric household appliances which are not in accordance with the standards prescribed
by ISI, being unsafe are defective - Farooq Hazi Ismail Saya v. Gavabhai Bhesania (1991)
2 CPJ 452 (Guj.).
 Gas Cylinder with excessive gas is defective goods - Dayanand A Avasare v. Bharat
Petroleum Corporation Ltd. (1993) 1 CPR 278 (Mah.).
 Development of cracks of half inch to three and a half inch in walls and mosaic floor in a
flat after taking possession from a Housing Board - R. Shanmugasundaram v. Tamil Nadu
Housing Board (1998) 1 CPJ 96 NC.
DEFICIENCY IN SERVICE

When a service is found deficient by a consumer, he can make a complaint under the Act.
Thus, the prime requirement is that the matter must fall within the definition of service, and it
must entail a deficiency as per the norms given by the Act.

Meaning of service

The Act provides that “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, board or loading 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.

Meaning of Deficiency

Section 2(1)(g) of the Act provides that, “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.

The above definition is explained as below:

(a) “deficiency” means any fault, imperfection, shortcoming or inadequacy in the quality,

nature and manner of performance

Examples:

1. A boarded a train. The compartment in which he and his wife travelled was in a bad shape-
fans not working, shutters of windows were not working, rexin of the upper berth was
badly torn and there were rusty nails which caused some injuries to the wife of A. A made
a complaint against the railway department. It was held that the complaint constituted
 ‘deficiency in service’ and the compensation of Rs. 1500 was awarded to A - General
Manager, South Eastern Railway v. Anand Prasad Sinha
2. Dr. A treated P under Allopathic system, though he himself was a Homoeopathic
practitioner. Later on P allegated A for wrong treatment. The Commission held it as
deficiency in service - Poonam Verma v. Ashwin Patel
3. A booked a car for B and promised to deliver it within one month of booking. The car was
not delivered even after four months. Here A could be held liable for deficiency in service.

(b) One interesting aspect is that deficiency in service should occur during the happening of
performance. Thus, it is crucial to determine when the performance of a service commenced.

Example: A contracted with B to supply, erect and commission cold rolling mill. A supplied
the mill, but failed to erect and commission the mill. B filed a suit alleging deficiency of
service on A’s failure to elect and commission the mill. The National Commission observed
that the deficiency must pertain to performance of service. Since A never started erecting and
commissioning the mill, the question of performance did not arise. Thus the case is not that of
deficiency of service - Jaipur Metals & Electricals Ltd. v. Laxmi Industries.

(c)   Such quality and manner of performance of service should have been required to be
maintained by or under any law for the time being in force or undertaken to be performed by a
person in pursuance of a contract or otherwise.

Example: A, the builder, promised under written agreement to provide a flat to B.

Subsequently he expressed his inability to give possession of the flat and entered into a fresh
agreement to pay Rs. 9,51,000 to B in place of flat. A didn’t even pay this money. B sued A.
The Commission held that since A had not even paid the money as per subsequent contract,
the rights of earlier contract can be involved by B. And that there was a deficiency of service
on the part of builders - Lata Construction v. Dr. Rameshchandra Ramniklal Shah AIR 2000
SC 380 (384).

(d)   The deficiency must be in relation to a service - The words ‘in relation to any service’ in
the definition signifies that the deficiency is always in terms of service. Thus, if the grievance
pertains to a matter which does not fall in the definition of service, the concept of deficiency
would not apply.

Example: A deposited Rs. 100 with B as application fee and executed bond for the purpose of
drilling tubewell. B did not drill the tubewell because it was not feasible. A alleged deficiency
in service. It was held that depositing Rs. 100 as application fee and executing a bond does not
amount to hiring of services, thus the deficiency of service cannot be complained of in the
matter - Mangilal v. Chairman District Rural Development Agency [1991] 1 CPJ 474 (Raj.).

(e) Deficiency in service due to circumstances beyond control

In normal course, if the service is found deficient as per the above criteria, it is held deficient
and the compensation is awarded. However, there may be abnormal circumstances beyond the
control of the person performing service. If such circumstances prevent a person from
rendering service of the desired quality, nature and the manner, such person should not be
penalised for the same.

Example: A undertook to supply water to B for irrigation of crops. Due to power grid failure
of the State, A could not get sufficient power to perform the service. Here A cannot be held
liable for deficiency in service.

(f) Negligence on the part of performer may not be excused under the cover of circumstances
beyond control.

Example: A agreed to supply water to B for irrigation of crops. He failed to do so because of a

power breakdown due to burning of transformer. As a result, crops damaged. B sued A for
providing deficient service. The National Commission held that it was duty of A to get the
transformer repaired immediately. Since he was negligent in doing so, he is liable for the
deficiency in service - Orissa Lift Irrigation Corpn. Ltd. v. Birakishore Raut.
SPURIOUS GOODS AND SERVICES

Definition of spurious goods.

Spurious goods and services" mean such goods and services which are claimed to be genuine
but they are actually not so. These goods are outwardly similar or corresponding to something
without having its original qualities. Thus such goods are intended to deceive the customers.

As per The Consumer Protection Act, 1986 “spurious goods and services” mean such goods
and services which are claimed to be genuine but they are actually not so.

Introduction:
Spurious goods are copy of the original products having well-known trade marks, logos, along
with the external packaging and product arrangement, so that they look like they are authentic
when they, are in reality second-rate copies or imitations of the original product. These
spurious goods are available due to a lack of consumer awareness, weak enforcement of
existing laws and rapid innovations in technology so today no consumer can be sure of the
authenticity of the product he or she he has purchased. Today many consumers are duped into
believing that the products they are buying are genuine when in reality they are actually fake.

Types of Spurious Goods

1. Counterfeit products: These are fake products that bear identical name of product/
packaging/graphics/colour scheme and even same name and address as the genuine
manufacturer. Someone produces these to look exactly like real products other than the
legal owner of the real products, trademarks and product packaging.  Sometimes it is
becoming more and more difficult to tell which is the real  "Ponds" talcum powder and
"Clinic Plus" shampoo from the fake products.

2. Pass-off products: They use similar sounding or are similar in spelling (for example
"Luk" for "Lux", "510" for "501", "Saveena" for "Sabeena", "Sun Max" or "Super
Master" i.e. they spell alike and look alike. They use similar type of packaging or
 colour or designs.  They come out with the motive of misleading and cheating ordinary
consumers who are uneducated or in a hurry in purchasing products.

Problem of Counterfeit products

Counterfeit problems are very dangerous when they occurs in the case of medicine. Drugs
play a crucial role in saving lives, restoring health, preventing diseases and epidemics. When
drug itself is counterfeit, it poses addictive danger to the patient. Counterfeit medicines are
difficult to detect. Due to these reasons, counterfeiting has become a global problem which
now has attained due attention of people from medical profession.