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THE CONSUMER PROTECTION ACT, 1986

THE CONSUMER PROTECTION ACT, 1986

(68 OF 1986)

[24^th December, 1986)

An Act to provide for better protection of the interests of consumers and for that purpose to make provision for the establishment of consumer councils and other authorities for the settlement of consumers’ disputes and for matters connected therewith.

BE it enacted by Parliament in the Thirty-seventh Year of the Republic of India as follows:—

CHAPTER I

PRELIMINARY

Short title, extent, commencement and application

1. (1) This Act may be called the Consumer Protection Act, 1986.

(2) It extends to the whole of India except the State of Jammu and Kashmir.

(3) It shall come into force on such date (The provisions of Chapters I, II and IV of this act have come into force in the whole of India except the State of Jammu and Kashmir on 15-4-1987: vide Notification No.S.O.390(E), dated 15^th April, 1987, published in the Gazette of India, 1987. Extra, Pt.II, Sec.3(ii), The provisions of Chapter III of this Act have come into force in the whole of India except the State of Jammu and Kashmir on 1-7-1987: vide Notification No.S.O.568(E), dated 10^th June, 1987, published in the Gazette of India, 1987, Extra, Pt.II, Sec.3(ii)) as the Central Government may, by notification, appoint and different dates may be appointed for different States and for different provisions of this Act.

(4) Save as otherwise expressly provided by the Central Government by notification, this Act shall apply to all goods and services.

Definitions

2. (1) In this Act, unless the context otherwise requires,—

(Subs. by Act 50 of 1993, sec.2 (w.e.f. 18-6-1993)) (a) “appropriate laboratory” means a laboratory or organisation—

(i) recognised by the Central Government;

(ii) recognised by a State Government, subject to such guidelines as may be prescribed by the Central Government in this behalf; or

(iii) any such laboratory or organisation established by or under any law for the time being in force, which is maintained, financed or aided by the Central Government or a State Government for carrying out analysis or test of any goods with a view to determining whether such goods suffer from any defect;]

(Ins. by Act 50 of 1993, sec.2 (w.e.f. 18-6-1993)) (aa) “branch office” means—

(i) any establishment described as a branch by the opposite party; or

(ii) any establishment carrying on either the same or substantially the same activity as that carried on by the head office of the establishment;]

(b) “complainant” means—

(i) a consumer; or

(ii) any voluntary consumer association registered under the Companies Act, 1956 (1of 1956) or under any other law for the time being in force; or

(iii) the Central Government or any State Government,

(Ins. by Act 50 of 1993, sec.2 (w.e.f. 18-6-1993)) [(iv) one or more consumers, where there are numerous consumers having the same interest;]

(v) in case of death of a consumer, his legal heir or representative; who or which makes a complaint;

(Subs. by Act 50 of 1993, sec.2 (w.e.f. 18-6-1993)) (i) an unfair trade practice or a restrictive trade practice has been adopted by any trader or service provider;]

(ii) (Subs. by Act 50 of 1993, sec.2 (w.e.f. 18-6-1993)) [the goods bought by him] or agreed to be bought by him; suffer from one or more defects;

(iii) (Subs. by Act 50 of 1993, sec.2 (w.e.f. 18-6-1993)) [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 or service provider, as the case may be, has charged for the goods or for the services mentioned in the complaint a price in excess of the price –

(a) fixed by or under any law for the time being in force;

(b) displayed on the goods or any package containing such goods;

(d) agreed between the parties;

(Ins. by Act 50 of 1993, sec.2 (w.e.f. 18-6-1993) [(v) goods which will be hazardous to life and safety when used or being offered for sale to the public,-

(a) in contravention of any standards relating to safety of such goods as required to be complied with, by or under any law for the time being in force;

(b) if the trader could have known with due diligence that the goods so offered are unsafe to the public;

(vi) services which are hazardous or likely to be hazardous to life and safety of the public when used, are being offered by the service provider which such person could have known with due diligence to be injurious to life and safety;

with a view to obtaining any relief provided by or under this Act;

(d) “consumer” means any person who—

(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or

(ii) (Subs. by Act 50 of 1993, sec.2 (w.e.f. 18-6-1993)) [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 (Subs. by Act 50 of 1993, sec.2 (w.e.f. 18-6-1993)) [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 but does not include a person who avails of such services for any commercial purposes;)

(Ins. by Act 50 of 1993, sec.2 (w.e.f. 18-6-1993)) [Explanation.—For the purposes of sub-clause (i), “commercial purpose” does not include use by a person of goods bought and used by him exclusively for the purposes of earning his livelihood by means of self-employment;]

(e) “consumer dispute” means a dispute where the person against whom a complaint has been made, denies or disputes the allegations contained in the complaint.

(f) “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 (Ins. by Act 50 of 1993, sec.2 (w.e.f. 18-6-1993)) [under any contract, express or implied or] as is claimed by the trader in any manner whatsoever in relation to any goods;

(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;

(h) “District Forum” means a Consumer Disputes Redressal Forum established under clause (a) of section 9;

(i) “goods” means goods as defined in the Sale of Goods Act, 1930 (3 of 1930);

(j) “manufacturer” means a person who—

(i) makes or manufactures any goods or part thereof; or

(iii) does not make or manufacture any goods but assembles parts thereof made or manufactured by others; or

(iv) puts or causes to be put his own mark on any goods made or manufactured by any other manufacturer;)

(Ins. by Act 50 of 1993, sec.2 (w.e.f. 18-6-1993)) (jj) “member” includes the President and a member of the National Commission or a State Commission or a District Forum, as the case may be;]

(k) “National Commission” means the National Consumer Disputes Redressal Commission established under clause (c) of section 9;

(l) “notification” means a notification published in the Official Gazette;

(m) “person” includes,—

(i) a firm whether registered or not;

(ii) a Hindu undivided family;

(iii) a co-operative society;

(iv) every other association of persons whether registered under the Societies Registration Act, 1860 (21 of 1860) or not;

(n) “prescribed” means prescribed by rules made by the State Government, oras the case may be, by the Central Government under this Act;

(Ins. by Act 50 of 1993, sec.2 (w.e.f. 18-6-1993)) (nn)”regulation” means the regulations made by the National Commission under this Act;)

(nnn) “restrictive trade practice” means a trade practice which tends to bring about manipulation of price or its conditions of delivery or to affect flow of supplies in the market relating to goods or services in such a manner as to impose on the consumers unjustified costs or restrictions and shall include;

(a) delay beyond the period agreed to by a trader in supply of such goods or in providing the services which has led or is likely to lead to rise in the price;

(b) any trade practice which requires a consumer to buy, hire or avail of any goods or, as the case may be, services as condition precedent to buying, hiring or availing of other goods or services;)

(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, board or lodging or both, (Ins. by Act 50 of 1993, sec.2 (w.e.f.18-6-1993) [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;

(oo) “spurious goods & services” mean such goods and services which are claimed to be genuine but they are actually not so;

(p) “State Commission” means a Consumer Disputes Redressal Commission established in a State under clause (b) of section 9;

(q) “trader” in relation to any goods means a person who sells or distributes any goods for sale and includes the manufacturer thereof, and where such goods are sold or distributed in package form, includes the packer thereof;

(Subs. by Act 50 of 1993, sec.2 (w.e.f. 18-6-1993)) (r) “unfair trade practice” 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, namely;—

(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 re-built, second-hand, 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;

(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;

Provided that where a defence is raised to the effect that such warranty or guarantee is based on adequate or proper test, the burden of proof of such defence shall lie on the person raising such defence;

(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 product or like 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 or misleading facts disparaging the goods, services or trade of another person.

Explanation.-For the purposes of clause (1), 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 orotherwise, for the sale or supply at a bargain price, of goods or 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 the advertisement.

Explanation.—For the purpose of clause (2), “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 prices at which the product advertised or like products are ordinarily sold;

(3) permits—

(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;

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;

(3A) withholding from the participants of any scheme offering gifts, prizes or other items free of charge, on its closure the information about final results of the scheme.

Explanation: For the purposes of this sub-clause, the participants of a scheme shall be deemed to have been informed of the final results of the scheme where such results are within a reasonable time, published, prominently in the same newspapers in which the scheme was originally advertised;)

(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 is intended to raise, the cost of those or other similar goods or services.]

(6) Manufacture of spurious goods or offering such goods for sale or adopting deceptive practices in the provision of services;)

(2) Any reference in this Act to any other Act or provision thereof which is not in force in any area to which this Act applies shall be construed to have a reference to the corresponding Act or provision thereof in force in such area.

COMMENTS

(i) Person buying goods either for re-sale or for use in large scale profit making activity will not be ‘consumers’ entitled to protection under the Act; Raj Kumar v. S.C. Verma, 2001 (1) CPR 437.

(ii) The government servants and the staff of Account General Office of the Comptroller and Auditor General maintains the records of provident fund of government servants, issue slips of deposit of fund and on retirement final payments are made to the subscribers. The government servants and the staff of the Accountant General in discharging their duties does not render any service for consideration, nor hiring of any service is involved hence, maintenance of General Provident Fund Accounts does not fall within the meaning ‘service’; Hari Vallabh Vijay v. Administration Officer, 2001 (1) CPR 529.

(iii) When the National Commission as a matter of fact, recorded the findings as to the discharge of the liability of the carrier, the Supreme Court did not interfere on the issue; Saddler Shoes Pvt. Ltd. v. Air India, (2001) 8S SCC 390.

(iv) The insurance company is not a consumer. Hence the consumer compliant by insurance company is not maintainable Savani Road Lines v. Sundaram Textiles Ltd., AIR 2001 SC 2630.

(v) The repudiation of the claim by the Insurance Company on the ground that the driver not holding a valid driving license at the time of the accident could not be termed as deficiency in service or negligence on the part of the Insurance Company within the meaning of section 2 (g) of the Act; New India Assurance Co. Ltd., v. Smt. Pushpa Vashwant Gharge, 1996 NCJ 195.

(vi) Medical services are covered under the definition of “service”. Service includes rendering of consultation, diagnosis and treatment, both medical and surgical; Indian Medical Association v. VP. Shantha, 1995 SCALE 273.

(vii) “Contract of personal service” has to be distinguished from a “contract for personal service”. In the absence of relationship of master and servant between the patient and the medical practitioner the service rendered by a medical practitioner to the patient cannot be regarded as service rendered under a contract of personal service. It is “contract for personal services”. Wherever, there is relationship like that of master and servant it is a “contract of personal service” and is excluded from the purview of the Act; Indian Medical Association v. VP. Shantha, 1995 SCALE 273.

(viii) A licensee to run a phone is not a consumer; Technocombine Associates v. Union of India, 1 (1994) CPI 481 : 1994 (I) CPR 298.

(ix) A Lottery ticket holder is not “consumer” within the ambit of the definition of “consumer” under the Act; Jagadish Chand v. Director, Sikkim State Lottery, 1994 (I) CPR 213.

(x) Applicant who merely applies for allotment of shares is nut a consumer; HG Bhatia v. ABC Computers Pvt. Ltd., 1994 (I) CPR 316.

(xi) The beneficial consumer jurisdiction cannot be extended to lotteries and wagering transactions or consequential rights from void contracts; Jagadish Chand v. Direct, Sikkim Lotteries, 1994 (I) CPR 213.

(xii) If somebody does not perform his part of the contract, it amount to deficiency in services; Smt. Ramala Roy v. Rabindra Nath Sen, 1994 (I) CPR 66.

(xiii) The agreement for hypothecation does not create the ownership right, and as such no complaint can be maintained for deficiency in service; Jayantilal Keshavlal Chauhan v. the National Insurance Co. Ltd., 1994 (I) CPR 390.

(xiv) Undue delay in declaration of examination result is obviously deficiency in service; Secretary, Board of School Education, Haryana v. Mukesh Chand, 1994 (I) CPR 269.

(xv) The student is a consumer of service of education institute; Sushant Yuvaraj Rode v. Shri Ramdeobaba Engineering College, 1993 (III) CPR 624.

(xvi) A person who receives medical treatment in a Government hospital is not a consumer under the Act; Consumer Unity & Trust Society v. State of Rajasthan, (1991) I CPR 24!. However, the Stale Commission of Orissa held that a patient is a Consumer being the beneficiary of services in as much as the State Government is paying the consideration amount in the form of salary to the doctors and hospital staff; Smt. Sukand Behera v. Dr. Sashi Bhosan Rath, II (1993) CPJ 633.

Act not in derogation of any other law

3. 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;

COMMENTS

(i) 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 other existing laws; The Consumer & Citizens Forum v. Karnataka Power Corporation, 1994 (1) CPR 130 .

(ii) When a case is pending in a court in which full evidence is to be recorded the Forums constituted under the Consumer Protection Act, 1986 should not entertain the complaint with respect to the same cause of action; Hanuman Prasad v, The New India Assurance Co. Ltd., I (1994) CPJ I (NC).

(iii) 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; S.K. Lakhotia v. National Insurance Co. Ltd., 1994 (I) CPR 43.

(iv) It is authoritatively settled that the arbitration clause is 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 statue; Ram Nath v. Improvement Trust, Bathinda, 1994 (I) CPR 357.

CHAPTER II

CONSUMER PROTECTION COUNCILS

The Central Consumer Protection Council

4. (1) The Central Government shall, by notification, establish with effect from such date as it may specify in such notification, a Council to be known as the Central Consumer Protection Council (hereinafter referred to as the Central Council).

(2) The Central Council shall consist of the following members, namely:—

(a) the Minister in charge of the (Subs. by Act 50 of 1993, sec.3 (w.e.f. 18-6-1993)) [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.

Procedure for meetings of the Central Council

5. (1) The Central Council shall meet as and when necessary, but (Subs. by Act 50 of 1993, sec.4 (w.e.f. 18-6-1993)) [at least one meeting] of the Council shall be held every year.

(2) The Central Council shall meet at such time and place as the Chairman may think fit and shall observe such procedure in regard to the transaction of its business as may be prescribed.

Objects of the Central Council

6. 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 (Ins. by Act 50 of 1993, sec.5 (w.e.f. 18-6-1993)) [and services] which are hazardous to life and property;

(b) the right to be informed about the quality, quantity, potency, purity, standard and price of goods (Ins. by Act 50 of 1993, sec.5 (w.e.f. 18-6-1993)) [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 (Ins. by Act 50 of 1993, sec.5 (w.e.f. 18-6-1993)) [and services] at competitive prices;

(d) the right to be heard and to be assured that consumer’s interests will receive due consideration at appropriate Fora’

(e) the right to seek redressal against unfair trade practices (Ins. by Act 50 of 1993, sec.5 (w.e.f. 18-6-1993)) [or restrictive trade practices] or unscrupulous exploitation of consumers; and

(f) the right to consumer education.

The State Consumer Protection Councils

7. (1) The State Government shall, by notification, establish with effect from such date as it may specify in such notification, a Council to be known as the Consumer Protection Council for ………… (hereinafter referred to as the State Council).

(Subs. by Act 50 of 1993, sec.6 (w.e.f. 18-6-1993)) [(2) The State Council shall consist of the following members, namely:

(a) the Minister incharge of consumer affairs in the State Government who shall be its Chairman;

(b) such number of other official or non-official members representing such interests as may be prescribed by the State Government.

(c) such number of other official or non-official members, not exceeding ten, as may be nominated by the Central Government.

(3) The State Council shall meet as and when necessary but not less than two meetings shall be held every year.

(4) The State Council shall meet at such time and place as the Chairman may think fit and shall observe such procedure in regard to the transaction of its business as may be prescribed by the State Government.]

Objects of the State Council

8. The objects of every State Council shall be to promote and protect within the State the rights of the consumers laid down in clauses (a) to (f) of section 6.

8A. (1) The State Government shall establish for every district, by notification, a council to be known as the District Consumer Protection Council with effect from such date as it may specify in such notification.

(2) The District Consumer Protection Council (hereinafter referred to as the District Council) shall consist of the following members, namely:—

(a) the Collector of the district (by whatever name called), who shall be its Chairman; and

(b) such number of other official and non-official members representing such interests as may be prescribed by the State Government.

(3) The District Council shall meet as and when necessary but not less than two meetings shall be held every year.

(4) The District Council shall meet at such time and place within the district as the Chairman may think fit and shall observe such procedure in regard to the transaction of its business as may be prescribed by the State Government)

8B. Objects of the District Council - The objects of every District Council shall be to promote and protect within the district the rights of the consumers laid down in clauses (a) to (f) of section 6.

CHAPTER III

CONSUMER DISPUTES REDRESSAL AGENCIES

Establishment of Consumer Disputes Redressal Agencies

9. There shall be established for the purposes of this Act, the following agencies, namely:—

(a) a Consumer Disputes Redressal Forum to be known as the “District Forum” established by the State Government (Omitted by Act 50 of 1993, sec.7 (w.e.f. 18-6-1993)) [* * *] in each district of the State by notification:

(Ins. by Act 50 of 1993, sc.7 (w.e.f. 18-6-1993)) [Provided that the State Government may, if it deems fit, establish more than one District Forum in a district;]

(b) a Consumer Disputes Redressal Commission to be known as the “State Commission” established by the State Government (Omitted by Act 50 of 1993, sec.7 (w.e.f. 18-6-1993)) [* * *] in the State by notification; and

COMMENTS

(i) One or more consumers can file complaint; Chief General Manager, Calcutta Telephones v. International Packers & Movers, I (1994) CPJ 132 : 1994 (I) CPR 252.

(ii) When an objection was taken to the territorial jurisdiction of District Forum by filling written version, the objection cannot be entertained in appeal raised orally; Essen Computers Ltd. v. Tagore Gracias, 1992 (II) CPR 556.

(iii) If a redressal forum has no jurisdiction, it cannot entertain the complaint on merits; Solvochen intermediates Pvt. Ltd. v. Boilertech Engineers Pvt. Ltd., 1992 (II) CPR 322.

Composition of the District Forum

10. (Subs. by Act 50 of 1993, se.8 (w.e.f. 18-6-1993)) (1) Each District Forum shall consist of,-

(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 recognised university,

(iii) be persons of ability, integrity and standing, and have adequate problems relating to economics, law, commerce, accountancy, industry, public affairs or administration:

Provided that a person 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

(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;

(Subs. by Act 50 of 1993, sec.8 (w.e.f. 18-6-1993)) [(1A) Every appointment under sub-section (I) shall be made by the State Government on the recommendation of a selection committee consisting of the following, namely:—

(i) the President of the State Commission — Chairman.

(ii) Secretary, Law Department of the State — Member.

(iii) Secretary incharge of the Department dealing with consumer affairs in the State — Member.]

Provided that where the President of the State Commission is, by reason of absence or otherwise, unable to act as Chairman of the Selection Committee, the State Government may refer the matter to the Chief Justice of the High Court for nominating a sitting Judge of that High Court to act as Chairman)

(2) Every member of the District Forum shall hold office for a term of five years or up to the age of 65 years, whichever is earlier:

Provided that a member shall be eligible for re-appointment for another term of five years or up to the age of sixty-five years, whichever is earlier, subject to the condition that he fulfills the qualifications and other conditions for appointment mentioned in clause (b) of sub-section (1) and such re-appointment is also made on the basis of the recommendation of the Selection Committee:

Provided further that a member may resign his office in writing under his hand addressed to the State Government and on such resignation being accepted, his office shall become vacant and may be 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:

Provided also that a person appointed as the President or as a member, before the commencement of the Consumer Protection (Amendment) Act, 2002, shall continue to hold such office as President or member, as the case may be, till the completion of his term.

(3) 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.

(Provided that the appointment of a member on whole-time basis shall be made by the State Government on the recommendation of the President of the State Commission taking into consideration such factors as may be prescribed including the work load of the District Forum)

COMMENTS

The person received by the presidents of the District Consumer Form in respect of their previous services as District Judges is subject to deduction from their salary as president of the forum fixed under provisions of the Act; M.S. Chawla v. State of Punjab, AIR 2001 SC 1706.

Jurisdiction of the District Forum

11. (1) Subject to the other provisions of this Act, the District Forum shall have jurisdiction to entertain complaints where the value of the goods or services and the compensation, if any, claimed (Subs. by Act 50 of 1993, sec.9 (w.e.f. 18-6-1993)) [does not exceed rupees twenty lakhs].

(2) A complaint shall be instituted in a District Forum within the local limits of whose jurisdiction,—

(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 (Subs. by Act 50 of 1993, sec.9 (w.e.f. 18-6-1993)) [carries on business or has a branch office or] personally works for gain, 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 (Subs. by Act 50 of 1993, sec.9 (w.e.f. 18-6-1993)) [carries on business or has a 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

COMMENTS

(i) Objection & regarding territorial jurisdiction should be taken at the earliest opportunity or the same deemed to have been waived; Kurukshetra University v. Vinay Prakash Verma, II (1993) CPJ 647.

(ii) A petition of complaint can be filed against corporation carrying on business within the territory of District Forum or Commission even though its sole or principal office is situated outside state limits; Consumer Education and Research Society v. Canara Bank, 1991 I CPR 405.

(Subs. by Act 50 of 1993, sec. 10 (w.e.f. 18-6-1993) Manner in which complaint shall be made

12. (1) A complaint 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 a District Forum by–

(a) the consumer 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 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 Government or the State Government, as the case may be, either in its individual capacity or as a representative of interests of the consumers in general.

(2) Every complaint filed under sub-section (1) shall be accompanied with such amount of fee and payable in such manner as may be prescribed.

(3) On receipt of a complaint made under sub-section (1), the District Forum may, by order, allow the complaint to be proceeded with or rejected:

Provided that a complaint shall not be rejected under this section unless an opportunity of being heard has been given to the complainant:

Provided further that the admissibility of the complaint shall ordinarily be decided within twenty-one days from the date on which the complaint was received.

(4) Where a complaint is allowed to be proceeded with under sub-section (3), the District Forum may proceed with the complaint in the manner provided under this Act:

Provided that where a complaint has been admitted by the District Forum, it shall not be transferred to any other court or tribunal or any authority set up by or under any other law for the time being in force.

Explanation.-For the purpose of this section “recognised consumer association” means any voluntary consumer association registered under the Companies Act, 1956 (1 of 1956) or any other law for the time being in force.]

Procedure on receipt of complaint

13. (1) The District Forum shall, on admission of a complaint, if it relates to any goods,—

(a) refer a copy of the complaint 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 under clause (a) 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 manner specified in clauses (c) to (g);

(c) 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 findings 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;

(d) before any sample of the goods is referred to any appropriate laboratory under clause (c), 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;

(e) the District Forum shall remit the amount deposited to its credit under clause (d) to the appropriate laboratory to enable it to carry out the analysis or test mentioned in clause (c) 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;

(f) 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;

(g) 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 under clause (f) and issue an appropriate order under section 14.

(2) the District Forum shall, if the complaint received by it 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 under clause (a) 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 decide it on merits)

(3) No proceedings complying with the procedure laid down in sub-sections (1) and (2) shall be called in question in any court on the ground that the principles of natural justice have not been complied with.

(3A) 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 commodities:

Provided that 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:

Provided further that 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.

Provided also that 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.

(3B) Where during the pendency of any proceeding before the District Forum, it appears to it necessary, it may pass such interim order as is just and proper in the facts and circumstances of the case.

(4) For the purposes of this section, the District Forum shall have the same powers as are vested in a civil court under Code of Civil Procedure, 1908 while trying a suit in respect of the following matters, namely:—

(i) the summoning and enforcing the attendance of any defendant or witness and examining the witness on oath;

(ii) the discovery and production of any document or other material object producible as evidence;

(iii) the reception of evidence on affidavits;

(iv) the requisitioning of the report of the concerned analysis or test from the appropriate laboratory or from any other relevant source;

(v) issuing of any commission for the examination of any witness, and

(vi) any other matter which may be prescribed.

(5) Every proceeding before the District Forum shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 of the Indian Penal Code (45 of 1860), and the District Forum shall be deemed to be a civil court for the purposes of section 195, and Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974).

(Ins. by Act 50 of 1993, sec.11 (w.e.f. 18-6-1993)) [(6) Where the complainant is a consumer referred to in sub-clause (iv) of clause (b) of sub-section (1) of section 2, the provisions of rule 8 of Order I of the First Schedule to the Code of Civil Procedure, 1908 (5 of 1908) shall apply subject to the modification that every reference therein to a suit or decree shall be construed as a reference to a complaint or the order of the District Forum thereon.]

(7) In the event of death of a complainant who is a consumer or of the opposite party against whom the complaint has been filed, the provisions of Order XXII of the First Schedule to the Code of Civil Procedure, 1908 (5 of 1908) shall apply subject to the modification that every reference therein to the plaintiff and the defendant shall be construed as reference to a complainant or the opposite party, as the case may be)

COMMENTS

(i) When the case is not a simple case of deficiency in service and involves determination of complex questions of facts and law, which cannot be satisfactorily determined by the redressal agency in the time frame provided under the Rules, it would be better for the complainant to seek redressal of his grievances in a Civil Court, if so advised; Harbans & Co. v. State Bank of India; II (1994) CPJ 476 : 1994 (I) CPR 381.

(ii) If “fraud” is alleged, it is desirable that the complainant should be directed to Civil Court as investigation about such fraud is required to be done; Jayantilal Keshavlal Chauhan v. The National Insurance Co. Ltd., 1994 (I) CPR 396.

(iii) A consumer knocking at the door of the redressal agencies under the Act for relief in a consumer dispute must do so with clean hands; Sagli Ram v. General Manager, United India Insurance Co. Ltd., II (1994) CPJ 444 : 1994 (I) CPR 434.

Finding of the District Forum

14. (1) If, after the proceeding conducted under section 13, the District Forum is satisfied that the goods complained against suffer from any of the defects specified in the complaint or that any of the allegations contained in the complaint about the services are proved, it shall issue an order to the opposite party directing him to (Subs. by Act 50 of 1993, sec. 12 (w.e.f. 18.6.1993)) [do] one or more of the following things, namely:—

(a) to remove the defect pointed out by the appropriate laboratory from the goods in question;

(b) to replace the goods with new goods of similar description which shall be free from any defect;

(d) to pay such amount as may be awarded by it as compensation to the consumer for any loss or injury suffered by the consumer due to the negligence of the opposite party.

(Provided that the District Forum shall have the power to grant punitive damages in such circumstances as it deems fit;)

(Ins. by Act 50 of 1993, sec.12 (w.e.f. 18-6-1993)) (e) to remove the defects in goods or deficiencies in the services in question;

(f) to discontinue the unfair trade practice or the restrictive trade practice or not to repeat it;

(g) not to offer the hazardous goods for sale;

(h) to withdraw the hazardous goods from being offered for sale;

(ha)to cease manufacture of hazardous goods and to desist from offering services which are hazardous in nature;

(hb)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:

Provided that the minimum amount of sum so payable shall not be less than five per cent. of the value of such defective goods sold or service provided, as the case may be, to such consumers:

Provided further that the amount so obtained shall be credited in favour of such person and utilized in such manner as may be prescribed;

(hc)to issue corrective advertisement to neutralize the effect of misleading advertisement at the cost of the opposite party responsible for issuing such misleading advertisement;

(i) to provide for adequate costs to parties.

(Subs. by Act 34 of 1991, sec.2 (w.e.f. 15-6-1991)) [(2) Every proceeding referred to in sub-section (1) shall be conducted by the President of the District Forum and at least one member thereof sitting together:

Provided that where a member, for any reason, is unable to conduct a proceeding till it is completed, the President and the other member shall continue the proceeding from the stage at which it was last heard by the previous member)

(2A) Every order made by the District Forum under sub-section (1) shall be signed by its President and the member or members who conducted the proceeding:

Provided that 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.]

(3) Subject to the foregoing provisions, 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.

COMMENTS

(i) Compensation is to be given for loss or injury suffered by a consumer, due to negligence of the opposite party; S.K. Lakhotia v. National Insurance Co. Ltd., 1994 (I) CPR 43.

(ii) The party to be awarded compensation has not only to show deficiency in service but also the negligence of the other party and without the finding of negligence there cannot be any award; Director, Himachal Institute of Engineering & Technology v. Anil Kumar Gupta, 1994 (I) CPR 182.

(iii) If a consumer sustained any loss or damage actually, he is entitled to compensation; Padmana Dash v. Divisional Rly. Manager, S.E. Rly., 1994 (I) CPR 77.

(iv) The Fora have no jurisdiction to pass interim order. The complaint was filed to restrain a public issue. It was also held that unsuccessful applicants, who have not been allotted any shares can not prefer a complaint under the Act; Morgan Stanley v. Kartik Das, II (1994) CPJ 7 (SC).

(v) Delay in delivery after booking of a car is no deficiency; M/s. Maruti Udyog Ltd. v. Mrs. Bhuvana Viswanathan, II (1993) CPJ 172 (NC).

(vi) Redressal forums have no jurisdiction in matters involving outright sale of immovable property at an auction; Allied (Garments) Exports Industries Pvt Ltd. v. D.D.A. II (1992) CPJ 505 (NC).

(vii) Consumer Forums have no jurisdiction to pass interim orders; District Manager, Telephones v. Mrs. Munilal Erij Mohan, I (1993) CPJ 41 (NC).

Appeal

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:

Provided that the State Commission may entertain an appeal after the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not finding it within that period.

(Provided further that no appeal by a person, who is required to pay any amount in terms of an order of the District Forum, shall be entertained by the State Commission unless the appellant has deposited in the prescribed manner fifty per cent. of that amount or twenty-five thousand rupees, whichever is less)

COMMENTS

(i) Providing cross objections all appellate stage cannot be made applicable to the proceedings under the Act, hence cross objections are not maintainable as these were not filed before the District Forum; Arvinder Singh Chawla v. Kullbhushan, 2001 (I) CPR 387.

(ii) the words “sufficient cause”, though deserves to receive a liberal interpretation, yet, a just and equitable balance has to be maintained between the right secured by the respondent as a result of expiry of the prescribed period of limitation and the injustice of depriving the appellant of a adjudication of his grievances on the merit of his appeal for causes beyond his reasonable control, which means the cause in bona fide and beyond the control of the appellant. Though, no hard and fast line can be drawn as to what affords ‘sufficient causes’ in a given case, yet, again as per settled law, any cause which prevents a person from approaching the court within the time is ‘sufficient cause’. In doing so, it is the test of a reasonable man in normal circumstances which has to be applied; Pradeep Kumar v. Assistant Finance Officer, Delhi Vidhut Board, 2001 (1) CPR 9.

(iii) The appellate fora constituted under the Act should not dismiss the appeal merely on the ground of appearance of the appellant but themerits of the case should be considered on the basis of the material available before them and thereafter pass appropriate order in the appeal; General Manager, Telecom v. Jyantilal hemchand Gandhi, 1993 (III) CPR 155.

(iv) Ordinarily, the appellate Court does not interfere with the compensation awarded unless it is too inadequate or too excessive; Namlada v. Suresh Chandra Mittal, 1993 (I) AIR 631.

Composition of the State Commission

16. (1) Each State Commission shall consist of—

(a) a person who is or has been a Judge of a High Court, appointed by the State Government, who shall be its President:

(Ins. by Act 50 of 1993, sec.13 (w.e.f. 18-6-1993)) [Provided that no appointment under this clause shall be made except after consultation with the Chief Justice of the High Court;]

(b) not less than two, 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 recognised university; and

(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:

Provided that not more than fifty per cent. of the members shall be from amongst 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 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

(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.

(1A) Every appointment under Sub-section (1) shall be made by the State Government on the recommendation of a Selection Committee consisting of the following members, namely:—

(i) President of the State Commission - Chairman;

(ii) Secretary of the Law Department of the State - Member;

(iii) Secretary incharge of the Department dealing with Consumer Affairs in the State - Member:

(1B) (i) The jurisdiction, powers and authority of the State Commission may be exercised by Benches thereof.

(ii) A Bench may be constituted by the President with one or more members as the President may deem fit.

(iii) If the members of a Bench differ in opinion on any point, the points shall be decided according to the opinion of the majority, if there is a majority, but if the Members are equally divided, they shall state the point or points on which they differ, and make a reference to the President who shall either hear the point or points himself or refer the case for hearing on such point or points by one or more or the other members and such point or points shall be decided according to the opinion of the majority of the members who have heard the case, including those who first heard it)

(2) The salary or honorarium and other allowances payable to, and the other terms and conditions of service (Omitted by Act 50 of 1993, sec.13 (w.e.f. 18-6-1993)) [* * *] of, the members of the State Commission shall be such as may be prescribed by the State Government.

(Ins. by Act 50 of 1993, sec. 13 (w.e.f. 18-6-1993)) (3) 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:

Provided that a member shall be eligible for re-appointment for another term of five years or up to the age of sixty-seven years, whichever is earlier, subject to the condition that he fulfills the qualifications and other conditions for appointment mentioned in clause (b) of sub-section (1) and such re-appointment is made on the basis of the recommendation of the Selection Committee:

Provided further that a person appointed as a President of the State Commission shall also be eligible for re-appointment in the manner provided in clause (a) of sub-section (1) of this section:

Provided also that a member may resign his office in writing under his hand addressed to the State Government and on such resignation being accepted, his office shall become vacant and may be 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.

(4) Notwithstanding anything contained in sub-section (3), a person appointed as the President or as a member, before the commencement of the Consumer Protection (Amendment) Act, 1993, shall continue to hold such office as President or member, as the case may be, till the completion of his term.]

Jurisdiction of the State Commission

17. Subject to the other provisions of this Act, the State Commission shall have jurisdiction—

(a) to entertain—

(i) complaints where the value of the goods or services and compensation, if any, claimed exceed rupees (subs. by Act 50 of 1993, sec.14 (w.e.f.18-6-1993)) [exceeds rupees twenty lakhs but does not exceed rupees one crore;) and

(ii) appeals against the orders of any District Forum within the State; and

(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, where it appears to the State Commission that such District Forum has exercised a jurisdiction 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.

(2) A complaint shall be instituted in a State Commission within the limits of whose jurisdiction,—

(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; 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 a branch office or personally works for gain, provided that in such case either the permission of the State Commission 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

COMMENTS

(i) If, in respect of the same subject matter, proceedings before the Civil Forum had been instituted prior to the institution of the proceedings before the fora constituted under the Act definitely gets ousted of jurisdiction; M/s. Sh. Jagannanth Constructions Ltd. v. M/s. Kotak Mahindra Pvt. Ltd., 2001 (I) CRP 1.

(ii) The State Consumer Disputes Redressal Commission has no jurisdiction to entertain complaints regarding the transactions of shops/kiosks having been purchased in auction from the Delhi Development Authority; Kashyap Constructions (Pvt) Ltd. v. Delhi Development Authority, 2001 (1) CPR 128.

(iii) Even if 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; C.R. Kataria, Telecom District Manager v. The Consumer Disputes Redressal District forum, 1991 (II) CPJ 682.

(17A. Transfer of cases. - On the application of the complainant or of its own motion, the State Commission may, at any stage of the proceeding, transfer any complaint pending before the District Forum to another District Forum within the State if the interest of justice so requires)

(17B. Circuit Benches.-The State Commission shall ordinarily function in the State Capital but may perform its functions at such other place as the State Government may, in consultation with the State Commission, notify in the Official Gazette, from time to time)

Procedure applicable to State Commissions

18. (Subs. by Act 50 of 1993, sec.15 (w.e.f. 18-6-1993)) [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.

COMMENTS

Section 11(2)(c) is not made applicable under section 18 of the Act. However, principle in respect of territorial jurisdiction of a State Commission would be governed under the Code of Civil Procedure; Ariestry Sanyasi Raju v. Hindustan Motors Ltd., 1992 (I) CPR 689.

Appeals

19. Any person aggrieved by an order made by the State Commission in exercise of its powers conferred by sub-clause (i) of clause (a) of section 17 may prefer an appeal against such order to the National Commission within a period of thirty days from the date of the order in such form and manner as may be prescribed:

Provided that the National Commission may 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.

(Provided further that no appeal by a person, who is required to pay any amount in terms of an order of the State Commission, shall be entertained by the National Commission unless the appellant has deposited in the prescribed manner fifty per cent. of the amount or rupees thirty-five thousand, whichever is less)

(19A. Hearing of Appeal - 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 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 the National Commission

20. (1) The National Commission shall consist of—

(a) a person who is or has been a Judge of the Supreme Court, to be appointed by the Central Government, who shall be its President:-

(Ins. by Act 50 of 1993, sec.16 (w.e.f.18-6-1993)) [Provided that no appointment under this clause shall be made except after consultation with the Chief Justice of India;]

(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 recognised university; and

(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:

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

(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 Central 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 Central Government :

(Ins. by Act 50 of 1993, sec.16 (w.e.f.18-6-1993)) [Provided that every appointment under this clause shall be made by the Central Government on the recommendation of a selection committee consisting of the following, namely:—

(a) a person who is a Judge of the Supreme Court, to be nominated by the Chief Justice of India - Chairman;

(b) the Secretary in the Department of Legal Affairs in the Government of India - Member

(1A)(i) The jurisdiction, powers and authority of the National Commission may be exercised by Benches thereof.

(ii) A Bench may be constituted by the President with one or more members as the President may deem fit.

(iii) if the Members of a Bench differ in opinion on any point, the points shall be decided according to the opinion of the majority, if there is a majority, but if the members are equally divided, they shall state the point or points on which they differ, and make a reference to the President who shall either hear the point or points himself or refer the case for hearing on such point or points by one or more or the other Members and such point or points shall be decided according to the opinion of the majority of the Members who have heard the case, including those who first heard it)

(2) The salary or honorarium and other allowances payable to and the other terms and conditions of service (Omitted by Act 50 of 1993, sec.16 (w.e.f. 18-6-1993)) [* * *] of the members of the National Commission shall be such as may be prescribed by the Central Government.

(Ins. by Act 50 of 1993, sec.16 (w.e.f. 18-6-1993)) [(3) Every member of the National Commission shall hold office for a term of five years or up to the age of seventy years, whichever is earlier and shall not be eligible for re-appointment.

Provided that a member shall be eligible for re-appointment for another term of five years or up to the age of seventy years, whichever is earlier, subject to the condition that he fulfills the qualifications and other conditions for appointment mentioned in clause (b) of sub-section (1) and such re-appointment is made on the basis of the recommendation of the Selection Committee:

Provided further that a person appointed as a President of the National Commission shall also be eligible for re-appointment in the manner provided in clause (a) of sub-section (1):

Provided also that a member may resign his office in writing under his hand addressed to the Central Government and on such resignation being accepted, his office shall become vacant and may be 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.

(4) Notwithstanding anything contained in sub-section (3), a person appointed as a President or as a member before the commencement of the Consumer Protection (Amendment) Act, 1993 shall continue to hold such office as President or member, as the case may be, till the completion of his term.

Jurisdiction of the National Commission

21. Subject to the other provisions of this Act, the National Commission shall have jurisdiction—

(a) to entertain—

(i) complaints where the value of the goods or services and compensation, if any, claimed exceeds rupees (Subs. by Act 50 of 1993, sec.17 (w.e.f.18-6-1993)) [twenty lakhs]; and

(ii) appeals against the orders of any State Commission; and

(b) 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 such State Commission has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity.

COMMENTS

The powers of National Commission are very limited; Kangara Ananth Ram v. Telecom Distt. Engineer, (1991) I CPR 391.

(Subs. by Act 50 of 1993, sec.18 (w.e.f.18-6-1993)) Power of and procedure applicable to the National Commission.

22. (1) 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 considered necessary by the Commission, be applicable to the disposal of disputes by the National Commission.

(2) Without prejudice to the provisions contained in sub-section (1), the National Commission shall have the power to review any order made by it, when there is an error apparent on the face of record)

(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.

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 among such members, shall preside over the National Commission in the absence of President of that Commission.

Appeal

23. Any person, aggrieved by an order made by the National Commission in exercise of its powers conferred by sub-clause (i) of clause (a) of section 21, may prefer an appeal against such order of the Supreme Court within a period of thirty days from the date of the order:

Provided that the Supreme Court may 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.

(Provided further that no appeal by a person who is required to pay any amount in terms of an order of the National Commission shall be entertained by the Supreme Court unless that person has deposited in the prescribed manner fifty per cent. of that amount or rupees fifty thousand, whichever is less)

Finality of orders

24. Every order of a District Forum, the State Commission or the National Commission shall, if no appeal has been preferred against such order under the provisions of this Act, be final.

(Ins. by Act 50 of 1993, sec.19 (w.e.f.18-6-1993)) [24A. Limitation period. (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) Notwithstanding anything contained in sub-section (1), a complaint may be entertained after the period specified in sub-section (1), if the complainant satisfies the District Forum, the State Commission or the National Commission, as the case may be, that he had sufficient cause for not filing the complaint within such period:

Provided that no such complaint shall be entertained unless the National Commission, the State Commission or the District Forum, as the case may be, records its reasons for condoning such delay.

24B. Administrative Control.—(1) The National Commission shall have administrative control over all the State Commissions in the following matters, namely:—

(i) calling for periodical return regarding the institution, disposal pendency of cases;

(iii) issuance of instructions regarding adoption of uniform procedure in the hearing of matters, prior service of copies of documents produced by one party to the opposite parties, furnishing of English translation of judgments written in any language, speedy grant of copies of documents;

(iv) generally overseeing the functioning of the State Commissions or the District Fora to ensure that the objects and purposes of the Act are best served without in any way interfering with their quasi-judicial freedom.

(2) The State Commission shall have administrative control over all the District Fora within its jurisdiction in all matters referred to in sub-section (1).

Enforcement of orders of the District Forum, the State Commission or the National Commission

24. (1) Where an interim order made under this Act, is not complied with the District Forum or the State Commission or the National Commission, as the case may be, may order the property of the person, not complying with such order to be attached.

(2) No attachment made under sub-section (1) 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 thereof, the District Forum or the State Commission or the National Commission may award such damages as it thinks fit to the complainant and shall pay the balance, if any, to the party entitled thereto.

(3) Where any amount is due from any person under an order made by a District Forum, State Commission or the National Commission, as the case may be, the person entitled to the amount may make an application to the District Forum, the State Commission or the National Commission, as the case may be, and such District Forum or the State Commission and the National Commission may issue a certificate for the said amount to the Collector of the district (by whatever name called) and the Collector shall proceed to recover the amount in the same manner as arrears of land revenue)

(Subs. by Act 50 of 1993, sec.20 (w.e.f.18-6-1993)) [Dismissal of frivolous or vexatious complaints

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 or vexatious, it shall, for reasons to be recorded in writing, 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.]

COMMENTS

(i) Where the complaint is mala fide, vexatious and frivolous and the opposite party has to incur expenses for contesting the complaint, the Redressal Fora should saddle the complainant with costs; K. Jayaraman v. The Poona Hospital & Research Centre, 1994 (I) CPR 23.

(ii) Merely because no court fee is payable for lodging a complaint before the consumer forums, parties have a tendency to misuse the provisions of the Consumer Protection Act in respect of matters not falling within its purview. This tendency must be discouraged; Orissa Vegetable Oil Complex Ltd. v. State of Orissa, 1991 (I) CPR 32. (i) Where the issue involved is a legal issue, the complaint cannot said to be frivolous; Rasiklal Mohanjpl v. Apollo Typres Ltd., 1992 (II) CPR 327.

(iii) Cost can be saddled with only in case of fraudulent or vexatious complaints; Viohol Jaswant Singh Shivaji v. The Asstt. Branch Manager, New India Assurance Co. Ltd., 1994 (I) CPR 417.

(iv) Where the issue involved is a legal issue, the complaint cannot said to be frivolous; Rasiklal Mahonlal v. Apollo Types Ltd., 1992 (II) CPR 327.

Penalties

27. (1) Where a trader or a person against whom a complaint is made (Ins. by Act 50 of 1993, sec.21 (w.e.f.18-6-1993)) [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 with imprisonment for a term which shall not be less than one month but which may extend to three years, or with fine which shall not be less than two thousands rupees but which may extend to ten thousand rupees, or with both:

(2) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, (2 of 1974), the District Forum or the State Commission or the National Commission, as the case may be, shall have the power of a Judicial Magistrate of the first class for the trial of offences under this Act, and on such conferment of powers, the District Forum or the State Commission or the National Commission, as the case may be, on whom the powers are so conferred, shall be deemed to be a Judicial Magistrate of the first class for the purpose of the Code of Criminal Procedure, 1973 (2 of 1974).

(3) All offences under this Act may be tried summarily by the District Forum or the State Commission or the National Commission, as the case may be)

27A. Appeal against order passed under section 27 - (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), an appeal under section 27, both on facts and on law, shall lie from -

(a) the order made by the District Forum to the State Commission ;

(b) the order made by the State Commission to the National Commission; and

(2) Except as aforesaid, no appeal shall lie to any court from any order of a District Forum or a State Commission or the National Commission.

(3) Every appeal under this section shall be preferred within a period of thirty days from the date of an order of a District Forum or a State Commission or, as the case may be, the National Commission :

Provided that the State Commission or the National Commission or the Supreme Court, as the case may be, may entertain an appeal after the expiry of the said period of thirty days, if, it is satisfied that the appellant had sufficient cause for not preferring the appeal within the period of thirty days.

CHAPTER IV

MISCELLANEOUS

Protection of action taken in good faith

28. No suit, prosecution or other legal proceedings shall lie against the members of the District Forum, the State Commission or the National Commission or any officer or person acting under the direction of the District Forum, the State Commission or the National Commission for executing any order made by it or in respect of anything which is in good faith done or intended to be done by such member, officer or person under this Act or under any rule or order made thereunder.

28A. Service of notice, etc. - (1) All notices required by this Act to be served shall be served in the manner hereinafter mentioned in sub-section (2).

(2) The service of notices may be made by delivering or transmitting a copy thereof by registered post acknowledgment due addressed to opposite party against whom complaint is made or to the complainant by speed post or by such courier service as are approved by the District Forum, the State Commission or the National Commission, as the case may be, or by any other means of transmission of documents (including FAX message).

(3) When an acknowledgment or any other receipt purporting to be signed

by the opposite party or his agent or by the complainant is received by the District Forum, the State Commission or the National Commission, as the case may be, or postal article containing the notice is received back by such District Forum, State Commission or the National Commission, with an endorsement purporting to have been made by a postal employee or by any person authorized by the courier service to the effect that the opposite party or his agent or complainant had refused to take delivery of the postal article containing the notice or had refused to accept the notice by any other means specified in sub-section (2) when tendered or transmitted to him, the District Forum or the State Commission or the National Commission, as the case may be, shall declare that the notice had been duly served on the opposite party or to the complainant:

Provided that where the notice was properly addressed, pre-paid and duly sent by registered post acknowledgment due, a declaration referred to in this sub-section shall be made notwithstanding the fact that the acknowledgment has been lost or mislaid, or for any other reason, has not been received by the District Forum, the State Commission or the National Commission, as the case may be, within thirty days from the date of issue of notice.

(4) All notices required to be served on an opposite party or to complainant shall be deemed to be sufficiently served, if addressed in the case of the opposite party to the place where business or profession is carried and in case of complainant, the place where such person actually and voluntarily resides.

Power to remove difficulties

29. (1) If any difficulty arises in giving effect to the provisions of this Act, the (Central Government may, by order in the Official Gazette, make such provisions not inconsistent with the provisions of this Act as appear to it to be necessary or expedient for removing the difficulty:

Provided that no such order shall be made after the expiry of a period of two years from the commencement of this Act

(2) Every order made under this section shall, as soon as may be after it is made be laid before each House of Parliament

(3) 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:

Provided that 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.

(4) Every order made under sub-section (3) shall be laid before each House of Parliament.

(Ins. by Act 34 of 1991, sec.4 (w.e.f.15-6-1991)) [29A. Vacancies or defects in appointment not to invalidate orders.—No act or proceeding of the District Forum, the State Commission or the National Commission shall be invalid by reason only of the existence of any vacancy amongst its member or any defect in the constitution thereof.]

Power to make rules

30. (1) The Central Government may, by notification, make rules for carrying out the provisions contained in (Ins. by Act 50 of 1993, sec.22 (w.e.f.18-6-1993)) [clause (a) of sub-section (1) of section 2] clause (b) of sub-section (2) of section 4, sub-section (2) of section 5, clause (vi) of sub-section (4) of section 13, section 19, sub-section (2) of section 20 and section 22 of this Act.

(2) The State Government may, by notification, make rules for carrying out the provisions contained in clause (b) of sub-section (2) and sub-section (4) of section 7], clause (b) of sub-section (2) and sub-section (4) of section 8A, clause (b) of sub-section (1) and sub-section 13, clause (hb) of sub-section (1) and sub-section (3) of section 14, section 15 and clause (b) of sub-section (1) and sub-section (2) of section 16 of this Act)

30A. Power of the National Commission to make regulations - (1) The National Commission may, with the previous approval of the Central Government, by notification, make regulations not inconsistent with this Act to provide for all matters for which provision is necessary or expedient for the purpose of giving effect to the provisions of this Act.

((2) In particular and without prejudice to the generality of the foregoing power, such regulations may make provisions for the cost of adjournment of any proceeding before the District Forum, the State Commission or the National Commission, as the case may be, which a party may be ordered to pay)

Rules and regulations to be laid before each House of Parliament

31. (1) Every rule and every regulation made under this Act shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or regulation or both Houses agree that the rule or regulation should not be made, the rule or regulation shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule or regulation.

(2) Every rule made by a State Government under this Act shall be laid as soon as may be after it is made, before the State Legislature.

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THE CONSUMER PROTECTION ACT, 1986

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