CONSUMER PROTECTION ACT, 1986

The Consumer Protection Act, 1986 was enacted by Parliament and is a milestone in the history
of consumer protection movement in India. This has been further strengthened by the latest
additions to the lists of legislations such as the Competition Act, 2002 and the Right to
Information Act, 2005.
The Act extends to the whole of India except the State of Jammu and Kashmir. Save as otherwise
expressly provided by the Central Government by notification, this Act shall apply to all goods
and services. It covers all sectors whether private, public or co-operative.
Objectives
The Consumer Protection Act, 1986 seeks to provide for protection of the interests of the
consumers in general. The Act has recognized the following six rights of the consumers:
1. Right to consumer education
The right to consumer education is an important right available to the consumers. Information
about the consumer products in the market and for the proper functioning of the legal system it is
necessary that the knowledge of the availability of a legal remedy should be so widely explained,
advertised and circulated, so that people as a whole become conscious of their rights.
2. Right to safety
The consumer has a right to be protected against marketing of goods which are hazardous to life
and property of the consumers. For example, adulterated food is dangerous to life and poor
quality cement is dangerous to life as well as to property.
3. Right to seek redressal
The consumer has been given the right to seek redressal against unfair trade practices or their
unscrupulous exploitation. The consumer should have some means of redress when goods fail to
live up to their promise or indeed cause injury.
4. Right to be heard
The right to be heard also includes the right to be assured that the consumer interest will receive
due consideration at appropriate forums. The consumer disputes should be resolved in a fair and
expeditious manner.
5. Right to choose
The right to choose means the right to be assured, wherever possible, access to a variety of goods
and services at competitive prices. Fair and effective competition must be encouraged in order to
provide consumers with the greatest range of choice among products and services at the lowest
price.
6. Right to information
The consumer has been given the right to be informed by the producer about the quality,
quantity, potency, purity, standard and price of goods so as to protect the consumer against unfair
trade practices. The right to obtain adequate information is an important right which enables the
consumer to take intelligent decision at the time of purchasing any goods or hiring any services.

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The Consumer Protection Act provides cheap and quick redressal of genuine consumers
grievances and it is a matter of paramount public importance that no person should misuse the
remedies available under this Act for lodging false complaints on the basis of fabricated evidence
and harass the persons who supply goods or render services.
Definition of a Consumer
A consumer means a 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 when such use is made with the approval of such person, but does not include a
person who obtains such goods for resale or for any commercial purpose; or
ii. HIRES or avails of any services for a consideration which has been paid or promised or
partly paid or partly promised, or under any system of deferred payment and includes any
beneficiary of such services 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 purpose.
To seek redressal under the Consumer Protection Act, it is necessary to first prove that one is a
consumer as defined under the Act. The definition of the term consumer as given above is
quite comprehensive one so as to cover not only consumer of goods but also consumer of
services. The definition is wide enough to include in the term consumer not only the person
who buys any goods for consideration but also any user of such goods with the approval of the
buyer.
Persons buying goods either for resale or for use in a large scale profit making activity will not
be consumers entitled to protection under the Act. However, a person who bought goods for
self-employment will be eligible as consumer.
Thus, definition of a consumer covers
i. One who buys or agrees to buy goods for a consideration for personal use.
ii. One who uses such goods with permission of buyer of goods.
iii.One who obtains goods on hire purchase or lease.
iv. One who hires or avails of any services for a consideration.
v. One who uses the services with permission of person who has hired the services.
vi. One who obtains services on deferred payment basis i.e. hire purchase or lease.
vii One who buys goods or hires services exclusively for purpose of earning his livelihood as
self-employment.
The term consumer does not include (a) One who buys goods for commercial purposes (b)
One who has not bought the goods.
Consumer Redressal Forums
The most important feature of the Act is the provision for setting up three-tier quasi-judicial
machinery popularly known as consumer courts at national, state and district levels. The apex
court, National Commission, functions in Delhi. Every State Government has a State

CONSUMER PROTECTION ACT, 1986

Commission. At present there are 35 State Commissions. The third tier is in each district and is
called district forum.
District Forum
District Consumer Disputes Redressal forum, commonly known as District forum is the lowest
authority having only original jurisdiction i.e. deciding the consumer complaint. Sec. 9 of the Act
provides for the establishment of a District Forum by the State Government in each district of the
State by notification. The State Government may establish more than one District Forum in a
district if it deems fit to do so.
The composition of a District Forum shall comprise a President (who has been or is qualified to
be a District Judge) and two other members, one of whom shall be a woman. The members
should be not less than 35 years of age, possess a bachelors degree from a recognized university
and shall be a person of integrity, ability and standing, and shall have adequate knowledge and
experience of at least 10 years in dealing with problems relating to economics, law, commerce,
accountancy, industry, public affairs or administration. Every member of the District Forum shall
hold office for a term of five years or upto the age of 65 years or whichever is earlier.
Section 11 provides for the jurisdiction of the District Forum under two criteria pecuniary and
territorial.
Under pecuniary limits, the District Forum can entertain complaints where the value of goods or
services and the compensation, if any, claimed does not exceed rupees twenty lakhs.
With respect to territorial limits, 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 carries on business or
has branch office or personally works for gain,
b. The cause of action, wholly or in part, arises.
State Commission
State Consumer Disputes Redressal Commission commonly known as State Commission is the
second highest authority having original as well as appellate jurisdiction over the entire state.
The Act provides for the establishment of such a body by the State Government in the State by
notification.
The composition of the State Commission consists of a President (a person who is or has been a
judge of a High Court) and not less than two, and not more than such number of members, as
may be prescribed, and one of whom shall be a woman. The members of the State Commission
shall have the same qualifications as required of the members of the District Forum.
Section 17 of the Act provides that the State Commission shall have jurisdiction to entertain
a. Complaints where the value of goods or services and compensation, if any, claimed exceeds
rupees twenty lakhs but does not exceed rupees one crore; and
b. Appeals against the orders of any District Forum within the State; and
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c. 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.
In the exercise of its appellate jurisdiction, the State Commission may entertain appeals only
against the orders of any District Forum within the State.
National Commission
National Consumer Disputes Redressal Commission, commonly known as National Commission
is the highest authority having original as well as appellate jurisdiction all over India. Section 9
provides for the establishment of this body by the Central Government by notification in the
official gazette.
The National Commission shall consist of a President (a person who is or has been a judge of the
Supreme Court) and not less than four, and more than such number of members, as may be
prescribed, and one of whom shall be a woman. The members of the National Commission shall
have the same qualifications as required of the members of the State Commission and District
Forum.
Section 21 provides that the National Commission shall have jurisdiction
a. To entertain complaints where value of goods or services and the compensation, if any,
claimed exceeds rupees one crore.
b. To entertain appeals against the orders of any State Commission; and
c. 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 such that 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.
Mode of Complaint
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 services provided or agreed to be provided.
b. Any recognized 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 ember 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, all consumers so interested; or
d. The Central or the State Government.
2. Every complaint shall be accompanied with such amount of fee and payable in such manner
as may be prescribed,
3. On receipt of a complaint the District Forum may, by order, allow the complaint to be
proceeded with or rejected (a complaint may not be rejected unless an opportunity of being
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CONSUMER PROTECTION ACT, 1986

heard is given to the complainant). 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, the District Forum may proceed with the
complaint in the manner provided under this Act.
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 order. However, 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 filing it within that period.
However, 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 50% of that amount or twenty five thousand rupees, whichever is less.
Any person aggrieved by an order made by the State Commission may prefer an appeal against
such order to the National Commission within a period of thirty days from the date of order.
However, 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.
However, 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 50% of that amount or thirty five thousand rupees, whichever
is less.
Any person aggrieved by an order made by the National Commission may prefer an appeal
against such order to the Supreme Court within a period of thirty days from the date of such
order. However, 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 the appellant has
deposited in the prescribed manner 50% of that amount or fifty thousand rupees, whichever is
less.
Remedies
A forum can provide the following remedies:
1. It can require the concerned party to remove the defect in the good;
2. To replace the good with a new one;
3. To return the excess price charged;
4. To pay compensation to the consumer for any loss or injury suffered by the consumer due to
the negligence of the opposite party;
5. To discontinue the unfair trade practice; or
6. To remove the deficiency in the service.