CONSUMER LAW AND RIGHTS

1. CONSUMER LAW AND RIGHTS Prepared by Advocate Jairam Chandnani – LEXIM ASSOCIATES LEXIM Associates

2. Who is a consumer? EVERYBODY is a consumer. When we pay a price for a commodity or service and use it, we become consumers. As per Consumer Protection Act, 1986, for purpose of goods/services a consumer means (i) one who buys any goods or hires any service(s) for consideration; and (ii) any user of such goods or any beneficiary of such service(s) other than the person who actually buys it or hires it, provided such use is made or such service(s) is availed with the approval of buyer. LEXIM Associates

3. Forms of Consumer Exploitation Due to the expansion of business activities in an economy, we have a variety of goods available in the market. We also have a number of services including insurance, transport, electricity, finance and banking. Our demand for goods and services is influenced by the advertisements in television, newspapers and magazines. We also find display of similar items by different companies, which makes it difficult for us to decide about a correct choice. We all know that companies spend a considerable amount on advertisements alone to attract consumers and feed information that they want us to feed information that they want us to know, but not the information that we as consumers need about the products. When we, as consumers, do not have sufficient information about the products, we normally get exploited and are sometimes even harassed by the business community. LEXIM Associates

4. common ways by which consumers are exploited Underweight and Under-measurements Sub-standard Quality High Prices Duplicate Articles Adulteration and Impurity Lack of Safety Devices Artificial Scarcity False or Incomplete Information - Advertisements Unsatisfactory after-sale Service Rough Behaviour and Undue Conditions LEXIM Associates

5. Examples of consumers Exploitation The after sales service provider of the TV set purchased, charges Rs. 200 as Service charge though repairs done within warranty period. Tie-in-sales, e.g., after sales service or stove with new gas connection. Offering gifts with no additional value, e.g., announcing contests or lotteries without intention of awarding any prize. Misleading advertisements, e.g., using brand names of companies with whom the seller has no tie ups. Non discharge of duties by doctor due to non deposit of funds in hospital. Delay in giving possession of flats by the builders. LEXIM Associates

6. Factors causing Exploitation of Consumers Limited Information Limited Supplies Limited Competition Low Literacy LEXIM Associates

7. Rights of Consumers – S.6 Right to Safety Right to be Informed Right to Choose Right to be Heard Right to Seek Redressal Right to Consumer Education LEXIM Associates

8. Duties of Consumers While purchasing the goods check quality & wherever possible insist for warranty. Ask for cash memo/invoices. Form consumer awareness organisations. Make complaints for genuine grievances. Know your rights and exercise them. LEXIM Associates

9. India’s Consumer Market India’s consumer market is riding the crest of the country’s economic boom. Driven by a young population with access to disposable incomes and easy finance options, the consumer market has been throwing up staggering figures. India officially classifies its population in five groups, based on annual household income (based on year 1995-96 indices). These groups are: Lower Income; three subgroups of Middle Income; and Higher Income. LEXIM Associates

10. India’s Consumer Market The rupee income classifications of various income classes by themselves do not present a realistic picture of market potential for a foreign business enterprise, because of significant differences in purchase power parities of various currencies. In fact, the Indian rupee has a very high purchase power parity compared to its international exchange value. For instance, while the exchange rate of one US dollar is 48.50i Rupees, the domestic purchasing power of a US dollar in the US is closer to the purchasing power of Rs 6 in India, for equivalent needs and services. As a result, India ranks fifth in the world, on purchase power parity terms, despite being having low per capita national income (US$ 340 per capita). LEXIM Associates

11. Consumer Protection Act of 1986 (COPRA) Consumer Protection Act (COPRA) 1986 that came into force with effect from July 1, 1987 is regarded as "magna carta" in the field of consumer protection and aims at checking unfair trade practices and deficiency in goods and services. The Act provides for the establishment of three-tier consumer disputes redressal agencies as following:- LEXIM Associates

12. Forums/Commisions Consumer Disputes Redressal Forum to be known as the "District Forum" established by the State Government in each district of the State by notification provided that the State Government may, if it deems fit, establish more than one District Forum in a district. Consumer Disputes Redressal Forum to be known as the "State Commission" established by the State Government in the State with notification; and National Consumer Disputes Redressal Commission established by the Central Government by notification. LEXIM Associates

13. Procedures followed by courts The consumer courts follow summary procedure and once the complaint has proved that there is defect in the goods purchased or services rendered were not upto the reasonable level of expectations, then the burden is on the other party to prove that there is no deficiency in the service rendered or that the goods supplied were defect free. The consumer courts will certainly examine the evidence, but cases will be decided on the basis of common principle of law, like justice equity and good conscience. The lengthy and laborious principles of evidence proving everything beyond the doubt are not followed while deciding the disputes. Hence keeping restrictions, is certainly a welcome measure and consumers can represent their case better than an Advocate. LEXIM Associates

14. Where can a complaint under COPRA be filed? All complaints have to be filed in the courts situated where the responding party resides or has a place of business or has a branch office or where the cause of action arose. The following are the consumer courts constituted under the Consumer Protection Act, 1986. A. District Consumer Disputes Redressal Forum, if the value of the claim is within Rs 5lakh. B. State Consumer Disputes Redressal Commission, if the value of the claim exceeds Rs 5 Lakh, but within Rs 20 lakh. C. National Consumer Disputes Redressal Commission, if the value of the claim exceeds Rs 20 lakh. LEXIM Associates

15. Jurisdiction of the District Forum – S.11 Subject to the other provisions of this Act, the District Forum shall have jurisdiction to entertain complaints where the values of the goods or services and the compensation, if any, claimed does not exceed rupee five lakhs. A complaint shall be filed in a District Forum within the local limits of whose jurisdiction; 1. 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 2. 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 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 the cause of action, wholly or in part, arises. LEXIM Associates

16. Jurisdiction of the State Commission – S.17 Subject to the other provisions of this Act, the State commission shall have jurisdiction A. To entertain complaints where the value of the goods or services and compensation, if any, claimed exceeds rupees5 lakh but does not exceed Rs.20 lakh; and B. Appeals against the orders of any District Forum within the State; 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 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. LEXIM Associates

17. Jurisdiction of the National Commission – S.21 Subject to the other provisions of this Act, the National commission shall have jurisdiction to entertain: A. Complaints where the value of the goods or services and compensation, if any, claimed exceeds rupees 20 lakh and B. 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 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 exercise of its jurisdiction illegally or with material irregularity. LEXIM Associates

18. How to write a complaint? A complaint should be in the following format: REDRESSAL BEFORE THE HON'BLE COMMISSION/FORUM Complainant's name and full address: Responding Party's name and full address: Complaint filed Under Section 12 of the Consumer Protection Act LEXIM Associates

19. How to write a complaint? (i) The complainant is _______The address for service of this complaint is as above. (ii) The Responding party is _______The address for service of the Opposite Party is as above (iii) The facts of the complaint with supporting documents The cause of action for the complaint (i.e. what led you to file the complaint before the Commission) (iv) The place where the complaint originated to explain jurisdiction of the forum applied to. (v) The complainant therefore prays that the District Forum/State Commission may direct the responding party to (whatever remedy is needed- compensation, repair works), (Reasonable costs for mental agony etc. may be added over and above costs of litigation. LEXIM Associates

20. No. of copies required Note: 1+5 copies to be made of the complaint (3 copies for the Commission 2 copies for the responding party, I copy to be retained. Add relevant copies of documents to support your claim. LEXIM Associates

21. Who can file the complaint & how? A complainant or his authorised agent can file a complaint. The complaint may be presented in person or sent by registered post. LEXIM Associates

22. Limitation Period to file a complaint The District Forum, the State Commission or the National commission shall not admit a complaint unless it is filled within 2yrs from the date on which the cause of action has arisen LEXIM Associates

23. Is there any Court fees? There is no court fee for filing a complaint. LEXIM Associates

24. Is an Advocate needed? Consumer Fora established under the Consumer Protection Act 1986 are quasi-judicial bodies where the strict rules of evidence as applicable in other civil proceedings before regular courts of law are not applicable. But if, one wants to get justice, there is no need for a consumer to engage the services of an advocate. He himself can present his case provided he takes pains to apply general principles of law and evidence. He also has to do the necessary homework. LEXIM Associates

25. Time frame for deciding the complaint The Forum and the Commission are required to decide the complaint, as far as possible, within a period of 3 months after receipt of notice by the responding party. There is also a suggestion that the responding party may be given a maximum of two adjournments for presenting the counter to the complaint. LEXIM Associates

26. Powers of Forum/commission The Forum/Commission has powers to obtain expert opinion, receive evidence in affidavits and even appoint a commission to receive evidence. LEXIM Associates

27. Frivolous or vexatious complaints Where a complaint instituted before the District Forum, the State Commission, 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 LEXIM Associates

28. Appeal 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 filing it within that period. Similarly, Any person aggrieved by an order made by the State Forum 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 LEXIM Associates

29. After the court passes order, what should be done? When an order is passed, 30 days time is given to the parties to comply with the order. If they do not comply, the aggrieved party may move the court for execution of the order either by way of moving the court, for revenue recovery proceeding to be initiated or an order for imprisonment of the party concerned for non-compliance of the order. LEXIM Associates

30. Penalties Where a trader or a person against whom a complaint is made [or the complainant] fails or omits to comply with any order made by the District Forum, the State Commission or the National Commission, as the case may be, such trader or person' or complainant shall be punishable 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 thousand rupees but which may extend to ten thousand rupees, or with both, LEXIM Associates

31. Proposals for amendment in C.P Act 1986 the district level consumer courts can also entertain and award compensation up to Rs. 20 Lakh. To put in other words, the original pecuniary limit of district forum was Rs. 5 Lakh and after the amendment it can go up to Rs. 20 Lakh. Similarly the state forum can entertain and award compensation between Rs. 20 Lakh and Rs. 1 crore and above 1 crore National Commission will decide and also appeals arising from decision of State Commission. LEXIM Associates

32. Proposals for amendment in C.P Act 1986 Another major amendment proposed is, restricting the role of legal practioneers to the barest minimum. In the proposed amendment there is no total ban on the appearance of advocates, but it is restricted. The advocates are allowed to appear, only if the complainant engages one, or the complainant himself is an advocate, or the complainant does not object to an advocate appearing for the other side. On can come across similar type of restrictions on the appearance of advocates before Labour courts and family courts. This proposal has raised a common in the advocate community. LEXIM Associates

33. Proposals for amendment in C.P Act 1986 The proposed amendments also cover the very constitution of the Commission itself. The concerned ministry at the centre will prescribe the number of members at the National Commission, and at least half of the members will be persons of "judicial background". Similarly at State level Commission also the power to decide the number of members is left with the State level ministry concerned. The case will be decided on the basis of simple majority. LEXIM Associates

34. Proposals for amendment in C.P Act 1986 the Government wants that the complaints should be decided as fast as possible. Hence a time schedule is imposed on the consumer courts to decide the complaints. Consumer courts at all levels are supported to decide the cases within 90 days. This will certainly reduce the delays, and allows the consumers to take their complains to its logical end. In order to reduce the unwanted and appeals, another proposal, asks the appellant to deposit half the amount of award of compensation, if he cares to prefer an appeal against an order of any Consumer Court. LEXIM Associates

35. Proposals for amendment in C.P Act 1986 Now Consumer Courts are also empowered to effect attachment and auction the properties of the person who fails to comply with the orders of the Commission. All these measures will certainly give more powers to the 'Consumer Courts', and also empowers them to implement their decisions with all force. LEXIM Associates

36. Guide to self-protection While buying costly durable consumer goods like refrigerators or while paying electricity, insurance premium or phone bill always pay by a crossed A/c payee cheque, on the reverse of the cheque, write your name and the details of the payments. In the event of receiving a reminder to pay bill, which has already been settled, cheque the bank pass book to ensure that the cheque has been encashed. After giving the particulars of the payment, if the demand still persists for the purpose, get a photocopy of the cheque (both sides) as proof from the bank your payment will be traced. LEXIM Associates

37. Cash Memo Always take a cash memo for every major purchase, and even for small items such as medicines cosmetics, food items etc. etc. it is proof in case of any complain to be made either to the vender or to the consumer court. The practice of foregoing a cash memo just to save sales from that you can save few rupees, without cash memo you can't file your case in the court, because the cash memo helps you in your fight for your rights as a consumer in other ways too, remember the tax is paid to the government to provide people with the basic infrastructure for a civilised life. LEXIM Associates

38. Guarantee/Warranty A guarantee is issued against any manufacturing defect and a warranty is an assurance of a proper performance. When buying any consumer product like fridge, get a guarantee/warranty card with a stamp of the shop and the date. Fill it in and post it to the manufacturer. Retain a photocopy. For electric items 'see if the items bears an ISI mark issued by the bureau of Indian standards (BIS) In case of a defective items, if the seller does not agree to put the unit back in working condition or replace if it is totally defective, consumer can invoke the third party guarantee. A complaint can be made to the BIS, which has offices in many places. Recently BIS has launched a scheme for the interest of the consumers who are going for purchasing a gold, the scheme is called Hallmarking and consumer can get right quality of gold. BIS has set standards for manufactured items to ensure that the consumer gets quality products. LEXIM Associates

39. Unlawful condition The consumers should insist that the vendors should remove the unlawful clause from their invoices/chalans “Goods once sold will not be taken back” LEXIM Associates

40. Composition of District Forum Composition of the District Forum. Composition of the District Forum. 5[ (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, who shall be persons of ability, integrity and standing, and have adequate knowledge or experience of, or have shown capacity in dealing with, problems relating to economics, law, commerce, accountancy, industry, public affairs or administration, one of whom shall be a woman.] Every appointment under sub- section (1) shall be made by the State Government on the recommendation of a selection committee consisting of the following, namely:-- (i) 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-- Members LEXIM Associates

41. Composition of State Commission 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: 3[ Provided that no appointment under this clause shall be made except after consultation with the Chief Justice of the High Court;] (b) two other members, who shall be persons of ability, integrity and standing and have adequate knowledge or experience of, or have shown capacity in dealing with, problems relating to economics, law, commerce, accountancy, industry, public affairs or administration, one of whom shall be a woman: 4[ Provided that every appointment under this clause. shall be made by the State Government on the recommendation of a selection committee consisting of the following, 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.] LEXIM Associates

42. Composition of National Commission (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: 3[ Provided that no appointment under this clause shall be made except after consultation with the Chief Justice of India;] (b) four other members who shall be persons of ability, integrity and standing and have adequate knowledge or experience of, or have shown capacity in dealing with, problems relating to economics, law, commerce, accountancy, industry, public affairs or administration, one of whom shall be a woman: 4[ 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, (c) Secretary of the Department dealing with consumer affairs in the Government of India]-- Member.]. LEXIM Associates