Consumer Redressal Agencies

23/07/2020 1 By indiafreenotes

Consumer Protection Councils:

The Act provides for setting up a Central Consumer Protection Council by the Central Government and State Consumer Councils by each state of India. The Central Consumer Protection Council shall consist of (1) the Minister in Charge of Consumer Affairs in the Central Government who shall be its chairman and such number of other official or non-official members representing such interests as prescribed.

It is required by the Act that Central Consumer Protection Council will meet as and when necessary. However, at least one meeting of the Central Council must be held every year. The objects of the council are to protect the rights of consumers and promote their interest as listed above from (a) to (f).

The State Consumer Councils to protect consumer rights as per amendment in the Act in 1993 will consist of (1) the Minister in Charge of Consumer Affairs in the State Government concerned and members of other officials and non-officials representing such interests as may be prescribed by the State Governments. As in the case of the Central Council, the objects of State Councils will be to protect the rights of consumers as listed above from (a) to (f) within the State.

Consumer Disputes Redressal System:

Under the Consumer Protection Act 1986 three-tier consumer disputes redressal system at the District, State and National levels has been set up.

Thus the Act provides for establishing the following consumer redressal agencies:

  1. District Consumer Forum in each district of a state set up by the State Government.
  2. State Consumer Commission in each state set up by each State.
  3. National Consumer Commission set up by the Central Government.

Composition of Consumer Redressal Agencies:

According to Consumer Protection Act 1986 each District Consumer Forum set up in each district of a State shall consist of a person who is or has been or is qualified to be a district judge. This person will work as president of the district consumer forum.

Two eminent members who have adequate knowledge and experience and have the ability in dealing with problems concerning law, commerce, economics, accountancy, industry, public affairs or administration and one of whom shall be a lady member, especially who is a social worker.

A District Forum has the jurisdiction to deal with the complaints where the value of good or service and the compensation claimed, if any, does not exceed Rs. 20 lakh (as per amendment in the Act in 2002). A complaint by consumers will be filed in a District Forum in case when the opposite party or each of the opposite party if there are more than one resides or carries on business within the district concerned at the time of filing the complaint or any one of the party (if there are more than one) residing or carrying on business in the district at the time of the filing of the complaint if the district forum grants permission for this.

The State Consumer Commission shall consist of:

(1) A person who is or has been a judge of a high court appointed by the State Government,

(2) Two other members of high standing and eminence who have adequate knowledge or experience concerning the problems relating to law, commerce, economics, industry, public administration etc. one of whom shall be a woman.

The State Consumer Commission as per the amendment of the Act in 2002 shall have the jurisdiction to entertain complaints where the value of goods or services and compensation claimed if any exceeds Rs. 20 lakh but is not more than Rs. 1 crore.

The State Consumer Commission will also entertain appeals against the orders of District Forums within the State. Besides, the State Consumer Commissions have been authorized to call for the records and give appropriate orders in case of any consumer dispute pending before the District Forum within the State or has been decided by it if the State Commission finds that a District Forum has exercised a power not vested in it by the Act or has failed to exercise a power or jurisdiction vested in it or acted illegally in exercise of its powers.

The National Consumer Commission will consist of:

(a) A person who is or has been a judge of the Supreme Court and is appointed by the Central Government in consultation with Chief Justice of India. He will also work as president of the national commission,

(b) Four other members of eminence having good knowledge or experience and ability to deal with the problems relating to commerce, economics, law, industry, public affairs or administration and one of whom shall be a woman.

National Consumer Commission has the jurisdiction:

(1) To entertain complaints where the value of goods or services and compensation claimed if any is, according to Amendment Act 2002, one crore or more;

(2) National Commission is authorized to hear appeals against the order of any State Consumer Commission;

(3) The Central Commission has the right to call for the records from the State Commissions.

It is important to note that all forums, commissions appointed under the Consumer Protection Act are in substantial matters not different from the ordinary civil courts. They are quasi-judicial tribunals created to render speedy justice

Remedial Action:

It may be noted that a complaint to a redressal agency may be filed by:

(a) An individual, consumer;

(b) Recognized consumer association,

(c) More than one consumers who have the same interest; and

(d) The State or Central Government. The complaint to a redressal agency must be in relation to goods sold or delivered or service provided to the complainant.

If the redressal agency is convinced that any of the allegations in the complaint filed before it is true, it shall issue an appropriate order to the opposite party.

This order may be any of the following types:

  1. To remove the defect if found to be true by the appropriate laboratory from the good in question;
  2. To replace the defective goods with the new goods of the same type free from the defects;
  3. To return to the complainant price of the defective good or charges paid by him;
  4. To pay the compensation to the complainant as may be decided by the redressal agency for the loss suffered by him;
  5. To remove the defects or deficiencies in the service rendered to the individuals;
  6. To stop the unfair or restrictive trade practice or give undertaking not to repeat in future;
  7. Not to supply hazardous goods;
  8. To withdraw the hazardous goods being offered for sale; and
  9. To give adequate costs to the parties in question.


The Consumer Commissions are authorized to impose penalties on trader or person against whom complaint is made if he fails to comply with the order of the redressal agency. The penalty or punishment may involve imprisonment for a period not more than 3 years or a fine of not more than 10 thousand rupees or both.

The Consumer Protection Amendment Act 2002:

The Consumer Protection Act 1986 held great hopes for the helpless consumers who have been denied fair deal by the unscrupulous producers or traders. In the implementation of Consumer Protection Act 1986 some deficiencies in the Act were noticed. Therefore, some important amendments were made in the Act by Consumer Amendment Act 2002. With this amendment all the redressal agencies (District Forums, State Consumer Commissions and Central Consumer Commission) have been given the powers of a judicial magistrate of a first class for trial of offences within their jurisdiction, subject of course to the right of appeal from a lower redressal agency to a higher one.

The important changes made by the Consumer Protection Amendment Act 2002 are the following:

  1. Both MRTP Act and Consumer Protection Act deal with unfair and restrictive trade practices. Amendment made in Consumer Protection Act in 2002 has clarified that the expression ‘restrictive trade practices’ will also include delay in supply of goods or services and rise in prices in the mean time.
  2. Provisions regarding unfair trade practices have been made more stringent. It is now provided that if the representations contained in an advertisement for the sale or supply of a good or service are misleading, the advertiser can be held responsible for taking corrective steps at his own cost apart from other obligations.
  3. The District Forums would be able to deal with cases involving the payment of compensation of Rs. 20 lakhs against the pre-existing Rs. 5 lakhs. Similarly, the State Consumer Commissions can now deal with cases involving compensation up to Rs. 1 crore while National Consumer Commission can deal with cases involving compensation of Rs. 1 crore or more instead of pre-existing Rs. 25 lakhs.
  4. In the event of the death of the complainant, amendment in the Act in 2002 now provides for substitution of his legal representatives. Surviving legal representatives can file a complaint or get substitution in place of the existing one.
  5. In regard to goods hazardous to life or safety of the public, traders supplying goods will be liable if it can be proved that the supplier could have known with due care that the goods or services supplied were hazardous to the public. Besides, liability of suppliers of spurious products and services is made clear in the Amendment Act 2002.
  6. An important amendment relates to the meaning of expression ‘manufacturing’. Manufacturing has now been defined to include merely assembling parts of goods made by others or putting one s own mark on any good manufactured by others.
  7. Amendment Act 2002 makes the restrictive trade practices more stringent by including under it trade practice which tends to the manipulation of price or the conditions of delivery of goods or affect the flow of supplies of goods in the market in a manner that imposes undue costs or restrictions on the consumers. Restrictive trade practice also includes delay in the delivery of goods beyond the period agreed to by the traders or delay in providing services when such delay is likely to lead to rise in their prices.
  8. According to an important provision in the 2002 Amendment Act, in trading or commerce of goods or services misleading or deceptive conduct of traders or suppliers would be treated as unfair trade practice. Those who make misleading or false representation luring consumers to buy goods or services would fall within unfair trade practice and would be held liable. Under the Consumer Protection Amendment Act 2002 the consumers who are lured to enter into such a contract would be entitled to get the damages.

Similarly, Amendment Act 2002 also covers the unfair treatment to the consumers who have suffered by being lured in the schemes offering gifts, concessional prices or some items free of charge depending on the official results of a particular scheme. This amendment provides remedy to the consumers who might be unfairly treated in such schemes by requiring the promoter to disclose proper information regarding the results of a scheme by appropriate timely publication of results in newspapers, etc.

Proposed Amendments in Consumer Act, 2010:

The Cabinet has given clearance to the proposed amendments to the Consumer Protection Act which is likely to be passed by the parliament in winter session of 2010. These amendments seek to make the consumer protection law more responsive to consumer complaints through quicker disposal of cases. The proposed amendments have widened the scope of the law, specified time limit for quicker disposal of cases and rationalized qualifications for appointment of members of consumer forums at the state and national level.

Evaluation of Consumer Protection Act:

Consumer Protection Act with amendments made in it in 2002 is a quite comprehensive piece of legislation that seeks to protect the consumers against unfair and exploitative practices of manufacturers. Consumer awareness in India is now fast growing. As a result, the number of complaints by the end of 2002 before District Forums had been about 14 lakhs, that before State Commissions 2 lakhs and that before National Commission about 21,000 all of which amount to the total of about 162,100.

It is important to note that Consumer Protection Act is additional law protecting consumers but not a derogation of any other laws which protect consumers. Services or goods provided by those dealing in information technology, electronic commerce (E-Commerce) are also liable under the Consumer Protection Act apart from the Act governing Telecommunication Regulatory Authority of India (TRAI) which regulates not only transactions between competing providers of telecommunication services but also regulate them to protect consumer interests.

Similarly, the Consumer Protection Act is in addition to MRTP Act which also tries to protect the interests of consumers by controlling monopolistic and restrictive trade practices. According to G.L. Sanghi, “The tribunals created under the Consumer Protection Act are in substantial matters not different from the ordinary civil courts. They are quasi-judicial tribunals created to render inexpensive and speedy justice. They provide additional remedies through the newly created forums”.

A Comprehensive Act:

The Consumer Protection Act is quite a comprehensive legislation. Under the Consumer Protection Act not only manufacturers and suppliers of goods but also of such services as insurance providers, medical treatment, lending and recovery of bank loans also come within the purview of the Act. A few such important cases are worth explaining.

Consumer Protection Act and Medical Practitioners:

The applicability of Consumer Protection Act to medical practitioners is a highly complicated issue and the case relating to it went even up to the Supreme Court of India. In defence of medical practitioners it was argued that their services are excluded category being services under “Control of Personal Services”. Supreme Court rejected these arguments and brought medical practitioners, hospitals and nursing homes where services are rendered for valuable consideration under the purview of Consumer Protection Act.

Doctors and hospitals committing medical negligence have therefore become liable and damages for medical negligence can be claimed from them. Though this has created fear and concern among medical practitioners and private hospitals but this will help in preventing medical negligence on the part of doctors and hospitals.

It has been widely reported in the media about medical negligence, for example, of operating a wrong eye, removing a kidney of a person without his consent, leaving screw, scissors and a towel in the abdomen of a patient, giving a wrong injection leading to the death of a patient. For all these acts of negligence compensation can be claimed from doctors and hospitals and also penalties can be imposed on them.

In an important case Supreme Court held that a medical practitioner may be liable if there was a negligence in respect of diagnosis and/or treatment given to a patient provided it can be demonstrated that the negligent act was not based on reasonable and responsible information as to the kind and quality of treatment.

Insurance Companies and Consumer Protection Act:

One of the important categories where Consumer Protection Act has been usefully applied is the claims against insurance companies. Many insurance companies (including public sector insurance companies) often deny medi-claims to the insurers on one pretext or the other.

Generally insurance companies deny claims for damages to the insurers that they did not disclose the pre-existing disease they were suffering from at the time of getting insured. In many cases consumer commissions have rejected the arguments of insurance companies and have awarded damages to the insurers and require insurance companies to fulfill their contractual obligations.

In a recent case of accident claim the United India Insurance Company denied to pay the damages on a car which met with an accident on the ground that it was being plied without the ‘fitness certificate’ as required under the Motor Vehicles Act. In this case in Nov. 2007, National Consumer

Commission held that the insurance companies, if the terms of the policy were not breached, cannot refuse to entertain claims on the pretext that the insured violated some other laws or conditions “as the insurance is a matter of contract between the two parties.”

Recovery of Bank Loans and Consumer Protection Act:

The wide applicability of Consumer Protection Act can be understood from the recent judgment of the State Consumer Commission of Delhi which slapped a fine of Rs. 55 lakhs on ICICI Bank for trying to recover a vehicle loan by hiring musclemen. The goons of recovery agent of the bank forcibly dragged out a youth from the car, beat him up with iron rods and left him bleeding and drove away with the vehicle. Justice J.D. Kapoor, president of the commission, said, “We hold ICICI Bank guilty of the grossest kind of deficiency in service and unfair trade practice for breach of terms of contract of hire-purchase/loan agreement by seizing the vehicle illegally.”


In view of the above usefulness and wide applicability of Consumer Protection Act, Mr. G.L. Sanghi is right in concluding, “In each and every area involving sale of goods and services for valuable consideration a consumer stands protected. The polarity of this law is unlimited. Its machinery is effective and awesome to the delinquent trader with solace to the consumer. As experience grows further improvements will un-doubtetedly make this remedy more and more useful”.