Liability In Case of Consumer Dispute | Law of Torts - CLAT PG PDF Download

Understanding Trader Under the Consumer Protection Act

• When a consumer identifies a defect in goods, such as a manufacturing flaw, an unreasonably high price, insufficient information about hazardous materials, or unfair trade practices, they have the right to file a complaint against the trader.
• It is crucial to understand who qualifies as a trader under the Consumer Protection Act.

Definition of Trader (Section 2(45))

• A trader, as per Section 2(45) of the Act, refers to any person who:
  • sells or distributes goods for sale, including the manufacturer of those goods.
  • In the case of packaged goods, this also includes the packer.
• Essentially, a trader is anyone engaged in trade. The Act broadens this definition to include packers, who are responsible for packing the goods.

Examples of Traders

• A individual with an agency for ‘Indana' products, selling and distributing these products in North India, qualifies as a trader under the Act.
• A manufacturer of combs is also considered a trader under the Act.
• A person providing bottles for packing perfume manufactured by another individual is likewise a trader under the Act.

Understanding Manufacturer (Section 2(24))

• Section 2(24) of the Act defines a manufactureras a person who:
  • produces any goods or parts of goods.
  • assembles goods or parts made by others.
  • places or causes to be placed their own mark on goods made by another person.

Examples of Manufacturers

• A Ltd., a manufacturer of pressure cookers, is liable if a cooker sold to a consumer bursts during use.
• A Ltd., assembling and selling computers under the brand name 'Rotal', is responsible if a Rotal computer malfunctions.

Manufacturer (Section 2(24))

Section 2(24) of the Act defines a manufacturer as a person who:

• produces any goods or parts of goods.
• assembles goods or parts made by others.
• places or causes to be placed their own mark on goods made by another person.

Examples of Manufacturers

• A Ltd., a manufacturer of pressure cookers, is liable if a cooker sold to a consumer bursts during use.
• A Ltd., assembling and selling computers under the brand name 'Rotal', is responsible if a Rotal computer malfunctions.

Complaint [Sec. 2(6)]

A complaint is a written allegation made by a consumer seeking relief under the Act. It can be filed under specific grounds, such as:

• Unfair Practices: Claiming that a trader or service provider has engaged in unfair trade practices or restrictive trade practices.
• Defective Goods: Alleging that the goods purchased or agreed to be purchased have one or more defects.
• Deficient Services: Stating that the services hired, availed, or agreed to be hired or availed suffer from any deficiency.
• Excessive Pricing: Claiming that a trader or service provider has charged a price for goods or services that exceeds the legally fixed price or the price displayed on the goods or packaging.

Complainant (Sec. 2(5) and Sec. 35)

A complainant is an individual who files a complaint. Under the Act, the following individuals are eligible to file a complaint:

Consumer

• A consumer includes anyone who uses goods or benefits from services. They have the right to file a complaint independently.

Voluntary Consumer Association

• Any voluntary consumer association registered under applicable laws can file a complaint.

Government Authorities

• The Central Government or any State Government can file a complaint on behalf of the public or a large section of the public.

Central Consumer Protection Authority

• The Central Consumer Protection Authority has the authority to file complaints.

Group of Consumers

• Multiple consumers with similar interests can file a complaint together.

Legal Representatives or Heirs of Deceased Consumers

Initially, the Consumer Protection Act, 1986 did not explicitly include legal representatives (LRs) or heirs of a consumer. However, legal precedents established that LRs acquire the rights and status of the deceased consumer, allowing them to file complaints. In 2002, the Act was amended to include LRs and legal heirs in the definition of 'consumer,' aligning with judicial interpretations.

Parent or Legal Guardian of a Minor Consumer

• Husband of the Consumer: In cases where women may be unaware of their legal rights, husbands can file complaints on behalf of their spouses.
• Relative of Consumer: Relatives can initiate complaints if the consumer signs the original complaint.
• Insurance Company: Insurance companies can also file complaints under certain circumstances.

New India Assurance Company Ltd. vs. Green Transport Co. II

When an insurance company compensates the insured for a loss and the insured transfers their rights to the company, the insurer can pursue claims against third parties responsible for the loss, such as service providers or transport companies.

Limitation [SEC. 69]

• Sec. 69 of the Consumer Protection Act, 2019 mandates that complaints must be filed within two years from the date the cause of action arises.
• Previously, under the Consumer Protection Act, 1986, there was no specific limitation period, and Consumer Forums followed the Limitation Act, 1963, allowing three years for filing a suit.
• The provision for limitation was added in 1993. The determination of when the cause of action arises varies based on the specific facts of each case.

Example

• If a house was allotted on January 1, 1999, and defects were noticed on January 10, 1999, the cause of action would arise on January 10, 1999.
• Sec. 69(2) allows for the extension of the complaint filing period if the Consumer Commission finds valid reasons for the delay.
• The Commission must document the reasons for accepting late complaints.

Mukund Lal Ganguly vs. Dr. Abhijit Ghosh III

• A man underwent eye surgery performed by a doctor in 1989 and received a blindness certificate on December 18, 1989.
• Hoping to regain his sight, he sought a second surgery in 1992 and was discharged on January 21, 1992.
• Subsequently, he filed a complaint against the doctor.

Remedies Available Under the Consumer Protection Act, 2019

A complainant can seek any one or more of the following relief under the Consumer Protection Act, 2019:

1. Removal of Defects

• To remove the defect pointed out by the appropriate laboratory from the goods in question.

2. Replacement of Goods

• To replace the goods with new goods of similar description which shall be free from any defect.

3. Refund of Price

• To return to the complainant the price, or, as the case may be, the charges paid by the complainant along with such interest on such price or charges as may be decided.

4. Compensation for Loss or Injury

• 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 Commission shall have the power to grant punitive damages in such circumstances as it deems fit;

5. Compensation in Product Liability Action

• To pay such amount as may be awarded by it as compensation in a product liability action under Chapter VI.

6. Removal of Defects in Goods or Deficiencies in Services

• To remove the defects in goods or deficiencies in the services in question.

7. Discontinuation of Unfair or Restrictive Trade Practice

• To discontinue the unfair trade practice or restrictive trade practice and not to repeat them.

8. Prohibition of Hazardous or Unsafe Goods

• To not offer the hazardous or unsafe goods for sale.

9. Withdrawal of Hazardous Goods

• To withdraw the hazardous goods from being offered for sale.

10. Cessation of Manufacture of Hazardous Goods

• To cease manufacture of hazardous goods and to desist from offering services which are hazardous in nature.

11. Determination of Compensation for Large Number of Consumers

• 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.

Complaints Which Cannot Be Entertained

There are certain types of complaints that cannot be entertained under the Consumer Protection Act. These include:

Complaints on Behalf of the Public

• A complaint filed on behalf of the public, which consists of unidentifiable consumers, cannot be filed under the Act.
• For example, in the case of Commissioner of Transport vs. Y.R. Grover, it was held that a complaint by an individual on behalf of the general public is not permitted.
• In another case,Consumer Education and Research Society, Ahmedabad vs. Indian Airlines Corporation, New Delhi, a complaint was filed based on a newspaper report about a delayed flight causing inconvenience to passengers. However, since no specific passenger came forward or authorized the complainant to make the complaint, it was deemed a general complaint and not entertainable.

Complaints by Unregistered Associations

• An unregistered association does not have the legal standing to file a complaint under the Act.

Time-Barred Complaints

• Complaints that are filed after the stipulated time period are considered time-barred and cannot be entertained.

Frivolous and Vexatious Complaints

• Complaints that are deemed frivolous or vexatious, meaning they are not serious or are intended to harass, will not be entertained.

Gulf Trivendrum Air Fare Forum vs. Chairman & Managing Director, Air India

• The complainant was an unregistered association formed in the Gulf and not recognized in India.
• Since the petitioner was not a voluntary organization registered under Indian law, they could not file a complaint under clause (d) of section 2(1) of the Act.

Time-Barred Complaints

• A complaint filed after the expiry of the limitation period is not allowed.
• Complaints cannot be lodged after two years from the date the cause of action arises, unless the forum is convinced about the genuine reason for the delay.

Frivolous and Vexatious Complaints

• The Act aims to provide an inexpensive procedure for filing complaints, but there is a risk of misuse for filing vexatious claims.
• To deter frivolous and vexatious claims, such complaints will be dismissed, and the complainant may be charged costs up to Rs. 10,000.

Consumer Commissions

• The Consumer Protection Act establishes a three-tier system for resolving consumer disputes.
• The three levels of consumer courts are:
• DCDRC: District Consumer Disputes Redressal Commission (District Commission).
• SCDRC: State Consumer Disputes Redressal Commission (State Commission).
• NCDRC: National Consumer Disputes Redressal Commission (National Commission).

DCDRC (District Consumer Disputes Redressal Commission)

• Established by the respective State Governments.
• Handles consumer disputes at the district level.

SCDRC (State Consumer Disputes Redressal Commission)

• Also formed by the State Governments.
• Deals with appeals against the orders of the District Commissions and consumer disputes of higher value.

NCDRC (National Consumer Disputes Redressal Commission)

• Established by the Central Government.
• Handles appeals against the orders of the State Commissions and significant consumer disputes at the national level.
• The establishment of these Commissions does not eliminate the jurisdiction of civil courts but offers an alternative remedy for consumers.
• Section 100 of the Act clarifies that its provisions are in addition to and do not derogate from other laws in force, ensuring that the jurisdiction of civil courts remains intact.

Consumer Disputes Redressal Commissions

The Consumer Protection Act of 2019 establishes a three-tier system of Consumer Disputes Redressal Commissions at the District, State, and National levels to address consumer grievances.

District Commission

• Established by the State Government in each District.
• Handles consumer complaints where the value of goods or services, along with any associated compensation, does not exceed ₹1 crore.

State Commission

• Established by the State Government in each State.
• Handles appeals against the orders of the District Commissions and consumer complaints where the value exceeds ₹1 crore but is less than ₹10 crores.

National Commission

• Established by the Central Government.
• Handles appeals against the orders of the State Commissions and significant consumer disputes at the national level.

The establishment of these Commissions does not eliminate the jurisdiction of civil courts but offers an alternative remedy for consumers.

Section 100 of the Act clarifies that its provisions are in addition to and do not derogate from other laws in force, ensuring that the jurisdiction of civil courts remains intact.