Consumer Protection Act, 1986: 2002 Amendments - Laurels and Loopholes

Section 2 (d) of the Consumer Protection Act, 1986, defines ‘consumer’ as 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) 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 1[hires or avails of] the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payments, when such services are availed of with the approval of the first-mentioned person.

Legal terminology apart, every human being at some point or other, has donned the role of a consumer in his/her lifespan. When we buy an electric appliance for the home, get the monthly ration or buy a brand new car- we become consumers. When we pay some fees to a doctor for the medical services provided by him/her, when we pay the telephone bill or when we post a registered letter- we become consumers of the doctor, telephone department and the postal services respectively.

Thus it would not be an exaggeration to point out that the Consumer Protection Act, 1986, is one of the most important legislations that governs the life of every human being in his transactions with the society for availing goods and services provided by others. It not only comes into daily use but prevents the exploitation of common man, the consumer, at the hands of the affluent and moneyed business man or service provider. Hence any change or amendment whatsoever, in the Act directly affects the common people thereby needing a close scrutiny of the amendments thereto.

This paper seeks to take a look at some of the most profound amendments to the Consumer Protection Act, 1986 brought about by the Consumer Protection (Amendment) Act, 2002, the subsequent repercussions of those respective amendments, the shortcomings which have still not been rectified despite the amendment and also the benefits that are resultant of certain amendments.

Some major loopholes of the Act still left unplugged by the 2002 Amendments are discussed here:
1) One of the biggest achievements of the Consumer Protection (Amendment) Act, 2002, was the conferment of First Class Magistrate’s powers to the Consumer Forums or Commissions

The main problem regarding the above empowerment and the relevant provision is the fact that the Gazette notification for the conferment of First Class Magistrate’s powers to the Consumer Forums or Commissions is still not issued. Thus it is practically impossible for the Forums or Commissions to exercise this power conferred by the Act.

2) Another lacuna present in the amended Act is the relatively softer approach adopted by the Act towards the judgment debtor in its certain provisions. The amendment of 2002 has not done anything concrete to fill this lacuna. For instance, S. 24 of the Consumer Protection Act, 1986, which reads as follows:-
S.24: Finality of order:-
Every order of a District Forum, State Commission or the National Commission shall, if no appeal has been preferred against such order under the provisions of this Act, be final.

Thus this provision implies that non- preferment of appeal renders the order final. Conversely, preferring an appeal means that order is not final. Hence once an appeal is preferred by the judgment debtor, he gets a stay against the execution and thus there cannot be any execution.
The judgment debtors have certainly misused this provision of the Act. It is a general pattern that judgment debtors just buy time before the Forum or Commission stating that appeal has been preferred. Even if the appeal is not admitted and may take quite some time for the purpose, even if the required bank guarantee is yet not given and the stay is still not granted, the consumer cannot get the execution of the original order done. Thus justice still eludes the hapless consumer while the seller (judgment debtor) more often than not manages to get adjournment. The Act is silent regarding a ‘stay order’. Even the Amendment Act of 2002 disappoints in this regard. This Section urgently calls for amendment substituting the words “appeal preferred” with the words stay granted.

3) Another important confusion is created by the amended S.25 of the Act that reads as under:
S.25: Enforcement of orders by the Forum, the State Commission or the National Commission:-
(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 or 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.

If we carefully give a perusal to the above provisions of the above section, we find that by virtue of S.25 (1) the provision of attachment is against the interim order and not the final order. But looking at the pattern of judgments, it can be clearly discerned that generally attachments are aimed at awarding compensation to the aggrieved party, mostly the consumers. Compensations are usually awarded as part of the final order and the interim order almost never awards compensation. Interim orders aim at compelling or restraining any agency for the commission or omission of some act but these interim orders are seldom used by the Forums or Commissions to attach or seal the property of any business person, manufacturer, banks, medical establishments, etc. for the simple reason that the Forums/ Commissions are not aware if there will be any compensation order against them at the conclusion of the proceedings before Consumer Protection Agencies. Since no recovery proceeding is provided under the Act, there cannot be any assessment of the dues and thus no interim attachment order. Thus a more practically feasible approach would be to replace the word interim order with all orders.

4) Also S. 25 (3) provides for issuance of a certificate to the Collector for recovery of the amount due from any concerned person. The consumers have to contact the Collector for recovery of their dues because there is no further provision as to what is the role of Consumer Forums/ Commissions after that. After a long wait for the order from the Forum, the hapless consumers still have to undergo the rigor of going to the collector for the realization of the dues. There is no clarity regarding who is responsible for the follow up with the revenue department and the stipulated time limit thereto. Thus the concerned provision of S. 25 (3) should provide for the revenue department to send the arrears to the Forum itself for reimbursement to the consumer.

Thus an amendment is required to take care of the afore-mentioned problem.

However while critiquing certain provisions of the Act, at the same time it is necessary to point out certain other provisions which are the product of the 2002 Amendments and have plugged many loopholes by their progressive wording. These provisions brought about by the amendment have gone a long way in doing away the perennial problems of delay.

1) Amendment to Section 11 enhances the jurisdiction of the District Forum to entertain complaints where the value of the goods or services and the compensation claimed does not exceed rupees twenty lakhs. This will be more convenient for the complainants and also reduce the number of complaints filed with the State Commission and National Commission.

2) Section 12 is substituted to provide that every complaint filed with the District Forum shall be accompanied with such amount of fee as may be prescribed. It also provides that the admissibility of the complaint shall ordinarily be decided within twenty-one days from the date on which the complaint is received and that once admitted a complaint shall not be transferred to any other Court or Tribunal. This will help to quicken disposal of complaints.

3) The amendments to section 13 require the District Forum to refer a copy of the admitted complaint within twenty-one days from the date of its admission to the opposite party to give his version within the prescribed time. It also provides the much needed provision for ex parte order as well as dismissal of complaint on non-appearance of complainant.

It includes a new sub-section (3A) to provide that complaint shall be heard as expeditiously as possible and endeavour made to decide the complaints within the prescribed period. Adjournments would ordinarily not be granted, and if granted for reasons to be recorded in writing by the forum, an order as to the costs occasioned by the adjournment would also be made by the forum. It is also provided 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.

It further includes a new sub-section (3B) to enable the District Forum to pass interim orders where required. It also includes a new sub-section (7) for the substitution of parties in accordance with the provisions of Order XXII of the First Schedule to the Code of Civil Procedure, 1908 in the event of death of the complainant or opposite party.

These amendments will facilitate quicker disposal of cases, enable complaints to get immediate relief where required to the hapless consumers. The procedural delays will be done away with.

4) New section 19A provides that endeavour shall be made to dispose of appeals filed before the State Commission or the National Commission within ninety days from the date of admission.

These are just some of the useful amendments and the afore-mentioned list is definitely not exhaustive. In fact all the amendments made to the Consumer Protection Act by the 2002 Amendments aim at furthering the efficiency of the Act and doing away with procedural delays which render the consumers disillusioned and dissatisfied. These Amendments have been fruitful in providing ‘protection’ to the consumers in the real sense of the term and served the purpose of the Act. It is hoped that further amendments would aim at even more efficiency and render the position of the consumers much stronger in this era of globalization and privatization where the sudden unchecked advent of Multi National Companies has to be balanced with the protection of the rights of the consumers by the legislature and the judiciary.

The author can be reached at: [email protected]

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