Notes on Consumer and Services

4.1 Consumer: Definition; Defect in Goods

Definition of Consumer

consumer" means 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 service 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 service other than the person who
hires or avails of the services for consideration paid or promised, or partly paid and
partly promised, or under any system of deferred payment, when such services are
availed of with the approval of the first mentioned person, but does not include a
person who avails of such service for any commercial purpose. Explanation.—For
the purposes of this clause,—

(a) the expression "commercial purpose" does not include use by a person of goods
bought and used by him exclusively for the purpose of earning his livelihood, by
means of self-employment;
(b) the expressions "buys any goods" and "hires or avails any services" includes
offline or online transactions through electronic means or by teleshopping or direct
selling or multi-level marketing

The term "consumer" is defined under Section 2(7) of the Consumer Protection
Act, 2019, in India. A consumer is any individual who:

1. Buys goods or avails of services for consideration, whether fully paid, partly
paid, or under deferred payment.
2. Uses such goods or services with the approval of the purchaser.

Exclusions: A person is not considered a consumer if goods or services are

obtained for commercial purposes, except for self-employment or livelihood
purposes.

Defect in Goods
A defect refers to any fault, imperfection, or shortcoming in the quality, quantity,
or standard of goods, as specified in Section 2(10) of the Consumer Protection Act,
2019.

 Examples of defects include:

o Faulty appliances (e.g., a defective refrigerator).
o Contaminated food products.
o Substandard or unsafe goods causing harm to the consumer.

Types of Defects:

1. Manufacturing Defect: Flaws arising during the production process.

 2. Design Defect: Inherent flaws in the product's design, making it unsafe or
unusable.
3. Failure to Warn: Lack of proper instructions or warnings regarding product
usage.

4.2 Services: Types of Services, Deficiency, Denial, and Related Concepts

Types of Services
Services refer to any activity provided to consumers in exchange for payment, and
they include the following categories:

1. Public Utility Services: Electricity, water supply, and telecommunications.

2. Transport Services: Airlines, railways, and road transport.
3. Banking and Financial Services: Loans, savings accounts, and insurance.
4. Medical Services: Treatment, diagnostics, and health consultations.
5. Educational Services: Schools, colleges, and training institutions.
6. Hospitality Services: Hotels, restaurants, and tourism.
7. E-commerce Services: Online shopping platforms and delivery systems.

Deficiency in Services
Deficiency, as defined under Section 2(11) of the Consumer Protection Act, 2019,
refers to any shortcoming, imperfection, or inadequacy in the quality, nature, or
manner of performance of services that is required by law or agreed upon in a
contract.
Examples of Deficiency:

 Delay in delivery of services (e.g., a delayed flight without reasonable

cause).
 Negligence by medical professionals leading to harm.
 Failure to honor insurance claims.

Denial of Services
Denial of services occurs when a service provider refuses to provide services
without valid justification or in contravention of legal or contractual obligations.

 Examples include refusal to admit a patient in a hospital or denial of

essential utilities like electricity or water.

Commercial and Professional Services

 Commercial Services: Activities undertaken for profit, including financial,

banking, and insurance services. These fall under the purview of consumer
protection if availed for non-commercial personal use.
 Professional Services: Services provided by skilled professionals such as
lawyers, doctors, and engineers. These are included under the Consumer
Protection Act, provided there is negligence or deficiency in service
delivery.

Medical Services
Medical services have been explicitly recognized as part of "services" under the
Consumer Protection Act following judicial interpretations, such as in the
landmark case Indian Medical Association v. V.P. Shantha (1995).

1. Scope: Includes diagnostic, surgical, and therapeutic services.

 2. Liability: Negligence by healthcare providers, such as wrong diagnosis or
failure to provide timely treatment, can constitute a deficiency in service.
3. Exclusions: Services provided free of cost or under government welfare
schemes may not fall under the ambit of the Consumer Protection Act.

1. Consumer Protection Councils

Consumer Protection Councils are statutory bodies established under the

Consumer Protection Act, 2019, to promote and protect consumer rights. Their
primary objective is to advise and assist consumers in addressing grievances and
ensure fair practices in the market.

Provisions Related to Consumer Protection Councils

Central Consumer Protection Council (CCPC)

Establishment: Under Section 3 of the Consumer Protection Act, 2019.

Composition:

Chairperson: The Union Minister in charge of Consumer Affairs.

Members: Includes representatives from various fields such as consumer

organizations, industry, and government departments.

Meetings: The CCPC must meet at least once annually.

Objectives:

o To promote and protect consumer rights at the national level.

o To review policies related to consumer welfare.
o To address consumer-related issues affecting national interest.

2. State Consumer Protection Council (SCPC)

Establishment: Under Section 6 of the Act.

Composition:

a. Chairperson: The Minister in charge of Consumer Affairs in the State

Government.
b. Members: Includes officials, representatives of consumer
organizations, and other experts nominated by the State Government.

Meetings: To be convened as prescribed by the State Government.

Objectives:

o To protect and promote consumer rights within the state.

o To address grievances related to unfair practices and defective goods
or services at the state level.
3. District Consumer Protection Council (DCPC)

Establishment: Under Section 8 of the Act.

Composition:

Chairperson: The District Collector or Deputy Commissioner.

Members: Includes officials and representatives nominated by the State

Government.

Meetings: Frequency of meetings is determined by the State Government.

Objectives:

o To promote consumer awareness and rights at the district level.

o To address local consumer grievances and suggest measures for their
redressal.

Functions and Role of Consumer Protection Councils

1. Promotion of Consumer Rights: Councils work to safeguard the six rights

of consumers, as defined under the Act:
o Right to safety.
o Right to be informed.
o Right to choose.
o Right to be heard.
o Right to redressal.
o Right to consumer education.
 2. Advisory Role: They advise the respective governments on consumer
welfare policies and measures.
3. Awareness and Education: Councils organize campaigns and programs to
educate consumers about their rights and remedies available under the law.
4. Policy Recommendations: They suggest improvements in policies, laws,
and market practices to enhance consumer welfare.

Significance of Consumer Protection Councils

a) Ensure consumers have a platform to voice grievances.

b) Serve as a bridge between consumers, businesses, and governments.
c) Help in reducing unfair trade practices by creating awareness and
monitoring compliance.

These councils play a crucial role in the effective implementation of consumer

protection laws and foster a fair marketplace that respects consumer rights.
Consumer Disputes Redressal Agencies

The Consumer Protection Act, 2019, establishes a three-tier framework for the
adjudication of consumer disputes, comprising the District Commission, State
Commission, and National Commission. These bodies aim to provide an
accessible, speedy, and effective mechanism for consumers to seek redressal for
grievances arising from defective goods, deficient services, or unfair trade
practices.

District Commission

The District Commission is the lowest tier of the consumer redressal mechanism,
established under Section 28 of the Act. It has jurisdiction to entertain complaints
where the value of goods or services, including compensation, does not exceed ₹1
crore. Each District Commission consists of a president (a person qualified to be a
District Judge) and two other members, one of whom must be a woman.
Complaints can be filed in the district where the complainant resides, works, or
where the cause of action arises. The District Commission has the power to grant
remedies such as compensation, replacement of goods, or refund.

State Commission

The State Commission operates at the state level under Section 42 of the Act and
serves as an appellate authority over District Commissions. It also has original
jurisdiction for cases where the value of goods or services, including
compensation, exceeds ₹1 crore but does not exceed ₹10 crores. The State
Commission consists of a president (a former High Court Judge) and at least four
members, one of whom must be a woman. Consumers dissatisfied with the
decisions of District Commissions can appeal to the State Commission within 45
days. The State Commission also has suo motu powers to call for records from
lower commissions to ensure the correctness of their decisions.

National Commission

The National Commission is the apex body for consumer disputes under Section
53 of the Act. It has original jurisdiction for cases exceeding ₹10 crores and
appellate jurisdiction over State Commission decisions. It comprises a president (a
former Supreme Court Judge) and at least four other members, one of whom must
be a woman. The National Commission can entertain appeals against State
Commission orders within 30 days and has the power to call for records and pass
orders to ensure justice. Its decisions are final and binding, subject to appeal before
the Supreme Court on questions of law.

Judicial Review

Judicial review plays a critical role in consumer redressal by ensuring fairness and
legality in the decisions of these commissions. While the commissions are quasi-
judicial bodies, their orders can be challenged in higher courts through writ
petitions under Articles 226 and 227 of the Constitution of India. The High Courts
and the Supreme Court examine whether the commissions acted within their
jurisdiction, followed principles of natural justice, and adhered to the law. Judicial
review ensures that consumer rights are upheld while also safeguarding the rights
of parties against arbitrary or excessive decisions by redressal agencies.

In conclusion, the three-tier consumer dispute redressal framework under the

Consumer Protection Act, 2019, is designed to address grievances at varying levels
efficiently. With the added provision of judicial review, the system ensures
transparency, accountability, and justice for consumers.
Motor Vehicles Act, 1988: Motor Accident Claims and Claims Tribunals

The Motor Vehicles Act, 1988, governs all aspects of motor vehicles in India,
including registration, licensing, traffic regulation, and accident compensation.
One of its key provisions addresses the mechanism for compensation in motor
accident cases through Motor Accidents Claims Tribunals (MACTs). These
tribunals provide an efficient and specialized forum for victims of motor vehicle
accidents to seek remedies.

Motor Accident Claims

Under the Motor Vehicles Act, 1988, victims of motor vehicle accidents, or their
legal representatives in case of death, can claim compensation for injuries,
fatalities, or property damage. Compensation can be claimed under two main
categories:

1. Fault Liability Claims: These require proof of negligence or wrongful act

by the driver or owner of the vehicle.
2. No-Fault Liability Claims: Under Sections 140 and 163A, compensation is
granted without the need to prove fault. The fixed compensation amounts
under no-fault liability aim to provide speedy relief.

Compensation is determined based on factors such as the severity of injury, loss of

income, medical expenses, and dependency in case of fatalities. The Act also
provides for structured compensation schemes under Section 163A, which list
predefined compensation amounts for specific injuries or death.
Claims Tribunals

The establishment and functioning of Motor Accidents Claims Tribunals (MACTs)

are governed by Sections 165-176 of the Motor Vehicles Act, 1988.

Establishment and Jurisdiction:

Claims Tribunals are constituted by State Governments to adjudicate motor
accident claims. Each tribunal has territorial jurisdiction within a specified area.
Victims or their legal representatives can file claims in the tribunal where the
accident occurred, where the claimant resides, or where the defendant resides.

Composition:
A Claims Tribunal is headed by a presiding officer, usually a judicial officer not
below the rank of a District Judge or an experienced legal professional appointed
by the State Government.

Procedures and Powers:

Claims Tribunals follow a simplified procedure compared to civil courts, ensuring
quick resolution of claims. They have the powers of a civil court under the Code of
Civil Procedure, 1908, such as summoning witnesses, examining documents, and
passing interim orders. They can also award interim compensation to claimants
pending the final decision.

Adjudication and Awards:

The tribunal assesses the evidence, determines liability, and calculates
compensation based on factors like the victim's age, income, and circumstances.
The tribunal’s award is binding, and compensation must typically be paid by
insurers, vehicle owners, or drivers. Appeals against tribunal awards can be made
to the High Court under Section 173 within 90 days of the decision.
Significance of Claims Tribunals

The Motor Accidents Claims Tribunals were introduced to provide a specialized

and less formal platform for resolving accident claims compared to traditional civil
courts. They aim to ensure justice and financial relief for accident victims
efficiently. By expediting compensation and reducing procedural complexities,
MACTs play a crucial role in mitigating the hardship faced by accident victims and
their families.

In conclusion, the Motor Vehicles Act, 1988, and the establishment of Claims
Tribunals provide a robust framework for addressing the consequences of motor
accidents. This system balances the need for prompt compensation with procedural
fairness, ensuring that victims and their dependents receive the justice they
deserve.

Liability Without Fault and Third-Party Risks under the Motor Vehicles Act,
1988

The Motor Vehicles Act, 1988, incorporates the principle of "liability without
fault" to ensure compensation for victims of motor accidents without requiring
proof of negligence or fault.

Under Section 140, in cases of death or permanent disablement caused by motor

vehicle accidents, the claimant is entitled to a fixed amount of compensation—
₹50,000 for death and ₹25,000 for permanent disablement . This provision aims to
provide immediate relief to victims or their families, irrespective of whether the
accident occurred due to the fault of the vehicle owner or driver.
Section 163A further strengthens this principle by introducing a structured
compensation scheme, where compensation is calculated based on a predetermined
formula, eliminating the need for claimants to establish fault or negligence.

The Act also addresses third-party risks to protect individuals who suffer injury,
death, or property damage due to motor vehicle accidents.

Section 146 mandates compulsory third-party insurance for all motor vehicles,
ensuring that accident victims can seek compensation directly from the insurer of
the offending vehicle.

This requirement aims to provide financial security to third-party victims while

also ensuring accountability for vehicle owners. The insurer's liability is extensive,
covering claims related to bodily injury, death, and property damage caused to
third parties.

Together, the principles of liability without fault and third-party risk coverage
under the Motor Vehicles Act create a robust framework to safeguard the interests
of accident victims, ensuring timely and fair compensation while minimizing
procedural hurdles.