What is the Consumer Protection Act, 1986?


What is the Consumer Protection Act, 1986?


BeingSkilled's picture

Consumer Protection Act, 1986 is an Act of the Parliament of India which was enacted in 1986 to protect the interests of consumers across India so that they won’t get cheated by malpractices done by the businesses. This act established several consumer councils working at district, state and national level in order to settle the disputes between consumer and the business.

The significance of statute is regarded as Magna Carta in the field of Consumers interest protection for checking the unfair trade practices and ‘deficiencies in the services’, ‘quality issues or defects in the products’.

It has impacted whole business scenario and service providers now give proper attention to the quality.

The scenario:

Arvind purchased a flat in Mumbai and the possession of which is delayed by the Builder.
Since the amount is more than 1 crore, the case will be filed to National Commission. About National Consumer Disputes Redressal Commission:

It is a quasi – judicial commission which was set up in 1988 under the Consumer Protection Act 1986. Its head office is in Delhi. The commission is headed by sitting or retired judge of Supreme Court.

It entertains:

  1. Complains where value of goods or services is more than 1 crore.

  2. Appeals against the orders of any State commission

To pass orders for pending cases before the State Commission or where the State Commission has no jurisdiction or failed to exercise it.

Reliefs which Arvind can claim against the Builder can be:
1. Ask for compensation – Since the builder has failed to provide the possession

in stipulated time, as a buyer national commission will ensure adequate compensation which will include returning the principle amount plus the interest rate on the amount for the entire duration plus another fine which the national commission may feel right.

  1. Claim the indirect losses – There are opportunity costs associated with every deal. Ask for the compensation of the losses incurred because of delay in possession. Provide the evidences to justify your demands.

  2. Claim the money spent in rents of alternate accommodation – Since the possession was not provided within the time frame, ask for the money you spent on the rent for the alternative residence.

  3. Partner with other flat owners to demand arrest – Arvind should join hands with other flat owners and demand for the arrest of the promoters of the builder group. That will set an example for other builders.

    These 4 remedies were given to recent cases like Unitech , Lodha Group and Shree Sainath Enterprises, Emaar MGF Land Ltd case where refunds of about INR 3.04 crores, 1 Crore and 2 crores were provided along with 10% 18% interest respectively.

    This shows that NCDRC is working actively towards safeguarding the consumers from the cheating builders.