Wednesday, October 24, 2018

Business Laws Notes: Sale of Goods Act 1930 and Consumer Protection Act 1986


Unit – 2: Sale of Goods Act
Contract of Sale and Its essentials
According to Section 4 of the Sale of Goods Act, 1930, ‘A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in the goods to the buyer for a price.’
The term ‘Contract of sale’ is a generic term and includes both a sale and an agreement to sell. Where under a contract of sale, the property in the goods is transferred from the seller to the buyer (i.e. at once), the contract is called a ‘sale’ but where the transfer of the property in the goods is to take place at a further time or subject to some condition thereafter to be fulfilled, the contract is called an ‘agreement of sell’. [Section 4(3)].
An agreement to sell becomes a sale when the time elapses or the condition, subject to which the property in the goods is to be transferred, is fulfilled. [Section 4(4)].
The essentials of a contract of sale are:-
1. Numbers of parties: Since a contract of sale involves a change of ownership, it follows that the buyer and the seller must be different persons. A sale is a bilateral contract. A man cannot buy from or sell goods to himself. To this rule there is one exception provided for in section 4(1) of the Sale of Goods Act. A part-owner can sell goods to another part-owner. Therefore a partner may sell goods to his firm and the firm may sell goods to a partner.
2. Goods: The subject-matter of the contract of sale must be ‘goods’. According to Section 2(7) “goods means every kind of movable property other than actionable claims and money; and includes stock and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale.” Goodwill, trademarks, copyrights, patents right, water, gas, electricity,, decree of a court of law, are all regarded as goods. In the case of land the grass which forms part of land have to be separated from the land. Thus where trees sold so that they could be cut out and separated from the land and then taken away by the buyer, it was held that there was a contract for sale of movable property or goods (Kursell vs Timber Operators & Contractors Ltd.). But contracts for sale of things ‘forming part of the land itself’ are not contracts for sale of goods. 
3. Price: The consideration for a contract of sale is price. Price means money consideration. If it is anything other than money, it will not be sale. But if the exchange is made partly for goods and partly for price, it will still amount to sale. However, the price may be paid or promises to be paid.
4. Transfer of property: 'Property' here means ownership. Transfer of property in the goods is another essential of a contract of sale of goods. A mere transfer of possession of the goods cannot be termed as sale. To constitute a contract of sale the seller must either transfer or agree to transfer the property in the goods to the buyer. Further, the term 'property', as used in the Sale of Goods Act, means 'general property' in goods as distinguished from 'special property' [Sec. 2(11)]. If P, who owns certain goods, pledges them to R, he has general property in the goods, whereas R (the Pawnee) has special property or interest in the goods to the extent of the amount of advance he has made to the pawnor. Similarly, in the case of bailment of goods for the purpose of repair, the bailee has special interest in goods bailed to the extent of his labour charges.
5. No formalities to be observed (Sec. 5): The sale of Goods Act does not prescribe any particular form to constitute a valid contract of sale. A contract of sale of goods can be made by mere offer and acceptance. The offer may be made either by the seller or the buyer and the same must be accepted by the other. Neither payment nor delivery is necessary at the time of making the contract of sale. Further, such a contract may be made either orally or in writing or partly orally and partly in writing or may be even implied from the conduct of the parties. Where articles are exhibited for sale and a customer picks up one and the sales assistant packs the same for him, there has resulted a contract of sale of goods by the conduct of the parties.
6. Includes both a ‘sale’ and ‘an agreement to sell’: The term ‘contract of sale’ is a generic term and includes both a ‘sale’ and an ‘agreement to sell’.
Sale: Where under a contract of sale, the property in the goods is immediately transferred at the time of making the contract from the seller to the buyer; the contract is called a 'sale' [Sec. 4(3)]. It refers to an absolute sale, e.g., an outright sale on a counter in a shop. There is immediate conveyance of the ownership and mostly of the subject-matter of the sale as well (delivery may also be given in future). It is an executed contract.
An agreement to sell: Where under a contract of sale, the transfer of property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled, the contract is called 'an agreement to sell' [Sec. 4(3)]. It is an Executory contract and refers to a conditional sale.
7. Other essential elements: A contract for the sale of goods must satisfy all the essential elements necessary for the formation of a valid contract, e.g., the parties must be component to contract, there must be free consent, there must be consideration, the object must be lawful etc.
Difference between ‘Sale’ and ‘agreement to sell’.
According to Section 4 of the Sale of Goods Act, 1930, ‘A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in the goods to the buyer for a price.’
The term ‘Contract of sale’ is a generic term and includes both a sale and an agreement to sell. Where under a contract of sale, the property in the goods is transferred from the seller to the buyer (i.e. at once), the contract is called a ‘sale’ but where the transfer of the property in the goods is to take place at a further time or subject to some condition thereafter to be fulfilled, the contract is called an ‘agreement of sell’. [Section 4(3)].
Difference between Sale and Agreement to Sale:-
Basis
Sale
Agreement to Sell
Definition
Where under a contract of sale, the property in the goods is transferred from the seller to the buyer (i.e. at once); the contract is called a ‘sale’.
where the transfer of the property in the goods is to take place at a further time or subject to some condition thereafter to be fulfilled, the contract is called an ‘agreement of sell’
Transfer of ownership
Transfer of ownership of goods takes place immediately.
Transfer of ownership of goods is to take place at a future time or subject to fulfillment of some condition.
Executed contract or Executory contract
It is an executed contract because nothing remains to be done.
It is an Executory contract because something remains to be done.
Conveyance of property
Buyer gets a right to enjoy the goods against the whole world including seller.
Buyer does not get such right.
Transfer of risk
Transfer of risk of loss of goods takes place immediately because ownership is transferred.
Transfer of risk of loss of goods does not take place because ownership is not transferred.
Right of seller against the buyer’s breach
Seller can sue the buyer for the price, even though the goods are in his possession.
Buyer can sue the seller for damages only.
Rights of buyer against the seller’s breach
Buyer can sue the seller for damages and can sue the third party who bought those goods for goods.
Buyer can sue the seller for damages only.
Effect of insolvency of seller having possession of goods.
Buyer can claim the goods from the official receiver or assignee because the ownership of goods has transferred to the buyer.
Buyer cannot claim the goods, even when he has paid the price because the ownership has not transferred to the buyer. The buyer who has paid the price can only claim rateable dividend.
Effect of insolvency of the buyer before paying the price.
Seller must deliver the goods to the official receiver or assignee because the ownership of goods has transferred to the buyer. He can only claim rateable dividend for the unpaid price.
Seller can refuse to deliver the goods unless he is paid full price of the goods because the ownership has not transferred to the buyer.
Right in rem / personam
It is a right in rem i.e. right against the whole world.
It creates a right in personam i.e. right against a person.
In risk of destruction of goods.
Buyer has to bear the risk even if possession is with the seller as ownership has passed.
Seller has to bear the risk, even if possession is with the buyer, as ownership has not passed.

“Goods’ under the Sale of Goods Act, 1930.
Goods: The subject-matter of the contract of sale must be ‘goods’. According to Section 2(7) “goods means every kind of movable property other than actionable claims and money; and includes stock and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale.” Goodwill, trademarks, copyrights, patents right, water, gas, electricity,, decree of a court of law, are all regarded as goods. In the case of land the grass which forms part of land have to be separated from the land. Thus where trees sold so that they could be cut out and separated from the land and then taken away by the buyer, it was held that there was a contract for sale of movable property or goods (Kursell vs Timber Operators & Contractors Ltd.). But contracts for sale of things ‘forming part of the land itself’ are not contracts for sale of goods. 
Goods may be classified into various types as under:
1. Existing goods: These are goods which are owned and possessed by the seller at the time of sale. Only existing goods can be the subject-matter of a sale. The existing goods may be –
Specific goods: These are goods which are identified and agreed upon at the time of contract of sale is made. For e.g. a person visit s a Titan showroom and identifies a watch for purchase.
Ascertained goods: Though commonly used as similar in meaning to specific goods, these are the goods which become ascertained subsequent to the formation of contract of sale. For e.g. from say 10 Sony T.V. a person identifies the particular T.V.
Unascertained goods: These are the goods which are not identified and agreed upon at the time of the contract of sale. They are defined only by description and may form part of a lot. For e.g. a shopkeeper has a bag containing 50 kg of sugar. He agrees to sell 10 kg sugar to X out of that bag The 10 kg of sugar is unascertained goods as they are yet to be identified from the bag containing 50 kg.
2. Future Goods: These are goods which a seller does not possess at the time of the contract but which will be manufactured, or produced, or acquired by him after the making of the contract of sale. [Section 2(6)]. A contract of present sale of future goods, though expresses as an actual sale, purports to operate as an agreement to sell the goods and not a sale. This is because the ownership of a thing cannot be transferred before that thing comes into existence.
3. Contingent Goods: It is a type of future goods but these are goods the acquisition of which by the seller depends upon a contingency which may or may not happen.
‘Condition’ and ‘Warranty’
In a contract of sale, the subject matter is ‘goods’. There are millions of sale transactions which occur in the normal course, all around the world. There are certain provisions which need to be fulfilled because it is demanded by the contract. These prerequisites can either be a condition and warranty. The condition is the fundamental stipulation of the contract of sale whereas Warranty is an additional stipulation.
Condition: Section 12(2) states that a condition is a stipulation which is essential to the main purpose of the contract. The breach of a condition gives rise to a right to treat the contract as repudiated or broken. So according the above definition it is clear that condition is very essential for the performance of a contract. The breach of condition will be regarded as the breach of the whole contract.
Example: A buys from B hair oil advertised as pure coconut oil. The oil turns out to be mixed with herbs. A can return the oil and claim the refund of price.
Warranty: Section 12(3) states that a warranty is a stipulation which is collateral to the main purpose of the contract. The breach of a warranty gives rise to a claim for damages but not a right to reject the goods and treat the contract as repudiated. The above definition shows that for the implementation of a contract warranty is not essential. For the breach of warranty only damages can be claimed.
Example: A while selling his car to B, stated the car gives a mileage of 12 kms per litre of petrol. The car gives only 10 kms per litre. B cannot reject the car. It is breach of warranty. He can only claim damages for the loss due to extra consumption of petrol.
Difference between Condition and warranty:
Basis of Difference
Condition
Warranty
Definition
A stipulation which is essential to the main purpose of the contract.
A stipulation which is collateral to the main purpose of the contract.
Result of Breach
The aggrieved party can terminate the contract due to breach.
The aggrieved party cannot terminate the contract.
Remedy
The aggrieved party can terminate the contract, claim damages or treat it as breach of warranty.
The aggrieved party cannot terminate the contract but can only claim damages.
Treatment
A breach of condition can be treated as a breach of warranty.
A breach of warranty cannot be treated as breach of condition.
Link with contract
It is directly associated with the objective of the contract.
It is a subsidiary provision related to the object of the contract.

When condition to be treated as warranty.
a)      Where a contract of sale is subject to any condition to be fulfilled by the seller, the buyer may waive the condition or elect to treat the breach of the condition as a breach of warranty and not as a ground for treating the contract as repudiated.
b)      Where a contract of sale is not severable and the buyer has accepted the goods or part thereof, the breach of any condition to be fulfilled by the seller can only be treated as a breach of warranty and not as a ground for rejecting the goods and treating the contract as repudiated, unless there is a term of the contract, express or implied, to that effect.
c)       Nothing in this section shall affect the case of any condition or warranty fulfillment of which is excused by law by reason of impossibility or otherwise.
Implied warranties and implied conditions
Implied Conditions:
1. Condition as to title: In a contract of sale, unless the circumstances of the contract are such as to show a different intention, there is an implied condition on the part of the seller that –
(a) In the case of a sale, he has a right to sell the goods and
(b) In the case of an agreement to sell, he will have a right to sell the goods at the time when the property is to pass.
2. Sale by description: Where there is a contract for the sale of goods by description, there is an implied condition that the goods shall correspond with the description (Section 15). If you contract to sell peas, you cannot oblige a party to take beans.
3. Sale by sample: In a case of a contract for sale by sample, there is an implied condition:
(a) That the bulk shall correspond with the sample in quality
(b) That the buyer shall have a reasonable opportunity of comparing the bulk with the sample.
(c) That the goods shall be free from any defect, rendering them unmerchantable.
4. Sale by description as well as sample: Section 15 further provides that if the sale is by sample as well as by description, the goods must correspond both with the sample and with the description.
5. Condition as to quality or fitness: Normally, in a contract of sale there is no implied condition as to quality or fitness of goods for a particular purpose. The buyer must examine the goods thoroughly before he buys them in order to satisfy himself that the goods will be suitable for the purpose for which he is buying them. However, in the following instances, the condition as to quality or fitness applied –
(a) Where the buyer, expressly or by implication makes known to the seller the particular purpose for which he needs the goods and depends upon the skill and judgement of the seller whose business it is to supply goods of that description, there is an implied condition that the goods are reasonable fit for that purpose. [Section 16(1)]. For e.g. an order was placed for some Lorries to be used “for heavy traffic in a hilly area”. The Lorries supplied were unfit and broke down. Held, there is a breach of condition as to fitness.
(b) An implied condition as to quality or fitness for a particular purpose may also be annexed by the usage of trade. [Section 16(3)]
6. Condition as to merchantability: Where goods are bought by description from a seller who deals in goods of that description, here is an implied condition that the goods are of merchantable quality. This means that the goods should be such as are commercially saleable under the description by which they are known in the market at their full value.
7. Condition as to wholesomeness: In the case of eatable and provisions, in addition to the implied condition as to merchantability, there is another implied condition that the goods shall be wholesome. For e.g. C bought a bun containing a stone which broke one of C’s teeth. Held, he could recover damages.
8. Condition implied by custom: An implied condition as to quality or fitness for a particular purpose may also be annexed by the usage of trade in the locality concerned.
Implied warranties
1. Warranty of quiet possession: In a contract of sale, unless there is a contrary intention, there is an implied warranty that the buyer shall have and enjoy quiet possession of the goods. If buyer’s possession is disturbed because of some defect in seller’s title, he can claim damages from the seller.
2. Warranty of freedom from encumbrances: The buyer is entitled to a further warranty that the goods are not subject to any charge or right in favour of a third party.
3. Warranty to disclose dangerous nature of goods: Where a person sells goods, knowing that the goods are inherently dangerous or they are likely to be dangerous to the buyer and that the buyer is ignorant of the danger, he must warn the buyer of the probable danger, otherwise he will be liable for damages.
‘Caveat Emptor’ and exceptions to this rule
The term ‘Caveat Emptor’ means ‘Let the buyer beware’ i.e. in sale of goods, the seller is under no duty to reveal unflattering truths about the goods sold. Therefore, when a buyer buys some goods, he must examine them thoroughly. If the goods turn out to be defective or do not suit his purpose, or if he depends upon his own skill and judgment and makes a bad selection, he cannot blame anybody excepting himself.
For e.g. H bought oats from S a sample of which had been shown to H. H erroneously thought that the oats were old. However the oats were new. Held, H could not avoid the contract. (Smith vs. Huges)
The doctrine of Caveat Emptor has certain important exceptions as under –
1. Fitness for buyer’s purpose: Where the buyer, expressly or by implication makes known to the seller the particular purpose for which he needs the goods and depends upon the skill and judgement of the seller whose business it is to supply goods of that description, there is an implied condition that the goods are reasonable fit for that purpose. [Section 16(1)]. For e.g. an order was placed for some Lorries to be used “for heavy traffic in a hilly area”. The Lorries supplied were unfit and broke down. Held, there is a breach of condition as to fitness.
2. Sale under a patent or trade name: In the case of a contract for the sale of a specified article under its patent or other trade name, there is no implied condition that the goods shall be reasonably fit for any particular purpose.
3. Merchantable quality: Where goods are bought by description from a seller who deals in goods of that description, here is an implied condition that the goods are of merchantable quality. But if the buyer has examined the goods, there is no implied condition as regard defect which such examination ought to have revealed. [Section 16(2)]
4. Usage of trade: An implied warranty or condition as regards quality or fitness for a particular purpose may be annexed by the usage of trade. [Section 16(3)]
5. Consent by fraud: Where the consent of the buyer, in a contract of sale, is obtained by the seller by fraud or where the seller knowing conceals a defect which could not be discovered on a reasonable examination, the doctrine of Caveat Emptor does not apply.
Unpaid Seller and His Rights
Section 45 define an unpaid seller as “One who has not been paid or tendered the whole of the price or one who receives a bill of exchange or other negotiable instrument as conditional payment and the condition on which it was received has not been fulfilled by reason of dishonour of the instrument or otherwise.”
The following conditions must be fulfilled before a seller can be deemed to be an unpaid seller –
(i) He must be unpaid and the price must be due.
(ii) He must have an immediate right of action for the price.
(iii) A bill of exchange or other negotiable instrument was received but the same has been dishonoured.
The rights of an unpaid seller can be broadly divided under 2 main headings –
I] Rights against the goods and
II] Rights against the buyer
I] Rights against the goods:
A] Where the property in the goods has passed to the buyer: Where the ownership in the goods has already been transferred to the buyer the following rights are available to an unpaid seller –
1. Right of Lien: The right of lien means the right to retain the possession of goods until the full price is paid or tendered.  When can lien be exercised:
(a) Where the goods have been sold without any stipulation as to credit.
(b) Where the goods have been sold on credit, but the term of credit has expired, and
(c) Where the buyer becomes insolvent.
The right can be exercised even if the seller holds the goods as an agent or bailee. Where part delivery of goods has been made, it can be exercised on the remaining goods, unless circumstances show he has waived his right.
Termination of lien: The right gets terminated under following circumstances:
(a) When the goods are delivered to a carrier or bailee but without reserving the right of disposal.
(b) When the possession is acquired by the buyer or his agent lawfully.
(c) When the right of lien is waived by the seller.
(d) When the buyer has disposed of the goods by sale of in any manner with the consent of the seller.
2. Right of stoppage of goods in transit: The right of stoppage in transit means the right to stopping the goods while they are in transit, to regain possession and to retain them until the price is paid. The essential feature of stoppage in transit is that the goods should be in the possession of someone intervening between the seller and the buyer. The unpaid seller can exercise the right of stoppage in transit if:
(a) The seller has parted with the possession of the goods.
(b) The buyer has not taken possession of goods.
(c) Buyer has become insolvent.
The unpaid seller may exercise the right to stoppage in transit in any one of the following 2 ways:
(a) By taking actual possession of the goods, or
(b) By giving notice of his claim to the carrier or other bailee in whose possession the goods are.
The right to stoppage in transit is lost under the following circumstances:
(a) If the buyer or his agent obtains possession.
(b) If after arrival of the goods at the appointed destination, the carrier or the bailee acknowledges to the buyer that he holds the goods on his (buyer’s) behalf.
(c) If the carrier or bailee wrongfully refuses to deliver the goods to the buyer or his agent.
(d) Where the part delivery of the goods has been made to the buyer or his agent, the remainder of goods may be stopped in transit. But if such part delivery has been given in such circumstances as to show an agreement to give up possession of the whole of the goods the transit comes to an end at the time of part delivery.
3. Right of resale: Where the unpaid seller has exercised his right of lien or resumes possession of the goods by exercising his right of stoppage in transit upon insolvency of the buyer, he can re-sell the goods under the following circumstance:
(a) where the goods are of perishable nature.
(b) Where the seller has given notice of his intention to re-sell the goods and yet the price remains unpaid.
(c) Where the seller expressly reserves a right of resale if the buyer commits a default in making the payment.
B] Where the property in the goods has not passed to the buyer: Where the property in the goods has not passed to the buyer, the unpaid seller can exercise the right to withholding delivery of the goods. This right is similar to and co-extensive with the right of lien and stoppage in transit where the property has passed to the buyer. Other remedies may include the right to claim damages for the loss suffered, special damages, etc.
II] Rights of an unpaid seller against the buyer personally
In addition to the unpaid seller’s rights against the goods, he has rights even against the buyer personally. They are as follows:
1. Suit for Price: Generally the seller can sue for the price of the goods only when the property in the goods has passed to the buyer and the price is not paid as per the terms of the contract. In cases where the property in the goods has not passed to the buyer, suit for price generally, cannot be maintained, unless under the contract, price is payable on a certain date irrespective of the delivery of passing of the ownership of the goods.
2. Suit for damages: The unpaid seller can bring an action for damages where the buyer wrongfully refuses to accept the goods or repudiates the contract.
3. Suit for interest: In case of breach of contract on the part of the buyer, the unpaid seller can claim for interest from the date of tender of the goods or from the date, the price becomes payable along with a suit for price.
  
Unit – 2: Consumer Protection Act
Features of Consumer Protection Act are:
a)      The Act applies to all goods and services unless specially exempted by Union Government.
b)      It covers all sectors – public, private or cooperative.
c)       Provisions of the Act are compensatory in nature.
d)      It contains all consumers’ rights - to choose, to be heard, to be informed, to safety, education and redressal.
e)      It empowers consumers seeking discontinuance of trader’s malpractices, defective goods, service deficiencies or withdrawal of hazardous goods from the market.
The main objective of the act is to provide for better protection of consumers. Unlike existing laws which are punitive or preventive in nature, the provisions of this Act are compensatory in nature. The act is intended to provide simple, speedy and inexpensive redressal to the consumers' grievances, and reliefs of a specific nature and award of compensation wherever appropriate to the consumer.
The objectives of the Consumer Protection Act are as follows:
a)      To assist countries in achieving or maintaining adequate protection for their population as consumers;
b)      To facilitate production and distribution patterns responsive to the needs and desires of consumers;
c)       To encourage high levels of ethical conduct for those engaged in the production and distribution of goods and services to consumers;
d)      To assist countries in curbing abusive business practices by all enterprises at the national and international levels which adversely affect consumers;
e)      To facilitate the development of independent consumer groups;
f)       To further international cooperation in the field of consumer protection;
g)      To encourage the development of market conditions which provide consumers with greater choice at lower prices.
Consumer and his Rights and Responsibilities
Consumer: Section 2 (1) (d) of the Consumer Protection Act, 1986 defines the term "consumer". It says ‘consumer’ means any person:
a)      Who buys goods and has paid or promised to pay a consideration partly or fully under any system of deferred payment.
b)      Who hires or avails of services and has paid or promised to pay a consideration partly or fully under any system of deferred payment.
c)       Who uses the goods with the approval of the person who has bought the goods for a consideration
d)      Who is a beneficiary of the services hired or availed by an individual with the consent of that individual?
Who is not a consumer?
a)      An applicant for a passport has been held to be not a consumer, because the duties of the passport officer do not fall in the category of services for consideration.
b)      An applicant for ration card is not a consumer.
c)       The beneficiaries of municipal services have been held to be not in the category of consumers.
Rights of Consumers:
a)      The right to safety: It refers to the right to be protected against products, production processes and services which are hazardous to health or life. It includes concern for consumers immediate and long term needs.
b)      The right to be informed: Consumers have a right to be informed about the quality, quantity, potency, purity, standard and price of goods or services so that they can make the right decision and protect themselves against malpractices.
c)       The right of choice: The consumer has the right to be assured of a choice of various goods and services of satisfactory quality and competitive price.
d)      Right to representation (or right to be heard): It is a right and the responsibility of civil society to ensure consumer interest prevails while formulating and executing policies which affect the consumers, as well as right to be heard while developing or producing a product or service.
e)      Right to seek redressal of grievances: The consumer has the right go to court if he has been unscrupulously exploited against unfair or restrictive trade practices and receives compensation for supply of unsatisfactory or shoddy goods.
f)       The right to consumer education: It is the right to acquire knowledge and skills to be an informed consumer because it is easier for the literate to know their rights and to take actions to influence factors that affect consumer’s decisions. The Union and State Governments have accepted the introduction of consumer education in school curriculum.
g)      Right to basic needs: It is the right to receive the eight basic necessities that are required to survive and lead a dignified life. These eight basic necessities include food, clothing, shelter, health care, sanitation, education, energy and transportation.
h)      Right to healthy environment: It is the right to be protected against environmental pollution and environmental degradation so as to enhance the quality of life of both the present and future generation.
Main responsibility of consumer are given as under
a)      Be aware about their right: Consumer must be aware of their own rights. This right is right to basics needs, right to consumer education, right to be informed, right to be choose, right to be safety, right to be heard and right to seek redressed of grievances.
b)      Quality conscious: while making purchase, consumer should look for quality certification makes like ISI on electrical appliances and Agmark on food product etc.
c)       Must obtain cash memo: Consumer must insist on cash memos as cash memo act as proof of purchase. No seller can deny given cash memo. A seller is bound to give a cash memo even if buyer doesn’t ask for it.
d)      Be Assertive: The consumer must be assertive in his dealings.
e)      Be Honest: Consumer must act honestly and choose goods/services, which are legitimate. They should also discourage unscrupulous practices like misleading advertisements and black marketing etc.
f)       Ready to lodge complaints: Consumer should not ignore the dishonesty to trader. The consumer should file a complaint even for a small loss. However, they should file complaints for the redressed of genuine grievances only.
g)      Respect Environment: Consumer should avoid polluting the environment.
Person
A person includes:
a)      A firm whether registered or not;
b)      A Hindu undivided family;
c)       A co-operative society;
d)      Every other association of persons whether registered under the Societies Registration Act, 1860 or not;
e)      A person by himself has no standing under the Consumer Protection Act. A person has to be a consumer within the definition of the word ‘Consumer’ to get remedy.
Goods
Goods mean goods as defined in the Sale of Goods Act 1930. Goods mean every kind of movable property other than actionable claims and money. E.g. it includes stocks and shares, attached to or forming part of the land including growing crops, grass which are agreed to be served before sale or under the contract of sale.
It means service of any description which is made available to potential users. It Includes the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information but does not include the rendering of any service free of charge or under a contract of personal service.
There is a distinction between the contract of service and contract for service. The contract of service implies some relationship of master and servant. The servant is obliged to obey the order of his master. This is Contract of Service. Where the person engages the service of another person and where he can only order what is to be done, it is Contract for Service.
Manufacturer
a)      Makes or manufactures any goods or parts thereof; or
b)      Does not make or manufacture any goods but assembles parts thereof made or     manufactured by others and claims the end product to be goods manufactured by himself; or
c)       Puts or causes to be put his own mark on any goods made or manufactured by any other manufacturer and claims such goods to be goods made or manufactured by him.
Trader
Is a person who
a)      Sells goods; or
b)      Distributes any goods for sale;
c)       Manufacturer of goods for sale;
d)      Packer of goods who sells or distributes goods in package form.
A complaint lies against a person who is a trader falling under the above categories. Even a Government company or an undertaking by the Government manufacturing and selling goods is covered by the word trader, like A middleman who brings together the buyer and seller and receives commission for the service rendered is NOT a trader.
Complainant
Section 2 (1) (b) of the Consumer Protection Act, 1986 defines the term "complainant" as: Complainant means
a)      a consumer; or
b)      any voluntary consumer association registered under the Companies Act, 1956 (1 of 1956), or under any other law for the time being in force; or
c)       the Central Government or any State Government,
d)      one or more consumers, where there are numerous consumers having the same interest;
e)      who or which makes a complaint;
A person seeking redress before the Consumer Redressal Forum must come within any of the four categories stated above; otherwise he has no locus standi to proceed with his case. The ‘Complainant’ among others means a ‘consumer’ generally. The expression ‘complainant’ as defined in section 2 (1) (b), is comprehensive to enable consumer as well as any voluntary consumer association. This definition is very suitable in a country like India, where majority of the people are illiterate and therefore, power to file a complaint is given to the voluntary consumer associations. The only restriction laid down under the Section in this regard is that, the association must be registered under the Companies Act, 2013 or any other law for the time being in force.
However, a consumer association cannot file a complaint on behalf of unspecified or unidentified number of consumers. In the Case of Upbhokta Sanrakshan Samiti V/s. Winsard foods Ltd., the consumers association found that, the biscuit packets sold by a food company were less in weights. A complainant demanding compensation for the public of the State of Rajasthan was not maintainable.
The act contemplates an identified consumer in order to make the application of its provisions or any consumer association to represent it. An act also contemplates an action in representative capacity, by providing that, when there are numerous consumers having same interest, one or more consumers must file complaint on behalf of others.
Complaint
In Section 2 (1) (c) "complaint" means any allegation in writing made by a complainant that:
a)      an unfair trade practice or a restrictive trade practice has been adopted by any trader;
b)      the goods bought by him or agreed to be bought by him suffer from one or more defect;
c)       the services hired or availed of or agreed to be hired or availed of by him suffer from deficiency in any respect;
d)      a trader has charged for the goods mentioned in the complaint a price in excess of the price fixed by or under any law for the time being in force or displayed on the goods or any package containing such goods;
e)      goods which will be hazardous to life and safety when used are being offered for sale to the public in contravention of the provisions of any law for the time being in force requiring traders to display information in regard to the contents, manner and effect of use of such goods.
With a view to obtaining any relief provided by or under this Act; the essential features of a “Complaint” are:
a)      The complaint must be in writing;
b)      The complaint must be made with a view to obtain any relief under the Act;
c)       The Complaint must make any of the five allegations stated under section 2 (1) (c), against a trader or manufacturer;
d)      The complaint must be filed in a manner prescribed under law i.e. under section 12 of the Act.
e)      The complaint must be filed before appropriate consumer commission having jurisdiction to entertain complaint. Section 17 & Section 21.
Ordinarily, the complaint must contain name, description and address of the Complainant and the purpose for which he bought the goods. It must also contain the name, description and address of the trader or manufacturer. It must state clearly, the facts of the case e.g. when the things was purchase? For what purpose? When the things were consumed or used? Defects in goods or deficiency in the service etc., what injury suffered etc. These facts must be supported by all relevant and proper documents. Lastly, the complaint must mention the relief or relief’s asked for against the trader or manufacturer i.e. the opposite party.
Procedure for Filing Complaint
The complainant or his authorised agent can present the complaint in person or send it by post to the appropriate forum or Commission, as the case may be. No fee is charged for filing a complaint before the District Forum or the State Commission or the National Commission.
Important Points
a.       Each of the members and the opposite parties are to be sent a copy of the complaint.
b.      The complaint himself should possess two or more copies of the complaint.
c.       If the complainant desires so he can send a copy to an active voluntary consumer organisation.
d.      A complaint should always be supported and verified by an affidavit.
The time period within which a complaint must be filed
The District Forum, the State Commission, or the National Commission shall not admit a complaint unless it is filed within two years from the date on which the cause of action has arisen. However, where the complainant satisfies the District Forum/State Commission, that he had sufficient cause for not filing the complaint within two years, such complaint may be entertained by it after recording the reasons for condoning the delay.
Decision Time: The District Forum, State Commission and National Commission are required to decide complaints, as far as possible, within three months from date of notice received by the opposite parties. For those complaints which require laboratory analysis or testing of commodities, the period is extended to five months. 
In case it is proved that there exists a defect in the goods or that the services rendered were deficient in nature the following remedies against the seller are available to the Consumer.
a)      To remove the defect pointed out by the appropriate laboratory from the goods in question or;
b)      Replace the goods with new goods of similar description, which shall be free from any defect;
c)       Return to the complainant the price of the goods or the charges for the services rendered and / or;
d)      Pay such amount as compensation for any loss or injury suffered by the Consumer or;
e)      Remove the deficiency in the service and/ or;
f)       Discontinue the unfair or restrictive trade practice and not to repeat them and / or;
g)      Not to offer hazardous goods for sale and / or;
h)      Withdraw the hazardous goods for sale and / or;
i)        Provide adequate costs to the parties.
Consumer Dispute
Section 2 (1) (e) provides "consumer dispute" means a dispute where the person against whom a complaint has been made, denies or disputes the allegations contained in the complaint;
A Consumer dispute would arise when there is a complaint by a consumer and the person against whom the complaint has been made denies or disputes the allegations contained in the complaint.
When a material proposition of fact or law is affirmed by one of the party and denied by the other, the issues arise and Court frames those issues in the form of questions. Each of such allegations made by the Complainant and denied by the defendant becomes a “consumer dispute.
There shall be established for the purposes of this Act, the following agencies, namely,-
a)      The Central Consumer Protection Council established by the Central Government by notification.
b)      The State Consumer Protection Council established by the State Government in the State by notification; and
c)       The District Consumer Protection Council established by the State Government   in each district of the State by notification. The State Government may, if it deems fit, establish more than one District Forum in a district.
1.       The Central Consumer Protection Council: The Central Government may, by notification, establish with effect from such date as it may specify in such notification, a council to be known as the Central Consumer Protection Council (hereinafter referred to as the Central Council).
a)      The Minister in charge of consumer affairs in the Central Government, who shall be its Chairman, and
b)      Such number of other official or non-official members representing such interests as may be prescribed.
The objects of the Central Council shall be to promote and protect the rights of the consumers such as-
a)      The right to be protected against the marketing of goods [and services] which are hazardous to life and property;
b)      The right to be informed about the quality, quantity, potency, purity, standard and price of goods 1[or services, as the case may be], so as to protect  the consumer against unfair trade practices;
c)       The right to be assured, wherever possible, access to a variety of goods and services at competitive prices;
d)      The right to be heard and to be assured that consumers'  interests will receive due consideration at appropriate forums;
e)      The right to seek redressal against unfair trade practices 1[or restrictive trade practices] or unscrupulous exploitation of consumers; and
f)       The right to consumer education.
Value for filling complaint in district forum: National Consumer Disputes Redressal Commission: The National Consumer Disputes Redressal Commission has jurisdiction to entertain complaints where the value of the goods or services and compensation if any claimed exceeds Rs.1,00,00,000 (ONE CRORE)
2.       The State Consumer Protection Councils
The State Government may, by notification, establish with effect from such date as it may specify in such notification, a council to be known as the Consumer Protection Council (hereinafter referred to as the State Council).
a.       The Minister in-charge of consumer affairs in the State Government who shall be its Chairman;
b.      Such number of other official or non-official members representing such interests as may be prescribed by the State Government.
The objects of every State Council shall be to promote and protect within the State the rights of the consumers laid down in clauses (a) to (f) of section 6. (Objects of National Council)
a)      The right to be protected against the marketing of goods [and services] which are hazardous to life and property;
b)      The right to be informed about the quality, quantity, potency, purity, standard and price of goods 1[or services, as the case may be], so as to protect  the consumer against unfair trade practices;
c)       The right to be assured, wherever possible, access to a variety of goods and services at competitive prices;
d)      The right to be heard and to be assured that consumers'  interests will receive due consideration at appropriate forums;
e)      The right to seek redressal against unfair trade practices 1[or restrictive trade practices] or unscrupulous exploitation of consumers; and
f)       The right to consumer education.
Value for filling complaint in district forum: The State Consumer Disputes Redress Commission is established in each state and these have jurisdiction to entertain complaints where the value of goods or services and the compensation if any, claimed exceeds Rs.20,00,000 (TWENTY LAKHS) but does not exceed Rs.1,00,00,000 (ONE CRORE).
Section 8-A as inserted by the Consumer Protection (Amendment) Act, 2002. The State government shall establish for every district, by notification, a council to be known as the District Consumer Protection Council.
The District Consumer Protection Council (hereinafter referred to as the District Council) shall consist of the following members:
a.       The collector of the district (by whatever name called) who shall be its Chairman; and
b.      Such number of other official and non-official members representing such interest as maybe described by the state government.
The Objects of every District Council shall be to promote and protect within the district the rights of consumers laid down in the clause (a) to (f) of Section 6 (National Consumer Protection Council).
a)      The right to be protected against the marketing of goods [and services] which are hazardous to life and property;
b)      The right to be informed about the quality, quantity, potency, purity, standard and price of goods 1[or services, as the case may be], so as to protect  the consumer against unfair trade practices;
c)       The right to be assured, wherever possible, access to a variety of goods and services at competitive prices;
d)      The right to be heard and to be assured that consumers'  interests will receive due consideration at appropriate forums;
e)      The right to seek redressal against unfair trade practices 1[or restrictive trade practices] or unscrupulous exploitation of consumers; and
f)       The right to consumer education.
Value for filling complaint in district forum: At the lowest level are the District Forums and these are established in each District and have jurisdiction to entertain complaints where the value of goods or services and the compensation if any, claimed does not exceed Rs.20, 00,000 (TWENTY LAKHS), and a complaint can be filed in a District Forum within the local limits of which
a)      The opposite party resides or
b)      Carries on his business or works for gain or
c)       Where the cause of action arises.

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