Consumer Protection Act Consumer Protection Act can be described as common mans Civil Court and MRTP Act

for the poor. The Act is designed to make available cheap and quick remedy to a small consumer. The Act was passed in 1986 and was made effective in 1987. Amendments were made in 1991 to provide for situations of absence of President of Forum. Major changes were made in 1993 (effective from 18-6-1993). - - On getting further experience of implementation of the Act, substantial changes have been made by Amendment Act, 2002. Major changes made in the Amendment Act are - * Enhancement in monetary limit of District Forum from Rs 5 lakhs to 20 lakhs and of State Commission from Rs 20 lakhs to Rs one crore * Payment of fees for filing complaint/appeal * Complaint/appeal will have to be admitted first * Reason to be recorded if decision not given within specified time * Cost of adjournment can be imposed * Interim orders can be passed * In absence of President, senior most member can discharge functions of President * Pre-deposit of certain amount before appeal is entertained * Notice can be sent by Fax/courier. The amendments have been made effective from 15-3-2003. Procedure under CPA - Section 12(1) provides that a complaint in relation to any goods sold or delivered or to be sold or delivered or any service provided or agreed to be provided may be filed with consumer forum. The Act envisages setting up of Consumer Disputes Redressal Agency at local, i.e., district level, state level and national (Central) level. District Forum has jurisdiction to decide consumer disputes where value of goods or services and the compensation claimed does not exceed Rs. 20 lakhs. State Commission has jurisdiction to decide the cases where value of goods and services plus compensation is over Rs. 20 lakhs but not over Rs. 100 lakhs. In addition, it decides appeals filed against order of District Forum. National Commission (HQ at New Delhi) has original jurisdiction where matter is over Rs. 100 lakhs. It also has appellate jurisdiction over State Commission. Appeal against order of State Commission can be filed only in case of original order by State Commission i.e. when matter was over Rs. 20 lakhs. No appeal can be filed to National Commission in case where State Commission has passed order in appeal against original order of District Forum. Appeal against order of National Commission lies with Supreme Court only in matters where it exercises original jurisdiction, i.e., when matter is over Rs. 100 lakhs. There is no provision of appeal in cases where National Commission decides under its appellate jurisdiction, i.e., when it decides appeal against order of State Commission. Thus, in all cases, only one appeal has been provided.[However, revision petition to National Commission, which is second appeal by back door, can be filed]. Complaint can be filed by a consumer, a voluntary consumer association or Central/State Government. Class Action i.e., some consumers filing complaint on behalf of many consumers is also permitted. Complaint can be filed against (a) deficiency in goods or service (b) unfair trade practice or restrictive trade practice (c) charging of higher prices (d) Supplying hazardous goods or services. Fees are required to be paid along with the complaint. Complaint must be filed within two years from cause of action. This period can be extended on showing sufficient cause. Appeal against order of District Forum/State Commission/National Commission must be filed within 30 days from date of order. Penalty upto Rs. 10,000 can be imposed on a complainant, if it is found that he has made frivolous (bogus) complaint. Persons not complying with order of redressal authorities can be punished with imprisonment upto three years and/or fine upto Rs. 10,000. Provisions are made for enforcement of order and imposition of penalty in case order of consumer forum is disobeyed. Complaint to consumer forum - Section 12(1) provides that a complaint in relation to any goods sold or delivered or to be sold or delivered or any service provided or agreed to be provided may be filed with consumer forum.

District, State Commission and National Commission are consumer forums, termed as Consumer Dispute Redressal Agencies. It is necessary to understand meaning of complaint and who can file the same. Defect - The word defect means any fault, imperfection or shortcoming in the quality, quantity potency, purity or standard that is required to be maintained by or under any law for the time being in force or under any contract, express or implied, or as is claimed by the trader in any manner whatsoever in relation to any goods (Section 2(1)(f) of CPA). Consumer Dispute - Consumer Dispute means a dispute where the person against whom a complaint has been made, denies or disputes the allegations contained in the complaint [section 2(1)(e)]. - - Obviously, if the person against whom complaint is made agrees to the complaint, there is no consumer dispute. Who is Complainant - Section 2(1)(b) of CPA defines that "Complainant" means (i) a consumer; or (ii) any voluntary consumer association registered under the Companies Act, or under any other law for the time being in force; or (iii) the Central Government or any State Government, who or which makes a complaint or (iv) One or more consumers, where there are numerous consumers having the same interest or (v) in case of death of a consumer, his legal heir or representative; - who or which makes a complaint. Exclusion if goods or services for Commercial purpose - A person who buys goods for resale or commercial purposes or avails services for commercial purposes is specifically excluded from definition of consumer. Trader - Complaint can be lodged against a trader in case of goods and against service provider in case of services. Trader includes manufacturer. Deficiency in service - Complaint can be lodged against service provider if there is deficiency in service, or if he charges higher prices or provides services which are hazardous or where service provider follows unfair or restrictive trade practice. Deficiency - Deficiency means any fault, imperfection or shortcoming in the quality, quantity, potency, purity or standard, which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service. [section 2(1)(g) of CPA]. Restrictive and Unfair Trade Practices - Consumer Protection Act makes specific provisions in respect of Restrictive Trade Practices (RTP) and Unfair trade Practices (UTP). Restrictive Trade Practice - Section 2(1)(nnn) of CPA [As amended by Amendment Act, 2002] define Restrictive Trade Practice (RTP) as one which tends to bring about manipulation of price or its conditions of delivery or to affect flow of supplies in the market relating to goods or services in such a manner as to impose on the consumers unjustified costs or restrictions and shall include (a) delay beyond the period agreed to by a trader in supply of such goods or in providing the services which has led or is likely to lead to rise in the price; (b) any trade practice which requires a consumer to buy, hire or avail of any goods or, as the case may be, services as condition precedent to buying, hiring or availing of other goods or services. Unfair Trade Practice - Unfair Trade Practice is defined under section 2(1)(r) of CP Act. Unfair trade practice means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice. Foreign Exchange Management Act, 1999 Foreign Exchange Management Act (FEMA), 1999 has been enacted as part of liberalisation process initiated by Government of India. The Act is implemented w.e.f. 1st June, 2000 . As per Statement of Objects to the FEMA Bill, the object of FEMA is to consolidate and amend the law relating to foreign exchange with the object of facilitating external trade and payments and for

promoting the orderly development and maintenance of foreign exchange markets in India. - Reserve Bank of India is the overall controlling authority in respect of FEMA. SALIENT PROVISIONS OF FEMA - FEMA provides * Free transactions on current account subject to reasonable restrictions that may be imposed * RBI control over capital account transactions * Control over realisation of export proceeds * Dealing in foreign exchange through 'Authorised Persons' like Authorised Dealer /Money Changer / Off-shore banking unit * Adjudication of Offences * Appeal provisions including Special Director (Appeals) and Appellate Tribunal * Directorate of Enforcement. Enforcement of FEMA - Though RBI exercises overall control over foreign exchange transactions, enforcement of FEMA has been entrusted to a separate Directorate of Enforcement formed for this purpose. [section 36]. Overall scheme of FEMA - Basically, FEMA makes provisions in respect of dealings in foreign exchange. Broadly, all current account transactions are free. However, Central Government can impose reasonable instructions by issuing rules. [section 3 of FEMA]. Capital Account Transactions are permitted to the extent specified by RBI by issuing regulations. [section 6]. FEMA envisages that RBI will have a controlling role in management of foreign exchange. Since RBI cannot directly handle foreign exchange transactions, it authorises Authorised Persons to deal in foreign exchange as per directions issued by RBI. [section 10 of FEMA]. RBI is empowered to issue directions to such Authorised Persons u/s 11. These directions are issued through AP(DIR) circulars. FEMA also makes provisions for enforcement, penalties, adjudication and appeals. Person resident in India - Person resident in India is defined in section 2(v). Broadly, person resident of India includes persons of India (except those staying abroad for work or business or other purpose) and foreign persons who come to India or stay in India for employment, carrying out business or other purpose. - - Person resident outside India - It means a person who is not resident in India. [section 2(w)]. Non-Resident Indian - 'Non Resident Indian (NRI)' means a person resident outside India who is a citizen of India or is a person of Indian origin. Permitted Currency/ Convertible currency/Hard Currency - As per regulation 2(v) of FEM (Manner and Receipt and Payment) Regulations, 2000, permitted currency means a foreign currency which is freely convertible. Foreign Exchange- Section 2(n) states that foreign exchange means foreign currency and includes (i) deposits, credits, and balances payable in any foreign currency (ii) drafts, travellers cheques, letter of credit or bill of Exchange expressed or drawn in Indian currency but payable in foreign currency. (iii) drafts, travellers cheques, letter of credit or bill of Exchange drawn by banks, institutions or persons outside India, but payable in Indian currency. Authorised Persons - Section 2(c) states that 'authorised person' means an authorised dealer, money changer, off-shore banking unit or any other person authorised u/s 10(1) to deal in foreign exchange and foreign securities. These are authorised by RBI under section 10 of FEMA to deal in foreign exchange. Prevention of Money Laundering Act The Act is to prevent money laundering. Money is generated in a very large scale due to crimes. These cover trade in narcotics, smuggling, trade in banned/prohibited articles, antics, corruption, counterfeiting currency, gambling, trade in prohibited arms/ammunition, selling national secrets etc. This money is required to be converted into untainted money so that it can be used. [In common terminology it is called converting black money or Number Two money into white money or Number One money]. In brief, converting tainted money into untainted money is called money laundering. What is money laundering - Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the

proceeds of crime and projecting it as untainted property shall be guilty of offence of moneylaundering. [section 3]. - - Interestingly, a person may be held guilty even if he unknowingly assists a party in money laundering. Proceeds of crime means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence, or the value of such property. [section 2(1)(u). Schedules offense - The definition of proceeds to crime applies when criminal activity is relating to scheduled offence. Scheduled Offence means (i) Offences specified under Part A of Schedule to the Act (ii) Offenses specified under Part B of Schedule to the Act if the total value involved in such offense is Rs thirty lakhs or more. Punishment for offense - The punishment for offence of money laundering shall be imprisonment upto seven years (10 years in case of offenses relating to narcotics drugs) and fine upto Rs five lakhs. [section 4]. In addition, the tainted property is confiscated by Central Government. [section 8(6)]. - - Note that the person who has actually committed the offense will be punished as per provisions of the particular Act. The punishment specified in this Act is only to person who was involved or who assisted in converting tainted money into untainted money. Obligations of banking companies, FI and intermediary - Money laundering will naturally be done through banking company, financial institutions or intermediary of share market. Hence, responsibility has been cast on them to keep prescribed records and inform doubtful transactions to Authority under the Act. [section 12]. KEEPING RECORDS AND INFORMING AUTHORITY - The bank, FI and intermediary should maintain record of all transactions of nature and value as prescribed, whether such transactions comprise of a single transaction or a series of transactions integrally connected to each other when such series of transactions take place within a month. The information should be informed to Director (authority under the Act) within prescribed time. The records should be maintained and identity of clients should be verified. - - The records should be maintained for 10 years. [section 12(2)]. Manner and procedure of furnishing information will be prescribed by Central Government. [section 15]. Authorities under the Act - Central Government will appoint special authorities to investigate the crimes under the Act. The department will be headed by Director who will be assisted by Deputy Director, Assistant Director etc. [section 48]. The Director will have powers of s Civil Court while trying a suit. [section 50(1)]. The director, joint director etc. have power to summon any person. [section 50(2)]. He will be examined and the proceeding will be deemed to be judicial proceeding. [section 50(4)]. They can impound the records produced before them. [section 50(5)]. The jurisdiction of officers will be decided by Central Government. [section 51]. Officers of other departments are empowered and required to assist the authorities under the Act. [section 54].