INTRODUCTION

Consumerrightsareanintegralpartofourlivesliketheconsumeristwayoflife.
Wehaveallmadeuseofthematsomepointinourdailylives.Marketresources
andinfluencesaregrowingbythedayandsoistheawarenessofonesconsumer
rights.TheserightsarewelldefinedandthereareagenciesliketheGovernment,
consumer courts and voluntary organizations that work towards safeguarding.
Whileweliketoknowaboutourrightsandmakefulluseofthem,consumer
responsibilityisanareawhichisstillnotdemarcatedanditishardtospellout
thatalltheresponsibilityisthataconsumerissupposedtoshoulder.Consumer
ProtectionAct,1986isanimportantActinthehistoryoftheconsumermovement
in the country. The Act was made to provide for the better protection and
promotionofconsumerrightsthroughtheestablishmentofconsumercouncilsand
quasijudicial machinery. It is mile stone in the history of socioeconomic
legislationanddirectedtowardspublicwelfareandpublicbenefits.
TheCPAwaspassedbytheLokSabhaon5 thDecember1986andRajyaSabhaon
10thDecember,1986andassentedtobythepresidentintheGazetteofIndia.An
Actprovideforbetterprotectionoftheinterestoftheconsumers andforthat
purposetomakeprovisionsfortheestablishmentofconsumercouncilsandother
authorities for the settlement of consumers dispute and for matters connected
therewith.1
UndertheAct,consumerdisputesredressalagencieshavebeensetupthroughout
thecountrywiththeDistrictForumattheDistrictlevel,StateCommissionatthe
State level and National Commission at national level to provide simple,
inexpensiveandspeedyjusticetotheconsumerwithcomplaintsagainstdefective
goods,deficientservicesandunfairandrestrictivetradepractices
TheLawrelatingtoconsumerprotectioninIndiaisatrecentoriginandis
developingslowly,daybyday,withthepronouncementoforderspassed
by the commissions constituted under the Act all over India and the
NationalCommission

1 Consumerprotectionact,1986.

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 However the presence of some protective Laws for the benefits of
consumerintheancientculturecannotbedenied.

ConsumerProtectionActof1986

ConsumerProtectionActisanIndianfederationlawenactedin1986toprotect
interests of consumers inIndia. It makes provision for the establishment of
consumercouncilsandotherauthoritiesforthesettlementofconsumerdisputes
andformattersconnectedtherewith.Thegrowinginterdependenceoftheworld
economyandinternationalcharacterofmanybusinesspracticeshavecontributed
to the development of universal emphasis on consumer rights protection and
promotion.Consumers,clientsandcustomersworldover,aredemandingvalue
formoneyintheformofqualitygoodsandbetterservices.Moderntechnological
developmentshavenodoubtmadeagreatimpactonthequality,availabilityand
safety of godsend services. But the fact of life is that the consumers are still
victims of unscrupulous and exploitative practices. Exploitation of consumers
assumesnumerousformssuchasadulterationoffood,spuriousdrugs,dubious
hire purchase plans, high prices, poor quality, deficient services, deceptive
advertisements,hazardousproducts,blackmarketingandmanymore.Inaddition,
withrevolutionininformationtechnologynewerkindsofchallengesarethrown
ontheconsumerlikecybercrimes,plasticmoneyetc.,whichaffecttheconsumer
in even bigger way. Consumer is sovereign and customers the king are
nothingmorethanmythsinthepresentscenarioparticularlyinthedeveloping
societies. However, it has been realised and rightly so that the Consumer
protectionisasocioeconomicprogrammetobepursuedbythegovernmentas
wellasthebusinessesthesatisfactionoftheconsumersisintheinterestofboth.In
thiscontext,thegovernment,however,hasaprimaryresponsibilitytoprotectthe
consumers interests and rights through appropriate policy measures, legal
structureandadministrativeframework.
TheintentionandobjectoftheConsumerProtectionAct,istoprovideaspeedy
remedyandforbetterprotectionofinterestsofconsumer.

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TheConsumerProtectionAct,1986hasdefinedthetermCONSUMER.Onlythe
complainantwhofallsunderthedefinitionofConsumercanbebenefitedthrough
Consumer Protection Act. Hence the definition of CONSUMER is of much
importancetodeterminetheapplicabilityoftheAct.

ObjectivesoftheAct

ThepurposeoftheActistoprovidefortheestablishmentoftheCommission:

Topreventpracticeshavingadverseeffectoncompetition;

Topromoteandsustaincompetitioninmarkets;

Toprotecttheinterestsofconsumersand

Toensurefreedomoftradecarriedonbyotherparticipantsinthemarkets,
in India
ThemajorfocusoftheActisonthefollowingareas:

Prohibitionofanticompetitiveagreements;

Prohibitionagainstabuseofdominantposition;

Regulationofcombinations;

Advocacyofcompetitionpolicy.

The legislative intention behind this Act is to clear all hurdles in promoting
competitionamongbusinessunitswhetherofdomesticorforeignorigin.

TheConsumerProtectionActof1986wasenactedwithanobjectivetoprovide
better protection of the interests of the Consumers, to make provision for the
establishmentofConsumerCouncilsandotherauthoritiesforthesettlementof
consumerdisputes.Thisisindeedaveryuniqueandhighlyprogressivepieceof

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SocialWelfareLegislation.TheprovisionsofthisActareintendedtoprovide
effective and efficient safeguards to the consumers against various types of
exploitationsandunfairdealings.Unlikeotherlaws,whicharebasicallypunitive
orpreventiveinnature,theprovisionsoftheActarecompensatory.Itisamatter
of great satisfaction that we can legitimately boast that we now have in our
countryastatute,whichprovidesmoreeffectiveprotectiontotheconsumersthan
anycorrespondinglegislationinforceincountries,whichareconsideredtobe
muchmoreadvancedandindustralised.CPAhasbeeninoperationforabout18
years.Anumberofdeficienciesandshortcominginrespectofitsoperationhave
cometolighttherebyrequiringamendmentsthrice,stillleavingscopeforfurther
improvements. Despite all this it is a handy weapon for consumers to ensure
accountabilityofproducersofgoodsandprovidersofservices.IntheInternational
Conference on Consumer Protection held in Malaysia in 1997, the Indian
Consumer Protection Act was described as one which has set in motion a
revolutioninthefieldofconsumerrights,theparallelofwhichhasnotbeenseen
anywhereelseintheworld.

DEFINITIONS:
1.Consumerism: isdefinedastheprotectionoftheinterestsofthebuyersof
goodsandservicesagainstdefectiveordangerousgoodsetc.
2.Consumer:sec2(1)(d)Consumersarepersonstowhomgoodsorservicesare
marketed,whohaveenteredintotransactionswithsuppliers,usersofparticular
goodsorrecipients/beneficiariesofservices.
3.Complaintant:Complainantmeans
o Aconsumertowhomgoodsaresoldordeliveredoragreedtobesoldor
deliveredorsuchservicesprovidedoragreedtobeprovided.
o VoluntaryConsumerOrganisation.
o TheCentralGovernment.
o TheStateGovernmentsorUnionTerritoryAdministration.
o Oneormoreconsumers,wheretherearenumerousconsumershavingthe
sameinterest.

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Example:Whereayoungchildistakentothehospitalbyhisparentsandthechild
istreatedbythedoctor,theparentsofsuchaminorchildcanfileacomplaint
undertheActSpringMeadowsHospitalv.HarjotAhluwaliaJT2
ThedefinitionasprovidedunderSec.2(1)(b)isdifferentfromlistofpersonswho
canfilecomplaint.Thelegalheirsorrepresentativesofthedeceasedhavebeen
includedindefinitionofcomplainantby2002amendmentbuthavenotbeen
specifiedinSec.12(1)aspersonwhocanfilecomplaint,which,createsadoubt
thathecannotfileandcanonlycontinueasacomplainantafterthedeathofthe
complainant.JosephAliasAnimonv.Dr.ElizabethZachariah.3
4.Complaint:Acomplaintmustcontainanyofthefollowingallegations.
o Anunfairtradepracticeorarestrictivetradepracticehasbeenadoptedby
anytrader.
Example:RameshsoldasixmonthsoldcartoSameerrepresentingittobeanew
one.HereSameercanmakeacomplaintagainstRameshforfollowinganunfair
tradepractice.
o Thegoodsboughtbyhimoragreedtobeboughtbyhimsufferfromoneor
moredefects.
Example:RajboughtacomputerfromSuprit.Itwasnotworkingproperlysince
dayone.RajcanmakeacomplaintagainstSupritforsupplyinghimadefective
computer.
o Theserviceshiredoravailedoforagreedtobehiredoravailedofbyhim
sufferfromdeficiencyinanyrespect.
Example: Pratik hired services of an advocate to defend himself against his
landlord.Theadvocatedidnotappeareverytimethecasewasscheduled.Pratik
canmakeacomplaintagainsttheadvocate.
o Atraderhaschargedforthegoodsmentionedinthecomplaintapricein
excessofthepricefixedbyorunderanylawforthetimebeinginforceor
displayedonthegoodsoranypackagecontainingsuchgoods.

21998(2)SC620.
31997CPJ96.

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Example:SagarboughtasackofcementfromMayurwhochargedhimRs.100
overandabovethereservepriceofthecementdeclaredbytheGovernment.Here
SagarcanmakeacomplaintagainstMayur.
o Goodswhichwillbehazardoustolifeandsafetywhenused,arebeing
offeredforsaletothepublicincontraventionoftheprovisionsofanylaw
for the time being in force requiring traders to display information in
regardtothecontents,mannerandeffectofuseofsuchgoods.
Example:Rajeshboughtatinofdisinfectantpowder.Ithadlidwhichwastobe
opened in a specific manner. Trader did not inform Rajesh about this. While
openingthelidinordinaryway,somepowderflewintheeyesofRajeshwhich
affectedhisvision.HereRajeshcanmakeacomplaintagainstthetrader.
AComplaintshouldcontainthefollowinginformation:
(a)Thename,descriptionandaddressofthecomplainant;
(b)Thename,descriptionandaddressoftheoppositepartyorparties;
(c)Thefactsrelatingthecomplaintandwhenandwhereitarose;
(d)Documentsifanyinsupportofallegationsand
(e)Thereliefwhichthecomplainantisseeking.
ThecomplaintshouldbesignedbytheComplainantorhis/herauthorisedagent.
FEATURES
FollowingarethefeaturesoftheActare:
I. TheActaimstoprovidebetterandallroundprotectiontoconsumers.
II. Intermsofgeographicalapplication,itappliestothewholeofIndiaexcept
theStateofJammuandKashmir.
III. Itappliestoallgoodsandservicesunlessotherwiseexpresslynotifiedby
theCentralGovernment.
IV. Itisindeedaveryuniqueandhighlyprogressivepieceofsocialwelfare
legislationandisacclaimedasthemagnacartaofIndianconsumers.
The Act has made the consumer movement really going and more powerful,
broadbasedandeffectiveandpeopleoriented.Infact,theActanditsAmendment
in1993havebroughtfreshhopestothebeleagueredIndianconsumer.Thisisthe
onlylawwhichdirectlypertainstomarketplaceandseekstoredresscomplaints
arisingfromit.Evenpriorto1986,therewereinforceanumberoflawswhich

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couldbeinterpretedinfavouroftheconsumers.But,thisActismostpowerful
pieceoflegislationtheconsumerhashadbefore1986.Itsprovisionsarevery
comprehensive and highly efficacious. In fact, it provides more effective
protection to consumers than any corresponding legislation in force even in
countrieswhichareconsideredtobemuchmoreadvanced.
V. Itprovideseffectivesafeguardstotheconsumersagainstdifferenttypesof
exploitationsuchasdefectivegoods,unsatisfactory(ordeficient)services
andunfairtradepractices.

CONSUMERRIGHTS
Section6oftheConsumerProtectionActdealswithconsumerrights:

Althoughbusinessmanisawareofhissocialresponsibilitieseventhenwecome
acrossmanycasesofconsumerexploitation.ThatiswhygovernmentofIndia
providedfollowingrightstoalltheconsumersundertheConsumerProtectionAct:

RighttoSafety:Accordingtothisrighttheconsumershavetherightto
be protected against the marketing of goods and services which are
hazardoustolifeandproperty,thisrightisimportantforsafeandsecure
life.Thisrightincludesconcernforconsumerslongterminterestaswell
asfortheirpresentrequirement.

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Sometimesthemanufacturingdefectsinpressurecookers,gascylindersandother
electricalappliancesmaycauselosstolife,healthandpropertyofcustomers.This
right to safety protects the consumer from sale of such hazardous goods or
services.

RighttoInformation:Accordingtothisrighttheconsumerhastheright
togetinformationaboutthequality,quantity,purity,standardandpriceof
goodsorservicesoastoprotecthimselfagainsttheabusiveandunfair
practices. The producer must supply all the relevant information at a
suitableplace.

Right to Choice:- According to this right every consumer

has the right to choose the goods or services of his or her
likings. The right to choose means an assurance of
availability, ability and access to a variety of products and
services at competitive price and competitive price means
just or fair price.

The producer or supplier or retailer should not force the customer to buy a
particular brand only. Consumer should be free to choose the most suitable
productfromhispointofview.

Right to be Heard or Right to Representation:- According to

this right the consumer has the right to represent him or to
be heard or right to advocate his interest. In case a
consumer has been exploited or has any complaint against
the product or service then he has the right to be heard
and be assured that his/her interest would receive due
consideration.

This right includes the right to representation in the government and in other
policymakingbodies.Underthisrightthecompaniesmusthavecomplaintcellsto
attendthecomplaintsofcustomers.

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 RighttoSeekRedressal: Accordingtothisrighttheconsumerhasthe
righttogetcompensationorseekredressalagainstunfairtradepracticesor
any other exploitation. This right assures justice to consumer against
exploitation.

Therighttoredressalincludescompensationintheformofmoneyorreplacement
ofgoods orrepairofdefectinthegoods asperthesatisfactionofconsumer.
Variousredressalforumsaresetupbythegovernmentatnationallevelandstate
level.

Right to Consumer Education:- According to this right it is

the right of consumer to acquire the knowledge and skills
to be informed to customers. It is easier for literate
consumers to know their rights and take actions but this
right assures that illiterate consumer can seek information
about the existing acts and agencies are set up for their
protection.

The government of India has included consumer education in the school

curriculumandinvariousuniversitycourses.Governmentisalsomakinguseof
mediatomaketheconsumersawareoftheirrightsandmakewiseuseoftheir
money.

Apartfromtheabovesixrightstwoadditionalrightsarerecommendedby
theUNO

RighttoBasicNeeds: Thebasicneedsmeanthosegoodsandservices
whicharenecessaryforadignifiedlivingofpeople.Itincludesadequate
food, clothing, shelter, energy, sanitation, health care, education and
transportation.Alltheconsumershavetherightfulfilthesebasicneeds.

Right to Healthy Environment: This right provides the consumers,

protection against environmental pollution so that the quality of life is

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 enhanced.Notonlythis,italsostressestheneedtoprotecttheenvironment
forthefuturegenerationsaswell.

StructureOfConsumerProtectionAct
TheActenvisagesathreetierquasijudicialmachineryatthe:
1. Nationallevel,
2. Statelevel,and
3. Districtlevels.

1. National Consumer Disputes Redressal Commission: known as

"National Commission" deals with complaints involving costs
andcompensationhigherthanRs.OneCrore.
2. State Consumer Disputes Redressal Commissions: known as "State
Commission, deals with complaints involving costs and compensation
higherthanRs.TwentyLakhsandlessthanRs.OneCrore.
3. District Consumer Disputes Redressal Forums: known as "District
Forum,dealswithcomplaintsinvolvingcostsandcompensationlessthan
Rs.TwentyLakhs.

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CreditCardInRelationWithConsumerProtection

CreditCardAccountabilityResponsibilityandDisclosureActof2009,commonly
calledtheCARDAct,isafederallawthatfundamentallychangedcreditcard
issuers'practicesandconsumers'rights.Hereisabriefguidetoitshistoryandits
12biggestconsumerprotections.

CreditCardAct:

Afteryearsofcomplaintsabout"gotcha"fineprintandconfusingterms,Congress
passedandPresidentObamasignedMay22,2009,areformlawthatmandated
more transparency and easiertounderstand terms. The law directed several
federalagenciestoworkoutthefinedetailsofenforcement,andtheydidsoover
thetwoyearsfollowingtheCARDAct'senactment.

Whathasthelawmeantforcardholders?Creditcardusersareprotectedfrom
retroactiveinterestrateincreasesonexistingcardbalancesandhavemoretimeto
paytheirmonthlybills,greateradvancenoticeofchangesincreditcardtermsand
therighttooptoutofsignificantchangesintermsontheiraccounts.Thelawgave
consumersabitmoretime45daysinsteadof15toshoparoundforbetterdealsif
theydon'tlikethenewterms..

CreditCardActLaw:

Limitedinterestratehikes:Interestratehikesonexistingbalancesare
allowedonlyunderlimitedconditions,suchaswhenapromotionalrate
ends,thereisavariablerateorifthecardholdermakesalatepayment.
Interestrates onnewtransactions canincreaseonlyafterthefirstyear.
Significantchangesintermsonaccountscannotoccurwithout45days'
advancenoticeofthechange.

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 Limiteduniversal default:"Universal default," the practice of raising
interest rates on customers based on their payment records with other
unrelatedcreditissuers(suchasutilitycompaniesandothercreditors),has
endedforexistingcreditcardbalances.Cardissuersarestillallowedtouse
universaldefaultonfuturecreditcardbalancesiftheygiveatleast45days'
noticeofthechange.
Therighttooptout:Consumershavetherighttooptoutoforreject
certainsignificantchangesintermsontheiraccounts.Optingoutmeans
cardholdersagreetoclosetheiraccountsandpayoffthebalanceunderthe
oldterms.Theyhaveatleastfiveyearstopaythebalance.
Limitedcredit to young adults:Credit card issuers are banned from
issuingcreditcardstoanyoneunder21,unlesstheyhaveadultcosigners
ontheaccountsorcanshowprooftheyhaveenoughincometorepaythe
carddebt.Creditcardcompaniesmuststayatleast1,000feetfromcollege
campusesiftheyareofferingfreepizzaorothergiftstoenticestudentsto
applyforcreditcards.
Clearerduedates,times:Issuershavetogivecardaccountholders"a
reasonableamountoftime"topayonmonthlybills.Thatmeanspayments
aredueatleast21daysaftertheyaremailedordelivered.Creditcard
issuersarenolongerabletosetearlymorningorotherarbitrarydeadlines
forpayments.Cutofftimessetbefore5p.m.onthepaymentduedatesare
illegal.Paymentsdueatthosetimesoronweekends,holidaysorwhenthe
cardissuerisclosedforbusinessarenotsubjecttolatefees.Duedates
mustbethesameeachmonth.
Highestinterestbalancespaidfirst:Whenconsumershaveaccountsthat
carry different interest rates for different types of purchases (i.e., cash
advances, regular purchases, balance transfers or ATM
withdrawals),paymentsinexcessoftheminimumamountduemustgoto
balanceswithhigherinterestratesfirst.Acommonpracticeintheindustry
hadbeentoapplyallamountsovertheminimummonthlypaymentstothe
lowestinterestbalancesfirstthusextendingthetimeittakestopayoff
higherinterestratebalances.

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 Limits onoverlimitfees:Consumers must"optin"tooverlimitfees.
Thosewhooptoutwillhavetheirtransactionsrejectediftheyexceedtheir
creditlimits,thusavoidingoverlimitfees.Feescannotexceedtheamount
ofoverspending.Forexample,going$20overthelimitcannothaveafee
ofmorethan.
Nomoredoublecyclebilling:Financechargesonoutstandingcreditcard
balancesmustnowbecomputedbasedonpurchasesmadeinthecurrent
cycle rather than going back to the previous billing cycle to calculate
interest charges. Socalled twocycle or doublecycle billing hurts
consumerswhopayofftheirbalances,becausetheyarehitwithfinance
chargesfromthepreviouscycleeventhoughtheyhavepaidthebillinfull.
Subprimecardsrulesset:Peoplewhogetsubprimecreditcardsandare
chargedaccountopeningfeesthateatuptheiravailablebalancesgetsome
reliefunderthelaw.Theseupfrontfeescannotexceed25percentofthe
availablecreditlimitinthefirstyearofthecard.Cardapplicantsstillneed
tobecautious:Someissuersshiftedandchargefeesbeforeaccountsare
opened.
Minimum payments disclosure:Credit card issuers must disclose to
cardholders the consequences ofmaking onlyminimum payments each
month,namelyhowlongitwouldtaketopayofftheentirebalanceifusers
only made the minimum monthly payment. Issuers must also provide
informationonhowmuchusersmustpayeachmonthiftheywanttopay
offtheirbalancesin36months,includingtheamountofinterest.
Late fee restrictions:Late fees arecapped at $25for occasional late
payments;however,thefeescanbehigherifcardholdersarelatemore
thanonceinasixmonthperiod.
Gift cards expiration rules:Gift cards cannot expire sooner than five
yearsaftertheyareissued.Dormancyfeescanonlybechargedifthecard
is unusedfor12months ormore.Issuers can charge onlyonefee per
month,butthereisnolimitontheamountofthefee.

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Cases:
PunjabandSindBankvs.ManpreetSingh4

Inthiscase,itwasheldbythePunjabStateCommissionthatasavingsbank
accountholderisaconsumerundertheAct.Itwasobservedthatdifferenceinthe
landingandborrowingrates is the consideration forrendering services bythe
bank.Itwasalsonotedthatevenifthebankdoesnotchargeforprovidingcheque
facilitytotheaccountholder,itcannotbesaidthatthesameisgivenwithout
consideration.Actually,thechequebookfacilityisobtainedbythedepositorin
considerationofhisputtingfundsatthedisposalofthebank.

VimalChandraGrovervs.BankofIndia5

InthiscaseitwasarguedbeforetheSupremeCourtonbehalfofthebankthatthe
appellant,whotookoverdraftfacilityfromthebankbypledgingshares,isnota
consumerwithinthemeaningoftheconsumerProtectionAct.TheSupremeCourt
repelledtheargumentsofthebankandheldthatbankisrenderingserviceby
providingoverdraftfacilitiestoaconsumer,whichisnotwithoutconsideration.
Bank is charging interest and other charges as well in providing the service.

41994(3)CPJ532,
52000(2)CPJ11(SC):AIR2000SC2181.

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Provisionforoverdraftfacilityiscertainlyapartofthebankingandfallswithin
themeaningofserviceasprovidedinsection2(1)(o)oftheAct.

IDBIvs.KrishnenduGhosh6

InthiscasethecomplainantappliedforthepostofDeputyManager(legal)along
withaD.D.ofRs.50/asexaminationfee.Theinterviewletterwasreceivedby
himonthesamedayonwhichinterviewwastobeheld.Thebankrejectedthe
requestforescheduling.Acomplaintwasfiledclaimingcompensationforinjury
andmentalshock.TheNationalCommissionheldthatpaymentofRs.50/as
examinationfeewasnotconsiderationforhiringoravailingoftheservicesofthe
bank.Therefore,thecomplainantwasnotconsumer.

VirendraPrashadvs.ReserveBankofIndia7

InthiscaseacomplaintwasfiledbeforetheNationalCommissionstatingthatthe
complainant was eligible for certain advantages in his foreign currency/ rupee
bankaccountsbutthesefacilitiesweredeniedbybankersontheinstructionsfrom
the RBI. The National Commission held that here was no contract of service
betweenthecomplainantandtheRBIandtheRBIwasmerelydischargingits
statutoryfunction.Hence,itwasoutsidethepurviewoftheConsumerProtection
Act.

OrsVs.ReserveBankofIndia&Ors
TheroleofRBIasdefendantbeforeConsumerForumsaswellaswhetherthe
same qualifies any relief for exorbitant rate of interest charged on ordinary
consumersusingcreditcardinlightofthejudgmentalone.

UnfairTradePracticesincontextofRBI

AcomplaintundertheConsumerProtectionAct,1986(Act)tocurbunfairtrade
practice(s) adopted by the banks is maintainable. Section 2(1)(o) of the Act
definesservicemeans serviceofanydescriptionwhichismadeavailableto

61996(2)CPR155
71991(1)CPJ336(NC).

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potential users and includes, but not limited to, the provision of facilities in
connection with banking, financing but does not include the rendering of any
servicefreeofchargeorunderacontractofpersonalservice;Theaforesaidsub
sectionwouldestablishbeyonddoubtthatiftheserviceprovidedbythebankin
connection with banking facilities is deficient, then it would be service as
contemplatedundertheActandanydisputepertainingtosuchservicewouldbe
governedundertheAct.Hence,ifthereisanyunfairtradepracticeonthepartof
banks, the provisions of the Act would be applicable and the banks can be
directed, as provided under section 14(1)(f), to discontinue such unfair trade
practiceandnottorepeatthem.Therefore,iftheBankingRegulationAct,1949
requiresthattheRBIshalldischargecertainfunctionsinthepublicinterestandthe
RBIdoesnotdischargesuchfunctions,itwouldamounttounfairtradepractice.

Held:

Fortheforegoingreasons,thetakeawayofthisdiscussionis:

i. Chargingofinterestatratesinexcessof30%p.a.fromthecreditcard
holdersbybanksfortheformersfailuretomakefullpaymentonthedue
dateorpayingtheminimumamountdue,isanunfairtradepractice.
ii. Penalinterestcanbechargedonlyonceforoneperiodofdefaultandshall
notbecapitalized.
iii. Chargingofinterestwithmonthlyrestsisalsoanunfairtradepractice.
Hence,thebanksaredirectednottoindulgeintheaforesaidunfairtrade
practices or repeat them. The Consumer For a made it clear that the
directionnottochargeinterestinexcessofaspecificratewouldnotbe
applicabletothepasttransactionsandthatwearenotreopeningthesame.
Considering the aforesaid factors, in our view, charging of interest in
excessof30%shallbeconsideredusuriesrateofinterestandthatifsuch
rateofinterestischargeditwouldamounttounfairtradepractice.

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 CONCLUSION
ConsumerProtectionActcanbeexplainedascommonmanscivilcourt.TheAct
isdesignedtomakeavailablecheapandquickremedytoaconsumer.Theobject
of the act is to protect the consumer forum the exploitative and unfair trade
practicestoprovideinexpensive,easilyaccessibleandspeedyremedy.Analysisof
thevariousjudgmentsoftheConsumerCourtsrevealsthattheyhavenotonly
beenawardingthevalueofthegoodsorservicesforthedefectanddeficiencyin
servicebutalsothecompensationforthementalagonyandharassment.Itisseen
thatinthesecasesagainsttheinjusticeconsumersareinproblemagainstthebank.
ButthejusticeseemstohaveprevailedundertheaegisoftheConsumerProtection
Act.Ithasbeenfoundthatthereisapositivejusticetotheconsumersagainstthe
faultybankingservices.

Although the reforms were dramatic, they do not protect card users from
everything.Issuerscanstillraiseinterestratesonfuturecardpurchasesandthere

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isnocaponhowhighinterestratescango.Businessandcorporatecreditcards
alsoarenotcoveredbytheprotectionsintheCARDAct.Ifcreditcardaccounts
are based on variable APRs (as the vast majority now are), interest rates can
increaseastheprimerategoesup.Creditcardcompaniescanalsocontinueto
close accounts and slash credit limits abruptly, without giving cardholders
warning.

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