CONSUMER PROTECTION ACT 1986 (Syllabus: GS Paper 3– Economy)

News-CRUX-10     15th May 2024        

Context: The Supreme Court on Tuesday ruled that lawyers cannot be sued in consumer courts for poor service, clarifying the extent of lawyers’ liability under the Consumer Protection Act.

Consumer Protection Act 1986

  • About: In this act, a consumer is defined as any person who purchases, hires, or avails of any goods or services for a consideration, which includes payment or promise of payment.
  • Applicability: Initially, the Act applied to the entire nation except for Jammu and Kashmir.
  • Amendments in 2002 were enforced from 15 March 2003, refining its provisions.
  • Jurisdiction: 

o District Forum: Up to ₹20 Lakhs

o State Commission: ₹20 Lakhs to ₹1 Crore

o National Commission: Above ₹1 Crore

  • Regulator: No explicit provision for a regulator was outlined during this period.
  • E-Commerce: There was no specific mention of E-Commerce within the provisions of the Act.
  • Authority: Three main authorities operated under this Act: District Forum, State Commission, and National Commission.
  • Composition of State Commission: The State Commission was composed of one president and two other members according to the Consumer Protection Act 1986.

Supreme Court Verdict on Consumer Protection Act

  • The Supreme Court made a significant ruling regarding legal representation and its classification under the Consumer Protection Act, 1986.
  • Lawyers Not Classified: The court asserted that legal representation for a fee cannot be categorized as a "service" under the Consumer Protection Act.
  • Unique Nature of Legal Services: The court highlighted the unique nature of legal services, indicating that the legislature did not intend to include professionals within the scope of the 1986 Act.
  • Previous Judgment: The Supreme Court overturned a 2007 judgment by the consumer commission, which had brought advocates under the purview of the Consumer Protection Act.
  • Legal Services Definition: The judgment clarified that legal services provided by lawyers fall within the definition of "service" as outlined in Section 2(1)(o) of the 1986 Act.
  • Lawyer's Responsibility: The 2007 judgment by the national consumer commission clarified that lawyers cannot be solely held responsible for case outcomes, as they depend on various factors beyond legal representation.