Lesson 13

THE CONSUMER PROTECTION ACT, 2019

INTRODUCTION

NEED FOR THE ACT:

1. The industrial revolution brought in the concept of standardisation and mass production and
over the years, the type of goods and the nature of services available grew manifold.
2. The doctrine of ‘Caveat Emptor’ or ‘let the buyer beware’ which came into existence in the
middle ages had been replaced by the principle of ‘Consumer Sovereignty or ‘Consumer is the
King’.
3. Unable to meet the rising demand which created a gap between the general ‘demand’ and
‘supply’ levels in the markets.
4. This to some extent watered down the concept of ‘Consumer Sovereignty’, what with
consumers being forced to accept whatever was offered to them.
5. ‘Advertising’, directed at informing potential consumers about the availability and uses of a
product began to be resorted to as a medium for exaggerating the uses of ones products or
disparaging others products so as to have an edge over competitors.
6. Unfair and deceptive practices such as selling of defective or sub-standard goods, charging
exhorbitant prices, became rampant.
7. It also became inevitable for consumers to unite on a common platform to deal with issues of
common concern and having their grievances redressed satisfactorily.

REPEAL OF CONSUMER PROTECTION ACT 1986 by 2019

1. Consumer markets for goods and services have undergone drastic transformation since the
enactment of the Consumer Protection Act in 1986. Although, the working of the consumer
dispute redressal agencies has served the purpose to a considerable extent, the disposal of
cases has not been fast. Due to various constraints. Several shortcomings have been noticed
while administering the various provisions of the Consumer Protection Act, 1986.
2. The modern market place contains a plethora of products and services. The emergence of global
supply chains, rise in international trade and the rapid development of e-commerce have led
to new delivery systems for goods and services and have provided new options and
opportunities for consumers. Equally, this has rendered the consumer vulnerable to new forms
of unfair trade and unethical business practices. Misleading advertisements, tele-marketing,
multi-level marketing, direct selling and amerce pose new challenges to consumer protection
and will require appropriate and swift executive interventions to prevent consumer detriment
and to counter unfair trade practices.
3. Therefore, it has become inevitable to modernise the Consumer Protection Act in 1986 to
address the myriad and constantly emerging vulnerabilities of the consumer in the market
economy extant.
4. THE CONSUMER PROTECTION ACT, 2019 RECEIVED THE ASSENT OF THE PRESIDENT ON THE
9TH AUGUST, 2019. THE CONSUMER PROTECTION ACT, 2019 REPLACED THE MORE THAN
THREE DECADES OLD CONSUMER PROTECTION ACT, 1986.

DEFINITIONS
1. Advertisement means any audio or visual publicity, representation, endorsement or
pronouncement made by means of light, sound, smoke, gas, print, electronic media, internet or
website and includes any notice, circular, label, wrapper, invoice or such other documents.
[Section 2(1)] - ADDED

2. “Appropriate Laboratory” Appropriate Laboratory means a laboratory or an organisation–

(i) Recognised by the Central Government; or
(ii) recognised by a State Government, subject to such guidelines issued by the Central
Government; or
(iii) Established by or under any law for the time being in force, which is maintained, financed
or aided by the Central Government or a State Government
for carrying out analysis or test of any goods with a view to determining whether such
goods suffer from any defect. [Section 2(2)]

3. Complainant

(i) a consumer; or
(ii) any voluntary consumer association registered under any law for the time being in force; or
Example of consumer association
Akhil Bhartiya Grahak Panchayat.
All India Consumer Protection Organization.
(iii) the Central Government or any State Government; or
(iv) the Central Authority; or (-ADDED)
(v) one or more consumers, where there are numerous consumers having the same interest; or
(vi) in case of death of a consumer, his legal heir or legal representative; or
(vii) in case of a consumer being a minor, his parent or legal guardian. [Section 2(5)] (-ADDED)

4. Complaint

Complaint means any allegation in writing, made by a complainant for obtaining any relief provided
by or under this Act, that–
(i) an unfair contract or unfair trade practice or a restrictive trade practice has been adopted by any
trader or service provider;
(ii) the goods bought by him or agreed to be bought by him suffer from defects;
(iii) the services availed of or agreed to be hired or availed of by him suffer from any deficiency;
(iv) a trader or a service provider, has charged, a price in excess of the price–
(a) fixed by or under any law for the time being in force; or
(b) displayed on the goods or any package containing such goods; or
(c) displayed on the price list exhibited by him by or under any law for the time being in force; or
(d) agreed between the parties;
(v) the goods, which are hazardous to life and safety when used, are being offered for sale to the
public–
(a) in contravention of standards relating to safety of such goods as required to be complied with,
by or under any law for the time being in force;
(b) where the trader knows that the goods so offered are unsafe to the public;
(vi) the services which are hazardous or likely to be hazardous to life and safety of the public when
used, are being offered by a person who provides any service and who knows it to be injurious to life
and safety;
(vii) a claim for product liability action lies against the product manufacturer, product seller or
product service provider, as the case may be. [Section 2(6)] (- Added)

5. Consumer
Consumer means any person who–
(i)
• buys any goods for a consideration which has been paid or promised or partly paid and partly
promised, or under any system of deferred payment and
• includes any user of such goods, when such use is made with the approval of such person,
• but does not include a person who obtains such goods for resale or for any commercial purpose;
or

(ii)

• hires or avails of any service for a consideration which has been paid or promised or partly paid
and partly promised, or under any system of deferred payment and
• includes any beneficiary of such service
• When such services are availed of with the approval of the first mentioned person,
• but does not include a person who avails of such service for any commercial purpose.

Explanation.–For the purposes of this clause,–

a. the expression “commercial purpose” does not include use by a person of goods bought and used
by him exclusively for the purpose of earning his livelihood, by means of self-employment;

b. the expressions “buys any goods” and “hires or avails any services” includes offline or online
transactions through electronic means or by teleshopping or direct selling or multi-level marketing.
[Section 2(7)]

Example of services:

6. Person includes–
(i) an individual;
(ii) a firm whether registered or not;
(iii) a HUF;
 (iv) a co-operative society;
(v) an association of persons whether registered under the Societies Registration Act, 1860 or not;
(vi) any corporation, company or a body of individuals whether incorporated or not;
(vii) any artificial juridical person, not falling within any of the preceding sub-clauses. [Section 2(31)]

Decided case laws

Case: In Laxmi Engineering Works v. P.S.G. Industrial Institute, Supreme Court held that, whether
the purpose for which a person has bought goods is a ‘commercial purpose’ is always a question of
facts and to be decided in the facts and circumstances of each case. If the commercial use is by the
purchaser himself for the purpose of earning his livelihood by means of self employment such
purchaser of goods would yet be a consumer. But if a person purchases a machine and appoint or
engage another person exclusively to operate the machine, then such person would not be a
consumer.

Case: In Bhupendra Jang Bahadur Guna v. Regional Manager, the National Commission held that a
tractor purchased primarily to till the land of the purchaser and let out on hire during the idle time
to till the lands of others would not amount to commercial use.

Case: Narasamma v. LIC of India. The State Commission held that as the term ‘consumer’ includes
any beneficiary of service other than the person who hires the services for consideration, the widow
being the beneficiary of services is a ‘consumer’ under the Act entitled to be compensated for the
loss suffered by her due to negligence of the LIC.

Case: Morgan Stanley Mutual Fund v. Kartik Das, the Supreme Court held that an application for
allotment of shares cannot constitute goods. It is after allotment; rights may arise as per the articles
of association of the company. At the stage of application there is no purchase of goods for
consideration and again the purchaser cannot be called the hirer of services for consideration.

7. Consumer rights

a. be protected against marketing of goods and services which are hazardous to life and property;
b. be informed about the quality, quantity, potency, purity, standard and price of goods, or
services so as to protect against unfair trade practices;
c. wherever possible, access to variety of goods and services at competitive prices;
d. right to consumer awareness. [Section 2(9)]
e. the right to be heard and to be assured that consumers interests will receive due consideration
at appropriate forums;
f. the right to seek redressal against unfair trade practices or restrictive trade practices or
unscrupulous exploitation of consumers;

#Inshort:
Right to safety -
Right to be informed
Right to choose
Right to consumer education
Right to be heard
Right to Seek redressal
8. Defect – Section 2(10)
Defect 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 or under any contract or as is
claimed by the trader in any manner whatsoever in relation to any goods or product.

9. Deficiency – Section 2(11)

Deficiency means any fault, imperfection, shortcoming or inadequacy in the quality, nature and
manner of performance which is required to be maintained by or under any law or has been
undertaken to be performed by a person in pursuance of a contract in relation to any service and
includes –
a) any act of negligence or omission or commission by such person which causes loss or injury to
the consumer; and
b) deliberate withholding of relevant information by such person to the consumer.

10. E-Commerce (- Added)

E-Commerce means buying or selling of goods or services including digital products over digital or
electronic network. [Section 2(16)]

11. “Electronic Service Provider” (- Added)

Electronic service provider means a person who provides technologies or processes to enable a
product seller to engage in advertising or selling goods or services to a consumer and includes any
online market place or online auction sites. [Section 2(17)]

12. Endorsement (- Added)

Endorsement in relation to an advertisement, means–

(i) any message, verbal statement,
demonstration; or

(ii) depiction of the name, signature, likeness

or other identifiable personal characteristics
of an individual; or
 (iii) depiction of the name or seal of any
institution or organisation, which makes the
consumer to believe that it reflects the
opinion, finding or experience of the person
making such endorsement. [Section 2(18)]

13. “Express Warranty”

Express warranty means any material statement, affirmation of fact, promise or description relating
to a product or service warranting that it conforms to such material statement, affirmation, promise
or description and includes any sample or model of a product warranting that the whole of such
product conforms to such sample or model. [Section 2(20)]

14. Goods

Goods means every kind of movable property and includes “food” (- Added) as defined in section
3(1)(j) of the Food Safety and Standards Act, 2006. [Section 2(21)]

15. Harm

Harm in relation to a product liability,

INCLUDES–
(i) damage to any property, other than the product
itself;

(ii) personal injury, illness or death;

(iii) mental agony or emotional distress attendant

to personal injury or illness or damage to property;
or

(iv) any loss of consortium or services or other loss resulting from a harm referred to in sub-clause
(i) or sub-clause (ii) or sub-clause (iii),

EXCLUDES- [#Covered under SOGA]

any harm caused to a product itself or any damage to the property on account of breach of warranty
conditions or any commercial or economic loss, including any direct, incidental or consequential loss
relating thereto. [Section 2(22)]

16. Misleading Advertisement (- Added)

Misleading Advertisement in relation to any product or service, means an advertisement, which–

(i) falsely describes such product or service; or
(ii) gives a false guarantee to, or is likely to mislead the consumers as to the nature, substance,
quantity or quality of such product or service; or
(iii) conveys an express or implied representation which, if made by the manufacturer or seller or
service provider thereof, would constitute an unfair trade practice; or
(iv) deliberately conceals important information. [Section 2(28)]

17. Product

It means any article or goods or substance or raw material or any extended cycle of such product,
which may be in gaseous, liquid, or solid state possessing intrinsic value which is capable of delivery
either as wholly assembled or as a component part and is produced for introduction to trade or
commerce, but does not include human tissues, blood, blood products and organs. Section 2(33)]

18. Product Liability (- Added)

Product liability means the responsibility of a PRODUCT MANUFACTURER or PRODUCT SELLER, of

any product or service, to compensate for any harm caused to a consumer by such defective product
manufactured or sold or by deficiency in services relating thereto. [Section 2(34)]

19. Product manufacturer

Product manufacturer means a person who–

(i) MAKES ANY PRODUCT or parts thereof; or
(ii) ASSEMBLES PARTS thereof made by others; or
(iii) PUTS OR CAUSES TO BE PUT HIS OWN MARK on any products made by any other person; or
(iv) MAKES A PRODUCT AND SELLS, distributes, leases, installs, prepares, packages, labels, markets,
repairs, maintains such product or is otherwise involved in placing such product for commercial
purpose; or
(v) designs, produces, fabricates, constructs or RE-MANUFACTURES ANY PRODUCT before its sale;
or
(vi) being a product seller of a product, is also a manufacturer of such product; [Section 2(36)]

20. Product Seller

Product seller in relation to a product, means a person who, in the course of business, imports, sells,
distributes, leases, installs, prepares, packages, labels, markets, repairs, maintains, or otherwise is
involved in placing such product for commercial purpose and includes–
(i) a manufacturer who is also a product seller; or
(ii) a service provider, BUT DOES NOT INCLUDE–
 a) a seller of immovable property, unless such person is engaged in the sale of constructed house
or in the construction of homes or flats;
b) a provider of professional services in any transaction in which, the sale or use of a product is
only incidental thereto, but furnishing of opinion, skill or services being the essence of such
transaction;
c) a person who–
(I) acts only in a financial capacity with respect to the sale of the product;
(II) is not a manufacturer, wholesaler, distributor, retailer, direct seller or an electronic service
provider;
(III) leases a product, without having a reasonable opportunity to inspect and discover defects
in the product, under a lease arrangement in which the selection, possession, maintenance,
and operation of the product are controlled by a person other than the lessor. [Section 2(37)]

21. Unfair Contract

MEANS: Unfair contract means a contract between a manufacturer or trader or service provider on
one hand, and a consumer on the other, having such terms which cause significant change in the
rights of such consumer.
INCLUDES
(i) REQUIRING MANIFESTLY EXCESSIVE SECURITY DEPOSITS to be given by a consumer for the
performance of contractual obligations; or
(ii) IMPOSING DISPROPORTIONATE PENALTY on the consumer, compared to loss occurred due to
such breach to the other party to the contract; or
(iii) REFUSING TO ACCEPT EARLY REPAYMENT of debts on payment of applicable penalty; or
(iv) entitling a party to the contract to TERMINATE SUCH CONTRACT UNILATERALLY, without
reasonable cause; or
(v) permitting or has the effect of permitting one party TO ASSIGN THE CONTRACT TO THE
DETRIMENT of the other party who is a consumer, without his consent; or
(vi) IMPOSING ON THE CONSUMER ANY UNREASONABLE CHARGE, obligation or condition which puts
such consumer to disadvantage; [Section 2(46)]

22. Unfair Trade Practice

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 or deceptive practice
including any of the following practices, namely:–

(i) MAKING ANY STATEMENT, whether orally or in writing or by visible representation including by
means of electronic record, which–

(a) FALSELY REPRESENTS THAT THE GOODS ARE OF A PARTICULAR STANDARD, quality, quantity,
grade, composition, style or model;
(b) falsely represents that the services are of a particular standard, quality or grade;
(c) FALSELY REPRESENTS any re-built, second-hand, renovated, reconditioned or old goods AS NEW
GOODS;
(d) represents that the goods or services have sponsorship, approval, performance, characteristics,
accessories, uses or benefits WHICH SUCH GOODS OR SERVICES DO NOT HAVE;
(e) represents that the seller or the supplier has A SPONSORSHIP or approval or affiliation which such
SELLER OR SUPPLIER DOES NOT HAVE;
(f) makes a FALSE OR MISLEADING REPRESENTATION concerning the need for, or the usefulness of,
any goods or services;
(g) gives to the public any warranty or guarantee of the performance, efficacy or LENGTH OF LIFE OF
A PRODUCT OR OF ANY GOODS THAT IS NOT BASED ON AN ADEQUATE OR PROPER TEST thereof:
Provided that where a defence is raised to the effect that such warranty or guarantee is based on
adequate or proper test, the burden of proof of such defence shall lie on the person raising such
defence;
(h) makes to the public a representation in a form that purports to be–

(A) a warranty or guarantee of a product or of any goods or services; or

(B) a promise to replace, maintain or repair an article or any part thereof or to repeat or continue
a service until it has achieved a specified result and there is no reasonable prospect that such
warranty, guarantee or promise will be carried out;

(j) gives false or misleading facts DISPARAGING(Negative views) the goods, services or trade of
another person.
Explanation. –For the purposes of this sub-clause, a statement that is,–
(A) expressed on an article offered or displayed for sale, or on its wrapper or container; or
(B) expressed on anything attached to, inserted in, or accompanying, an article offered or
displayed for sale, or on anything on which the article is mounted for display or sale; or

(ii) PERMITTING THE PUBLICATION OF ANY ADVERTISEMENT, whether in any newspaper or

otherwise, electronic record, for the sale at a BARGAIN PRICE OF GOODS OR SERVICES THAT ARE NOT
INTENDED TO BE OFFERED FOR SALE OR SUPPLY AT THE BARGAIN PRICE, or for a period that is, and
in quantities that are, reasonable, having regard to the nature of the market in which the business is
carried on, the nature and size of business, and the nature of the advertisement.
Explanation.–For the purpose of this sub-clause, “bargain price” means,–
(A) a price that is stated in any advertisement to be a bargain price, by reference to an ordinary price
or otherwise; or
(B) a price that a person who reads, hears or sees the advertisement, would reasonably understand
to be a bargain price having regard to the prices at which the product advertised or like products are
ordinarily sold;

(III) PERMITTING–
(a) THE OFFERING OF GIFTS, PRIZES OR OTHER ITEMS with the INTENTION OF NOT PROVIDING THEM
as offered or creating impression that something is being given or offered free of charge when it is
fully or partly covered by the amount charged, in the transaction as a whole;
(b) the CONDUCT OF ANY CONTEST, LOTTERY, GAME OF CHANCE OR SKILL, FOR THE PURPOSE OF
PROMOTING, DIRECTLY OR INDIRECTLY, THE SALE, use or supply of any product or any business
interest, except such contest, lottery, game of chance or skill as may be prescribed;
(c) WITHHOLDING from the participants of any scheme offering gifts, prizes or other items free of
charge on its closure, the information about final results of the scheme.
Explanation.–For the purpose of this sub-clause, the participants of a scheme shall be deemed to have
been informed of the final results of the scheme where such results are within a reasonable time
published, prominently in the same newspaper in which the scheme was originally advertised;
(iv) permitting the sale or supply of goods to consumers, knowing or having reason to believe that
the goods do not comply with the standards as are necessary to prevent or reduce the risk of injury
to the person using the goods;
(v) MANUFACTURING OF SPURIOUS (Duplicate/fake/counterdeit) GOODS
(vi) NOT ISSUING BILL or cash memo or receipt for the goods sold or services
(vii) refusing, to take back or withdraw defective goods or to withdraw or discontinue deficient
services and to refund the consideration thereof, if paid, within the period stipulated in the bill or cash
memo or receipt or in the absence of such stipulation, within a PERIOD OF 30 DAYS;
(viii) DISCLOSING TO OTHER PERSON ANY PERSONAL INFORMATION GIVEN IN CONFIDENCE BY THE
CONSUMER unless such disclosure is made in accordance with the provisions of any law for the time
being in force. [Section 2(47)]

LIMITATION PERIOD - Section 69

(1) The District Commission, the State Commission or the National Commission shall not admit a
complaint unless it is filed within 2 years from the date on which the cause of action has arisen.
(2) A complaint may be entertained after the period, if the complainant satisfies the Commission, as
the case may be, that he had sufficient cause for not filing the complaint within such period.

CONSUMER PROTECTION COUNCIL

Central Consumer Protection State Consumer Protection District Consumer

Council Councils Protection Council
1. The Central Government 1. Every State Government 1. The State Government
establishes the Central establishes a State Consumer establishes for every
Consumer Protection Council Protection Council. District, a District
to be known as the Central 2. Composition: Consist of the Consumer Protection
Council. - Minister-in-charge of Council to be known as the
2. Composition: consist of the Consumer Affairs in the State District Council.
- Minister-in-charge of the Government who shall be the 2. Composition: consist of
Department of Consumer Chairperson; - Collector of the district,
Affairs in the Central - such number of other official or who shall be the
Government, who shall be non-official members Chairperson; and
the Chairperson; representing such interests as - such number of other
- and such number of other may be prescribed official and non-official
official or non-official - and such number of other members representing
members representing such official or non-official such interests as may be
interests as may be members, not exceeding 10, as prescribed.
prescribed. may be nominated by the 3. Meetings: Meet as and
3. Meetings: Meet as and when Central Government. when necessary but not
necessary, but at least 1 3. Meetings: Meet as and when less than 2 meetings shall
meeting to be held every necessary but not less than 2 be held every year.
year. meetings shall be held every 4. Objects: To render advice
4. Objects: To render advice on year. on promotion and
promotion and protection of 4. Objects: To render advice on protection of consumer
the consumers’ rights under promotion and protection of rights under the Act within
the Act. consumer rights under the Act the district.
within the State.
 CENTRAL CONSUMER PROTECTION AUTHORITY (CCPA) (- Added)

I. Establishment of Central Consumer Protection Authority

• Section 10 empowers the Central Government to establish a Central Consumer Protection

Authority to be known as the Central Authority
• The headquarters of the CCPA is at Delhi, and it shall have regional and other offices in any other
place in India as the Central Government may decide.

II. Composition

• CHIEF COMMISSIONER and

• such number of OTHER COMMISSIONERS as may be prescribed, to be appointed by the Central
Government to exercise the powers and discharge the functions under the Act.
• The Central Government shall provide the Central Authority such number of officers and other
employees as it considers necessary for the efficient performance of its functions under this Act.

III. Vacancy, etc., not to invalidate proceedings of Central Authority by reason of–

(a) any vacancy in, or any defect in the constitution of, the Central Authority; or
(b) any defect in the appointment of Chief Commissioner or as a Commissioner; or
(c) any irregularity in the procedure of the Central Authority shall not affect the merits of the case.

IV. Investigation Wing of Central Authority

(1) The Central Authority shall have an Investigation Wing headed by a DIRECTOR GENERAL for the
purpose of conducting inquiry or investigation under this Act as directed by the Central Authority.
(2) The Central Government may appoint a Director General and such number of Additional Director
General, Director, Joint Director, Deputy Director and Assistant Director, from amongst persons who
have experience in investigation and possess such qualifications, in such manner, as may be
prescribed.
(3) The inquiries or the investigations made by the Director General shall be submitted to the Central
Authority

V. Functions/object and powers of Central Authority

According to section 18(1) the Central Authority empowers to:

(a) protect, promote and enforce the rights of consumers and prevent violation of consumers rights
under this Act;
(b) prevent unfair trade practices
(c) ensure that no false or misleading advertisement
(d) ensure that no person takes part in the publication of false or misleading advertisement

Section 18(2) states that without prejudice to the generality of the provisions contained in Section 18
(1), the Central Authority may, for any of the purposes aforesaid, –
 (a) inquire or cause an inquiry or investigation to be made into violations of consumer rights or unfair
trade practices, either suo motu or on a complaint received or on the directions from the Central
Government;
(b) FILE COMPLAINTS before the District, State, the National Commission,
(c) INTERVENE IN ANY PROCEEDINGS before the District, State, the National Commission, in respect
of any allegation of violation of consumer rights or unfair trade practices;
(d) review the matters relating to, and the factors preventing enjoyment of, consumer rights, and
recommend appropriate remedial measures for their effective implementation;
(e) recommend adoption of best international practices on consumer rights
(f) undertake and promote research in the field of consumer rights;
(g) spread and promote awareness on consumer rights;
(h) issue safety notices to alert consumers against dangerous or hazardous or services;
(i) issue necessary guidelines to prevent unfair trade practices and protect consumers’ interest.

VI. Power of Central Authority to refer matter for investigation or to other Regulator

Section 19(1) of the Act provides that the Central Authority may, after preliminary inquiry as to
whether there exists a case of violation of consumer rights or any unfair trade practice or any false
or misleading advertisement, it shall cause investigation to be made by the Director General or by
the District Collector.
According to Section 19(2) where, after preliminary inquiry, the Central Authority is of the opinion
that the matter is to be dealt with by a Regulator established under any other law for the time being
in force, it may refer such matter to the concerned Regulator along with its report.

VII. Power of Central Authority to recall goods

Where the Central Authority is satisfied on the basis of investigation that there is sufficient evidence
to show violation of consumer rights or unfair trade practice by a person, it may pass such order as
may be necessary, including–
(a) recalling of goods or withdrawal of services which are dangerous, hazardous or unsafe;
(b) reimbursement of the prices of goods or services so recalled to purchasers of such goods or
services; and
(c) Discontinuation of practices which are unfair and prejudicial to consumers’ interest

VIII. Power of Central Authority to issue directions and penalties against false or misleading
advertisements

• Section 21 provides that where the Central Authority is satisfied after investigation that any
advertisement is false or misleading and is prejudicial to the interest of any consumer it may, by
order, issue directions to the concerned trader or manufacturer or endorser or advertiser or
publisher, as the case may be to discontinue such advertisement or to modify the same in such
manner and within such time as may be specified in that order.
• The Central Authority impose on MANUFACTURER OR ENDORSER a penalty which may extend to
10 lakh rupees. The Central Authority may, for every subsequent contravention by a manufacturer
or endorser, impose a penalty, which may extend to 50 lakh rupees.
• Where the Central Authority deems it necessary, it may, by order, PROHIBIT THE ENDORSER of a
false or misleading advertisement from making endorsement of any product or service for a period
which may extend to one year. Central Authority may, for every subsequent contravention,
 prohibit such endorser from making endorsement in respect of any product or service for a period
which may extend to 3 years.

EXCEPTIONS
• No endorser shall be liable to a penalty, if he has exercised due diligence to verify the veracity of
the claims made in the advertisement regarding the product or service being endorsed by him.
• No person shall be liable to such penalty if he proves that he had published or arranged for the
publication of such advertisement in the ordinary course of his business: Provided that no such
defence shall be available to such person if he had previous knowledge of the order passed by the
Central Authority for withdrawal or modification of such advertisement.
• WHILE DETERMINING THE PENALTY, REGARD SHALL BE HAD TO THE FOLLOWING, NAMELY:–
(a) the population and the area impacted or affected by such offence;
(b) the frequency and duration of such offence;
(c) the vulnerability of the class of persons likely to be adversely affected by such offence; and
(d) the gross revenue from the sales effected by virtue of such offence.
The Central Authority shall give the person an opportunity of being heard before an order under this
section is passed.

IX. Search and seizure

• According to section 22 of the Act, for the purpose of conducting an investigation after preliminary
inquiry under section 19(1), the Director General or the District Collector, as the case may be, may,
if he has any reason to believe that any person has violated any consumer rights or committed
unfair trade practice or causes any false or misleading advertisement to be made, shall,–
(a) enter at any reasonable time into any such premises and search for any document or record or
article or any other form of evidence and seize such document, record, article or such evidence;
(b) make a note or an inventory of such record or article; or
(c) require any person to produce any record, register or other document or article.
The provisions of the Code of Criminal Procedure, 1973, relating to search and seizure shall apply, as
far as may be, for search and seizure under this Act.

• Every document, record or article seized or produced shall be returned to the person, from whom
they were seized or who produced the same, within a period of 20 days of the date of such seizure,
after copies have been taken.
• Where any article seized are subject to speedy or natural decay, the Director General or such
other officer may dispose of the article in such manner as may be prescribed.
• Section 38(2)(c) provides that if the complaint alleges a defect in the goods which cannot be
determined without proper analysis or test of the goods, obtain a sample of the goods from the
complainant, seal it and authenticate it in the manner as may be prescribed and refer the sample
so sealed to the appropriate laboratory along with a direction that such laboratory to make an
analysis or test, whichever may be necessary, with a view to finding out whether such goods suffer
from any defect alleged in the complaint or from any other defect and to report its findings
thereon to the District Commission within a period of 45 days of the receipt of the reference or
within such extended period as may be granted by it.

X. Vexatious Search
 The Director General or any other officer, exercising powers under section 22, who knows that there
are no reasonable grounds for so doing, and yet–
(a) searches, or causes to be searched any premises; or
(b) seizes any record, register or other document or article, shall, for every such offence, be punished
with imprisonment for a term which may extend to 1 year, or with fine which may extend to 10
thousand rupees or with both.

XI. Appeal

Section 24 provides that a person aggrieved by any order passed by the Central Authority under
sections 20 and 21 may file an appeal to the National Commission within a period of 30 days from
the date of receipt of such order.

District Consumer Disputes Redressal Commission

FINDINGS OF DISTRICT COMMISSION - Section 39

(1) Where the District Commission is satisfied that the goods complained against suffer from any of
the defects specified in the complaint or that any of the allegations contained in the complaint about
the services or any unfair trade practices, or claims for compensation under product liability are
proved, it shall issue an order to the opposite party directing him to do ONE OR MORE of the
following, namely:—
(a) to REMOVE THE DEFECT pointed out by the appropriate laboratory from the goods in question;
(b) to REPLACE THE GOODS with new goods of similar description which shall be free from any defect;
(c) to RETURN THE CHARGES PAID by the complainant along with such interest on such price or
charges as may be decided;
(d) to pay such amount as may be AWARDED BY IT AS COMPENSATION to the consumer for any loss
or injury suffered by the consumer due to the negligence of the opposite party: Provided that the
District Commission shall have the power to grant punitive damages in such circumstances as it
deems fit;
(e) to REMOVE THE DEFICIENCIES IN THE SERVICES in question;
(f) to DISCONTINUE THE UNFAIR TRADE PRACTICE OR RESTRICTIVE TRADE PRACTICE and not to
repeat them;
(g) NOT TO OFFER THE HAZARDOUS OR UNSAFE GOODS for sale;
(h) to WITHDRAW THE HAZARDOUS GOODS from being offered for sale;
(j) to ISSUE CORRECTIVE ADVERTISEMENT TO NEUTRALISE THE EFFECT OF MISLEADING
ADVERTISEMENT
(m) to provide for ADEQUATE COSTS TO PARTIES.

State Consumer Disputes Redressal Commission

National Consumer Disputes Redressal Commission
Procedures for Service of Notice - Section 65

(1) All notices, required by this Act to be served, shall be served by delivering or transmitting a copy
thereof
• by registered post acknowledgment due addressed to opposite party against whom complaint is
made or to the complainant
• by speed post or
• by such courier service,
• by any other mode of transmission of documents including electronic means.
(2) the notice required by this Act may be served on an electronic service provider at the address
provided by it on the electronic platform from where it provides its services as such and for this
purpose, the electronic service provider shall designate a nodal officer to accept and process such
notices.
(3) Deemed delivery of notice
• When an acknowledgment signed by the opposite party or his agent by the complainant is
received by the District, State or the National Commission, as the case may be, or
• postal article containing the notice is received back by such District, State or the National
Commission, to the effect that the opposite party or his agent or complainant had refused to
take delivery when tendered or transmitted to him, the Commission, shall declare that the
notice has been duly served on the opposite party or to the complainant, as the case may be.

(4) Which address should the notice be sent to?

- It is to be addressed in the case of the opposite party, to the place where business or profession is
carried on, and
- in case of the complainant, the place where such person actually and voluntarily resides.

Mediation

1) Establishment of Consumer Mediation Cell – Section 74

1) About Consumer Mediation Cell –

a) State Government to establish a consumer mediation cell to be attached to each of the District
Commissions and the State Commissions of that State.
b) Central Government also empowers to establish a consumer mediation cell to be attached to
the National Commission and each of the regional Benches.
2) Every consumer mediation cell shall maintain –
a) a list of empanelled mediators;
b) a list of cases handled by the cell;
c) record of proceeding; and
3) Every consumer mediation cell shall submit a quarterly report to the District, State or the
National Commission to which it is attached.
2) Empanelment of Mediators – Section 75

a) For the purpose of mediation, the District, State or the National Commission, shall prepare a
panel of the mediators to be maintained by the consumer mediation cell attached to it, on the
recommendation of a selection committee.
b) The panel of mediators shall be valid for a period of 5 years, and the empanelled mediators shall
be eligible to be considered for re-empanelment for another term.
c) The qualifications and experience required for empanelment as mediator, the procedure for
empanelment, the manner of training empanelled mediators, the fee payable to empanelled
mediator, the terms and conditions for empanelment, the code of conduct for empanelled
mediators, the grounds on which, and the manner in which, empanelled mediators shall be
removed or empanelment shall be cancelled and other matters relating thereto, shall be such
as may be specified by regulations.
3) Replacement of Mediator in Certain Cases – Section 78

Where the District, State or the National Commission, as the case may be, is satisfied, on the
information furnished by the mediator or on the information received from any other person
including parties to the complaint and after hearing the mediator, it shall replace such mediator by
another mediator.
4) Procedure for Mediation – Section 79

a) Mediation shall be held in the consumer mediation cell attached to the District Commission, the
State Commission or the National Commission.
b) Where a consumer dispute is referred for mediation by the District Commission or the State
Commission or the National Commission, as the case may be, the mediator nominated by such
c) Commission shall have regard to the rights and obligations of the parties, the usages of trade, if
any, the circumstances giving rise to the consumer dispute and such other relevant factors, as
he may deem necessary and shall be guided by the principles of natural justice while carrying
out mediation.
d) The mediator so nominated shall conduct mediation within such time and in such manner as
may be specified by regulations.
5) Settlement through Mediation – Section 80

a) Pursuant to mediation, if an agreement is reached between the parties with respect to all of
the issues involved in the consumer dispute or with respect to only some of the issues, the terms
of such agreement shall be recorded in writing, and signed by the parties to such dispute or
their authorised representatives.
b) Mediator shall prepare a settlement report of the settlement and forward the signed
agreement along with such report to the concerned Commission.
c) Where no agreement is reached between the parties within the specified time or the mediator
is of the opinion that settlement is not possible, he shall prepare his report accordingly and
submit the same to the concerned Commission.
6) Recording Settlement and Passing of Order – Section 81

a) The District Commission or the State Commission or the National Commission, as the case may
be, shall, within 7 days of the receipt of the settlement report, pass suitable order recording
such settlement of consumer dispute and dispose of the matter.
b) Where the consumer dispute is settled only in part, the District Commission or the State
Commission or the National Commission, as the case may be, shall record settlement of the
issues which have been so settled and continue to hear other issues involved in such consumer
dispute.
c) Where the consumer dispute could not be settled by mediation, the District Commission or the
State Commission or the National Commission, as the case may be, shall continue to hear all the
issues involved in such consumer dispute.

PRODUCT LIABILITY - Section 82 to 87

This shall apply to every claim for compensation under a PRODUCT LIABILITY ACTION by a
complainant for any harm caused by a defective product
- manufactured by a product manufacturer or
- serviced by a product service provider or
- sold by a product seller

1) Liability of Product Manufacturer

Section 84 states that a product manufacturer shall be liable in a product liability action, if–
(a) the product contains a manufacturing defect; or
(b) the product is defective in design; or
(c) there is a deviation from manufacturing specifications; or
(d) the product does not conform to the express warranty; or
(e) the product fails to contain adequate instructions of correct usage to prevent any harm or any
warning regarding improper or incorrect usage.
NOTE: A product manufacturer shall be liable in a product liability action even IF HE PROVES THAT
HE WAS NOT NEGLIGENT OR FRAUDULENT in making the express warranty of a product.

2) Liability of Product Service Provider

Section 85 provides that a product service provider shall be liable in a product liability action, if–
(a) the service provided by him was faulty or imperfect or deficient or inadequate in quality, nature
or manner of performance which is required to be provided by or under any law for the time being in
force, or pursuant to any contract or otherwise; or
(b) there was an act of omission or commission or negligence or conscious withholding any
information which caused harm; or
(c) the service provider did not issue adequate instructions or warnings to prevent any harm; or
(d) the service did not conform to express warranty or the terms and conditions of the contract.

3) Liability of Product Sellers

Section 86 states that a PRODUCT SELLER who is NOT A PRODUCT MANUFACTURER shall be liable in
a product liability action, if–
(a) he has exercised substantial control over the designing, testing, manufacturing, packaging or
labelling of a product that caused harm; or
(b) he has altered or modified the product and such alteration or modification was the substantial
factor in causing the harm; or
(c) he has made an express warranty of a product independent of any express warranty made by a
manufacturer and such product failed to conform to the express warranty made by the product seller
which caused the harm; or
(d) the product has been sold by him and the identity of product manufacturer of such product is
not known, or if known, the service of notice or process or warrant cannot be effected on him or he
is not subject to the law which is in force in India
(e) he failed to exercise reasonable care in assembling, inspecting or maintaining such product or he
did not pass on the warnings or instructions of the product manufacturer regarding the dangers
involved or proper usage of the product while selling such product and such failure was the proximate
cause of the harm.

4) Exceptions to Product Liability Action

• According to Section 87 of the Act a PRODUCT LIABILITY ACTION CANNOT BE BROUGHT AGAINST
THE PRODUCT SELLER IF, at the time of harm, the product was misused, altered, or modified.
• In any product liability action based on the failure to provide adequate warnings or instructions,
the PRODUCT MANUFACTURER SHALL NOT BE LIABLE, IF–
(a) the product was purchased by an employer for use at the workplace and the product
manufacturer had provided warnings or instructions to such employer;
(b) the product was sold as a component or material to be used in another product, but the harm
was caused to the complainant by use of the end product in which such component or material was
used;
(c) the product was one which was legally meant to be used or dispensed only by or under the
supervision of an expert and the product manufacturer had employed reasonable means to give the
warnings or instructions for usage of such product to such expert or class of experts; or
 (d) the complainant, while using such product, was under the influence of alcohol or any prescription
drug which had not been prescribed by a medical practitioner.
(e) A product manufacturer shall not be liable for failure to instruct or warn about a danger which is
obvious or commonly known to the user or consumer of such product or which, such user or
consumer, ought to have known, taking into account the characteristics of such product.

OFFENCES AND PENALTIES

I. Penalty for Noncompliance of Direction of Central Authority – Section 88

Imprisonment for a term which may extend to six months or with fine which may extend to twenty
lakh rupees, or with both.

II. Punishment for False or Misleading Advertisement- Section 89

Imprisonment for a term which may extend to 2 years and with fine which may extend to 10 lakh
rupees; and for every subsequent offence, be punished with imprisonment for a term which may
extend to 5 years and with fine which may extend to 50 lakh rupees.

III. Punishment for Manufacturing for Sale or Storing, Selling or Distributing or Importing Products
Containing ADULTERANT

Section 90(1) provides that whoever, by himself or by any other person on his behalf, manufactures
for sale or stores or sells or distributes or imports any product containing an adulterant shall be
punished, if such act–
(a) does not result in any injury to the consumer, with imprisonment for a term which may extend to
six months and with fine which may extend to one lakh rupees; [6M 1L]
(b) causing injury NOT AMOUNTING TO GRIEVOUS HURT to the consumer, with imprisonment for a
term which may extend to one year and with fine which may extend to three lakh rupees; [1Y3L]
(c) causing injury resulting in grievous hurt to the consumer, with imprisonment for a term which
may extend to seven years and with fine which may extend to five lakh rupees; and [7Y5L]
(d) results in the death of a consumer, with imprisonment for a term which shall not be less than
seven years, but which may extend to imprisonment for life and with fine which shall not be less
than ten lakh rupees. [7Y10L]

#Meaning: “Adulterant” means any material including extraneous matter which is employed or used
for making a product unsafe;

IV. Punishment for Manufacturing for Sale or for Storing or Selling or Distributing or Importing
SPURIOUS GOODS

Section 91(1) provides that whoever, by himself or by any other person on his behalf,
manufactures for sale or stores or sells or distributes or imports any spurious goods shall be
punished, if such act–
(a) causing injury not amounting to grievous hurt to the consumer, with imprisonment for a term
which may extend to one year and with fine which may extend to three lakh rupees;
(b) causing injury resulting in grievous hurt to the consumer, with imprisonment for a term which
may extend to seven years and with fine which may extend to five lakh rupees;
 (c) results in the death of a consumer, with imprisonment for a term which shall not be less than
seven years, but may extend to imprisonment for life and with fine which shall not be less than
ten lakh rupees.

Compounding of Offences

• According to Section 96(1) of the Act, any offence punishable under sections 88 and 89, may,
either before or after the institution of the prosecution, be compounded, on payment of such
amount as may be prescribed.
• 96 (1) shall not apply to person who commits the same or similar offence, within a period of
three years from the date on which the first offence, committed by him, was compounded.
• Any second or subsequent offence committed after the expiry of a period of three years from
the date on which the offence was previously compounded, shall be deemed to be a first
offence.
• Section 96(4) provides that where an offence has been compounded under sub-section (1), no
proceeding or further proceeding, as the case may be, shall be taken against the offender in
respect of the offence so compounded.
Note: Section 100 states that the provisions of Consumer Protection Act, 2019 shall be in addition
to and not in derogation of the provisions of any other law for the time being in force.