Part VI Other Business Legislations

Chapter 21
The Consumer Protection Act, 2019
 OBJECTIVE: To provide better protection of
consumers’ interest.
THROUGH: Speedy and in-expensive
redressal of consumer grievances.
BY: A 3-tier adjudicative
machinery, set up at the District, State,
and National levels.
•The Act was passed in August 2019 but came into force with effect
from July 20, 2020.
•The Act contains 107 sections which spread over VIII Chapters and
extends to the whole of India.

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As the New Act seeks to replace the more than 3 decades old Consumer Protection Act, 1986,
set out below are some of the Key Highlights of the The Consumer Protection Act, 2019:
1. Covers E-Commerce Transactions: The New Act has widened the definition of 'consumer'
which now includes any person who buys any goods and hires or avails offline or online
through electronic means, teleshopping, direct selling or multi-level marketing.
2.  Enhancement of Pecuniary Jurisdiction: As per revised pecuniary limits, the district
commissions can now entertain consumer complaints where the value of goods or services
paid does not exceed INR 1 Cr. State Commission can entertain disputes for such value
between INR 1 Cr. to INR 10 Cr., and National Commission can exercise jurisdiction where
such value exceeds INR 10 Cr.
3. Provision for  E-Filing of Complaints: The New Act provides flexibility to the consumer to
file complaints with the jurisdictional consumer forum located at the place of residence or work
of the consumer. The New Act also contains enabling provisions for consumers to file
complaints electronically and for hearing and/or examining parties through video-conferencing.
4. Establishment of Central Consumer Protection Authority: The New Act proposes the
establishment of a regulatory authority known as the Central Consumer Protection Authority
(CCPA), with wide powers of enforcement. The CCPA will have an investigation wing, headed
by a Director-General, which may conduct inquiry or investigation into consumer law
violations.
5. Provision for Product Liability & Penal Consequences: The New Act has introduced the
concept of product liability and brings within its scope, the product manufacturer, product
service provider and product seller, for any claim for compensation.
6. Curbs on Unfair Trade Practices: The New Act introduces a specific broad definition of
Unfair Trade Practices, which also includes sharing of personal information given by the
consumer in confidence, unless such disclosure is made in accordance with the provisions of
any other law.
7. Penalties for Misleading Advertisement: The CCPA may impose a penalty of up to INR
10 lacs on a manufacturer or an endorser, for a false or misleading advertisement and may
also sentence them to imprisonment for up to 2 years for the same. In case of a subsequent
offence, the fine may extend to INR 50 lacs and imprisonment of up to 5 years. The CCPA can
also prohibit the endorser of a misleading advertisement from endorsing that product or
service for a period of up to 1 year. For every subsequent offence, the period of prohibition
may extend to 3 years.
8. Liability of Endorsers: The New Act fixes liability on endorsers considering that there have
been numerous instances in the recent past where consumers have fallen prey to unfair trade
practices under the influence of celebrities acting as brand ambassadors.
9. Provision for Alternate Dispute Resolution (ADR): The New Consumer Legislation
provides for mediation as an ADR mechanism, making the process of dispute adjudication
simpler and quicker. This will help with the speedier resolution of disputes and reduce pressure
on consumer courts, who already have numerous cases pending before them.
 ADVISORY BODIES ADJUDICATIVE BODIES
(Consumer Protection Councils) (Consumer Disputes Redressal Agencies)

REGULATORY BODY
Central Consumer Protection Authority
(CCPA)

District State
Central State District Commission Commission National
Consumer Consumer Consumer (610 Commission
Protection Protection (35 State (NCDRC)
Protection District
Council Councils Commissions)
Councils Commissions)

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 To Deliberate
&
Advise the Government
for
Promoting
&
Protecting
Basic rights
of consumers under the Act/Within the State/District as
the case may be
1. The right to protection against marketing of hazardous goods and services;

2. The right to information about the quality, quantity, potency, purity, standard, and
price of goods or services to protect him against unfair trade practices;

3. The right to be assured, wherever possible, access to a variety of goods, products

or services at competitive prices;

4. The right to be heard and to be assured that consumer’s interest will receive due
consideration at appropriate commission;

5. The right to seek redressal against UTP or RTP or unscrupulous exploitation; and

6. The right to consumer awareness. [Section 2(9)]

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1. Duty to buy only safe and standard products.
2. Duty to gather product information.
3. Duty to obtain proof of purchase.
4. Duty to organize, speak, and participate.
5. Duty to lodge a complaint.
6. Duty not to lodge a frivolous or vexatious complaint.
7. Duty to take up class-action cases.
• The Consumer Protection Act, 2019 proposes the establishment of a
regulatory authority, known as the Central Consumer Protection Authority
(CCPA), with wide powers of enforcement.
• Headquartered in Delhi, the CCPA will have an investigation wing,
headed by a Director-General, which may conduct inquiry or investigation
into consumer law violations.
• The CCPA has been granted wide powers to take suo-moto actions,
recall products, order reimbursement of the price of goods/services,
cancel licenses
• The CCPA can also file class action suits, if a consumer complaint affects
more than one individual.
1. To protect, promote and enforce the rights of consumers as a class, and prevent
violation of consumers rights under this Act;
2. To prevent unfair trade practices and ensure that no person engages himself in
unfair trade practices;
3. To ensure that no false or misleading advertising is made of any goods or
services which contravenes the provisions of this Act or the rules or regulations
made thereunder; and
4. To ensure that no person takes part in the publication of any advertisement which
is false or misleading.

c
 COMPOSITION
1. District Consumer Disputes Redressal Commission (‘District
Commission’): President + 2 Members
2. State Consumer Disputes Redressal Commission (‘State
Commission’): President + 4 or more Members
3. National Consumer Disputes Redressal Commission (‘National
Commission’): President + 4 or more Members
QUALIFICATIONS
President
Members
JURISDICTION:
District Forum
State Commission
National Commission
 Passing of
Filing of complaint Hearing by appropriate Compliance of
before the the order providing the
appropriate commission suitable Order
redressal commission relief

Appeal against the order

by the aggrieved party

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01/02/23 13
 i. A Consumer; or
ii. Any Voluntary Registered Consumers’ Association; or
iii. The Central Government or any State Government; or
iv. The Central Authority (CCPA); or
v. One or more consumers on behalf of numerous consumers (‘Class Action’); or
vi. Legal heir or representative of the deceased consumer; or
vii. In case of a consumer being a minor, his parent or legal guardian. [Sec. 2 (5) ]
CONSUMER: Any person
(i) buys any goods for a consideration and includes any user of such goods other than the
person who buys such goods, when such use is made with the approval of such person
who buys the goods, 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 and includes any beneficiary of such
service other than the person who hires or avails of the services 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.
NOTE: Buying or using the goods or availing services exclusively for earning livelihood, by means of
self-employment, is not a ‘commercial purpose’.
[Sec. 2 (7)]

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• Defect in goods
• Deficiency in service
• Excess price charged
• Unfair trade practice
• Restrictive trade practice
• Offering of hazardous or unsafe goods
• Offering of hazardous services

RELEVANT CONCEPTS
GOODS
Defect in Goods
SERVICE
Deficiency in Service
Medical service also included (provided it is not completely free)
Case: Indian Medical Association vs. V.P. Santha, (1995) 6 SCC 651
UNFAIR TRADE PRACTICE - Adopted by any trader or service-provider
RESTRICTIVE TRADE PRACTICE - Adopted by any trader or service-provider

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Adopting any unfair method or deceptive practice for promoting sale,
use or supply of any goods or provision of any service, adopts any
unfair method or unfair or deceptive practice including the
following:
1. Misleading advertisements or false claims.
2. Advertisements falsely offering goods or services at bargain price.
3. Offering pseudo-gifts and conducting sales contests.
4. Supply of unsafe or hazardous goods.
5. Hoarding or destruction of goods or refusal to sale.
6. Withholding of information from participants of sale promotion
scheme.
7. Manufacturing or offering of spurious goods/deceptive practice
in providing service. [Section 2
(47)]
A trade practice, which tends to –
• Bring about manipulation of prices, or its conditions of delivery, or
• To affect flow of supplies in the market relating to goods or services
in a such a manner as to impose on consumers unjustified costs or
restrictions.
It includes:
• Delay beyond the period agreed to by a trader in supply of such
goods or providing the services, leading or likely to lead price rise.
• Any trade practice which requires a consumer to buy, hire or avail of
any goods or services as condition precedent for buying, hiring or
availing of other goods or services. [Section 2(41)]
1. District Commission, having territorial jurisdiction, if the claim
is up to ₹1 Core.
2. State Commission, having territorial jurisdiction, if the claim
exceeds ₹1 Crore but not Rs. 10 crore.
3. National Commission, if the claim exceeds ₹10 crore.
Territorial Jurisdiction:
OP/OPs resides/carries on business/has a branch office/works
for gain.
Important: The New Act provides flexibility to the consumer to
file complaints with the jurisdictional consumer commission
located at the place of residence or work of the consumer. The
New Act also contains enabling provisions for consumers to file
complaints electronically and for hearing and/or examining
parties through video-conferencing.
1. Simple Procedure
- Written complaint to be filed by the consumer or any recognized consumer
association or one or more consumers having the same interest, or the Central
or State Government or even the CCPA
- Either in person or by registered post or by electronic means
- Full facts and cause of complaint
- Supporting documents (cash memo, warranty card, etc.)
- Relief sought
- No advocate necessary
2. Prescribed fee to be paid
3. Complaint can be admitted or rejected by the appropriate Commission,
ordinarily within 21 days
4. Hearing to be given before rejection
5. Reference to mediation at the first hearing or at any later stage, at the
discretion of the Commission concerned

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• Notice to the opposite party, within 21 days of admission of complaint.
• His version to be given within 30 days
• Reference to appropriate laboratory, in case of defective goods; report
to be submitted within 45 days
• Copy of test report to the complainant
• Reasonable opportunity of hearing to both parties
• ex parte order in the absence of either party
• Proceedings not to be questioned by any court on the ground of
principles of natural justice
• Expeditious hearing; disposal within 3 months (5 months in case of
laboratory test)
• Ordinarily, no adjournment
• Reasons for adjournment/delay in disposal to be recorded and cost to
be awarded
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• Powers same as vested in a civil court under CPC, 1908 S. 13 (4)
- Summoning any defendant or witness
- Examining the witness on oath
- Discovery and production of any document as evidence
- Requisitioning test report from laboratory or other source
- Appointing any commission for examining witness
• Proceedings deemed as judicial proceedings under IPC, 1960 S. 13 (5)
• Requisitioning production of books, accounts, documents, and commodities
• Requisitioning necessary information
• Power of entry, search, and seizure, through any officer
• Enforcement of orders — attachment of property; recovery as arrears of
land revenue
• Power of judicial magistrate of 1st class, under CrPc, for trial of offences
• Power to pass interim order
STATE AND NATIONAL COMMISSIONS
• Similar procedure and powers
 Removal of defect in goods or deficiency in service
 Replacement of defective goods with new ones
 Refund of price/service charges
 Compensation for loss or injury suffered
 Also, punitive damages*
 Cease-and-desist order against RTP/UTP
 Cease-and-desist order against supply of spurious goods/hazardous
services
 Withdrawal of hazardous goods from sale
 Compensation for unidentifiable consumers
 Corrective Advertisement*
 Costs (to either party) [Section 14 (1)]
• By whom? – Any aggrieved person
• To which authority? – State Commission, National Commission,
and Supreme Court
• Time limit: 30 days from the date of order; delay to be condoned
for sufficient cause
• If the appellant is required by DF to pay any amount, he has to
deposit 50% of that amount or Rs. 25,000, whichever is less
• In the case of appeal before NC, or supreme Court:
50% of the amount or Rs. 35,000
50% of the amount or Rs. 50,000, whichever is less

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COMPLAINT
- 3 months, where the case does not require product
testing/analysis, from the date of receipt of notice by OP.
- 5 months, if it requires test/analysis
APPEAL
State Commission and National Commission: 90 days, from the date
of first hearing
Supreme Court: not specified
Limitation Period For Filing Complaint
2 Years From The Date Of Cause Of Action.
The delay can be condoned by DF, SC or NC, for
sufficient cause – reasons to be recorded

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 (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;
(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
(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. [S. 90]

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 4. Punishment for manufacturing for sale or storing, selling or distributing or importing
spurious goods: (1)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.
(2) The offences under clauses (b) and (c) shall be cognizable and non-bailable.
(3) Notwithstanding the above punishment, the court may, in case of first conviction, suspend any
licence issued to the person referred to in that sub-section, under any law for the time being in
force, for a period up to two years, and in case of second or subsequent conviction, cancel the
licence. [S. 91]

• 

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 5. Punishment for 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 one year, or with fine which may extend to ten thousand
rupees or with both.
[S. 93]

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LDA vs. M.K. Gupta (SC)
SC asked the LDA to fix responsibility for deficient services and recover
the compensation amount proportionately from officers concerned.
AIR 1994 SC 87
IMA vs. V.P. Santha & others, III (1995) CPJ 1SC
Wg. Commander P.S. Sandhu & others v. Union of India
Mrs. Sandhu died in a boat tragedy at a boat club at Barapani
Lake, near Shillong. Held: guilty of negligence for not providing life
jackets and other measures.
Awarded compensation of Rs. 3 lakhs to Wg. Comm. Sandhu and
Rs. 2.4 lakhs each to his two children.
National Insurance Co. vs. Pawan S. Sahney
NC broadened the scope of fire insurance claims.