Consumer Protection Act

Introduction

Consumer protection is the practice of safeguarding buyers of goods and services against unfair practices
in the market. It refers to the steps adopted for the protection of consumers from corrupt and
unscrupulous malpractices by the sellers, manufacturers, service providers, etc. and to provide remedies
in case their rights as a consumer have been violated.
In India, the protection of the rights of the consumers is administered by the Consumer Protection Act,
2019. The Consumer Protection Act, 2019 was introduced to replace the Consumer Protection Act, 1986.
The new Act contains various provisions which incorporate the challenges faced by modern and
technology-dependent consumers. The Act also contains various provisions for the protection and
promoting the rights of the consumers.

Definition Of Consumer
A consumer is an individual or group of individuals who purchase goods and services for their own
personal use and not for the purpose of manufacturing or resale.
Section 2(7) of the Consumer Protection Act, 2019 defines a consumer as any person who buys goods or
services in exchange for consideration and utilises such goods and services for personal use and not for
the purpose of resale or commercial use.
In the explanation of the definition of consumer, it has been distinctly stated that the term ‘buys any
goods’ and ‘hires or avails any services’ also includes all online transactions conducted through
electronic means or direct selling or teleshopping or multi-level marketing.

CONSUMER DISPUTE:
Section 2 (1) (e), It refers to a dispute where the person against to whom a complaint has been made,
denies or disputes the allegations contained in the complaint. Thus, it is clear that if a person against to
whom complaint is made agrees to the compliant, there is on ' Consumer dispute.

What are unfair trade practices under Consumer Protection Act, 2019
Section 2(47) of the Consumer Protection Act, 2019 defines the term ‘unfair trade practices’ which
include:
1. Manufacturing spurious goods or providing defective services.
2. Not issuing cash memos or bills for the goods purchased or services rendered.
3. Refusing to take back or withdraw the goods or services and not refunding the consideration taken for
the purchase of the goods or services.
4. Disclosing the personal information of the consumer.

Advertisement –
Section 2(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.

Objective of the Consumer Protection Act, 2019

The main objective of the Act is to protect the interests of the consumers and to establish a stable and
strong mechanism for the settlement of consumer disputes. The Act aims to:

1. Protect against the marketing of products that are hazardous to life and property.
2. Inform about the quality, potency, quantity, standard, purity, and price of goods to safeguard the
consumers against unfair trade practices.
3. Establish Consumer Protection Councils for protecting the rights and interests of the consumers.
4. Assure, wherever possible, access to an authority of goods at competitive prices.
5. Seek redressal against unfair trade practices or unscrupulous exploitation of consumers.
6. Protect the consumers by appointing authorities for timely and sufficient administration and
settlement of consumers’ disputes.
7. Lay down the penalties for offences committed under the Act.
8. Hear and ensure that consumers’ welfare will receive due consideration at appropriate forums in case
any problem or dispute arises.
9. Provide consumer education, so that the consumers are able to be aware of their rights.
10. Provide speedy and effective disposal of consumer complaints through alternate dispute resolution
mechanisms.

What are consumer rights under Consumer Protection Act, 2019

There exist six rights of a consumer under the Consumer Protection Act,2019. The rights of the
consumers are mentioned under Section 2(9) of the Act, which are as follows:

1.The right of a consumer to be protected from the marketing of goods and services that are hazardous
and detrimental to life and property.
2. The right of a consumer to be protected against unfair trade practices by being aware of the quality,
quantity, potency, purity,standard and price of goods, products or services.
3. The right of a consumer to have access to a variety of goods, services and products at competitive
prices.
4. The right to seek redressal at respective forums against unfair and restrictive trade practices.
5. The right to receive adequate compensation or consideration from respective consumer forums in
case they have been wronged by the seller.
6. The right to receive consumer education.

Consumer Duties under the Act:

There are various duties which are enforced on consumers. They are as follows:
1. Duty to be Aware
The consumer should be proactively aware of the quality of the products and services he is availing of.
For example, he should check that the goods have Hallmark, FSSAI approval, etc.
2. Duty to Stay Informed
The consumer should be updated with information about the products and services he wants to engage
in
3. Duty to Follow the Rules
The consumer should not infringe any rules in order to get the benefit of the service or while purchasing
any product.
4. Duty to Receive a Receipt
The consumer should make sure that he receives the receipt when making any purchase from the
market. The receipt can be used in his favour at a later stage if any inconvenience takes place.
5. Duty to Be Vocal
The consumer must give voice to any exploitive measures happening to them by the sellers and make
the issue noticeable to the public.
6. Duty to Form an Organisation
To express their needs, grievances, demands, and views, consumers should form a non-political
organisation to give their opinions a voice.
7. Duty to Be Ethical
The consumer himself cannot act unethically and blame the seller. Consumer himself, in the first place,
should act ethically and in a fair manner and should not indulge in any malpractice measures.
8. Duty to Consume Resources Sustainably
Consumers should be aware of the consequences of their consumption of the resource. Resources
should be utilised in such a manner that it does not cause inconvenience to the upcoming future
generations.
9. Duty to Be Responsible Towards Environment
Consumers should be careful of their consumption so that it does not harm the environment and natural
resources.
Essential provisions of Consumer Protection Act, 2019
The essential provisions of the Consumer Protection Act, 2019 are:
Consumer Protection Councils
The Act establishes consumer protection councils to protect the rights of the consumers at both the
national and state levels.

Central Consumer Protection Council

Under Chapter 2 Section 3 of the Consumer Protection Act, 2019 the Central Government shall establish
the Central Consumer Protection Council which is known as the Central Council. It is an advisory body
and the Central Council must consist of the following members;
1. The Minister-in-charge of the Department of Consumer Affairs in the Central Government will be
appointed as the chairperson of the council, and
2. Any number of official or non-official members representing necessary interests under the Act.

The Central Council may meet as and when necessary, however, they must hold at least one meeting
every year. The purpose of the Central Council is to protect and promote the interests of the consumers
under the Act.

State Consumer Protection Councils

Every state government shall establish a State Consumer Protection Council known as the State Council
having jurisdiction over that particular state. The State Council acts as an advisory body. The members of
the State Council are:

1. The Minister-in-charge of the Consumer Affairs in the State Government will be appointed as the
chairperson of the council,
2. Any number of official or non-official members representing necessary interests under the Act, and
3. The Central Government may also appoint not less than ten members for the purposes of this Act.

The State Councils must hold at least two meetings every year.

District Consumer Protection Council

Under Section 8 of the Act, the state government shall establish a District Consumer Protection Council
for every district known as the District Council. The members of the District Council are:

1. The collector of that district will be appointed as the Chairperson of the District Council, and
2. Any other members representing necessary interests under the Act.

Central Consumer Protection Authority

The Central Government shall establish a Central Consumer Protection Authority which is known as the
Central Authority under Section 10 of the Consumer Protection Act, 2019, to regulate matters relating to
violation of the rights of consumers, unfair trade practices and false or misleading advertisements which
are prejudicial to the interests of the public and consumers and to promote, protect and enforce the
rights of consumers. The Central Government will appoint the Chief Commissioner and the other
Commissioners of the Central Authority as required under the Act.

The Central Authority must have an ‘Investigative Wing’ under Section 15 of the Act to conduct an
inquiry or investigation. The investigative wing must comprise of the Director-General and the required
number of Additional Director-General, Director, Joint Director, Deputy Director and Assistant Director
possessing the required experience and qualifications to carry out the functions under this Act.

Functions and duties of the Central Authority

The functions and responsibilities of the Central Authority are laid down in Section 18 of the Act which
includes;
1. To protect and promote the rights of the consumers as a class and to prevent violation of consumer
rights,
2. To prevent unfair trade practices,
3. To ensure no false or misleading advertisements regarding any goods or services are promoted,
4. To ensure no person takes part in false or misleading advertisements,
5. Inquire or investigate in cases of violation of consumer rights or unfair trade practices.
6. File complaints before the National, State or District Commission as the case may be,
7. To review matters relating to the factors hindering the enjoyment of consumer rights.
8. To recommend the adoption of international covenants and best international practices concerning
consumer rights
9. Promote research and awareness of consumer rights.
10. Lay down necessary guidelines to prevent unfair trade practices and protect the interests of the
consumers.

Furthermore, the Central Authority also has the power to investigate after receiving any complaint or
directions from the Central Government or of its own motion in cases where there is an infringement of
consumer rights or unfair trade practices are carried out. And if the Central Authority is satisfied that
infringement of consumer rights or unfair trade practices has occurred then it may:

• Recall the goods or services which are hazardous and detrimental to the consumers,

• Reimburse the prices of the goods and services to the consumers,and

• Discontinue the practices that are prejudicial and harmful to the consumers.

Under Section 21 of the Act, the Central Authority is authorised to issue directions to false and
misleading advertisements which may extend to ten lakh rupees. While determining the penalty of the
offence the Central Authority must keep in mind factors such as; the population affected by the offence,
frequency of the offence and gross revenue from the sales of such product. The Central Authority can
also direct search and seizure for the purposes of this Act and in that case the provisions of the Criminal
Procedure Code, 1973will apply.

Consumer disputes redressal commission

The state government shall establish a District Consumer Disputes Redressal Commission, known as the
District Commission in each district of the state under the Consumer Protection Act, 2019. The District
Commission shall comprise of a President and not less than two members prescribed by the Central
Government.

Section 34 of the Act authorises the District Commission to entertain complaints where the value of the
goods or services paid as consideration does not exceed one crore rupees. The complaint relating to
goods and services can be filed to the District Commission by the consumer, recognized consumer
association, Central Government, Central Authority, State Government, etc. Section 36 states that all the
proceedings before the District Commission shall be conducted by the President and at least one
member of the commission.

Mediation

Chapter 5 Section 74 of the Consumer Protection Act, 2019 states that a Consumer Mediation Cell shall
be established by the Central Government at the national level and every state government shall
establish Consumer Mediation Cell exercising within the jurisdiction of that state. The mediator
nominated to carry out the mediation shall conduct it within such time and in such manner as may be
specified by regulations.

Section 75 of the Act talks about the empanelment of the mediators. It states the qualifications, terms
and conditions of service, the procedure for appointing, and the fee payable to the empanelled
mediators. It is the duty of the mediator to disclose certain facts such as; any personal, financial or
professional in the result of the consumer dispute, the circumstances giving rise to their independence
or impartiality and any other necessary information for the protection of consumer rights.
Changes incorporated in Consumer Protection Act, 2019:
The changes that were incorporated with the enactment of the Consumer Protection Act, 2019 are:
1. The District Commissions will have the jurisdiction to entertain complaints where the value of
the goods, services or products paid as consideration to the seller does not exceed 50 lakh
rupees.
2. State Commissions will have the jurisdiction to entertain complaints where the value of the
goods, services or products paid as consideration to the seller exceeds 50 lakh rupees but does
not exceed two crore rupees.
3. The National Commission will have the jurisdiction to entertain complaints where the value of
the goods, services or products paid as consideration to the seller exceeds two crore rupees.
4. The Act further states that every complaint concerning consumer dispute shall be disposed of as
expeditiously as possible. A complaint filed under this Act shall be decided within the period of
three months from the date of receipt of notice by the opposite party in the cases the complaint
does not require analysis or testing of the goods and services and within a period of 5 months, if
it requires analysis or testing of the goods and services.
5. The Consumer Protection Act, 2019 also facilitates the consumers to file complaints online. In
this regard, the Central Government has set up the E-Daakhil Portal, which provides a
convenient, speedy and inexpensive facility to the consumers all over India so that they are able
to approach the relevant consumer forums in case of any dispute arises.
6. The Act lays down the scope for e-commerce and direct selling.
7. The Consumer Protection Act, 2019 lays down provisions for mediation and alternative dispute
resolution so that the parties are able to dispose of the case conveniently without going through
the trouble of litigation.
8. The Consumer Protection Act, 2019 contains provisions for product liability, unfair contracts and
it also includes three new unfair trade practices. In contrast, the old Act just stated six types of
unfair trade practices.
9. The Act of 2019 acts as the advisory body for the promotion and protection of consumer rights.
10. Under the Consumer Protection Act, 2019 there is no scope for selection committees, the Act
authorises the Central Government to appoint the members.
Therefore, with the changes in the digital era, the Indian Parliament enacted and brought the Consumer
Protection Act, 2019 in force to include the provisions for e-commerce as digitalization has facilitated
convenient payment mechanisms, variety of choices, improved services, etc.

Product liability

Under Section 83 of the Act, a product liability action may be brought by a complainant against a product
manufacturer, product service provider or product seller.

Liability of product manufacturer-

A product manufacturer will be held liable in a product liability action under the following
circumstances:
• The product contains manufacturing defects.
• The product is defective.
• There is a deviation from manufacturing specifications.
• The product does not conform to the express warranty.
• The product fails to contain adequate information for proper usage.

Liability of product service provider

A product service provider will be held liable in a product liability action under the following
circumstances:
• The service provider will be responsible when the service provided by them is faulty or imperfect.
• There was an act of negligence on their part.
• The service provider failed to issue adequate instructions and warnings for the services.
• The service provider failed to conform to the express warranty or terms and conditions of the contract.

Liability of product seller

A product seller will be held liable in a product liability action under the following circumstances:
• They altered or modified the product which resulted in being detrimental to the consumer.
• They failed to exercise reasonable care in assembling, inspecting or maintaining such product
• They exercised substantial control over the product which resulted in causing harm to the consumer.

Exceptions to product liability

There are certain exceptions to product liability action mentioned in Section 87 of the Act, such as;
• The product was altered, modified or misused by the consumer,
• A consumer cannot bring product liability action when the manufacturer has given adequate warnings
and instructions for the use of the product,
• The manufacturer would not be liable in case of a product liability action for not warning about any
danger that is commonly known to the general public.

Offences and penalties under Consumer Protection Act, 2019

The offences and penalties listed under this Act are mentioned as follows.

1. Punishment for false and misleading advertisements: Under Section 89 of the Act any manufacturer or
service provider who promotes false or misleading advertisements will be punished with imprisonment
for a term that may extend to two years and with fine that may extend to ten lakh rupees.
2. Punishment for manufacturing, selling, distributing products containing adulterants: Under Section 90
of the Consumer Protection Act, 2019 any person who sells, manufactures, distributes products
containing adulterants shall be penalised in case of the following circumstances;

• If the adulterated product does not cause any injury to the consumer then the term for imprisonment
will extend to a period of six months and fine which may extend to one lakh rupees,
• If the product containing adulterant causes injury not amounting to grievous hurt then the term for
imprisonment will extend to a period of one year and fine which may extend to three lakh rupees,
• If the product containing adulterant causes injury amounting to grievous hurt then the term for
imprisonment will extend to a period of seven years and fine which may extend to five lakh rupees,
• If the product results in causing death to the consumer then the term for imprisonment will be for a
period of seven years which may extend to life imprisonment and fine not less than ten lakh rupees.

3. Punishment for manufacturing, selling, and distributing spurious products: Section 91 states that any
person who sells, manufactures, or distributes spurious products shall be punished for such acts.

How do consumers benefit from Consumer Protection Act, 2019?

The Consumer Protection Act, 2019 is a significant piece of legislation brought as it is beneficial for the
consumers. The Act widens the scope of protection regarding the rights and interests of consumers.
1. Unfair contracts: The Act introduced ‘unfair contract’ under Section 2(46) of the Act, which
includes contracts requiring excessive security deposits to be given by the consumer for the
performance of contractual obligations. However, the inclusion of unfair contracts in the Act
would enable the consumer to file complaints in such cases and would also keep the fraudulent
businesses in check.
2. Territorial jurisdiction: The Act enables the consumers to file complaints where the complainant
resides or personally works for gain thus it would benefit the consumers in seeking redressal for
their grievances when their rights have been violated.
3. False and misleading advertisements: The Act defines the term ‘false and misleading
advertisements’ and also lays down strict penalties for such acts or omissions.
4. Product liability: The term ‘product liability’ has been defined by this Act, which states that it is
the duty of the product manufacturer, service provider or seller to compensate for any harm
caused to a consumer by such defective product manufactured or service provided to the
consumer.
5. Mediation and alternative dispute resolution: The Act enables the consumer to opt for
mediation and alternative dispute resolution mechanisms for speedy and effective settlement of
consumer disputes.
6. E-filing of complaints: The Act also facilitates e-filling of the complaints and seeking video
conference hearings by the Commission. Thus, providing convenient means for the consumers to
voice their grievances.
Landmark Cases:
Horlicks Ltd. v. Zydus Wellness Products Ltd. (2020)
In this case, both parties are manufacturers of nutritional drinks, however, Zydus advertised a television
commercial trivialising the products of Horlicks Ltd. The commercial was being telecasted in various
languages including English, Tamil and Bengali. Therefore, the Delhi High Court relied on various
judgments on misleading advertisements, disparagement and law governing the publication of
advertisements on television and held that the advertisement is disparaging as it does not provide any
concrete proof regarding the quality of the product. Further, electronic media leaves an impression on
the minds of the viewers thus, these types of advertisements would not only be detrimental to the
consumers but also the complainant would suffer irreparable damage.
Veena Khanna v. Ansal Properties & Industries Ltd, NCDRC (2007)
In this case, the complainant offered to purchase a flat from the respondent which the respondent
agreed to deliver on 1.6.1999 through a letter. However, the flat was not constructed within the specified
date and hence it was not delivered. For such deficiency in services, the complainant demanded the
refund of the deposited amount with interest at the rate of 18% pa which was refused by the opposite
party.
The National Commission observed that due to delays in construction and delivery of possession it is
quite difficult for a consumer to purchase a flat at market price. The National Commission stated that it is
the duty of the State Commission to direct the builders to deliver the possession of the flat as soon as it
is completed and the complainant should be awarded suitable compensation for the delay in
construction. The complainant just claimed the refund amount before the State Commission, but the
case was pending before the commission for five years and during that time there was a tremendous rise
in the market prices of the immovable property. The National Commission further stated that it was the
duty of the State Commission to direct the respondents to deliver the possession of the flat or any other
flat of equivalent size to the complainant with appropriate compensation, due to the delay in delivering
the possession within the specified time. Or, adequate compensation ought to have been provided to
the complainant so that they could purchase a new flat of the same size at the prevailing market rate in
that same locality.