Consumer Protection Act, 2019

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.

Meaning of the word ‘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 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.

Need for the Consumer Protection Act, 2019

The Consumer Protection Act, 2019 was enacted by the Indian
legislature to deal with matters relating to violation of consumer’s rights,
unfair trade practices, misleading advertisements, and all those
circumstances which are prejudicial to the consumer’s rights. The
intention of the Parliament behind enacting the Act was to include
provisions for e-consumers due to the development of technology,
buying and selling of goods and services online have considerably
increased during the last few years.

The Act seeks to provide better protection of the rights and interests of
the consumers by establishing Consumer Protection Councils to settle
disputes in case any dispute arises and to provide adequate
compensation to the consumers in case their rights have been infringed.
It further provides speedy and effective disposal of consumer complaints
through alternate dispute resolution mechanisms. The Act also promotes
consumer education in order to educate the consumer about their rights,
responsibilities and also redressing their grievances.

The CPA 1986, even though it had changed the perspective towards the
consumers, had some limitations. It had limitations in terms of penalty it
could impose. The sanctions were limited only to civil ones. It could only
provide civil remedies.

Due to this limited sanction, various forms of consumer harassment

activities were not sufficiently addressed. As a consequence, the act
went through a major change, got repealed and eventually got replaced
by a new legislation, CPA 2019. Several Sections of the Act came into
force on July 20, 2020 and the remaining Sections came into force on
July 24, 2020. Despite having special provisions for consumers to
protect them from unfair trade practices, the old law(1986) , in some
manners, has been found ineffective throughout the time. The act to
some extent has failed in regulating certain wrongs and deceptive acts
committed against consumers.

One such was in relation to product liability. In 2015, there was a case of
excess content of lead in maggie.

According to a March 2019 recall, more than 50,000 Volkswagen Golf,

Jetta, and Tiguan models manufactured from 2015 through 2019 are at
risk for tire failures and crashes.
These two cases show the deficiency of the old act in dealing with the
issues related to certain defective goods and services. There are many
more which show the deficiency of the old law in proving itself as
sufficient for providing relief to consumers. Another issue which could be
highlighted when it comes to state the reason for the requirement of new
legislation is the promotion and advertisement of unhealthy and fatal
products. We often see celebrities promoting the sales of Gutka, tobacco
, pan masala and many more unhygienic products. These types of false
and misleading endorsements and advertisements can indirectly affect
the right to choice of an individual, clearly broached in CPA.

Penalties for Misleading Advertisement

Misleading and false advertisements is one of the many aspects that
were introduced by the 2019 Act. The repealed Act did not deal with the
concept of misleading and false advertisements.

Problem with 3 tier Redressal mechanism in respect to 1986

legislation and its comparison to New Legislation
The government has Set-up a 3 tier Redressal mechanism for the
speedy and inexpensive justice to the consumers. These 3 were set-up
at District, state and national level, with their jurisdictions. Jurisdictions
are as follows:

 District forum - up to 20 lakh

 State commission - 20 lakh to 1cr
 National commission - Above 1 cr.

These jurisdictions were according to CPA 1986. Now the problem with
that is since 1986, our economy has undergone much of the change and
as a consequence, the price of goods and services and purchasing
power of consumers has increased manifold.

This has put a lot of burden on district level Forums as consumers

purchase and acquire goods and services respectively, of below the
amount of Rs 20 lakhs. So also for this obvious reason, the then 2019
government thought to bring a new legislation, annulling the previous
one.

 As per the new legislation, there will be no fee for filing cases up to
Rs. 5 lakh
 There was no separate regulatory body in 1986 legislation, but
there is a central consumer protection authority to be formed.
  There was no legal provision for mediation in the old legislation
whereas according to the new legislation, courts can allow
settlement of disputes through mediation also.
 There was no legal provision for E-commerce in the old legislation,
whereas all rules of direct selling are extended to e-commerce.

So for the above broached drawbacks of the old law , the government in
2019, thought to annul it and formulate and enact a new legislation.

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.

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.

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.

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.
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 case laws

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.

A famous judgement relied on by Delhi High Court while deciding this

case is Pepsi Co. Inc. v. Hindustan Coca Cola Ltd., 2003 where the
Delhi High Court held that there are certain important factors that are to
be kept in mind in case of disparagement which are; manner of the
commercial, intent of the commercial and storyline of the commercial.

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.

Sapient Corporation Employees v. Hdfc Bank Ltd. & Ors. (2012)

In this case, a consumer complaint was filed by Sapient Corporation

Employees Provident Fund Trust against HDFC bank Ltd. The
complainant claimed that OP-Bank has committed deficiency of services
by debiting the account of the Complainant. The court in this case held
that there was no deficiency of service on the part of OP-bank and the
arguments contented by the complainant are baseless. A behaviour that
conforms to the direction of regulatory authority cannot be said to be
negligence or service deficiency.

Conclusion
The Consumer Protection Act, 2019 is a modified piece of legislation that
offers the consumers a great variety of benefits and rights to protect
them from unfair trade practices, false or misleading advertisements, etc.
The Act enables the consumers to seek alternative dispute resolution
mechanisms and mediation so that the parties can opt for speedy and
effective settlement of consumer disputes. The scope of e-filing of
complaints and e-consumers in the Act portrays forward-thinking in part
of the legislature. Furthermore, the Act also introduced new terms such
as product liability, unfair contracts, etc. thereby widening the scope of
protection of consumer rights and enabling the consumers to file
complaints when their rights have been violated under the Act.
Thus, the inclusion of the provisions in this fills up the lacunae in the
Consumer Protection Act, 1986. The enactment of the Act was
paramount and it changed the ambit of protecting the rights of
consumers in the country.