Central Consumer Protection Authority: Roject Eport

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PROJECT REPORT

ON

CENTRAL CONSUMER
PROTECTION AUTHORITY

UNDER THE GUIDANCE OF:

DR. PRITI RAMANI NAYYAR


ASSISTANT
PROFESSOR
SCHOOL OF LAW

SUBMITTED BY:
SHASHANK KUMAR (180010201058)

GD GOENKA UNIVERSITY
SOHNA ROAD, GURGAON – 122103, HARYANA, INDIA
INTRODUCTION

The recent Consumer Protection Act, 2019 has ushered in an added array of
protections for consumers of expanding non-traditional market places such as e-
commerce portals, online sales, direct selling, multi-level marketing etc. Newly
evolved concepts like ‘product liability’ and ‘unfair contracts’ have also been
introduced to strengthen and protect the interests of consumers.

The Act replaced The Consumer Protection Act, 1986, and seeks to widen its scope
in addressing consumer concerns. The CCPA, introduced in the new Act, aims to
protect the rights of the consumer by cracking down on unfair trade practices, and
false and misleading advertisements that are causing harm to the interests of the
public and consumers.

Section 10(1), in Chapter III of the Act, provides for the establishment of a
‘Central Consumer Protection Authority’ to regulate matters relating to violation
of 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 and enforce the rights of consumers as a class. Section 10(2)
provides that the Central Authority would consist of a Chief Commissioner and
such number of other Commissioners as may be prescribed, to be appointed by the
Central Government. On 23 July 2020, the Central Government notified in the
Official Gazette that Chapter III of the Act would come into force on 24 July 2020.
Simultaneously, in exercise of powers conferred by Section 10 of the Act, the
Central Government notified the establishment of a CCPA as a body corporate
having perpetual succession and a common seal with effect from the same day, i.e. 
24 July 2020.

Additionally, Section 11 of the Act provides that the Central Government may, by
notification, make rules to provide for qualifications for appointment of such Chief
Commissioner and Commissioners, method of  recruitment, procedure for
appointment, term of office, salaries and allowances, resignation, removal and
other terms and conditions of their service. In other words, the Act itself does not
afford any clarity on important aspects such as the qualifications for appointment
of its Chief Commissioner and Commissioners, their conditions of service, the
constitution of the Selection Committee for making such appointments etc.  These
rules are yet to be notified.

It is noteworthy that although the Central Authority is vested with adjudicatory


powers (including the power to direct search and seizure, pass cease and desist
orders and even restrain endorsements by persons) and its orders are appealable to
the National Commission, the Act does not contain even a minimum prescription
that the Central Authority’s members (or at least some of them) should be drawn
from areas of expertise in law and be competent to discharge judicial functions.

Rather, Section 13(2) merely provides that the Central Authority may engage
experts and professionals of integrity and ability having special knowledge and
experience in areas of consumer rights and welfare, consumer policy, law,
medicine, food safety, health, engineering, product safety, commerce, economics,
public affairs and administration. This could be taken to mean that the engagement
of a person having a background, qualification or experience in law is merely
optional.  

FUNCTIONS OF CCPA
Some of the main functions of CCPA under the consumer protection act 2019 are:
1. Inquire or cause an inquiry or investigation to be made into violations of
consumers rights or unfair trade practices, either suo motu or on a complaint
received or on the directions of the Central Government;
2. File complaints before the District Commission or the State Commission or
the National Commission;
3. Intervene in any proceedings before any of the Commission in respect of any
allegation of violation of consumer rights or unfair trade practices;
4. review the matters relating to, and the factors inhibiting enjoyment of
consumer rights, including safeguards provided for the protection of
consumers under any other law for the time being in force and recommend
appropriate remedial measures for their effective implementation;
5. recommend adoption of international covenants and best international
practices on consumer right to ensure effective enforcement of consumer
rights;
6. Undertake and promote research in the field of consumer rights;
7. Spread and promote awareness on consumer rights;
8. Encourage non-government organizations and other institutions working in
the field of consumer rights to co-operate and work with consumer
protection agencies;
9. Mandate the use of unique and universal goods identifiers in such goods, as
may be necessary, to prevent unfair trade practices and to protect
consumers’ interest;
10.Issue safety notices to alert consumers against dangerous or hazardous or
unsafe goods or services;

POWERS OF CCPA

The Central Authority enjoys sweeping and wide-ranging powers under the Act
and can discharge functions which are regulatory, investigative or adjudicatory in
nature. These include the power to:

(i) Inquire or cause an inquiry into violations of consumer rights or unfair trade
practices, either suo moto or on a complaint or on directions from the Central
Government [Section 18(2)].
(ii) Cause investigation to be made by the Director General or by the District
Collector if it is satisfied, after a preliminary inquiry, that there exists a prima
facie case of violation of consumer rights or any unfair trade practice or any false
or misleading advertisement prejudicial to public interest or to the interests of the
consumers [Section 19(1)].

(iii) Call upon a person found prima facie to be involved in violation of consumer


rights or any unfair trade practice or any false or misleading advertisement as
described above and also to direct him to produce any document or record in his
possession. Additionally, the Director General or the District Collector would have
powers of search and seizure under the Code of Criminal Procedure, 1973 and also
the power to direct production of any document or record [Section 22].

(iv) recall goods or withdraw services which are dangerous, hazardous of unsafe,
or direct reimbursement of the prices of goods or services so recalled or
discontinuation of unfair practices after giving the target person an opportunity of
being heard [Section 20].

(v) engage in and promote consumer advocacy including by filing complaints


before the District Commission, the State Commission or the National Commission
constituted under the Act, intervening in any proceedings before these fora,
recommending remedial measures, undertaking research, spreading awareness and
issuing safety alerts to consumers [Section 18].

(vi) Issue directions, after investigation, to a trader or manufacturer or endorser or


advertiser or publisher to discontinue false or misleading advertisements
prejudicial to consumers, and to impose monetary penalties up to Rupees ten lakhs
[Section 21].
(vii) Restrain the endorser of a false or misleading advertisement from making
endorsement of any product or service for a period up to one year, or in case of
subsequent contravention up to three years [Section 21(3)].

(viii) Section 21 of the new Act defines the powers given to the CCPA to crack
down on false or misleading advertisements.

(ix) The CCPA may order investigation that any advertisement is false or
misleading and is harmful to the interest of any consumer, or is in contravention of
consumer rights.

(x) If dissatisfied, the CCPA may issue directions to the trader, manufacturer,
endorser, advertiser, or publisher to discontinue such an advertisement, or modify
it in a manner specified by the authority, within a given time.
PENELTIES UNDER CCPA

For manufacture, selling, storage, distribution, or import of adulterated products,


the penalties are:

1. If injury is not caused to a consumer, fine up to Rs 1 lakh with imprisonment

up to six months;

2. If injury is caused, fine up to Rs 3 lakh with imprisonment up to one year;

3. If grievous hurt is caused, fine up to Rs 5 lakh with imprisonment up to 7

years;

4. In case of death, fine of Rs 10 lakh or more with a minimum imprisonment

of 7 years, extendable to imprisonment for life.

5. The authority may also impose a penalty up to Rs 10 lakh, with

imprisonment up to two years, on the manufacturer or endorser of false and

misleading advertisements.

6. The penalty may go up to Rs 50 lakh, with imprisonment up to five years,

for every subsequent offence committed by the same manufacturer or endorser.

7. CCPA may ban the endorser of a false or misleading advertisement from

making endorsement of any products or services in the future, for a period that may

extend to one year.


8. The ban may extend up to three years in every subsequent violation of the

Act.

COMPOSITION OF CCPA

 It will have a Chief Commissioner as head, and only two other


commissioners as members — one of whom will deal with matters relating
to goods while the other will look into cases relating to services.
 The CCPA will have an Investigation Wing that will be headed by a Director
General.
 District Collectors too, will have the power to investigate complaints of
violations of consumer rights, unfair trade practices, and false or misleading
advertisements.

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