Consumer Protection

Consumer Protection Act 2019 vis-à-vis 1986

• enacted for the purpose of providing timely and effective
administration and settlement of consumer disputes and related
matters.
• The Government instead of bringing an amendment in the 1986 Act,
enacted a new Act altogether so as to provide enhanced protection
to the consumers taking into consideration the booming e-commerce
industry and the modern methods of providing goods and services
such as online sales, tele-shopping, direct selling and multi-level
marketing in addition to the traditional methods.
• The 2019 Act expands the scope of the definition of Consumer so as
to include the consumers involved in online transactions and it now
squarely covers the E-commerce businesses within its ambit.
• widened the definition of Unfair Trade Practices ,
• introduced the concept of unfair contract which includes those
contracts, which favor the manufacturers or service providers and are
against the interest of the consumers
• Central Consumer Protection Authority - to regulate, protect and
enforce the interest of the consumers and matters related to unfair
trade practices-with vast powers to inquire, investigate and take
action against violations of the 2019 Act
• CCPA has been showered with, is the power to take action and
impose penalty against misleading and false advertisement as well as
against any endorser of such advertisement,
• the concept of Product Liability which covers within its ambit the
product manufacturer, product service provider and product seller,
for any claim for compensation.
• Territorial jurisdiction- The 2019 Act now provides an added
advantage to the consumers by providing for filing of complaints
where the complainant resides or personally works for gain as against
the 1986 Act
• The 2019 Act also changed the pecuniary jurisdiction for the District,
State and National Commissions, the 2019 Act has also changed the
manner for determining the pecuniary jurisdiction for filing the
Complaint.
• the 2019 Act to ensure speedy resolution of disputes is to provide for
referring the disputes to mediation.
• E-filing- provisions for filing of Complaints before the District Forums
electronically
 Who is a Consumer?
• A person who buys any goods or services for a consideration, which has
been;
• paid or promised or
• partly paid and partly promised, or
• under any system of deferred payment
• also includes the user with approval of such goods or beneficiary of
services.

• As per Consumer Protection Act 2019, the expression “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.
 goods
Section 2(21) -"goods"

• every kind of movable property and

• includes "food" as defined in the Food Safety and Standards Act, 2006
• General Clauses Act - movable property – means 'property of every
description except immovable property'.

• The Registration Act defines movable property to include property of

every description except immovable property, but including standing
timber, growing crops and grass.
Food Safety and Standards Act, 2006
• 'food' - any substance, whether processed, partially processed or
unprocessed, which is intended for human consumption and
• includes primary food to the extent defined in clause (zk), genetically
modified or engineered food or food containing such ingredients,
infant food, packaged drinking water, alcoholic drink, chewing gum,
and any substance, including water used into the food during its
manufacture, preparation or treatment

• but does not include any animal feed, live animals unless they are
prepared or processed for placing on the market for human
consumption, plants, prior to harvesting, drugs and medicinal
products, cosmetics, narcotic or psychotropic substances:
• The Act, unlike the Sale of Goods Act, 1930, does not insist on money
consideration only.
• Transactions of transfer for services, or barter or exchange will come within
the purview of the Act.

• The Act aims to extend protection available to a consumer under the

Act to the users of the goods and services who may not have bought
it.
• When a person buys goods, that may be used by his family members,
relatives and friends or acquaintances upon approval from the buyer.
• However, he should be a rightful user, and should not be the one who
has obtained the good by unlawful means.
 Who is a not a consumer?
• A person who obtains;

• goods or who avails services free of charge

• who obtains goods for resale or for any commercial purposes
• who avails services for any commercial purposes or under contract
of service
• "consumer" does not include a person who obtains such goods for
resale or for any commercial purpose,

• where the expression "commercial purpose" does not include people

who purchase goods solely for the purpose of earning livelihood by
means of self-employment.
 • When goods are bought for commercial purposes and such purchase
satisfy the following criteria:

1. the goods are used by the buyer himself;

2. exclusively for the purpose of earning his livelihood;
3. by means of self-employment,

• Then such use would not be termed as use for commercial purposes
under the Act, and the user is recognised as a consumer.
• Let’s check out a few problem questions………………
 A young child is taken to hospital by his parents and is treated by the
doctor. For deficiency of service, can the parents sue directly against
the doctor.
• Do they (parents) come under the definition of consumer?
A person purchases a truck to earn his livelihood by means of
self-employment. However, he appointed a driver to ply such a truck.
Do he come under the definition of consumer under CPA?
Can a govt servant raise a dispute under CPA regarding his service
conditions or payment of gratuity or retirement benefit?
 Theft of a car from valet parking of a hotel - when possession of
vehicle is handed over to a hotel employee for valet parking.
• Can the vehicle owner be considered a consumer under CPA and sue
against the Hotel Authority;

1. When parking token taken

2. Where no separate payment is made to park the car in the parking lot.
Can a litigant file a consumer dispute against a Lawyer for deficiency
in Service?
Whether a Sub-Registrar registering sale deeds renders any service
under the Consumer Protection Act, 2019 ?
Whether a person applying for allotment of shares of a Company can
be termed as a Consumer ?
Can a customer of a bank who avails overdraft facility be described as
a customer?
 Whether consumer dispute can be raised by students against;

• an educational institution
• examining bodies like Board of Secondary Education, State/Central
Board
• coaching Institutes
• An Ayurveda doctor prescribing an allopathic medicine, which caused
death of a patient. Decide liability under CPA.
• X had purchased a computer from Y Company for their business
purpose. After two days of the purchase, it was not functioning
properly and it occurred repetitively. X gave a complaint for repair,
but Y had given evasive reply. Discuss the liability of Y Company.
• Y a doctor, working in a hospital rendering free medical services,
treated the patient for malaria. Due to wrong diagnosis, the P had to
undergo prolonged treatment and was put to great suffering. P sued for
damages. Discuss the liability under CPA.
• A corporation purchased nine cars from an automobile dealer for the
purpose of its executives. There was a manufacturing defect in one of
the cars purchased by the corporation and desires to file a complaint
before the Consumer forum. Advise.
• Complainant- means;

(i) a consumer; or
(ii) any voluntary consumer association registered under any law for
the time being in force; or
(iii) the Central Government or any State Government; or
(iv) the Central Authority; or
(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;
 • Complaint- means an allegation in writing, made by a complainant
for obtaining any relief provided under the 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 one or more defects;

(iii) the services hired or availed of or agreed to be hired or availed of

by him suffer from any deficiency;
(iv) a trader or a service provider, as the case may be, has charged for
the goods or for the services mentioned in the complaint, 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;
 “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, including the following, namely:--
i. requiring manifestly excessive security deposits to be given by a consumer for
the performance of contractual obligations; or
ii. imposing any penalty on the consumer, for the breach of contract thereof which
is wholly disproportionate to the 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;
“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 method or unfair or deceptive practice

 “Restrictive trade practice" means
• a trade practice which tends to bring about manipulation of price or
its conditions of delivery or to affect flow of supplies in the market
relating to goods or services

• in such a manner as to impose on the consumers unjustified costs or

restrictions and shall include–
a. delay beyond the period agreed to by a trader in supply of such goods or in
providing the services which has led or is likely to lead to rise in the price;
b. any trade practice which requires a consumer to buy, hire or avail of any
goods or, as the case may be, services as condition precedent for buying,
hiring or availing of other goods or services;
 “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 for the time being in force or
• under any contract, express or implied or
• as is claimed by the trader in any manner whatsoever
• in relation to any goods or product and the expression "defective"
shall be construed accordingly;
 “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 for the time being in force or
• has been undertaken to be performed by a person in pursuance of a contract
or otherwise 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;
 “Service" means
• service of any description which is made available to potential users
and includes, but not limited to,
• the provision of facilities in connection with banking, financing,
insurance, transport, processing, supply of electrical or other energy,
telecom, boarding or lodging or both, housing construction,
entertainment, amusement or the purveying of news or other
information,

• but does not include the rendering of any service;

1. free of charge or
2. under a contract of personal service;
 “Product" 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;
 “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
 "product manufacturer" means a person who—
a. makes any product or parts thereof; or
b. assembles parts thereof made by others; or
c. puts or causes to be put his own mark on any products made by any
other person; or
d. 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
e. designs, produces, fabricates, constructs or re-manufactures any
product before its sale; or
f. being a product seller of a product, is also a manufacturer of such
product
 “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–

a) a manufacturer who is also a product seller; or

b) 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—
a. acts only in a financial capacity with respect to the sale of the product;
b. is not a manufacturer, wholesaler, distributor, retailer, direct seller or an
electronic service provider;
c. 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;
"misleading advertisement" in relation to any product or service,
means an advertisement, which-

a. falsely describes such product or service; or

b. 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
c. 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
d. deliberately conceals important information;
"consumer rights" includes--
a. the right to be protected against the marketing of goods, products or
services which are hazardous to life and property;
b. the right to be informed about the quality, quantity, potency, purity,
standard and price of goods, products or services, as the case may be, so as
to protect the consumer against unfair trade practices;
c. the right to be assured, wherever possible, access to a variety of goods,
products or services at competitive prices;
d. the right to be heard and to be assured that consumer's interests will
receive due consideration at appropriate fora;
e. the right to seek redressal against unfair trade practice or restrictive trade
practices or unscrupulous exploitation of consumers; and
f. the right to consumer awareness
 Authorities under 2019 Act

I. Consumer Protection Councils

II. Central Consumer Protection Authority

III. Consumer Dispute Redressal Commission

I. Consumer Protection Councils
• Central
• State
• District

• Advisory body consisting of Minister in charge of Consumer affairs

(Chairperson) and such number of official and non-official members.

• Object- to render advise in promotion and protection of the

consumer rights
II. Central Consumer Protection Authority

• Chief Commissioner and such number of other commissioners

• Object- To regulate matters relating to violation of rights of

consumers, unfair trade practices and false or misleading
advertisements which are prejudicial to interests of public and
consumers and to promote, protect and enforce the rights of
consumers as a class.
Central Authority;

• shall have an Investigation wing headed by Director-General for

conducting inquiry or investigation - and submit the same to Central
Authority
• may direct the District Collector to investigate or inquire into
complaints regarding violation of consumer rights as a class- and
submit report to Central Authority
• Power and functions of Central Authority- S. 18

• to promote its objective

• to inquire and investigate into violations of consumer rights- suo
motu, on complaint received or direction of Cent Govt
• File complaints before Commission- District, State or National
• Recommend adoption of Int Conv and best Int practice on
consumer rights – to ensure effective enforcement of consumer
rights
• Undertake research and spread awareness…..
❖ Power of Central Authority to recall goods- S. 20
❖ Power of Central Authority to issue directions and penalties against
false or misleading advertisements- S. 21

• Penalty for non-compliance of direction of Central Authority- S. 88

• A person aggrieved by the order of Central Authority may appeal to

National Commission- within 30 days.
III. Consumer Dispute Redressal Commission
• District
• State
• National

• Each Commission shall consist of a President and such number of

members.
Jurisdiction-

based on the value of goods or services paid as consideration

• District Commission- can entertain complaints whose value does

not exceed 1 crore
• State Commission- exceeds 1 crore but does not exceed 10 crore
• National Commission- if it exceeds 10 crore
• Complaint can be filed by the complainant within the local limits of
whose jurisdiction-

1. Opposite party or any/each of opposite party- ordinarily resides,

carries on business, has a branch office or personally works for
gain
2. Cause of action –wholly or partly arises
3. Complainant resides or personally works for gain
• Proceeding before Commission- conducted by President and at least
one member

• Admissibility- within 21 days -by order either admit the complaint and
proceed with or reject the same.
• After admission or at any later stage- if commission feels that there
exist elements of settlement- which may be acceptable for the
parties- refer for mediation (Chap 5)
• Procedure on admission or on failure of mediation- S.38-
• copy of complaint to opposite party in 21 days- reply within 30 days-
• if complaint alleges defect, to obtain sample and send it to lab for report on
the defect in 45 days

• Reasonable opportunity of being heard to both parties- to raise objection

regarding correctness of lab report
• Final decision on the basis of evidence brought to its notice.

• It shall decide ex parte if opposite party omits or fails to take

representation within time.
• It shall decide on merits if complainant fails to appear on date of
hearing.
• Every complaint shall be heard on basis of affidavit and documentary
evidence placed on record
• Proviso- hearing or examination of parties in person may be allowed on
application with sufficient reason
• Every complaint shall be disposed of as expeditiously as possible; –
• within 3 months from date of receipt of notice by opposite party (where it
does not require testing in lab)
• Within 5 months – (if it requires testing of commodities)

• Every proceeding before the Commission shall be deemed to be a

judicial proceeding.
• Commission has all the power vested with a civil court under CPC
while tying the suit.
• S. 39- Findings of Commission- if satisfied that the goods complained
of suffer any defect specified in the allegation- Commission shall issue
order to opposite party to-
• Remove or replace the defective good, return price or compensate the
consumer or to grant punitive damages

• State Commission and National Commission may also declare any

terms of contract, which is unfair to any consumer to be null and
void.
Appeal from;
• District Commission – to State Commission
• State Commission – to National Commission
• National Commission – to Supreme Court

No appeal;
• If order is passed in pursuant of a settlement by mediation.
• If a person is required to pay an amount in the order- Unless
appellant has deposit 50% of that amount
• Finality of orders of Commission- S. 68
• Limitation period- within 2 yrs from date of cause of action- S. 69
• Enforcement of orders of Commission- in the same manner as if it
were a decree made by a court – S. 71

• Penalty for non-compliance of order of Commission- upto 3 yrs- S. 72

 Product liability- Chap 6 (S.82-87)
S. 2(37)- “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
• S.83- A product liability action may be brought by a complainant
against

a. a product manufacturer or
b. a product service provider or
c. a product seller, as the case may be,

• for any harm caused to him on account of a defective product

 Liability of product manufacturer(S.84)—
1. 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

2. 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.
 Liability of product service provider (s.85).
• 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.
 Liability of product sellers(S.86).
• A product seller who is not a product manufacturer shall be liable in a
product liability action, if—

• he has exercised substantial control over the designing, testing,

manufacturing, packaging or labelling of a product that caused harm; or

• he has altered or modified the product and such alteration or modification

was the substantial factor in causing the harm; or

• 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
• 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 or the order, if any, passed or to be passed cannot be enforced
against him; or

• 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.
 Exceptions to product liability action (s.87)

1. A product liability action cannot be brought against the product seller if,
at the time of harm, the product was misused, altered, or modified.
2. In any product liability action based on the failure to provide adequate
warnings or instructions, the product manufacturer shall not be liable,
if—
• the product was purchased by an employer for use at the workplace and the
product manufacturer had provided warnings or instructions to such employer;
• the product was sold as a component or material to be used in another product
and necessary warnings or instructions were given by the product manufacturer to
the purchaser of such component or material, but the harm was caused to the
complainant by use of the end product in which such component or material was
used;
 • the product was one which was legally meant to be used or dispensed only by
or under the supervision of an expert or a class of experts 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
• 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.

3. 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.