Central Consumer Protection Authority (CCPA): establishment, composition and powers

In one minute

The Central Consumer Protection Authority (CCPA) is a regulator created by section 10 of the 2019 Act. It protects, promotes and enforces consumer rights as a class. It can investigate, recall goods, order refunds, impose penalties on false advertisements, and search and seize.

In exams, this topic is asked as "explain the establishment, composition and powers of the CCPA". The usual trap is to confuse it with the Commissions, which decide individual complaints.

Legal provision

• Section 10: establishment, objects and composition.
• Section 11: rules on qualifications and service conditions of the Chief Commissioner and Commissioners.
• Sections 12 to 14: vacancies, officers and procedure.
• Section 15: the Investigation Wing.
• Section 16: power of the District Collector.
• Section 17: complaints to the authorities.
• Section 18: powers and functions.
• Section 19: preliminary inquiry and investigation.
• Section 20: power to recall goods.
• Section 21: directions and penalties for false or misleading advertisements.
• Section 22: search and seizure.
• Section 23: designation of another body to function as the Authority.
• Section 24: appeal to the National Commission.
• Sections 88 and 89: penalties for non-compliance and for false advertisements.

Meaning and definition

The Central Authority is defined in section 2(4) as the Central Consumer Protection Authority established under section 10. Its purpose is 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. It also promotes, protects and enforces the rights of consumers as a class.

Detailed explanation

Step 1: Establishment and composition (section 10)

• The Central Government establishes the Authority by notification.
• It consists of a Chief Commissioner and such number of other Commissioners as may be prescribed, appointed by the Central Government.
• The headquarters are in the National Capital Region of Delhi, with regional and other offices elsewhere in India as the Central Government decides.
• The qualifications, term, salary and removal of the Chief Commissioner and Commissioners are set by rules (section 11).
• The Central Government may designate any statutory authority or body to exercise the powers of the Authority (section 23).

Step 2: The Investigation Wing (section 15)

• It is headed by a Director-General, who is appointed by the Central Government from persons with experience in investigation.
• It conducts inquiries and investigations as directed by the Authority.
• The Director-General can delegate powers to Additional Directors-General, Directors, Joint Directors, Deputy Directors and Assistant Directors.

Step 3: The District Collector (sections 16 and 17)

• The District Collector may inquire into or investigate complaints about violation of consumer rights as a class, unfair trade practices and false or misleading advertisements within his jurisdiction, and report to the Authority or the Commissioner of a regional office.
• A complaint of this kind may be sent in writing or electronically to the District Collector, the Commissioner of a regional office or the Central Authority.

Step 4: Functions (section 18)

• Protect, promote and enforce the rights of consumers as a class and prevent violation of consumer rights.
• Prevent unfair trade practices and see that no person engages in them.
• Ensure that no false or misleading advertisement is made and that no person takes part in publishing one.

Step 5: Powers (section 18(2) and sections 19 to 22)

• Inquire or investigate into violations of consumer rights or unfair trade practices, on its own motion, on a complaint or on the directions of the Central Government.
• File complaints before the District, State or National Commission.
• Intervene in any proceeding before a Commission on an allegation of violation of consumer rights or unfair trade practices.
• Review the factors that inhibit enjoyment of consumer rights and recommend measures.
• Conduct a preliminary inquiry and, if there is a prima facie case, cause an investigation to be made by the Director-General or the District Collector (section 19).
• Refer a matter to another Regulator, such as a sector regulator, along with its report (section 19(2)).
• Recall goods or withdraw services that are dangerous, hazardous or unsafe, order the price to be reimbursed, and order discontinuation of unfair practices, after giving a hearing (section 20).
• Search and seize: enter premises at a reasonable time, search for and seize documents, records or articles, and require production of records, with the Code of Criminal Procedure on search and seizure applying (section 22).

Step 6: False or misleading advertisements (section 21)

• After investigation, the Authority may direct the trader, manufacturer, endorser, advertiser or publisher to discontinue or modify the advertisement.
• It may impose a penalty of up to Rs 10 lakh on a manufacturer or endorser, and up to Rs 50 lakh for each subsequent contravention.
• It may prohibit an endorser from endorsing any product or service for up to one year, and for up to three years for each subsequent contravention.
• It may impose a penalty of up to Rs 10 lakh on a person who publishes, or is a party to publication of, a misleading advertisement.
• Failure to comply with directions under sections 20 and 21 is punishable with imprisonment of up to six months or a fine of up to Rs 20 lakh, or both (section 88).

Step 7: Appeal (section 24)

A person aggrieved by an order of the Authority under section 20 or 21 may file an appeal to the National Commission within 30 days of receipt of the order.

1. 1. Complaint or own motionA complaint to the Collector, a regional Commissioner or the Authority, or action on its own motion.
2. 2. Preliminary inquiryThe Authority checks whether there is a prima facie case.
3. 3. InvestigationBy the Director-General or the District Collector, with powers of search and seizure.
4. 4. Order after a hearingRecall of goods, refund, discontinuation, penalty, or a ban on the endorser.
5. 5. AppealTo the National Commission within 30 days.

Don't confuse: the Authority and the Commissions

Point	Central Authority	Consumer Commissions
Protects	Consumers as a class	The individual complainant
Nature	Regulator	Quasi-judicial
Powers	Investigate, recall, penalise, search and seize	Decide complaints, award relief
Appeal	To the National Commission, 30 days	To the next tier

Common mistakes

• Saying that the Authority decides individual complaints. It acts for consumers as a class.
• Forgetting that appeals from the Authority lie to the National Commission.
• Giving the penalty as one fixed amount. It is up to Rs 10 lakh, and up to Rs 50 lakh for a subsequent contravention.
• Forgetting that endorsers can be penalised and banned.
• Forgetting that the Authority must give a hearing before ordering a recall.

Apply it

Leading case laws

• Indian Medical Association v. V.P. Shantha (1995)

  Facts. Conflicting rulings on whether medical work is a service under the consumer law.

  Principle. Medical work for a fee is a service.

  Significance. Class-wide complaints on such services can also be taken up by the Authority.

How to write this answer in the exam

Key points to remember

• Established under section 10; a Chief Commissioner and other Commissioners.
• Acts for consumers as a class.
• Powers: inquire, file complaints, intervene, recall goods, search and seize.
• Penalty on a false advertisement: up to Rs 10 lakh, and up to Rs 50 lakh for each subsequent contravention.
• Appeal to the National Commission within 30 days.

Quick self-test

Related topics

• Restrictive and Unfair Trade Practices
• Penalties for misleading advertisement
• Consumer Disputes Redressal Commissions: Jurisdiction and Powers