Consumer Protection Act,2019

In one minute

The Consumer Protection Act, 2019 replaced the 1986 Act. It adds a regulator (the Central Consumer Protection Authority), a chapter on product liability, mediation, e-commerce rules, e-filing, and heavier penalties for false advertisements.

In exams, this topic is asked as "explain the scheme and new features of the Consumer Protection Act, 2019". The usual trap is to forget the new features and to mix up the appeal periods and the penalties.

Legal provision

• Section 1: the Act extends to the whole of India. A notification of 30 October 2019 made it applicable to the Union territories of Jammu and Kashmir and Ladakh. It applies to all goods and services unless the Central Government provides otherwise.
• Section 2: definitions, including consumer (2(7)), consumer rights (2(9)), defect (2(10)), deficiency (2(11)), e-commerce (2(16)), product liability (2(34)), restrictive trade practice (2(41)), unfair contract (2(46)) and unfair trade practice (2(47)).
• Chapter II (sections 3 to 9): Consumer Protection Councils.
• Chapter III (sections 10 to 27): Central Consumer Protection Authority.
• Chapter IV (sections 28 to 73): Consumer Disputes Redressal Commissions.
• Chapter V (sections 74 to 81): mediation.
• Chapter VI (sections 82 to 87): product liability.
• Chapter VII (sections 88 to 93): offences and penalties.
• Chapter VIII (sections 94 to 107): miscellaneous, including section 94 on e-commerce and direct selling, section 100 (the Act is in addition to other laws) and section 107 (repeal of the 1986 Act).

Meaning and definition

The 2019 Act is the present law that protects consumers in India. It does more than settle disputes. It also prevents unfair practices through a regulator, and it covers modern markets such as e-commerce and direct selling.

Detailed explanation

Step 1: Wider definitions

• A consumer buys goods or hires services for consideration, and includes a user or beneficiary with the buyer's approval. A person who buys goods for resale or for a commercial purpose is excluded. Buying and using goods exclusively to earn a livelihood by self-employment is not commercial purpose.
• "Buys any goods" and "hires or avails any services" now include offline and online transactions through electronic means, teleshopping, direct selling or multi-level marketing.
• Service does not include the rendering of any service free of charge or under a contract of personal service.
• A complainant can be a consumer, a registered voluntary consumer association, the Central or State Government, the Central Authority, numerous consumers with the same interest, a legal heir, or the parent or guardian of a minor.

Step 2: Consumer rights and Councils

Section 2(9) lists six rights: protection against hazardous goods and services, information, access to a variety of goods at competitive prices, the right to be heard, redressal, and consumer awareness. Councils at the Central, State and District levels render advice on promotion of these rights.

Step 3: The Central Consumer Protection Authority

Sections 10 to 27 create the Authority to regulate matters of violation of consumer rights, unfair trade practices and false or misleading advertisements. It can investigate, search and seize, recall goods, order refund, and impose penalties. See the note on the Authority.

Step 4: Three Commissions

• A District Commission in each district, a State Commission in each State, and the National Commission.
• Section 34 sets the District Commission's limit at Rs 1 crore of consideration paid, with a power for the Central Government to prescribe another value. Section 47 gives the State Commission Rs 1 crore to Rs 10 crore, and section 58 gives the National Commission cases above Rs 10 crore.
• The Central Government has prescribed other values by the Consumer Protection (Jurisdiction of the District Commission, the State Commission and the National Commission) Rules, 2021: up to Rs 50 lakh for the District Commission. Above Rs 50 lakh and up to Rs 2 crore for the State Commission. Above Rs 2 crore for the National Commission.
• The jurisdiction depends on the consideration paid for the goods or services, and not on the compensation claimed.
• Unfair contract complaints go to the State Commission up to Rs 10 crore and to the National Commission above that.
• A complaint can be filed where the complainant resides or works for gain, which is a new convenience for consumers (section 34(2)(d)).

Step 5: Procedure and time

• A complaint may be filed electronically. Its admissibility is ordinarily decided within 21 days of filing (section 36). After admission, a copy goes to the opposite party within 21 days, who has 30 days to reply, extendable by up to 15 days (section 38).
• The Commission tries to decide within three months, or five months if testing is needed.
• A complaint is heard on affidavit and documents, and a party may be heard by video conferencing with leave.
• The Commission can review its orders for an error apparent on the face of the record (sections 40, 50 and 60).

Step 6: Mediation

Chapter V creates consumer mediation cells attached to the Commissions. If a District Commission sees elements of a settlement that the parties may accept, it may ask them to consent in writing within five days. It then refers the matter to mediation within five days (section 37). A settlement is recorded as an order, and no appeal lies against it.

Step 7: Product liability

Chapter VI makes a product manufacturer, a product service provider and a product seller liable for harm caused by a defective product or deficient service. It states the exceptions in section 87. See the note on product liability.

Step 8: Appeals and limitation

• District Commission to State Commission: 45 days, with a deposit of 50 per cent of the amount ordered (section 41).
• State Commission to National Commission: 30 days, with the same deposit (section 51).
• National Commission to Supreme Court: 30 days, with the same deposit (section 67).
• A complaint must be filed within two years of the cause of action, extendable for sufficient cause with reasons recorded (section 69).

Step 9: Enforcement and penalties

• An order is enforced as a civil court decree (section 71).
• Failure to comply with an order: imprisonment of one month to three years, or a fine of Rs 25,000 to Rs 1 lakh, or both (section 72).
• False or misleading advertisement: imprisonment up to two years and a fine up to Rs 10 lakh, and for a subsequent offence up to five years and Rs 50 lakh (section 89).
• Adulterant and spurious goods: punishment depends on the injury caused, up to imprisonment for life where death results (sections 90 and 91).
• Non-compliance with a direction of the Central Authority: imprisonment up to six months or a fine up to Rs 20 lakh, or both (section 88).

Step 10: Repeal

Section 107 repeals the Consumer Protection Act, 1986, with savings for things done under it. Section 100 says that the 2019 Act is in addition to, and not in derogation of, any other law.

1. 1. Chapters I and IIDefinitions, application and Consumer Protection Councils.
2. 2. Chapter IIICentral Consumer Protection Authority: regulation, recall, penalties.
3. 3. Chapter IVDistrict, State and National Commissions: complaints, orders, appeals.
4. 4. Chapters V and VIMediation and product liability.
5. 5. Chapters VII and VIIIOffences, penalties, e-commerce measures, repeal of the 1986 Act.

Don't confuse: the 2019 Act and the 1986 Act

Point	1986 Act	2019 Act
Regulator	None	Central Consumer Protection Authority
Product liability	Not a separate chapter	Chapter VI
Mediation	None	Chapter V
E-commerce	Not covered	Covered; e-filing allowed
Jurisdiction by	Value of goods or services and compensation claimed	Consideration paid
Where to file	Where the opposite party is or the cause arises	Also where the complainant resides or works for gain
Penalty for non-compliance (section 72 and 27)	Fine of Rs 2,000 to Rs 10,000	Fine of Rs 25,000 to Rs 1 lakh

Common mistakes

• Giving the Rs 1 crore and Rs 10 crore limits without mentioning that the 2021 Rules changed them.
• Saying that jurisdiction depends on the compensation claimed. It depends on the consideration paid.
• Mixing the appeal periods: 45 days to the State Commission, 30 days to the National Commission and the Supreme Court.
• Forgetting that a mediation settlement cannot be appealed.
• Forgetting the new features: the Authority, product liability, mediation and e-commerce.

Apply it

Leading case laws

• Lucknow Development Authority v. M.K. Gupta (1994)

  Facts. A statutory housing authority claimed to act in a sovereign function when it built and allotted flats.

  Principle. The Supreme Court read "deficiency in service" in a wide, purposive way.

  Significance. The consumer Acts are beneficial laws.

• SpiceJet Ltd. v. Ranju Aery (2017)

  Facts. An airline cancelled a connecting flight, refused a refund and offered no alternative.

  Principle. The consumer fora, up to the National Commission, held it a deficiency in service.

  Significance. Shows the Act applied to transport services.

How to write this answer in the exam

Key points to remember

• 2019 Act replaced the 1986 Act (section 107).
• New: Central Authority, product liability, mediation, e-commerce and e-filing.
• Jurisdiction by consideration paid: Rs 50 lakh, Rs 2 crore under the 2021 Rules.
• Appeals: 45 days to the State Commission, then 30 days each, with a 50 per cent deposit.
• Limitation: two years. False advertisement: up to two years and Rs 10 lakh.

Quick self-test

Related topics

• Salient features of the Consumer Protection Act, 1986
• Central Consumer Protection Authority (CCPA): establishment, composition and powers
• Liability of the Service Providers, Manufacturers and Traders under the Act- Product Liability
• Consumer Disputes Redressal Commissions: Jurisdiction and Powers