Civil and Criminal Liability and Penalties for Misleading Advertisements — MCQs

All questions with answers and explanations

Read the full set here, or use the practice card above to test yourself one question at a time.

1. What is the fundamental character of civil liability under the Consumer Protection Act, 2019?

   • Punitive — designed to punish the wrongdoer
   • Compensatory — designed to place the consumer in the position they would have been in had the wrong not occurred (correct answer)
   • Purely symbolic with no real remedy
   • Applicable only to government entities

   Explanation. Civil liability under the Act is compensatory — refund, replacement, compensation, and discontinuation orders — not punitive.

2. Can civil liability and criminal liability under the Act arise from the same underlying conduct?

   • No, a trader can only face one or the other, never both
   • Yes, the same conduct can attract both simultaneously, through different processes (correct answer)
   • Only if the consumer specifically requests both
   • Only for offences committed by government officials

   Explanation. Civil liability (before a Commission) and criminal liability (before a criminal court) can both arise from the same conduct, serving different purposes through different processes.

3. Under Section 89, the punishment for a first offence of causing a false or misleading advertisement prejudicial to consumers is

   • Imprisonment up to 2 years and fine up to ₹10 lakh (correct answer)
   • Imprisonment up to 10 years and fine up to ₹1 crore
   • Only a warning, no imprisonment or fine
   • A fine only, with no possibility of imprisonment

   Explanation. Section 89 prescribes imprisonment up to two years and a fine up to ten lakh rupees for a first offence.

4. Under Section 89, what is the punishment for a subsequent (repeat) offence?

   • The same punishment as the first offence, with no enhancement
   • Imprisonment up to 5 years and fine up to ₹50 lakh (correct answer)
   • Automatic permanent business closure with no fine
   • A reduced fine as a leniency measure

   Explanation. For every subsequent offence under Section 89, the punishment increases to imprisonment up to five years and a fine up to fifty lakh rupees.

5. What is the relationship between a 'misleading advertisement' under Section 89 and 'unfair trade practice' under Section 2(47)?

   • They are completely unrelated legal concepts
   • A misleading advertisement is, in substance, a particularly serious form of unfair trade practice, now separately criminalised (correct answer)
   • Unfair trade practice replaced misleading advertisement as a legal term in 2019
   • Only advertisements on television can be 'misleading'; print ads cannot

   Explanation. A misleading advertisement overlaps with and is a serious instance of unfair trade practice, now singled out for a dedicated criminal penalty under Section 89.

6. Under the 2019 Act, liability for a misleading advertisement can extend beyond the manufacturer to

   • No one else; liability is strictly limited to the manufacturer
   • Endorsers and, in appropriate cases, publishers of the advertisement (correct answer)
   • Only the consumer who purchased the product
   • Only foreign companies, never Indian ones

   Explanation. The 2019 Act extends potential liability for misleading advertisements to endorsers and, in certain circumstances, publishers.

7. What role does the CCPA play in relation to Section 89 offences?

   • No role at all; only criminal courts are involved
   • It investigates (often suo motu), directs discontinuation/modification, and can impose its own regulatory penalties, complementing the criminal process (correct answer)
   • It replaces the criminal court entirely and imposes imprisonment directly
   • It can only act after a criminal court has already convicted the offender

   Explanation. The CCPA plays a central investigative and preventive role, complementing rather than replacing the ordinary criminal justice process under Section 89.

8. A manufacturer sells adulterated food causing illness. A Commission orders compensation to affected consumers, and separately the manufacturer is prosecuted under criminal provisions of the Act. How should this be understood?

   • This is a legal error; only one proceeding can be pursued
   • This is correct — civil compensation and criminal prosecution serve different purposes and can proceed independently from the same facts (correct answer)
   • The criminal prosecution automatically cancels the civil compensation order
   • Only the criminal prosecution is valid; the civil order must be withdrawn

   Explanation. Civil and criminal liability are not mutually exclusive — both can validly proceed from the same underlying wrongful conduct.

9. A cosmetics manufacturer falsely claims its cream permanently reverses skin ageing, with no scientific basis, causing skin irritation in some buyers. Which of the following is correct?

   • Only affected consumers can act; no criminal liability is possible
   • Affected consumers can seek compensation before a Commission, and the manufacturer can separately be prosecuted under Section 89 regardless of whether any complaint is filed (correct answer)
   • The manufacturer faces no consequence unless every single buyer complains
   • Only the advertising agency, never the manufacturer, can be held liable

   Explanation. Consumers can pursue civil compensation, and the manufacturer can independently face Section 89 criminal liability for the false advertisement, irrespective of individual complaints.

10. Why is Section 89 considered a genuinely new feature of the Consumer Protection Act, 2019?

    • Because the 1986 Act had an identical provision with the same penalties
    • Because the 1986 Act had no dedicated criminal penalty specifically targeting misleading advertisements (correct answer)
    • Because it is the only provision in the entire Act
    • Because it applies exclusively to online advertisements

    Explanation. The 1986 Act had no dedicated criminal offence for misleading advertisements; Section 89 is a genuinely new addition under the 2019 Act.