NO. 35 OF 2019
[9th August, 2019.]
An Act to provide for protection of the interests of consumers and for the said purpose, to establish authorities for timely and effective administration and settlement of consumers' disputes and for matters connected therewith or incidental thereto.
BE it enacted by Parliament in the Seventieth Year of the Republic of India as follows:-
Section I Short title, extent, commencement and application
Section 2 Definitions
Section 3 Central Consumer Protection Council
Section 4 Procedure for meetings of Central Council
Section 5 Objects of Central Council
Section 6 State Consumer Protection Councils
Section 7 Objects of State Council
Section 8 District Consumer Protection Council
Section 9 Objects of District Council
Section 10 Establishment of Central Consumer Protection Authority.
Section 11 Qualifications, method of recruitment, etc., of Chief Commissioner and Commissioners
Section 12 Vacancy, etc., not to invalidate proceedings of Central Authority
Section 13 Appointment of officers, experts, professionals and other employees of Central Authority
Section 14 Procedure of Central Authority
Section 15 Investigation Wing
Section 16 Power of District Collector
Section 17 Complaints to authorities
Section 18 Powers and functions of Central Authority
Section 19 Power of Central Authority to refer matter for investigation or to other Regulator
Section 20 Power of Central Authority to recall goods, etc
Section 21 Power of Central Authority to issue directions and penalties against false or misleading advertisements
Section 22 Search and seizure
Section 23 Designation of any statutory authority or body to function as Central Authority
Section 24 Appeal
Section 25 Grants by Central Government
Section 26 Accounts and audit
Section 27 Furnishing of annual reports, etc
Section 28 Establishment of District Consumer Disputes Redressal Commission
Section 29 Qualifications, etc., of President and members of District Commission
Section 30 Salaries, allowances and other terms and conditions of service of President and members of District Commission.
Section 31 Transitional provision
Section 32 Vacancy in office of member of District Commission
Section 33 Officers and other employees of District Commission
Section 34 Jurisdiction of District Commission
Section 35 Manner in which complaint shall be made
Section 36 Proceedings before District Commission
Section 37 Reference to mediation
Section 38 Procedure on admission of complaint
Section 39 Findings of District Commission
Section 40 Review by District Commission in certain cases
Section 41 Appeal against order of District Commission
Section 42 Establishment of State Consumer Disputes Redressal Commission
Section 43 Qualifications, etc., of President and members of State Commission
Section 44 Salaries, allowances and other terms and conditions of service of President and members of State Commission
Section 45 Transitional provision
Section 46 Officers and employees of State Commission
Section 47 Jurisdiction of State Commission
Section 48 Transfer of cases
Section 49 Procedure applicable to State Commission
Section 50 Review by State Commission in certain cases
Section 51 Appeal to National Commission
Section 52 Hearing of appeal
Section 53 Establishment of National Consumer Disputes Redressal Commission
Section 54 Composition of
Section 55 Qualifications, etc., of President and members of National Commission
Section 56 Transitional provision
Section 57 Other officers and employees of National Commission
Section 58 Jurisdiction of National Commission
Section 59 Procedure applicable to National Commission
Section 60 Review by National Commission in certain cases
Section 61 Power to set aside ex parte orders.
Section 62 Transfer of cases
Section 63 Vacancy in office of President of National Commission
Section 64 Vacancies or defects in appointment not to invalidate orders
Section 65 Service of notice, etc
Section 66 Experts to assist National Commission or State Commission
Section 67 Appeal against order of National Commission
Section 68 Finality of orders
Section 69 Limitation period
Section 70 Administrative control
Section 71 Enforcement of orders of District Commission, State Commission and National Commission
Section 72 Penalty for noncompliance of order
Section 73 Appeal against order passed under section 72
Section 74 Establishment of consumer mediation cell
Section 75 Empanelment of mediators
Section 76 Nomination of mediators from panel
Section 77 Duty of mediator to disclose certain facts
Section 78 Replacement of mediator in certain cases
Section 79 Procedure for mediation
Section 80 Settlement through mediation
Section 81 Recording settlement and passing of order
Section 82 Application of Chapter
Section 83 Product liability action
Section 84 Liability of product manufacturer
Section 85 Liability of product service provider
Section 86 Liability of product sellers
Section 87 Exceptions to product liability action
Section 88 Penalty for noncompliance of direction of Central Authority
Section 89 Punishment for false or misleading advertisement
Section 90 Punishment for manufacturing for sale or storing, selling or distributing or importing products containing adulterant
Section 91 Punishment for manufacturing for sale or for storing or selling or distributing or importing spurious goods.
Section 92 Cognizance of offence by court
Section 93 Vexatious search
Section 94 Measures to prevent unfair trade practices in e-commerce, direct selling, etc.
Section 95 Presidents, members, Chief Commissioner, Commissioner and certain officers to be public servants
Section 96 Compounding of offences
Section 97 Manner of crediting penalty.
Section 98 Protection of action taken in good faith.
Section 99 Power to give directions by Central Government.
Section 100 Act not in derogation of any other law
Section 101 Power of Central Government to make rules
Section 102 Power of State Government to make rules
Section 103 Power of National Commission to make regulations
Section 104 Power of Central Authority to make regulations
Section 105 Rules and regulations to be laid before each House of Parliament
Section 106 Power to remove difficulties
Section 107 Repeal and savings
Pecuniary limits have been fixed under the New Act.
|District forum||Rs. 10,000,000|
|State Commission||Rs. 10,000,000 To Rs. 100,000,000|
|National Commission||Amount Exceeds Rs. 100,000,000|
The New Act has widened the definition of 'consumer'. The definition now includes any person who buys any goods, whether through offline or online transactions, electronic means, tele-shopping, direct selling or multi-level marketing. The earlier Act did not specifically include e-commerce transactions.
Aimed to provide procedural ease and reduce inconvenience and harassment for the consumers, the New Act provides flexibility to the consumer to file complaints with the jurisdictional consumer forum located at the place of residence or work of the consumer. It also contains enabling provisions for consumers to file complaints electronically and for hearing and/or examining parties through video-conferencing.
The New Act proposes the establishment of a regulatory authority known as the Central Consumer Protection Authority (CCPA), with wide powers of enforcement. The CCPA will have an investigation wing, headed by a Director-General, which may conduct inquiry or investigation into consumer law violations. The CCPA has been granted wide powers to take suo-moto actions, recall products, order reimbursement of the price of goods/services, cancel licenses and file class action suits, if a consumer complaint affects more than 1 (one) individual.
The New Act has introduced the concept of product liability and brings within its scope, the product manufacturer, product service provider and product seller, for any claim for compensation. The defense that e-commerce platforms merely act as 'platforms' or 'aggregators' will not be accepted. The term 'product seller' is defined to include a person who is involved in placing the product for a commercial purpose and as such would include e-commerce platforms as well. There are increased liability risks for manufacturers as compared to product service providers and product sellers, considering that under the New Act, manufacturers will be liable in product liability action even where he proves that he was not negligent or fraudulent in making the express warranty of a product. Certain exceptions have been provided under the New Act from liability claims, such as, that the product seller will not be liable where the product has been misused, altered or modified.
The New Act introduces a specific broad definition of Unfair Trade Practices, which also includes sharing of personal information given by the consumer in confidence, unless such disclosure is made in accordance with the provisions of any other law.
The CCPA may impose a penalty of up to Rs. 1,000,000 (Rs. 10 Lakhs) on a manufacturer or an endorser, for a false or misleading
advertisement. The CCPA may also sentence them to imprisonment for up to 2 (two)
years for the same. In case of a subsequent offence, the fine may extend to Rs.
5,000,000 (Rs. 50 Lakhs) and imprisonment of up to 5 (five) years.
The CCPA can also prohibit the endorser of a misleading advertisement from
endorsing that particular product or service for a period of up to 1 (one) year.
For every subsequent offence, the period of prohibition may extend to 3 (three)
The New Act fixes liability on endorsers considering that there have been numerous instances in the recent past where consumers have fallen prey to unfair trade practices under the influence of celebrities acting as brand ambassadors. In such cases, it becomes important for the endorser to take the onus and exercise due diligence to verify the veracity of the claims made in the advertisement to refute liability claims.
The New Act provides for mediation as an Alternate Dispute Resolution
mechanism, making the process of dispute adjudication simpler and quicker. This
will help with the speedier resolution of disputes and reduce pressure on
consumer courts, who already have numerous cases pending before them.
With the New Act all set to become the law, gone are the days, where the 'consumer was asked to beware'. A consumer is now the one who assumes to be treated like a King. Hence, it is important for consumer driven businesses (such as, retail, e-commerce) to be mindful of the changes in the legal landscape and have robust policies dealing with consumer redressal in place. Consumer driven businesses must also strive to take extra precautions against unfair trade practices and unethical business practices.