ROLE, POWERS AND FUNCTIONS OF CENTRAL CONSUMER

PROTECTION AUTHORITY: CRITICAL ANALYSIS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................2
LITERATURE REVIEW................................................................................................................2
LIST OF STATUTES......................................................................................................................3
STATEMENT OF PROBLEM........................................................................................................3
OBJECTIVE....................................................................................................................................3
HYPOTHESIS.................................................................................................................................3
RESEARCH QUESTIONS.............................................................................................................3
CONSUMER PROTECTION BILL 2019......................................................................................4
CENTRAL CONSUMER PROTECTION AUTHORITY.............................................................7
CRITICAL ANALYSIS OF THE CENTRAL CONSUMER PROTECTION AUTHORITY....11
CONCLUSION, CRITICISMS AND SUGGESTIONS...............................................................12
BIBLIOGRAPHY..........................................................................................................................13
 INTRODUCTION
A completely new era of digital branding and commerce has emerged due to digital age, along
with this it developed a set of expectation for customers. Easy access has been made available to
the customer due to digitisation, also an easy and convenient mode of payment, improved
services and convenient shopping. Though, with these conveniences it has also brought in few
challenges affecting consumer protection.

On August 6, 2019, the Indian Parliament in order to tackle the challenges that have arisen
recently for the consumers in this age of digital has passed a landmark legislation namely,
Consumer Protection Bill, 2019 that has an aim of providing effective and without delay
administration and consumer dispute settlement. On August9, 2019 the Consumer Protection
Bill, 2019 got an assent to become Consumer Protection Act, 2019 by the President of India
which was later on published in the official gazette. This act will come in to force on the day
specified by the Central Government. The three-decade old act of consumer protection i.e.,
Consumer Protection Act, 1986 got replaced by the new act. The act of 2019 authorises the
creation of a Central Consumer Protection Authority. This paper lays down a detailed and critical
analysis of the Act of 2019 and the CCPA made under the Act.1

LITERATURE REVIEW
 Consumer Protection Act by S C Tripathi
This book is a great and comprehensive piece of work in the field of Consumer Protection Law.
The book lays down several guiding principles regarding the intricacies of several consumer
protection theories. The book also is a comprehensive work regarding making it clears to the
researcher, the basic intricacies of the Consumer Protection Act. The book has also made it clear
that there is an analysis of several merits and demerits of Consumer Protection Act making it a
wholesome piece of research for any scholar, academician or professor.

 Commercial’s Consumer Protection Act, 2019- Bare Act

This book has helped the researcher in understanding various provisions related to CP Act, 2019
in a conceptual manner. The Bare Act helps the researcher in a contemporary analysis and a
1
Ministry of Law and Justice, Consumer Protection Act, 2019 Official Gazette, GOVT. OF INDIA (September 13,
2020, 3:50 AM), http://egazette.nic.in/WriteReadData/2019/210422.pdf.
comparison between several provisions. The book has helped the researcher in understanding the
merits and demerits of CP Act, 2019. Moreover, the act is an amended one and therefore has
helped the researcher in comparing the old act with the new one. Lastly, act has been presented
in a simplified manner for the best understanding of any scholar or academician.

LIST OF STATUTES
 The Consumer Protection Act, 1986
 The Consumer Protection Act, 2019

STATEMENT OF PROBLEM
The researcher draws an analysis of role of CP Act, 2019 and finds out the merits of demerits of
the Act. The researcher has also discussed the CP Bill, 2019 in detail. The researcher has given a
detailed analysis of the Central Consumer Protection Authority. The researcher has also laid
down several criticisms related to the CCPA.

OBJECTIVE
The objective of this paper is to study the provision of the CP Act, 2019; its features, advantages
and disadvantages. Also, the objective is to discuss in detail, various intricacies related to the
Central Consumer Protection Authority and criticize the same.

HYPOTHESIS
The researcher is of the belief that the newly amended Act has its own set of merits and demerits
but comes down as a wholesome piece of legislation in order to protect the rights of the
consumers. Moreover, the CCPA always carries a sense of doubt with itself since the statutory
body did not get ample opportunities to fulfill its duties as the Act came in 2019 and the
economy was struck by a pandemic in the same year.

RESEARCH QUESTIONS
1. What are the necessary changes in the newly amended CP Act, 2019?
2. What are the basic features of CCPA?
3. What are the merits and demerits of CCPA?
4. What are the various criticisms associated with the CCPA?
 CONSUMER PROTECTION BILL 2019
On July 30, 2019 Lok Sabha passed the Consumer Protection Bill, 2019 and which later got
assented on August 06, 2019 by Rajya Sabha. In Parliament it was introduced by Mr, Ram Vilas
Paswan who is the Minister of Consumer Affairs, Food and Public Distribution. In order to
protect the interest of the consumers the Consumer Protection Act, 2019 was brought. Across the
country this act has an inevitable effect on resolving the pending large amount of complaints of
consumer in the consumer courts all over the country. It prescribes many ways and means to
resolve these complaints in a speedy manner.

Saving the consumer rights is the primary objective of Consumer Protection Act, 2019 which is
ensured by it by establishing authorities for effective and timely administration and consumer
dispute settlement. According to the Consumer Protection Act, 2019 a consumer is a person who
is either buying a good or any services for the use of himself. It is important to mention that in
case a person buys anything or availed any service which he does in order to resale it or for the
commercial purpose then in that case that person will not be called as a consumer. This
definition of consumer is exhaustive in nature and hence covers both online as well as offline
transactions2.

Some of the essential features of the Consumer Protection Act, 2019 are as follows:

1. E-Commerce transactions are covered: The Consumer Protection Act, 2019 has
broadened the ambit of the word ‘Consumer’. The word consumer now covers any person
who either buys any good or avails any service irrespective of whether it is online or
offline, by electronic mode or teleshopping mode, by multi-level marketing or direct
selling. On the other hand, the act does not particularly include transaction done through
e-commerce and this fallacy has been resolved by the newly constructed Consumer
Protection Act, 2019.3

2
Hemant Singh, Consumer Protection Act, 2019: Meaning and Key Features, JAGRANJOSH (September 13, 2020,
3:50 AM),https://www.jagranjosh.com/general-knowledge/meaning-and-features-of-consumer-protection-act-2019-
1578557665-1
3
Id.
 2. Enhancement of Pecuniary Jurisdiction:
Under the Consumer Protection Act, 2019 the fixed pecuniary limits have been revised.
The limit of the district forum has been increased in order to entertain the complaints of
consumer related to goods of value which shall not be more than One Crore Rupees.
Whereas the limit of state commission to hear the dispute of good whose value is not
more than 10 Crore Rupees and lastly the jurisdiction of the National Commission is for
goods and services of more than 10 Crore Rupees4
3. E-Complaints: The Consumer Protection Act, 2019provides in filing complaints in the
forum of jurisdiction located at the place where either the consumer resides or work and
hence the new act made it flexible. Whereas in the old act the forum was decided where
either the consumer purchased the good or the place where the office of the seller is
registered. The Consumer Protection Act, 2019 also provides an option for the consumer
to electronically file the complaint and for examining or hearing the parties through the
online mode via video-conferencing. This has led to the reduction of harassment of
consumer and his inconvenience by making the process easy.5
4. Establishment of Central Consumer Protection Authority: The Consumer Protection
Act, 2019 provides for an authority to regulate the Consumer protection which is named
as Central Consumer Protection Authority, which has been given a wide-ranging power.
The Central Consumer Protection Authority will have a specific wing of investigation
which will be headed by Director-General, which may conduct investigation or injury
into violation of consumer law.
5. The Central Consumer Protection Authority has been allotted broad powers to take up
actions Suo-motu, recall products, reimbursement order of the services and goods, file
class action suits and cancel licenses, if more than one individual has been affected by
consumer complaints.
6. Penal Consequences & Product Liability:The Consumer Protection Act, 2019 has
brought into its ambit the product service provider, product manufacturer and product
seller by introducing the concept of product liability and bring all this under its scope.
The term 'product seller' is defined to involve an individual who is working for placing
the product for commercial use and also it would involve in its ambit the platform of e-
4
Id.
5
Id.
 commerce. This defence will not be accepted which says that the platform of e-commerce
will not act as ‘platforms’ or ‘aggregators. The risks for manufacturer has increased in
comparison with the product sellers and service providers, accepting the fact that
manufacturers will be accounted for the action related to product liability under this act
even where it is proved that he was neither fraudulent nor negligent while granting
express warranty for products. Certain exception from liability related claim has been
provided under the Consumer Protection Act, 2019 like, where there has been some
misuse of the product then the product seller will not be held accountable for it, modified
or altered.6
7. Unfair Trade Practices: A broad and specific definition of Unfair Trade Practice has
been introduced by Consumer Protection Act, 2019, which is inclusive of personal
information in confidence, until such revelation has been made as per the provision of
any other law.
8. Penalties for Misleading Advertisement: The Central Consumer Protection Authority
may on the manufacturer or an endorser impose a fine of 10 lakh Rupees for misleading
or false advertisement. The Central Consumer Protection Authority also have the power
to sentence them for 2 years of imprisonment for the same offence. In case of the later
offence, the fine can be extended to Indian Rupees Fifty Lakh and imprisonment can be
increased up to five year. The endorser or the manufacturer can be prohibited by the
authority for endorsing same product for one more year. For every repetition of offence,
the prohibition period may extend to three years of imprisonment.
9. The Consumer Protection Act, 2019 by considering the instances of past the new act
fixed the liability of endorsers in cases where the consumers have fallen in to trap for
unfair trade practices under the impact of brand ambassadors which usually are
celebrities. It becomes necessary in such cases for the endorsers to take responsibility and
exercise with due diligence in order to verify the reliability of the claims made by their
advertisement to refute the claims of liability.7
10. Provisions for Alternate Dispute Resolution: The Consumer Protection Act, 2019 in order
to make the whole process of dispute resolution quick and simple, it provides for

6
Drishti IAS, Consumer Protection Act, 2019, DRISHTI IAS (September 14, 2020, 9:31 AM),
http://egazette.nic.in/WriteReadData/2019/210422.pdf
7
Id.
 Alternate Dispute Resolution mechanism. This will reduce the pressure of consumer
courts and help by providing quicker resolutions, for those consumers which already have
many cases pending and also the courts will become burden less.8

With the coming of the new act, the consumer need not be asked to be aware instead the law
will assume the consumer and will treat him like a king. Therefore, for businesses such as e-
commerce, retail which is customer driven it is important for them to be attentive of the
changes which are being done in the legal landscape and have a robust policy which is
dealing with consumer redressal. Against unethical practices of business and unfair trade
practices some extra precautions should be taken by the consumer driven businesses.9

CENTRAL CONSUMER PROTECTION AUTHORITY

Central Consumer protection authority has been brought in by the central government with the
help of Consumer Protection Act, 2019 in order to protect, promote and enforce the consumer
protection rights. This authority will be helpful in regulating resolving matters related to the
consumer rights violation, misleading advertisement and unfair trade practice. The Central
Consumer Protection Authority will be having a specific wing for investigation which will be
headed by the Director-general who will be given power to either conduct investigation or
inquiry in to such violations.10
The Central Consumer Protection Authority will be having a small body where there will only be
three members namely; Chief Commissioner who will be the head of the body and along with
him there will be two other commissioners who will only be the members. Out of the two, one
will be dealing with matters related to goods while the others will deal with the cases which are
related to services. The headquarters of this body has been made at National Capital Region of
Delhi where the regional office is there. The investigation wing will be headed by Director
General where as under the investigation wing the district collectors will be given power to
8
J. Jagannath, Consumer Protection Act, 2019 comes into force from today, covers e-commerce too, LIVEMINT
(September 14, 2020, 11:11 AM), https://www.livemint.com/news/india/consumer-protection-act-2019-comes-into-
force-from-today-covers-e-commerce-too-11595245073150.html.
9
Stuti Galiya, India: Consumer Protection Act, 2019 – Key Highlights, Mondaq (September 15, 2020, 4:50 AM),
https://www.mondaq.com/india/dodd-frank-consumer-protection-act/838108/consumer-protection-act-2019-key-
highlights.
10
Ministry of Consumer Affairs, Central Consumer Protection Authority established to promote, protect and
enforce the rights of consumers; will function from Indian Institute of Public Administration premises, GOVT. OF
INDIA (September 16, 2020, 1:10 AM), https://pib.gov.in/PressReleasePage.aspx?PRID=1642422.
investigate complaints of misleading or false advertisement, unfair trade practices and violations
of consumer rights as well. 11
The Central Consumer Protection Authority has been made by the Consumer Protection Act,
2019 by replacing the Consumer Protection Act of 1986 giving the reason of widening of scope
in addressing consumer concerns, therefore Central Consumer Protection Authority will be
acting as a statutory body. Under the new act regarding the quality or quantity of goods and
services if any false information has been given then it will be covered under the act. In case of
dangerous or hazardous goods and services the act also specifies some actions. The Central
Consumer Protection Authority also aims in protecting the consumer rights by removing the
false and misleading advertisements, unfair trade practices that have been constantly hampering
the interest of consumers and public. The body in case of unfair trade practices or consumer
rights is given the power to investigate or inquire into these matters in Suo motu manner, or on
receiving the complaint or on the central government discretions. The body before the National
Consumer dispute redressal, State Consumer dispute redressal, District Consumer dispute
redressal can file complaints of violation of consumer rights or unfair trade practices. A safety
notice will be issued by this body against unsafe, hazardous or unsafe goods or services in order
to alert the consumers.12
FUNCTIONS:

The Central Consumer Protection Authority will be performing these of the following functions:

 They will be keeping a check on the violation of rights of the consumer; furthermore they
will launch prosecution in appropriate court and will investigate into the matter.
 They will be required to pass orders according to the Consumer Protection Act, 2019 in
order to recall the various goods or withdraw services which are hazardous in nature,
reimbursement of paid price and stopping of unfair trade practices.
 It also has the power to issue directions to the manufacturer/ trader/publisher/ advertiser/
endorser to either modify the misleading or false advertisement or discontinue it.
 It has the power to impose the penalties on the wrongdoer.

11
PRS India, Draft Rules under Consumer Protection Act, 2019, PRS India, (September 17, 2020, 6:10 PM),
https://www.prsindia.org/billtrack/draft-rules-under-consumer-protection-act-2019.
12
Supra Note 8.
  The Central Consumer Protection Authority issues notices for safety of consumers
against goods and services which are unsafe.13

Penalties for a misleading advertisement:

The Central Consumer Protection Authority may either impose penalty on an endorser or on a
manufacturer of imprisonment up to two years or a fine of Rs. 10 Lakh for a misleading or false
advertisement. In case the same offence is repeated, the imprisonment may extend to five years
and the fine may extend up to Rs. fifty lakhs.14
The Central Consumer Protection Authority can further prohibit the endorser from endorsing a
misleading specific product or service for a period of one year. For every repeated offence, the
period of restriction may extend up to three years. Though there are few exceptions in which
case the endorsers will not be held liable for the penalty.

Consumer Disputes Redressal Commission

Consumer Dispute Redressal Commissions will be established by the Central Consumer

Protection Authority at all the three levels i.e. National, State and District level. With this
establishment the consumer will be given the opportunity to file complaint in Consumer Dispute
Redressal Commission in relation to deceptive or overcharging, restrictive or unfair trade,
defective service or goods and the sale may be hazardous to safety and life with the offerings of
services and goods. Complaint which can be filed in the states and national appeals from
districtConsumer Dispute Redressal Commissions in cases of complaint against unfair trade will
be heard by the state Consumer Dispute Redressal Commissions. Whereas the National
Consumer Dispute Redressal Commissions will be hearing the appeals from State Consumer
Dispute Redressal Commissions. Lastly, the final appeal will be made at Supreme Court.

Jurisdiction of the Consumer Dispute Redressal Commissions has been divided properly. The
National Consumer Dispute Redressal Commissions will be hearing the cases where the value of
goods and services are of more than Rs 10 Crore. The State Consumer Dispute Redressal

13
Harikishan Sharma, Explained: Govt to establish Central Consumer Protection Authority; what is it?, INDIAN
EXPRESS (September 15, 2020, 11:40 PM), https://indianexpress.com/article/explained/ram-vilas-paswan-food-and-
public-distribution-central-consumer-protection-act-6288654/.
14
Ias Gateway, Central Consumer Protection Authority, IAS GATEWAY, (September 15, 2020, 11:40 PM),
https://iasgatewayy.com/central-consumer-protection-authority/.
Commissions will be hearing the cases where the value of goods and services are of more than
Rs 1 crore but less than Rs 10 Crore. Whereas the District Consumer Dispute Redressal
Commissions will be hearing the cases where the value of goods and services areof less than Rs.
1 Crore.15

Product liability

Product liability is defined as that liability of a product where the consumer is compensated by
seller or service provider, manufacturer for the damages or harm caused by the product sold by
them or for any service provided by them. Before claiming the compensation, the consumer is
required to prove deficiency or defect in one of the conditions mentioned in the bill.

Unfair contracts
Unfair contract is a contract in which because of the contract relevant changes have been made in
the consumer rights such as excessive security deposit demand imposition of a inconsistent
penalty for a breach of contract etc. The terms or a contract are unfair and declare such terms to
be void if it is determined by National and State commissions.16
Unfair and restrictive trade practices
The term Unfair trade means that making of a false statement with regards to the quality of
service and goods rendered or selling of damaged goods or below standard service. The term
restrictive trade practice means that one by increasing the cost of the product in unjustified
manner, restrictions on consumers which includes delayed supply which leads to the hike in
price or making it mandatory for people to buy a certain goods or services as a form of condition
to render any service or buy any goods. The Central Consumer Protection Authority might take
any steps to discontinue or prevent restrictive and unfair trade practices.17

15
Supra Note 8.
16
Devika, Consumer Protection Act, 2019 comes into force from today, SCC ONLINE, (September 15, 2020, 1:43
AM), https://www.scconline.com/blog/post/2020/07/20/consumer-protection-act-2019-comes-into-force-from-
today/.
17
Economic Times, Central Consumer Protection Authority, ECONOMIC TIMES (September 15, 2020, 11:40 PM),
https://economictimes.indiatimes.com/topic/central-consumer-protection-authority.
CRITICAL ANALYSIS OF THE CENTRAL CONSUMER PROTECTION AUTHORITY
Tough the CCPA was brought in order to protect the rights of the consumers, it hasn't been able
to prove its worth because of the fact that the act came in 2019, and soon the country descended
into a pandemic struck economy in the form of COVID-19. Moreover, the investigation body
being comprised of only three members is a questionable fact as a three member panel cannot be
expected to resolve every dispute related with consumers. Moreover, it is a noticeable fact that
the consumer law in India has gone through an existential crisis since most of the consumers are
unaware of their rights and actionable claims and the ones who are aware of them, tend to not go
ahead with the judicial process as the same is not very cost effective and time taken at the same
time is extremely disproportionate with the dispute arising which seems too trivial in front of the
complexities of the judiciary.

It is needless to say that people need to be aware of their rights under the consumer law in order
to protect themselves from faulty goods and misleading advertisements. In a country with a
population of over 130 crore, it is questionable as to whether the country can be governed by a
statutory body like CCPA which has a very limited panel of investigating and adjudicating
authorities. Moreover, the doubt continues to grow as the CCPA has not yet been able to prove
its proper worth in the country where the pandemic also is a reason enough. Also the doubt
regarding corruption in the statutory body also continues to grow because of the fact that it is a
less member panel.

It is an undeniable fact that investigation is a long and tedious process which needs proper due
diligence in regards to faulty consumer practices. Though the government has tried to create a
statutory body in the form of CCPA under the 2019 act, the doubt regarding lack of investigation
continues to grow.

Also the Act of 2019 gives CCPA, wide discretionary powers to take matter suo-motu. Various
other discretionary rights are also given by the act. Moreover, there are several immunities given
to the statutory body because of the Act. Though wide discretionary powers do not always lead
to discrimination nor will it invalidate legislation, but the same should not be built on arbitrary or
fanciful terms and lack sound guidelines which is clearly evident in the Act of 2019 with regards
to the CCPA and hence can lead to violation of Art. 14 of the Constitution on the ground of
arbitrary state practice. It is concluded that, sound discretion is always guided by laws and rules
and must not be arbitrary or fanciful in nature.18

CONCLUSION, CRITICISMS AND SUGGESTIONS

It is concluded that new quasi-judicial bodies have been set up in the form of consumer dispute
redressal commissions in order to be an adjudicating authority over disputes. New members can
be appointed to these commissions has the central government has been empowered by the new
Act. Presence of a judicial member in the commissions has nowhere been specified in the Act. If
only executive members are present in the commissions then that would lead to violation of the
principle of separation of powers.
Central government has been empowered by the new Act for the appointment, removal and
prescription of conditions of service for members of the district, state and NCDRC. The
government at the centre has been given discretionary powers regarding the composition of the
commissions and the same can lead to severe effects on the independence of these quasi-judicial
bodies. Several districts and states shall be empowered with Central Protection Councils taking
the role of advisory bodies. The councils at the state and national level are presided by Ministers
who have the charge of Consumer Affairs.
No specifications are laid down in the Act in regards to whom will the councils advice to. If the
advice is given by the councils to the government, no clarity is given in regards to the capacity in
which such advice will be given. Moreover, since several regulators are there in any sectors, it
may give birth to duplication or clashes between CCPA and other bodies.
In regards to the CCPA the aforementioned doubt continues to grow until the economy is
restored to what it used to be before the pandemic and that is the time, this statutory body will
have ample time and opportunities to prove its worth and stand out properly. Even if there are
several criticisms to the Act, it is an undeniable fact that consumer protection this is an integral
part of the notions of democracy and needs to be upheld in a proper manner. The Act of 2019 is a
good enough initiative taken by the centre to uphold the notions of consumer protection and
provide an edge over the earlier existing act. Whether the Act proves to be worthy enough, is
something that rests in the hands of future and the answer to which is only possible if it gets
more time to lay down its provisions in a proper manner.

18
Id.
 BIBLIOGRAPHY
1. Devika, Consumer Protection Act, 2019 comes into force from today, SCC ONLINE,
(September 15, 2020, 1:43 AM),
https://www.scconline.com/blog/post/2020/07/20/consumer-protection-act-2019-comes-
into-force-from-today/.
2. Drishti IAS, Consumer Protection Act, 2019, DRISHTI IAS (September 14, 2020, 9:31
AM), http://egazette.nic.in/WriteReadData/2019/210422.pdf
3. Economic Times, Central Consumer Protection Authority, ECONOMIC TIMES (September
15, 2020, 11:40 PM), https://economictimes.indiatimes.com/topic/central-consumer-
protection-authority.
4. Harikishan Sharma, Explained: Govt to establish Central Consumer Protection
Authority; what is it?, INDIAN EXPRESS (September 15, 2020, 11:40 PM),
https://indianexpress.com/article/explained/ram-vilas-paswan-food-and-public-
distribution-central-consumer-protection-act-6288654/.
5. Hemant Singh, Consumer Protection Act, 2019: Meaning and Key Features,
JAGRANJOSH (September 13, 2020, 3:50 AM),https://www.jagranjosh.com/general-
knowledge/meaning-and-features-of-consumer-protection-act-2019-1578557665-1
6. Ias Gateway, Central Consumer Protection Authority, IAS GATEWAY, (September 15,
2020, 11:40 PM), https://iasgatewayy.com/central-consumer-protection-authority/.
7. J. Jagannath, Consumer Protection Act, 2019 comes into force from today, covers e-
commerce too, LIVEMINT (September 14, 2020, 11:11 AM),
https://www.livemint.com/news/india/consumer-protection-act-2019-comes-into-force-
from-today-covers-e-commerce-too-11595245073150.html.
8. Ministry of Consumer Affairs, Central Consumer Protection Authority established to
promote, protect and enforce the rights of consumers; will function from Indian Institute
of Public Administration premises, GOVT. OF INDIA (September 16, 2020, 1:10 AM),
https://pib.gov.in/PressReleasePage.aspx?PRID=1642422.
9. Ministry of Law and Justice, Consumer Protection Act, 2019 Official Gazette, GOVT. OF
INDIA (September 13, 2020, 3:50 AM),
http://egazette.nic.in/WriteReadData/2019/210422.pdf.
10. PRS India, Draft Rules under Consumer Protection Act, 2019, PRS India, (September 17,
2020, 6:10 PM), https://www.prsindia.org/billtrack/draft-rules-under-consumer-
protection-act-2019.

11. Stuti Galiya, India:  Consumer Protection Act, 2019 – Key Highlights, Mondaq
(September 15, 2020, 4:50 AM), https://www.mondaq.com/india/dodd-frank-consumer-
protection-act/838108/consumer-protection-act-2019-key-highlights.