UNIT 17 – CONSUMER PROTECTION ACT, 2019 (PART-I)

Nevertheless, a completely revised bill on Consumer Protection was introduced in the Parliament on July 8,
2019. The same was, after due deliberations, passed by Lok Sabha on July 30, 2019 and Rajya Sabha on
August 06, 2019 and thereafter it received the Assent of President on 9th August 2019.

However, the said Act, 2019 came into force only w.e.f. July 2020 by the issuance of Gazette Notification
on the subject

17.1 APPLICATION OF THE ACT

This Act, 2019 is made applicable as detailed below:

(i) to the whole of India except the State of Jammu and Kashmir [section 1(2)],
to come into force on such date as the Central Government may, by notification, appoint [section 1(3)].
Accordingly, the Act, 2019 came into force w.e.f. 20th July, 2020 by the issuance of Gazette notification
(ii) the Central Government is empowered to appoint different dates for different States and
for different provisions of this Act [Section 1 (3)].
(iii) to all goods and services [section 1(4)].

17.2 DEFINITIONS

17.2.1 “Advertisement”:

The term advertisement is newly incorporated under the Act, 2019 [Section 2 (1)]. As per this definition,
‘advertisement’ means or refers to:
(i) any audio or (ii) visual publicity, (iii) representation, (iv) endorsement or pronouncement made by
means of (a) light, (b) sound, (c) smoke, (d) gas, (e) print, (f) electronic media, (g) internet or website and
includes any (v) (a) notice, (b) circular, (c) label, (d) wrapper, (e) invoice or (f) such other documents;
[Section 2 (1)].
17. 5.2 “Appropriate laboratory”: It refers to a laboratory or an organization-

(i) recognised or established by or under any law for the time being in force, which is (i)
maintained, (ii) financed or (iii)aided by the Central Government or a State Government (iv) for carrying
out analysis or test of any goods (v) with a view to determining whether such goods suffer from any defect
[Section 2(2)].

This definition is the same as defined under the Act 1986, with necessary amendments made till the
Act, 2019 came to force.

17. 5.3 “Branch office”: It refers to-[Section 2(3)].

17.5.4 “Central Authority”:

This definition is newly added under the Act, 2019. As per this definition, The Central Authority refers to
the Central Consumer Protection Authority (CCPA) established under [Section 10; under Chapter-
III] of the Act, 2019. They include:
(i) Central Consumer Protection Authority (CCPA).
(ii) Regional Offices and other offices established under the Act, 2019 and (ROs)
(iii) District Collector [Section 2 (4)].

Further details are elaborately discussed under Para 17.7 (Chapter-III of the Act 2019) dealing with
CCPA.

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17.5.5 “Complainant”: The Complainant means or refers to:
(i) a consumer; or
(ii) any Voluntary Consumer Association
(iii) the Central Government or any State Government; or
(iv) the Central Authority (referred under section 10, Chapter-III of the Act, 2019) or
(v) one or more consumers,
(vi) legal heir or legal representative; or
(vii) in case of minor, his parent or legal guardian;

The Act, 2019 added two new category of complainants i.e. Central Authority (cl. iv) and parent or
guardian (cl. viii). The remaining categories are the same as covered under the Act, 1986 [Section 2(5)].

17. 5.6 “Complaint”: The term complaint means or refers to:

(i) any allegation in writing,
(ii) made by a complainant or
(iii) for obtaining any relief as provided by or under this Act.

The basis or grounds for obtaining any relief provided, by or under this Act are newly added under the
Act, 2019 vis-à-vis the earlier Act, 1986.
The nature of complaints to be made may include.
(i) an unfair contract or unfair trade practice or a restrictive trade practice
(ii) the goods bought by him or agreed to be bought by him suffer from one or more defects;
(iii) the services hired or availed of or agreed to be hired or availed of by him suffer
from any deficiency (
(iv) trader or a service provider, as the case may be, has charged for the goods or for the
services mentioned in the complaint, a price in excess of the price-
(a) fixed by or under any law for the time being in force; or
(b) displayed on the goods or any package containing such goods; or
(c) displayed on the price list exhibited by him by or under any law for the time being
in force; or
(d) agreed between the parties;
(v) The goods, which are hazardous to life and safety when used, are being offered
for sale to the public-
(a) in contravention of standards relating to safety of such goods as required to be
complied with, by or under any law for the time being in force;
(b) where the trader knows that the goods so offered are unsafe to the public;

(vi) the services which are hazardous or likely to be hazardous to life and safety of the public
when used, are being offered by a person who provides any service and who knows it to be injurious to
life and safety.

(vii) a claim for product liability action lies against the product manufacturer,
product seller or product service provider, as the case may be [Section 2(6)].

17. 5.7 “Consumer”: The term consumer refer to: any person who-
(i) (a) buys any goods for a consideration which has been paid or promised or
partly paid and
partly promised, or under any system of deferred payment, and

(b) includes any user of such goods other than (a)

(c) when the said use is made with the approval of such person (original buyer),
(d) but does not include a person who obtains such goods for resale or for any
commercial purpose; [Section 2.7(i)] or.
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(ii) (a) hires or avails of any service for a consideration which has been paid or promised or
partly paid and partly promised, or under any system of deferred payment, and
(b) includes any beneficiary of such service other than the person who hires or avails of
the services for consideration paid or promised, or partly paid and partly promised, or under any system of
deferred payment,
(c) when such services are availed of with the approval of the first mentioned person,
(d) but does not include a person who avails of such service for any commercial purpose
[Section 2.7(ii)]

The definition of the term ‘Consumer’ has been kept by and large unchanged under the Act, 2019
except the inclusion of clause (b) under the category ‘explanation’ to [Section 2.7(ii)].

17. 5.8 “Consumer Dispute”: The term ‘Consumer Dispute’ refers to a dispute where the person against
whom a complaint has been made, either denies or disputes the allegations contained in the complaint
[Section 2(8)].

17. 5.9 “Consumer Rights”: These Consumer Rights include:

(i) the right to be protected against the marketing of goods, products or services
which are hazardous to life and property;
(ii) the right to be informed about the quality, quantity, potency, purity, standard and pri
of goods, products or services, as to protect the consumer against unfair trade practices;
(iii) the right to be assured, wherever possible, access to a variety of goods,
products or services at competitive prices;
(iv) the right to be heard and to be assured that consumer's interests will receive due
consideration at appropriate fora;
(v) the right to seek redressal against unfair trade practice or restrictive trade
practices or unscrupulous exploitation of consumers; and
(vi) the right to consumer awareness;[Section 2(9)].

This definition is newly added under Act, 2019. The old Act, 1986 did not contain definition on
Consumer Rights. But the above referred six Consumers Right were covered under the Act, 1986 in
the form of objects of the Central Council (Chapter II: Consumer Protection Councils, (Section 6 of
Act, 1986).

17. 5.10 “Defect”: The term Defect refers to any (i) fault, (ii) imperfection or (iii) shortcoming in the
(a) quality, (b) quantity, (c) potency, (d) purity or (e) standard which is required to be
maintained by or under any law for the time being in force or under any contract, express or implied or
(iv) as is claimed by the trader in any manner whatsoever in relation to any goods or product and the
expression "defective" will be construed accordingly.

The terms or ‘product and the expression defective shall be construed accordingly’ are the only terms
newly added under the Act, 2019 [Section 2 (10)].

17. 5.11 “Deficiency”: It refers to any (i) fault, (ii) imperfection, (iii) shortcoming or (iv)
inadequacy in the (a) quality, (b) nature and manner of performance (c) which is required to be maintained
by or under any law for the time being in force or (d) has been undertaken to be performed by a person in
pursuance of a contract or otherwise in relation to any service and includes-
(i) any act of negligence or omission or commission by any person which causes
loss or injury to the consumer; and
(ii) deliberate withholding of relevant information by any person to the consumer;
[Section 2(11)].

The clauses (i) and (ii) stated above are newly added under the Act, 2019 and the remaining part of
the term are the same as covered under the Act, 1986.

17. 5.12 "Design": In relation to a product, refers or means the intended or known physical and material
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 characteristics of such product and includes any intended or known formulation or content of such product
and the usual result of the intended manufacturing or other process used to produce such product;
[Section 2(12)]. This definition is newly added under Act, 2019.

17. 5.17 “Electronic Service Provider”: Electronic Service Provider refers to person who provides
technologies or processes to enable a product seller to engage in advertising or selling goods or services to
a consumer and includes any online market place or online auction sites [Section 2(17)]. This definition
is newly added under the Act, 2019.
17. 5.18 “Endorsement”: in relation to an advertisement, refers to-
(i) any message, verbal statement, demonstration; or
(ii) depiction of the name, signature, likeness or other identifiable personal
characteristics of an individual; or
(iii) depiction of the name or seal of any institution or organization

which of the above, makes the consumer to believe that it reflects the opinion, finding or experience of the
person making such endorsement [Section 2(18]. This definition is newly added under the Act, 2019.

17. 5.19 “Establishment”: The term establishment includes (i) an advertising agency, (ii) commission
agent,(iii) manufacturing, (iv) trading or any other commercial agency which carries on (a) any business,
(b) trade or profession or any (c) work in connection with or incidental or ancillary to any commercial
activity,(d) trade or profession, or (e) such other class or classes of persons including (f) public utility
entities in the manner as may be prescribed [Section 2(19)]. This definition is newly added under the
Act, 2019.

17. 5.20 “Express Warranty”: It refers to (i) any material statement, (ii) affirmation of fact, (iii) promise
or description relating to a product or service warranting that it conforms to such material
statement, affirmation, promise or description and (iv) includes any sample or model of a
product warranting that the whole of such product conforms to such sample or model
[Section 2(20)]. This definition is newly added under the Act, 2019.

17. 5.21 “Goods”: It refers to every kind of movable property and includes "food" as defined in
clause (j) of sub-section (1) of section 3 of the Food Safety and Standards Act, 2006
(No.34 of 2006) [Section 2 (21)]. The Act, 1986 had a restrictive definition of ‘Goods’ as
defined under the sale of Goods Act, 1930.

17. 5.22 “Harm”: in relation to a product liability, includes-

(i) damage to any property, other than the product itself;
(ii) personal injury, illness or death;
(iii) mental agony or emotional distress attendant to personal injury or illness or damage
to property; or
(iv) any loss of consortium or services or other loss resulting from a harm referred to in sub-
clauses (i) or (ii) or (iii),
However, the above does not include any harm caused to a product itself or any damage to the property on
account of breach of warranty conditions or any commercial or economic loss, including any direct,
incidental or consequential loss relating thereto [Section 2(22)]. This definition is newly added under
the Act, 2019.

17. 5.24 “Manufacturer”: means or refers to a person who-

(i) makes any goods or parts thereof; or
(ii) assembles any goods or parts thereof made by others; or
(iii) puts or causes to be put his own mark on any goods made by
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 any other person; [Section 2.24)].
17. 5.31 “Person”: The term ‘person’ refers to and includes-
(i) an individual;
(ii) a firm whether registered or not;
(iii) a Hindu undivided family;
(iv) a co-operative society;
(v) an association of persons whether registered under the Societies Registration Act,
1860
(vi) any corporation, company or a body of individuals whether incorporated or not;
(vii) any artificial juridical person, not falling within any of the preceding sub-clauses;
[Section 2(31)].

The clauses (ii) to (v) above were also covered under Act, 1986.However, the clauses (i), (vi) and
(vii) are newly added under the Act, 2019
17. 5.33 “Product:” Its refers to any (i) article or (ii) goods or (iii) substance or (iv) raw material or
(v) any extended cycle of such product, which may be in (a) gaseous, (b) liquid, or (c) solid state possessing
intrinsic value (vi) which is capable of delivery either as wholly assembled or as a component part and is
produced (vii) for introduction to trade or commerce. However, it does not include human tissues,
blood, blood products and organs [Section 2(33)].
This definition is newly added under the Act, 2019.

17. 5.34 “Product Liability”: It means and refers to (i) the responsibility of a product manufacturer or
product seller, of any product or service, (ii) to compensate (iii) for defective and deficiency

17. 5.35 “Product Liability Action”: It refers to a complaint filed for claiming compensation for the harm
caused to him [Section 2(35)].

17. 5.36 “Product Manufacturer:” refers to a person who-

(i) makes any product or parts thereof; or
(ii) assembles
(iii) puts or causes to be put his own mark
(iv) makes a product and sells, distributes, leases, installs, prepares, packages,
labels, markets, repairs, maintains such product or is otherwise involved in placing such product for
commercial purpose; or
(v) designs, produces, fabricates, constructs or re-manufactures any product
before its sale; or
(vi) being a product seller of a product, is also a manufacturer of such product
[Section 2(36)].

17. 5.37 “Product Seller”: in relation to a product, refers to a person who, in the course of
business, imports, sells, distributes, leases, installs, prepares, packages, labels, markets, repairs, maintains,
or otherwise is involved in placing such product for commercial purpose and includes-
(i) a manufacturer who is also a product seller; or
(ii) a service provider, [Section 2(37)].

However, the ‘product seller’ does not include the following category of persons-
(i) a seller of immovable property, unless such person is engaged in the sale of constructed
house or in the construction of homes or flats;
(ii) a provider of professional services in any transaction in which, the sale or use of a
product is only incidental but furnishing of opinion, skill or services being the essence of the
transaction;
(iii) a person who-

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• acts only in a financial capacity with respect to the sale of the product;
• is not a manufacturer, wholesaler, distributor, retailer, direct seller or an electronic service provider;
• leases a product, without having a reasonable opportunity to inspect and discover defects in the product,
under a lease arrangement in which the selection, possession, maintenance, and operation of the product
are controlled by a person other than the lessor;
This definition is newly added under the Act, 2019.
17. 5.42 “Service”: It means and refers to service of any description which is made
available to potential users and includes, but not limited to, the provision of facilities in connection
with(i) banking,(ii) financing, (iii) insurance, (iv) transport, (v) processing, (vi) supply of electrical or
other energy, (vii) telecom, (viii) boarding or lodging or both, (ix) housing construction, (x)
entertainment, (xi) amusement or (xii) the purveying of news or other information.

However the ‘service’ does not include (i) the rendering of any service free of charge or (ii)
under a contract of personal service [Section 2(42)].
This definition is same as defined under the Act, 1986.

17. 5.43 “Spurious Goods”: It means and refers to goods which are falsely claimed to be
genuine.

17. 5.45 “Trader”: in relation to any goods, refer to (i) s a person who sells or distributes any goods for
sale and (ii) includes the manufacturer thereof, (iii) and where such goods are sold or distributed in
package form, includes the packer thereof; [Section 2(45)].
(This definition is the same as defined under the Act, 1986).

This definition if newly added under the Act. 2019.

CONSUMER PROTECTION COUNCILS CHAPTER-II OF ACT, 2019

Central State District

establish Central Section 3(1)].
Nature Advisory [Section 3(2)].
Composition Minister-in-charge Central
Government several
number of other official or
non-official members
nominated by the Central
Government
No of meeting at least one [Section 4(1)].
Procedure of time and place as decided
Meetings by the Chairperson
prescribed by the Central
Government[Section 4 (2)].
State (Section 6)Section 6.1)
Advisory Section 6.2
Minister-in-charge State Section 6
(2) (a)]. Government other
official or non-official members
as prescribed under rules and
regulations[Section 6 (2) (b)].
not to exceed ten [(Section 6
(2) (c)].
not less than two [Section
6(3)].
time and place as determined
by the as prescribed under
rules regulations[Section 6
(4)].
State Section 8.1).
(
Collector of the District (by
whatever name called), as
the Chairperson; and
[Section 8 (2) (a)] and
several number of official
and non-official members
but not less than two
meetings [Section 8 (3)].
time and place within the
District as decided by the
Chairperson as prescribed
under relevant rules and
regulations [Section 8 (4)]

The establishment of the above explained three tier Consumer Protection Councils are
further elaborated under the following diagram.

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 CONSUMER PROTECTION COUNCIL
CCPC: Central Consumer Protection Council
SCPC: State Consumer Protection Council
DCPC: District Consumer Protection Council
CP: Chairperson
UM: Union Minister
St. M: State Minister
MCA: Ministry of Consumer Affairs

17.3 ESTABLISHMENT OF CENTRAL CONSUMER PROTECTION AUTHORITY

(CCPA) (CHAPTER-III OF ACT, 2019)

The Act, 2019, provided for the establishment of a Central Consumer Protection Authority (CCPA) by the
Central Government (Section 10.1).

17.3.1 Objects of CCPA: The objects of CCPA are to regulate matters relating to:
 violation of Rights of Consumers
 unfair Trade Practices, and
 false or misleading advertisement pre-judicial to the interest of public and consumers, and
 to promote, protect and enforce the Rights of Consumers [Section 10 (1)].

17.3.2 The Central Authority (CCPA) will consist of a Chief Commissioner (CC) and
several other Commissioners as prescribed, and to be appointed by the Central Government to exercise
powers and discharge functions under the Act, 2019 [Section 10(2)].

17.3.3 Chief Commissioners: Qualifications and Method of Recruitment: The Central

Govt. is empowered to make rules to provide for the (i) qualifications, (ii) method of recruitment,
(iii) procedure for appointment, (iv) term of office, (v) salaries and allowances resignation and removal,
and (vi) other terms are conditions of service of Commissions (Section 11).

Vacancy not to Invalidate Proceedings: The act or proceedings of the Central Authority will not be
invalid as well as not invalidate the proceedings on the ground of defect, either on the Constitution of
Central Authority or defect in the appointment or any irregularity in the procedure of the Central
Authority or defect in the appointment or any irregularity in the procedure of the Central Authority not
affecting the merits of the case (Section 12).

17.3.4 Appointment of Officials and Experts at CCPA: The Central Government is

further empowered to provide the required officers and employees to the Central Authority for the
efficient performance of its functions [Section 13(1)].

The Central Authority is authorized to engage the experts and professionals of integrity and ability who
have special knowledge and experience in the areas of Consumer Right and Welfare, Consumer Policy,
Law, Medicine, Food Safety, Health Engineering, Product, Safety, Commerce, Economics, Public Affairs
and Administration [Section 13(2)].

17.3.5 Procedure of Central Authority: The Central Authority is empowered to regulate the
procedure for transaction of its business and allocation of its business amongst all the Commissions
(Section 14).

17.3.6 Purpose of CCPA: The CCPA is to be established by Central Government and will have an
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Investigation Wing headed by Director General for the purpose viz.:
• to conduct any inquiry or investigation (Section 15.1).
• to submit the inquiries or the investigation made by the Director General to the CCPA
(Section 15.5).
17.3.7 The CCPA Investigation Wing will function at three stages i.e.
(i) National level headed by Director General supported by Additional / Joint / Deputy /
Assistant / Director Generals,
(ii) Regional level headed by Commissioner of Regional Office (CRO) and
(iii) District level headed by District Collector. The same is further elaborated through the
following diagram D1.

Power of District Collector (Section16)

The District Collector either based on a Complaint or on a reference made to him by the Central Authority
or the Commissioner of Regional Office is empowered to inquire or investigate complaints relating.

• Violation of:
• Consumer Rights
• Unfair Trade Practices
• False or Misleading Advertisements

Within their jurisdiction and submit a report to CA or CRO (Section 16)

Complaint to Authorities: In the event of above referred violations are found to be prejudicial to the
interests of consumer as a class then the complaints to be made either in writing or electronic mode to any
one of the following Authorities.
(i) The District Collector (DC)
(ii) The Commissioner of Regional Office of Central Authority (CRO)
(iii) The Central Authority (CCPA) (Section 17)

17.3.8 Powers and Functions of CCPA (Section 18):

The functions of CCPA as elaborately listed under Section 18 of the Act, 2019 are furnished below.
(i) to protect, promote and enforce rights of consumers as a class including prevention of
violation of such rights.
(ii) to prevent Unfair Trade Practices.
(iii) to ensure that:
• no person engages himself in Unfair Trade Practices,
• no false or misleading advertisement is made of any goods or services which contravenes
the prisons of this Act or rules or regulations.
• no person takes part in the publication of false or misleading advertisement which is false
or this leading [Section 18(1)].
(iv) To Inquire or investigate into violation of Consumer Rights or Unfair Trade Practices
either suo- motu or on a complaint received.
(v) To file complaints before District Commission, State Commission or the National Commission.
(vi) To intervene in any proceeding before any or all consumer foras in respect of any
allegation of violation of Consumer Rights or Unfair Trade Practices.
(vii) To undertake and promote research including to spread awareness on consumer right, and
(viii) To issue guidelines to prevent Unfair Trade Practices and protect the interest of consumers
(Section 18).

17.3.9 Power of Central Authority to Refer Matter for Investigation or to other

Regulator (Section 19)
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The Central Authority on receipt of information or complaint or directions from the Central government or
on its own motion, inter-alia, is, empowered to conduct or cause to be conducted a preliminary inquiry as
to whether there exist a prima facie case of violation of Consumer Rights or Unfair Trade Practice or any
false or Misleading Advertisement by any person.

Power to Central Authority: To issue Directions and Impose Penalties against False or Misleading
Advertisements (Section 21).

The Central Authority is also empowered to:

(i) To issue directions: To issue directions to concerned traders or manufacturers or
endorser or advertiser or publisher to discontinue advertisement or modify the same [Section 21(1)].
(ii) To Impose penalties: To impose penalties in respect of false or misleading advertisement
by a manufacturer or an endorser upto a maximum of Rupees 10 lakh [Section 21(2)]. And up to Rupees
50 Lakhs for every subsequent contravention[proviso to Section 21(2)].
(iii) To prohibit the endorser of a false or misleading advertisement from making endorsement
of any product or service for a period of one year [Section 21(3)]. And upto three years for every
subsequent contravention
(iv) After investigation, if the Central Authority is satisfied that any person is found to
publish, or is a party to be publication of a misleading advertisement, it may impose a penalty when may
extend upto Rupees 10 Lakh [Section 21(4)].
(v) Nevertheless, the endorser will not be held liable to a penalty (under s. 21(2) &
(3), if he has exercised due diligence to verify the veracity of the claims made in the advertisement with
respect to the product or service being endorsed by him [Section 21(5)].
(vi) Further, in the event if a person could prove that he had published or arranged for the
publication of advertisement in the ordinary course of business, such person will not be held table for
imposition of penalty [Section 21(6)].
However, the said defense will not be available to a person who had previous knowledge of the order
passed by the Central authority for withdrawal or modification of such advertisement [proviso to Section
21(6)].
(vii) Further, while determining the penalty under this section (27), the Central Authority will
have regard to be following factors.
(a) the population and the area impacted or affected by such offence;
(b) the frequency and duration of such offence;
(c) the vulnerability of the class of persons likely to be adversely affected by such offence; and
(d) the gross revenue from the sales effected by virtue of such offence[Section 21(7)].

17.3.10 Power of Search and Seizure

Who is authorized to carry out search and seizure: The Director General or any other authorized by
him or the District Collector is authorised to carry out the search and seizure operations. if has any
reason to believe that the person concerned has violated (a) any Consumer Rights or (b) Committed
Unfair Trade Practices or caused any false or misleading advertisement to be made [Section
22(1)].Purpose of conducting an investigation after preliminary inquiry under [Section 22(1)].

Manner to Carryout Search and Seizure Operations [Section 22(1)].

(i) to enter at any reasonable time into any premises and search for any document or record
or article or any other form of evidence and seize the relevant document, record, article or evidence;
(a) to make a note or an inventory of such record or article; or
(b) to require any person to produce any record, register or other document or article.

Procedure to be followed while carrying out search and seizure operation: The provisions of Code of
Criminal Procedure, 1973 relating to search and seizure operations will be made applicable for search and
seizure under this Act [Section 22(2)].
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 The documents, records or articles seized should be returned either to persons from whom they were seized
or who produced the same, within a period of twenty days of the date of such seizure or production.
However, before the return of said documents, the Authority concerned should take copies or extracts
duly certified by the concerned person, in the manner prescribed, if any [Section 22(3)].

In the case of seizure of perishable articles subjected to natural decay, the authorities concerned should
follow the procedure, if any, prescribed for the purpose [Section 22(4)].
The Central Government is empowered to designate any Statutory Authority or body, by notification, to
exercise powers and functions of the Central Authority (Section 23).

Appeal lies to National Commission: Any person aggrieved by any order passed by the Central Authority
(under S. 21 & 22) is provided an opportunity to file an appeal before the national Commission within 30
days from the date of receipt of such order (Section 24).

Grants by Central Government: The manner of grants to be provided to the Central Authority by the
Central Government is provided under (Section 25).

Accounts and Audit: The manner and method of maintaining proper accounts and relevant records and
carrying out audit etc. are provided under (Section 26). Submission of annual Reports by Central
Authority to Central Government (Section 27) The Central Authority will prepare an Annual Report
……………
every year in the form, manner and time as prescribed, under the law, rules and regulations, thereby,
giving full account of its activities for the year and submit to Central Government.

18.1 ESTABLISHMENT OF CONSUMER DISPUTE REDRESSAL COMMISSION

There are three types of Jurisdiction available for settlement of disputes or differences between or among the
parties, by Courts, Tribunals or Commissions. They are: (i) Territorial Jurisdiction, (ii) Pecuniary Jurisdiction
and (iii) Subject matter Jurisdiction. The said jurisdiction are equally applicable to Consumer Commission as
well.

The territional jurisdiction refers and extends to the physical geographical area earmarked for each Commission.
The financial or pecuniary jurisdiction refers to the financial limits prescribed to hearing the matter by the
Commission. The subject matter jurisdiction refers to the Consumer Dispute in the case of Consumer
Commissions.
18.1.1 Establishment of District Consumer Dispute Redressal Commission

The details relating to the Constitution, Composition and Jurisdiction (Pecuniary) of District Consumer Disputes
Redressal Commission (called District Commission) is elaborated under table-I.
Table: I
District Consumer Dispute Redressal Commission (Constitution / Establishment,
Composition and Jurisdiction)

Name of Constitution / Composition Jurisdiction/Pecuniary

Commission Establishment
1. District  By State Government in  One President To entertain complaints
Commission each District.  Not less than two members. where the value of goods
(Section 28  Ifconsidered necessary,  Not more than number of or services paid as
to 41) may consideration does not
members prescribed, if any, by
establish more than one State Government but in exceed rupees one crore
District Commission in (Section 34)
consultation with central
a District [Section 28 (1)] government [Section 28
(2)]

18.1.1.1 Jurisdiction (Territorial) of District Commission1*

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A Consumer Complaint containing allegations in respect of either goods purchased or services hired has to be
made before the District Consumer Commission within its local limits as detailed below:
(i) where the opposite party or parties in the case of more than one (i) ordinarily resides or (ii)
carries on business or (iii) has a branch office or (iv) personally works for gain at the time of institution of the
complaint [Section 34(2)(a)].
(ii) where any of the opposite parties (in the case of more than one) (i) actually and voluntarily resides or (ii)
carries on business or (iii) has a branch office or (iv) personally works for gain at the time of institution of
complaint. However, in such cases, the permission of the District Commission concerned needs to be obtained
[(Section 34(2)(b)].
(iii) where the cause of action either wholly or in part arisen [Section 34(2)(c)] or
(iv) where the complainant resides personally works for gain [Section 34(2)(d)].

18.1.2 Manner in which Complaint shall be made

This section clearly specified the type of persons who are competent to file complaint in relation to goods either
sold or delivered including agreed to be sold or delivered or any services provided or agreed to be provided
before the District Commission: [Section 35(i)].

However, such complaints have to be filed with permission of the District Commission.
• The Complaint can be made either on behalf of all or for the benefit of all
Consumers interested therein [Section 35(i)(c)].
• the Central Government State Government or the Central Authority [Section 35(i)(d)].

This section enables the consumer or the above referred persons to file complaints through electronical devises
such as email, online submission of complaints, serving of notices etc[Section 35(1) (d)].. Recognished
Consumer Association includes both registered as well as unregistered Voluntary Consumer Association
(Explanation to Section 35).

Each complaint filed before District Commission will be accompanied by fee and the manner prescribed
including electronic mode of payment [Section 35 (2)].

18.1.3 Proceeding before District Commission

Composition of the Quorum:

 Proceedings conducted by the President and at least one Member sitting together [Section 36(1)].
 In case a Member, for any reason is not able to conduct or participate in a proceeding till its completion
or end, the President and any other member [Proviso to Section 36(1)].
 On receipt of Complaint (under section 35), the District Commission is competent to pass an appropriate
Order either to:
a) admit the complaint for further proceedings, or
b) reject the complaint given an opportunity of being heard before such rejection [Section 36(2)].
 Further, the District Commission should decide on the admissibility of the complaint within 21 days from
the date on which the complaint was made (Section 36(2) otherwise the complain will be deemed to have
been admitted [Section 36(3)].

18.1.4 Reference to Mediation

However, the Act, 2019 has added completely a new chapter on Mediation (Chapter V). This chapter is
dealt with separately under para 18.4.

11
18.1.4.1 Reference to Mediation by District Commission

Once the District Commission has decided to admit the complaint for further proceedings on merit, the complaint
will be listed for hearing. On the first date of hearing of the complaint admitted or at any later stage, the District
Commission is authorized to direct the parties to the consumer dispute to give their consent in writing within
5 days to settle their dispute through a process of mediation as per provisions contained under chapter V
(Section 74 to 81) [Section 37(1)].

On receipt of the said consent in writing from the parties concerned, the District Commission will
refer the matter for mediation within 5 days of receipt of such consent [Section37(2)].

18.1.4.2 Procedure on admission of Complaint

If mediation failed, following procedure is followed [Section 38(1)].

A. In respect of Complaints related to goods:

Transmission of complaints to opposite party:
(i) to refer the copy of the complaint admitted to the opposite party (or parties) mentioned in the complaint
within 21 days from the date of its admission, thereby, directing him (or them) to give his (or their) version
of the case within a period of 30 days or with further extension not exceeding 15 days [Section 38 (2) (a)].

(ii) Probable Response by the opposite Party:

In the event of the opposite party (or parties) on receipt of the above referred complaint either denies or disputes
the allegations or omits or fails to take any action to represent his (their) case within the given time
period, the District Commission will proceed to settle the consumer dispute in the manner elaborated
below i.e. Clause (c) to (g) of Section 38 [Section 38 (2) (b)].

(B) In respect of Complaint with allegation of defect in the goods which cannot be determined
without proper analysis or test:
(i) to obtain the sample of the goods from the complainant.
(ii) to seal and authenticate the said goods in the manner prescribed if any, and
(iii) to refer the said sealed sample to the appropriate laboratory with a direction to make an analysis or test
as considered necessary with a view to find out whether the goods referred suffer from any defect either as
alleged in the complaint or from any other defect, and.
(iv) to report its finding, to the District Commission within 45 days of receipt of the reference or within
the further extended time, if any [Section 38 (2) (c)].
(v) to require the complainant to deposit the fee specified if any, to the credit of the District Commission
well in advance of the sample goods referred to the concerned laboratory.
(vi) the fee deposit referred above is meant for making payment to the concerned laboratory for the
purpose of carrying out the analysis or test of sample goods [Section 38(1) (d)].
(vii) to forward a copy of the laboratory report received from the concerned Laboratory along with its own
remarks as deemed appropriate, to the opposite party [Section 38(1)(e)].
(viii) in the event of parties to the dispute (both complainant as well as the opposite party) either dispute the
correctness of the findings of the concerned laboratory or disputes the correctness of the analysis or test
adopted by the laboratory concerned, the District Commission can ask the parties (both complainant or the
opposite party) to submit his or their objections in writing in respect of the report made by the concerned
laboratory [Section 38(1)(f)].
(ix) to provide a reasonable opportunity to both or either of the parties of being heard in respect of the
correctness or otherwise of the laboratory report and also to the objection made/raised therein as stated above
[Section 38(1)(f)] [Section 38(1) (g)]
(x) finally, to issue an appropriate order (under Section 39 discussed later at appropriate place)
[Section 38 (1) (g)].

(C) In respect of admitted complaints related to goods which do not require test or analysis by
laboratory as well as related to services [Section 37(3)]:
12
(i) to refer the copy of the complaint admitted to the opposite party (or parties) mentioned in the
complaint thereby, directing him (or them) to give his (or their) version of the case within a period of 30 days
or with further extension not exceeding 15 days [(Section 38 (3) (a)].
(ii) in the event of the opposite party (or parties) on receipt of the above referred complaint either denies
or disputes the allegations contained in the complaint or omits or fails to take any action to represent his (their)
case within the given time period, the District Commission will proceed to settle the consumer dispute in the
manner elaborated below: [(Section 38 (3) (a)].
(iii) on the basis of evidence brought to its notice by the parties to the dispute (complainant as well as
opposite party), in the event of opposite party denies or disputes the allegations made in the complaint, or
[(Section 38 (3) (b) (i)], or
(iv) to decide the consumer dispute ‘ex-parte’ on the basis of evidence produced by the complainant, in
the event of opposite party omits or fails to take any action to represent his within the time period given by the
District Commission [(Section 38 (3) (b) (ii)].
(v) to decide the complaint on merits if the complainant fails to appear on the date of hearing
[(Section 38 (3) (c)].
(vi) the District Commission, for the purposes of section 38(2) and (3) discussed elaborately above, can
by order require the Electronic Service Provider to provide relevant information, documents or records as
specified in the order [Section38(4)].
(vii) the proceedings complying with the procedure laid down under section 37(1) and (2) cannot be
called in question in any court on the ground that the principles of natural justice have not been followed
[Section38(5)].
(viii) the complaint admitted by the District Commission will be heard on the basis of affidavit and
documentary evidence placed on record [Section 38(6)].
(ix) further, in cases where the application is made for hearing or examination of parties in person or
through video conferencing, the District Commission is empowered to allow the same based sufficient course
shown followed by recording its reasons in writing [Proviso to Section 38(6)].

(D) Duration within which the complaints should be disposed:

requiring analysis or testing

If no,within three months If yes,within five months

(i) the complaint not requiring analysis or testing by laboratory should be disposed of as expeditiously
as possible and make endeavour to decide the complaint within three months from the date of receipt of notice
by opposite party.
(ii) the complaint requiring analysis or testing by laboratory should be disposed of as well as
decided within five months [Section 38(7)].
(iii) further, the District Commission should not ordinarily grant adjournment. However, the adjournment
may be granted if sufficient cause is shown for not filing complaint within the given time period and further
followed by recording reasons for the same in writing [Proviso to Section 38(7)].
(iv) the District Commission is also empowered to pass interim orders during the pendency of the
proceedings as deemed just and proper, based on the facts and circumstance of the case [Section 38(8)].

(E) District Commission to have the powers of Civil Court under Code of Civil Procedure, 1908
while trying a suit:

The District Commission is empowered to exercise the powers of civil court under the Code of Civil Procedure
Code, 1908 while trying a suit in respect of the following matters [Section 38(9)].

(i) the summoning and enforcing the attendance of any defendant or witness and examining the
witness on oath;
(ii) produce any document or other material object
(iii) receiving of evidence on affidavits;

13
(iv) the requisitioning of the report of the concerned analysis or test from the appropriate laboratory of
from any other relevant sources;
(v) issuing of commissions for the examination of any witness, or document; and
(vi) any other matter which may be prescribed by the Central Government.

The Proceedings before District Commission will be deemed as judicial proceedings (within the meaning of
sections 193 & 228 of the Indian Penal Code, 1860 [Section 38(10)] and

The District Commission will be deemed as Criminal Court for the purposes of section 195 and chapter XXVI
of the Code of Criminal Procedure, 1973 [Section 37(10)].

18.1.4.3 Findings of the District Commission

The District Commission is satisfied i.e. after reaching to the findings that (a) the goods complained suffer from
any defects stated in the complaint, or (b) any of the allegations stated in the complaint about the (i) services or
(ii) any unfair trade practices or (iii) claims for compensation under product liability are proved, then it will
pass an order directing the opposite party to do one or more of the following as listed under Section 39(1).

(i) to remove the defect pointed out by the appropriate laboratory from the goods in question;
(ii) to replace the goods with new goods of similar description which shall be free from any defect;
(iii) to return to the complainant the price, or, as the case may be, the charges paid by the complainant
along with such interest on such price or charges as may be decided;
(iv) to pay such amount as may be awarded by it as compensation to the consumer for any loss or injury
suffered by the consumer due to the negligence of the opposite party:
Provided that the District Commission shall have the power to grant punitive damages in such circumstances
as it deems fit;
(v) to pay such amount as may be awarded by it as compensation in a product liability action under
Chapter VI;
(vi) to remove the defects in goods or deficiencies in the services in question;
(vii) to discontinue the unfair trade practice or restrictive trade practice and not to repeat them;
(viii) not to offer the hazardous or unsafe goods for sale;
(ix) to withdraw the hazardous goods from being offered for sale;
(x) to cease manufacture of hazardous goods and to desist from offering services which are hazardous in
nature;
(xi) to pay such sum as may be determined by it, if it is of the opinion that loss or injury has been
suffered by a large number of consumers who are not identifiable conveniently:

18.1.4.4 Minimum amount payable to the consumers

The minimum amount payable should not be less than 25 percent of the value of the defective goods sold or
service provided to the consumers (Proviso to Section 39).
(xii) to issue corrective advertisement to neutralise the effect of misleading advertisement at the cost of the
opposite party responsible for issuing such misleading advertisement [Section 39(1) (l)].
(xiii) to provide for adequate costs to parties; and [Section 39(1) (m)].
(xiv) to cease and desist from issuing any misleading advertisement [Section 39(1) (n)].

The amount obtained from the opposite party responsible for issuing misleading advertisement towards
issuance of corrective advertisement to neutralize the misleading advertisement [Section 39(2)] will be credited
to the find created for the purpose if, any, and utilized in the manner prescribed [Section 39(2)].

18.1.4.5 Difference in the opinion between the President and Member to be referred to another
Member for hearing
In the event of differences on points between the President and a Member, the point(s) of such differences will
be referred to another Member for hearing on such points. The opinion of majority (among the three members)
14
 will become the order of District Commission [Section 39(3)].

Further, the other Member to whom the difference of opinion in points is referred should give his opinion
within one month from the date of reference [Proviso to Section 39(3)].

The orders of the District Commission Sub-Section (I) will be signed by the President and the Members who
conducted the proceedings Commission [Section 39(4)].

In the cases where the order is passed by majority opinion, such orders should be signed by the other member
as well.

18.1.4.6 Review of the order of District Commission in Certain Cases

The District Commission is vested with the power to review any of the order passed by it on the ground or
basis that there is an error apparent on the face of the record. The review power may be exercised either
on its own motion or based an application made by any of the parties with 30 days from the date of
making such order (Section 40).

18.1.4.7 Appeal against the order of District Commission

prefer an appeal against District Commission done in the State Commission. The appeal can be preferred on
the grounds of facts or law that too with in a period of 45 days from the date of the order passed by
District Commission. The appeal may be preferred in the manner prescribed if any (Section 41).

The State Commission, however, is empowered to entertain the appeal even after the expire of forty five days if
sufficient cause is shown for not filing the appeal within that specified period (1st proviso to Section 41).
Further, the person who prefers an appeal to the State Commission is required to pay fifty percent of the
amount specified in the order of District Commission failing which the appeal may not be entertained (second
proviso to Section 41).
Furthermore, the right of appeal is not available against the settlement reached by mediation under
Section 80 (third proviso to Section 41). ESTABLISHMENT OF STATE

CONSUMER DISPUTES REDRESSAL COMMISSION (SECTION 42):

The provisions relating to the Establishment, Constitution, Composition and Jurisdiction (pecuniary
financial) of the State Commission are elaborated under Table II below:
Table: II
State Consumer Dispute Redressal Commission (Constitution Establishment,
Composition and Jurisdiction)

Name of Constitution Composition Jurisdiction/Pecuniary

Commission
State Commission  By State Government in
(Section 42 to 52) the State(s.42(1)
 If considered
necessary, may
establish Regional Benches
of the State Commission at
different places in the State
(s.42 (2)proviso
 One President [Section To entertain complaints
42(3)(a)] where the value of goods
 Not less than Four or services paid as
members. consideration
exceeds rupees one
 Not more than number of
Crore but does not
members prescribed if any
exceed Ten Crores
by State Govt. but in
[Section 47 (1) (a)(i)].
consultation with central
govt. [Section
42(3)(b)]

18.1.4.8 Jurisdiction of State Commission2*

15
(A) The State Commission will have to Jurisdiction:

(a) To entertain:
(i) Complains for values of goods or services paid as consideration exceeds rupees 1-10 crore
[Section 47(1) (a) (i)].
In addition, Central Government is also empowered to prescribe any other value as deemed fit or
necessary [proviso to Section 47 (1) (a) (i)].
(ii) Appeals against the orders of District Commission within the state [Section 47(1) (as) (iii)].
(iii) To call for records and pass appropriate orders in any consumer dispute either pending before or
decided by District Commission and if it appears to State Commission that the District Commission: (i)
exercised jurisdiction not vested upon it under law or (ii) has failed to exercise the jurisdiction vested upon it or
(iii) has acted in exercise of its jurisdiction illegally or with material irregularity [Section 47(1) (b)].

(B) Difference in the opinion between the President and Member to be referred to another Member
for hearing:

During the course of proceeding conducted by the President and a member, if they differ on any point or points, the
said points shall be decided according to the opinion of majority if there is a majority, but if

the members are equally divided, they will state the point or points on which they differ and refer the same to
President. The President will either hear the point himself or refer the case for hearing by one or more members
on such point or points and will be decided based on the opinion of the majority of members who have heard
the case including these who heard first [Section 47(3)].

President or the other member is required give opinion on such point or points referred to him them within a
period of one month from the date of such reference [Proviso to Section 47(3)].

(C) Where to make a Complaint (Territional Jurisdiction):

The complaint will be filed in a State Commission within the limits of whose jurisdiction:

(i) the opposite party or each of the opposite parties, where there are more than one, at the time of the
institution of the complaint, ordinarily resides or carries on business or has a branch office or personally works
for gain; or
(ii) any of the opposite parties, where there are more than one, at the time of the institution of the complaint,
actually and voluntarily resides, or carries on business or has a branch office, or personally works for gain,
provided that in such case the permission of the District Commission is given; or
(iii) the cause of action, wholly or in part, arises; or
(iv) the complainant resides or personally works forgain.

18.1.4.9 Transfer of cases in the interest of Justice

The State Commission is empowered to transfer any complaint pending before any District Commission to
another District Commission at any Stage of proceeding in the interest of Justice either on the basis application
of the complainant received or an its own motion (Section 48).

18.1.4.10 Procedure applicable to State Commission

The provisions relating the complaints under Section 35, 36, 37, 38 and 39 (as applicable to District
Commission) with necessary modifications, will also be made applicable to the disposal of complaints by the
State Commission (These provisions are elaborately discussed already under District Commission para
17.8.2 to para 17.8.4.4).

Further, the State Commission is also empowered to declare any term of contract unfair to consumer to be null

16
 and void (unlawful from the beginning) [Section 49(2)].

18.1.4.11 Review by State Commission in Certain Cases

The State Commission is vested with the power to review any of the order passed by it in the event of an error
apparent on the face of the record noticed, either of its own motion or on an application made by any of the
parties within 30 days of such order passed (Section 50).

18.1.4.12 Appeal to National Commission

Any person aggrieved by an order made by the State Commission may prefer an appeal against such order to the
National Commission on the grounds of facts or law within a period of 30 days from the date of the order,
in such form and manner, as may be prescribed [Section 51(1)].
However, the National State Commission may entertain an appeal even after the expiry of the said period of
thirty days, if it is satisfied that there was sufficient cause for not filing the appeal within that period [Proviso to
Section 51(1)].
Further, the appeal filed by a person, who is required to pay any amount in terms of an order of the State
Commission, will not be entertained by the National Commission unless the appellant has deposited fifty per
cent, of that amount in the manner prescribed [second proviso to Section 51(1)].
Furthermore, an appeal will also lie to the National Commission from any order passed in the appeal by any State
Commission in the event of national Commission is satisfied that the case involves Substantial Question of
Law [Section 51 (2)].

Furthermore, in an appeal involving a question of law, (i) the memorandum of appeal will preciously state the
substantial question of law involved [Section 51(3)], (ii) The National Commission will formulate the
question and hear the appeal on that question [Section 51 (4)].

Nevertheless, the National Commission will have the power to hear the appeal on any other substantial question
of law if it is satisfied that the case involves question of law, of course, by recording reasons in writing for the
same [Proviso to Section 51(4)].

An appeal to the National Commission may also lie from the order passed ex parte by the State Commission
[Section 51(5)].

18.1.4.13 Hearing of Appeal

The appeal filed before the State Commission or National Commission will be heard as well as disposed of as
expeditiously as possible and also endeavour will be made to dispose of the appeal within ninety days from the
date of its admission (Section 52).

Further, the adjournment sought, if any, will not be ordinarily granted either by State or National Commission,
unless if sufficient cause is shown and reasons for grant of adjournment been recorded in writing by the said
Commissions (Proviso to Section 52).

Furthermore, the State as well as National Commission is also empowered to make order towards cost
occasioned by the adjournment, as specified under regulations if any.

Also, in the event of disposal of an appeal after the above specified period, the State as well as National
Commission will record in writing the reason for the same at the time of disposal of appeal (second proviso to
Section 52).
18.1.5 Establishment of National Commission

The Legal Provisions relating to the establishment abolishment constitution composition and jurisdiction
(pecuniary / financial) of the National Commission is elaborately provided under Table III, below (Section 53).

Table: III
National Consumer Dispute Redressal Commission (Constitution Establishment,
Composition and Jurisdiction)
17
 Name of Constitution Composition Jurisdiction/Pecuniary
Commission
National  By Central Government  One President To entertain complaints
Commission (Section 53(i) (Section 54(a) where the value of goods
(S. 53 to 73)  If considered necessary, may  Not less than four or services paid as
establish Regional Benches members. consideration
 Not more than number of exceeds rupees Ten
of National Commission at
crores [Section 58(1) (a)
different Places (Section 53 members as prescribed, if
(i)]
(2) proviso any, Section 54 (b)

18.1.5.1 The Jurisdiction (Territional) of National Commission: The National Commission will have
Jurisdiction
(i) To entertain:
(a) complains for values of goods or services paid as consideration exceeds rupees ten crore. In
addition, Central Government is also empowered to prescribe any other value as deemed fir or necessary
[Provo. to Section 58(1)].
(b) complaints against unfair contracts for value of goods or services paid as consideration
exceeds rupees ten crore.
(c) appeals against the orders of State Commission.
(d) appeals against the orders of the Central Authority [Section 58(1)(a)].
(ii) To call for records and pass appropriate orders in any consumer dispute either pending before or
decided by State Commission and if it appears to National Commission that the State Commission.
(a) has exercised jurisdiction not vested upon it under law or (ii) has failed to exercise the jurisdiction
vested upon it or (iii) has acted in exercise of its jurisdiction illegally or with material irregularity [Section
58(1)(b)].

18.1.5.2 Exercise of jurisdiction by benches

The jurisdiction, powers and authority of National Commission may also be exercised by benches constituted by
the President of the National Commission with one or more members [Section 58 (2)]. Further, the Senior
Most Member will preside over the branch (Section 58(2) & proviso).
Difference in the opinion between the President and Member to be referred to another Member for hearing
[Section 58(3)].

In the event of differences on points between the President and a Member, the point(s) of differences will be
decided according to the opinion of majority, if there is a majority. But if members are divided equally, the said
points of difference will be stated and be referred to the President. On receipt the said reference, the President
will either hear the points himself or refer the case for hearing to other members for hearing on such points.
The opinion of majority by (among the three members) will become the order of National Commission
[Section 58(3)].

Further, the President or the other Member to whom the difference of opinion in points is referred should give
his opinion within two month from the date of reference [Proviso to Section 58(3)].

18.1.5.3 Procedure Applicable to National Commission

The provisions relating the complaints under S.35, 36, 37, 38 and 39 (as applicable to District commission) with
necessary modifications, will also be applicable to the disposal of complaints by the National Commission
(These provisions are elaborately discussed already under District Commission, ( Para 17.8.2bto
para 17.8.4.4).

Further, the National Commission is also empowered to declare any term of contract unfair to consumer to be
18
 null and void (unlawful from the beginning) [Section 59(2)].

18.1.5.4 Review by National Commission in certain cases

The National Commission is entrusted with have the power to review any of the order passed by it, if there is an
error apparent on the face of the record noticed, either of its own motion or on an application made by any
of the parties to the dispute within thirty days of such order (Section 60).

18.1.5.5 Power to Set Aside Ex-parte Order

Any aggrieved party to an ex-parte order passed by the National Commission can move an application to
National Commission for setting aside such order (Section 61).

18.1.5.6 Transfer of Cases

The National Commission either base on the application of the complainant or of its own motion, at any stage of
the proceeding, is vested with the power to transfer any complaint pending before a District Commission of one
State to a District Commission of another State or one State Commission to another State Commission in the
interest of justice (Section 62).

18.1.5.7 Vacancy in the office of President of National Commission

As an when the President or the person occupying the office of the President of National Commission is unable
to perform the duties associated with the office of the President the same will be performed by the Senior
Most Member of National Commission (Section 63).

Further, in cases where either the retired Judge of a High Court or a person who has been a judicial Member or
the senior most Judicial Member of the National Commission will preside over the National Commission in
the absence of President of the National Commission (Proviso to Section 63).
18.1.5.8 Vacancies on defects in appointment not to invalidate orders

The action or proceedings of the District, State or National commission will not become invalid by reason only
of the existence of any vacancy amongst its members or any defect in the constitution of the said Commission
(Section 64).

18.1.5.9 Service of Notice

All the notices required to be served under this law will be served in the following manner (Section 65).
(i) physical personal delivery with acknowledgement due.
(ii) transmission of a copy by registered post with acknowledgement due addressed either to the opposite
party against whom complaint is made or to the complainant by (i) speed cost or (ii) courier service duly
approved by concerned District, State or the National Commission, or
(iii) any other mode of transmission of documents including electronic means [Section 65(1)].

Further, the notice required under this Act, 2019 can also be on an Electronic Service Provider at the address
provided by it on the Electronic platform from where it provides its services. In addition, the Electronic Service
Provider will designate a Nodal Officer for the purpose i.e. to accept and process such notices [Section 65(2)].

18.1.5.10 Declaration regarding notice served

The Commissions (District, State and National Commission) are empowered under law to declare the serving of
notices on the opposite party or to the complainant in the following circumstances:
(i) the acknowledgement or other receipt purporting to be duly signed by the opposite party or his agent or
by the complainant is received by the said commission (District, State and National Commission) or
(ii) the notice or the postal article containing the notice is received back by the District, State or National
19
 Commission with an endorsement purporting to have been made by the postal employee or person authorized
by the courier service, to the effect that:
(a) the opposite party or his agent or the complainant refused to take delivery of the postal
article containing notice or
(b) refused to accept the notice by any other means specified [under Section 65(i)] when tendered or
transmitted to him [Section. 65(3)].
(c) in cases where the notice was properly addressed, prepaid and duly sent by registered post with
acknowledgement due by the District Commission, State Commission and National Commission it will be
deemed that the notice is served regardless of the fact that the acknowledgement has been lost or misplaced or
for any other reason has not been received by the District, State or the National Commissions within thirty
days from the date of issue of notice [proviso to Section 65(3)].
(iii) all notices required to be served on the opposable party or to complainant will be deemed served, if
addressed.
(a) in the case of the opposite party, to the place where the business or profession is carried on, and
(b) in the case of complainant, the place where the persons actually and voluntarily resides
[Section 65(4)].
18.1.5.11 Experts to assist National or State Commission

In cases where the issues raised in the complaint involves the larger interest of consumer in the opinion of State
Commission or National Commission either based on an application made by the complainant or otherwise, the
said Commissions my direct any individual or organization or expert to assist the National Commission or State
Commission (Section 66).

18.1.5.12 Appeal against the order of National Commission

Any person aggrieved by the order of the National Commission and in exercise of its power conferred under
[Section 58 (1) (a) (i) or (ii)] is entitled to prefer an appeal to the Supreme Court against the said order
within a period of thirty days from the date of the order.

The Supreme Court, however, may entertain an appeal even after the expiry of 30 days period if the aggrieved
party has sufficient cause for not filing the appeal within the period and, of course, subject to the satisfaction
of Supreme Court (first proviso to Section 67).

Further, the Supreme Court is not required to entertain any appeal filed by a person who is required to pay any
amount specified in the order of National Commission, has in fact not deposited fifty percent of the amount in
the manner prescribed (second proviso to Section 67).

18.1.5.13 Finality Order

Every order passed by the District Commission, State Commission and National Commission will become final,
if no appeal is preferred against such order (Section 68).

18.1.5.14 Limitation period

The District Commission, State and National Commission will not admit a complaint filed beyond two years
from the date on which the cause of action has arisen [Section 69(1)].

Nevertheless, a complaint filed even beyond the above said two years period before the District commission,
State Commission and National Commission can still be entertained, if the complainant had sufficient cause for
not filing the complaint within the said period, ofcourse, subject to the satisfaction of said commissions
respectively [Section 69(2)].

In such case, the Commissions (District, State and National Commission) should record their reasons for
condoning the delays [proviso to Section 69(2)].

18.1.5.15 Administrative Control

20
The National Commission will have the authority to lay down adequate standards in consultation with central
government for the better protection of the interest of Consumer hence have administrative control over all
State Commission, ofcourse, in consultation with central government from time to time on the following
subject matters [Section 70 (1)].
(i) monitoring performance of the State Commissions in terms of their disposal by calling for periodical
returns regarding the institution, disposal and pendency of cases;
(ii) investigating into any allegations against the President and Members of a State Commission and
submitting inquiry report to the State Government concerned along with copy endorsed to the Central
Government for necessary action;
(iii) issuance of instructions regarding adoption of uniform procedure in the hearing of matters, prior
service of copies of documents produced by one party to the opposite parties, furnishing of English translation of
judgments written in any language speedy grant of copies of documents;
(iv) overseeing the functioning of the State Commission or the District Commission either by way of
inspection or by any other means, as the National Commission may like to order from time to time, to ensure
that the objects and purposes of the Act are best served and the standards set by the National Commission
are implemented without interfering with their quasi-judicial freedom.

In addition, a Monitoring Cell will be constituted by the President of the National Commission to oversee the
functioning of the State Commission from the administrative point of view [Section 70(2)].

The State government will have the administrative control over all the District Commissions within their
jurisdiction in all matters referred under [Section 70(1)] [Section 70 (3)].
The National and State Commission will furnish to the Central Government periodically or as and when
required, any information including the pendency of cases in the form and manner prescribed [Section 70 (4)].

The State Commission in addition to the above, will also send the above said information to the State
government including pendency of cases in the form and manner prescribed [Section 70 (5)].

18.1.5.16 Enforcement of orders of District Commission, State Commission or National

Commission

Every order made by the District Commission, State Commission or National Commission is enforceable in the
same manner as decree made by a Civil Court in a suit and the provisions of Order XXI of First Schedule of
Civil Procedure Code 1908 will be made applicable subject to necessary modification (Section 71).

18.1.5.17 Penalty for non-compliance of the order

Any person who fails to comply with the order made by District Commission, State Commission or National
Commission is punishable with imprisonment ranging between one month and three years or with fine ranging
between rupees twenty five thousand and one lakh rupees or with both [Section 72(1)].

Further, the District Commission, State Commission or National Commission will have the power of Judicial
Magistrate 1st class for trial of offences and also the said Commissions will be deemed as Judicial Magistrate 1st
class for the purpose of Code of Criminal Procedure, 1973 [Section 72(2)].

The offences under [Section 72 (1) (Para 18.3.6.14)] will be tried summarily by the District, State or the
National Commission [Proviso to Section 72 (3)].

18.1.5.18 Appeal against order passed under Section 73

Regardless of the provisions of Code of Criminal Procedure, 1973, in cases involving order passed under
[Section 72(1)], an appeal both on facts law will lie as detailed below

(i) from the order made by District Commission to State Commission

21
(ii) from the order made by State Commission to National Commission
(iii) from the order made by National Commission to the Supreme Court [Section 73 (ii)]
It is clearly stated that no other appeal (than those referred above) will lie before any court from any order of
District Commission, State Commission or National Commission [Section 73(2)].

Further, every appeal under this section should be prepared within 30 days from the date of orders of [Section
73(3) District, State or the National Commission].

Nevertheless, the State Commission, National Commission or Supreme Court may entertain an appeal even after
the expiry of said thirty days if the appellant had sufficient causes for not preferring the appeal within the said
period, ofcourse, subject to the satisfaction of the concerned Commission/Court [Section 73(4)].

18.4 MEDIATION (CHAPTER V)

18.4.1 Establishment of Consumer Mediation Cell

The State Government is empowered to establish, by notification, a Consumer Mediation Cell to be attached to
each of the District Commissions and the State Commissions of the State concerned. [Section 74(1)].

(i) Similarly, the Central Government is empowered to establish, by notification, a Consumer Mediation
Cell to be attached to the National Commission and each of the regional Benches [Section 74(2)].
(ii) A Consumer Mediation Cell will consist of several persons, as prescribed in the rules / regulations
[Section 74(3)].
(iii) Every consumer Mediation Cell willmaintain-
(a) a list of empanelled mediators;
(b) a list of cases handled by the cell;
(c) record of proceeding; and
(d) any other information as may be specified by regulations
(iv) Every Consumer Mediation Cell should submit a quarterly report to the District Commission, State
Commission or the National Commission to which it is attached, in the manner specified by regulations
[Section 74(4)].

18.4.2 Empanelment of Mediators

The National Commission or the State Commission or the District Commission, will prepare a panel of the
mediators to be maintained by the Consumer Mediation Cell attached to it. Such panel should be prepared on
the recommendation of a Selection Committee consisting of the President and a member of that Commission.
[Section 75(1)].

For the purpose of mediation, the regulations may prescribe the following:
(i) the Qualifications and experience required for empanelment as mediator,
(ii) the procedure for empanelment,
(iii) the manner of training empanelled mediators,
(iv) the fee payable to empanelled mediator,
(v) the terms and conditions for empanelment,
(vi) the code of conduct for empanelled mediators,
(vii) the grounds on which, and the manner in which, empanelled mediators can be removed or
empanelment should be cancelled, and
(viii) other related matters [Section75(2)].

The above panel of mediators will be valid for a period of five years. The empanelled mediators will also be
22
 eligible to be considered for re-empanelment for another term, subject to conditions specified by regulations
[Section75(3)].
18.4.3 Nomination of Mediators from the Panel

The District Commission, the State Commission or the National Commission while nominating any person from
the panel of mediators referred above [in Section 75 (Para 18.4.2)] will consider their suitability for resolving the
consumer dispute involved (Section 76).
18.4.4 Duty of Mediator to Disclose Certain Facts

The mediator will have a duty inter-allia, to disclose the following:

(i) any personal, professional or financial interest in the outcome of the consumer dispute;
(ii) the circumstances which may give rise to a justifiable doubt as to his independence or impartiality;
and
(iii) any other facts specified by regulations (Section 77).

18.4.5 Replacement of Mediator in certain Cases

The District Commission or the State Commission or the National Commission, either based on the information
furnished, if any, by the mediator or on the information received from any other person including parties to the
complaint will replace such mediator by another mediator. However, before the said replacement, mediator
against whom information is received should be given an opportunity of being heard (Section 78).

14.4.6 Procedure of mediation

(i) The mediation will be held in the Consumer Mediation Cell attached to the District Commission, State
Commission or the National Commission, respectively [Section 79(1)].
(ii) Where a consumer dispute is referred for mediation by the District Commission or the State
Commission or the National Commission, the mediator so nominated by the said Commission will have regard to:
(a) the rights and obligations of the parties,
(b) the usages of trade, if any,
(c) the circumstances giving rise to the consumer dispute,
(d) any other relevant factors, as deemed necessary and
(e) also be guided by the principles of natural justice while carrying out mediation [Section
79(2)].
(iii) The mediator so nominated should conduct the mediation proceedings within the time period and the
manner specified by regulations [Section 79(3)].

18.4.7 Settlement through Mediation

(i) based on the above said Mediation proceedings, if an agreement is reached between the parties to all
the issues involved in the consumer dispute or with respect to only some of the issues, the terms of such
agreement will be reduced to writing and signed by the parties to such dispute or their authorised
representatives [Section 80(1)].
(ii) the mediator will prepare a settlement report of the settlement and forward the signed agreement along
with such report to the concerned Commission [Section 80(2)].
(iii) the mediator will also prepare a report (failure report) if no agreement is reached between the parties
within the specified time or the mediator is of the opinion that settlement is not possible, and submit the same
to the concerned Commission [Section 80(3)].
18.4.8 Recording Settlement and passing of order

(i) In cases where the report is received from the mediator, the District Commission or the State
Commission or the National Commission, as the case may be will within seven days of the receipt of the
23
 settlement report, pass suitable order recording such settlement of consumer dispute and dispose of the matter
accordingly [Section 81(1)].
(ii) In cases where the consumer dispute is settled only in part, the District Commission or the State
Commission or the National Commission, will record settlement of the issues which have been
so settled and continue to hear other issues involved in such consumer dispute [Section 81(2)].
(iii) In cases where the consumer dispute could not be settled by mediation, the District Commission or the
State Commission or the National Commission, will continue to hear all the issues involved in such consumer
[Section 81(3)].

18.5 PRODUCT LIABILITY (CHAPTER VI)

18.5.1 Application of Chapter

This Chapter on Product Liability is applicable to every claim for compensation under a Product Liability
Action by a complainant for any harm caused by:
(i) a defective product manufactured by a product manufacturer, or
(ii) serviced by a product service provider or
(iii) sold by a product seller (Section 82).

18.5.2 Product Liability Action

A product liability action may be brought by a complainant against:

(i) a product manufacturer, or
(ii) a Product Service Provider, or
(iii) a Product Seller,

for any harm caused to him on account of a defective product (or deficiency in services rendered)
(Section 83)
18.5.3 Liability of Product Manufacturer
(1) A product manufacturer will be liable in a product liability action, if-
(a) the product contains a manufacturing defect; or (Section 84)
(b) the product is defective in design; or
(c) there is a deviation from manufacturing specifications; or
(d) the product does not conform to the express warranty; or
(e) the product fails to contain adequate instructions of correct usage to prevent any harm or any
warning regarding improper or incorrect usage [Section 84(1)].
(2) A product manufacturer will be liable in a product liability action even if he proves that he was not
negligent or fraudulent in making the express warranty of a product [Section 84(2)].

18.5.4 Liability of Product Service Provider

A Product Service Provider will be liable in a product liability action, if-

(i) the service provided by him was (a) faulty, or (b) imperfect, or (c) deficient, or (d) inadequate in (i)
quality, (ii) nature or manner of performance which is required to be provided by or under any law for the time
being in force, or (c) pursuant to any contract or otherwise; or
(ii) there was an act of omission or commission or negligence or conscious withholding of any
information which caused harm; or
(iii) the service provider did not issue adequate instructions or warnings to prevent any
harm; or
(iv) the service did not conform to express warranty or the terms and conditions of the contract
24
(Section 85).

18.5.5 Liability of Product Sellers

A product seller who is not a product manufacturer will be liable in a product liability action, if-
(i) he has exercised substantial control over the (i) designing, (ii) testing, (iii) manufacturing, (iv)
packaging or (v) labelling of a product that caused harm; or [Section 86(a)].
(ii) he has (i) altered or (ii) modified the product and (iii)such alteration or modification was the
substantial factor in causing the harm; or [Section 86(b)].
(iii) he has made an express warranty of a product (i) independent of any express warranty made by a
manufacturer and (ii) such product failed to conform to the express warranty made by the product seller which
caused the harm; or [Section 86(c)].
(iv) the product has been sold by him and the (i) identity of product manufacturer of such product is
not known, or (ii) if known, the service of notice or process or warrant cannot be
effected on him, or (iii) he is not subject to the law which is in force in India, or (iv) the order, if
any, passed or to be passed cannot be enforced against him; or [Section 86(d)].
(v) he failed to exercise reasonable care in (i) assembling,(ii) inspecting, or (iii) maintaining such
product, or (iv) he did not pass on the warnings or instructions of the
product manufacturer regarding the dangers involved or (v) proper usage of the product while
selling such product and such failure was the proximate cause of the harm [Section 86(e)].

18.5.6 Exceptions to Product Liability Action

(i) A product liability action cannot be brought against the product seller if, at the time of harm, the product
was misused, altered, or modified (Section 87).
(ii) In any product liability action based on the failure to provide adequate warnings or instructions,
the product manufacturer will not be liable, if- [Section 87(1)].
(a) the product was purchased by an employer for use at the workplace and the product manufacturer
had provided warnings or instructions to such employer;
(b) the product was sold (i) as a component or material to be used in another product and
(ii) necessary warnings or instructions were given by the product manufacturer to the purchaser of such
component or material, (iii) but the harm was caused to the complainant by use of the end product in which
such component or material was used;
(c) the product was one which was legally meant to be used or dispensed (i) only by or
under the supervision of an expert or a class of experts and (ii) the product manufacturer had employed
reasonable means to give the warnings or instructions for
usage of such product to such expert or class of experts; or
(d) the complainant, while using such product, either was under the influence of alcohol or any
prescription of drug which had not been prescribed by a medical practitioner [Section 87(2)].

(iii) A product manufacturer will not be liable for failure to instruct or warn (i) about a danger which is
obvious or commonly known to the user or consumer of such product or which, such user or
consumer, ought to have known, taking into account the characteristics of such
product [Section 87(3)].
18.6 OFFENCES AND PENALTIES (CHAPTER VII)

18.6.1 Penalty for Non-Compliance of Direction of Central Authority

The Failure to comply with any direction of the Central Authority under sections 20 and 21 by any person (i)
will be punished with imprisonment for a term which may extend to six months or (ii) with fine which may
extend to twenty lakh rupees, or (iii) with both (Section 88).

18.6.2 Punishment for False or Misleading Advertisement

Any manufacturer or service provider who causes a false or misleading advertisement to be made which is
25
 prejudicial to the interest of consumers will be punished with (i) imprisonment for a term which may extend to
two years, and (ii) with fine which may extend to ten lakh rupees; and (iii) for every subsequent offence, be
punished with (a) imprisonment for a term which may extend to five years and
(b) with fine which may extend to fifty lakh rupees (Section 89).

18.6.3 Punishment for Manufacturing for Sale or Storing, Selling or Distributing or Importing
Products Containing Adulterant

Any person, either by himself or by any other person on his behalf, manufactures for sale or stores or sells or
distributes or imports any product containing an adulterant shall be punished, (Section 90) if such act-
(i) does not result in any injury to the consumer, (i) with imprisonment for a term which may extend to six
months and (ii) with fine which may extend to one lakh rupees;
(ii) causes injury not amounting to grievous hurt to the consumer, (i) with imprisonment for a term which
may extend to one year, and (i) with fine which may extend to three lakh rupees;
(iii) causes injury resulting in grievous hurt to the consumer, (i) with imprisonment for a term which may
extend to seven years, and (ii)with fine which may extend to five lakh rupees; and
(iv) results in the death of a consumer,(i) with imprisonment for a term which shall not be less than seven
years, but which may extend to imprisonment for life and (ii) with fine which will not be less than ten lakh
rupees [Section 90(1)].
(v) The offences under [Section 90(1), (c), (d)].will be treated cognizable and non-bailable [Section 90(2)].
(vi) In case of first conviction, court may (i) suspend any licence issued to the person referred to in that sub-
section, under any law for the time being in force, for a period up to two years, and (ii) in case of second or
subsequent conviction, may cancel the licence [Section 90(3)].

Explanation.—For the purposes of this section,-

(i) "adulterant" means any material including extraneous matter which is employed or used for
making a product unsafe;
(ii) "grievous hurt" shall have the same meaning as assigned to it in section 320 of the Indian Penal
Code.
18.6.4 Punishment for Manufacturing for Sale or Storing, Selling or Distributing or Importing
Spurious Goods

Any one (i) by himself or (ii) by any other person on his behalf, manufactures for (a) sale or (b) stores or (c) sells
or (d) distributes or (e) imports any spurious goods will be punished, if such act- (Section 91).
(i) causes injury not amounting to grievous hurt to the consumer, (a) with imprisonment for a term
which may extend to one year, and (b) with fine which may extend to three lakh rupees;
(ii) causes injury resulting in grievous hurt to the consumer,(a) with imprisonment for a term which may
extend to seven years and (b) with fine which may extend to five lakh rupees;
(iii) results in the death of a consumer, (a) with imprisonment for a term which will not be less than seven
years, but may extend to imprisonment for life and (b) with fine which will not be less than ten lakh rupees
[Section 91(1)].
(iv) The offences under clauses (a) and (b) of sub-section (c) will be treated as cognizable and non-
bailable [Section 91(2)].
(v) In case of first conviction, licence issued to the person referred to in sub-section (a), under any law for
the time being in force, (b) may be suspended for a period up to two years, and (c) in case
of second or subsequent conviction, may cancel the licence [Section 91(3)].

18.6.5 Cognizance of Offences by Court

Cognizance will not be taken by a competent court of any offence under sections 88 and 89 except on a complaint
filed by the Central Authority or any officer authorised by it in this behalf (Section 92)

18.6.6 Vexatious Search

26
The Director General or any other officer, exercising powers under section 22, who knows that there are no
reasonable grounds for so doing, and yet-
(i) searches, or causes to be searched any premises; or
(ii) seizes any record, register or other document or article,

will, for every such offence, (i) be punished with imprisonment for a term which may extend to one year, or (ii)
with fine which may extend to ten thousand rupees or with both (Section 93)
Table: III
Nature of Offence and Quantum of Punishment Prescribed under the Act, 2019

Quantum of Punishment
Section Nature of Offence Imprisonment Fine
88 Failure to comply with any punished with imprisonment for a term with fine which
direction of the Central which may extend to six months may extend to
Authority under sections 20 twenty lakh
and 21, (ii) rupees
Yes or both
89 Any manufacturer or service punished with imprisonment for a term with fine which may
provider who causes a false or which may (i) extend to 2 years extend 10 lakh rupees
misleading advertisement to be
made which is prejudicial to the
interest of consumers

For Subsequent Offences punished with imprisonment for a fine which may extend
term which may extend to 5 years to 50 lakh rupees

90 manufacture for sale or for

stores or sell or distribute or
imports containing an adult
event, if such act
91(a) does not result in any injury to with imprisonment for a term which with fine which may
the consumer may extend to 6 months extend to 1 lakh
rupees
91(b) causing injury not amounting with imprisonment for a term which with fine which may
to grievous hurt to the may extend to 1year extend to 3 lakh rupees
consumer
91(c) causing injury resulting in grievous with imprisonment for a term which with fine which may
hurt to the consumer may extend to 7 year extend to 5 lakh
rupees
91(d) results in the death of a with imprisonment for a term which fine which will not be
consumer will not be less than seven year but less than ten 10lakh
which may extend to rupees
imprisonment for life

91 manufacture for sale or for stores

or self or distributes or imports
and spurious good, if
such act

91 (a) causing injury not amounting to with imprisonment for a term which with fine which may
grievous hurt to the may extend to one year extend to three lakh
consumer rupees

27
91(b) causing injury resulting in grievous with imprisonment for a term which with fine which may
hurt to the consumer may extend to seven years extend to five lakh
rupees
91(c) results in the death of a with imprisonment for a term which fine which will not be
consumer will not be less than seven year but less than ten lakh
may extend to rupees
imprisonment for life, and

92 (3) In case of first conviction licence issued to the person referred to NIL
in sub-section (1), under any law for
the time being in
force, may be suspended for a period up to
two years, and

in case of second or Cancel the lecence NIL

subsequent conviction, cancel the
licence

28