Q1.

Consumer Rights

Right to safety

Means right to be protected against the marketing of goods and services, which are
hazardous to life and property. The purchased goods and services availed of should not only
meet their immediate needs, but also fulfil long term interests. Before purchasing,
consumers should insist on the quality of the products as well as on the guarantee of the
products and services. They should preferably purchase quality marked products such as
ISI,AGMARK, etc

Right to choose
Means right to be assured, wherever possible of access to variety of goods and services at
competitive price. In case of monopolies, it means right to be assured of satisfactory quality
and service at a fair price. It also includes right to basic goods and services. This is because
unrestricted right of the minority to choose can mean a denial for the majority of its fair
share. This right can be better exercised in a competitive market where a variety of goods
are available at competitive prices

Right to be informed
Means right to be informed about the quality, quantity, potency, purity, standard and price
of goods so as to protect the consumer against unfair trade practices. Consumer should
insist on getting all the information about the product or service before making a choice or a
decision. This will enable him to act wisely and responsibly and also enable him to desist
from falling prey to high pressure selling techniques.

Right to consumer education

Means the right to acquire the knowledge and skill to be an informed consumer throughout
life. Ignorance of consumers, particularly of rural consumers, is mainly responsible for their
exploitation. They should know their rights and must exercise them. Only then real
consumer protection can be achieved with success.

Right to be heard
Means that consumer's interests will receive due consideration at appropriate forums. It
also includes right to be represented in various forums formed to consider the consumer's
welfare. The Consumers should form non-political and non-commercial consumer
organizations which can be given representation in various committees formed by the
Government and other bodies in matters relating to consumers.

Right to Seek redressal

Means right to seek redressal against unfair trade practices or unscrupulous exploitation of
consumers. It also includes right to fair settlement of the genuine grievances of the
consumer. Consumers must make complaint for their genuine grievances.Many a times their
complaint may be of small value but its impact on the society as a whole may be very large.
They can also take the help of consumer organisations in seeking redressal of their
grievances.
As the markets are globalizing, the direct link between the manufacturer and the final user
getting distant, post purchase grievances have to be heard through a strong redressal
system. For this, Consumer disputes redressal agencies (popularly known as Consumer
Forums or Consumer Courts) are set up under the Act at District, State and National level to
provide simple and inexpensive quick redressal against consumer complaints. The District
forum deals with complaints where the compensation sought is less than 23 lakhs. This limit
is commonly known as the ‘pecuniary jurisdiction’ of the Consumer Redressal Forum. The
State Forum deals with the complaints where the value of the goods and services and
compensation claimed does not exceed rupees one crore and the National Forum entertains
the complaints where the value of the goods or services and compensation claimed exceeds
rupees one crore.
The Consumer Forum can order the company to take the following actions once it hears the
complaint and decides that the company is at fault:

 Correct deficiencies in the product to what they claim.

 Repair defect free of charges
 Replace product with similar or superior product
 Issue a full refund of the price
 Pay compensation for damages / costs / inconveniences
 Withdraw the sale of the product altogether
 Discontinue or not repeat any unfair trade practice or the restrictive trade practice
 Issue corrective advertisement for any earlier misrepresentation

Consumer Protection Act

An Act to provide for protection of the interests of consumers and for the said purpose, to
establish authorities for timely and effective administration and
settlement of consumers' disputes and for matters connected connected therewith.”
(According to Consumer Protection Act, 2019).
“An Act to provide for better protection of the interests of consumers and for that purpose
to make provision for the establishment of consumer councils and other authorities for the
settlement of consumers' disputes and for matters connected therewith.”(According to
Consumer Protection Act, 1986).
Consumer Protection Act, 1986 seeks to promote and protect the interest of consumers
against deficiencies and defects in goods or services. It also seeks to secure the rights of a
consumer against unfair or restrictive trade practices. This act was passed in Lok Sabha on
9th December,1986 and Rajya Sabha on 10th December, 1986 and assented by the
President of India on 24th December, 1986 and was published in the Gazette of India on
26th December, 1986.
Q2. Consumer protection redressal agencies
To protect consumer rights, the Act mentions the establishment of three redressal
mechanisms wherein the consumers can approach to address their grievances.

District Commission

This the lowest rung in the redressal commissions that consumers can approach. The State
Government, under section 28(1) establishes at least one district consumer dispute
redressal commission in every district of the state. If the government deems fit, it can even
establish more than one district commission in a district. Every district commission needs to
have a minimum of one president and two members but can have more members after
discussing it with the Central government. If your redressal value is 1 crore or less than that,
then you can approach the district commission.

Who can file a complaint at the district commission?

The following people can file a complaint at the commission under section 35(1) of the Act:

 The consumer
i) To whom such goods are delivered, or sold or agreed to be sold or such service which has
been provided or has been agreed to be provided.

ii) Who alleges unfair trade practises in respect of such goods.

 Consumer Association
Any voluntary consumer association registered under the law. It doesn’t matter if the
consumer is part of such association or not.

 One or more consumers appearing on behalf of all consumers with a common

interest
These consumers would first need to get permission from the District Commission to
proceed with the complaint in such a manner.

 The Central Government, The State Government or the Central Authority as the
case might be
Under Section 34(2), a complaint can be filed at the District Court under within whose local
limits:
 o The opposite party or each of the opposition parties, in case there are
more than one, normally reside, or carry on business, or have a branch
or personally work for gain.
 Any of the opposite parties ordinarily reside, or carry on business, or personally
work for gain. Provided, the permission of the district commission is taken.
 Where the cause of action wholly or partly arises.
 Where the complainant resides or personally works for gain.
On filing the complaint, it is necessary for the Commission to admit or reject the complaint
within 21 days of receiving the complaint. It is legally prohibited under Section 36 for the
commission to reject a complaint without first hearing the complainant. It is also necessary
for every proceeding to be presided by the President and one member at least. Where the
member who has been sitting for a particular proceeding is absent, the proceeding can be
resumed with another method.

Once the complaint is admitted, the commission must:

1. Refer a copy of the complaint, within 21 days of the complaint being admitted, to
the opposite party and direct it to give its version of the story within 30 days or
the extended period granted by the commission.
2. If the opposite party disputes the allegation or fails and omits to take any action
regarding the complaint, then district commission must deal with it in the
following ways.
3. Must seal the allegedly defective goods, and send them to the appropriate
laboratory after authenticating it in the manner required. It must direct the
laboratory to find if there is any genuine fault with the goods and report its
findings to the commission within 45 days or how much ever time granted by the
commission.
4. Before the goods go to the library, the complainant must be directed to deposit
the sum of money required for testing in the credit of the commission.
5. If any of the parties dispute the correctness of the finding of the laboratory, then
the parties must be directed to submit their objections in writing to the
commission.
6. Give a reasonable opportunity to the opposite party or the initiating party to be
heard regarding their objections.
If the above-mentioned procedure can’t be followed due to the lack of goods to take a
sample from or if the defect alleged is in the service of the opposite party. Then the
commission shall settle the dispute:

1. On the basis of evidence provided by the complainant or the opposite party if the
opposite party disputes the allegation.
 2. Take an ex parte decision if the opposite party omits to do anything regarding the
allegations.
3. Decide the case on its merits if the complainant fails to show up for the hearing.
If it’s inconvenient for the party to show up to the commission in person, you can submit an
application for hearing or examination of parties through video conferencing and if the
district commission agrees with the reasons then it may allow so after recording the reason.

The commission must deal with the case as expeditiously as possible and endeavour must
be done to dispose of the case within three months if no analysis or testing is required and
five months if analysis and testing are required.

The District commission has the same power as the district court under this act.

If a party is aggrieved by the order of the district commission then they may prefer an
appeal to the State Commission within 45 days of receiving such order. Even though the
State Commission may entertain the plea after 45 days if sufficient reason is given by the
party.

The State Commission shall not hear the appeal of the party if the party has to pay a certain
amount ordered to be paid by the District Commission. Minimum 50% of the amount must
be paid before the State Commission will hear the appeal.

State Commission

The State government establishes a State commission, under section 42(1) of the Act, in the
state through the notification and can even establish regional branches if it seems fit. Each
State Commission shall consist of one President and no less than four members and a
maximum of as many members as is required.

According to section 47, the State Commission has the jurisdiction to entertain:

(i) complaints where the value of the goods or services paid as consideration, exceeds
rupees one crore but does not exceed rupees ten crores:

Provided that where the Central Government deems it necessary so to do, it may prescribe
such other value, as it deems fit;

(ii) complaints against unfair contracts, where the value of goods or services paid as
consideration does not exceed ten crore rupees;

(iii) appeals against the orders of any District Commission within the State;
Apart from that, it also has the jurisdiction to call for the records and pass appropriate
orders in any consumer dispute which is pending before or has been decided by any District
Commission within the State, where it appears to the State Commission that such District
Commission has exercised a jurisdiction not vested in it by law, or has failed to exercise a
jurisdiction so vested or has acted in exercise of its jurisdiction illegally or with material
irregularity.

A bench of the State Commission must consist of a President and one member or more if
the president deems it fit.

The State Commission also has the power to shift proceedings from one district commission
to another under section 48. The State Commission can do that on its own cognizance or
through an application filed by the parties. But it must be to serve the purpose of justice.

State Commission disposes of the case in the exact same method as the District Commission
and also holds the power to review its own cases.

If aggrieved by the decision, the aggrieved party may prefer an appeal to the National
Commission within 30 days of receiving the order from the state commission. If sufficient
reason is shown then the national commission can also entertain the plea after the thirty
days.

The national commission shall not listen to an appeal if the person who has to pay a
particular amount from the order of the state commission, has not paid at least 50% of the
amount ordered to be paid.

The appeal must be dealt with expeditiously and endeavours must be made to dispose of
the appeal within 90 days from its date of admission.

National Commission

Under Section 53(1), the Central Government establishes a National commission through
notification. The main National Commission operates on the national capital region but the
Central government can establish regional branches through notification. The National
Commission must have one president and at least 4 members with the maximum being
whatever is prescribed by the national government.

The National Commission has jurisdiction, under section 58 of the Act:

(a) to entertain:
(i) complaints where the value of the goods or services paid as consideration exceeds rupees
ten crores: Provided that where the Central Government deems it necessary so to do, it may
prescribe such other value, as it deems fit;

(ii) complaints against unfair contracts, where the value of goods or services paid as
consideration exceeds ten crore rupees;

(iii) appeals against the orders of any State Commission;

(iv) appeals against the orders of the Central Authority; and

(b) to call for the records and pass appropriate orders in any consumer dispute which is
pending before or has been decided by any State Commission where it appears to the
National Commission that such State Commission has exercised a jurisdiction not vested in it
by law, or has failed to exercise a jurisdiction so vested, or has acted in the exercise of its
jurisdiction illegally or with material irregularity.

A bench in the National Commission must at least consist of the President and one member
but there can be more members if the President deems it fit.

The National Commission disposes of a case in the same manner as the district commission
and also reserves the right to review its cases suo moto or based on an application filed by
one of the parties.

Section 65(1) also states

All notices, required by this Act to be served, shall be served by delivering or transmitting a
copy thereof by registered post acknowledgment due addressed to opposite party against
whom complaint is made or to the complainant by speed post or by such courier service,
approved by the District Commission, the State Commission or the National Commission, as
the case may be, or by any other mode of transmission of documents including electronic
means:

If the postal delivery guy acknowledges that the post was refused by the party then the
commission must acknowledge the party as duly served under 65(2).

If aggrieved by the decision then an appeal does lie to the Supreme Court if made within
thirty days of receiving the order.

Administrative control

Section 70 of the act states that the national commission shall lay down regulations for the
State Commission after consultation with the Central government, for the better protection
of the consumers and for that purpose must also have administrative control over all state
commissions in the following matters:

a) monitoring performance of the State Commissions in terms of their disposal by calling for
periodical returns regarding the institution, disposal and pendency of cases;

(b) 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;

(c) issuance of instructions regarding the 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 the English translation of judgments written in any language, speedy grant of
copies of documents;

(d) 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.

There shall be a monitoring cell instituted by the president of the national commission and
the State Commission shall also have the same administrative control over the district
commission.

Section 71 of the Act also states that every decision of the commission must be enforced in
the same way as a decree made by the court under Order XXI of the first schedule of the
Civil procedure code.

Section 72 lays down the punishment on the disobedience of commission orders:

Whoever fails to comply with any order made by the District Commission or the State
Commission or the National Commission, as the case may be, shall be punishable with
imprisonment for a term which shall not be less than one month, but which may extend to
three years, or with fine, which shall not be less than twenty-five thousand rupees, but which
may extend to one lakh rupees, or with both.

The section further grants the commissions the same power as a judicial magistrate first
class under the Code of Criminal Procedure.
Q3. CENTRAL CONSUMER PROTECTION AUTHORITY

For the purpose of protecting the rights of the consumer the Central Consumer Protection
Authority (CCPA) was established under section 10(1) of the Consumer Protection Act,
2019.

Section 10(1) of the Act states that the Consumer Protection Authority has the power of
regulating the cases relating to violation of consumer rights, unfair trade practices and false
and misleading advertisements that are detrimental to the interests of the consumers. The
Central Consumer Protection Authority has the power to inquire or investigate into these
cases by taking suo motu actions , or on a complaint received, or on a direction from the
central government.

According to section 10(2), Central Consumer Protection Authority will consist of a Chief
Commissioner and such number of other Commissioners as may be prescribed, to be
appointed by the Central Government to exercise the powers and discharge the functions
under this Act.

According to section 10(3), the headquarters of Central Consumer Protection Authority will
be in the National Capital Region of Delhi. However, the central government has the power
to set up its regional and other offices in other parts of the country.

Central Consumer Protection Authority also has an Investigation Wing for the purpose of
conducting inquiry or investigation under this Act.

POWERS AND FUNCTIONS OF CENTRAL CONSUMER PROTECTION AUTHORITY

The Central Authority enjoys wide powers under the Act and can discharge regulatory,
investigative or adjudicatory functions.

Under section 18(1) the Central Authority has the power to:

 Protect, promote and enforce the rights of consumers as a class, and prevent violation
of consumers rights under this Act.
 Prevent unfair trade practices and ensure that no person engages himself in unfair
trade practices.
 Ensure that no false or misleading advertisement is made of any goods or services
which contravenes the provisions of this Act or the rules or regulations made under this
Act.
 Ensure that no person takes part in the publication of any advertisement which is false
or misleading.

For the above-mentioned purposes, the Central Authority under section 18(2) has the
power to:
  Inquire or cause an inquiry or investigation to be made into violations of consumer
rights or unfair trade practices, either suo motu or on a complaint received or on the
directions from the Central Government.
 File complaints before the District Commission, the State Commission or the National
Commission, as the case may be, under this Act.
 Intervene in any proceedings before the District Commission or the State Commission
or the National Commission, as the case may be, in respect of any allegation of
violation of consumer rights or unfair trade practices.
 Review the matters relating to, and the factors inhibiting enjoyment of, consumer
rights, including safeguards provided for the protection of consumers under any other
law for the time being in force and recommend appropriate remedial measures for
their effective implementation.
 Recommend adoption of international covenants and best international practices on
consumer rights to ensure effective enforcement of consumer rights.
 Undertake and promote research in the field of consumer rights.
 Spread and promote awareness on consumer rights.
 Encourage non-Governmental organisations and other institutions working in the field
of consumer rights to co-operate and work with consumer protection agencies.
 Mandate the use of unique and universal goods identifiers in such goods, as may be
necessary, to prevent unfair trade practices and to protect consumers’ interest.
 issue safety notices to alert consumers against dangerous or hazardous or unsafe
goods or services.
 advise the Ministries and Departments of the Central and State Governments on
consumer welfare measures.
 issue necessary guidelines to prevent unfair trade practices and protect consumers’
interest.

POWER OF CENTRAL AUTHORITY TO REFER MATTER FOR INVESTIGATION OR TO OTHER

REGULATOR.

Under section 19(1) the Central Authority has a power to conduct conduct or cause to be
conduct a preliminary inquiry after receiving any information or complaint or directions
from the Central Government or of its own motion and if after the inquiry it is satisfied that
there exists a prima facie case of violation of consumer rights or any unfair trade practice or
any false or misleading advertisement, by any person, which is prejudicial to the public
interest or to the interests of consumers, it can cause investigation to be made by the
Director- General or by the District Collector.

Under section 19(2) the Central Authority has power to refer the matter to the concerned
Regulator along with its report.

Under section 19(3) the Central Authority empowered to call upon a person referred to in
sub-section (1) and also direct him to produce any document or record in his possession.

POWER OF CENTRAL AUTHORITY TO RECALL GOODS, ETC.

Under section 20 the Central Authority is empowered to pass the following orders:
  Recalling of goods or withdrawal of services which are dangerous, hazardous or unsafe;
 Reimbursement of the prices of goods or services so recalled to purchasers of such
goods or services; and
 Discontinuation of practices which are unfair and prejudicial to consumers’ interest.

However, the Central Authority shall give the person an opportunity of being heard before
passing an order under this section.

POWER OF CENTRAL AUTHORITY TO ISSUE DIRECTIONS AND PENALTIES AGAINST FALSE

OR MISLEADING ADVERTISEMENTS.

Under section 21(2) the Central Authority has the power to impose a penalty which may
extend to ten lakh rupees on manufacturer or endorser a penalty in respect of false or
misleading advertisement by such manufacturer or an endorser. Proviso to this section
provides that the Central Authority has the power to impose a penalty which may extend to
fifty lakh rupees for every subsequent contravention by a manufacturer or endorser.

Under section 21(3) the Central Authority has the power to prohibit the endorser of a false
or misleading advertisement from making endorsement of any product or service for a
period which may extend to one year. Proviso to this section provides that the prohibition
may extend to three years for every subsequent contravention.

Under section 21(4) the Central Authority has the power to impose a penalty which may
extend to ten lakh rupees on such person who is found to publish, or is a party to the
publication of, a misleading advertisement.

CONCLUSION

The Consumer Protection Act, 2019 created the way for the proper enforcement of
consumer rights by creating the Central Consumer Protection Authority. The Central
Protection Act of 2019 gives the Central Consumer Protection Authority power of
investigation and inquiry which enhances the ambit of consumer rights.

Q4. What is a Product

What is a Product, how you can understand and define a product?

We can define a product anything – goods, services and ideas – that can be offered in a
market to satisfy customer needs and wants. A product has a bundle of tangible and
intangible characteristics.

Definition of Product
“Anything that can be offered to a market for attention, acquisition, use or consumption that
might satisfy a want or need. It includes physical objects, services, persons, places,
organizations and ideas”.
Kotler, Wong, Saunders, Armstrong
What is a Product
A Pair of Nike shoes, a mobile phone device, a Volvo truck, a Samsung LED, your bank
account, and a doctor advice all the products. The above definition of a product by Philip
Kolter not only consists tangible product attributes, for example, a car, an office, a book, a
mobile device but according to a broader view of a product, its consist ideas, services,
physical object, place and even organizations and persons.

The above definition also covers the service in marketing. Those activities, benefits and
satisfactions essentially intangible – one party offer to another for sale. Service activities
include banking services, renting rooms in a hotel, doctor consolation, haircutting, repair
and maintenance services.

Three Levels of a Product

The marketer must understand these three levels of classification. Each product level means
adding more value.

Core Product. This is not a physical object but consist of the problem-solving benefits that
satisfy the consumer needs. Products are based on the consumer perspective. For
Lululemon deals in yoga clothes, Revlon combines chemicals to produce lipstick, Coca-Cola
uses chemicals to produce Coke Drink. Here Each product is based on core benefits.
Revlon is not selling cosmetics but Beauty and Hope. Coca-Cola fulfils thirst of consumers,
medicine gives cure and healthy life.

The second level, the marketers must convert the core benefits into a physical or actual
product that have the attributes to satisfy customer needs and wants. If the company want
to deliver its core benefits, it must have combined five attributes name, parts, packaging,
features and style.
After physical goods and next levels is augmented product that includes after-sales services,
installation, warranty. For example, you purchased a split air conditioner, many brands may
offer you free installation and one-year warranty. Other bundle of benefits may include an
instruction manual, free number to call for a quick repair.
Types of products
When someone goes to a market, he/she can find a variety of products, whereas some are
for the end users while others are for resellers. In the following lines, we will be discussing
different types of products.

Consumers Products
Do you know products are labeled based on their users? If the end-user a consumer then it
is a consumer product but if the end-user is a business then it will be classified as a business
product. For instance, a printer is either a consumer or business product, depending on who
is the consumer.

Furthermore, consumer products fulfil personal need and desire. There are two categories
of consumer products, consumable and durable. For instance, you can purchase a bottle of
Coca-Cola that can quench your thirst. A good example of a durable product is a bicycle.
Once you purchase it and you can use it for a longer period of time.
Industrial Products
Industrial products are those products that are purchased for further processing in a
manufacturing or business process. The main difference between consumer and industrial
product lies in the usage for which it is bought. For instance, if a person is buying a
lawnmower for his personal use then it is a consumer product. But if he purchases the same
product for his landscaping business then it is a business product

Products liability

Overview

Products liability refers to the liability of any or all parties along the chain of manufacture of
any product for damage caused by that product. This includes the manufacturer of
component parts (at the top of the chain), an assembling manufacturer, the wholesaler, and
the retail store owner (at the bottom of the chain). Products containing inherent defects
that cause harm to a consumer (or someone to whom the product was loaned, given, etc.)
of the product would be the subjects of products liability suits. While products are generally
thought of as tangible personal property, products liability has stretched that definition to
include intangibles (i.e. gas), naturals (i.e. pets), real estate (i.e. house), and writings (i.e.
navigational charts). Products liability is derived mainly from torts law.

Prima Facie Case (for the commercial seller of the defective product)

a. The defendant sells a product that the plaintiff uses

b. The defendant is the commercial seller of such a product
c. The plaintiff suffers an injury
d. When the defendant sold the item, the item was defective
e. The defect was an actual and proximate cause of the plaintiff's injury

Types of Products Liability Claims

Products liability claims can be based on negligence, strict liability, or breach of warranty of
fitness. This will typically depend on the jurisdiction within which the claim is based, due to
the fact that there is no federal products liability law. This lack of uniformity has resulted in
the United States Department of Commerce publishing the Model Uniform Products Liability
Act (MUPLA), which has tried to encourage uniform procedures for the products liability
tort.

Defects That Create Liability

There are three types of product defects that incur liability in manufacturers and suppliers:

1. Design Defects
1. Design defects are inherent, as they exist before the product is
manufactured.While the item might serve its purpose well, it can be
unreasonably dangerous to use due to a design flaw.
 2. In 47 states, the plaintiff has the burden of proof to prove the existence of a
design defect. In Alaska, California, and Hawaii however, the defendant must
justify the product’s design to show why there was no defect.
2. Manufacturing Defects
1. Manufacturing defects occur during the construction or production of the
item
2. Only a few out of many products of the same type are flawed in this case
3. Defects in marketing
1. Defects in marketing deal with improper instructions and failures to warn
consumers of latent dangers in the product

Strict Liability
Products Liability is generally considered a strict liability offense. With regard to products
liability, a defendant is liable when the plaintiff proves that the product is defective,
regardless of the defendant's intent. It is irrelevant whether the manufacturer or supplier
exercised great care; if there is a defect in the product that causes harm, he or she will be
liable for it.

Overcoming Liability Even When the Product is Defective

Even when a product is defective due to a design flaw, some courts will use one of two tests
to find that the defendant has no liability.

1. Risk-Utility Test
1. the defendant is not liable for a design defect if evidence shows that the
product’s utility outweighs its inherent risk of harm.
2. Consumer Expectation Test
1. a reasonable consumer would find the product defective when using the
product in a reasonable manner
1. if a reasonable consumer would not find the product to be defective
even when using it in a reasonable manner, then the defendant is not
liable, even if the product's design flaw resulted in injury

Q5. Consumer Mediation in the Consumer Protection Act, 2019.

Introduction

Mediation is an age old process of dispute resolution practiced since Vedic period.Mediation
as an alternative way to settle disputes is now fast catching up in the country with even
some senior members of the judiciary in the Supreme Court and the High Courts of several
States expressing their favour. Given the pendency of cases in courts of law, it is obvious
that parties to a dispute do not want justice to be delayed since it is as good as being
denied. Understanding the need and importance of ADR, several laws in India have
undergone changes and have incorporated ADR mechanisms within them. This Article aims
to critically analyze Mediation in the new Consumer Protection Act, 2019.
Alternate Dispute Resolution
Alternative dispute resolution (ADR) refers to a variety of processes that help parties resolve
disputes without a trial. Typical ADR processes include mediation, arbitration, neutral
evaluation, and collaborative law. These processes are generally confidential, less formal,
and less stressful than traditional court proceedings. The Consumer Protection Act 2019
(CPA) was given assent by the President of India on 09th August 2019 and came in force
from 20th July 2020. The new act has brought few eminent changes in the provisions. More
importantly Chapter V of the new act has brought the provisions of Mediation. Subsequent
to that Consumer Protection (Mediation) Rules 2020 came in force from 20th July 2020.

Benefits of mediation
In Mediation a neutral person called a "mediator" helps the parties try to reach a mutually
acceptable resolution of the dispute. The mediator does not decide the case, but helps the
parties communicate so they can try to settle the dispute themselves. Mediation is
voluntary, party friendly, cost effective and it aims at giving mutually satisfactory results.
Mediation can prove to be an effective tool for dispute resolution and hence sector specific
mediation has been highly recommended. Compared to the traditional court systems,
mediation is quite flexible when it comes to procedure and is more party friendly. Also, in
mediation parties can directly come together and do not require legal professionals and the
end result of mediation is more agreeable as the entire process is highly collaborative.

Understanding Mediation under CPA 2019

According to new CPA, a Consumer Mediation Cell shall be attached with all the Dispute
Resolution Forums at District, State and National level. The Act further states that, if upon
the admission of complaint the Forum feels that if the Complaint is fit for mediation, then it
can direct the parties to undertake Mediation [Sec.1 (37)] and the parties have to send their
written consent to undergo mediation within 5 days. Upon the receiving consent, the Forum
shall send the Complaint to Mediation Cell within 5 days.

As per the Consumer Protection (Mediation) Regulations 2020, the entire Mediation process
shall stand terminated on expiry of three months from the date of first appearance before
the mediator unless the time for completion of mediation is extended by the Consumer
Commission, in which case it shall stand terminated on expiry of such extended time. The
Agreement reached between parties is then sent to the Commission in a sealed cover. If no
agreement is reached the reasons stating so must be accordingly sent to the Commission.

ANALYSIS

Last Resort
A consumer knocks the doors of court after he has already exhausted other alternate
remedies. For instance, a complainant of defective products or one availing insurance
services first approaches that product provider, service provider or Complaint cell of that
provider and tries to settle the issue and if that fails a complaint is filed with Consumer
Forums. However, with the introduction of Mediation Process an additional step is
introduced which can prove to be time consuming. Further, if there has been no agreement
between parties within 3 months the consumer would have no option but continue with the
regular proceedings. This would further add to the pendency of proceedings.

Lack of bargaining power

According to Blacks – Law – Dictionary, MEDIATION is the act of a third person who
interferes between two contending parties with a view to reconcile them or persuade them
to adjust or settle their dispute. Mediation can often be synonymous to compromise where
the parties mutually come to an agreement. However, mediation can often be problematic
where one party (usually the consumer) has less bargaining power, for instance in a typical
case of delayed possession a flat buyer might have to settle for much less than what the
court grants. Also, the main objective of Consumer Protection Act is restoration and
enforcement of “Consumer Rights” and providing a protection to consumers, the consumer
forums act as a sense of security to the consumers. Also, the Consumer Protection act
allows the person to appear in person and the same applies for mediation, and an individual
Consumer would often not have such bargaining power. In such cases, whether Mediation
would be a successful tool in restoring the consumer rights is a question to be pondered
upon!

Suggestive Nature
In Mediation the decision of a mediator is only “suggestive” in nature, the mediator can only
recommend the compensation, this can be highly problematic. Typically, four situations
arise when a complaint goes for mediation viz.
1. Settlement – Approved by Commission.
2. Settlement – Partly approved and partly disapproved
3. Settlement – Completely Disapproved by Commission
4. No Settlement in Mediation
Here, the situations b), c), d) can be troublesome, since the very nature of the settlement
between parties and observations of Mediator are merely suggestive, how far shall that
settlement be binding upon parties, wherein there is minimal or no violation of consumer
rights is to be taken into account by the Commission. In case on non settlement, part
settlement or disapproved settlement, the complaint is transferred back to the commission
and the regular proceedings, this would entirely defeat the very purpose of speedy disposal.

Deterrence
The main purpose of the Consumer Protection Act is to protect the interest of Consumers.
The Consumer Commissions act as deter to prevent the abuse of consumers from unfair
practices and further ensures in restoring the consumer rights. These Commissions are
capable of giving strict orders in case of violation of consumer rights and restoring their
faith. Since, mediation aims at mutual settlement, it doesn’t act as a deter, unlike the courts,
this could hamper the consumers in cases of gross violation of consumer rights, wherein the
other party may just get away by paying off settlement amount.
Judicial Infrastructure
Lack of judicial infrastructure is one of the major reasons for pendency of cases. As per a
recent report, currently, Karnataka has the third highest number of pending consumer cases
in the State Commissions after Uttar Pradesh (25,500) and Maharashtra (18,408). The new
act talks about establishing Mediation Cells, however the act is silent as to cases with how
much pecuniary limit can be sent for mediation. With the pecuniary jurisdiction of District
and State Forums increased, these forums are bound to be overburdened with complaints,
similarly with lack of infrastructure the mediation cells are also bound to be overburdened.
This would defeat the very purpose of speedy disposal of complaints.
Party Autonomy
According to Consumer Protection Act, “At the first hearing of the complaint after its
admission, or at any later stage, if it appears to the District Commission that there exists
elements of a settlement which may be acceptable to the parties, except in such cases as
may be prescribed, it may direct the parties to give in writing, within five days, consent to
have their dispute settled by mediation in accordance with the provisions of Chapter V.” The
entire essence of mediation lies in its voluntary nature. However, in situations where in one
party agrees to go for mediation with court direction and if other party is reluctant in going
further might still have to go further, this might severely affect the party autonomy as the
consumer would often have to compromise on his right of choice

SUGGESTION

Pre Litigation Mediation

The most essential element of Mediation is that it is voluntary and mutual in nature.
One of the efficient ways in resolving Consumer Complaint is analyzing the subject matter of
complaint. If the dispute can be mediated, attempts should be made at a pre litigation stage
by bringing the parties together. Such a process would be less time consuming and more
satisfactory compared to post litigation mediation, wherein the parties would have to wait
for their case to come on board, and get the complain transferred to Mediation Cell.
Establishing mediation cells that can be directly approached can be a much more effective
tool for dispute resolution. The Online Consumer Mediation Centre, established at the
National Law School of India University, Bengaluru under the aegis of Ministry of Consumer
Affairs, Government of India aims to provide for a state-of-theart infrastructure for resolving
consumer disputes both through physical as well as online mediation through its platform.

Online Dispute Resolution (ODR)

In this age of technological advancement, ODR has become a new normal. ODR platforms
can be an effective tool for fast and easy dispute settlement. The new Act includes E-
Commerce within its ambit, ODR mechanisms can prove to be effective tool for resolving
issues arising out of E-Commerce services. ODR can be used to settle disputes involving
small claims.
CONCLUSION
At the face of it consumer mediation might seem to be great addition to the Act and could
prove to effective in resolving matters like delayed possession to multiple home buyers,
negligence etc. However, Mediation could be an add on step to the already existing
Redressal system which could be time consuming as Consumer Disputes Redressal Forums
are already established for speedy disposal. Also the act does not set a cap on what type of
cases could be referred for mediation this could lead to back logging of cases referred for
mediation. However, consumer mediation could be effective as mediation is an informal
mechanism and would not require legal experts, setting up of Mediation Centers especially
online mediation centers which can be directly approached without filing of complaint in the
Redressal forums could be more effective. The success of Consumer Mediation in India will
purely depend upon the effectiveness of the Mediation Cells and how efficiently they would
dispose of the complaints in a speedy manner.

Q6. The Consumer Protection Act provides the following Rights and Remedies to a
Consumer:

1. The right to be protected against marketing of goods which are hazardous to life and
property.

 The right to be informed about the quality, quantity, potency, purity, standard and
price of goods to protect the consumer against unfair trade practices.
 The right to be heard and assured that consumer’s interests will receive due
consideration at appropriate forums.
 The right to seek redressal against unfair trade practices or unscrupulous
exploitation of consumers.
 The right to consumer education.

2. The remedies Provided to the Consumer by the Act are:

 Removal Of Defects: If after proper testing the product proves to be defective, then
the ‘remove its defects’ order can be passed by the authority concerned.
 Replacement of Goods
 Refund of Price
 Award of Compensation: If because of the negligence of the seller a consumer
suffers physical or any other loss, then compensation for that loss can be demanded
for.
 Removal of Deficiency in Service: If there is any deficiency in delivery of service, then
orders can be passed to remove that deficiency. For instance, if an insurance
company makes unnecessary delay in giving final touch to the claim, then under this
Act orders can be passed to immediately finalise the claim.
 Discontinuance of Unfair/Restrictive Trade Practice: If a complaint is filed against
unfair/restrictive trade practice, then under the Act that practice can be banned with
immediate effect. For instance, if a gas company makes it compulsory for a
 consumer to buy gas stove with the gas connection, then this type of restrictive
trade practice can be checked with immediate effect.
 Stopping of sale of Hazardous Goods
 Withdrawal of Hazardous Goods from the market.
 Payment of Adequate Cost

Q7. Who is ‘Consumer’

As per Section 2(7) of Consumer Protection Act, 2019, “Consumer” means any person who:

(i) 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 includes any user of such
goods other than the person who buys such goods for consideration paid or promised or
partly paid or partly promised, or under any system of deferred payment, when such use is
made with the approval of such person, but does not include a person who obtains such
goods for resale or for any commercial purpose; or

(ii) 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 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, when such services are availed of with the approval of the first
mentioned person, but does not include a person who avails of such service for any
commercial purpose.

Explanation—For the purposes of this clause,— (a) the expression “commercial purpose”
does not include use by a person of goods bought and used by him exclusively for the
purpose of earning his livelihood, by means of self-employment (b) the expressions “buys
any goods” and “hires or avails any services” includes offline or online transactions through
electronic means or by teleshopping or direct selling or multi-level marketing
– Explanation to Section 2(7) of Consumer Protection Act, 2019.

Direct selling – “direct selling” means marketing, distribution and sale of goods or provision
of services through a network of sellers, other than through a permanent retail location –
Section 2(13) of Consumer Protection Act, 2019.

Seller is not a consumer – A seller of goods is not a ‘consumer’ as purchaser is not supposed
to provide any service to seller – Larsen & Toubro Ltd. v. SCDRC AIR 1998 Cal 313.

Franchise is not consumer – Franchise holder who is maintaining STD/PCO office is licensee
of the grantor of franchiser. The service is really provided by franchiser and not by franchise
to final consumer. The franchisee is not consumer – General Manager, Madras
Telephones v. R Kannan I (1994) CPJ 14 (NCDRC). Franchisee of computer training institute is
not a consumer. – Softpec Software v. Digital Equipment II (2002) CPJ 5 (NCDRC).
Tenant is not consumer – A tenant is not consumer when landlord has not agreed to render
any service to tenant in lease agreement. – Laxmiben Laxmichand Shah v. Sakerben
Kanji I(2001) CPJ 7 (SC) – confirming Laxmiben Laxmichand Shah v. Sakerben Kanji I(1992)
CPR 74 (NCDRC).

Q8.

Q9. Section 2(1)(r) Unfair Trade Practices in the Consumer Protection Act, 1986
Section 2(1)(r) “unfair trade practice” means a trade practice which, for the purpose of
promoting the sale, use or supply of any goods or for the provision of any service, adopts
any unfair method or unfair or deceptive practice including any of the following practices,
namely:—
(1) the practice of making any statement, whether orally or in writing or by visible
representation which,—
(i) falsely represents that the goods are of a particular standard, quality, quantity, grade,
composition, style or model;
(ii) falsely represents that the services are of a particular standard, quality or grade;
(iii) falsely represents any re-built, second-hand, renovated, reconditioned or old goods as
new goods;
(iv) represents that the goods or services have sponsorship, approval, performance,
characteristics, accessories, uses or benefits which such goods or services do not have;
(v) represents that the seller or the supplier has a sponsorship or approval or affiliation
which such seller or supplier does not have;
(vi) makes a false or misleading representation concerning the need for, or the usefulness
of, any goods or services;
(vii) gives to the public any warranty or guarantee of the performance, efficacy or length of
life of a product or of any goods that is not based on an adequate or proper test thereof:

Q10. Deficiency in Service under Consumer Protection Act, 2019

Introduction
Under the Consumer Protection Act, 2019, a complaint can be filed when a consumer
detects deficient in a service. However, the threshold of deficiency must fall under the ambit
of the definition of deficiency given under the Consumer Protection At, 2019. The consumer
Protection Act, 2019 came into effect on July 20, 2020. The Consumer Protection Act 2019
not only recognizes physical relationship of buyer-seller but also has acknowledged services
pertaining to e-commerce platforms. The aim of both new and old Consumer Protection Act
is to protect and safeguard the interest of consumers.

Definition of Deficiency of Service

Section 2 (11) of Consumer Protection Act, 2019 defines Deficiency of Service as “any fault,
imperfection, shortcoming or inadequacy in the quality, nature and manner of performance
which is required to be maintained by or under any law for the time being in force or has
been undertaken to be performed by a person in pursuance of a contract or otherwise in
relation to any service and includes (a) any act of negligence or omission or commission by
such person to the consumer and (b) deliberate withholding of relevant information by such
person to the consumer.”

The term ‘defect’ is defined under Section 2 (10) of Consumer Protection Act, 2019 as “any
fault, imperfection or shortcoming in the quality, quantity, potency, purity or standard
which is required to be maintained by or under and law for the time being in force or under
any contract, express or implied or as is claimed by the trader in any manner whatsoever in
relation to any goods or products and the expression ‘defective’ shall be construed
accordingly.”

In any buyer-seller relationship, deficiency of service prevails. Such as legal aid, banks,
railways, construction, transportation, education, electricity, entertainment, restaurant,
hospitality, etc. The consequences of deficiency of service can range from inconvenience or
harassment to mental or physical injury to death, thereby leading to legal consequences.

Important Case Laws

Indian Medical Association v V.P. Shanth

This case is a result of medical negligence from medical profession. This landmark decision
recognized patient’s rights through giving them the consumer status where complaints
could be lodged in a case of deficiency in the field of medical services under the Consumer
Protection Act, 1986. The liability of doctor and hospital management arises when a patient
is admitted. The standard duty of care must be maintained by the hospital. When a patient
is admitted, he/she is also considered as a consumer.

The Supreme Court emphasized on the interest and safeguards of patients which is given
the upmost importance.

Q11. Consumer Councils Under The Consumer Protection Act, 2019

The Consumer Protection Act is a legislation born out of a dire need for the protection of
the rights of consumers by law, to prevent unfair trade practices and monopolisation, and
promote transparency in the process of exchange of goods and services. The Consumer
Protection Act, 2019 replaces the Consumer Protection Act, 1986. The new Act brings with it
changes concurrent with the changing times, and the present age of digitalisation and e-
commerce. It has been amended keeping in mind the new set of challenges faced by
consumers in the digital age. The new Act has several new features such as provisions
regarding e-commerce transactions, enhanced pecuniary jurisdiction of the consumer
dispute redressal forums, allowance for the online filing of complaints and additionally,
provisions for the establishment of Central Consumer Protection Authority, etc.
The new Act also empowers the central government to establish consumer disputes
redressal agencies at the national, state and district levels with the aim to resolve consumer
 disputes. The Act provides for a central consumer protection council, a state consumer
protection council and a district consumer protection council. The objective of these
councils is to render advice on the promotion and protection of the consumers' rights at
their respective levels.
Consumers today have no knowledge of the fact that the quality of goods, the price of
products, and protection against hazardous products comes under the purview of the
Consumer Protection Act. First passed in 1986 and then 2019, The Government of India has
made several strict laws so that the rights of consumer are not violated, but due to the
ignorance of the consumers, the laws still prove to be weak in terms of implementation and
enforcement.
A skilled and effective Consumer Protection Act is very important, as the entire population
of India is a consumer in one way or the other. A manufacturer or service provider is
additionally a consumer of another product or service. If the manufacturer, service provider
and consumer comprehend the interdependence of relations in the market, adulterated,
counterfeit and faulty goods and services can be kept under check. It is necessary that the
Consumer Protection Act should guarantee honesty in business activities, with high quality
goods and services being provided free of defects. It is imperative for transparency in
transactions, and thus, complete details regarding the manufacturing, cost, and quality of
the product must be furnished to the consumer so as to enable them to make the right
choice. Subject to the Consumer Protection Act, implementation of consumer right is truly
the greatest responsibility of the Government.
The Consumer Protection Act of the Parliament of India is enacted to protect the interests
of consumers in India. It is made for the establishment of consumer councils for the
settlement of consumer's grievances and for matters connected therewith. The Council is
instituted with the task of enhancing consumer welfare and empowering consumers to
make sure their rights are protected. The objects of the Central Council, State and District
Councils are to render advice on promotion and protection of the consumers' rights under
this Act, according to Sections 5, 7 and 9 of the Consumer Protection Act, 2019.
The Central Council will be an advisory council and will consist of the following members:

1. the Minister-in-charge of the Department of Consumer Affairs in the Central Government,

who
shall be the Chairperson; and
2. such number of other official or non-official members representing such interests as may be
prescribed.

A State Council shall be composed of the subsequent members, namely:

1. the Minister-in-charge of Consumer Affairs in the State Government who shall be the
Chairperson;
2. such number of other official or non-official members representing such interests as may be
prescribed; and
3. such number of other official or non-official members, not exceeding ten, as may be
nominated
by the Central Government.
The District Forum shall have the jurisdiction to entertain claims upto Rs. 1 Crore under the
2019 Act, as opposed to the earlier pecuniary jurisdiction of Rs. 20 Lakh. The State Forum
shall be empowered to entertain claims between Rs. 1 Crore to Rs. 10 Crore, along with
complaints against unfair contracts up to Rs. 10 Crore. The National Commission will hear
claims above Rs. 10 Crore along with complaints against unfair contracts above Rs. 10 Crore.
A complaint can be instituted in a District or State Commission within the local limits of
whose jurisdiction the complainant resides or personally works for gain.

Q12. Section 87: Exceptions to Product Liability Action.

(1) A product liability action cannot be brought against the product seller if, at the time of
harm, the product was misused, altered, or modified.

(2) In any product liability action based on the failure to provide adequate warnings or
instructions, the product manufacturer shall not be liable, if—

(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 as a component or material to be used in another product and
necessary warnings or instructions were given by the product manufacturer to the
purchaser of such component or material, 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 only by or under
the supervision of an expert or a class of experts and 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, was under the influence of alcohol or any
prescription drug which had not been prescribed by a medical practitioner.

(3) A product manufacturer shall not be liable for failure to instruct or warn 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.

Q13. E-Commerce-

New modes of business i.e., telemarketing, direct selling, multilevel marketing and e-
commerce, which were not foreseen almost three decades back, have made consumers
more vulnerable to unfair trade practices. The existing i.e. Old Act, rules, guidelines and
circulars issued by the Consumer Ministry had failed to address these emerging issues. The
Old Act in its present scenario is an ineffective piece of legislation, not keeping pace with the
new market conditions, technologies, and processes for instituting accountability of sellers
on online platforms. As a result of which, consumer complaints in e-commerce have
continued to grow by each passing year, most of which have been for non-delivery of
product, defective products, delivery of wrong product, deficiency in services etc. Earlier,
direct selling and multilevel marketing were regulated through guidelines issued by State
Governments and the Consumer Affairs Ministry. The New Act brings these activities in its
umbrella.

By the New Act the definition of the Consumer has been enlarged and as per new definition,
a Consumer is a person who “buys any goods” and “hires or avails any services” which
includes offline or online transactions through electronic means or by teleshopping or direct
selling or multi-level marketing.

Along with the above the New Act also provides for the definition of “e-commerce”. As per
Section 2(16) of the New Act, “e-commerce” means buying or selling of goods or services
including digital products over digital or electronic network; Further as per Section 2(17) of
the New Act, “electronic service provider” means a 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;

The Central Government has been given power to take measures to prevent unfair trade
practices in e-commerce, direct selling, etc. Section 94 of the New Act provides that for the
purposes of preventing unfair trade practices in e-commerce, direct selling and also to
protect the interest and rights of consumers, the Central Government may take such
measures in the manner as may be prescribed. Further, Section 101 of the New Act gives the
power to the Central Government to make rules, by notification, for the measures to be
taken by the Central Government to prevent unfair trade practices in e-commerce, direct
selling under Section 94.

Q14. Consumer Protection Act, 2019 provisions on misleading advertisements:

Section 2(28): defines misleading advertisements as any advertisement in relation to any
product or service which:

1. Falsely describes such product or services or

2. It gives a false guarantee to, or is likely to mislead the consumers as to the nature,
substance, quantity or quality of such product or services or
3. It conveys an express or implied representation which, if made by the manufacturer
or seller or services provider thereof, would constitute an unfair trade practices or
4. Deliberately conceals important information.

Section 10- establishment of Central Consumer Protection Authority to be known as the

Central Authority to regulate matters relating to violation of rights of consumers, unfair
trade practices and false or misleading advertisements which are prejudicial to the interest
of pubic and consumers and to promote, protect and enforce the rights of consumers as a
class.

Section 16- power of District Collector (by whatever name called) may, on a complaint or on
a reference made to him by the Central Authority or the Commissioner of a regional office,
inquire into or investigate complaints regarding violation of rights of consumers as a class,
on matters relating to violation of consumer rights, unfair trade practices and false or
misleading advertisements, within his jurisdiction and submit his report to the Central
Authority or the Commissioner of a regional office, as the case may be.

Section 17:
complaints to authorities relating to violation of consumer rights or unfair trade practices or
false or misleading advertisements which are prejudicial to the interest of consumers as a
class, may be forwarded either in writing or in electronic mode, to any one of the
authorities, namely, the District Collector or the Commissioner of a regional office or the
Central Authority.

Section 18(1)(c):
power of Central Authority is to ensures that no false or misleading advertisements is made
of any goods or services which contravenes the provisions of this Act or the rules or
regulations made there under; and section 18(1)(d) ensures that no person takes part in the
publication of any advertisements which is false or misleading.

Section 19(1):
power of Central Authority to refer to matter for investigation or to other Regulator may,
after receiving any information or complaint or directions from the Central Government or
of its own motion, conduct or cause to be conducted a preliminary inquiry as to whether
there exists a prima facie case of violation of consumer rights or any unfair trade practices
or false or misleading advertisements, by any person, which is prejudicial to the public
interest or to the interests of consumers and if it is satisfied that there exists a prima facie
case, it shall cause investigation to be made by the District- General or by the District
Collector.

Section 21:
Powers to Central Authority to issue directions and penalties against any false or
misleading advertisements:

1. Where the Central Authority is satisfied after investigation that any advertisements is
false or misleading and is prejudicial to the interest of any consumer or is in
contravention of consumer rights, it may, by order, issue directions to the concerned
trader or manufacturer or endorser or advertiser or publisher, as the case may be, to
discontinue such advertisement or to modify the same in such manner and within
such time as may be specified in that order.
 2. Notwithstanding the order passed under sub-section (1), if the Central Authority is of
the opinion that it is necessary to impose a penalty in respect of such false or
misleading advertisement, by a manufacturer or an endorser, it may, by order,
impose on manufacturer or endorser a penalty which may extend to ten lakh rupees:
Provided that the Central Authority may, for every subsequent contravention by a
manufacturer or endorser, impose a penalty, which may extend to fifty lakh rupees.

3. Notwithstanding any order under sub-sections (1) and (2), where the Central
Authority deems it necessary, it may, by order, prohibit the endorser of a false or
misleading advertisement from making endorsement of any product or service for a
period which may extend to one year:
Provided that the Central Authority may, for every subsequent contravention,
prohibit such endorser from making endorsement in respect of any product or
service for a period which may extend to three years.
4. Where the Central Authority is satisfied after investigation that any person is found
to publish, or is a party to the publication of, a misleading advertisement, it may
impose on such person a penalty which may extend to ten lakh rupees.
5. No endorser shall be liable to a penalty under sub-sections (2) and (3) if he has
exercised due diligence to verify the veracity of the claims made in the
advertisement regarding the product or service being endorsed by him.
6. No person shall be liable to such penalty if he proves that he had published or
arranged for the publication of such advertisement in the ordinary course of his
business: Provided that no such defence shall be available to such person if he had
previous knowledge of the order passed by the Central Authority for withdrawal or
modification of such advertisement.
7. While determining the penalty under this section, regard shall be had to the
following, namely:

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.
8. The Central Authority shall give the person an opportunity of being heard before an
order under this section is passed.

Section 39(1)(l)- findings of District Commission is to issue corrective advertisement to

neutralise the effect of misleading advertisement at the cost of the opposite party
responsible for issuing such misleading advertisement;
(m) to provide for adequate costs to the parties; and

(n) to cease and desist from issuing any misleading advertisement.

Section 89- punishment for false or misleading advertisement is that Any manufacturer or
service provider who causes a false or misleading advertisement to be made which is
prejudicial to the interest of consumers shall be punished with imprisonment for a term
which may extend to two years and with fine which may extend to ten lakh rupees; and for
every subsequent offence, be punished with imprisonment for a term which may extend to
five years and with fine which may extend to fifty lakh rupees.

Q15. Filing Complaint Under Consumer Protection Act 2019 (Amended)

The Consumer Protection Act,2019 provides for efficient and effective settlement of
consumer disputes while promoting the interest of the consumers. The introduction of
online filing of complaints and meditation proceedings is a step towards speedy disposal of
consumer cases and is a greater step towards digitization of consumer disputes.
Mechanism for filing complaints:
Under section 2 clause 6 of CPA,2019 complaint is defined as:
Any allegation in writing, made by a complainant for obtaining relief provided under the act
in case of unfair trade practices, defects in goods, deficiency in service, excess price of goods
and services, selling of hazardous goods and product liability
Who Has the Authority to File a Complaint?
A complaint can be filed before designated authorities by:

 A consumer
 Any voluntary consumer association registered under any law for the time being in
force
 The Central Government or any State Government
 The Central Authority
 One or more consumers, where there are numerous consumers having the same
interest
 In the event of a consumer's death, his legal heir or representative
 In the case of a juvenile, his parent or legal guardian

It is to be noted, there is no need for an advocate to appear in consumer court. Consumers

can file and represent their complaints themselves or via a representative.

Mode of complaint:
A complaint can be filed in form of writing or online via govt. Provided portal @
https://consumerhelpline.gov.in/ or through mobile apps launched by the government of
India like NCH app, Umang app or Consumer app.

The status of a complaint can be checked online and the fees for submission of the
complaint can also be submitted through an online payment portal.
Things to keep in mind when instituting consumer complaints:
Issuance of notice:
It is recommended that a notification be sent to the opposing party before filing the
complaint, outlining the defects/deficiencies in the products or services offered. If the
parties are unable to reach an agreement, the complainant may submit a complaint with a
jurisdiction authority/forum.
Jurisdiction determination:
Pecuniary jurisdiction:
The pecuniary jurisdiction limit has been modified under the CPA, 2019. According to the
new statute, the pecuniary limitation bar is as follows

1. District Commission: Amount not exceeding 1 crore

2. State Commission: 1 Crore - 10 Crore Rupees
3. National Commission: Amount exceeding Rupees 10 Crore

Territorial jurisdiction:
As per the CPA,2019 a complaint can be filed where the consumer resides or personally
works for gains Aswell as the place where the opposite party resides or carry-on business.
The complaint can also be filed where the cause of action, wholly or in part, arises.
Submission of Complaint:
A complaint can be submitted either online or in person. It might be submitted in person by
the complainant or by his representative. It can also be sent by registered post with the
court fee.
Three copies of the complaint are required to be submitted out of which one is retained for
the official purpose, one is forwarded to the opposite party and one is for the complainant.
If the number of opposing parties is increased, more copies of the complaint are necessary.
Contents of the Complaint:
The complaint should include the following information:

 Name, description, and address of the complainant

 The name, description, and address of the opposing party or parties
 Facts about the complaint, such as when and where it occurred
 Documents to back up allegations, if any
 Specifics of the dispute: a flaw in the goods/a deficiency in the service
 The relief being sought

Limitation for filing Complaint/Appeal:

The complaint must be filed within two years of the date the cause of action arose. This
would be two years from the day the deficit in service or defect in products was discovered.
This is also known as the statute of limitations for filing a complaint under consumer court.
Appeal before state commission would have to be filed within 30 days from the order of
District commission and appeal before National commission is to be made within 30 days
from the order of the lower forum and for an appeal before Supreme court against the
order of Nation commission is to be within 45 days.
Court Fees:
the court fees remain nil up to consideration of 5 lakh Rs involved before the district
commission. In respect of state commission, the court fees range from 2,500 Rs to 6,000 Rs
whereas court fees in the case of the national commission are 7,500 Rs.
In the event of an appeal before the State Commission or the National Commission, a
deposit of 50% of the entire award amount passed by the lower commission is required.

Q16. Concept of Unfair Contract

The 2019 Act has also introduced the concept of unfair contract. 'Unfair Contract' is defined
under Section 2(46) and it refers to any contract between a consumer and a manufacturer
or service provider or trader whose terms brings about a significant change in the consumer
rights under the Act. These terms are namely such as:

1. requirement of excessive security deposits by the consumer in for facilitating the

performance of obligations under the contract;
2. imposing penalty for breach of contract on the consumer which is not in proportion
with the loss suffered due to such breach;
3. not accepting early debt repayment along with the applicable penalty;
4. allowing one of the parties to terminate the contract without any reasonable cause
or unilaterally;
5. entitling one party to assign the contract to the detriment of the consumer and
without his consent;
6. imposing unreasonable condition, obligation or charge on the consumer that puts
him in a disadvantageous position;

Q17. Objective of the Consumer Protection Act, 2019

The main objective of the Act is to protect the interests of the consumers and to establish a
stable and strong mechanism for the settlement of consumer disputes. The Act aims to:

1. Protect against the marketing of products that are hazardous to life and property.
2. Inform about the quality, potency, quantity, standard, purity, and price of goods
to safeguard the consumers against unfair trade practices.
3. Establish Consumer Protection Councils for protecting the rights and interests of
the consumers.
4. Assure, wherever possible, access to an authority of goods at competitive prices.
5. Seek redressal against unfair trade practices or unscrupulous exploitation of
consumers.
6. Protect the consumers by appointing authorities for timely and sufficient
administration and settlement of consumers’ disputes.
7. Lay down the penalties for offences committed under the Act.
8. Hear and ensure that consumers’ welfare will receive due consideration at
appropriate forums in case any problem or dispute arises.
 9. Provide consumer education, so that the consumers are able to be aware of their
rights.
10. Provide speedy and effective disposal of consumer complaints through alternate
dispute resolution mechanisms.

Q18. ENDORSEMENT

The New Act defines “endorsement” as any message, verbal statement, demonstration
or depiction of the name, signature, likeness, or other identifiable personal characteristics of
an individual or depiction of the name or seal of any institution or organisation which makes
the consumer believe that if it reflects the opinion, finding or experience of the person
making such endorsement.

The CCPA has the power to bring the person advertising the product or service, i.e. the
endorser, under the penal provisions of the New Act for false or misleading advertisements.
An advertisement may be false or misleading if the advertisement falsely describes a
product or service, or gives a false guarantee that misleads consumers as to the nature or
attributes of the product or service, or if the advertisement deliberately conceals important
information about the product or service.[x] In October 2017, the Consumer Complaints
Council formed by the Advertising Standards Council of India (“ASCI”) found that the claims
of Hindustan Unilever Ltd (HUL) for its Lever Ayush soap stating that it was “based on 5,000-
year-old ayurved scriptures with 15 ayurvedic herbs”, besides other claims, were
inadequately substantiated and were misleading. From time to time, false and misleading
advertisements have been pulled up by the ASCI and manufacturers/sellers have been asked
to modify or remove the advertisement from circulation to the public.

Liability of Endorsers under the New Act

 Brands and companies look at engaging celebrities to attract target consumers, and
for the consumers to have a top of the mind recall for the brand and its product.
Celebrities have often become synonymous with the brands and products that they
endorse. Social pressure on celebrities endorsing brands has also been building up
for some time now. Several celebrities, including Shah Rukh Khan, John Abraham,
Ileana D’Cruz and Deepika Padukone faced the heat recently for having endorsed
fairness creams. The CCPA now holds the endorsers accountable in case of a
misleading advertisement that features them. This enhanced scrutiny by the CCPA
will lead to endorsers being cautious of the brands they endorse.
 When the CCPA finds an advertisement to be false or misleading it may issue
directions in the form of an order to the concerned manufacturer or endorser to
discontinue the advertisement or to modify the same within the timeframe and
manner specified in the order which is not prejudicial to the interest of the
consumer or in contravention with the consumer rights.
 The CCPA may levy a penalty of up to Rs. 10,00,000/- on the endorser of a false or
misleading advertisement, at first instance. On further breach, the endorser may be
liable for a further penalty of up to Rs. 50,00,000/-. In addition to the penalty, the
 CCPA may also prohibit endorsers from endorsing any other products or services for
up to one year at first instance. On subsequent breach by the endorser, this period
of prohibition may be extended to up to three years.
 Prior to the New Act, certain guidelines for celebrities existed in ASCI’s Code for Self-
Regulation of Advertising Content in India (“Code”), wherein celebrities were
expected to have knowledge of the Code and had to conduct their own due
diligence before endorsing a brand or service; while also reiterating that it was the
duty of the advertiser and the advertising or other agencies to make the celebrities
aware of such guidelines, including the Code. However, the Code being voluntary
self-regulatory in nature, does not provide for any statutory penalties for celebrities
appearing in misleading or false advertisements.
 The New Act, when read with the ASCI Code on ‘Guidelines for Celebrity Endorsers’
covers the gap that previously existed with respect to false and misleading
advertisements and the liabilities for the same.

Q19. Settlement through mediation

Q20. DISTRICT CONSUMER FORUM

Introduction:
 A district consumer forum, also known as the District Commission, is a consumer
dispute redressal commission established by the State Government, by a
notification, in each district of the state, under the section 28(1) of the Consumer
Protection Act, 2019.
 These consumer forums are established with the purpose of protecting and
enforcing the rights of the consumers and providing them with an additional way,
along with the action in civil courts, to seek redressal. These consumer forums are
quasi-judicial bodies, established by the act of the Parliament which run parallel to
the civil courts.
 The consumer’s right to seek redressal against unfair trade practices or restrictive
trade practices or their unscrupulous exploitation is protected by these forums.
 Along with the district consumer forum, the Consumer Protection Act (hereafter
referred to as “the act”) also provides for the establishment of the State Consumer
Disputes Redressal Commission, also known as the State Commission, by the State
Government and the National Consumer Disputes Redressal Commission, also
known as the National Commission, by the Central Government, each of these
commissions having varying jurisdictions.
Composition:
 The District Forum would be composed of:
1. President—a person who is, or has been, or is qualified to be a District Judge,
2. Not less than two other members— one of the two members shall be a woman. The
two members shall have the following qualifications:
3. 35 years of age is bare minimum;
4. having a bachelor’s degree from a university which is recognised;
  Integrity, ability and standing is essential and have adequate knowledge and
experience of at least 10 years of dealing problems related to economics, public
affairs, industry, commerce, accountancy, law or administration.
 As an assistance for the District Commission, certain officers as well as employees
may be provided by the Government of the State. Under the general
superintendence of the President of the District Commission, their functions would
be discharged by such officers.
 A member would be disqualified from the appointment on the following grounds:
1. Having convicted for an offence involving moral turpitude; or
2. is of unsound mind; or
3. dismissed from the service of the government or any corporate body under the
government; or
4. Having a financial interest, according to the State Government;
5. is an insolvent; or
6. has such other disqualifications as notified by the State Government.
 Every appointment as mentioned shall be done by the State Government on the
advice of a selecting committee consisting of:
1. President of the State Commission
2. Consumer Affair Department’s Secretary
 State’s Law Department Secretary
 Each member will hold the office for a period of 4 years or till the age of 65 years,
whichever is earlier and would also be eligible for a re appointment, if not reached
the age of 65 years.
Jurisdiction:
 The District Forum shall have jurisdiction to entertain complaints where the value of
the goods or services and the compensation, if any, claimed does not exceed rupees
one crore. If the Central Government feels necessary, it would provide other values
as it deems fit.
 A complaint shall be instituted in a District Forum within the local limits of whose
jurisdiction:
1. the opposite party or each 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; or
2. 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;
 the cause of action, wholly or in part, arises; or
1. Residence or the workplace of the complainant.
 Mere dealing with claim by some at Regional Office would not furnish part of cause
of action.
 In cases of vacancy, the State Government may extend the jurisdiction of a particular
district commission, beyond that district to the one with a vacancy.
 The functions of the District Commission would be ordinarily performed at the
headquarters or any other place as notified by the State Government.
Powers:
 The district commission has the power to entertain complaints and charge fee in
relation to the goods sold or agreed to be sold or the services provided or agreed to
be provided by:
1. The consumer of such goods or services; or
2. Any recognised consumer association; or
 One or more consumers in case where numerous consumers have the same interest;
or
1. the Central Government, the Central Authority or the State Government, as the case
may be.
 Every proceeding before the District Commission shall be conducted by the President
of that Commission and at least one member thereof, sitting together and on receipt
of a complaint made, the District Commission may, by order, admit the complaint for
being proceeded with or reject the same (After an opportunity to be heard is given
to the complainant).
 If it appears to the District Commission that there are elements of settlement which
would be acceptable to both the parties, it may direct the parties to give in writing
consent to have their dispute settled by mediation.
 Where the complaint is in reference to any goods, the commission would pass the
copy of the complaint to the opposite party named in the complaint to get their
version of the case. The same applies in case of the services provided.
 In case of an allegation of a defect in a good which cannot be ascertained without a
test or proper analysis of the substance, the commission may obtain a sample of the
goods from the complainant, seal it and provide it to the appropriate laboratory for
analysing or testing, as the case may be, for which a fee must be deposited by the
complainant.
 The District Commission may also seek to settle the consumer dispute ex parte, on
the basis of evidence provided by the complainant, in the case the party mentioned
in the complaint fails to respond within the prescribed time period.
 The commission may also provide for adjournment of the case, where sufficient
cause has been shown and recorded by the commission in writing. It may also
provide an interim order, if necessary, depending upon the facts and circumstances
of the case.
 The commission would have the same powers as vested under the CPC, 1908 in a
civil court in matters namely:
1. Summoning of any witness or defendant or issuing of commissions for examination
of documents or any witness.
2. Requiring production of a material or object as evidence or the analysis/test report
from the concerned laboratory.
 Matters prescribed by the Centre.
 In cases where the allegations of the complainant are proved, the commission may
order the opposite party:
1. To remove the defect as have been pointed out or to replace the goods with new
goods which are defect free
2. To return the complainant the price or the charges paid along with interest and also
provide the complainant with the compensation awarded, for the loss and damage
suffered due to the negligence of the opposite party
  To pay an amount as a compensation in product liability
1. To remove the defects in the goods and deficiency in the services and discontinue
the unfair or restrictive trade practices.
2. To stop the manufacture, sale and offer of hazardous goods and services.
3. To pay a sum as determined by the commission in case of a large number of
consumers that might be affected but are not easily identifiable.
 To provide corrective advertisement an desist from issuing any misleading
advertisement.
 The Commission has the power to review the orders passed by it if they have an
error apparent on the face of the record, either by self-evaluation or by an
application of any of the parties.
 The District Forum would also have the power to grant punitive damages depending
upon the circumstances of the case.
This was the Composition, Jurisdiction and Power of the District Consumer Forum.

Q21.