(..10..)
CONSUMER PROTECTION ACT, 2019
QUESTION BANK
Q.1. What are the reasons for the coming into force of the Consumer Protection Act, 2019?
Q.2. Discuss the historical background of the Consumer Protection Act-2019.
Q.3. Give a brief account of the evolution of consumerism in India.
Q.4. Explain the history and development of consumerism.
SYNOPSIS
I. History and development of consumerism-
1. Consumer movement in the USA-
2. Consumer movement in England-
3. Consumer Movement in India-
i. Introduction-
ii. Pre-Independence History-
iii. Post-Independence Era-
iv. The Consumer Protection Act, 1986-
v. The Consumer Protection Act, 2019-
vi. Criminal sanctions under different laws-
I. History and development of consumerism-
In earlier English Common law, the doctrine of caveat emptor (i.e. let the buyer beware) was the philosophy of the law of sale. It is due to the English people being traders. The purchaser was supposed to be responsible if any defect was found in the goods after the sale. He was supposed to purchase goods with open eyes and care. This philosophy was deeply rooted in the laissez-faire economic model of the era, where the state maintained a hands-off approach to private commercial transactions. But subsequently, this rule got exceptions with the passage of time. Now, the law is governed by exceptions rather than the rule of caveat emptor. This doctrine accorded the shape of laissez-faire. This was the situation up to the end of the 19th century. The existing remedy for consumer protection under common law was an action for breach of contract or an action for wrong under tort. However, the existing remedies were insufficient to soften consumers' hardships.
After the advent of the 20th century, certain changes occurred in the nature of industrial corporations, technology, and commerce. This made the product more sophisticated and out of the reach of consumers who wanted to understand its composition. The rule of 'demand and supply’ shifted to 'supply and demand'. Markets were flooded with products. Advertisements started to influence consumers. Pervasive advertising influenced consumers, leaving them in a dilemma when trying to select products in highly competitive markets.. Accordingly, consumers' capacity was affected to a great extent. In many cases, consumers were found to have been cheated by sellers.
1. Consumer movement in the USA-
The modern consumer movement gained global momentum following US President John F. Kennedy’s historic address to the US Congress on March 15, 1962, wherein he formally declared the four basic consumer rights. This date is now commemorated globally as World Consumer Rights Day.
2. Consumer movement in England-
In England, early consumer protection under common law relied on actions brought either for breach of contract or under the law of torts. Donoghue V. Stevenson is the landmark judgment on protecting the Consumer against harmful and noxious material or food.
Facts: - The plaintiff drank a bottle of ginger beer manufactured by the defendant company. The bottle contained the decomposed snail, which was not detected until the greater part of the bottle had been consumed. The bottle was made of dark opaque (non-transparent) glass, so its contents could not be ascertained by inspection. The plaintiff suffered shock and severe gastroenteritis.
Lord Atkin Held: - that a manufacturer owes a duty of care to the ultimate consumer to ensure that the product is free from defect or noxious elements. This established the foundational 'neighbour principle' in the law of negligence.
3. Consumer Movement in India-
i. Introduction-
The consumer movement in India did not emerge from a single dramatic movement; rather, it is a decades-long transition born from systemic public frustration. Historically, Indian buyers had to face shortages, food adulteration, black marketing, and poor public utility services with virtually no legal recourse under the classical common law doctrine of caveat emptor (let the buyer beware).
Over the decades, through organised civil activism, landmark litigation, and sweeping legislative overhauls, the movement successfully shifted the legal paradigm to caveat venditor (let the seller beware).
ii. Pre-Independence History-
Ancient India: Codified consumer protection existed in ancient texts like the Manusmriti and Kautilya’s Arthashastra, which heavily penalized hoarding, adulteration, and false weights.
Modern Era: Early sparks emerged during the Swadeshi Movement via boycotts of British goods. By the 1920s and 30s, urban cooperative buyer networks began forming to distribute pure food grains to members.
iii. Post-Independence Era-
After independence, the nation grappled with severe inflation, artificial food scarcity, and rampant hoarding. In 1956, the Planning Commission backed the formation of the Indian Association of Consumers (IAC) in Delhi to serve as a national base for consumer interests. Some social activists started to form consumer associations, such as the Consumer Guidance Society of India, which was formed in Mumbai in 1966, by nine women. Some NGOs like Visakha Consumers Council (1973), Consumer Education and Research Centre (CERC), Ahmedabad (1978), founded by Manubhai Shah; Common Cause, Delhi (1980), founded by H.D. Shourie played a significant role in articulating consumer movements after post-independence, forcing legislators to pass a special legislation to protect consumers’ interests.
We will find several pieces of legislation post-independence protecting the interests of consumers. The legislation is the Constitution of India, the Indian Penal Code, the Sale of Goods Act, 1930, the Indian Contract Act, 1872, Agricultural Produce (Grading and Marking) Act.1937, Drugs and Cosmetics Act,1940, Drugs (Control) Act,1950, Drugs and Magic Remedies (Objectionable Advertisements) Act,1954, Prevention of Food Adulteration Act,1954, Essential Commodities Act.1955, Essential Services Maintenance Act, 1968, Trade and Merchandise Marks Act.1958, Standards of Weights and Measures Act.1976, Bureau of Indian Standards Act,1986, The Monopolies and Restrictive Trade Practices Act, 1969 (now replaced by the Competition Act, 2002, etc.). All such legislation was protecting one or the other right of the consumer, but there was no special law dedicated to consumer protection.
iv. The Consumer Protection Act, 1986-
The Consumer Protection Act 1986 (hereinafter called ‘the Act’) was enacted to provide simple, speedy, and inexpensive justice to the Consumer from restrictive trade practices or unfair trade practices adopted by the seller of goods or services. It was the first special and comprehensive law for the protection of consumers' rights. The Act has made provisions for the establishment of Consumer Councils and other authorities for the settlement of consumer disputes and for matters connected therewith. Separate Forums are constituted by this Act at the District, State, and National levels. Complaints can be lodged before the District Forum and in certain types of cases, before the State Commission. Appeals against the order of the District Forum lie to the State Commission, from where the further appeal lies with the National Commission. Further, the appeal from the National Commission lies with the Supreme Court. This Act aims to provide speedy and simple redressal to consumer disputes by providing self-contained quasi-judicial machinery. This was not so in other legislation; the normal procedure under C.P.C. was required to be followed by courts. This Act is social welfare legislation made for the protection of the interests of consumers, and therefore, no court fees are to be affixed to the complaint by the complainant. Rules of law do not strictly bind these Forums but are based on equity and good conscience. The Act was substantive as well as procedural.
The Act has been repealed by the Consumer Protection Act, 2019. The 2019 Act is a total overhaul of the 1986 Consumer Protection Act; therefore, henceforth the provisions of the 2019 Act are discussed and quoted.
v. The Consumer Protection Act, 2019-
[Discussed in detail at the end of the topic]
vi. Criminal sanctions under different laws-
In different laws, criminal sanctions (punishments) are imposed. Such laws are the Bharatiya Nyaya Sanhita, 2023, and the Drugs and Cosmetics Act.1940; Drugs (Control) Act.1950; Drugs and Magic Remedies (Objectionable Advertisements) Act.1954; Prevention of Food Adulteration Act.1954; Essential Commodities Act.1955; Essential Services Maintenance Act., 1968; Trade and Merchandise Marks Act.1958; Standards of Weights and Measures Act.1976 (Replaced by the Legal Metrology Act, 2009); Bureau of Indian Standards Act.1986; The Monopolies and Restrictive Trade Practices Act. 1969, etc.
***
Notes-
The Consumer Protection Act, 2019
I. Introduction-
II. Objectives of the Act-
1. To Provide Simple, Speedy, and Inexpensive Redressal:
2. To Prevent Unfair Trade Practices:
3. To Institutionalize Consumer Rights:
4. To Regulate Modern Transaction Mediums:
II. The Six Core Consumer Rights-
1. Right to Safety:
2. Right to be Informed:
3. Right to Choose:
4. Right to be Heard:
5. Right to Seek Redressal:
6. Right to Consumer Education:
III. Major Institutional and Structural Innovations-
1. The Central Consumer Protection Authority (CCPA)-
a. Investigative Wing:
b. Powers:
c. Misleading Advertisements:
2. Statutory Product Liability-
a. Scope-
b. Accountability-
3. Inclusion of E-Commerce and Direct Selling-
IV. The Three-Tier Dispute Redressal Machinery
Procedural Simplifications-
a. E-Filing (e-Daakhil):
b. Admissibility of Complaints:
c. Mediation Cells (Chapter V):
V. Legal Classification: Substantive and Procedural Law-
a. Substantive Law:
b. Procedural Law:
VI. Changes brought by the Consumer Protection Act, 2019-
Changes Brought by the Consumer Protection Act, 2019-
1. Revised Pecuniary Jurisdiction (Monetary Limits)-
District Consumer Disputes Redressal Commission (District Commission):
Crucial Shift in Calculation:
2. Establishment of a Central Regulator (CCPA)-
3. Introduction of Product Liability-
4. Inclusion of E-Commerce and Direct Selling-
5. Unfair Contracts and Expanded Unfair Trade Practices (UTPs)-
6. Alternate Dispute Resolution (Mediation)-
7. Ease of Filing: E-Daakhil and Territorial Jurisdiction-
8. Strict Timelines for Case Disposal-
9. Appointment of Members-
Conclusion
I. Introduction-
The Consumer Protection Act, 2019 (COPRA 2019) is a milestone in the history of socio-economic legislation in India. Enacted by Parliament to repeal and replace the outdated three-decade-old Consumer Protection Act of 1986, the 2019 Act officially came into force on July 20, 2020.
The rapid transformation of the marketplace necessitated this modernization. While the 1986 Act was designed for a traditional era of physical transactions, the 21st-century market is defined by e-commerce, digital payments, multi-level marketing, and highly sophisticated, data-driven advertising. COPRA 2019 fundamentally re-engineered India's consumer law to address these modern complexities, shifting the legal paradigm firmly from caveat emptor (let the buyer beware) to caveat venditor (let the seller beware). The Act contains several provisions for the protection and promotion of the rights of consumers. The New Act introduced institutional reforms, stricter penalties, and new mechanisms such as mediation and product liability to protect consumers. It applies to all goods and services, including online and offline transactions, except free and personal services.
The Consumer Protection Act, 2019, is structured into 8 Chapters comprising a total of 107 Sections as follows-
Chapter | Topic / Subject Matter | Section Range |
Chapter I | Preliminary (Short Title, Extent, Definitions) | Sections 1 – 2 |
Chapter II | Consumer Protection Councils | Sections 3 – 9 |
Chapter III | Central Consumer Protection Authority (CCPA) | Sections 10 – 27 |
Chapter IV | Consumer Disputes Redressal Commission (CDRC) | Sections 28 – 73 |
Chapter V | Mediation | Sections 74 – 81 |
Chapter VI | Product Liability | Sections 82 – 87 |
Chapter VII | Offences and Penalties | Sections 88 – 93 |
Chapter VIII | Miscellaneous | Sections 94 – 107 |
II. Objectives of the Act-
The Act is a piece of social welfare legislation designed with the main objective of protecting consumers.
1. To Provide Simple, Speedy, and Inexpensive Redressal to the consumers.
It maintains a quasi-judicial machinery that bypasses the formalistic, lengthy, and expensive procedures of traditional civil courts and facilitates quick justice to the consumer.
2. To Prevent Unfair Trade Practices:
It strictly targets misleading advertisements, hoarding, black marketing, and the sale of spurious or hazardous goods.
3. To Institutionalise Consumer Rights:
It formally empowers consumers with executive and judicial backing to enforce their statutory rights.
4. To Regulate Modern Transaction Media:
It brings e-commerce, tele-shopping, and direct selling under strict regulatory oversight.
II. The Six Core Consumer Rights-
Under Section 2(9) of the Act, six fundamental consumer rights are legally recognized and protected:
1. Right to Safety-
The right to be protected against the marketing of goods, products, or services that are hazardous to life and property.
2. Right to be Informed:
The right to be informed about the quality, quantity, potency, purity, standard, and price of goods or services, shielding the consumer from unfair trade practices.
3. Right to Choose:
The right to be assured, wherever possible, access to a variety of goods, products, or services at competitive prices.
4. Right to be Heard:
The right to be heard and assured that consumer interests will receive due consideration at appropriate forums.
5. Right to Seek Redressal:
The right to seek redressal against unfair trade practices or unscrupulous exploitation, including the right to a fair settlement of genuine claims.
6. Right to Consumer Education:
The right to acquire the knowledge and skill to be an informed consumer throughout life.
III. Major Institutional and Structural Innovations-
The 2019 Act is not merely an amendment of the 1986 Act; it is a structural overhaul that introduced several powerful new mechanisms:
1. The Central Consumer Protection Authority (CCPA)-
Under the older 1986 framework, there was no dedicated regulatory body to proactively prevent consumer exploitation; action only began when an individual filed a complaint. The 2019 Act resolved this by establishing the CCPA (Chapter III), an executive regulator with class-action powers.
a. Investigative Wing:
Headed by a Director-General, it can conduct inquiries and investigations into consumer rights violations.
b. Powers:
The CCPA can order the recall of unsafe goods, order the reimbursement of prices paid, and file class-action complaints on behalf of a group of affected consumers.
c. Misleading Advertisements:
It can impose penalties of up to ₹10 Lakhs (and up to ₹50 Lakhs for subsequent violations) on manufacturers, advertisers, and endorsers (celebrities) for misleading advertisements.
2. Statutory Product Liability-
For the first time in Indian statutory law, a dedicated chapter on Product Liability (Chapter VI) was introduced.
a. Scope-
A consumer can now bring a product liability action against a Product Manufacturer, a Product Service Provider, or a Product Seller.
b. Accountability-
If a product or service causes physical harm, injury, or property damage due to a defect, deviation from specifications, or inadequate instructions/warnings, the responsible party is strictly liable to pay compensation.
3. Inclusion of E-Commerce and Direct Selling-
Unlike the old Act, the 2019 Act explicitly defines and regulates online marketplaces. Under the Consumer Protection (E-Commerce) Rules, online platforms are treated on par with traditional sellers. They are legally mandated to:
a. Disclose country of origin, refund policies, and product details transparently.
b. Establish a robust grievance redressal mechanism with designated grievance officers.
c. Prevent unfair price manipulation and discriminatory trade practices.
IV. The Three-Tier Dispute Redressal Machinery
The Act establishes a simplified, three-tier quasi-judicial system to resolve disputes. The pecuniary (monetary) jurisdictions of these commissions were significantly updated to prevent overcrowding of higher commissions-
Redressal Body | Territorial Level | Pecuniary Jurisdiction (Value of Goods/Services Paid) | Appellate Authority |
District Commission (formerly District Forum) | Established in each District | Up to ₹50 Lakhs | State Commission (Appeal within 45 days) |
State Commission | State Capital | Above ₹50 Lakhs to ₹2 Crores | National Commission (Appeal within 30 days) |
National Commission | New Delhi | Above ₹2 Crores | Supreme Court of India |
Procedural Simplifications-
The Act has brought procedural simplification in seeking justice.
a. E-Filing (e-Daakhil):
Consumers can now file complaints electronically from their home, eliminating the need to physically travel to a forum.
b. Admissibility of Complaints:
Complaints are deemed admitted if the commission does not decide on admissibility within 21 days of filing.
c. Mediation Cells (Chapter V):
The Act introduces statutory Mediation Cells attached to the District, State, and National Commissions to promote swift, out-of-court settlements where both parties agree. No appeal lies against a settlement reached through mediation.
V. Legal Classification: Substantive and Procedural Law-
Like its predecessor, the Consumer Protection Act, 2019, acts as a comprehensive code. It is:
a. Substantive Law:
The Act defines the rights of consumers, characterises what constitutes an actionable wrong (defect, deficiency, unfair trade practices), and establishes liabilities (such as product liability).
b. Procedural Law:
The Act prescribes the step-by-step procedure for the establishment of Commissions, the method of filing complaints, the rules of evidence, the timeline for hearings, and the mechanism for appeals.
Furthermore, Section 100 of the Act (corresponding to Section 3 of the 1986 Act) explicitly states that the provisions of this Act are in addition to and not in derogation of any other law for the time being in force. This ensures that a consumer can choose to seek remedies under this Act even if alternative remedies exist under other specialized statutes.
VI. Changes brought by the Consumer Protection Act, 2019-
Changes brought by the CPA, 2019, into the CPA, 1986, are discussed at the appropriate places. But some important changes are discussed below-
Changes Brought by the Consumer Protection Act, 2019-
The Consumer Protection Act, 2019 (CPA 2019) replaced the archaic Consumer Protection Act, 1986 (CPA 1986) to address the challenges of the modern digital marketplace. The most significant structural and statutory changes introduced by the new Act are detailed below:
1. Revised Pecuniary Jurisdiction (Monetary Limits)-
To reduce the burden on the National and State Commissions, the monetary limits for filing cases were drastically revised (and further updated via government notification in December 2021):
District Consumer Disputes Redressal Commission (District Commission):
Entertains complaints where the value of the goods or services paid as consideration does not exceed ₹50 lakh. (Note: Under the 1986 Act, this was up to ₹20 lakh).
State Consumer Disputes Redressal Commission (State Commission):
Entertains complaints where the consideration paid exceeds ₹50 lakh but does not exceed ₹2 crore. (Note: Under the 1986 Act, this was ₹20 lakh to ₹1 crore).
National Consumer Disputes Redressal Commission (National Commission): Entertains complaints where the consideration paid exceeds ₹2 crore. (Note: Under the 1986 Act, this was above ₹1 crore).
Crucial Shift in Calculation:
Under the 1986 Act, jurisdiction was decided by the "value of goods/services plus compensation claimed." Under the 2019 Act, it is strictly decided by the "value of the goods or services paid as consideration," preventing inflated compensation claims from manipulating jurisdictions.
2. Establishment of a Central Regulator (CCPA)-
Unlike the 1986 Act, which was purely post-litigation and remedial, the 2019 Act established the Central Consumer Protection Authority (CCPA).
It acts as a proactive regulatory body to protect, promote, and enforce the rights of consumers as a class.
It has an investigative wing empowered to conduct inquiries, recall defective goods, order refunds, and issue severe penalties against misleading advertisements.
3. Introduction of Product Liability-
The CPA 2019 introduced a dedicated chapter on Product Liability.
A consumer can now claim compensation for harm, injury, or property damage caused by a defective product or deficient service.
This claim can be brought not just against the Product Manufacturer, but also against the Product Service Provider and the Product Seller (including e-commerce platforms). No such explicit provision existed in the 1986 Act.
4. Inclusion of E-Commerce and Direct Selling-
The 1986 Act was silent on digital markets. The 2019 Act explicitly covers all forms of transactions—including online, tele-shopping, multi-level marketing, and direct selling. Under this, the Consumer Protection (E-Commerce) Rules, 2020 mandate that e-commerce giants display product origins, expiry dates, grievance officer details, and refund policies clearly.
5. Unfair Contracts and Expanded Unfair Trade Practices (UTPs)-
Unfair Contracts: The 2019 Act introduces the concept of "unfair contracts," giving State and National Commissions the power to declare excessive security deposits, unreasonable penalties, or unilateral termination clauses in consumer contracts as null and void.
New UTPs: The Act expanded the definition of Unfair Trade Practices by adding three new categories:
i. Failure to issue a proper bill or cash memo.
ii. Refusal to take back defective goods or withdraw deficient services and refund the consideration within the stipulated time.
iii. Disclosure of personal information given in confidence by a consumer (breach of privacy).
6. Alternate Dispute Resolution (Mediation)-
To ensure speedy disposal of cases, the 2019 Act introduces institutionalized Mediation as an Alternate Dispute Resolution (ADR) mechanism.
Consumer Commissions can refer a dispute to a Mediation Cell if both parties agree and there is scope for an amicable settlement.
No appeal can be filed against an order passed through mediation, making the resolution final and cost-effective.
7. Ease of Filing: E-Daakhil and Territorial Jurisdiction-
E-Filing: The Central Government established the E-Daakhil Portal, allowing consumers to file complaints, pay requisite fees, and track case progress online from anywhere in India.
Territorial Jurisdiction: Under the 1986 Act, a consumer had to file a case where the cause of action arose or where the defender resided. The 2019 Act allows consumers to file complaints where the complainant resides or personally works for gain, significantly reducing hardship for the aggrieved consumer.
8. Strict Timelines for Case Disposal-
The Act mandates that every consumer dispute be resolved as expeditiously as possible:
Within 3 months: From the date of receipt of notice by the opposite party, if the case does not require testing or analysis of commodities.
Within 5 months: If the dispute requires technical analysis, testing, or laboratory evaluation of the goods or services.
9. Appointment of Members-
Under the CPA 2019, the selection committees have been abolished. The Act authorises the Central Government to formulate rules regarding the qualifications, recruitment, term of office, and removal of the members of the Consumer Commissions, thereby streamlining the administrative process.
Conclusion
With the rapid evolution of the digital era, the Indian Parliament enacted the Consumer Protection Act, 2019, to replace the outdated 1986 framework. By incorporating e-commerce rules, electronic filing through the E-Daakhil portal, strict product liability laws, and ADR mechanisms like mediation, the 2019 Act provides a robust, transparent, and highly accessible ecosystem to protect the modern Indian consumer.
*****
References-
1. Bare Act, the Consumer Protection Act, 2019 https://ncdrc.nic.in/bare_acts/CPA2019.pdf
2. Consumer Protection Act, 2019 By Sneha Mahawar https://blog.ipleaders.in/consumer-protection-act-2019-2/
3. Consumer Protection Act 2019, Features, Provisions, Initiatives By Vajiram Content Team https://vajiramandravi.com/current-affairs/consumer-protection-act-2019/
4. Consumer Protection Act, 2019
https://matsuniversity.ac.in/data1/study_materials/mats_school_of_law/CPA%20bilingual%20notes.pdf
5. Consumer Protection Act, 2019
https://en.wikipedia.org/wiki/Consumer_Protection_Act,_2019
6. Consumer Movement in India: Milestones and Key Organisations • Law Notes by TheLaw.Institute