Consumer Protection Act 2019 – Overview | Provisions | Legal Framework

Consumer Protection Act 2019 is a legislative measure introduced in India to safeguard consumer rights, ensure fair trade practices, and provide efficient dispute redressal. It replaces the 1986 Act, expanding jurisdictional limits, introducing a three-tier complaint system (District, State, and National Commissions), and establishing provisions like product liability and mediation for faster, more affordable consumer justice.

Table of Contents

1. Introduction to Consumer Protection Act 2019
2. Overall Scheme of Consumer Protection Act, 2019
3. Validity of Consumer Protection Act
4. Constitutional Background of Consumer Protection Act

Check out Taxmann's Consumer Protection Law & Practice which provides an in-depth commentary on India's Consumer Protection Laws and covers the statutory portion, including Acts, Rules, Regulations, Circulars, and Notifications. It features the Guidelines for Prevention and Regulation of Greenwashing, 2024, and provides a comparative analysis of the Consumer Protection Acts of 2019 and 1986, highlighting key legislative changes.

1. Introduction to Consumer Protection Act 2019

Consumer Protection Act can be described as common man’s Civil Court. The Act is designed to make available cheap and quick remedy to a small consumer.

Under Sale of Goods Act, the principle is ‘caveat emptor,’ i.e., ‘buyer be aware.’ Buyer is supposed to take care before buying goods. He is supposed to be knowledgeable and well informed. This may be true about 100 years ago, when both buyer and seller were on equal footing. However, as organised manufacturing activity increased, sellers became bigger and better organised, while buyer continued to be unorganised and weak. Buyer could be easily misled and duped.

It is now realised that a common consumer is neither knowledgeable nor well informed. He needs support and protection from unscrupulous sellers. A common consumer is not in a position to approach civil court. Quick, cheap and speedy justice to his complaints is required.

United Nations adopted guidelines for protection of consumers on 9-4-1985. All countries were expected to take suitable legislative measures.

Accordingly, ‘Consumer Protection Act, 1986’ was passed and made effective in 1987.

The objectives of the Act were discussed in V Kishan Rao v. Nikhil Super Speciality Hospital (2010) 5 SCC 513 (SC).

In Laxmi Engineering Works v. P.S.G. Industrial Institute 1995 AIR SCTh 2114 = AIR 1995 SC 1428 = 84 Comp. Cas. 121 (SC) = (1995) 3

SCC 583, it was observed that object of the Act is to protect the consumer from the exploitative and unfair practices of trade and to provide inexpensive, easily accessible and speedy remedy.

After gaining experience, new Consumer Protection Act, 2019 was passed. The Act has been made fully effective on 24-7-2020. The earlier Consumer Protection Act, 1986 has been repealed.

There are many new innovations in the 2019 Act.

Act applies to all goods and services – Save as otherwise expressly provided by the Central Government, by notification, the Consumer Protection Act shall apply to all goods and services – section 1(4) of Consumer Protection Act, 2019.

World Consumer Day – 15th March is organised as Thorld Consumer Day, as on that day, US President John Kennedy gave the consumer rights to US citizen in 1962.

2. Overall Scheme of Consumer Protection Act, 2019

The overall scheme of the 2019 Act is as follows.

Three tier consumer disputes redressal mechanism – The Consumer Protection Act, 2019 envisages three tier mechanism to redress consumer disputes –

(a) District Commission where value of goods or services does not exceed Rs. one crore [section 34(1)]

(b) State Commission where value of goods or services exceeds Rs. one crore but does not exceed Rs. ten crore [section 47(1)(a)]

(c) National Commission where value of goods or services exceeds Rs. ten crore [section 58(1)(a)(i)]

[Under the 1986 Act, the limit was Rs. 20 lakhs in case of District Forum and Rs. 100 lakhs in case of State Commission].

In the Consumer Protection Act, 1986, the District Commission was known as ‘consumer forums’.

Complainant can file complaint where he is resident – Complainant can also institute the complaint within the territorial jurisdiction of the Commission where the complainant resides or personally works for gain besides what was provided earlier [Section 34(2) and 47(4)]. This will ease burden on complainant.

Appeal against orders of Commission – The State Commission hears appeal against order of District Commission and National Commission hears appeals against original orders of State Commission.

Appeal to National Commission can be filed only against Order-in-Original (O-i-O) of State Commission and not against order passed by State Commission in appeal against the order of District Commission [section 51(1)]

Appeal to Supreme Court can be filed only against Order-in-Original (O-i-O) of National Commission and not against order passed by National Commission in appeal against the order of State Commission [section 67]

[Of course, jurisdiction of Supreme Court to admit Special Leave Petition remains unaffected].

Thus, in each case, only one appeal is provided.

Time limit for filing appeal before State Commission– The limitation period for filing of appeal to State Commission is increased from 30 days to 45 days. However, there is and was power to condone the delay.

Second appeal before National Commission on substantial question of law – A second appeal to National Commission has been provided under section 51(3), if any substantial question of law is involved in the matter.

Commission can review their orders – Power of review has been conferred to District Commission, State Commission and National Commission under sections 40, 50 and 60 of the Consumer Protection Act, 2019. This is a new provision. The review is only to correct an error apparent from record. However, in my view, this provision may be misused and may delay the matter.

Pre-deposit while filing appeal – A pre-deposit of 50% of amount is mandatory to file appeal. There is absolutely no provision to waive this pre-deposit of amount. This will considerably reduce frivolous appeals, though in many cases, this will cause miscarriage of justice, where high pitch unrealistic demands have been confirmed. [In the 1986 Act, limit for pre-deposit was only Rs. 25,000/35,000].

Administrative control of State Commission over District Commission and National Commission over State Commission – Provision has been made for administrative control of State Commission over District Commission and National Commission over State Commission [section 70]

Enforcement of orders of Commission – Section 71 of Consumer Protection Act confers power of execution of order of Commission as provided under Order XXI of First Schedule of the Code of Civil Procedure, 1908.

Mediation – The State Government shall establish a consumer mediation cell to be attached to each of the District Commissions and the State Commissions of that State – Section 72(1) of Consumer Protection Act, 2019. If both parties agree, the District/State Commission shall refer the matter to mediation. This is similar to lok-adalat and may expedite procedure of settlement of dispute. If mediation fails, matter will go back to District/State Commission [This is a new provision in 2019 Act].

Provisions relating to unfair contract, restrictive and unfair trade practices – Provisions relating to unfair contract, restrictive and unfair trade practices have been made in the 2019 Act. Provisions relating to unfair contract [section 2(46)] are new provisions. Section 49(2) and 59(2) of the 2019 Act gives power to the State Commission and National Commission respectively to declare any terms of contract, which is unfair to any consumer, to be null and void. Provisions relating to restrictive trade practice [section 2(42) and unfair trade practices [section 2(47)] were in the 1986 Act also.

Measures to prevent unfair trade practices in e-commerce, direct selling, etc. – 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 – Section 94 of Consumer Protection Act, 2019 [This section has been notified and made effective on 24-7- 2020.]

Central Consumer Protection Authority [Central Authority] – Sections 10 to 27 of Consumer Protection Act, 2019 deal with provisions relating to Central Consumer Protection Authority [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 interests of public and consumers and to promote, protect and enforce the rights of consumers as a class.

The Central Authority shall consist of a Chief Commissioner and other members. These provisions are not so far notified and not made effective. Thide powers have been conferred on Central Authority.

Investigation Wing of Central Authority headed by Director General – The Central Authority shall have an Investigation Thing headed by a Director General for the purpose of conducting inquiry or investigation under the Consumer Protection Act as may be directed by the Central Authority [Section 15(1) of Consumer Protection Act, 2019]

Director General has powers of search and seizure under section 22.

Powers of District Collector – Powers have been vested on District Collector to investigate and report matters relating to violation of consumer rights [section 16]. He has powers of search and seizure under section 22.

Powers to Director General of search and seizure – Thide powers have been conferred on Director General of search and seizure [section 22].

Offences and Penalties – Provision of fine and imprisonment has been made for first time in Consumer Protection Act [sections 88 to 93].

• Penalty for non-compliance of direction of Central Authority – section 88
• Punishment for false or misleading advertisement – section 89
• Punishment for manufacturing for sale or storing, selling or distributing or importing products containing adulterant section
• Punishment for manufacturing for sale or for storing or selling or distributing or importing spurious goods – section 91.

Product Liability – The 2019 Act provides for claim for compensation under a product liability action by a complainant for any harm caused by a defective product manufactured by a product manufacturer or serviced by a product service provider or sold by a product seller – Section 82 of Consumer Protection Act, 2019. This is a new provision in the 2019 Act.

Central, State and District Consumer Protection Council – The Central Government shall, by notification, establish the Central Consumer Protection Council to be known as the Central Council – Section 3(1) of Consumer Protection Act, 2019.

The Central Council shall be an advisory council and consist of the following members, namely:

(a) the Minister-in-charge of the Department of Consumer Affairs in the Central Government, who shall be the Chairperson; an

(b) such number of other official or non-official members representing such interests as may be prescribed – Section 3(2) of Consumer Protection Act, 2019.

Similarly State and District Consumer Protection Councils shall be established.

The objects of the Central, State and District Consumer Protection Council shall be to render advice on promotion and protection of the consumers’ rights under Consumer Protection Act.

3. Validity of Consumer Protection Act

In Indian Medical Association v. V P Shantha (1995) 6 SCC 651 = 1995 AIR SCTh 4463 = (1996) 1 Comp LJ 15 = 86 Comp Cas 806 = (1995) 3 CTJ 969 = AIR 1996 SC 550 (SC 3 member bench), legal validity of the Act and its redressal procedure has been fully upheld. – also in Vishwabharathi House Building Cop Soc v. UOI (2000) 26 SCL 161 = (1999) 4 Comp LJ 454 (Karn HC DB) – upheld in State of Karnataka v. Vishwabarathi House Building Coop Soc 2003 AIR SCTh 558 = AIR 2003 SC 1043 = (2003) 2 SCC 412 (SC 3 member bench), where it was held that Consumer Redressal For a supplements and not supplant jurisdiction of Civil Courts or other statutory authorities.

In Laxmi Engineering Works v. P.S.G. Industrial Institute 1995 AIR SCTh 2114 = AIR 1995 SC 1428 = 84 Comp. Cas. 121 (SC) = (1995) 3 SCC 583, it was observed that object of the Act is to protect the consumer from the exploitative and unfair practices of trade and to provide inexpensive, easily accessible and speedy remedy. It was held that the District Forum etc. are not Courts though invested with some powers of a civil court. They are quasi-judicial tribunals to render inexpensive and speedy remedies to consumer. They only supplement existing judicial system. However, decision of District Forum etc. cannot be agitated in a Civil Court. It can be agitated only in manner provided in the Act.

3.1 Liberal Construction of Act as it is Beneficial Legislation

In Spring Meadows Hospital v. Harjot Ahluwalia 92 Comp Cas 797 = (1998) 2 Comp LJ 228 (SC) = (1998) 4 SCC 39 = AIR 1998 SC 1801 = 1998 AIR SCTh 1590, it was held that since Consumer Protection Act is a beneficial legislation intended to confer some speedier remedy from being exploited by unscrupulous traders, the provisions should receive a liberal construction – same view in H N Shankara Shastry v. Asst Director of Agriculture 2004 AIR SCTh 3164 * National Seeds Corporation Ltd. v. M Madhusudhan Reddy (2012) 2 SCC 506.

In Lucknow Development Authority v. M K Gupta (1994) 1 SCC 243 = 1994 AIR SCTh 97 = AIR 1994 SC 787 = 80 Comp Cas. 714 (SC) = (1994) 1 Comp LJ 1 (SC), it was observed that Consumer Protection Act is a social benefit legislation. It should be construed in favour of customer.

Consumer Forum is primarily meant to provide better protection in the interest of the consumers and not to short-circuit the matter or to defeat the claim on technical grounds – Smt. Savita Garg v. National Heart Institute AIR 2004 SC 5088 = (2004) 8 SCC 56 = 2004 AIR SCTh 5820 – quoted with approval in Ethiopian Airlines v. Ganesh Narain Saboo (2011) 8 SCC 539 (SC 3 member bench).

3.2 Provisions in CPA are Addition to and Not in Derogation of Any Other Law

Section 100 of the Consumer Protection Act, 2019 [earlier section 3 of 1986 Act] states that provisions of the Act are in addition to and not in derogation of any other law.

In Kalawati v. United Vaish (2002) I CPJ 71 (NCDRC), it was held that provisions of Contract Act would apply to complaint filed under Consumer Protection Act.

In Trans Mediterranean Airways v. Universal Exports (2011) 10 SCC 316, it was held that Consumer Forum has jurisdiction even where remedy available under other statutes (Carriage by Air Act, 1972 in this case) – same view in National Seeds Corporation Ltd. v. M Madhusudhan Reddy (2012) 2 SCC 506.

Consumer Commission can be approached even if there is an arbitration agreement – In Secretary, Thirumurugan Coop Agricultural Society v. M Lalitha 2003 AIR SCTh 6873 = (2004) 1 SCC 305 = AIR 2004 SC 448, it was held that complainant can approach Consumer Forum even if Arbitration forum under Cooperative Societies Act is available to him. – Same view in National Seeds Corporation Ltd. v. M Madhusudhan Reddy (2012) 2 SCC 506.

Consumer forum can be approached even if RERA Act provides remedy – Remedies available under Consumer Protection Act are additional remedies over and above other remedies, including those under special statute, Consumer forum can be approached even if RERA Act [Real Estate (Regulation and Development) Act, 2016] provides remedy. RERA Act does not bar remedy under Consumer Protection Act – Imperia Structures v. Anil Patni [2020] 10 SCC 783 = 167 SCL 195 = 121 taxmann.com 52 (SC) * Ireo Grace Realtech P Ltd v. Abhishek Khanna (2021) 3 SCC 241 (SC 3 member bench).* Experion Developers v. Sushma Ashok Shiroor (2022) 172 SCL 124 = 137 taxmann.com 111 (SC).

Principle of foreign sovereign immunity not available – Principle of foreign sovereign immunity is not available to cases before consumer forum. A foreign State owned entity is not entitled to immunity for acts of commercial nature – Ethiopian Airlines v. Ganesh Narain Saboo (2011) 8 SCC 539 (SC 3 member bench).

Consumer Forum can look into deficiency of service even if suit is filed – In Sat Pal Mohindra v. Surindra Timber Stores (1999) 5 SCC 696 (SC 3 member), it was held that even if civil suit is filed to claim price of goods, complaint in consumer forum is maintainable for deficiency of service, as the type of relief claimed is different. In Mrs. Vishwalakshmi Sasidharan v. Syndicate Bank (1997) 89 Comp Cas 128 = (1997) 2 Comp LJ 22 (SC 3 member bench), the bank had filed a suit for recovery. However, it was held that even if Bank had filed a suit, the Consumer Court can consider whether there was any deficiency of service, unless that issue is specifically raised as a defence in the suit.

3.3 Government or Semi-Government Body or Local Authority is as Much Amenable to Consumer Protection Act

In Punjab Urban Planning and Development Authority v. Vidya Chetal (2019) 9 SCC 83 (SC 3 member bench), it has been held that Statutory fees levied by statutory authority in lieu of service provided is subject to jurisdiction of Consumer Forum, it is not sovereign function. A Government or semi-Government body or local authority is as much amenable to Consumer Protection Act.

3.4 Sovereign Functions Not Amenable to Consumer Protection Act

The Consumer Protection Act shall apply to all goods and services – Section 1(4) of Consumer Protection Act, 2019.

Sovereign activities of Government is neither goods nor service. Hence, the Act does not apply to sovereign activities.

Activities like Dispensing Justice, maintaining armed Forces conducting audit by C&AG, elections to Parliament or State Legislatures are ‘sovereign activities’ as no other person can do it.

3.5 Non-applicability of Consumer Protection Act, 2019

There are various decisions where it has been held that provisions of CPA are not applicable. These are summarised below.

Special Act provisions prevail over Consumer Protection Act – Consumer Protection Act is a general Act. Hence, when special provisions are made in a special Act, those provisions will prevail.

Railway claims – Jurisdiction in respect of complaints on account of deficiency in service due to loss, destruction, damage, deterioration or non-delivery of goods entrusted to railways lies exclusively with ‘Railway Claims Tribunal’. Thus, consumer forums have no jurisdiction to entertain complaints in these matters. – Chairman, Thiruvalluver Transport Corporation v. Consumer Protection Council AIR 1995 SC 1384 = (1995) 2 SCC 479 = 83 Comp Cas 82 (SC) * Union of India v. M Adaikalam – II (1993) CPJ 145 = (1993) 1 CTJ 476 (NCDRC).

Railway Claim Tribunal has jurisdiction in respect of railway parcel claims. In such case, consumer forums will not have jurisdiction. – Kalawati v. United Vaish I (2002) CPJ 71 (NCDRC) * Southern Rail- ways v. M Chidambaram I (2002) CPJ 34 (NCDRC). – In a contrary view, in DCCM, Eastern railway v. Dr. K K Sharma III(2000) CPJ 1 (NCDRC), it was held that Consumer Court cannot supplant jurisdiction of Railway Tribunal or any other judicial or quasi judicial authority, but can supplement jurisdiction of these bodies in appropriate cases. It provides an additional remedy to a consumer.

Telecom services – In Vodafone Idea Cellular v. Ajay Kumar Agarwal (2022) 6 SCC 496 (SC 3 member bench), it has been held that jurisdiction of consumer forum is not ousted by Telegraph Act as Consumer Protection Act is special Act.

In view of the judgment, validity of following judgments is now doubtful.

In General Manager, Telecom v. M Krishnan (2009) 8 SCC 481 = AIR 2010 SC 90, it has been held that Telegraph Act is a special Act. Hence, disputes in respect to telephones are subject to Telegraph Rules. Special remedy provided under section 7B of Telegraph Act of arbitration of dispute shall apply and consumer forum has no jurisdiction – relying on Thiruvalluvar Transport Corpn. v. Consumer Protection Council (1995) 2 SCC 479 = AIR 1995 SC 1384, where it was held that consumer forum has no jurisdiction to adjudicate upon claims arising out of motor vehicles accidents.

Dispute about electricity meter reading – In SDO, Electricity v. B S Lobana (2005) 6 SCC 280, it was held that dispute about correctness of electricity meter should be with Electrical Inspector under section 26(6) of Electricity Act and not with consumer forum.

Limitation as provided in Special Act prevails – In Old Village Industries Ltd. v. Air India (1996) 4 CTJ 776 (NCDRC), it was held that limitation provided under ‘Carriage by Air Act’ will be applicable as it is a special Act. In Manager, Air India v. India Everbright Shipping I 2002 CPJ 51 (NCDRC), it was held that a consumer forum cannot award claim more than limited liability as prescribed in Carriage by Air Act, 1972.

Refund only as per statutory provisions – In Girish Kumar Balubhai Choksi v. State of Gujarat (NCDRC) CS – LTh 183.12.1999, it was held that if a Statute provides complete mechanism for refund, the refund can be claimed only as per provisions of that Statute.

3.6 No Concurrent Jurisdiction to Commission

In Indian Medical Association Hsg. Society Ltd. v. Rustomji Develop- ments – III (1994) CPJ 130 (NCDRC), it was held that when an identical issue covering the same matter is pending adjudication with other authority like arbitrator or civil court, the consumer forum has no jurisdiction. In re Sahyadri Motors Agency/Mahindra & Mahindra Ltd. (1997) 25 CLA 359 (MRTPC), it was held that if same issue is already decided by consumer forum, MRTP Commission will not entertain proceedings on the very same cause of action.

In Telecom Dist Manager v. R Shanmugam (1995) 5 CTJ 670 (NCDRC), it was held that consumer forum has no jurisdiction to entertain appeal against award of arbitrator.

In K S Yadav v. Uniscans and Sonic (1992) III CPJ 39 (NCDRC), it was held that there cannot be simultaneous and concurrent jurisdiction of identical issues by consumer forums and MRTP Commission.

However, in Prudential Capital Market v. State of Andhra Pradesh (2000) 27 SCL 482 = 108 Comp Cas 441 (AP HC), it was held that even if CLB has powers in respect of public deposits, consumer forum can exercise jurisdiction, as remedy under Consumer Protection Act is an additional one which a consumer cannot be deprived.

No jurisdiction in tax refund matters – Consumer Forum has no jurisdiction and cannot order excise officer to make refund of excise duty, as the order is appealable under Excise Law – Assistant Commissioner v. Rajesh Bhatti 2003 (156) ELT 58 (NCDRC).

3.7 Extra-territorial Jurisdiction Only in Respect of Practice in India

In Man Roland Druckimachinen AB v. Multicolour Offset Ltd. 2004 AIR SCTh 3151 = 53 SCL 146 (SC), it has been held as follows:

(a) Consumer Forum has no extra territorial jurisdiction

(b) Since forum can grant relief only in respect of practices in India, the practice complained of must have taken place in India

(c) The forum does not have jurisdiction only because the effect is in India.

The ‘effective doctrine’ applies provided the effect of practice is in India [Decision in respect of jurisdiction of MRTP Commission in respect of Unfair Trade Practices, but would equally apply to consumer forums also].

4. Constitutional Background of Consumer Protection Act

There is no specific heading in any entry in Seventh Schedule to Constitution relating to consumer protection. However, following entries are in list III (Concurrent List) which are relevant to consumer protection – * Entry 7 – Contracts * Entry 11A – Administration of Justice * Entry 18 – Adulteration of foodstuffs and other goods * Entry 33 – Trade and commerce in and production, supply and distribution of products of industry (where control is by Union), foodstuffs, including oilseeds and oils etc. * Entry 33A – Theights and measures * Entry 34 – Price Control.

In view of these entries, it appears that Consumer Protection is being treated as concurrent subject. Though it is Central Act, its implementation has been mainly entrusted to State Governments. Administrative aspects of District Forum and State commission, providing infrastructure etc. at district and State level is responsibility of respective State Governments.

Act presently not applicable to Jammu and Kashmir – The 1986 Act was extended to Jammu and Kashmir and Ladakh w.e.f. 9-8-2019 [Earlier, Jammu and Kashmir Consumer Protection Act, 1987 was passed by that Legislature]. Presently, the Consumer Protection Act, 2019 has not been extended to Jammu and Kashmir [section 1(2) of the 2019 Act] [This will be done in due course].