KSLU Corner™ New AIBE previous QP

Consumer Protection Act, 2019

Law of Torts · Unit V · Topic 15 of 16 · 8 min read

The Act that replaced the 1986 law: who is a consumer, defect and deficiency, unfair trade practices, product liability, the Central Consumer Protection Authority, the three Commissions and their jurisdiction, limitation and mediation.

← All Law of Torts topics Past papers
On this page
  1. 1. Why consumer law sits in torts
  2. 2. Salient features of the 2019 Act
  3. 3. Who is a consumer: s.2(7)
  4. 4. Defect, deficiency and unfair trade practice
  5. 5. Medical services
  6. 6. Product liability: Chapter VI (ss.82 87)
  7. 7. Central Consumer Protection Authority
  8. 8. The Commissions and their jurisdiction
  9. 9. Mediation and penalties
  10. 10. Problem
  11. How this is examined
Cases checked to exist. Read the judgment before quoting a holding.

Every case cited here has been checked to exist — the citation resolves and names the right parties. The propositions attributed to each case have not been verified line by line against the judgment. Case names link through to the full judgment: read it before quoting a holding in an examination answer, and never carry a proposition from notes into court on trust.

Read the syllabus carefully. The KSLU syllabus still names the Consumer Protection Act, 1986. That Act was repealed by the Consumer Protection Act, 2019, which came into force on 20 July 2020. Answer on the 2019 Act and say so in your first line. Pending cases filed under the old Act continue under it, but every new complaint is under the 2019 Act.

1. Why consumer law sits in torts

A consumer harmed by a defective product or careless service could always sue in negligence or contract, but the civil suit is slow and costly. The Act gives a summary, inexpensive remedy before specialised Commissions. Section 100 makes it in addition to and not in derogation of any other law, so the consumer may choose the Commission or the civil court.

2. Salient features of the 2019 Act

3. Who is a consumer: s.2(7)

A consumer is a person who (i) buys goods for consideration paid, promised or partly paid, or under a deferred payment system, or (ii) hires or avails of services for consideration, and includes any user of the goods or beneficiary of the services with the approval of the buyer. Two points are examined:

4. Defect, deficiency and unfair trade practice

Defect (s.2(10)) means any fault, imperfection or shortcoming in the quality, quantity, potency, purity or standard which is required to be maintained by law, or under a contract, or claimed by the trader, in relation to goods or products.

Deficiency (s.2(11)) means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance of a service, and expressly includes negligence, omission or commission causing loss or injury to the consumer, and deliberate withholding of relevant information. “Service” under s.2(42) covers banking, insurance, transport, electricity, housing construction, entertainment and similar services, but not services free of charge or under a contract of personal service. In Lucknow Development Authority v. M.K. Gupta, 1993 INSC 365, (1994) 1 SCC 243, the Supreme Court held that a statutory authority building houses renders a service, and that compensation may be awarded for harassment and mental agony caused by its officers.

Unfair trade practice (s.2(47)) covers false representations about standard, quality, sponsorship or price; misleading advertisement; bait advertising; fake “free” gifts and contests; selling goods that do not comply with safety standards; hoarding; manufacturing spurious goods; not issuing a bill or cash memo; refusing to take back defective goods or refund within thirty days; and disclosing a consumer's personal information given in confidence.

5. Medical services

In Indian Medical Association v. V.P. Shantha, 1995 INSC 720, (1995) 6 SCC 651, decided under the 1986 Act, the Supreme Court held that service rendered by doctors and hospitals for a fee is a “service”. It is not a contract of personal service, since there is no master-servant relation between doctor and patient. Only service rendered entirely free of charge to all patients falls outside. Free treatment in a hospital that charges other patients is covered, because the paying patients bear the cost. The 2019 Act's definition of service does not name health care (the word was dropped while the Bill was in Parliament), but Shantha continues to be applied.

Watch this point. In Bar of Indian Lawyers v. D.K. Gandhi, 2024 INSC 410, the Supreme Court held that advocates' services are not within the Act, and observed that Shantha needed reconsideration, referring the question to a larger Bench. Until a larger Bench decides otherwise, Shantha remains binding. Mention this in one sentence; it shows you know the current position.

6. Product liability: Chapter VI (ss.82–87)

Product liability (s.2(34)) is the responsibility of a product manufacturer or seller to compensate for harm caused by a defective product. A product liability action may be brought against the manufacturer (s.84) where the product has a manufacturing defect, a design defect, deviates from specifications, does not conform to an express warranty, or lacks adequate instructions or warnings. The manufacturer is liable even if he proves he was not negligent or fraudulent in making the express warranty: the liability is strict. Service providers (s.85) and sellers (s.86) are liable in narrower cases, such as where the seller altered the product or the manufacturer cannot be identified. Section 87 lists exceptions, including misuse, alteration or modification of the product by the consumer, and obvious or commonly known dangers.

7. Central Consumer Protection Authority

The CCPA is established under s.10 to regulate matters affecting the rights of consumers as a class. It can inquire into violations, order recall of unsafe goods and withdrawal of services, order refunds, discontinue misleading advertisements, and impose penalties. Under s.21 it may impose on a manufacturer or endorser a penalty of up to ₹10 lakh for a false or misleading advertisement (up to ₹50 lakh for a repeat), and may bar an endorser from endorsing for up to one year (three years for a repeat). An endorser escapes if he exercised due diligence to verify the claims.

8. The Commissions and their jurisdiction

The Act sets up a District Commission (s.28), a State Commission (s.42) and the National Commission (s.53). Pecuniary jurisdiction depends on the value of the goods or services paid as consideration, not the compensation claimed. The Act originally fixed the limits at ₹1 crore and ₹10 crore. The Consumer Protection (Jurisdiction of the District Commission, the State Commission and the National Commission) Rules, 2021, notified on 30 December 2021, revised them:

Appeals. District to State within 45 days (s.41), on deposit of 50% of the amount ordered; State to National within 30 days (s.51); National to the Supreme Court within 30 days (s.67).

Limitation. Under s.69 a complaint must be filed within two years from the date on which the cause of action arose. A later complaint may be admitted if the complainant shows sufficient cause and the Commission records its reasons.

9. Mediation and penalties

If the parties agree, the Commission may refer the dispute to mediation at the earliest stage (s.37). Mediation cells are attached to each Commission under Chapter V (ss.74–81). A settlement is recorded in an order; no appeal lies from it.

Failure to comply with an order of a Commission is punishable under s.72 with imprisonment of one month to three years, or fine of ₹25,000 to ₹1 lakh, or both. Section 89 punishes a false or misleading advertisement with imprisonment up to two years and fine up to ₹10 lakh (higher for repeat offences).

10. Problem

P orders a pressure cooker online from a marketplace. It explodes on first use because of a faulty safety valve, injuring her. The marketplace says it is only an intermediary; the manufacturer says P must prove negligence. The cooker cost ₹4,000; P claims ₹5 lakh.

Issue. Whether P is a consumer, against whom she can proceed, and where.

Law. Online purchases are covered by s.2(7). A manufacturer is liable in a product liability action for a manufacturing defect without proof of negligence (s.84). Jurisdiction is fixed by the consideration paid.

Application. P bought for personal use, so she is a consumer. The faulty valve is a manufacturing defect; the manufacturer's plea fails because s.84 liability is strict. The marketplace's liability depends on its role under s.86 and the E-Commerce Rules, but P can in any case proceed against the manufacturer. The value paid is ₹4,000, within the District Commission's limit; she can file where she lives, within two years.

Conclusion. P should file a product liability complaint before the District Commission against the manufacturer (and the platform, if it is a seller in law) for compensation for injury.

How this is examined

A 10-mark question asks for the salient features of the Act, the definition of consumer, or the redressal machinery. Begin by stating that the 2019 Act has replaced the 1986 Act. Short notes: “Consumer”, “Deficiency in service”, “Medical negligence and consumer law” (V.P. Shantha), “Product liability”, “Unfair trade practice”, “Central Consumer Protection Authority”.

Now try the real questions: Law of Torts past question papers.