Law relating to Consumer Protection: formula sheet

Key formulas

Consumer (goods)

Buys goods for consideration (paid/promised/part/deferred) + not for resale or commercial purpose

Approved users of the goods are included. Self-employment livelihood use is not commercial purpose.

Consumer (services)

Hires or avails of service for consideration + not for commercial purpose

Beneficiaries with the approval of the hirer are included. Free services and contracts of personal service are outside.

Defect vs deficiency

Defect = fault in goods; Deficiency = fault in service

Deficiency includes negligence, omission or commission causing loss, and deliberate withholding of relevant information.

Complainant

Consumer | registered voluntary consumer association | Central/State Government | Central Authority | numerous consumers with same interest | legal heir | parent or guardian of minor

Seven categories in all. Cite Section 2(5).

Complaint grounds

Unfair contract/unfair or restrictive trade practice; defective goods; deficient services; excess price; hazardous goods; hazardous services; product liability claim

Complaint must be an allegation in writing. Cite Section 2(6).

Product liability

Manufacturer/seller/service provider compensates for harm caused by defective product or deficient service

Harm covers damage to other property, personal injury, illness, death, mental agony, loss of consortium. It excludes harm to the product itself and commercial or economic loss.

Restrictive trade practice

Manipulates price or delivery conditions or flow of supplies, imposing unjustified costs on consumers

Includes delay in supply leading to a price rise and tie-in conditions.

Refund of defective goods

Refusal to take back defective goods or withdraw deficient services and refund within the period in the bill, or 30 days if none stated = unfair trade practice

Part of Section 2(47)(viii).

Six consumer rights

Safety · Information · Choice (access to variety at competitive prices) · Be heard · Redressal · Consumer awareness

Learn them as a list of six. In an answer, write each right in the Act's own wording and then apply it to the facts.

Central Council (Sections 3 and 5)

Established by the Central Government by notification. Chair: Minister in charge of the Department of Consumer Affairs. Other members: as prescribed. Object: advice on promotion and protection of consumers' rights.

It is an advisory council. It has no power to decide complaints.

State Council (Sections 6 and 7)

Established by each State Government. Chair: Minister in charge of Consumer Affairs in the State. Members: as prescribed + up to 10 nominated by the Central Government. Meetings: as and when necessary, at least 2 a year. Object: advice within the State.

The 'not exceeding ten' nominees by the Central Government appear only for the State Council.

District Council (Sections 8 and 9)

Established by the State Government for every district. Chair: Collector of the district. Members: as prescribed. Meetings: as and when necessary, at least 2 a year, within the district. Object: advice within the district.

The Collector, by whatever name called, is the chairperson.

Who establishes which body

Central Council: Central Government. State Council: State Government. District Council: State Government.

Examiners often test this. A District Council is not set up by the Central Government.

Establishment and composition

Section 10: Central Authority = Chief Commissioner + other Commissioners (as prescribed)

Set up by Central Government notification. Headquarters in NCR of Delhi; regional offices elsewhere in India.

Complaint routes

Section 17: District Collector OR Commissioner of regional office OR Central Authority

Complaint may be in writing or electronic mode, for violations affecting consumers as a class.

Investigation

Section 19: preliminary inquiry → prima facie case → investigation by Director-General or District Collector

Documents and records can be called for. The matter may be referred to another Regulator with a report.

Recall order

Section 20: recall goods or withdraw services + reimburse prices + discontinue unfair practices

Needs sufficient evidence after investigation. The person must be heard before the order.

Directions on misleading advertisement

Section 21(1): order to discontinue or modify the advertisement

Issued to trader, manufacturer, endorser, advertiser or publisher, after investigation.

Penalty on manufacturer or endorser

Section 21(2): up to ₹10 lakh; each subsequent contravention up to ₹50 lakh

Applies to manufacturer or endorser only.

Endorser prohibition

Section 21(3): up to 1 year; subsequent contravention up to 3 years

Bars the endorser from endorsing any product or service.

Penalty on publisher of misleading advertisement

Section 21(4): up to ₹10 lakh

On a person who publishes, or is a party to publishing, a misleading advertisement.

Defences

Section 21(5) endorser: due diligence. Section 21(6) publisher: ordinary course of business

The publisher's defence fails if he knew of the Authority's earlier order for withdrawal or modification.

Penalty factors

Section 21(7): population and area affected; frequency and duration; vulnerability of class; gross revenue from sales

A fair hearing must be given before any order (Section 21(8)).

Pecuniary jurisdiction (rules made under the Act, 2021)

District: consideration ≤ ₹50 lakh | State: > ₹50 lakh to ₹2 crore | National: > ₹2 crore

Based on value of goods or services paid as consideration. The Act's own text for the National Commission says ten crore but lets the Central Government prescribe another value.

Composition

District: President + at least 2 members | State: President + at least 4 members

The upper limit of members is as prescribed in consultation with the Central Government.

Appeal, District to State (Section 41)

45 days; deposit 50% of amount ordered

Grounds of facts or law. Delay can be condoned for sufficient cause. No appeal against a mediation settlement order.

Appeal, State to National (Section 51)

30 days; deposit 50% of amount ordered

Covers State Commission's original orders. A second appeal from its appellate order lies only on a substantial question of law.

Appeal, National to Supreme Court (Section 67)

30 days; deposit 50% of amount ordered

Only against National Commission's original orders under Section 58(1)(a)(i) or (ii).

Appeal against penal orders (Section 73)

30 days; District → State → National → Supreme Court

Applies to orders under Section 72(1). No other appeal lies to any court.

Revision (Section 58(1)(b))

National Commission may call for records of State Commission cases

Where the State Commission acted without jurisdiction, failed to use it, or acted illegally or with material irregularity.

Limitation period

Complaint within 2 years from the date the cause of action arose (Section 69(1))

Delay can be condoned for sufficient cause, but the Commission must record reasons (Section 69(2)).

Admissibility timeline

Decide admissibility ordinarily within 21 days of filing; if not decided, complaint is deemed admitted (Section 36(2), (3))

A complaint cannot be rejected without giving the complainant a hearing.

Reference to opposite party (goods)

Copy of admitted complaint referred within 21 days of admission (Section 38(2)(a))

Opposite party has 30 days to reply, plus up to 15 more days if granted.

Opposite party's reply time

30 days + extension of not more than 15 days (Section 38(2)(a), 38(3)(a))

The Commission itself grants the extension. The opposite party cannot claim it as a right.

Laboratory report

Report within 45 days of receipt of reference, or extended period granted (Section 38(2)(c))

Applies only where the defect cannot be found without analysis or test.

Target for disposal

3 months from receipt of notice by opposite party; 5 months if testing is required (Section 38(7))

It is an endeavour, not a hard bar. Reasons must be recorded if disposal is later.

Mode of hearing

Hearing on affidavit and documentary evidence (Section 38(6))

Personal or video-conference hearing allowed on sufficient cause, with reasons recorded in writing.

Enforcement

Order enforced as a civil court decree under Order XXI of CPC (Section 71)

References to decree are read as references to the order.

Seller liability: Section 86 (five grounds)

Seller (not a manufacturer) is liable if: (a) substantial control over design, testing, manufacture, packaging or labelling; (b) altered or modified the product and this was the substantial factor in the harm; (c) own express warranty that the product failed to meet; (d) manufacturer unknown, cannot be served, is not subject to Indian law, or the order cannot be enforced against him; (e) failed to use reasonable care in assembling, inspecting or maintaining, or did not pass on the manufacturer's warnings, and this was the proximate cause

Learn the grounds as a list of five. Grounds (b) and (e) need causation: 'substantial factor' and 'proximate cause'.

Who can be sued: Section 83

Complainant may act against manufacturer, service provider or seller, as the case may be, for harm from a defective product

Section 82 says the Chapter applies to every claim for compensation for harm caused by a defective product manufactured by a product manufacturer, serviced by a product service provider or sold by a product seller.

Seller exception: Section 87(1)

No action against a seller if, at the time of harm, the product was misused, altered or modified

This is the seller's shield. Compare it with Section 86(b), where the seller himself altered the product.

Manufacturer exceptions for warning-based claims: Section 87(2)

No liability if: (a) product bought by an employer for the workplace and warnings were given to the employer; (b) product sold as a component or material and warnings were given to the buyer; (c) product meant to be used only by or under an expert and reasonable means were used to warn the expert; (d) complainant, while using the product, was under the influence of alcohol or any prescription drug not prescribed by a medical practitioner

These apply only where the claim is based on failure to give adequate warnings or instructions.

Obvious danger: Section 87(3)

Manufacturer not liable for failure to warn of a danger that is obvious or commonly known to the user, or that the user ought to have known given the product's characteristics

Example: a warning that a knife is sharp is not needed.

Penalties for adulterated and spurious goods

Imprisonment and fine, graded by the seriousness of the injury caused: no injury, injury not amounting to grievous hurt, grievous hurt, and death

The punishment rises with the injury. Take the exact terms and fine amounts for each tier from the bare Act and your ICSI study material, and do not quote figures from memory.

Quick revision

• The Central Authority is established by the Central Government by notification under section 10 to protect consumers as a class.
• The Central Authority has a Chief Commissioner and other Commissioners, and its headquarters is in the National Capital Region of Delhi.
• Section 18 lets the Central Authority inquire suo motu, file complaints, intervene in proceedings, issue safety notices and issue guidelines.
• Under section 21, the Central Authority can order a false or misleading advertisement to be discontinued or modified.
• Section 21 penalty on a manufacturer or endorser: up to ₹10 lakh, and up to ₹50 lakh for each subsequent contravention.
• An endorser can be barred for up to one year, and up to three years for each subsequent contravention.
• Penalty factors include the population affected, frequency and duration, vulnerability of the class and gross revenue from sales.
• A hearing must be given before an order under section 21 is passed.
• The State Government sets up the District Commission in each district and the State Commission in the State.
• A State Commission has a President and at least four members; a District Commission has a President and at least two members.
• The National Commission hears complaints where consideration paid exceeds ₹10 crore, plus appeals from State Commission and Central Authority orders.
• A consumer mediation cell is attached to each District, State and National Commission, and reports quarterly to its Commission.

Common mistakes

• Treating every buyer as a consumer. Fix: Always ask why the goods were bought. Resale or commercial use takes the buyer out. Livelihood through self-employment does not count as commercial purpose.
• Using defect and deficiency interchangeably. Fix: Defect belongs to goods. Deficiency belongs to services. Say so in the first line of your answer.
• Saying the Consumer Protection Councils decide consumer complaints. Fix: Write that each Council is an advisory council. Complaints go to the District, State or National Commission.
• Saying the District Council is established by the Central Government. Fix: Remember that the State Government establishes the State Council and also the District Council for every district.
• Saying the CCPA decides an individual consumer's complaint for compensation. Fix: Remember that the CCPA acts for consumers as a class. Individual relief such as refund and compensation is given by the District Commission under Section 39.
• Applying the ₹10 lakh / ₹50 lakh penalty to every person in an advertisement case. Fix: Use Section 21(2) for manufacturer or endorser. A publisher falls under Section 21(4), with a penalty up to ₹10 lakh.
• Deciding the forum by the compensation claimed. Fix: Use the value of goods or services paid as consideration.
• Quoting the ten crore limit for the National Commission as the final figure. Fix: Say the Act allows the Central Government to prescribe another value, and give the prescribed limits (₹50 lakh and ₹2 crore).
• Saying a complaint filed after two years is always barred. Fix: State both. Late complaints can be entertained for sufficient cause, but only after the Commission records reasons for condoning the delay.
• Saying a complaint not decided in 21 days is rejected. Fix: Section 36(3) says the opposite. If the Commission does not decide admissibility in time, the complaint is deemed admitted.

Exam tips

• Quote the opening words of each definition. Examiners reward the exact conditions such as consideration, resale and commercial purpose.
• Write the section number with the clause, for example Section 2(7) for consumer and Section 2(47) for unfair trade practice.
• For case-based questions, test the person first, then the thing, then the wrong. This gives you a fixed structure.
• Learn a short list of unfair trade practices: false representation, bargain-price ads, gifts and contests, unsafe goods, hoarding, spurious goods, no bill, refusal to refund within 30 days, and disclosing confidential personal information.
• Do not write case names unless you are certain of them. A clear application of the definition earns more.
• Expect a mix of 'enumerate the rights' and 'distinguish between the Councils' questions. Prepare a short point-wise answer for each.
• Write the rights in the Act's wording first and apply them to facts only after that. Examiners reward the provision first.
• In any Council answer, state clearly that it is an advisory council, and never describe it as a court or tribunal.