Definition of Consumer

●​ A consumer is anyone who buys goods or services for self-use, not for resale or
commercial purposes.
●​ Includes transactions in both online and offline modes.

Key Features of the Consumer Protection Act, 2019

1. Central Consumer Protection Authority (CCPA):

●​ Established to protect, promote, and enforce consumer rights.

●​ Handles unfair trade practices, misleading advertisements, and consumer rights
violations.
●​ Can impose penalties, recall goods, withdraw services, and reimburse consumers.
●​ Investigation wing headed by a Director-General.

2. Consumer Rights:

●​ Right to information on quantity, quality, purity, price, etc.

●​ Protection from hazardous goods and unfair trade practices.
●​ Access to a variety of goods at competitive prices.

Deficiency of Service

●​ Defined under Section 2(11) of CPA 2019 as imperfection in quality, quantity, or

standards of service or deliberate negligence causing harm.
●​ Covers all sectors like railways, banking, education, healthcare, etc.

Judicial Precedents:

●​ Indian Medical Association v. V.P. Shanth: Medical negligence included under CPA.
●​ Gurshinder Singh vs. Shriram General Insurance Co.: Insurance claims can't be denied
on mere technical grounds like delay in intimation.

Unfair Trade Practices

●​ Includes misleading claims about quality, fake advertising, and non-compliance with
safety standards.
 ●​ Governed by Consumer Protection (E-commerce) Rules, 2020, applicable to all
e-commerce platforms.
○​ Mandates refund policies, grievance redressal, and grievance officer
appointments.
○​ Consumers must be answered within 48 hours, with resolution within one month.

Product Liability

Definition and Scope:

●​ Responsibility of manufacturers or sellers to compensate consumers for harm caused by

defective products.
●​ Includes manufacturing defects, design defects, marketing defects, or breach of
warranty.

Nature of Product Liability Law:

●​ Based on “caveat venditor” (let the seller beware).

●​ Privity of contract not required to sue (Donoghue v. Stevenson, Henningson v.
Bloomfield Motors Inc.).

Types of Product Liability Claims:

1.​ Manufacturing Defects: Errors during production, e.g., missing parts.

2.​ Design Defects: Faulty blueprints causing inherent product flaws.
3.​ Marketing Defects: Lack of proper usage instructions or warnings.
4.​ Breach of Warranty: Product fails within the stated warranty period.

Remedies Available to Consumers

Against Manufacturers (Section 84):

●​ For defects in manufacturing, design, marketing, or warranty breaches.

●​ Non-compliance with specified manufacturing standards.

Against Service Providers (Section 85):

●​ Poor quality or non-compliance with service agreements.

●​ Omission of safety warnings causing harm.
●​ Breach of warranty or service contract.

Remedies Against Product Sellers

The remedies available under Section 86 of the Consumer Protection Act, 2019, outline several
scenarios where a product seller can be held liable, including:

1.​ Control in Manufacturing or Design: Harm caused due to significant seller

involvement in product creation.
2.​ Product Modifications: Liability for harm resulting from modifications made by the
seller.
3.​ Express Warranty by the Seller: A seller’s warranty, if unmet, can attract liability.
4.​ Undisclosed Manufacturer: The seller becomes liable if the manufacturer is
undisclosed or cannot be sued.
5.​ Negligence in Maintenance: Failure to inspect, maintain, or warn consumers
adequately.

Examples of successful claims include defective air conditioners, poorly functioning televisions,
ffaulty pressure cookers, and defective designs in park equipment.

Defenses Against Product Liability Claims

Section 87 outlines exceptions to product liability:

1.​ Consumer Modification: Harm caused by consumer-altered products.

2.​ Adequate Warnings Provided: Claims invalid if warnings were given but ignored.
3.​ Component Products: No liability for harm caused when components are combined
with other products.
4.​ Consumer Intoxication: No liability if harm resulted from the consumer’s negligence
due to intoxication.
5.​ Obvious Risks: No obligation to warn about dangers that reasonable consumers should
know (e.g., sharp knives).

Manufacturers and sellers are protected if they demonstrate any of these exceptions.

Online Shopping and Product Liability

With the rise of e-commerce, the liabilities of online retailers have evolved:

1.​ Increased Seller Responsibility: Online sellers face greater liability due to the
consumer’s inability to inspect the product pre-purchase.
2.​ Retailer Accountability: Platforms like Amazon and Flipkart may be held liable for
third-party defects.
3.​ Issues in Online Shopping: These include wrong products, delivery damage, delays,
and difficulties suing foreign sellers.
Liability for Food Products

The safety and traceability of food products sold online are paramount. Defective food items can
result in significant liability. Sellers must ensure proper labeling, safety measures, and provide
clear information about products and suppliers.

False and Misleading Advertisements

Misleading advertisements distort competition and harm consumer rights. These may involve:

1.​ Health-Related Claims: False efficacy of products targeting vulnerable groups.

2.​ Other Deceptive Practices: Misrepresentations about warranties, features, or prices.

Relevant Indian Laws

1.​ Consumer Protection Act, 2019: Establishes penalties for false advertising and
ensures robust mechanisms for dispute resolution.
2.​ Cable Television Networks (Regulations) Act, 1995: Prohibits airing offensive or
misleading advertisements.
3.​ Drugs and Magic Remedies Act, 1954: Regulates claims for medicinal products.
4.​ Cigarettes and Other Tobacco Products Act, 2003: Restricts advertisements for
tobacco products.
5.​ Modern Marketplace Dynamics:
a.​ The Act addresses rapid technological and retail trade changes, making
marketplaces accessible digitally.
b.​ Focuses on timely and effective consumer dispute resolution.
6.​ Applicability:
a.​ Broad definition of "e-commerce entity" includes all platforms facilitating
electronic commerce.
b.​ Covers all goods, services, and retail models (B2C, B2B, B2B2C).
c.​ Includes entities operating outside India but selling to Indian consumers.
d.​ Applies to unfair trade practices across all e-commerce models.

Key Obligations for E-Commerce Entities

1.​ General Compliance:

○​ Prevent unfair trade practices and misleading advertisements.
○​ Prohibit price manipulation and maintain a level playing field.
2.​ Consumer Consent:
○​ Obtain explicit consumer consent for purchases (e.g., not pre-ticked
checkboxes).
 ○​ Present terms and conditions before checkout for guest users.
3.​ Price Manipulation:
○​ Ban on price manipulation for unfair profits.
○​ Level playing field required for all sellers without favoritism or bias.
4.​ Consumer Discrimination:
○​ Ensure no discrimination between consumers of the same class.
○​ Disclose preferential treatment to specific sellers.
5.​ Cancellation and Refunds:
○​ No cancellation charges unless applied reciprocally.
○​ Refunds must be processed within a "reasonable period," tailored to consumer
and transaction factors.
6.​ Grievance Redressal:
○​ Appoint a grievance officer with details displayed on the platform.
○​ Complaints must be acknowledged within 48 hours and resolved within one
month.
7.​ Nodal Person of Contact:
○​ Designate a senior official to ensure compliance with the Consumer Protection
Act.
8.​ Complaint Tracking:
○​ Provide ticket numbers for tracking consumer complaints.

Sellers: Obligations Under E-Commerce Rules

1.​ Written Contract

○​ Sellers must have a mandatory written contract with the e-commerce platform.
○​ Standard onboarding contracts need revisions for risk allocation and liability
limitation.
○​ Preferential treatment details must be disclosed.
2.​ False or Misleading Advertisements
○​ Sellers must not impersonate consumers or post fake reviews.
○​ Refunds must be provided for defective or non-conforming goods/services.
○​ Advertisements and images must reflect actual product features.
3.​ Grievance Redressal Officer
○​ Sellers must appoint a grievance redressal officer for compliance.
4.​ Mandatory Disclosures
○​ Sellers must disclose legal name, address, GSTIN, PAN, product details (MRP,
taxes, warranties), and refund/exchange terms.

Consumer Complaint Redressal Mechanism

1.​ Consumer Courts (Three-Tier System)

○​ District Forum: Up to ₹1 crore.
 ○​ State Commission: ₹1 crore–₹10 crore.
○​ National Commission: Above ₹10 crore.
2.​ Filing Process
○​ Exhaust internal grievance mechanisms before legal action.
○​ Send a legal notice detailing the complaint before filing, though it is optional.
○​ Complaint must include all relevant details and documents, filed within two years
of cause.
3.​ Mediation and Appeals
○​ Mediation is an option for settlement if both parties consent.
○​ Appeals are allowed for dissatisfied verdicts, from District to State to National
levels, within 30–45 days of the order.

Central Consumer Protection Authorities (CCPA)

1.​ Role of CCPA

○​ Addresses consumer rights violations, unfair trade practices, and misleading
advertisements.
○​ Headed by a Chief Commissioner, with investigative authority under a
Director-General.
2.​ Appeals
○​ Orders by the CCPA can be appealed before the National Commission within 30
days.

Consumer Dispute Redressal Commissions (CDRC)

1.​ Jurisdiction by Value

○​ District Commission: Up to ₹1 crore.
○​ State Commission: ₹1 crore–₹10 crore.
○​ National Commission: Above ₹10 crore.
2.​ Enhanced Accessibility
○​ Complaints can be filed based on the complainant's residence or business
location.

Mediation

1.​ Alternate Dispute Resolution

○​ Successful mediation terms are recorded.
○​ Partial settlements allow continued hearings for unresolved issues.
○​ Failed mediation reverts the case to the respective commission.
Offences and Penalties

1.​ False or Misleading Advertisements

○​ Penalty for manufacturers/endorsers: Up to ₹10 lakh.
○​ Non-compliance or dealing in adulterated/spurious products results in further
penalties under Chapter VII.

Related Rules and Regulations

Consumer Protection (E-Commerce) Rules, 2020

●​ Mandatory rules focus on consumer and product/service provider interests.

●​ Rule 5: E-commerce entities must provide information on return, refund, exchange,
warranty, delivery, payment methods, grievance redressal, charge-back options, and
country of origin.
●​ Acknowledge consumer complaints within 48 hours and resolve them within 1 month.
Must appoint a grievance officer.
●​ Sellers cannot deny refunds or returns for defective, deficient, delayed, or
misrepresented goods/services.
●​ Prohibits price manipulation for unreasonable profit.

Consumer Protection (Consumer Disputes Redressal Commissions) Rules, 2020

●​ No fee for filing complaints in District Commissions for claims up to ₹5 lakhs (Rule 7).
●​ Unidentified consumer credits to go to the Consumer Welfare Fund (CWF).
●​ State Commissions to submit quarterly reports to the Central Government on case
pendency and disposal.

Central Consumer Protection Council (CCPC)

●​ Advisory body for consumer issues.

●​ Chaired by Union Minister of Consumer Affairs; three-year tenure.
●​ Includes representatives from states across regions and 34 other members.

Case Studies and Precedents

Misleading Advertisements

●​ Horlicks Ltd. v. Zydus Wellness Products Ltd.: Court restrained misleading

advertisement comparing Complan to Horlicks.
●​ Principles Governing Disparagement (Dabur Ltd. v. Colortek):
 1.​ Advertisements must not be false, misleading, or deceptive.
2.​ Comparisons allowed if truthful; untruthful disparagement is not permissible.
3.​ Factors to assess disparagement: intent, manner, and overall effect.

Unfair Trade Practices

●​ Connaught Plaza Restaurants Ltd. v. Kapil Mitra: McDonald's scheme deemed unfair
for forcing additional purchases and concealing terms.
○​ NCDRC reduced compensation to ₹30,000 and costs to ₹70,000.

Deficiency in Service

●​ Ernakulam Medical Centre v. P.R. Jayasree: Releasing a dead body to an unrelated

third party amounts to a deficiency in service under Section 2(1)(g) & (o) of the
Consumer Protection Act.

Medical Negligence

●​ Union of India v. N.K. Srivastava:

○​ Sarvodaya Hospital exonerated; Safdarjung Hospital held liable for medical
negligence.
○​ NCDRC directed Safdarjung Hospital to pay ₹2 lakhs in compensation.
○​ Revision petitions allowed challenging adverse findings.