The  Central government has notified the application of the Consumer Protection Act, 2019 with effect from July 20. The timing of the notification comes at a time when the industries are already coping with the blows dealt by the lockdown and labour crisis. (The Act had received President's assent last year on August 8).

Both manufacturers and sellers may not immediately be impacted by the coming into effect of the stringent provisions, thanks to all the quasi-judicial fora  that remains largely non-functional (DUE TO COVID-19?).The already low on morale multinational companies will have to bite another bullet.

In this piece we discuss the major challenges that await us and examine the changes brought about in the consumer laws under the new Consumer Protection Act, 2019.


District Consumer Forum claims < Rs 1 Crore

State Consumer Commission claims < Rs10 Crores

National Commission > Rs 10 Crores

The pecuniary jurisdiction has been increased and under the new act, consumers can file complaints at the district level where the value of goods and services forming the subject matter of the dispute does not exceed Rs. 1 Crore. Another important change relating to pecuniary jurisdiction is that for the purpose of jurisdiction, only the value of goods and services shall be considered and not the quantum of damages being sought, thus the consumer can no longer confer jurisdiction on a forum of his choice/convenience by claiming exaggerated damages on account of mental harassment etc. In addition to the foregoing, the CP Act 2019 enables complainants/aggrieved persons to institute complaints in the jurisdiction where the complainant resides or works. Under civil law, a suit can be brought against a defendant where he resides or works for gain. The jurisdiction has now been conferred upon courts where the complainant resides or works for gain. In addition to the convenience of the consumer as regards the choice of venue, the Act also provides for filing of the complaint through electronic modes.

Interestingly, the Act aimed at timely and effective settlement of consumer disputes has for the first time introduced mediation as a dispute resolution mechanism under the aegis of the concerned consumer dispute commission. Under the old act there was no alternate dispute resolution mechanism in place and the forums dedicated towards quick and easy resolution of consumer grievances had become identical to the clichéd Indian civil court – repeated adjournments, woeful infrastructure, huge backlog. However, the reference to mediation under the new act is only directory in nature and not mandatory unlike the pre-litigation mediation under the Commercial Courts Act. A survey conducted in over 600 consumer courts spread across the length and breadth of the country has revealed that 91% of all consumer disputes are settled at the district level, with the number falling to 80% at the state commission level and marginally substantially increased to 87% at the National Commission. Considering the high possibility of disputes being amicably settled, the legislature ought to have made the process of mediation mandatory at the pre litigation stage.

Manufacturers, traders and sellers ought to revisit their customer contracts to ensure that the contract terms are not unfair to the customer, as this could result in non conformation to the standards prescribed under the Consumer Protection Act 2019.


"Product liability" is defined under Section 2 as the responsibility of a product manufacturer or product seller, of any product or service, to compensate for any harm caused to a consumer by such defective product manufactured or sold or by deficiency in services relating thereto;

The introduction of the concept of product liability essentially spins the general principal a full 360 degrees and the general principle of 'Caveat Emptor' defined under Sale of Goods Act replaced by the lesser known 'Caveat Vendetor' translating to Seller beware, placing the onus on the seller for any inconvenience that the buyer might face with a service or product. The introduction of the provision fixes upon a manufacturer or vendor, the responsibility of providing compensation for causing any form of injury to the ultimate consumer on account of defective merchandise being sold to him, irrespective of the fact whether any contract existed between such effected consumer and the manufacturer.

Chapter VI of the 2019 Act, which deals with product liability, clearly stipulates the cases wherein the liability shall be fastened on the manufacturer i.e. in case the product is defective in design, contains a manufacturing defect, deviation from manufacturing specifications etc. The stringency of the provision may be adjudged from the fact that the mere inadequate instructions or warning related to incorrect usage of product shall attract strict liability of the manufacturer. The chapter also encapsulates scenarios wherein liability shall be the responsibility of the product seller or the service provider. The law however creates an exception under the product liability provisions in cases where the product has been misused, altered, or modified at the time of harm.


Celebrity endorsements are part of everyday life in India. All goods and services, irrespective of their price, utility, effectiveness and target population are widely advertised and endorsed by celebrities from  various fields.  Industry insiders estimate that 50% of all consumer goods feature celebrities in print as well as digital media advertisements. Under the current regime, there is no mechanism in place to regulate the endorsement fee being charged by the celebrities nor is there any provision to fasten liability on endorsers for defective/substandard products or deficiency in service.

Advertisers confirm that the prestige of the product dictates the deal value. The relationship between the size of  a brand and the endorsement fee that's being charged is inverse. Simply put, the deal value depends squarely on the perception of the brand in the eyes of the celeb endorser. Negative perception of brands results in resistance and extremely high fees being charged by celebrities. Similarly, when celebrities perceive brands to be more appealing, they willingly let go a decent proportion of their endorsement fees in lieu of the intangible value of being associated with a leading mammoth brand.

A similar approach needs to be adopted by courts while deciding the extent of liability of the endorser and the brand value and reach of the manufacturer/service provider must be taken into account while arriving at the quantum of penalty to be imposed. Unfortunately the Act under Section 21, provides for imposition of penalty for any advertisement which is false or misleading and is prejudicial to the interest of any consumer or is in contravention of consumer rights, on the manufacturer or endorser. subject to a maximum penalty of Rs 10 lakh  other than discontinuing such advertisements. In case of  any subsequent violation, the extent of penalty may be extended to Rs 50  lakh rupees, which is a minor fraction of the endorsement fee being earned by such endorsers. The provision of imposition of penalty is only directory and not mandatory and going by the lenient approach being adopted by courts, the celebrities may get away with no penalty in most cases.


The Consumer Protection Act, 2019 is the first statute to define e-commerce under section 2(16) of the Act.  The steady increase in the number of both urban and semi urban shoppers on online portals even for items of everyday use forced the government to frame a policy in respect of goods and services being offered via web portals. With the  Covid-19 pandemic making the future of brick and mortar stores uncertain, the exponential surge in number of services being availed by consumers due to stay-at-home compulsions, unregulated e-marts  are jeopardizing the interests of innocent consumers.

E-commerce platforms now mandatorily need to display their terms of delivery, payment, return, refund and exchange, warranty and guarantee policies, grievance redressal mechanism etc. In addition, e-commerce entities shall also be held liable in case any false or misleading advertising regarding product characteristics, are displayed on their website. The E-commerce Rules, 2020 postulate further details. including health and safety information, secure payment methods, the shelf life of products, the breakdown of prices, showing all included charges. Under the new regime, e-commerce entities have to unconditionally accept the return of goods that are delivered late or are defective, including counterfeit and wrongly advertised products, and provide refunds within fourteen days.

Unfair contracts  The new act enables consumers to file complaints against and challenge contracts that are unfair or arbitrary. E-commerce websites heavily rely upon contractual terms to mitigate risk exposure and safeguard their interests against third-party liabilities. These terms and conditions, which are generally in the form of auto-ticked check boxes, become binding on consumers as soon as they register on the platform for the purchase of goods and/or services. These standard terms and conditions now need to be in conformity with the rules framed in this regard.

Sale of spurious products The Act sets out penalties for the manufacture, sale, storage, distribution or import of spurious and adulterated products, including imprisonment and suspension or cancellation of trading  licenses. The first conviction under these provisions shall attract suspension of trade license for a period up to two years and the subsequent conviction shall culminate in cancellation of trade license. Further, e-sellers are obliged to accept the return of spurious or counterfeit goods and refund the purchase amount within fourteen days. Further, depending on the nature of injury caused to the consumer, the act provides for imprisonment varying from six months in case of no injury, to life imprisonment in case of death of a consumer. Violations resulting in  grievous hurt to consumer or causing death of consumer have been made cognizable and non bailable.

Level playing field. The rules have been framed keeping in mind, the necessity of maintaining parity between geographically locatable stores and e-commerce platforms, while ensuring that smaller players are not disadvantaged by predatory pricing and deep discounting. The e-commerce entities are expected to refrain, directly or indirectly, from influencing the price of goods or services sold through their portals and not to indulge in practices influencing the price of goods or services available through offline modes.

Redressal Procedures. The rules cast an obligation on e-commerce entities to appoint grievance officers and to publish their contact details on their websites. The entities are expected to briefly explain the procedure through which consumers can make complaints. The rules require grievance officers to acknowledge the receipt of the complaint within  48-hours and resolve the complaint within one month of receipt of the complaint.


The new act although beneficial for the consumers, is hard hitting for the manufacturers and sellers. In a country like India, where people are happy litigating and frivolous complaints are equivalent to, if not more than, genuine grievances, the journey to achieving the desired objective shall be long and arduous. Although the intent of the legislature may be unquestionable, considering the objective behind the act, its high time the legislators and draftsmen realise that what is lacking in the justice delivery system is not the software(statutory/procedural laws) for the running of the courts, but the hardware(basic infrastructure) for accommodating the mammoth burden of cases. The path to speedy redressal of consumer grievances will happen only adequate members are allotted to the commissions and by providing excellent infrastructure to deal with the interminable causelist.

1986 Act v. 2019 Act: A Comparison


Consumer Protection Act, 1986

Consumer Protection Act, 2019



No separate regulator

Central Consumer Protection Authority (CCPA) to be formed

Section 10

Territorial Jurisdiction

Complaint could be filed in a consumer court where the seller's (defendant's)office is located

Complaint can be filed in a consumer court where the complainant resides or works

Section 34 (Section 11 of the 1986 Act)

Section 47 (Section 17 of the 1986 Act)

Section 58 (Section 21 of the 1986 Act)

Product Liability

No provision

Consumer can seek compensation for harm caused by a product or service

Section 82-87

Pecuniary Jurisdiction

District: Up To INR 20 Lakh

State: INR 20 Lakh to INR 1 Cr

National: Above INR 1 Cr

District: Up To INR 1 Cr

State: INR 1 Cr to 10 Cr

National: Above INR 10 Cr

Section 34 (Section 11 of the 1986 Act)

Section 47 (Section 17 of the 1986 Act)

Section 58 (Section 21 of the 1986 Act)

Unfair Trade

No Provision

Defined as a contract between a manufacturer or trader or service provider and a consumer, having such terms which cause significant change in the rights of such consumer

Section 2(46)


No provision

All rules of direct selling extended to e-commerce

Section 2(16)


No Provision

Court can refer settlement through mediation

Section 74 - 81


The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.