Chapter 8: The Consumer Protection Act, 2019

CHAPTER VIII: MISCELLANEOUS 

Section 94. Measures to prevent unfair trade practices in e-commerce, direct selling, etc.

This gives the Central Government the power to actively regulate modern trade practices.

94. Government Power to Regulate E-commerce and Direct Selling:

• Simple Translation: To actively prevent unfair trade practices in modern commercial areas like e-commerce (online buying/selling) and direct selling (network marketing/multi-level marketing), and to protect consumers, the Central Government can take specific measures in the manner that they officially prescribe (set rules for).
• Real-World Example: Because online sellers sometimes hide the final price until checkout, the Central Government uses this power to issue a rule mandating that all e-commerce platforms must display the total price, including all taxes and charges, upfront on the product page.

Section 95. Presidents, members, Chief Commissioner, Commissioner and certain officers to be public servants.

This section grants certain officials the status of a “public servant,” which comes with both legal protection and accountability.

95. Public Servant Status for Officials:

• Simple Translation: All key officials involved in the Consumer Protection Act—including the Presidents and Members of the District, State, and National Commissions, the Chief Commissioner and Commissioners of the CCPA, and all officers and employees of the Central Authority—shall be considered public servants within the meaning of the Indian Penal Code (IPC).
• Effect: This means that these officials are legally protected while performing their duties (Section 98 protects them from lawsuits) but are also subject to all the laws and punishments that apply to public servants who engage in corruption or misuse of office.
• Real-World Example: If a party to a dispute attempts to bribe a member of a State Commission, that member is protected by law, and the person offering the bribe would be charged with an offense against a public servant under the IPC, leading to harsher penalties.

Section 96. Compounding of offences.

This section provides a mechanism to settle certain criminal offenses outside of a formal trial by paying a prescribed fee.

96(1) Compounding (Settlement) Option:

• Simple Translation: Two specific offenses—Section 88 (Non-compliance with CCPA direction) and Section 89 (False or misleading advertising)—can be “compounded” (settled) either before or after the formal prosecution has begun. This is done by paying a prescribed monetary amount.
  • Proviso 1 (Court Permission): If a criminal complaint has already been filed in court (under Section 92), this settlement cannot happen without the court’s permission.
  • Proviso 2 (Fine Limit): The settlement amount paid to compound the offense cannot be more than the maximum fine that could have been imposed for that specific offense under the Act.
• Real-World Example: A manufacturer who ran a misleading advertisement (Section 89) offers to pay the maximum fine of ₹10 lakh before the CCPA takes them to criminal court. The CCPA, with the court’s leave (if applicable), accepts the payment, and the criminal case is dropped.

96(2) Authority to Compound:

• Simple Translation: The authority to accept the compounding fee and settle the case rests with the Central Authority (CCPA) or any officer they specifically authorize for this purpose.
• Real-World Example: The CCPA publishes a regulation stating that the Director-General of the Investigation Wing is the authorized officer who can negotiate and finalize compounding settlements.

96(3) Bar on Repeat Offenders:

• Simple Translation: This settlement option is not available to a person who commits the same or a similar offense within a period of three years from the date their first offense was compounded (settled).
  • Explanation (Defining ‘First Offense’): If a person commits a second offense after the three-year cooling-off period has expired, that second offense is legally treated as a “first offense,” and they regain the compounding option.
• Real-World Example: A clothing retailer pays a fee to compound an offense for falsely labeling a product (Section 89) in 2024. If they commit the same or similar offense in 2026, they cannot settle it; they must face full criminal prosecution. If the next offense happens in 2028, they can settle, as the three-year period has passed.

96(4) Effect of Compounding:

• Simple Translation: Once an offense has been officially compounded (settled) under this section, no further legal or criminal proceedings related to that specific offense can be taken against the offender.
• Real-World Example: After a company pays the compounding fee for non-compliance, they are completely released from the criminal charge, and the CCPA cannot later restart the prosecution for that specific act of non-compliance.

96(5) Legal Status of Compounding:

• Simple Translation: The act of the CCPA accepting the compounding fee is legally considered the same as an acquittal (being found not guilty) under the Code of Criminal Procedure, 1973.
• Real-World Example: The compounding settlement provides the offender with a strong legal outcome, ensuring the offense cannot be later used against them in another legal context, just as a formal court acquittal would.

Section 97. Manner of crediting penalty.

This specifies what happens to the money collected from penalties and settlements.

97. Where the Money Goes:

• Simple Translation: Any money collected as a penalty under Section 21 (False advertisement fines) and any amount collected from compounding offenses under Section 96 must be deposited into a prescribed fund (a specific government-managed account).
• Real-World Example: The Central Government creates a “Consumer Welfare Fund.” All fines collected from manufacturers for false advertising and all compounding settlement amounts are credited directly to this fund, which can then be used for consumer awareness and protection activities.

Section 98. Protection of action taken in good faith.

This section provides legal immunity to all officials who perform their duties honestly.

98. Protection for Honest Officials:

• Simple Translation: No lawsuit, prosecution, or other legal action can be brought against any official, from a District Commission President to a CCPA Commissioner or any staff member, for any action that was done or intended to be done in good faith (honestly and without malicious intent) in carrying out the provisions of this Act, rules, or orders.
• Real-World Example: A District Commission member passes an order against a powerful builder who then tries to sue the member personally for damages. Since the member passed the order honestly in their official capacity, this section protects them, and the lawsuit against the individual member will be dismissed.

Section 99. Power to give directions by Central Government.

This clarifies the administrative hierarchy and ensures the Central Government can guide policy.

99(1) Government Policy Directions:

• Simple Translation: The Central Authority (CCPA) is required to follow any written directions regarding questions of policy that the Central Government gives it from time to time.
  • Proviso (Opportunity to Speak): Before the Government gives any such policy direction, the CCPA must be given a chance to express its views on the matter, as far as is practically possible.
• Real-World Example: The Central Government decides that regulating dark patterns in online sales is a national policy priority. The Government directs the CCPA in writing to prioritize investigation into this area, but only after consulting with the CCPA Chief Commissioner on how best to implement the policy.

99(2) Final Decision on Policy:

• Simple Translation: If there is any dispute over whether a specific issue constitutes a “question of policy” (and must therefore be followed by the CCPA), the Central Government’s decision is final.
• Real-World Example: The CCPA questions whether a Government directive about product safety standards is a policy matter or an operational detail. The Central Government rules that it is indeed a policy question, and the CCPA must then follow the direction.

Section 100. Act not in derogation of any other.

This clarifies the relationship of the Consumer Protection Act with all other existing laws.

100. Act is Additional, Not Replacement:

• Simple Translation: The rules and provisions of this Act are meant to be in addition to (supplementary to) and not in derogation of (not taking away from or replacing) the provisions of any other law currently in force.
• Effect: This means that a consumer has the choice to seek relief under this Act, or under any other relevant law (like contract law or specific sector regulations), or both.
• Real-World Example: A consumer is defrauded by a bank. They can file a complaint for deficiency of service under the Consumer Protection Act AND also file a complaint under the Banking Regulation Act or even pursue a criminal case under the Indian Penal Code. The Consumer Protection Act doesn’t cancel out their rights under other laws.

Section 101. Power of Central Government to make rules.

This grants the Central Government the primary authority to create the detailed rules for the Act.

101(1) General Rule-Making Power:

• Simple Translation: The Central Government has the authority to make official rules to carry out any and all provisions contained in this Act.
• Real-World Example: The Act mentions that a complaint can be filed “electronically in such manner as may be prescribed.” The Central Government uses this power to publish the specific Rule that sets up the E-filing portal (e-Daakhil) and defines the exact format and steps for online complaint submission.

101(2) Specific Matters for Rules:

• Simple Translation: Without limiting the general power above, the Central Government can specifically make rules for a long list of detailed matters (clauses (a) through (zj)). These include:
  • (d) Central Council Members: The exact number of official and non-official members (besides the Minister-in-Charge) of the Central Consumer Protection Council.
  • (g) CCPA Officials’ Terms: The qualifications, recruitment method, appointment procedure, salary, and service conditions of the Chief Commissioner and other Commissioners of the CCPA.
  • (i) Investigation Wing Staff: The specific qualifications and appointment process for the Director-General, Additional Director-General, and other officers of the Investigation Wing.
  • (o) District Commission Jurisdiction Value: The power to change the monetary jurisdiction limit (currently ₹1 crore) for the District Commissions.
  • (q) Complaint Fees: The fee structure and acceptable electronic methods for paying the fee when filing a complaint (under Section 35).
  • (u) Fund Utilization: How the money collected from non-identifiable consumers (Section 39(1)(k)) is credited and utilized for consumer protection.
• Real-World Example: The Central Government publishes the “Consumer Protection (Consumer Disputes Redressal Commissions) Rules, 2020,” which, using this section’s power, sets the maximum age limit for a District Commission President and the exact format for the quarterly reports they must submit.

Section 102. Power of State Government to make rules.

This grants State Governments the authority to create detailed rules for the provisions that fall under their direct purview.

102(1) General State Rule-Making Power:

• Simple Translation: Every State Government has the authority to make official rules to carry out the provisions of the Act that apply to the state level (like the State Commissions and District Commissions).
  • Proviso (Model Rules): The Central Government can first create model rules. Until a State creates its own rules, the Central Government’s model rules apply. When the State does make its own rules, they should try to conform to the model rules as much as possible.
• Real-World Example: The Central Government publishes model rules on the salaries for District Commission members. The State of Karnataka uses this model as a base but modifies the specific allowances to better align with its state civil service structure.

102(2) Specific Matters for State Rules:

• Simple Translation: Without limiting the general power above, the State Government can specifically make rules for matters such as:
  • (c) State Council Members: The number of members for the State Consumer Protection Council.
  • (g) District Commission Members: The number of members required for each District Commission.
  • (h) Salaries of District Commission: The salaries and allowances for the President and members of the District Commission.
  • (i) Staff Salaries: The salaries and allowances for the officers and employees of the District Commission.
  • (k) Appeal Deposit Manner: The exact manner in which the mandatory 50% deposit for an appeal to the State Commission must be made (e.g., via demand draft, bank transfer, etc.).
• Real-World Example: The State of Maharashtra passes a rule under this section specifying that the staff of the District Commission must be provided by its general administration department and sets their pay scale.

Section 103. Power of National Commission to make regulations.

This grants the highest consumer body, the National Commission, the authority to create regulations related to court procedure.

103(1) General Regulation-Making Power (National Commission):

• Simple Translation: The National Commission can create official regulations (with the prior approval of the Central Government) to provide for all matters necessary for carrying out the Act’s provisions, as long as these regulations are consistent with the Act.
• Real-World Example: The Act outlines the procedure for admitting a complaint. The National Commission, under this power, creates a detailed Regulation specifying the exact font, margin size, number of copies, and documentation that must accompany every complaint filed.

103(2) Specific Matters for National Commission Regulations:

• Simple Translation: The National Commission can specifically make regulations for:
  • (a) Adjournment Costs: The costs to be paid by a party when requesting an adjournment at the District Commission level (Section 38(7)).
  • (c) Mediation Cell Records: The type of information and records that the Consumer Mediation Cells must maintain (Section 74(4)).
  • (e) Mediator Empanelment: The qualifications, training, fee, code of conduct, and process for removing/canceling mediators on the panel (Section 75(2)).
• Real-World Example: The National Commission issues a regulation stipulating that if a party requests an adjournment for a non-urgent matter, they must pay a ₹2,000 fine, which is then credited to the Consumer Welfare Fund.

Section 104. Power of Central Authority to make regulations.

This grants the CCPA the power to create regulations for its own functioning and investigation process.

104(1) General Regulation-Making Power (CCPA):

• Simple Translation: The Central Authority (CCPA) can create official regulations (with the prior approval of the Central Government) to provide for all matters necessary for carrying out the Act’s provisions, as long as these regulations are consistent with the Act.

104(2) Specific Matters for CCPA Regulations:

• Simple Translation: The CCPA can specifically make regulations for:
  • (a) Engaging Experts: The procedure for hiring and the number of experts and professionals to assist the CCPA (Section 13(3)).
  • (b) CCPA Procedure: The procedure for conducting its business and how the work is distributed between the Chief Commissioner and the Commissioners (Section 14(1)).
  • (c) Investigation Reporting: The form, manner, and time limit within which the Director-General must submit investigation reports to the CCPA (Section 15(5)).
• Real-World Example: The CCPA passes a regulation specifying the mandatory training modules and ethical standards that any external expert (like a food safety professional or engineer) must clear before being engaged to assist in an investigation.

Section 105. Rules and regulations to be laid before each House of Parliament.

This is a crucial check on the power of the government and commissions, ensuring democratic oversight.

105(1) Central Rules and Regulations to Parliament:

• Simple Translation: Every single rule made by the Central Government and every regulation made by the National Commission or the CCPA must be presented and laid before both Houses of Parliament (the Lok Sabha and the Rajya Sabha) as soon as possible after they are made.
• Process and Oversight: This must happen for a total period of thirty days (which can be over one session or several). If, during that time, both Houses agree to:
  • Modify the rule/regulation, then it will only take effect in the modified form.
  • Annul (cancel) the rule/regulation, then it will have no effect.
• Proviso: Importantly, any modification or cancellation does not affect the validity of anything already done under that original rule or regulation before the change or cancellation took effect.
• Real-World Example: The Central Government passes a rule about e-commerce compliance. It is laid before Parliament. After thirty days of review, Parliament decides to modify the rule to make compliance deadlines six months longer. The new rule is applied from that date, but any enforcement action taken before the modification is still valid.

105(2) State Rules to State Legislature:

• Simple Translation: Every rule made by a State Government under this Act must be laid before the State Legislature (the State Assembly) as soon as possible after it is made.
• Real-World Example: The State of Tamil Nadu passes a rule regarding the salary of District Commission members. That rule must be officially presented to the Tamil Nadu Legislative Assembly for review and oversight.

Section 106. Power to Remove Difficulties.

This section grants the Central Government the authority to step in and fix unforeseen problems that might arise when putting the new Act into practice.

106. Authority to Solve Implementation Problems:

• Simple Translation: If the Central Government finds any difficulty in giving effect to the provisions of this Act (meaning, if there’s an unforeseen legal or logistical hurdle), the Government can issue an official order in the Official Gazette to make provisions that help remove that difficulty. This order must not contradict the main provisions of the Act.
• Proviso (Time Limit): This emergency problem-solving power is temporary. The Central Government cannot make any such order after the expiry of a period of two years from the date the Act commenced (came into force).
• Real-World Example: When the Act first came into force, the rule about which bank account the 50% appeal deposit should go into caused confusion because the new commissions weren’t fully established. Using this power, the Central Government temporarily ordered that all deposits be made to a specific, centralized government account for the first six months until the system was fully operational.

Section 107. Repeal and savings.

This section is the formal declaration that the old law is cancelled and specifies how cases started under the old law should be handled.

107(1) The Old Act is Cancelled:

• Simple Translation: The Consumer Protection Act, 1986 (the old law) is hereby formally repealed (cancelled and replaced).
• Real-World Example: The passage of the 2019 Act means that from the date it came into effect, no new consumer complaints could be filed under the provisions of the 1986 Act.

107(2) Saving Clause (Continuation of Actions):

• Simple Translation: Despite the cancellation of the old Act, any action taken, thing done, or order issued under the 1986 Act will be deemed (treated legally) as if it was done under the corresponding provision of the new 2019 Act, provided it doesn’t conflict with the new Act.
• Real-World Example: A District Forum (under the 1986 Act) had passed an order in 2018 requiring a builder to refund money. When the 2019 Act came into force, this order is still legally valid and enforceable, and the builder cannot claim the order is invalid just because the old law was repealed.

107(3) General Clauses Act Application:

• Simple Translation: The mention of continuing specific actions (like in sub-section (2)) does not limit or affect the general application of Section 6 of the General Clauses Act, 1897.
• Effect: Section 6 of the General Clauses Act is a standard legal safeguard that ensures legal proceedings already pending under an old law are allowed to continue and be concluded under that old law, unless the new law explicitly says otherwise. This prevents a huge number of pending court cases from being dismissed overnight just because the law changed.

Real-World Example: A consumer filed a complaint in 2017. When the 2019 Act began, the case was still being heard. Thanks to the General Clauses Act, that case can legally continue to be heard and decided as if the 1986 Act were still in force for that specific matter, avoiding the need to refile the entire case under the new, different procedures.