CHAPTER VII: OFFENCES AND PENALTIES
Section 88. Penalty for non-compliance of direction of Central Authority.
This section establishes a criminal penalty for ignoring orders issued by the Central Consumer Protection Authority (CCPA).
88. Punishment for Ignoring the CCPA:
- Simple Translation: Anyone who fails to comply with any legal direction or order issued by the CCPA under Sections 20 (Recalling Goods) and 21 (False Advertising Directions) faces criminal punishment:
- Imprisonment: A jail term that may extend up to six months.
- Fine: A fine that may extend up to twenty lakh rupees (₹2,000,000).
- Both: The person may be punished with both imprisonment and a fine.
- Real-World Example: The CCPA orders a company to recall all defective electronic scooters (Sec 20). If the CEO ignores the order, they can be prosecuted under this section and face up to six months in jail and a large fine.
Section 89. Punishment for false or misleading advertisement.
This section establishes a direct criminal penalty for companies that engage in false or misleading advertising.
89. Punishment for Misleading Ads:
- Simple Translation: Any manufacturer or service provider who causes a false or misleading advertisement to be made that harms the interests of consumers shall be punished:
- First Offense: Imprisonment up to two years and a fine up to ten lakh rupees (₹1,000,000).
- Subsequent Offenses: Imprisonment up to five years and a fine up to fifty lakh rupees (₹5,000,000).
- Real-World Example: A travel agency runs an advertisement falsely claiming its resorts offer “all-inclusive 5-star services,” which is far from the truth. If the CCPA proves this is misleading and prejudicial, the service provider (agency owner/director) can face up to two years in jail and a ₹10 lakh fine for the first offense.
Section 90. Punishment for manufacturing for sale or storing, selling or distributing or importing products containing adulterant.
This is a very serious criminal offense related to making products unsafe, with penalties escalating based on the harm caused.
90(1) Criminal Punishment for Adulteration:
- Simple Translation: Any person who manufactures, stores, sells, distributes, or imports any product containing an adulterant (a material that makes the product unsafe) will face punishment, with the severity determined by the outcome:
- (a) No Injury: If the act of adulteration does not result in any injury to the consumer: Imprisonment up to six months and a fine up to one lakh rupees (₹100,000).
- Example: A small-scale dairy adds excessive water (an adulterant) to milk, but no one gets sick.
- (b) Injury (Not Grievous Hurt): If the act causes an injury that is not grievous (a less severe injury) to the consumer: Imprisonment up to one year and a fine up to three lakh rupees (₹300,000).
- Example: A vendor adds a chemical dye to a sweet, and a consumer suffers a moderate allergic reaction requiring an emergency room visit.
- (c) Grievous Hurt: If the act causes grievous hurt (a severe injury, like the permanent loss of sight or limb, as defined in the Indian Penal Code) to the consumer: Imprisonment up to seven years and a fine up to five lakh rupees (₹500,000).
- Example: A food processor uses industrial oil instead of cooking oil in a snack, leading a consumer to suffer permanent kidney damage.
- (d) Death: If the act results in the death of a consumer: Imprisonment of at least seven years but which may extend to life imprisonment, and a fine of at least ten lakh rupees (₹1,000,000).
- Example: A supplier sells industrial methanol falsely labeled as drinking alcohol, and a consumer dies after consumption.
- (a) No Injury: If the act of adulteration does not result in any injury to the consumer: Imprisonment up to six months and a fine up to one lakh rupees (₹100,000).
90(2) Cognizable and Non-Bailable Offenses:
- Simple Translation: The offenses involving Grievous Hurt (90(1)(c)) and Death (90(1)(d)) are legally classified as cognizable (meaning the police can arrest the accused without a warrant) and non-bailable (meaning bail is not automatically granted).
90(3) License Suspension/Cancellation:
- Simple Translation: In addition to the jail time and fines in Sub-section (1), the court has the authority to:
- First Conviction: Suspend any license the person holds (e.g., a food handling license) for up to two years.
- Second or Subsequent Conviction: Cancel the license permanently.
- Real-World Example: A restaurant owner is convicted a second time for using banned chemicals (adulterants) in their food. The court not only imposes a fine and jail time but also permanently cancels the restaurant’s operating license.
Explanation (Definitions for the Section):
- (a) Adulterant: Any material, including extraneous matter, used to make a product unsafe.
- (b) Grievous Hurt: This has the same definition as provided in the Indian Penal Code (IPC), Section 320, covering severe injuries.
Section 91. Punishment for manufacturing for sale or for storing or selling or distributing or importing spurious goods.
This section establishes severe criminal penalties for dealing with spurious goods (products falsely claimed to be genuine), with penalties tied directly to the harm caused.
91(1) Criminal Punishment for Spurious Goods:
- Simple Translation: Any person who manufactures, stores, sells, distributes, or imports spurious goods will face criminal punishment, with the severity determined by the outcome:
- (a) Injury (Not Grievous Hurt): If the act causes an injury that is not grievous (a less severe injury) to the consumer: Imprisonment up to one year and a fine up to three lakh rupees (₹300,000).
- Real-World Example: A seller markets fake, branded helmets. A consumer buys one and has a minor accident where the helmet cracks, causing a slight concussion but no permanent harm.
- (b) Grievous Hurt: If the act causes grievous hurt (a severe, permanent injury, like loss of sight or limb) to the consumer: Imprisonment up to seven years and a fine up to five lakh rupees (₹500,000).
- Real-World Example: A supplier sells spurious (fake) surgical equipment to a hospital. Due to the poor quality of the counterfeit tool, a patient suffers a severe, debilitating injury during surgery.
- (c) Death: If the act results in the death of a consumer: Imprisonment of at least seven years but which may extend to life imprisonment, and a fine of at least ten lakh rupees (₹1,000,000).
- Real-World Example: A distributor imports fake anti-malarial drugs. A consumer takes the medication, which contains no active ingredients, and subsequently dies from the untreated illness.
- (a) Injury (Not Grievous Hurt): If the act causes an injury that is not grievous (a less severe injury) to the consumer: Imprisonment up to one year and a fine up to three lakh rupees (₹300,000).
91(2) Cognizable and Non-Bailable Offenses:
- Simple Translation: The offenses involving Grievous Hurt (91(1)(b)) and Death (91(1)(c)) are legally classified as cognizable (meaning the police can arrest the accused without a warrant) and non-bailable (meaning bail is not automatically granted).
91(3) License Suspension/Cancellation:
- Simple Translation: In addition to the jail time and fines in Sub-section (1), the court has the authority to:
- First Conviction: Suspend any license the person holds for up to two years.
- Second or Subsequent Conviction: Cancel the license permanently.
- Real-World Example: A large pharmacy is caught selling fake imported cosmetics for a second time. The court cancels the pharmacy’s retail license after imposing a fine and jail term on the owner.
Section 92. Cognizance of offence by court.
This defines who has the authority to initiate a criminal case against a company for false advertising or non-compliance with the CCPA.
92. Who Can File the Criminal Complaint:
- Simple Translation: A competent criminal court cannot take legal notice (start proceedings) for offenses under Section 88 (Non-compliance with CCPA orders) and Section 89 (False or misleading advertising) unless the complaint is officially filed by the Central Authority (CCPA) or an officer specifically authorized by the CCPA.
- Real-World Example: An individual consumer cannot go directly to a criminal court to sue a company for false advertising. They must first complain to the CCPA. Only the CCPA, after investigating and authorizing a complaint, can initiate the criminal prosecution under Section 89.
Section 93. Vexatious search.
This protects businesses from potential harassment by investigation officers, providing a penalty if officers abuse their power.
93. Punishment for Abuse of Power (Bad Faith Search):
- Simple Translation: The Director General or any other officer performing a search and seizure under Section 22 who conducts or causes a search or seizure, knowing there are no reasonable grounds to do so, is guilty of an offense.
- Punishment: For this offense, the officer shall be punished with:
- Imprisonment: A jail term that may extend up to one year.
- Fine: A fine that may extend up to ten thousand rupees (₹10,000).
- Both: The officer may face both imprisonment and a fine.
- Real-World Example: A CCPA officer conducts a disruptive, hours-long search of a small local business purely because of a personal grudge, knowing the business has not committed any violation. The officer can be prosecuted and fined for this abuse of power.