Offences and Penalties under the Consumer Law

Procedure and protection

Section 92: cognizance. No court shall take cognizance of an offence under sections 88 and 89 except on a complaint in writing made by the Central Authority or any officer authorised by it.

Section 93: vexatious search. The Director-General or any other officer exercising powers under section 22 who knows there are no reasonable grounds for doing so and searches or causes a search to be made is punishable with imprisonment up to one year or fine up to ten thousand rupees, or both.

Section 95: public servants. The Presidents and members of the Commissions, the Chief Commissioner and Commissioners of the Central Authority and certain officers are deemed public servants.

Section 96: compounding. An offence punishable under sections 88 and 89 may be compounded, either before or after the institution of prosecution, by the Central Authority on payment of such amount as may be prescribed; where an offence has been compounded, no prosecution shall be instituted for the same offence, and a person who does not comply with the compounding order is liable to pay a further sum.

Section 98: good faith. No suit, prosecution or other legal proceeding lies against the Presidents, members, officers or employees for anything done in good faith under the Act.

E-commerce and the machinery sections

Section 94: e-commerce and direct selling. For the purposes of preventing unfair trade practices in e-commerce and direct selling and protecting the interest and rights of consumers, the Central Government may take such measures in the manner as may be prescribed. This is the provision under which the e-commerce rules are made, and it is the Act's only direct handle on online selling.

Section 97 and 99. The Central Government's power to give directions, and connected provisions.

Section 100: not in derogation. The provisions of the Act are in addition to and not in derogation of any other law for the time being in force. That is the section which lets a consumer sue in a civil court as well, and it is the basis on which State of Karnataka v. Vishwabharathi House Building Co-operative Society, (2003) 2 SCC 412, upheld the Act, and on which Emaar MGF Land Ltd v. Aftab Singh, (2019) 12 SCC 751, held that a consumer complaint is not to be referred to arbitration.

Sections 101 to 105. Rule-making by the Central Government, by the State Governments, regulations by the National Commission and by the Central Authority, and the laying of rules and regulations before Parliament.

A worked example

A trader sells packaged spices adulterated with a colouring agent. Two customers fall ill, one seriously, and one dies.

The offence. Section 90, on three different grades depending on the consumer: up to six months and one lakh where there is no injury; up to one year and three lakh for injury not amounting to grievous hurt; up to seven years and five lakh for grievous hurt; and not less than seven years, extending to life, with a fine of not less than ten lakh, for the death.

Arrest. The grievous hurt and death offences are cognizable and non-bailable under section 90(2).

The licence. On a first conviction the court may suspend his food licence for up to two years, and on a second cancel it, under section 90(3).

If the spices had been passed off as a well-known brand, section 91 would apply as well, spurious goods being goods falsely claimed to be genuine.

If the Central Authority had ordered him to stop and he continued, section 88 gives up to six months or twenty lakh rupees or both, and only the Central Authority or its authorised officer may complain, under section 92.

And the customers' own claims? Compensation before a Consumer Commission, and a product liability action under Chapter VI, since section 100 keeps every other remedy alive.

What it does NOT mean

These punishments are not awarded by the Commissions. They are offences tried by criminal courts; the Commissions award compensation and may punish non-compliance with their own orders under section 72.

Not every offence may be compounded. Section 96 covers sections 88 and 89 only.

A private person cannot prosecute under sections 88 and 89. Section 92 requires a complaint by the Central Authority or an authorised officer.

The Act does not displace other laws. Section 100 says it is in addition to them.

Quick revision

1. Section 88: non-compliance with a direction of the Central Authority, up to six months or twenty lakh rupees or both.
2. Section 89: false or misleading advertisement, up to two years and ten lakh rupees; five years and fifty lakh for a subsequent offence.
3. Section 90: adulterated goods, graded from six months and one lakh where there is no injury to not less than seven years extending to life and not less than ten lakh where a consumer dies.
4. Section 90(2): the grievous hurt and death offences are cognizable and non-bailable. Section 90(3): suspension of licence up to two years on a first conviction, cancellation on a second.
5. Section 91: spurious goods, on the same graded scale.
6. Section 92: cognizance only on a complaint by the Central Authority or an authorised officer.
7. Section 93: vexatious search, up to one year or ten thousand rupees or both.
8. Section 96: compounding of offences under sections 88 and 89.
9. Section 94: measures to prevent unfair trade practices in e-commerce and direct selling, as prescribed.
10. Section 100: the Act is in addition to and not in derogation of any other law.

Test yourself

1. What are the offences under the Consumer Protection Act 2019 and their punishments? Section 88 punishes failure to comply with a direction of the Central Authority with imprisonment up to six months or fine up to twenty lakh rupees or both. Section 89 punishes a manufacturer or service provider who causes a false or misleading advertisement prejudicial to the interest of consumers with imprisonment up to two years and fine up to ten lakh rupees, and for a subsequent offence up to five years and fifty lakh rupees. Section 90 punishes the manufacture for sale, storage, sale, distribution or import of a product containing an adulterant on a graded scale: up to six months and one lakh rupees where no injury results; up to one year and three lakh where injury not amounting to grievous hurt is caused; up to seven years and five lakh for grievous hurt; and not less than seven years, extending to imprisonment for life, with fine of not less than ten lakh rupees, where a consumer dies. The last two are cognizable and non-bailable, and the court may suspend the offender's licence for up to two years on a first conviction and cancel it on a second. Section 91 applies the same graded scale to spurious goods, and section 93 punishes a vexatious search.

2. Who may prosecute, and can these offences be compounded? Section 92 provides that no court shall take cognizance of an offence under sections 88 and 89 except on a complaint in writing made by the Central Authority or by an officer authorised by it, so a private consumer cannot set those prosecutions in motion; his own remedy is a complaint for compensation before a Commission, and a product liability action where the harm was caused by a defective product. Section 96 allows an offence punishable under sections 88 and 89 to be compounded, either before or after the institution of prosecution, by the Central Authority on payment of the prescribed amount, and where an offence has been compounded no prosecution shall be instituted for the same offence; a person who fails to comply with a compounding order is liable to pay a further sum. The offences under sections 90 and 91, which involve adulterated and spurious goods, are not within the compounding provision.