Penalty for Non-Compliance with Orders of Consumer Forums (Section 59)

The orders passed by the District Commission, State Commission, and National Commission are legally binding on the parties. To ensure compliance and make the redressal mechanism effective, the Consumer Protection Act, 2019, provides for penalties for failure to comply with these orders.

Imprisonment and Fine

As per **Section 72** of the Consumer Protection Act, 2019 (Section 59 defines National Commission's original jurisdiction, Section 72 deals with penalties for non-compliance), whoever fails to comply with any order made by the District Commission or the State Commission or the National Commission, as the case may be, shall be punishable with:

• **Imprisonment** for a term which shall **not be less than one month**, but which may extend to **three years**; OR
• With **fine** which shall **not be less than twenty-five thousand rupees**, but which may extend to **one lakh rupees**; OR
• With **both** imprisonment and fine.

The complaint for non-compliance is filed before the same Commission that passed the order that was not complied with. The Commission then follows a procedure for hearing the party accused of non-compliance before imposing the penalty.

Who is Liable?

The person or entity against whom the order was passed (usually the opposite party – manufacturer, seller, service provider, etc.) is liable for non-compliance. If the opposite party is a company, the officers responsible for compliance may also be held liable.

Execution of Orders (Section 71):

In addition to initiating penal action for non-compliance under Section 72, the Commission that passed the order also has the power to **execute** its order. Section 71(1) states that every order made by a District Commission, State Commission or National Commission shall, if no appeal has been preferred against such order, be binding on the opposite party. Section 71(2) provides that every order of a District Commission, State Commission or National Commission may be enforced by the Commission in the same manner as if it were a decree made by a Court in a suit. The Commission can send the order for execution to the court within whose local limits the opposite party's property is situated or where the opposite party resides or carries on business. The Court then executes the order as if it were its own decree.

These provisions for penalties and execution ensure that the orders of the consumer forums are not merely advisory but are legally enforceable, providing real remedies to consumers.

Penalty for False Information (Section 63)

To discourage frivolous complaints and ensure that the consumer dispute redressal mechanism is used for genuine grievances, the Consumer Protection Act, 2019, includes provisions to penalise complainants who file false cases or provide misleading information.

Penalty for Vexatious Complaints:

As per **Section 63** of the Consumer Protection Act, 2019, where a complaint instituted before the District Commission, the State Commission or the National Commission, as the case may be, is found to be:

• **Frivolous or vexatious** (meaning it is groundless, without merit, or intended to harass the opposite party); OR
• Contains **false or misleading information**.

In such cases, the Commission may, after giving the complainant a reasonable opportunity of being heard, record its reasons for doing so and order that the complainant shall pay to the opposite party, a cost **not exceeding ten thousand rupees**. This amount is a cost imposed on the complainant and is payable to the opposite party as a form of compensation for having to defend a false or baseless complaint.

Purpose:

This penalty aims to deter consumers from filing complaints that lack substance or are based on fabricated information, ensuring that the limited resources of the consumer forums are utilised for genuine consumer grievances.

Judicial Discretion:

The power to impose this penalty rests with the Commission, and it is used judiciously. The Commission must provide the complainant with an opportunity to be heard before concluding that the complaint is frivolous or vexatious or contains false information.

This provision acts as a check against potential misuse of the consumer protection mechanism.

Penalty for Misleading Advertisements (Section 147)

Misleading advertisements are a major form of unfair trade practice that directly harms consumers. The Consumer Protection Act, 2019, provides strong provisions, including penalties, to curb such advertisements.

Penalty by Central Consumer Protection Authority (CCPA)

While Section 147 of the Act deals with punishment for contravening directions of the Central Authority related to search and seizure, the penalties for misleading advertisements are primarily provided under **Section 21** and **Section 89** of the Act.

Action by CCPA (Section 21):

The Central Consumer Protection Authority (CCPA) has significant powers to deal with misleading advertisements. As per Section 21, where the Central Authority is satisfied after investigation that any advertisement is misleading and prejudicial to the interest of any consumer or is in contravention of the rights of consumers, it may, by order, issue directions to the concerned trader or manufacturer or endorser or advertiser or publisher to:

• Discontinue such advertisement or modify it.
• Impose a **penalty** on the manufacturer or endorser or publisher of such misleading advertisement, which may extend to **ten lakh rupees**.

For every subsequent contravention, the penalty may extend to **fifty lakh rupees**.

Additionally, the CCPA can prohibit the **endorser** of a misleading advertisement from making endorsement of any product or service for a period which may extend to **one year** for the first contravention and for a period which may extend to **three years** for subsequent contraventions.

Criminal Penalty (Section 89):

Section 89 of the Act provides for a criminal penalty for making or publishing a false or misleading advertisement. Any person who makes or publishes, or causes to be made or published, any false or misleading advertisement, which is prejudicial to the interest of consumers, shall be punishable with:

• **Imprisonment** for a term which may extend to **two years**; AND
• With **fine** which may extend to **ten lakh rupees**.

This criminal penalty is distinct from the monetary penalty imposed by the CCPA and requires proceedings before a Magistrate. The CCPA can, however, file a complaint with the Magistrate under this section.

These multiple layers of penalties – significant monetary penalties and prohibition of endorsement by CCPA, and potential criminal penalties – aim to act as strong deterrents against businesses and individuals involved in disseminating false or misleading information through advertisements.

Penalty for Product Tampering (Section 88)

To protect consumers from the serious risks posed by tampered products, the Consumer Protection Act, 2019, includes specific criminal penalties for product tampering.

Punishment for Knowingly Tampering with Product:

As per **Section 88** of the Consumer Protection Act, 2019, whoever **knowingly** sells, distributes, or imports, or causes to be sold, distributed, or imported, or stores, offers for sale or stores for sale, any product which is **tampered with** and which causes **no injury** to the consumer, shall be punishable with:

• **Imprisonment** for a term which may extend to **two years**; AND
• With **fine** which may extend to **twenty-five thousand rupees**.

Penalty for Tampering Causing Injury:

If the tampering with the product causes **injury** to the consumer, the penalty is significantly higher (Section 88(2)):

• **Imprisonment** for a term which shall **not be less than one year**, but which may extend to **seven years**; AND
• With **fine** which may extend to **five lakh rupees**.

Penalty for Tampering Causing Grievous Hurt:

If the tampering causes **grievous hurt** (as defined in the Indian Penal Code, 1860) to the consumer (Section 88(3)):

• **Imprisonment** for a term which shall **not be less than five years**, but which may extend to **fifteen years**; AND
• With **fine** which shall **not be less than twenty-five lakh rupees**.

Penalty for Tampering Causing Death:

If the tampering with the product causes the **death** of the consumer (Section 88(4)):

• **Imprisonment** for a term which shall **not be less than seven years**, but which may extend to **imprisonment for life**; AND
• With **fine** which shall **not be less than ten lakh rupees**.

These severe criminal penalties underscore the seriousness with which the Act treats product tampering, aiming to protect consumers from dangerous alterations to products that are often done for fraudulent purposes.

Cognizable and Non-Cognizable Offences

The Consumer Protection Act, 2019, creates certain offences, some of which are punishable with imprisonment. The nature of these offences, specifically whether they are cognizable or non-cognizable, determines how law enforcement agencies can act.

Meaning of Cognizable and Non-Cognizable:

• **Cognizable Offence:** As per the Code of Criminal Procedure, 1973 (CrPC), a cognizable offence is one for which a police officer may, in accordance with the First Schedule of the CrPC or under any other law for the time being in force, **arrest without a warrant** and can **commence investigation without the permission of the court**. These are generally more serious offences.
• **Non-Cognizable Offence:** For a non-cognizable offence, a police officer **cannot arrest without a warrant**, nor can they **commence investigation without the prior permission of a Magistrate**. These are generally less serious offences.

Offences under the Consumer Protection Act, 2019:

The Consumer Protection Act, 2019, specifies penalties for several offences, including:

• **Non-compliance with orders of Consumer Forums (Section 72):** Imprisonment up to three years and/or fine up to ₹1 Lakh.
• **Manufacturing, selling, distributing, or importing tampered products (Section 88):** Imprisonment and fine, with severity depending on the harm caused (up to life imprisonment if death is caused).
• **Making or publishing false or misleading advertisements (Section 89):** Imprisonment up to two years and fine up to ₹10 Lakhs.
• **Contravention of directions of the Central Authority regarding investigation (Section 147):** Imprisonment and fine.

Classification under the Act:

**Section 90** of the Consumer Protection Act, 2019, specifically classifies the offences under the Act:

• All offences under **Section 88** (penalty for tempering with product) which cause injury to the consumer (i.e., Section 88(2), 88(3), 88(4) dealing with injury, grievous hurt, and death) shall be **cognizable and non-bailable**. This means police can arrest without a warrant, and getting bail is not a matter of right, requiring a court application.
• All other offences under the Act shall be **non-cognizable and bailable**. This means a police officer cannot arrest without a warrant, and bail can usually be obtained from the police station or a court.

This classification is significant as it empowers law enforcement agencies to take swift action, including arrest, for serious offences like product tampering causing harm, while other offences require a more formal process involving warrants and court permission for investigation.

Prosecution for misleading advertisements

Misleading advertisements are specifically addressed under the Consumer Protection Act, 2019, with provisions for both civil action by the Central Consumer Protection Authority (CCPA) and criminal prosecution.

Criminal Prosecution for Misleading Advertisements (Section 89):

As mentioned earlier, **Section 89** of the Act provides for criminal prosecution for making or publishing false or misleading advertisements. The elements required for an offence under Section 89 are:

• Making or publishing, or causing to be made or published, an advertisement.
• The advertisement must be false or misleading.
• It must be prejudicial to the interest of consumers.
• The person must have the intention or knowledge that the advertisement is false or misleading. (This element is implicit in the term "false or misleading" and often needs to be proven).

Who Can Initiate Prosecution?

Section 89 prescribes the punishment, but it does not explicitly state who can initiate the prosecution. However, generally, in India, criminal prosecution is initiated by the State, usually through the police filing a First Information Report (FIR) or through a complaint filed before a Magistrate by an authorised person or entity. In the context of the Consumer Protection Act, the following can typically initiate proceedings under Section 89:

• **The Central Consumer Protection Authority (CCPA):** The CCPA is specifically empowered under Section 21 to take action against misleading advertisements. Section 21(3) states that where the Central Authority is satisfied that any advertisement is misleading, it may file a complaint before a Magistrate under Section 89. The CCPA, therefore, is a key authority for initiating criminal prosecution for misleading advertisements.
• **Any person:** Subject to the provisions of the CrPC regarding filing of criminal complaints before a Magistrate by private individuals, it might be possible for a consumer or consumer association to file a criminal complaint under Section 89, though typically action by the CCPA is the more direct route provided by the Act.

Procedure for Prosecution:

Prosecution under Section 89 is a criminal proceeding conducted before a Magistrate. The procedure would follow the relevant provisions of the Code of Criminal Procedure, 1973. The trial would involve presenting evidence to prove that the advertisement was false or misleading and caused prejudice to consumers' interests, and that the accused made or published it knowingly. If found guilty, the accused is liable for imprisonment and/or fine as specified in Section 89.

Action by CCPA (Monetary Penalty & Directions):

It's important to reiterate that apart from criminal prosecution, the CCPA can also independently impose monetary penalties and issue directions regarding misleading advertisements under **Section 21**, which is a civil action and does not involve imprisonment. This provides a faster and more direct way for the CCPA to address misleading advertisements.

Thus, the Act provides a dual approach to tackling misleading advertisements: civil action and monetary penalties by the CCPA, and criminal prosecution potentially initiated by the CCPA, with the latter involving the possibility of imprisonment.