1      Introduction to the Hon'ble Central Consumer Protection Authority (CCPA)

The Hon'ble Central Consumer Protection Authority, often referred to as the Hon'ble Central Authority or Hon'ble CCPA, is a regulatory body established under the Consumer Protection Act, 2019. Its primary role is to oversee and manage issues where consumers' rights are violated, where businesses engage in unfair trade practices, or where false or misleading advertisements are published that harm the public interest or the interests of consumers. A key aspect of its purpose is to act on behalf of consumers as a group, promoting, protecting, and enforcing their rights.

For consumers, the Hon'ble CCPA acts as a powerful body that can address widespread issues affecting many individuals, such as systemic unfair practices by a company or misleading advertising campaigns that could deceive a large number of people. It’s an avenue for redressal, especially when individual complaints might not capture the broader impact on consumers as a class.

Businesses need to be aware that the Hon'ble CCPA is an authority that monitors and regulates their conduct concerning consumer rights, trade practices, and advertising. Non-compliance with consumer protection laws can lead to investigations and actions by the Hon'ble CCPA to protect the collective interests of consumers.

1.1     Matters Regulated by the Hon'ble CCPA

The core areas that the Hon'ble CCPA regulates are directly outlined in its establishment mandate under Section 10(1) of the Consumer Protection Act, 2019. These are:

• violation of rights of consumers
• unfair trade practices
• false or misleading advertisements which are prejudicial to the interests of public and consumers

Furthermore, the Hon'ble CCPA's overarching function is to "promote, protect and enforce the rights of consumers as a class." The powers and functions detailed in Section 18 of the Act elaborate on these regulatory areas, including inquiring into or investigating violations, preventing unfair trade practices, and ensuring no false or misleading advertisements are made.

2      How to Forward a Complaint to the Hon'ble Central Authority (CCPA)

The Consumer Protection Act, 2019, provides mechanisms for addressing violations of consumer rights, unfair trade practices, and false or misleading advertisements that are prejudicial to the interests of consumers as a class.

This means the Hon'ble CCPA primarily concerns itself with issues that affect a larger body of consumers rather than isolated individual disputes, unless such individual dispute points to a larger systemic issue like an unfair trade practice or a misleading advertisement that has a broad impact. The recent orders of the Hon'ble CCPA reveal that the focus is on matters like the widespread sale of non-compliant goods (e.g., toys without ISI mark, pressure cookers violating Quality Control Orders ), misleading advertisements by coaching centres affecting many aspirants, or unfair practices by e-commerce platforms regarding refunds or service delivery.

Any group of consumers may submit complaint relating to the violation of consumer rights as a class, unfair trade practices, or false or misleading advertisements either through a traditional written letter or by using electronic means, which could include email or specific portals if designated in future.

2.1     Authorities to Whom Complaints Can Be Forwarded

As per Section 17 of the Consumer Protection Act, 2019, the complaints (relating to violation of consumer rights as a class, UTPs, or misleading ads prejudicial to consumer interest) can be forwarded to any one of the authorities, namely, the District Collector or the Commissioner of regional office or the Central Authority.

This provides the complainant multiple official channels to report widespread consumer issues. You can choose the authority that seems most accessible or appropriate for the nature and scope of your complaint. Forwarding the complaint to any of these authorities can bring the matter to the attention of the regulatory system.

3      The Process After a Complaint or Information Reaches the Hon'ble CCPA

Once information or a complaint is forwarded to the Hon'ble Central Consumer Protection Authority (CCPA), the Consumer Protection Act, 2019, outlines a structured process that the Hon'ble CCPA may follow. This typically involves a preliminary inquiry, and if a prima facie case is found, a detailed investigation.

3.1     Preliminary Inquiry by the Hon'ble CCPA

The Hon'ble CCPA has the authority to initiate a preliminary inquiry to assess the merits of the information or complaint received. The inquiry can be triggered in several ways:

1.    Suo Motu: The Hon'ble CCPA can decide to start an inquiry on its own, based on information it has gathered from various sources. Several orders of the CCPA show cases being taken up suo motu.

2.    On a Complaint Received: This could be information forwarded by a consumer, a voluntary consumer association, or other entities as defined under "complainant" when the matter pertains to consumer rights as a class, UTPs, or misleading ads prejudicial to consumer/public interest.

3.    On Directions from the Central Government: The Central Government can also direct the Hon'ble CCPA to conduct an inquiry.

3.2     Determine a prima facie case of violation of consumer rights

A "prima facie case" means that, based on initial information, there appears to be sufficient evidence to suggest that a violation might have occurred. The preliminary inquiry is not a final judgment but an initial assessment to see if the matter warrants a deeper investigation.

3.3     Further Investigation

Once the Hon'ble CCPA establishes that there is a preliminary basis for the complaint (a prima facie case), it directs a formal investigation. This investigation is carried out by the Director-General of the CCPA's Investigation Wing or by the Hon'ble District Collector. The Investigation Wing is headed by a Director-General for conducting such inquiries or investigations as directed by the Central Authority.

If you are a consumer, a decision by the Hon'ble CCPA to investigate means your concerns about a widespread violation are being taken seriously and will be examined in detail by a specialized investigative body. Whereas if you are a business owner and a prima facie case is established against your business, you will face a formal investigation by the Director-General (Investigation Wing of CCPA) or the Hon'ble District Collector. This is a more intensive scrutiny of your practices, advertisements, or products.

3.4     Powers During Investigation:

During the investigation, the investigating authority (Central Authority, Director General, or District Collector) has the power to summon the person or entity being investigated and require them to produce any documents or records they possess that are relevant to the investigation. This ensures that the investigating body can access necessary information to ascertain the facts of the case.

3.5     Search and Seizure Powers of the Investigation Wing

To ensure effective investigation, the Act grants significant powers, including search and seizure, to the investigating authorities. If the Director-General (or an officer authorized by him) or the Hon'ble District Collector has a justifiable reason to believe that consumer rights have been violated, an unfair trade practice has been committed, or a false/misleading advertisement has been made, they can enter the premises of the concerned person/entity. They can search for and seize relevant documents, records, articles, or other evidence. They are also empowered to make notes or an inventory of what is seized.

4      Important Considerations for Those Forwarding a Complaint

When you decide to forward information or a complaint to the Hon'ble Central Consumer Protection Authority (CCPA) concerning issues like violation of consumer rights, unfair trade practices, or false/misleading advertisements, it's helpful to keep certain aspects in mind. These considerations align with the Hon'ble CCPA's mandate and the scope of actions it can undertake as per the Consumer Protection Act, 2019.

4.1     Focus on Matters Prejudicial to the Interests of Consumers as a class

The Hon'ble CCPA's primary mandate, as established under Section 10(1) of the Consumer Protection Act, 2019, is "to regulate matters relating to violation of rights of consumers, unfair trade practices and false or misleading advertisements which are prejudicial to the interests of public and consumers and to promote, protect and enforce the rights of consumers as a class."

This means that while an individual experience might be the trigger for a complaint, the Hon'ble CCPA is more likely to intervene if the issue highlighted affects a large number of consumers or has a broad impact on the public interest.

Examples from the Hon'ble CCPA's orders include:

• The sale of toys without ISI marks, which poses a safety risk to many children buying such toys.
• Misleading advertisements by coaching centers that could potentially deceive numerous aspirants.
• Unfair trade practices by e-commerce entities regarding refunds or service quality affecting a wide user base.
• The sale of domestic pressure cookers that do not conform to mandatory safety standards, a household good present in many homes.

5      Types of Relief the Hon'ble CCPA Can Order (Recalling goods, reimbursement, discontinuation of unfair practices, penalties for misleading ads)

The Consumer Protection Act, 2019, empowers the Hon'ble CCPA to issue various directions and impose penalties to safeguard consumer interests. The primary sections detailing these are Section 20 and Section 21.

5.1     Directions under Section 20

Under Section 20 of the Consumer Protection Act, 2019, if the Hon'ble Central Authority is satisfied after investigation that there is sufficient evidence of a violation of consumer rights or an unfair trade practice, it may pass orders for:

•  (a) recalling of goods or withdrawal of services which are dangerous, hazardous or unsafe;
•  (b) reimbursement of the prices of goods or services so recalled to purchasers of such goods or services;
•  (c) discontinuation of practices which are unfair and prejudicial to consumers' interest: The Act ensures that the person or entity against whom such an order is contemplated is given an opportunity of being heard.

5.2     Directions under Section 21

Under Section 21 of the Consumer Protection Act, 2019, concerning false or misleading advertisements, the Hon'ble Central Authority, if satisfied after investigation, may:

• Issue directions to the concerned trader, manufacturer, endorser, advertiser, or publisher to discontinue or modify such an advertisement within a specified time.
• Impose a penalty on the manufacturer or endorser, which may extend to ten lakh rupees for the first contravention, and up to fifty lakh rupees for every subsequent contravention.
• Prohibit an endorser of a false or misleading advertisement from making any endorsement for up to one year, and for up to three years for subsequent contraventions.
• Impose a penalty on any person found to publish or be a party to the publication of a misleading advertisement, which may extend to ten lakh rupees.

5.3     Penalties for Non-Compliance of Hon'ble CCPA Directions

Failure to comply with the directions issued by the Hon'ble CCPA under Section 20 (e.g., recall of goods, withdrawal of services) and Section 21 (e.g., discontinuance or modification of advertisement) can lead to severe consequences.

Section 88 of the Consumer Protection Act, 2019, stipulates: "Whoever, fails to comply with any direction of the Central Authority under sections 20 and 21, shall be punished with imprisonment for a term which may extend to six months or with fine which may extend to twenty lakh rupees, or with both."

If an opposite party is directed by the Hon'ble CCPA to take certain actions, such as recalling unsafe goods or stopping a misleading advertisement, and fails to do so, they can face criminal prosecution. The punishment can be imprisonment for up to six months, a fine of up to twenty lakh rupees, or both.

5.4     Punishment for Causing False or Misleading Advertisement

Beyond the penalties imposed directly by the Hon'ble CCPA under Section 21, the Act also provides for criminal punishment for manufacturers or service providers who cause false or misleading advertisements that are prejudicial to consumer interests.

Section 89 of the Consumer Protection Act, 2019, states: "Any manufacturer or service provider who causes a false or misleading advertisement to be made which is prejudicial to the interest of consumers shall be punished with imprisonment for a term which may extend to two years and with fine which may extend to ten lakh rupees; and for every subsequent offence, be punished with imprisonment for a term which may extend to five years and with fine which may extend to fifty lakh rupees."

Explanation: This section imposes criminal liability on manufacturers or service providers responsible for creating false or misleading advertisements that harm consumer interests. A first-time offence can lead to imprisonment up to two years and a fine up to ten lakh rupees. For any subsequent similar offence, the penalties can increase to imprisonment up to five years and a fine up to fifty lakh rupees. This is a separate punitive measure from the penalties the Hon'ble CCPA can impose.

6      The Perspective of the Opposite Party (Trader/Manufacturer/Advertiser/Endorser)

When the Hon'ble Central Consumer Protection Authority (CCPA) initiates an inquiry or investigation based on a complaint or other information regarding violation of consumer rights as a class, unfair trade practices, or false/misleading advertisements, the entity against whom such proceedings are initiated (the opposite party) has certain rights and faces specific liabilities under the Consumer Protection Act, 2019. It is crucial for businesses, manufacturers, service providers, advertisers, and endorsers to understand these aspects.

6.1     Opportunity of Being Heard: Before an order for recall of goods or penalties for misleading ads is passed

The Consumer Protection Act, 2019, ensures that the principles of natural justice are followed. Before the Hon'ble CCPA passes certain significant orders, the concerned opposite party is given a chance to present its case.

The proviso to Section 20 of the Consumer Protection Act, 2019, which deals with the power of the Hon'ble Central Authority to recall goods or withdraw services, explicitly states: "Provided that the Central Authority shall give the person an opportunity of being heard before passing an order under this section."

Similarly, Section 21(8) of the Consumer Protection Act, 2019, concerning the power to issue directions and penalties against false or misleading advertisements, mandates: "The Central Authority shall give the person an opportunity of being heard before an order under this section is passed."

Recent CCPA orders themselves consistently record that hearings were conducted and opportunities were provided to the opposite parties to make submissions. For example, in the case against Zoo Bee / Mowak concerning the sale of toys without an ISI mark, a hearing was held through video conferencing. In the matter against Idle Brain e-Tail for selling non-compliant pressure cookers, an opportunity of hearing was scheduled and held.

6.2     Due Diligence Defence for Endorsers of Advertisements

Endorsers, such as celebrities or experts who lend their name or image to promote a product or service, have a specific defence available if an advertisement they endorsed is found to be false or misleading.

Section 21(5) of the Consumer Protection Act, 2019, provides: "No endorser shall be liable to a penalty under sub-sections (2) and (3) if he has exercised due diligence to verify the veracity of the claims made in the advertisement regarding the product or service being endorsed by him."

An endorser can avoid penalties (which can include fines up to ten lakh rupees for a first contravention and a prohibition on future endorsements for up to one year) if they can prove that they took reasonable steps and precautions to check the truthfulness of the claims made in the advertisement for the product or service they were endorsing.

The Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022, Clause 13(1), also emphasize that an endorsement must reflect the genuine, reasonably current opinion of the endorser and be based on adequate information or experience.

6.3     Ordinary Course of Business Defence for Publishers of Advertisements

Publishers of advertisements, such as newspapers, television channels, or online media platforms, also have a specific defence.

Section 21(6) of the Consumer Protection Act, 2019, states: "No person shall be liable to such penalty if he proves that he had published or arranged for the publication of such advertisement in the ordinary course of his business: Provided that no such defence shall be available to such person if he had previous knowledge of the order passed by the Central Authority for withdrawal or modification of such advertisement."

A person or entity that published a misleading advertisement (or arranged for its publication) might not be penalized if they can demonstrate that it was done as part of their regular business operations. However, this defence is not available if the publisher was already aware of an existing order from the Hon'ble CCPA directing the withdrawal or modification of that particular advertisement.

6.4     Factors Considered for Penalties in Misleading Advertisements

When the Hon'ble CCPA decides to impose a penalty for a false or misleading advertisement, it considers several factors to determine the quantum of the penalty.

Section 21(7) of the Consumer Protection Act, 2019, outlines these factors: "While determining the penalty under this section, regard shall be had to the following, namely:— (a) the population and the area impacted or affected by such offence; (b) the frequency and duration of such offence; (c) the vulnerability of the class of persons likely to be adversely affected by such offence; and (d) the gross revenue from the sales effected by virtue of such offence."

The Hon'ble CCPA will assess the reach and impact of the misleading advertisement, how often and for how long it was published, whether it targeted vulnerable consumers (like children or a specific demographic), and the financial gains made by the company due to that advertisement. These considerations ensure that the penalty is proportionate to the nature and impact of the violation. For example, in an order against coaching institutes, the Hon'ble CCPA considered the large number of UPSC aspirants affected when imposing penalties. Similarly, when dealing with misleading advertisements for products like Horlicks, the vulnerability of children as a class of consumers is a key consideration.

7      Appealing an Order of the Hon'ble Central Authority.

The Consumer Protection Act, 2019, provides a mechanism for challenging certain orders passed by the Hon'ble Central Consumer Protection Authority (CCPA). If an opposite party is dissatisfied with specific directives issued by the Hon'ble CCPA, they have the right to appeal to the Hon'ble NCDRC.

The right to appeal is available to any person who is aggrieved by specific orders of the Hon'ble Central Authority. Section 24 of the Consumer Protection Act, 2019, states: "A person aggrieved by any order passed by the Central Authority under sections 20 and 21 may file an appeal..."

This means that if your business (as a trader, manufacturer, endorser, advertiser, or publisher) has been issued an order by the Hon'ble CCPA under Section 20 (which includes directions for recalling goods, withdrawing hazardous services, reimbursing prices, or discontinuing unfair practices ) or under Section 21 (which includes directions to discontinue/modify misleading advertisements, imposition of penalties, or prohibition on endorsers ), and you are dissatisfied with this order, you have the right to appeal.

Complainant's Perspective: While typically the opposite party would appeal an adverse order, understanding this provision is useful to know the further course of action if an order passed by the Hon'ble CCPA (perhaps on a complaint initiated by a consumer association or the Hon'ble CCPA itself) is challenged.

Opposite Party's Perspective: This is your statutory right if you believe an order passed against you by the Hon'ble CCPA under Section 20 or Section 21 is unjustified or erroneous. You can seek a review of such an order through the appellate process.

8      Conclusion

The Hon'ble Central Consumer Protection Authority (CCPA) serves as a critical institution under the Consumer Protection Act, 2019, dedicated to safeguarding the collective interests of consumers in India.

For businesses and advertisers, adherence to the Act and its guidelines is paramount, as non-compliance can lead to significant penalties and even imprisonment. However, the Act also ensures that principles of natural justice are upheld by providing an opportunity of being heard before stringent orders are passed by the Hon'ble CCPA, and offers a mechanism for appeal to the Hon'ble National Commission against specified orders.

Ultimately, the framework established under the Consumer Protection Act, 2019, with the Hon'ble CCPA at its core for class-level actions, aims to create a fair and transparent marketplace where consumer rights are actively protected and enforced.