Key Definitions under the Act**

Consumer (Section 2(7))

The definition of 'Consumer' is fundamental to the Consumer Protection Act, 2019, as it determines who can avail of the remedies and protections provided by the Act. The definition in the 2019 Act is broader than that in the 1986 Act, specifically including modern transaction methods.

According to **Section 2(7)** of the Consumer Protection Act, 2019, consumer means any person who—

Buys any goods or hires or avails of any services

The definition covers persons who:

• **Buy any goods:** This includes acquiring ownership of movable property.
• **Hire or avail of any service:** This includes using or obtaining services for a charge.

The transaction can be offline, or through **electronic means**, teleshopping, direct selling, or multi-level marketing. This explicit inclusion of e-commerce and other modern methods is a key update in the 2019 Act, ensuring that consumers in the digital marketplace are equally protected.

For consideration

The purchase of goods or hiring/availing of services must be **for a consideration**. This consideration can be:

• Paid (wholly or partly).
• Promised (wholly or partly).
• Under any system of deferred payment.

This means transactions where goods or services are obtained free of charge (like free samples or complimentary services) generally do not fall under the purview of the Act unless they are part of a larger paid transaction where the free component is incidental.

Includes user of goods/services with buyer's approval (except for resale/commercial purpose)

The definition of 'consumer' is not limited only to the person who directly buys or hires the goods/services. It also **includes any user of such goods** or **any beneficiary of such service** who uses or benefits from them with the approval of the person who originally bought/hired them for consideration. For example, if a father buys a television (goods) for the family, his wife or children using the television with his approval are also considered consumers. Similarly, if a person buys a health insurance policy (service) for their family members, the family members who are beneficiaries of the service are also consumers under the Act.

However, this inclusion of 'users' and 'beneficiaries' is subject to the same exclusions as the original buyer/hirer, particularly the exclusion related to resale or commercial purpose.

Exclusions: Person obtaining goods for resale or commercial purpose

The definition of 'consumer' **expressly excludes** a person who obtains goods or services for **resale** or for any **commercial purpose**. If a person buys goods not for their own consumption or use but with the intention of selling them further, or if a person hires or avails of services specifically for a commercial venture, they are generally not considered a consumer under the Act. This is because the Act is primarily intended to protect the end-consumer and not businesses using goods/services as inputs for their commercial activities.

Exception to commercial purpose exclusion

There is a crucial exception to the 'commercial purpose' exclusion. As per the proviso to Section 2(7), commercial purpose does **not include** use by a person of goods bought and used by him and services availed by him exclusively for the purpose of **earning his livelihood by means of self-employment**. This exception protects individuals who are self-employed and use goods or services as tools or inputs for their own livelihood generation. For instance, a taxi driver buying a car for his taxi business (self-employment) is a consumer of the car; a small shopkeeper buying a computer for billing in his shop is a consumer of the computer. This ensures that small-scale, self-employed individuals are not left without statutory protection.

In essence, a consumer is a person who pays for goods or services for their personal use or livelihood generation through self-employment, including approved users/beneficiaries, irrespective of whether the transaction is offline or online.

Goods (Section 2(21))

The term 'Goods' is defined in the Consumer Protection Act, 2019, and is central to understanding the scope of what can be the subject of a consumer complaint regarding a 'defect'. The definition is aligned with the definition of 'goods' in the Sale of Goods Act, 1930.

According to **Section 2(21)** of the Consumer Protection Act, 2019, goods means every kind of movable property and includes growing crops, grass and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale.

Includes all movables, growing crops, grass, etc.

The definition essentially covers **all forms of movable property**. This includes everyday items like electronics, vehicles, furniture, food products, clothing, machinery, etc. It specifically includes:

• **Growing crops and grass:** These are considered goods if they are intended to be separated from the land before or under the contract of sale.
• **Things attached to or forming part of the land:** Items like trees, buildings, or minerals are generally considered immovable property. However, if there is an agreement that these things will be detached or severed from the land before the sale is completed (or as part of the sale contract), then they are treated as 'goods' under this definition.

Excludes immovable property and actionable claims

The definition of 'goods' **expressly excludes two categories**:

• **Immovable property:** Land, buildings, and things permanently attached to the earth (unless agreed to be severed) are not considered 'goods' under this Act. Complaints related to defects in construction might fall under 'services' (housing construction), but the land itself is excluded from the definition of goods.
• **Actionable claims:** An actionable claim is a claim to any debt (other than a debt secured by mortgage of immovable property or by hypothecation or pledge of movable property) or to any beneficial interest in movable property not in the possession, either actual or constructive, of the claimant, which the civil courts recognise as affording grounds for relief, whether such debt or beneficial interest be existent, accruing, conditional or contingent (as defined in Section 3 of the Transfer of Property Act, 1882). Essentially, these are rights that can be enforced in court but are not tangible property (e.g., a claim for an unsecured debt). These are excluded from the definition of goods.

Therefore, any complaint regarding a 'defect' under the Consumer Protection Act must relate to a product that falls within this definition of 'goods'.

Services (Section 2(42))

The definition of 'Service' in the Consumer Protection Act, 2019, is very broad and inclusive, covering almost all types of services that are hired or availed of for consideration. A complaint related to a 'deficiency' can only be filed if the service falls within this definition.

According to **Section 2(42)** of the Consumer Protection Act, 2019, service means service of any description, which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing, insurance, transport, processing or supply of electrical or other energy, telecom, boarding or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information.

Includes Banking, financing, insurance, transport, supply of electrical energy, housing construction, entertainment, etc.

The phrase "service of any description" indicates a wide scope. The list provided in the definition is illustrative ("includes, but not limited to") and not exhaustive. Some of the key sectors explicitly mentioned where services are covered are:

• **Financial Services:** Banking, financing, insurance.
• **Utilities:** Supply of electrical or other energy.
• **Infrastructure & Logistics:** Transport, telecom (telephone services), housing construction.
• **Hospitality & Recreation:** Boarding or lodging or both, entertainment, amusement.
• **Information Dissemination:** Purveying of news or other information.

Over time, judicial interpretations have further expanded the coverage to include a wide array of professional services like medical services (by hospitals and doctors), legal services, architectural services, educational services (like coaching institutes), etc., provided they are rendered for consideration and do not fall under the specific exclusions.

Excludes service rendered free of charge or under contract of personal service

Notwithstanding the broad scope, the definition contains two specific exclusions:

1. **Service rendered free of charge:** Services provided without any consideration are not covered. For example, free medical treatment in a government hospital where no charge is levied is generally outside the purview of the Act. However, if certain incidental charges are collected (like for tests or medicines), the service might still be considered for consideration.
2. **Contract of personal service:** A contract of personal service implies a master-servant relationship where one party is under the direct control and supervision of the other while rendering the service (e.g., an employer and employee relationship). Services rendered under such contracts are excluded. This is distinct from a **contract for service**, where an independent professional or entity is engaged to perform a task (e.g., hiring a lawyer or a contractor), which *is* covered under the Act. The distinction hinges on the element of control and subordination.

Subject to these exclusions, almost any service availed by a consumer for payment falls within the extensive scope of the Act, allowing consumers to seek redressal for deficiencies.

Defect (Section 2(10))

The term 'Defect' is defined in the Consumer Protection Act, 2019, specifically in relation to **goods**. It provides the ground for a consumer to complain about the quality or condition of a product they have purchased.

According to **Section 2(10)** of the Consumer Protection Act, 2019, defect means any fault, imperfection or shortcoming in the **quality, quantity, potency, purity or standard** which is required to be maintained by or under any law for the time being in force or under any contract, express or implied, or as is claimed by the trader in any manner whatsoever in relation to any goods.

In goods: Manufacturing defect, faulty design, etc.

A defect in goods refers to any aspect where the goods fall short of what is expected or promised. This can manifest in various ways:

• **Fault or Imperfection:** The goods have a flaw that prevents them from functioning correctly or looking as intended (e.g., a car with a faulty engine, a television with a broken screen).
• **Shortcoming:** The goods lack a feature or quality that they ought to possess based on standards or claims.
• **Quality, Quantity, Potency, Purity, or Standard:** The goods do not meet the required benchmarks related to these attributes. This requirement can arise from:
  • **Legal Standards:** Standards mandated by statutes or regulations (e.g., food safety standards, electrical safety standards).
  • **Contractual Terms:** Quality or quantity promised in the sale agreement (express contract) or implied by law (implied contract, like merchantable quality under Sale of Goods Act).
  • **Trader's Claims:** Standards claimed by the seller, manufacturer, or service provider through advertisements, labels, brochures, etc.

Examples of Defects:

• **Manufacturing Defect:** A flaw introduced during the manufacturing process.
• **Faulty Design:** The product's design itself is flawed, leading to problems.
• **Substandard Quality:** The materials used or the overall finish is below the promised or expected standard.
• **Incorrect Quantity:** Less quantity of goods delivered than paid for.
• **Lack of Purity/Potency:** Food items being adulterated, or medicines lacking required potency.
• **Non-compliance with Standards:** Goods failing to meet safety or quality standards mandated by regulatory bodies (like BIS standards).
• **Goods not matching claims:** A product not performing as claimed in advertising.

When a consumer purchases goods and finds such a fault, imperfection, or shortcoming, they can file a complaint alleging a 'defect' under the Consumer Protection Act, provided they meet the definition of a consumer.

Deficiency (Section 2(11))

The term 'Deficiency' is defined in the Consumer Protection Act, 2019, specifically in relation to **services**. It provides the ground for a consumer to complain about the quality or standard of a service they have hired or availed of.

According to **Section 2(11)** of the Consumer Protection Act, 2019, deficiency means any fault, imperfection, shortcoming or inadequacy in the **quality, nature and manner of performance** which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service.

In services: Faulty, imperfect, incomplete, or unsatisfactory service

A deficiency in service occurs when the service provided falls short of what was expected or promised, either legally, contractually, or otherwise. This can relate to:

• **Fault, Imperfection, Shortcoming, or Inadequacy:** The service is flawed, incomplete, or substandard.
• **Quality, Nature, and Manner of Performance:** These attributes of the service are not as they should be. The required standard can arise from:
  • **Legal Requirements:** Standards mandated by laws applicable to the specific service (e.g., regulations for banking services, telecom services).
  • **Contractual Obligations:** Service quality, nature, or manner of performance agreed upon in the contract with the consumer.
  • **General Expectations:** Services are expected to be performed with due care and diligence, adhering to professional standards where applicable (e.g., medical services, legal services).

Examples of Deficiency in Service:

• **Delay:** Unreasonable delay in providing the service (e.g., delay in delivering a flat in housing construction, delay in granting a loan, delay in repairing a vehicle).
• **Poor Quality:** The service is not performed properly or is of substandard quality (e.g., poor quality repair work, ineffective medical treatment, unsatisfactory cleaning service).
• **Incomplete Service:** The service agreed upon is not fully performed.
• **Negligence:** Lack of due care or skill in rendering the service, especially applicable to professional services (e.g., medical negligence by a doctor, professional negligence by a lawyer or architect).
• **Overcharging:** Charging more than the agreed price or legally mandated rate for a service.
• **Lack of facilities:** Failure to provide facilities promised in connection with a service (e.g., promised amenities in a hotel or residential complex not provided).

Deficiency is the counterpart of 'defect' and applies specifically to the realm of services, providing consumers recourse when the service provider fails to deliver the expected standard of performance.

Unfair Trade Practice (Section 2(47))

Unfair Trade Practice is a crucial concept in consumer protection law, referring to business practices that are considered unfair or deceptive towards consumers. The Consumer Protection Act, 2019, defines and prohibits various such practices to ensure a fair marketplace.

According to **Section 2(47)** of the Consumer Protection Act, 2019, unfair trade practice means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any **unfair method or unfair or deceptive practice including** any of the following practices:

Trade practices that adopt unfair methods or practices for promoting sale, use or supply of goods or for the provision of any service

The definition starts with a broad statement covering any unfair or deceptive method used to promote sales or services. It then provides an inclusive list of specific practices that fall under this definition. The 2019 Act has expanded this list compared to the 1986 Act and includes digital unfair practices.

Key Examples of Unfair Trade Practices listed in Section 2(47) (Illustrative):

• **False Representation:** Making false or misleading statements regarding the standard, quality, quantity, grade, composition, style, or model of goods/services; making false or misleading representations concerning the need for goods/services; giving false warranty or guarantee; etc.
• **Misleading Advertising:** Publication of any advertisement, whether electronic, print or otherwise, which—
  • falsely represents that the goods are of a particular standard, quality, quantity, grade, composition, style or model;
  • falsely represents that the services are of a particular standard, quality or grade;
  • misleadingly gives to the public a material representation concerning the goods or services;
  • constitutes a false or misleading representation of facts;
  • creates a misleading impression as to the substance of the product or service;
  • misleads the public concerning the price at which the product or service is offered;
  • is published in a form and manner which would mislead the public; or
  • materially misleading the public about the nature, characteristics or suitability for purpose of a product or service.
• **Bait Advertising:** Offering gifts, prizes, or other items with the intention of not providing them as offered, or with the intention of not having them for the purpose of attracting consumers.
• **Conducting Promotional Contests:** Conducting any contest, lottery, game of chance or skill, for the purpose of promoting, directly or indirectly, the sale, use or supply of any product or any business interest, if arranged otherwise than in accordance with the rules made by the Central Government.
• **Withholding Information:** Permitting the publication of any advertisement which makes a claim to efficacy or benefit or guarantee of a product or service that is not based on adequate or scientific data, or withholds material information.
• **Hoarding or Destruction of Goods:** Permitting the hoarding or destruction of goods, or refusing to sell the goods or provide services, so as to raise or tend to raise the cost of those goods or services to the consumers.
• **Tie-in Sales:** Selling goods or services on the condition that the consumer shall also buy other goods or services.
• **Non-compliance with Standards:** Manufacturing, selling, or distributing any goods or providing services, which do not comply with the standards prescribed by the competent authority, or the standards declared by the seller.
• **Adulterated/Spurious Goods:** Manufacturing or selling adulterated goods or spurious goods.
• **Pyramid Schemes:** Promoting a pyramid scheme (a multi-layered network chain structure where participants earn from recruiting new participants rather than selling goods/services).
• **Failure to Issue Cash Memo/Receipt:** Not issuing a cash memo or receipt for the goods sold or services rendered in violation of any law.

Complaints about unfair trade practices can be filed with the consumer forums. Additionally, the Central Consumer Protection Authority (CCPA) has the power to take suo motu action, investigate, and issue directions or impose penalties in case of unfair trade practices affecting consumers as a class, particularly concerning misleading advertisements.

Restrictive Trade Practice (Section 2(40))

Restrictive Trade Practice refers to business practices that manipulate supply or prices or otherwise impose unjustified costs or restrictions on consumers by hindering competition or distorting the market. The Consumer Protection Act, 2019, provides consumers with recourse against such practices.

According to **Section 2(40)** of the Consumer Protection Act, 2019, restrictive trade practice means a trade practice which tends to obstruct the flow of capital or resources into the stream of production or which tends to bring about manipulation of prices or conditions of delivery or to affect the flow of supplies in the market relating to goods or services in such a manner as to impose on the consumers **unjustified costs or restrictions**.

Practices that manipulate prices, conditions of delivery, or affect supply to impose unjustified costs or restrictions on consumers

The definition focuses on the **effect** of the trade practice on the consumer – whether it imposes unjustified costs or restrictions. It covers practices that interfere with the normal market mechanisms related to production, supply, pricing, and delivery. The Act lists certain examples:

• **Manipulation of Prices or Conditions:** Practices that tend to manipulate prices or conditions of delivery. This could include actions that lead to artificial price increases or unfavourable delivery terms for consumers.
• **Affecting Flow of Supplies:** Practices that affect the flow of supplies in the market in a manner that harms consumers. This could involve creating artificial scarcity or controlling distribution channels to the detriment of consumers.
• **Imposing Unjustified Costs or Restrictions:** The key element is the imposition of costs or restrictions that are not justified by market conditions or the nature of the product/service.

Examples (Drawing from principles and related laws like Competition Act):

• **Tie-in arrangement:** Requiring a consumer to purchase another commodity as a condition of purchasing the desired commodity. (While also listed under UTP, it can also be restrictive).
• **Exclusive Dealing:** Forcing consumers to purchase goods only from the seller and not from competitors.
• **Price Cartels:** Agreements between competitors to fix prices at artificially high levels.
• **Resale Price Maintenance:** Manufacturers dictating the minimum price at which retailers must sell, preventing retailers from offering discounts.
• **Refusal to Deal:** A dominant player refusing to sell goods/services to certain buyers without valid reasons, limiting consumer access.

While the Competition Act, 2002, is the primary law dealing with anti-competitive practices from a market perspective, the Consumer Protection Act empowers individual consumers to complain about restrictive trade practices that specifically cause them unjustified costs or restrictions in the context of acquiring goods or services.

Product Liability (Section 2(34))

The concept of 'Product Liability' is a significant introduction in the Consumer Protection Act, 2019. It simplifies the process for consumers to seek compensation for harm caused by defective products or deficient services, shifting the focus towards holding the entities in the supply chain directly responsible.

According to **Section 2(34)** of the Consumer Protection Act, 2019, product liability means the responsibility of a **product manufacturer or product seller**, of any product or service, to compensate for any **harm** caused to a consumer by such **defective product** or **deficient service**.

Responsibility to compensate for harm caused by defective product or deficient service

Product liability establishes that entities involved in manufacturing, selling, or providing services related to a product are legally accountable if that product or service causes harm to a consumer due to a defect or deficiency. This means a consumer no longer necessarily has to prove negligence on the part of the manufacturer or seller in all cases, especially for manufacturing defects. Liability can arise simply from the fact that the product was defective and caused harm (often referred to as 'strict liability' or 'no-fault liability' principles applied in some cases of product liability).

Who can be held liable?

• **Product Manufacturer (Section 84):** The manufacturer of a defective product can be held liable even if they were not negligent, provided the defect was present when the product left their control and caused harm.
• **Product Service Provider (Section 85):** A person who provides service in respect of a product can be held liable for deficiency in that service causing harm.
• **Product Seller (Section 86):** A person who sells a product (e.g., a retailer, wholesaler) can also be held liable for harm caused by a defective product, though they have specific defences available under Section 86.

What constitutes 'Harm'? (Section 2(22))

The Act defines harm in relation to a product liability action as:

• damage to property, subject to certain exceptions;
• personal injury, illness, or death;
• mental agony or emotional distress attending to personal injury, illness, or death;
• any loss of consortium or services or other loss resulting from a harm referred to above.

However, 'harm' does **not** include damage to the product itself or any property used along with the product, or any monetary loss consequent to that, unless the harm is caused to the property other than such product.

The introduction of product liability significantly strengthens consumer protection by providing a direct avenue to claim compensation for injuries or losses caused by faulty products or services, placing a higher degree of responsibility on businesses in the supply chain.

Product Liability Defences (Section 83)

While the Consumer Protection Act, 2019, introduces product liability, it also provides certain defences that can be taken by the entities facing a product liability action. Section 83 specifically lists defences available to a **product seller** in certain circumstances, while Section 87 lists defences for a product manufacturer and Section 85 deals with product service providers.

According to **Section 83** of the Consumer Protection Act, 2019, a product seller shall **not be liable** to a consumer for harm caused by a product if the product was—

Defences available to a Product Seller

Section 83 provides defences to a product seller when a product liability action is brought against them alleging that the product is defective on the ground of manufacturing defect or defect in design or inadequate warnings. The seller can escape liability if they prove that:

• **At the time the product was sold by the product seller, he was not the owner of such product and the product was in the possession of a third party.** (This implies the seller did not have control over the product when it was sold).
• **The product seller had only a service and repair relationship with the manufacturer of the product.** (This defence applies if the seller's role was limited to servicing or repairing, not selling or distributing the product itself in a manner implying ownership).
• **The product seller has not exercised substantial control over the manufacturing, designing, testing or labeling of the product that caused harm.** (Liability generally rests more heavily on parties who had control over the product's creation and presentation).
• **The warranty or guarantee, if any, relating to the product was not inconsistent with, or did not extend beyond, the express warranty or guarantee provided by the manufacturer of the product.** (Seller is not liable for extending warranties beyond the manufacturer's).
• **The product was sold by the product seller in a sealed package and the product seller did not participate in the manufacturing of the product, but only affixed his own brand name on the product.** (This is a significant defence for retailers selling branded products manufactured by others, provided they did not tamper with the product and the manufacturer is identifiable).
• **The product was acquired by the product seller as an unopened package from a manufacturer.** (Similar to the above, indicating the seller did not introduce the defect).
• **The product seller while acting as a mere conduit in the case of a product liability action relating to a manufacturing defect, is not liable to the consumer.** (This defence applies to sellers who simply pass on the product from the manufacturer/distributor without altering it).

Note: These defences under Section 83 are specific to the **product seller** and relate to specific types of defects (manufacturing, design, warning). The defences available to a product manufacturer under Section 87 are different and more limited.

These specific defences ensure that while product sellers can be held liable, they are not unfairly held responsible for defects that were entirely attributable to the manufacturer or other parties up the supply chain, provided they acted merely as intermediaries without contributing to the defect.