California Consumer Privacy Act of 2018

CIVIL CODE – CIV

DIVISION 3. OBLIGATIONS [1427 – 3273]

  ( Heading of Division 3 amended by Stats. 1988, Ch. 160, Sec. 14. )

PART 4. OBLIGATIONS ARISING FROM PARTICULAR TRANSACTIONS [1738 – 3273]

  ( Part 4 enacted 1872. )

TITLE 1.81.5. California Consumer Privacy Act of 2018

[1798.100 – 1798.199]

( Title 1.81.5 added by Stats. 2018, Ch. 55, Sec. 3. )

1798.100.

(a) A consumer shall have the right to request that a business that collects a consumer’s personal information disclose to that consumer the categories and specific pieces of personal information the business has collected.

(b) A business that collects a consumer’s personal information shall, at or before the point of collection, inform consumers as to the categories of personal information to be collected and the purposes for which the categories of personal information shall be used. A business shall not collect additional categories of personal information or use personal information collected for additional purposes without providing the consumer with notice consistent with this section.

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ONGC LTD. & ORS. Vs CONSUMER EDUCATION RESEARCH SOCIETY & ORS- 09/12/2019

Consumer- whether any amount is being paid by the employees for contribution to the services rendered by the Trust, it is apparent that the service, if any, is being rendered by the Trust and not by the ONGC. Therefore, we have no hesitation in coming to the conclusion that there is no relationship of consumer and service provider between the claimants and the ONGC.

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO(S). 9257 OF 2019

(Arising out of SLP (C) No(s).14941 of 2014)

CHAIRMAN­CUM­MANAGING DIRECTOR

ONGC LTD. & ORS. …APPELLANT(S)

Versus

CONSUMER EDUCATION RESEARCH

SOCIETY & ORS. …RESPONDENT(S)

WITH

CIVIL APPEAL NOS. 9258 OF 2019

(Arising out of SLP (C) Nos. 26660 of 2014)

CIVIL APPEAL NOS. 9259 OF 2019

(Arising out of SLP (C) No. 26659 of 2014)

CIVIL APPEAL NOS. 9260 OF 2019

(Arising out of SLP (C) No. 26662 of 2014)

CIVIL APPEAL NOS. 9261 OF 2019

(Arising out of SLP (C) No. 26655 of 2014)

CIVIL APPEAL NOS. 9262 OF 2019

(Arising out of SLP (C) No. 26657 of 2014)

CIVIL APPEAL NOS. 9263 OF 2019

(Arising out of SLP (C) No. 26661 of 2014)

CIVIL APPEAL NOS. 9264 OF 2019

(Arising out of SLP (C) No. 26663 of 2014)

JUDGMENT

Deepak Gupta, J.

Leave granted.

2. All these appeals are being disposed of by a common judgment since the issue involved is common in all the cases.

3. At the outset, we may note that Shri Krishnan Venugopal, learned senior counsel appearing for the appellants submits that without prejudice to the rights of the appellants to challenge the impugned orders of the National Consumer Disputes Redressal Commission as well as the Gujarat State Consumer Disputes Redressal Commission and the District Forum, the appellants shall pay the amount as directed in the impugned orders. This has been done because the amounts involved are small, the appellants had retired a long time back and they should not be forced to go into the second round of litigation.

4. The main issue involved is whether there is relationship of consumer and service provider existing between the private respondents (claimants) and the appellants.

5. The undisputed facts are that all the claimants were employees of the Oil and Natural Gas Commission (for short ‘the ONGC’). A Self Contributory, Post Retirement and Death in Service Benefits Scheme, 1991 (for short ‘the Scheme’) was introduced in the ONGC after obtaining permission of the Government of India and the relevant portion of the letter dated 18.09.1991 granting permission reads as follows:­

“(i) Contribution to the fund to be established from the employee of the ONGC would be in cash, with a token contribution of Rs.100 per annum by ONGC.”

The Scheme has also been annexed and the relevant portion of the Scheme reads as follows:­

“1(c) Membership

(i) xxx xxx xxx

(ii) The Scheme shall be optional to the existing executives in regular service of the Commission on the effective date of the Scheme 01 04 1990 However, t will be compulsory for executives joining regular service in the Commission as new entrant on or after the effective date of the Scheme option once exercise shall be final and irrevocable

xxx xxx xxx

2 Contribution

2.1 The contribution to be make by the member­ employee shall be calculate his salary and the rate will be as given hereunder depending on his age on the effective of the Scheme for employees on the rolls ONGC as on 01.04.1990 and on the date Joining ONGC for new entrants. The rate of contribution fixed at the time of entry will remain constant. The following rates of the contribution are payable in the various age group:

(i) Below 25 years ­0.5% of salary

(ii) 25 and upto 35 years ­0.75% of Salary
(iii) above 30 and up to 35 years ­1% of salary
(iv) above 35 and up to 40 years ­2% of salary
(v) Above 40 and up to 45 years ­3% of salary
(vi) Above 45 and up to 48 years ­4.5% of salary
(vii) Above 48 and up to 50 years ­4.5% of salary
Above 50 and up to 58 years ­5% of salary
xxx xxx xxx

5. MANAGING THE SCHEME

(a) The Scheme shall be run by a Trust consisting of trustees to be nominated by the Chairman ONGC and representative as may nominated on the board by CWC of ASTO. The Trust would make investment plan of the fund as per pattern of Rule 67 (2) of Income Tax Rule 1961 and would purchase annuity from LIC for the beneficiaries

under the Scheme.

6. Scheme is based on voluntary contribution by the member employees. No contribution will be made by ONGC towards this Scheme except Rs.100 p.a. No. other financial liability on account of this Scheme will devolve on ONGC or the Govt. of India.”

It is not necessary to deal with other facts. The case of the claimants was that due to delay in sending their claims to the LIC, they suffered a loss. This averment is denied by the appellants but, in our view, that is not very relevant. The Consumer Fora held that the employees were consumers of the ONGC and therefore passed orders awarding various amounts and costs in favour of the claimants and hence the ONGC is liable to pay the same.

6. Shri Venugopal has raised various pleas before us. The first is that in terms of the definition of consumer in the Consumer Protection Act, 1986 (for short ‘the Act’), the first essential ingredient is payment of consideration for availing services. The second contention is that rendering of service free of charge under a contract of personal service is not included in the definition of service under the Act. We may refer to Section 2(d) of the Act, which reads as follows:­

“(d) “consumer” means any person who,—

(i) xxx xxx xxx

(ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person but does not include a person who avails of such services for any commercial purpose;”

We may also refer to Section 2(o) of the Act, which reads as follows:­

“(o) “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, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service;”

Shri Venugopal has relied upon the judgment of this Court in the case of Jagmittar Sain Bhagat & Ors. vs. Director, Health Services, Haryana & Ors.1 in this regard. On the other hand, learned counsel for the respondents has placed reliance on the judgment of this Court in Regional Provident Fund Commissioner v. Shiv Kumar Joshi2 and Regional Provident Fund Commissioner v. Bhavani3.


1 2013(10) SCC 136

2 2000(1) SCC 98

3 (2008) 7 SCC 111


7. In our opinion, it is not necessary to answer all the issues raised by Shri Venugopal since, in our opinion, there is virtually no privity of contract for providing service between the ONGC and the claimants. From a perusal of the letter dated 18.09.1991 and the Scheme, relevant portion of which has been quoted above, it is apparent that contributors to the Scheme were the employees of ONGC. Whereas the employer was only making a token contribution of Rs.100 per annum, the Scheme was also voluntary and optional for the employees who were in service from the effective date i.e. 01.04.1990. It is not disputed that all the claimants were in service before the effective date. The Scheme envisages that every employee shall contribute to the fund at rates specified therein. The younger the employee, the percentage deducted from his salary is less and this rises progressively as the age increases. It has obviously been done to ensure that the contribution of the employee is equal i.e. those who have less years of remaining service will contribute at a higher rate and those who have more years of remaining service will contribute at a lower rate. The most important aspect is that the Scheme is managed and run by a Trust and not by the ONGC. The trustees of the Trust are nominated by the Chairman of the ONGC and representatives may be nominated to the Board of Trustees by the Central Working Committee (CWC) of Association of Scientific and Technical Officers. We have been informed at the Bar that 7 trustees are nominated by the Chairman of the ONGC and 6 by the CWC. Be that as it may, it is the Trust which manages the fund. Therefore, without going into the question as to whether any amount is being paid by the employees for contribution to the services rendered by the Trust, it is apparent that the service, if any, is being rendered by the Trust and not by the ONGC. Therefore, we have no hesitation in coming to the conclusion that there is no relationship of consumer and service provider between the claimants and the ONGC. We make it clear that we have not gone into the other questions since, in view of the aforesaid decision, it is not necessary to decide the other questions raised by Shri Venugopal.

8. In view of the above discussion, we partly allow the appeals and set aside the orders of the National Consumer Disputes Redressal Commission and the State Consumer Disputes Redressal Commission in so far as it held that there is a relationship of consumer and service provider between the claimants and the ONGC. We also set aside the costs imposed by the National Consumer Disputes Redressal Commission. However, in view of the statement made by Shri Venugopal, recorded in the opening portion of this judgment, we direct the ONGC to pay the amounts payable (other than the costs) under the orders impugned to the claimants within 8 weeks from today.

9. Pending application(s), if any, stand(s) disposed of.

J. (S. Abdul Nazeer)

J. (Deepak Gupta)

 

New Delhi

December 09, 2019


H.V.P.N.L. Vs Mahavir-21/07/2000

SUPREME COURT OF INDIA JUDGMENTS

How to hear an appeal by Consumer Commission

The Appellate Forum is bound to refer to the pleadings of the case, the submissions of the counsel, necessary points for consideration, discuss the evidence and dispose of the matter by giving valid reasons.

SUPREME COURT OF INDIA

H.V.P.N.L.
Appellant

Versus

Mahavir
Respondent

(Before: M. Jagannadha Rao And Doraiswamy Raju, JJ.)

Petitions for Spl. Leave to Appeal (Civil) No. 9979 of 2000, Decided on: 21-07-2000.

Constitution of India, 1950—Article 132.

order

1. In a number of cases coming up in appeal in this Court, we find that the State Consumer Disputes Redressal, Commission Haryana at Chandigarh is passing a standard order in the following terms:

“We have heard the Law Officer of the H.V.P.N. – appellant and have also perused the impugned order. We do not find any legal infirmity in the detailed and well-reasoned order passed by District Forum, Kaithal. Accordingly, we uphold the impugned order and dismissed the appeal”.

2. We may point out that while dealing with a First Appeal, this is not the way to dispose of the matter. The Appellate Forum is bound to refer to the pleadings of the case, the submissions of the counsel, necessary points for consideration, discuss the evidence and dispose of the matter by giving valid reasons. It is very easy to dispose of any appeal in this fashion and the higher Courts would not know whether learned State Commission had applied its mind to the case. We hope that such orders will not be passed by the State Consumer Disputes Redressal Commission, Haryana at Chandigarh in future. A copy of this order may be communicated to the Commission.

3. Issue notice for remand of the matter to the State Commission, for disposal afresh in accordance with law.

4. Status quo, as of today, shall be maintained by the parties.


AIR 2000 SC 3586(1) : (2001) 10 SCC 659 : (2000) 5 SCALE 287

California Consumer Privacy Act of 2018

The California Online Privacy Protection Act of 2003, amended in 2014, is a state-level law that governs what data websites can collect on their California-based consumers and how they display their data usage and policy guidelines.

Date Published: 06/29/2018 04:00 AM

AMENDMENT LAW 2014

BILL START

Assembly Bill No. 375

CHAPTER 55

An act to add Title 1.81.5 (commencing with Section 1798.100) to Part 4 of Division 3 of the Civil Code, relating to privacy.

[ Approved by Governor June 28, 2018. Filed with Secretary of State June 28, 2018. ]

LEGISLATIVE COUNSEL’S DIGEST

AB 375, Chau. Privacy: personal information: businesses.

The California Constitution grants a right of privacy. Existing law provides for the confidentiality of personal information in various contexts and requires a business or person that suffers a breach of security of computerized data that includes personal information, as defined, to disclose that breach, as specified.

This bill would enact the California Consumer Privacy Act of 2018. Beginning January 1, 2020, the bill would grant a consumer a right to request a business to disclose the categories and specific pieces of personal information that it collects about the consumer, the categories of sources from which that information is collected, the business purposes for collecting or selling the information, and the categories of 3rd parties with which the information is shared. The bill would require a business to make disclosures about the information and the purposes for which it is used. The bill would grant a consumer the right to request deletion of personal information and would require the business to delete upon receipt of a verified request, as specified. The bill would grant a consumer a right to request that a business that sells the consumer’s personal information, or discloses it for a business purpose, disclose the categories of information that it collects and categories of information and the identity of 3rd parties to which the information was sold or disclosed. The bill would require a business to provide this information in response to a verifiable consumer request. The bill would authorize a consumer to opt out of the sale of personal information by a business and would prohibit the business from discriminating against the consumer for exercising this right, including by charging the consumer who opts out a different price or providing the consumer a different quality of goods or services, except if the difference is reasonably related to value provided by the consumer’s data. The bill would authorize businesses to offer financial incentives for collection of personal information. The bill would prohibit a business from selling the personal information of a consumer under 16 years of age, unless affirmatively authorized, as specified, to be referred to as the right to opt in. The bill would prescribe requirements for receiving, processing, and satisfying these requests from consumers. The bill would prescribe various definitions for its purposes and would define “personal information” with reference to a broad list of characteristics and behaviors, personal and commercial, as well as inferences drawn from this information. The bill would prohibit the provisions described above from restricting the ability of the business to comply with federal, state, or local laws, among other things.

The bill would provide for its enforcement by the Attorney General, as specified, and would provide a private right of action in connection with certain unauthorized access and exfiltration, theft, or disclosure of a consumer’s nonencrypted or nonredacted personal information, as defined. The bill would prescribe a method for distribution of proceeds of Attorney General actions. The bill would create the Consumer Privacy Fund in the General Fund with the moneys in the fund, upon appropriation by the Legislature, to be applied to support the purposes of the bill and its enforcement. The bill would provide for the deposit of penalty money into the fund. The bill would require the Attorney General to solicit public participation for the purpose of adopting regulations, as specified. The bill would authorize a business, service provider, or 3rd party to seek the Attorney General’s opinion on how to comply with its provisions. The bill would void a waiver of a consumer’s rights under its provisions. The bill would condition its operation on the withdrawal of a specified initiative from the ballot.

DIGEST KEY
Vote: majority Appropriation: no Fiscal Committee: yes Local Program: no

BILL TEXT


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1. This measure shall be known and may be cited as “The California Consumer Privacy Act of 2018.”

SEC. 2. The Legislature finds and declares that:

(a) In 1972, California voters amended the California Constitution to include the right of privacy among the “inalienable” rights of all people. The amendment established a legal and enforceable right of privacy for every Californian. Fundamental to this right of privacy is the ability of individuals to control the use, including the sale, of their personal information.
(b) Since California voters approved the right of privacy, the California Legislature has adopted specific mechanisms to safeguard Californians’ privacy, including the Online Privacy Protection Act, the Privacy Rights for California Minors in the Digital World Act, and Shine the Light, a California law intended to give Californians the ‘who, what, where, and when’ of how businesses handle consumers’ personal information.
(c) At the same time, California is one of the world’s leaders in the development of new technologies and related industries. Yet the proliferation of personal information has limited Californians’ ability to properly protect and safeguard their privacy. It is almost impossible to apply for a job, raise a child, drive a car, or make an appointment without sharing personal information.
(d) As the role of technology and data in the every daily lives of consumers increases, there is an increase in the amount of personal information shared by consumers with businesses. California law has not kept pace with these developments and the personal privacy implications surrounding the collection, use, and protection of personal information.
(e) Many businesses collect personal information from California consumers. They may know where a consumer lives and how many children a consumer has, how fast a consumer drives, a consumer’s personality, sleep habits, biometric and health information, financial information, precise geolocation information, and social networks, to name a few categories.
(f) The unauthorized disclosure of personal information and the loss of privacy can have devastating effects for individuals, ranging from financial fraud, identity theft, and unnecessary costs to personal time and finances, to destruction of property, harassment, reputational damage, emotional stress, and even potential physical harm.
(g) In March 2018, it came to light that tens of millions of people had their personal data misused by a data mining firm called Cambridge Analytica. A series of congressional hearings highlighted that our personal information may be vulnerable to misuse when shared on the Internet. As a result, our desire for privacy controls and transparency in data practices is heightened.
(h) People desire privacy and more control over their information. California consumers should be able to exercise control over their personal information, and they want to be certain that there are safeguards against misuse of their personal information. It is possible for businesses both to respect consumers’ privacy and provide a high level transparency to their business practices.

(i) Therefore, it is the intent of the Legislature to further Californians’ right to privacy by giving consumers an effective way to control their personal information, by ensuring the following rights:
(1) The right of Californians to know what personal information is being collected about them.

(2) The right of Californians to know whether their personal information is sold or disclosed and to whom.
(3) The right of Californians to say no to the sale of personal information.
(4) The right of Californians to access their personal information.
(5) The right of Californians to equal service and price, even if they exercise their privacy rights.

SEC. 3. Title 1.81.5 (commencing with Section 1798.100) is added to Part 4 of Division 3 of the Civil Code, to read:

TITLE 1.81.5. California Consumer Privacy Act of 2018

1798.100. (a) A consumer shall have the right to request that a business that collects a consumer’s personal information disclose to that consumer the categories and specific pieces of personal information the business has collected.
(b) A business that collects a consumer’s personal information shall, at or before the point of collection, inform consumers as to the categories of personal information to be collected and the purposes for which the categories of personal information shall be used. A business shall not collect additional categories of personal information or use personal information collected for additional purposes without providing the consumer with notice consistent with this section.
(c) A business shall provide the information specified in subdivision (a) to a consumer only upon receipt of a verifiable consumer request.
(d) A business that receives a verifiable consumer request from a consumer to access personal information shall promptly take steps to disclose and deliver, free of charge to the consumer, the personal information required by this section. The information may be delivered by mail or electronically, and if provided electronically, the information shall be in a portable and, to the extent technically feasible, in a readily useable format that allows the consumer to transmit this information to another entity without hindrance. A business may provide personal information to a consumer at any time, but shall not be required to provide personal information to a consumer more than twice in a 12-month period.
(e) This section shall not require a business to retain any personal information collected for a single, one-time transaction, if such information is not sold or retained by the business or to reidentify or otherwise link information that is not maintained in a manner that would be considered personal information.
(1) Retain any personal information collected for a single, one-time transaction, if the information is not sold or retained by the business.
(2) Reidentify or otherwise link any data that, in the ordinary course of business, is not maintained in a manner that would be considered personal information.

1798.105. (a) A consumer shall have the right to request that a business delete any personal information about the consumer which the business has collected from the consumer.
(b) A business that collects personal information about consumers shall disclose, pursuant to subparagraph (A) of paragraph (5) of subdivision (a) of Section 1798.130, the consumer’s rights to request the deletion of the consumer’s personal information.
(c) A business that receives a verifiable request from a consumer to delete the consumer’s personal information pursuant to subdivision (a) of this section shall delete the consumer’s personal information from its records and direct any service providers to delete the consumer’s personal information from their records.
(d) A business or a service provider shall not be required to comply with a consumer’s request to delete the consumer’s personal information if it is necessary for the business or service provider to maintain the consumer’s personal information in order to:
(1) Complete the transaction for which the personal information was collected, provide a good or service requested by the consumer, or reasonably anticipated within the context of a business’s ongoing business relationship with the consumer, or otherwise perform a contract between the business and the consumer.
(2) Detect security incidents, protect against malicious, deceptive, fraudulent, or illegal activity; or prosecute those responsible for that activity.
(3) Debug to identify and repair errors that impair existing intended functionality.
(4) Exercise free speech, ensure the right of another consumer to exercise his or her right of free speech, or exercise another right provided for by law.
(5) Comply with the California Electronic Communications Privacy Act pursuant to Chapter 3.6 (commencing with Section 1546) of Title 12 of Part 2 of the Penal Code.
(6) Engage in public or peer-reviewed scientific, historical, or statistical research in the public interest that adheres to all other applicable ethics and privacy laws, when the businesses’ deletion of the information is likely to render impossible or seriously impair the achievement of such research, if the consumer has provided informed consent.
(7) To enable solely internal uses that are reasonably aligned with the expectations of the consumer based on the consumer’s relationship with the business.
(8) Comply with a legal obligation.
(9) Otherwise use the consumer’s personal information, internally, in a lawful manner that is compatible with the context in which the consumer provided the information.

1798.110. (a) A consumer shall have the right to request that a business that collects personal information about the consumer disclose to the consumer the following:
(1) The categories of personal information it has collected about that consumer.
(2) The categories of sources from which the personal information is collected.
(3) The business or commercial purpose for collecting or selling personal information.
(4) The categories of third parties with whom the business shares personal information.
(5) The specific pieces of personal information it has collected about that consumer.
(b) A business that collects personal information about a consumer shall disclose to the consumer, pursuant to paragraph (3) of subdivision (a) of Section 1798.130, the information specified in subdivision (a) upon receipt of a verifiable request from the consumer.
(c) A business that collects personal information about consumers shall disclose, pursuant to subparagraph (B) of paragraph (5) of subdivision (a) of Section 1798.130:
(1) The categories of personal information it has collected about that consumer.
(2) The categories of sources from which the personal information is collected.
(3) The business or commercial purpose for collecting or selling personal information.
(4) The categories of third parties with whom the business shares personal information.
(5) The specific pieces of personal information the business has collected about that consumer.
(d) This section does not require a business to do the following:
(1) Retain any personal information about a consumer collected for a single one-time transaction if, in the ordinary course of business, that information about the consumer is not retained.
(2) Reidentify or otherwise link any data that, in the ordinary course of business, is not maintained in a manner that would be considered personal information.

1798.115. (a) A consumer shall have the right to request that a business that sells the consumer’s personal information, or that discloses it for a business purpose, disclose to that consumer:
(1) The categories of personal information that the business collected about the consumer.
(2) The categories of personal information that the business sold about the consumer and the categories of third parties to whom the personal information was sold, by category or categories of personal information for each third party to whom the personal information was sold.
(3) The categories of personal information that the business disclosed about the consumer for a business purpose.
(b) A business that sells personal information about a consumer, or that discloses a consumer’s personal information for a business purpose, shall disclose, pursuant to paragraph (4) of subdivision (a) of Section 1798.130, the information specified in subdivision (a) to the consumer upon receipt of a verifiable request from the consumer.
(c) A business that sells consumers’ personal information, or that discloses consumers’ personal information for a business purpose, shall disclose, pursuant to subparagraph (C) of paragraph (5) of subdivision (a) of Section 1798.130:
(1) The category or categories of consumers’ personal information it has sold, or if the business has not sold consumers’ personal information, it shall disclose that fact.
(2) The category or categories of consumers’ personal information it has disclosed for a business purpose, or if the business has not disclosed the consumers’ personal information for a business purpose, it shall disclose that fact.
(d) A third party shall not sell personal information about a consumer that has been sold to the third party by a business unless the consumer has received explicit notice and is provided an opportunity to exercise the right to opt out pursuant to 1798.120.

1798.120. (a) A consumer shall have the right, at any time, to direct a business that sells personal information about the consumer to third parties not to sell the consumer’s personal information. This right may be referred to as the right to opt out.
(b) A business that sells consumers’ personal information to third parties shall provide notice to consumers, pursuant to subdivision (a) of Section 1798.135, that this information may be sold and that consumers have the right to opt out of the sale of their personal information.
(c) A business that has received direction from a consumer not to sell the consumer’s personal information or, in the case of a minor consumer’s personal information has not received consent to sell the minor consumer’s personal information shall be prohibited, pursuant to paragraph (4) of subdivision (a) of Section 1798.135, from selling the consumer’s personal information after its receipt of the consumer’s direction, unless the consumer subsequently provides express authorization for the sale of the consumer’s personal information.
(d) Notwithstanding subdivision (a), a business shall not sell the personal information of consumers if the business has actual knowledge that the consumer is less than 16 years of age, unless the consumer, in the case of consumers between 13 and 16 years of age, or the consumer’s parent or guardian, in the case of consumers who are less than 13 years of age, has affirmatively authorized the sale of the consumer’s personal information. A business that willfully disregards the consumer’s age shall be deemed to have had actual knowledge of the consumer’s age. This right may be referred to as the “right to opt in.”

1798.125. (a) (1) A business shall not discriminate against a consumer because the consumer exercised any of the consumer’s rights under this title, including, but not limited to, by:
(A) Denying goods or services to the consumer.
(B) Charging different prices or rates for goods or services, including through the use of discounts or other benefits or imposing penalties.
(C) Providing a different level or quality of goods or services to the consumer, if the consumer exercises the consumer’s rights under this title.
(D) Suggesting that the consumer will receive a different price or rate for goods or services or a different level or quality of goods or services.
(2) Nothing in this subdivision prohibits a business from charging a consumer a different price or rate, or from providing a different level or quality of goods or services to the consumer, if that difference is reasonably related to the value provided to the consumer by the consumer’s data.
(b) (1) A business may offer financial incentives, including payments to consumers as compensation, for the collection of personal information, the sale of personal information, or the deletion of personal information. A business may also offer a different price, rate, level, or quality of goods or services to the consumer if that price or difference is directly related to the value provided to the consumer by the consumer’s data.
(2) A business that offers any financial incentives pursuant to subdivision (a), shall notify consumers of the financial incentives pursuant to Section 1798.135.
(3) A business may enter a consumer into a financial incentive program only if the consumer gives the business prior opt-in consent pursuant to Section 1798.135 which clearly describes the material terms of the financial incentive program, and which may be revoked by the consumer at any time.
(4) A business shall not use financial incentive practices that are unjust, unreasonable, coercive, or usurious in nature.

1798.130. (a) In order to comply with Sections 1798.100, 1798.105, 1798.110, 1798.115, and 1798.125, in a form that is reasonably accessible to consumers, a business shall:

(1) Make available to consumers two or more designated methods for submitting requests for information required to be disclosed pursuant to Sections 1798.110 and 1798.115, including, at a minimum, a toll-free telephone number, and if the business maintains an Internet Web site, a Web site address.
(2) Disclose and deliver the required information to a consumer free of charge within 45 days of receiving a verifiable request from the consumer. The business shall promptly take steps to determine whether the request is a verifiable request, but this shall not extend the business’s duty to disclose and deliver the information within 45 days of receipt of the consumer’s request. The time period to provide the required information may be extended once by an additional 45 days when reasonably necessary, provided the consumer is provided notice of the extension within the first 45-day period. The disclosure shall cover the 12-month period preceding the business’s receipt of the verifiable request and shall be made in writing and delivered through the consumer’s account with the business, if the consumer maintains an account with the business, or by mail or electronically at the consumer’s option if the consumer does not maintain an account with the business, in a readily useable format that allows the consumer to transmit this information from one entity to another entity without hindrance. The business shall not require the consumer to create an account with the business in order to make a verifiable request.
(3) For purposes of subdivision (b) of Section 1798.110:
(A) To identify the consumer, associate the information provided by the consumer in the verifiable request to any personal information previously collected by the business about the consumer.
(B) Identify by category or categories the personal information collected about the consumer in the preceding 12 months by reference to the enumerated category or categories in subdivision (c) that most closely describes the personal information collected.
(4) For purposes of subdivision (b) of Section 1798.115:
(A) Identify the consumer and associate the information provided by the consumer in the verifiable request to any personal information previously collected by the business about the consumer.
(B) Identify by category or categories the personal information of the consumer that the business sold in the preceding 12 months by reference to the enumerated category in subdivision (c) that most closely describes the personal information, and provide the categories of third parties to whom the consumer’s personal information was sold in the preceding 12 months by reference to the enumerated category or categories in subdivision (c) that most closely describes the personal information sold. The business shall disclose the information in a list that is separate from a list generated for the purposes of subparagraph (C).
(C) Identify by category or categories the personal information of the consumer that the business disclosed for a business purpose in the preceding 12 months by reference to the enumerated category or categories in subdivision (c) that most closely describes the personal information, and provide the categories of third parties to whom the consumer’s personal information was disclosed for a business purpose in the preceding 12 months by reference to the enumerated category or categories in subdivision (c) that most closely describes the personal information disclosed. The business shall disclose the information in a list that is separate from a list generated for the purposes of subparagraph (B).
(5) Disclose the following information in its online privacy policy or policies if the business has an online privacy policy or policies and in any California-specific description of consumers’ privacy rights, or if the business does not maintain those policies, on its Internet Web site, and update that information at least once every 12 months:

(A) A description of a consumer’s rights pursuant to Sections 1798.110, 1798.115, and 1798.125 and one or more designated methods for submitting requests.
(B) For purposes of subdivision (c) of Section 1798.110, a list of the categories of personal information it has collected about consumers in the preceding 12 months by reference to the enumerated category or categories in subdivision (c) that most closely describe the personal information collected.
(C) For purposes of paragraphs (1) and (2) of subdivision (c) of Section 1798.115, two separate lists:
(i) A list of the categories of personal information it has sold about consumers in the preceding 12 months by reference to the enumerated category or categories in subdivision (c) that most closely describe the personal information sold, or if the business has not sold consumers’ personal information in the preceding 12 months, the business shall disclose that fact.
(ii) A list of the categories of personal information it has disclosed about consumers for a business purpose in the preceding 12 months by reference to the enumerated category in subdivision (c) that most closely describe the personal information disclosed, or if the business has not disclosed consumers’ personal information for a business purpose in the preceding 12 months, the business shall disclose that fact.
(6) Ensure that all individuals responsible for handling consumer inquiries about the business’s privacy practices or the business’s compliance with this title are informed of all requirements in Sections 1798.110, 1798.115, 1798.125, and this section, and how to direct consumers to exercise their rights under those sections.
(7) Use any personal information collected from the consumer in connection with the business’s verification of the consumer’s request solely for the purposes of verification.
(b) A business is not obligated to provide the information required by Sections 1798.110 and 1798.115 to the same consumer more than twice in a 12-month period.
(c) The categories of personal information required to be disclosed pursuant to Sections 1798.110 and 1798.115 shall follow the definition of personal information in Section 1798.140.

1798.135. (a) A business that is required to comply with Section 1798.120 shall, in a form that is reasonably accessible to consumers:

(1) Provide a clear and conspicuous link on the business’ Internet homepage, titled “Do Not Sell My Personal Information,” to an Internet Web page that enables a consumer, or a person authorized by the consumer, to opt out of the sale of the consumer’s personal information. A business shall not require a consumer to create an account in order to direct the business not to sell the consumer’s personal information.
(2) Include a description of a consumer’s rights pursuant to Section 1798.120, along with a separate link to the “Do Not Sell My Personal Information” Internet Web page in:
(A) Its online privacy policy or policies if the business has an online privacy policy or policies.
(B) Any California-specific description of consumers’ privacy rights.
(3) Ensure that all individuals responsible for handling consumer inquiries about the business’s privacy practices or the business’s compliance with this title are informed of all requirements in Section 1798.120 and this section and how to direct consumers to exercise their rights under those sections.
(4) For consumers who exercise their right to opt out of the sale of their personal information, refrain from selling personal information collected by the business about the consumer.
(5) For a consumer who has opted out of the sale of the consumer’s personal information, respect the consumer’s decision to opt out for at least 12 months before requesting that the consumer authorize the sale of the consumer’s personal information.
(6) Use any personal information collected from the consumer in connection with the submission of the consumer’s opt-out request solely for the purposes of complying with the opt-out request.
(b) Nothing in this title shall be construed to require a business to comply with the title by including the required links and text on the homepage that the business makes available to the public generally, if the business maintains a separate and additional homepage that is dedicated to California consumers and that includes the required links and text, and the business takes reasonable steps to ensure that California consumers are directed to the homepage for California consumers and not the homepage made available to the public generally.
(c) A consumer may authorize another person solely to opt out of the sale of the consumer’s personal information on the consumer’s behalf, and a business shall comply with an opt out request received from a person authorized by the consumer to act on the consumer’s behalf, pursuant to regulations adopted by the Attorney General.

1798.140. For purposes of this title:

(a) “Aggregate consumer information” means information that relates to a group or category of consumers, from which individual consumer identities have been removed, that is not linked or reasonably linkable to any consumer or household, including via a device. “Aggregate consumer information” does not mean one or more individual consumer records that have been de­identified.

(b) “Biometric information” means an individual’s physiological, biological or behavioral characteristics, including an individual’s deoxyribonucleic acid (DNA), that can be used, singly or in combination with each other or with other identifying data, to establish individual identity. Biometric information includes, but is not limited to, imagery of the iris, retina, fingerprint, face, hand, palm, vein patterns, and voice recordings, from which an identifier template, such as a faceprint, a minutiae template, or a voiceprint, can be extracted, and keystroke patterns or rhythms, gait patterns or rhythms, and sleep, health, or exercise data that contain identifying information.

(c) “Business” means:
(1) A sole proprietorship, partnership, limited liability company, corporation, association, or other legal entity that is organized or operated for the profit or financial benefit of its shareholders or other owners, that collects consumers’ personal information, or on the behalf of which such information is collected and that alone, or jointly with others, determines the purposes and means of the processing of consumers’ personal information, that does business in the State of California, and that satisfies one or more of the following thresholds:
(A) Has annual gross revenues in excess of twenty-five million dollars ($25,000,000), as adjusted pursuant to paragraph (5) of subdivision (a) of Section 1798.185.
(B) Alone or in combination, annually buys, receives for the business’ commercial purposes, sells, or shares for commercial purposes, alone or in combination, the personal information of 50,000 or more consumers, households, or devices.
(C) Derives 50 percent or more of its annual revenues from selling consumers’ personal information.
(2) Any entity that controls or is controlled by a business, as defined in paragraph (1), and that shares common branding with the business. “Control” or “controlled” means ownership of, or the power to vote, more than 50 percent of the outstanding shares of any class of voting security of a business; control in any manner over the election of a majority of the directors, or of individuals exercising similar functions; or the power to exercise a controlling influence over the management of a company. “Common branding” means a shared name, servicemark, or trademark.

(d) “Business purpose” means the use of personal information for the business’ or a service provider’s operational purposes, or other notified purposes, provided that the use of personal information shall be reasonably necessary and proportionate to achieve the operational purpose for which the personal information was collected or processed or for another operational purpose that is compatible with the context in which the personal information was collected. Business purposes are:
(1) Auditing related to a current interaction with the consumer and concurrent transactions, including, but not limited to, counting ad impressions to unique visitors, verifying positioning and quality of ad impressions, and auditing compliance with this specification and other standards.
(2) Detecting security incidents, protecting against malicious, deceptive, fraudulent, or illegal activity, and prosecuting those responsible for that activity.
(3) Debugging to identify and repair errors that impair existing intended functionality.
(4) Short-term, transient use, provided the personal information that is not disclosed to another third party and is not used to build a profile about a consumer or otherwise alter an individual consumer’s experience outside the current interaction, including, but not limited to, the contextual customization of ads shown as part of the same interaction.
(5) Performing services on behalf of the business or service provider, including maintaining or servicing accounts, providing customer service, processing or fulfilling orders and transactions, verifying customer information, processing payments, providing financing, providing advertising or marketing services, providing analytic services, or providing similar services on behalf of the business or service provider.
(6) Undertaking internal research for technological development and demonstration.
(7) Undertaking activities to verify or maintain the quality or safety of a service or device that is owned, manufactured, manufactured for, or controlled by the business, and to improve, upgrade, or enhance the service or device that is owned, manufactured, manufactured for, or controlled by the business.

(e) “Collects,” “collected,” or “collection” means buying, renting, gathering, obtaining, receiving, or accessing any personal information pertaining to a consumer by any means. This includes receiving information from the consumer, either actively or passively, or by observing the consumer’s behavior.

(f) “Commercial purposes” means to advance a person’s commercial or economic interests, such as by inducing another person to buy, rent, lease, join, subscribe to, provide, or exchange products, goods, property, information, or services, or enabling or effecting, directly or indirectly, a commercial transaction. “Commercial purposes” do not include for the purpose of engaging in speech that state or federal courts have recognized as noncommercial speech, including political speech and journalism.

(g) “Consumer” means a natural person who is a California resident, as defined in Section 17014 of Title 18 of the California Code of Regulations, as that section read on September 1, 2017, however identified, including by any unique identifier.

(h) “Deidentified” means information that cannot reasonably identify, relate to, describe, be capable of being associated with, or be linked, directly or indirectly, to a particular consumer, provided that a business that uses deidentified information:
(1) Has implemented technical safeguards that prohibit reidentification of the consumer to whom the information may pertain.
(2) Has implemented business processes that specifically prohibit reidentification of the information.
(3) Has implemented business processes to prevent inadvertent release of deidentified information.
(4) Makes no attempt to reidentify the information.

(i) “Designated methods for submitting requests” means a mailing address, email address, Internet Web page, Internet Web portal, toll-free telephone number, or other applicable contact information, whereby consumers may submit a request or direction under this title, and any new, consumer-friendly means of contacting a business, as approved by the Attorney General pursuant to Section 1798.185.
(j) “Device” means any physical object that is capable of connecting to the Internet, directly or indirectly, or to another device.

(k) “Health insurance information” means a consumer’s insurance policy number or subscriber identification number, any unique identifier used by a health insurer to identify the consumer, or any information in the consumer’s application and claims history, including any appeals records, if the information is linked or reasonably linkable to a consumer or household, including via a device, by a business or service provider.

(l) “Homepage” means the introductory page of an Internet Web site and any Internet Web page where personal information is collected. In the case of an online service, such as a mobile application, homepage means the application’s platform page or download page, a link within the application, such as from the application configuration, “About,” “Information,” or settings page, and any other location that allows consumers to review the notice required by subdivision (a) of Section 1798.145, including, but not limited to, before downloading the application.

(m) “Infer” or “inference” means the derivation of information, data, assumptions, or conclusions from facts, evidence, or another source of information or data.

(n) “Person” means an individual, proprietorship, firm, partnership, joint venture, syndicate, business trust, company, corporation, limited liability company, association, committee, and any other organization or group of persons acting in concert.

(o) (1) “Personal information” means information that identifies, relates to, describes, is capable of being associated with, or could reasonably be linked, directly or indirectly, with a particular consumer or household. Personal information includes, but is not limited to, the following:
(A) Identifiers such as a real name, alias, postal address, unique personal identifier, online identifier Internet Protocol address, email address, account name, social security number, driver’s license number, passport number, or other similar identifiers.
(B) Any categories of personal information described in subdivision (e) of Section 1798.80.
(C) Characteristics of protected classifications under California or federal law.
(D) Commercial information, including records of personal property, products or services purchased, obtained, or considered, or other purchasing or consuming histories or tendencies.
(E) Biometric information.
(F) Internet or other electronic network activity information, including, but not limited to, browsing history, search history, and information regarding a consumer’s interaction with an Internet Web site, application, or advertisement.
(G) Geolocation data.
(H) Audio, electronic, visual, thermal, olfactory, or similar information.
(I) Professional or employment-related information.
(J) Education information, defined as information that is not publicly available personally identifiable information as defined in the Family Educational Rights and Privacy Act (20 U.S.C. section 1232g, 34 C.F.R. Part 99).

(K) Inferences drawn from any of the information identified in this subdivision to create a profile about a consumer reflecting the consumer’s preferences, characteristics, psychological trends, preferences, predispositions, behavior, attitudes, intelligence, abilities, and aptitudes.
(2) “Personal information” does not include publicly available information. For these purposes, “publicly available” means information that is lawfully made available from federal, state, or local government records, if any conditions associated with such information. “Publicly available” does not mean biometric information collected by a business about a consumer without the consumer’s knowledge. Information is not “publicly available” if that data is used for a purpose that is not compatible with the purpose for which the data is maintained and made available in the government records or for which it is publicly maintained. “Publicly available” does not include consumer information that is deidentified or aggregate consumer information.

(p) “Probabilistic identifier” means the identification of a consumer or a device to a degree of certainty of more probable than not based on any categories of personal information included in, or similar to, the categories enumerated in the definition of personal information.

(q) “Processing” means any operation or set of operations that are performed on personal data or on sets of personal data, whether or not by automated means.

(r) “Pseudonymize” or “Pseudonymization” means the processing of personal information in a manner that renders the personal information no longer attributable to a specific consumer without the use of additional information, provided that the additional information is kept separately and is subject to technical and organizational measures to ensure that the personal information is not attributed to an identified or identifiable consumer.

(s) “Research” means scientific, systematic study and observation, including basic research or applied research that is in the public interest and that adheres to all other applicable ethics and privacy laws or studies conducted in the public interest in the area of public health. Research with personal information that may have been collected from a consumer in the course of the consumer’s interactions with a business’ service or device for other purposes shall be:
(1) Compatible with the business purpose for which the personal information was collected.
(2) Subsequently pseudonymized and deidentified, or deidentified and in the aggregate, such that the information cannot reasonably identify, relate to, describe, be capable of being associated with, or be linked, directly or indirectly, to a particular consumer.
(3) Made subject to technical safeguards that prohibit reidentification of the consumer to whom the information may pertain.
(4) Subject to business processes that specifically prohibit reidentification of the information.
(5) Made subject to business processes to prevent inadvertent release of deidentified information.
(6) Protected from any reidentification attempts.
(7) Used solely for research purposes that are compatible with the context in which the personal information was collected.
(8) Not be used for any commercial purpose.
(9) Subjected by the business conducting the research to additional security controls limit access to the research data to only those individuals in a business as are necessary to carry out the research purpose.

(t) (1) “Sell,” “selling,” “sale,” or “sold,” means selling, renting, releasing, disclosing, disseminating, making available, transferring, or otherwise communicating orally, in writing, or by electronic or other means, a consumer’s personal information by the business to another business or a third party for monetary or other valuable consideration.

(2) For purposes of this title, a business does not sell personal information when:

(A) A consumer uses or directs the business to intentionally disclose personal information or uses the business to intentionally interact with a third party, provided the third party does not also sell the personal information, unless that disclosure would be consistent with the provisions of this title. An intentional interaction occurs when the consumer intends to interact with the third party, via one or more deliberate interactions. Hovering over, muting, pausing, or closing a given piece of content does not constitute a consumer’s intent to interact with a third party.
(B) The business uses or shares an identifier for a consumer who has opted out of the sale of the consumer’s personal information for the purposes of alerting third parties that the consumer has opted out of the sale of the consumer’s personal information.
(C) The business uses or shares with a service provider personal information of a consumer that is necessary to perform a business purposes if both of the following conditions are met: services that the service provider performs on the business’ behalf, provided that the service provider also does not sell the personal information.
(i) The business has provided notice that information being used or shared in its terms and conditions consistent with Section 1798.135.
(ii) The service provider does not further collect, sell, or use the personal information of the consumer except as necessary to perform the business purpose.
(D) The business transfers to a third party the personal information of a consumer as an asset that is part of a merger, acquisition, bankruptcy, or other transaction in which the third party assumes control of all or part of the business provided that information is used or shared consistently with Sections 1798.110 and 1798.115. If a third party materially alters how it uses or shares the personal information of a consumer in a manner that is materially inconsistent with the promises made at the time of collection, it shall provide prior notice of the new or changed practice to the consumer. The notice shall be sufficiently prominent and robust to ensure that existing consumers can easily exercise their choices consistently with Section 1798.120. This subparagraph does not authorize a business to make material, retroactive privacy policy changes or make other changes in their privacy policy in a manner that would violate the Unfair and Deceptive Practices Act (Chapter 5 (commencing with Section 17200) of Part 2 of Division 7 of the Business and Professions Code).

(u) “Service” or “services” means work, labor, and services, including services furnished in connection with the sale or repair of goods.

(v) “Service provider” means a sole proprietorship, partnership, limited liability company, corporation, association, or other legal entity that is organized or operated for the profit or financial benefit of its shareholders or other owners, that processes information on behalf of a business and to which the business discloses a consumer’s personal information for a business purpose pursuant to a written contract, provided that the contract prohibits the entity receiving the information from retaining, using, or disclosing the personal information for any purpose other than for the specific purpose of performing the services specified in the contract for the business, or as otherwise permitted by this title, including retaining, using, or disclosing the personal information for a commercial purpose other than providing the services specified in the contract with the business.
(w) “Third party” means a person who is not any of the following:
(1) The business that collects personal information from consumers under this title.
(2) A person to whom the business discloses a consumer’s personal information for a business purpose pursuant to a written contract, provided that the contract:
(A) Prohibits the person receiving the personal information from:
(i) Selling the personal information.
(ii) Retaining, using, or disclosing the personal information for any purpose other than for the specific purpose of performing the services specified in the contract, including retaining, using, or disclosing the personal information for a commercial purpose other than providing the services specified in the contract.
(iii) Retaining, using, or disclosing the information outside of the direct business relationship between the person and the business.

(B) Includes a certification made by the person receiving the personal information that the person understands the restrictions in subparagraph (A) and will comply with them.
A person covered by paragraph (2) that violates any of the restrictions set forth in this title shall be liable for the violations. A business that discloses personal information to a person covered by paragraph (2) in compliance with paragraph (2) shall not be liable under this title if the person receiving the personal information uses it in violation of the restrictions set forth in this title, provided that, at the time of disclosing the personal information, the business does not have actual knowledge, or reason to believe, that the person intends to commit such a violation.

(x) “Unique identifier” or “Unique personal identifier” means a persistent identifier that can be used to recognize a consumer, a family, or a device that is linked to a consumer or family, over time and across different services, including, but not limited to, a device identifier; an Internet Protocol address; cookies, beacons, pixel tags, mobile ad identifiers, or similar technology; customer number, unique pseudonym, or user alias; telephone numbers, or other forms of persistent or probabilistic identifiers that can be used to identify a particular consumer or device. For purposes of this subdivision, “family” means a custodial parent or guardian and any minor children over which the parent or guardian has custody.

(y) “Verifiable consumer request” means a request that is made by a consumer, by a consumer on behalf of the consumer’s minor child, or by a natural person or a person registered with the Secretary of State, authorized by the consumer to act on the consumer’s behalf, and that the business can reasonably verify, pursuant to regulations adopted by the Attorney General pursuant to paragraph (7) of subdivision (a) of Section 1798.185 to be the consumer about whom the business has collected personal information. A business is not obligated to provide information to the consumer pursuant to Sections 1798.110 and 1798.115 if the business cannot verify, pursuant this subdivision and regulations adopted by the Attorney General pursuant to paragraph (7) of subdivision (a) of Section 1798.185, that the consumer making the request is the consumer about whom the business has collected information or is a person authorized by the consumer to act on such consumer’s behalf.

1798.145. (a) The obligations imposed on businesses by this title shall not restrict a business’s ability to:

(1) Comply with federal, state, or local laws.
(2) Comply with a civil, criminal, or regulatory inquiry, investigation, subpoena, or summons by federal, state, or local authorities.
(3) Cooperate with law enforcement agencies concerning conduct or activity that the business, service provider, or third party reasonably and in good faith believes may violate federal, state, or local law.
(4) Exercise or defend legal claims.
(5) Collect, use, retain, sell, or disclose consumer information that is deidentified or in the aggregate consumer information.
(6) Collect or sell a consumer’s personal information if every aspect of that commercial conduct takes place wholly outside of California. For purposes of this title, commercial conduct takes place wholly outside of California if the business collected that information while the consumer was outside of California, no part of the sale of the consumer’s personal information occurred in California, and no personal information collected while the consumer was in California is sold. This paragraph shall not permit a business from storing, including on a device, personal information about a consumer when the consumer is in California and then collecting that personal information when the consumer and stored personal information is outside of California.
(b) The obligations imposed on businesses by Sections 1798.110 to 1798.135, inclusive, shall not apply where compliance by the business with the title would violate an evidentiary privilege under California law and shall not prevent a business from providing the personal information of a consumer to a person covered by an evidentiary privilege under California law as part of a privileged communication.
(c) This act shall not apply to protected or health information that is collected by a covered entity governed by the Confidentiality of Medical Information Act (Part 2.6 (commencing with Section 56 of Division 1)) or governed by the privacy, security, and breach notification rules issued by the federal Department of Health and Human Services, Parts 160 and 164 of Title 45 of the Code of Federal Regulations, established pursuant to the Health Insurance Portability and Availability Act of 1996. For purposes of this subdivision, the definition of “medical information” in Section 56.05 shall apply and the definitions of “protected health information” and “covered entity” from the federal privacy rule shall apply.
(d) This title shall not apply to the sale of personal information to or from a consumer reporting agency if that information is to be reported in, or used to generate, a consumer report as defined by subdivision (d) of Section 1681a of Title 15 of the United States Code, and use of that information is limited by the federal Fair Credit Reporting Act (15 U.S.C. Sec. 1681 et seq.).
(e) This title shall not apply to personal information collected, processed, sold, or disclosed pursuant to the federal Gramm-Leach-Bliley Act (Public Law 106-102), and implementing regulations, if it is in conflict with that law.
(f) This title shall not apply to personal information collected, processed, sold, or disclosed pursuant to the Driver’s Privacy Protection Act of 1994 (18 U.S.C. Sec. 2721 et seq.), if it is in conflict with that act.
(g) Notwithstanding a business’ obligations to respond to and honor consumer rights requests pursuant to this title:
(1) A time period for a business to respond to any verified consumer request may be extended by up to 90 additional days where necessary, taking into account the complexity and number of the requests. The business shall inform the consumer of any such extension within 45 days of receipt of the request, together with the reasons for the delay.
(2) If the business does not take action on the request of the consumer, the business shall inform the consumer, without delay and at the latest within the time period permitted of response by this section, of the reasons for not taking action and any rights the consumer may have to appeal the decision to the business.
(3) If requests from a consumer are manifestly unfounded or excessive, in particular because of their repetitive character, a business may either charge a reasonable fee, taking into account the administrative costs of providing the information or communication or taking the action requested, or refuse to act on the request and notify the consumer of the reason for refusing the request. The business shall bear the burden of demonstrating that any verified consumer request is manifestly unfounded or excessive.
(h) A business that discloses personal information to a service provider shall not be liable under this title if the service provider receiving the personal information uses it in violation of the restrictions set forth in the title, provided that, at the time of disclosing the personal information, the business does not have actual knowledge, or reason to believe, that the service provider intends to commit such a violation. A service provider shall likewise not be liable under this title for the obligations of a business for which it provides services as set forth in this title.
(i) This title shall not be construed to require a business to reidentify or otherwise link information that is not maintained in a manner that would be considered personal information.
(j) The rights afforded to consumers and the obligations imposed on the business in this title shall not adversely affect the rights and freedoms of other consumers.

1798.150. (a) (1) Any consumer whose nonencrypted or nonredacted personal information, as defined in subparagraph (A) of paragraph (1) of subdivision (d) of Section 1798.81.5, is subject to an unauthorized access and exfiltration, theft, or disclosure as a result of the business’ violation of the duty to implement and maintain reasonable security procedures and practices appropriate to the nature of the information to protect the personal information may institute a civil action for any of the following:

(A) To recover damages in an amount not less than one hundred dollars ($100) and not greater than seven hundred and fifty ($750) per consumer per incident or actual damages, whichever is greater.

(B) Injunctive or declaratory relief.

(C) Any other relief the court deems proper.
(2) In assessing the amount of statutory damages, the court shall consider any one or more of the relevant circumstances presented by any of the parties to the case, including, but not limited to, the nature and seriousness of the misconduct, the number of violations, the persistence of the misconduct, the length of time over which the misconduct occurred, the willfulness of the defendant’s misconduct, and the defendant’s assets, liabilities, and net worth.
(b) Actions pursuant to this section may be brought by a consumer if all of the following requirements are met:
(1) Prior to initiating any action against a business for statutory damages on an individual or class-wide basis, a consumer shall provide a business 30 days’ written notice identifying the specific provisions of this title the consumer alleges have been or are being violated. In the event a cure is possible, if within the 30 days the business actually cures the noticed violation and provides the consumer an express written statement that the violations have been cured and that no further violations shall occur, no action for individual statutory damages or class-wide statutory damages may be initiated against the business. No notice shall be required prior to an individual consumer initiating an action solely for actual pecuniary damages suffered as a result of the alleged violations of this title. If a business continues to violate this title in breach of the express written statement provided to the consumer under this section, the consumer may initiate an action against the business to enforce the written statement and may pursue statutory damages for each breach of the express written statement, as well as any other violation of the title that postdates the written statement.
(2) A consumer bringing an action as defined in paragraph (1) of subdivision (c) shall notify the Attorney General within 30 days that the action has been filed.
(3) The Attorney General, upon receiving such notice shall, within 30 days, do one of the following:
(A) Notify the consumer bringing the action of the Attorney General’s intent to prosecute an action against the violation. If the Attorney General does not prosecute within six months, the consumer may proceed with the action.
(B) Refrain from acting within the 30 days, allowing the consumer bringing the action to proceed.
(C) Notify the consumer bringing the action that the consumer shall not proceed with the action.
(c) Nothing in this act shall be interpreted to serve as the basis for a private right of action under any other law. This shall not be construed to relieve any party from any duties or obligations imposed under other law or the United States or California Constitution.

1798.155. Any business or third party may seek the opinion of the Attorney General for guidance on how to comply with the provisions of this title.

(a) A business shall be in violation of this title if it fails to cure any alleged violation within 30 days after being notified of alleged noncompliance. Any business, service provider, or other person that violates this title shall be liable for a civil penalty as provided in Section 17206 of the Business and Professions Code in a civil action brought in the name of the people of the State of California by the Attorney General. The civil penalties provided for in this section shall be exclusively assessed and recovered in a civil action brought in the name of the people of the State of California by the Attorney General.
(b) Notwithstanding Section 17206 of the Business and Professions Code, any person, business, or service provider that intentionally violates this title may be liable for a civil penalty of up to seven thousand five hundred dollars ($7,500) for each violation.
(c) Notwithstanding Section 17206 of the Business and Professions Code, any civil penalty assessed pursuant to Section 17206 for a violation of this title, and the proceeds of any settlement of an action brought pursuant to subdivision (a), shall be allocated as follows:
(1) Twenty percent to the Consumer Privacy Fund, created within the General Fund pursuant to subdivision (a) of Section 1798.109, with the intent to fully offset any costs incurred by the state courts and the Attorney General in connection with this title.
(2) Eighty percent to the jurisdiction on whose behalf the action leading to the civil penalty was brought.
(d) It is the intent of the Legislature that the percentages specified in subdivision (c) be adjusted as necessary to ensure that any civil penalties assessed for a violation of this title fully offset any costs incurred by the state courts and the Attorney General in connection with this title, including a sufficient amount to cover any deficit from a prior fiscal year.

1798.160. (a) A special fund to be known as the “Consumer Privacy Fund” is hereby created within the General Fund in the State Treasury, and is available upon appropriation by the Legislature to offset any costs incurred by the state courts in connection with actions brought to enforce this title and any costs incurred by the Attorney General in carrying out the Attorney General’s duties under this title.
(b) Funds transferred to the Consumer Privacy Fund shall be used exclusively to offset any costs incurred by the state courts and the Attorney General in connection with this title. These funds shall not be subject to appropriation or transfer by the Legislature for any other purpose, unless the Director of Finance determines that the funds are in excess of the funding needed to fully offset the costs incurred by the state courts and the Attorney General in connection with this title, in which case the Legislature may appropriate excess funds for other purposes.

1798.175. This title is intended to further the constitutional right of privacy and to supplement existing laws relating to consumers’ personal information, including, but not limited to, Chapter 22 (commencing with Section 22575) of Division 8 of the Business and Professions Code and Title 1.81 (commencing with Section 1798.80). The provisions of this title are not limited to information collected electronically or over the Internet, but apply to the collection and sale of all personal information collected by a business from consumers. Wherever possible, law relating to consumers’ personal information should be construed to harmonize with the provisions of this title, but in the event of a conflict between other laws and the provisions of this title, the provisions of the law that afford the greatest protection for the right of privacy for consumers shall control.

1798.180. This title is a matter of statewide concern and supersedes and preempts all rules, regulations, codes, ordinances, and other laws adopted by a city, county, city and county, municipality, or local agency regarding the collection and sale of consumers’ personal information by a business.

1798.185. (a) On or before January 1, 2020, the Attorney General shall solicit broad public participation to adopt regulations to further the purposes of this title, including, but not limited to, the following areas:
(1) Updating as needed additional categories of personal information to those enumerated in subdivision (c) of Section 1798.130 and subdivision (o) of Section 1798.140 in order to address changes in technology, data collection practices, obstacles to implementation, and privacy concerns.
(2) Updating as needed the definition of unique identifiers to address changes in technology, data collection, obstacles to implementation, and privacy concerns, and additional categories to the definition of designated methods for submitting requests to facilitate a consumer’s ability to obtain information from a business pursuant to Section 1798.130.
(3) Establishing any exceptions necessary to comply with state or federal law, including, but not limited to, those relating to trade secrets and intellectual property rights, within one year of passage of this title and as needed thereafter.
(4) Establishing rules and procedures for the following, within one year of passage of this title and as needed thereafter:
(A) To facilitate and govern the submission of a request by a consumer to opt out of the sale of personal information pursuant to paragraph (1) of subdivision (a) of Section 1798.145.
(B) To govern business compliance with a consumer’s opt-out request.
(C) The development and use of a recognizable and uniform opt-out logo or button by all businesses to promote consumer awareness of the opportunity to opt out of the sale of personal information.
(5) Adjusting the monetary threshold in subparagraph (A) of paragraph (1) of subdivision (b) of Section 1798.106 in January of every odd-numbered year to reflect any increase in the Consumer Price Index.
(6) Establishing rules, procedures, and any exceptions necessary to ensure that the notices and information that businesses are required to provide pursuant to this title are provided in a manner that may be easily understood by the average consumer, are accessible to consumers with disabilities, and are available in the language primarily used to interact with the consumer, including establishing rules and guidelines regarding financial incentive offerings, within one year of passage of this title and as needed thereafter.
(7) Establishing rules and procedures to further the purposes of Sections 1798.110 and 1798.115 and to facilitate a consumer’s or the consumer’s authorized agent’s ability to obtain information pursuant to Section 1798.130, with the goal of minimizing the administrative burden on consumers, taking into account available technology, security concerns, and the burden on the business, to govern a business’ determination that a request for information received by a consumer is a verifiable request, including treating a request submitted through a password-protected account maintained by the consumer with the business while the consumer is logged into the account as a verifiable request and providing a mechanism for a consumer who does not maintain an account with the business to request information through the business’ authentication of the consumer’s identity, within one year of passage of this title and as needed thereafter.
(b) The Attorney General may adopt additional regulations as necessary to further the purposes of this title.

1798.190. If a series of steps or transactions were component parts of a single transaction intended from the beginning to be taken with the intention of avoiding the reach of this title, including the disclosure of information by a business to a third party in order to avoid the definition of sell, a court shall disregard the intermediate steps or transactions for purposes of effectuating the purposes of this title.

1798.192. Any provision of a contract or agreement of any kind that purports to waive or limit in any way a consumer’s rights under this title, including, but not limited to, any right to a remedy or means of enforcement, shall be deemed contrary to public policy and shall be void and unenforceable. This section shall not prevent a consumer from declining to request information from a business, declining to opt out of a business’ sale of the consumer’s personal information, or authorizing a business to sell the consumer’s personal information after previously opting out.

1798.194. This title shall be liberally construed to effectuate its purposes.

1798.196. This title is intended to supplement federal and state law, if permissible, but shall not apply if such application is preempted by, or in conflict with, federal law or the California Constitution.

1798.198. (a) Subject to limitation provided in subdivision (b), this title shall be operative January 1, 2020.
(b) This act shall become operative only if initiative measure No. 17-0039, The Consumer Right to Privacy Act of 2018, is withdrawn from the ballot pursuant to Section 9604 of the Elections Code.

SEC. 4. (a) The provisions of this bill are severable. If any provision of this bill or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.


AMENDMENT LAW 2014

Format of Original Complaint before State Consumer Commission u/s 17 CP Act

BEFORE THE HON’BLE STATE CONSUMER DISPUTE REDRESSAL COMMISSION

WEST BENGAL BHAVANI BHAWAN, KOLKATA-700027

ORIGINAL JURISDICTION

CONSUMER COMPLAINT NO _CC35/2012

 In the Matter of:

A complaint under section 17 of the Consumer  Protection Act 1986 and the Rules made thereunder

AND

In the Matter of

THE  XXX TRADING CORPORATION OF INDIA LTD

( A GOVT OF INDIA ENTERPRISE)

NILHAT HOUSE( 9TH & 10TH  FLOOR)

41, R. N  MUKHERJEE ROAD KOLKATA-1

REPRESENTED BY

MR.——————

                      ———COMPLAINANT

—–VERSUS—

                                    UNITED INDIA  INSURANCE  CO. LTD.

( A GOVT OF INDIA UNDERTAKING)

KOLKATA REGIONAL OFFICE,

XXXXXXX HOUSE 3RD FLOOR,

36B JAWAHARLAL NEHRU ROAD

KOLKATA -71

                      —–OPPOSITE PARTY

ADVOCATE- ON -RECORD.

SERVICE ADDRESS

XXXXX BHATTACHARYYA

18/8/1 DANESH SK LANE , HOWRAH-9

TEL – 9239212841

VALUE OF THIS COMPLAINT  Rs.- 90,94881/-

The Hon’ble President and his  Companion  members   of the State  Commission

The humble complaint of the complainant above-named most respectfully submits as follows:-

The  claim in  brief

Standard  Fire Policy was taken for nine consecutive months for 44,048  Mt Non- Cooking coal@ Rs. 2043.22 PMt.

Due to unilateral imposition of the of Policy Excess at the second and third phase of policy spanning for nine months of a continuous Standard  Fire Insurance Policy was settled by Rs.71.728/-  against the claim of Rs. 80,59,881 /-due to spontaneous combustion caused huge loss.

The Lose in brief

 The first incident of  fire was reported by the insured STC on 25.01.2006 to the united India insurance Co., against that they replied vide letter dated 25.01.2006, inter alia directed not to disturb the affected area and let the stock remain as it was with the ignite state and then the second incident of fire was reported by STC on 16.02.2006, against that insurance replied on 17.02.2006 inter alia stated that unless and until there is any physical lose of the coal stock due to any insured peril for which physical inspection has to be carried out by IRDA accredited surveyor they will not entertain any incidents although reported by STC from time to time, then further on 21.02.2006 STC wrote that without manipulation of the pile of coal there was no possibility to quantify the loses and by the same letter they requested for appointment of surveyor to measure the lose. Then other incidents of fire was reported 21.04.2006, 26.04.2006, 08.05.2006, 23.05.2006 and 12.05.2006, which was as per report received from STC appointed surveyor in the occasion of insurance`s failure to appoint their surveyor to ascertain the lose. The dates of loses were intimated as per volumetric measurement of gross lose of 4439.364MTs as the under writers did not authorize segregation of the burnt coal and the same time request for surveyor from the side of insurance also went unheeded. After a hectic exercise of correspondence, a surveyor from the side of insurance were issued after a long lapses of time, and a joint survey report on 28.08.2006 was prepared and the lose was estimated 3948.590 MT which is only 11% less of above estimation. 

 The law point  

Whether Fire Insurance Tariff (Wording & Rates) is a Public Document like Railways & Custom Tariff and whether the insurance company has any right to change and or alter it for imposing Special Condition of policy deductibles or excess at heir sweet will?

Whether Joint Survey Report of Assessment of Loss by two IRDA accredited Surveyors representing insured and insurers can be disowned under any circumstances when it is recomended by the Insurers?

Whether when there is no “Duration Clause” under Fire Policy, then in that circumstances a  claim of any duration is payable under the policy can  be repudiate under Indian Contract Act?.

Whether a single incident of continious Self Combustion  of Coal can be segregated in parts subsequently in different occasion  on the visual basis of reporting after reporting the first incident to adjust the Special Policy Excess clauses in favour of the insurer?

Whether the Insurer can go against their own direction?

 

THE POLICY

  1. That the XXX Trading Corporation(Here in after STC) of India  is a Govt of India undertaking entered into a insurance contract with the United India  Insurance Company  Ltd( Here in after UII) and had taken Standard  Fire Insurance  Policy for for a period of three months. And the policy was extended for next three months and again the same policy was extended with the same condition for another three months.The United India  Insurance Company Ltd issued multiple policy numbers for a total policy period covering a span of  total none months from 26.1.2005  to 25.7 2006 for their 44,048  Mt Non- Cooking coal lying in two plots (OLD GENERAL GOOD SHED  AND “B” TYPE QUARTER PLOT)  of Visakhapattanam Port( Andhra Pradesh). A full description of the policies  are as under.

NO POLICY PERIOD POLICY NO SUM INSURED RISK COVERED POLICY EXCESS RS.
1. 26.10.2005 TO 25.1.06(three months) 031100/11/05/00353 NINE CRORE SPONTANEOUS

COMBATION

10, 000/-
2. 26.1.2006 TO 25.4.2006(three months) 031100/11/05/00508 NINE CRORE SPONTANEOUS

COMBATION

10,000/-
.3. 26.4 2006 TO 25.7 2006(three months) 031100/11/06/11/00000096 EIGHT CRORE NINETY-NINE LAKH NINETY NINE THOUSAND EIGHT HUNDRED EIGHTY NINE ONLY SPONTANEOUS

COMBATION

20, 00000/- (imposed later unilaterally without knowledge of the  insured by using forged documents)

  1. That the whole stock of Non- Cooking coal ( bulk) was insured for a sum of  Nine Crores and no portion of the stock was removed in the policy period i.e 26.10.2005  to 25.7 2006(total nine months ) or misused by the Complainant State Trading Corporation(STC) at any relevant time. Fire insurance Policy with Spontaneous Combustion peril Add- on Cover of coal stock as valued @ Rs. 2043.22  per metric Ton for a Stock of quantity weighting 44048MTs was initially taken for three months  then extended for consecutively three months and three months on the same conditions and for the same insured money. Total policy period was Nine months.

Xerox Copies of the Insurance policies are attached herewith and collectively marked as A-1/ A-2 /A-3 (INTERNAL PAGE NO-       )

  1. That under the first two policy period covering a period of six months from   10 .05 to 25. 4. 2006, in its policy paper included a clause of”policy excess” of Rs. 10,000/- for each and every loss, which the Insurer and the Insured were well aware and mutually agreed. and on the same basis, for the third time when the policy was extended for a period of three months (26 .4 2006 TO 25.7 2006), it was understood that the same condition as agreed for the first two policies would be extended.  Policy proposal from the side of STC was advanced with the same impression of facts that the policy Excess will be Rs. 10,000/- as earlier. But  later shockingly it was discovered that the insurance company unilaterally imposed “Special excess of 2% of sum insured subject to minimum of RS. 20 Lacks” clause without  the knowledge of  STC and in violation of provisions made in Indian Contract Act 1882.  Discovering this STC immediately registered their protest with insurance company.

A Xerox copy of the letter dated 1.9.2006   by  STC TO THE UII  attached herewith and marked as B (INTERNAL PAGE NO-       )

  1. That the complainant STC  in several instances communicated with the Insurance Company highlighting it`s Unilateral imposition of 20 Lacs  of  Policy Excess in the third policy,   but the Insurance Company chose to be remain silent . STC took the pain to rise the issue with Insurance Regulatory authority pointing the absurdity of the   of the Policy Access clause  if taken in its face value,  over looking the violation of Indian Contract Act against a Govt . Company( STC) by an another Govt company( United Insurance) of imposition of  unilateral “Excess”  .
  2. Xerox copies of the letter dated 30.8.2006 to the UII and the Communication to the IRDA dated 1.9.2006 are annexed herewith and collectively marked as  C  , D (INTERNAL PAGE NO-       )

  1. That after discovery and being aware of the unilateral imposition of the extraordinary and exorbitant  Special excess of Rs. 20 Lacs on the third policy period , STC approached National Insurance , Kolkata DO-XI 19  N Mukherjee Road Kol-1.  National Insurance ( Another Govt Company indulging in the same general insurance business) agreed with the standard  Policy Excess of Rs. 10,000/- and issued a policy affected for a period   from 26.07.06 to 24.10.06 as per then prevailing All India Fire Tariff norms and regulation. This  proved beyond doubt that  UII is indulging in “restrictive trade practice” along with “unfair trade practice”  in the area of Insurance business. Due to this STC incurred huge losses.

In this policy its spontaneous combustion clause suggests that ” in case of any smoke comming from coal stock immediately water is to be spread in order to cooling down the coal”

A xerox copy of the policy dated27.7.2006  with the  National Insurance is attached here with  and marked as E        (INTERNAL PAGE NO-       )

  1. That by a letter dated 17.7.2006 STC while pointing out the above-mentioned fact  inter alia wrote to the UII–

“ You have never informed us about the above condition( 20 lacs policy excess) while we paid the premium to you . The “ standard Fire and Special  Peril Policy” for which we proposed for the insurance and the policy you have issued to us must be governed by the Fire Tariff Of IRDA in respect of rates /wordings/ endorsements/ add- on covers etc. and as per norms all Fire policy must be in strict conformity with the  codified  provision s of All India Fire Tariff( AIFT). We request you please appreciate that we, as a public Sector Company can not compromise with the risk coverage at all. as an underwriter , of course you had the option not to accept the risk. But having accepted the risk under AIFT you can not unilaterally impose any condition outside the ambit of the AIFA, on the back door without the knowledge of the insured. We consider this as a gross violation of the Tariff.”

By this letter STC requested and call upon the insurance company  to correct the anomaly .

A xerox copy of the letter dated 17.7.2006 is attached here with  and marked as – F- (INTERNAL PAGE NO-       )

  1. That by a letter dated 1.11.2006 to the IRDA, STC made a representation about the failure of the United Insurance to supply the Proposal form .

 Again by a letter dated 1.11.2006 STC made a heartily request  to the United Insurance  to supply the proposal pertaining to the third insurance being policy number 03 /11/06/11/00000096 which they failed to supply within the 30 days of acceptance of the Policy . in this letter  STC wrote –

“ In view of the above , we would once again request you to kindly comply with IRDA regulations. Since the dispute of unilateral imposition of Rs. 20 Lacs excess under the above policy  was referred to IRDA, We need to send the proposal form to them for their decision.”

A xerox copy of the letter dated 1.11.06 to the IRDA and United Insurance attached herewith and collectively marked as G1, G2 (INTERNAL PAGE NO-       )

  1. That On 6.11.2006 the United insurance supplied the much expecting  Proposal form which was signed by the STC at the time of acceptance of the policy.  This proposal   Form was devoid of any Policy Access condition and in printed formate. but after receiving it , it was found that  last page ( Page Three) at the side of the Declaration some body penned “ As per your proforma bill dated 25.4.06“  which was initially not at the time of making. STC promptly communicate this over telephone.

 A Xerox copy of the Proposal  dated 25.4.06  has been attached herewith  and marked as H (INTERNAL PAGE NO-       )

  1. That by a letter dated 18.7.2006 UII inter alia accepted the following-

As per your contention that Standard Fire and Special Peril Policy is governed by the Fire Tariff you are correct in this regard. However, imposition of excess/ special condition warranties and endorsement are imposed considering  the exposer/ type/ nature of risk  by the underwriters during the time of acceptance”

The above mentioned Proposal does not support the view of the UII and further more  imposition of any thing contrary to the standard Tariff  regime is contravention of law to deprive the lawful claim of the insured , in this case the victim is STC.

Again in this letter UII put blames on the STC that it  had discussed the matter pertaining to the Policy excess with  STC official MR. Sharma( Manager Marketing) is pure invention,imagination and conjecture, which is cooked up and after thought at the occasion of the claim. Without prejudice under the strict proof of evidence STC is challenging the UII.

A Xerox copy of the letter dated 18.7.06  attached herewith and marked as I (INTERNAL PAGE NO-       )

  1. That the proposal was preferred on 25. 4.06 from the side of the STC and after due deliberation it was accepted by the UII on 26.4.25  for a period of three month dated  from 26.4.06 to 25.7.06 . Receipt was issued on  4.2006.  But  policy schedule document ( ANNEXURE  A-3)   was  manufactured after the policy had  been taken out by the STC  . The Computer-generated  paper shows the date of origin  of that paper , which is AKG L36361-03/05/2006. IN THIS DOCUMENT 20 LACS POLICY ACCESS CLAUSE IMPOSED WITHOUT THE KNOWLEDGE OF STC .  This mischief had been organized to  frustrate our claim under third phase  of extended policy.

THE  BACKGROUND

  1. That by a letter dated 25.1 2006 for the first time to the United insurance, STC informed  the following-

“ WE have been informed today morning by ———- our Clearing & handling Agent  that they have noticed some smoke in the stocks of coal lying at Vizag, which they put of by sprinkling water on it. This has been intimated to our surveyor M/S BSI Inspectorate  India Pvt Ltd regarding above incident.”

By this letter inter alia request was made to deploy a surveyor from the side of UII.

A Xerox copy of the letter dated of STC 25.1.06  attached herewith and marked as J

  1. In reply to the said intimidation  vide their letter Ref 031100/ Fire-CLM/06 dated 25.01.06 inter alia instructed “ not to disturb the affected area and let it  remain as it was “. Due to this standing instruction  the surveyor on behalf could not able to ascertain the actual loss due to fire .

A Xerox copy of the letter dated 25.1.06  of UII attached herewith and marked as- K

  1. The second intimation had been communicated on behalf of STC to the UII by a letter dated 16.2.06. in response to the to that letter  UII by a letter dated 17.2. 06 inter alia stating –

“ Unless and until there is any physical loss of coal stock due to any insured peril for which physical inspection has been carried out  by IRDA accredited surveyor, we will not be in position to proceed to entertain any of your such alleged incidents being reported by you from time to time . Please take note of the same and revert back”

Again by a letter dated 21.2.2006  STC  inter alia mentioned -” In view of your advice not to disturb the area , it was not possible for us to ascertain the losses. Please appreciate the fact that unless the peril is dug up and brunt out ash removed/ segregated it would not be possible to quantify the losses.

You are , therefore, requested to depute your representative/ surveyor to Visakapattanam so as to conduct survey in presence of our surveyors, BSI Inspectorate india Pvt. Ltd and ascertain the loss quantity “.

A Xerox copy of the letter dated 17.2.06 and 21.2.2006  attached herewith and marked as -L1 ,L2

  1. That when the first incident was reported to the United India Insurance , it put an embargo  for not disturbing the affected stock and leave it as it is  and as it is where. STC surveyor M/S Inspectorate Griffith India ( IGI), an accredit surveyor   time to time  took the volumetric measurement  of the stock and the same was communicated to the UII accordingly. By a letter dated 14.7.2007 STC  gave a feed back to the UII, inter alia citing  the policy wise loss and the quantum of loss thereunder assessed by volumetric measurement. It was measured a loss of 4439.364MTS Then again by a letter dated  dated 25.7.06 STC finally intimated to the UII that as per volumetric measurement total Spontaneous combat ion of coal stands 4439.364 MT. Due to non segregation or bifurcation stipulated by the standing instruction on part of the UII, only volumetric measurement could be possible  and M/S Inspectorate Griffith India ( IGI) . In this regard standard practice and survey norms  were followed.  Later in there joint measurement UII’S surveyor  also followed the same standard and norms. as a Public sector company STC could not accept any unscientific methodology. Full particular of the incident  is as below-

  POLICY PARTICULARS NAME OF THE PLOT DATE OF THE INCIDENT LOSS OF QUANTITY(MT)
1.(a) 031100/11/05/00353 OLD GENERAL GOOD SHED 25.01.06  22.000
  031100/11/05/00353 B” TYPE QUARTER PLOT ( 25.01.06 18.000 TOTAL 40MT(1+2) ON 25.1.06 VALUE RS 87729/-

POLICY EXESS RS. 10000/-

  031100/11/05/00508 OLD GENERAL GOOD SHED

(VALUE

10.02.06 TO 11.02.06,

15.2.02.06 TO 16.02.06,

20.02.06 TO 22.02.06

  90.000
  031100/11/05/00508 “B” TYPE QUARTER PLOT 10.02.06 TO 11.02.06,

15.02.06 TO 16.02.06,

.20.02.06 TO 22.02.06

 50.000TOTAL 140MT (3+4)ON 25.1.06

POLICY EXESS RS. 10000/-

VALUE RS 286048/-

  031100/11/05/00508 OLD GENERAL GOOD SHED 24.02 .2006 TO26.02.2006 1039.868 POLICY EXESS RS. 10000/-

VALUE RS 2124679/-

  031100/11/05/00508 B” TYPE QUARTER PLOT 14.03.2006 TO 16.03.2006 957.496 POLICY EXESS RS. 10000/-

VALUE RS. 1956375/-

2(b) 031100/11/06/11/00000096 OLD GENERAL GOOD SHED 27.04.2006

TO 29.4.2006

1062.000SPECIAL POLICY ACCESS  OF RS 20 LACS  INPOSED

VALUE RS.2169900/-

  031100/11/06/11/00000096 OLD GENERAL GOOD SHED 3.5.2006 TO 8.5.2006 1200.000SPECIAL POLICY EXCESS OF RS 20 LACS IMPOSED

VALUE RS.2451864/-

 TOTAL LOSS ASCERTAINED 4439.364 MT. VALUE RS. 50,16,59/-AFTER DEDUCTING RELEVANT POLICY EXCESS

 

A Xerox copy of the letter dated14.9.2007 and 25. 7.06  attached herewith and marked as M1, M2

  1. That by several letter STC intimated the occurrence of fire  and requested the United Insurance to appoint their surveyor .  By a letter dated 11.8.06 STC  in formed  that if united India fails to a- ppoint surveyor  then in that occasion  STC would appoint IRDA acredited “A” category surveyor  and put up the claim bill to the insurance company accompanied with the survey fees bill . In this  regard STC appointed M/S J. B Boda Surveyors Pvt Ltd to assess the loss.

A Xerox copy of the letter dated 11.8.06  attached herewith and marked as N ( Internal page no    )

  1. That a series of communication had been send to the UII and consequential request of appointing of surveyor had been made. UII choose not to pay heed of this . From the day one  that is 25.1.2006, when it was for the first time reported  that smoke had been detected  on the superficial level of the stock till the end of the third policy period , the fire was never extinguished in depth of the pile / bulk of the stock. Only an honest attempt was made to stop it by sprinkling water on the outer surface. That attempt might stopped gussying out of the smoke but never ceased to exist at the bottom of the pile.  If there  no  un- intelligent embargo  was put  to the STC and had the STC  been allowed to dig or segregate the pile , may the fire could be stopped to spread its tentacle. Fire never extinguished , so occasional vomiting of smoke is very natural or consequential. STC reported the same and requested to appoint surveyor promptly.  Inspectorate Griffit India Pvt Ltd, a well known survey agency was deputed by the STC to assess loss periodically and the same was passed to the UII. UII was duty bound to appoint their surveyor to assess the quantum of loss then to believe STC or its survey or    Inspectorate Griffit India Pvt Ltd, who made volumetric measurement time to time  and finally the quantum of loss assessed  a loss of 4439.364MTs. By a letter dated 25.7.2006, this was communicated to the UII.

A Xerox copy of the letter dated 25.7.06  attached herewith and marked as N1 ( Internal page no-   )

  1. That after a long time after the completion of the policy period ended on 25.7.06 , united insurance appointed one surveyor Mr Prasad Babu  . By a letter dated 14.8. 2006 United Insurance communicated this to the STC  .  Mr Prasad babu By his letter dated  8.06 confirmed his appointment  as a surveyor . In his letter  he mentioned  about his personal knowledge-

“ As per the information gathered by me that you have imported thermal coal in bulk was 44,048 MT and stored at the above two plots for  for the period from July , 2005 to till date and during  this period number of times  or occasions , they have reported that smokes was emanated from these due to spontaneous combustion and when ever they were observing smoke they use to sprinkle water and they have not sought any service of VPT  fire wing.

It was also further ascertained by me that your Surveyor M/S Inspectorate Griffith India Private Ltd, have conducted joint physical stock verifications, issued reports and based on those report, you have intimated to the insurers through letter dated 25th July  that 4,439.36MT was involved or damaged due to  reported spontaneous combustion on number of occasions, kindly provide me such copies of survey reports along with measurements.”

As per his demand all necessary papers were supplied.  In his letter inter alia he had shown interest in joint physical examination for volumetric measurement.

A Xerox copy of the letter dated 14.8.06  of UII and letter dated 16.8.06  by Prasad Babu  attached herewith and marked as O ( Internal page no-   )

  1. That on 28.08. 06 a joint verification  was made  by D.S Prasad Babu and the stock verified stands 40099.410 MT against the discharged quantity  of 44048    So apparent loss of stock due to combustion was 3948.59 MT. of thermal coal.

A xerox copy of the stock verification certificate dated   28 .08. 06 attached herewith and marked as P  ( Internal page no-   )

  1. That by a letter dated 22.1 2008 to the UII, the STC inter alia registered their objection about the joint Survay report by the following way in page no 1-

“ It was imperative for the surveyor to let us know about the assessment of loss before submission of the Survay report but your Surveyor preferred to keep us in dark in the matter contrary to the market practice”

 In this letter  STC pointed out some major inconsistency or contradiction of the Survey Report.

A Xerox copy of the letter dated 22.1.2008   by  STC  attached herewith and marked as Q  ( Internal page no-   )

  1. That again by a letter dated 23.6.2008 STC clarified the whole matter encompassing the loss along with the policy excess matter and an assessment of loss in terms of money to the UII. in this letter in page number 5  the loss computed  Rs 43,94,832/- for the first two policy period  and Rs 621764/- for the third policy period taking under consideration of 20 lacs policy excess. Though STC never recognize this unilateral imposition of policy excess. With all honesty , and  conformity  with the policy contract the assessment was made . The total loss was calculated  50,16,595/- after deducting policy excess in each reported incident. Though  there was several reporting of the incident to the UII for appointing of the surveyor to assess the loss then and there and settle it  accordingly. However, the STC always maintained that there exist but only single case of fire due to self combustion which never ceased or passivated and started again afresh to constitute a second incident. But for the taming and controlling the escalating controversies settled it once for all with Rs. 50,16,595/-.

Unfortunately, the matter never settled so STC are orced to start this proceeding.

A xerox copy of the stock verification certificate dated   23 .06. 08 attached herewith and marked as R  ( Internal page no-   )

  1. That D.S Prasad Babucould could able to made his observation  only  on 6 th October 2008 . Inter alia in his observation in page  no two  that-

even thou , the cost of above observed shortage of imported coal works out to Rs 80, 66, 969. 37/—- but after application number of excess considering number of events or accidents, locations, finally net loss assessment is NIL”.          

Prasad Babu came to this conclusion after putting several blames on the head of STC,  however he never disclosed in his letter that why he not appreciated his own measurement done in joint stock verification dated 28.8.06.

A Xerox copy of the letter dated 6.10.2008   by Prasad Babu  attached herewith and marked as RI  ( Internal page no-   )

  1. That by a letter 17 Apl.2008 regarding the anomalies in the survey report the STC categorically addressed the issues point -wise but there was no response either from the side of UII or its Surveyor, then  again by a letter dated 5.11.2008  to the Surveyor  S Prasad Babu  again clarified the whole objections and the back grounds of the reported incidents. In this letter  inter alia in the para no 11 the STC clarified-

technically there was only one loss of spontaneous combustion in each of the stake during the whole policy period( from Oct 2005 to Jul 2006) of three policies since there was no destacking/ rolling etc of the both coal stacks( as per instructions of the underwriter vide their letter— 21.1. 06). As IGI, our Surveyor does not know insurance policy conditions , they noted and considered the dates of loss only when fire surfaced on the top of the coal stacks. Scientifically, spontaneous combustion should continue ceaselessly in undisturbed coal stacks untill and unless the oxidization which results the combustion can be stopped by destaking or by any other means. From the view of the matter scientifically it is a single loss and the dates of losses are not relevant at all but STC reported losses to the underwriters from time to time as in event IGI ‘s report and thus the under writer need s to consider their relevance vis- a-vis the impact of varying policy excess.

 

A Xerox copy of the letter dated 17.4.2008 and 5.11.2008   by  STC  attached herewith and marked as S1 , S2  ( Internal page no-   )

  1. That subsequently on the basis of the report submitted by Prasad Babu, United India insurance by its letter dated 24.7.2009  agreed to settle the claim ( claim no. 031100/11/05/11/90000010) arising out of damages caused by fire firstly reported no 25.1.06 and it was reported for the last time and finally on 8.5.2006. In their settlement letter they put policy excess Rs Ten Lacs for the second policy period which is completely wrong and without any basis and in this regard nobody has any information of this. This has only 10000/- policy excess. this one is pure invention to frustrate the claim of the STC.  And about  Rs 20 lacks excess STC  always objected the same in all quarters.

United India  insurance agreed to settle the claim with a paltry amount in the following manner–

DATE OF LOSS WITH POLICY NO LOSS OF QUANTITY VALUE POLICY EXCESS NET LOSS ASSESSED
25/1/2006,  26/10/05 TO 25/1/2006

031100110511000000353

40 MT 81728.40 10000/- 71728.40
10/11.2.06, 15/16.2.06, 20/22.2.06,  26/10/06 TO25/4/06

03110011051100000508

140MT 286049.40 100000/- NIL
27/28.4.26, 26/04/06 TO 25/7/06 03110011051100000096 749.094MT 1530556.30 200000/- NIL
3/4.05.2006 757.496MT 1547723.40 200000/- NIL

A Xerox copy of the letter dated 24.7.2009   by  UII  attached herewith and marked as T  ( Internal page no-   )

  1. That Insurance Surveyor, Mr. D.S. Prasad Babu submitted Survey Report recommending repudiation of claim on ground that spontaneous fire was continuously occurring and claim is not payable. There is no Duration Clause in Standard Fire And Special Perils Policy taken by STC. So, the Surveyor was utterly wrong in claim repudiation on that ground.    So, Survey Report violated the policy condition and biased/motivated and prejudicial to the interest of STC. If, the insurance Surveyors contention is taken as correct  and claim is considered as a single case continuance spontaneous combustion of coal, only one policy excess of Rs.10,000/- shall be deducted. as the first incident was reported in the consumption of the first policy period, which has 10,000/- standadr policy excess. The payable loss should be (3949.59 MT X Rs.2043.22)-Rs10000/- = Rs 80,59,881/
  1. That In a joint meeting with United India, Surveyor and STC at Kolkata Regional Office of United on 30.09.08 it was decided that Surveyor should review the matter and obtain further details/information/ clarification, if any  from STC. A detail letter was sent to Surveyor by STC. Accordingly, the Surveyor submitted his Addendum Report (Ref.PB:UI:STC:024:2009 dated 25/3/09) and re-assessed the loss of  only Rs.9.49,519.80. This was contested by STC as Surveyor had planted different date(s) of loss on the third policy so that major part of the loss falls under the last policy. Details are as under :
       Date(s) of loss reported by STC Date(s) of loss changed by Surveyor
24/26th February, 2006 27/28th April, 2006
14/16th March, 2006 3rd/4th May, 2006
27/29th April,2006 27/29th May, 2006

Surveyor appointed in mid-August, 2006 (after several months of loss) and can not change date(s) of loss under any circumstances. This is perennially an arbitrary action of  Surveyor and proves his biasness beyond any doubt.

A Xerox copy of the letter dated 20.8.2009  by  STC  attached herewith and marked as U  ( Internal page no-   )

  1. That in mid-2009 a Voucher of Rs.71,728/- was sent by United India to STC as against Surveyor’s above recommendation of 9.49,519.80. The insurance co.’s Divisional Office provided a xerox copy of an Endorsement bearing No.031100/ 11/ 05/11/ 8200082 which states imposition of Special Excess of minimum of Rs.10 Lacs on the 2nd policy No.031100/11/05/00508 which was evidently issued on expiry date of policy (25/04/06 –the system generated date on Endt.) without any knowledge of STC whatsoever prior to that date in 2009.Interestingly, United India Ins. Co. provided all insurance documents to Surveyors but evidently this totally arbitrary Endorsement No.031100/ 11/ 05/11/ 8200082 was not given to Surveyors else the assessment could not be for Rs.9.5 Lacs. This arbitrary Special Excess on every loss date had reduced claim form Rs.9.50 Lacs to Rs. 71,728/-. The issuance of Claim Voucher admits liability under the policy. The matter was taken up with Divisional Office/ Regional Office/Head Office of United but no  response received by STC so afar.  Approach by Director of STC to CMD/United India could not also evoke any response.

 

28. That by a letter dated 8.7.2011 United India insurance communicated the STC—–

“ With reference to your letter Ref 574 dated 20th August  2009 regarding the above , we would like to inform you that we have once again checked our underwriting and claim file and come to a conclusion that our stands regarding settlement of last three claims( for value Rs. 2,86,049/- Rs.-153055.30 and Rs. 15,47,723.40) remain unchanged.”

 It is evident from their own admission that how deliberately they delay the process as they are responding on  8.7.2011 to a letter which delivered them two years back. This high handedness proof their culpable laziness to frustrate a legitimate claim. However  they accepted their liability . Which is Rs.71.728/- only (according to clause 13 of the policy documents) . Which is prejudicial to the interest of the STC. Which is against the claim  of STC.

A Xerox copy of the letter dated 8.7.2011   by UII  attached herewith and marked as V

HUMBLE SUBMISSIONS BY THE COMPLAINANT

  1. The claim was reported by STC Kolkata on 25.01.2006 to United India Ins. Co without mentioning the loss quantity. United responded on same day and advised ‘not to disturb the affected area’. Loss quantity informed to Insurance company as per report of Inspectorate Griffith India (IGI), Surveyor.United informed vide letter dated 12.06.06 that claim falls within stipulated Policy Excess limit and stated that  ‘thus the alleged claim stands as NO CLAIM’. Second repudiation letter issued by United.United had not even appointed Surveyor for assessment despite repeated reminders  for six (6) months and STC was compelled to appoint IRDA accredited Surveyor, M/s J.B.Boda, keeping United informed of this Surveyor appointment to lodge the claim bill on the strength of M/s J.B.Boda, Survey Report.When STC appointed M/s. J.B.Boda Surveyor by formally informing United India , they were perhaps unnerved and  ultimately United India appointed Mr. D.S.Prasad Babu, Surveyor from Visakapatnam in Aug. 06.  There was a Joint Survey of loss on 28.08.06 quantifying the then available stock 40099.410 MT and thus the total quantity loss stood to 3949.59 MT and not 4439.410 MT as intimated earlier. The variation is only 11% as claimed by STC. Therefore, the gross estimated loss stands to around Rs.80 Lacs. Special Policy excess (deductibles) of Rs.20 Lacs on third policy period 25/4/06 to 24/07/06, net adjusted payable loss stood around Rs.38 Lacs. THE JOINT SURVEY REORT BY TWO IRDA ACCRIDITED SURVEYORS (both insured and insurers) IS THE MOST VALUABE VITAL DOCUMENT FOR STC IN CASE OF ANY JUDICIAL PROCEEDINGS.  Since the Special Excess of Rs.20 Lacs for each loss was imposed by United in last policy (period 04.06 to 24.07.06) would eat away almost the entire loss, matter taken-up with IRDA against Tariff policy gross deviation by United and about the legality & propriety of Special Excess which virtually takes back the promise of policy itself. The IRDA disposed the complaint because STC was informed about Special Excess of Rs.20 lacs before accepting policy by United India in their Proforma Bill. So, complain was rejected. The IRDA did not consider the legal point that the then Tariff Rates & Tariff Wording in 2006 were public document and  there is no provisions for any kind of Special Excess as per Tariff Rates & Tariff Wording  and therefore, the insurance companies has no authority to change the policy contrary to Tariff.

 

  1. No scientific calculation of Spontaneous combustion in undisturbed coal stack is possible unless survay is conducted immediately after the loss. debris are need to removed and de- staking is done to stop the continuity of the peril and minimize further losses.
  • The opposite party UII incurs liability by committing offence under section of 420 IPC by causing wrongful loss to the complainant through imposition of Policy Access fraudulently without the knowledge of STC and gain wrongfully through the policy excess. UII has committed breach of confidence  which is worst kind of mal practises on part of  UII and caused injury to the business interest of the complainant.
  1. From all circumstances including act and conduct of UII, it is amount to gross deficiency of service to the complainant.

 

  1. That the cause of action arose on and from dated 8.7.2011 when the opposite party UII through its Sr. Div. Manager refused to settle the  legitimate claim of the STC  and decided to pay arbitrarily a paltry amount against to a huge loss. And relief for complained valued at 90,94,881/-. This claim is within the limitation period from the date on which the cause of action has arisen.

 

  1. That the complainant has incurred a loss of Rs.80,59881/- due to deficiency in service on the part of the opposite party. The complainant has to undergo mental torture, harassment and mental strain due to course of transactions and negotiations to settle the claim.  The complainant is entitled to recover a ,sum of Rs 80,59881/- towards the loss due to fire and Rs 10,00000 as a compensation for mental torture , harassment , mental strain and business loss and again Rs 35,000  as legal expenses and correspondence.  Thus the total claim stands total Rs 90,94,881/-.
  2. That this forum has jurisdiction to entertain this complaint.

  1. That for the purpose of the jurisdiction, the complainant has transacted all the business documents through it`s office in kolkata at to the opposite party`s office in kolkata.

  1. STC HAS PAID THE REQUIRED FEES BY DEMAND DRAFT of Rs 4000/- , NO 302364, DATED_13/09/2011, issued by SBI- CAG BRANCH- KOLKATA. The complainant hereby giving an undertaking that in any reason the demand draft is not honoured on demand, the complainant will deposit a new demand draft without fail.

THE PRAYER    

It is, therefore, most respectfully prayed that your Honour may gracefully be pleased to grant the following relief/ relives to the complainant:-

Declaration of the unilateral imposition of RS. 10 lacs and 20 lacs Policy excess is illegal and fraudulent and the effect of the policy excess clause in policy number 033/11/06/11/00000096 is null and void.

Declaration of the settlement offer dated 24.7.2009 by the UII is null and void and without any effect.

Realization of Rs .80,59,881 /-.

Realization of Rs . 10,00,000 towards compensation

Realization of Rs 35,000 towards legal expenses and correspondence.

Cost, interests and other relief/ relieves etc . as the Hon’ble commission deems fit and proper.

                                           


                                       Verification

 

I, Mr.                                        son                                               of  residing at

                                                                   do hereby solemnly declare and state that the statements contained in the complaint above are true to the best of my knowledge and belief and the rest are my humble submission and that I have not suppressed any material fact.

Verified at kolkata

this _____th day of ________ 2012

Date:

Place:                                                                  Signature of the deponent

Law of Consumer Protection In India

The Consumer Protection Act
The Consumer Protection Rules
The Consumer Protection Regulations
The Consumer Protection (Procedure for regulation of allowing appearance of Agents or representatives or Non-Advocates or Voluntary Organisations before the Consumer Forum) Regulations
The National Consumer Disputes Redressal Commission (Registrar) Recruitment Rules
The Consumer Welfare Fund Rules
Relevant Provisions of the Central Excise Act and Customs Act
The Supreme Court Rules (Relevant Extracts)
Bureau of Indian Standards (Recognition of Consumers’ Associations) Rules
The Relevant Provisions of the Monopolies and Restrictive Trade Practices Act
The Monopolies and Restrictive Trade Practices (Recognition of Consumers’ Association) Rules
The Andaman and Nicobar Islands Consumer Protection Rules
The Andhra Pradesh State Consumer Protection Rules
The Arunachal Pradesh Consumer Protection Rules
The Arunachal Pradesh Consumer Welfare Fund Rules
The Assam State Consumer Protection Rules
The Bihar Consumer Protection Rules
The Chandigarh Consumer Protection Rules
The Dadra and Nagar Haveli Consumer Protection Rules
The Delhi Consumer Protection Rules
The Goa Consumer Protection Rules
The Gujarat Consumer Protection Rules
The Consumer Welfare Fund Rules of the State of Gujarat
The Haryana Consumer Protection Rules
The Haryana Consumer Welfare Fund Rules
The Himachal Pradesh Consumer Protection Rules
The Karnataka Consumer Protection Rules
The Karnataka State Consumer Welfare Fund Rules
The Kerala Consumer Protection Rules
The Lakshadweep Consumer Protection Rules
The Madhya Pradesh Consumer Protection Rules
The Maharashtra Consumer Protection Rules
The Meghalaya Consumer Protection Rules
The Mizoram Consumer Protection Rules
The Mizoram State Consumer Welfare Fund Rules
The Nagaland Consumer Protection Rules
The Orissa Consumer Protection Rules
The Orissa Consumer Welfare Fund Rules
The Pondicherry Consumer Protection Rules
The Consumer Protection (Punjab) Rules
The Consumer Protection (Rajasthan) Rules
The Sikkim Consumer Protection Rules
The Tamil Nadu Consumer Protection Rules
The Tamil Nadu State Consumer Welfare Fund Rules
The Tripura Consumer Protection Rules
The Uttar Pradesh Consumer Protection Rules
The Uttarakhand Consumer Protection Rules
The West Bengal Consumer Protection Rules
List of Approved Laboratories
Directory of Redressal Agencies under the Consumer Protection Act
Code for Commercial Advertising on Doordarshan
Standards of Practice For Advertising Agencies
Code of Standards in Relation to the Advertising of Medicines and Treatments
Code of Ethics for Food Trade and Industry
United Nations Guidelines for Consumer Protection

Consumer Protection Act, 2019

(Act No. 35 of 2019)

Dated: 09.08.2019.

The following Act of Parliament received the assent of the President on the 9th August, 2019, and is hereby published for general information:-

An Act to provide for protection of the interests of consumers and for the said purpose, to establish authorities for timely and effective administration and settlement of consumers’ disputes and for matters connected therewith or incidental thereto.

Be it enacted by Parliament in the Seventieth Year of the Republic of India as follows:-

CHAPTER I

Preliminary

1. Short title, extent, commencement and application. – (1) This Act may be called the Consumer Protection Act, 2019.
(2) It extends to the whole of India except the State of Jammu and Kashmir.
(3) It shall come into force on such date as the Central Government may, by notification, appoint and different dates may be appointed for different States and for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision.
(4) Save as otherwise expressly provided by the Central Government, by notification, this Act shall apply to all goods and services.

2. Definitions. – In this Act, unless the context otherwise requires,-

(1) “advertisement” means any audio or visual publicity, representation, endorsement or pronouncement made by means of light, sound, smoke, gas, print, electronic media, internet or website and includes any notice, circular, label, wrapper, invoice or such other documents;

(2) “appropriate laboratory” means a laboratory or an organisation-

(i) recognised by the Central Government; or

(ii) recognised by a State Government, subject to such guidelines as may be issued by the Central Government in this behalf; or

(iii) established by or under any law for the time being in force, which is maintained, financed or aided by the Central Government or a State Government for carrying out analysis or test of any goods with a view to determining whether such goods suffer from any defect;

(3) “branch office” means-

(i) any office or place of work described as a branch by the establishment; or

(ii) any establishment carrying on either the same or substantially the same activity carried on by the head office of the establishment;

(4) “Central Authority” means the Central Consumer Protection Authority established under section 10;

(5) “complainant” means-

(i) a consumer; or

(ii) any voluntary consumer association registered under any law for the time being in force; or

(iii) the Central Government or any State Government; or

(iv) the Central Authority; or

(v) one or more consumers, where there are numerous consumers having the same interest; or

(vi) in case of death of a consumer, his legal heir or legal representative; or

(vii) in case of a consumer being a minor, his parent or legal guardian;

(6) “complaint” means any allegation in writing, made by a complainant for obtaining any relief provided by or under this Act, that-

(i) an unfair contract or unfair trade practice or a restrictive trade practice has been adopted by any trader or service provider;

(ii) the goods bought by him or agreed to be bought by him suffer from one or more defects;

(iii) the services hired or availed of or agreed to be hired or availed of by him suffer from any deficiency;

(iv) a trader or a service provider, as the case may be, has charged for the goods or for the services mentioned in the complaint, a price in excess of the price-

(a) fixed by or under any law for the time being in force; or

(b) displayed on the goods or any package containing such goods; or

(c) displayed on the price list exhibited by him by or under any law for the time being in force; or

(d) agreed between the parties;

(v) the goods, which are hazardous to life and safety when used, are being offered for sale to the public-

(a) in contravention of standards relating to safety of such goods as required to be complied with, by or under any law for the time being in force;

(b) where the trader knows that the goods so offered are unsafe to the public;

(vi) the services which are hazardous or likely to be hazardous to life and safety of the public when used, are being offered by a person who provides any service and who knows it to be injurious to life and safety;

(vii) a claim for product liability action lies against the product manufacturer, product seller or product service provider, as the case may be;

(7) “consumer” means any person who-

(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment, when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or

(ii) hires or avails of any service for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such service other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person, but does not include a person who avails of such service for any commercial purpose.

Explanation. – For the purposes of this clause,-

(a) the expression “commercial purpose” does not include use by a person of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self-employment;

(b) the expressions “buys any goods” and “hires or avails any services” includes offline or online transactions through electronic means or by teleshopping or direct selling or multi-level marketing;

(8) “consumer dispute” means a dispute where the person against whom a complaint has been made, denies or disputes the allegations contained in the complaint;

(9) “consumer rights” includes,-

(i) the right to be protected against the marketing of goods, products or services which are hazardous to life and property;

(ii) the right to be informed about the quality, quantity, potency, purity, standard and price of goods, products or services, as the case may be, so as to protect the consumer against unfair trade practices;

(iii) the right to be assured, wherever possible, access to a variety of goods, products or services at competitive prices;

(iv) the right to be heard and to be assured that consumer’s interests will receive due consideration at appropriate fora;

(v) the right to seek redressal against unfair trade practice or restrictive trade practices or unscrupulous exploitation of consumers; and

(vi) the right to consumer awareness;

(10) “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 or product and the expression “defective” shall be construed accordingly;

(11) “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 and includes-

(i) any act of negligence or omission or commission by such person which causes loss or injury to the consumer; and

(ii) deliberate withholding of relevant information by such person to the consumer;

(12) “design”, in relation to a product, means the intended or known physical and material characteristics of such product and includes any intended or known formulation or content of such product and the usual result of the intended manufacturing or other process used to produce such product;

(13) “direct selling” means marketing, distribution and sale of goods or provision of services through a network of sellers, other than through a permanent retail location;

(14) “Director-General” means the Director-General appointed under sub-section (2) of section 15;

(15) “District Commission” means a District Consumer Disputes Redressal Commission established under sub-section (1) of section 28;

(16) “e-commerce” means buying or selling of goods or services including digital products over digital or electronic network;

(17) “electronic service provider” means a person who provides technologies or processes to enable a product seller to engage in advertising or selling goods or services to a consumer and includes any online market place or online auction sites;

(18) “establishment” , in relation to an advertisement, means-

(i) any message, verbal statement, demonstration; or

(ii) depiction of the name, signature, likeness or other identifiable personal characteristics of an individual; or

(iii) depiction of the name or seal of any institution or organisation,

which makes the consumer to believe that it reflects the opinion, finding or experience of the person making such endorsement;

(19) “establishment” includes an advertising agency, commission agent, manufacturing, trading or any other commercial agency which carries on any business, trade or profession or any work in connection with or incidental or ancillary to any commercial activity, trade or profession, or such other class or classes of persons including public utility entities in the manner as may be prescribed;

(20) “express warranty” means any material statement, affirmation of fact, promise or description relating to a product or service warranting that it conforms to such material statement, affirmation, promise or description and includes any sample or model of a product warranting that the whole of such product conforms to such sample or model;

(21) “goods” means every kind of movable property and includes “food” as defined in clause (j) of sub-section (1) of section 3 of the Food Safety and Standards Act, 2006 (34 of 2006);

(22) “harm”, in relation to a product liability, includes-

(i) damage to any property, other than the product itself;

(ii) personal injury, illness or death;

(iii) mental agony or emotional distress attendant to personal injury or illness or damage to property; or

(iv) any loss of consortium or services or other loss resulting from a harm referred to in sub-clause (i) or sub-clause (ii) or sub-clause (iii),

but shall not include any harm caused to a product itself or any damage to the property on account of breach of warranty conditions or any commercial or economic loss, including any direct, incidental or consequential loss relating thereto;

(23) “injury” means any harm whatever illegally caused to any person, in body, mind or property;

(24) “manufacturer” means a person who-

(i) makes any goods or parts thereof; or

(ii) assembles any goods or parts thereof made by others; or

(iii) puts or causes to be put his own mark on any goods made by any other person;

(25) “mediation” means the process by which a mediator mediates the consumer disputes;

(26) “mediator” means a mediator referred to in section 75;

(27) “member” includes the President and a member of the National Commission or a State Commission or a District Commission, as the case may be;

(28) “misleading advertisement” in relation to any product or service, means an advertisement, which-

(i) falsely describes such product or service; or

(ii) gives a false guarantee to, or is likely to mislead the consumers as to the nature, substance, quantity or quality of such product or service; or

(iii) conveys an express or implied representation which, if made by the manufacturer or seller or service provider thereof, would constitute an unfair trade practice; or

(iv) deliberately conceals important information;

(29) “National Commission” means the National Consumer Disputes Redressal Commission established under sub-section (1) of section 53;

(30) “notification” means a notification published in the Official Gazette and the term “notify” shall be construed accordingly;

(31) “person” includes-

(i) an individual;

(ii) a firm whether registered or not;

(iii) a Hindu undivided family;

(iv) a co-operative society;

(v) an association of persons whether registered under the Societies Registration Act, 1860(21 of 1860) or not;

(vi) any corporation, company or a body of individuals whether incorporated or not;

(vii) any artificial juridical person, not falling within any of the preceding sub-clauses;

(32) “prescribed” means prescribed by rules made by the Central Government, or, as the case may be, the State Government;

(33) “product” means any article or goods or substance or raw material or any extended cycle of such product, which may be in gaseous, liquid, or solid state possessing intrinsic value which is capable of delivery either as wholly assembled or as a component part and is produced for introduction to trade or commerce, but does not include human tissues, blood, blood products and organs;

(34) “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 manufactured or sold or by deficiency in services relating thereto;

(35) “product liability action” means a complaint filed by a person before a District Commission or State Commission or National Commission, as the case may be, for claiming compensation for the harm caused to him;

(36) “product manufacturer” means a person who-

(i) makes any product or parts thereof; or

(ii) assembles parts thereof made by others; or

(iii) puts or causes to be put his own mark on any products made by any other person; or

(iv) makes a product and sells, distributes, leases, installs, prepares, packages, labels, markets, repairs, maintains such product or is otherwise involved in placing such product for commercial purpose; or

(v) designs, produces, fabricates, constructs or re-manufactures any product before its sale; or

(vi) being a product seller of a product, is also a manufacturer of such product;

(37) “product seller”, in relation to a product, means a person who, in the course of business, imports, sells, distributes, leases, installs, prepares, packages, labels, markets, repairs, maintains, or otherwise is involved in placing such product for commercial purpose and includes-

(i) a manufacturer who is also a product seller; or

(ii) a service provider, but does not include-

(a) a seller of immovable property, unless such person is engaged in the sale of constructed house or in the construction of homes or flats;

(b) a provider of professional services in any transaction in which, the sale or use of a product is only incidental thereto, but furnishing of opinion, skill or services being the essence of such transaction;

(c) a person who-

(I) acts only in a financial capacity with respect to the sale of the product;

(II) is not a manufacturer, wholesaler, distributor, retailer, direct seller or an electronic service provider;

(III) leases a product, without having a reasonable opportunity to inspect and discover defects in the product, under a lease arrangement in which the selection, possession, maintenance, and operation of the product are controlled by a person other than the lessor;

(38) “product service provider”, in relation to a product, means a person who provides any service in respect of such product;

(39) “regulations” means the regulations made by the National Commission, or as the case may be, the Central Authority;

(40) “Regulator” means a body or any authority established under any other law for the time being in force;

(41) “restrictive trade practice” means a trade practice which tends to bring about manipulation of price or its conditions of delivery or to affect 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 and shall include-

(i) delay beyond the period agreed to by a trader in supply of such goods or in providing the services which has led or is likely to lead to rise in the price;

(ii) any trade practice which requires a consumer to buy, hire or avail of any goods or, as the case may be, services as condition precedent for buying, hiring or availing of other goods or services;

(42) “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, supply of electrical or other energy, telecom, boarding or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service;

(43) “spurious goods” means such goods which are falsely claimed to be genuine;

(44) “State Commission” means a State Consumer Disputes Redressal Commission established under sub-section (1) of section 42;

(45) “trader”, in relation to any goods, means a person who sells or distributes any goods for sale and includes the manufacturer thereof, and where such goods are sold or distributed in package form, includes the packer thereof;

(46) “unfair contract” means a contract between a manufacturer or trader or service provider on one hand, and a consumer on the other, having such terms which cause significant change in the rights of such consumer, including the following, namely:-

(i) requiring manifestly excessive security deposits to be given by a consumer for the performance of contractual obligations; or

(ii) imposing any penalty on the consumer, for the breach of contract thereof which is wholly disproportionate to the loss occurred due to such breach to the other party to the contract; or

(iii) refusing to accept early repayment of debts on payment of applicable penalty; or

(iv) entitling a party to the contract to terminate such contract unilaterally, without reasonable cause; or

(v) permitting or has the effect of permitting one party to assign the contract to the detriment of the other party who is a consumer, without his consent; or

(vi) imposing on the consumer any unreasonable charge, obligation or condition which puts such consumer to disadvantage;

(47) “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, namely:-

(i) making any statement, whether orally or in writing or by visible representation including by means of electronic record, which-

(a) falsely represents that the goods are of a particular standard, quality, quantity, grade, composition, style or model;

(b) falsely represents that the services are of a particular standard, quality or grade;

(c) falsely represents any re-built, second-hand, renovated, reconditioned or old goods as new goods;

(d) represents that the goods or services have sponsorship, approval, performance, characteristics, accessories, uses or benefits which such goods or services do not have;

(e) represents that the seller or the supplier has a sponsorship or approval or affiliation which such seller or supplier does not have;

(f) makes a false or misleading representation concerning the need for, or the usefulness of, any goods or services;

(g) gives to the public any warranty or guarantee of the performance, efficacy or length of life of a product or of any goods that is not based on an adequate or proper test thereof:

Provided that where a defence is raised to the effect that such warranty or guarantee is based on adequate or proper test, the burden of proof of such defence shall lie on the person raising such defence;

(h) makes to the public a representation in a form that purports to be-

(A) a warranty or guarantee of a product or of any goods or services; or

(B) a promise to replace, maintain or repair an article or any part thereof or to repeat or continue a service until it has achieved a specified result,

if such purported warranty or guarantee or promise is materially misleading or if there is no reasonable prospect that such warranty, guarantee or promise will be carried out;

(i) materially misleads the public concerning the price at which a product or like products or goods or services, have been or are, ordinarily sold or provided, and, for this purpose, a representation as to price shall be deemed to refer to the price at which the product or goods or services has or have been sold by sellers or provided by suppliers generally in the relevant market unless it is clearly specified to be the price at which the product has been sold or services have been provided by the person by whom or on whose behalf the representation is made;

(j) gives false or misleading facts disparaging the goods, services or trade of another person.

Explanation. – For the purposes of this sub-clause, a statement that is,-
(A) expressed on an article offered or displayed for sale, or on its wrapper or container; or

(B) expressed on anything attached to, inserted in, or accompanying, an article offered or displayed for sale, or on anything on which the article is mounted for display or sale; or

(C) contained in or on anything that is sold, sent, delivered, transmitted or in any other manner whatsoever made available to a member of the public, shall be deemed to be a statement made to the public by, and only by, the person who had caused the statement to be so expressed, made or contained;

(ii) permitting the publication of any advertisement, whether in any newspaper or otherwise, including by way of electronic record, for the sale or supply at a bargain price of goods or services that are not intended to be offered for sale or supply at the bargain price, or for a period that is, and in quantities that are, reasonable, having regard to the nature of the market in which the business is carried on, the nature and size of business, and the nature of the advertisement.

Explanation. – For the purpose of this sub-clause, “bargain price” means,-

(A) a price that is stated in any advertisement to be a bargain price, by reference to an ordinary price or otherwise; or

(B) a price that a person who reads, hears or sees the advertisement, would reasonably understand to be a bargain price having regard to the prices at which the product advertised or like products are ordinarily sold;

(iii) permitting-

(a) the offering of gifts, prizes or other items with the intention of not providing them as offered or creating impression that something is being given or offered free of charge when it is fully or partly covered by the amount charged, in the transaction as a whole;

(b) the conduct of 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, except such contest, lottery, game of chance or skill as may be prescribed;

(c) withholding from the participants of any scheme offering gifts, prizes or other items free of charge on its closure, the information about final results of the scheme.

Explanation. – For the purpose of this sub-clause, the participants of a scheme shall be deemed to have been informed of the final results of the scheme where such results are within a reasonable time published, prominently in the same newspaper in which the scheme was originally advertised;
(iv) permitting the sale or supply of goods intended to be used, or are of a kind likely to be used by consumers, knowing or having reason to believe that the goods do not comply with the standards prescribed by the competent authority relating to performance, composition, contents, design, constructions, finishing or packaging as are necessary to prevent or reduce the risk of injury to the person using the goods;

(v) permitting the hoarding or destruction of goods, or refusal to sell the goods or to make them available for sale or to provide any service, if such hoarding or destruction or refusal raises or tends to raise or is intended to raise, the cost of those or other similar goods or services;

(vi) manufacturing of spurious goods or offering such goods for sale or adopting deceptive practices in the provision of services;

(vii) not issuing bill or cash memo or receipt for the goods sold or services rendered in such manner as may be prescribed;

(viii) refusing, after selling goods or rendering services, to take back or withdraw defective goods or to withdraw or discontinue deficient services and to refund the consideration thereof, if paid, within the period stipulated in the bill or cash memo or receipt or in the absence of such stipulation, within a period of thirty days;

(ix) disclosing to other person any personal information given in confidence by the consumer unless such disclosure is made in accordance with the provisions of any law for the time being in force.

CHAPTER II

Consumer Protection Councils

3. Central Consumer Protection Council. – (1) The Central Government shall, by notification, establish with effect from such date as it may specify in that notification, the Central Consumer Protection Council to be known as the Central Council.
(2) The Central Council shall be an advisory council and consist of the following members, namely:-
(a) the Minister-in-charge of the Department of Consumer Affairs in the Central Government, who shall be the Chairperson; and

(b) such number of other official or non-official members representing such interests as may be prescribed.

4. Procedure for meetings of Central Council. – (1) The Central Council shall meet as and when necessary, but at least one meeting of the Council shall be held every year.
(2) The Central Council shall meet at such time and place as the Chairperson may think fit and shall observe such procedure in regard to the transaction of its business as may be prescribed.

5. Objects of Central Council. – The objects of the Central Council shall be to render advice on promotion and protection of the consumers’ rights under this Act.

6. State Consumer Protection Councils. – (1) Every State Government shall, by notification, establish with effect from such date as it may specify in such notification, a State Consumer Protection Council for such State to be known as the State Council.
(2) The State Council shall be an advisory council and consist of the following members, namely:-
(a) the Minister-in-charge of Consumer Affairs in the State Government who shall be the Chairperson;

(b) such number of other official or non-official members representing such interests as may be prescribed;

(c) such number of other official or non-official members, not exceeding ten, as may be nominated by the Central Government.

(3) The State Council shall meet as and when necessary but not less than two meetings shall be held every year.
(4) The State Council shall meet at such time and place as the Chairperson may think fit and shall observe such procedure in regard to the transaction of its business, as may be prescribed.

7. Objects of State Council. – The objects of every State Council shall be to render advice on promotion and protection of consumer rights under this Act within the State.

8. District Consumer Protection Council. – (1) The State Government shall, by notification, establish for every District with effect from such date as it may specify in such notification, a District Consumer Protection Council to be known as the District Council.
(2) The District Council shall be an advisory council and consist of the following members, namely:-
(a) the Collector of the district (by whatever name called), who shall be the Chairperson; and

(b) such number of other official and non-official members representing such interests as may be prescribed.

(3) The District Council shall meet as and when necessary but not less than two meetings shall be held every year.
(4) The District Council shall meet at such time and place within the district as the Chairperson may think fit and shall observe such procedure in regard to the transaction of its business as may be prescribed.

9. Objects of District Council. – The objects of every District Council shall be to render advice on promotion and protection of consumer rights under this Act within the district.

CHAPTER III

Central Consumer Protection Authority

10. Establishment of Central Consumer Protection Authority. – (1) The Central Government shall, by notification, establish with effect from such date as it may specify in that notification, a Central Consumer Protection Authority to be known as the Central Authority 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.
(2) The Central Authority shall consist of a Chief Commissioner and such number of other Commissioners as may be prescribed, to be appointed by the Central Government to exercise the powers and discharge the functions under this Act.
(3) The headquarters of the Central Authority shall be at such place in the National Capital Region of Delhi, and it shall have regional and other offices in any other place in India as the Central Government may decide.

11. Qualifications, method of recruitment, etc., of Chief Commissioner and Commissioners. – The Central Government may, by notification, make rules to provide for the qualifications for appointment, method of recruitment, procedure for appointment, term of office, salaries and allowances, resignation, removal and other terms and conditions of the service of the Chief Commissioner and Commissioners of the Central Authority.

12. Vacancy, etc., not to invalidate proceedings of Central Authority. – No act or proceeding of the Central Authority shall be invalid merely by reason of-
(a) any vacancy in, or any defect in the constitution of, the Central Authority; or

(b) any defect in the appointment of a person acting as the Chief Commissioner or as a Commissioner; or

(c) any irregularity in the procedure of the Central Authority not affecting the merits of the case.

13. Appointment of officers, experts, professionals and other employees of Central Authority. – (1) The Central Government shall provide the Central Authority such number of officers and other employees as it considers necessary for the efficient performance of its functions under this Act.
(2) The salaries and allowances payable to, and the other terms and conditions of service of, the officers and other employees of the Central Authority appointed under this Act shall be such as may be prescribed.
(3) The Central Authority may engage, in accordance with the procedure specified by regulations, such number of experts and professionals of integrity and ability, who have special knowledge and experience in the areas of consumer rights and welfare, consumer policy, law, medicine, food safety, health, engineering, product safety, commerce, economics, public affairs or administration, as it deems necessary to assist it in the discharge of its functions under this Act.

14. Procedure of Central Authority. – (1) The Central Authority shall regulate the procedure for transaction of its business and allocation of its business amongst the Chief Commissioner and Commissioners as may be specified by regulations.
(2) The Chief Commissioner shall have the powers of general superintendence, direction and control in respect of all administrative matters of the Central Authority:
Provided that the Chief Commissioner may delegate such of his powers relating to administrative matters of the Central Authority, as he may think fit, to any Commissioner (including Commissioner of a regional office) or any other officer of the Central Authority.

15. Investigation Wing. – (1) The Central Authority shall have an Investigation Wing headed by a Director-General for the purpose of conducting inquiry or investigation under this Act as may be directed by the Central Authority.
(2) The Central Government may appoint a Director-General and such number of Additional Director-General, Director, Joint Director, Deputy Director and Assistant Director, from amongst persons who have experience in investigation and possess such qualifications, in such manner, as may be prescribed.
(3) Every Additional Director-General, Director, Joint Director, Deputy Director and Assistant Director shall exercise his powers, and discharge his functions, subject to the general control, supervision and direction of the Director-General.
(4) The Director-General may delegate all or any of his powers to the Additional Director-General or Director, Joint Director or Deputy Director or Assistant Director, as the case may be, while conducting inquiries or investigations under this Act.
(5) The inquiries or the investigations made by the Director- General shall be submitted to the Central Authority in such form, in such manner and within such time, as may be specified by regulations.

16. Power of District Collector. – The District Collector (by whatever name called) may, on a complaint or on a reference made to him by the Central Authority or the Commissioner of a regional office, inquire into or investigate complaints regarding violation of rights of consumers as a class, on matters relating to violations of consumer rights, unfair trade practices and false or misleading advertisements, within his jurisdiction and submit his report to the Central Authority or to the Commissioner of a regional office, as the case may be.

17. Complaints to authorities. – A complaint relating to violation of consumer rights or unfair trade practices or false or misleading advertisements which are prejudicial to the interests of consumers as a class, may be forwarded either in writing or in electronic mode, to any one of the authorities, namely, the District Collector or the Commissioner of regional office or the Central Authority.

18. Powers and functions of Central Authority. – (1) The Central Authority shall-
(a) protect, promote and enforce the rights of consumers as a class, and prevent violation of consumers rights under this Act;

(b) prevent unfair trade practices and ensure that no person engages himself in unfair trade practices;

(c) ensure that no false or misleading advertisement is made of any goods or services which contravenes the provisions of this Act or the rules or regulations made thereunder;

(d) ensure that no person takes part in the publication of any advertisement which is false or misleading.

(2) Without prejudice to the generality of the provisions contained in sub-section (1), the Central Authority may, for any of the purposes aforesaid,-
(a) inquire or cause an inquiry or investigation to be made into violations of consumer rights or unfair trade practices, either suo motu or on a complaint received or on the directions from the Central Government;

(b) file complaints before the District Commission, the State Commission or the National Commission, as the case may be, under this Act;

(c) intervene in any proceedings before the District Commission or the State Commission or the National Commission, as the case may be, in respect of any allegation of violation of consumer rights or unfair trade practices;

(d) review the matters relating to, and the factors inhibiting enjoyment of, consumer rights, including safeguards provided for the protection of consumers under any other law for the time being in force and recommend appropriate remedial measures for their effective implementation;

(e) recommend adoption of international covenants and best international practices on consumer rights to ensure effective enforcement of consumer rights;

(f) undertake and promote research in the field of consumer rights;

(g) spread and promote awareness on consumer rights;

(h) encourage non-Governmental organisations and other institutions working in the field of consumer rights to co-operate and work with consumer protection agencies;

(i) mandate the use of unique and universal goods identifiers in such goods, as may be necessary, to prevent unfair trade practices and to protect consumers’ interest;

(j) issue safety notices to alert consumers against dangerous or hazardous or unsafe goods or services;

(k) advise the Ministries and Departments of the Central and State Governments on consumer welfare measures;

(l) issue necessary guidelines to prevent unfair trade practices and protect consumers’ interest.

19. Power of Central Authority to refer matter for investigation or to other Regulator. – (1) The Central Authority may, after receiving any information or complaint or directions from the Central Government or of its own motion, conduct or cause to be conducted a preliminary inquiry as to whether there exists a prima facie case of violation of consumer rights or any unfair trade practice or any false or misleading advertisement, by any person, which is prejudicial to the public interest or to the interests of consumers and if it is satisfied that there exists a prima facie case, it shall cause investigation to be made by the Director- General or by the District Collector.
(2) Where, after preliminary inquiry, the Central Authority is of the opinion that the matter is to be dealt with by a Regulator established under any other law for the time being in force, it may refer such matter to the concerned Regulator along with its report.
(3) For the purposes of investigation under sub-section (1), the Central Authority, the Director General or the District Collector may call upon a person referred to in sub-section (1) and also direct him to produce any document or record in his possession.

20. Power of Central Authority to recall goods, etc. – Where the Central Authority is satisfied on the basis of investigation that there is sufficient evidence to show violation of consumer rights or unfair trade practice by a person, it may pass such order as may be necessary, including-
(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; and

(c) discontinuation of practices which are unfair and prejudicial to consumers’ interest:

Provided that the Central Authority shall give the person an opportunity of being heard before passing an order under this section.

21. Power of Central Authority to issue directions and penalties against false or misleading advertisements. – (1) Where the Central Authority is satisfied after investigation that any advertisement is false or misleading and is prejudicial to the interest of any consumer or is in contravention of consumer rights, it may, by order, issue directions to the concerned trader or manufacturer or endorser or advertiser or publisher, as the case may be, to discontinue such advertisement or to modify the same in such manner and within such time as may be specified in that order.
(2) Notwithstanding the order passed under sub-section (1), if the Central Authority is of the opinion that it is necessary to impose a penalty in respect of such false or misleading advertisement, by a manufacturer or an endorser, it may, by order, impose on manufacturer or endorser a penalty which may extend to ten lakh rupees:
Provided that the Central Authority may, for every subsequent contravention by a manufacturer or endorser, impose a penalty, which may extend to fifty lakh rupees.
(3) Notwithstanding any order under sub-sections (1) and (2), where the Central Authority deems it necessary, it may, by order, prohibit the endorser of a false or misleading advertisement from making endorsement of any product or service for a period which may extend to one year:
Provided that the Central Authority may, for every subsequent contravention, prohibit such endorser from making endorsement in respect of any product or service for a period which may extend to three years.
(4) Where the Central Authority is satisfied after investigation that any person is found to publish, or is a party to the publication of, a misleading advertisement, it may impose on such person a penalty which may extend to ten lakh rupees.
(5) 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.
(6) 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.

(7) 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.

(8) The Central Authority shall give the person an opportunity of being heard before an order under this section is passed.

22. Search and seizure. – (1) For the purpose of conducting an investigation after preliminary inquiry under sub-section (1) of section 19, the Director-General or any other officer authorised by him in this behalf, or the District Collector, as the case may be, may, if he has any reason to believe that any person has violated any consumer rights or committed unfair trade practice or causes any false or misleading advertisement to be made, shall,-
(a) enter at any reasonable time into any such premises and search for any document or record or article or any other form of evidence and seize such document, record, article or such evidence;

(b) make a note or an inventory of such record or article; or

(c) require any person to produce any record, register or other document or article.

(2) The provisions of the Code of Criminal Procedure, 1973, relating to search and seizure shall apply, as far as may be, for search and seizure under this Act (2 of 1974).
(3) Every document, record or article seized under clause (a) of sub-section (1) or produced under clause (c) of that sub-section shall be returned to the person, from whom they were seized or who produced the same, within a period of twenty days of the date of such seizure or production, as the case may be, after copies thereof or extracts therefrom certified by that person, in such manner as may be prescribed, have been taken.
(4) Where any article seized under sub-section (1) are subject to speedy or natural decay, the Director-General or such other officer may dispose of the article in such manner as may be prescribed.
(5) In the case of articles other than the articles referred to in sub-section (4), provisions contained in clause (c) of sub-section (2) of section 38 shall mutatis mutandis apply in relation to analysis or tests.

23. Designation of any statutory authority or body to function as Central Authority. – The Central Government may, if it considers necessary, by notification, designate any statutory authority or body to exercise the powers and perform the functions of the Central Authority referred to in section 10.

24. Appeal. – A person aggrieved by any order passed by the Central Authority under sections 20 and 21 may file an appeal to the National Commission within a period of thirty days from the date of receipt of such order.

25. Grants by Central Government. – The Central Government may, after due appropriation made by Parliament by law in this behalf, make to the Central Authority grants of such sums of money as that Government may think fit for being utilised for the purposes of this Act.

26. Accounts and audit. – (1) The Central Authority shall maintain proper accounts and other relevant records and prepare an annual statement of accounts in such form and manner as may be prescribed in consultation with the Comptroller and Auditor-General of India.
(2) The accounts of the Central Authority shall be audited by the Comptroller and Auditor-General of India at such intervals as may be specified by him and any expenditure incurred in connection with such audit shall be payable by the Central Authority to the Comptroller and Auditor-General of India.
(3) The Comptroller and Auditor-General of India or any other person appointed by him in connection with the audit of the accounts of the Central Authority shall have the same rights, privileges and authority in connection with such audit as the Comptroller and Auditor-General of India generally has, in connection with the audit of the Government accounts and, in particular, shall have the right to demand the production of books, accounts, connected vouchers and other documents and papers and to inspect any of the offices of the Central Authority.
(4) The accounts of the Central Authority as certified by the Comptroller and Auditor-General of India or any other person appointed by him in this behalf together with the audit report thereon shall be forwarded annually to the Central Government which shall cause the same to be laid before each House of Parliament.

27. Furnishing of annual reports, etc. – (1) The Central Authority shall prepare once in every year, in such form, manner and at such time as may be prescribed, an annual report giving full account of its activities during the previous year and such other reports and returns, as may be directed, and copies of such report and returns shall be forwarded to the Central Government.
(2) A copy of the annual report received under sub-section (1) shall be laid, as soon as may be after it is received, before each House of Parliament.

CHAPTER IV

Consumer Disputes Redressal Commission

28. Establishment of District Consumer Disputes Redressal Commission. – (1) The State Government shall, by notification, establish a District Consumer Disputes Redressal Commission, to be known as the District Commission, in each district of the State:
Provided that the State Government may, if it deems fit, establish more than one District Commission in a district.

(2) Each District Commission shall consist of-
(a) a President; and

(b) not less than two and not more than such number of members as may be prescribed, in consultation with the Central Government.

29. Qualifications, etc., of President and members of District Commission. – The Central Government may, by notification, make rules to provide for the qualifications, method of recruitment, procedure for appointment, term of office, resignation and removal of the President and members of the District Commission.

30. Salaries, allowances and other terms and conditions of service of President and members of District Commission. – The State Government may, by notification, make rules to provide for salaries and allowances and other terms and conditions of service of the President, and members of the District Commission.

31. Transitional provision. – Any person appointed as President or, as the case may be, a member of the District Commission immediately before the commencement of this Act shall hold office as such as President or, as the case may be, as member till the completion of his term for which he has been appointed.

32. Vacancy in office of member of District Commission. – If, at any time, there is a vacancy in the office of the President or member of a District Commission, the State Government may, by notification, direct-
(a) any other District Commission specified in that notification to exercise the jurisdiction in respect of that district also; or

(b) the President or a member of any other District Commission specified in that notification to exercise the powers and discharge the functions of the President or member of that District Commission also.

33. Officers and other employees of District Commission. – (1) The State Government shall provide the District Commission with such officers and other employees as may be required to assist the District Commission in the discharge of its functions.
(2) The officers and other employees of the District Commission shall discharge their functions under the general superintendence of the President of the District Commission.
(3) The salaries and allowances payable to, and the other terms and conditions of service of, the officers and other employees of the District Commission shall be such as may be prescribed.

34. Jurisdiction of District Commission. – (1) Subject to the other provisions of this Act, the District Commission shall have jurisdiction to entertain complaints where the value of the goods or services paid as consideration does not exceed one crore rupees:
Provided that where the Central Government deems it necessary so to do, it may prescribe such other value, as it deems fit.
(2) A complaint shall be instituted in a District Commission within the local limits of whose jurisdiction,-
(a) the opposite party or each of the opposite parties, where there are more than one, at the time of the institution of the complaint, ordinarily resides or carries on business or has a branch office or personally works for gain; or

(b) any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides, or carries on business or has a branch office, or personally works for gain, provided that in such case the permission of the District Commission is given; or

(c) the cause of action, wholly or in part, arises; or

(d) the complainant resides or personally works for gain.

(3) The District Commission shall ordinarily function in the district headquarters and may perform its functions at such other place in the district, as the State Government may, in consultation with the State Commission, notify in the Official Gazette from time to time.

35. Manner in which complaint shall be made. – (1) A complaint, in relation to any goods sold or delivered or agreed to be sold or delivered or any service provided or agreed to be provided, may be filed with a District Commission by-

(a) the consumer,-

(i) to whom such goods are sold or delivered or agreed to be sold or delivered or such service is provided or agreed to be provided; or

(ii) who alleges unfair trade practice in respect of such goods or service;

(b) any recognised consumer association, whether the consumer to whom such goods are sold or delivered or agreed to be sold or delivered or such service is provided or agreed to be provided, or who alleges unfair trade practice in respect of such goods or service, is a member of such association or not;

(c) one or more consumers, where there are numerous consumers having the same interest, with the permission of the District Commission, on behalf of, or for the benefit of, all consumers so interested; or

(d) the Central Government, the Central Authority or the State Government, as the case may be:

Provided that the complaint under this sub-section may be filed electronically in such manner as may be prescribed.
Explanation. – For the purposes of this sub-section, “recognised consumer association” means any voluntary consumer association registered under any law for the time being in force.
(2) Every complaint filed under sub-section (1) shall be accompanied with such fee and payable in such manner, including electronic form, as may be prescribed.

36. Proceedings before District Commission. – (1) Every proceeding before the District Commission shall be conducted by the President of that Commission and atleast one member thereof, sitting together:
Provided that where a member, for any reason, is unable to conduct a proceeding till it is completed, the President and the other member shall continue the proceeding from the stage at which it was last heard by the previous member.
(2) On receipt of a complaint made under section 35, the District Commission may, by order, admit the complaint for being proceeded with or reject the same:
Provided that a complaint shall not be rejected under this section unless an opportunity of being heard has been given to the complainant:
Provided further that the admissibility of the complaint shall ordinarily be decided within twenty-one days from the date on which the complaint was filed.
(3) Where the District Commission does not decide the issue of admissibility of the complaint within the period so specified, it shall be deemed to have been admitted.

37. Reference to mediation. – (1) At the first hearing of the complaint after its admission, or at any later stage, if it appears to the District Commission that there exists elements of a settlement which may be acceptable to the parties, except in such cases as may be prescribed, it may direct the parties to give in writing, within five days, consent to have their dispute settled by mediation in accordance with the provisions of Chapter V.
(2) Where the parties agree for settlement by mediation and give their consent in writing, the District Commission shall, within five days of receipt of such consent, refer the matter for mediation, and in such case, the provisions of Chapter V, relating to mediation, shall apply.

38. Procedure on admission of complaint. – (1) The District Commission shall, on admission of a complaint, or in respect of cases referred for mediation on failure of settlement by mediation, proceed with such complaint.
(2) Where the complaint relates to any goods, the District Commission shall,-
(a) refer a copy of the admitted complaint, within twenty-one days from the date of its admission to the opposite party mentioned in the complaint directing him to give his version of the case within a period of thirty days or such extended period not exceeding fifteen days as may be granted by it;

(b) if the opposite party on receipt of a complaint referred to him under clause (a) denies or disputes the allegations contained in the complaint, or omits or fails to take any action to represent his case within the time given by the District Commission, proceed to settle the consumer dispute in the manner specified in clauses (c) to (g);

(c) if the complaint alleges a defect in the goods which cannot be determined without proper analysis or test of the goods, obtain a sample of the goods from the complainant, seal it and authenticate it in the manner as may be prescribed and refer the sample so sealed to the appropriate laboratory along with a direction that such laboratory to make an analysis or test, whichever may be necessary, with a view to finding out whether such goods suffer from any defect alleged in the complaint or from any other defect and to report its findings thereon to the District Commission within a period of forty-five days of the receipt of the reference or within such extended period as may be granted by it;

(d) before any sample of the goods is referred to any appropriate laboratory under clause (c), require the complainant to deposit to the credit of the Commission such fees as may be specified, for payment to the appropriate laboratory for carrying out the necessary analysis or test in relation to the goods in question;

(e) remit the amount deposited to its credit under clause (d) to the appropriate laboratory to enable it to carry out the analysis or test mentioned in clause (c) and on receipt of the report from the appropriate laboratory, it shall forward a copy of the report along with such remarks as it may feel appropriate to the opposite party;

(f) if any of the parties disputes the correctness of the findings of the appropriate laboratory, or disputes the correctness of the methods of analysis or test adopted by the appropriate laboratory, require the opposite party or the complainant to submit in writing his objections with regard to the report made by the appropriate laboratory;

(g) give a reasonable opportunity to the complainant as well as the opposite party of being heard as to the correctness or otherwise of the report made by the appropriate laboratory and also as to the objection made in relation thereto under clause (f) and issue an appropriate order under section 39.

(3) The District Commission shall, if the complaint admitted by it under sub-section (2) of section 36 relates to goods in respect of which the procedure specified in sub-section (2) cannot be followed, or if the complaint relates to any services,-
(a) refer a copy of such complaint to the opposite party directing him to give his version of the case within a period of thirty days or such extended period not exceeding fifteen days as may be granted by the District Commission;

(b) if the opposite party, on receipt of a copy of the complaint, referred to him under clause (a) denies or disputes the allegations contained in the complaint, or omits or fails to take any action to represent his case within the time given by the District Commission, it shall proceed to settle the consumer dispute-

(i) on the basis of evidence brought to its notice by the complainant and the opposite party, if the opposite party denies or disputes the allegations contained in the complaint, or

(ii) ex parte on the basis of evidence brought to its notice by the complainant, where the opposite party omits or fails to take any action to represent his case within the time given by the Commission;

(c) decide the complaint on merits if the complainant fails to appear on the date of hearing.

(4) For the purposes of sub-sections (2) and (3), the District Commission may, by order, require an electronic service provider to provide such information, documents or records, as may be specified in that order.
(5) No proceedings complying with the procedure laid down in sub-sections (1) and (2) shall be called in question in any court on the ground that the principles of natural justice have not been complied with.
(6) Every complaint shall be heard by the District Commission on the basis of affidavit and documentary evidence placed on record:
Provided that where an application is made for hearing or for examination of parties in person or through video conferencing, the District Commission may, on sufficient cause being shown, and after recording its reasons in writing, allow the same.
(7) Every complaint shall be disposed of as expeditiously as possible and endeavour shall be made to decide the complaint within a period of three months from the date of receipt of notice by opposite party where the complaint does not require analysis or testing of commodities and within five months if it requires analysis or testing of commodities:
Provided that no adjournment shall ordinarily be granted by the District Commission unless sufficient cause is shown and the reasons for grant of adjournment have been recorded in writing by the Commission:
Provided further that the District Commission shall make such orders as to the costs occasioned by the adjournment as may be specified by regulations:
Provided also that in the event of a complaint being disposed of after the period so specified, the District Commission shall record in writing, the reasons for the same at the time of disposing of the said complaint.
(8) Where during the pendency of any proceeding before the District Commission, if it appears necessary, it may pass such interim order as is just and proper in the facts and circumstances of the case.
(9) For the purposes of this section, the District Commission shall have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit in respect of the following matters, namely:-
(a) the summoning and enforcing the attendance of any defendant or witness and examining the witness on oath;

(b) requiring the discovery and production of any document or other material object as evidence;

(c) receiving of evidence on affidavits;

(d) the requisitioning of the report of the concerned analysis or test from the appropriate laboratory or from any other relevant source;

(e) issuing of commissions for the examination of any witness, or document; and

(f) any other matter which may be prescribed by the Central Government.

(10) Every proceeding before the District Commission shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 of the Indian Penal Code, and the District Commission shall be deemed to be a criminal court for the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974).

(11) Where the complainant is a consumer referred to in sub-clause (v) of clause (5) of section 2, the provisions of Order I Rule 8 of the First Schedule to the Code of Civil Procedure, 1908 (5 of 1908) shall apply subject to the modification that every reference therein to a suit or decree shall be construed as a reference to a complaint or the order of the District Commission thereon.

(12) In the event of death of a complainant who is a consumer or of the opposite party against whom the complaint has been filed, the provisions of Order XXII of the First Schedule to the Code of Civil Procedure, 1908(5 of 1908) shall apply subject to the modification that every reference therein to the plaintiff and the defendant shall be construed as reference to a complainant or the opposite party, as the case may be.

39. Findings of District Commission. – (1) Where the District Commission is satisfied that the goods complained against suffer from any of the defects specified in the complaint or that any of the allegations contained in the complaint about the services or any unfair trade practices, or claims for compensation under product liability are proved, it shall issue an order to the opposite party directing him to do one or more of the following, namely:-

(a) to remove the defect pointed out by the appropriate laboratory from the goods in question;

(b) to replace the goods with new goods of similar description which shall be free from any defect;

(c) to return to the complainant the price, or, as the case may be, the charges paid by the complainant along with such interest on such price or charges as may be decided;

(d) to pay such amount as may be awarded by it as compensation to the consumer for any loss or injury suffered by the consumer due to the negligence of the opposite party:

Provided that the District Commission shall have the power to grant punitive damages in such circumstances as it deems fit;

(e) to pay such amount as may be awarded by it as compensation in a product liability action under Chapter VI;

(f) to remove the defects in goods or deficiencies in the services in question;

(g) to discontinue the unfair trade practice or restrictive trade practice and not to repeat them;

(h) not to offer the hazardous or unsafe goods for sale;

(i) to withdraw the hazardous goods from being offered for sale;

(j) to cease manufacture of hazardous goods and to desist from offering services which are hazardous in nature;

(k) to pay such sum as may be determined by it, if it is of the opinion that loss or injury has been suffered by a large number of consumers who are not identifiable conveniently:

Provided that the minimum amount of sum so payable shall not be less than twenty-five per cent. of the value of such defective goods sold or service provided, as the case may be, to such consumers;

(l) to issue corrective advertisement to neutralise the effect of misleading advertisement at the cost of the opposite party responsible for issuing such misleading advertisement;

(m) to provide for adequate costs to parties; and

(n) to cease and desist from issuing any misleading advertisement.

(2) Any amount obtained under sub-section (1) shall be credited to such fund and utilised in such manner as may be prescribed.
(3) In any proceeding conducted by the President and a member and if they differ on any point or points, they shall state the point or points on which they differ and refer the same to another member for hearing on such point or points and the opinion of the majority shall be the order of the District Commission:
Provided that the other member shall give his opinion on such point or points referred to him within a period of one month from the date of such reference.
(4) Every order made by the District Commission under sub-section (1) shall be signed by the President and the member who conducted the proceeding:
Provided that where the order is made as per majority opinion under sub-section (3), such order shall also be signed by the other member.
40. Review by District Commission in certain cases. – The District Commission shall have the power to review any of the order passed by it if there is an error apparent on the face of the record, either of its own motion or on an application made by any of the parties within thirty days of such order.

41. Appeal against order of District Commission. – Any person aggrieved by an order made by the District Commission may prefer an appeal against such order to the State Commission on the grounds of facts or law within a period of forty-five days from the date of the order, in such form and manner, as may be prescribed:

Provided that the State Commission may entertain an appeal after the expiry of the said period of forty-five days, if it is satisfied that there was sufficient cause for not filing it within that period:
Provided further that no appeal by a person, who is required to pay any amount in terms of an order of the District Commission, shall be entertained by the State Commission unless the appellant has deposited fifty per cent. of that amount in the manner as may be prescribed:

Provided also that no appeal shall lie from any order passed under sub-section (1) of section 81 by the District Commission pursuant to a settlement by mediation under section 80.

42. Establishment of State Consumer Disputes Redressal Commission. – (1) The State Government shall, by notification, establish a State Consumer Disputes Redressal Commission, to be known as the State Commission, in the State.
(2) The State Commission shall ordinarily function at the State capital and perform its functions at such other places as the State Government may in consultation with the State Commission notify in the Official Gazette:

Provided that the State Government may, by notification, establish regional benches of the State Commission, at such places, as it deems fit.
(3) Each State Commission shall consist of-
(a) a President; and

(b) not less than four or not more than such number of members as may be prescribed in consultation with the Central Government.

43. Qualifications, etc., of President and members of State Commission. – The Central Government may, by notification, make rules to provide for the qualification for appointment, method of recruitment, procedure of appointment, term of office, resignation and removal of the President and members of the State Commission.

44. Salaries, allowances and other terms and conditions of service of President and members of State Commission. – The State Government may, by notification, make rules to provide for salaries and allowances and other terms and conditions of service of the President and members of the State Commission.

45. Transitional provision. – Any person appointed as President or, as the case may be, a member of the State Commission immediately before the commencement of this Act shall hold office as such, as President or member, as the case may be, till the completion of his term.

46. Officers and employees of State Commission. – (1) The State Government shall determine the nature and categories of the officers and other employees required to assist the State Commission in the discharge of its functions and provide the Commission with such officers and other employees as it may think fit.
(2) The officers and other employees of the State Commission shall discharge their functions under the general superintendence of the President.
(3) The salaries and allowances payable to and the other terms and conditions of service of, the officers and other employees of the State Commission shall be such as may be prescribed.

47. Jurisdiction of State Commission. – (1) Subject to the other provisions of this Act, the State Commission shall have jurisdiction-
(a) to entertain-

(i) complaints where the value of the goods or services paid as consideration, exceeds rupees one crore, but does not exceed rupees ten crore:

Provided that where the Central Government deems it necessary so to do, it may prescribe such other value, as it deems fit;

(ii) complaints against unfair contracts, where the value of goods or services paid as consideration does not exceed ten crore rupees;

(iii) appeals against the orders of any District Commission within the State; and

(b) to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any District Commission within the State, where it appears to the State Commission that such District Commission has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested or has acted in exercise of its jurisdiction illegally or with material irregularity.

(2) The jurisdiction, powers and authority of the State Commission may be exercised by Benches thereof, and a Bench may be constituted by the President with one or more members as the President may deem fit:

Provided that the senior-most member shall preside over the Bench.

(3) Where the members of a Bench differ in opinion on any point, the points shall be decided according to the opinion of the majority, if there is a majority, but if the members are equally divided, they shall state the point or points on which they differ, and make a reference to the President who shall either hear the point or points himself or refer the case for hearing on such point or points by one or more of the other members and such point or points shall be decided according to the opinion of the majority of the members who have heard the case, including those who first heard it:
Provided that the President or the other members, as the case may be, shall give opinion on the point or points so referred within a period of one month from the date of such reference.

(4) A complaint shall be instituted in a State Commission within the limits of whose jurisdiction,-
(a) the opposite party or each of the opposite parties, where there are more than one, at the time of the institution of the complaint, ordinarily resides or carries on business or has a branch office or personally works for gain; or

(b) any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides, or carries on business or has a branch office or personally works for gain, provided in such case, the permission of the State Commission is given; or

(c) the cause of action, wholly or in part, arises; or

(d) the complainant resides or personally works for gain.

48. Transfer of cases. – On the application of the complainant or of its own motion, the State Commission may, at any stage of the proceeding, transfer any complaint pending before a District Commission to another District Commission within the State if the interest of justice so requires.

49. Procedure applicable to State Commission. – (1) The provisions relating to complaints under sections 35, 36, 37, 38 and 39 shall, with such modifications as may be necessary, be applicable to the disposal of complaints by the State Commission.
(2) Without prejudice to the provisions of sub-section (1), the State Commission may also declare any terms of contract, which is unfair to any consumer, to be null and void.

50. Review by State Commission in certain cases. – The State Commission shall have the power to review any of the order passed by it if there is an error apparent on the face of the record, either of its own motion or on an application made by any of the parties within thirty days of such order.

51. Appeal to National Commission. – (1) Any person aggrieved by an order made by the State Commission in exercise of its powers conferred by sub-clause (i) or (ii) of clause (a) of sub-section (1) of section 47 may prefer an appeal against such order to the National Commission within a period of thirty days from the date of the order in such form and manner as may be prescribed:

Provided that the National Commission shall not entertain the appeal after the expiry of the said period of thirty days unless it is satisfied that there was sufficient cause for not filing it within that period:

Provided further that no appeal by a person, who is required to pay any amount in terms of an order of the State Commission, shall be entertained by the National Commission unless the appellant has deposited fifty per cent. of that amount in the manner as may be prescribed.
(2) Save as otherwise expressly provided under this Act or by any other law for the time being in force, an appeal shall lie to the National Commission from any order passed in appeal by any State Commission, if the National Commission is satisfied that the case involves a substantial question of law.
(3) In an appeal involving a question of law, the memorandum of appeal shall precisely state the substantial question of law involved in the appeal.
(4) Where the National Commission is satisfied that a substantial question of law is involved in any case, it shall formulate that question and hear the appeal on that question:
Provided that nothing in this sub-section shall be deemed to take away or abridge the power of the National Commission to hear, for reasons to be recorded in writing, the appeal on any other substantial question of law, if it is satisfied that the case involves such question of law.
(5) An appeal may lie to the National Commission under this section from an order passed ex parte by the State Commission.

52. Hearing of appeal. – An appeal filed before the State Commission or the National Commission, as the case may be, shall be heard as expeditiously as possible and every endeavour shall be made to dispose of the appeal within a period of ninety days from the date of its admission:

Provided that no adjournment shall ordinarily be granted by the State Commission or the National Commission, as the case may be, unless sufficient cause is shown and the reasons for grant of adjournment have been recorded in writing by such Commission:
Provided further that the State Commission or the National Commission, as the case may be, shall make such orders as to the costs occasioned by the adjournment, as may be specified by regulations:
Provided also that in the event of an appeal being disposed of after the period so specified, the State Commission or the National Commission, as the case may be, shall record in writing the reasons for the same at the time of disposing of the said appeal.

53. Establishment of National Consumer Disputes Redressal Commission. – (1) The Central Government shall, by notification, establish a National Consumer Disputes Redressal Commission, to be known as the National Commission.
(2) The National Commission shall ordinarily function at the National Capital Region and perform its functions at such other places as the Central Government may in consultation with the National Commission notify in the Official Gazette:
Provided that the Central Government may, by notification, establish regional Benches of the National Commission, at such places, as it deems fit.

54. Composition of National Commission. – The National Commission shall consist of-
(a) a President; and

(b) not less than four and not more than such number of members as may be prescribed.

55. Qualifications, etc., of President and members of National Commission. – (1) The Central Government may, by notification, make rules to provide for qualifications, appointment, term of office, salaries and allowances, resignation, removal and other terms and conditions of service of the President and members of the National Commission:
Provided that the President and members of the National Commission shall hold office for such term as specified in the rules made by the Central Government but not exceeding five years from the date on which he enters upon his office and shall be eligible for re-appointment:
Provided further that no President or members shall hold office as such after he has attained such age as specified in the rules made by the Central Government which shall not exceed,-
(a) in the case of the President, the age of seventy years;

(b) in the case of any other member, the age of sixty-seven years.

(2) Neither the salary and allowances nor the other terms and conditions of service of President and members of the National Commission shall be varied to his disadvantage after his appointment.

56. Transitional provision. – The President and every other member appointed immediately before the commencement of section 177 of the Finance Act, 2017 (7 of 2017) shall continue to be governed by the provisions of the Consumer Protection Act, 1986 (68 of 1986) and the rules made thereunder as if this Act had not come into force.
57. Other officers and employees of National Commission. – (1) The Central Government shall provide, in consultation with the President of the National Commission, such number of officers and other employees to assist the National Commission in the discharge of its functions as it may think fit.
(2) The officers and other employees of the National Commission shall discharge their functions under the general superintendence of the President of the National Commission.
(3) The salaries and allowances payable to, and the other terms and conditions of service of, the officers and other employees of the National Commission shall be such as may be prescribed.

58. Jurisdiction of National Commission. – (1) Subject to the other provisions of this Act, the National Commission shall have jurisdiction-
(a) to entertain-

(i) complaints where the value of the goods or services paid as consideration exceeds rupees ten crore:

Provided that where the Central Government deems it necessary so to do, it may prescribe such other value, as it deems fit;
(ii) complaints against unfair contracts, where the value of goods or services paid as consideration exceeds ten crore rupees;

(iii) appeals against the orders of any State Commission;

(iv) appeals against the orders of the Central Authority; and

(b) to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any State Commission where it appears to the National Commission that such State Commission has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity.

(2) The jurisdiction, powers and authority of the National Commission may be exercised by Benches thereof and a Bench may be constituted by the President with one or more members as he may deem fit:
Provided that the senior-most member of the Bench shall preside over the Bench.
(3) Where the members of a Bench differ in opinion on any point, the points shall be decided according to the opinion of the majority, if there is a majority, but if the members are equally divided, they shall state the point or points on which they differ, and make a reference to the President who shall either hear the point or points himself or refer the case for hearing on such point or points by one or more of the other members and such point or points shall be decided according to the opinion of the majority of the members who have heard the case, including those who first heard it:
Provided that the President or the other member, as the case may be, shall give opinion on the point or points so referred within a period of two months from the date of such reference.

59. Procedure applicable to National Commission. – (1) The provisions relating to complaints under sections 35, 36, 37, 38 and 39 shall, with such modifications as may be considered necessary, be applicable to the disposal of complaints by the National Commission.
(2) Without prejudice to sub-section (1), the National Commission may also declare any terms of contract, which is unfair to any consumer to be null and void.

60. Review by National Commission in certain cases. – The National Commission shall have the power to review any of the order passed by it if there is an error apparent on the face of the record, either of its own motion or on an application made by any of the parties within thirty days of such order.

61. Power to set aside ex parte orders. – Where an order is passed by the National Commission ex parte, the aggrieved party may make an application to the Commission for setting aside such order.

62. Transfer of cases. – On the application of the complainant or of its own motion, the National Commission may, at any stage of the proceeding, in the interest of justice, transfer any complaint pending before the District Commission of one State to a District Commission of another State or before one State Commission to another State Commission.

63. Vacancy in office of President of National Commission. – When the office of President of the National Commission is vacant or a person occupying such office is, by reason of absence or otherwise, unable to perform the duties of his office, these shall be performed by the senior-most member of the National Commission:
Provided that where a retired Judge of a High Court or a person who has been a Judicial Member is a member of the National Commission, such member or where the number of such members is more than one, the senior-most person amongst such members, shall preside over the National Commission in the absence of President of that Commission.

64. Vacancies or defects in appointment not to invalidate orders. – No act or proceeding of the District Commission, the State Commission or the National Commission shall be invalid by reason only of the existence of any vacancy amongst its members or any defect in the constitution thereof.

65. Service of notice, etc. – (1) All notices, required by this Act to be served, shall be served by delivering or transmitting a copy thereof by registered post acknowledgment due addressed to opposite party against whom complaint is made or to the complainant by speed post or by such courier service, approved by the District Commission, the State Commission or the National Commission, as the case may be, or by any other mode of transmission of documents including electronic means.
(2) Without prejudice to the provisions contained in sub-section (1), the notice required by this Act may be served on an electronic service provider at the address provided by it on the electronic platform from where it provides its services as such and for this purpose, the electronic service provider shall designate a nodal officer to accept and process such notices.
(3) When an acknowledgement or any other receipt purporting to be signed by the opposite party or his agent or, as the case may be, by the complainant is received by the District Commission, the State Commission or the National Commission, as the case may be, or postal article containing the notice is received back by such District Commission, State Commission or the National Commission, with an endorsement purporting to have been made by a postal employee or by any person authorised by the courier service to the effect that the opposite party or his agent or complainant had refused to take delivery of the postal article containing the notice or had refused to accept the notice by any other means specified in sub-section (1) when tendered or transmitted to him, the District Commission or the State Commission or the National Commission, as the case may be, shall declare that the notice has been duly served on the opposite party or to the complainant, as the case may be:
Provided that where the notice was properly addressed, pre-paid and duly sent by registered post acknowledgment due, a declaration referred to in this sub-section shall be made notwithstanding the fact that the acknowledgment has been lost or misplaced, or for any other reason, has not been received by the District Commission, the State Commission or the National Commission, as the case may be, within thirty days from the date of issue of notice.
(4) All notices required to be served on an opposite party or to complainant, as the case may be, shall be deemed to be sufficiently served, if addressed in the case of the opposite party, to the place where business or profession is carried on, and in case of the complainant, the place where such person actually and voluntarily resides.

66. Experts to assist National Commission or State Commission. – Where the National Commission or the State Commission, as the case may be, on an application by a complainant or otherwise, is of the opinion that it involves the larger interest of consumers, it may direct any individual or organisation or expert to assist the National Commission or the State Commission, as the case may be.

67. Appeal against order of National Commission. – Any person, aggrieved by an order made by the National Commission in exercise of its powers conferred by sub-clause (i) or (ii) of clause (a) of sub-section (1) of section 58, may prefer an appeal against such order to the Supreme Court within a period of thirty days from the date of the order:
Provided that the Supreme Court may entertain an appeal after the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not filing it within that period:
Provided further that no appeal by a person who is required to pay any amount in terms of an order of the National Commission shall be entertained by the Supreme Court unless that person has deposited fifty per cent. of that amount in the manner as may be prescribed.

68. Finality of orders. – Every order of a District Commission or the State Commission or the National Commission, as the case may be, shall, if no appeal has been preferred against such order under the provisions of this Act, be final.

69. Limitation period. – (1) The District Commission, the State Commission or the National Commission shall not admit a complaint unless it is filed within two years from the date on which the cause of action has arisen.

(2) Notwithstanding anything contained in sub-section (1), a complaint may be entertained after the period specified in sub-section (1), if the complainant satisfies the District Commission, the State Commission or the National Commission, as the case may be, that he had sufficient cause for not filing the complaint within such period:

Provided that no such complaint shall be entertained unless the District Commission or the State Commission or the National Commission, as the case may be, records its reasons for condoning such delay.

70. Administrative control. – (1) The National Commission shall have the authority to lay down such adequate standards in consultation with the Central Government from time to time, for better protection of the interests of consumers and for that purpose, shall have administrative control over all the State Commissions in the following matters, namely:-

(a) monitoring performance of the State Commissions in terms of their disposal by calling for periodical returns regarding the institution, disposal and pendency of cases;

(b) investigating into any allegations against the President and members of a State Commission and submitting inquiry report to the State Government concerned along with copy endorsed to the Central Government for necessary action;

(c) issuance of instructions regarding adoption of uniform procedure in the hearing of matters, prior service of copies of documents produced by one party to the opposite parties, furnishing of english translation of judgments written in any language, speedy grant of copies of documents;

(d) overseeing the functioning of the State Commission or the District Commission either by way of inspection or by any other means, as the National Commission may like to order from time to time, to ensure that the objects and purposes of the Act are best served and the standards set by the National Commission are implemented without interfering with their quasi-judicial freedom.

(2) There shall be a monitoring cell to be constituted by the President of the National Commission to oversee the functioning of the State Commissions from the administrative point of view.
(3) The State Commission shall have administrative control over all the District Commissions within its jurisdiction in all matters referred to in sub-section (1).

(4) The National Commission and the State Commissions shall furnish to the Central Government periodically or as and when required, any information including the pendency of cases in such form and manner as may be prescribed.

(5) The State Commission shall furnish, periodically or as and when required to the State Government any information including pendency of cases in such form and manner as may be prescribed.

71. Enforcement of orders of District Commission, State Commission and National Commission. – Every order made by a District Commission, State Commission or the National Commission shall be enforced by it in the same manner as if it were a decree made by a Court in a suit before it and the provisions of Order XXI of the First Schedule to the Code of Civil Procedure, 1908 (5 of 1908) shall, as far as may be, applicable, subject to the modification that every reference therein to the decree shall be construed as reference to the order made under this Act.

72. Penalty for noncompliance of order. – (1) 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.

(2) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), the District Commission, the State Commission or the National Commission, as the case may be, shall have the power of a Judicial Magistrate of first class for the trial of offences under sub-section (1), and on conferment of such powers, the District Commission or the State Commission or the National Commission, as the case may be, shall be deemed to be a Judicial Magistrate of first class for the purposes of the Code of Criminal Procedure, 1973.

(3) Save as otherwise provided, the offences under sub-section (1) shall be tried summarily by the District Commission or the State Commission or the National Commission, as the case may be.

73. Appeal against order passed under section 72. – (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), where an order is passed under sub-section (1) of section 72, an appeal shall lie, both on facts and on law from-

(a) the order made by the District Commission to the State Commission;

(b) the order made by the State Commission to the National Commission; and

(c) the order made by the National Commission to the Supreme Court.

(2) Except as provided in sub-section (1), no appeal shall lie before any court, from any order of a District Commission or a State Commission or the National Commission, as the case may be.
(3) Every appeal under this section shall be preferred within a period of thirty days from the date of order of a District Commission or a State Commission or the National Commission, as the case may be:
Provided that the State Commission or the National Commission or the Supreme Court, as the case may be, may entertain an appeal after the expiry of the said period of thirty days, if it is satisfied that the appellant had sufficient cause for not preferring the appeal within the said period of thirty days.

CHAPTER V

Mediation

74. Establishment of consumer mediation cell. – (1) The State Government shall establish, by notification, a consumer mediation cell to be attached to each of the District Commissions and the State Commissions of that State.
(2) The Central Government shall establish, by notification, a consumer mediation cell to be attached to the National Commission and each of the regional Benches.
(3) A consumer mediation cell shall consist of such persons as may be prescribed.
(4) Every consumer mediation cell shall maintain-
(a) a list of empanelled mediators;

(b) a list of cases handled by the cell;

(c) record of proceeding; and

(d) any other information as may be specified by regulations.

(5) Every consumer mediation cell shall submit a quarterly report to the District Commission, State Commission or the National Commission to which it is attached, in the manner specified by regulations.

75. Empanelment of mediators. – (1) For the purpose of mediation, the National Commission or the State Commission or the District Commission, as the case may be, shall prepare a panel of the mediators to be maintained by the consumer mediation cell attached to it, on the recommendation of a selection committee consisting of the President and a member of that Commission.
(2) The qualifications and experience required for empanelment as mediator, the procedure for empanelment, the manner of training empanelled mediators, the fee payable to empanelled mediator, the terms and conditions for empanelment, the code of conduct for empanelled mediators, the grounds on which, and the manner in which, empanelled mediators shall be removed or empanelment shall be cancelled and other matters relating thereto, shall be such as may be specified by regulations.
(3) The panel of mediators prepared under sub-section (1) shall be valid for a period of five years, and the empanelled mediators shall be eligible to be considered for re-empanelment for another term, subject to such conditions as may be specified by regulations.

76. Nomination of mediators from panel. – The District Commission, the State Commission or the National Commission shall, while nominating any person from the panel of mediators referred to in section 75, consider his suitability for resolving the consumer dispute involved.

77. Duty of mediator to disclose certain facts. – It shall be the duty of the mediator to disclose-
(a) any personal, professional or financial interest in the outcome of the consumer dispute;

(b) the circumstances which may give rise to a justifiable doubt as to his independence or impartiality; and

(c) such other facts as may be specified by regulations.

78. Replacement of mediator in certain cases. – Where the District Commission or the State Commission or the National Commission, as the case may be, is satisfied, on the information furnished by the mediator or on the information received from any other person including parties to the complaint and after hearing the mediator, it shall replace such mediator by another mediator.

79. Procedure for mediation. – (1) The mediation shall be held in the consumer mediation cell attached to the District Commission, the State Commission or the National Commission, as the case may be.
(2) Where a consumer dispute is referred for mediation by the District Commission or the State Commission or the National Commission, as the case may be, the mediator nominated by such Commission shall have regard to the rights and obligations of the parties, the usages of trade, if any, the circumstances giving rise to the consumer dispute and such other relevant factors, as he may deem necessary and shall be guided by the principles of natural justice while carrying out mediation.
(3) The mediator so nominated shall conduct mediation within such time and in such manner as may be specified by regulations.

80. Settlement through mediation. – (1) Pursuant to mediation, if an agreement is reached between the parties with respect to all of the issues involved in the consumer dispute or with respect to only some of the issues, the terms of such agreement shall be reduced to writing accordingly, and signed by the parties to such dispute or their authorised representatives.
(2) The mediator shall prepare a settlement report of the settlement and forward the signed agreement along with such report to the concerned Commission.
(3) Where no agreement is reached between the parties within the specified time or the mediator is of the opinion that settlement is not possible, he shall prepare his report accordingly and submit the same to the concerned Commission.

81. Recording settlement and passing of order. – (1) The District Commission or the State Commission or the National Commission, as the case may be, shall, within seven days of the receipt of the settlement report, pass suitable order recording such settlement of consumer dispute and dispose of the matter accordingly.
(2) Where the consumer dispute is settled only in part, the District Commission or the State Commission or the National Commission, as the case may be, shall record settlement of the issues which have been so settled and continue to hear other issues involved in such consumer dispute.
(3) Where the consumer dispute could not be settled by mediation, the District Commission or the State Commission or the National Commission, as the case may be, shall continue to hear all the issues involved in such consumer dispute.

CHAPTER VI

Product Liability

82. Application of Chapter. – This Chapter shall apply to every claim for compensation under a product liability action by a complainant for any harm caused by a defective product manufactured by a product manufacturer or serviced by a product service provider or sold by a product seller.

83. Product liability action. – A product liability action may be brought by a complainant against a product manufacturer or a product service provider or a product seller, as the case may be, for any harm caused to him on account of a defective product.

84. Liability of product manufacturer. – (1) A product manufacturer shall be liable in a product liability action, if-

(a) the product contains a manufacturing defect; or

(b) the product is defective in design; or

(c) there is a deviation from manufacturing specifications; or

(d) the product does not conform to the express warranty; or

(e) the product fails to contain adequate instructions of correct usage to prevent any harm or any warning regarding improper or incorrect usage.

(2) A product manufacturer shall be liable in a product liability action even if he proves that he was not negligent or fraudulent in making the express warranty of a product.

85. Liability of product service provider. – A product service provider shall be liable in a product liability action, if-
(a) the service provided by him was faulty or imperfect or deficient or inadequate in quality, nature or manner of performance which is required to be provided by or under any law for the time being in force, or pursuant to any contract or otherwise; or

(b) there was an act of omission or commission or negligence or conscious withholding any information which caused harm; or

(c) the service provider did not issue adequate instructions or warnings to prevent any harm; or

(d) the service did not conform to express warranty or the terms and conditions of the contract.

86. Liability of product sellers. – A product seller who is not a product manufacturer shall be liable in a product liability action, if-
(a) he has exercised substantial control over the designing, testing, manufacturing, packaging or labelling of a product that caused harm; or

(b) he has altered or modified the product and such alteration or modification was the substantial factor in causing the harm; or

(c) he has made an express warranty of a product independent of any express warranty made by a manufacturer and such product failed to conform to the express warranty made by the product seller which caused the harm; or

(d) the product has been sold by him and the identity of product manufacturer of such product is not known, or if known, the service of notice or process or warrant cannot be effected on him or he is not subject to the law which is in force in India or the order, if any, passed or to be passed cannot be enforced against him; or

(e) he failed to exercise reasonable care in assembling, inspecting or maintaining such product or he did not pass on the warnings or instructions of the product manufacturer regarding the dangers involved or proper usage of the product while selling such product and such failure was the proximate cause of the harm.

87. Exceptions to product liability action. – (1) A product liability action cannot be brought against the product seller if, at the time of harm, the product was misused, altered, or modified.
(2) In any product liability action based on the failure to provide adequate warnings or instructions, the product manufacturer shall not be liable, if-
(a) the product was purchased by an employer for use at the workplace and the product manufacturer had provided warnings or instructions to such employer;

(b) the product was sold as a component or material to be used in another product and necessary warnings or instructions were given by the product manufacturer to the purchaser of such component or material, but the harm was caused to the complainant by use of the end product in which such component or material was used;

(c) the product was one which was legally meant to be used or dispensed only by or under the supervision of an expert or a class of experts and the product manufacturer had employed reasonable means to give the warnings or instructions for usage of such product to such expert or class of experts; or

(d) the complainant, while using such product, was under the influence of alcohol or any prescription drug which had not been prescribed by a medical practitioner.

(3) A product manufacturer shall not be liable for failure to instruct or warn about a danger which is obvious or commonly known to the user or consumer of such product or which, such user or consumer, ought to have known, taking into account the characteristics of such product.

CHAPTER VII

Offences and Penalties

88. Penalty for noncompliance of direction of Central Authority. – 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.

89. Punishment for false or misleading advertisement. – 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.

90. Punishment for manufacturing for sale or storing, selling or distributing or importing products containing adulterant. – (1) Whoever, by himself or by any other person on his behalf, manufactures for sale or stores or sells or distributes or imports any product containing an adulterant shall be punished, if such act-
(a) does not result in any injury to the consumer, with imprisonment for a term which may extend to six months and with fine which may extend to one lakh rupees;

(b) causing injury not amounting to grievous hurt to the consumer, with imprisonment for a term which may extend to one year and with fine which may extend to three lakh rupees;

(c) causing injury resulting in grievous hurt to the consumer, with imprisonment for a term which may extend to seven years and with fine which may extend to five lakh rupees; and

(d) results in the death of a consumer, with 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.

(2) The offences under clauses (c) and (d) of sub-section (1) shall be cognizable and non-bailable.
(3) Notwithstanding the punishment under sub-section (1), the court may, in case of first conviction, suspend any licence issued to the person referred to in that sub-section, under any law for the time being in force, for a period up to two years, and in case of second or subsequent conviction, cancel the licence.

Explanation. – For the purposes of this section,-
(a) “adulterant” means any material including extraneous matter which is employed or used for making a product unsafe;

(b) “grievous hurt” shall have the same meaning as assigned to it in section 320 of the Indian Penal Code.

91. Punishment for manufacturing for sale or for storing or selling or distributing or importing spurious goods. – (1) Whoever, by himself or by any other person on his behalf, manufactures for sale or stores or sells or distributes or imports any spurious goods shall be punished, if such act-
(a) causing injury not amounting to grievous hurt to the consumer, with imprisonment for a term which may extend to one year and with fine which may extend to three lakh rupees;

(b) causing injury resulting in grievous hurt to the consumer, with imprisonment for a term which may extend to seven years and with fine which may extend to five lakh rupees;

(c) results in the death of a consumer, with imprisonment for a term which shall not be less than seven years, but may extend to imprisonment for life and with fine which shall not be less than ten lakh rupees.

(2) The offences under clauses (b) and (c) of sub-section (1) shall be cognizable and non-bailable.
(3) Notwithstanding the punishment under sub-section (1), the court may, in case of first conviction, suspend any licence issued to the person referred to in that sub-section, under any law for the time being in force, for a period up to two years, and in case of second or subsequent conviction, cancel the licence.

92. Cognizance of offence by court. – No cognizance shall be taken by a competent court of any offence under sections 88 and 89 except on a complaint filed by the Central Authority or any officer authorised by it in this behalf.

93. Vexatious search. – The Director General or any other officer, exercising powers under section 22, who knows that there are no reasonable grounds for so doing, and yet-
(a) searches, or causes to be searched any premises; or

(b) seizes any record, register or other document or article, shall, for every such offence, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to ten thousand rupees or with both.

CHAPTER VIII

Miscellaneous

94. Measures to prevent unfair trade practices in -commerce, direct selling, etc. – For the purposes of preventing unfair trade practices in e-commerce, direct selling and also to protect the interest and rights of consumers, the Central Government may take such measures in the manner as may be prescribed.

95. Presidents, members, Chief Commissioner, Commissioner and certain officers to be public servants. – The Presidents and members of the District Commission, the State Commission and the National Commission, and officers and other employees thereof, the Chief Commissioner and the Commissioner of the Central Authority, the Director General, the Additional Director General, the Director, the Joint Director, the Deputy Director and the Assistant Director and all other officers and employees of the Central Authority and other persons performing any duty under this Act, while acting or purporting to act in pursuance of any of the provisions of this Act, shall be deemed to be public servants within the meaning of section 21 of the Indian Penal Code.

96. Compounding of offences. – (1) Any offence punishable under sections 88 and 89, may, either before or after the institution of the prosecution, be compounded, on payment of such amount as may be prescribed:
Provided that no compounding of such offence shall be made without the leave of the court before which a complaint has been filed under section 92:
Provided further that such sum shall not, in any case, exceed the maximum amount of the fine, which may be imposed under this Act for the offence so compounded.
(2) The Central Authority or any officer as may be specially authorised by him in this behalf, may compound offences under sub-section (1).
(3) Nothing in sub-section (1) shall apply to person who commits the same or similar offence, within a period of three years from the date on which the first offence, committed by him, was compounded.
Explanation. – For the purposes of this sub-section, any second or subsequent offence committed after the expiry of a period of three years from the date on which the offence was previously compounded, shall be deemed to be a first offence.
(4) Where an offence has been compounded under sub-section (1), no proceeding or further proceeding, as the case may be, shall be taken against the offender in respect of the offence so compounded.
(5) The acceptance of the sum of money for compounding an offence in accordance with sub-section (1) by the Central Authority or an officer of the Central Authority empowered in this behalf shall be deemed to amount to an acquittal within the meaning of the Code of Criminal Procedure, 1973 (2 of 1974).

97. Manner of crediting penalty. – The penalty collected under section 21 and the amount collected under section 96 shall be credited to such fund as may be prescribed.

98. Protection of action taken in good faith. – No suit, prosecution or other legal proceeding shall lie against the Presidents and members of the District Commission, the State Commission and the National Commission, the Chief Commissioner, the Commissioner, any officer or employee and other person performing any duty under this Act, for any act which is in good faith done or intended to be done in pursuance of this Act or under any rule or order made thereunder.

99. Power to give directions by Central Government. – (1) Without prejudice to the foregoing provisions of this Act, the Central Authority, shall, in exercise of its powers or the performance of its functions under this Act, be bound by such directions on questions of policy, as the Central Government may give in writing to it from time to time:
Provided that the Central Authority shall, as far as practicable, be given an opportunity to express its views before any direction is given under this sub-section.
(2) The decision of the Central Government whether a question is one of policy or not shall be final.

100. Act not in derogation of any other law. – The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.

101. Power of Central Government to make rules. – (1) The Central Government may, by notification, make rules for carrying out any of the provisions contained in this Act.
(2) Without prejudice to the generality of the foregoing power, such rules may provide for, –
(a) the other class or classes of persons including public utility entities under clause (19) of section 2;

(b) the contest, lottery, game of chance or skill which are to be exempted under item (b) of sub-clause (iii) of clause (47) of section 2;

(c) the manner of issuing bill or cash memo or receipt for goods sold or services rendered under sub-clause (vii) of clause (47) of section 2;

(d) the number of other official or non-official members of the Central Council under clause (b) of sub-section (2) of section 3;

(e) the time and place of meeting of Central Council and the procedure for the transaction of its business under sub-section (2) of section 4;

(f) the number of Commissioners in the Central Authority under sub-section (2) of section 10;

(g) the qualifications for appointment, method of recruitment, procedure of appointment, term of office, salaries and allowances, resignation, removal and other terms and conditions of service of the Chief Commissioner and other Commissioners of the Central Authority under section 11;

(h) the salaries and allowances payable to, and the other terms and conditions of service of, the officers and other employees of the Central Authority under sub-section (2) of section 13;

(i) the qualifications for appointment of Director General, Additional Director General, Director, Joint Director, Deputy Director and Assistant Director and the manner of appointment under sub-section (2) of section 15;

(j) the manner of taking copies or extracts of document, record or article seized or produced before returning to the person under sub-section (3) of section 22;

(k) the officer and the manner of disposing of articles which are subject to speedy or natural decay under sub-section (4) of section 22;

(l) the form and manner for preparing annual statement of accounts by the Central Authority in consultation with the Comptroller and Auditor-General of India under sub-section (1) of section 26;

(m) the form in which, and the time within which, an annual report, other reports and returns may be prepared by the Central Authority under sub-section (1) of section 27;

(n) the qualifications for appointment, method of recruitment, procedure for appointment, term of office, resignation and removal of President and members of the District Commission under section 29;

(o) the other value of goods and services in respect of which the District Commission shall have jurisdiction to entertain complaints under proviso to sub-section (1) of section 34;

(p) the manner of electronically filing complaint under the proviso to sub-section (1) of section 35;

(q) the fee, electronic form and the manner of payment of fee for filing complaint under sub-section (2) of section 35;

(r) the cases which may not be referred for settlement by mediation under sub-section (1) of section 37;

(s) the manner of authentication of goods sampled in case of the National Commission under clause (c) of sub-section (2) of section 38;

(t) any other matter which may be prescribed under clause (f) of sub-section (9) of section 38;

(u) the fund where the amount obtained may be credited and the manner of utilisation of such amount under sub-section (2) of section 39;

(v) the form and the manner in which appeal may be preferred to the State Commission under section 41;

(w) the qualifications for appointment, method of recruitment, procedure for appointment, term of office, resignation and removal of the President and members of the State Commission under section 43;

(x) the other value of goods and services in respect of which the State Commission shall have jurisdiction under the proviso to sub-clause (i) of clause (a) of sub-section (1) of section 47;

(y) the form and manner of filing appeal to the National Commission, and the manner of depositing fifty per cent. of the amount before filing appeal, under sub-section (1) of section 51;

(z) the number of members of the National Commission under clause (b) of section 54;

(za) the qualifications, appointment, term of office, salaries and allowances, resignation, removal and other terms and conditions of service of the President and members of the National Commission under sub-section (1) of section 55;

(zb) the salaries and allowances payable to, and other terms and conditions of service of, the officers and other employees of the National Commission under sub-section (3) of section 57;

(zc) the other value of goods and services in respect of which the National Commission shall have jurisdiction under the proviso to sub-clause (i) of clause (a) of sub-section (1) of section 58;

(zd) the manner of depositing fifty per cent. of the amount under the second proviso to section 67;

(ze) the form in which the National Commission and the State Commission shall furnish information to the Central Government under sub-section (4) of section 70;

(zf) the persons in the consumer mediation cell under sub-section (3) of section 74;

(zg) the measures to be taken by the Central Government to prevent unfair trade practices in e-commerce, direct selling under section 94;

(zh) the amount for compounding offences under sub-section (1) of section 96;

(zi) the fund to which the penalty and amount collected shall be credited under section 97; and

(zj) any other matter which is to be, or may be, prescribed, or in respect of which provisions are to be, or may be, made by rules.

102. Power of State Government to make rules. – (1) The State Governments may, by notification, make rules for carrying out the provisions of this Act:

Provided that the Central Government may, frame model rules in respect of all or any of the matters with respect to which the State Government may make rules under this section, and where any such model rules have been framed in respect of any such matter, they shall apply to the State until the rules in respect of that matter is made by the State Government and while making any such rules, so far as is practicable, they shall conform to such model rules.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:-
(a) the other class or classes of persons including public utility entities under clause (19) of section 2;

(b) the contest, lottery, game of chance or skill which are to be exempted under item (b) of sub-clause (iii) of clause (47) of section 2;

(c) the number of other official or non-official members of the State Council under clause (b) of sub-section (2) of section 6;

(d) the time and place of meeting of the State Council and the procedure for the transaction of its business under sub-section (4) of section 6;

(e) the number of other official and non-official members of District Council under clause (b) of sub-section (2) of section 8;

(f) the time and place of meeting of the District Council and procedure for the transaction of its business under sub-section (4) of section 8;

(g) the number of members of the District Commission under clause (b) of sub-section (2) of section 28;

(h) the salaries and allowances payable to, and other terms and conditions of service of, the President and members of the District Commission under section 30;

(i) the salaries and allowances payable to, and other terms and conditions of service of, the officers and other employees of the District Commission under sub-section (3) of section 33;

(j) the manner of authentication of goods sampled by the State Commission and the District Commission under clause (c) of sub-section (2) of section 38;

(k) the manner of depositing fifty per cent. of the amount before filing appeal under second proviso to section 41;

(l) the number of members of the State Commission under sub-section (3) of section 42;

(m) the salaries and allowances payable to, and other terms and conditions of service of, the President and members of the State Commission under section 44;

(n) the salaries and allowances payable to, and other terms and conditions of service of, the officers and other employees of the State Commission under sub-section (3) of section 46;

(o) the form in which the State Commission shall furnish information to the State Government under sub-section (5) of section 70;

(p) the persons in the consumer mediation cell under sub-section (3) of section 74;

(q) any other matter which is to be, or may be prescribed, or in respect of which provisions are to be, or may be, made by rules.

103. Power of National Commission to make regulations. – (1) The National Commission may, with the previous approval of the Central Government, by notification, make regulations not inconsistent with this Act to provide for all matters for which provision is necessary or expedient for the purpose of giving effect to the provisions of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such regulations may make provisions for-
(a) the costs for adjournment to be imposed by the District Commission under the second proviso to sub-section (7) of section 38;

(b) the costs for adjournment to be imposed by the State Commission or the National Commission, as the case may be, under the second proviso to section 52;

(c) the maintenance of any other information by the consumer mediation cell under sub-section (4) of section 74;

(d) the manner of submission of quarterly report by consumer mediation cell to the District Commission, the State Commission or the National Commission under sub-section (5) of section 74;

(e) the qualifications and experience required for empanelment as mediator, the procedure for empanelment, the manner of training empanelled mediators, the fee payable to empanelled mediator, the terms and conditions for empanelment, the code of conduct for empanelled mediators, the grounds on which, and the manner in which, empanelled mediators shall be removed or empanelment shall be cancelled and the other matters relating thereto under sub-section (2) of section 75;

(f) the conditions for re-empanelment of mediators for another term under sub-section (3) of section 75;

(g) the other facts to be disclosed by mediators under clause (c) of section 77;

(h) the time within which, and the manner in which, mediation may be conducted under sub-section (3) of section 79; and

(i) such other matter for which provision is to be, or may be, made by regulation.

104. Power of Central Authority to make regulations. – (1) The Central Authority may, with the previous approval of the Central Government, by notification, make regulations not inconsistent with this Act, for the purpose of giving effect to the provisions of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such regulations may provide for all or any of the following matters, namely:-
(a) the procedure for engaging experts and professionals and the number of such experts and professionals under sub-section (3) of section 13;

(b) the procedure for transaction of business and the allocation of business of the Chief Commissioner and Commissioner under sub-section (1) of section 14;

(c) the form, manner and time within which, inquiries or investigation made by the Director-General shall be submitted to the Central Authority under sub-section (5) of section 15; and

(d) such other matter for which provision is to be, or may be, made by regulation.

105. Rules and regulations to be laid before each House of Parliament. – (1) Every rule and every regulation made under this Act shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or regulation or both Houses agree that the rule or regulation shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule or regulation.
(2) Every rule made by a State Government under this Act shall be laid as soon as may be after it is made, before the State Legislature.

106. Power to remove difficulties. – If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order in the Official Gazette, make such provisions not inconsistent with the provisions of this Act as appear to it to be necessary or expedient for removing the difficulty:
Provided that no such order shall be made after the expiry of a period of two years from the commencement of this Act.

107. Repeal and savings. – (1) The Consumer Protection Act, 1986 (68 of 1986) is hereby repealed.
(2) Notwithstanding such repeal, anything done or any action taken or purported to have been done or taken under the Act hereby repealed shall, in so far as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken under the corresponding provisions of this Act.
(3) The mention of particular matters in sub-section (2) shall not be held to prejudice or affect the general application of section 6 of the General Clauses Act, 1897 (10 of 1897) with regard to the effect of repeal.

The Direct Selling Guidelines 2016

Ministry of Consumer Affairs, Food and Public Distribution

(Department of Consumer Affairs)

G.S.R. 1013(E). – The Government constituted on consisting an Inter-Ministerial Committee representatives from Ministry of Finance, the Department of Industrial Policy and Promotion, Department of Legal Affairs, Department of Information Technology and Ministry of Corporate Affairs, besides representatives of State Governments of Delhi, Andhra Pradesh and Kerala to look into the matters concerning the direct selling industry.

Based on the deliberations of the Inter-Ministerial Committee and consultations with the Stakeholders, the model guidelines for States & Union Territories, on direct selling, have been formulated for protecting the legitimate rights and interests of Industry and Consumers. It is envisaged in the guidelines that the State Governments will set up a mechanism to monitor/ supervise the activities of Direct Sellers, Direct Selling Entities regarding compliance of the guidelines for Direct Selling.

Any direct selling entity, conducting direct selling activities, shall submit an undertaking to the Department of Consumer Affairs by 9th December, 2016 stating that it is in compliance with these guidelines and shall also provide details of its incorporation. Being enforcement agencies, the State Governments & Union Territories may take necessary action to implement these guidelines.

The Guidelines are available on the website http://www.Consumeraffairs.nic.in
Enclosure: Model Guidelines on Direct Selling English and Hindi
With proforma for declaration Undertaking are attached.
Advisory to State Governments/ Union Territories:

Model Framework for Guidelines on Direct Selling

These guidelines, may be called the Direct Selling Guidelines 2016. These are issued as guiding principles for State Governments to consider regulating the business of “Direct Selling” and Multi-Level Marketing (MLM) and strengthen the existing regulatory mechanism on Direct Selling and MLM, for preventing fraud and protecting the legitimate rights and interests of consumers.

  1. Definitions. – In these Guidelines unless and otherwise required:
  2. “Act” means the Consumer Protection Act, 1986 (68 of 1986);
    2. “Consumer” shall have the same meaning as provided under the Consumer Protection Act, 1986;
    3. “Prospect” means a person to whom an offer or a proposal is made by the Direct Seller to join a Direct Selling opportunity;
    4. “Direct Seller” means a person appointed or authorized, directly or indirectly, by a Direct Selling Entity through a legally enforceable written contract to undertake direct selling business on principal to principal basis.
    5. “Network of Direct Selling” means a network of direct sellers at different levels of distribution, who may recruit or introduce or sponsor further levels of direct sellers, who they then support:
    Explanation. – “network of direct selling” shall mean any system of distribution or marketing adopted by a direct selling entity to undertake direct selling business and shall include the multi-level marketing method of distribution.
    6. “Direct Selling” means marketing, distribution and sale of goods or providing of services as a part of network of Direct Selling other than under a pyramid scheme,
    Provided that such sale of goods or services occurs otherwise than through a “permanent retail location” to the consumers, generally in their houses or at their workplace or through explanation and demonstration of such goods and services at a particular place
    7. “Direct Selling Entity”, means an entity, not being engaged in a pyramid scheme, which sells or offers to sell goods or services through a direct seller.
    Provided that “Direct Selling Entity” does not include any entity or business notified otherwise by the Government for the said purpose from time to time.
    8. “Goods” means goods as defined in the Sale of Goods Act, 1930 and “Service” means service as defined in the Consumer Protection Act, 1986;
    9. “Saleable” shall mean, with respect to goods and/ or services, unused and marketable, which has not expired, and which is not seasonal, discontinued or special promotion goods and/ or services;
    10. “Cooling-off Period” means the duration of time counted from the date when the direct seller and the direct selling entity enter into an agreement under Clause 4 and ending with date on which the contract is to be performed and within which the direct seller may repudiate the agreement without being subject to penalty for breach of contract;
    11. “Pyramid Scheme” means. – A multi layered network of subscribers to a scheme formed by subscribers enrolling one or more subscribers in order to receive any benefit, directly or indirectly, as a result of enrollment, action or performance of additional subscribers to the scheme. The subscribers enrolling further subscriber(s) occupy higher position and the enrolled subscriber(s) lower position, thus, with successive enrollments, they form multi-layered network of subscribers.
    Provided that the above definition of a “Pyramid Scheme” shall not apply to a multi layered network of subscribers to a scheme formed by a Direct Selling Entity, which consists of subscribers enrolling one or more subscribers in order to receive any benefit, directly or indirectly, where the benefit is as a result of sale of goods or services by subscribers and the scheme/ financial arrangement complies with all of the following:
    a) It has no provision that a Direct Seller will receive remuneration or incentives for the recruitment/ enrollment of new participants.
  3. b) It does not require a participant to purchase goods or services:
  4. for an amount that exceeds an amount for which such goods or services can be expected to be sold or resold to consumers;
  5. for a quantity of goods or services that exceeds an amount that can be expected to be consumed by, or sold or resold to consumers;
  6. c) It does not require a participant to pay any entry/ registration fee, cost of sales demonstration equipment and materials or other fees relating to participation;
  7. d) It provides a participant with a written contract describing the “material terms” of participation;
  8. e) It allows or provides for a participant a reasonable cooling-off period to participate or cancel participation in the scheme and receive a refund of any consideration given to participate in the operations;
  9. f) It allows or provides for a buy-back or repurchase policy for “currently marketable” goods or services sold to the participant at the request of the participant at reasonable terms;
  10. g) It establishes a grievance redressal mechanism for consumers, more particularly described in Clause 7 herein.

Explanation 1. – For the purposes of this proviso the term “material terms” shall means buy-back or repurchase policy, cooling-off period, warranty and refund policy

  1. “Money Circulation Scheme” has the same meaning as defined under the Prize Chits and Money Circulation Schemes (Banning) Act, 1978.
  2. “Remuneration System” means the system followed by the direct selling entity to compensate the direct seller which illustrates the mode of sharing of incentives, profits and commission, including financial and non-financial benefits, paid by the direct selling entity to the direct sellers, on a monthly or periodic or yearly basis or both, as the case may be. This system, for every Direct Selling entity, shall:
    a) Have no provision that a direct seller will receive remuneration from the recruitment to participate in such direct selling;
  3. b) ensure that direct sellers shall receive remuneration derived from the sale of goods or services;
  4. c) clearly disclose the method of calculation of remuneration.
  5. “State” includes a Union territory.
  6. Conditions for the setting up of Direct Selling business. – Every Direct selling entity intending to carry out direct selling business subsequent to the publication of the notification in the Gazette, shall within 90 days comply with the following set of conditions for the conduct of direct selling business:
    It shall
  7. be a registered legal entity under the laws of India.
  8. Provide a mandatory orientation session to all prospective direct sellers providing fair and accurate information on all aspects of the direct selling operation, including but not limited to the remuneration system and expected remuneration for newly recruited direct sellers;
  9. Provide accurate and complete information to prospective and existing direct sellers concerning the reasonable amount of remuneration opportunity, and related rights and obligations;
  10. Pay all dues and make with holdings from direct sellers in a commercially reasonable manner;
  11. Notify and provide a full refund or buy-back guarantee to every direct seller on reasonable commercial terms which can be exercised within a period of 30 days, from the date of the distribution of the goods or services to the direct seller;
  12. Notify and provide to every direct seller a cooling-off period which entitles such direct seller to return any goods/ services purchased by the direct seller during the cooling-off period;
  13. The promoter or key management personnel should not have been convicted of any criminal offense punishable with imprisonment in last 5 years by any Court of competent jurisdiction;
  14. It shall have an office with identified jurisdiction of its operation in the State to enable the consumers and direct seller to acquaint themselves with price of products, return or replacement of products and efficient delivery of goods and services, and post-sale redressal of grievances;
  15. Conditions for conduct of Direct Selling Business. – Every Direct Selling entity shall comply with the following conditions:
  16. It shall be the owner, holder, licensee of a trademark, service mark or any other identification mark which identifies the entity with the goods to be sold or supplied or services to be rendered;
  17. It shall issue proper identity document(s) to its Direct Sellers;
  18. It shall maintain proper records either manual or electronic of their business dealings, with complete details of their goods, services, terms of contract, price, income plan, details of direct sellers, including but not limited to enrollment, termination, active status, earning etc;
  19. a) Every Direct Selling entity shall maintain a “Register of Direct Sellers” wherein relevant details of each enrolled Direct Seller shall be updated and maintained;
  20. b) The details of Direct Sellers shall include and not be limited to verified proof of address, proof of identity and PAN;
  21. It shall maintain proper and updated website with all relevant details of the entity, contact information, its management, products, product information, product quality certificate, price, complete income plan, terms of contract with direct seller and complaint redressal mechanism for direct sellers and consumers. The website should have space for registering consumer complaints and should ensure that grievances are addressed within 45 days of making such complaints;
  22. It shall provide to all direct sellers their periodic account/ information concerning, as applicable, sales, purchases, details of earnings, commissions, bonus and other relevant data, in accordance with agreement with the direct sellers. All financial dues shall be paid and any withholding made in a commercially reasonable manner;
  23. It shall monitor the value of the purchases of all its Direct Sellers/ Distributors on a monthly basis and once the purchase value crosses the VAT threshold; it must intimate the Direct seller/ Distributor to pay the VAT;
  24. A Direct Selling entity shall not:
  25. a) Use misleading, deceptive or unfair recruiting practices, including misrepresentation of actual or potential sales or earnings, in their interaction with prospective or existing direct sellers;
  26. b) Make any factual representation to a prospective direct seller that cannot be verified or make any promise that cannot be fulfilled;
  27. c) Present any advantages of direct selling to any prospective direct seller in a false or deceptive manner;
  28. d) Make or cause, or permit to be made, any representation relating to its direct selling business, including remuneration system and agreement between itself and the direct seller, or to the goods or services being sold by itself or by the direct seller which is false or misleading;
  29. e) Engage in, or cause or permit, any conduct that is misleading or likely to mislead with regard to any material particulars relating to its direct selling business, including remuneration system and agreement between itself and the direct seller, or to the goods or services being sold by itself or by the direct seller;
  30. f) Use, or cause or permit to be used, fraud, coercion, harassment, or unconscionable or unlawful means in promoting its direct selling practice, including remuneration system and agreement between itself and the direct seller, or to the goods or services being sold by itself or by the direct seller;
  31. g) Require its direct sellers to provide any benefit, including entry fees and renewal fees or to purchase any sales demonstration equipment or material in order to participate in its direct selling operations;
  32. h) Provide any benefit to any person for the introduction or recruitment of one or more persons as direct sellers;
  33. i) Require the direct sellers to pay any money by way of minimum monthly subscription or renewal charges;
  34. Notwithstanding the distribution system adopted by a direct selling entity, the Direct Selling Entity shall be responsible for compliance of these Guidelines by any member of its network of direct selling, whether such member is appointed directly or indirectly by the Direct Selling Entity.
  35. Conditions for Direct Selling contract between Direct Seller/ Distributor and Direct Selling Entity. –
  36. Every Direct Selling entity shall execute a contract agreement, whether directly or indirectly, with Direct Sellers before enrollment:
  37. a) The Agreement shall be provided in a manner consistent with Section 10 of the Indian Contract Act, 1872;
  38. b) In addition to the rights and obligations of parties to this agreement under these guidelines or any other law in force, parties shall have rights and obligations that are coextensive with rights and obligations of parties under the Indian Contract Act, 1872;
  39. The agreement shall be made in writing, describing the material terms of participation and shall:
    a) Not compel or induce the direct seller to purchase goods or services in an amount that exceeds an amount that can be expected to be sold to consumers within a reasonable period of time;
  40. b) Allow or provide the direct seller a reasonable cooling-off period in which to cancel participation and receive a refund for goods or services purchased;
  41. c) Allow for the termination of contract, with reasonable notice, in such instances and on such terms where a direct seller is found to have made no sales of goods or services for a period of up to two years since the contract was entered into, or since the date of the last sale made by the direct seller;
  42. d) Allow or provide for a buy-back or repurchase policy for currently marketable goods or services sold to the direct seller at the said direct seller’s request at reasonable terms
  43. Certain obligations of Direct Sellers. –
  44. Direct Seller engaged in direct selling should carry their identity card and not visit the customer’s premises without prior appointment/ approval;
    2. At the initiation of a sales representation, without request, truthfully and clearly identify themselves, the identity of the direct selling entity, the nature of the goods or services sold and the purpose of the solicitation to the prospective consumer;
    3. Offer a prospective consumer accurate and complete explanations and demonstrations of goods and services, prices, credit terms, terms of payment, return policies, terms of guarantee, after-sales service;
    4. Provide the following information to the prospect/ consumers at the time of sale, namely:
    a) Name, address, registration number or enrollment number, identity proof and telephone number of the direct seller and details of direct selling entity;
  45. b) A description of the goods or services to be supplied;
  46. c) Explain to the consumer about the goods return policy of the company in the details before the transaction;
  47. d) The Order date, the total amount to be paid by the consumer along with the bill and receipt;
  48. e) Time and place for inspection of the sample and delivery of good;
  49. f) Information of his/ her rights to cancel the order and/ or to return the product in saleable condition and avail full refund on sums paid;
  50. g) Details regarding the complaint redressal mechanism;
  51. A direct seller shall keep proper book of accounts stating the details of the products, price, tax and the quantity and such other details in respect of the goods sold by him/ her, in such form as per applicable law.
  52. A direct seller shall not:
  53. a) Use misleading, deceptive and/ or unfair trade practices;
  54. b) Use misleading, false, deceptive, and/ or unfair recruiting practices, including misrepresentation of actual or potential sales or earnings and advantages of Direct Selling to any prospective direct seller, in their interaction with prospective direct sellers;
  55. c) Make any factual representation to a prospective direct seller that cannot be verified or make any promise that cannot be fulfilled;
  56. d) Present any advantages of Direct Selling to any prospective direct seller in a false and/ or a deceptive manner;
  57. e) Knowingly make, omit, engage, or cause, or permit to be made, any representation relating to the Direct Selling operation, including remuneration system and agreement between the Direct Selling entity and the direct seller, or the goods and/ or services being sold by such direct seller which is false and/ or misleading;
  58. f) Require or encourage direct sellers recruited by the first mentioned direct seller to purchase goods and/ or services in unreasonably large amounts;
  59. g) Provide any literature and/ or training material not restricted to collateral issued by the Direct Selling entity, to a prospective and/ or existing direct sellers both within and outside the parent Direct Selling entity, which has not been approved by the parent Direct Selling entity;
  60. h) Require prospective or existing direct sellers to purchase any literature or training materials or sales demonstration equipment.
  61. Relationship between Direct Selling Entity and Direct Seller. – 1.1 The relationship between Direct Selling entity and Direct Seller shall be determined as per the written agreement between the parties which shall contain the rights and obligations that are expressly provided as conditions for the conduct of Direct Selling business as well as provide for the obligation of the direct selling entity and the direct seller in terms of these guidelines;

1.2 All other rights and obligations shall be determined as per the express terms of written agreement between a Direct Selling entity and Direct Seller;
2. The Direct Selling entity will be liable for grievances arising out of sale of products, services or business opportunity by its Direct Sellers;
3. It will be the responsibility of the Direct Selling entity to monitor and control the practices/ methods adopted by the Direct Sellers;
7. Conduct for the Protection of Consumer. – 1. Direct Sellers and Direct Selling Entity shall take appropriate steps to ensure the protection of all private information provided by a consumer;
2. Direct Sellers and Direct Selling Entity shall be guided by the provision of the Consumer Protection Act 1986;
3. All complaints received over phone, email, website, post and walk-in should have a complaint number for tracing and tracking the complaint and record time taken for redressal;
4. Every Direct Selling company shall constitute a Grievance Redressal Committee whose composition, nature of responsibilities shall include but not limited to:
a) The Grievance Redressal Committee shall consist of at least three officers of the Direct Selling entity;

  1. b) The Grievance Redressal Committee shall address complaints and inform complainants of any action taken;
  2. c) Complaints may be made by any member of the general public against a Direct Seller of the company, an employee or any other officer of the entity;
  3. d) All such grievances will be resolved directly by the Direct Selling Entity;
  4. The direct selling entity shall provide information to the consumer upon purchase which shall contain:
    (a) the name of the purchaser and seller;

(b) the delivery date of goods or services;

(c) procedures for returning the goods; and

(d) warranty of the goods and exchange/ replacement of goods in case of defect. Provided that no Direct Seller shall, in pursuance of a sale, make any claim that is not consistent with claims authorized by the Direct Selling Entity.

  1. Any person who sells or offers for sale, including on an e-commerce platform/ marketplace, any product or service of a Direct Selling Entity must have prior written consent from the respective Direct Selling Entity in order to undertake or solicit such sale or offer.
    8. Prohibition of Pyramid Scheme & Money Circulation Scheme. – 1. No person or entity shall promote a Pyramid Scheme, as defined in Clause 1(11) or enroll any person to such scheme or participate in such arrangement in any manner whatsoever in the garb of doing Direct Selling business.
    2. No person or entity will participate in Money Circulation Scheme, as defined in Clause 1(12) in the garb of Direct Selling of Business Opportunities.
    9. Appointment of Monitoring Authority. – 1. The Nodal department to deal with the issues related to Direct Selling will be Department of Consumer Affairs at the Union and the respective State Governments in the States;
    2. The State Governments will also set up a mechanism to monitor/ supervise the activities of Direct Sellers, Direct Selling Entity regarding compliance of the guidelines for Direct Selling;
    3. Any direct selling entity conducting direct selling activities shall submit an undertaking to the Department of Consumer Affairs, stating that it is in compliance with these guidelines and shall also provide such details of its incorporation and other business details as may be notified from time to time.
    Declaration by Direct Selling Entities/ Companies

Proforma

Part – A

1 (i) Name of the Company (As Registered)
(ii) CIN No:
(iii) Name and address of Directors on Board (Enclose details)
2 Details of Registration (With Jurisdiction)
(a) Address of Registered Office (Enclose copy of Registration Certificate):
(b) Email :
(c) Telephone Nos:
(d) Company Website:
(e) Details of other registrations (with jurisdiction), if any

(Attach copy of Registration Certificate)

(f) Type of Entity (Private, Public, Trust, Ltd. Etc.)
3 Head Office
(a) Address
(b) E-mail
(c) Details of Key Management Personnel as per registration under the Companies Act:
(d) Details of Regional Offices:
(e) Nodal Officer for interacting with D/o Consumer Affairs;

(Name, designation, Tel No., e-mail, Fax, mobile No.)

4. Whether anyone from the Management was convicted by any court in the past within the past 5 years (from the date of application). If so, the details thereof;
5. Whether direct selling is of Products or services or both?
6. Details of License(s), Trade Mark or Principal Brand which indentifies the company:
7. i. Address/ Telephone Nos./ e-mails etc. of Customer Care & Grievance Redress Cells (HQ & Branches);
ii. Details of Consumer Grievance Redress Committee as per guidelines:
    a.     Member Name, Phone No and email:
    b.     Member Name, Phone No and email:
    c.     Member Name, Phone No and email:

Part B

(Direct Selling Business Details)

8. Details of Products/ Services offered (Give link of websites) Yes/ No
9. Please confirm the following about your direct selling scheme:-
(a) It has no provision that a Direct Seller will receive remuneration or incentives for the recruitment/ enrollment of new participants and provide that direct sellers will receive remuneration derived only from the sale of goods or services. Yes/ No
(b) It does not require a participant to purchase goods or services:
i. for an amount that exceeds an amount for which such goods or services can be expected to be sold or resold to consumers; Yes/ No
ii. for a quantity of goods or services that exceeds an amount that can be expected to be consumed by, or sold or resold to consumers; Yes/ No
(c) It does not require a participant to pay any entry/ registration fee, cost of sales demonstration equipment and materials or other fees relating to participation; Yes/ No
(d) It provides a participant with a written contract describing the “material terms” of participation; Yes/ No
(e) It allows or provides for a participant a reasonable cooling-off period to participate or cancel participation in the scheme and receive a refund of any consideration given to participate in the operations; Yes/ No
(f) It allows or provides for a buy-back or repurchase policy for “currently marketable” goods or services sold to the participant at the request of the participant at reasonable terms; Yes/ No
Note: 1. Give details in regard to the above in an enclosure.
2. In case any of the answers in this para is ‘No’, please provide full details with reasons in an enclosure.
10 (a) Whether proper identity document(s) to all the Direct Sellers are issued. Yes/ No
(b) Whether you maintain “Register of Direct Sellers” wherein relevant details of each enrolled Direct Seller is updated and maintained with details including verifiable proof of address, proof of identity and PAN as per the Income Tax Act. Yes/ No
(c) What is the mechanism for payment of VAT? Give details.
11. (a) The website is proper and updated regularly with all relevant details, contact information, details pertaining to management, products, product information and complaint redress mechanism for direct sellers and consumers. Yes/ No
(b) There are arrangements for registering consumer complaints online or otherwise and grievances are resolved within 45 days of date of making such complaints. Details to be provided. Yes/ No
12 Notes/ Remarks, if any.

Part – C

(Undertaking)

I/ We, …………… in the capacity of ……………… of the ……………… company/ firm declare that we are compliant with the following:

(a) We do not promote a Pyramid Scheme, as defined in Clause 1(11) or enroll any person to such scheme or participate in such arrangement in any manner whatsoever in the garb of doing Direct Selling business.

(b) We do not participate in Money Circulation Scheme, as defined in Clause 1(12) in the garb of Direct Selling of Business Opportunities.

(c) We are compliant with all the remaining aspects mentioned in the guidelines issued vide F. No. 21/18/2014- IT (Vol-II) dated 9th September, 2016 by the Department of Consumers, Ministry of Consumer Affairs, Food and Public Distribution and shall also provide such details as may be notified from time to time.

Place:
Seal of the
Company
 
Sd/-
Name …………………………..
Designation ………………….
Tel No. ………………………….
E-mail: …………………………

List of documents to be provided:

  1. Certificate of Registration/ Bye-laws/ Memorandum of Association
  2. List of Board of Directors, with contact details
  3. Brief details of direct selling scheme and compensation plan.
  4. Sample of contract with direct sellers/ distributors.

Guidelines for the Direct Selling Entities

FAQs

  1. Clause 1.4. – “Direct Seller” means a person appointed or authorized, directly or indirectly, by a Direct Selling Entity through a legally enforceable written contract to undertake direct selling business on principal to principal basis.” How shall digital and e-contracts be treated?
    Answer: The ‘written contract’ includes e-contracts or digital contracts and the same shall be governed as per the provisions of the Information Technology Act, 2000.
    2. Clause 1.6 (Proviso). – “Provided that such sale of goods or services occurs otherwise than through a “permanent retail location” to the consumers, generally in their houses or at their workplace or through explanation and demonstration of such goods and services at a particular place”. Does this Proviso mean that every sale needs to take place away from permanent retail location only?
    Answer: Clause 1.6 does not restrict/ preclude sales made from permanent retail location. However, direct selling entity will be governed by these guidelines.
    3. Clause 2.2. – “Provide a mandatory orientation session to all prospective direct sellers providing fair and accurate information on all aspects of the direct selling operation, including but not limited to the remuneration system and expected remuneration for newly recruited direct sellers”. Whether the training/ orientation provided by the Direct Seller to other prospective Direct Sellers would be in compliance to this clause?
    Answer: Yes, the training/ orientation will be provided by the Direct Selling Entity or by a Direct Seller or by any authorized representative of Direct Selling Entity, either in person or through any digital means.
    4. Clause 2.8. – “It shall have an office with identified jurisdiction of its operation in the State to enable the consumers and direct seller to acquaint themselves with price of products, return or replacement of products and efficient delivery of goods and services, and post-sale redressal of grievances.” Whether an office in one State can be designated as focal point for jurisdiction of two or more states?
    Answer: An office in one particular State can be designated having jurisdiction over two or more states, subject to the accessibility of the consumers, where Direct Sellers/ consumers can interact with the Direct Selling Entity/ Authorized representative of Direct Selling Entity.
    5. Clause 3.3 (b). – “The details of Direct Sellers shall include and not be limited to verified proof of address, proof of identity and PAN”. Should the Direct Selling Entity take verified proof of address, identity and PAN?
    Answer. The requirement of PAN shall be as per the provisions of the Income Tax Act, 1961. Direct Sellers should submit to Direct Selling Entity, any photo ID card as issued by the State or Central government. These ID cards could be from the following-: Aadhaar Card, Driving License, Voter ID Card, Passport and Ration Card or any other identity document issued by the state or central government which can be verified.
    6. Clause 3.8. – “Notwithstanding the distribution system adopted by a direct selling entity, the Direct Selling Entity shall be responsible for compliance of these Guidelines by any member of its network of direct selling, whether such member is appointed directly or indirectly by the Direct Selling Entity”. How will a Direct Selling Entity ensure compliance of these Guidelines by Direct Sellers?
    Answer. To comply to this clause, Direct Selling Entity shall sign an addendum to the current contracts with the existing Direct Sellers. For the Direct Sellers to be appointed herein-after, this clause shall be added in the contract signed by both the parties. The Direct Selling Entity should ensure that it contractually binds its Direct Sellers to comply with these Guidelines and take disciplinary action against reported non-compliance.
    7. Clause 4.2(c). – “Allow for the termination of contract, with reasonable notice, in such instances and on such terms where a direct seller is found to have made no sales of goods or services for a period of up to two years since the contract was entered into, or since the date of the last sale made by the Direct Seller”. When can the contract between Direct Selling Entity and Direct Seller be terminated?
    Answer: The date of termination shall be provided or governed by the respective conditions of the contract executed between Direct Selling Entity and Direct Seller or by giving notice of reasonable period by either party say one month or as per the provisions of the Indian Contract Act.
    8. Clause 6.2. – The Direct Selling Entity shall be liable for grievances arising out of sale of products and services or business opportunity by the Direct Seller. And
    Clause 6.3. – “It will be the responsibility of the Direct Selling entity to monitor and control the practices/ methods adopted by the Direct Sellers”.
    Does this mean that only the direct selling entity will be liable for all grievances arising out of sale of products and services or business opportunity by the direct seller?
    Answer. – It is clarified that the Direct Selling Entity will be responsible for the quality of products and services and it will guide and help the Direct Seller to follow best practices in the interest of consumers. The scope and specific liabilities of the Direct Seller in such cases will be defined in unambiguous terms in the contract signed. By way of providing in the contract, every Direct Selling Entity shall define and develop some mechanism to monitor the practices being adopted by its Direct Sellers.
    9. Clause 7.5. – Industry: It appears to be a typographical error in this Clause. As the consumer is buying the products or services from the Direct Sellers, it should be the Direct Seller which will provide various details listed in this sub-clause. Please clarify.
    Answer. – Yes, it should be the Direct Seller. Please read Direct Seller in place of Direct Selling entity in this sub-clause.

Published vide Notification No. G.S.R. 1013 (E), dated 26th October, 2016

Consumer Laws

BUREAU OF INDIAN STANDARDS  (RECOGNITION OF CONSUMERS’ ASSOCIATIONS) RULES, 1991

BUREAU OF INDIAN STANDARDS
(RECOGNITION OF CONSUMERS’
ASSOCIATIONS) RULES, 1991
1

GSR 619(E) DATED 9-10-1991

In exercise of the powers conferred by section 37 of the Bureau of Indian Standards Act, 1986 (63 of 1986), the Central Govern­ment hereby makes the following rules, namely:—

Short title and commencement.

1.    (1) These rules may be called the Bureau of Indian Standards (Recognition
of Consumers Associations) Rules, 1991.

(2) They shall come into force on the date of their publication in the Official Gazette.

Definitions.

2.    In these rules, unless the context otherwise requires —

(a)   “Act” means the Bureau of Indian Standards Act, 1986 ( 63 of 1986);

(b)   “Form” means a Form appended to the Schedule to these rules;

(c)   “Ministry” means the Ministry of Civil Supplies, Con­sumer Affairs and Public Distribution; and

(d)   “Principal Officer” in relation to a consumer associa­tion means any individual who is specifically authorised in writing or by means of a resolution adopted by such consumers’ association in that behalf.

Application for recognition of consumers’ association.

3.    (1) Every consumers’ association which is desirous of being recognised as
a registered Consumers’ Association —

(a)   shall have not less than fifty consumers as its members; and

(b)   shall make an application for such recognition in triplicate to the Bureau of Indian Standards in Form I.

(2) Every application made under sub-rule (1) shall be accompa­nied by a bank draft of rupees one thousand.

(3) On receipt of an application made under sub-rule (1), the Bureau of Indian Standards shall note thereon the date of its receipt and shall forthwith communicate such date to the appli­cant.

  1.   Published in the Gazette of India (Extra), Pt. II section 3(i), No. 363, dated 9-10-1991,
pp. 3-4.
  1.246  

1.247 BUREAU OF INDIAN STANDARDS RULES, 1991

Form I

(4) The Bureau of Indian Standards may, before issue of a certif­icate of recognition, require the applicant to furnish, within such period as may be specified by it, such additional informa­tion as may be considered necessary within a period of 30 days of a receipt of that letter by the applicant.

(5) On receipt of an application and such other additional infor­mation as may be sought under sub-rule (4), the Bureau of Indian Standards shall process the application and forward documents to the Ministry of Civil Supplies. Government of India with its recommendations for their consideration.

(6) On receipt of the recommendations of the Bureau under sub-rule (5), the Ministry shall consider those recommendations and after satisfying itself that the applicants’ association is fit to be recognised, may recognise the association in this behalf.

(7) The certificate of recognition to be issued by the Ministry under sub-rule (6) shall be in Form II.

(8) Where a certificate of recognition issued under these rules is lost, destroyed or mutilated, a duplicate may be issued on an application made in this behalf and on payment of a fee of rupees one hundred.

Payment of fees.

4.    The fees payable under those rules shall be paid in the form of a bank draft
in favour of the Bureau of Indian Standards, New Delhi.

Refusal to grant certificate of recognition to consumers’ associ­ation.

5.    Where a certificate of recognition of a consumers’ association has been
refused, the applicant shall be informed of the reasons for such refusal by the Bureau.

Copies of certificate of recognition to be furnished to certain authorities.

6.    Every consumers’ association which has been recognised as a ‘registered
consumers’ association under these rules shall fur­nish a copy of the certificate of recognition issued to it while filing a complaint under section 35(1) of the Act.

Verification of application.

7.    Every application made under these rules shall be duly veri­fied by the
Principal Officer.

SCHEDULE

FORM I

[See sub-rule (1) of rule 3]

Form of application to be submitted to the Bureau of Indian Standards for recognition of consumers’ association.

(to be submitted in triplicate)

(1) Name of the Consumers’ Association:

(2) Address:

(a)   Registered Office:

(b)   For correspondence:

(c)   Branches:

Form I BUREAU OF INDIAN STANDARDS RULES, 1991 1.248
   (3)   If registered under any other law the Act under which regis­tered and date of registration (certified copy of the certificate of registration to be enclosed):

(4)   Total number of members of the association (as on date of application):

(5)   Objects of the association (certified copy of Memorandum of Association to be enclosed along with copy of the rules and regulations of the Association):

(6)   Names, addresses and occupations of persons on the Board of Directors, Governing body, Council/Committee (by whatever name called), to whom the management of the affairs of the association is entrusted:

(7)   Number of employees:

(a)   Whole-time:

(b)   Part-time:

(8)   Year-wise details of the work done by the association during the last three years in the filed of protection of consumers’ interest:

(9)   Copies of published annual report and audited accounts of the association of the last three years:

(10)   Details of Laboratory organisation, if any, owned, run or operated by the association for purposes of protection of consum­er’s interest:

 

Place :…………                                                                              Signature :………………………………

Date :………….                                                                              Name & designation :…………..

VERIFICATION

I, …….. do hereby solemnly state that what is stated in terms 1 to 11 above is true to the best of my knowledge and behalf.

 

Place :…………                                                                              Signature :………………………………

Date :………….                                                                              Name & designation :…………..

 

1.249 BUREAU OF INDIAN STANDARDS RULES, 1991

Form II

FORM II

[See sub-rule (7) of rule 3]

CERTIFICATE OF RECOGNITION

(Government of India)

Ministry of Civil Supplies, consumer affairs and Public distribu­tion

Certified that the consumers’ Association whose particulars are given below has this day been recognised as a “registered Con­sumers’ Association” in terms of section 34 of the Bureau of Indian Standards Act, 1986 (63 of 1986).

Particulars

(1)   Name of the Consumers’ Association:

(2)   Address:

(3)   Name of persons on the governing board/body/council to whom management of the Association is entrusted:

(4)   Number of members:

(5)   Registration Number:

Signature :…………………………………..

Date :……………………………………………

File No :……………………………………….

Seal of the Ministry of Civil Supplies,

Consumer Affairs and Public Distribution

The Bureau of Indian Standards Act, 2016