Offences and Penalties Under the Consumer Protection Act, 2019: Ensuring Compliance and Protecting Consumer Rights

Every time you buy a product or hire a service, you place a certain amount of trust in the seller. But what happens when that trust is broken – when a product is adulterated, an advertisement is misleading, or a business simply ignores a regulatory order? The Consumer Protection Act, 2019 answers this question with a clear and structured framework of offences and penalties. Contained in Chapter VII (Sections 88 to 93) of the Act, these provisions are designed to hold manufacturers, service providers, advertisers, and traders accountable – not just through monetary fines, but through criminal liability where the harm is serious.

The role of Chapter VII in the Act’s enforcement architecture 🔗

Consumer protection law is only as strong as its enforcement. The rights guaranteed to consumers – the right to safety, the right to be informed, the right to choose – would remain aspirational without a credible deterrent against violation. Chapter VII of the Consumer Protection Act, 2019, fills this gap. It creates a penal framework that runs alongside the civil redressal mechanism of consumer forums, making the Act both a tool for individual compensation and a mechanism for market-wide compliance. The penalties are calibrated based on the severity of the harm caused, whether the act was committed for the first time or repeatedly, and the nature of the offence itself.

Section 88: Penalty for non-compliance with directions of the Central Authority 🔗

The Central Consumer Protection Authority (CCPA), established under Section 10 of the Act, is the primary regulatory body empowered to protect the rights of consumers as a class. Under Sections 20 and 21, the CCPA can issue directions to manufacturers, traders, and service providers – including orders to recall unsafe goods, discontinue unfair trade practices, and withdraw or modify misleading advertisements.

Section 88 makes non-compliance with these directions a punishable offence. Any person who fails to follow a direction issued by the Central Authority under Sections 20 or 21 can face imprisonment of up to six months, a fine of up to ₹20 lakh, or both. This provision is significant because it backs the CCPA’s administrative orders with criminal teeth. A recall order, for instance, is not merely advisory – ignoring it can lead to prosecution. The PRS India legislative summary of the Act notes that enhanced penalties apply for continued violations, with fines potentially reaching ₹50 lakh in such cases.

Section 89: Punishment for false or misleading advertisements 🔗

Misleading advertising is one of the most pervasive forms of consumer deception. A product that claims to cure illness, a coaching institute that overstates exam results, a financial scheme that guarantees impossible returns – all of these affect consumer choices in concrete and often irreversible ways. The 2019 Act addresses this with specific criminal liability under Section 89.

Any manufacturer or service provider who causes a false or misleading advertisement to be made – one that is prejudicial to the interests of consumers – can be punished with imprisonment of up to two years and a fine of up to ₹10 lakh. For every subsequent offence, the imprisonment term can extend to five years and the fine to ₹50 lakh. These provisions apply not just to manufacturers but also to endorsers and publishers, each of whom can face civil penalties under Section 21 of up to ₹10 lakh for a first offence and ₹50 lakh for repeat contraventions. Additionally, the CCPA’s Guidelines for Prevention of Misleading Advertisements and Endorsements, 2022 specify that an endorser can be prohibited from endorsing any product or service for up to one year, with the ban extending to three years for subsequent violations.

What makes an advertisement “misleading”? 🔗

Section 2(28) of the Act defines a misleading advertisement as one that falsely describes a product or service, gives a false guarantee, or is likely to mislead consumers about the nature, substance, quantity, or quality of what is being sold. Deliberately concealing material information – such as the actual course taken by a student in a coaching success claim – also qualifies as misleading. The CCPA looks at both what is said and what is strategically left unsaid.

The CCPA in action: real enforcement examples 🔗

The CCPA’s enforcement record since 2019 demonstrates that Section 89 is not merely theoretical. In late 2024, the authority took systematic action against coaching institutes for making inflated claims about UPSC results. Vajirao & Reddy Institute and StudyIQ IAS were each fined ₹7 lakh, while Edge IAS was penalised ₹1 lakh for misleading advertisements regarding UPSC Civil Services results. In a landmark first, Vision IAS was fined ₹11 lakh as the first case of a repeat offence penalty under the Act – the institute continued to publish misleading performance claims even after earlier regulatory intervention. By early 2025, the CCPA had issued 57 notices to coaching institutes and imposed total penalties exceeding ₹1.09 crore on 28 institutions.

Sections 90 and 91: Adulterated and spurious goods 🔗

Of all the offences under Chapter VII, the provisions dealing with adulterated and spurious goods carry the most severe consequences – and rightly so. Consuming adulterated food, medicine, or any product can cause serious physical harm. The Act draws a clear distinction between these two categories.

Section 90: Adulterated products 🔗

An adulterant is defined in the Act’s Explanation as any material – including extraneous matter – that is employed or used for making a product unsafe. Section 90 punishes the manufacture, storage, sale, distribution, or import of any product containing an adulterant on a sliding scale tied directly to the harm caused:

• If no injury is caused to the consumer: imprisonment up to six months and fine up to ₹1 lakh.
• If injury short of grievous hurt results: imprisonment up to one year and fine up to ₹3 lakh.
• If grievous hurt is caused (as defined under Section 320 of the Indian Penal Code): imprisonment up to seven years and fine up to ₹5 lakh.
• If the adulteration results in death: minimum imprisonment of seven years, extendable to life imprisonment, and a minimum fine of ₹10 lakh.

Offences leading to grievous hurt or death are cognizable and non-bailable under Section 90(2), meaning the police can arrest without a warrant and bail is not a matter of right. Beyond imprisonment and fines, the court may suspend the offender’s business licence for up to two years on first conviction, and cancel it entirely on a second or subsequent conviction – a penalty that effectively ends the ability to operate.

Section 91: Spurious goods 🔗

Spurious goods are counterfeit or fake products – items passed off as genuine when they are not. Section 91 prescribes penalties for their manufacture, storage, sale, distribution, or import on a similar harm-linked scale:

• Injury not amounting to grievous hurt: imprisonment up to one year and fine up to ₹3 lakh.
• Grievous hurt: imprisonment up to seven years and fine up to ₹5 lakh.
• Death of consumer: minimum seven years imprisonment, extendable to life, and minimum fine of ₹10 lakh.

The statutory text of Sections 90 and 91 makes clear that liability attaches whether the person acts directly or through any other person on their behalf – closing off the defence that someone else was responsible for the actual production or sale. Licence suspension and cancellation provisions apply to spurious goods offences as well.

Compounding of offences 🔗

The Act recognises that not every violation warrants full criminal prosecution. Under the compounding provisions applicable to Sections 88 and 89, offenders may settle the matter by paying a prescribed amount – up to the maximum fine stipulated under the Act – without going through a trial. This is a pragmatic mechanism that enables faster resolution while still imposing a financial cost for non-compliance.

However, the option to compound is not available to a repeat offender committing the same or a similar offence within three years of the date their previous offence was compounded. This prevents compounding from becoming a routine workaround for habitual violators. As analysed by legal commentators on Lexology, this three-year bar is an important feature that distinguishes a genuine first-time lapse from calculated, repeated misconduct.

Cognizance of offences and the CCPA’s gatekeeping role 🔗

A critical procedural safeguard in Chapter VII is that courts cannot take cognizance of offences under Sections 88 and 89 on their own or on a private complaint. Cognizance can only be taken after receiving a complaint from the CCPA or an officer duly authorised by it. This centralises enforcement authority in a specialised body with the expertise and investigative capacity to assess consumer protection violations – preventing frivolous prosecution while ensuring that genuine violations are pursued systematically. The CCPA’s Director General can conduct preliminary inquiries, enter premises, and collect evidence under the Code of Criminal Procedure before recommending action.

Why this penalty framework matters 🔗

The penalty provisions of the Consumer Protection Act, 2019, reflect a deliberate policy choice: consumer protection in India cannot be achieved through civil redressal alone. When a manufacturer sells adulterated medicine or a business consistently ignores regulatory directions, civil compensation to individual complainants is an inadequate response. The inclusion of imprisonment – particularly for adulteration leading to grievous hurt or death – signals that consumer safety is treated as a matter of public interest, not merely private dispute. The escalating penalties for repeat offences send an equally clear message: compliance is expected, and sustained non-compliance will attract progressively harsher consequences.

For students, businesses, and practitioners working within India’s consumer protection framework, understanding Chapter VII is essential – not just for exam purposes, but because these provisions define the legal exposure that any market participant faces when they cut corners at the consumer’s expense.

What do you think? Given that the CCPA imposed penalties exceeding ₹1 crore on coaching institutes for misleading advertisements within just a few years of enforcement, do you think the current penalty caps under Section 89 are sufficient to deter large, well-funded businesses? And should the compounding option be available at all for offences involving adulterated products that cause physical harm?

References

1. https://www.indiacode.nic.in/handle/123456789/15256
2. https://consumeraffairs.gov.in/pages/consumer-protection-acts
3. https://prsindia.org/billtrack/the-consumer-protection-bill-2019
4. https://www.pib.gov.in/PressReleasePage.aspx?PRID=1832906
5. https://www.indiatvnews.com/news/india/ias-coaching-centres-penalised-by-ccpa-for-misleading-advertisements-on-upsc-results-of-2022-and-2023-vajirao-and-reddy-edge-delhi-2024-12-26-968018
6. https://www.outlookbusiness.com/news/ccpa-slaps-11-lakh-penalty-on-vision-ias-for-misleading-ads-first-case-of-repeat-offence
7. https://vidhijudicial.com/sec-88-to-93-chapter-vii-(offences-and-penalties)-the-consumer-protection-act,-2019.html
8. https://www.lexology.com/library/detail.aspx?g=e644c9ae-68a6-4385-8f89-dfcde0beb54c