PPB Unit AChapter Notes5–6 Marks Expected

The Consumer Protection Act, 2019: Preamble, Extent and Definitions

Principles & Practices of Banking | Unit A · Chapter 20

CPA 2019 vs 1986, who is a consumer, 6 consumer rights, CCPA, the 3-tier jurisdiction framework, complaint procedure, appeals, product liability, unfair contracts, and banking services under the Act.

By Bankopedia.co.inUpdated 2026JAIIB PPB · Module A

📌 Why This Chapter Matters in JAIIB

Expect 5–6 questionsfrom this chapter. The CPA 2019 is high-yield — questions regularly test jurisdiction limits (₹50L / ₹2Cr / unfair contracts ₹10Cr), appeal timelines (45/30/30 days), the 50% deposit rule, 2-year limitation, who qualifies as a "consumer" (with tricky examples like sureties, housewives, gift recipients), and the 8 new features of CPA 2019 vs 1986.

All Key Numbers — Chapter 20 at a Glance

1986Original Consumer Protection Act — replaced by CPA 2019

2019Consumer Protection Act 2019 — extends to whole of India incl. J&K

36Maximum members in Central Consumer Protection Council (CPC)

2 meetings/yrMinimum meetings per year: State Council and District Council

₹5 lakhNo fee for complaints where consideration ≤ ₹5 lakh

≤ ₹50 lakhDistrict Commission jurisdiction (value of goods/services)

₹50L – ₹2CrState Commission jurisdiction (regular complaints)

> ₹2 croreNational Commission jurisdiction (regular complaints)

≤ ₹10 croreUnfair Contract complaints → State Commission

> ₹10 croreUnfair Contract complaints → National Commission

21 daysComplaint admission decision; also: copy to opposite party within 21 days

30 daysOpposite party response period (extendable by 15 days)

45 daysLab testing period (extendable)

5 daysConsent for mediation; District Commission referral to mediation

3 monthsMaximum mediation period (from first appearance)

7 daysCommission to pass order after receiving mediation settlement report

2 yearsLimitation period to file complaint (from cause of action)

45 daysAppeal: District Commission → State Commission

30 daysAppeal: State Commission → National Commission

30 daysAppeal: National Commission → Supreme Court

50%Deposit required by appellant before appeal is entertained

90 daysTarget period for disposal of appeals (record reasons if delayed)

30 daysAppeal against Section 72 order (non-compliance penalty)

30 daysPower of Review: application period after an order

₹10,000Max cost imposed on frivolous/vexatious complaint

Min 1M/Max 3YrImprisonment for non-compliance of Commission order (Section 72)

6 months / ₹20LPenalty for non-compliance of CCPA direction (imprisonment/fine or both)

30 daysAppeal to National Commission against CCPA order

4 years / 65 yrsTerm of President/Member of State/District Commission (whichever earlier)

5 yearsValidity of mediator empanelment panel

≥10 yearsAdvocate's minimum Bar experience for mediator empanelment

≥15 yearsExpert/bureaucrat's minimum experience for mediator empanelment

Section 1

CPA 2019: Overview, Who is a Consumer & Consumer Rights

🧠 8 New Aspects of CPA 2019 vs 1986 — Mnemonic "CUPD-AEEM"

C — Consumer Rights defined specifically (6 rights)

U — Unfair Contract added as a new concept

P — Product Liability Action introduced

D — Design (product design) defined and included

A — Advertising and Endorsement included

E — E-commerce and Electronic Service Provider included

E — Express Warranty parameter added

M — Manufacturer distinctions: Manufacturer / Product Manufacturer / Product Seller / Product Service Provider

"Customers Under Protection Demand Accurate E-commerce, Express & Manufacturing clarity."

Who Is a Consumer? — Core Rules + Tricky Examples

Consumer = any person who, for consideration paid or to be paid, buys goods (not for resale/commercial purpose) OR hires/avails services (not for commercial purpose, not under personal service contract). Includes offline AND online (e-commerce, teleshopping, direct selling, multi-level marketing).

Key exception: "Commercial purpose" does NOT include goods bought for self-employment to earn livelihood — that person IS a consumer.

Surety for a bank loan

NOT a consumer

Surety does not hire/avail any service from the bank. Cannot complain.

Guest eating a gifted cake (nail found in it)

IS a consumer

Used goods with the buyer's implicit permission (gifting = permission). Can complain.

Housewife using sewing machine for self-employment income

IS a consumer

Used for earning livelihood by self-employment — exemption from 'commercial purpose'. Can complain.

Person buying goods for resale

NOT a consumer

Buying for commercial purpose (resale) explicitly excluded from definition.

6 Consumer Rights Under CPA 2019 — "PAIR-HA"

Protected: Against marketing of goods/services hazardous to life and property

Access: To variety of goods/services at competitive prices (wherever possible)

Informed: About quality, quantity, potency, purity, standard and price — to protect against unfair trade practices

Redressal: Against unfair trade practices, restrictive trade practices, or unscrupulous exploitation

Heard: To be heard and assured that consumer's interests receive due consideration at appropriate fora

Awareness: Right to consumer education and awareness

Under CPA 1986, consumer rights were only a passing reference in the objectives of Consumer Protection Councils. CPA 2019 gives them a specific statutory definition.

Section 2

Key Definitions, Various Fora & Consumer Protection Councils

Must-Know Definitions for JAIIB

Deficiency

Any fault, imperfection, shortcoming or inadequacy in quality, nature and manner of performance required by law or contract. Includes: (i) deliberate withholding of relevant information; (ii) any act of negligence or omission or commission causing loss/injury.

Defect

Any fault, imperfection or shortcoming in quality, quantity, potency, purity or standard of goods as required by law or contract or as claimed by the trader.

Harm (Product Liability)

Personal injury/illness/death; damage to property (other than product itself); mental agony/emotional distress; loss of consortium or services. Does NOT include: damage to product itself, breach of warranty conditions, or commercial/economic loss.

Product Liability

Responsibility of a product manufacturer / product seller / product service provider to compensate for any harm caused to a consumer by a defective product or deficiency in related services.

Unfair Contract

Contract between manufacturer/trader/service provider and consumer having terms causing significant change in consumer's rights — e.g. disproportionate penalty for breach, excessive security deposits, refusing early repayment, unilateral termination without cause, assignment without consent, unreasonable charges/obligations.

Misleading Advertisement

An advertisement that: (i) falsely describes the product/service; (ii) conveys false representation; (iii) gives false guarantee or misleads as to nature/substance/quality; or (iv) deliberately conceals important information.

Restrictive Trade Practice

Trade practice that tends to bring about manipulation of price or conditions of delivery or affects flow of supplies in a manner that imposes unjustified costs or restrictions on consumers. Includes: delay in supply causing price rise; conditioning purchase of goods/services on another purchase.

Spurious Goods

Goods which are falsely claimed to be genuine.

4 Bodies Under CPA 2019

→Consumer Protection Councils (Central / State / District): advisory; promote & protect consumer rights; do NOT handle complaints
→Central Consumer Protection Authority (CCPA): regulatory body (like TRAI/FSSAI); handles violations, unfair trade practices, misleading ads
→Consumer Disputes Redressal Commissions (District / State / National): handle consumer complaints
→Consumer Mediation Cells: attached to each Commission and Regional Bench; attempt settlement through mediation

Consumer Protection Councils — Composition

Central Council (CPC)

Max 36 members. Chairperson = Minister-in-Charge of Consumer Affairs, Central Govt. Member Secretary = Secretary in-charge of Consumer Affairs. Includes ministers, MPs, regulators, Chief Commissioner CCPA, Registrar NCDRC, State secretaries.

State Council (SPC)

Official + non-official members + max 10 others. Chairperson = Minister-in-Charge (Consumer Affairs), State Govt. Minimum 2 meetings per year.

District Council (DPC)

Official + non-official members. Chairperson = District Collector. Minimum 2 meetings per year.

Section 3

Central Consumer Protection Authority (CCPA)

Composition & HQ

Chief Commissioner + such number of Commissioners as prescribed. HQ: New Delhi. Regional and other offices elsewhere in India. Established as a regulatory body in line with TRAI, FSSAI, etc.

Main Functions

→Protect, promote and enforce consumer rights as a class
→Prevent violation of consumer rights
→Prevent unfair trade practices
→Ensure no false or misleading advertisement is made
→Ensure no person publishes false or misleading advertisement

Ancillary Functions

→Inquiries/investigations (suo motu or on complaint)
→Intervene in any proceedings before District/State/National Commission
→Issue notices to alert consumers against dangerous goods/services
→Issue guidelines to prevent unfair trade practices
→Promote research in consumer rights; spread awareness

Powers of CCPA

(a) Conduct Inquiry — into violation of consumer rights, unfair trade practice, false/misleading advertisement

(b) Order Recall of Goods — order recall of dangerous/hazardous/unsafe goods; reimbursement of prices; discontinuation of unfair practices

(c) Order Discontinuing Advertisement — order discontinuing/modifying false/misleading ad; impose penalty; prohibit endorser from making future endorsements

(d) Search and Seizure — Director General may enter premises, search and seize documents, records, articles, evidence at any reasonable time

⚠️ CCPA Penalty & Appeal — Exam Points

Penalty for non-compliance of CCPA direction: Imprisonment up to 6 months OR fine up to ₹20 lakh, or both.
Appeal against CCPA order: To the National Commission within 30 days of receipt of order.

Section 4

Consumer Disputes Redressal Commissions — Composition & Appointment

Commission	Established by	Composition	Normally functions at
District Commission	State Government (in each district; can be more than one)	President + min 2, max prescribed members. ≥1 must be woman.	District headquarters
State Commission	State Government (one per state)	President + min 4, max prescribed members. ≥1 must be woman.	State capital
National Commission	Central Government (National Capital Region; Regional Benches may be established)	President + min 4, max prescribed members. ≥1 must be woman.	National Capital Region

Term of President / Members (State/District Commission)

4 years OR age 65 (whichever earlier). Eligible for re-appointment for another 4 years, subject to the age limit of 65 years.

Selection Committee (for State/District Commission)

→Chief Justice of High Court or nominated Judge (Chairperson)
→Secretary in-charge of Consumer Affairs, State Govt. (Member)
→Nominee of Chief Secretary (Member)

Section 5

Jurisdiction of Commissions — The 3-Tier Table

⚠️ Most Frequently Tested — Jurisdiction Limits

Jurisdiction is determined by the VALUE of goods/services paid as consideration, NOT the amount of compensation claimed. Different limits apply for regular complaints vs unfair contract complaints.

Commission	Regular Complaints (value of consideration)	Unfair Contract Complaints	Appeal Jurisdiction
District	Does not exceed ₹50 lakh	—	Appeals from District go to State
State	Exceeds ₹50 lakh but ≤ ₹2 crore	Does not exceed ₹10 crore	Appeals from State Commission orders; substantial questions of law from District; ex-parte State Commission orders
National	Exceeds ₹2 crore	Exceeds ₹10 crore	Appeals from State Commission + substantial questions of law
Supreme Court	Appeals from National Commission only		Final appellate authority

Where to File the Complaint (Place/Territory)

A complaint is filed within the local limits of jurisdiction where:

→Opposite party ordinarily resides or carries on business or has a branch office or personally works for gain; OR
→Any of multiple opposite parties does the above (with Commission's permission); OR
→The cause of action wholly or in part arises; OR
→The complainant resides or personally works for gain

Section 6

Complaint Procedure — Filing, Proceedings & Orders

Who Can File a Complaint?

→a. The consumer (buyer of goods / user / person who hired service or alleges unfair trade practice)

→b. Any recognised consumer association (voluntary, registered under any law) — member or not

→c. One or more consumers on behalf of many having the same interest (class action; with District Commission permission)

→d. Central Government, Central Authority or State Government

→e. In case of death of consumer — legal heir or legal representative

→f. In case of consumer being a minor — parent or legal guardian

Fee: No fee if consideration ≤ ₹5 lakh. Paid by crossed DD on a nationalised bank, crossed Indian Postal Order, or electronic mode. A complaint may not be entertained if the same matter is sub-judice before a competent Civil Court.

Proceedings Before District Commission — Timeline

Admission
Decision on admission within 21 days. If no decision → complaint deemed admitted.
Mediation referral
If settlement element exists → parties give written consent within 5 days → Commission refers to mediation within 5 days.
Copy to Opposite Party
Within 21 days of admission, copy sent to opposite party.
Opposite Party Response
30 days to give version (extendable by 15 days).
Lab Testing (if needed)
Sample sealed, sent to lab → 45 days to report (extendable). Complainant pays fee in advance.
Settlement / Ex-Parte
If opposite party fails to respond → proceedings continue ex parte. If complainant fails to appear → decided on merits.
Order
Commission issues appropriate order on being satisfied about defect / deficiency / unfair trade practice / product liability.

Orders a Commission Can Issue (Against Opposite Party)

→Remove defects in goods

→Replace goods with new, defect-free goods

→Return price / charges paid + interest

→Pay compensation for loss or injury (incl. punitive damages)

→Pay compensation in product liability action

→Remove deficiencies in services

→Discontinue unfair / restrictive trade practice and not repeat

→Not to offer hazardous/unsafe goods for sale

→Withdraw hazardous goods from sale

→Cease manufacture of hazardous goods

→Pay sum to consumers if a large number suffered identifiable loss (min 25% of value of defective goods/services)

→Issue corrective advertisement to neutralise misleading ad (at opposite party's cost)

→Cease and desist from issuing misleading advertisement

→Provide adequate costs to parties

Section 7

Appeals — Timelines, 50% Deposit & Other Aspects

Appeal	To	Deadline	Notes
Against District Commission order	State Commission	45 days	On grounds of facts OR law. No appeal against mediation-settled orders.
Against State Commission order	National Commission	30 days	Also: appeal in State Commission order involving substantial question of law; ex-parte State Commission order.
Against National Commission order	Supreme Court	30 days	Final appellate authority.
Against Section 72 order (non-compliance penalty)	Next Commission / Supreme Court	30 days	District → State; State → National; National → Supreme Court. On both facts and law.

⚠️ 50% Deposit — Critical Rule

A person required to pay any amount under a Commission order must deposit 50% of that amount before the appeal can be entertained by State/National Commission or Supreme Court.

Appeal Disposal Target

Appeals to be disposed within 90 days from date of admission. If delayed, State/National Commission shall record reasons in writing. Normally, no adjournment granted; if granted, reasons recorded and costs awarded.

Limitation Period

Complaint must be filed within 2 years from the date on which the cause of action arose. Commission may condone delay on sufficient cause (recording reasons).

Non-Compliance of Commission Order (Section 72)

Imprisonment: min 1 month, max 3 years. Plus fine. Commission has powers of a Judicial Magistrate of First Class; offences tried summarily.

Section 8

Mediation, Product Liability, Unfair Contracts & Banking Services

Frivolous/Vexatious Complaints

Commission dismisses with reasons + orders complainant to pay up to ₹10,000 as cost to the opposite party.

Power of Review

District/State Commissions can review their own orders to correct errors. Application must be filed within 30 days of the order. (New in CPA 2019 — not in 1986 Act.)

Digitalisation

CPA 2019 permits e-filing of complaints, online fee payment, and hearing/examination via video conferencing to avoid delays.

Transfer of Cases

State Commission can transfer between District Commissions in the State. National Commission can transfer: District→District (across states) or State→State.

20.15

Mediation Process

Mediation Cells — Who Establishes?

→State Government: attaches cells to each District Commission and State Commission
→Central Government: attaches cells to National Commission and Regional Benches

Mediator Eligibility

→Retired Judges of Supreme Court

→Retired Judges of High Courts

→Retired Members of Consumer Commission

→Retired District and Session Judges (or Add. D&S Judges)

→Retired Judicial officers with ≥10 years experience

→Advocate with ≥10 years at Bar

→Mediators empanelled with SC/HC/District Court

→Person with ≥5 years experience in mediation/conciliation

→Experts / retired senior bureaucrats / retired executives with ≥15 years

Key Mediation Rules

→Panel valid for 5 years; eligible for re-empanelment for another term
→If no agreement within 3 months from first appearance → mediator informs Commission; Commission may extend; else terminated
→Mediator submits signed agreement to Commission in sealed cover
→Commission passes order within 7 days of receiving settlement report
→Confidentiality: no audio/video recording; nothing disclosed from mediation
→Mediator does NOT impose settlement — only facilitates
→No appeal against order passed pursuant to mediation settlement

Product Liability

New concept in CPA 2019. A product liability action is a complaint filed before District/State/National Commission for compensation for harm. May be brought against any of:

→Product Manufacturer
→Product Service Provider
→Product Seller

Defense of acting merely as "platform" or "aggregator" is NOT valid in consumer disputes.

Unfair Contracts — Filing Forum

CPA 2019 enables consumers to seek remedy against unfair contracts (e.g., click-wrap contracts for online purchases/services that are one-sided).

→Consideration ≤ ₹10 crore → State Commission
→Consideration > ₹10 crore → National Commission

Data Protection: Disclosure of consumer's personal information given in confidence = Unfair Trade Practice (unless required by law).

Banking Services Under CPA 2019

Actionable Deficiencies (Bank CAN be sued)

✗Delay in repayment of deposits

✗Wrongful dishonour of cheque

✗Wrongful dishonour of bank draft

✗Non-credit of cheque tendered (bank collected but not credited)

✗Default by Business Correspondent (BC collected but not deposited)

✗Non-issue of receipt / not crediting deposited amount

✗Not crediting public issue subscription to issuer's account

NOT Actionable (Commercial/Business Decisions)

✓Interest rates on deposits / advances (within regulatory framework)

✓Charges for various services

✓Types of deposit products

✓Type of loan products offered

✓Quantum of loan sanctioned

✓Security (collateral) required for loan facility

Note: Commission may still consider certain commercial acts as deficiency depending on facts.

Section 9

Exam Strategy — Chapter 20

✅ 20 Must-Know Points for JAIIB

1.CPA 2019 extends to whole of India including J&K (unlike 1986 Act). Not overriding on any other law — additional remedy only.
2.CPA excludes: goods for resale, goods for commercial purpose, services free of charge, services under personal service contract.
3.'Commercial purpose' exception: buying for self-employment/livelihood = consumer (e.g., housewife sewing for income).
4.Surety for a bank loan = NOT a consumer of the bank. Complaint not maintainable.
5.Guest consuming gifted cake = IS a consumer. Uses goods with buyer's implicit permission.
6.8 new aspects of CPA 2019: CUPD-AEEM (Consumer Rights, Unfair Contract, Product Liability, Design, Advertising, E-commerce, Express Warranty, Manufacturer distinctions).
7.6 Consumer Rights: PAIR-HA (Protection, Access, Informed, Redressal, Heard, Awareness).
8.CCPA HQ = New Delhi. Appeal against CCPA order = National Commission within 30 days.
9.Penalty for non-compliance of CCPA direction: up to 6 months imprisonment OR ₹20 lakh fine, or both.
10.District Commission: ≤ ₹50 lakh. State Commission: ₹50L–₹2Cr. National: >₹2Cr.
11.Unfair Contract: State if ≤ ₹10 Cr; National if > ₹10 Cr.
12.No fee if consideration ≤ ₹5 lakh.
13.Complaint admission: 21 days. If no decision → deemed admitted. Copy to opposite party within 21 days.
14.Appeal: District→State = 45 days. State→National = 30 days. National→SC = 30 days.
15.50% deposit required by appellant before appeal is entertained.
16.Appeal disposal target: 90 days.
17.Limitation period = 2 years from cause of action (can be condoned for sufficient cause).
18.Non-compliance of Commission order (Section 72): min 1 month, max 3 years imprisonment.
19.Frivolous complaint: dismissed + cost up to ₹10,000 to opposite party.
20.No appeal against mediation-settled orders. Mediation panel valid 5 years. Agreement to Commission in 3 months; order within 7 days of receipt.

The Consumer Protection Act, 2019: Preamble, Extent and Definitions

CPA 2019: Overview, Who is a Consumer & Consumer Rights

Key Definitions, Various Fora & Consumer Protection Councils

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