Centre notifies new rules for Consumer Panels


From UPSC perspective, the following things are important :

Prelims level : Consumer Disputes Redressal mechanism

Mains level : Consumer protection

The Ministry of Consumer Affairs, Food, and Public Distribution has notified monetary jurisdiction for various Consumer Disputes Redressal Commission (CDRC) under the Consumer Protection Act, 2019.

What are the new changes?

  • The Centre has notified new rules to revise pecuniary jurisdiction for entertaining consumer complaints at district, state and national level commissions, a move aimed at fast disposal of cases.
  • The NCDRC will now have jurisdiction to entertain consumers’ complaints where the value of the goods or services exceeds Rs 2 crore as against the earlier limit of over Rs 10 crore.
  • The state commissions will have jurisdiction to similar complaints with value of goods or services between Rs 50 lakh and Rs 2 crore, and the National Commission over Rs 2 crore.
  • District commissions have jurisdiction to entertain complaints where value of goods or services paid as consideration does not exceed Rs 1 crore.

Legal basis of these changes

  • The Act provides a “three-tier quasi-judicial mechanism” for redress of consumer disputes: district commissions, state commissions, and the national commission.
  • The law also provides pecuniary jurisdiction of each tier of consumer commission.

Benefits of the move

  • Fast-track disposal of cases: Reduction of limit of pecuniary jurisdiction of district and state commissions will reduce workload at these two tiers of dispute resolution system, and thereby reduce pendency at these two levels.
  • Easy litigation: Besides, with E-Dakhil in place, consumers can take their complaints to a state or national commission without visiting the commission physically.

Back2Basics: Features of the Consumer Protection Act, 2019

[1] Definition of consumer

  • A consumer is defined as a person who buys any good or avails a service for a consideration.
  • It does not include a person who obtains a good for resale or a good or service for commercial purpose.
  • It covers transactions through all modes including offline, and online through electronic means, teleshopping, multi-level marketing or direct selling.

[2] Rights of consumers

Six consumer rights have been defined in the Bill, including the right to:

  • be protected against marketing of goods and services which are hazardous to life and property
  • be informed of the quality, quantity, potency, purity, standard and price of goods or services
  • be assured of access to a variety of goods or services at competitive prices and
  • seek redressal against unfair or restrictive trade practices

[3] Central Consumer Protection Authority

  • The central government will set up a Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of consumers.
  • It will regulate matters related to violation of consumer rights, unfair trade practices, and misleading advertisements.
  • The CCPA will have an investigation wing, headed by a Director-General, which may conduct inquiry or investigation into such violations.

[4] Penalties for misleading advertisement

  • The CCPA may impose a penalty on a manufacturer or an endorser of up to Rs 10 lakh and imprisonment for up to two years for a false or misleading advertisement.
  • In case of a subsequent offence, the fine may extend to Rs 50 lakh and imprisonment of up to five years.
  • CCPA can also prohibit the endorser of a misleading advertisement from endorsing that particular product or service for a period of up to one year.

 [5] Consumer Disputes Redressal Commission

  • CDRCs will be set up at the district, state, and national levels.
  • A consumer can file a complaint with CDRCs in relation to: (i) unfair or restrictive trade practices; (ii) defective goods or services; (iii) overcharging or deceptive charging; and (iv) the offering of goods or services for sale which may be hazardous to life and safety.
  • Complaints against an unfair contract can be filed with only the State and National Appeals from a District CDRC will be heard by the State CDRC.
  • Appeals from the State CDRC will be heard by the National CDRC.
  • Final appeal will lie before the Supreme Court.

[6] Jurisdiction of CDRCs

  • The District CDRC will entertain complaints where value of goods and services does not exceed Rs one crore.
  • The State CDRC will entertain complaints when the value is more than Rs one crore but does not exceed Rs 10 crore.
  • Complaints with value of goods and services over Rs 10 crore will be entertained by the National CDRC.

[7] Product liability

  • Product liability means the liability of a product manufacturer, service provider or seller to compensate a consumer for any harm or injury caused by a defective good or deficient service.
  • To claim compensation, a consumer has to prove any one of the conditions for defect or deficiency, as given in the Bill.


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