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Overview: Deficient Services under Consumer Protection Act, 2019 (India)

Published on : 07 Jan 2021

Deficient Services under Consumer Protection Act, 2019 (India)

The Consumer Protection Act, 2019 (the New CPA) heralds the commencement of a new era in India concerning the consumer rights to be in sync with the new-generation consumer expectations. The modes of business like telemarketing, direct selling, multilevel marketing and e-commerce were not envisaged three decades back in the 1986 legal framework and have made consumers more vulnerable to unfair trade practices. Well, new problems do require new solutions! The direct selling and multilevel marketing earlier regulated through guidelines issued by state governments and the consumer affairs ministry are now within the ambit of the New CPA.

The New CPA modifies the rich legacy of the Consumer Protection Act, 1986 (the "1986 Act") to curb the challenges of a rapidly growing, sophisticated and inter-dependent market for goods and services. The New CPA expands the scope of grievances that consumers can complain against, as well as gives the regulator suo motu powers. The 1986 Act had a three-tier structure providing for adjudicating any complaint, but failed to provide for a regulator which could initiate or intervene on a preventive basis like direct product recalls which are dangerous or unsafe. The New CPA provides for this by establishing a Central Consumer Protection Authority. The New CPA creates a regulatory structure on a par with advanced global jurisdictions like the U.S. and U.K.

When a consumer finds the service deficient, he can lodge a complaint under the New CPA. This marks the prime requirement to be that the matter must fall within the definition of "service", and it must entail a deficiency as per the requirements provided under the New CPA.

What is Deficiency of Service?

According to the definition under Section 2(11) of the New CPA, "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—

  1. any act of negligence or omission or commission by such person which causes loss or injury to the consumer; and
  2. deliberate withholding of relevant information by such person to the consumer.

From the railway sector to aviation, from the banking sector to the entertainment sector, deficiency of service could be witnessed in any service sector which holds a buyer-seller relationship. The consequences of deficiency of service can vary from being minor to grave, ranging from harassment to mental or physical injury to death, thus leading to legal consequences.

The CPA's main purpose has always been to protect and safeguard the interests of the consumers. The New CPA came into effect on 20 July 2020 and has within its ambit the physical platforms for buyer-seller relationship along with recognizing services provided by E-commerce platforms.

In Gurshinder Singh vs Sriram General Insurance Co. Ltd. & Ors. 2020 (MANU/SC/0083/2020), the Supreme Court of India held that mere delay in intimating the insurance company regarding the theft of the vehicle could not be a ground to deny the claim of the insured.

It was held that denying the claimant merely on the ground that there was some delay in intimating the insurance company would be unfair and unjust. The insurance claims should not be declined on technical grounds if it had already been verified and found to be genuine by the investigator.

Section 2(47) of the New CPA expands the definition of “unfair trade practice”.

While the 1986 Act had listed six types of unfair trade practices, the New CPA states three additional types of unfair trade practices:

  1. non-issuance of bill or cash memo or receipt for the goods sold or services rendered in such manner as may be prescribed;
  2. refusing to withdraw or take back defective goods or to discontinue or withdraw deficient services and to refund the consideration paid, within the period stipulated in the bill, cash memo or receipt and in the absence of such stipulation, within a period of thirty days. It is relevant to determine whether the goods or deficient services have been provided; and
  3. disclosing to another 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.

Sections 82-87 of the New CPA deal with "Product Liability". Section 2(35) of the New CPA entitles a person to make a claim of product liability against the manufacturer, seller or service provider for such defective products to compensate for the harm caused to a consumer by the defective product manufactured or sold or by deficiency in services relating to the product.

As per Section 85 of the New CPA, the product service provider may be liable if 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.

No specific provision of product liability existed under the 1986 Act. However, the consumer can now seek compensation for harm caused by a defective product or a deficient service under the New CPA.

Due to the Healthcare Amendment, there has been a deletion of "Healthcare" from the definition of services under the New CPA. The Supreme Court in Indian Medical Association vs VP Shantha & Ors. (1996 AIR 550) had included Healthcare into the definition of services under the 1986 Act. However, it is yet to be seen whether the inclusion of Healthcare will continue to apply under the New CPA.

Jurisdiction under the New CPA is decided based on the ‘value of goods or services paid as consideration’ by the consumer. The Consumer Courts is a 3-tier system of courts, National level, State level and District level. The threshold for pecuniary jurisdiction of the commissions are; District Commission: Rs 1 crore or less, State Commission: Rs 1 crore to Rs 10 crore, and National Commission: Exceeding Rs 10 crore.


  1. The aggrieved consumer may approach the Grievance Redressal Mechanism of the Service Provider before initiating any legal action against the service provider.
  2. The aggrieved consumer can also send the legal notice to the service provider detailing the complaint, relief sought and time period to comply.
  3. The sending of the Legal Notice is not mandatory, and hence the aggrieved consumer can file the complaint directly before the appropriate Consumer Forum.
  4. As per Section 37 of the New CPA, if as per the District Commission there exists a possibility of a settlement which may be acceptable to the parties, it may direct the parties to give consent in writing, within five days, to have their dispute settled by mediation. 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.
  5. The complainant, if not satisfied with the verdict passed by the District Consumer Forum, can file a review application, within 30 days from the date of order, in the same Forum (Section 40 of the New CPA). Furthermore, if still not satisfied by order of the review application, the aggrieved can appeal to the State Commission within 45 days from the date of order (Section 41 of the New CPA).
  6. The aggrieved if not satisfied with the State Commission order, can file a review application, within 30 days from the date of order, in the same Forum (Section 50 of the New CPA) and accordingly can appeal to the National Forum within 30 days from the date of order given by prior Forum (Section 51 of the New CPA).


‘Buyers beware’ is no more the norm with the New CPA in force. The consumer is now the king, not just in business but also in law as the New CPA leverages responsibilities on the sellers, manufacturers, service providers and also the endorsers of such products. The New CPA fastens the process of resolving the disputes and also offers mediation cells for easy settlement.





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