Section 2 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
This is the third article on section 2. It covers every clause not taken in the first two articles: the practices the Act treats as wrongful (unfair trade practice 47, unfair contract 46, restrictive trade practice 41, misleading advertisement 28), the selling terms (advertisement 1, endorsement 18, e-commerce 16, electronic service provider 17, direct selling 13, spurious goods 43) and the institutional terms. The earlier articles are on consumer and complaint and on defect, deficiency and product liability.
An unfair trade practice is a trade practice that, to promote sale, use or supply of goods or services, adopts any unfair method or unfair or deceptive practice, including nine listed groups of conduct (2(47)). An unfair contract has terms that cause significant change in the consumer's rights, with six examples (2(46)). A misleading advertisement falsely describes a product, misleads on nature, substance, quantity or quality, makes a representation that would be an unfair trade practice, or deliberately conceals important information (2(28)). If a seller's conduct matches these, a consumer legal notice is the usual first step.
Clause numbers covered in this article
| Group | Clauses |
|---|---|
| Practices and contracts | 2(28) misleading advertisement; 2(41) restrictive trade practice; 2(46) unfair contract; 2(47) unfair trade practice |
| Advertising and selling | 2(1) advertisement; 2(13) direct selling; 2(16) e-commerce; 2(17) electronic service provider; 2(18) endorsement; 2(43) spurious goods |
| Establishments | 2(3) branch office; 2(19) establishment |
| Authorities and bodies | 2(4) Central Authority; 2(14) Director-General; 2(15) District Commission; 2(27) member; 2(29) National Commission; 2(44) State Commission; 2(40) Regulator |
| Mediation | 2(25) mediation; 2(26) mediator |
| Interpretation | 2(30) notification; 2(32) prescribed; 2(39) regulations |
Section 2(47): unfair trade practice
A trade practice that "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". The list is illustrative, not closed.
| Item | Practice, in short |
|---|---|
| (i) | Statements (oral, written, visible or electronic) that falsely represent standard, quality, quantity, grade, composition, style or model; pass off old or reconditioned goods as new; claim sponsorship, approval or benefits that do not exist; give a public warranty or assurance not based on an adequate or proper test (burden of proof on the person raising that defence); make a materially misleading promise to replace or repair; materially mislead on price; or disparage another person's goods, services or trade with false facts |
| (ii) | Permitting publication of an advertisement for a bargain price of goods or services not intended to be offered at that price, or for a period or in quantities that are not reasonable |
| (iii) | Gifts or prizes offered with no intention of providing them, or an impression that something is given without charge when the amount charged covers it; contests or lotteries to promote sale, except as may be prescribed; withholding final results of a prize scheme |
| (iv) | Permitting sale or supply of goods knowing or having reason to believe they do not meet standards prescribed by the competent authority to prevent or reduce risk of injury |
| (v) | Permitting hoarding or destruction of goods, or refusal to sell or provide a service, if it raises or tends to raise cost |
| (vi) | Manufacturing spurious goods, offering them for sale, or adopting deceptive practices in providing services |
| (vii) | Not issuing a bill, cash memo or receipt in such manner as may be prescribed |
| (viii) | Refusing, after sale or service, to take back defective goods or withdraw deficient services and refund the consideration within the period stated in the bill, cash memo or receipt, or, if none, within thirty days |
| (ix) | Disclosing to another person personal information given in confidence by the consumer, unless the disclosure is according to law |
In item (i) the Explanation deems a statement printed on the article, its wrapper or container to be a statement made to the public "by, and only by" the person who caused it to be so expressed. For a fuller overview, see Unfair Trade Practices Under CPA 2019.
Example. A shopkeeper who refuses to take back a defective fan within the period printed on the bill fits item (viii).
Section 2(46) and 2(41): unfair contract and restrictive trade practice
Unfair contract. A contract between a manufacturer, trader or service provider on one side and a consumer on the other, "having such terms which cause significant change in the rights of such consumer", including: (i) manifestly excessive security deposits; (ii) a penalty for breach wholly disproportionate to the loss; (iii) refusing early repayment of debts on payment of the applicable penalty; (iv) letting a party terminate unilaterally without reasonable cause; (v) letting one party assign the contract to the consumer's detriment without consent; (vi) any unreasonable charge, obligation or condition that puts the consumer at disadvantage.
Restrictive trade practice. A trade practice that tends to manipulate price or conditions of delivery or affect flow of supplies in the market so as to impose unjustified costs or restrictions on consumers, and it includes (i) delay beyond the agreed period in supply or service which has led or is likely to lead to a price rise, and (ii) requiring a consumer to buy, hire or avail goods or services as a condition for other goods or services (tie-in).
Section 2(28), (1), (18): misleading advertisement, advertisement, endorsement
A misleading advertisement is one that (i) falsely describes the product or service; (ii) gives a false assurance of the warranty kind to the consumer, or is likely to mislead as to nature, substance, quantity or quality; (iii) conveys an express or implied representation which, if made by the manufacturer, seller or service provider, would be an unfair trade practice; or (iv) deliberately conceals important information. See Misleading Advertisements Under CPA 2019.
Advertisement: any audio or visual publicity, representation, endorsement or pronouncement by means of light, sound, smoke, gas, print, electronic media, internet or website, including any notice, circular, label, wrapper, invoice or other document. Endorsement: any message, verbal statement or demonstration; depiction of the name, signature, likeness or other identifiable personal characteristics of an individual; or depiction of the name or seal of an institution, which makes the consumer believe it reflects the opinion, finding or experience of the person making it.
E-commerce, direct selling, spurious goods: 2(16), (17), (13), (43)
- E-commerce: buying or selling of goods or services including digital products over digital or electronic network.
- Electronic service provider: a person who provides technologies or processes to enable a product seller to advertise or sell goods or services to a consumer; includes any online market place or online auction site.
- Direct selling: marketing, distribution and sale of goods or provision of services through a network of sellers, other than through a permanent retail location.
- Spurious goods: goods falsely claimed to be genuine.
Detailed conduct rules for e-commerce and direct selling are made by rules; see E-Commerce Consumer Protection Rules 2020.
Establishments, bodies and interpretation clauses
| Clause | Meaning in short |
|---|---|
| 2(3) branch office | Any office or place of work described as a branch by the establishment, or any establishment carrying on the same or substantially the same activity as the head office |
| 2(19) establishment | Includes an advertising agency, commission agent, manufacturing, trading or other commercial agency carrying on business, trade or profession, or such other classes of persons including public utility entities as prescribed |
| 2(4) Central Authority | The Central Consumer Protection Authority established under section 10 |
| 2(14) Director-General | The Director-General appointed under section 15(2) |
| 2(15) District Commission | A District Consumer Disputes Redressal Commission established under section 28(1) |
| 2(44) State Commission | A State Commission established under section 42(1) |
| 2(29) National Commission | The National Commission established under section 53(1) |
| 2(27) member | Includes the President and a member of the National, State or District Commission |
| 2(25), 2(26) mediation, mediator | Process by which a mediator mediates consumer disputes; a mediator is one referred to in section 75 |
| 2(40) Regulator | A body or authority established under any other law for the time being in force |
| 2(30) notification | A notification published in the Official Gazette |
| 2(32) prescribed | Prescribed by rules made by the Central or, as the case may be, the State Government |
| 2(39) regulations | Regulations made by the National Commission or, as the case may be, the Central Authority |
Where the Act says "as may be prescribed", the rules fix the detail; where it says "as may be specified by regulations", the National Commission or the Central Authority fixes it.
Need help with a notice to a seller?
If a seller has refused a refund, charged a hidden amount or made a false claim, a well-drafted notice often prompts action before any complaint. We can draft one that names the practice under section 2 and states your demand. Start with consumer notice drafting and bring the bill, the advertisement and the seller's replies.
Key takeaways
- Unfair trade practice (2(47)) has nine groups; the list is illustrative.
- Refusal to take back defective goods and refund within the stated period, or thirty days if none, is an unfair trade practice (item (viii)).
- Unfair contract terms must cause significant change in the consumer's rights; six examples are given.
- Misleading advertisement covers false description, misleading claims, unfair-trade-practice representations and deliberate concealment.
- "Prescribed" means set by rules; "regulations" means those of the National Commission or Central Authority.
Read next
- Section 2: consumer, complainant, complaint and consumer rights
- Section 2: defect, deficiency, goods, service and product liability
- Unfair Trade Practices Under CPA 2019
- Misleading Advertisements Under CPA 2019
Disclaimer: Based on the Consumer Protection Act, 2019 as enacted, as consulted on 1 October 2026. Monetary limits, fees and procedure are set or revised by rules and regulations made under the Act and should be checked in their current form. This article is general information, not legal advice; check the official text before acting.