Section 21 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.
Section 21 is the Authority's main tool against false or misleading advertisements. After investigation, it can direct a trader, manufacturer, endorser, advertiser or publisher to stop or change an advertisement, impose a penalty on a manufacturer or an endorser of up to ten lakh rupees (up to fifty lakh for each later contravention), bar an endorser from endorsing for up to one year (three years for later contraventions), and penalise publishers. It also gives defences and lists factors for fixing the penalty. For advice on an advertising campaign or an endorsement, a legal consultation is a sensible first step.
After investigation, the Authority may direct discontinuation or modification of an advertisement (21(1)); impose a penalty on a manufacturer or endorser up to ten lakh rupees, and up to fifty lakh rupees for each subsequent contravention (21(2)); prohibit an endorser from endorsing for up to one year, and up to three years for each subsequent contravention (21(3)); and penalise a publisher or party to publication up to ten lakh rupees (21(4)). An endorser who exercised due diligence is not liable under (2) and (3) (21(5)). The Authority must hear the person first (21(8)).
Section 21 at a glance
| Sub-section | Subject | Key figure or point |
|---|---|---|
| 21(1) | Directions to discontinue or modify | To trader, manufacturer, endorser, advertiser or publisher |
| 21(2) | Penalty on manufacturer or endorser | Up to ten lakh rupees; up to fifty lakh for each subsequent contravention |
| 21(3) | Prohibition on endorser | Up to one year; up to three years for each subsequent contravention |
| 21(4) | Penalty on publisher or party to publication | Up to ten lakh rupees |
| 21(5) | Endorser's defence | Due diligence to verify claims |
| 21(6) | Publisher's defence | Published in the ordinary course of business |
| 21(7) | Factors for penalty | Four listed factors |
| 21(8) | Hearing | Opportunity of being heard before an order |
Section 21(1): directions to discontinue or modify
"Where the Central Authority is satisfied after investigation that any advertisement is false or misleading and is prejudicial to the interest of any consumer or is in contravention of consumer rights, it may, by order, issue directions to the concerned trader or manufacturer or endorser or advertiser or publisher, as the case may be, to discontinue such advertisement or to modify the same in such manner and within such time as may be specified in that order."
Points to note:
- It follows investigation, as in section 20. See our article on section 19.
- Five kinds of persons can be directed: trader, manufacturer, endorser, advertiser, publisher.
- The direction is either to discontinue or to modify, and the manner and time are "as may be specified in that order".
- "False or misleading" is read with the definitions of misleading advertisement and endorsement in section 2. See our article on the definitions and the site's Misleading Advertisements Under CPA 2019.
Section 21(2): penalty on manufacturer or endorser
"Notwithstanding the order passed under sub-section (1), if the Central Authority is of the opinion that it is necessary to impose a penalty in respect of such false or misleading advertisement, by a manufacturer or an endorser, it may, by order, impose on manufacturer or endorser a penalty which may extend to ten lakh rupees". The proviso allows, "for every subsequent contravention by a manufacturer or endorser", a penalty "which may extend to fifty lakh rupees".
| Occurrence | Maximum penalty (as printed) |
|---|---|
| First | Up to ten lakh rupees |
| Each subsequent contravention | Up to fifty lakh rupees |
"May extend to" sets a ceiling, not a fixed sum. The Authority fixes the actual amount in each case within the ceiling, having regard to sub-section (7). The penalty is in addition to, and not a substitute for, the direction in sub-section (1) ("notwithstanding"). The section does not define "subsequent contravention" or say whether it must relate to the same advertisement.
Section 21(3): prohibiting an endorser
"Notwithstanding any order under sub-sections (1) and (2), where the Central Authority deems it necessary, it may, by order, prohibit the endorser of a false or misleading advertisement from making endorsement of any product or service for a period which may extend to one year". The proviso allows, "for every subsequent contravention", a prohibition "for a period which may extend to three years".
| Occurrence | Maximum prohibition (as printed) |
|---|---|
| First | Up to one year |
| Each subsequent contravention | Up to three years |
The prohibition covers "any product or service", not only the one in the advertisement.
Section 21(4): publishers and parties to publication
"Where the Central Authority is satisfied after investigation that any person is found to publish, or is a party to the publication of, a misleading advertisement, it may impose on such person a penalty which may extend to ten lakh rupees." There is no higher figure for later contraventions in this sub-section. The words "any person" are wide and include a publisher, subject to the defence in sub-section (6).
Defences: 21(5) and 21(6)
Endorser, 21(5). "No endorser shall be liable to a penalty under sub-sections (2) and (3) if he has exercised due diligence to verify the veracity of the claims made in the advertisement regarding the product or service being endorsed by him." Note that the defence names sub-sections (2) and (3), the penalty and the prohibition. The text does not say what steps amount to due diligence.
Publisher, 21(6). "No person shall be liable to such penalty if he proves that he had published or arranged for the publication of such advertisement in the ordinary course of his business." Here the person must prove it. The proviso removes the defence "if he had previous knowledge of the order passed by the Central Authority for withdrawal or modification of such advertisement". So a publisher who keeps running an advertisement after learning of the Authority's order cannot rely on it.
Factors for fixing the penalty: 21(7)
"While determining the penalty under this section, regard shall be had to":
- the population and the area impacted or affected by such offence;
- the frequency and duration of such offence;
- the vulnerability of the class of persons likely to be adversely affected by such offence; and
- the gross revenue from the sales effected by virtue of such offence.
Regard "shall" be had to these, so they are mandatory considerations.
Hearing and appeal: 21(8) and section 24
"The Central Authority shall give the person an opportunity of being heard before an order under this section is passed." An order under section 21 can be appealed to the National Commission within thirty days of receipt under section 24; see our article on sections 23-24.
Example. A manufacturer advertises a drink with a health claim that has no basis. The Authority directs it to modify the advertisement and penalises it. The film personality who endorsed it shows he checked test reports before endorsing; under 21(5) he is not liable if the Authority accepts his due diligence.
What section 21 leaves out
- The ten lakh and fifty lakh figures are as printed in the Act as enacted; this article states no other amount.
- No definition of due diligence, and no time limit for passing the order.
- Criminal punishment for misleading advertisements is in a separate section; see our article on sections 88-89 when published.
Need help with an advertisement or endorsement?
Advertisers, publishers and public figures should check claims before a campaign goes live, and keep proof of the checks. We can review your claims, endorsement agreements and any Authority notice. Book a legal consultation and bring the advertisement, the contract and the supporting test or data.
Key takeaways
- The Authority can direct discontinuation or modification of a false or misleading advertisement (21(1)).
- Penalty on a manufacturer or endorser: up to ten lakh rupees, up to fifty lakh for each subsequent contravention.
- Endorser may be barred for up to one year, up to three years for each subsequent contravention.
- Publishers or parties to publication: penalty up to ten lakh rupees.
- Endorser's defence is due diligence; publisher's defence is ordinary course of business, lost on previous knowledge of the order.
- Four factors guide the penalty, and a hearing is required.
Read next
- Section 20: recall of goods and refund orders
- Section 22: search and seizure
- Misleading Advertisements Under CPA 2019
- Penalties Under Consumer Protection Act 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.