Misleading Advertisements (Section 89) →

For the first time in Indian consumer law, a manufacturer or service provider can be sent to prison for an advertisement. Section 89 of the Consumer Protection Act, 2019 makes a false or misleading advertisement that is prejudicial to consumers a punishable offence carrying imprisonment up to two years and a fine up to ten lakh rupees. Read with the statutory definition in Section 2(28) and the formidable civil-penalty machinery of the new Central Consumer Protection Authority under Section 21, the 2019 Act creates a two-track regime — criminal prosecution before a court and administrative penalty before a regulator — that has already been used against FMCG giants, coaching institutes and celebrity endorsers alike. This article maps the definition, the offence, the penalties, the endorser's exposure and the leading case law every aspirant must command.

Why the 2019 Act Changed Everything on Advertising

Under the repealed Consumer Protection Act, 1986, a misleading advertisement was at best an instance of an unfair trade practice for which a consumer could seek compensation; there was no dedicated criminal offence and no regulator empowered to police advertising in the public interest. The Consumer Protection Act, 2019 transformed the landscape. It did three things at once: it inserted a free-standing statutory definition of a misleading advertisement in Section 2(28); it created a criminal offence in Section 89; and it established a powerful enforcement agency, the Central Consumer Protection Authority (CCPA), armed under Section 21 to issue directions, order the discontinuance of an advertisement, impose civil penalties and even bar an endorser from future endorsements.

The shift reflects the reality that advertising is no longer a private dispute between two competitors but a matter of public harm capable of misleading consumers as a class. The Statement of Objects and Reasons of the 2019 Act expressly identified "false or misleading advertisements which are prejudicial to the interest of the public and consumers" as a mischief the legislature intended to suppress. For the foundational architecture of the Act and how these pieces fit together, see our introduction to the Consumer Protection Act, 2019.

It is worth appreciating the policy logic behind criminalising advertising. An advertisement, unlike a defective product sold to one buyer, reaches the entire market simultaneously and shapes the purchasing decisions of thousands. A false claim about a baby food, a medicine or a financial product therefore inflicts diffuse but large-scale harm that no individual consumer has the incentive or resources to litigate. The 1986 Act's purely compensatory model left this collective harm unaddressed. By coupling a criminal offence with a public regulator, the 2019 Act internalises the deterrent that a compensation-only system lacked, and it does so by targeting the source of the harm — the manufacturer or service provider who commissions the message — rather than waiting for downstream injury to materialise.

The Statutory Definition: Section 2(28)

Section 2(28) defines a "misleading advertisement", in relation to any product or service, as an advertisement which — (i) falsely describes such product or service; or (ii) gives a false guarantee to, or is likely to mislead the consumers as to the nature, substance, quantity or quality of such product or service; or (iii) conveys an express or implied representation which, if made by the manufacturer or seller or service provider thereof, would constitute an unfair trade practice; or (iv) deliberately conceals important information.

Four points of examination significance flow from the drafting. First, the four limbs are disjunctive — the word "or" means any single limb suffices; an advertisement need not be literally false to be misleading. Second, limb (ii) catches the likelihood of misleading, so actual deception of a particular consumer need not be proved. Third, limb (iv) — "deliberately conceals important information" — is the limb that has done the heavy lifting against coaching institutes, where the misleading character lay not in any false statement but in suppressing the actual course a topper had taken. Fourth, limb (iii) imports the entire vocabulary of "unfair trade practice" defined in Section 2(47), so that the older jurisprudence on false representations folds neatly into the new definition.

The Offence: Section 89 Dissected

Section 89 provides that any manufacturer or service provider who causes a false or misleading advertisement to be made which is prejudicial to the interest of consumers shall be punished with imprisonment for a term which may extend to two years and with fine which may extend to ten lakh rupees; and for every subsequent offence, with imprisonment up to five years and fine up to fifty lakh rupees.

Several ingredients must be parsed for an exam answer. (a) The actor is narrowly defined — only a "manufacturer or service provider". Significantly, Section 89 itself does not name the endorser, the advertiser or the publisher; their exposure lies on the civil track under Section 21. (b) The actus reus is "causes a false or misleading advertisement to be made", language wide enough to catch one who commissions the advertisement, not merely the agency that produces it. (c) The advertisement must be "prejudicial to the interest of consumers" — a harm element that distinguishes mere puffery from a punishable misstatement. (d) The escalating second-offence penalty signals a recidivism-focused design, mirroring Section 21's graduated civil penalties.

Cognizance and Gatekeeping: Section 92

A crucial procedural safeguard sits in Section 92: no court shall take cognizance of any offence under Sections 88 and 89 except on a complaint filed by the Central Authority or any officer authorised by it in this behalf. This is a deliberate filter. An aggrieved competitor or consumer cannot directly launch a criminal prosecution for a misleading advertisement; the gateway runs through the CCPA. The provision channels prosecutorial discretion to the regulator, preventing the criminal process from being weaponised in private commercial rivalries while ensuring that genuinely harmful campaigns are pursued by a specialised body.

Read alongside Section 96 (compounding of offences under Sections 88 and 89 with the leave of the court) and Section 86 of the Act, the scheme shows the legislature treating advertising offences as regulatory-criminal hybrids rather than ordinary IPC-style crimes. For how the CCPA itself is constituted and staffed, see the Central Consumer Protection Authority.

The Civil Track: CCPA Powers under Section 21

Section 89 is only half the picture. Section 21 gives the CCPA a swift administrative remedy that does not require a criminal trial. Where the Authority is satisfied, after investigation, that any advertisement is false or misleading and prejudicial to the interest of any consumer or in contravention of consumer rights, it may by order direct the trader, manufacturer, endorser, advertiser or publisher to discontinue or modify the advertisement within the time specified.

Beyond a discontinuance direction, Section 21 empowers the Authority to impose a penalty up to ten lakh rupees on a manufacturer or endorser, rising to fifty lakh rupees for every subsequent contravention. It may further prohibit the endorser of a false or misleading advertisement from making any endorsement of any product or service for a period which may extend to one year, and up to three years for a subsequent contravention. These graduated civil sanctions are explored in detail in our note on the powers and functions of the CCPA. The civil track has proved far more active in practice than the criminal one, precisely because it bypasses the slow machinery of a magistrate's court.

The investigative spine of this power lies in Sections 19 and 20 read with Section 21. The CCPA, on a complaint or suo motu or on a reference from the Central Government, may direct its Director-General or the District Collector to investigate. Where the investigation establishes that an advertisement is false or misleading, the Authority's order to discontinue or modify is immediately enforceable, and disobedience itself attracts punishment under Section 88 (imprisonment up to six months or fine up to twenty lakh rupees, or both). This makes the Section 21 direction a self-enforcing instrument: the advertiser either complies or commits a further, separately punishable offence. The architecture deliberately front-loads administrative deterrence so that most misleading campaigns are stopped long before any criminal court is troubled.

Endorser Liability and the Due-Diligence Defence

One of the boldest innovations of the 2019 Act is direct liability for the endorser — typically a celebrity who lends their face and credibility to a product. Under Section 21(2) and (3), an endorser of a false or misleading advertisement faces the same penalty band (ten lakh, rising to fifty lakh rupees) and a prohibition on endorsements (one year, rising to three years).

This liability is, however, tempered by a statutory defence. The first proviso to Section 21 declares that 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. The defence places a positive verification burden on celebrities: passive lending of name no longer suffices. The Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022, issued under the Act, flesh out what "due diligence" requires, mandating that endorsements reflect the genuine, reasonably current opinion of the endorser and be based on adequate information about the product.

Comparative Advertising: Horlicks Ltd. v. Zydus Wellness

The leading judicial treatment of when a glorifying advertisement crosses into a misleading and disparaging one is Horlicks Ltd. v. Zydus Wellness Products Ltd., decided by the Delhi High Court (Justice Mukta Gupta) by order dated 14 May 2020. Zydus had aired a television commercial claiming that one cup of Complan contained the same protein as two cups of Horlicks. Horlicks sought an injunction, contending the advertisement was misleading and disparaging.

The Court held that the impugned commercial was misleading and disparaging notwithstanding a disclaimer, because the disclaimer was not clear and the six-second advertisement created the impression that one cup of Complan equalled two cups of Horlicks without disclosing the differing serve sizes of the two drinks. The Court reiterated the settled principle that a manufacturer is entitled to puff and glorify its own goods, but the moment the message conveys a false impression or denigrates a rival's product, the protection of mere puffery is lost. The case is the doctrinal bridge between trademark-disparagement law and the misleading-advertisement definition in Section 2(28)(i) and (ii).

The decision is also instructive on the legal weight of a disclaimer. The Court accepted the well-settled rule that a disclaimer can cure an otherwise misleading impression only if it is as prominent, legible and durable as the principal claim it qualifies. A fleeting line of fine print appended to a six-second commercial cannot neutralise a bold headline message, because the consumer's net impression is formed by what is salient, not by what is technically present. This "net impression" or "overall effect" test, drawn from a long line of comparative-advertising authorities, is now routinely applied by the consumer fora and the CCPA when assessing whether an advertisement falls within Section 2(28). Aspirants should be able to deploy Horlicks v. Zydus precisely on this point: a true statement, presented so as to create a false overall impression, is still a misleading advertisement.

The Patanjali Saga: IMA v. Union of India

The most consequential recent litigation on misleading health advertisements is Indian Medical Association v. Union of India (W.P.(C) No. 645 of 2022), in which the Supreme Court (Justices Hima Kohli and Ahsanuddin Amanullah) confronted Patanjali Ayurved's campaign claiming cures for ailments and disparaging allopathic medicine. By order dated 27 February 2024 the Court restrained Patanjali from advertising products claiming to cure diseases covered by the Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954, after Patanjali breached an earlier undertaking.

When the offending advertisements continued, the Court issued contempt notices to the company, its managing director Acharya Balkrishna and co-founder Baba Ramdev, eventually rejecting their initial apologies and widening the proceedings to address regulatory inaction by State licensing authorities. Although the case was anchored in the 1954 Act and contempt jurisdiction rather than Section 89 directly, it powerfully illustrates the judiciary's stance that medicinal cure-claims are quintessentially misleading advertisements, and it spurred the CCPA and the Court to demand self-declaration certificates from advertisers. The saga is now the standard examination vehicle for discussing the intersection of misleading advertising, public health and regulatory enforcement.

CCPA in Action: The Coaching-Institute Crackdown

The most prolific use of the Section 21 machinery has been against UPSC and other coaching institutes that advertise spectacular success rates while concealing the actual course a topper had enrolled in — a textbook application of Section 2(28)(iv), "deliberately conceals important information". The CCPA fined Vajiram & Ravi IAS Study Centre seven lakh rupees on finding that large proportions of its advertised successful candidates had enrolled only in short interview-guidance programmes, a fact suppressed from the advertisements.

It penalised Drishti IAS five lakh rupees for inflating selection claims even after notice, and imposed eleven lakh rupees on Vision IAS — described as the first penalty for a repeat offence, triggering the enhanced second-contravention band. To structurally curb the practice, the CCPA issued the Guidelines for Prevention of Misleading Advertisement in Coaching Sector, 2024, mandating disclosure of the specific course, duration and rank of every topper depicted. These enforcement actions show why the civil track under Section 21 — not the criminal track under Section 89 — has become the workhorse of misleading-advertisement regulation in India.

The coaching cases are doctrinally rich because the impugned claims were frequently literally true — the named candidates had indeed cleared the examination and had indeed taken some programme with the institute. The misleading character lay entirely in the suppression of which programme, converting a true fact into a deceptive overall impression. This is the clearest illustration in Indian practice of limb (iv) of Section 2(28) operating independently of limbs (i) and (ii): an advertisement need contain no false statement at all to be misleading, provided it deliberately conceals information that a consumer needs to make an informed choice. The 2024 coaching-sector Guidelines codify this by requiring disclosure of the course name, its duration, the medium and the rank obtained for every successful candidate depicted, so that the omission itself becomes a documented contravention.

The Puffery Line: Glorification versus Deception

Indian law, like English law, permits a trader to indulge in puffery — exaggerated, boastful praise of one's own goods that no reasonable consumer takes literally ("the best cup of tea in the world"). The line is crossed when the claim conveys a specific, verifiable and false representation, or when self-glorification tips into denigration of a competitor. Horlicks v. Zydus sits squarely on this fault line, holding that a comparative numerical claim presented without honest qualification loses the shelter of puffery.

The distinction matters for Section 89 because the offence requires the advertisement to be "prejudicial to the interest of consumers". Pure puffery, being incapable of misleading a reasonable consumer, causes no such prejudice and therefore falls outside the offence. The harder cases involve health, safety and financial claims, where consumers are least able to verify the truth and where the courts and the CCPA have shown the least tolerance — as the Patanjali proceedings vividly demonstrate.

Surrogate, Bait and Other Pernicious Forms

Several recurring advertising techniques squarely engage Section 2(28). Surrogate advertising — promoting a prohibited product (such as liquor or tobacco) under the guise of a permitted brand extension like soda or music CDs — is treated as misleading because it conveys an implied representation through subterfuge, attracting limb (iii). Bait advertising, where a seller advertises goods at a low price with no intention or capacity to supply them in reasonable quantity, falls within the definition of unfair trade practice and hence limb (iii) of Section 2(28).

The 2022 Guidelines expressly proscribe surrogate and bait advertisements, free-claim advertisements that are not genuinely free, and advertisements addressed to children that exaggerate or exploit credulity. Each technique illustrates that the statutory net is cast not only over literally false claims but over any communication whose net impression deceives — a principle the consumer fora have consistently applied, recognising even a cigarette purchaser allured by long-running misleading advertisements as a "consumer" for the purposes of the Act.

Overlap with Other Statutes and Regulators

Section 89 does not operate in isolation. Misleading advertising is also addressed by the Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954 (cure-claims), the Food Safety and Standards Act, 2006 (food claims), the Cable Television Networks Rules, 1994 and the self-regulatory Advertising Standards Council of India (ASCI) Code. The 2019 Act expressly preserves these parallel regimes — Section 100 provides that its provisions are in addition to and not in derogation of any other law.

The practical effect is concurrent jurisdiction: a single deceptive campaign may simultaneously invite a CCPA penalty under Section 21, criminal prosecution under Section 89, an ASCI complaint and action under sector-specific statutes. For aspirants, the key takeaway is that the Consumer Protection Act provides the most general and consumer-facing remedy, while the specialised statutes address particular product categories. The relationship between these remedies and the broader bundle of statutory protections is examined in our note on consumer rights.

Remedies, Forum and Strategic Choice

A consumer or complainant confronting a misleading advertisement has a menu of options. For compensation, the route is a complaint before the Consumer Disputes Redressal Commissions, treating the misleading advertisement as an unfair trade practice. For cessation of an ongoing campaign and public-interest sanction, the route is a representation to the CCPA, which can order discontinuance and impose penalties under Section 21 far more swiftly. For criminal accountability of the manufacturer or service provider, prosecution under Section 89 is available, but only at the instance of the CCPA by virtue of the Section 92 gatekeeping rule.

This forum architecture rewards strategic thinking. A rival competitor, barred from launching a criminal complaint directly, will typically pursue a civil disparagement injunction (as in Horlicks v. Zydus) and simultaneously lodge a CCPA complaint. An aggrieved class of consumers will favour the CCPA route for its regulatory muscle. The cumulative design — criminal, civil-regulatory and compensatory tracks running in parallel — makes Section 89 and Section 21 together the centrepiece of modern Indian advertising regulation.

For revision, fix the spine of the topic firmly: Section 2(28) supplies the four-limbed definition; Section 89 supplies the criminal offence against the manufacturer or service provider, with imprisonment up to two years and fine up to ten lakh rupees, escalating on repetition; Section 92 channels prosecution exclusively through the CCPA; and Section 21 supplies the swift civil-regulatory remedy of discontinuance, penalty and endorser prohibition, subject to the endorser's due-diligence defence. Horlicks v. Zydus illustrates the puffery-versus-deception boundary and the net-impression test; the IMA v. Patanjali proceedings illustrate health-claim enforcement and the judiciary's insistence on self-declaration; and the coaching-institute penalties illustrate concealment-based misleading advertising under limb (iv). Mastery of these five provisions and three authorities equips an aspirant to answer almost any question on misleading advertisements. Return to the Consumer Protection Act notes hub for the complete chapter map.