Consumer Protection Act, 2019

The 2019 Consumer Protection Act brings about fundamental changes to the
existing 1986 legislation. But it also envisages a Central Consumer Protection
Authority and vests too much power and control in this authority without
proposing adequate administrative safeguards.

Mid-August, the Consumer Protection Act, 2019 (2019 Act) received

Presidential assent and came into effect. Notably, the 2019 Act, repeals the
previous consumer protection legislation which had been in effect since 1986
(1986 Act). This prior legislation had been amended from time-to-time to bring
it in accordance with changes brought about by economic liberalisation,
globalisation of markets and digitalisation of products and services. However,
its practical implementation was far from fulfilling its desired objective of being
a socio-economic legislation which sought “to provide for better protection of
the interests of consumers.” While using the same phrase in its preamble, the
2019 Act, has substantially enhanced the scope of protection afforded to
consumers, by bringing within its purview advertising claims, endorsements
and product liability, all of which play a fundamental role in altering consumer
behavior and retail trends in the 21st century.

New Additions

The definition of “consumer” under the 2019 Act includes those who make
purchases online. Endorsement of goods and services, normally done by
celebrities, are also covered within the ambit of the 2019 Act. In fact, an
additional onus has been placed on endorsers, apart from manufacturers and
service providers, to prevent false or misleading advertisements. In contrast to
the 1986 Act, the definition of “goods” has been amended to include “food” as
defined in the Food Safety and Standards Act, 2006. This would also bring the
meteorically rising number of food delivery platforms within the fold of the
2019 Act.

Interestingly, “telecom” has been added to the definition of “services” to bring

telecom service providers within the purview of the 2019 Act. But surprisingly,
such inclusion has not been worded as “telecommunication service” defined
under the Telecom Regulatory Authority of India Act, which would have
included internet, cellular and data services.

A significant addition to the 2019 Act is the introduction of “product liability”

whereby manufacturers and sellers of products or services have been made
responsible to compensate for any harm caused to a consumer by defective
products, manufactured or sold, or for deficiency in services. Another newly
introduced concept is that of “unfair contracts” aimed to protect consumers
from unilaterally skewed and unreasonable contracts which lean in favour of
manufacturers or service providers.

The definition of “unfair trade practices” has been enlarged to include

electronic advertising which is misleading, as well as refusing to take back or
withdraw defective goods, or to withdraw or discontinue deficient services,
and to refund the consideration within the period stipulated or in the absence
of such stipulation, within a period of thirty days. It is now also an offence if
any personal information, given in confidence and gathered in the course of a
transaction, gets disclosed.

All these changes signify an attempt to create more transparency in the

marketplace, through legislative protection, with a view to ensure that
consumer interests are above all else.

Overview

The 2019 Act continues to have Consumer Dispute Redressal Commissions

at the District, State and National levels (Consumer Commissions), however
the pecuniary jurisdiction, i.e. the monetary value of complaints that can be
entertained, of each of these commissions have been substantially increased
to reduce the burden on the State and National Commissions by encouraging
consumers to approach the District Commission for complaints valued up to
Rupees 1 Crore.

Furthermore, the jurisdiction of the Consumer Commissions has also been

expanded to allow complaints to be made where the complainant resides or
personally works for gain, as opposed to the 1986 Act where complaints had
to be instituted where the opposite party resides or conducted business, or
where the cause of action arose. This will ease the burden on consumers who
will now be able to institute complaints at the district level where they reside
and will not be compelled to travel to other parts to pursue their complaints.

Notably, the admissibility of complaints made to Consumer Commissions are

to be decided within twenty-one days. Though such provision was part of the
1986 Act as well, an addition to the 2019 Act is that if the issue of admissibility
of the complaint is not decided within such time, the complaint shall be
deemed to have been admitted. One can’t overstate what a remarkable
addition this is, as it does away with the languishing of complaints at the pre-
admission stage, as had become a current practice, especially at the National
Commission. Regrettably, corresponding procedural amendments have not
been introduced, which raise some doubts about the practical efficacy of the
changes.

The 2019 Act introduces the power of judicial review, which would allow
Consumer Commissions to review their orders, thereby reducing the burden
faced on account of appeals being preferred to rectify errors apparent on the
face of the record. In stark contrast to the 1986 Act, appeals from the State
Commission to the National Commission may now only be made where they
involve substantial questions of law. Appeals from the National Commission to
the Supreme Court can only be made against complaints which originated in
the National Commission. The period prescribed for preferring appeals has
now also been made more
stringent, with a view to tightening the noose regarding timely filing of appeals.

Challenges for the Future

The new legislation has created a Central Consumer Protection Authority

(Authority) to inter alia “regulate matters relating to violation of rights of
consumers, unfair trade practices and false or misleading advertisements
which are prejudicial to the interests of public and consumers and to promote,
protect and enforce the rights of consumers as a class.” To enforce this
provision, the Authority is empowered to inquire and investigate, which it does
through a dedicated investigative wing set-up headed by a Director-General,
analogous to the Competition Commission. Additionally, the Authority can
also file complaints and intervene in matters before the Consumer
Commissions.

While a laudable initiative, it is unclear on how the Authority will practically

function, especially since existing District Collectors have been tasked to
undertake certain functions pertaining to inquiries and investigations. There is
also considerable overlap between the investigative wing and the search and
seizure functions of the District Collector, which are likely to lead to a potential
conflict of interest.

Interestingly, the Authority is empowered to order for recall of goods,

reimburse price paid for goods and services, as well as issue directions and
penalize manufacturers and endorsers for misleading advertisements.
Appeals against such orders can only be preferred before the National
Commission. The factors on which the National Commission may hear such
appeals is unclear and one only hopes it doesn’t lead to the opening of a
Pandora’s Box!

At this point, one is also unclear on whether matters currently pending before
the Consumer Commissions will continue or if they are likely to get transferred
on account of the change in pecuniary jurisdiction. This ambiguity will further
add to delays.

Conclusion

All-in-all the 2019 Act is a positive step towards reformation and development
of consumer laws, in the light of dynamically changing socio-economic
developments. One has seen many other similar steps having recently been
taken, for example, homebuyers being considered Financial Creditors under
the Bankruptcy Code and the coming into effect of RERA. But the real test for
the 2019 Act is in its implementation and some leeway needs to be given for it
to actualize the relief for the consumers.

What is new about the Consumer Protection Act,

2019 

The Consumer Protection act, 2019 was recently passed by both houses of parliament.
How does this differ from the 1986 act and what is in it for the consumers? Here is an
explainer.
The new Consumer Protection bill was passed by the Parliament on 06 August 2019 when
it was passed through a voice vote in the Rajya Sabha. The bill was earlier presented and
passed in the Lok Sabha on 30 July 2019. This bill would replace Consumer Protection
Act, 1986.
But how is the new act different from the 1986 act? We look at some of the important
aspects of the 2019 act and how consumers can benefit from these provisions.

Central Regulatory Authority & Product Liability among key features of the new
act 
Consumer Protection Act, 2019 has proposed certain new provisions which were not part
in the earlier Consumer Protection Act, 1986.  Few of the key provisions which vary from
the earlier Consumer Protection act are the following

What are the Rights of the Consumers?

The new bill has defined 6 rights of the consumers. Which include:
 Right to be protected against the marketing of goods, products or services which
can be hazardous to life and property
 Right to be informed about the quality, quantity, potency, purity, standard and
price of goods, products and services
 Right to be assured of access to goods, products and services at competitive
prices.
 Right to be heard at appropriate forums
 Right to seek redressal against unfair trade practices that are involved in
exploitation of customers
 Right to consumer awareness
What is the role of the Central Consumer Protection Authority?
One of the important provisions of the new act is the proposal to set up a Central
Consumer Protection Authority (CCPA) by the Central Government. The stated purpose
of CCPA would be ‘to promote, protect and enforce the rights of the consumers.’
An investigative wing headed by a Director General would conduct inquires and
investigations into any violations relating to consumer rights, unfair trade practices and
misleading advertisements. The earlier Consumer Protection Act, 1986 did not have any
such provision for a regulator.

The important functions of CCPA would include:

 Inquiring into consumer rights violations.

 Investigating these violations and proceeding with prosecution as appropriate
 Pass orders to recall any goods or withdraw services that are deemed to be
hazardous
 Issue orders in regard to reimbursement of the price paid by customers for such
services
 Issues directions to the appropriate personnel in regard to any false or misleading
advertisement to either discontinue or modify it
 Imposing penalties in respect to any violations
 Issues notices to educate consumers in regard to unsafe goods and services.
In the statement of objects & reasons of the new bill, it is mentioned that
the ‘establishment of an executive agency like the CCPA to promote, protect and enforce
the rights of consumers; make interventions when necessary to prevent consumer
detriment arising from unfair trade practices and to initiate class action including
enforcing recall, refund and return of products, etc. fills an institutional void in the
regulatory regime. Currently, the task of prevention of or acting against unfair trade
practices is not vested in any authority. This has been provided for in a manner that the
role envisaged for the CCPA complements that of the sector regulators and duplication,
overlap or potential conflict is avoided.’
Then what about the Consumer Disputes Redressal Commissions?
Like in the case of the 1986 act,  Consumer Disputes Redressal Commissions (CDRCs)
would be setup at various levels. The CDRCs would be set up at multiple levels – district,
state and national.
Consumers can file complaints with the CDRCs regarding any of the following.

 Defective goods or services

 Overcharging or deceptive charging on goods and services
 Any unfair or restrictive trade practices
 Offering services or sale of goods which can be hazardous to life or not safe
Complaints for all these can be filed in the district level CDRCs and all these complaints
can be made online (electronically).

Jurisdiction of CDRCs: Each of these levels of CDRCs have varying jurisdiction based

on the value of goods and services for which the complaint is being made.

What is the appellate process?

The parties involved in the complaint have the right to appeal in the higher forums in
respect to any ruling provided in the respective CDRCs.

 Any appeals from the district CDRC would be heard in the State CDRC.
 Appeals from State CDRCs would be taken up in National CDRC.
 The final appeal beyond National CDRC would be taken up by the Supreme
Court.
What about product liability?
Product Liability is a key aspect introduced in this bill that would benefit the consumers.
Under the provisions of this bill, a manufacturer or a service provider would be required
to compensate the consumer in case of any loss or injury due to a manufacturing defect in
the product or a poor service.
This differs from the existing provision where only the cost of the product was
compensated by the manufacturer or the service provider and not the cost of the loss or
injury as in the current proposal. The provision for seeking compensation for the loss or
injury was only through the civil courts, which have been observed to take a long time to
resolve.

E-Commerce would also be covered

E-Commerce has been gaining traction over the past few years and Consumer Protection
Act, 1986 does not have any provisions to deal with these transactions.  As per the new
act, all the laws that apply for direct selling would also be applicable for E-Commerce.

One of the key guidelines in this regard is that the E-Commerce platforms (Amazon,
Flipkart etc.) are required to disclose the details of the sellers. Apart from the
manufacturers, product liability would also include the sellers as well as the service
providers i.e. the e-commerce aggregators.

Guidelines regarding Misleading advertising and Endorsers

The bill lays down guidelines for any misleading advertisements for a product or service
which effects the consumer. It could lead to a prison term of two years and a fine which
can be up to Rs. 10 Lakhs. Any subsequent offence could lead to an imprisonment of up
to 5 yeas and a fine extending to Rs. 50 Lakhs.
The new bill, has provisions which allow CCPA to fix the liability even on the endorser
of any misleading advertisement. It can also prohibit an endorser from making
endorsement for any product or service for a period of one year if found necessary. Any
subsequent violation could result in prohibition from endorsing any product or service for
a period of 3 years. This is expected to make the brand ambassadors exercise due
diligence on the veracity of the claims being made about a product or a service before
choosing brands to endorse.
The bill simplifies consumer litigation and takes cognizance of emerging trends, but
implementation remains a challenge
The electronic filing of complaints & permission to attend the hearing through video
conference are very important steps in simplifying the process of complaints. Further, the
idea of mediation could also help in quicker disposal of cases. With the inclusion of E-
commerce under the gambit of consumer laws, the bill takes cognizance of the emerging
trends in the marketplace.

However, it remains to be seen how all the new provisions will be implemented since it
will require augmenting the physical & human resources at every level and that will
require additional allocation of funds both by the Central & State Governments.
Salient Features of Consuer Protection Act /
Consumer dispute redressal

1. Chapter II- The Central Consumer Protection Council

The Central Government shall, by notification, establish with effect from such date as
it may specify in that notification, the Central Consumer Protection Council to be
known as the Central Council. The Central Council shall be an advisory council
whose object shall be to render advice on promotion protection of the consumer's
rights under this Act.

It shall consist of the following members, namely:- (a) the Minister-in-charge of the
Department of Consumer Affairs in the Central Government, who shall be the
Chairperson; and (b) such number of other official or non-official members
representing such interests as may be prescribed.

Similarly, the state government shall also by way of a notification establish a state
consumer protection council at the state level and a District Consumer Protection
Council for every district in the state.

2. Chapter III- Central Consumer Protection Authority (CCPA):

2.1 The central government shall, through a notification set up the Central Consumer
Protection Authority (CCPA) to be known as "Central Authority" to promote, protect
and enforce the rights of consumers as a class. It will regulate matters related to
violation of consumer rights, unfair trade practices, and misleading advertisements.
The CCPA would make interventions to prevent consumer detriment arising from
unfair trade practices. The agency can also initiate class action, including enforcing
recall, refund and return of products. It is introduced with an intent to fill the
institutional void in the regulatory regime extant. Currently the task of prevention of
and acting against unfair trade practise is not vested in any authority. The role
envisaged for the CCPA complements that of a sector regulator and thus
duplications, overlap or potential conflict is avoided.

2.2 The Central Authority shall be headquartered at the National Capital Region of
Delhi and shall have regional and other offices in other parts of India.

2.3 Under section 18, the CCPA will be empowered to:

2.3.1 Protect, promote and enforce the rights of consumers as a class, and prevent
violation of consumers rights under this Act;

2.3.2 Prevent unfair trade practices and ensure that no person engages himself in
unfair trade practices;

2.3.3 Ensure that no false or misleading advertisement is made of any goods or

services which contravenes the provisions of this Act or the rules or regulations made
thereunder
2.3.4 Ensure that no person takes part in the publication of any advertisement which
is false or misleading.

2.4 The Central Authority may for any of the aforesaid reasons:

2.4.1 inquire or cause an inquiry or investigation to be made into violations of

consumer rights or unfair trade practices, either suo motu or on a complaint received
or on the directions from the Central Government;

2.4.2 file complaints before the District Commission, the State Commission or the
National Commission, as the case may be, under this Act;

2.4.3 intervene in any proceedings before the District Commission or State

Commission or National Commission, as the case may be, in respect of any
allegation of violation of consumer rights or unfair trade practices;

2.4.4 review the matters relating to, and the factors inhibiting enjoyment of ,consumer
rights, including safeguards provided for the protection of consumers under any other
law for the time being in force and recommend appropriate remedial measures for
their effective implementation;

2.4.5 Recommend adoption of international covenants and best international

practices on consumer rights to ensure effective enforcement of consumer rights

2.4.6 undertake and promote research in the field of consumer rights;

2.4.7 spread and promote awareness on consumer rights;

2.4.8 encourage non-Governmental organisations and other institutions working in

the field of consumer rights to co-operate and work with consumer protection
agencies;

2.4.9 mandate the use of unique and universal goods identifiers in such goods, as
may be necessary, to prevent unfair trade practices and to protect consumers'
interest;

2.4.10 issue safety notices to alert consumers against dangerous or hazardous or

unsafe goods or services;

2.4.11 advise the Ministries and Departments of the Central and State Governments
on consumer welfare measures;

2.4.12 issue necessary guidelines to prevent unfair trade practices and protect
consumers' interest.

2.5 The bill has specifically sought to safeguard the acts and proceeding of the
central authority and held them to be valid in the following cases:

2.5.1 any vacancy in, or any defect in the constitution of, the Central Authority; or

2.5.2 any defect in the appointment of a person acting as the Chief Commissioner or
as a Commissioner; or
2.5.3 any irregularity in the procedure of the Central Authority not affecting the merits
of the case.

2.6 Under section 19. the Central Authority may, based on complaint, information or
directions from the central government or on its own motion, where there seems to
be a prima facie case of violation of Consumer rights or any unfair trade practise,
conduct a preliminary inquire to authenticate the information.

2.7 Under section 20, where on the basis of investigation, the Central Authority is
satisfied that there is sufficient evidence to show violation of Consumer rights and
unfair trade practise by a person, the Central Authority may pass orders as may be
necessary, including:

2.7.1 recalling of goods or withdrawal of services which are dangerous, hazardous or

unsafe;

2.7.2 reimbursement of the prices of goods or services so recalled to purchasers of

such goods or services; and

2.7.3 discontinuation of practices which are unfair and prejudicial to consumers'

interest:

Provided that the Central Authority shall give the person an opportunity of being
heard before passing an order under this section.21.

2.8 Under section 21, the Central Authority may, in case of false or misleading
advertisements or which is prejudicial to the interest of the consumer or is in
contravention of Consumer Rights pass directions to the manufacturer or endorser to
discontinue or modify the same along with the imposition of fines( which may extend
to 10 lakh rupees. Order in this regard may also extend to a ban on the manufacturer
or endorser, which may extend to 1 year. The bill provides for aggravated
punishments for subsequent contraventions.

2.9 Under section 22, for conducting the investigation, after the preliminary enquiry,
the Central Authority may also conduct search and seizure. (the provisions Cr. PC
relating to search and seizure shall apply to search and seizure under this Act.

2.10 Under section 24, the aggrieved party in cases where the authority has passed
order to recall goods, or the aggrieved party wherein the authority has passed orders
to discontinue or modify advertisements, can appeal to the National Commission
within 30 days of receipt of the impugned order.

2.11 Clearly, the objective is to set up an authority with a large mandate and with
wide powers, which is evident from the fact that the CCPA will have an investigation
wing, headed by a Director-General, which may conduct inquiry or investigation into
such violations.

3. Chapter IV- Consumer Disputes Redressal Commission

3.1 Under the Consumer protection Act, 1986 as well as the bill of 2019, there are
three forums to redress consumer disputes as per pecuniary limits. Under the bill of
2019, the monetary relief/ compensation sought by the aggrieved consumer is based
on the value of consideration "paid" for the product or service and not "claimed" by
the consumer.

3.2 Under the Consumer Protection Bill, 2019, pecuniary Jurisdiction of the three
forums have been enhanced to-

a. District Commission –Up to Rs.1 crore

b. State Commission- Between Rs.1 crore and Rs 10 crore
c. National Commission –Above Rs.10 crore

3.3 Under section 28, the state government may establish a District Consumer
disputes Redressal Commission (District Commission) in every district of the state or
more than 1 District Commission in a single district. Pecuniary limit of the District
Commission is 1 crore.

3.4 Under section 32, any vacancy in the office of the members of the District
Commission, the State Government may direct any other District Commission vide
notification to exercise the jurisdiction of that particular Commission. The person so
designated shall also exercise his/ her respective function of their Commission.

3.5 Under section 35, the following persons can file complaints in relation to any
good sold or delivered or agreed to be sold or delivered or any service provided or
agreed to be provided:

a. Consumer
b. Any recognised Consumer association, irrespective of whether the aggrieved
party is a member of such group or association.
c. One or more consumers, when there are multiple consumers with the same
interest, with the permission of the District Commission.
d. Central Government, Central Authority or State Authority.

Provided the complaint in this section may be filed electronically. It shall not be
rejected without affording a hearing to the Complainant and the admissibility of the
Complaint shall be decided within 21 days from the date of filing the
Complaint.

It is important to note that the aggrieved party can file the complaint even from
where he/she resides unlike initially where it had to be filed where the seller or
service provider is located- which has significant cost and time implications on
the complaint. This is even more beneficial where e-commerce and e-
transactions are on the rise and the service providers/ sellers could have their
registered office anywhere in the world.

3.6 Under section 37, when after the admission of the Complaint, it appears to the
District Commission that there exists elements of settlement which may be
acceptable to the parties, it may direct the parties to give in writing within 5 days,
their consent to have the dispute settled through Mediation.

3.7 Under section 38, a complaint after admission ( including cases where Mediation
has failed) must be disposed of within 3 months of the date of receipt of the Notice by
the opposite party where the Complaint does not require analysis or testing of
commodities and within five months if it requires analysis and testing of commodities.
3.8 Powers of Civil Court under CPC, 1908-

For the purpose of section 38, District Commission shall have the same power as are
vested in the civil court under the CPC, 1908, while trying suits in the following
matters:

a. The summoning and enforcing the attendance of any defendant or witness

and examining the witness on oath;
b. Requiring the discovery and production of any document or other material
object as evidence;
c. Receiving of evidence on affidavits;
d. The requisitioning of the report of the concerned analysis or test from the
appropriate laboratory or from any other relevant source;
e. Issuing of commissions for the examination of any witness, or document;
f. Any other matter which may be prescribed by the Central Government.

3.9 Under section 42 (3) and section 54(1), the composition of the State and the
National Commission shall consist of:

a. The President
b. Not less than four and more than such number of members as may be
prescribed.

As compared to the Consumer Protection Act, 1986, the present bill does not
lay emphasis on qualifications for the members of the State and National
Commission. Section 55 (1) provides that the Central government may, by
notification make rules to provide for qualification, appointments, term of
office amongst other things.

The President and every other member appointed immediately before the
commencement of section 177 of the Finance Act, 2017 shall continue to be
governed by the provisions of the Consumer Protection Act, 1986 and the rules
made thereunder as if this Act had not come into force.

3.10 Transitional Provision

The President and every other member appointed immediately before the
commencement of section 177 of the Finance Act, 2017 shall continue to be
governed by the provisions of the Consumer Protection Act, 1986 and the rules made
thereunder as if this Act had not come into force.

3.11 Jurisdiction of the State Commission under section 47-

3.11.1 to entertain—

3.11.1.1 complaints where the value of the goods or services paid as consideration,
exceeds rupees one crore, but does not exceed rupees ten crore. Provided that
where the Central Government deems it necessary so to do, it may prescribe such
other value, as it deems fit;

3.11.1.2 complaints against unfair contracts, where the value of goods or services
paid as consideration does not exceed ten crore rupees;
3.11.1.3 appeals against the orders of any District Commission within the State; and

3.11.2 to call for the records and pass appropriate orders in any consumer dispute
which is pending before or has been decided by any District Commission within the
State, where it appears to the State Commission that such District Commission has
exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction
so vested or has acted in exercise of its jurisdiction illegally or with material
irregularity.

3.12 Jurisdiction of the National Commission under section 58

3.12.1 to entertain—

3.12.1.1 complaints where the value of the goods or services paid as consideration

exceeds rupees ten crore. Provided that where the Central Government deems it
necessary so to do, it may prescribe such other value, as it deems fit.

3.12.1.2 complaints against unfair contracts, where the value of goods or services
paid as consideration exceeds ten crore rupees;

3.12.1.3 appeals against the orders of any State Commission;(iv) appeals against the
orders of the Central Authority; and(b) to call for the records and pass appropriate
orders in any consumer dispute which is pending before or has been decided by any
State Commission where it appears to the National Commission that such State
Commission has exercised a jurisdiction not vested in it by law, or has failed to
exercise a jurisdiction so vested, or has acted in the exercise of its jurisdiction
illegally or with material irregularity.

It is pertinent to note that the pecuniary limits of all three forums have been
enhanced through the present bill. However, what is interesting in terms of the
pecuniary jurisdiction, is the specific language employed in the Bill.
Pertinently, such a clause in the 1986 Act was stated as " where the value of
goods or services and compensation , if any, claimed....", whereas in the bill ,
the language in the provision is as follows:" where the value of the goods and
services paid as consideration...". Therefore the compensation claimed by the
Complainant does not seem a factor in assessment of jurisdiction, but the
phrase " paid as consideration" seems to imply that the pecuniary jurisdiction
is determined by what has been actually paid already by the Complainant and
not the total value of the goods/ service. Such a reading of this provision may
particularly impact flat purchasers, where even though the value of the
property may be above 1 crore, but because they have paid a lesser
consideration ( as per construction milestones), they would be denied the right
to approach the State or National Commission.

One more important addition in the reliefs that can be granted by the State and
the National Commission is that they can look into and consider unfair and
one-sided contracts. This is in line with multiple SC judgments where it has
been held that courts will not enforce and will, when called upon to do so strike
down an unfair and unreasonable contract. This is especially useful in light of
standard, unilateral , terms and conditions imposed upon the customers in
various fields like housing, e-commerce, banking etc.
It is pertinent to note that under the present bill, the composition of the district,
state and National Commission does not consist of serving or retired members
from the judiciary.

The appointment of members of the District and State Commission is made in

consultation with the Central Government. This may prolong the appointment
of members and delay the delivery of justice. It is important to give each
Commission such amount of powers which will ensure their autonomy and
smooth functioning.

3.13 Review

Under sections 40, 50 and 60, the District Commission, the State Commission and
the National Commission respectively shall have the powers to review any of its
orders if there is an error on the face of the record, either of its own motion or on an
application made by any of the parties within 30 days of the date of the order.

3.14 Appeals

Under section 52, an appeal filed before the state or the National Commission shall
be heard as expeditiously as possible and disposed of within a period of 90 days
from the date of its admission.

3.15 Expert Opinion

Under section 66, where the National Commission or the State Commission, as the
case may be, on an application by a complainant or otherwise, is of the opinion that it
involves the larger interest of consumers, it may direct any individual or organisation
or expert to assist the National Commission or the State Commission, as the case
may be.

3.16 Administrative Control-

Apart from the general power of control that the State and National commission have
been granted under the 1986 Act, the present bill proposes the establishment of a
monitoring cell to be constituted by the President of the National Commission to
oversee the functioning of the State Commission from the administrative point of
view.

3.17 Enforcement of orders

Every order made by a District Commission, State Commission or the National

Commission shall be enforced by it in the same manner as if it were a decree made
by a Court in a suit before it and the provisions of Order XXI of the First Schedule to
the Code of Civil Procedure, 1908 shall, as far as may be, applicable, subject to the
modification that every reference therein to the decree shall be construed as
reference to the order made under this Act.

3.18 Penalty for non-compliance of order

3.18.1 Whoever fails to comply with any order made by either of the 3 forums, shall
be punishable with imprisonment for a term which shall not be less than one month,
but which may extend to three years, or with fine, which shall not be less than twenty-
five thousand rupees, but which may extend to one lakh rupees, or with both.

3.18.2 Notwithstanding anything contained in the Code of Criminal Procedure, 1973,

the three forums shall have the power of a Judicial Magistrate of First Class for the
trial of offences under sub-section (1) above, and on conferment of such powers, the
said three forums, shall be deemed to be a Judicial Magistrate of First Class for the
purposes of the Code of Criminal Procedure, 1973.

3.18.3 Save as otherwise provided, the offences under sub-section (1) shall be tried
summarily by the District Commission or the State Commission or the National
Commission, as the case may be.

In the 1986 Act, non-compliance of interim orders would ensue attachment of

property. If the default continued beyond 3 months, then the property would be
sold, and proceeds given to the consumer as damages as determined by the
adjudicating forum and the balance to the party entitled thereto.

The present bill has sought to increase the culpability of the offences that may
be committed against the consumers and have made the penal provisions
more severe and deterrent. It has attempted to bring the Consumer Protection
Act under the ambit of criminal jurisprudence.

4. Chapter-V- Mediation under section 74

4.1 The present bill has introduced the remedy of Mediation within the fold of
Consumer Protection Act. The act per se does not lay down a specific time line for
the completion of Mediation but has mentioned that the Mediator has to conduct
mediation within such time and in such a manner as may be specified by the
regulations (which is made by state and National Commissions)

4.2 The state government shall by notification establish a consumer mediation cell to
be attached to every district and state Commission of the state.

4.3 The Central Government shall establish, by notification, a consumer mediation

cell to be attached to the National Commission and each of the regional Benches.

4.4 A consumer mediation cell shall consist of such persons as may be prescribed.

4.5 Every consumer mediation cell shall maintain—

a. a list of empanelled mediators;

b. a list of cases handled by the cell;
c. record of proceeding; and
d. any other information as may be specified by regulations.

4.6 Empanelment of Mediators

For the purpose of Mediation, the 3 forums shall prepare a panel of Mediators to be
maintained by the Consumer Mediation Cell attached to the respective forum. The
said list of Mediators shall be valid for a period of 5 years.

4.7 Settlement through Mediation under section 80-

Pursuant to mediation, if an agreement is reached between the parties, the same
ought to be reduced in writing and signed by the parties and their respective
representatives. This could be w.r.t. all the issues or some issues.

4.8 When no agreement is reached, the Mediator has to prepare the report to that
effect and submit the same with the concerned Commission.

4.9 Recording settlement and passing orders-

The three forums shall within 7 days of receipt of the settlement report from the
mediator pass order recording the settlement and dispose of the case. In the event
only certain issues have been settled, so the concerned Commission record the
issues so settled and proceed to hear the other issues involved in the case. And
where issues are not settles, the Commissions shall continue to hear all the issues
involved in the consumer dispute.

5. Chapter VI -Product Liability

5.1 A manufacturer or product service provider or product seller will now be

responsible to compensate for injury or damage caused by defective product or
deficiency in services.

5.2 The basis for product liability action for a product manufacturer under section 84
are:

a. Manufacturing defect
b. Design defect
c. Deviation from manufacturing specifications
d. Product not conforming to express warranty
e. Product failing to contain adequate instruction of correct use to prevent any
harm or any warning regarding improper or incorrect usage.

5.3 The basis for product liability action for a product service provider under section
85 are:

a. Services provided are faulty, imperfect, deficient or inadequate in quality,

nature or manner of performance, required to be provided by or under the
prevalent law or contract as the case may be.
b. Action of omission or commission or negligence or conscious withholding of
information which caused harm.
c. Service didn't confirm to express warranty or terms and conditions of the
contract.

5.4 A product seller who is not a product manufacturer shall be liable in a product
liability action under section 86, if—

a. he has exercised substantial control over the designing, testing,

manufacturing, packaging or labelling of a product that caused harm; or
b. he has altered or modified the product and such alteration or modification was
the substantial factor in causing the harm; or
 c. he has made an express warranty of a product independent of any express
warranty made by a manufacturer and such product failed to conform to the
express warranty made by the product seller which caused the harm; or
d. the product has been sold by him and the identity of product manufacturer of
such product is not known, or if known, the service of notice or process or
warrant cannot be effected on him or he is not subject to the law which is in
force in India or the order, if any, passed or to be passed cannot be enforced
against him; or
e. he failed to exercise reasonable care in assembling, inspecting or maintaining
such product or he did not pass on the warnings or instructions of the product
manufacturer regarding the dangers involved or proper usage of the product
while selling such product and such failure was the proximate cause of the
harm.

The said definition has very effectively brought online market within the ambit
of Consumer Protection Act. Online retail platforms can be made liable for the
products available for sale on their websites. It is also interesting to note that,
post coming into effect of the 2019 bill, celebrities endorsing misleading ads
would also be liable for fine. The said provision of product liability also
ensures that the product manufacturers or service providers do not supply
defective products and provide deficient services.

5.5 Exceptions to product liability action:

5.5.1 Under section 87, product liability action cannot be brought against the seller, if
at the time of harm, the product was misused, altered and modified.

5.5.2 In any product liability action based on the failure to provide adequate warnings
or instructions, the product manufacturer shall not be liable, if—

a. the product was purchased by an employer for use at the workplace and the
product manufacturer had provided warnings or instructions to the employer.
b. Product was sold as a component or material to be used in another [product
and instructions or warnings were given by the manufacturer to the
purchaser, but the harm was caused to the Complainant by use of the end
product in which such component or material was used.
c. The product was legally meant to be used or dispensed only by or under the
supervision of an expert or a class of experts and the product manufacturer
had employed reasonable means to give the warnings or instructions for
usage of such product to the expert or class of experts.
d. The complainant while using such a product was under the influence of
alcohol or any prescription drug, no prescribed by a medical practitioner

5.5.3 A product manufacturer shall not be liable to instruct or warn about a danger
which is obvious or commonly known to the user or consumer of the product or which
such user or consumer ought to have known, considering the characteristics of such
product.

This particular provision (c) provides a lot of levy to the product manufacturer
wherein it is very easy for the product manufacturer to find loopholes to
escape liability. A simple example would be of cigarette manufacturing
companies, where they would escape liability under the cover of this provision.

Some Judgements:
 In Indian Medical Association v. V.P. Shantha, AIR 1996 SC 550
the SC held that medical services are covered under the purview of
the Consumer Protection Act. A Patient aggrieved by the medical
treatment can file a complaint as a consumer. However, if the
services are rendered free of charge or under a contract for personal
service, they are not covered under the Consumer Protection Act.
 In Spring Meadows Hospital v. Harjot Ahluwalia, AIR 1998 SC
1801, it was held that if due to the fault of a Nursing Home, brain
damage is caused to a child, nursing home shall be liable for that
under the Consumer Protection. Both parents and the child would
be entitled to compensation because parents are consumers as they
hire the services and the child is a consumer as he is beneficiary of
the services.
 In Surjit Kumar Banerjee v. M/s Ramesh Wasan, AIR 2009 SC
1188, in case of agreement between land owner and the builder for
the construction of a building and delivery of agreed construction
area, it has been held by SC that land owner is a consumer within
the meaning of Section 2(1) (d) (g) of the Act, 1986 and the
builder is a service provider.
 In A.C. Modagi v. Cross Well Tailor, II (1991) C.P.J. 586, the
National Commission has held that the service rendered by a tailor
is not a contract of personal service and if he defectively stitches a
garment, he is liable for loss arising thereby.
 S.K. Kaushal, Ambala Cantt. V. Saini Law Agency, 1 (1992) CPJ
384. In this case it was held that Book Seller is not a consumer
hence his complaint was dismissed.
 In Charan Singh v. Healing Touch Hospital and others, (2007) 7
SCC 668, the Apex Court held that calculation of damages depends
on the facts and circumstances of each case. No hard and fasr rule
can be laid down for universal application.
 In Madan Kumar Singh v. District Magistrate Sultanpur, (2009) 9
SCC 79, A person Purchasing a Truck for consideration which was
paid bt him for earning his livelihood is a consumer even if he
employs a driver for running the truck. The buyers of goods for
‘self consumption’ in the economic activities’ in which they are
engaed would be consumers and such a purpose cannot be called
‘commercial purpose’.
 In Bihar school Examination Board v. Suresh Prasad Sinha, AIR
2010 SC 93, A statutory Board conducting examinations is not a
service provider and does not offer services to candidates while
conducting an examinations.
 The SC in Om Prakash V. Reliance General Insurance, AIR 2017
Sc has observed that though the owner has to intimate the insurer
immediately after the theft of the vehicle, this condition should not
bar settlement of genuine claims, particularly when the delay in
intimation or submission of documents is due to unavoidable
circumstances.