Consumer Protection Act, 2019
Introduction:
A consumer is defined as a person who buys any good or avails a service for
a consideration. It does not include a person who obtains a good for resale
or a good or service for commercial purpose. It covers transactions through
all modes including offline, and online through electronic means,
teleshopping, multi-level marketing or direct selling. The Consumer
Protection Bill, 2019 was introduced in Lok Sabha by the Minister of
Consumer Affairs, Food and Public Distribution, Mr. Ram Vilas Paswan on
July 8, 2019. The Bill replaces the Consumer Protection Act, 1986.
Consumer Protection Act, 2019 is a law to protect the interests of the
consumers. This act was inevitable to resolve a large number of pending
consumer complaints in consumer courts across the country. It has ways
and means to solve the consumer grievances speedily. The main aim of the
Consumer Protection Act, 2019 is to save the rights of the consumers by
establishing authorities for timely and effective administration and
settlement of consumers’ disputes.
Features:
Establishment of the Central Consumer Protection Authority (CCPA):
The act has the provision of the Establishment of the CCPA which will
protect, promote and enforce the rights of consumers. The CCPA will
regulate cases related to unfair trade practices, misleading advertisements,
and violation of consumer rights. The CCPA will have the right to impose a
penalty on the violators and passing orders to recall goods or withdraw
services, discontinuation of the unfair trade practices and reimbursement of
the price paid by the consumers. The Central Consumer Protection
Authority will have an investigation wing to enquire and investigate such
violations. The CCPA will be headed by the Director-General.
Rights of consumers:
The act provides 6 rights to the consumers;
1. To have information about the quantity, quality, purity, potency,
price and standard of goods or services.
2. To be protected from hazardous goods and services.
3. To be protected from unfair or restrictive trade practices.
4. To have a variety of goods or services at competitive prices.
Prohibition and penalty for a misleading advertisement:
The Central Consumer Protection Authority (CCPA) will have the power to
impose fines on the endorser or manufacturer up to 2-year imprisonment for
misleading or false advertisement (Like Laxmi Dhan Warsha Yantra).Worth
to mention that repeated offense may attract a fine of Rs 50 lakh and
imprisonment of up to 5 years.
Consumer Disputes Redressal Commission:
The act has the provision of the establishment of the Consumer Disputes
Redressal Commissions (CDRCs) at the national, state and district levels.
The CDRCs will entertain complaints related to;
1. Overcharging or deceptive charging.
2. Unfair or restrictive trade practices.
3. Sale of hazardous goods and services which may be hazardous to
life.
4. Sale of defective goods or services
New Additions to the act:
1. 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.
2. 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.
3. 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.
4. 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.
Jurisdiction under the Consumer Protection Act, 2019:
The Consumer Redressal Forums are concerned; certain key changes have
been brought by the 2019 Act such as:
1. Territorial Jurisdiction –
The 2019 Act now provides an added advantage to the consumers by
providing for filing of complaints where the complainant resides or
personally works for gain as against the 1986 Act which only provides for
filing of complaint where the opposite party resides or carry on business.
This would help in removing the difficulties faced by the consumers in
seeking redressal of their grievances against businesses who may not have
an office or branch in their state.
2. Pecuniary Jurisdiction –
The 2019 Act also changed the pecuniary jurisdiction for the District, State
and National Commissions, respectively. The pecuniary limit for the District
Commission has been increased to up to Rs.1 Crore from up to Rs.20
Lakhs; for State Commission it has been increased to up to Rs.10 Crores
from up to Rs.1 Crore; and for National Commission the pecuniary
jurisdiction has been increased to over and above Rs.10 Crores as against
Rs.1 Crore in the 1986 Act. In addition to this, the 2019 Act has also
changed the manner for determining the pecuniary jurisdiction for filing the
Complaint. Now the pecuniary jurisdiction will be determined on the basis of
the value of goods or services paid as consideration as against the 1986 Act
wherein, the pecuniary jurisdiction was determined as per the value of
goods and services as well as compensation claimed. This would help in
doing away the practice of inflating the compensation claimed so as to bring
the complaint within the jurisdiction of State or National Commission.
3. Alternate Dispute Resolution –
Another provision introduced by the 2019 Act to ensure speedy resolution of
disputes is to provide for referring the disputes to mediation. As per the
2019 Act, the Consumer Forum shall refer the matter to mediation on
written consent of both the parties. For this purpose, the 2019 Act also
provides for establishment of a consumer mediation cell by the respective
State Governments in each District Commission and State Commission as
well as at the National Commission by the Central Government.
4. E-Complaints –
The 2019 Act also provides for filing of Complaints before the District
Forums electronically in accordance with the rules which are yet to be
prescribed by the Government.
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. The Consumer Protection Act, 2019 when
compared with the 1986 Act shows that it provides for greater protection of
consumer interests taking into consideration the current age of digitization.
The 2019 Act also deals with the technological advancements in the
industry, provides for easier filing of complaints and also imposes strict
liability on businesses including endorsers for violating the interest of the
consumers. However, the test of time will prove the fate of the 2019 Act as
and when it is notified by the Central Government, which, prima-facie,
appears to be much more consumer-friendly than the 1986 Act and also
includes the current industry trends of e-commerce.
