Consumer Protection Act 2019- An Overview by Avijit Singh & Saksham Khunger
Introduction
The Consumer Protection Act, 1986 was replaced by the Consumer Protection Act, 2019. The bill was introduced by the Minister of Consumer Affairs in the Parliament and was passed by the Lok Sabha on 30th July2019 and by Rajya Sabha on 6th August 2019. Later, it came to be known as Consumer Protection Act, 2019 after getting assent by the President on 9th August 2019.
The Act has been enacted to provide speedy and effective measures for consumer disputes and it will empower consumers to protect their rights through its effective administration. The measures in the Consumer Protection Act, 2019 are less time consuming as compared to the Consumer Protection Act, 1986 where a dispute was handled by a three-tier consumer dispute redressal machinery.
The Consumer Protection Act, 2019 provides more protection to the consumers considering the rapidly evolving e-commerce industry and the new methods of providing products to the consumer such as teleshopping, online shopping in addition to the traditional methods.
The Consumer Protection Act, 2019 has widened the scope of the definition of ‘Consumer’ and ‘Unfair Trade Practice’. As per the Act,a consumer is a person who buys any type of goods or avails any type of services whether online or offline.
The basic aim of the 2019 Act is to guard the rights of the consumers by establishing authorities for speedy and effective dispute redressal. The Act except the provisions relating to Central Consumer Protection Authority came into force on 20th July 2020 along with the Consumer Disputes Redressal Commissions Rules, 2020.
Central Consumer Protection Authority
The Consumer Protection Act, 2019 initiated the Central Consumer Protection Authority whose main concern is to protect and promote the rights of the consumers. It is a law to protect the rights of the consumers and helps to resolve a plethora of pending consumer complaints before the consumer courts of the country. The 2019 act has the potential to solve consumer complaints speedily.
As per the Act, a consumer is a person who avails the goods and services for personal use. The good and services bought for resale or any other commercial purpose will be not considered as a consumer.
The Central Consumer Protection Authority is empowered to deal with cases related to unfair trade practices, violation of consumer rights and misleading advertisements.
The chairman of CCPA will be the Director-General and will have a special investigation wing to investigate such complaints made by the consumers. The CCPA is also vested with the power to initiate suo-moto proceedings against violators or file a class-action suit on behalf of multiple consumers which makes it less time consuming for the consumers to get justice.
Further, such platforms are required to answer the query of the consumer within 48 hours of the request by the customer and the complaint shall be provided proper redressal in a month. The rules also mandate the compulsory appointment of a grievance officer
Unfair Trade Practices and Unfair Contracts
The 2019 Act accounts for some major changes for enhanced protection of the consumers in comparison to the earlier 1986 Act. The 2019 Act has widened the definition of the term ‘consumer’ and ‘unfair trade practice’. Now the act also includes consumers involved in online transactions and also accounts for the E-commerce industry.
The 2019 Act has also established the concept of ‘unfair contract’ which deals with the contracts which are in favour of the sellers or manufacturers and consumers are made a party to a contract forcefully such as contracts requiring excessive security deposits for fulfilling their contractual obligations or contracts which doesn’t allow early repayment of the debt so that service provider can earn interest from the consumers or any unnecessary charges are levied on consumers. Such contracts are now governed by the 2019 Act and a consumer can file a complaint in consumer courts if he feels that he has been cheated by the service provider.
The provisions governing the contracts will now help to keep a check on the various service providers including banks and e-commerce websites that take advantage of consumers by making them party to a contract forcefully and accept their terms before a good or services can be availed by a consumer.
The CCPA is vested with the right to impose heavy penalties on the wrongdoers and can pass an order to recall goods or withdraw its services, can ban unfair trade practices or even refund the money paid by the consumers. The CCPA can impose a penalty of upto Rs 10 lakhs for the first violation and upto Rs. 50 lakhs on every subsequent violation for any malpractices conducted by manufacturers or sellers even a misleading advertisement can also be penalised by the authorities. The violators of the rules under the 2019 act can also face imprisonment for upto 2 years.
Product Liability
Another major concept of ‘Product Liability’ was introduced in the 2019 Act which covers the product manufacturer, product seller and service provider.
It is defined in the 2019 Act as the “responsibility of a product manufacturer or product seller, of any service, to compensate for any loss caused to a consumer by a defective product manufactured or sold.”
The term ‘Product Seller’ is defined in the 2019 Act as a person who is involved in using a product for commercial purposes such as reselling the product and such would include e- commerce platforms too.
With the introduction of the concept of ‘Product Liability’ and inclusion of online sellers in its definition, the act has made product manufacturers and product sellers liable in case of any harm caused by their product to the consumers who earlier used to get away from their liability because they were merely acting as a ‘platform’ or ‘middleman’.
However, there are certain exceptions that the product seller will not be liable for in case of misuse, alteration and modification of the product by the consumer.
The ‘Product Liability can be initiated if there’s a manufacturing defect, alteration in manufacturing specifications or not conforming to express warranty.
Misleading Advertisements
The 2019 Act has certain provisions where a consumer can file a complaint with CCPA against any false advertisement which can mislead a consumer. The CCPA has been vested with powers to order discontinuation or modification of the misleading advertisement.
The CCPA is vested with the right to impose heavy penalties on the wrongdoers and can pass an order to recall goods or withdraw its services, can ban unfair trade practices or even refund the money paid by the consumers. The CCPA can impose a penalty of upto Rs 10 lakhs for the first violation and upto Rs. 50 lakhs on every subsequent violation for any malpractices conducted by manufacturers or sellers even a misleading advertisement can also be penalised.
The 2019 Act has brought the advertisers or even the actors who work in the advertisements under its purview as they play an important role in influencing the consumers. Now the advertisers have to be more careful in selecting the goods and services that they wish to advertise to protect themselves from any liability under the 2019 Act.
Alternate Dispute Resolution
The 2019 Act has introduced the provision of alternate dispute resolution in cases wherever there is a scope for early settlement between the parties. It also provides for consumer mediation cells by the state government in each district and at the national commission by the central government.
Jurisdiction
The jurisdiction of the Consumer Disputes Redressal Commission is defined under the 2019 Act as the pecuniary limit for the District Commission has been increased up to Rs. 1 crore from Rs. 20 Lakhs and for State Commission it has increased up to Rs.10 crores from Rs 1 crore and for national commission above Rs 10 crores as against Rs. 1 crore in the 1986 Act.
The 2019 Act has also changed the manner for examining the jurisdiction for filing a complaint now the jurisdiction will be determined based onthe value of goods and services paid as consideration otherwise in the 1986 Act the jurisdiction was examined as per the value of goods and services and as well as compensation claimed.
E-filing of Complaints
The Provisions of the 2019 Act allow a consumer with greater flexibility to file their complaints in the commission which has territorial jurisdiction to handle the complaints. This is a big relief for the consumers from the 1986 Act, whereby the consumers has to file a complaint at the commission which had the territorial jurisdiction over the place of work or business of theparty to a suit. Furthermore, this act also allows consumers to file complaints electronically.
In a recent case titled Francis Vadakkkan v. A-One Medicals, Dhathri Ayurveda Pvt. Ltd. which was dealt by the Hon’ble District Commission Thrissur, Kerala under the newly established Consumer Protection Act, 2019 whereby the bench while hearing a complaint where the complainant used the ‘Dhathri Hair Cream’ which was endorsed by film actor Anoop Menon held the film actor liable for making false claims endorsing a hair cream product without even ascertaining the effectiveness of the same.
The Company as well as the film actor were asked to pay a compensation of Rs 10,000 each to the consumer for making false promises which have been made possible only due to the coming of the new act.
In the case of Sehgal School Of Competition VS Dalbir Singh, the complainant had paid the entire fees to the coaching institute but left the coaching in between since the coaching institute was not teaching the subjects he was interested in. On demanding the refund of the extra amount paid, the institute denied which gave rise to the complaint with the national commission. The commission stated that coaching should not charge whole fees in the beginning and directed the coaching institute to refund the extra amount.
Conclusion
As a consumer, we need to understand the various rights and reliefs which are provided to us by the 2019 Act in case of violation of our rights. The Consumer Protection Act, 2019 ensures that the sellers and manufacturers must take precautionary measures so that they never get involvedin disputes regarding the violation of consumer rights.
Consumer Protection Act 2019 covers all the aspects with increasing the pecuniary jurisdiction and with increased fines which shall give more power and authority to the Commissions at the District Level. The consumer is now in a superior position under the law and with the inclusion of e-commerce in the act, the ambit of the act is wider than ever before. The Act also aims to provide a mechanism for the online filing of complaints by aggrieved consumers.
Previously in the 1986 Act, the aspect of product liability was not a base on a Consumer Court but the new Act fastens the liability of the product not only on the manufacturer but also the one who is endorsing the product. Ultimately the Act protects the consumer and ensures that an environment is created where the consumer is the ultimate king and that the mighty manufacturers cannot control the entire market according to their whims and fancies.
It provides the consumer with rights and provides a mechanism where if the rights are violated, speedy justice can be delivered with the establishment of CCPA and mediation process in the 2019 Act.
Consumer Protection Act, 2019 when compared with the Consumer Protection1 Act,1986 shows that it provides for more protection of consumer interests taking into consideration the current age of digitization. The 2019 Act also deals with the technological improvements in the industry, provides for easier filing of complaints and alsoprovides for strict liability on businesses including sellers for violating the interest of the consumers.
The Maxim caveat emptor (buyer beware) is now rendered obsolete all thanks go to the new Act, but it only truly go obsolete when we use the rights that have been granted to us by the 2019 Act.
Bibliography
- Hemant Singh, Consumer Protection Act, 2019: Meaning and Key Features, Jagronjosh(April 14,2021,10:05 AM),https://www.jagranjosh.com/general- knowledge/meaning-and-features-of-consumer-protection-act-2019-1578557665- 1
- Drishti, Consumer Protection Act, 2019, drishtiias, (April 14,2021,10:08 AM),https://www.drishtiias.com/daily-updates/daily-news-analysis/consumer- protection-act-2019
- GaurangKanth,India: The Consumer Protection Act, 2019: An Overview, Mondaq, (April 14,2021,10:05 AM),https://www.mondaq.com/india/dodd-frank- consumer-protection-act/876600/the-consumer-protection-act-2019-an-overview
Indian Laws
- Consumer Protection Act,2019
- Consumer Protection Act,1986 Case Laws
- Francis Vadakkkan A-One Medicals, Dhathri Ayurveda Pvt. Ltd.
- Sehgal School Of Competition VS Dalbir Singh
1 Students at Symbiosis Law School, Pune & Army Institute of Law, Mohali respectively