CONSUMER PROTECTION ACT, 2019
Aim of Consumer Protection Act, 2019
The very new Consumer Protection Act, 2019 aims at providing the timely and
effective administration and settlement of consumer disputes with ways and means to
solve
the
consumer
grievances
speedily.
So, now without any further delay, let’s look at the Salient features of Consumer
Protection Act 2019:
1. All e-commerce transactions will be covered:
The Consumer Protection Act, 2019 has widened the definition of ‘consumer’.
The definition now includes any person who buys any goods, whether through
offline or online transactions, teleshopping, electronic mode, teleshopping,
direct selling or multi-level marketing. In Consumer Protection Act 1986, there
was
no
inclusion
of
e-commerce
transactions.
Now, under the new act Enhancement of Pecuniary Jurisdiction,
1. The district forum can now entertain those consumer complaints where
the value of goods or services paid does not exceed INR 1crore.
2. The State Commission can entertain disputes where such value is more
than INR 1Crore & less than 10 crore.
3. The National Commission can exercise jurisdiction where the value
exceeds INR 10Crore.
2. New product liability provisions proposed:
The provisions for product liability have been proposed under Consumer
Protection Act 2019. The defence that e-commerce platforms are merely the
‘platforms’ or ‘aggregators’ will no longer be accepted. Now, the manufacturer
or a service provider has to compensate a consumer in case he/she undergoes
an injury or a loss due to defective goods or poor service. For instance, if a
mobile phone or any electronic appliance explodes due to a manufacturing
defect and harms the consumer, then the manufacturer will be liable to
compensate the consumer for the injury.
The most significant impact of this provision impacts e-commerce platforms.
The product liability is now extended to sellers and service providers along with
manufacturers. This means e-commerce sites cannot exclude the aggregators
anymore. They will also be bearing the loss of injury, if caused to any consumer.
The Consumer Protection Act,2019 has also introduced a specific broad
definition of Unfair Trade Practices. The 2019 Act has also widened the
definition of Unfair Trade Practices as compared to the 1986 Act which now
includes within its ambit online misleading advertisements; the practice of not
issuing bill/memo for the goods and services; failing to take back defective
goods or deactivate defective services and refund the amount within the
stipulated time mentioned in the bill or memo or within 30 days in the absence
of such stipulation; and disclosing personal information of a consumer unless
such disclosure is in accordance with law.
3. Establishment of Central Consumer Protection Authority:
The New Act has proposed the establishment of a regulatory authority. It is the
Central Consumer Protection Authority (CCPA), possessing wide powers of
enforcement. Headed by a Director-General, the CCPA will have an
investigation wing that may conduct inquiry or investigation into consumer law
violations.
The CCPA has been granted wide powers to take suo-moto actions, order
reimbursement of the price of goods/services, recall products, cancel licenses
and file class action suits, if a consumer complaint affects more than 1 (one)
individual.
4. Enact 6 rights of consumers:
The act offers 6 rights to the consumers:
Be protected against the marketing of goods, products or services which are
hazardous to life and property;
be informed about the quality, quantity, potency, purity, standard and price of
goods, products or services;
be assured, wherever possible, access to a variety of goods, products or
services at competitive prices;
be heard and to be assured that consumers' interests will receive due
consideration at appropriate fora;
(v) seek redressal against unfair trade practice or restrictive trade practices or
unscrupulous exploitation of consumers;
Right to consumer education.
5. Prohibition and Penalties for misleading advertisements:
The Central Consumer Protection Authority (CCPA) will have the power to
impose fines on the manufacturers with upto 2 years of imprisonment for
publishing misleading or false advertisements. For example: Dhan Varsha
Laxmi Mantra, or expensive Tabeej to protect from bad evils. For repeated
offense, the manufacturer may attract imprisonment for upto 5 years and a fine
of Rs 50 Lakhs.
The CCPA also prohibits the endorser from endorsing a misleading
advertisement of that particular product or service for 1 year. For every further
offence, the period of prohibition may extend to 3 years.
The Act also fixes the liability in case a consumer falls prey to unfair trade
practices under the influence of celebrities acting as brand ambassadors. This
provision clearly indicates that the endorser would need to take the onus and
exercise due diligence for verifying the claims made in the advertisements.
6. Establishment of Consumer Disputes Redressal Commission:
This new act has enacted the provision of the establishment of the Consumer
Disputes Redressal Commissions (CDRCs) at the National, State and District
levels. This panel has been formed to entertain complaints related to (i)
Overcharging or deceptive charging (ii) Unfair or restrictive trade practices (iii)
Sale of hazardous goods and services that may be hazardous to life (iv) Sale
of defective goods or services
7. Provision for Alternate Dispute Resolution:
This New Act is quite convenient from the previous one, thanks to Alternate
Dispute Resolution mechanism, that makes the process of dispute dissolution
simpler and quicker. It enables speedier resolution of disputes and reduces
pressure on consumer courts that already have numerous cases pending
before them.
8. E-Filing of Complaints:
It is one of the most valuable benefits of Consumer Protection Act 2019. It offers
wide flexibility to the consumers. They can file complaints with the nearby
jurisdictional consumer forum, be it close to residence or place of work. It is
unlike the previous practice, where the filing was made from the place of
purchase or where the seller has its registered office address. The complaints
can also be lodged electronically. Infact, videoconferencing can be done for
hearing or examining parties. It aims to offer procedural ease and reduce
inconvenience and harassment for the consumers.
With the new act based on the foundation of fair trade practices, the consumers are
no more asked to beware. Today, a consumer is treated like a King. Hence, it becomes
important for the owners of consumer driven businesses, like e-commerce or retail to
be mindful of the changes in the legal landscape and have robust policies that deal
with consumer redressal in place. Consumer driven businesses need to be cautious
before opting for unfair trade practices.