Consumer Protection Act, 2019 – An Overview

Edited By – Tirtharaj Basu Ray


This article is written by Sampoorna Chatterjee, a law student at Amity University, Kolkata


Introduction

The Indian Parliament, on 6th August 2019, passed the much needed Consumer Protection Bill, 2019. The Consumer Protection Act, 2019, which aims to replace the Consumer Protection Act, 1986, 34-year-old legislation, looks promising and addresses some serious concerns.

Key highlights of the Act

1.        E-commerce within its radar – With the inclusion of the e-commerce space in the legislation, it is proved that the Government is taking cognizance of the emerging trends in modern-day retail.

      With the broadened definition of a ‘consumer’ to include a person engaged in the purchase of goods or availing of services, through online or offline transactions, electronic means, teleshopping, direct selling or multi-level marketing, the lacunae have been addressed.

      Union Minister for Consumer Affairs, Food & Public Distribution, Mr Ram Vilas Paswan, while briefing the media on the same, said that the Act further mandates the e-commerce platforms to provide necessary details such as – delivery and shipment, modes of payment, guarantee and warranty, country of origin, etc in the pre-purchase stage on the concerned platforms for the consumers to know what they are getting themselves into so that they can make wise decisions.

      Further, the e-commerce companies need to address a consumer complaint within 48 hours of receipt and redress the concerned grievance in 1 month from the date of receipt.

2.        Product Liability – Product liability refers to the liability conferred upon the product manufacturers and sellers upon a harm/damage/loss suffered by the consumer upon using a defecting good or a deficient service, to compensate for such loss.

      The earlier defence used by e-commerce platforms of regarding themselves as just ‘platforms’ or ‘aggregators’ will no longer be applicable as they too will have to abide by this rule.

      The liability under this rule is, however, more so upon the manufacturers as even if the manufacturer proves that he/she was not negligent or fraudulent, no mercy will be given.

3.        Unfair Trade Practices – The horizon of the term has been broadened by including the concept of maintaining full confidentiality of consumer information unless the same is subject to disclosure under any law in force.

4.        Revised Pecuniary Jurisdiction – The concerned Act brings about a revised system of thresholds. Now, the District Commission can deal with matters up to the value of Rs. 1 crore, the State Commission within Rs. 1 crore and Rs. 10 crores, and the National Consumer Disputes Redressal Commission (NCDRC) for more than 10 crores.

5.        Regulatory Body – The Act has also set up the Central Consumer Protection Authority (CCPA). The CCPA has wide powers including those of initiation of class action suits, termination of licenses, reimbursement of orders, suo-moto action, etc.

      The CCPA will also have an investigation wing, headed by a Director-General, who will look into the violations.

6.        Unfair Contracts – Unfair contracts are defined as a contract between the manufacturer/seller/service provider and the consumer that stands the potential of significantly impacting the consumer rights and favouring the former. Such contracts may contain the following terms – requiring excessive security deposits for the performance of contractual obligations, entitling a party to terminate the contract unilaterally without a just or reasonable explanation.

7.        False/Misleading Advertisements – The CCPA shall impose a penalty of INR 1,000,000 on the manufacturer/endorser of a product being advertised misleadingly or falsely coupled with imprisonment of 2 years. In the case of repeat offenders, the penalty may run up to INR 5,000,000 coupled with 5 years of imprisonment. The CCPA also has the power to prohibit the endorser in a misleading advertisement from endorsing the concerned product for a year which may extend up to 3 years on subsequent indulgence into the same.

     Hence, the endorsers need to be extremely cautious before taking up any such endorsement and must ascertain the veracity of the claims made against the concerned product.

8.        Mediation – The Act also rolls out an option of settling the case at hand through mediation (a mode of Alternate Dispute Resolution) in the mediation cells established under the aegis of the Consumer Commissions. This will not only ensure speedy redressal of grievances and simplification of the adjudication process but will also reduce pressure on the already burdened consumer courts.

9.        Provision for E-filing of Complaints – The Act also provides for e-filing of complaints and video conferencing for the followed up action. It also states that the consumer can file the complaint with the consumer forum in the jurisdiction of his residence or work, unlike the previous rule of having it lodged in the place of purchase or where the seller has a registered office. This is a hassle-free approach.

10.      Consumer Rights – The following set of rights have been added –

•         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 the exploitation of customers

•         Right to consumer awareness

Conclusion

The changes brought about by the Consumer Protection Act, 2019 were much needed, given the dynamics of the market.

The Consumer Protection Act, 2019 has broadened the scope of consumer rights.

The inclusion of ‘endorsers’ appears to be one of the highlighted features considering the important role played by them in convincing consumers and consequently, on the sale of products and services.

Again, adopting digital means for conducting hearings/cross-examinations is a sign of keeping up with the times.

Also, the option of having out of court settlements, considering how tedious, costly, and time taking court proceedings can be, is one of the celebrated provisions. The same will ensure smooth and quick settlements. While on one hand, it will encourage consumers to come forth and redress their grievances, on the other hand, it will ensure that the goodwill of the company (which has allegedly tampered upon the rights of the consumer) is not tarnished, like mediation, as a means of out of court settlement, is a private affair.

However, no matter how promising the ramifications look on paper, the real effectiveness of the same would be gauged only once the implementation of the same starts.


Written By:

Author Name – Sampoorna Chatterjee

Published on – 01/08/2020