CONSUMER PROTECTION ACT, 2019. AN ANALYSIS

Consumer protection is of vital concern and importance for all of us because we are all consumers in one form or the other. Although various scientific and technological developments have brought about perceptible socio-economic changes, the consumer’s control over the market, the mechanism had gradually diminished, which made the pathway for the old Consumer Protection Act1986.

Legislative History

Consumer Protection Act 1986 has been enacted when it was considered necessary to have a separate comprehensive consumer protection legislation which could provide for speedy, simple, and inexpensive relief/compensation to consumers. To make it effective, it was also felt that the redressal machinery should be available within easy reach of the consumers. Consumer Protection Act 1986 came into force on December 24, 1986.

The Consumer Protection Act, 2019 (‘New Act’) received the assent of the President of India and was published in the official gazette on 9th August 2019. This New Act will replace the old Consumer Protection Act, 1986 (‘Old Act’). In exercise of the powers conferred by sub-section (3) of section 1 of the New Act, MINISTRY OF CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION (Department of Consumer Affairs) has issued a Notification No. S.O. 2351(E) dated 15th July 2020 (‘the Said Notification’) whereby the Central Government has appointed the 20th day of July 2020 as the date on which various provisions of the said Act shall come into force.

The Consumer Protection Bill, 2019

Introduced in Lok Sabha Jul 08, 2019

Passed in Lok Sabha Jul 30, 2019

Passed in Rajya Sabha Aug 06, 2019

Received assent from President 9 August 2019

Notified in The Gazette of India August 09, 2019 

Some provisions of the said Act shall come into force July 20, 2020.

Introduction to Consumer Protection Act, 2019

New Additions in 2019

This Bill is similar to the Consumer Protection Bill, 2018, however, some new provisions/features has been added in it:

What is the Intent of the Act?

“An Act to provide for protection of the interests of consumers and for the said purpose, to establish authorities for timely and effective administration and settlement of consumers' disputes and for matters connected therewith or incidental thereto.” Consumer Protection Act 2019

“An Act to provide for better protection of the interests of consumers and for that purpose to make provision for the establishment of consumer councils and other authorities for the settlement of consumers disputes and for matters connected therewith.”

Consumer Protection Act 1986

The intent of the act moves around the focal point of “timely and effective administration” as it has been felt that its disposal of the cases takes a long time. 

EMPOWERING CONSUMERS

Protection of Consumer for False and Misleading Advertisement

"advertisement" has been defined in the new act, however, in the previous act advertisement were mentioned two times but not defined. The new act made a stringent provision to ensure that no false or misleading advertisement is made of any goods or a service which contravenes the provisions of this Act or the rules or regulations made thereunder, and further ensure that no person takes part in the publication of any advertisement which is false or misleading.

Penalties for a misleading advertisement: The CCPA may impose a penalty on a manufacturer or an endorser of up to Rs 10 lakh and imprisonment for up to two years for a false or misleading advertisement. In case of a subsequent offense, the fine may extend to Rs 50 lakh and imprisonment of up to five years.

CCPA can also prohibit the endorser of a misleading advertisement from endorsing that particular product or service for a period of up to one year. For every subsequent offense, the period of prohibition may extend to three years. However, there are certain exceptions when an endorser will not be held liable for such a penalty.

Extension of the consumer territory

“consumer” "buys any goods" and "hires or avails any services" includes offline or online transactions through electronic means or by teleshopping or direct selling or multi-level marketing. Means it extended it territory to e-commerce as well.

Food is also part of Good

"goods" means every kind of movable property and includes "food" as defined in clause (j) of sub-section (1) of section 3 of the Food Safety and Standards Act, 2006.

It will take under the ambit of new food delivery the platform, and certainly ensure the food safety and quality with the back of Food Safety and Standards Act, 2006.

Telecom under the Service territory

the word “telecom” been including in the act, but the word creates confusion, as its only define “telecom”, but has not been worded as “telecommunication services” as has been defined in the Telecom Regulatory of India Act.

It the word used in the synonym of “telecommunication services” then it would be a great relief for the consumers.

The veracity of “Harm” Strengthen the Consumer Protection

"product liability" and "product liability action" the responsibility of a product manufacturer or product seller, of any product or service, to compensate for any harm caused to a consumer by such defective product manufactured or sold or by a deficiency in services relating thereto. Earlier the provision was found in the Jurisdiction of Civil court, and not in the Consumer Forum, the new act seems a mix of Forum and Civil Court.

The act enables the consumer to take action against manufacturer or seller for claiming compensation for the harm caused to him. The veracity of word hard "harm", extended widely in relation to product liability, includes damage to any property, other than the product itself; personal injury, illness or death; mental agony or emotional distress attendant to personal injury or illness or damage to property; or any loss of consortium or services or other losses resulting from harm.

Unfair contract, protection from unilateral contract:

The new introduction of Unfair Contract, protect the consumer from the terms and condition of the unilateral biased contract, which the consumer forced to singed or accept in buying any service or product, mostly online.

Comfort to the Consumer

Twofold aspects have been adopted to provide comfort to the consumer:

·        Jurisdiction to File the Case

·        Mode of Filing

The complainant can file a complaint where he is resident:

A consumer can now institute a complaint from her place of residence or where she works for gain. This comes as a significant change and a big relief as earlier they were required to file complaints in the area where the seller or service provider was located. This will ease the burden on the complainant, and provide comfort to the consumer. This comes as a fitting move considering the rise in e-commerce purchases, where the seller could be located anywhere.

Mode of filing the Complaint included electronic mode:

A complaint relating to violation of consumer rights or unfair trade practices or false or misleading advertisements which are prejudicial to the interests of consumers as a class may be forwarded either in writing or in electronic mode. Act also enables the consumer to seek a hearing through video conferencing, saving him both money and time.

Central Consumer Protection Authority (CCPA)

The Act includes rules for the establishment of the Central Consumer Protection Authority (CCPA) to protect and enforce the rights of consumers. It empowered to conduct investigations into violations of consumer rights and institute complaints and prosecution, order recalls of unsafe goods and services as well as discontinues unfair trade practices and misleading advertisements. It will also have powers to impose penalties on manufacturers, endorsers, and publishers of misleading advertisements.

Judicial Review

Review its order, is the new addition of this act, many are arguing to support this provision it will reduce the burden Commission is facing in the appeal. However, it seems it will put additional burden when the pecuniary jurisdiction has been enhanced, and the huge pendency in the commission and forums are crucial.

Penalties

The new act also enables the commission to impose enhanced penalties,

if a person does not comply with orders of the Commissions, in the CPA 1986 it was imprisonment between one month and three years or fine between Rs 2,000 to Rs 10,000, or both. Now in the CPA 2019 imprisonment up to three years, or a fine not less than Rs 25,000 extendable to Rs one lakh, or both.

Pecuniary Jurisdiction Enhanced

The pecuniary jurisdiction of all three commissions have been raised under CPA 2019

Level

CPA1986

CPA 2019

District

Up to Rs 20 lakh

Up to Rs one crore

State

Between Rs 20 lakh and up to Rs one crore

Between Rs one crore and up to Rs 10 crore.

National

Above Rs one crore.

Above Rs 10 crore.

However, the fundamental question remained, it will not put the extra burden on the function of District and State level when presently they are overburden and the time of disposal of cases is high even to the provision were in the act it must be disposed of within a stipulated time. What mechanism would be adapted to speedy disposal of the cases? 

E-commerce is not out of the Radar of new CPA2019

Under CPA-2019 e-commerce sites cannot escape as aggregators anymore, as it also includes service providers under its ambit, when the Product liability is now extended to service providers and sellers along with manufacturers and Consumer Protection (E-Commerce) Rules, 2020, has also been notified by the government. This covers wide Scope and Applicability, as these rules shall apply to:

(a) all goods and services bought or sold over the digital or electronic network including digital products;

(b) all models of e-commerce, including marketplace and inventory models of e-commerce;

(c) all e-commerce retail, including multi-channel single-brand retailers and single brand retailers in single or multiple formats; and

(d) all forms of unfair trade practices across all models of e-commerce:

Alternate dispute redressal mechanism

To provide more comfort and with a view to speed resolution of the dispute, ADR Mechanism has been included in the CPA2019, Mediation cells will be attached to the District, State, and National Commissions, in case there is a possibility of settlement at the stage of admission of a complaint or at any later stage, if acceptable to both parties.

Appointment

The CPA 2019 establishes various bodies including a regulator, and adjudicatory bodies and advisory councils at the district, state, and national level. However, the process of appointment has been changed compared to earlier act Selection Committee (comprising a judicial member and other officials) will recommend members on the Commissions. In the new Act No provision for Selection Committee. Now Central government will appoint through notification.

Though the intent to introduce this Act is to protect the Consumer as it exhibits from the Title, in both the Acts, but there were some shortcoming or due to change of circumstance this new act came into existence. However, the new act anticipated certain new concepts to make it more powerful and stringent to protect the consumer.