The Consumer Protection Act, 2019

Introduction

The industrial revolution and the development in the international trade and commerce has led to the vast expansion of business and trade, as a result of which a variety of consumer goods have appeared in the market to cater to the needs of the consumers and a host of services have been made available to the consumers like insurance, transport, electricity, housing, entertainment, finance and banking. A well organized sector of manufacturers and traders with better knowledge of markets has come into existence, thereby affecting the relationship between the traders and the consumers making the principle of consumer sovereignty almost inapplicable.

The advertisements of goods and services in television, newspapers and magazines influence the demand for the same by the consumers though there may be manufacturing defects or imperfections or shortcomings in the quality, quantity and the purity of the goods or there may be deficiency in the services rendered. Remedy is available under various laws such as CPC, CRPC, Indian Contract Act, The Specific Relief Act, Essential Commodities Act. Etc but there is an ambiguity about which remedy is prevailing in case of deficient service. To resolve this ambiguity, the government enacted The Consumer Protection Act in 1986.

The Consumer Protection Act 2019

The said Act received president’s Assent on 9 August 2019 and replaced earlier Act of 1986.  The new Act will empower consumers and help them in protecting their rights through its various notified Rules and provisions like Consumer Protection Councils, Consumer Disputes Redressal Commissions, Mediation, Product Liability and punishment for manufacture or sale of products containing adulterant / spurious goods.

Key features of the Act

• Central Consumer Protection Authority (CCPA) :

The CCPA will be empowered to conduct investigations into violations of consumer rights and institute complaints / prosecution, order recall of unsafe goods and services, order discontinuance of unfair trade practices and misleading advertisements, impose penalties on manufacturers/endorsers/publishers of misleading advertisements.Shri Paswan further said that the rules for prevention of unfair trade practice by e-commerce platforms will also be covered under this Act. The gazette notification for establishment of the Central Consumer Protection Authority and rules for prevention of unfair trade practice in e-commerce are under publication.

• Product Liability

New Act introduces the concept of product liability and brings within its scope, the product manufacturer, product service provider and product seller, for any claim for compensation. Every e-commerce entity is required to provide information relating to return, refund, exchange, warranty and guarantee, delivery and shipment, modes of payment, grievance redressal mechanism, payment methods, security of payment methods, charge-back options, etc. including country of origin which are necessary for enabling the consumer to make an informed decision at the pre-purchase stage on its platform.  He said that e-commerce platforms have to acknowledge the receipt of any consumer complaint within forty-eight hours and redress the complaint within one month from the date of receipt under this Act. The Act provides for punishment by a competent court for manufacture or sale of adulterant/spurious goods. The court may, in case of first conviction, suspend any licence issued to the person for a period of up to two years, and in case of second or subsequent conviction, cancel the licence.

• E- filing of Complaint

Enables a consumer to file complaints electronically and file complaints in consumer Commissions that have jurisdiction over the place of his residence, videoconferencing for hearing and deemed admissibility of complaints if the question of admissibility is not decided within the specified period of 21 days

• Review of Orders of Forum

The new Act provides for simplifying the consumer dispute adjudication process in the consumer commissions, which include, among others,  empowerment of the State and District Commissions to review their own orders.

•  Alternate Dispute Resolution mechanism : Mediation

This will simplify the adjudication process.  A complaint will be referred by a Consumer Commission for mediation, wherever scope for early settlement exists and parties agree for it. Mediation will be held in the Mediation Cells to be established under the aegis of the Consumer Commissions.  There will be no appeal against settlement through mediation.

• Consumer Welfare Fund (CWF)

There will be no fee for filing cases upto Rs. 5 lakh. There are provisions for filing complaints electronically, credit of amount due to unidentifiable consumers to Consumer Welfare Fund (CWF). The State Commissions will furnish information to the Central Government on a quarterly basis on vacancies, disposal, pendency of cases and other matters. 

• Pecuniary Jurisdiction of Commission

Under Consumer Protection Act 2019 , there are three tire dispute redressal mechanism viz.  District Commission, State Commission, National Commission. Pecuniary jurisdiction of these commissions was modified by the new Act.

District Commission : According to Sec 34 the District Commission shall have jurisdiction to entertain complaints where the value of the goods or services paid as consideration does not exceed one crore.

State Commission: Sections 47 of the 2019 Act provide that: the State Commissions shall have jurisdiction for disputes whose value exceeds INR 1 crore but remains less than INR 10 crore;

National Commission:  Section 58 of the Act provides that the NCDRC is to have jurisdiction for disputes which are valued over INR 10 crore.

• Central Consumer Protection Council Rules

Rules provide for the constitution of the Central Consumer Protection Council, an advisory body on consumer issues, headed by the Union Minister of Consumer Affairs, Food and Public Distribution with the Minister of State as Vice Chairperson and 34 other members from different fields. The Council, which has a three-year tenure, will have Minister-in-charge of consumer affairs from two States from each region- North, South, East, West, and NER. There is also provision for having working groups from amongst the members for specific tasks.

Conclusion

The new Act has been introduced after many amendments to provide protection to buyers not only from traditional sellers but also from the new e-commerce retailers/platforms. He said that this Act will prove a significant tool in protecting consumer rights in the country.

References

https://pib.gov.in/PressReleasePage.aspx?PRID=1639925 
https://www.mondaq.com/india/dodd-frank-consumer-protection-act/958250/the-consumer-protection-act-2019 
https://www.mondaq.com/india/dodd-frank-consumer-protection-act/1093688/pecuniary-jurisdiction-under-the-consumer-protection-act-2019--a-concept-evolving-backwards