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Consumer Protection Act 2019

History

Consumers are the one for whom the market is meant to be, if there will be no consumers then for whom will the producer produce and how will the economy work. Before the introduction of money the “Barter system” was used. In this system, goods were exchanged for goods, but there was a problem in measuring the quantity of one good with another for equal worth and to remove this hindrance money was introduced, to protect both the consumers and producers by differentiating them as producer and consumer. Later, the producer started exploiting the consumer, to resist this Consumer Protection Act 1986 was enacted. This ensured full protection to the consumer by providing various rights and remedies.

Introduction

 It is well said that change is essential in every aspect as per the change in the environment and time. Since the Act was enacted in 1986 and so much has changed to today, there was an urgent need to update the Act to continue its primary provision of protecting the rights of the consumer. The upgradation would help to achieve its goal in the new era of digitisation. Therefore, the Consumer Protection Act 2019 was enacted repairing Consumer Protection Act 1986 by Lok Sabha passed on 30 July 2019, it was introduced by Ram Vilas Paswan as Consumer Protection bill 2019. The origin of consumer movement was primarily started in the west and can be rooted to the historical case law Carlill versus Carbolic smoke ball company[1] where for the first time the minimum quality standards for the product was established, and to be taken care by the manufacturer to protect the consumer.

 Later in 1932, leading case Donoghue versus Stevenson[2], the manufacturer was held liable for the injury caused to the consumer which was a great deal in the era with a limited approach to the Consumer rights.”The manufacturer owned a reasonable care towards the product” it was stated in this case law.

Need for Consumer Protection Act 2019 

There is an usher dependence on online business transactions these days, every day to day activity is based on the digital experience of online, it has provided the consumers a lot of convenience buy online payment, shopping and improvised ways to access other services as well. It is just one message or a click which completes the transaction. However, with opportunities comes the challenges, digitisation has no doubt helped in many ways by upgrading the traditional methods but at the same time, it is one of the biggest challenges in the path of growth. 

Undoubtedly, the consumer is the king of the market and digitisation made him the supreme Power dictating that his satisfaction is the only way to survive in the market. 

Whereas, at the same time there are chances of exploitation of the consumer and to protect the consumer even in this new age of digitisation Consumer Protection Act 2019 has been enacted.

 Major changes done in the Act

 Definition of consumer the Consumer Protection act 2019 in Section 2 (7) states the inclusion of those as consumers who buy products online or offline through electronic means or direct selling.  Previously CPA 1986 had the definition of consumer in Section 2 (d) stating those who buy any good for consideration or highest any service for consideration is to be termed as a consumer. In this 2019 Act, there is explicit mention about online buying and selling as well.

·       Addition of E-commerce

 Section 2 (16) of CPA act 2019 defines E-Commerce as buying or selling of goods online. Addition of this provision in consumer protection act 2019 enlarged the ambit of markets ranging from direct selling to the vast platform of electronic selling.

·       Central Consumer Protection Authority

 Consumer Protection Act 2019 established Central Consumer Protection Authority under Section 10 of the aforesaid act. This authority is established to protect the rights of the consumer and for speedy redressal.

 It has been directed to investigate matters concerning consumer rights and their protection from unfair trade practices.

·       Remedy at each level 

 As per the 2019 act, the consumer has a remedy at each level of marketing previously in 1986 act only manufacturer was held liable but in the2019 act consumer is provided with remedy at each level from manufacturing to marketing of the product.

·       Introduction of new grounds to file a complaint

 CPA 2019 increased one more ground to file complaints making it 7 valid grounds, remaining 6 are the same as in the 1986 act, out of which one is modified. Also, product liability is added as the new ground to file a complaint.

·       Unfair contracts

Section 2 (6)(i) of CPA 2019 adds one more ground to file a complaint, if the consumer is in a contract which is unfair, reasonable and unilateral then the consumer has the right to challenge it.

·       Unfair trade practice 

CPA 1986 had six types of unfair trade practices defined but in 2019 three more types has been added to ensure that consumers are not exploited.

 The three types are mentioned below;

 1. Failure of a bill or cash memo

2. Refusal to take back defective goods or discontinue service.

3. Disclosure of personal information of the consumer unless required by law in Public Interest.

·       Chapter of Product liability 

Section 2 (35) of CPA 2019 states that a consumer can claim product liability from the manufacturer or seller for any kind of defect in the product. Whereas section 87 of CPA 2019 provides an exception to this provision of product liability. Those exceptions are;

1. If there is misuse of the product

2. The employer who purchased the product did not consider the warning

3. If the product is of such nature that the user should have known the associated danger with it. 

·       Healthcare exempted from services

 There is no explicit mention of healthcare in the services in CPA 2019. Consumer Protection Act 1986 had Healthcare in the definition of services but in 2019 Act an

 amendment removed it due to tough opposition from the medical community. However, it is certainly not clear, it will be seen when the contradiction arises in the court and then how the court interprets it.

·       False advertisement 

Advertisement plays a very important role in today’s market which shapes the mind of the consumer to buy the product. CCPA has been empowered to take action against false or misleading advertisements which might even charge penalty from the actors or actresses in those advertisements.

·       Pecuniary jurisdiction 

In 1986 the value of money was different as of today, hence there was a requirement to observe the difference and make changes in the pecuniary jurisdiction.

At district Commission– CPA  1986 can hear cases involving money up to 20 lacs whereas in CPA 2019 it is up to 1 crore.

 At the State Commission– CPA 1986 cases of monetary value from 20 lacs to 1 crore were heard, in CPA 2019 it starts from 1 crore to 10 crore.

 At National Commission– cases above 1 crore could be heard under the 1986 act, whereas in CPA 2019 the court can hear cases above 10 crores. 

·       More provisions

1. Penalty charges have been increased due to monetary factors.

2. Mediation process is also introduced to make sure that there is speedy disposal of consumer complaints but only if both parties willfully agree to mediation.

Conclusion

“Change is inevitable. Change is constant.”

-BENJAMIN DISRAELI

To grow, pacing with the change is required. The market has changed so has the consumer since 1986, and to keep pace with this without disturbing the ideal motive of consumer protection the Consumer Protection Act 2019 was enacted repealing 1986 act. It ensured the complete protection of the consumer in the digital era. It has aimed at increasing the scope of consumer protection covering a wide range of consumers.

Consumer Protection Act, 2019 covers all the aspects from pecuniary jurisdiction to increment in the amount of fine charged. Since the present generation is largely dependent upon online buying and selling, this act of 2019 covers them in its ambit explicitly. The act also introduces electronic filing of the complaints making it easy for the consumer to reach out for redressal.

Previously in the 1986 Act product liability was not the basis for filing a complaint but in the new act, there is a provision of filing the case based on product liability. Also, it defines the liability of not only the manufacturer but every person involved from manufacturing to marketing. Ultimately this Act preserves the basic idea of protecting the interest of consumers in the market and alerts the sellers and manufacturers with more responsibility to avoid every aspect in which the interest of the consumer is impacted leading to the exploitation of the consumer. Establishment of CCPA and mediation process in the 2019 act ensures the speedy disposal of complaints related to consumer rights.

However, the complete understanding of the act will be done when the cases appear in the court and it will be evident to observe how the court interprets all these new provisions and to what extent the motive behind the introduction of this act will be achieved.

References

[1] 1893(1)Q.B.256

[2] (1932)A.C.562

Published by Khushbu Sangwan

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