Key Features of the New Consumer Protection Act 2019 – A Short Overview

For a very long time, ‘buyer beware’ is the popular phrase that will adhere to how well consumer rights are protected. But with the new changes that are made ‘seller beware’ is what is expected to result in.

The first consumer protection legislation called the Consumer Protection Act, 1986 (the old Act) was introduced with the primary aim of protecting consumer rights. But due to the advent of technology and improvements in the field of commerce, we have jumped into e-commerce which created a drastic change in various other mechanisms of conducting business, a revampment of existing legislation was needed for a prudent way to conduct the modern-day businesses and protect consumer rights. Over the last 20-30 years, the consumer landscape in India has seen a paradigm shift with the advent of online marketplace and e-commerce. Therefore, in an attempt to address the issues which could not be possibly resolved with the previous Act of 1986, the Consumer Protection Act, 2019 has been passed. It is passed with some modifications made to the old Act. This paper aims to address the most important changes which were brought about with the new Act and also mention the key features of the same.

Introduction

The demand for goods and services is influenced through advertisements in television, newspapers and magazines through defects in manufacturing is possible affecting quality quantity and purity of commodities and service deficiency.

The production of the same item by many firms has led the consumers, who have little time to make a selection, to think before they can purchase what is best available. For the welfare of the public, sub-standard articles and adulterated in the market have to be checked. There have been various provisions like the Code of Civil Procedure, 1908, the Indian Contract Act, 1872, the Sale of Goods Act, 1930, the Indian Penal Code, 1860, the Standards of Weights and Measures Act, 1976 and the Motor Vehicles Act, 1988 which provide protection to the consumer by taking stringent action against substandard goods. Since the Monopolies and Restrictive Trade Practices Act, 1969 Prevention of Food Adulteration Act, 1954 have not been effective in providing relief to consumers against exploitation and adulterated goods, deficient services, ultimately saving the interest of the consumers the Consumer Protection Bill, 1986 was introduced in the Lok Sabha. 

How the new Act is Different?

On July 20th, 2020, the new Consumer Protection Act, 2019 came into force in India which replaces the previous enactment of 1986. The new Act maintains the administration and settlement of consumer disputes in India by providing strict penalties which includes jail terms for adulteration and for misleading advertisements. It also prescribes rules for the sale of goods through e-commerce.

Consumer Protection Act 2019 provides for Regulator bodies such as the Central Consumer Protection Authority (CCPA) to be formed whereas earlier no separate regulator was present in 1986. It protects, promotes and enforces the rights of the consumers. The CCPA has the right to impose a penalty on the violators and passing orders to recall goods and withdraw services, discontinuation of the unfair trade practices and reimbursement of the price paid by the consumers. The CCPA will have an investigation wing to enquire and investigate the violations which will be headed by the Director-General.

The complaint can be filed in a consumer court where the complainant is residing or working but the earlier filing of the complaint can be made only where the seller’s office is located. Under the new Act 2019, the product liability applies to harm caused by product and services also and hence consumers can seek compensation for it as well. The new Act has also brought in e-commerce within its ambit.

Also, the Act provides for six rights such as to have information about the quantity, quality, purity, potency, price, and standard of goods or services.

To be protected from hazardous goods and services.

Provides to be protected from unfair and restrictive trade practices.

 To have a variety of goods or services at competitive prices.

The CCPA has the power to impose fines on the endorser or manufacturer up to 2year imprisonment for misleading or false advertisement. If repeated it can attract up to 5years imprisonment.

Consumer Disputes Redressal Commission is established at national, state and district levels by the new Act.

Act of 2019

This Section will explain the key features of the new Act.

The Consumer Protection Act, 2019 was brought into effect from July 20, 2019 which replaces the previously introduced Consumer Protection Act, 1986 giving more power to consumers.

  1. Previously the complaint could be initiated only in the place where the transaction of goods took place but now consumers can institute a complaint from where they reside or work or gain. The original pecuniary jurisdiction of District Commissions was increased up to Rs.1 crore from Rs.20 lakh earlier.
  2. The pecuniary jurisdiction of the State Commissions increased from Rs.1 crore to Rs.10 crores.
  3. National Commission can handle cases above Rs.10 crores from Rs.1 crore earlier.
  4. Earlier, the opposite party had to deposit Rs.25000 at the maximum ordered by the District Commission before filing an appeal. Now the opposite party needs to deposit 50% of the amount which is ordered by the District Commission before filing an appeal before the State Commission.
  5. The limitation period for filing of appeals to the State Commission is increased from being 30 days to 45 days. Parties are also allowed to settle disputes through mediation.
  6. The new Act broadens the definition of the consumer by recognizing those engaged in offline and online multi-level and telemarketing transactions, that will protect those rendered vulnerable in rapidly developing technology.
  7. Provisions increasing pecuniary limits and providing statutory recognition to mediation processes, allowing filing of complaints from any jurisdiction and hearing parties through video-conferencing will increase accessibility to judicial forums and afford crucial protection exactly when international e-commerce giants are expanding their base.
  8. A consumer can conduct their own case via video conferencing and engaging a lawyer is optional.
  9. A concept of product liability has been introduced by the new law which allows aggrieved consumers to claim significant compensation as a relief due to the negligence of the manufacturer or service provider.
  10. Certain provisions regarding misleading advertisements, celebrity endorsement of products, the constitution of the Apex Central Protection Authority, e-commerce etc. have not been notified yet, the notified provisions are assured to streamline and expand benefits to consumers.
  11. The vacancies at the District Commission levels needed to be filled for effective implementation of the new Act.
  12. The SCDRC should have a minimum of 1 President and 4 Members.
  13. The provisions in Section 49(2) and 59(2) of the Act empower both the State Commission and National Commission to deem any terms of the contract between the consumer and the service provider and manufacturer as the case may be which are unfair to any consumer to be ineffective and void. It’s a new provision with power vested upon the SCDRC and the NCDRC which were not in the previous Act.
  14. The NCDRC can exercise its power of revision under Section 58 clause (1) sub-clause (b) of the Act and by the SCDRC can exercise the same power under Section 47 clause (1) sub-clause (b) of the Act.
  15. The NCDRC, SCDRC and the DCDRC can exercise their powers of review which are conferred to them under Sections 40,50 and 60 of the Act.
  16. A group of aggrieved consumers can come together and file a class-action suit, just like in the USA to reduce costs and improve the chances of redressal or settlement.
  17. Producers of spurious goods may be punished with imprisonment.
  18. Misleading advertisements may be punished with imprisonment. Celebrities endorsing a product or service may not be punished but be barred from endorsing if the advertisement was misleading.
  19. Consumers also have several protected rights, including the right to safety, information, choice, redressal as well as the right to be heard, to be educated as a consumer.
  20. Corporates entities that provide for the consumers will have to exercise greater care and caution in terms of quality, quantity, and product safety. The boards of corporates that manufacture or trade consumer goods must create a Consumer Affairs Committee to periodically review consumer complaints and address them.

Conclusion

The Act is indeed a much needed and wanted to move as it finds to cover the lacunae of the old Act. Being introduced in a very important phase in global marketing, it will protect consumers’ rights and interests. This Act also aims to rest more power on to District Commission, State Commission while also revising their respective pecuniary jurisdictions by reducing the workload of the National Commission. With the much-needed changes made it will expand and strengthen consumer protection especially when digitalization has transformed the manner in which a customer performs electronic purchases and online shopping. With the hope that CPA 2019 will fasten the customer dispute resolution process let us support the implementation of the Act.

Questions

Q1. Does the new Act aim to increase the number of complaints and consumers who appear before Consumer Court?

The Act is not promoting frivolous issues to be brought before the court but at the same time encourages, helps genuine complaints to be noticed and addressed by the Court. The basic aim of the Consumer Protection Act,2019 is to save the rights of the consumers by providing and establishing authorities for timely and effective settlement of disputes.

Q2. What is the meaning of the Consumer Protection Act, 2019?

Consumer Protection Act,2019 is a law aiming to protect the interests of the consumers and to resolve a large number of pending consumer complaints in consumer courts around the country. It provides for ways and means by which consumer grievances can be resolved.

Q3. What is the definition of the consumer?

A consumer is a person who avails the services and buys any good for their own use. If a person buys any good or avails any service for resale or even for commercial purposes, he/she is not considered a consumer. This definition includes both online and offline transactions.

Q4. How the new Act impacts the e-tailers?

Under the e-commerce rules, it is mandatory for e-tailers to display details of price, expiry date, return, refund, exchange, warranty and guarantee, delivery and shipment, modes of payment, grievance redressal mechanism, payment methods, the security of payment methods, country of origin, chargeback options, etc.

Q5. Will celebrities endorsing a product or service be punished for misleading advertisements of the same?

Misleading advertisements may be punished with imprisonment but celebrities endorsing a product or service may not be punished but be barred from endorsing if the advertisement was misleading by the Code for Self Regulation in Advertising and Guidelines.  Since currently, misleading advertisements are very high in the educational, healthcare products and services, teleshopping sector the ASCI will soon be launching monitoring of potentially misleading advertisements appearing on digital media along with print and television surveillance.

References

  1. https://www.outlookindia.com/newsscroll/new-consumer-protection-act-comes-into-force-govt-notifies-rules/1899048
  2. http://ncdrc.nic.in/bare_acts/Consumer%20Protection%20Act-1986.html.
  3. https://www.mondaq.com/india/dodd-frank-consumer-protection-act/969026/an-overview-of-the-changes-to-be-introduced-by-the-consumer-protection-act-2019
  4. https://www.financialexpress.com/brandwagon/consumer-protection-act-to-come-into-force-from-july-20/2027171/
  5. https://www.thehindu.com/news/national/tamil-nadu/new-consumer-protection-act-gives-more-power-to-consumers-experts-say/article32135908.ece.

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