In India, new technological developments are making a high impact on the quantity and the quality of the products, but the fact is that the consumers are still the victim of fraudulent practices. Therefore, the Consumer Protection Act,2019 comes in to force from 20 July, with its salient features including the establishment of the Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of consumers. The Consumer Protection Act, 2019 replaced the old Consumer Protection Act, 1986. The new bill was passed by the president on Aug 06, 2019.
Consumer protection is the practice of safeguarding buyers of goods and services against unfair practices in the market. It refers to the steps adopted for the protection of consumers from corrupt and unscrupulous malpractices by the sellers, manufacturers, service providers, etc. and to provide remedies in case their rights as a consumer have been violated.
Meaning of Consumer Protection Act, 2019
Consumer Protection Act, 2019 is a law to protect the interests of the consumers. This act was inevitable to resolve a large number of pending consumer complaints in consumer courts across the country. It has ways and means to solve the consumer grievances speedily.
The basic aim of the Consumer Protection Act, 2019 to save the rights of the consumers by establishing authorities for timely and effective administration and settlement of consumers’ disputes.
Meaning of the word ‘consumer’
A particular person who purchases the goods or the services for his or her personal use not for the resale or manufacturing the goods or the services is called a “Consumer”. A consumer has the right to decide whether to purchase the product or not to purchase the product.
A consumer is an individual or group of individuals who purchase goods and services for their own personal use and not for the purpose of manufacturing or resale. Section 2(7) of the Consumer Protection Act, 2019 defines a consumer as any person who buys goods or services in exchange for consideration and utilises such goods and services for personal use and for the purpose of resale or commercial use. In the explanation of the definition of consumer, it has been distinctly stated that the term ‘buys any goods’ and ‘hires or avails any services’ also includes all online transactions conducted through electronic means or direct selling or teleshopping or multi-level marketing.
Other Laws Regarding Consumers in India
A consumer is a priority in Indian democracy. Indian democracy can’t withstand if the consumer is being cheated in any manner. Various legislations that govern the consumer laws in India, which you must know:
- The Drugs (Control) Act, 1950.
- The Prevention of Food Adulteration Act, 1954.
- The Essential Commodities Act, 1955.
- The Consumer Protection Act, 1986.
- The Bureau of Indian Standards Act, 1986.
- The Monopolies and the Restrictive Trade Practices Act, 1969.
Need for the Consumer Protection Act, 2019
The Consumer Protection Act, 2019 was enacted by the Indian legislature to deal with matters relating to violation of consumer’s rights, unfair trade practices, misleading advertisements, and all those circumstances which are prejudicial to the consumer’s rights. The intention of the Parliament behind enacting the Act was to include provisions for e-consumers due to the development of technology, buying and selling of goods and services online have considerably increased during the last few years.
The Act seeks to provide better protection of the rights and interests of the consumers by establishing Consumer Protection Councils to settle disputes in case any dispute arises and to provide adequate compensation to the consumers in case their rights have been infringed. It further provides speedy and effective disposal of consumer complaints through alternate dispute resolution mechanisms. The Act also promotes consumer education in order to educate the consumer about their rights, responsibilities and also redressing their grievances.
Key features of the Consumer Protection Act, 2019
- Establishment of Central Consumer Protection Authority: The New Act will establish a new regulatory authority known as the Central Consumer Protection Authority (“Central Authority”), which will have wide powers of investigation including the power of search and seizure. The CCPA will have an investigation wing, headed by a Director-General, which may conduct inquiry or investigation into violation of consumer rights or unfair trade practices (much like the MRTP Commission under erstwhile Monopolies and Restrictive Trade Practices Act, 1969 that had powers to investigate monopolistic or restrictive trade practice). The Central Authority has been granted wide powers to take suo-moto actions, recall products, order reimbursement of the price of goods/services and file class-action suits if a consumer complaint affects more than 1 (one) individual.
- Product Liability: A manufacturer or product service provider or product seller will be held responsible to compensate for injury or damage caused by defective product or deficiency in services. The basis for product liability action are as follows:
- Manufacturing defect.
- Design defect.
- Deviation from manufacturing specifications.
- Not conforming to express warranty.
- Failing to contain adequate instructions for correct use.
- Service provided-faulty, imperfect or deficient.
- Unfair Contracts: Following international jurisprudence, the New Act introduces a unique provision that safeguards consumers against unfair contracts by declaring them to be illegal. An unfair contract covers contracts between manufacturer/ trader and a consumer that causes significant changes in the rights of the consumer that the New Act explicitly recognizes, such as by way of – imposing unreasonable obligation or condition on the consumer which puts consumer to disadvantage; reserving right to unilateral termination (without reasonable cause) or assignment without consent (which is to the detriment of the consumer) in the contract; imposing a penalty for breach which is disproportionate to loss caused etc.
- Unfair Trade Practices: The New Act introduces a broader definition of Unfair Trade Practices, which also includes sharing of personal information given by the consumer in confidence, unless such disclosure is made in accordance with the provisions of any other law. The New Act empowers the Central Authority and Consumer Commission (i.e. the judicial fora) to order the perpetrator of such practice to discontinue it.
- Penalties for Misleading Advertisement: The New Act introduces, for the first time, a definition of misleading advertisement. It covers false description and guarantee of a product or services. It also covers information that was deliberately concealed from the consumer. If a misleading advertisement is found to be prejudicial to the interest of consumers, then the Central Authority may impose a penalty of up to INR 1,000,000 (Indian Rupees One Million) on a manufacturer. Separately, the New Act has made it a criminal offence to publish false or misleading advertisement for manufacturers and services providers. If found guilty, they could be sentenced to imprisonment for up to 2 (two) years.
- Celebrity Endorsement: The New Act fixes liability on endorsers considering that there have been numerous instances in the recent past where consumers have fallen prey to unfair trade practices under the influence of celebrities acting as brand ambassadors. In such cases, it becomes important for the endorser to take the onus and exercise due diligence to verify the veracity of the claims made in the advertisement to refute liability claims. If a misleading advertisement is found to be prejudicial to the interest of consumers, then the Central Authority may impose a penalty of up to INR 1,000,000 (Indian Rupees One Million) on the endorser as well. The Central Authority can also prohibit the endorser of a misleading advertisement from endorsing that particular product or service for a period of up to 1 (one) year. For every subsequent offence, the period of prohibition may extend to 3 (three) years.
- E-Commerce Transactions Covered: The New Act has widened the definition of ‘consumer’. The definition now includes any person who buys any goods, whether through offline or online transactions, electronic means, teleshopping, direct selling or multi-level marketing. The earlier Act did not specifically include e-commerce transactions.
- Enhancement of Pecuniary Jurisdiction: Like the previous Act, there are three fora for consumer grievance redressal: The District Commission, State Commissioner and National Commission. Each for a has been given a pecuniary limit to entertain consumer complaints. These limits are far higher than the limits set by the previous Act. The District Commission (earlier referred to as District Forum) can now entertain consumer complaints where the value of goods or services paid does not exceed INR 10,000,000 (Indian Rupees Ten Million). The State Commission can entertain disputes where such value exceeds INR 10,000,000 (Indian Rupees Ten Million) but does not exceed INR 100,000,000 (Indian Rupees One Hundred Million), and the National Commission can exercise jurisdiction where such value exceeds INR 100,000,000 (INR One Hundred Million).
- E-Filing of Complaints: The New Act provides flexibility to the consumer to file complaints with the jurisdictional consumer forum located at the place of residence or work of the consumer. This is not an option under the previous Act, which mandated filing of the complaint at the place of work or business of the opposite party. The New Act also contains enabling provisions for consumers to file complaints electronically and for hearing and/or examining parties through video-conferencing. This should reduce inconvenience for the consumers, especially the ones who are physically challenged due to ill-health or old age.
- Provision for Alternate Dispute Resolution: The New Act provides for mediation as an alternate dispute resolution mechanism, making the process of dispute adjudication simpler and quicker. This will help speedier resolution of disputes and reduce pressure on consumer courts.
Objective of the Consumer Protection Act, 2019
- Protect against the marketing of products that are hazardous to life and property.
- Inform about the quality, potency, quantity, standard, purity, and price of goods to safeguard the consumers against unfair trade practices.
- Establish Consumer Protection Councils for protecting the rights and interests of the consumers.
- Assure, wherever possible, access to an authority of goods at competitive prices.
- Seek redressal against unfair trade practices or unscrupulous exploitation of consumers.
- Protect the consumers by appointing authorities for timely and sufficient administration and settlement of consumers’ disputes.
- Lay down the penalties for offences committed under the Act.
- Hear and ensure that consumers’ welfare will receive due consideration at appropriate forums in case any problem or dispute arises.
- Provide consumer education, so that the consumers are able to be aware of their rights.
- Provide speedy and effective disposal of consumer complaints through alternate dispute resolution mechanisms.
What are consumer rights under Consumer Protection Act, 2019
There exist six rights of a consumer under the Consumer Protection Act, 2019. The rights of the consumers are mentioned under Section 2(9) of the Act, which are as follows:
- The right of a consumer to be protected from the marketing of goods and services that are hazardous and detrimental to life and property.
- The right of a consumer to be protected against unfair trade practices by being aware of the quality, quantity, potency, purity, standard and price of goods, products or services.
- The right of a consumer to have access to a variety of goods, services and products at competitive prices.
- The right to seek redressal at respective forums against unfair and restrictive trade practices.
- The right to receive adequate compensation or consideration from respective consumer forums in case they have been wronged by the seller.
- The right to receive consumer education.
Changes incorporated in Consumer Protection Act, 2019
The changes that were incorporated with the enactment of the Consumer Protection Act, 2019 are:
- The District Commissions will have the jurisdiction to entertain complaints where the value of the goods, services or products paid as consideration to the seller does not exceed 50 lakh rupees.
- State Commissions will have the jurisdiction to entertain complaints where the value of the goods, services or products paid as consideration to the seller exceeds 50 lakh rupees but does not exceed two crore rupees.
- The National Commission will have the jurisdiction to entertain complaints where the value of the goods, services or products paid as consideration to the seller exceeds two crore rupees.
- The Act further states that every complaint concerning consumer dispute shall be disposed of as expeditiously as possible. A complaint filed under this Act shall be decided within the period of three months from the date of receipt of notice by the opposite party in the cases the complaint does not require analysis or testing of the goods and services and within a period of 5 months, if it requires analysis or testing of the goods and services.
- The Consumer Protection Act, 2019 also facilitates the consumers to file complaints online. In this regard, the Central Government has set up the E-Daakhil Portal, which provides a convenient, speedy and inexpensive facility to the consumers all over India so that they are able to approach the relevant consumer forums in case of any dispute arises.
- The Act lays down the scope for e-commerce and direct selling.
- The Consumer Protection Act, 2019 lays down provisions for mediation and alternative dispute resolution so that the parties are able to dispose of the case conveniently without going through the trouble of litigation.
- The Consumer Protection Act, 2019 contains provisions for product liability, unfair contracts and it also includes three new unfair trade practices. In contrast, the old Act just stated six types of unfair trade practices.
- The Act of 2019 acts as the advisory body for the promotion and protection of consumer rights.
- Under the Consumer Protection Act, 2019 there is no scope for selection committees, the Act authorises the Central Government to appoint the members.
FAQs
What is the Consumer Protection Act, 2019?
The Consumer Protection Act, 2019 is a legislation enacted in India to strengthen consumer rights and protection. It replaces the Consumer Protection Act, 1986, and aims to address emerging challenges in the consumer protection landscape.
What are the key features of the Consumer Protection Act, 2019?
The Act introduces the concept of Central Consumer Protection Authority (CCPA), mediation, product liability, e-commerce guidelines, and enhanced penalties for misleading advertisements.
How does the Act address e-commerce-related issues?
The Act includes provisions specific to e-commerce, such as mandatory disclosure of terms and conditions, cancellation policies, and guidelines for preventing unfair trade practices.
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