Consumer Protection Act,2019: Analysis and Challenges for Future

The Author, Prof. (Dr.) Chitrapu Kama Raju is Principal at IFIM Law School and Abhishek Sharma is 2nd Year B.COM.LLB student at Chandigarh University, Punjab.

Introduction

Mahatama Gandhi once said that “A customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider in our business. He is part of it. We are not doing him a favour by serving him. He is doing us a favour by giving us an opportunity to do so”. The digital age has ushered and immensely grown in a fresh new era of e-commerce and brought new customer expectations. The digital age has brought easy access, increased choices and time saving modes of shopping for the consumers. 

Due to the spurt of digitalization, the old Act possessed certain challenges and needed immediate attention. But the time has come where consumers can witness and cherish the new Consumer Protection Act, 2019 (hereafter referred as 2019 Act) that has recently replaced the three-decade old Consumer Protection Act, 1986 hereafter referred as the 1986 Act. The historical day was 6 August 2019 when the government passed the landmark Consumer Protection Act, 2019. 

The 1986 Act consisted some huge legal flaws which the 2019 Act proposes to settle in. The 2019 Act proposes a slew of measures and tightens the existing rules present in 1985 Act to further enhance consumer welfare. This article will make the readers understand the key aspects of the Consumer Protection, 2019, compare with the 1986 Act.

New Additions

Now new consumer protection laws were needed owing to the drastic change in the manner market functions. There is rise in international trade, global supply chains and rapid development of e-commerce. India has also witnessed the backlog of pending cases in the consumer courts. The new market set-up has witnessed mis-leading advertisements, and a special check was needed on direct selling and multi-level marketing. The new Act is going to benefit the society at large

1. E-Commerce and false advertisement:

The definition of “consumer” under the new Act i.e. 2019 Act includes the consumers who make purchases through e-commerce platform. The earlier Act did not include the consumers who buy products online and this lacuna has beenfilled by the 2019 Act. There is a separate provision for endorsement of goods and se services, which are normally endorsed by the celebrities are covered under the provision of false and misleading advertisement. The onus on the celebrities is additional to the liability placed on the manufacturers and service providers. Mis-leading advertisement shall also mean deliberately hiding important information. CCPA which shall be discussed later also regulates false and mis-leading advertisement.

2. Food Safety and Standards Act, 2006

The 2019 Act includes the definition of “food” as defined under the Food and Standards Act, 2006. This has replaced the definition of “goods” under the 1986 Act. This would help in bringing the number of food delivery platforms to come under the ambit of consumer protection.

3. Telecom Services

In order to bring the telecom services under the 2019 Act, “telecom” has been added to the definition of “services”. However, it would have been much better if such inclusion was added as “telecommunication service” as defined by the Telecom Regulatory Authority of India Act (TRA), rather than “telecom”.

4. Pecuniary Jurisdiction

The income of the consumers and their shopping lifestyle has tremendously grown over the period of time. The amount which the consumers spend in their purchase, projects, infrastructure was very minimal as compared to 21^st century. Therefore, there was extra burden on the National Commission. Therefore, in the light of this issue, the pecuniary jurisdiction of the Consumer Courts has changed;

5. Structural Reforms

A case is deemed to be admitted if no decision is given within 21 days. If complainant do not reach the consumer forum then case shall be decided on merit.

6. Appeals

7. Central Consumer Protection Authority

Central Consumer Protection Authority (CCPA) has been set up to promote, protect and enhance consumer rights. The headquarter shall be in NCR and regional offices shall be decided by the government. The authority shall regulate the violation of consumer rights, unfair trade practices, and misleading advertisements. There shall be an investigation wing headed by Director general (DG).

8. Unfair Contracts

An unfair contract shall mean a contract between manufacturer/trader/service provider and a consumer which causes harm to the consumer or significant change in the rights of the consumer. One of such examples can be unilateral termination of the contract without any prior information. For the same purpose a complaint can, be filed in the State Commission up to 10 Crore INR and in National Commission above 10 Crore INR.

9. Product Liability

The Manufacturer, Product Service Provider and Product Seller shall be liable under the new Act for any kind of harm caused by their product(s) which results in any injury or death of the consumer. However, the liability on the part of the manufacturer will be more. This shall also apply to the e-commerce platforms as well. The harm should be caused by the defective good which results in injury, death, mental agony, loss of consortium or any other harm. The harm must be real and does not include any economic loss.

10. Mediation (Alternate dispute Resolution)

The new Act provides facility for mediation which shall be voluntary and not binding on the parties. Median shall make the process quicker, simpler and help with speedier resolution of disputes. The Consumer Mediation Cell (CMC) shall be attached to each district, state and national level which is itself a tedious and lengthy task owing to the funding that courts get and the lack of infrastructuralfacilities especially at the district level.

11. Filing of Complaint

The complaint can be filed by the consumer himself or the parents and legal guardian of the consumer. The new Act allows the consumer to file a complaint at the place where he/she resides or at the place he/she works. The complaint can also be filed electronically and heard vial video conferencing in certain circumstances.

12. Offences and Penalties\

                                                       Penalties for non-compliance of orders

Punishment (Products Containing Adulterant)

                                                      Punishment (Spurious Goods)

Challenges for the future

Central Consumer Protection Authority (CCPA) has been set up to promote, protect and enhance consumer rights. The headquarter shall be in NCR and regional offices shall be decided by the government. The authority shall regulate the violation of consumer rights, unfair trade practices, and misleading advertisements. To enforce and enhance this authority will be dedicated task for the government and its implication will certainly be very important for 2019 Act. While it is laudable initiative but it is unclear as to how this authority will function and certain function relating to investigations and inquiries. There is an overlap between the functions of director General while considering the investigative wing and search and seizure functions. CCPA is empowered to order recall of goods, reimburse price and issue directions and penalize manufacturers or endorsers. Interestingly, appeal against such orders can only be preferred before the national Commission. The circumstances or the criteria under which National Commission shall entertain such cases is till unclear. It is unclear whether the existing cases will be transferred on account of change in pecuniary jurisdiction. However, there are speculations that only fresh cases shall fall under the new jurisdiction.

Conclusion

We can say that Consumer Protect Act, 2019, the process of drafting was started in 2010 is one of the sincerest steps taken by the central government for enhancing consumer rights and speedy delivering of justice. The new Act touches on may aspects such as Mediation and E-commerce which the world was unaware in 1986. So, it was important to amend the act when digitalization has changed the way a consumer conduct online transactions and mode of shopping has shifted from offline to online. Certainly 2019 Act is a positive step towards reformation, development and enhancing consumer rights. Socio-economic developments are taking place every year and e can aspect new amendments to 2019 act as well. But the real implementation of 2019 Act will be seen in coming times by analyzing how much relief it offers to the consumers.