The Consumer Protection Act of 2019: What new does it offer?

The Author, Sidak Singh Kalra, is a 3rd-year, BBA. LL.B. student at Vivekananda Institute of Professional Studies, IP University, Delhi. He is currently interning with Jasra & Jasra Law Offices.

India being a welfare state has always given paramount importance to the interests of consumers and therefore in pursuance, the Consumer Protection Act, 1986[1] was enacted. In an attempt to safeguard the interests of the consumers, the legislature bestowed upon the consumers various rights and enacted a mechanism for the due enforcement of these rights. However, the apparent lacunae and the radical introductions in the nature of business transactions over the past three decades are believed to have outworn these laws [2], as reflected by absence of express provisions for e-commerce, unfair contracts, authorizing commissions to take suo-moto cognizance, absence of a regulatory authority, multi-level delivery chains amongst other ungoverned market dynamics, and inadequate penalties[3] in the Consumer Protection Act, 1986.

In an attempt to fill the prevailing lacuna in the consumer protection system, the Consumer Protection Act, 2019[4] (hereinafter referred to as ‘Act’) was passed by the legislature and duly received presidential assent on 9^th of August 2019. On the historic day of 20^th July 2020, certain provisions of the new legislation came into force, with stricter penalties and better enforcement. The new Act intends to provide for protection of the interests of consumers and establish authorities for timely and effective administration and settlement of consumers' disputes. The transition from ‘Consumer beware’ to ‘Consumer is the king’ in these 34 years has been duly reflected in the new Act by the medium of provisions at pace with the rapid development of trade and commerce i.e. e-commerce, emergence of global supply chains and constant rise in global trade.

The question, which now arises is, what took the legislature this long to act on these limitations? The answer to which is, even after the 1991 and 2002 amendments to the Consumer Protection Act of 1986, the legislature still felt the need to replace the said act and in pursuance, The Consumer Protection (Amendment) Bill, 2011 was introduced in Lok Sabha on 16^th of December 2011 which then lapsed after its referral to Standing Committee on Food, Consumer Affairs and Public Distribution[5]. On 10^th August 2015, the Consumer Protection Bill, 2015 was introduced in Lok Sabha which was then withdrawn on 5^th January 2018 in order to introduce the new Consumer Protection Bill, 2018[6]. The new bill passed in the Lok Sabha on 20^th January 2018 but lapsed[7]. The efforts of the legislature were finally fructified when Consumer Protection Bill, 2019 was introduced and passed by Lok Sabha on 30^th July 2019 and by Rajya Sabha on 6^th August 2019 which then ultimately received presidential assent on 9^th August 2019[8].

The question that what new does the successor has to offer, can be answered by discussing major takeaways from the new Act:

• Establishment of Central Consumer Protection Authority: A new regulatory body to be established by the Central Government with an array of powers and autonomy, equipped with  investigation wings[9], power to review[10], advise and pass recommendations on matters related to consumer affairs[11], power to intervene with proceedings of authorities[12], power to file class action suits[13],  order recall of products[14] , reimbursement of price[15] and discontinuation of unfair practices[16] in event of any violation of any consumer right and most importantly the power to take suo-moto cognizance of violations and file complaint(s) before the appropriate authority[17]
• Consumer Convenience: The new Act allows the consumer to:

1. File a complaint before the authority under whose jurisdiction he resides or works for gain[18] as opposed to seller’s location, as followed earlier[19]
2. Electronically file his complaint in the comfort of his residence and on sufficient cause being shown by the applicant[20], the proceeding can also take place via video conferencing[21].
3. Appeal before the State Commission within 45 days[22], as opposed to the 30 day limitation period prescribed before[23].

• Concept of Product Liability: The new Act has also introduced the concept of product liability as a separate concept[24], where the consumer can demand compensation from the manufacturer, seller or service provider for the harm caused by a defective product or deficiency in services.
• Stricter Penalties: The new Act provides for imposition of stricter penalties on the violators in event of (i) failure to comply with directions of CCPA,[25] (ii) false or misleading advertisements,[26] (iii) manufacture/sale/storage of adulterated goods,[27] (iv) manufacture/sale/storage of spurious goods[28], to deter violators from committing any wrong under the act.
• Widened Ambit: The new Act has increased the ambit of consumer laws as the new Act (i)contains express provisions for e-commerce[29], (ii)has broadened the definition of consumer by including persons engaged in multi-level transactions in the definition, thus exposing sellers at every level to liability under the new act[30], (iii) has broadened the definition of ‘unfair trade practices by introducing three additional UTPs[31], (iv) has introduced one additional ground to file complaint i.e. ‘unfair contracts’ which allows the consumers to challenge unfair, unilateral and unreasonable contracts[32] (v) has broadened the definition of consumer to include a company buying goods for non-commercial use[33].
• Speedy Disposal: The Act has made attempts to ensure speedy disposal of cases by (i) making various amends such as increasing pecuniary jurisdiction of all three commissions[34], (ii)introducing an option for settlement by mediation, by a mediation cell attached to every commission for speedy resolution[35] (iii) attributing advisory role to Consumer Protection Councils (CPCs)[36].
• Increased powers with commission: The Act has also vested greater powers in the authorities by (i) vesting power of review in District[37] and State[38] commissions which were enjoyed only by National Commission up till now (ii) empowering all the three authorities to condone delay in filing of complaint[39] (iii) empowering National Commission to exercise administrative control over State Commissions[40] and State Commission to exercise administrative control over District Commissions[41] (iv) empowering commissions to execute their orders as provided under Order XXI of the Code of Civil Procedure, 1908[42].
• Liabilities for endorsers: The new Act also intends to bring products endorsers under the purview of false and misleading advertisements clause[43] in which, celebrities and performers indulging in misleading advertisements can be penalized under the provisions of the act. This step will ensure a two-point check system, one on behalf of marketer and second on endorser, for any false and misleading advertisements.

After these amendments and introductions, the consumer can evidently be referred to as ‘the king’ as now a consumer has been empowered with greater rights, by imposing an increased want of fair practices and cautious operations on part of sellers engaged at every level. These introductions and amendments, can however, only be appreciated in light of position prior to the enactment of Consumer Protection Act, 2019.

To summarize the position prior to 2019 amendment, it can be said that consumer protection authorities were unregulated, the power to make regulations was vested only with National Commission, there was no provision for alternate dispute resolution, insufficient powers and inadequate autonomy with the authorities, absence of excess provisions for e-commerce, slow disposal of cases, devoid of expert advisory bodies for consumer affairs, and the penalties were outworn by incentive in today’s times. However, the legislature took into consideration these limitations and new consumer legislation was passed by the government which intends to increase the confidence of a consumer. It would be safe to say that this new legislation has justifiably struck a balance between the rights of both consumers and sellers, by placing duties on the consumers pursuant to their rights, to place a check on misuse of rights by the consumers.

In conclusion, the new Act has taken due accord of not only the lacunae present in the earlier consumer laws but also the prevailing market dynamics and has accordingly introduced a complete reform in the consumer protection system in the form of:

1. Structural Reforms by establishing a new regulator, introducing mediation for speedy disposal of cases and enhancing pecuniary jurisdiction of the authorities along with enabling them to exercise administrative control over subordinate authorities
2. Societal Reforms by placing greater responsibility on product marketers and endorsers to promote the actual usage and idea of products, imposing stricter penalties to act as deterrents and holding sellers at every level liable for action.

The new Act is indeed the need of the hour and definitely promising in its true colour and nature.

BIBLIOGRAPHY

1. The Consumer Protection Act 1986 (68 of 1986)
2. The Consumer Protection Act 2019 (35 of 2019)
3. Ministry of Consumer Affairs, Food and Public Distribution, Ninth Report on Consumer Protection Bill, 2015 (Standing Committee on Food, Consumer Affairs and Public Distribution 2015-16)
4. https://www.prsindia.org/

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