Critical Analysis: Consumer Protection Act, 2019

Introduction

The digital age has ushered and tremendously grown in this new era of e-commerce and brought in its scope new expectations and desires of the consumers. It has now become easily accessible, with wider choices to the consumers and provides with effective methods of business.

Due to such a revolution which is brought about by digitalization, the Consumer Protection Act, 1986 had several challenges and faced many setbacks which needed immediate attention. But the government brought about a drastic change and introduced the Consumer Protection Act, 2019 which came into force on 20 July 2020. This earlier enactment had been revised every now and then to bring it in conformity with changes brought about by globalisation, economic liberalisation, digitalization of products and services etc. however, its implementation was a long way to achieve its desired objective of socio-economic legislation which sought to provide protection of the interests of the consumers. While on the other hand the new Consumer Protection Act, 2019 will strengthen and enhance the scope of protection provided to the consumers by revamping the advertising claims, endorsements, punishments, jail terms, administration of the disputes and various other factors.

Consumer Protection Act, 1986

Consumer Protection Act, 1986 is an act which provides for effective protection of the interests of the consumers, provide for remedies and speedy redressal of the dispute through the help of various councils and other authorities.

Broadly speaking, the CPA seeks to protect the following basic rights of consumers:

• Right against the marketing of goods and services which are hazardous to life and property;
• Right to be informed about the quality, quantity, potency, purity, standard and price of goods or services;

• Right to choice, wherever possible through access, to a variety of goods and services at competitive prices;
• Right to be heard and to be assured that consumers’ interests will receive due consideration at appropriate forums;
• Right to seek redressal against unfair trade practices or restrictive trade practices or unscrupulous exploitation of consumers;
• Right to consumer education; and
• Right to clean and healthy environment.

Further, the Consumer Protection Act elaborated as to who is a consumer, their rights as mentioned above. Apart from that is also states detailed provisions relating to the administration and settlement of the consumer disputes through three-tier quasi-judicial mechanism at the District, State and National levels for redressal of consumer disputes and grievances.

Depending on the facts and circumstances, the redressal forums may issue orders for one or more of the following relief(s):

• Removal of defects from the goods;
• Replacement of the goods;
• Refund of the price paid;
• Award of compensation for the loss or injury suffered;
• Withdrawal of the hazardous goods from being offered for sale; or
• Award for adequate costs to parties.
• Removal of defects or deficiencies in the services;
• Discontinuance of unfair trade practices or restrictive trade practices or direction not to repeat them;

Consumer Protection Act, 2019

AMENDMENTS:

The sections which shall come into force are as follows:

CONSUMER COURTS:

The said act allows the consumer to institute the complaint from where they reside or work for gain. This has provided the consumers with great relief as earlier the complaint was filed only where the seller or service provider was located or where the cause of action arose. This move is considered apposite after looking at the rising e-commerce, where service provider could be located anywhere.

PECUNIARY JURISDICTION:

There has been a tremendous and paramount change in the pecuniary jurisdiction of the courts handling consumer disputes. In the wake of the new act, the district commission can now entertain consumer disputes whose value does not exceed Rs. 1 crore. The state commission can entertain disputes whose value exceeds Rs. 1 crore but does not exceed Rs. 10 crores and the national commission can entertain disputes whose value exceeds Rs. 10 crores.

PRODUCT LIABILITY:

The significant addition to 2019 act is the provision for product liability whereby the manufacturers or service providers have been made responsible to compensate the consumer for any harm, injury, the loss suffered due to defective products, or deficiency in the service. This also includes e-commerce within its ambit and even they cannot escape the wrath of the act as now the product liability has been extended to the service providers and not just limited to the manufacturers.

E-COMMERCE AND DIRECT SELLING:

Another amendment was related to e-commerce functioning according to the laws set for direct selling. The guidelines make it compulsory for the e-businesses to disclose the seller’s details like their address, website, email etc. and information related to refund, return, guarantee and warranty, delivery, shipment, payment options, the safety of payment, grievance handling mechanism etc. This step is paramount as in the growing world of e-commerce defective and deficient products and services are provided and through this provision the companies could be penalised for the same.

“Under the new Act, e-commerce will be governed similar to direct selling in India and online platforms for selling goods or services, or aggregating services will be held liable for any violation of consumer rights or adopting any unfair trade practices,” Mehta said³.

REGULATOR:

A central regulator, Central Consumer Protection Authority (CCPA) has been created by the act which would address issues related to consumer rights, unfair trade practices or misleading advertisements and would provide the consumers with effective redressal of the dispute and protect, promote and enforce the rights of the consumers as a class.

According to Ram Vilas Paswan, the Union Minister for Consumer Affairs, Food & Public Distribution says “CCPA will be empowered to conduct investigations into violations of consumer rights and institute complaints/prosecution, order recalls of unsafe goods and services, order discontinuance of unfair trade practices and misleading advertisements, impose penalties on manufacturers/endorsers/publishers of misleading advertisements”^.

MEDIATION AS ALTERNATIVE DISPUTE RESOLUTION AND E-FILING:

The act provides for provision related to mediation and e-filing of the complaints ⁵. Mediation as an alternate dispute resolution is very effective as it helps in speedier disposal of the case and also reduces the burden of the consumer courts which are already burdened with ample of cases. A complaint will be referred by a Consumer Commission for mediation, wherever scope for early settlement exists and parties agree for it. The act also provides for e-filing of the complaints. To speed up the process of redressal of the dispute the act provides that the complaint could be filed electronically and the proceedings and the examination of the parties could be taken up through video conferencing.

Source:https://economictimes.indiatimes.com/wealth/spend/heres-how-consumers-will-benefit-under-the-new-consumer-protection-act/articleshow/70711304.cms?from=mdr

Overview

The said new act of 2019 continues with dispute resolution through National, State and District Redressal Commissions ⁶. However, their pecuniary jurisdictions have increased tremendously to reduce the burden on these commissions. The monetary value of the complaints that can be entertained has been substantially increased. On one hand, this provision provides relief to the overburdened courts and on the other hand, the value of the lower commission will improve extensively.

Furthermore, the consumers can now file a complaint with appropriate jurisdiction of the consumer forum located at the place of residence or office of the consumer as opposed to 1986 act where the consumer needed to travel a long distance and file the complaint where the seller or service provider is located.

The admission of the complaints to the consumer forums is to be decided within twenty-one days. This was observed in the 1986 act, but according to the new act if the issue to file the complaint fails to be decided then by default the complaint will be deemed to be registered. This provision as such does away with the languishing of complaints at the initial stage which was essential for admission of the genuine complaints. This creates serious doubts as to the practical efficacy of the changes.

The new act also introduces the power of judicial review. This allows the consumer forums to review their judgements rather than filing appeals to the next level forum and thereby overburdening the courts further. In the 2019 act, the appeals from the State Commission to the National Commission can only be made where they involve substantial questions of law. Further, appeals from the National Commission to the Supreme Court can only be made against complaints which originated in the National Commission.

A new concept of “unfair contracts” has been added to the 2019 act. These contracts harm consumers and cause significant changes in the rights of consumers. The said ac has created a provision which would protect the consumers from skewed and unreasonable contracts which favours the manufacturers and the service providers.

The act further provides for punishment and penalties arising out of misleading advertisements. The CCPA may impose a penalty up to Rs. 10 lakhs or imprisonment up to 2 years on a manufacturer or endorser for misleading advertisement. In subsequent offence, the penalty may extend to Rs. 50 lakhs or imprisonment up to 5 years. The CCPA can also prohibit the endorser from practicing misleading advertising up to a period of 1 year and for the subsequent offence, it may extend to 3 years.

Moreover, the opposite party needs to deposit 50% of the amount ordered by the District Commission before filing an appeal before the State Commission. Earlier, the ceiling was a maximum of ₹25,000, which has been removed. Further, the limitation period for filing of appeals to the State Commission has been increased from 30 days to 45 days.

Challenges

The Central Consumer Protection Authority (CCPA) has been created to “regulate matters relating to a violation of rights of consumers, unfair trade practices and false or misleading advertisements which are prejudicial to the interests of public and consumers and to promote, protect and enforce the rights of consumers as a class.” 8 Further, the authority is given the power to inquire and investigate, which is done through an investigative wing headed by a director-general. Though this provision is commendable in its real sense the functions of the authority is vague as since district collectors are given the responsibility to undertake inquiries and investigations. Therefore, in the near future, the task of the investigative wing and the functions of the district collector will somewhat overlap which would, in turn, lead to a clash in their interests.

Further, the authority is also empowered to impart justice by penalizing manufacturers or endorsers for misleading advertisements, return of goods, preventing the endorsers to undertake activities relating to misleading of the advertisements, reimbursement of the price paid for good and services. Appeals against such order can only be challenged in the National Commission. But the basis for hearing such appeals is unclear which leaves the legal fraternity as well as the consumers in great confusion.

It is also not known as to whether the disputes with the present consumer commission will be heard by the same or will be transferred to the courts having the pecuniary jurisdiction according to the new act. This ambiguity will lead to further delays.

Conclusion

The Consumer Protection Act 2019 is a constructive step which would bear fruits in the future. The act includes within itself several new concepts which were the need of the hour and the thought of implementing the same in a country like India would give a satisfactory result. In the growing world of digitalization steps like e-filing of cases, proceedings through video conferencing will reform, develop and enhance consumer rights to a great extent. But one cannot deny and question the implementation and practical application of the provisions. For any law to be successful, it is essential that its implementation should be done properly and efficiently. Therefore, for the 2019 act to become productive it needs to overcome its drawbacks and leeway should be given to actualize the relief for the consumers.