Major Amendments to the Consumer Protection Act of 2019

By | July 30, 2020
Major Amendments to the Consumer Protection Act of 2019

This article discusses the latest major amendments to the Consumer Protection Act of 2019 with key insights into the relevance of the term, Consumer, directly addressing the importance of its demands.

The Pandemic is taking over the economy, with a number of cases rising each day, extending over to consecutive lockdowns. With talks on provisions to decriminalize Section 138 of the Negotiable Instrument Act and others to bring ease to the business and kick start the economy,  the Indian Government didn’t skip the rights of the Consumer.

Steps have been taken to safeguard the consumer of all the cheating and frauds that might take a toll in this disturbing scenario. It became crucial that the new Consumer Protection Act be notified to force and ensure the consumer’s well-being.

Introduction

The Ministry of Consumer Affairs, food and public distribution on 15 July 2020 notified the passed Consumer Protection Bill, 2019 to replace the long-existing Consumer Protection Act, 1986. Most of the provisions of this act came into force from 20th July 2020.

This act introduces the composition of the Central Consumer Protection Council which will come into effect with the introduction of its constitution and powers in a separate Act. The Act has also instituted the State and District Commissions and introduced and notified Consumer Protection (Salary, allowances and conditions of service of President and Members of the State Commission and District Commission) Model Rules, 2020.

Consumer Protection (Qualification for appointment, method of recruitment, the procedure of appointment, term of office, resignation and removal of the President and members of the State Commission and District Commission) Rules, 2020 came into force on July 20. The act has also introduced the mandatory rules for Consumer forums and Commissions of Mediation i.e. Consumer Protection (Mediation) Rules, 2020 to explore dispute resolution by mediation as a superior alternative before presenting the same in adjudicating in the tribunals.

Major Amendments to the Consumer Protection Act of 2019

  1. The first and foremost change is the evolution of the definition of “consumer”. This act defines a consumer as “a person who buys any goods or hires/avails any service for a valuable consideration” is consumer. This definition especially excludes any person who obtains the goods for resale or commercial purpose. The essence of this definition is to widen the scope of a consumer to both online and offline transactions through any means.
  2. Secondly, the Act introduces the concept of “product liability” which lays a mandatory responsibility on the product manufacturer/seller and/or service provider to compensate the losses incurred by the consumer due to defective product manufactured, sold, deficiency of service.
  3. The Act in Section 2 (9)[1] especially defines the rights of the consumer which includes:
  • the right to be protected against the marketing of goods, products or services which are hazardous to life and property;
  • the right to be informed about the quality, quantity, potency, purity, standard and price of goods, products or services, as the case may be, so as to protect the consumer against unfair trade practices;
  • the right to be assured, wherever possible, access to a variety of goods, products or services at competitive prices;
  • the right to be heard and to be assured that consumer’s interests will receive due consideration at appropriate fora;
  • the right to seek redressal against unfair trade practice or restrictive trade practices or unscrupulous exploitation of consumers; and
  • the right to consumer awareness.
  1. The Act also includes e-commerce and electronic service providers in its ambit by introducing its definition in Section 2(16)[2],(17)[3] and also the provisions of unfair practices corresponding to e-commerce in Section 94[4]. It also includes product liability on online market places and auction sites in section 86[5].
  2. The previous Consumer Act introduced the national, state and district redressal forums, this act further introduces the establishment of Central Consumer Protection Authority and State and district regulatory authorities which impose penalties, protect consumer rights, provide refunds etc. The main task of CCPA is to ensure no person engages in unfair trade practices or market false/misleading advertisements and investigate on such matters standalone or with the assistance of other authorities thereof.
  3. This Act has also penalized a characteristic element of consumer market i.e. misleading/false advertisements and broadly described the ambit of misleading advertisement to cover all types of unfair practices used by manufacturers to sell their products.
  4. The Act has enhanced the jurisdiction of Consumer Dispute Redressal Commissions at each level with district commissions being able to handle a case for value under 1 Cr. State commission till 10 Cr. and the National Commission to entertain all the matters beyond 10 Cr.
  5. The Act has inserted a crucial jurisdictional clause i.e. Section 34(2)(d)[6] which aids the complainant to file the complaint for redressal within local limits where he/she resides or works. Apart from that, the act also gives the complainant liberty to file a complaint where the organization/other party resides or work from i.e. has a branch or head office.
  6. The Act has further introduced the process of alternate dispute resolution by the way of mediation through Consumer Protection (Mediation) Rules, 2020 in order to resolve the consumer dispute faster without having to approach the Commission. It has also rendered liberty to sort the same in parts or as a whole. Unresolved issues are referred to the Commission. The process of Mediation is further promoted as the opposite party needs to submit 50% of the amount ordered by District Commission before filing an appeal to State Commission and hence opens a great possibility for matters to end up in mediation.
  7. The State Commissions and NCDRC by power vested under Section 49(2)[7] and 59 (2)[8] can declare any provision of contract null and void that is unfair to any consumer.
  8. The Act also brings Consumer Protection (Salary, allowances and conditions of service of President and Members of the State Commission and District Commission) Model Rules, 2020. Consumer Protection (Qualification for appointment, method of recruitment, procedure of appointment, term of office, resignation and removal of the President and members of the State Commission and District Commission) Rules, 2020 for allocating salaries and defining powers of every commission and person in the commissions.

Pending Provisions of the Act

The act has not yet been notified in its entirety and some of the provisions have been held off because of the current pandemic situation and are expected to come into force upon normalcy of these situations.

These Provisions[9] are:

  1. Clause (4), (13),(14),(16),(40) of section 2 which defines CCPA, direct-selling, e-commerce etc.
  2. Section 10 to 27
  3. Section 88 and 89
  4. Section 92 , 93, 94, 96, 97,99, 104
  5. Clauses (f) and (m) of section 101 and (zg) (zh) and (zi) of sub section 2 of Section 101

Conclusion

The Act is totally redesigned keeping in mind the importance and value of consumers. It aims to make stringent laws so that the consumer doesn’t encounter any grievance on part of neglect and less efficient work on part of the manufacturer.

This act specifically aims to protect the consumer from unjust market practices of various companies just to sell their products and  provides them with clearly defined rights and dispute resolution process which may enable them to resolve their grievances on a fast-track basis. Online marketplaces and online auction sites, which have all throughout been included under the purview of an “aggregator”, have also been included under the purview of this Act which will place more responsibility on them with respect to the goods and services being sold and provided by them.

Apart from establishing authorities at district, state and national level for consumer disputes redressal, the Act also seeks to hold the product manufacturers liable along with the product service providers and product sellers where the rights of the consumer have been infringed due to defects or deficiency in the goods and services provided.


Authored by:  Tanmay Jain

Chanderprabhu Jain College of Higher Studies & School of Law


References

[1] Section 2(9) Consumer Protection Act, 2019

[2] Section 2(16) Consumer Protection Act, 2019

[3] Section 2(17) Consumer Protection Act, 2019

[4] Section 94 Consumer Protection Act, 2019

[5] Section 86 Consumer Protection Act, 2019

[6] Section 34(2)(d) Consumer Protection Act, 2019

[7] Section 49(2) Consumer Protection Act, 2019

[8] Section 59(2) Consumer Protection Act, 2019

[9] Consumer Protection Act, 2020 notification.


  1. Important Definitions Under Consumer Protection Act
  2. Read Complete Consumer Protection Act, 2019 Here
  • Hansraj Jain says:

    Excellent

  • Namita says:

    Relatable article.. useful info