Consumer Protection Act 2019 – Key Changes
Introduction: Consumer Protection Act 2019 The Parliament passed the Consumer Protection Act 2019 has received the assent of the President on 9th August 2019. The Act has repealed the Consumer Protection Act, 1986 a 33 years old consumer protection legislation. The Indian market has undergone drastic changes in past few decades with the advent of digital technologies, development… Read More »
Introduction: Consumer Protection Act 2019
The Parliament passed the Consumer Protection Act 2019 has received the assent of the President on 9th August 2019. The Act has repealed the Consumer Protection Act, 1986 a 33 years old consumer protection legislation. The Indian market has undergone drastic changes in past few decades with the advent of digital technologies, development of E-commerce, smartphones etc. but CPA 1986 had become archaic and outdated to cover these emerging complexities in the market. In the wake of this Consumer Protection Act 2019 has been enacted.
This Consumer Protection Act 2019 is socio-economic legislation which aims to protect and promote the interests of consumers and establishing authorities for expeditious administration and settlement of consumer disputes. It has introduced a myriad of provisions in this regard and is expected to benefit consumers in numerous ways.
The key changes brought in by the Consumer Protection Act 2019 are:-
Covering E-Commerce Transactions
Purchasing through online platforms is in vogue and has been legally recognized by The Information Technology Act, 2000. But the CPA, 1986 did not specifically have any provisions to cover online transactions. Due to the paucity of laws to protect consumers online the economic interest of consumers was being adversely affected. Consumers had complained of getting products which are counterfeit, lacks desired quality, late delivery etc. In Loreal v. Brandworld & Anr.[i], it was found by the Delhi High Court that Counterfeit Loreal products were being sold by shopclues.com. As per UNCTAD, only 52% of countries in the world have online consumer protection legislation[ii].
CPA 2019 has overcome this by covering buying of goods, hiring or availing of any services via any electronic mode, teleshopping, direct selling or even multi-level marketing, thus widening the definition of consumer under section 2(7) of the Act as anyone who buys goods or hires services by these means is a consumer under the Act. Any purchase by these channels is amenable to the provisions of the Act and a complaint in re the same can be filed if the grounds provided in the Act exists. Expressly encompassing transaction through e- platforms in this digital era will be instrumental in addressing contentions arising out of online purchases and extending the protection law to the consumers online..
Establishment Of Central Consumer Protection Authority –
The Act establishes a regulatory body known as Central Consumer Protection Authority, or Central Authority under section 10 to protect, promote and enforce the rights of consumers as a class and to regulate matters related to violation of consumer rights, false and misleading advertisements and unfair trade practices which are prejudicial to consumer interests. The Central Authority will conduct an investigation into any of these matters on the basis of the complaint alleging any such act. The central Authority can also initiate an investigation Suo Motto or on the directions of Central Government as well.
For the purpose of the investigation, the Central Authority will have an “Investigation Wing” headed by Director-General. If after investigation the Central Authority is satisfied on the basis of the evidence that the alleged acts have been prima facie committed it can pass appropriate orders under section 20 and 21 of the Act which inter alia includes an order to recall of goods, reimbursement of price, discontinuation of practice, or discontinuance of such advertisement etc. The party aggrieved by the orders of the Central Authority can make an appeal against such order under section 24 in the National Commission within 30 days from the date of receipt of such order.
‘JUSTICE DELAYED IS JUSTICE DENIED’
It has been held by the Supreme Court in Abdul Rehman Antulay and Ors. v. R.S. Nayak and Anr[iii] that speedy trial is the part of the fundamental right guaranteed under Article 21. The Central Authority will provide a fast track alternative so that justice reaches the consumer immediately as earlier the only remedy was to approach Consumer Forums. Also, it will alleviate the burden on Consumer forums and assist them in disposing of pending cases effectively.
The preamble of the Act provides for “Timely” and “Effective” settlement of Consumer disputes. However as per of NCDRC there at present more than 488009 [iv] cases pending collectively in all consumer forums. This showcase that the actual position is far away from the desired objective. The supreme court in Bijoy Sinha Roy v. Biswanath Das and Ors [v] has held that to achieve the objectives of the Consumer Protection Act there is need for devising a mechanism for speedy trial and to adopt an Alternative Dispute Resolution Mechanism.
CPA, 2019 has adopted an Alternative Dispute Resolution Mechanism by providing for mediation in consumer dispute settlement. Chapter V of the Act deals with the Mediation process. The Mediation process is new to Consumer Protection law in India.
Section 74 provides that the Central and the State government shall set up mediation cells in National, State and District Commissions where the mediation will take place. The Consumer Dispute Redressal Commissions by the virtue of section 37, 49, and 59 of the Act can refer any matter to mediation at any stage on the concurrence of both the parties if there exists an element of the settlement.
The Apex court in Afcons Infrastructure Ltd. v. Cherian Varkey Construction Ltd.[vi] has held that the use of ADR is suitable in consumer disputes also. This will certainly lead to swift disposal of cases and foster the dispute redressal process.
CPA, 2019 has incorporated the concept of Product liability. It is defined under section 2(34) of the Act as the responsibility of the “Product manufacturer” or “Product Seller” or “Product Service Provider” to compensate for any harm or injury caused to the consumer by any defective product sold or manufactured or any deficiency in service.
It has been observed that e- platforms generally take the plea that they are a mere intermediary between the buyer and the actual seller. In Loreal v. Brandworld & Anr [vii] shopclues.com raised the plea that it was merely an intermediary and serves as a platform between the buyer and the selling company, This Provision will render such objections untenable at the outset.
Chapter VI of the Act contains the provisions dealing with Product liability. If a consumer has suffered any harm or injury attributed to a defective product or deficient service, he can file a complaint about product liability action against the product manufacturer or product service provider or product seller, as the case may be. The specific grounds regarding the same are given under section 84, 85 and 86 respectively It makes the product seller responsible even if he has not himself manufactured the defective product. This will allow the consumer to file claims against e-commerce platforms who merely acts as a selling platform.
Section 2(6)(vii) of the Act has specifically provided that a claim for product liability action can be the ground for the filing of the complaint. As per section 82(2) of the Act a product manufacturer can be held liable in a product liability action even if it is proved that he was not negligent or fraudulent in making the express warranty of a product.
Countries like USA, China, Japan, Australia also have laws for product liability action.
Unfair Trade Practices
The purview of unfair trade practices has also been expanded by adding clause vii, viii & ix in section 2(47) of the Consumer Protection Act 2019. Consequently, non-issuance of bill or receipt for goods sold and services provided to the consumer or any refusal to withdraw deficient services, refusal to take back any defective product and returning the consideration paid for such goods or services, disclosing any personal information of the consumer to any person other than consumer himself, making any false statement regarding the product by electronic means will amount to unfair trade practice and is a ground for filing a complaint.
Classifying these activities as unfair trade practices will certainly act as a bulwark and protect consumers from exploitation and will deter the sellers from undertaking such undesirable activities in the avarice of reaping profit.
Penalties For Misleading Advertisements
Misleading advertisements represent the quality, quantity, character or substance etc. of a product or service falsely so as to influence the consumer’s decision. In India despite various regulatory bodies like ASCI, TRAI, IRDA etc. there has not been any substantial control on these advertisements. These advertisements are often endorsed by celebrities having a profound impact on consumer’s economic behaviour.
In Nikhil Jain v. Emami Ltd[viii] where the advertisement of a fairness cream “Fair and Handsome” manufactured by the respondent which was endorsed by renowned celebrity Shah Rukh Khan claiming that the cream will make men fair in 3 weeks was held to be misleading by the consumer forum. Similarly, in the case against Nestle in 2015 it was alleged that the respondent company’s claim that its product Maggi does not contain MSG was allegedly false[ix]. The major remedy provided by the existing laws is merely compensation. There is however intense need to curb these advertisements to meet the objectives of the Consumer Protection Act.
The Standing committee on food and consumer affairs & Public distribution in its 9th report has recommended stringent provisions to deter misleading advertisements[x].
The Act has introduced penalties for the advertisement which are false or misleading under section 21 of the Act. If an advertisement is found as false or misleading the same can be ordered to be discontinued, besides this, a penalty up to 10 lakh rupees can be imposed on manufacturer or endorser and such penalty can go up to 50 lakh rupees on subsequent contraventions. The endorser of false or misleading advertising may be prohibited from endorsing any product for a period up to 1 year. This Act is first of its kind which imposes liability on the endorser also. These provisions will have a knock-on effect on the use of false or misleading advertisements.
Pecuniary Jurisdiction Of Consumer Forums
The Act has augmented the pecuniary jurisdiction Consumer forums.
District Commission under section 34(1) of the Act can now entertain cases where the value of goods and services does not exceed 1 crore rupees. State Commission under section 47(1) where the value of goods and services exceeds 1 crore rupees but does not exceed rupees 10 crores. and National Commission under section 58(1) where the value of goods and services paid as consideration exceeds rupees ten crores.
This has increased consumer’s convenience as under the precursory law this limit was 25 lakh, 1 crore and above 1 crore for District, State and National commission respectively.
For assessing this value the amount actually paid by the consumer as consideration will be taken into account and not the price of such goods or services. Also, the Act has provided a massive relief as the complaint can now be filed even at the place of residence of the complainant under section 34(1)(d) of the Act. Earlier the complaint could be filed only where the cause of action arose or where the opposite party resides.
Admissibility Of Complaint
The Act provides that if any complaint is filed in any consumer forum, such complaint shall either be admitted or rejected within 21 days from the date of filing of a complaint, however, if such complaint is neither accepted nor rejected within this specified time, it will be deemed to have been admitted.
The Act has also eased the filing of the complaint by providing for e-filing of complaints this will make the filing process more convenient and consumer-friendly for this purpose government has also launched a mobile app known as “ Consumer App” where a consumer can file his complaint which will be disposed of in the maximum 60 days.
By – Sanjay Shisodia
Amity Law School, Amity University Noida
[i] CS (OS) 3127/2014
[ii] UNCTAD, World Consumer Protection Map, (July 7, 2017)
[iv] Statistics on consumer protection available at http://ncdrc.nic.in/stats.html (Last Visited – April 4, 2020)
[v] 2017 (11) SCALE 391
[vi] 2010 (8) SCC 24
[vii] Supra n.8
[viii] Order dated 31/10/2015 in case no. 53/2013 by the District Forum, Delhi
[ix] Editorial “Case against Maggi: Supreme Court refuses Nestle’s plea” The Economic Times, December 12, 2015
[x] Government of India “9th Report of standing Committee on Food, Consumer Affairs And public Distribution” ( Ministry of, Consumer Affairs, Food And public Distribution), pg. 23, 2016