Development of consumer protection act

To modernize the existing law and to make its scope vaster, practical, and to provide safety and easy access to the consumer through digitization, the Consumer Protection Act 2019 came into force after the landmark Consumer

Protection Bill, 2019 was passed by the Parliament on 6th August 2019. The Consumer Protection Act 2019 received

assent from the President of India and was published in the official gazette on 9th August 2019.[1] The new act replaced the 33 years old act (more than three decades) Consumer Protection Act, 1986.

Consumer preference changes from time to time, and in this digitization age, the consumer is more titled towards

buying products online as it is convenient. They also provide a wide variety of products worldwide. To address the new challenges faced by the consumers, the new Consumer Protection Act, 2019 was introduced.

Below are some Key Highlights of the New Act:

• E-Commerce Transactions: The new act has widened the definition of ‘Consumer’. The description now consists of a person or an individual who buys any goods, whether through offline or online transactions, electronic means, direct selling, teleshopping, or multi-level marketing.[2] The earlier act (1986, Act) did not include E-commerce transactions.
• Enhancement of Pecuniary Jurisdiction: The new act fixed the revised monetary limits. Now the District forum can entertain consumer complaints where the value of goods or services paid does not exceed Rs.1 Crores (from up to Rs.20 Lakhs). The State Commission can entertain disputes up to Rs.10 Crores (from up to Rs.1 Crores), and the National Commission can exercise jurisdiction where the value exceeds Rs. 10 Crores as against Rs.1 Crores in the 1986 Act.[3]

• E-Filling of Complaints: The New Act provides more flexibility to the consumer to file grievances with the consumer forum located at the local place of residence or the workplace of the consumer. Before in the old act, the practice of filing it at the site of purchase or where the seller has its registered office address has been changed and made more flexible. The New Act also contains empowering provisions for consumers to file complaints electronically and for hearing and examining parties through video-conferencing. Hence, it provides technical comfort and reduces inconvenience and harassment for the consumers.
• Establishment of the Central Consumer Protection Authority (CCPA): The New Act proposes the institution of a regulatory authority known as the Central Consumer Protection Authority (CCPA), with extensive powers of enforcement. The Director-general will be leading an investigation wing to examine consumer law violations and conduct inquiries.
• Full control has been grant to the CCPA to take Suo-Moto actions, recall products, order reimbursement of the amount of goods/services, cancel licenses, and class-action file suits if a consumer complaint affects more than 1 (one) individual.
• Product Liability: The New Act has introduced the concept of product liability, under this the product manufacturer, product service provider, and product seller will have to compensate a consumer if their goods or services causes ‘harm’ which incorporate damage to property/personal injury, illness or death/mental agony or emotional distress.[4] The term ‘product seller’ is define to include any individual who is involve in placing the merchandise for a commercial purpose, and intrinsically would come up with e-commerce platforms as well.[5] There are increase liability risks for manufacturers as compare to product service providers and merchandise sellers, considering that under the New Act, manufacturers are going to be more liable in product liability action even where he proves that he wasn’t negligent or fraudulent in making the express warranty of a product. There are few exceptions under the New Act from liability claims, such as, that the product seller will not be responsible where the product has been misused/tempered, altered, or changed.[6]
• Unfair Trade Practices: The New Act presents a comprehensive definition of Unfair Trade Practices, which also includes sharing of personal information or private data give by the consumers in confidence unless such disclosure is make following the provisions of any other law, a refusal to withdraw defective goods or deficient services. The measures described above have been use to protect the data of consumers, keep a tab on transactions, and making it easy to claim refunds and returns.

• Penalties for False Advertisement: The CCPA may impose a penalty of up to INR 10,00,000 (Rupees Ten Lakhs) on a manufacturer or an associate endorser or celebs for a false or misleading/dishonest advertisement. The CCPA may sentence the violators to imprisonment for up to two years or the same. In case of the following offense,
• the fine may extend to INR 50,00,000 (Rupees Fifty Lakhs) and the imprisonment of up to 5 (five) years. The CCPA can also ban the endorser of a misleading advertisement from endorsing that actual product or service for a period of up to 1 (one) year. For every following offense, the period of the ban may extend to 3 (three) years.[7]
• Mediation: The provision for mediation was missing in the old act which was introduce in the new act where there is a proviso for referring dispute to the District, State or National Commission on written consent given by both the parties. For mediation purpose, the National Commission or the State Commission or the District Commission, shall prepare a panel of the mediators which is to be maintain by the consumer mediation cell attach to it.
• The New Act fixes the responsibility of endorsers given that there have been several cases in the past where consumers have fallen prey to unfair trade practices under the influence of big celebrities acting as brand ambassadors. Therefore,
• it becomes very important for the endorser to take the obligation and exercise due diligence to verify the reliability of the claims made in the advertisement to counter liability claims.
• Alternate Dispute Resolution: The New Act provides for conciliation as an Alternate Dispute Resolution mechanism, creating the method of dispute judgement less complicated. This can facilitate with the swifter resolution of
• disputes and reduce the pressure on consumer courts, which already have abundant cases awaiting before them. The said provision for conciliation had been missing in the previous act.

Conclusion:

All-in-all we can say, that the 2019 Act is a very constructive step towards the reformation and the development of the

consumer laws, in light of rapidly changing socio-economic developments. With the New Consumer Protection Act, 2019 the era, where the ‘Consumer was ask to beware’ is gone. A buyer is now the one who is treat like a King. Hence, consumer-driven businesses (such as retail, e-commerce) must be aware of the changes within the legal

landscape and have sturdy policies dealing with consumer redressal in place. Consumer-driven businesses should also try to take additional safety measures against unfair trade practices and unethical business practices. However, the government should also create additional allocation towards filling the vacancies and raising the infrastructure for

active implementation of the several provisions and speedy disposal of complaints.

Reference

[1] Consumer Protection Act 2019 § 2

[4] Ranjan Narula , Amendments to Consumer Protection Act- what Brand owners must know!, LEXOLOGY(Feb 01, 2021, 7:40 PM)https://www.lexology.com/library/detail.aspx?g=9d0ef742-35ac-4011-9b02-a301b7027b9e

[6] The Consumer Protection Act 2019 § 2(34) ,2(35)

[7] TNF Staff, Under new Consumer Protection Bill, up to Rs 50 lakh fine for celebs endorsing false ads, THE NEWS