Consumer Laws have been protecting the interests of the consumers since dim and distant. The new act directs a time-based effective administration and settlement of consumer disputes, to protect consumer rights.
By: Anshika Singh, 3rd Year, LLB (Hons), Department of Law, PIMR.
On 20th July 2020, the new Consumer Protection Act 2019, came into force after replacing the three-decades-old Consumer Protection Act, 19861. The consumer protection bill received the President’s assent on 9th August 2019. The Union Minister of consumer affairs, Mr. Ramvilas Paswan introduced the act, which was later passed by both the houses. The new Consumer Protection Act is a result of the changing needs of the consumers. It has fixed the accountability and has created a definite structure for redressal of consumer complaints. In an attempt to safeguard the interests of the consumers, the legislature bestowed upon the consumer’s 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
The key features of the new act are provided below:
1. Mediation-As a medium to settle
To provide a quick and speedy resolution for the consumer dispute, the new act, as an Alternative Dispute Resolution Mechanism provides Mediation. It will reduce the pendency of the cases, and also there will be a strict timeline fixed in the rules. The court can now refer to settlement through Mediation, which will facilitate the process of adjudication.
2. Imposing Strict Penalties
The new act consists of a provision for a jail term and fine for the manufacturer on giving misleading advertisements and adulteration. The penalty which can be imposed is up to Rs 10 lac, on the manufacturer or an endorser, and can be sentenced for imprisonment up to 2 years. For subsequent doing of such an offense, the fine can be expanded up to Rs 50 lac. The authority may also ban the endorser (of misleading advt.) in case of endorsing the product, for a period of 1 year, and for every subsequent offense, it may extend to 3 years. From the various instances of the past, it has become important that the endorser must exercise due diligence, and verify the product before endorsing. In the case of adulterating the products and errant businesses, such manufacturers, or seller/distributor can be awarded punishment –
• When Consumer is not injured –Rs 1lac fine or 6 months imprisonment.
• When Consumer is injured – Rs 5lac and 7 yrs imprisonment.
• If Consumer dies- Rs 10lac and 7 yrs imprisonment extended up to Life imprisonment.3
3. E-Filing and Jurisdiction
Unlike the present practice of filing a consumer complaint, the e-filing feature has bought flexibility to the consumers within the jurisdictional consumer forum, located at the place where the consumer is residing or working. Accordingly, to provide procedural ease and reducing inconvenience, the hearings and/or examination of parties can also be done through video conferencing.
4. Product liability
Along with all the features, the Consumer Protection Act 2019, has become an exclusive law dealing with product liability. Product liability is a wide concept that includes, within its ambit, the product manufacturer, product service provider, and product seller, for any compensation claim.
Earlier, there was a shield that has protected the commercial platforms (including e-commerce platforms) stating that ‘they are merely platforms or aggregators’, but unfortunately this defense will not work in the new act.
The product liability clause levies a heavy liability on the manufacturer even though there was no negligence or fraud in making the express warranty of a product (with a few exceptions). There are a few exceptions for the product seller too, to protect him from liability, such as in the cases where the product has been misused, modified, or changed.
The definition of consumers, under its ambit, will now include any commercial transactions of goods, or buying of goods, through both offline or online mode.
The previous act did not include e-commerce transactions specifically.
To increase transparency, the online platforms such as Amazon, Flipkart, etc., will need to disclose their seller’s details, address, website, etc., and other conditions such as refund, exchange, warranty, etc., on the website. This move will expose the fake products sold on the E-Commerce and teleshopping sites. The e-commerce platforms will have to acknowledge receipt of any consumer complaint within 48hrs, and the redressal should be completed within one month from the date of receipt.
6. Central Consumer Protection Authority [CCPA]:
Under the new act, a separate regulatory authority known as the Central Consumer Protection Authority is established4, which consists of wide powers for the enforcement of the act. It will address the issues relating to unfair trade practices, misleading advertisements, selling fake and faulty products, etc.
The authority also has an investigation wing that will conduct inquiry or investigation in case of violation of any consumer law.5
The wing will be headed by Director General, appointed for such purposes. It will have powers to take Suo Motu actions, cancel licenses and file class-action suits, etc.
7. Pecuniary Jurisdiction stretched
Under the aegis of the new act, the pecuniary limits of the district, state, and national commission have been extended. The revised limits are-
District forum – upto Rs 10,000,000 (i.e.,1cr)
State forum – above Rs 10,000,000 but cannot exceed Rs 100,000,000
National Commission – Above 100,000,0006
According to the new act, Class action suits can also be bought.
The new consumer protection act, if executed effectively, may solve and protect the interest of the consumers speedily, as compared to the earlier times. Due to the dynamic nature of the market, various new techniques of marketing, buying, and selling, have evolved in the previous decades, which required huge changes in the redressal system also. There are still some challenges from the future perspective as, the circumstances or the criteria under which National Commission shall entertain such cases is not clear yet. The position regarding this is unclear whether the existing cases will be transferred or not, on account of change in pecuniary jurisdiction. The new act will set up legal accountability as well as speedy recovery of the damages, of the public. The introduction of class action suit and legal accountability for the endorser, are some of the key changes which were needed, from the present, general & e-commerce perspective.
1.Shipra Singh, ET Bureau, Here’s how consumers will benefit under the new Consumer Protection Act, 19 August 2019,https://economictimes.indiatimes.com/wealth/spend/heres-how-consumers-will-benefit-under-the-new-consumer-protection-act/articleshow/70711304.cms
2.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) paras 1.4-1.5.
3.The Consumer Protection Act, NO. 35 OF 2019, http://egazette.nic.in/WriteReadData/2019/210422.pdf
5.StutiGaliya, Khaitan& Co., Consumer Protection Act, 2019-Key Highlights,20 August 2019, https://www.mondaq.com/india/dodd-frank-consumer-protection-act/838108/consumer-protection-act-2019-key-highlights