GUIDE TO CONSUMER PROTECTION ACT, 2019

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GUIDE TO CONSUMER PROTECTION ACT,

2019

Co-Authors: Vihaan Kumar

Sreeya Chowdary
Shraddha Sharma
Editor: Kanhaiya Singhal

INTRODUCTION:
The Consumer Protection Act, Act no. 35 of 2019 is an Act passed by the Parliament of
India. The first draft of the bill was introduced in Lok Sabha on 8 th July, 2019 by Shri.
Ram Vilas Paswan, the incumbent Minister of Consumer Affairs, Food and Public
Distribution and was named as Bill No. 144 of 2019. It repeals the Consumer Protection
Act, 1986. The bill was passed by Lok Sabha on 30 July, 2019 and later got passed in
Rajya Sabha on 6 August, 2019. After receiving assent from the President, Shri. Ram
Nath Kovind on 9th August, 2019, it was finally published in the official gazette on the
same date. It accompanies various other Acts that have been passed by the Parliament of
India for the protection of consumers which were introduced by the Ministry of
Consumer Affairs like the Real Estate (Regulation and Development) Act, 2016,
Essential Commodities Act and Essential Services Maintenance Act.

As per Section 7 of the Act; a person is called a consumer, “when he/she buys any good
or avails any service for a given amount of consideration which is promised to be paid by
him for self-use”. It is worth to mention here that if a person buys any good and avail any
service for resale or commercial purpose, then he is not considered as a consumer. This
definition covers all types of transactions i.e. online and offline through electronic means
or by teleshopping or direct selling or multi-level marketing.

The Act states the provision of establishing a Central Consumer Protection Authority
known as the Central Authority under Section 10 which has the power to regulate matters
involving unfair trade practices, misleading advertisements or violation of the rights of
the Consumer where a complainant who can be either a consumer, or a voluntary
consumer association registered with the law in force, or even the Central or State
Government. Since the passing of the new Act, gone are the days, where the principle of
Caveat Emptor or 'let the consumer beware' was applied. Now the principle of Caveat
Venditor or ’the seller is assumed to be more sophisticated than the purchaser and hence
must bear responsibility for the faulty goods or services’ has taken its place in the
common market where the rights of the consumers are more efficiently looked upon.

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OVERVIEW OF THE ACT OF 2019

The Act inculcates within itself the provision of judicial review where in Section 24 of
the Act, it is mentioned that a person who is aggrieved by any order given by the Central
Authority in pursuance of the complaint filed by him can appeal to the National
Commission within the stipulated time being 30 days. The Act has widened the definition
of ‘unfair trade practice’ by adding within its perspective any information disclosed to the
other person which was given by the consumer in confidence unless the law in force at
that time prescribes him to do so.

The pecuniary jurisdiction of the different authorities has been revised by the Act where
the district forum can entertain cases where the value of goods or the services paid is
within 1,000.00,000 (Indian Rupees 1 crores), the state commission can entertain disputes
where the limits are between 1,00,00,000 to 10,00,00,000 (Indian Rupees 1 crores to 10
crores) and the National Commission entertains all the disputes beyond the limit of
10,00,00,000 (Indian Rupees 10 Crores). Also, the appeals against any order can be made
from the State Commission to the National Commission only when a substantial question
of law is concerned.

The newly established Central Consumer Protection Authority has been given various
powers with departments such as Investigation wing headed by Director General which
investigates consumer rights violation. They have been assigned with various tasks such
as they can file suits, recall products, take up Suo-Moto Actions, order reimbursement of
goods and/or services etc.

The offences and their penal consequences have been widely listed under Sections 88 to
91 wherein failure to comply with the order of the Central Authority can be punished with
6 months of imprisonment and fine extending to 20 Lakh Rupees. The punishment for
false or misleading advertisement and for manufacturing for sale or storing, selling or
distributing or importing products containing adulterant are also listed in the provisions.

In addition to all these new provisions as well as additions to the existing provisions of
the 1986 Act, the 2019 Act adopts a modern view with respect to the digital era and to
make the processes simpler by shifting the work load from physical paperwork to
maintaining an online database, the new Act states provisions regarding the E-filling of
complaints regarding violation of the Consumer rights as well as it inculcates the
application of Alternative Dispute Resolution (ADR) which helps to reduce pressure on
the Courts and solve the matters efficiently.

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NEED FOR THE NEW ACT

The Consumer Protection Act, 1986 was an exclusive legislation for the protection of
consumer’s interests. But it lacked on several fronts.

The Act did not authorize a customer to complain to the customer for and if an alternative
solution is accessible under some other grounds.

The Consumer Protection (Amendment) 1993, incorporated two clauses regarding the
supply of hazardous goods, but it did not imposed any strict liability on those who
supplied them.

The Consumer Protection Act, 1986 Act did not give any definition of safety
requirements and permitted hazard levels.

Under this Act, a consumer could seek Redressal only if he suffered a loss or damage as a
result of the unfair trade practice or deficiency in service or the unfair trade practices
resorted to by a trader.

It did not allow the publishing of the names of the manufacturers, traders, dealers whose
goods were found to be hazardous.

No liability on the Chief Executive, manager when an offence is was committed.

The Act conceded six rights of consumers i.e., right to choice, right to safety, right to be
informed, right to be informed, right to be heard, right to redress and right to consumer
education. But these were not made justifiable.

The storage of commodities was also a big question as it had a lot of issues.

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DIFFERENCES BETWEEN CONSUMER PROTECTION ACT,

1986 AND CONSUMER PROTECTION ACT, 2019
Consumer Protection Act, 2019 has proposed new provisions to safeguard consumer rights
which vary from the earlier Act. These are the important aspects of the 2019 Act:-

Product liability: Under this a manufacturer or a service provider would be required

to compensate the consumers in case of any loss or damage caused by manufacturing.
It differs from the previous provision which the cost of the product was compensated
by the manufacturer or the service provider but not the loss suffered.

Consumer courts: Consumer courts are in the district, state and national levels to
solve the consumer complaints. The 2019 Act also changed the pecuniary jurisdiction
for the district, state and national commissions. Districts have been increased up to
Rs. 1 Crores as these will be convenient. State has been increased to Rs. 10 Crores
and National has been increased to above Rs. 10 Crores.

E-commerce: Increasing in the E-commerce transactions has lead to new provisions.

As per the new Act, all the laws that apply for direct selling would also be applicable
for E-commerce. The guidelines propose that platforms like Amazon, Snapdeal, and
Flipkart etc will have to disclose the details of the sellers and even the product
liability would increase. As fake products have been increasing the new rule is if any
product is reported, the company could be penalized.

Separate regulator: One of the most important provisions of this 2019 Act is the set
up of a Central Consumer Protection Authority (CCPA). The purpose is to “TO
PROMOTE, TO PROTECT and ENFORCE the rights of the consumers”. It will
concentrate on the manufacturers, sellers and service providers. It also been granted
the authority to initiate suo-Moto proceedings against the violators and take Action on
behalf of consumers.

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NEW ADDITIONS INCLUDED IN THE ACT OF 2019

The changes made in the Act have been done so to create a transparent system in the
marketplace in order to ensure consumer interests while being under strict legislative
protection.

In the Consumer Protection Act 2019, the definition of the term “Consumer” has a wider
meaning. It now also includes those you purchase online services and products. Celebrity
endorsements of goods and services also come under the purview of the Act now.
In order to prevent false claims in advertisements or to prevent misleading advertisement
altogether an additional onus is on the endorsers under the Act.
Since “food” has also been included in the definition of “goods”, all the food delivery
platforms also come under the purview of the Act.
Telecom services are now included under the term “services” within the ambit of the Act.
A point to be noted here is that the term used is “telecom” and not “telecommunication”
which would have included internet and cellular data services.
The new Act makes the sellers and the manufacturers of the different products and
services responsible for compensation in case of any harm caused because of any
defective product manufactured or sold as well for any deficiency in the services being
provided to the consumer under “product liability”.
The concept of “unfair contracts” has been introduced to prevent the consumers from
being caught up in unreasonable or distorted contracts which have biased clauses in the
favor of the service providers and manufacturers.
The term “unfair trade practices’ also has a wider meaning now as it facets include the
discontinuation of deficient services, false or misleading electronic advertising along with
the refusal to taking back defective goods, to refund consideration within the stipulated
time period.
Disclosing any personal information of the consumer collected in confidence is also an
offence under the Act.

CRITICAL ANALYSIS OF THE ACT:

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The digitization of the worldwide marketplace and the increasing diversity in the nature of
goods and services were the challenges that were needed to be combat as they were the
challenges faced by the consumers. This digitized marketplace has increased the consumer
expectation by a noticeably great margin in the past two decades. This challenge became the
foundation of the new Act. The Act quite naturally aims at providing an approachable,
systematic and completely hassle free method to the consumers for the Redressal of their
disputes. The Act of 1986, even though provided a mechanism for consumer grievance
Redressal, but fixated on reverse gear when it came to combat challenges in the electronic
digitized market.

The new Act has a Central Consumer Protection Authority to “regulate matters relating to
violation of rights of consumers, unfair trade practices and false or misleading advertisements
which are prejudicial t the interests of public and consumers and to promote, protect and
enforce the rights of consumers as a class.” This authority has been empowered to investigate
through a set which is under the Director-General corresponding to the Competition
Commission.

The scheme is commendable, but it is ambiguous on the practical functioning of the

Authority. The tasks of the Director General pertaining to inquiries and investigations overlap
with the functions of the District Collector causing a probable conflict of interest. This
Authority has been empowered to issue directions that can penalize manufacturers and
endorses for misleading or false advertisements the appeal against which can be preferred
only before the National Commission. However there is a gray area on the point as to on
which factors the appeal may be heard by the National Commission.

There is also an ambiguity on the basis of the transfer of matters before the Consumer
Commissions on account of pecuniary jurisdictions.

The one reasonable solution to this would be for the courts to interpret the provisions in a
manner that they restore the infringed rights of the consumer while also not subsiding the
stand of the producers and manufacturers since no party should be condemned unheard in a
court of law.

CONCLUSION:

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The objective of the Act remains to safeguard the rights of each and every consumer. The
scope of the rights have widened with the meaning of goods and services along with the
method of availing them. The legislation is at par with the developments in the e-commerce
sector.

The Act provides a structural implementation of its provisions along with easily accessible
categorical grievance machineries. The Act also ensures a strong safeguard against the
exploitation of its provisions both by and against the consumer. It is also a movement for the
legislation to be diverse to fit into the ever changing socio-economic-cultural dimensions of
the present day marketplace.

Now the true test rests within the Actual practical implementation and the applicability of the
provisions of the Act to ensure that the consumer of the space-age technology has a better
safeguard against corrupt exploitation.

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