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What’s What of Consumer Protection Act, 2019

Have you ever imagined the globalized world without the ‘Free Market Activity’? The free market is one where the voluntary exchange of goods and services are governed by laws of ‘Demand and Supply’. For this to happen both the parties to the exchange, Producer/Manufacturer and Consumer must be on the equal footing. The new era of consumer jurisprudence was ushered in India after the enactment of consumer protection act, 1986, which changed the old status quo of ‘Caveat Emptor’ meaning ‘Let buyers beware’ to ‘Caveat Venditor’ meaning ‘ Let sellers beware’, by empowering consumers with certain rights.

From then 1986 to now 2019, especially after the internet becoming an essential part of our daily life. This particular technology has transformed the way we consume whether knowledge, product or services. It became predominantly important to overhaul the consumer act therefore Parliament enacted a new Consumer Protection Act, 2019.

Highlights of Consumer Protection Act, 2019

 

  1. Definition of Consumer: The new act has broadened the definition of the consumer to include persons who engage in the consumption of services or products either online or offline, transacted through electronic means or by teleshopping or direct selling or multi-level marketing. 

Here, consumer means, any person who is consuming for personal needs whether he has paid himself or another person has availed the services or products for consideration. In Indian Medical Association v V.P. Shantha, Supreme Court has held that professional services rendered for consideration come within the ambit of service as defined in section 2(1)(o) of 1986 act and section 2(42) of 2019 act.

 Deletion of Healthcare from the definition of services

Although a new amendment brought by parliament removed ‘healthcare’ from the list of services following stiff opposition from the medical fraternity. Even after the removal from the list, the interpretation of SC in V.P. Shanta case will hold, till the parliament does apply from prospective effect, till then all judgement by SC will not cease to apply in future cases. However, the time will tell which way the courts will decide, when a similar question will raise on grounds of removal of Healthcare from services list under the consumer protection act, 2019

 

  • E-commerce: E-commerce has been defined under section 2(14) as a means of buying or selling of goods or services including digital products over a digital or electronic network;

 

  1. Introduction of Unfair Contracts: Unfair contract provides a ground to file complaints on grounds being unfair, unilateral or unreasonable. The unfair contract has been defined to include contracts under section 2(46) between a manufacturer or trader or service provider on one hand, and a consumer on the other, having such terms which cause a significant change in the rights of such consumer, including the following, namely:—
    1. requiring manifestly excessive security deposits to be given by a consumer for the performance of contractual obligations; or
    2. imposing any penalty on the consumer, for the breach of contract thereof which is wholly disproportionate to the loss occurred due to such breach to the other party to the contract; or
    3. refusing to accept early repayment of debts on payment of applicable penalty; or entitling a party to the contract to terminate such contract unilaterally, without reasonable cause; or

 

  • entitling a party to the contract to terminate such contract unilaterally, without reasonable cause; or

 

  1. permitting or has the effect of permitting one party to assign the contract to the detriment of the other party who is a consumer, without his consent; or
  2. imposing on the consumer any unreasonable charge, obligation or condition which puts such consumer to disadvantage.
  1. Enlarge definition of unfair trade practice

 Three  types of additional unfair trade practices have now been added to the list which is as follows:

  1. non-issuance of a bill or a cash memo in a prescribed manner;
  2. Refusing to accept back or withdraw defective goods or withdrawal or discontinuance of deficient services or not refunding the consideration amount paid within the period as stipulated in the bill or cash memo or receipt or in the absence of such stipulation, refusal to withdraw or refund goods or services within thirty days; and

iii. Disclosing any consumer’s personal information to any other person outside the ambit of any law for the time being in force or public interest 

  1. Product Liability: A new ground of  “Product Liability” for filing complaints as chapter IV has been of great significance, Section 2(35) holds manufacturer, seller or service provider liable for defective products or service provided which rendered any harm to The peculiar consumer due to such defect or deficiency in services. 
  2. Central Consumer Protection Authority as the new regulator

An establishment of new central authority, the Central Consumer Protection Authority (“CCPA”) under section 10 of the act to promote, protect, and enforce the rights of consumers against misleading advertisements and unfair trade practices.

This authority will have investigative powers related to consumer rights violations as well as to bring class-action suits.

  1. False or misleading advertisements: The liability on endorsers have been fixed if they found promoting the goods or services through misleading advertisements. Not only this, but similar liability has also been fixed on manufacturers and service providers. Violation of which may bring a penalty of INR 1 million or 2 years of imprisonment.
  2. The pecuniary jurisdiction of the commissions is increased 

The pecuniary jurisdiction of all three commissions has been raised under CPA 2019. The changes are reflected in the table below:

Sr. No.

Commissions

CPA 1986

CPA 2019

1.

District

Up to INR 20,00,000

Upto INR 10,000,000

2.

State

INR 20,00,000

  • 1,00,00,000

INR 10,000,000- INR  100,000,000

3.

Central

INR 1,00,00,000

 or more

Above INR 100,000,000

 

  1. Mediation: The new act provides mediation as a way of dispute settlement if it is agreed by both parties. A mediation cell will be attached to each district, state and National Commission and its regional Benches for a quick resolution.

Wrapping Up

The several important issues have been addressed while making the consumer protection act, 2019 to empower and strengthen the consumer protection regime by leveraging responsibilities not only of the sellers, manufacturers, service providers, but also the endorsers of such products. 

The new act also attempted for more expedite dispute resolution by increasing the pecuniary jurisdiction of the commissions, attaching mediation cells, increasing the members of the commissions, imposing higher penalties etc. This act just like its predecessor act of 1986 will have a greater impact on protecting the rights of consumers.

 

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