The Consumer Protection Act has been regarded as the Magna Carta in the field of consumer protection for the purpose of checking unfair fair practices, defects in goods, and deficiency in services all over the country. The Act has resulted in the establishment of a widespread network of consumer forums and appellate courts for consumer dispute resolution throughout the country.
The Consumer Protection Act was initially enacted in 1986 by the Parliament with the purpose of protecting the interests of consumers of the country. In the year 2019, the three-decade-old Act was replaced by the Consumer Protection Act, 2019. The new Act was evidently a need of the hour. According to statistics[i], 329 million Indian citizens would buy products online, indicating that 70% of mobile internet users would shop online. This data makes the implementation of the Consumer Protection Act, 2019 very significant.
The new Act is designed to help customers and it endeavors to overcome the problems which are faced in providing the basic rights of consumers of e-commerce, which happens to be a major sector. The right to safety, Right to Choose, Right to be informed, Right to consumer education, and Right to be heard and Right to seek redressal are the six basic rights of the consumers recognized by the Act. The new Act helps in protecting these basic rights by application of new methods and procedures.
Salient features of the new Act
The Consumer Protection Act, 2019 came into force on 20th July 2019 and aims at enforcing and protecting the rights of consumers, and providing an effective mechanism to address consumer grievances. The Consumer Protection Bill, 2019 was introduced in the Rajya Sabha on 8th July 2019 by the Minister of Consumer Affairs, Food, and Public Distribution, Ram Vilas Paswan. The Lok Sabha passed the Bill on 30th July 2019 and by the Rajya Sabha on 6th August 2019. On 9th August, the President of India assented to the Bill.
The Consumer Protection Act, 2019 is more holistic and stringent legislation addressing the protection of interests of consumers. Certain key features of the new Act have been discussed below:
Definition of ‘consumer’
The Consumer Protection Act, 2019 has expanded the definition of ‘consumer’ that initially was limited to buying goods and services, and did not include online purchases or teleshopping. The new definition under the 2019 Act includes the description of online transactions, offline tractions, teleshopping, multi-level marketing, and direct selling.
The previous Act provided for no dedicated regulating authority for the protection of consumer rights. However, by the 2019 Act, the Government has planned to start a new regulating authority named Central Consumer Protection Authority (CCPA) which will develop easy processes or plans for protecting consumers from injury arising from defective products or services. It is also aimed at developing processes for protecting consumers from unfair trade practices. The main objective of CCPA is to render advice on the promotion and protection of the consumers’ rights under this Act. The authority is deemed to have the highest powers for recalling products or withdrawal of services that are dangerous and hazardous or unsafe. Under the new Act, each state shall have a State Consumer Protection Council and the district shall have its own district council which will be governed by the District collector.
In the 1986 Act, the District Consumer Court was allowed to handle cases for goods or services worth up to 20 lacs only, State Consumer courts were allowed to handle cases for goods or services worth 20 lac to 1 crore. The new Act has increased the limit up to 1 crore for District Consumer Courts and 1 crore to 10 crores for State Consumer Courts. The National Court shall handle cases in which the value of goods or services is more than 10 crores. On a proper perusal, the advantage is that consumers will not have to go to the National Court every now and then for getting help.
The new Act, unlike the old Act, has detailed provisions about misleading advertisements or false representation of products. Hence, for misleading or false advertisements, not only the manufacturer but also the endorser will be held liable, which of course is a big enhancement. According to the 2019 Act, the fine for the misleading or false advertisement for endorsers is 10 lakh rupees which can extend up to 50 lakh rupees. The Act would also require the endorser to verify the claims that the product is claiming before endorsing the product. If the endorser is found guilty in the investigation of CCPA then he shall have to pay a fine of 10 lakh rupees which can be extended up to 50 lakh rupees. The new Act also provides for a punishment of imprisonment for 2 years for the manufacturer or endorser who is found guilty.
The Consumer Protection Act, 2019 provides for mediation for the purpose of resolving disputes rapidly which would make the solving of disputes easier than before. Each state shall have mediation cell branches aimed at helping consumer courts to lessen their pressure who already have many pending old cases.
The 2019 Act provides that the matter of e-commerce shall be governed under all the laws that apply to direct selling of products or services. It entails that e-commerce sites shall have to disclose their seller’s details such as seller’s contact number, email id, website details, and detained address to the buyers. Also, there are strict penalties laid down by the Act for selling counterfeit products on these e-commerce platforms.
There are a significant number of differences between provisions of the Consumer Protection Act, 1986 and Consumer Protection Act, 2019. Some significant differences between the two Acts, classified on certain bases for comparison have been tabled below:
|Basis of Comparison||Consumer Protection Act, 1986||Consumer Protection Act, 2019|
|Scope of the law||All goods and services for consideration, excluding personal services||All goods and services including telecom and housing construction and all forms of transactions including online and teleshopping for consideration, excluding personal services.|
|Unfair trade practices||Includes six kinds of such practices under Section 2(1)(r), including false representation and misleading advertisements.||Three types of practices are added to the list which is: failure to issue a bill or receipt, refusal to accept a good return within 30 days, and the disclosure of personal information given in confidence unless required by law or in the public interest.|
|Product liability||No such provision||There can be a claim for product liability against the manufacturer, service provider, and seller. The Act provides for compensation as well if one of the several specified conditions provided for in the Act is proved.|
|Unfair contracts||No such provision||‘Unfair contracts’ have been defined in the Act as contracts that cause a significant change in consumer rights. The Act also lays down six contract terms that can be held as unfair.|
|Central Protection Councils (CPCs)||CPCs established at the district, state, and national levels, are meant to promote and protect the rights of consumers||The Act makes the CPCs advisory bodies for the protection of consumer rights.|
|Composition of Commissions||The District Commission was headed by a current or former District Judge and two members, the State Commission was headed by a current or former High Court Judge and at least two members, and the National Commission was headed by a current or former Supreme Court Judge and at least four members.||The District Commission is headed by a President and at least two members, the State Commission is headed by a President and at least four members, and the National Commission is headed by a President and at least four members.|
|Appointment||The appointment of members of the Commission has to be done on the basis of the recommendation of a Selection Committee consisting of a judicial member and other officials.||The Act does not provide for a Selection Committee. The appointment of members of Commissions would be done by the Central Government through notification.|
|Penalties||A person not complying with the orders of the Commissions may face imprisonment between one month and three years or a fine between Rs. 2,000 to Rs. 10,000, or both.||A person not complying with the orders of the Commissions may face imprisonment up to three years, or a fine not less than Rs. 25,000 extendable to Rs. one lakh, or both.|
The Observation regarding the new Act
The Government of India has undoubtedly taken a huge step by replacing a 30-year-old consumer protection law. However, there are certain observations that come to light on a proper perusal of the provisions of the Consumer Protection Act, 2019.
The new Act provides that the online selling platforms shall be also held liable for selling faulty products or services. This entails that e-commerce giants shall have to set up mechanisms for reducing the sale of counterfeit products on their platforms, which is somewhat threatening to the economy of the country because a failure to set up such mechanisms may lead to some e-commerce giants ceasing their business in the country. Hence, it is required that the government aids them in designing a uniformed mechanism.
Also, there is a requirement for spreading awareness about the Act as soon as possible and make the consumers know about their basic rights.
Hence, Consumer Protection Act, 2019, when compared with Consumer Protection Act, 1986, shows that it provides for greater protection of consumer interests and very importantly, takes into consideration the new age of digitalization. The new Act also deals with the technological advancements in the industry, provides for easier complaint filings, and imposes stricter liabilities on businesses including endorsers for infringement of consumer rights.
However, it shall be the test of time that will prove the fate of the 2019 Act as and when it is notified by the Central Government, the Act appears to be much more consumer-friendly than the old Act of 1986, and also takes into account the current trends of the industry.
Student, School of Law and Justice, Adamas University
The author is currently pursuing B.Sc. LL.B. (H) from the School of Law and Justice Adamas University, Kolkata. She has completed her plus two with 98% marks in the ISC. She is a regular mooter and article-writer. Her area of interest mainly includes Constitutional Law and Criminal Law. However, she also takes a keen interest in Human Rights issues. Public speaking is her passion, and her ardour for penning down her opinions has not been dampened. With an additional benefit of belonging to the legal fraternity, she has a passion for the discipline, and also understands the need for legal research and legal education in the country.