Introduction
The Indian legislature has enacted the new Consumer Protection Act, 2019, which replaces the decade-old Consumer Protection Act. The new legislation contains structural and procedural reforms to the previous law, intending to eradicate the shortcomings of the 1986 Act.
In order to have a vibrant economy, consumers’ rights must be protected. The Consumer Protection Act of 1986 addressed customers’ concerns and safeguarded their interests. It was a commendable step at the time, and it was modified from time to time. However, the country’s three-decade-old law has not kept up with the current market and digital technological advancement.
With the enactment of the Consumer Protection Act, 2019, a new era in Indian consumer rights has started. Now, consumers are more powerful than before. The Consumer Protection Act of 2019 is notable for establishing a Central Consumer Protection Authority, which serves as a regulatory authority to “promote, protect, and enforce consumer rights as a class.” The recent Act also includes provisions for penalties for unfair trade practices and deceptive ads and a slew of other modifications, such as safeguarding E-commerce, to keep consumer rights current with market developments.
Who is a Consumer
According to Section 2(7) of the 2019 Act, a consumer is “any person who buys products or receives services for a consideration” and includes “any user,” except “any person who has received such services or goods for resale or commercial use.” According to the definition’s explanation, “buys any goods” and “hires or avails any services” incorporate all online transactions done via electronic means, as well as direct selling, e-shopping, and multi-level marketing. Online transactions are a unique aspect of this Act, which was established in response to the rising e-commerce industry and technological advancements.
What is Unfair Trade Practice
Unfair trade practice is defined under Section 2(47) of the Consumer Protection Act of 2019. This concept covers a wide spectrum of unscrupulous or misleading practices used to promote the purchase, sale, or usage of any products or services. This involves making deceptive assertions about products and services, making false promises, providing warranties that aren’t based on adequate testing, and generally deceiving people.
Definition of Unfair Contract
The concept of an unfair contract was also included in the 2019 Act. Section 2(46) defines an “unfair contract” as any contract between a consumer and a manufacturer, service provider, or trader whose conditions result in a substantial change in the Consumer’s rights under the Act.
Consumer Rights
Under the Act, consumers have six primary rights, which are listed as follows:
- the right to be protected against the marketing of goods, products, or services which are hazardous to life and property;
- the right to be informed about the quality, quantity, potency, purity, standard, and price of goods, products or services, as the case may be, so as to protect the consumer against unfair trade practices;
- the right to be assured, wherever possible, access to a variety of goods, products, or services at competitive prices;
- the right to be heard and to be assured that consumer’s interests will receive due consideration at appropriate fora;
- the right to seek redressal against unfair trade practice or restrictive trade practices or unscrupulous exploitation of consumers; and
- the right to consumer awareness;[1]
Establishment of Central Consumer Protection Authority
The establishment of the Central Consumer Protection Authority under Chapter III is one of the significant aspects of the 2019 Act. The Authority was established to advocate, preserve, and enforce consumer rights as a group. The authority has the jurisdiction to issue safety notifications, product recalls, prohibit unfair and restrictive trade practices, refund purchase prices, and impose fines for deceptive and misleading advertising. The authorities may conduct Suo Motu proceedings under Section 18 to inquire about or investigate violations of consumer rights or unfair trade practices. In addition, the authority has the power to file consumer complaints and intervene in any proceedings before the Consumer Commission.
Penalties for Misleading Advertisement
New Act encompasses the issue relating to Misleading Advertisements. The repealed Act does not address the issue of misleading and fraudulent advertising. Misleading advertising is defined in Section 2(28) of the Act as any advertisement that provides a false description of a product or service, provides a false guarantee, conveys express representation constituting unfair trade practice, or intentionally withholds essential information about the product.
Anyone who publishes false and misleading ads is subject to imprisonment or a penalty of up to ten lakh rupees under Section 21(4) of the Act. In addition, Section 21 (3) of the CCPA specifies that the endorser of any such misleading and fraudulent ads might be barred from endorsing any other goods or services for a year. The publisher of any deceptive ads is also responsible for neutralizing the impact of the advertisements.
The High Court passed an interim order restraining Zydus from telecasting its advertisement comparing Complan to Horlicks on the grounds that the same was misleading and disparaging.[2]
The concept if Product Liability
One of the notable and crucial moves incorporated in the 2019 Act is product liability. Chapter 10 deals with product liability. If a complainant is aggrieved as a result of a defective product or service, he may file a product liability claim against the manufacturer, service provider, or seller.
A product manufacturer will be held accountable under Section 84 of the Act if the product has a manufacturing issue, is defective in design, does not meet the manufacturing requirements, does not comply with the implied guarantee, and does not provide necessary instructions for proper product use.
In a product liability case, Section 85 of the Act addresses the service provider’s responsibility. To be liable under this section, the service provided must be deficient, faulty, inadequate, or imperfect, or negligence withholding any information that would be responsible for the injuries caused, as well as a lack of adequate warnings and instructions, and compliance with an express warranty or contractual terms.
Jurisdiction[3]
Title | CPA,1986 | CPA, 2019 |
TERRITORIAL
JURISDICTION |
∙ the opposite party or each of the opposite parties ordinarily resides or carries on business or personally works for gain
∙ the cause of action, wholly or in part, arises |
∙ the opposite party or each of the opposite parties ordinarily resides or carries on business or personally works for gain
∙ the cause of action, wholly or in part, arises ∙ the complainant resides or personally works for gain. |
PECUNIARY
JURISDICTION |
∙ District forum: up to 20 lakh
∙ State commission: more than 20 lakh but less than 1 crore ∙ National Commission: more than 1 crore |
∙ District forum: up to 1 crore
∙ State Commission: more than 1 crore but less than 10 crore ∙ National Commission: more than 10 crore |
Introduction of Mediation
Under Chapter V of the Act, dispute resolution through mediation has been introduced, which ensures speedy justice to a consumer. If it appears to the Consumer Dispute Redressal Forum that the consumer dispute can be settled by way of mediation, it may refer the parties to mediation with their consent.[4] For the purpose of mediation, the State Government shall establish a consumer mediation cell for each District Commission and State Commission.[5] The Central Government shall establish a consumer mediation cell attached to the National Commission.[6]
The consumer mediation cell will be responsible for maintaining a list of empanelled mediators, cases handled by the cell, a record of the proceeding, and other information specified in the regulations.[7] The cell also has to submit a quarterly report to its attached commission.[8]
E-COMMERCE
With the growing advancement of technology buying and selling products, the online market poses a greater risk. In order to deal with online scams or unfair trade practices, The Ministry of Consumer Affairs, Food, and Public Distribution (“Ministry”) on July 23, 2020, notified Consumer Protection (E-Commerce) Rules, 2020 (“Act”) under the Consumer Protection Act, 2019 (“Act”).
The Consumer Protection (E-Commerce) Rules, 2020, which are obligatory rather than advisory, set out all relevant information for e-commerce organizations, considering both the consumer and the product/service provider.
Under Rule 5, Consumers must be given information on the return, refund, exchange, warranty and guarantee, delivery and shipping, modes of payment, grievance redressal system, payment methods, security of payment methods, charge-back options, and country of origin.
Under the new rule, E-Commerce platforms must acknowledge receipt of any consumer complaint within 48 hours of receipt and resolve the issue within one month of receipt. They would also be required to set up a grievance officer to handle customer complaints. If products or services are defective, inadequate, delivered late, or do not reflect the description of the platform, sellers cannot refuse to accept returns, withdraw services, or deny reimbursements. The guidelines also make it illegal for E-commerce enterprises to manipulate the pricing of products or services in order to make an unjustifiable profit.
Conclusion
The Consumer Protection Act, 2019 is a positive step toward developing and reforming consumer laws in the country. Implementation of the Act is a welcome change in favor of consumers, ensuring that the consumer is king, and Caveat emptor has been replaced with Caveat Venditor. The new Act fosters digitalization—e-filing, hearings, and cross-examination of parties through video-conferencing are all positive developments. The Act also holds makers, producers, and endorsers of products and services accountable, which will serve to defend consumer rights to a significant extent. It encourages companies to be more cognizant of and responsible for their actions. While enacting the Consumer Protection Act of 2019, legislation did an outstanding job. Consumers will now feel more secure while transacting. It is up to the remaining two parts of democracy, the judicial and executive, to make the legislation more beneficial and far-reaching for all consumers.
By Sahid Ahmad
Student Editor, LawDIKTAT
[1] Section 2(9) of the Consumer Protection Act, 2019
[2] Horlicks Ltd. v. Zydus Wellness Products Ltd., 2020 SCC OnLine Del 873.
[3] Mahima. ” THE CONSUMER PROTECTION ACT, 2019″, International Journal of Engineering Development and Research (IJEDR), ISSN:2321-9939, Vol.8, Issue 8, pp.2301-2307, August 2020, URL:http://www.ijedr.org/papers/IJCRT2008248.pdf
[4] Section 37 of the Consumer Protection Act, 2019
[5] Section 74(1) of the Consumer Protection Act, 2019
[6] Section 74(2) of the Consumer Protection Act, 2019
[7] Section 74(4) of the Consumer Protection Act, 2019
[8] Section 74(5) of the Consumer Protection Act, 2019