Unfair practices and New Consumer Protection law

Pushpa Girimaji

I read that the new Consumer Protection law has replaced the earlier 1986 Act. Can you please explain how this is different from the old one?

The concept of consumer protection has undergone a sea change in the last three decades since the Consumer Protection Act of 1986 came into being. Similarly, the market reforms and the rapid changes in digital technology have completely transformed the market dynamics. The new Consumer Protection Act of 2019 takes into account all these factors and gives us a law more in tune with the present day.

The new law retains all the components of the landmark 1986 law that gave Indian consumers their six basic rights and a consumer justice system or the three-tier consumer courts. What is different is that it expands the scope of the consumer courts to deal with new and emerging issues haunting consumers, such as unfair practices vis-a-vis e-commerce, direct selling entities and the not-so-new problems like unfair contracts or unfair terms in consumer contracts. In fact, the comprehensive e-commerce rules notified under the new law lays down the code of conduct for e-commerce businesses, thereby protecting consumer interest.

The law also provides for product liability action against manufacturers, sellers and service providers for any defects or deficiencies in the products or services or even failure to provide adequate warning about the use of the product or service.

However, the most dynamic part of the new law is the creation of a regulator — the Central Consumer Protection Authority — to protect, promote and enforce the rights of consumers. Even though the 1986 law encapsulated the rights of consumers, it failed to provide a regulator to enforce all the rights, particularly the right to be protected from unsafe goods and services and unfair trade practices. In other words, under the old law, the government took no responsibility for the protection of consumers’ rights. Or to put it differently, there was no regulator to prevent violation of consumers’ rights, but only a mechanism to redress consumer complaints arising from violation of such rights. This was a major lacuna in the law and this has finally been remedied.

The CCPA has the power to investigate into unsafe goods, order their recall and direct refund of the cost of such goods to the consumers; it can put a stop on all unfair trade practices, including unfair terms in consumer contracts and false and misleading advertisements. It can also hold celebrity endorsers liable for false and misleading promotions. It can also take to task those selling and manufacturing adulterated and spurious goods. And the punishment prescribed under the law for some of these offences is stringent. However, it may take some time for the Authority to become fully functional, but on its functioning rests consumer empowerment substantially.

Is there anything in particular that one should remember when one files a complaint before the consumer court under the new law?

There is a change in the pecuniary jurisdiction of the courts and one should keep that in mind while filing new complaints. The consumer court at the district level or the District Consumer Disputes Redressal Commission has the jurisdiction to entertain complaints up to the value of Rs1 crore. Those above Rs1 crore and upto Rs10 crore will be handled by the State Commission and complaints above Rs10 crore will go the National Commission.

However, the biggest advantage to the consumer under the new law is that (a) you can file the complaint online, sitting in the comfort of your home; b) the choice of the court no more depends on where the opposite party resides or has an office. You can choose a consumer court close to your home or place of work. Of course, as far as e-filing is concerned, you need to check whether the consumer court where you wish to file the complaint is technology-ready.

The consumer commissions have to decide on the admissibility of the complaint within 21 days or else it will be deemed to have been admitted. Otherwise, there is no substantial change in the procedure before these courts. So, the lawyers will still be there and so also the adjournments and protracted litigation, unless the government finds ways and means of strictly enforcing the 90-day limit for completing the adjudication, as prescribed under the old and now the new law. The new law also makes it clear that the complaints shall be heard “on the basis of affidavit and documentary evidence placed on record”. Under the new law, there is only one appeal. Once the State Commission passes an order on appeal, the National Commission can take it up only if it involves substantial question of law.

The new law also provides for mediation as an option. If you do not want a long legal battle, you can opt for mediation for quick settlement of your dispute.

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