The Consumer Protection Act, 2019: An Overview
Dr Bharat
Whosoever you are, “You are a consumer… rather, ‘We are all consumers!’ Consumers are the key to business, and that is why their satisfaction is at the heart of business strategy for sustainability and survival. As in the words of Patrick Dixon, “Business strategy is the battle plan for a better future”. Thus, consumer protection is a matter of great concern and has evolved through centuries.
Roots of Consumer Protection in India
In ancient India, all sections of society followed “Dharma”, which laid down social norms and rules, and served as the guiding principle governing human-relations. These principles were derived from ‘Vedas’ which were considered as the words of God, and law is said to have divine roots which was transmitted to society through sages. To substantiate, Manu Smriti illustrated the social, political and economic conditions of society besides ethical trade practices prescribing a code for traders and specified punishments for those committing ‘crimes’ against buyers. Also, Kautilya’s Arthasastra described the role of the State in regulating trade and its duty to prevent ‘crime’ against consumers. All ancient codes sought to protect the interests of the consumer, with the aim of safety and security.
Advent of the Consumer Protection Act, 2019
The Consumer Protection Act, 2019 provides for protection of consumer’s interest and establishes authorities for timely and effective administration and settlement of their disputes. It has come into force from July 20, 2020 repealing, reforming and replacing the Consumer Protection Act, 1986; as consumer markets witnessed drastic transformation with the emergence of global supply chain, rise in international trade and rapid development of e-commerce leading to new delivery system besides new options and opportunities for consumers.
Who is a Consumer?
A consumer is defined as a person who buys any goods or avails any service for a consideration (paid or promised or partly paid and partly promised) either for his personal use or to earn his livelihood by means of self-employment. But it does not include one who obtains goods/service for commercial purpose. The 2019 law has broadened the definition of ‘consumer’ as it covers transactions through all modes including offline, online through electronic means, teleshopping, direct selling or multi-level marketing.
Attributes of the Consumer Protection Act, 2019
The main attributes of this law which has replaced the more than three-decade old law are as under:
Establishment of Authority: It establishes the Central Consumer Protection Authority (CCPA) with wide powers to promote, protect and enforce the rights of consumers as a class. It is empowered to conduct investigations into violations and institute complaints/prosecution; order recall of unsafe goods and services; order discontinuance of unfair trade practices and misleading advertisements; order reimbursement of the price paid; and impose penalties for misleading advertisements.
Consumer Disputes Redressal Commissions: The Consumer Disputes Redressal Commissions (CDRC) will entertain complaints related to unfair trade practice or unfair contracts. The law has re-defined the pecuniary jurisdiction of the CDRC and tagged it to the consideration paid. The National CDRC will hear complaints worth more than ten crore rupees. The State CDRC will hear complaints worth more than one crore but upto ten crore rupees while the District CDRC will entertain complaints when consideration is upto one crore rupees.
Simplified and electronic processing: It provides swift and less time consuming adjudication process as it enables electronic filing of complaints, and unlike past practice, now the complaint can also be filed at the place where consumer resides/works. Further, to provide procedural ease and reduce inconvenience/harassment, 2019 law contains enabling provisions for video-conferencing. Also, it has the concept of deemed admissibility of complaint if the question of admissibility is not decided, besides empowering CDRCs to enforce and review their orders.
Consumer Mediation Cell: It pioneers ‘mediation’ as an alternate dispute resolution mechanism, in order to ensure timely settlement of dispute and to reduce pressure on CDRCs. Wherever scope for early settlement exists and parties agree for it, the dispute can be resolved by the ‘Consumer Mediation Cells’ (under the aegis of the CDRC) either in whole or in parts and there will be no appeal against such settlement.
Product Liability Action: Key concept on ‘product liability’ is introduced wherein the consumer is compensated if the goods/service causes injury or loss owing to manufacturing/design defect or poor service etc. For instance, if a consumer is harmed by the explosion of pressure cooker owing to manufacturing defect, then manufacturer is liable to compensate the consumer for injury. Earlier, compensation was in the ambit of ‘time consuming’ civil courts only. Interestingly, it will extend to all e-commerce platforms too. Also, the law explicitly provides the breakup of liabilities of the product manufacturer, product service provider and product seller.
Addresses new age issues of e-commerce and direct selling: Every e-commerce entity (including Amazon, Flipkart, Snapdeal, IndiaMart etc.) is mandatorily required to provide information relating to return, refund, exchange, warranty and guarantee, delivery and shipment, modes of payment, grievance redressal mechanism, payment methods, charge-back options, origin-country, etc. which are basic for decision at the pre-purchase stage. Also, they have to acknowledge the receipt of consumer complaint within forty-eight hours and redress it within one month of receipt.
Punishment for Misleading Advertisement: Defining ‘misleading advertisements’, the law offers strict punishment for false or misleading advertisement to the extent of imprisonment for a term up to two years and with maximum fine of ten lakh rupees; and for every subsequent offence, the imprisonment for a term up to five years and with maximum fine of fifty lakh rupees. Also, now celebrities acting as brand ambassadors will have to exercise due diligence to verify the veracity of the claims made in the advertisement to avoid penal consequences.
To sum up, the inclusion of new aspects and tightening of the existing provisions, in the best interest of consumers, has broadened the scope of the law and is all set to prove as a prominent tool to empower consumers.
(The writer is Assistant Professor, University Institute of Legal Studies, Panjab University, Chandigarh)
