ANALYSIS OF CONSUMER PROTECTION ACT 2019

This article is written by Robin Kumar Thakur from Chanakya National University, Patna.

The Indian government introduced the Consumer Protection Act 2019 in the era where the markets went through a rapid makeover. Unexplored avenues like e-markets had just begun opening up for the consumers. The Indian market in the quest to match up with the advancements around the world along with modern India’s inspiration of becoming a five trillion economy began calls for exponentially increased consumption. This rapid increase in consumption triggered an increase in information asymmetry, and businesses tended to take unfair advantage of the age-old laws which didn’t take into account the modern avenues of the market.

FEATURES OF CONSUMER PROTECTION ACT, 2019

The preamble of this act states:

“An Act to provide for protection of the interests of consumers and for the said purpose, to establish authorities for timely and effective administration and settlement of consumers’ disputes and for matters connected therewith or incidental thereto.”

Provision for Minors: Section 2 (5)(vii) of this act brings minors under the ambit of the consumer meaning that the minor can enjoy the rights of a consumer and if aggrieved can reach out to the authorities with the help of their parents or legal guardian.

Advertisements: Section 2(1) of the act defines “advertisement” . The law now can hold manufacturers, service providers, celebrity endorsers accountable for coming up with misleading advertisements. If the consumer falls prey to any misleading advertisements through any of these mediums, then the aggrieved consumer can approach the authorities for relief.

Product liability: A new clause of “product liability action” has been added to the definition of complaint. Here the liability of the product lies against the product manufacturer, seller or service provider as the case may be.

Unfair Contract: Through sec 2(6)(i), unfair contract has also been added to the definition of the complaint. By this, the act ensures that larger businesses can not build on their profits by unfair or restrictive trade practices.

E-commerce: Two terms e-commerce and electronic service provider have been added in sec 2(16) and 2(17) respectively. These have been brought to bring the e-market under the ambit of consumer protection laws. These strengthen the rights of the e-consumers and make the e-commerce businesses answerable in case of any right. Infringement.

The provisions under Section 2(9) are the most important feature of the Consumer Protection Act of 2019 which defines consumer rights as the right:

to be protected against the marketing of goods, products or services which are hazardous to life and property;

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 practice

to be assured, wherever possible, access to a variety of goods, products or services at competitive prices;

to be heard and to be assured that consumer’s interests will receive due consideration at appropriate fora;

to seek redressal against unfair trade practice or restrictive trade practices or unscrupulous exploitation of consumers; and

to consumer awareness;

DISPUTE RESOLUTION

Central Consumer Protection Authority

The primary distinction of the Consumer Protection Act 2019 from the Consumer Protection Act 1986 is the setting up of regulatory authorities to regulate matters related to consumer rights’ infringement. Chapter 3 of the consumer protection act of 2019 establishes the Central Consumer Protection Authority (CCPA) which has the powers to regulate matters entertaining false or misleading advertisements, unfair trade practices and other matters related to consumer’s right infringement.

Consumer Disputes Redressal Commission

Chapter IV of the Act establishes the Consumer Disputes Redressal Commission which has the powers to resolve disputes arising out of restrictive or unfair trade practices, MRP and hazardous goods. It has to be set up at three levels, i.e. the District, State and National levels (commissions). Though these commissions had been already established by the consumer protection act of 1986, by this act the jurisdiction, as well as powers of the commission, were enhanced.

District Consumer Disputes Redressal Commission

District Consumer Disputes Redressal Commission entertains the complaints where the value of the goods and services paid as consideration does not exceed one crore rupees. Under section 34(2)(d) of the act, now complaint can be filed in the jurisdiction in which the complainant resides or works for his\her gains or in the jurisdiction where the other party resides, has his|her business or personally work for gains. It is headed by a President who is assisted by not less than two or more than the number prescribed in consultation with the central government.

State Consumer Disputes Redressal Commission

State Consumer Disputes Redressal commission entertains the complaints where the consideration exceeds one crore rupees but does not exceed ten crore rupees. The commission consists of a president assisted by not less than four or more than than the number prescribed in consultation with the central government.

National Consumer Disputes Redressal Commission

National Consumer Disputes Redressal Commission entertains the complaints where the consideration exceeds ten crore rupees. The National Commission consists of a President who is assisted by not less than four and not more than such number of members as may be prescribed. This commission primarily functions in the national capital region and the central government has powers to establish branches.

Mediation

The most important and new provision of the consumer protection act 2019 is mediation. Section 74 of this act empowers the state government to establish a consumer mediation cell to be attached to each of the District Commissions and the State Commissions of that State and the Central government to the National Commission and each of its branches. This cell has been set up to resolve consumer related disputes through mediation without having to approach the commissions.

PROS AND CONS OF THE CONSUMER PROTECTION ACT 2019

PROS:

The act guarantees Consumer sovereignty over choice of goods

Consumers are protected from false and misleading advertisements

The redressal machinery is within easy reach to the consumers.

It ensures redressal in case of defective products or services,

It ensures fast track redressal of complaints.

CONS:

Only those activities for which a payment is made comes under this act. Many free activities like a prescription from a government hospital, or basic civil services escape the liability in case consumer rights are infringed.

The act does not mention the definition of safety requirements and the permissible hazardous levels of hazardous goods

It does not empower the commissions to take cases suo moto and it also forbids the consumer from filing any complaint to the commission if other remedies are available in some other law.

If the liability is put against an organisation the commission has no right to impose liability on the higher ranking officials of that organisation

EFFECT ON CONSUMERS AND SELLERS

The Act has ensured a smooth transition from the principle of “caveat emptor” to the principle of “caveat venditor”. In simple terms, this Act has ensured that the customer enjoys their right to the fullest and the sellers beware of the products and services they are providing. The Act gives immense rights to the consumer and makes the seller liable in case of a defect in any of its services or products. The seller has to ensure that its products are neither defective and hazardous to the customer nor he practices any unfair or restrictive trade practices . The Act ensures that the consumer is fully protected and well informed about the quality, standard, quantity and purity of the product and in case his rights are infringed provides fast redressal. This Act has made the seller more accountable to the consumers for their products.

CASE LAWS

Horlicks Limited v. Zydus Wellness Products Limited, 2020 AIR CC 2416

In this case, the High Court restrained Zydus from advertising a commercial comparing Complan to Horlicks stating that the same was misleading and disparaging.

Connaught Plaza Restaurants Ltd. v. Kapil Mitra, 2020 SCC OnLine NCDRC 192

In this case, the petitioner had participated in a McDonald’s scheme. He alleged that the scheme was an unfair practice as details of the entire scheme and the result of the entire scheme was not revealed. The court held this scheme as an unfair practice.

CONCLUSION

The Consumer Protection Act 2019 has successfully managed to address the problems for which it was brought. It was a much-required change as the previous law had become outdated and couldn’t cater to the modern needs of the consumer. Now the consumer stands much empowered as the law has clearly defined rights and a fast-tracked dispute resolution process. The act is surely a welcoming move but it also lacks on some fronts. Involvement of the executive in the affairs and less consumer awareness are one of the main hurdles now. Though the act may not be perfect but it provides better protection to the consumers in these modern days of digitalization

REFERENCES

THE CONSUMER PROTECTION ACT, 2019, NO 35, ACTS OF PARLIAMENT,2019 (INDIA)

THE CONSUMER PROTECTION ACT, 2019, SEC 10, NO 35, ACTS OF PARLIAMENT,2019 (INDIA)

THE CONSUMER PROTECTION ACT, 2019, SEC 28, NO 35, ACTS OF PARLIAMENT,2019 (INDIA)

THE CONSUMER PROTECTION ACT, 2019, SEC 42, NO 35, ACTS OF PARLIAMENT,2019 (INDIA)

THE CONSUMER PROTECTION ACT, 2019, SEC 53, NO 35, ACTS OF PARLIAMENT,2019 (INDIA)

THE CONSUMER PROTECTION ACT, 2019, SEC 74, NO 35, ACTS OF PARLIAMENT,2019 (INDIA)

Curated by Shivanshika Samaddar of National Law University Delhi.