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CONSUMER PROTECTION ACT 2019 INTO FORCE NOW; READ KEY CHANGES!

Dated: July 22, 2020

Consumer Protection Act, 1986 was enacted to prevent the consumers from getting cheated for the goods which they have made a purchased. This act protects the rights of a consumer and allows for simple and prompt redress for consumer complaints. It supports and allows consumers to speak out about insufficiencies and defects in the products and services. The main of the Consumer Protection Act, 1986 is to provide aid to the aggrieved parties and prevent the long running lawsuits. This act offers a customer to lodge a case and tribunal takes an action against the manufacturer or retailer involved and compensation is given to the consumer for the trouble he/she has experienced. There are certain rights which are recognized by this act and these rights of an consumer includes- right to information, right to be heard, right to safety, right to grievance redressal, right to choose etc. With every right there also comes a corresponding duty and there are certain duties of customers as well which they need to keep in their mind. It’s a duty of a customer to pay for any good or services. A customer should not make a purchase from black market. It’s a consumer’s duty to initiate a complaint for any defective goods. Duty of a consumer also includes checking all the labels of his goods which he has purchased like price, expiry date, manufacturing date etc.

In the era of digitalization a need was felt to amend the Consumer Protection Act, 1986 as this act was too old to cater to the technological advancements and protect the rights of a consumer. As a result Consumer Protection Act, 2019 came into force to cater to all those needs of time. Instead of bringing an amendment in the 1986 Act, Government altogether introduced a new Act to provide better protection for customers, taking into the account of advancement of e-commerce industry and innovative ways of distributing goods on online platform, tele-shopping etc.  

This newly enacted legislation comes to force from 20th July, 2020 and this new act aims to revamp the method of regulating and settling consumer disputes, with stringent sanctions, including the prosecution of corporations for adulteration and misleading advertising.

The new act has made a several substantial reforms and allowed more protection to the rights of a consumer in comparison with the earlier act of 1986, and this thing is evident from the detailed interpretation of the words ‘consumer’ and ‘unfair trade practice’. The 2019 Act extends the application of the consumer concept to include customers participating in online purchases and now it specifically includes e-commerce entities within its framework. The definition of consumer has to be amended because earlier definition did not take e-commerce into its ambit.

The newly act of 2019 also calls for establishment of Central Consumer Protection Authority (CCPA) which will protect and enforce the rights of consumers. CCPA will be vested with huge amount of powers to investigate, inquire and take prominent action if there is any violation of this act. CCPA can impose penalties on the manufacturers, retailers or sellers if they are found to be guilty. Another power which CCPA has been sprinkled with, is the power that CCPA can also initiate a suo-moto proceedings against anyone who violates the rule and can also file a class action suit in order to prevent the large interest of the consumers in order to protect their rights. CCPA can also preclude the endorser from deceptive advertising for a period of 1 year.

As per the new act Consumer Disputes Redressal Commission will be set up at district, state and national level subsequently. The 2019 Act likewise also modified pecuniary jurisdiction for the respective district, state and national commissions. For district commission, the pecuniary cap has been raised to Rs 1 crore from Rs 20 lakhs, for state commission it has been raised to Rs 10 crore from Rs 1 crore and finally for the national commission it has been expanded to more than Rs 10 crore from Rs 1 crore, in the Act of 1986.  

The Act of 2019 also empowers the consumer to file a complaint in a consumer court where the consumer/complainant reside or works. Earlier as per the Act of 1986, complainant can only file in a consumer court where a seller’s office resides. As per the new act, consumer does have an option to file a complaint via electronic mode in the commission which has the jurisdiction over his place of living not necessarily where the mode of business took place. Another clause adopted by the Act of 2019 to ensure that the conflicts are resolved quickly is to allow the parties to go for mediation process. Earlier Act of 1986 did not provide for such kind of legal process, but the Act of 2019 do mention about an ADR process i.e., mediation in order explore the possibilities to resolve the dispute early. Professional mediator will be appointed by the commission and the decision of the mediator will be treated as order of court.

The new Act of 2019 also made a significant addition by including product liability. As per the term product liability it is the responsibility of the manufacturer, seller to give compensation to the consumer for suffering any harm caused by that defective product. It is the liability of the product manufacturer or service provider to provide relief to its customers if any harm has been caused to them by the defective product or defective service. As per the new act product liability will also cover the e-commerce platform. Earlier e-commerce sellers usually say that they cannot do anything because they are merely acting as a platform if the complaint is put forwarded before them regarding the defective product, but now this will not be the case as per this new act, and online platforms will be liable to compensate the consumers if they suffer any harm. E-commerce platforms have to address the query a customer as soon as possible, and they need to acknowledge the receipt within 48 hours and redress the complaint within 1 month.

There is no doubt that Consumer Protection Act, 2019 when compared with the older act provides more protection to the rights of consumers considering the aspect of digitization. The newly formulated legislation also deals with technological developments in the industry, making it easier for consumers to file the complaint and furthermore imposes strict liability on the business if the interest of the customer is getting violated. Lastly, whenever law is given teeth, the chances of adhering to discipline increases.