Consumer Protection Act 2019 comes into force!

The much awaited Consumer Protection Act 2019 with new significant features, has come into force,  replacing the earlier Consumer Protection Act 1986. The Act aims at protecting the rights of consumers by establishing the Central Consumer Protection Authority, including specific provisions for e-commerce, product liability, mediation, misleading advertisements, amongst others.   

The present Act expands the definition of “consumer” to include  any person who "purchases any products" and "hires any services" through electronic medium, teleshopping, direct sales or multi-level marketing online and offline transactions.

The Central Consumer Protection Authority (CCPA) will investigate violations of consumer rights, order recall of unsafe goods and services, enforce discontinuation of unfair trade practices and misleading advertisements, and impose penalties for misleading advertisements. These will go a long way in protecting the interests of consumers. 

The e-commerce space, which has been seeing an exponential growth over the last few years and remained unregulated, has been brought within the purview of the Act. According to the Act, e-commerce entities are required to provide details about their return/refund/exchange policies, information about warranty, shipment, delivery, payment options, grievance redressal mechanism, etc. To  prevent unfair trade practice by electronic platforms, some features like having a compulsory nodal officer as a point of contact for grievance redress, eliminating prefilled check boxes where there are many chances for the consumers to agree to certain conditions unknowingly etc. have been introduced. 

Another notable provision is that of product liability, where the Act fixes responsibility, by way of compensation, on a product manufacturer/seller for a defective product or service, for any harm caused to the consumer. Offences like sale of adulterated, spurious products and those capable of causing grievous hurt are punishable with penalties, imprisonment and cancellation of licence. As for the Consumer Commissions, the State and the District Commissions are empowered to review their Orders under the new Act. The pecuniary jurisdiction of all Commissions have been considerably increased - District Commissions: upto 1 crore; State Commissions: 1crore to 10 crores; National Commission: above 10 crores. E-filing of complaints and hearing through video conferencing are allowed. Mostly importantly, consumers can file complaints at the place they reside.  

The Act provides for Alternate Dispute Resolution in the form of Mediation. Matters will be referred to mediation if there is scope for resolution and if both parties agree to it. No appeals can be made for settlements made through mediation. 

Fee payable for filing complaints:

To discuss the various provisions of the Act and the measures to be taken to ensure that the spirit of the legislation is upheld, CAG organised a Dialogue on Consumer Protection Act 2019 on August 10, 2020. Mr. N. L. Rajah - Senior Advocate and Advisor CAG, Dr. Pratima Narayan - Advocate and Mediator and Mr. Sanjay Pinto - Advocate, Columnist and Author joined as panellists. The intent behind the enactment of Consumer Protection Act 1986, its progress over the years, gaps and challenges were discussed at length. While speaking about the pecuniary jurisdiction, Mr. Sanjay Pinto pointed out that under the new Act, the jurisdiction was limited to the value of goods or services paid and did not include compensation, as was with the old legislation. So most consumers will have to go through the three levels (District, State, National Commissions) without much of an option. For example, as per CPA 1986, if the actual value of the service provided was Rs. 10,00,000/-, and the aggrieved consumer decides to demand compensation of Rs.12,00,000/- for deficiency in service, the total of actual value and compensation will determine the pecuniary jurisdiction, to file a complaint. In this case, it adds up to Rs.22,00,000/- and so, the consumer could file the complaint in the State Commission (above twenty lakhs)  directly. As per the new Act, only the actual value of the product or service will be considered to determine the jurisdiction. Compensation is excluded from its purview. 

Dr. Pratima explained in detail about the various provisions in the new e-commerce  rules and how it is likely to benefit consumers. 

All panellists agreed on the fact that there was an urgent need for complete overhaul of the Consumer Commissions. Delays should be avoided, adjournments should not be entertained, vacancies for the posts of Presidents and Members should be promptly filled, adequate infrastructure should be made available to enable e-filing and processes should be simplified in order to ensure quick redressal of complaints. Only this will restore consumers’ trust in the system. 

Finally, when the panellists were asked to give a one line response to the question on where the success of the Consumer Protection Act 2019 lay, all of them unanimously said that it lies in simplifying the procedures and in the effective implementation of the Act. 

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