Modi Government is all geared up to replace the decade old Consumer Protection Act, 1986 by the Consumer Protection Act, 2019. On August 6, 2019, the proposed bill was passed in the Parliament to address a set of new challenges in the digital age. The amendments made to the Act primarily aims at providing timely and effective administration and settlement in regards to consumer disputes.
Besides this, Union Ministry of Consumer Affairs, Food and Public Distribution also announced that a dedicated Central Consumer Protection Authority (CCPA) will be set up under Section 10(1) of The Consumer Protection Act, 2019. The authority will be responsible to protect consumer rights by eliminating unfair trade practices and misleading advertisements that are detrimental to consumers’ interest.
Now a circulation has been issued that the Act will come into effect from July 20, 2020. As several amendments have been made to the act, it is significant to gain an understanding of newly added sections.
Key highlights of Consumer Protection Act, 2019:
Product liability and penal consequences – The new Act formally introduced the concept of product liability, in order to bring in the scope of any compensation claim for the product manufacturer, product service provider, and product seller. A product liability claims can now be made on grounds of defectiveness of goods or deficiency of services resulting in harm caused to a person or his/her property. The scope of defect and deficiency has been extended to non-conformance, express warranty, design defect, lack of warnings or misleading information to prevent any harm, failure to provide adequate instructions, etc. However, the act has also given certain exceptions such as that the product seller will not be liable for any misuse or modification of product post sales.
E-commerce transactions – Consumer Protection Act, 2019 has widened the definition of ‘consumer’ and now the new definition describes a consumer as any goods, whether through offline or online transactions, electronic means, teleshopping, direct selling or multi-level marketing. The previous act doesn’t specifically defined consumers involved in e-commerce transactions.
E-filing of complaints – The new amendments of the act provides flexibility to the consumer, so that they can file complaints with the jurisdictional consumer forum at their own convenience. The new act contains provisions that allow a consumer to file complaints through electronic modes, and in fact, the hearings are done through video-conferencing. The objective of enabling digital filling of complaints was to ease down the procedure and eliminate inconvenience and harassment caused to the consumer.
Enhance of pecuniary jurisdiction – The newly introduced amendments have also revised pecuniary limits and the District Commission, State Commissioner, and National Commission has been given enhanced limits to entertain consumer complaints. As per the amendments made, the District Commission will now take consumer complaints for the value of goods and services not exceeding Rs.10 million. Similarly, complaints or disputes ranging from Rs.10 million to Rs.1 crore will be addressed under the jurisdiction of the State Commission and the disputes exceeding Rs.1 crore value will be addressed under the jurisdiction of the National Commission.
Unfair trade practices – The Consumer Protection Act, 2019 introduced broader definition of Unfair Trade Practices including sharing of consumer’s personal information in confidence, without their consent or unless such disclosure is made in accordance with the provisions of any other law. The Central Authority and Consumer Commission have been given powers to order the perpetrator of such practices to discontinue it.
Penalties for misleading advertisement – While advertisement is a direct source to connect to target audience, the new act introduced the definition of misleading advertisement for the first time. The definition also covers false description and guarantee of a product or services. In addition, any information that was deliberately concealed from the consumer is also covered in the definition under new act. In case of any misleading advertisement found, then a penalty of up to Rs.1 million will be imposed by the Central Authority. In addition, the act separately has made it a criminal offence for manufacturers and service providers to publish false or misleading advertisement. If found guilty, they could be imprisoned for up to 2 years and/or penalty of up to Rs.10 lakhs will be imposed on a manufacturer or an endorser. In case of a subsequent offence, the imprisonment could be extended for up to 5 years and/or fine of up to Rs.50 lakhs. For every subsequent offence, the period of prohibition could be extended for another 3 years.
Provision for alternate dispute resolution – The new act provides for mediation as an alternate dispute resolution mechanism, which makes the process of dispute adjudication easier and faster. This will result in speedy resolution of disputes, ultimately reducing pressure on consumer courts, who already have several cases piled up for hearing.