University College Code : 399 | Mandatory Disclosure | NAAC | NIRF | ALC-JCA | Press Room
facebook twitter instagram youtube linkedin ALC@Flickr

Consumer Protection Act 2019 and Its Practical Implications

Posted on by Asian Law College

Consumer Protection Act 2019 and Its Practical Implications

Introduction

The Consumer Protection Act, 2019 (“New Act”) received the President’s assent on 9th August 2019 and has replaced the Consumer Protection Act, 1986 (“Old Act”). The New Act attempts to bring in a new era of consumer protection laws and makes appropriate changes to bring the law in sync with the changing times. Although the law has always been consumer-centric, with the passing of the New Act it has become more consumer-centric.

Key Highlights of the New Act

Some of the key highlights of the Consumer Protection Act, 2019 can be enumerated as below:

  1. It extends the law to e-commerce businesses:The New Act introduces some fundamental changes to include within its ambit e-commerce businesses and ensure recognition and regulation of online transactions between consumers and sellers/service providers as matters falling under the Act. The Old Act did not expressly include e-commerce transactions and this shortcoming has been addressed by the New Act.
  2. It introduces the concept of “Product liability” and penal consequences:In the New Act, the concept of “product liability” has been introduced for the first time and it has been defined as the responsibility of a product manufacturer or product seller of any product or service to compensate for any harm caused to a consumer because of defective product manufactured, sold or deficiency in services relating thereto.
  3. It effects changes in pecuniary jurisdiction:Whereas under the Old Act, the pecuniary jurisdiction was determined on the basis of “value of the goods or services and the compensation, if any, claimed”, the New Act bases the jurisdiction on “value of the goods or services paid as consideration”. Consequently, the old practice of forum shopping by inflating the compensation claim has been eradicated and now the pecuniary jurisdiction shall be fixed based on the consideration actually paid by the consumer.
  4. It undertakes changes to territorial jurisdiction and e-filing of complaints:In the New Act, flexibility has been provided to the consumer that enables them to file complaints with the jurisdictional consumer forum located at the consumer’s place of residence or work. This is quite unlike the previous practice of filing the complaint at the place of purchase or where the seller resides or has its registered office. Furthermore, the New Act also includes enabling provisions for consumers to file complaints electronically and for hearing and/or examining parties through video-conferencing. This has been done with a view to provide procedural ease and reduce inconvenience and harassment for the consumers.
  5. It notifies new rules for Consumer Protection Councils:Although the provisions relating to constitution and powers of the Consumer Protection Councils at Central and State levels are not included in the notification, but the New Act has clearly notified some new Rules on Composition of the Central Council, their term etc. As per these Rules, the Central Council shall now consist of up to 36 members. The main objective of the Central and State Councils is to render advice on promotion and protection of the consumers’ rights under the Act.
  6. It establishes the regulatory body, viz., Central Consumer Protection Authority (CCPA):The New Act introduces the establishment of a Central Consumer Protection Authority (“CCPA”) by the Central Government as a regulatory authority empowered to impose penalties, recall goods, cause withdrawal of services, provide refunds and investigate into matters. It shall thereby protect the rights of consumers as a class and also ensure that no person engages in unfair trade practices and that no misleading advertisements are made.
  7. It provides for Mediation:The New Act scouts for mediation as an Alternate Dispute Resolution mechanism with the express intention to make the process of dispute adjudication simpler and quicker.
  8. It recommends strict penalties for false and misleading advertisements:The New Act has clearly defined the term “misleading advertisement” and has endorsed strict penalties for false and misleading advertisements.

Conclusion

In many ways, the Consumer Protection Act, 2019 is a welcome change for consumers. The Act takes those extra steps that are required for addressing the issues and gaps in the earlier law, particularly relating to the increasingly popular online transactions and e-commerce where the legal rights and liabilities of the respective parties were unclear under the old Consumer Protection Act, 1986. For sure, there is a perceptible shift in the approach towards a more consumer-friendly law that not only makes it easier for a consumer to take action on consumer disputes but also strengthens his or her rights and imposes additional safeguards and liabilities on manufacturers and endorsers.