Consumer Protection Act 2019: An Analysis

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Consumer Protection Act 2019

“A customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider in our business. He is part of it. We are not doing him a favor by serving him. He is doing us a favor by giving us an opportunity to do so”.

Mahatma Gandhi

Introduction

The Lok Sabha passed the Consumer Protection Bill, 2019 on July 30, 2019, and the Rajya Sabha passed it on August 6, 2019. Mr. Ram Vilas Paswan, Minister of Consumer Affairs, Food and Public Distribution, proposed this measure in parliament. The Consumer Protection Act of 2019 is a law that protects customers’ interests. Consumers are protected under this law from defective products, poor service, and unfair trade practices.

The main goal of the Consumer Protection Act of 2019 is to protect consumers’ rights by establishing authorities to administer and settle consumer disputes in a timely and effective manner. The 2019 Act has made some significant revisions and provides greater consumer protection than the 1986 Act, as evidenced by the detailed definitions supplied for the terms “consumer” and “unfair trade practice.”

In comparison to the 1986 Act, the 2019 Act has expanded the definition of unfair trade practices to include online misleading advertisements; failing to issue bills/memos for goods and services; failing to take back defective goods or deactivate the defective services, and refunding the full amount within the stipulated time mentioned in the bill or memo, or within 30 days in the absence of such stipulation; and disclosing personal information.

Why the new Act?

Now that we’ve been exposed to the new Consumer Protection Act of 2019, the question of “Why do we need a new Act?” may arise in our minds. We live in a world where the corporate environment is incredibly dynamic and rapid changes occur. For example, there were no mobile phones, the internet, e-marketing, telemarketing, video conferencing, or other forms of marketing in 1986, when the original consumer protection legislation was drafted.

The law was created to defend consumer interests while taking into consideration the realities of the period. With changes in corporate operations, the previous norms and regulations have become obsolete. Secondly, to guarantee that the legislation continues to accomplish the desired objectives, it is always good to update and improve it. In response to the changing business environment, the government passed the Consumer Protection Act of 2019.

The long title of the new Consumer Protection Act of 2019 expresses the entire and exclusive objective of the Act in the fewest possible terms. While the Consumer Protection Act of 1986 had a nearly identical long title, it was around three decades old and did not include the necessary provisions to address the problems of modern, technology-dependent consumers, necessitating the replacement of the entire Act with a new one and a fundamental change.

Key Features

  • Widened definition of Consumer– The 2019 Act broadens the definition of consumer to include consumers who engage in online transactions, effectively bringing E-commerce enterprises under its purview. The 2019 Act also addresses technological changes in the industry, makes it easier to file complaints, and holds firms, including endorsers, accountable for violating consumers’ interests.
  • Central Consumer Protection Authority– The new Act establishes a Central Consumer Protection Authority (CCPA) to promote, protect, and enforce consumer rights; intervene when necessary to prevent consumer harm caused by unfair trade practises; and bring class action lawsuits for product recalls, refunds, and returns. For the purpose of conducting inquiries or investigations, the Authority will have an Investigation Wing led by a Director General. Section 22 of the Act gives the Director General search and seizure authority.
  • Consumer Commissions- There will be a three-tier system for resolving consumer complaints under the new Act: District Commissions, State Commissions, and the National Commission. When the value of goods or services does not exceed one crore, a complaint can be lodged with the District Commission [section 34(1)]. When the value of goods or services exceeds 1 crore but does not exceed 10 crore [section 47(1) I a complaint can be submitted with the State Commission, and when the value of goods or services surpasses 10 crore, it can be filed with the National Commission [section 58(1) (a) I A resident can make a complaint in the Commission’s territorial jurisdiction where he or she lives or works for a living.
  • Consumer Protection Council (CPC) – Consumer Protection Councils are to be established at the national, state, and district levels. These councils will be obliged to convene on a regular basis and provide recommendations to the appropriate authorities on how to promote and safeguard the Act’s consumer rights.
  • Product Liability- The introduction of “product liability,” in which producers and sellers of items or services are held liable for any injury caused to a consumer by defective products, manufactured or sold, or by service deficiencies, is a significant addition to the 2019 Act. Another recently proposed idea is “unfair contracts,” which aims to shield consumers from contracts that are arbitrarily slanted and unjust in favour of manufacturers or service providers.
  • Mediation- In order to resolve consumer disputes quickly without having to contact the Commissions, the Act has added a new chapter on mediation as an alternative dispute resolution tool. The dispute might be settled in its entirety or in sections. In the event that the mediation is successful, the parameters of the agreement shall be reduced to writing. When a consumer dispute is only partially resolved, the Commission must record the resolution of the matters that have been resolved and continue to hear the remaining problems in the disagreement.

Neena Aneja anr. Vs. Jai Prakash Associates Ltd; The Supreme Court held that it is agreed that Section 34 of the Act of 2019 entrusts the District Commission with the authority to “consider” complaints while determining its jurisdiction. Sections 47 and 58 of the SCDRC and NCDRC, respectively, include a comparable provision. In Hindustan Commercial Bank Ltd. v. Punnu Sahu (Dead) Through Legal Representatives1, a two-judge Bench of this Court analysed the term “entertain” in the context of the terms of Order XXI Rule 90 of the CPC.

The term “entertain” has been adopted by the Court as meaning “to adjudicate on or proceed to evaluate on merits.” Unquestionably, a three-judge Bench of this Court in Nusli Wadia(supra) interpreted the term “entertain” in the context of Section 9A of the Code of Civil Procedure, as amended in Maharashtra, to mean “to adjudicate upon or continue to deliberate on merits.” Sections 34, 47, and 58 all state that the respective consumer forums can hear complaints within their jurisdiction’s financial limits.

These restrictions will almost certainly apply to complaints filed after the Act of 2019 took effect. However, the mere inclusion of the word “entertain” in the definition of jurisdiction is insufficient to overcome the overwhelming legislative intent to protect consumers by omitting a provision for the transfer of pending proceedings in the Act of 2019 or under Section 106 of the Act of 2019, which gives the Attorney General the power to remove difficulties for a period of two years after the Act of 2019 takes effect.

Conclusion

The Consumer Protection Act of 2019 replaces the Consumer Protection Act of 1986, which had been in effect for three decades. Increased penalties and stricter accountability for consumer interests violations have the potential to deter unethical company activities. While the government’s improvements are admirable, such as the addition of mediation, product responsibility, and e-commerce, the Act’s enforcement and practical applicability will only be decided when it has stood the test of time.

We may say that the Consumer Protect Act of 2019, which has been in the works since 2010, is one of the federal government’s most serious efforts to protect consumer rights and speed up justice delivery. Many of the new Act’s provisions, such as mediation and e-commerce, were unheard of in 1986. As a result, when digitalization changed the way consumers conduct online transactions and purchasing shifted from offline to online, the actions needed to be amended. The Consumer Rights Act of 2019 is undoubtedly a significant step forward in the reform, development, and strengthening of consumer rights. Every year, socioeconomic changes occur, and we should expect fresh adjustments to the 2019 legislation as well.

About the Author

Sreshta Satpathy

Sreshta Satpathy

Student at Adv. Balasaheb Apte college of Law , Mumbai 

I am 20 years old and I belong to Orissa. I’m currently a third-year student pursuing BLS LL.B from Mumbai University. I intend to pursue corporate law in the future.

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