The Consumer Protection Act, 2019
After long
anticipation, the Parliament, after receiving the assent from the President of
India, introduced the new holistic Consumer Protection Act, 2019 (“CP Act,
2019”) on August 9, 2019. The Act
has retained some old provisions but also shows the gleam of some new
perceptions. The Ministry of Law and
Justice has meticulously framed the Consumer Protection Act, 2019 covering all
the possibilities of defaults that may arise in the new epoch.
SCOPE OF THE CP ACT 2019
While the Act contains
certain old provisions, the Parliament has incorporated certain new clauses with
regard to consumers’ grievances attributed to the modernized society, with a
view of creating an exhaustive consumer protection law.
Compared to the earlier
CP Act, 1986 which had only 31 sections divided into 4 chapters, the CP Act,
2019 contains 107 sections divided into 8 chapters. The CP Act, 2019 also incorporates new words
for definition such as ‘Advertisement’, ‘Central Authority’, ‘Consumer Rights’,
‘Design’, ‘Direct Selling’, ‘Director General’, ‘E-Commerce’, ‘Electronic
Server Provider’, ‘Endorsement’, ‘Establishment’, ‘Express Warranty’, ‘Harm’, ‘Injury’,
‘Mediation’, ‘Mediator’, ‘Misleading Advertisement’, ‘Product and Product
Liability’, ‘Product Liability Action’, ‘Product Manufacturer’, ‘Product Seller’,
‘Product Service Provider’ and ‘Regulator and Unfair Contract’.
Further a few words have
been given a wider definition such as:
- COMPLAINANT
shall also be the central authority and in case of a minor, his parent or legal
guardian; - CONSUMER
shall also be a person who buys any goods or avails services, via offline or
online transactions through electronic means or by teleshopping or direct
selling or multi-level marketing. - DEFICIENCY
further includes an act of negligence, omission, commission causing loss or
injury to the consumer and deliberate withholding of relevant information. - The definition of term ‘GOODS’ has been modified completely to
include movable property and food as defined in clause (j) of subsection (l) of
section 3 of the Food Safety and Standards Act, 2006. - The word telecom has been added in the
definition of ‘SERVICE’. Further,
the object of the Central Council apart from protecting the consumer rights
shall also be to render advice on promotion.
CENTRAL AUTHORITY
The CP Act, 2019embraces
the establishment of the Central Consumer Protection Authority known as ‘Central
Authority’, headquarter being established at Delhi and other offices in any
place as Central Government may decide. The post of “Chief Commissioner” of the
Central Authority and a number of other Commissioners have been introduced in
order to resolve the matters relating to violation of consumer rights such as
unfair trade practices, false or misleading advertisements that are prejudicial
to the interest of public. For this purpose, they shall have under them, an
investigation wing headed by a Director General who has the power to issue
directions to the trader, manufacturer, endorser, advertiser, or publisher to
discontinue such advertisement or to modify the same. The central authority shall
also have the power to impose punishment with imprisonment and the penalty
varying on the default.
One of the noteworthy
amendment in the CP Act 2019 is that the false and misleading advertisements,
made to arouse prejudicial interest of consumer, shall attract the imposition
of punishment up to two years and for subsequent contravention up to five years
and penalty up to 10 lakh and for subsequent contravention penalty up to 50
lakh, but no cognizance of offence shall be taken by any court until the
complaint is filed by Central Authority or an officer authorized by the Central
Authority.
MEDIATION
The new CP Act, 2019 escalates
the importance of mediation in consumer matter, which has been inserted under
the Chapter V to encourage the parties to undergo mediation after the admission
of a complaint or at any later stage. If it appears to the members of the
Central Authority, that there exists an element of a settlement, they may refer
it to mediation and in case of failure of mediation, the complaint shall
further proceed.
PRODUCT LIABILITY
Under the CP Act, 2019,
the complainant can claim for compensation under a product liability action for
any harm caused by a defective product manufactured, serviced, or sold.
A product manufacturer
shall be liable in a product liability action, if the product has a
manufacturing defect, is defective in design, or there is a deviation from
manufacturing specifications, or does not conform to the express warranty, or
the product fails to contain adequate instructions of correct usage to prevent
any harm or any warning regarding improper or incorrect usage.
A product service
provider shall be liable in a product liability action, if the service provided
was faulty, imperfect, deficient, inadequate in quality, nature or manner or
there was an act of omission or commission or negligence or conscious
withholding of any information which caused harm; or did not issue adequate
instructions or warnings to prevent any harm; or did not conform to express
warranty or the terms and conditions of the contract.
A product seller who
is not a product manufacturer shall be liable in a product liability action, if
he has exercised substantial control over the designing, testing,
manufacturing, packaging or labelling of a product that caused harm; or has
altered or modified the product and such alteration or modification was the
substantial factor in causing the harm; or did not pass on the warnings or
instructions of the product manufacturer regarding the dangers involved or
proper usage of the product, while selling such product and such failure was
the proximate cause of the harm or has made an express warranty of a product
independent of any express warranty made by a manufacturer. If such product
failed to conform to the express warranty made by the product seller which
caused the harm; or the product has been sold by him and the identity of
product manufacturer of such product is not known, or if known, the service of
notice or process or warrant cannot be effected on him or he is not subject to
the law enforced in India or the order
passed cannot be enforced against him; or failed to exercise reasonable care in
assembling, inspecting or maintaining such product.
JURISDICTION
The new CP Act, 2019
has protracted the jurisdiction of the District Consumer Forum up to 1 crore,
State Consumer Forum from 1 crore to 10 crore and the National Consumer Forum
above 10 crore.
CONCLUSION
The new CP Act, 2019
initiates modernized rules for the credit of consumers. By making numerous favourable changes and
implementing the important new measures in relation to various types of
consumer grievances, the Act is creating a new structure for the credit of
consumers and ensues the obligations to the traders, product manufacturer,
service provider, and product seller.
The regulation further imposes mandatory content and format for the
parties to undergo mediation in order to sort out the issues before proceeding
with the complaint and at any time if there appear the elements of settlement.
The CP Act, 2019 also
includes the framework for digital marketing and online purchasing which has
opened wider room for the consumers for approaching the forums for the
deficiency in goods or services even bought online or service availed online.
Now, the property
buyer exclusively has the advantage of approaching either NCLT against the
Developer as financial creditor after Amendments[1]
upheld by the Supreme Court on August 09, 2019 which was approved by the
Parliament on August 01, 2019, or RERA
Authorities or District Consumer Forum or State Consumer Forum as per the extension of pecuniary jurisdiction up to 1 crore for District
Consumer Forum and up to 10 crore for State Consumer Forum for their grievance
with the builders and developers unlike the decision in Ambrish Kumar Shukla
Case[2]where it was decided that the consideration shall include compensation
and interest claimed by the complainant which was exceeding the pecuniary
jurisdiction of both District Consumer Forum and State Consumer Forum and since
the jurisdiction of the complainants seeking relief in property-related matters
were to approach National Consumer Forum only, but that is not the scenario now
as the CP Act, 2019 has extended the jurisdiction level.
The Consumer Protection Act, 2019 allows the District Commission, State Commission and National Commission to review its own orders if there is an error apparent on the face either by its own motion or on application being made within 30 days before filing appeal against such orders. This will give either party to correct the error if reviewable in the same court instead of approaching an appeal.
The only shortcoming of
the new CP Act, 2019 is that the Act does not give provision for the consumers
to approach a forum for the medical negligence which was present under the old
Act.
Contributed By – Latha Shanmugam
Designation – Associate
- [1] Insolvency and Bankruptcy Code (Amendment) Act, 2019
- [2] Ambrish Kumar Shukla & Ors. Vs Ferrous infrastructure Pvt Ltd (07.10.2016 – NCDRC) : MANU/CF/0499/2016
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