The Consumer Protection Act, 2019: All You Need To Know!

The Consumer Protection Act, 2019 has come into enforcement from 20 Jul, 2020. Mr. Ram Vilas Paswan, Union Minister of Consumer Affairs, Food and Public Distribution, did the briefing of the act to the media on the same date through video conference. It will replace the old Consumer Protection Act, 1986.

Background

On 8 Jul, 2019, Mr. Ram Vilas Paswan introduced the Consumer Protection Bill, 2019 in the Lok Sabha. It was passed in the Lok Sabha on 30 Jul, 2019. Later, on 6 Aug, 2019, it was passed in the Rajya Sabha. The bill got assent from Hon’ble President Shri

The Consumer Protection Act, 2019 has come into enforcement from 20 Jul, 2020. Mr. Ram Vilas Paswan, Union Minister of Consumer Affairs, Food and Public Distribution, did the briefing of the act to the media on the same date through video conference. It will replace the old Consumer Protection Act, 1986.
Background
On 8 Jul, 2019, Mr. Ram Vilas Paswan introduced the Consumer Protection Bill, 2019 in the Lok Sabha. It was passed in the Lok Sabha on 30 Jul, 2019. Later, on 6 Aug, 2019, it was passed in the Rajya Sabha. The bill got assent from Hon’ble President Shri Ram Nath Kovind on 9 August, 2019 and was notified in The Gazette of India on the same date.
The date of enforcement of the act was mentioned on the bill as 20 Jul, 2020. So, the act came into enforcement on the prescribed date. From now on, all the cases on consumer disputes will be decided according to the provisions of this particular Act.
What’s New?
As expected the new Act is full of new and improved provisions. One of them is Mediation mentioned from Sec 74 to 81 of the respective Act which will help in the speedy disposal of the disputes. Others are:
Sr. no. Title Explanation

  1. Covers E-Commerce Transactions The New Act has broadened the definition of ‘consumer’. The updated definition includes a person who buys any goods, whether through offline or online transactions, electronic means, teleshopping, direct selling or multi-level marketing. The earlier Act did not specifically include e-commerce transactions, and this shortfall has been taken care of by the New Act.
  2. Enhancement of Pecuniary Jurisdiction Revised pecuniary limits are fixed under the New Act. Accordingly, the district forum can now entertain consumer complaints where the value of goods or services paid is below INR 10,000,000 (Indian Rupees Ten Million). The State Commission can entertain disputes where the worth of products is more than INR 10,000,000 (Indian Rupees Ten Million) but less than INR 100,000,000 (Indian Rupees One Hundred Million), and the National Commission can exercise jurisdiction where such value is more than INR 100,000,000 (INR One Hundred Million).
  3. E-Filling of Complaints The New Act provides flexibility to the buyer to file complaints with the jurisdictional consumer forum located at the place of residence or work of the buyer. This is unlike the present practice of filing it at the place of purchase or where the vendor has its registered office address. The New Act also contains enabling provisions for consumers to file complaints electronically and for hearing and/or examining parties through video-conferencing. This is aimed to supply procedural ease and reduce inconvenience and harassment for the consumers.
  4. Establishment of Central Consumer Protection Authority The New Act initiated the establishment of a regulatory authority known as the Central Consumer Protection Authority (CCPA), with extensive powers of enforcement. The CCPA will have an investigation wing, headed by a Director-General, which will conduct inquiry or investigation into the consumer law violations.
  • The CCPA has been granted wide powers to take suo-moto actions (an action when the court takes its own control over the case), recall products, order reimbursement of the price of goods/services, cancel licenses and file class-action suit, if a consumer complaint affects more than one individual.
  1. Provision for ADR (Alternative Dispute Resolution) The New Act provides for mediation as an Alternate Dispute Resolution mechanism, making the process of dispute adjudication simpler and faster. This will help with the speedier resolution of disputes and decrease the pressure on consumer courts, which already have a lot of cases pending before them.
  2. Product Liability & Penal Consequences The New Act has instituted the concept of merchandise liability and brings within its scope, the merchandise manufacturer, merchandise service provider and merchandise seller, for any claim of compensation. The term ‘merchandise seller’ refers to a person who is involved in placing the merchandise for a commercial purpose and as such includes e-commerce platforms too. The defense that e-commerce platforms merely act as ‘platforms’ or ‘aggregators’ will no longer be accepted. There is increased liability risk for manufacturers as compared to the merchandise service providers and merchandise sellers, considering that under the New Act, manufacturer will be liable in merchandise liability action albeit he proves that he wasn’t negligent or fraudulent in making the express warranty of merchandise. Certain exceptions have been provided under the New Act from liability claims, such as, that the merchandise seller won’t be liable where the merchandise has been misused, altered or modified.
  3. Penalties for Misleading Advertisements The CCPA may impose a penalty of up to INR 1,000,000 (Indian Rupees One Million) on a manufacturer or an endorser, for a false or misleading advertisement. The CCPA can also sentence them to imprisonment for up to 2 (two) years for the same. In case of a subsequent offence, the fine of maximum INR 5,000,000 (Indian Rupees Five Million) and imprisonment of up to five years. Furthermore, the CCPA can prohibit the endorser of a misleading advertisement from endorsing that specific product or service for a period of up to one year. For every subsequent offence, the period of prohibition can be of maximum three years.
  • The New Act fixes liability on sellers considering that there are various instances in recent past where consumers have fallen prey to unfair trade practices under the influence of celebrities acting as brand ambassadors. In such cases, it becomes important for the endorser to take the onus and exercise due diligence to verify the veracity of the claims made in the advertisement to refute liability claims
  1. Unfair Trade Practices The New Act introduces a specific broad definition of Unfair Trade Practices, which also includes sharing of personal information given by the consumer in confidence, unless such disclosure is made in obedience to the provisions of any other law.

Conclusion
It is clear that the scope of the new Consumer Protection Act, 2019 has been widened by the Indian Legislature. The Act has strengthened the consumer’s rights by establishing authorities, imposing strict liabilities etc. With the enforcement of the new act gone are the days when the consumer had to ‘beware’. Now, consumers will be treated like Kings. Sellers will now have to become more attentive regarding their malpractices and will have to be extra cautious. Through this, now, we know for sure that the world is changing and our Indian Legislature is improving. We are now good to go!!

on the same date.

The date of enforcement of the act was mentioned on the bill as 20 Jul, 2020. So, the act came into enforcement on the prescribed date. From now on, all the cases on consumer disputes will be decided according to the provisions of this particular Act.

What’s New?

As expected the new Act is full of new and improved provisions. One of them is Mediation mentioned from Sec 74 to 81 of the respective Act which will help in the speedy disposal of the disputes. Others are:

Sr. no.TitleExplanation
1.Covers E-Commerce Transactions The New Act has broadened the definition of ‘consumer’. The updated definition includes a person who buys any goods, whether through offline or online transactions, electronic means, teleshopping, direct selling or multi-level marketing. The earlier Act did not specifically include e-commerce transactions, and this shortfall has been taken care of by the New Act.  
2.Enhancement of Pecuniary JurisdictionRevised pecuniary limits are fixed under the New Act. Accordingly, the district forum can now entertain consumer complaints where the value of goods or services paid is below INR 10,000,000 (Indian Rupees Ten Million). The State Commission can entertain disputes where the worth of products is more than INR 10,000,000 (Indian Rupees Ten Million) but less than INR 100,000,000 (Indian Rupees One Hundred Million), and the National Commission can exercise jurisdiction where such value is more than INR 100,000,000 (INR One Hundred Million).  
3.E-Filling of ComplaintsThe New Act provides flexibility to the buyer to file complaints with the jurisdictional consumer forum located at the place of residence or work of the buyer. This is unlike the present practice of filing it at the place of purchase or where the vendor has its registered office address. The New Act also contains enabling provisions for consumers to file complaints electronically and for hearing and/or examining parties through video-conferencing. This is aimed to supply procedural ease and reduce inconvenience and harassment for the consumers.  
4.Establishment of Central Consumer Protection Authority The New Act initiated the establishment of a regulatory authority known as the Central Consumer Protection Authority (CCPA), with extensive powers of enforcement. The CCPA will have an investigation wing, headed by a Director-General, which will conduct inquiry or investigation into the consumer law violations. – The CCPA has been granted wide powers to take suo-moto actions (an action when the court takes its own control over the case), recall products, order reimbursement of the price of goods/services, cancel licenses and file class-action suit, if a consumer complaint affects more than one individual.  
5.Provision for ADR (Alternative Dispute Resolution)The New Act provides for mediation as an Alternate Dispute Resolution mechanism, making the process of dispute adjudication simpler and faster. This will help with the speedier resolution of disputes and decrease the pressure on consumer courts, which already have a lot of cases pending before them.  
6.Product Liability & Penal ConsequencesThe New Act has instituted the concept of merchandise liability and brings within its scope, the merchandise manufacturer, merchandise service provider and merchandise seller, for any claim of compensation. The term ‘merchandise seller’ refers to a person who is involved in placing the merchandise for a commercial purpose and as such includes e-commerce platforms too. The defense that e-commerce platforms merely act as ‘platforms’ or ‘aggregators’ will no longer be accepted. There is increased liability risk for manufacturers as compared to the merchandise service providers and merchandise sellers, considering that under the New Act, manufacturer will be liable in merchandise liability action albeit he proves that he wasn’t negligent or fraudulent in making the express warranty of merchandise. Certain exceptions have been provided under the New Act from liability claims, such as, that the merchandise seller won’t be liable where the merchandise has been misused, altered or modified.  
7.Penalties for Misleading AdvertisementsThe CCPA may impose a penalty of up to INR 1,000,000 (Indian Rupees One Million) on a manufacturer or an endorser, for a false or misleading advertisement. The CCPA can also sentence them to imprisonment for up to 2 (two) years for the same. In case of a subsequent offence, the fine of maximum INR 5,000,000 (Indian Rupees Five Million) and imprisonment of up to five years. Furthermore, the CCPA can prohibit the endorser of a misleading advertisement from endorsing that specific product or service for a period of up to one year. For every subsequent offence, the period of prohibition can be of maximum three years. – The New Act fixes liability on sellers considering that there are various instances in recent past where consumers have fallen prey to unfair trade practices under the influence of celebrities acting as brand ambassadors. In such cases, it becomes important for the endorser to take the onus and exercise due diligence to verify the veracity of the claims made in the advertisement to refute liability claims
8.Unfair Trade PracticesThe New Act introduces a specific broad definition of Unfair Trade Practices, which also includes sharing of personal information given by the consumer in confidence, unless such disclosure is made in obedience to the provisions of any other law.

Conclusion

It is clear that the scope of the new Consumer Protection Act, 2019 has been widened by the Indian Legislature. The Act has strengthened the consumer’s rights by establishing authorities, imposing strict liabilities etc. With the enforcement of the new act gone are the days when the consumer had to ‘beware’. Now, consumers will be treated like Kings. Sellers will now have to become more attentive regarding their malpractices and will have to be extra cautious. Through this, now, we know for sure that the world is changing and our Indian Legislature is improving. We are now good to go!!

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