The first consumer protection legislation i.e. Consumer Protection Act, 1986 is repealed with the new Consumer Protection Act, 2019 with effect from 20th July, 2020. The first legislation was introduced to guard consumer rights. However, with the advent of technology and introduction of e-commerce and various other mechanisms of conducting business, the necessity to bring changes in the previous legislation is felt to better protect modern-day consumers.
The new Act tends to provide protection to buyers not only from traditional sellers but also from new e-commerce retailers and platforms. This latest piece of legislation brings easement for buyers by recognizing online transactions as well as provides facility to institute complaints from place of residence or work.
What is the aim of Consumer Protection Act, 2019?
The essence of Consumer Protection Act, 2019 is to save rights of the customers by establishing authorities for timely and effective administration and effective redressal of customer’s complaints. It is established to protect the interests of customers.
Gist of Consumer Protection Act, 2019:
Broad definition of consumer: As per the new Act, a person is called a customer who avails the services and buys any good for self use. It is notable to mention here that if person buys any goods and any avail services for resale or commercial purpose, is not considered a customer. The definition covers all types of transactions i.e. offline or online.
Convenience to consumers: The new Act allows the consumer to file complaint before the authority under whose jurisdiction he/she resides or work. This new concept is opposed to the earlier trend of filing complaint at the place of seller. Complaint can also be filed via electronic mode and even proceedings of the same can take place via video conferencing on showing reasonable ground by the consumer. Period of limitation to file appeal before the State Commission against the order of District Commission has been increased from 30 days to 45 days. Second appeal is also maintainable before the National Commission under Section 51 (3) if it involves any substantial question of law.
Establishment of the Central Consumer Protection Authority: The authority also refers to CCPA which will be headed by Director-General to protect, promote and enforce the rights of customers. The CCPA will regulate the cases related to unfair trade practices, misleading advertisings and violation of consumer rights.
Investigation wing will be established in the authority to investigate and enquire violations under the Act. The CCPA will have right to impose penalty on violators and pass orders to recall goods or withdraw services, stop unfair trade practices and reimbursement of the price paid by the customers. National Commission is empowered to hear appeals against the orders of Central Consumer Protection Authority.
Establishment of Consumer Disputes Redressal Commission: The new Act renamed the District Consumer Disputes Redressal Forum as District Consumer Disputes Redressal Commission and also provides the establishments of Consumer Disputes Redressal Commissions at national and state levels. The Consumer Disputes Redressal Commissions will entertain the complaints with regard to following subject matters:-
- Sale of defective goods or services
- Overcharging or deceptive charging of goods or services.
- Sale of hazardous goods or services which may be dangerous to life.
- Unfair trade practices.
Penalty for misleading advertisement: The manufacturer can be punished with fine or imprisonment upto 2 years for misleading advertisement. On the repetition of the same may attract the fine of Rs. 50 lacs and imprisonment upto 5 years. Such power to impose penalty for false or misleading advertisement will vests with CCPA.
Jurisdiction: Before discussing more, it is important to know what does jurisdiction means. Jurisdiction is a power of court to try or hear cases under any specific area that area can be geographical or on the basis of specific subject matter or monetary limit. The Consumer Protection Act decides the jurisdiction of the court on the basis of monetary limit.
The new Act revised the monetary jurisdictions of consumer commissions. Now, National Consumer Disputes Redressal Commission will have jurisdiction to entertain the complaints worth more than Rs. 10 crores, State Commission will have jurisdiction to hear complaints when value is more than 1 crore but less than 10 crore. District Commission will hear complaints when value of goods or services is upto Rs 1 crore.
Recognition of mediation: The new Act provides statutory recognition to mediation under Section 74. To get quick justice in consumer disputes the mechanism for promoting mediation in redressal of consumer disputes is provided.
Product liability: The new Act brings the concept of product liability according to the same; customer can demand compensation from the manufacturer, seller or service provider for the harm incurred by a defective product or deficiency in service.
Rights of consumers: The consumers will have following rights under the new Act:
- To know about the quality, quantity, potency, purity, price and standard of goods and services.
- Protection from hazardous goods and services.
- To be shielded from unfair trade practices.
- To have access to variety of goods or services at competitive prices.
With the introduction of various e-commerce platforms in business the need for new legislation for cover of consumers is felt, so to cater this need our Parliament brings amendment in the existing Consumer Protection Act to keep pace with the time. It was required to bring amendments under Consumer Protection Act as with advent of technology numerous questions arise for protection of consumers. The New Act broadens the definition of consumer and recognizes both offline and online transactions for purchase of products and services which can be proved as boon for consumers in future.
Associate at Aggarwals & Associates, S.A.S. Nagar, Mohali