(GIST OF YOJANA) Consumer Protection Act, 2019 [DECEMBER-2019]
(GIST OF YOJANA) Consumer Protection Act, 2019
Consumer Protection Act, 2019
- The Consumer Protection Act (CPA), 1986 being the foremost legislature for protecting the rights of the consumers had become archaic and does not cover rapid changes in the consumer marketplaces, especially those dealing with online shopping, teleshopping, product recall, unsafe contracts, and misleading advertisements.
- Therefore, it was felt to replace it with the Consumer Protection Act, 2019.
Why the new CPA is needed?
- The growing number of pending cases in the consumer courts and huge delays in providing speedy justice to the consumers for petty amounts, the need of the hour was to bring in a new legislature to empower consumers.
- The Consumer Protection Act, 2019 (No. 35 of 2019) was passed by the Parliament and received the assent of the President on 9 August, 2019 and provides for the protection of consumers and fast-track alternatives so that justice reaches to the aggrieved consumers immediately.
- The new Act repeals and replaces the older CPA, 1986 and provides mechanisms for making the consumer complaint system more robust.
- It envisages to remove anomalies and problems faced by the consumers. Innovative methods such as mediation, establishment of Central Consumer Protection Authority, class action suits etc. would be part of the Consumer Protection Act, 2019.
- Since the rules of the New Consumer Protection Act, 2019 are yet to be framed and implemented it is time to look at what the new Act would deliver and draw a comparison with CPA, 1986.
Shortcomings in the CPA, 1986:
- The CPA, 1986 has become outdated and does not consider rapid changes in consumer marketplaces. Section 13 (3A) of CPA, 1986 states that “every complaint shall be heard expeditiously as possible and endeavour made to dispose of complaint within a period of three months from the date of notice by the opposite party and five months if it requires testing of commodities.” But it is seen that due to heavy pendency of cases and frequent adjournments delay in getting justice takes place.
- The consumer commissions have been overburdened with pending cases and the buyer-seller contract is tilted in favour of the seller. Further, the procedures are becoming expensive and time consuming.
- The presidents and members of the consumer courts constitute the backbone of the consumer dispute redressal system. They play a major role in establishing the faith of the consumers in the redressal mechanism. But it has been seen that there are more than 400 posts of President and members in various consumer forums which are lying vacant. The State Governments show less interest in immediately filling up the vacant posts and the issue of consumer protection is not always at the top of any political parties’ agenda.
- Consumer commissions are functioning with staff deputed from other departments who do not have any experience in judicial practices. It is necessary to provide intensive training to the members of the Consumer courts before putting them on the job. The present practice is to provide training after assuming charge as a member.
- Many times, it is seen that the award ordered by consumer commissions is very meagre and the consumer has to run from pillar to post to get the orders implemented.
- There has been lack of proper coordination among the President and
members of the
consumer commissions for timely adjudication of cases and quite often around ten or fifteen adjournments are allowed.
- The President of the National Commission/State Commissions are not empowered to take up suo motu action in consideration of the damages affecting a sizable number of population, e.g., misleading advertisements.
Highlights of the Consumer Protection Act, 2019:
- The objective of the Act is to provide for the protection of the interests of consumers and to establish authorities for timely and effective administration and settlement of consumers’ disputes. Some of the highlights of the Consumer Protection Act, 2019 are:
- The definition of ‘Consumer’ would include both offline and online consumers. The expressions “buys any goods” and “hires or avails any services” would include offline or online transactions through electronic means or by teleshopping or direct selling or multi-level marketing.
- Establishment of the Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of consumers, to investigate and intervene when necessary to prevent consumer detriment arising from unfair trade practices, and to initiate class action including enforcing recall, refund and return of products.
Thus CCPA can act on:
- complaints of unfair trade practices,
- issue safety guidelines,
- order product recall or discontinuation of services,
- refer complaints to other regulators,
- has punitive powers such as imposing penalties,
- can tile actions before consumer commissions, and
- Intervene in proceeding in matters of consumer rights or unfair trade practices.
The Central Authority will have an Investigation Wing headed by a
Director-General for the purpose of conducting inquiry or investigation under
the Act. For false and misleading advertisements CCPA may issue a penalty up to
10 lakh on a manufacturer and endorser and includes online marketing. For a
subsequent offence, the fine may extend to Rs. 50 lakh. For
every subsequent offence, the period of prohibition may extend to three years. However, there are certain exceptions when an endorser will not be held liable for such a penalty. The CCPA has the authority to direct the removal of a misleading advertisement.
- The pecuniary jurisdiction of adjudicatory bodies increased in case of District Commission to Rs. 1 crore, in case of State Commission between 1 crore to 10 crore, and for National Commission, above Rs 10 crore. Further simplification of procedure for filing of complaints and online filing of complaints has also been envisaged.
- The Bill also lists punitive actions against those who are found to be manufacturing, storing, distributing, selling, or importing products that arc spurious or contain adulterants.
- Provisions for “product liability” action for or on account of harm caused by or resulting from any product by way of fixing the liability of a manufacturer to a claimant.
- Provision for “mediation” as an Alternate Dispute Resolution (ADR) mechanism which aims at giving legislative basis to resolution of consumer disputes through mediation, thus making the process less cumbersome, simple, and quicker. This will be done under the aegis of the consumer fora.
- Several provisions aimed at simplifying the consumer dispute adjudication process in the consumer fora are envisaged. These include, among others, enhancing the pecuniary jurisdiction of the consumer disputes redressal agencies, increasing the minimum number of members in the consumer fora to facilitate quick disposal of complaints, power to review their own orders by the State and district commission, constitution of ‘circuit bench’ to facilitate quicker disposal of complaints, reforming the process for the appointment of the President and members of the district fora, enabling provisions for consumers to file complaints electronically and file complaints in consumer fora that have jurisdiction over the place of residence of the complainant, and deemed admissibility of complaints if the question of admissibility is not decided within the specified period of 21 days.
- E-commerce guidelines would be mandatory under consumer protection law which would include 14-day deadline to affect refund request. It would mandate e-tailers to display details of sellers supplying goods and services on their websites and moot the procedure to resolve consumer complaints. The e-commerce companies would also be required to ensure that personally identifiable information of customers are protected. Terms of contract between e-Commerce entity and the seller relating to return, refund, exchange, warranty/guarantee, delivery/shipment, mode of payments, grievance redressal mechanism etc. to be displayed to enable consumers to make informed decisions.