Amendments in the Consumer Protection Act

Amendments in the Consumer Protection Act

Date : 23 Dec, 2020

Post By Advocate Surabhi Diwan

India being a welfare state has always given utmost priority to the interests of consumers and therefore the Consumer Protection Act,1986 was enacted. While trying to defend the interests of consumers, the legislature bestowed consumer rights for the same and enacted a mechanism for the enforcement due to these rights. 

In order to fill in all the prevailing lacunae in consumer protection prior, the New act was introduced with all the amendments known as the Consumer Protection Act,2019. 

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This act was passed on 9th August 2019. It's a repealing statute revoking over the three-decade-old law for Consumer Protection Act, 1986. 

Drawbacks in Consumer Protection Act,1986

  1. The Act incorporates just two provisions concerning the inventory of perilous goods, however, it doesn't perpetrate any severe responsibility on the individuals who give such items.

  2. This Act doesn't allow the Consumer  Redressal Fora to continue either of interim order or "to cease and end orders".

The initial question, which currently emerges is, what took for the legislature body this long to follow up on these limitations in the first place? 

The response to which is, even after the 1991 and 2002 revisions to the Consumer Protection Act of 1986, the Legislative Council actually wanted to supplant the said demonstration and incompatibility, The Consumer Protection (Amendment) Bill, 2011 was presented in Lok Sabha on 16th December,2011 which at that point slipped by after its reference to Standing Committee on Food, also for Consumer Affairs and Public Distribution. On 10th August,2015 the Consumer Protection Bill, 2015 was presented in Lok Sabha which was then withdrawn on 5th January,2018 to present the new Consumer Protection Bill, 2018. The new bill which was passed in the Lok Sabha on 20th January, 2018 however got lapsed. The endeavors of the assembly were at last fructified when the Consumer Protection Bill, 2019 was presented and passed by Lok Sabha on 30th July,2019 and by Rajya Sabha on 6th August,2019 which at that point eventually got official consent on 9th August,2019. The key takeaways that were accepted and taken into consideration while framing this new act are discussed below.

Objectives of the Consumer Protection Act 2019

  1. Establishing Central Consumer Protection Authority ie (CCPA)

  2. Foundation for establishing the Mediation Center

  3. Product Liability Option 

  4. To introduce, Filling by Video Conferencing

  5. The Imposition of Higher penalties

  6. E-commerce to be included within the ambit of COPRA.

  7. Provision for Alternate Dispute Resolution being mediation

  8. Pecuniary jurisdiction and class action suit is incorporated as per foreign legislature.

The New Act has an augmented definition for 'consumer'. The definition currently incorporates any individual who purchases any goods, regardless of the mode of exchange : online or offline, telescoping, electronic means, direct selling & or multi-level marketing. The previous Act didn't explicitly incorporate e-commerce business transactions, and this lacuna has been covered under the New Act.

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The New Act proposes the foundation of a regulatory authority known to be the Central Consumer Protection Authority (CCP)  who is our consumer protection council, with wide powers of the requirement being enforced. The CCPA will have an examination wing, headed by a Director-General, which may lead to inquiry or examination/investigation concerning consumer law infringement.

The CCPA has been granted with wide powers to take suo-moto actions, review items, request order for a reimbursement of the cost of product or services, drop & cancel licenses, record class action suits if the consumer complaint affects an individual being more than 1.

Further, the concept of product liability has been brought under the scope of this act where  product manufacturer, service provider, and seller covering for whatsoever claims and compensation is included. The term 'Product seller' is explained to incorporate an individual who is associated with placing the product for any commercial purpose and would also include e-commerce business across platforms. The barriers pertaining to e-commerce, concerning the “platform” or the associated “aggregators” won’t be accepted. Liability risk has increased for product manufacturers in comparison to profit service providers and product sellers. Considering the fact that even under this new act, manufacturers’ claims would be liable in ‘Product Liability Action’, even if they prove to be not negligent or fraudulent under making these express warranty for the product.

However, exceptions have been made where liability claims for product sellers won’t exist in cases of misuse, altered or modified products from the one manufactured in the first place.

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Unfair Trade Practices

The New Act presents a particular and broader meaning to Unfair Trade Practices, which likewise incorporates sharing of individual data or information given by the consumer in certain confidence, except unless such disclosure is made as per provisions of any other law in certain.

Penalties for Misleading Advertisement

The authority can have the ability to impose a penalty for up to Rs 10 lakh and imprisonment of upto two years for a bogus/false or misleading advertisement. They could be restricted for supporting items on the off chance that it is found to be misleading.

Pecuniary Jurisdiction

The 2019 Act additionally changed pecuniary jurisdiction also for the District, State and National Commissions, individually. As far as possible for the District Commission pecuniary limit has been expanded to up to Rs.1 Crore from up to Rs.20 Lakhs; for State Commission, it has increased substantially to Rs.10 Crores from Rs.1 Crore; and for National Commission, the pecuniary limit has been expanded to well beyond Rs.10 Crores as against Rs.1 Crore in the 1986 Act. What's more, the 2019 Act has likewise changed the way for deciding the pecuniary jurisdiction even for documenting the Complaint. Presently the pecuniary jurisdiction was to be determined with respect to the value of goods and services as the consideration paid against the 1986 Act wherein, the pecuniary jurisdiction was resolved according to the estimation of goods or services just as compensation claims. This would help in doing endlessly the practice of inflating the compensation claimed so as to bring the complaint under the ambit of jurisdiction for state or National commission.

So we can deduce that the new act has expanded the ambit of consumer laws as follows- 

  1. Contains an express provision for  e-commerce.

  2. Has widened the meaning of customer by incorporating multilevel transactions with staggered exchanges in the definition, consequently uncovering sellers at each level to be accountable for risk under the new act.

  3. It has widened the meaning of ‘Unfair Trade Practices’ rehearsed by presenting three extra UTPs.

  4. It has acquainted one extra ground to file a complaint. For example : 'unfair contracts or agreements' which permits the customers to challenge out of line, one-sided and irrational contracts.

  5. Has expanded the meaning of Consumer Act to incorporate an organization or company purchasing goods for any non-commercial use.

Concluding the new Act, It has taken due accord of not just the lacunae present in the prior consumer laws yet, but also the overall prevailing market elements in dynamics and has likewise presented a total reform in the customer protection framework as-

Structural reforms: By building up a new regulator, presenting mediation for quick disposal of cases, and upgrading the pecuniary jurisdiction of the specialist authorities alongside empowering them to exercise regulatory power over subordinate specialists.

Societal reforms:

By putting a more prominent duty on product marketers and also endorsers to advance the actual utilization and the idea of products, forcing stricter penalties to go about as deterrents, and holding those sellers at each level accountable for risky activity.

The author of this blog is Advocate Surabhi Diwan having an experience of 5+ years in handling Consumer-related matters from her experience she wants to share this beneficial information for the individuals having any issues with respect to Consumer related matters.

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