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Key Highlights Of Consumer Protection Act 2019

Prefatory
Food, clothing and shelter are fundamental to one’s life but apart from these requirements we use many things in our daily life such as household goods, vehicles, cameras, furniture, cosmetics, etc. and thus we are consumers to these products. It is our right and duty of the seller to get things from the market at a reasonable price, quality, quantity, etc.

Rights and duties are interrelated like two sides of a coin but without any control and supervision these rights and duties are not possible which leads to the formulation of acts, statutes and laws. India's economic and business sector has grown with the changing times. India has now become a partner of global trade with the world in past years. But this success has also made customers aware of new problems.

This article aims to provide the key highlights of the consumer protection act 2019.

Who is Consumer

Mahatama Gandhi once said that:
A customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider in our business. He is part of it. We are not doing him a favour by serving him. He is doing us a favour by giving us an opportunity to do so.[1]

Consumer[2] as per Consumer protection act 2019, means any person who:

Buys any goods and hires or avails of any service for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment, when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose.
The consumer protection act 1986 did not specifically include e-commerce transactions, and this lacuna has been addressed by the New Act.

Consumer Protection Act 2019

The Consumer Protection Act 2019 is enacted to provide redressal to consumer grievances. The Act seeks to promote and protect the interest of consumers against deficiencies, unfair trade practices and defects in goods or services. This Act came into force from 20th July 2020 and this act will empower consumers and help them in protecting their rights through its various updated provisions and penalties.

A new provision to safeguard the rights of consumer against unfair contracts by declaring them to be illegal is added in this amendment. In general, an unfair contract means a contract between manufacturer or trader and a consumer that causes disadvantages to the rights of the consumer such as - imposing unreasonable condition on the consumer, reserving right to unilateral termination of agreements without reasonable cause or assignment of condition without consent which is to the detriment of the consumer in the contract, etc. this act imposes the fines and penalties for such violations.

A product liability action may be brought by a consumer against a product manufacturer or a product service provider or a product seller, for any harm caused to him on account of a defective product.[3] But the product liability action cannot be brought against the product seller if, at the time of harm, the product was misused, altered, or modified.[4]

Section 2(35) of CPA 2019 allows a person to make a claim of product liability against such manufacturer, seller or service provider for such defective products. Product liability means the responsibility of a product manufacturer or product seller, of any product or service, related to the product to compensate for any harm caused to a consumer by such defective product manufactured or sold or by deficiency in services relating to the product.

The consumer protection act 2019 provides the e-filing facility to decrease the customer pressure and to file complaints online without personal appearance. This act also provides for hearing and examining parties through video-conferencing and make the dispute redressal more flexible to the consumer.  This act also provides for the filing of complaints in the jurisdiction of residence or work of complainant, whereas the previous act was limited to the jurisdiction of place of work or business of the opposite party.

Dispute Redressal Mechanism

There should be establishment of a regulatory authority known as the Central Consumer Protection Authority with wide powers, headed by a Director-General, for the conduct of inquiry or investigation of consumer law violations and to regulate unfair trade practices and false or misleading advertisements and to promote, protect and enforce the rights of consumers as a class. The authority has powers to take suo-moto actions, recall products, search and seizure of productes, order reimbursement of goods/services, cancel licenses and file class action suits, in case of consumer complaint.

There should be establishment of  State Consumer Disputes Redressal Commission consist of President and not less than such number of members as may be prescribed by the Central Government. The appellate jurisdiction of district commission lies with the state commission and it may call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any District Commission within the State, where it appears to the State Commission that such District Commission has exercised its illegal and materially irregular jurisdiction.

There should be establishment of District Consumer Disputes Redressal Commission, in each district which consists of President and such number of members as may be prescribed by Central Government. Every proceeding before the District Commission shall be conducted by the President with at least one member thereof, sitting together: The District Commission shall have the power to review any of the order passed by it if there is an error apparent on the face of the record, either of its own motion or on an application made by any of the parties within thirty days of such order.

The consumer protection act 2019 shall also provide the provisions for the establishment of mediation cells as per the aegis of the consumer commissions for mutual settlement of disputes outside the court for which there will be no appeal against such settlement.

Provision for Alternate Dispute Resolution:

There is an addition of provision of mediation or alternate dispute resolution in the Consumer protection act 2019 which makes the process of dispute adjudication simpler and quicker. This is the way to easy and speedy disposal of cases and grievances outside the courtroom without burdening on the court, which already has numerous cases pending before them.

Pecuniary jurisdiction[5]

The pecuniary limit for the different commissions is as follows

  • District Commission - up to Rs.1 Crore
  • State Commission - up to Rs.10 Crores
  • National Commission - to over and above Rs.10 Crores

Celebrity Endorsement

There have been several cases in recent times where customers have fallen prey to unfair trade practices under the influence of advertisements made by celebrities as brand ambassadors of that particular product. In such cases, there was no provision for action against advertisements made by celebrities earlier, but now after the enactment of this act the liability is fixed on celebrities and the celebrity takes diligence to verify the veracity of the claims made in the advertisement to refute liability claims.

If a misleading advertisement is found to be prejudicial to the interest of consumers, then the Central Authority may impose a penalty of up to 10 lakhs on the endorser or celebrity as well. The Central Authority can also prohibit the endorser of a misleading advertisement from endorsing that particular product or service for a period of up to 1 year which may extend up to 3 years for every subsequent offence.[6]

Offences and penalties under Consumer Protection Act 2019

Any manufacturer of a product or any service provider who causes a false or misleading advertisement, which is prejudicial to the interest of consumers shall be punished with imprisonment for a term which may extend to two years and with fine which may extend to ten lakh rupees; and for every subsequent offence, be punished with imprisonment for a term which may extend to five years and with fine which may extend to fifty lakh rupees.[7]

Penalty for noncompliance of direction of Central Authority is imprisonment for a term which may extend to six months or with fine which may extend to twenty lakh rupees, or with both[8]. The rest of the punishments and penalties for the violation is mentioned under chapter VIII of the Consumer Protection Act 2019.

Other rules and regulations

As per the Consumer Disputes Redressal Commission Rules, there will be no fee for filing cases up to Rs. 5 lakh. The State Commissions will provide reports of vacancies, disposal, the pendency of cases and other matters to the Central Government on a quarterly basis. Apart from these general rules, there are Central Consumer Protection Council Rules, provided for the constitution of the Central Consumer Protection Council.

Conclusion
The new consumer protection act is indeed a boon for the consumers. Now no manufacturer or vendor will trick the consumer. There are penal provisions against the vendors and manufacturers or service providers in case of violations. It’s time to change the maxim caveat emptor with caveat venditor, because if the manufacturers or service provider tries to cheat with the consumer he will definitely behind the bars.

End-Notes:
  1. Werner Hüttenrauch, “A customer is the most important visitor on our premises…” Published on July 28, 2017, https://www.linkedin.com/pulse/customer-most-important-visitor-our-premises-werner-h%C3%BCttenrauch#:~:text=Gandhi%20said%20this%3A-,%E2%80%9CA%20customer%20is%20the%20most%20important%20visitor%20on%20our%20premises,is%20the%20purpose%20of%20it
  2. Section 2(7) of Consumer Protection Act 2019- https://www.indiacode.nic.in/bitstream/123456789/12808/1/the_consumer_protection_act%2c_2019_no._35_of_2019_date_09.08.2019.pdf
  3. Section 83 of Consumer Protection Act 2019- https://www.indiacode.nic.in/bitstream/123456789/12808/1/the_consumer_protection_act%2c_2019_no._35_of_2019_date_09.08.2019.pdf
  4. Section 87(1) of Consumer Protection Act 2019- https://www.indiacode.nic.in/bitstream/123456789/12808/1/the_consumer_protection_act%2c_2019_no._35_of_2019_date_09.08.2019.pdf
  5. Consumer protection act 2019
  6. Arogya Legal, Highlights - Consumer Protection Act, 2019, August 28 2019, https://www.lexology.com/library/detail.aspx?g=592f2bfc-30c8-4af6-88a8-61ad1f104492
  7. Section 89 of consumer protection act 2019- https://www.indiacode.nic.in/bitstream/123456789/12808/1/the_consumer_protection_act%2c_2019_no._35_of_2019_date_09.08.2019.pdf
  8. Section 88 of consumer protection act 2019.

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