CONSUMER PROTECTION ACT, 2019: W.E.F – 20th JULY 2020

CONSUMER PROTECTION ACT, 2019: W.E.F – 20th JULY 2020

This Article is written by Ananya Verma, a student of MSR College.

Introduction

Consumer Protection Act, 1986 was an Act of the Parliament enacted in 1986 to protect the interests of the consumers in India, which is now replaced by the Consumer Protection Act, 2019. The Consumer Protection Bill, 2019 was introduced in the Lok Sabha on 8th July 2019 by the Minister of Consumer Affairs, Mr. Ram Vilas Paswan. It was passed by Lok Sabha on 30th July 2019 and later passed in Rajya Sabha on 6th August 2019. The bill received assent from President Shri Ram Nath Kovind on 9th August and was notified in The Gazette of India on the same date. The act came into effect by 20th July 2020. The act aims to protect and strengthen the rights of the consumer by establishing authorities, imposing strict liabilities and penalties on the product manufacturers, electronic service providers, misleading advertisement, and by providing additional settlement of consumer disputes through mediation. In addition to this, the act has also brought structural changes in the Consumer courts in the number of members, compensation, and staff.

Who is a Consumer?

According to the act, a person is called a consumer who avails the service and buys any good for self-use, but if a person buys any good and avails any service for resale or commercial purpose then is not considered as a consumer. The term “consumer” is defined under Section 7 of the Consumer Protection Act, 2019 as: ‘any person who buys any goods for consideration or hires/avails any service for consideration’.

Meaning of Consumer Protection:

The Consumer Protection Act safeguards and encourages consumers to speak against the inadequacy and flaws in goods and services. If traders and manufactures practice any illegal trade, this act protects their rights as a consumer. It covers all the goods and services of all public, private or cooperative sectors, except those exempted by the Central Government. The act provides a platform for a consumer where they can file their complaint and commission takes action against the concerned supplier and compensation is granted to the consumer for the inconvenience caused.

Features of the Consumer Protection Act, 2019:

  • Establishment of the Central Consumer Protection Authority (CCPA)

One of the most significant additions to the 2019 act is the proposal to establish the Central Consumer Protection Authority, so as to regulate, protect, and enforce the interest of the consumers and matters related to unfair trade practices. The CCPA has been provided with vast powers to inquire, investigate and take action against violations of the 2019 Act and has also been granted the authority to initiate suo-moto proceedings against violators and file class-action suits on behalf of the multiple consumers which makes it an effective tool to curb mass violation of consumer interest.

  • Penalty and Prohibition against misleading and false advertisement

Another significant power the Central Consumer Protection Authority has been showered with is the power to take action and impose penalties against misleading and false advertisements as well as against any endorser or manufacturer of such advertisement. The CCPA may impose a penalty of up to Rs.10 Lakh and 2 years of imprisonment for the first violation. However, if repeated the offence may attract a fine of Rs.50 Lakh and also may be sentenced to imprisonment for up to 5 years.

  • Structural changes & Consumer Dispute Redressal Commission

The act has provided the provision of the establishment of CDRCs, at the national, state, and districts level. District forum is renamed as District Commission (District Consumer Dispute Redressal Commission). The CDRCs will entertain complaints related to:

  • Overcharging or deceptive charging.
  • Unfair or restrictive trade practices.
  • Sale of hazardous goods and service which may be hazardous to life.
  • Sale of defective goods and services.
  • Rules on E-commerce
  • E-commerce entities are required to provide information to consumers, relating to return, refund, exchange, warranty and guarantee, delivery and shipment, mode of payment, grievance redressal mechanism, payment method, the security of payment methods, the security of payment methods, charge back options and country of origin.
  • E-commerce will have to acknowledge the receipt of any consumer complaint within 48 hours and redress the complaint within one month from the date of receipt.
  • Sellers cannot refuse to take back goods or withdraw service or refuse refunds, if such goods or services are defective, deficient, delivered late, or if they do not meet the description on the platform.
  • Rules also prohibit the e-commerce companies from manipulating the price of the goods or service to gain unreasonable profit through unjustified prices.
  • Pecuniary Jurisdiction

The act has defined the criteria of the Consumer Disputes Redressal Commission.

  • The National Commission will hear complaints worth more than Rs.10 crores.
  • The State Commission will hear complaints when the value is more than Rs.1 crore but less than Rs.10 crore.
  • The District Commission will hear complaints when the value of goods or services is up to Rs.1 crore.
  • Other changes are
  • The opposite Party needs to deposit 50% of the amount ordered by the District Commission before filing an appeal before the State Commission, earlier the ceiling was maximum of Rs. 25,000/-, which is now removed.
  • The limitation period for filing an appeal to the State Commission is increased from 30 days to 45 days while retaining the power to condone the delay.
  • State Commission shall have a minimum of one President and four members.
  • Section 49(2) and Section 59(2) of the Act gives power to the State Commission and National Commission respectively to declare any terms of the contract, which is unfair to any consumer, to be null and void.
  • A second appeal to National Commission has been provided under section 51(3) if there is a substantial question of law involved in the matter.
  • The power of revision can be exercised by the National Commission under section 58(1) (b) and by State Commission under 47(1) (b) of the Act.
  • The power of review has been conferred to District Commission, State Commission, and National Commission under section 40, section 50, and section 60 respectively.
  • The National Consumer Dispute Redressal Commission can hear appeals against the order of Central Authority by virtue of Section 58 of the Act.
  • The period of limitation in the filing of complaint remains 2 years with a provision for condonation of delay power under section 69 of the Act.
  • Section 70 provides for administrative control of the State Commission over the District Commission and that of National Commission over State Commission.
  • Section 71 confers the power of execution as provided Under Order XXI, The Code of Civil Procedure, 1908 with such limitation as provided in the section.
  • Consumers can now institute a complaint from where they reside or personally work for gain.
  • Mediation is given statutory status by the way of introduction of section 74 in the new act, so now courts can refer settlement through mediation.
  • Chapter III of the Act provides for the creation of a Central Authority to regulate matters relating to a violation of rights of consumers, unfair trade practices, and false or misleading advertisement which are prejudicial to the interest of the public and consumers and to promote, protect, and enforce the right of the consumers as a class.
  • The Central Authority shall have an Investigation wing headed by a Director-General for the purpose of conducting an investigation or inquiry under this act.

Conclusion:

We can conclude that the new Consumer Protection, 2019 act covers the limitations in the existing act. The act vests more power on the hands of district commission and state commission and also reducing the workload of the National Commission. With the implementation of the provision of the Act, the popular phrase ‘buyers beware’ can be replaced with ‘sellers beware’ or ‘manufactures beware’ in case they are found in contravention of the Act.

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