| KEY TAKEAWAYS: CONSUMER PROTECTION ACT, 2019 |
The Digital Age has ushered in a new era of commerce and digital branding, as well as a new set of customer expectations. Digitisation has provided easy access, a large variety of choice, convenient payment mechanisms, improved services and shopping as per convenience. However, along the growth path it also brought in challenges related to consumer protection.
To address the new set of challenges faced by consumers in the digital age, The Ministry of Law and Justice vide its Notification no. 54/09-08-2019 has issued Consumer Protection Act, 2019 (“The Act”) which received the assent of President of India on 09th August, 2019 and come into force from 20th July, 2020which aims to provide the timely and effective administration and settlement of consumer disputes. The New Act seeks to replace the more than 3 (three) decades old Consumer Protection Act, 1986 (Act).
and was published in official Gazette of India on 09th August, 2019 The Act empower consumers and help them in protecting their rights through its various notified Rules and provisions like Consumer Protection Councils, Simplified Dispute Resolution Process, Mediation, Product Liability and Punishment for manufacture or sale of products containing adulterant/ spurious goods.
Salient Features of the Consumer Protection Act, 2019
| Establishment of the Central Consumer Protection Authority (“CCPA”) |
Establishment of the Central Consumer Protection Authority (“CCPA”) and rules for prevention of unfair trade practices by e-commerce platforms. Every e-commerce entity is required to provide information relating to return, refund and shipment, mode of payment, grievance Redressal mechanism, payment methods, security of payment methods, charge back options etc. including country of origin which are necessary for enabling the consumer to make an informed decision at the pre purchase stage on its platform. E-commerce platforms have to acknowledge the receipt of any consumer complaint within forty- eight (48) hours and redress their complaint within one (1) month from the date of receipt under this Act.
CCPA has been granted wide powers to take suo-moto actions, recall products, order reimbursement of the price of goods/services, cancel licenses and file class action suits, if a consumer complaint affects more than 1 (one) individual.
| Product Liability |
- Product Liability and Penal Consequences- This Act, introduces the concept of Product Liability and brings within its scope, the product manufacturer, product service provider and product seller, for any claim for compensation.
- The term ‘product seller’ is defined to include a person who is involved in placing the product for a commercial purpose and as such would include e-commerce platforms as well. The defense that e-commerce platforms merely act as ‘platforms’ or ‘aggregators’ will not be accepted anymore now.
- The act provides for punishment by a competent court for manufacture or sale of adulterant/spurious goods. The court may, in case of first conviction, suspend any license issue to the person for the period of upto two (2) years, and in case of second or subsequent conviction, cancel the license.
| Simplified Consumer Dispute adjudication process |
- Simplified Consumer Dispute adjudication process- this act also brings in the Simplified Consumer Dispute adjudication process in the consumer commissions, which includes, among others, empowerment of the State and District Commissions to review their own orders, enabling a consumer to file complaints electronically and file complaints in Consumer Commissions that have jurisdiction over the place of his residence, videoconferencing for hearing and deemed admissibility of the complaints if the question of admissibility is not decided within the specified period of Twenty One (21) days.
- An alternate Dispute Resolution mechanism of Mediation has been provided in the Act. This will simplify the adjudication process. A complaint will be referred by a Consumer Commission for mediation, whenever scope for early settlement exists and parties agree for it. Mediation will be held in the Mediation Cells to be established under the aegis for the Consumer Commissions. There will be no appeal against settlement through mediation.
- Furthermore, as per the Consumer Dispute Redressal Commission Rules, there will be no fee for filing cases upto INR Five Lakhs (Rs.5,00,000/-). There are provisions for filing complaints electronically, credit of amount due to unidentifiable consumers to Consumer Welfare Fund (“CWF”). The State Commission will furnish information to Central Government on a quarterly basis on vacancies, disposal, pendency of cases and other matters.
- Under the Act, besides the general rules, there are Central Consumer Protection Council Rules, Consumer Dispute Redressal Commission Rules, Appointment of President & Members in State/ District Commission Rules, Mediation Regulations and Administrative control over State Commission & District Commission Regulations.
| Benefits to the Consumers: |
- The Consumer Protection Act, 1986 was a single point of access to justice, which is time consuming. Additional swift executive remedies provided through Central Consumer Protection Authority (“CCPA”).
- Deterrent punishment to check misleading advertisement and adulteration of products.
- Product Liability provisions to deter manufacturers and service providers from delivering defective products or deficient services.
- Ease of approaching Consumer Commissions and Simplification of adjudication process.
- Scope for early disposal of cases through mediation.
- Provisions for rules for new age consumer issues, e-commerce and Direct selling.
| Conclusion |
Earlier under the Consumer Protection Act, 1986 a single point access to justice was given, which was time consuming. The new Act has been introduced after many amendments to provide protection to buyers not only from traditional sellers but also from the new e-commerce retailers/ platforms which is becoming the main platform for selling the goods especially in this new era of being normal
With the New Act all set to become the law, gone are the days, where the ‘consumer was asked to beware’. A consumer is now the one who assumes to be treated like a King. Hence, it is important for consumer driven businesses (such as, retail, e-commerce) to be mindful of the changes in the legal landscape and have robust policies dealing with consumer redressal in place
