20th July 2020 was a big day for the Consumer rights movement in India. On this day the new Consumer Protection Act, 2019 came into force after receiving the President’s assent on 9 August 2019.
Till the mid-80s there were no specific enforceable consumer laws and all the remedies available to the consumers were mainly reactive and not compensatory. The high cost of litigation and the long-drawn-out legal process were some of the other pain-points. Hence the need was felt to protect the interest of the consumers.
This gave way for the Consumer Protection Act, 1986 (COPRA) to protect the interests of consumers in India. It came into force on December 24, 1986 after being enacted by the parliament and went on to check unfair trade practices, defects and deficiencies in products and services in India. It also led to the establishment of a series of consumer forums and appellate courts all over India. The Act, for the first time, introduced the concept of ‘consumer’ empowered by certain exclusive rights which were clearly spelt out under the Consumer Protection Act, 1986.
The COPRA proved to be a milestone and went on to protect the interests of the consumers and safeguard their rights. It provided the framework to protect consumer interests, by spreading awareness about their rights through “jago grahak jago” campaign and establishment of consumer councils. It also provided a platform for consumers to settle their disputes in a cost-effective and time-bound manner.
The new Consumer Protection Act, 2019 now provides for a Central Consumer Protection Authority (CCPA) as the much needed regulatory body to promote, protect and enforce the rights of consumers. Besides streamlining the existing consumer dispute redressal machinery the new Act aims to protect and strengthen the rights of the consumers by imposing strict liabilities and penalties on manufacturers, service providers, misleading advertisers and providing for alternate consumer disputes resolution through mediation. All in all, it is a big step forward for timely and effective settlement of consumer disputes.
The new Act defines the “consumer” as a person who “buys any goods” and “hires or avails of any service” for consideration but does not include a person who obtains goods for resale or goods or service for any commercial purpose. The Act seeks to widen the scope of this definition by including even those people who “buy any goods” and “hire any services” both online and offline through teleshopping, direct selling or multi-level marketing.
The most outstanding feature of the Consumer Protection Act, 2019 is the provision for a Central Consumer Protection Authority (CCPA) – a regulatory authority duly empowered to impose penalties, recall goods, cause the withdrawal of services, and provide a refund. The CCPA will be empowered to conduct investigations into violations of consumer rights and institute complaints/prosecution, order recalls of unsafe goods and services and order discontinuance of unfair trade practices and misleading advertisements. The Act provides for establishing an investigation wing headed by the Director-General who shall be appointed by the central government for conducting investigations as per the order of the CCPA. The CCPA would also be empowered to impose penalties on manufacturers/endorsers/publishers of misleading advertisements.
Another feature of the Act, the Consumer Protection (E-commerce) Rules, 2020 would help regulate the e-commerce entities that would be required to provide information to consumers, regarding the return, refund, exchange, warranty, delivery, shipment, mode of payment, and grievance redressal mechanism.
The Act not only defines “e-commerce” as a means for buying or selling of goods or services in any online marketplace or online auction site but also seeks to protect the rights of consumers due to unfair trade practices in e-commerce and direct selling deals. Besides seeking to protect the rights of the e-consumers the Act enables them to proceed against the e-commerce websites in the event of any infringement or violation.
These would help the consumer make an informed decision at the pre-purchase stage and make it binding on manufacturer, or sales platform to acknowledge the receipt of the consumer complaint within 48 hours and sort out the matter within one month from the date of receipt. The e-commerce entities will also have to appoint a grievance officer for redressal of the consumer grievance.
The best part of the story is that instead of being mere suggestion the Consumer Protection (E-commerce) Rules, 2020 would make it mandatory for the seller to withdraw or take back goods and services that are defective, deficient, delivered late, or do not meet the description on the platform. The new legislation also prohibits e-commerce companies from making an unjustified and unreasonable profit by manipulating the price of the goods or services. The new law will also make it mandatory on the manufacturer or service provider to compensate the buyers for any injury or damage caused by defective product or deficiency in services like manufacturing defect, design defect, fake, imperfect, faulty, or false description as well as adulterated or spurious goods.
The new law empowers the courts to suspend the license of such spurious goods supplier for a period of up to two years in case of the first conviction, and cancel the license permanently in case of second or subsequent conviction.
Another step forward in the new legislation is the provision for speedy and inexpensive alternate dispute resolution mechanism. Under the new law in case both the parties agree they may go for mediation. There will be no appeal against settlement worked out through proceedings held in the Mediation Cells under the purview of the Consumer Commissions.
According to the Union Minister for Consumer Affairs, Food & Public Distribution Ram Vilas Paswan, the new Act provides for simplifying the consumer dispute adjudication process in the consumer commissions, which include, 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 complaints if the question of admissibility is not decided within the specified period of 21 days.
Besides general rules, Consumer Protection Act, 2019 describes the framework for Central Consumer Protection Council Rules, Consumer Disputes Redressal Commission Rules, Appointment of President & Members in State/District Commission Rules, Mediation Rules, Model Rules and E-Commerce Rules and Consumer Commission Procedure Regulations, Mediation Regulations and Administrative control over State Commission & District Commission Regulations.
The Act also provides for the constitution of Central Consumer Protection Council, an advisory body on consumer issues, headed by the Union Minister of Consumer Affairs, Food and Public Distribution with the Minister of State as Vice Chairperson and 34 other members from different fields. The Council, which has a three-year tenure, will have Minister-in-charge of consumer affairs from two States from each region- North, South, East, West, and NER. There is also provision for having a working group from amongst the members for specific tasks.