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Consumer protection is the practise of protecting buyers of goods and services from unfair trade practices. The Consumer Protection Act, 2019 was published in the official gazette on 9 August 2019 and came into force on 20 July 2020, replacing the previous Consumer Protection Act of 1986. The updated framework aims to offer enhanced safeguards for consumer rights, simplified procedures for lodging complaints, mediation for resolving disputes, and more stringent provisions for product liability.

Key Provisions of Consumer Protection Act, 2019

• Wider Definition of a Consumer:

The definition of "consumer" has been broadened by the New Act. Any person who purchases goods, whether through offline or online transactions, electronic means, teleshopping, direct selling, or multi-level marketing, is now included in the definition. The previous Act did not cover e-commerce transactions, and the New Act fills that gap.

• Establishment of Central Consumer Protection Authority:

The New Act calls for the creation of a regulatory body known as the Central Consumer Protection Authority (CCPA). The CCPA has been given broad enforcement powers, including the ability to take suo-moto actions, recall products, order reimbursement of the price of goods/services, cancel licences, and file class action suits, in cases where the consumer complaint affects a group of people.

• E-Filing of Complaints:

The Consumer Protection Act of 2019 offers consumers the convenience of filing complaints online. To support this, the Central Government has established the E-Daakhil Portal, which provides a cost-effective and efficient means for consumers across India to access the relevant consumer forums in the event of a dispute. Moreover, the Act incorporates provisions that enable individuals to engage in hearings or examinations through video-conferencing, with the goal of reducing any inconvenience or mistreatment that consumers may encounter. These measures are intended to make the process more streamlined and consumer-friendly.

• Product Liability & Penal Consequences:

The new Act has introduced the notion of product liability, which encompasses the product manufacturer, service provider, and seller, rendering them accountable for any claims for compensation. The term 'product seller' is defined to incorporate a person who is involved in placing the product for a commercial purpose and as such would include e-commerce platforms as well.

E-commerce platforms cannot seek refuge by claiming that they function only as 'platforms' or 'aggregators'; such defense will not be considered valid. Under the New Act, manufacturers face greater liability risks compared to service providers and sellers. Manufacturers may be held liable in product liability suits even if they can prove that they were not negligent or fraudulent when making an express warranty for the product. The New Act does provide certain exceptions to liability claims, such as where the product has been modified, misused, or altered, in such cases the product seller will not be held responsible.

• Unfair Trade Practices

The new Consumer Protection Act defines 'unfair trade practises' as, among other things, disclosing personal information given by the consumer in confidence and refusing, after the sale of goods or services, to take back or withdraw defective goods or withdraw or discontinue deficient services and refund the consideration, if paid, within the stipulated period or, in the absence of such a stipulation, within 30 days.

• Unfair Contracts: 

The National and State Commissions have the authority to declare any contract term that is unfair to any consumer null and void. The Consumer Protection Act defines a "unfair contract" as a contract between a manufacturer/trader/service provider on the one hand and a consumer on the other, with terms that cause a significant change in the consumer's rights. This is a broad definition that includes manifestly excessive security deposits, the imposition of disproportionate penalties, unreasonable charges, obligations, or conditions on consumers, and the unilateral termination of a contract without reasonable cause.

• Revised Pecuniary and Territorial Jurisdiction:

In addition to the location of the opposing party and the occurrence of the cause of action, the territorial jurisdiction now includes the residence or place of business of the complainant. The pecuniary jurisdiction of the District, State, and National Commissions has been updated as follows:

• District Commission – upto ₹1 crore (previously up to Rs. 20 lakhs);

• State Commission – between ₹1 crore to ₹10 crore (previously up to Rs. 1 crore);

• National Commission – above ₹10 crore (previously above Rs. 1 crore)

• Mediation:

The 2019 Act has introduced mediation as an alternative dispute resolution mechanism and established a Consumer Mediation Cell to facilitate the process. If there is a likelihood of resolving a dispute between the parties, the District, State, or National Commission may direct them to provide written consent to settle their dispute through mediation.

• New penalties/punishments:

The act of manufacturing, storing, selling, distributing, or importing products containing adulterants and counterfeit goods is subject to punishment, with both fines and imprisonment based on the extent of harm caused, ranging from a prison term of six months with a fine of one lakh rupees to imprisonment for seven years with a fine of five lakhs. In instances where a consumer's death results from such actions, life imprisonment with a fine of ten lakh rupees may be imposed, with a minimum prison sentence of seven years.

References:

https://www.legalserviceindia.com/legal/article-3790-overview-of-the-new-consumer-protection-act-2019.html

https://www.amsshardul.com/insight/consumer-protection-act-2019-key-provisions/

https://www.azbpartners.com/bank/new-consumer-protection-regime-in-force/