Explainer: What is new about the Consumer Protection Act, 2019?
Sai Krishna Muthyanolla
September 16, 2019
The Consumer Protection act, 2019 was recently passed by both houses of parliament. How does this differ from the 1986 act and what is in it for the consumers? Here is an explainer.
The new Consumer Protection bill was passed by the
Parliament on 06 August 2019 when it was passed through a voice vote in theRajya Sabha. The bill was earlier presented and passed in the Lok Sabha on 30 July 2019.This bill would replace Consumer
Protection Act, 1986.
But how is the new act different from the 1986 act? We look at someof the important aspects of the 2019 act and how consumers can benefit fromthese provisions.
Central Regulatory Authority & Product Liability among key features
of the new act
Consumer
Protection Act, 2019 has proposed certain new provisions which were notpart in the earlier Consumer Protection Act, 1986.  Few of the key provisions which vary from theearlier Consumer Protection act are the following
What are the Rights of the Consumers?
The new bill has defined 6 rights of
the consumers. Which include:
What is the role of the Central Consumer Protection Authority?
One of the important provisions of the new act is the proposal toset up a Central
Consumer Protection Authority (CCPA) by the Central Government. The statedpurpose of CCPA would be ‘to promote, protect and enforce the rights of the
consumers.’
An investigative wing headed by a Director General would conductinquires and investigations into any violations relating to consumer rights,unfair trade practices and misleading advertisements. The earlier ConsumerProtection Act, 1986 did not have any such provision for a regulator.
The important functions of CCPA would include:
In the statement of objects & reasons of the new bill, it ismentioned that the ‘establishment of an executive agency like the CCPA to
promote, protect and enforce the rights of consumers; make interventions when
necessary to prevent consumer detriment arising from unfair trade practices and
to initiate class action including enforcing recall, refund and return of
products, etc. fills an institutional void in the regulatory regime. Currently,
the task of prevention of or acting against unfair trade practices is not
vested in any authority. This has been provided for in a manner that the role
envisaged for the CCPA complements that of the sector regulators and
duplication, overlap or potential conflict is avoided.’
Then what about the Consumer Disputes Redressal Commissions?
Like in the case of the 1986 act,  Consumer
Disputes Redressal Commissions (CDRCs) would be setup at various levels. TheCDRCs would be set up at multiple levels – district, state and national.
Consumers can file complaints with the CDRCs regarding any of thefollowing.
Complaints for all these can be filed in the district level CDRCsand all these complaints can be made online (electronically).
Jurisdiction of CDRCs: Each of theselevels of CDRCs have varying jurisdiction based on the value of goods andservices for which the complaint is being made.
What is the appellate process?
The parties involved in the complaint have the right to appeal inthe higher forums in respect to any ruling provided in the respective CDRCs.
What about product liability?
Product
Liability is a key aspect introduced in this bill that would benefit theconsumers. Under the provisions of this bill, a manufacturer or a serviceprovider would be required to compensate the consumer in case of any loss orinjury due to a manufacturing defect in the product or a poor service.
This differs from the existing provision where only the cost of theproduct was compensated by the manufacturer or the service provider and not thecost of the loss or injury as in the current proposal. The provision forseeking compensation for the loss or injury was only through the civil courts,which have been observed to take a long time to resolve.
E-Commerce would also be covered
E-Commerce has been gaining traction over the past few years and ConsumerProtection Act, 1986 does not have any provisions to deal with thesetransactions.  As per the new act, allthe laws that apply for direct selling would also be applicable for E-Commerce.
One of the key guidelines in this regard is that the E-Commerceplatforms (Amazon, Flipkart etc.) are required to disclose the details of thesellers. Apart from the manufacturers, product liability would also include thesellers as well as the service providers i.e. the e-commerce aggregators.
Guidelines regarding Misleading advertising and Endorsers
The bill lays down guidelines for any misleading
advertisements for a product or service whicheffects the consumer. It could lead to a prison term of two years and a finewhich can be up to Rs. 10 Lakhs. Any subsequent offence could lead to animprisonment of up to 5 yeas and a fine extending to Rs. 50 Lakhs.
The new bill, has provisions which allow CCPA tofix the liability even on the endorser of any misleading advertisement. It canalso prohibit an endorser from making endorsement for any product or service for a periodof one year if found necessary. Any subsequent violation could result inprohibition from endorsing any product or service for a period of 3 years. Thisis expected to make the brand ambassadors exercise due diligence on theveracity of the claims being made about a product or a service before choosingbrands to endorse.
The bill simplifies consumer litigation and
takes cognizance of emerging trends, but implementation remains a challenge
The electronic filing of complaints &permission to attend the hearing through video conference are very importantsteps in simplifying the process of complaints. Further, the idea of mediationcould also help in quicker disposal of cases. With the inclusion of E-commerceunder the gambit of consumer laws, the bill takes cognizance of the emergingtrends in the marketplace.
However, it remains to be seen how all the new provisions will be implemented since it will require augmenting the physical & human resources at every level and that will require additional allocation of funds both by the Central & State Governments.
Featured Image: Consumer Protection Act, 2019