In August 2019, the Consumer Protection Act, 2019 repealed the 1986 Act. Because of the changing economic liberalization, globalization of markets and digitalization of products and services the Act was amended from time-to-time. But, its practical implementation was far from fulfilling its objective of providing better protection of the interests of consumers.
Keeping the same objective in mind, the legislators this time has expanded the scope of the Act by bringing within its purview advertising claims, endorsements and product liability all of which play a fundamental role in altering consumer behavior and retail trends in the 21st century.
Amendments in the Act:
The 2019 Act, also includes those people who make purchases online under the category “consumer” defined in Section 2(7) of the Act. An additional provision of endorsement of goods and services is being covered under the 2019 Act. This has been done to prevent false or misleading advertisements.
The definition of “goods” provided under Section 2(21) is being enlarged by including the “food” as defined in the Food Safety and Standards Act, 2006. This would also bring the meteorically rising number of food delivery platforms within the fold of the 2019 Act.
In the definition of services given under Section 2(42) the “telecom services” has been added in the text of the definition of services given under the 2019 Act. But on the other hand, the telecom service as defined under the Telecom Regulatory Authority of India Act is not being included under the Consumer Protection Act, 2019.
The concept of “product liability” has been introduced in the Act of 2019. Whereby the manufactures/sellers have been made responsible for the harm caused to the consumer by defective products or from deficiency in services. Under this, the application for compensation can be filed under the State Commission or District Commission as per Section 2(35). This concept was not there in the previous Act of 1986.
Another major newly introduced concept is that of “unfair contracts”. These are aimed to protect consumers from unilateral and unreasonable contracts which are in favour of manufactures or service providers.
“Unfair Trade Practice”
The definition of “unfair trade practice” is being expanded to include electronic advertising. By which is misleading, as well as refusing to take back or withdraw defective goods or to refund the consideration within the period stipulated or in the absence of such stipulation, within a period of thirty days. It is now also an offence if any personal information, given in confidence and gathered in the course of a transaction, gets disclosed.
Amendments related to the Jurisdiction-
The pecuniary limits of the District Commission have been substantially increased to Rs. 1 Crore. The jurisdiction of filing the complaint under the Consumer Commissions has also been expanded to where the complainant resides or personally works for gain. However, in the Act of 1986, the complaints had to be instituted where the opposite party resides or conducts business, or where the cause of action arose.
As per the New Act-
The issue of the admissibility of the complaint is to be decided within the 21 days. If not decided, then the complaint shall be deemed to have been admitted. The 2019 Act also specifies the concept of judicial review. Which would allow Consumer Commissions to review their orders, thereby reducing the burden of appeals.
And the appeals which will move from State Commission to National Commission may only be made where the substantial question of law is involved. The appeals from the National Commission to the Supreme Court will only be made which originated in the National Commission. The period prescribed for preferring appeals has now also been made more stringent.
Challenges for the Future
A Central Consumer Protection Authority has been created to regulate the matters relating to the violation of the right of consumers, unfair trade practices and false or misleading advertisements. The Authority can also file complaints and intervene in matters before the Consumer Commissions.
Duties and Responsibilities
However, the functioning of this Authority is unclear. The task of investigation is also being given to the District Collectors. Therefore, there is considerable overlap between the duties and responsibilities of the District Collector and the newly made Authority. The Authority has the power to issue directions and penalize the manufacturers for misleading advertisements. The Appeals from the Authority will be preferred before the National Commission.
Further, the confusion of whether the matters currently pending before the Consumer Commissions will continue. Or if they are likely to get transferred on account of the change in the pecuniary jurisdiction.
The 2019 Act is a positive step towards reformation and development of consumer laws. In the light of dynamically changing socio-economic developments. A similar example of the Act of protecting the interest of the consumer is that homebuyers being considered Financial Creditors under the Bankruptcy Code. And the coming into effect of Real Estate (Regulation and Development) Act, 2016.
But the real test for the Act of 2019 is that of the execution/implementation of the newly made laws. The changes that are being made in the Act is an attempt to create transparency in the marketplace. Through legislative protection with a view to ensure that consumer interests are above all else.