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The Consumer Protection Act, 2019 replaced the three decade old Consumer Protection Act of 1986.

The new act brings in some substantial changes beneficial to the consumer by adding more remedial measures and expanding the operation of the act in areas like online selling as well. The transactions through electronic means or by teleshopping or direct selling or multi-level marketing have come under the purview of this act. The act has come into effect on 20th July 2020.

Increase in pecuniary jurisdiction

The new act has increased the pecuniary jurisdiction of the consumer redressal commissions, popularly known as consumer courts, present at the district, state and national levels. It means that the value of the cases to be taken up by these commissions at the three levels has increased.  

Now the District Commission can take up cases upto 1 Crore; the State Commission can take up cases above 1 crore to 10 Crore; and the National Commission can take up cases of above 10 crore.

This change will result in filing of more complains before the District Commissions, which remains close to the consumers within their district itself.

Consideration determines the Jurisdiction

Another crucial change is in the calculation of the value of each case for the purpose of determining the pecuniary jurisdiction of each case.

Now the money a consumer spends on buying the product till that time will determine the value of the case. In earlier act of 1986, the total value of the purchased goods/services was considered to calculate the value. The compensation claimed was also taken into consideration while determining the pecuniary jurisdiction.

That means it is not the maximum retail price but the amount paid by the consumer on the products or services will be basis of determining the value of each case.  In other words, the value of the consideration paid by the consumer will alone be taken into consideration while determining the pecuniary jurisdiction.

Consumer can file complaint anywhere

The act now allows the consumer to file his/her complaint with the commission from anywhere. This is a great relief to the consumer.

Earlier they were required to file complaint in the area where the seller or service provider was located.

In online purchase the seller could be located anywhere. The act empowers the consumer to seek a hearing through video conferencing. It will save his money and time.

Seller has product liability

Product liability action means the responsibility on the part of the product manufacturer, product seller or product service provider for any harm caused to a consumer. A consumer can make a claim under product liability action against the harm caused to him.

A claim under product liability action can now be made by the consumer against:

  • any loss due to damage to any property other than the product itself
  • personal injury, illness or death
  • mental agony or emotional distress attendant to personal injury or illness or damage to property.

Therefore a manufacturer, seller or a service provider has to compensate a consumer if their good/service causes injury or loss to the consumer due to manufacturing defect or poor service. That means, if a pressure cooker explodes due to a manufacturing defect and harms the consumer, the manufacturer or seller is liable to compensate the consumer for the injury.  

Earlier, the consumer would only be compensated with the cost of the cooker alone by the consumer court. The consumer had to seek compensation only through a civil case which normally may take years to conclude.

Product liability is now extended to service providers and sellers along with manufacturers. Therefore the e-commerce websites may not be able to escape anymore by claiming that they are mere aggregators.

Law applies to E-commerce also

The act applies to E-commerce also. All the laws that apply to direct selling will now be applicable to E-Commerce henceforth.

The online platforms or sellers will have to disclose the details of the sellers, such as their address, website, email, etc and other conditions related to refund, exchange, terms of contract and warranty on their website to ensure transparency.

The onus of ensuring that no counterfeit product is sold on these online selling platforms will also lie with them. If any such product is reported or recognised, the online company could be penalised.

Proposes to have a Central Consumer Protection Authority

The act proposes to establish a Central Consumer Protection Authority (CCPA) to address issues related to consumer rights, unfair trade practices, misleading advertisements and penalties for selling faulty or fake products.

The broad purpose of CCPA is to strengthen the existing consumer rights. The CCPA will regulate the manufacturers, sellers and service providers but may not address the disputes and grievances of customers directly.  

Mediation gets a central role

In resolving consumer disputes mediation becomes a key element.  The act authorises specifically to send a dispute where there is a possibility of settlement to a formal mediation process by a mediator from a formal panel within five days after obtaining written consents from the parties.

If mediation fails to reach out a settlement, the Commission will subject the dispute to the natural process of resolution.

Some other provisions the act provides for

In case sample analysis of any product is needed to resolve a consumer dispute the commission will refer the sample to a laboratory. The consumer complaints will be heard by affidavits or documents but online examination is also possible in essential cases.

The Commission has power to review its on order suo motu or on an application in case there is an apparent error. Every order of a Commission is tantamount to a decree of a civil court and any failure to comply with the orders will lead to punishment including imprisonment up to three years.

Consumer can take action on selling f goods hazardous to life and safety without following standard practices. Similarly complaint can be made against misleading advertisements which give false assurances.

Conclusion

The new act makes the consumer more powerful in many ways. It addresses some of the key problems they faced earlier. If the commissions take its subtleties further ahead the act would be a great advantage for the consumer. No doubt, the act is a welcome legislation in favour of the consumer.

Additional reading

The Consumer Protection Act 2019, available at http://egazette.nic.in/WriteReadData/2019/210422.pdf

 

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K Rajasekharan Online
on 24 September 2020
Published in Others
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