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Key Features of Consumer Protection Act, 2019

August 31, 2019

By Rupin Chopra and Priyanka Batra

The Union Food and Consumer Affairs Minister, Mr, Ram Vilas Paswan introduced the Consumer Protection Bill, 2019 in the Lok Sabha on July 29, 2019. The said Bill replaces the Consumer Protection Act, 1986.

The Consumer Protection Bill, 2019 came into effect from August 09, 2019.

  • Introduction of new terms:

The Act introduces various new terms like “advertisement”, “design”, “direct selling”, “endorsement”, “product”, product liability”, “product manufacturer”, “product seller”, “e-commerce” etc. which helps in educating and giving a better understanding to the consumers and the manufacturers.

  • Redefining rights of consumers:

The Act redefines the right of the consumers in the following manner:

  1. right to be protected against marketing of goods and services which are hazardous to life and property;
  2. right to be informed of the quality, quantity, potency, purity, standard and price of goods or services
  3. right to be assured of access to a variety of goods or services at competitive prices;
  4. Right to seek redressal against unfair or restrictive trade practices.
  5. Right to seek redressal for deficiency of services.
  • Setting up of Central Consumer Protection Councils:

The Central Government shall, by notification establish with effect from the date as specified in the notification set up Consumer Protection council which shall be known as Central Council. Similarly, the State Government shall by notification establish the State Consumer Protection Councils and the District Consumer Protection Council. The main  function of the Consumer Protection Councils is to be  an advisory council which shall advice on the promotion and protection of the consumers’ rights.

  • Setting up of Central Consumer Protection Authority: 

A Central Consumer Protection Authority (CCPA) shall now be set up to promote, protect and enforce the rights of the consumers.

Its main function would be:

  1. To regulate matters related to violation of consumer rights, unfair trade practices, and misleading advertisements.
  2. CCPA shall have an investigation wing, headed by a Director-General, which may conduct inquiry or investigation into such violations.
  3. Inquiring into violations of consumer rights, investigating and launching prosecution at the appropriate forum
  4. passing of orders to recall goods or withdraw services that are hazardous,
  5. Reimbursement of the price paid for the product, and discontinuation of the unfair trade practices
  6. To issue directions to the concerned trader/ manufacturer/ endorser/ advertiser/ publisher to either discontinue a false or misleading advertisement, or modify the same
  7. Imposition of penalties
  8. Issuing safety notices to consumers against unsafe goods and services.
  9. Imposition of penalties on a manufacturer or an endorser of up to Rs. 10 lakh and imprisonment for up to two years for a false or misleading advertisement.  In case of a subsequent offence, the fine may extend to Rs. 50 lakh and imprisonment of up to five years.
  10. CCPA shall also have the right to prohibit the endorser of a misleading advertisement from endorsing that particular product or service for a period of up to one year. For every subsequent offence, the period of prohibition may extend to three years.

However, there are certain exceptions when an endorser will not be held liable for such a penalty.

  • Setting up of Consumer Disputes Redressal Commissions:

A Consumer Disputes Redressal Commissions (CDRCs) shall be set up at the District, State and National level enabling a consumer to file a complaint with CDRCs in relation to the following:

  1. unfair or restrictive trade practices
  2. defective goods or services
  3. overcharging or deceptive charging;
  4. Offering of goods or services for a sale which may be hazardous to life and safety.
  5. Complaints/ challenging against an unfair contract which can only be filed with State and National commissions.
  • Enhancement of pecuniary jurisdiction:
District CDRC Upto one crore
State CDRC Rs. one crore not exceeding Rs. 10 crore
National CDRC over Rs. 10 crore
  • Mediation

For the purpose of mediation, the National Commission or the State Commission or the District Commission, as the case may be, shall prepare a panel of the mediators to be maintained by the consumer medication cell attached to it.

  • Product liability:

Product liability means the liability of a product manufacturer, service provider or seller to compensate a consumer for any harm or injury caused by a defective good or deficient service.  To claim compensation, a consumer has to prove any one of the conditions for defect or deficiency, as given in the Bill.

  • Measures to Prevent Unfair Trade Practices in E-commerce

The Bill in the wake of augmented e-commerce activities and consequent consumer related disputes renders an exclusive definition of “e-commerce” and states that it means buying or selling of goods or services including digital products over digital or electronic network.

The Bill empowers the Central Government to take such measures in the manner as may be prescribed to protect the interest and rights of consumers.

  • Filing of Consumer Complaints Electronically

In view of the onset of technological advancement and digitization, the Bill vide Section 35 provides for filing of consumer complaints electronically. The statutory provision enumerates that a complaint, in relation to any goods sold or delivered or any service provided, may be filed with a District Commission electronically in such manner as may be prescribed.

  • Miscellaneous

For preventing unfair trade practices in e-commerce, direct selling and also to protect the interest and rights of consumers, the Central Government may take such measures to protect the interest of the consumers.

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