CONSUMER PROTECTION ACT- Critical Analysis

CONSUMER PROTECTION ACT:-
With the advent of industrialization, trade and commerce saw rapid increase which led to forming of a recognized segment of society – the consumers. From the very beginning the consumers or the buyers had been disadvantaged with inferior bargaining power which led to the manufacturers and sellers taking advantage of the superior position. To protect the interest of such consumers various legislations have been brought up by different countries over time.

In India, before 1986 consumer protection was governed by various miscellaneous acts like The Drugs Control Act, 1950, The Trade and Merchandise Marks Act, 1958, The Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954, etc. There was a need felt for a more comprehensive legislation to remedy the exploitation of consumers as these Acts were unable to provide appropriate remedies. Based on the framework laid down by the United Nations, finally a Consumer Protection Act (COPRA) came into effect in 1986. With the ever-changing nature of trade and commerce, consumer protection laws have simultaneously evolved and changed over the years As of now Consumer Protection Act, 2019 acts as a comprehensive legislation for consumer protection law in India.

Development of Consumer Protection Law in India

Proper legislative attempts in regard with regulating consumer laws started with the British Colonial rule. Statutes like Indian Contract Act, 1872, Sale of Goods Act, 1930 and Drugs and Cosmetics Act, 1940 were the most prominent ones. The legislative intent with the Consumer Protection Act, 1986 (“Act 1986”) was to provide an informal consumer redressal system where an average buyers grievances could be addressed against a seller. For the first time specific adjudicating bodies were formed to address consumer grievances. The establishment of consumer forum was path breaking in this regard. Statute allowed awarding both monetary and correctional damages to the consumer by the seller. Throughout the Act, attempts are made to keep the Act simple so that the process doesn’t get complicated and the redressal becomes easy, quick and cheap.

Over the years the Act has been amended three times to majorly widen the scope of powers given to the consumer courts.

CONSUMER PROTECTION ACT, 2019

Number of new changes have been introduced in the new Consumer Protection Act, 2019 (“Act 2019”). The major changes explained briefly are:

1. Digitalization:

The new Act has inculcated various new provisions with regard to digitalization. This welcome change had become necessary given the overwhelming advent of e-transactions. Consumer rights also had to be evolved accordingly. The changes in this regard were:

Definition of consumer expanded:
In the definition of ‘consumer’ given in the code an explanation by way of clause was added[1] to expressly include offline or online transactions through electronic means or by teleshopping or direct selling or multi-level marketing in the expressions “buys any goods” and “hires or avails any services”.

E-filing: The new Act 2019 also allows for the complaints to be filed electronically.

2. Jurisdictional Changes:

Pecuniary Jurisdiction Changed:
Given the inflation and taking into consideration the change in value of rupee, pecuniary jurisdiction was enhanced across all 3 (three)forums. According to the new Act district forums can hear matters where value of goods and services does not exceed Rs. 1,00,00,000 (Rupees One Crore Only), state forums can hear the matter where value of goods and services exceeds Rs. 1,00,00,000 (Rupees One Crore Only) but under Rs. 10,00,00,000 (10 crores). National commission can now hear matters where such value exceeds Rs. 10,00,00,000 (Rupees Ten Crore Only).

Enabling filing from place of residence or work of consumer:
As per the provisions of the previous Act 1986, a consumer can file a complaint in the local jurisdiction of the forum where the purchase took place or the place where the seller’s registered office is located. The new Act 2019 now enables the consumers to file the complaint in the local jurisdiction at the place of their residence or place of work as well.

3. Establishment of Central Consumer Protection Authority:

As per Section 10(1) of the Act 2019, the Central Consumer Protection Authority was established to regulate matters relating to violation of rights of consumers, unfair trade practices and false or misleading advertisements which are prejudicial to the interests of the public and consumers and to promote and enforce the rights of consumers as a class. The functions of the CCPA are regulatory, investigative and adjudicative simultaneously.

4. Product Liability:

The concept of product liability has been introduced in the Act which affixes the liability for faults in goods as well as services to the product manufacturer, product service provider and the product seller. The interesting aspect of the provisions is that now the liability for the product is attached more towards the manufacturers than the seller. The Act 2019 also makes out certain exceptions to these liabilities where the consumer is primarily at fault and the product has been misused, altered or modified.

5. Introduction of Unfair Trade Practices:

A broad definition of Unfair Trade Practices[2] has also been introduced under the Act 2019. This definition covers a broad range of unfair or deceptive practices in promoting the sale, selling or use of any goods or services. This includes making false statements in regard with goods and services, false representations, guarantees not based on proper testing, and in general misleading the public.

6. Penalty against false or misleading advertisements:

In an attempt to curb misleading advertisements, the Act 2019 has granted wide powers to CCPA to curb misleading advertisement. The CCPA[3] after investigating that an advertisement is false or misleading and is prejudicial to the interest of any consumer or is in contravention of consumer rights, by order issues directions to the concerned trader or manufacturer or endorser or advertiser or publisher, as the case may be, to discontinue such advertisement or to modify the same in such manner and within such time as may be specified in that order. Notwithstanding the orders the CCPA may impose penalty in respect of false or misleading advertisement to the tune of Rs 10,00,000/- (Rupees Ten Lakhs Only) or imprisonment for up to 2 (two) years.
7. Alternate Dispute Resolution mechanism introduced:

For cost effective and speedy disposal of matters by the Legislature, the Act 2019 has been included in Part V of the Act included Mediation. The Act 2019 provides that every proceeding before the State, District, National commission where element of settlement exists which is acceptable to the parties shall be referred to mediation. The central government recently on 15th July 2020 notified Consumer Protection (Mediation) Rules, 2020. The said Rules however clearly list out matters which under no circumstance can be mediated, such as, matters relating to medical negligence resulting in death or grievous injury, matters relating to public interest litigation, etc.
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CONSUMER PROTECTION ACT-Critical Analysis
VANDANA YADAV
17TH MAY, 2021

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