Changes in India’s Consumer Protection Act 2019

With the new age of digitization in India, there has been a sudden growth in the e-commerce business.

Easy payment mechanisms make it convenient for the consumer to access a variety of choices at a click of a button. However, due to the spurt of digitization, there have been certain challenges which required immediate attention and keeping in mind the same, the Indian Government seeks to bring into effect the new Consumer Protection Act, 2019 (“CP Act”). The CP Act would repeal the old Consumer Protection Act, 1986 with the aim to provide timely and effective administration and settlement of consumer’s disputes. Following are the key highlights of the CP Act;-

E-Commerce: 

E-commerce has been included in the CP Act. In this regard, The CP Act has also broadened the definition of “Consumer” to include a person who “buys any goods” and “hires or avails any services” through offline or online transactions, such as electronic means or by teleshopping or direct selling or multi-level marketing.

Rights of a Consumer:

The rights of a Consumer have been defined under the CP Act and also include:

  1. Protection against the marketing of goods, products or services which are hazardous to life and property;
  2. Protection against unfair trade practices by being informed about the quality, quantity, potency, purity, standard and price of goods, products or services;
  3. Access to a variety of goods, products or services at competitive prices;
  4. Consumer’s interests will receive due consideration at the appropriate fora;
  5. To seek redressal against unfair trade practice or restrictive trade practices or unscrupulous exploitation of consumers.

The definition of “Complainant” shall extend to parents or legal guardians of a minor who is a consumer.

Product Liability:

  • The CP Act shall include “Product Liability” in order to discourage the manufacturers and service providers from delivering defective or deficient services. A product liability action may be brought against a product manufacturer or a product service provider for any harm caused to a consumer on account of a defective product.
  • It is important to note that a product manufacturer shall be liable even if he proves that he was not negligent or did not act fraudulently in making the express warranty of a product.

Central Agency for regulating the laws on Consumer Protection:

  • A Central Consumer Protection Authority (“Central Authority”) shall be established to regulate matters relating to violation of rights of consumers, unfair trade practices and false or misleading advertisements which are prejudicial to the public interest and the consumers.
  • Central Authority shall have an “Investigation Wing” for the purpose of conducting inquiry or investigation.
  • Amongst the various powers held by the Central Authority, the most relevant ones are;-
  1. Inquire into a matter, suo motu or on a complaint received or on direction of Central Government;
  2. File Complaints or intervene in any proceedings before District or State or National Commission;
  3. After a preliminary inquiry, the Central Authority will further have a right to refer the matter for investigation or refer the same to some other competent Regulator established under any other law for the time being in force;
  4. Recall of goods, withdrawal of services which are dangerous or unsafe, reimbursement of prices of goods or services etc.
  5. Issue directions and penalties against false or misleading advertisements.

The CP Act is certainly progressive in nature and has been drafted keeping in mind the radical changes in the consumer base and consumer platforms.

Complainant:

The definition of “Complainant” shall extend to parents or legal guardians of a minor who is a consumer.

Filing of complaint:

  • The CP Act shall allow the complainant to file a complaint in a Commission, within local limits of where the complainant resides or personally works for gain.
  • It shall allow the complaints to be filed electronically and also permit hearing or examination of parties through video conferencing in certain circumstances.
  • The jurisdiction of Commissions to entertain complaints shall be enhanced:

 

Commission Jurisdiction
District Commission Where the value of the goods or services paid as consideration does not exceed one crore rupees.
State Commission Where the value of the goods or services paid as consideration, exceeds rupees one crore, but does not exceed rupees ten crore
National Commission Where the value of the goods or services paid as consideration exceeds rupees ten crore.

 

Alternate Dispute Resolution Mechanism:

  • The CP Act provides for the establishment of a Consumer Mediation Cell at each level i.e. District, State and National Commission.
  • The Commissions can, at any stage of the proceedings, direct the parties to have their matter settled by mediation, where it appears that there exists a possibility of resolution of the dispute through mediation.
  • Where the matter has been settled by mediation, the District, State or National Commission shall duly record such settlement in its order. If the mediation fails, the Commission shall then proceed to hear the matter.

The CP Act widens the scope of protection of a consumer. The CP Act is certainly progressive in nature and has been drafted keeping in mind the radical changes in the consumer base and consumer platforms. However, the successful effectiveness and speediness of the functions under the new CP Act will only be seen over the course of time.

 

For any clarification or further information, please contact:

Varun Pareek

Partner

varun.pareek@clasislaw.com 

Sidhant Pandita

Associate

sidhant.pandita@clasislaw.com

The firm, Clasis Law is a full service Indian law firm that is international in vision, scope, experience and capability. The core values of the firm include a high degree of legal expertise, commitment to excellence, efficiency, integrity, focus and client care, all of which guide each member of the firm, be it the partners, associates or staff of Clasis Law in their business dealings on a daily basis. With the in-depth expertise and know-how of the partners, together with highly trained teams, the firm is able to provide clients with bespoke solutions and exceptional service.

The firm, Clasis Law is a full service Indian law firm that is international in vision, scope, experience and capability. The core values of the firm include a high degree of legal expertise, commitment to excellence, efficiency, integrity, focus and client care, all of which guide each member of the firm, be it the partners, associates or staff of Clasis Law in their business dealings on a daily basis. With the in-depth expertise and know-how of the partners, together with highly trained teams, the firm is able to provide clients with bespoke solutions and exceptional service.

The firm, Clasis Law is a full service Indian law firm that is international in vision, scope, experience and capability. The core values of the firm include a high degree of legal expertise, commitment to excellence, efficiency, integrity, focus and client care, all of which guide each member of the firm, be it the partners, associates or staff of Clasis Law in their business dealings on a daily basis. With the in-depth expertise and know-how of the partners, together with highly trained teams, the firm is able to provide clients with bespoke solutions and exceptional service.

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