Consumers in a particular society play an essential role in the economic system of the nation, and their consumption system affects the economy, therefore a country needs a law to protect the interests of the consumers, for this purpose Consumer Protection Act formulated in the year 1986. However, with the industrial revolution, development in the international trade and commerce and opening of various domains in business (eg. e-commerce), there was an urgent need for a new Act which would address new types of grievances of the consumers.
The Consumer Protection act, 2019 was introduced in the Lok Sabha on 8 July 2019 by the Minister of Consumer Affairs, Food and Public Distribution, Ram Vilas Paswan. It was passed by Lok Sabha on 30 July 2019 and later passed in Rajya Sabha on 6 August 2019.
The bill received assent from President Ram Nath Kovind on 9 August, and was notified in The Gazette of India on the same date. The Act came into effect by 20 July 2020, while certain other provisions of the Act like establishing the Central Consumer Protection Authority came into effect from 24 July 2020.
CHANGES BROUGHT UNDER THE NEW ACT
| KEY POINTS | OLD ACT | NEW ACT |
|---|---|---|
| Pecuniary Jurisdiction | District Forum: up to 20 lacs State Commission: from 20 lacs to 1 crore National Commission: from 1 crore and above | District forum: up to 50 lacs State Commission: from 50 lacs to 2 crores National Commission: from 2 crore and above |
| Basis to decide pecuniary jurisdiction | In the case of Ambrish Kumar Shukla & Ors v. Ferrous Infrastructure Pvt. Ltd it was settled that for the purpose of determining the pecuniary jurisdiction of a consumer forum under 1986 Act, the consideration paid or agreed to be paid by the consumer at the time of purchasing the goods or hiring or availing of the services, as the case may be, plus the amount of the compensation, is to be considered. | In the case of M/s Pyaridevi Chabiraj Steels Pvt. Ltd. v. National Insurance Company Ltd. & Ors. the NCDRC held that under the provisions for determining the pecuniary jurisdiction of the District Commission, State Commission or the NCDRC, the value of the goods or services paid as consideration alone has to be taken, and not the value of the goods or services purchased/taken |
| Territorial Jurisdiction | Where seller has his/her office | Where complainant resides or works |
| Appeal | Within a period of 30 days from the date of order of District Forum Provided 50% of award amount or Rs 25000 to be deposited whichever is less | Within a period of 45 days from the date of the order of District Forum Provided 50% of award amount to be awarded |
| Unfair Trade Practices | Section 2(1)(r) of CPA, 1986 provides six types of unfair trade practices | Section 2(47) of CPA, 2019 adds 4 more types of unfair trade practices to the list |
| Authority | District consumer forum State consumer forum National Consumer Dispute Redressal Commission | District commission State commission National Consumer Dispute Redressal Commission |
| Composition of State Commission | President and 2 other members | President and 4 other members |
| Appointment | Selection Committee (comprising a judicial member and other officials) will recommend members on the Commissions | No provision for Selection Committee. Central Government will appoint through notification. |
| Penalties | If a person does not comply with the orders of the Commissions, he/she may face imprisonment between 1 month and 3 years or fine between Rs 2000 and Rs 10000 or both | If a person does not comply with the orders of the Commissions, he/she may face imprisonment up to 3 years or a fine not less than Rs 25000, extendable to 1 lakh or both |
NEW PROVISIONS INCORPORATED UNDER CONSUMER PROTECTION ACT
- E-commerce –The new act defines direct selling, e- commerce and electronic service provider. Now all provision applicable to direct seller has been extended to e-commerce. The central government has prescribed rules for preventing unfair trade practices in e-commerce and direct selling under Consumer Protection (E- commerce) Rules, 2020
- Review- Under Section 40 of the Consumer Protection Act 2019 has now provided the District Commission with the power to review any Order, in certain instances like error apparent on the face the record, either suo moto or on Application filed by the Parties within 30 days of said Order.
- Alternate Dispute Redressal Mechanism- The parties before the consumer courts now have an option of opting for mediation as a redressal mechanism for their disputes, at any time after the admission of the complaint. As per Section 74 of the Act, the State government has been empowered to establish a consumer mediation cell to be attached to each district and state commission of that particular state. The procedure for conducting mediation proceedings by the mediation cell has been laid down in Section 79 of the Consumer Protection Act, 2019.
- Unfair Contracts – Section 2(46) of CPA, 2019 has provided the definition of unfair contracts as a contract between a manufacturer or trader or service provider on one hand, and a consumer on the other, having such terms which cause significant change in the rights of such consumer. Furthermore, it lists six contract terms which may be held unfair.
- Establishment of CCPA – Under Section 10 of CPA, 2019, Central government, by notification has the power to regulate matters relating to regulate matters relating to violation of rights of consumers, unfair trade practices and false or misleading advertisements in order to protect and enforce the rights of the customers.
- Product Liability – Sections 82-87 of CPA, 2019 deal with product liability. A consumer can claim a product liability against a seller, service provider and a manufacturer. A consumer can claim compensation on one of the several grounds provided in the act. However, there are some exceptions to product liability action which are listed under Section 87 of the Act.
Ayush Khare
Symbiosis Law School
Nagpur
