Consumer Protection Act, 2019

The Consumer Protection Act, 2019 has been published by the Government of India, Ministry of law & Justice (Legislative Department) by notification dated 09/08/2019 in Part II, Section 1, of the Gazette of India, Extraordinary and has been made effective from the date of publication i.e. 09/08/2019.

Some salient features of the revamped Rules are as follows:

• District forum is renamed as District Commission
• Definition of consumer: A consumer is defined as a person who buys any good or avails a service for a consideration. It does not include a person who obtains a good for resale or a good or service for commercial purpose. It covers transactions through all modes including offline, and online through electronic means, teleshopping, multi-level marketing or direct selling.
• Rights of consumers: Four consumer rights have been defined in the Bill, including the right to:

1. 1. be protected against marketing of goods and services which are hazardous to life and property;
   2. be informed of the quality, quantity, potency, purity, standard and price of goods or services;
   3. be assured of access to a variety of goods or services at competitive prices; and
   4. seek redressal against unfair or restrictive trade practices.

• The Opposite Party needs to deposit 50% of the amount ordered by District Commission before filing appeal before State Commission, earlier the ceiling was of maximum of Rs. 25,000/-, which has been removed.
• Limitation period for filing of appeal to State Commission is increased from 30 days to 45 days, while retaining power to condone the delay.
• State Commission shall have a minimum of 1 President and 4 Members
• Pecuniary jurisdiction
  District Commission shall be upto Rs. 1 Crore
  State Commission from 1 Cr – 10 Cr.
  NCDRC to be more than Rs. 10 crore
• Territorial jurisdiction-Now complainant can also institute the complaint within the territorial jurisdiction of the Commission where the complainant resides or personally works for gain besides what was provided earlier
• Section 49(2) and 59(2) of the new act gives power to the State Commission and NCDRC respectively to declare any terms of contract, which is unfair to any consumer, to be null and void.
• A second appeal to NCDRC has been provided U/s 51(3) if there is a substantial question of law involved in the matter
• Power of revision can still be exercised by NCDRC U/s 58(1)(b) and by State commission under 47(1)(b) of the Act.
• Power of review has been conferred to District Commission, State Commission and NCDRC U/s 40, 50 and 60 of the Act respectively
• NCDRC can hear appeals against the order of Central Authority by virtue of Section 58 of the Act
• Period of limitation in filing of complaint remains 2 years with a provision for condonation of delay power U/s 69 of the Act
• Section 70 provides for administrative control of State Commission over District Commission and that of NCDRC over State Commission. It inter alia provides for investigation into any allegations against the President and members of a State Commission / District Commission and submitting inquiry report to the State Government concerned along with copy endorsed to the Central Government for necessary action
• A product liability action may be brought by a complainant against a product manufacturer or a product service provider or a product seller, as the case may be, for any harm caused to him on account of a defective product.
• Chapter III of the Act provides for creation of Central Authority 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 public and consumers and to promote, protect and enforce the rights of consumers as a class.
• The Central Authority shall have an Investigation Wing headed by a Director General for the purpose of conducting inquiry or investigation under this Act as may be directed by the Central Authority. Functions, including: (i) inquiring into violations of consumer rights, investigating and launching prosecution at the appropriate forum; (ii) passing orders to recall goods or withdraw services that are hazardous, reimbursement of the price paid, and discontinuation of the unfair trade practices, as defined in the Bill; (iii) issuing directions to the concerned trader/ manufacturer/ endorser/ advertiser/ publisher to either discontinue a false or misleading advertisement, or modify it; (iv) imposing penalties, and; (v) issuing safety notices to consumers against unsafe goods and services.
• Penalties for misleading advertisement: The CCPA may impose a penalty 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.
• CCPA can also 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.
• The Act of 2019 has come into effect w.e.f. 9.8.19 and old Act of 1986 stands repealed, subject to section 1(3) of the New Act.
• Rules regarding appointment, conditions of service etc. of the Members are to be notified soon.

Disclaimer

This article contains information of a general nature and is intended only to provide a summary of aspects of the subject matter included. It does not constitute legal or professional advice and should not be relied upon as a substitute for legal or other professional advice on any particular matter or to make any particular decision.