The promulgation of Consumer Protection Act 1986 took place to protect the consumers from unfair trade practices. This is through the implementation of their right to safety, the right to information, the right to choose, and the right to hearing. This act proved to be useful for a long period of more than 3 decades. But over the years, manufacturers, traders, marketplaces, global supply chains, international trade, and e-commerce have undergone a drastic transformation. Hence, the Act of 1986 felt a need for changes. Consumer Protection Bill 2019 got introduction in Lok Sabha by the Minister of Consumer Affairs, Food and Public Distribution Mr. Ram Vilas Paswan on 8th July 2019. Lok Sabha passed the bill on 30th July 2019 and Rajya Sabha on 6th Aug 2019. Many relevant provisions institute this bill.
The main objectives of the Act are the protection of interests of consumers, the establishment of authorities, and settlement of consumer disputes. The major changes include the following aspects. This bill has broadened the purview of these provisions by including e-commerce transactions in the new Act. Any person who buys goods or services through online transactions, electronic means, teleshopping, or multi-level marketing can also seek redressal through this Act. There is introduction of the concept of product liability. Wherein, the product manufacturer, service provider or seller will compensate for any harm or injury which a defective good or deficient service causes. The defense that e-commerce platforms merely act as “platforms” or “aggregators” will not be accepted. Product manufacturers faces increased liability risks. But certain exceptions have been provided under the Act; such as there isn’t any liability of product seller in case of misusing, altering and modification of the product.
The bill proposes the establishment of the Central Consumer Protection Authority (CCPA) with wide powers to promote the enforcement of consumer rights. It will have an investigation wing, headed by a Director-General, which may conduct inquiry or investigation into consumer rights violations. CCPA can pass orders to recall goods or withdraw hazardous services, reimburse the price paid, cancel licenses, file class-action suits, and discontinue unfair trade practices as defined in the bill. This also includes sharing of the personal information given by the consumer in confidence; unless made under any other provision of law.
The new Act fixes liability on endorsers; considering that there have been several instances in the past in which the consumers have fallen prey to misleading advertisements under the influence of celebrities acting as brand ambassadors. The CCPA may impose a penalty on the manufacturer or an endorser of up to Rs 10 lakh and imprisonment for up to two years for a false or deceptive advertisement.
In case the offense is repeated, the fine may be extended up to Rs 50 lakh and imprisonment of up to five years. It may also proscribe such misleading endorsements for a period of up to one year; which may get extended up to three years in case of repetition. However, there are certain exceptions under which the endorser will not be held liable. Consumer courts are quasi-judicial bodies. The pecuniary jurisdiction of Consumer Disputes Resolution Commissions (CDRCs) has also been increased. The District CDRC can entertain complaints up to Rs 1crore, the State CDRC up to Rs 10 crores, and the National CDRC over Rs 10 crores.
Before this Act, consumers were allowed to file a complaint only where the seller’s office is located. A complaint can be filed from where the consumer resides or works too. Moreover, it also enables provisions for consumers to file e-complaints and for examining parties through video conferencing. This will further lead to procedural ease and reduce the inconvenience and harassment of the consumers. The courts after examining the case can also refer settlement of the parties through mediation.
Alternate Dispute Resolution Mechanism will reduce the hassle and make the process expedient. The Consumer Protection Act is a welfare legislation. The new amendments will help to fulfill the purpose of this Act in a better manner. The consumers can redress their problems without any complicated or elongated procedure. It will enhance the security of the consumer. The penal liability will also act as deterrence for the product manufacturers and sellers; Due to this they will refrain from engaging in any kind of inappropriate practice. Hence, this Consumer Protection Act 2019 will indeed help to gain the best possible remedies for the protection of consumer rights.
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