ANALYSIS OF THE CONSUMER PROTECTION ACT, 2019

On 15th July 2020, the Government of India has notified the Consumer Protection Act, 2019 (‘New Act’), effective from 20th July 2020. The old consumer protection legislation i.e. The Consumer Protection Act, 1986 (‘Old Act’) has been overhauled keeping in mind the advent of technology, the boom of the e-commerce sector, and various other mechanisms of conducting business in order to protect consumers on both online as well as offline modes. 

Salient features of the New Act:

The New Act has widened the definition of ‘Consumer’: The definition of ‘Consumer’ now includes any person who buys any goods, whether through offline or online transactions, electronic means, teleshopping, direct selling, or multi-level marketing. E-commerce transactions have now also been brought under the purview of the New Act.

E-filing system for Complaints: A Complainant/Consumer can now institute a Complaint within the territorial jurisdiction of a commission where the Consumer resides or works for gain. Earlier, under the Old Act jurisdiction of filing a complaint was at the place of purchase or where the seller has its registered office address. The New Act further simplifies the procedure for the Consumers by enabling provisions to file complaints electronically and allowing hearing and/or examination of parties through video-conferencing.

Revised Pecuniary Jurisdiction: The revised pecuniary limits under the New

Act are as follows: – 

  1. District Forum – Rs. 20 lakhs to Rs. 1 crore.
  2. State Commission – Rs. 1 crore to Rs. 10 crores.
  3. National Commission – above Rs. 10 crores which earlier was above Rs. 1 crore under the Old Act.
  • Renaming the District Forum: The erstwhile District Consumer Disputes Redressal Forum (“DCDRF”) has been renamed as District Consumer Disputes Redressal Commission (‘DCDRC’/’District Commission’).

 

  • Pre-deposit for filing of appeals: In case of Appeals, the Party against whom any amount is ordered by the District Commission is now under the New Act, required to deposit 50% of the amount ordered by the District Commission, before filing an appeal before the State Commission/State Consumer Disputes Redressal Commission (“SCDRC”). Earlier, the ceiling for the pre-deposit amount for filing appeals was a maximum of Rs. 25,000/-, which has now been removed.

 

  • Revision of limitation period: The limitation period for filing of appeals to the State Commission from an order of District Commission/DCDRC has been increased from 30 days to 45 days. However, the power to condone the delay has been retained.

 

  • Alternate Dispute Resolution (ADR): ADR has been introduced for the speedy resolution of matters with the Parties now being allowed to settle the disputes through mediation.

 

  • Revision in sitting members: The SCDRC shall now have a minimum of 1 President and 4 Members.

 

  • Second Appeal to NCDRC: There is now a provision for a Second Appeal to the NCDRC, in the event where there is a substantial question of law involved.

 

  • Power of review: The NCDRC, SCDRC, and DCDRC can still exercise their powers of Review which have been conferred to them under the New Act.

 

  • Power to hear the appeals against the orders of the Central Authority: The NCDRC is empowered to hear appeals against orders of the Central Authority.

 

  • Powers regarding administrative control: The New Act provides for administrative control of the SCDRC over the DCDRC and that of the NCDRC over the SCDRC. It also provides for an investigation into any allegations against the President and members of a particular SCDRC / DCDRC. The provision also provides for submission of an inquiry report to the State Government concerned along with a copy to the Central Government for their needful action.

 

  • Action for product liability: An action for product liability may now 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.

 

  • Liabilities of Celebrities: Celebrities are no longer immune for the products/ brands they endorse as now they can be held accountable in case misleading advertisements featuring them make vague claims.

 

IMPLICATIONS ON THE E-COMMERCE SECTOR 

E-commerce giants like Amazon and Flipkart ruling the Indian consumer segment over the past few years shall be directly impacted as they have been brought directly under the domain of the New Act. Further, Telemarketing and multilevel marketing have also been brought under the ambit of the law. 

Further, the e-commerce industry might see a rise in litigation in the New Act, as it allows the consumers to file complaints from the place where they reside or work for gain and the consumers also have the legal recourse to file class-action suits under the New Act.

CONCLUSION

The New Act is a step in the right direction and is a welcome move from the three-decade Old Act. With greater powers given to the consumers now, the consumer-driven companies will have to give paramount importance to quality control and customer service to avoid litigations and consequent bad publicity. The growth of the E-commerce sector, also demands a system of checks and now with New Act being notified, the E-commerce sector will be forced to grow responsibly keeping the interest of the consumers in mind.

 

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