All you need to know about the Consumer Protection Act 2019

The Consumer Protection Act, 2019 ("Bill"), seeking to replace the erstwhile Consumer Protection Act of 1986 ("Act"), was ratified by the Lok Sabha on December 20, 2019, and it awaits approval of the Rajya Sabha. The Bill focuses on implementing consumer rights along with the timely and effective resolution of consumer disputes.

The crux of the existing Act includes goods and services that are considered exclusions are free and personal services. The Bill will widen the scope of the existing Act covering and regulating goods and services, including telecom and housing construction, as well as all modes of transactions inclusive of online, teleshopping, and so on for consideration. Newer concepts like 'product liability' aims at addressing the altering dynamics of the consumer markets.

The inclusion of new definitions like 'e-commerce' in particular, will seemingly widen the ambit of the Act to include the e-commerce sector in particular, which is excluded in the existing Act. Point to be noted, "Consumer" has been defined and explained inclusive of consumers purchasing goods or availing services by using online platforms including Airbnb, Quikr and Flipkart.

The Bill will regulate online shoppers as well as the traditional consumers purchasing or availing goods and services from brick and mortar shops.

Some prevalent concepts like the 'Complainant' will include Central Consumer Protection Authority which the Bill aims at establishing, and the parent or legal guardianship in regards to a minor consumer. The complainant, besides the existing rules under the Act, can now lodge a complaint against a trader or a service provider alike for being a party to an unfair contract and can also stake a claim for product liability. Furthermore, owing to the Bill the complainant has the option of filing the complaint through electronic media and getting in touch with the consumer disputes resolution authorities from the comfort of one’s home or business. 

In all likelihood introducing the provision of 'product liability' is one of the most crucial features of the Bill. The current Act hasn’t got any provision for 'product liability'. The concept of 'product liability' has been introduced through the bill permitting complainants to stake a claim of product liability against the manufacturer of a product or a service provider if the product is defective or if the service is deficient in any way, shape or form. The product manufacturer shall be deemed liable in a product liability class action if there is a manufacturing defect in the product including design defects, deviation from the manufacturing specifications or explicit warranty, or instructions are inadequate for use. Point to be noted, the product manufacturer can be held responsible or liable even if there isn’t any proof of negligence or fraud in making the explicit warranty of a product.

A product service provider’s liability arises, if the quality of the service delivered was faulty or imperfect or deficient or inadequate in its nature or the performance levels or there may have been acts of omission or commission or even negligence or any pertinent information may have been wilfully withheld causing irreparable harm or the instructions or warnings issued by the service provider may have been inadequate for the prevention of any harm or the service hasn’t been conforming to explicit warranty or the contract’s terms and conditions. Besides, the Bill provides for product liability of a seller who may not be a product manufacturer in special cases.

The Bill further aims at establishing a Central Consumer Protection Authority for expedited and efficient judgments of consumer complaints. Besides regulatory functions, the Authority has suo motu powers to inquire about any aberrations of consumer rights.

An appeal can be filed by an aggrieved person on the basis of an order decreed by the new Central Consumer Protection Authority, to the National Commission. Besides, the Bill vests advisory functions on the current Consumer Protection Councils and provides for these Councils to be established at district, state, and national levels.

The Bill brings forth provisions enabling mediation to be an alternate remedy. Resolving consumer disputes through mediation will reduce the burden to a great extent on the consumer disputes resolution authorities and the dispute resolution process would be expedited.

One particular provision of the Bill imposes a penalty on the manufacturer or the manufacturer or service provider is penalized for putting up a fake or misleading ad that is prejudicial to the consumer’s interest. Both the endorser and publishers of fake and misleading advertisements have to pay a hefty penalty and are even banned for a few years on offenses subsequently. While this may seem like a positive change, the possibility of a frivolous lawsuit against the celebrities exists for monetary or personal gain.

Besides, the Bill considers a contract 'unfair' if it’s the cause of material alterations of consumers’ rights. The State and National Commissions may ascertain if the contract terms are unfair and proclaim such terms null and void.

Last but not the least,  the government is empowered by the Bill to create rules for preventing unfair trade practices in e-commerce, direct selling and to safeguard the vested interests and entitlements of the consumers resulting in effectively resolving issues that arise from online transactions and blooming e-commerce marketplace.

With the era driven by the internet emerging and with the growth of e-commerce has besides providing user-friendly options and opportunities for online consumers has paved the way for the newest versions of unfair trade and unethical business practices. The Consumer Protection Bill, 2019 will be protecting consumer interests and keep the consumer protection laws up to speed with the altering dynamics of the consumer market and the newer market trends.

Contact 7604047601 for a consultation with a registered expert consumer protection lawyer on Vidhikarya.