THE CONSUMER PROTECTION ACT, 2019 – THE FUTURE FOWARD

In my recent blog, I shall deal with a newly formed statue namely – The Consumer Protection Act, 2019. This Act has come as a big relief to the consumers and has drastically changed a few areas in the old Act of 1986. This Act of 2019 has been said to be a big positive breakthrough for the consumers and has revamped the three decade old Act which, now has been replaced by the present one.

My blog shall deal with the following pointers mentioned below.

1. Introduction to the Consumer Protection Act, 2019.
2. Changes brought by the Consumer Protection Act, 2019.
3. Conclusion.

Introduction to the Consumer Protection Act, 2019.

The Consumer Protection Act, 2019 (also said to be the ‘New Act’) was put forward as a bill in the Parliament of India and thereafter received the assent of the President of India, which was later notified and published in the Official Gazette on the 9^th day of August, 2019. This Act shall come into force at any such point of time as the Central Government may notify.

The purpose of creating a new Act altogether was to evolve the scope and ambit of the Consumer Protection Act, 1986. As we all know that Consumer Protection Act was nothing more than a fighting legislative statute which prevented Consumers to become a scapegoat from the Sale of Goods Act. The rule of ‘Caveat Emptor’ (buyers be aware) was used as a defense every time the buyer was said to be at fault and as such they used to wash away their hands by the very rule as above – mentioned. The Consumer Protection Act, 1986 empowered the consumers to have a say and to uphold their rights which were genuinely neglected and could not find space in the Sale of Goods Act. This was a counter legislation drafted to ensure that no consumer is deprived of its rights.

However, with the changing times there were changing needs and the Consumer Protection Act, 1986 started showing its loopholes which needed injections. There were areas which needed further coverage to secure the ends of the consumer and as such amendments were many to be made. In the wake of such events it was best to redraft a statute with the change of society in mind and to repeal the old Act in totality. It is in such state of affairs that The Consumer Protection Act, 2019 was drafted.  

Changes brought by the Consumer Protection Act, 2019.

This new Act has proposed for certain new provisions which were not present in the old Act of 1986.

Few of the key provisions are as follows: -

1. Provision for Regulator – The old Act had no provision for a Central Regulator. However, the new Act of 2019 has specific provisions for a Central Consumer Protection Authority to be set up.
2. Filing of Complaint – Earlier the aggrieved Consumers had to file the complaint under the jurisdiction of such Consumer Forum where the seller is. However, after the Act of 2019, an aggrieved Consumer can now file a complaint anywhere or from the place of his/her residence.
3. Mediation – As for the provision of Regulator, there was no provision in the old Act for settlement through Mediation. However, the new Act encourages settlement through mediation cells.
4. Product Liability / E – Commerce and Video Conferencing
5. Provisions for Product Liability, E – Commerce and Video Conferencing which were absent in the old Act have been inserted in the new Act giving a breather to the consumer.

Definition of Consumer – Broadened in the new Act of 2019

The very definition of “Consumer” has been restructured and it has included persons who are engaging themselves in offline or online transactions through any electronic medium or by way of tele – shopping, direct selling or multi level marketing.

By doing so the Act has taken into its grip every seller at each level and has not just restricted itself to the manufacturer of the product. Indeed the Act has exposed all those entities who are involved at the various stages of production and marketing under its grip of liability.

Definition of E – Commerce

What is fascinating to see is that the term ‘E – Commerce’ has got a definition in the new Act which shall include the buying or selling of goods and services which shall include digital products, bought or sold over digital or any electronic network.

Bringing E – Commerce under the scope and ambit of unfair trade practice and Consumer grievance is a just a small show as to the mammoth changes the Act intends.

New grounds to file Complaints

The earlier provisions of the 1986 act had just six grounds to file a complaint whereas the new Act of 2019 has seven grounds to file a complaint. Also, the new act has modified one of the grounds under section 2(c) (i) of the old Act.

Insertion of the term ‘Unfair Contract’

In the earlier Act, an aggrieved consumer could only file a case if the trader/service provider has indulged in unfair trade practice or restricted trade practice. However, in the latest legislation the addition of the term ‘Unfair Contract’ adds fuel when read with unfair trade practice. This would now mean that not only the consumers can file a case if the trader/service provider is adopting unfair trade/restricted trade, the consumers are at liberty to file a case if the very contract entered between the consumer and trader/service provider is unilateral/unfair or unreasonable.

Expansion of the definition of the term ‘Unfair Trade Practice’

The earlier Act of 1986 has a total of six types of unfair trade practice under which a trader/service provider can be held liable. The new Act of 2019 has included three new provisions which expand the scope of the term ‘Unfair Trade Practice’.

The three additional provisions are listed below: -

1.     Failure to issue a bill or cash memo to the consumer.

2.     Refusal of the following: -

a)    To take back ;          

b)    To withdraw defective goods;       

c)    Withdrawal or discontinuation of deficient services;

d)    Refusal to refund the consideration amount paid (within such period as has been mentioned in the bill/invoice/memo of purchase);

In the absence of the above, refusal to withdraw goods/services within thirty days.

3.     To not disclose the personal information of any consumer to any third person for the protection of interest and privacy save and except such disclosure in done in accordance to any law or in need of public interest.

False and misleading advertisements

In an era where everything is online and digital marketing is one of the basic structures on which any brand markets its product, there was a dirth for provisions penalising those who used to dupe bonafide consumers basis their false and misleading advertisements.

The Consumer Protection Act, 2019 has been empowered to impose penalty on such false and misleading advertisement. The penalty provision is as high as INR one million for the first offence and subsequently has been given a higher cap limit of INR five million. The scope of the same is extended to endorsers also, which shall mean that celebrities endorsing any brand by way of advertisements need to be extra careful and do a due diligence check before they sign up with any brands knowing well that such false advertisements can also bring them under the wrath of severe penalty and liability provisions.

Deletion of the term ‘Health Care’ from the definition of services

Out of all the changes and revamps, modifications/additions/alterations etc. This is one specific deletion which catches the eye. Now why I say this is because there was a lot of debate over this.

Even though the bill which was passed by the Lok Sabha had included ‘Health Care’ as a part of the definition of services, the Parliament by way of an amendment removed the term which was the after effect of the apprehension shown by the medical fraternity which stated that the said Act would be misused against them.

It is due to the Healthcare amendment that it is still unclear to a lot of people whether or not healthcare services form a part of service in the present Act and is included in the ambit of the same. Though the Government has said that such amendment shall not debar healthcare from the purview of the Act of 2019 but deletion of the term definitely brings the ‘doctrine of ultra vires’ into play. 

The deletion of the term has made this legislation a front of grey area whereby it is still unclear that will healthcare services be covered under the said Act and whether or not the ruling of Indian Medical Association v. VP Shantha  continue to apply.

Increase in Pecuniary Jurisdiction of District Forums, State Forums and National Commission

The new Act of 2019 has revamped the pecuniary jurisdictions of the District Forums, State Forums and The National Commission. This change has been brought about so as to settle the cases in the very state itself with the first appellate authority being in its very state. The previous Act had a jurisdiction which was meagre and all complaints over and above 1cr needed to be filed in the National Commission set in Delhi. The upper limit set was so less that any complaint would go up to the National Commission and that in it would over burden the Commission.

Addressing this and looking into the need of the consumers the new Act of 2019 has now set forth the following pecuniary jurisdiction as mentioned below: -

1. District Forums – Pecuniary Jurisdiction of 1cr (upper limit)
2. State Forums – Pecuniary Jurisdiction of 1cr to 10cr (upper limit)
3. National Commission – Pecuniary Jurisdiction of 10cr and above

Conclusion

The Consumer Protection Act, 2019 seems to me a great piece of drafting as it has brought into consideration a variety of new aspects which needed attention from the very beginning.

Expansion of the terms as have been mentioned above and insertion of the term ‘Unfair Contract’ shall in all likelihood give a strong hold to the consumer. The service provider needs to be extra careful and needs to make contacts and agreements accordingly.

What is exclusive here is that I find justice done to the idea of Consumer Protection being a beneficial legislation. The new act has tried to cover and protect the interest of the consumer by leaps and bounds and has tried to secure all ends of justice. The same has been drafted with a futuristic thought process and with the main motive to make sure that the end users (i.e. the consumers) need to face the least possible trouble in litigation.

There are a few concerns however, as to how will a consumer find his way out of healthcare after such deletion. Will the VP Shantha’s case become meaningless and not hold ground even as a precedent in consumer courts?

The ramifications of Consumer Protection Act, 2019 should not be precisely gauged beforehand, many new concepts have been introduced and what  can definitely be said is that everyone other than the consumer, will have to be more careful, and cautious than ever before.