The Bill was recently passed by the Parliament and by both Lok Sabha and Rajya Sabha. The Bill was introduced in the Lok Sabha by the Ministry of Consumer Affairs, Food and Public Distribution. It is a Governor’s bill because it was introduced by the Ministry at Lok Sabha. It seeks to enhance the interest of consumers and ensure timely settlement of grievances. The 2019 Bill will replace the Consumer Protection Act of 1986. The Consumer Protection Act of 1986 provides better protection in the interest of the consumer and provides for the establishment of a Consumers Council and other authorities for the settlement of consumers disputes and for matters connected therewith. The new Act aims for betterment of protection of rights and consumer safety and security from the hazardous goods and services. It provides many essential rights to the consumer that was not present before in the Consumer Protection Act, 1986.
Who is a Consumer?
A consumer is any person who buys any goods or avails a service for a consideration. Any product or any good or services which is not available free of cost but for a consideration. The consideration here means money, so if a person purchases a particular good or avail any service after providing consideration of a particular sum of money, that person is known as a consumer under the Act. A consumer does not include a person who obtains a particular good for resale or for commercial purposes. Consumer is thus one who procures goods and services, for himself and not for the sale of goods to another person.
Definition of consumer is also mentioned under section 2(1) (d) Consumer Protection Act this also says, when a consumer buys a goods or any services for a consideration which has been paid or promised, or partly paid and partly promise, or any deferred payment, it includes only those people who consumes it and not one who sells it further.
What is Consumer Protection?
Consumer Protection is a group of laws and organisations designed to ensure the rights of the consumer as well as fair trade, competition and accurate information in the marketplace. The laws are designed to prevent businesses that engage in fraud or specified unfair practices to gain an advantage over competitors.
Types of Consumers
- Consumer of goods
- Consumers of goods include those consumers who purchase the goods for resale or for any commercial purpose and are not consumers under the Act.
- A person buying goods for self employment is a consumer.
- Consumer of services
- Service includes banking, financing, insurance, transport supply, electrical, Loading, Export, Import, entertainment, construction and so on.
Consumer may be any person-
- Occupation, age, gender, community or religion, it does not discriminate on the basis of any of the above because consumers can be anyone.
- Consideration is necessary
- Consideration must be paid or payable, or partly paid and partly promised.
- Consideration may be cash or kind.
Any person who uses the goods with the approval of the buyer is a consumer user of the promotional scheme is also a consumer.
Rights of consumers
- Right of protection/Right to be protected
Protection from hazardous goods which are harmful for the consumer. If any kind of good is hazardous to the life and property of the consumer, the consumer will get protection from such types of goods and services.
- Right to Information
The consumer has a right to be informed about the quality of the product, the potential of the cord, the purity and the standard and also the price of cost and also any other further details that are required or necessary details that have to be known to a consumer. There are various products which have not been informed to the consumer how to use them and how they should not be used which entitles the consumer to damages.
- Right to access
The right ensures and is assured to accept the variety of goods and services at competitive prices. This essentially means that the consumer will not be charged an excess amount, and this is due to lack of monopoly or available market conditions.
- Free markets – Under this the producers are free to produce goods and services for the consumer and consumers are also free to choose the goods of their own choice. There is no obligation from the consumer or towards the producer.
- Monopoly – In this market form, there is only a single seller and a large number of buyers which means that the producer is only one and the buyers are many, because of which the consumers here don’t have a right to choose because no alternatives are available.
If there is more demand, supply will be more and the price will also increase. On the other hand if there is less demand, then the supply will also be less and the price will also decrease.
- Right to seek redressal
The consumers can seek redressal against any unfair or any unfair trade practices which include misleading advertisement or speculations.
CCPA ( Central Consumer Protection Authority)
The Consumer Protection Act 2019 comes into force from 20 July, with its salient features including the establishment of the central Consumer Protection Authority CCPA to promote, protect and enforce the rights of consumers.
While briefing the media about the Consumer Protection Act, 2019 through video conference, the Union Minister for Consumer Affairs, Food and Public Distribution Ram Vilas Paswan said that this new Act will empower consumers, help them and protect their rights through its various notified rules and provisions like Consumer Protection Council, consumer disputes redressal, Commission, meditation, product liability and punishment for manufacturer or sale of products containing adulterant/spurious goods.
Consumer Protection Act, 1986 v. Consumer Protection Act, 2019
- No separate regulator, Hindi Consumer Protection Act 1986 but now there is a regulator named as Central Consumer Protection authority CCPA.
- Complaints could be filed in a consumer court where the seller’s (defendant) office is located, but now according to the new Act, the complaint can be filed by the consumer where the complainant resides or works. It doesn’t matter whether the producer also lives there.
- Earlier there was no provision that consumers could only approach a Civil Court but now the consumer can seek compensation for harm caused by a product or the services.
- Earlier the courts could only hear matters up to the following limits: District: up to 20 lakh, State: 20 lakh to 1 crore, National: above 1cr. Now, District: upto 1cr, State: 1cr to 10cr, National: above 10cr.
- Earlier there was no provision regarding direct selling but now there are rules for direct selling extended to e-commerce.
- Earlier there was no legal provision for mediation cells but now the Court can refer to settlement through mediation.
CCPA will be empowered to conduct investigations into violation of consumer rights and institute complaints/prosecution, order recall of unsafe goods and services, order discontinuance of unfair trade practice and misleading advertisement, impose penalties on manufacturer/endorsers or publishers of misleading advertisements.
Paswan further said that under this Act, every e-commerce entity is required to provide information relating to return, refund, exchange, warranty and guarantee, delivery and shipment, modes of payment, grievance, redressal, mechanism, payment method ,security of payment method, chargeback options etc.
Functions of CCPA
- Inquiry – there is an investigation wing and through this investigation wing the CCPA has authority to inquire into the violation of the right of consumer. It can also launch prosecution at an appropriate forum.
- Passing Order – It has the authority to pass orders of any kind of goods or to recall or withdraw any kind of services that seems to be hazardous or consider to be an unfair trade practice.
- Issuing direction – The CCPA can issue directions to consumers, traders, manufacturers and to search publishers to discontinue a false advertisement to modify it. The CCPA has the power or authority to issue directions to any stakeholder or market agency for any advertisement that seems to be misleading.
- Impose penalty – The CCPA can impose penalties on the manufacturers or service providers for those who are involved in misleading advertisements or products.
- Issuing safety notice – The CCPA has the authority to issue a safety notice to the consumer so that the consumer may not be harmed or damaged by the producers.
The CCP has the power to impose a penalty of up to rupees 10 lakh and imprisonment for up to two years or both combined. Further, if there is a subsequent offence by the producer, then the penalty can also go up to 50 lakh and imprisonment can also increase up to five years.
CDRC (Consumer Dispute Redressal Commission)
According to the Bill, the Consumer Dispute Redressal Commission will be set up at district level, state level and also at the national level. It means that it is a three-tier body so the consumers can file complaints with the CDRC for anything related to unfair trade practice or defective goods or any overcharge from the consumer by the producer or any hazardous goods.
Liability of a product manufacturer, service provider or seller, to compensate the consumer for any of the goods or for causing any kind of injury or deficient services. It is the responsibility of the seller in case of goods and also in the case of services to provide compensation for any kind of damage or harm caused to consumers by usage of the product. Under this Bill, the consumer has to prove any kind of defect and deficiency caused by the product.
There will be an overlapping of Jurisdiction and conflict of interest in cases where the government is an accused Party as a service provider. There will be several members with judicial experience leading to a possibility of poor grievance redressal mechanism. Deterrent punishment to check misleading advertisement adulteration of products. Product liability provision to deter manufacturers and service providers from delivering defective products for deficient services. Ease approaching consumer Commission and simplification of the adjudication process. Scope for early disposal of cases to mediation. Provision for rules for new age consumer issues E-Commerce and direct selling.