A new generation of consumer benchmarks and the digital age has brought in a new phase in commerce and modern branding. Digitization has enabled easier connectivity, a wide range of options, flexible payment systems, better facilities, and convenience-based shopping. However, it has also raised issues relevant to customer safety along the development path.
To cater to the need of the hour ,Consumer Protection Act, 1986, was repealed by the Parliament of India and substituted by the Consumer Protection Act, 2019. In the new act, the Government has adopted holistic and all-inclusive concepts of the customer, customer rights, e-commerce, advertisement, product liability, unequal contract, misleading ads, incorporated ‘telecom’ in the concept of ‘service, allowed for the formation of the Central Consumer Protection Authority (CCPA from herein ) with the authority of ‘search & seizure’ and problem guidance. The new legislation allows for specific provisions in accordance with the present situation, including robust punishment & fines.
Table of Contents
SALIENT CHANGES BROUGHT ABOUT BY THE CONSUMER ACT
Who is a Consumer?
The definition of ‘consumer’ has been expanded by the New Act. It is inclusive of offline or online transactions, electronic means, teleshopping, direct sales, or multi-level marketing, the term now encompasses any person who purchases any products. The 1986 Act did not expressly cover e-commerce purchases, and the current Act fixed this void [1].
Establishment Of Central Consumer Protection Authority (CCPA)
The Union government shall set up CCPA to govern matters pertaining to consumer rights abuses of various forms. An investigative wing [2] and investigations as prescribed in Cr. P.C, but a spurious search is a punishable offence as a giver under S. 93 of the latest Act [3]. The District Collectors has the authority under the new Act to prosecute or persecute allegations about consumer rights abuses, unfair trading practises, and inaccurate or misleading advertising about a reference given to him by the CCPA [4].
The CCPA just has the authority to give guidance and fines to the trader or producer or endorser or advertiser or publisher [5] involved against deceptive or misleading advertising. In this way, the customer may advance his complaint concerning false or misleading advertising either in written or in the electronic form to the District Collector or Commissioner of the Regional Office or the Central Authority [6]and then to the CCPA, which will provide reasonable guidance after inquiry or might penalise.
E-Filing of Complaints and Enhancement of Pecuniary Jurisdiction
The New Act allows the customer with the choice to lodge grievances with the jurisdictional consumer forum situated at the consumer’s place of residence or job [7]. This is contrary to the erstwhile method of filing it at the place of purchase or where the office address has been registered by the seller. There are clauses enabling consumers to file grievances [8] as well as serve notices online [9]. and by video-conferencing [10] for listening and/or questioning parties. This is targeted at ensuring procedural simplicity and reducing customer distress and harassment. Revamped pecuniary caps have been specified under the New Act. Likewise, if the gross number of products or services charged does not surpass INR 1 crore[11], the district forum will now file consumer complaints. Disputes up to INR 10 crore [12] may be settled by the State Commission and the National Commission may exercise authority if the value exceeds INR 10 crore [13].
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Power Of Review
The new Act grants the District Commission [14], State Commission [15], and National Commission [16] the right to investigate their own order in the case of an apparent mistake.
Penalty For Non-Compliance Of Order
Non-conformation with the orders of the District Commission, State Commission, and National Commission, the new Act also includes a provision for severe penalties. It is notable to state that offences will incur a fine of up to Rs . 1 lakh and up to 3 years in prison [17].
Product Liability & Penal Consequences
The Act also implemented the definition of product responsibility which requires, with every demand with restitution, the product manufacturer, product service supplier and product distributor within its scope. ‘Product seller ‘is specified to mean an entity that is interested in the commercial positioning of the product and would be inclusive of e-commerce platforms. It would not be agreed to justify that e-commerce sites simply operate as ‘platforms’ or ‘aggregators.’ In comparison to product-service suppliers and product retailers, there are heightened liability concerns for producers, given that producers would be liable in product liability litigation under the Act even though they prove that they were not incompetent or dishonest in rendering the explicit warranty of a product. Many such exemptions from liability charges have been given under the New Act, such as that the commodity vendor would not be responsible if the commodity has been exploited, changed, or altered [18].
Unfair Trade Practices
A specific general definition of unfair trade practises is enforced under the New Legislation, which also requires the exchange of sensitive personal information supplied by the customer, except such disclosure is made in compliance with any other regulation.
Penalties for Misleading Advertisement
The CCPA can place a penalty for an inaccurate or deceptive advertisement on a manufacturer or an endorser of up to INR 10 lacs [19]. They can also be sentenced by the CCPA to up to two years in jail for the same term. The fine can be extended to INR 50 lakhs and up to five years of jail in the event of a future offence. The CCPA can also bar the promoter of a misleading commercial for a term of up to one year from advertising the specific product or service. The term of the ban may stretch to three years for any additional offence [20].
The Act sets endorsers’ liabilities given that in the recent past there have been several cases where customers have fallen victim to unethical trade practises under the control of celebrities posing as brand ambassadors. In such cases, to check the authenticity of the assertions made in the advertising to dismiss liability claims, it becomes necessary for the influencer to take the burden and exercise due caution.
Provision for Alternate Dispute Resolution
At the first proceeding after receipt of the complaint, if it indicates to the Commission (district, state, or national) that there is a likelihood of resolution, the judge, having obtained the written consent of the parties, could, by way of mediation, request resolution. Yet there would be no appeal by mediation against the deal. There was no legal framework for this prior to this [21].
POLICY SUGGESTIONS BY THE CONSUMER ACT
Sections 2(1)(d) and 2(1)(0) of the Act should be interpreted appropriately to include the meaning of the terms ‘consumer ‘and’ facilities ‘in order to make it evident that, in the context of medical and local facilities rendered by the municipality, the concern is not a precedent. A survivor of medical neglect in a state hospital must be eligible for liability by broadening the concept of a consumer and by supplying the government with free public services.
The Consumer Redress Fora should be allowed to issue temporary injunctions regulating the conduct of any unfair trade activity as specified in the Act by an undertaking. The Customer Redressal Fora must be allowed to take up the suo moto proceedings. Besides, a protocol must be created to make it obligatory upon the court to provide the parties a copy of the decision promptly, so that no reason is offered for the delay in the filing of appeals.
The professionalism and expertise of non-judicial representatives appointed to serve on the Benches of Consumer Redress Agencies must be completely necessary. Consumer redress agencies must be prepared with employees to enforce their directives and the requirement to rely on Civil or Criminal Courts should be minimised. The critical resources must be prescribed to District Forums and State Boards so that they work efficiently.
CONCLUSION
The Act is a positive change as it appears to fill the ambiguities of the old Act which is being implemented at a critical period in which it is important to defend customers whose rights as the world economies grow more and more consumer-oriented. The Act grants the District Commission, the State Commission more power, while also revamping their pecuniary jurisdictions, thus decreasing the National Commission’s task. The common term’ caveat emptor’ may be replaced with’ caveat venditor ‘ for the application of the provisions of the Act in the event that they are deemed in contravention of the Act given the protection given to customers.
References:
[1The Consumer Protection Act, 2019, s. 2(7).
[2] The Consumer Protection Act, 2019, s.15.
[3] The Consumer Protection Act, 2019, s.22.
[4] The Consumer Protection Act, 2019, s.16.
[5] The Consumer Protection Act, 2019, s.21.
[6] The Consumer Protection Act, 2019, s.17.
[7] The Consumer Protection Act, 2019, s.34
[8] The Consumer Protection Act, 2019, s.35.
[9] The Consumer Protection Act, 2019, s.65.
[10The Consumer Protection Act, 2019, s.38(6).
[11] The Consumer Protection Act, 2019, s.34(1).
[12] The Consumer Protection Act, 2019, s.47(1)(a)(i) .
[13] The Consumer Protection Act, 2019, s. 58(1)(a)(i) .
[14] The Consumer Protection Act, 2019, s.40.
[15] The Consumer Protection Act, 2019, s.50
[16] The Consumer Protection Act, 2019, s.60.
[17] The Consumer Protection Act, 2019, s.88.
[18] The Consumer Protection Act, 2019, Chapter VI.
[19] The Consumer Protection Act, 2019 , s.10,2(28).
[20] The Consumer Protection Act, 2019, s.21(2),89 .
[21] The Consumer Protection Act, 2019, s. 37.
BY SHATAKSHI | NLSIU BANGALORE