Consumer Protection Act, 2019

The new Consumer Protection Act was passed by Parliament in 2019. It came into force in July
2020 and replaced the Consumer Protection Act, 1986.

Given below is a gist of the Consumer Protection Act, 2019:

Enactment August 9, 2019

Date: 

Act Year:  2019

Short Title:  The Consumer Protection Act, 2019

Long Title:  An Act to provide for protection of the interests of consumers and for the said
purpose, to establish authorities for timely and effective administration and
settlement of consumers’ disputes and for matters connected therewith or
incidental thereto

Ministry:  Ministry of Consumer Affairs, Food and Public Distribution

Department:  Department of Consumer Affairs

Need for the new act:

 The Digital Age has ushered in a new era of commerce and digital branding, as well as a
new set of customer expectations. Digitisation has provided easy access, a large variety
of choices, convenient payment mechanisms, improved services and shopping as per
convenience. However, there are also associated challenges related to consumer
protection.
 To help address the new set of challenges faced by consumers in the digital age, the
Indian Parliament passed the landmark Consumer Protection Bill, 2019 which aims to
provide timely and effective administration and settlement of consumer disputes.

Details:

 Consumer Protection Act, 2019 is a law to protect the interests of the consumers. This
Act provides safety to consumers regarding defective products, dissatisfactory services,
and unfair trade practices.
 The basic aim of the Consumer Protection Act, 2019 is to save the rights of the
consumers by establishing authorities for timely and effective administration and
settlement of consumers’ disputes.
Rights of the consumers:

 Consumers have the right to information on various aspects of goods and services. This
could be information about the quantity, quality, purity, potency, price, and standard of
goods or services.
 To be protected from hazardous goods and services. Right to protection against goods
and services that can be dangerous to life and property.
 To be protected from unfair or restrictive trade practices.
 Consumers have the right to access a variety of goods and services at competitive
prices.
 Consumers should have the right to redressal.

Salient Provisions of the Consumer Protection Act

New definition of consumer:

 The new Act has widened the definition of ‘consumer’.

Definition of consumer:

 As per the Act, a person is called a consumer who avails the services and buys any good
for self-use. Worth to mention that if a person buys any good or avails any service for
resale or commercial purposes, he/she is not considered a consumer. This definition
covers all types of transactions i.e. offline and online through teleshopping, direct selling
or multi-level marketing.

Central Consumer Protection Authority:

 The Act proposes the establishment of the Central Consumer Protection Authority
(CCPA) as a regulatory authority.
 The CCPA will protect, promote and enforce the rights of consumers and regulate cases
related to unfair trade practices, misleading advertisements, and violation of consumer
rights.
 CCPA would be given wide-ranging powers.

o The CCPA will have the right to take suo-moto actions, recall products, order
reimbursement of the price of goods/services, cancel licenses, impose penalties
and file class-action suits.
o The CCPA will have an investigation wing to conduct independent inquiry or
investigation into consumer law violations.
.

Consumer Disputes Redressal Commission: 

 The Act has the provision of the establishment of Consumer Disputes Redressal
Commissions (CDRCs) at the national, state and district levels to entertain consumer
complaints.
  As per the notified rules, the State Commissions will furnish information to the Central
Government on a quarterly basis on vacancies, disposal, the pendency of cases and
other matters.
 The CDRCs will entertain complaints related to:

o Overcharging or deceptive charging

o Unfair or restrictive trade practices
o Sale of hazardous goods and services which may be hazardous to life.
o Sale of defective goods or services
 As per the Consumer Disputes Redressal Commission Rules, there will be no fee for filing
cases up to Rs. 5 lakh.

E-Filing of Complaints:

 The new Act provides flexibility to the consumer to file complaints with the jurisdictional
consumer forum located at the place of residence or work of the consumer. This is unlike
the earlier condition where the consumer had to file a complaint at the place of purchase
or where the seller has its registered office address.
 The new Act also contains enabling provisions for consumers to file complaints
electronically and for hearing and/or examining parties through video-conferencing.
 Consumers will also not need to hire a lawyer to represent their cases.

Product Liability & Penal Consequences:

 The Act has introduced the concept of product liability.

o A manufacturer or product service provider or product seller will now be

responsible to compensate for injury or damage caused by defective products or
deficiency in services.
 This provision brings within its scope, the product manufacturer, product service provider
and product seller, for any claim for compensation. The term ‘product seller’ would also
include e-commerce platforms.

Penalties for Misleading Advertisement:

 The CCPA may impose a penalty on a manufacturer or an endorser, for a false or

misleading advertisement. The CCPA may also sentence them to imprisonment.

Provision for Alternate Dispute Resolution:

 The new Act provides for mediation as an Alternate Dispute Resolution mechanism. For
mediation, there will be a strict timeline fixed in the rules.
 As per the recently notified rules, a complaint will be referred by a Consumer Commission
for mediation, wherever scope for early settlement exists and parties agree for it. The
 mediation will be held in the Mediation Cells to be established under the aegis of the
Consumer Commissions. There will be no appeal against settlement through mediation.

Unfair Trade Practices:

 The new Act has armed the authorities to take action against unfair trade practices too.
 The Act introduces a broad definition of Unfair Trade Practices, which also includes the
sharing of personal information given by the consumer in confidence unless such
disclosure is made in accordance with the provisions of any other law.
The Central Consumer Protection Council:

 The Consumer Protection Act empowers the Central Government to establish a Central

Consumer Protection Council. It will act as an advisory body on consumer issues.

o As per the notified Central Consumer Protection Council Rules, the Central
Consumer Protection Council would be headed by the Union Minister of
Consumer Affairs, Food and Public Distribution with the Minister of State as Vice
Chairperson and 34 other members from different fields.
o The Council, which has a three-year tenure, will have a Minister-in-charge of
consumer affairs from two States from each region – North, South, East, West,
and NER. There is also a provision for having working groups from amongst the
members for specific tasks.
Applicability:

 This Act is applicable to all the products and services, until or unless any product or
service is especially debarred out of the scope of this Act by the Central Government.

Significance of the Act:

Empowering consumers:

 The new Act will empower consumers and help them in protecting their rights through its
various rules and provisions. The new Act will help in safeguarding consumer interests
and rights.

o Consumer-driven businesses such as retail, e-commerce would need to have

robust policies dealing with consumer redressal in place.
o The new Act will also push the consumer-driven businesses to take extra
precautions against unfair trade practices and unethical business practices.

Inclusion of the e-commerce sector:

 The earlier Act did not specifically include e-commerce transactions, and this lacuna has
been addressed by the new Act.
 o E-commerce has been witnessing tremendous growth in recent times. The Indian
e-commerce market is expected to grow to US$ 200 billion by 2026.
 The Act also enables regulations to be notified on e-commerce and direct selling with a
focus on the protection of interest of consumers. This would involve rules for the
prevention of unfair trade practices by e-commerce platforms.
o As per the notified rules, 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
methods, the security of payment methods, charge-back options, etc. including
country of origin which are necessary for enabling the consumer to make an
informed decision at the pre-purchase stage on its platform.
o The e-commerce platforms will have to acknowledge the receipt of any consumer
complaint within forty-eight hours and redress the complaint within one month
from the date of receipt under this Act. This will bring e-commerce companies
under the ambit of a structured consumer redressal mechanism.
o E-commerce entities that do not comply will face penal action.

Time-bound redressal:

 A large number of pending consumer complaints in consumer courts have been common
across the country. The new Act by simplifying the resolution process can help solve the
consumer grievances speedily.
 A main feature of the Act is that under this, the cases are decided in a limited time
period.

Responsible endorsement:

 The new Act fixes liability on endorsers considering that there have been numerous
instances in the recent past where consumers have fallen prey to unfair trade practices
under the influence of celebrities acting as brand ambassadors.
 This will make all stakeholders – brands, agencies, celebrities, influencers and e-
commerce players – a lot more responsible. The new Act would force the endorser to
take the onus and exercise due diligence to verify the veracity of the claims made in the
advertisement to refute liability claims.

Upholding consumer interests:

 For the first time, there will be an exclusive law dealing with Product Liability.
 Product liability provision will deter manufacturers and service providers from delivering
defective products or deficient services.
 The new legislation empowers the National Consumers Dispute Redressal Committee as
well as the State Commission to declare null and void any terms of a contract while
purchasing a product. This will go a long way in protecting consumers, who are often
subject to contract conditions that favour a seller or manufacturer.
Alternate dispute redressal mechanism:

 The provision of Mediation will make the process of dispute adjudication simpler and
quicker.
 This will provide a better mechanism to dispose of consumer complaints in a speedy
manner and will help in the disposal of a large number of pending cases in consumer
courts across the nation.

Simplified process for grievance redressal:

 The new Act would ease the overall process of consumer grievance redressal and
dispute resolution process. This will help reduce inconvenience and harassment for the
consumers.
 The enhanced pecuniary jurisdiction and provisions providing statutory recognition to
mediation processes, enabling filing of complaints from any jurisdiction and for hearing
parties through video-conferencing will increase accessibility to judicial forums and
afford crucial protection in times when international e-commerce giants are expanding
their base.

Concerns:

State regulation:

 As part of the Consumer Protection Act, 2019, the Ministry of Consumer Affairs will
compile a code of conduct for advertisers and agencies, a move designed to curb unfair
practices and misleading claims. The planned code will detail penalties for advertisers
and their agencies and publishers if misleading advertising and false claims are found.
 There have been concerns that this approach would mark a move from self-regulation to
a more federated oversight.
Implementational challenges:

 The existing vacancies at the district commission level would undermine the effective
implementation of the new Act.
Lack of differentiated approach:

 As per the proposed rules for the e-commerce businesses, companies are not allowed to
“manipulate the price” of goods and services offered on their platforms to gain
unreasonable profit or discriminate between consumers of the same class or make any
arbitrary classification of consumers affecting their rights under the Act.
 The clause on the manipulation of price by e-commerce companies appears irrelevant as
sometimes, the e-commerce companies would want to reduce the price to enhance sales
volume. For a country with market size of around $25 billion, the guidelines should have
taken a deeper view of the e-commerce ecosystem, covering all prevailing business
models between consumers, marketplaces and sellers.
What is the Consumer Protection Act in India?
In order to protect the consumers from exploitation and to save them from adulterated and
substandard goods and deficient services, the Consumer Protection Act came into force on 15th
April 1986. It was replaced by the Consumer Protection Act 2019.

What are the main features of the Consumer Protection Act?

The new Act has widened the definition of ‘consumer’. The Act proposes the establishment of
the Central Consumer Protection Authority (CCPA) as a regulatory authority. The new Act
provides flexibility to the consumer to file complaints with the jurisdictional consumer forum
located at the place of residence or work of the consumer. The Act has introduced the concept
of product liability. The new Act provides for mediation as an Alternate Dispute Resolution
mechanism. For mediation, there will be a strict timeline fixed in the rules. The new Act has
armed the authorities to take action against unfair trade practices too. This Act is applicable to
all the products and services, until or unless any product or service is especially debarred out of
the scope of this Act by the Central Government.

What is the aim of the consumer protection act?

The basic aim of the Consumer Protection Act, 2019 to save the rights of the consumers by
establishing authorities for timely and effective administration and settlement of consumers’
disputes.