Consumer Protection Act, 2019: A New Era of Consumer Rights 

Consumer Protection Act, 2019: A New Era of Consumer Rights 

 

Introduction

Recognising the changing nature of commerce and the emergence of digital marketplaces, the Consumer Protection Act, 2019 replaced the 1986 legislation with a more comprehensive legal framework. The new Act introduces several significant reforms, including the establishment of the Central Consumer Protection Authority (CCPA), product liability provisions, mediation, enhanced consumer rights, regulation of e-commerce, and stricter action against misleading advertisements. This paper examines the evolution of consumer protection law in India, compares the Consumer Protection Acts of 1986 and 2019, and analyses the concept of product liability along with important judicial precedents that have shaped consumer jurisprudence. 

 

Consumer Protection Act, 1986: An Overview 

The Bill of Consumer Protection was passed in 1986, and was drafted on 5th December 1986. This Bill became an Act on 9th December 1986 and came into force on 24th December 1986. This Act made remedies easily available, consumers less expensive to bear, and enabled effective and quick decision-making possible. It covered various aspects for protection of the consumer. It covers expired goods, poor service, defective products, and so forth. It only covers redress when the product is bought for personal use, not for reselling or commercial purpose. Under this Act, complaints in the consumer forum will only be punished in monetary relief, and no other form of relief was granted under this Act.      

This act provided protection to the consumer in case the goods and service are not fair. If the product does not do fair trade, it does not qualify in quality or service according to its price. It ensures that the product and service are available to consumers at a competitive price. It also had a consumer forum facility and through this act, consumers could seek redressal if any unfair or unjust trade happened with them. In the act, in the Consumer Protection Act 1986, to file a complaint, there were some terms and conditions.

1) The complaint needs to be filed by the consumer within two years of purchase or service. 

2) The complaint had to be submitted in written, oral complaint won’t be acceptable. 

3) The complaint should have all the details of the person against whom the complaint is filed and the required document should be attached to it. 

4) The consumer should mention the relief they are seeking in the complaint and it should be reasonable.

5) The complaint should safeguard the agreement, deal, bill, written memo or any such document relevant to the case. As without this document, it becomes hard to prove whether any wrong has been done to the consumer or not.

6)There is no language barrier in filing a complaint. It can be filed in any language but English is mostly preferred. The consumer can himself file a complaint and do the needful. There is no necessity to hire a lawyer.

These were the terms and conditions for a complaint to be filed under the Consumer Protection Act of 1986.If the consumer is not satisfied by the consumer court decision, he can apply in higher court. There are some procedures that need to be followed by the applicant according to the Consumer Protection Act of 1986. The procedure is as follows. If a consumer is not satisfied with the decision of the district forum, then he can file an appeal with the state commission within 30 days of it. It can be extended to 15 more days. If not satisfied by the state commission order, appeal can be filed with the national commission within 30 days, with extension of 15 more days. At last, if the consumer is not even satisfied with the national commission, he can apply to the Supreme Court. The consumer court has the right to enforce their order. If so happens that the defaulter doesn’t appear, the court can issue a warrant, notice, or appearance reminder. Even the court can also decide the matter in absence of the defaulter if he fails to appear.

Who is a consumer? 

A consumer is someone who decides to buy goods or services for personal use rather than for resale or business. A customer is someone who buys something for a consideration that has been paid or agreed to be paid or partly paid and partly promised. The Carlill versus Carbolic Smoke Ball Company case is a landmark case in which the manufacturer was required to adhere to minimum quality requirements for the first time to safeguard the consumer, and the origin of the consumer movement can be traced back to this case. In the landmark case of Donoghue versus Stevenson, 1932, the court held that the manufacturer liable for harm caused to the consumer, making a significant milestone in the development of consumer protection law. The case established that the manufacturer owed a duty of care to customers and must exercise reasonable care in the protection of their goods to prevent foreseeable harm.

Consumer Protection Act 2019. On August 9th, 2019, the President of India gave his acceptance to the Consumer Protection Act 2019, in brackets(new Act). This new bill includes several new safeguards, customization for consumers. It intends to provide consumer assistance and solve problems in providing basic consumer rights in major areas known as e-commerce. In India, consumers get seven basic rights. Right to be protected, right to choose, the right to be informed, the right to consumer education, the right to be heard, right to seek redressal. This new bill seeks to safeguard all these consumer rights and finds different ways to introduce modern methodology and practice in the Indian consumer market.

Salient Features of the Consumer Protection Act, 2019

 

Establishment of the Central Consumer Protection Authority (CCPA):

One of the most significant reforms introduced by the Consumer Protection Act, 2019 is the establishment of the Central Consumer Protection Authority (CCPA). The CCPA functions as the central regulatory body entrusted with protecting consumers’ rights and preventing unfair trade practices. It has been vested with extensive enforcement powers, including initiating suo motu investigations, ordering the recall of unsafe goods, directing refunds to consumers, discontinuing unfair practices, imposing penalties, suspending licences where necessary, and instituting class action proceedings in matters affecting a large number of consumers.

Expanded Definition of Consumer:

The Act broadens the scope of the term “consumer” by recognising purchases made through both traditional and modern modes of commerce. It now includes individuals who purchase goods or avail services through e-commerce platforms, electronic transactions, teleshopping, direct selling, and multi-level marketing. Unlike the Consumer Protection Act, 1986, the new legislation specifically extends legal protection to online consumers.

 

Wider Scope of Unfair Trade Practices:

The 2019 Act expands the concept of unfair trade practices by including the unauthorised disclosure of a consumer’s personal information. Businesses that disclose confidential consumer data without lawful authority or the consumer’s consent may be held liable unless such disclosure is required under any other applicable law.

 

Introduction of Product Liability:

A major innovation under the Act is the introduction of product liability, enabling consumers to seek compensation for harm caused by defective products or deficient services.Liability may extend to manufacturers, service providers, and product sellers, including e-commerce platforms involved in the commercial distribution of products. Manufacturers may be held liable even if they demonstrate that they exercised reasonable care while manufacturing the product or issuing an express warranty. However, the Act also provides certain statutory defences, such as where the product has been altered, modified, or misused by the consumer after purchase.

 

Promotion of Alternative Dispute Resolution:

To facilitate quicker and more efficient settlement of consumer disputes, the Act incorporates mediation as an Alternative Dispute Resolution (ADR) mechanism. This initiative is intended to reduce the burden on consumer commissions, minimise litigation costs, and encourage amicable resolution of disputes.

 

Online Filing of Consumer Complaints:

Recognising the importance of digital accessibility, the Act permits consumers to file complaints electronically before the appropriate consumer commission having jurisdiction over their place of residence or employment.This marks a departure from the earlier requirement of filing complaints only where the seller carried on business. The Act also permits hearings through video conferencing, thereby making the grievance redressal process more accessible, convenient, and cost-effective.

Penalties for Misleading Advertisements:

The Consumer Protection Act, 2019 imposes stringent penalties for false or misleading advertisements. The CCPA is empowered to impose fines of up to ₹10 lakh on manufacturers or endorsers responsible for deceptive advertisements and may also impose imprisonment for up to two years. For repeated violations, the fine may extend to ₹50 lakh along with imprisonment for up to five years. Additionally, the CCPA may prohibit an endorser from promoting a product or service for up to one year, with the period of prohibition extending up to three years in the case of subsequent offences. The Act also introduces accountability for celebrity endorsers, requiring them to exercise due diligence in verifying the truthfulness of advertising claims before endorsing products or services.

Enhanced Pecuniary Jurisdiction:

The Act revises the pecuniary jurisdiction of consumer dispute redressal commissions to improve administrative efficiency Consumer complaints involving consideration up to ₹1 crore fall within the jurisdiction of the District Consumer Disputes Redressal Commission. Matters involving consideration exceeding ₹1 crore but not exceeding ₹10 crore are heard by the State Consumer Disputes Redressal Commission, while disputes involving consideration above ₹10 crore are adjudicated by the National Consumer Disputes Redressal Commission.

 

Comparative Analysis of the Consumer Protection Act, 1986 and the Consumer Protection Act, 2019 

 If we compare Consumer Protection Act 2019 and Act 1986, we see there is no separate regulator in the Consumer Protection Act of 1986, but in the 2019 Act, the Central Consumer Protection Authority is formed. It is a regulatory body tasked with protecting, promoting, and enforcing the rights of consumers as a class. It investigates violation of consumer rights, curbs unfair trade practices, and regulates misleading advertisement to ensure a fair and ethical marketplace. Earlier, there was no simple product liability clause present, but now consumers can seek compensation for harm caused by a defective product or service. In the 1986 Act, there was no formal requirement for mediation, and now the settlement will be referred to mediation by the court. Under the Act of 1986, a complaint could only be filed where the opposite party resides, carried on business, or where the cause of action arose. The Consumer Protection Act of 2019 allows consumers to file complaints at the consumer commission having jurisdiction over their place of residence or work, making the grievance redressal process more convenient and accessible. The Consumer Protection Act 1986 did not contain specific provision on product liability. The Consumer Protection Act 2019 introduces a dedicated product liability framework, enabling consumers to claim compensation for injury or loss caused by the defective product or defective service, thereby enhancing the accountability of manufacturer, seller, and service problems.

Product liability under the CPA Act 2019.

 Firstly, product liability as per Section 2, Clause 34 of the Consumer Protection Act 2019 means the responsibility of a product manufacturer or seller of any product or service they are providing to compensate for any harm caused due to product or service of defective product, manufactured or sold. Product liability before Consumer Protection Act. Before the Act of 2019, the product liability was not considered as an independent legal concept, but still there were some remedies regarding it. Consumer Protection Act 1986 and various relevant statutes were used to address arising issues from defective products and deficiencies in services. There was a case in the Supreme Court where a 10-year-old boy, Harjot Ahluwalia, was admitted to Spring Meadows Hospital for the treatment of typhoid. During his stay at the hospital, one nurse injected some medicine and it was without the supervision of the doctor. Due to this careless act, the boy went into a coma and suffered lifetime brain damage. His parents filed a complaint against the hospital for their negligence in due care at the hospital and irrelevant harm caused to the child. The Supreme Court held that the doctor and the medical staff were liable for gross medical negligence. Another important aspect of the case is that it stated who was considered as the consumer. The court held that both the child and his parents, who are paying the medical bills, are the consumers.

 

Definitions for product liability and codified responsibility for the harm caused by the lack of service and faulty product is given under Chapter 4 of Consumer Protection Act 2019. Under this Act, product manufacturer, the product seller, and product service provider are considered liable for any faulty product or any negligence in the service. In the case National Restaurant Association and ORS versus Union of India and Anr, Delhi High Court ruled that service charges or tips are voluntary payments made by the client that can’t be imposed on a meal bill by hotel and restaurant. The Central Consumer Protection Authority 2022 rules forbid hotels and restaurants from charging service fees automatically or by default on meal bills. It was upheld by the court. Also, the court observed that the service charge or tip is a voluntary payment made by the customer, and it is not mandatory in any situation. The court held that any additional charges like tip and service charge, that too on a mandatory basis, will be a violation of consumer’s rights.

Under the product liability section of Consumer Protection Act, Section 82 states that a product manufacturer, seller, or service provider can be sued for harm caused by a defective product or deficient service. Section 83 makes all three, manufacturer, seller, service provider, jointly and severally liable. Under Section 84, it specifies conditions for manufacturer liability, including manufacturing defect, design defect, deviation from specification, non-conformity with express warrant, and failure to provide adequate instructions and warning. Section 86 deals with liability of product service providers and covers deficient service leading to harm. Section 87 allows sellers to avoid liability if the product wasn’t misused, warnings were provided to employers, except if the consumer was under the influence of alcohol or drugs.

 

Conclusion

The Consumer Protection Act, 2019 marks a significant advancement in India’s consumer protection regime by addressing the shortcomings of the Consumer Protection Act, 1986 and adapting the law to the realities of the digital economy. Through the establishment of the Central Consumer Protection Authority, recognition of e-commerce transactions, introduction of product liability, promotion of mediation, and stronger safeguards against unfair trade practices and misleading advertisements, the Act provides consumers with more effective and accessible remedies.Judicial decisions such as Donoghue v. Stevenson and Spring Meadows Hospital v. Harjot Ahluwalia has further strengthened consumer rights by establishing the principles of duty of care and accountability for defective products and negligent services. Overall, the Consumer Protection Act, 2019 promotes greater transparency, accountability, and fairness in the marketplace while empowering consumers to assert their rights. As commercial transactions continue to evolve with technological advancements, the effective implementation of the Act will play a crucial role in ensuring consumer welfare and maintaining confidence in India’s consumer protection framework.

 

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References

1. Consumer Protection Act, 1986 (Act No. 68 of 1986), Preamble. 

2.Consumer Protection Act, 1986, § 2(1)(d), § 2(1)(f), § 2(1)(g), and § 2(1)(r) (definitions of consumer, defect, deficiency, and unfair trade practice). 

3.Consumer Protection Act, 1986, §§ 12, 14, and 24A (filing of complaints, reliefs available to consumers, and limitation period for filing complaints). 

1.Donoghue v Stevenson (establishing the manufacturer’s duty of care towards consumers).

2.Consumer Protection Act, 2019 (Act No. 35 of 2019), §§ 2(7), 10–27 (definition of “consumer” and establishment, powers, and functions of the Central Consumer Protection Authority).

3.Consumer Protection Act, 2019, Preamble (providing for the protection of consumers’ interests, establishment of consumer dispute redressal commissions, and regulation of matters relating to consumer rights, including e-commerce).