Consumer Protection Act: A milestone reform in consumer protection framework in India
Abhishek Dayal, Director, PIB Imphal
The Consumer Protection Act, 2019 came into force this week (from 20 July, 2020) marking a major milestone in Consumer protection reforms in the country and paving the way for a healthier, more honest marketplace for the countrymen. The Act was passed in the parliament last summer and replaces the Act of 1986. It establishes a new architecture of institutional protection to Consumers, led by a Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of consumers.
Generally speaking, a Consumer is not united as a class and does not have the time or the capacity to take on manufacturers or retailers if cheated. They are also unsure of their rights and would rather suffer a small loss than spend valuable time in taking on costly litigation, thus emboldening those who indulge in such practices. Legislation and reforms in the institutional setup to protect their rights was a much needed step and comes at a time when Indian economy is set to take off to exponentially higher levels of activity.
Last few years has seen a sea change in the commerce landscape in the country with online business slowly growing in volume of sales. The mushrooming growth of online e-tailers and multi-brand platforms no doubt gave Consumers a wider choice and convenience, but without legal rights also left them vulnerable to malpractices, cheating or at the very least, inconvenience to get themselves heard if they had a problem with a manufacturer or a retailer. A better awareness of their rights, new legislation and the consumer protection mechanism is essential for the people to be able to use it for their benefit.
Provisions of the Act
The Act establishes a new regulatory framework. Briefing the media about the Act, Union Minister for Consumer Affairs, Food & Public Distribution, Shri Ram Vilas Paswan said that the Act will empower consumers and help them in protecting their rights through provisions like Consumer Protection Councils, Consumer Disputes Redressal Commissions, Mediation, Product Liability and punishment for manufacture or sale of products containing adulterant / spurious goods.
With this Act, a big development in the sphere of consumer rights in the country is the possibility of class action suits through the establishment of a Central Consumer Protection Authority that can initiate legal action on behalf of a class of Consumers against any malpractice. It will be empowered to (a) Conduct investigations into violations of consumer rights and institute Complaints / Prosecution, (b) Order recall of unsafe goods and services, (c) Order discontinuance of unfair trade practices and misleading advertisements and (d) Impose penalties on Manufacturers/Endorsers/Publishers of Misleading Advertisements.
Class action lawsuits are part of legal framework in many developed countries. It protects the rights of similarly placed Consumers who may not know that their interests are being subverted or may not be able or inclined to take on powerful commercial interests. The Authority will act on their behalf.
Another big advance in the new Act is inclusion of online commerce. 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 methods, 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. Further, e-commerce platforms 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. The Act introduces the concept of product liability and brings within its scope, the product manufacturer, product service provider and product seller, for any claim for compensation.
The definitions within the Act in itself fill many gaping holes in the earlier consumer protection laws. The comprehensive definitions of obligation and liabilities strengthens the common man in getting justice if they have a grievance. It provides for simplifying the consumer dispute adjudication process in the Consumer Commissions, which include empowerment of the State and District Commissions to review their own orders. It enables a Consumer to file complaints electronically and file complaints in Consumer Commissions that have jurisdiction over the place of their own residence and video-conferencing. There will be no fee for filing cases upto Rs. 5 lakh.
Alternate Dispute Resolution mechanism of Mediation will simplify the adjudication process. A complaint will be referred by a Consumer Commission for mediation, wherever scope for early settlement exists and parties agree for it. 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.
Direct Benefits to the consumer
In a nutshell, some of the direct benefits to the Consumers through this legislation will be - Additional swift executive remedies provided through CCPA, deterrent punishment to check misleading advertisements and adulteration of products, product liability provision to deter manufacturers and service providers from delivering defective products or deficient services, ease of approaching Consumer Commissions and simplification of adjudication process, scope for early disposal of cases through mediation and provision for rules for new age consumer issues related to e-commerce. Even with a cursory glance at the provisions of the Act, it is quite evident that this important legislation will go a long way in protecting the interests of the common man and enhance his/her ease of living.