Customer Is King: The Consumer Protection Act, 2019
The Consumer Protection Act, 2019 (New Act) received the assent of the President of India and was published in the official gazette on 9 August, 2019. The New Act seeks to replace the more than three decades old Consumer Protection Act, 1986.
Indian market today is dominated by the consumerism, particularly after a decade from economic reforms process. It is gradually being transformed from a predominantly sellers’ market to a buyers’ market where exercised choice by the consumers depends on their awareness level. Consumer rights could be protected in a competitive economy only when right standards for goods and services for which one makes payment are ensured by evolving a network of institutions and legal protection system. Ensuring consumer welfare is the responsibility of the government as every citizen of the country is a consumer in one way or the other.
- The Act in its present form is an inefficient piece of legislation, not keeping pace with the new market dynamics, multi-layered delivery chains, and innovative and often misleading advertising and marketing machinery.
- Keeping this in mind and to address the new set of challenges faced by consumers in the digital age, the Indian Parliament, on 6 August 2019, passed the landmark Consumer Protection Bill, 2019 which aims to provide the timely and effective administration and settlement of consumer disputes.
Salient Features of the Act
Definition of Consumer: Person who buys any goods or avails any service which has been paid or promised or partly paid and partly promised or under deferred payment .It covers transactions through all modes including offline, and online through electronic means, teleshopping, multi-level marketing or direct selling.
Rights of Consumers
- The right to be protected against the marketing of goods, products or services which are hazardous to life and property.
- The right to be informed about the quality, quantity, potency, purity, standard and price of goods, products or services, so as to protect the consumer against unfair trade practices.
- The right to be assured, access to a variety of goods, products or services at competitive prices.
- The right to be heard and to be assured that consumer›s interests will receive due consideration at appropriate fora.
- The right to seek redressal against unfair trade practice or restrictive trade practices or unscrupulous exploitation of consumers.
- The right to consumer awareness.
Central Consumer Protection Council: The Central Government will establish the Central Consumer Protection Council to be known as the Central Council. The objects of the Central Council shall be to render advice on promotion and protection of the consumers’ rights under this Act.
Central Consumer Protection Authority: The Central Government will establish a Central Consumer Protection Authority to be known as the Central Authority to regulate matters relating to violation of rights of consumers, unfair trade practices and false or misleading advertisements and to promote, protect and enforce the rights of consumers.
Penalties for Misleading Advertisement: Central Consumer Protection Authority can impose penalty of Rs 10 lakh, extendable to Rs 50 lakh.
Consumer Disputes Redressal Commission: Act provides for setting up of Consumer Disputes Redressal Commissions (CDRCs) at the district, state, and national level. Appeals from a District CDRCs will be filed at State CDRC. Appeals from the State CDRC will be filed at National CDRC. Final appeal will be before the Supreme Court.
Jurisdiction of CDRCs: District Commission shall have jurisdiction to entertain complaints where the value of the goods or services paid as consideration does not exceed one crore rupees. State Commission shall have jurisdiction to entertain complaints where the value of the goods or services paid as consideration does not exceed ten crore rupees. Complaints with value of goods and services over Rs 10 crore lie in jurisdiction of National CDRC.
- It will tackle the challenges posed by online transactions, and tele-marketing, multi-level marketing and digital marketing.
- Central Consumer Protection Authority (CCPA) will keep check on misleading advertisement and provision of penalty upto 50 lakh will act as deterrent.
- It emphasises early dispose of cases. For example, the National Consumer Disputes Redressal Commission is grappling with appeals and original complaints filed in the period 2008-2010, which means consumers are being made to suffer for an average of five years to get their grievances redressed.
- Clearly demarcate consumer rights which will help in the settlements of disputes and signify that consumer is the king.
- This is the first time that powers to take action for damage caused by a product have been introduced in a consumer protection framework. This step will act as a deterrent for manufacturers since the liability quotient has increased.
- Central Consumer Protection Authority (CCPA) need to be vigilant and it should not become another page in the book of dormant institutions.
- Awareness drives should form the core as the consumers need to be educated about their rights, especially in rural areas.
- Formulation of code of ethics for advertisers and ensure its compliance to decrease the litigation.
- Having a comprehensive law with right intent does not guarantee its success until and unless it is enforced with the right intent and spirit. So, faithful implementation of the statute will be the bedrock of ensuring healthy consumer market in India.