18 February, 2020
With the new age of digitization in India, there has been a sudden growth in the e-commerce business. Easy payment mechanisms make it convenient for the consumer to access a variety of choices at a click of a button. However, due to the spurt of digitization, there have been certain challenges which required immediate attention and keeping in mind the same, the Indian Government recently brought into effect the new Consumer Protection Act, 2019 (“CP Act”). The CP Act repeals the old Consumer Protection Act, 1986 with the aim to provide timely and effective administration and settlement of consumer's disputes. Following are the key highlights of the CP Act;
The definition of “Complainant” now extends to parent or legal guardian of a minor who is a consumer.
E-Commerce:
- E-commerce has been included in the CP Act. In this regard, The CP Act has also broadened the definition of “Consumer” to include a person who “buys any goods” and “hires or avails any services” through offline or online transactions, such as, electronic means or by teleshopping or direct selling or multi – level marketing and is not restricted to only the manufacturer of the product.
Rights of a Consumer:
- The rightsaConsumerhavebeendefinedunderthe CP Act which also include:
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a) Protection against the marketing of goods, products or services which are hazardous to life and property;
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b) Protect the consumer against unfair trade practices by being informed about the quality, quantity, potency, purity, standard and price of goods, products or services;
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c) Access to a variety of goods, products or services at competitive prices;
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d) Consumer's interests will receive due consideration at appropriate fora;
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e) To seek redressal against unfair trade practice or restrictive trade practices or unscrupulous exploitation of consumers.
Product Liability:
- The CPA act now includes “ProductLiability”inorder to discourage the manufacturers and service providers from delivering defective or deficient services. A product liability action may be brought against a product manufacturer or a product service provider for any harm caused to him on account of a defective product.
- It is important to note that a product manufacturer shall be liable even if he proves that he was not negligent or fraudulent in making the express warranty of a product.
Central Agency for regulating the laws on Consumer Protection:
- The CP Act provides for establishment of Central Consumer Protection Authority (“Central Authority”) to regulate matters relating to violation of rights of consumers, unfair trade practices and false or misleading advertisements which are prejudicial to the public interest and the consumers.
- Central Authority shall have an “Investigation Wing” for the purpose of conducting inquiry or investigation.
- Amongst the various powers held by the Central Authority, the most relevant ones are:
a) Inquire into a matter, suo motu or on a complaint received or on direction of Central Government;
b) File Complaints or intervene in any proceedings before District or State or National Commission;
c) After a preliminary inquiry, the Central Authority will further have a right to refer the matter for investigation or to the other Regulator established under any other law for the time being in force;
d) Recall for goods, withdrawal of services which are dangerous or unsafe, reimbursement of prices of goods or services etc.
e) Issue directions and penalties against false or misleading advertisements.
Filing of Complaint
- The CP Act allows complainant to file a complaint in a Commission, within local limits of where the complainant resides or personally works for gain.
- It also allows complaints to be filed electronically and hearing or examination of parties through video conferencing in certain circumstances.
- The jurisdiction of Commissions to entertain complaints has been enhanced:
|
Commission |
Jurisdiction |
|---|---|
|
District Commission |
Where the value of the goods or services paid as consideration does not exceed one crore rupees. |
|
State Commission |
Where the value of the goods or services paid as consideration, exceeds rupees one crore, but does not exceed rupees ten crore. |
|
National Commission |
Where the value of the goods or services paid as consideration exceeds rupees ten crore. |
Alternate Dispute Resolution Mechanism:
- The CP Act 2019 provides for Establishment Consumer Mediation Cell at each level i.e. District, State and National commission.
- The Commissions can, at any stage of the proceedings, direct the parties to have their matter settled by mediation, where it appears that there exist possibility of resolution of dispute through settlement.
- Where the matter has been settled by mediation, the District, State or National Commission shall duly record in its order such settlement. If the mediation fails, the Commission shall then proceed to hear the matter.
The CP Act has widened the scope of protection of a consumer. The amendments are certainly progressive in nature and have been made keeping in mind the radical changes in the consumer base and consumer platforms. However, the effectiveness and speediness of the functions under the new Act will only be ascertained over the course of time.
For further information, please contact:
Vineet Aneja, Partner, Clasis Law
vineet.aneja@clasislaw.com
