The Consumer Protection Act, 2019

The Consumer Protection Act, 2019 (‘Act’) came into force on 20th July 2020 and the Act aims to provide for protection of interests of consumers by introducing an effective and timebound administration and settlement of consumer disputes. The digital era and boom in the e-commerce industry had increased the challenges related to consumer protection and disputes which were not covered in the 30-year-old Consumer Protection Act, 1986. Thus, the said Act is a welcome, much needed and comprehensive move and approach by the Department of Consumer Affairs, which aims at addressing such difficulties.

Salient features of the Act:

– E-commerce:

The definition of ‘consumer’ has been widened so as to include offline or online transactions through electronic means by teleshopping or direct selling or multi-level marketing. Further, it also lays down obligations wherein 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.

– Establishment of Central Consumer Protection Authority (CCPA):

The said authority shall be the central authority to regulate matters relating to violation of consumer rights, unfair trade practices and false or misleading advertisements and promote, protect, and enforce the rights of consumers.  The CCPA will be empowered to conduct investigations into violations of consumer rights and institute complaints / prosecution, order recall of unsafe goods and services, order discontinuance of unfair trade practices and misleading advertisements, impose penalties on manufacturers/endorsers/publishers of misleading advertisements.

The gazette notification for establishment of the Central Consumer Protection Authority and rules for prevention of unfair trade practice in e-commerce are under publication.

– Pecuniary jurisdiction:

i. The Act has revised and enhanced the pecuniary limits of the Consumer Forums. The District Forum shall have the jurisdiction to entertain consumer complaints where the value of the goods or services paid as consideration does not exceed one crore rupees.

ii. The State Commission Forum shall have the jurisdiction to entertain consumer disputes where the value of the goods or services paid as consideration exceeds one crore rupees and in addition, it is empowered to adjudicate complaints against unfair contracts, where the value of goods or services paid as consideration does not exceed ten crore rupees.

iii. The National Commission Forum shall have the jurisdiction to entertain consumer disputes where the value of the goods or services paid as consideration exceeds ten crore rupees and in addition, it is empowered to adjudicate complaints against unfair contracts, where the value of goods or services paid as consideration exceeds ten crore rupees. Appeals from orders passed by CCPA shall also lie before this forum.

– Simplification of filing and adjudication process of consumer complaints:

In order to simplify the adjudication process of consumer disputes, the Act enables a consumer to file complaints electronically and file complaints in the Consumer Forums that have jurisdiction over the place of his residence or work. In addition, the amendment enables videoconferencing for hearing and deemed admissibility of complaints if the question of admissibility is not decided within the specified period of 21 days.

– Concept of product liability:

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 for any harm caused by a defective product. The Act lays down the instances a product manufacturer/ product service provider/ product seller shall be held liable.

– Alternate dispute resolution:

The Act introduces an alternate dispute resolution mechanism of mediation to simplify the adjudication process.  Under this mechanism, a complaint will be referred by a Consumer Forum for mediation, wherever scope for early settlement exists and parties agree for it.

– Penal punishments:

The Act introduces penal punishments for various offences such as:

i) On the manufacturer or service provider who causes a false or misleading advertisement to be made;

ii) On any person for manufacturing for sale or storing, selling or distributing or importing products containing adulterant;

iii) On any person for manufacturing for sale or for storing or selling or distributing or importing spurious goods.


Contributing Advisors