ABSTRACT
In the economy, consumers play a significant role, as said by Mahatma Gandhi “A customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider in our business. He is part of it. We are not doing him a favor by serving him. He is doing us a favor by giving us an opportunity to do so.” He considers the consumers as the king but first, we must start with who is a consumer? The consumer is any person who buys and consumes the goods from the seller in exchange for the money accessible to him/her in the market. A consumer is an individual or group of individuals who buy any goods or hire any service for their own personal use and not for resale. And as a consumer, he/she looks for the right quality, quantity, performance, mode of use, and safety of the goods and services, and this becomes the duty of the producers to produce the right goods and services if the producers fail to do so, which is causing any kind of unjust and misleading business operations to the consumers. For this, the constitution of India has protected the rights of consumers by the act of consumer protection right in 2019, but here the question arises: does the act of consumer protection 2019 safeguard the consumer rights? And moreover, why was there an amendment of the Consumer Protection Act of 1986 to the Consumer Protection Act of 2019? What was the difference between them? Was it needed? Did it bring any improvements in protecting the rights of consumers in India? This research paper tries to answer all this question.
KEYWORDS
Consumer, Producer, Goods and Services, Central Consumer Protection Authority Consumer Protection Act 2019, Consumer Protection Act 1986, E- commerce.
INTRODUCTION
The Consumer Protection Act, 1986 has been repealed and the new Consumer Protection Act, 2019 (CPA, 2019) is enforced which received the assent of the President on 9 August 2019. It is an Act to provide for protection of the interests of consumers and for the said purpose, to establish authorities for timely and effective administration and settlement of consumers’ disputes and for matters connected therewith or incidental thereto.
Ever since the introduction of the Consumer Protection Act, consumers have been given more rights and protections when it comes to purchasing goods and services. This has helped to ensure that businesses are held accountable for any deceptive practices or faulty products they may try to sell to customers. This was mainly made to protect the consumer from the unfair business practices in the economy. Considering the current position of India with huge growth commercialization in the economy, it may lead to a lot of unfair and misleading business practices in the economy. For this matter, consumer protection becomes an essential act to protect the rights of consumers. The preamble to the Act states that it seeks to provide for protection of the interests of consumers and towards such goal, establishment of authorities for timely and effective administration and settlement of consumers’ disputes. It applies to the whole of India, and came into force on 20th July, 2020.
RESEARCH METHODOLOGY
This research is a doctrinal analytical paper that attempts to provide a thorough analysis of the history and provisions of the Consumer Protection Act of 2019. The effectiveness of the new provisions included in the 2019 Act in comparison to earlier laws will also be analyzed and discussed. The Consumer Protection Act, 1986 and the Consumer Protection Act, 2019 are the primary sources; textbooks, blogs, and articles are the secondary sources.
REVIEW OF LITERATURE
1] Brief on Consumers and Key Features of the Consumer Protection Act, 2019 by Mahelaka Akbar Team Pro-bono India. This research paper discusses the powers and regulatory investigative capabilities of the Central Consumer Protection Authority intending to critically analyze the Consumer Protection Act.
2] Singh, Vagish K., Managing Partner of Law Firm, and Singh, Ashish K., Managing Partner of Law Firm (2020), provide a comprehensive analysis of the implications of the Consumer Protection Act, 2019 on consumers and businesses. The authors highlight important provisions and offer insights into the practical application of the law in different scenarios. “Central Consumer Protection Authority: A Critical Analysis,” International Journal on Consumer Law and Practice: Vol. 8, Article 4.
3]The Consumer Protection Act, 2019 by Mahima Dabas under International Journal of Creative Research Thoughts (IJCRT).
4] A Study on Consumer Protection Act 2019 and Its Implications on the Pillars of Integrated Communication Channel by Prof. Dr.V.Balachandran and Dr.Arunima K.V, Department of Manage under IOSR Journal of Business and Management.
7] Law of Torts by R.K. Bangia 26th edition of Book House Allahabad Law Agency. In this book, the author aims to give practical insights and foundation knowledge of tort and gives us in-depth knowledge of civil wrongs and the Law of Tort .
8] Introduction to the Law of Torts and Consumer Protection by Dr. Avtar Singh and Prof. (Dr)Harpreet Kaur, fourth edition of the book house LexisNexis. This book aims at guiding the fascinating branch of law. It contains to induce easy grasp and understanding of the law of torts and the consumption.
WHO IS A CONSUMER?
According to the Consumer Protection Act, 2019, a “consumer” is;
The term “consumer” refers to any person who purchases goods services or any commodities with the exchange of money available to him/her for consideration, including those who have paid or promised, or are under a deferred payment system that is receiving the income at a later or future time rather than immediately and it also includes persons who utilize electronic devices for multi-level marketing, teleshopping, direct selling, and offline or online shopping. The seller, along with all other entities involved at various stages of manufacturing and marketing, may be held accountable at every stage of multi-level marketing, as per CPA, 2019. This purchase is primarily for personal, social, household, family, and other similar needs, but the purchases are not directly linked to the enterprises or business industries. This includes users with the approval of the person who bought the goods but does not include those who obtain them for resale or commercial purposes. Similarly, a person hires or avails of a service for a consideration, including any beneficiary, but not for commercial purposes. It can be said as an individual or a group who pays some amount of money for the things required for him to consume goods and services. Mainly, if the person is availing of the goods and services as a gifted commodity, then the consumption of those goods and services isn’t considered as a consumer, but the question of the facts, whether it’s a gift or not, depends from case to case. The use of goods purchased and used by an individual solely for the purpose of supporting himself through self-employment is not included in the definition of “commercial purpose” and the phrases “hires or avails any services” and “buys any goods” refer to online and teleshopping transactions as well as multi-level marketing and direct sales.
THE CONSUMER PROTECTION ACT OF 1986
The Consumer Protection Act, 1986 was enacted as a result of the widespread consumer protection movement. Based on the report of the Secretary-General on Consumer Protection dated 27 May 1983, the United Nations Economic and Social Council recommended that the world governments should develop, strengthen and implement a coherent consumer protection policy taking into consideration the guidelines set out therein. The governments were to further provide adequate infrastructure including the bodies as well as financial facilities to develop, implement and monitor consumer protection policies.
The Consumer Protection Act 1986 was a legal procedure given to the consumer to settle their grievances and disputes caused by the producers, and moreover, this act gives the consumer freedom and authority to protect their rights to consume the right goods and services. It was made due to the socio-economic inequalities and differences caused by the consumer at the time.
Section 6 of the Consumer Protection Act, 1986 provided that;
- the right to be protected against the marketing of goods and services which are hazardous to life and property;
- the right to be informed about the quality, quantity, potency, purity, standard and price of goods or services, as the case may be, to protect the consumer against unfair trade practices;
- the right to be assured, wherever possible, access to a variety of goods and services at competitive prices;
- the right to be heard and to be assured that consumers’ interests will receive due consideration at appropriate forums;
- the right to seek redressal against unfair trade practices or restrictive trade practices or unscrupulous exploitation of consumers; and
- the right to consumer education.
The aim of the 1986 Consumer Protection Act is to prevent customers from poor goods, inferior services, and unethical company conduct. Six rights were granted to consumers: safety, choice, representation, information, recompense, and consumer education. The Act is interpreted constructively by the court to make sure it reflects the intent of the parliament.
WHY WAS THERE NEED OF AMENDING?
The Consumer Protection Act of 1986 was essential to replace because in between its implementation in 1986 and 2019, India saw many developments and changes. As commercialization and globalization entered the country, unfair and deceptive trade practices began to emerge, such as digital transactions, e-commerce, misleading advertisements, and complex financial products. The Consumer Protection Act of 1986 offered no remedies for these unfair trade practices. The successful implementation of e-commerce, digital transactions, misleading advertisements, and many others required certain revisions to the statute as development grew. The 1986 Consumer Act did not include the concept of e-commerce and digital marketing, and as various provisions began to emerge, it become important for the laws and regulations to reflect the present situation. Otherwise, the public and the statutory authority will be dependent upon the mere analogical extension of judicial principles. The Consumer Protection Act of 1986 was finally replaced by the Consumer Protection Act of 2019. The new act addresses issues related to online transactions, data privacy, and protection against fraudulent practices in the digital space. It aims to provide consumers with stronger safeguards and legal recourse in the rapidly evolving landscape of e-commerce and digital marketing.
THE CONSUMER PROTECTION ACT OF 2019
As India joined the digital and global economy, it brought with it improvements to the way consumers bought goods and services, taking into consideration safeguards against the rapidly expanding e-commerce industry and online sales of goods and services via teleshopping and additional people. Consequently, the emergence of digitalized economies and transnational level marking presented new avenues for enterprises to broaden their customer base and extend their activities beyond traditional borders. Businesses had to innovate and adjust to the shifting market dynamics as a result of this change in the marketplace, which also increased rivalry among them.
“An Act to provide for protection of the interests of consumers and for the said purpose, to establish authorities for timely and effective administration and settlement of consumers’ disputes and for matters connected therewith or incidental thereto.”
THE ESTABLISHMENT OF CENTRAL CONSUMER PROTECTION AUTHORITY
The Consumer Protection Council (CCPA) has a regulatory mission under Section 10 of the Act, 2019, establishing it at national, central, and district levels. The CCPA’s goals include protecting consumer rights, preventing infringement, and conducting investigations into unfair business practices. It ensures no false or misleading advertisements and encourages participation in proceedings. Complaints can be filed with the District Commission, State Commission, or National Commission, and individuals can participate in proceedings regarding unfair trade practices or infringement of consumer rights. The CCPA aims to spread and promote awareness on consumer rights
The Provision of E-Commerce
The Consumer Protection Act of 2019, it also states that those who buy products or services through electronic devices, including teleshopping, direct selling, multilevel marketing, offline, and online transactions, are also included as consumers. According to e-commerce, products and services can be exchanged through electronic or digital platforms like Myntra, Amazon, Ajio or any other platform that accepts digital content. These platforms are required to give information about the products and services they are producing on their platform, including quality, quantity, warranty, exchange, and refund policies. This online store is required to acknowledge and reply to customer complaints within 48 hours.
Product liability
It refers to an entity’s obligation to make good on any damages that a customer may suffer as a result of a defective product that has been manufactured or sold, or from a lack of adequate services related to the product. In the terms of this bill, a producer or a service provider would have to pay the customer’s losses or damages if the product had a manufacturing flaw or the service was inferior. This is different from the current provision, which allows the manufacturer or service provider to only pay for the cost of the product—rather than the cost of the injury or loss, as is the case with the current plan.
Mediation
In District and State Commissions, National Commissions, and regional Benches, the State and Central Governments will set up consumer mediation cells. Staffed by designated personnel, these cells will maintain records of cases, mediators, and proceedings in addition to providing quarterly reports to the relevant commissions. The Consumer Commission may submit the matter for mediation if the parties are amenable to settling their disputes through mediation and they think there is a chance for an early resolution. The Consumer Commission intends to establish mediation cells as venues for mediation. It is not possible to dispute a mediation settlement because it is final.
Unfair trade
Any unfair or fraudulent method used to advance the supply, use, or sale of products or services is referred to as an unfair trade practice. This can involve making false claims that goods or services meet a specific standard, quality, or grade; enacting on rebuilt or used goods as brand-new; claiming that the supplier or seller is sponsored or involved; making misleading or false claims about the utility of the goods or services; and providing untrue warranties or guarantees.
Video conference e-complaints and hearings
The new Act allows customers to register E-complaints while seated in their homes, in contrast to the previous Act. Several issues that customers had throughout the filing, court appearance, and time-consuming document involvement procedures have been clarified and resolved by the electronic filing of complaints and video conference hearings. Further, the new act lets consumers to make complaints from anywhere, despite where they reside, as opposed to filing in the jurisdiction where the vendor is located.
The further improvements also the in-depth changes of the Consumer Protection Act of 1986 can be understood through the differences of the Acts of 1986 and 2019.
What makes the Consumer Protection Act of 1986 different from the Consumer Protection Act of 2019?
| TITLE | CPA,1986 | CPA,2019 |
| Establishment | Consumer Disputes Redressal Agencies at district, state, and national levels. | Dispute Resolution Commissions and the Central Consume Protection Authority.(CCPA) |
| Commissions and Councils | District, state, and federal Consumer Protection Councils. | created a mediation mechanism and established the Central Consumer Protection Council. |
| Authority of Commissions | District: Maximum of Rs. 20 lakhs Status: Between Rs. 20 lakhs and Rs. 1crore domestic: More than Rs. 1 crore. | District: Not to exceed Rs. 1 crore State: between Rs. 1 and Rs. 10 crores Domestic: More than Rs. 10 crores. |
| Positions | primarily concerned with resolving consumer disputes. | widened to include proactive steps to safeguard consumers and uphold their rights. |
| Mechanisms | State Commissions, National Commission, and District Forums. | District, State, and National Commissions; the establishment of mediation cells for quicker the settlement of disputes. |
| Filing of Complaints | by customers, members of associations, and federal and state authorities. | expanded to incorporate electronic filing and acknowledge the CCPA’s function in submitting complaints on behalf of consumer organizations. |
| Title | CPA,1986 | CPA,2019 |
| Definitions | Phrases like “complainant,” “consumer,” and “defect” have basic definitions. | Amended phrases like “unfair trade practices,” “advertisement,” and the express mention of e-commerce transactions to the expanded definitions. |
| Penalties | Penalties for frivolous complaints, non-compliance with orders. | harsher punishments for deceptive advertising, selling contaminated goods, and disobeying orders; in some situations, imprisonment. |
| Liability for Products | Not specifically addressed. | Extensive regulations on product liability that guarantee the responsibility of producers and suppliers. |
| E-commerce and Digitalization | No such provision. | included clauses that ensured consumer protection in the digital sphere and regulated e-commerce and digital transactions. |
| Alternate Dispute Resolution (ADR) | based all dispute resolution on adjudication. | introduced mediation as a form of alternative dispute resolution and linked mediation cells to all levels of consumer commissions |
| Unfair Contracts | No information on unfair contracts in particular. | defined unfair contracts and incorporated clauses to shield customers from agreements that are one-sided. |
| Miscellaneous Enhancements | Did not give consumers the ability to take collective action, instead focusing primarily on individual complaints. | By adding opportunities for class action lawsuits, enhanced collective redressal procedures. fines for misleading advertising have been raised in an effort to deter false claims and protect consumers’ interests. |
| Title | CPA,1986 | CPA,2019 |
| Role of Central Consumer Protection Authority (CCPA) | Lack of a centralized body to safeguard consumers. | Created the CCPA, which has the power to control and uphold consumer rights through fines, license cancellations, and recalls. |
| Time limit for filing a complaint | 30 DAYS | 45 DAYS |
| Video Conferencing | No such provision. | Consumers can seek hearingthrough video conferencing. |
SUGGESTIONS
The introduction of a thorough mobile app that gives users up-to-date information on their rights, complaint procedures, and real-time updates on their complaints is suggested as a means of improving consumer protection.
The Act should also include special measures to prevent digital fraud, such as harsh penalties for spoofing, phishing, and other online scams.
To promote openness, e-commerce platforms must to be required to publicly publish their entire return, refund, and exchange policies.
For some high-risk products, strict responsibility should be implemented, with producers bearing the burden of proving their goods aren’t flawed.
To further improve consumer protection and awareness, national efforts should be started to inform people about their legal rights under product liability laws.
CONCLUSION
People from all walks of life applaud the Consumer Protection Act of 2019. The Act appears to be fully and extensively designed to effectively handle all types of situations. In order to protect consumers from unfair trade practices and give them access to efficient dispute resolution procedures, the Act aims to address the flaws of the previous Act and enable prompt and efficient resolution of consumer grievances. The Act also seeks to guarantee that consumers have the ability to make knowledgeable decisions in the marketplace and to encourage fair competition. The scope of consumer laws has expanded, and numerous adjustments have been made by this act. It presented ideas such as the ADR mechanism and setup that CPA, 1986 did not even mention. of statutory authority, as well as video conference hearings. Raising the commissioners’ financial authority and penalizing more is a step toward reducing the number of claims before appellate commissions, which guarantees the quicker resolution of cases. In a sense, the proficiency and effectiveness of the CCPA might balance the differences between consumers from all backgrounds, including those who are less affluent, less developed, or less educated, and corporate behemoths. In order to safeguard consumer rights and encourage fair competition in the market, the CCPA is essential. As a result, we can conclude that the Act of Consumer Protection of 2019 has addressed every issue raised by the Act of 1986, fully safeguarding consumers and providing them with security against the Indian constitution.
DEEYA ANIL DANI
RAMIAH INSTITUTE OF LEGAL STUDIES