Practical Implications of the latest Consumer Protection Act, 2019 upon different Businesses, Corporates & Industries | Corporate Law Attorney in Delhi NCR | Corporate Lawyer in Delhi NCR |

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In the era of digital economy and growing multitude of business transactions, consumer satisfaction and consumer protection are perhaps the two most important concerns for any business or service entity. Gone are the days, when the principle of “caveat emptor” or “buyer beware” used to exist in the society. Now, the consumers are at a pivotal position and their interests are at the forefront in times of changing facets of technology and commerce.

In India, the new Consumer Protection Act, 2019 (the 2019 Act/new Act) seeks to replace the three decade old Consumer Protection Act, 1986 with its primary focus on protecting the interests of the consumers by stablishing authorities and fast settlement of consumer grievances through efficient and effective administration.
The new Consumer law has brought certain strong changes which directly affects the Industries and especially the Ayurveda & Herbal products, Beauty & Wellness products, Health Supplements, Cosmetics, E-Commerce etc.

The definition of “consumer” has been extended to the ones who purchase goods through e-commerce transactions. The definition of goods under the 1986 Act has been replaced with food, as defined under the Food Safety and Standards Act, 2006, which effectively brings in food delivery businesses within the ambit of the 2019 Act. The term “service” has been extended to mean “telecom”, though the definition of the latter is different from the expression “Telecommunication services” as envisaged under the TRAI Act.

Revised Pecuniary Jurisdiction: Under the new Act, the District Consumer Dispute Redressal Forum can now exercise jurisdiction over complaints where the amount is up to INR one crore, the State Consumer Dispute Redressal Commission where the amount is up to INR ten crore and the National Consumer Dispute Redressal Commission (NCDRC) where the amount is above INR ten crore. Further, now appeals can only be made from the State Commission to the National Commission where there is a substantial question of law. Appeals from the National Commission to the Hon’ble Supreme Court can be made only against the complaints emanating from the National Commission. It is pertinent to note the difference of language employed in the 2019 Act in contrast to the 1986 Act, with regards to pecuniary jurisdiction. In the 1986 Act the relevant clause stated “where the value of goods or services and compensation , if any, claimed….”, whereas, in the 2019 Act, it is rephrased as “where the value of the goods and services paid as consideration…“. Therefore, the latter seems to imply that jurisdiction is depended upon what has been paid by the Complainant and not the value of the concerned goods/services.
As opposed to the 1986 Act, the 2019 Act does not provide for any pre-requisite qualifications for members of the State and National Commission. Section 55(1) enables the Central Government to provide for qualification, appointments, term of office etc. Section 42(3) and 54(1) of the Bill provides that the composition of the State and National commissions shall consist of the President and four or more members as may be prescribed. Prior consultation with the Central Government is required before making appointments to the District and State Commissions. None of the commissions shall consist of present or retired judges of the Courts of India.

E-Filing of complaints: It is not mandatory for the consumers to now file complaints before the forums Cf their jurisdiction. The 2019 Act provides mechanisms for filing complaints electronically which aims to eradicate inconvenience and harassment for the consumers.

Product liability and Unfair Contracts: Perhaps, the most significant change brought in by the new Act, is the introduction of “product liability.” Now, the manufacturers and sellers of products and services can be made liable to compensate for any harm caused to consumers by defective goods or for deficiency in services. The liability will exist even where the product sellers are not negligent or fraudulent in their actions, or if they use the defence that they merely act “aggregators.” However, certain exceptions such as misuse, alteration and modification of product will not make the manufacturers and sellers liable.
Unfair contracts between a manufacturer/trader/service provider and a consumer is also included in the Bill, and shall mean the following –
i. Demand for high security deposit.
ii. Refusal in accepting repayment of early debt.
iii. Disproportionate penalty.
iv. Unilateral termination without a reasonable cause
v. Assigning contract to the detriment of the other party without his consent. The party shall means the consumer.
vi. Imposition of unreasonable charge, obligation or condition on a consumer, which puts him in a disadvantageous position.
The new Consumer law shall also be directly affecting the charges imposed by Private Banks and Non-Banking Financial Institutions (NBFCs) including the contracts and the proposals of the Insurance Companies and upon the Credit Cards. The same shall also be covering the Real Estate sector which shall include the Agents, Brokers Builders, Contractors & Consultants respectively.

Unfair Trade Practices: The definition of “unfair trade practices” has been broadened to incorporate misleading advertisements and if any personal data is given by the consumer in confidence, and the same gets disclosed. A manufacturer may be asked to discontinue or modify the ads, and a penalty of up to INR 10 lakh may be imposed on the manufacturer. Under the 1986 Act, there was no authority or institution to prevent unfair trade practices and violation of consumer rights. However, in the 2019 Act, there is a provision for the establishment of a central regulatory body known as the Central Consumer Protection Authority (CCPA). This body aims to promote and enforce consumer rights and curb unfair trade practices. It has the authority to initiate an inquiry into consumer right violations and unfair trade practices both ‘suo motu’ or through complaints, or according to the directions of the Central Government.

A time limit of twenty-one (21) days has been imposed on the Consumer Commissions to adjudicate upon the admissibility of complaints. However, this was the position in the 1986 Act as well, but the change brought in the 2019 Act is that if the issue of admissibility is not decided within the aforementioned period, the complaint shall be deemed to have been admitted.

Without any doubt, the 2019 Act is a giant leap towards promotion, reformation and development of consumer rights and its enforcement, in the light of rapidly changing socio-economic as well as technological advancements in the society. The Indian Parliament has passed the Consumer Protection Act, 2019 and it is all set to become a law, effective from such date that the Central Government may appoint by notification.
Authored By: Adv. Anant Sharma & Mayank Barman