Consumer Protection Act 2019: Salient Features & Limitations

consumer protection act 2019 upsc ias essay notes mindmap

In Mid-August this year, the Consumer Protection Act, 2019 had received the Presidential assent and had come to effect. The prior legislation had been amended from time-to-time on par with the changes caused due to economic liberalisation, globalisation, and digitisation of the products and services. However, the new Act is far from fulfilling the desired objective of being socio-economic legislation which sought “to provide better protection of the interests of the consumers” as there is ambiguity within the amendments.

Disclaimer: IAS EXPRESS owns the copyright to this content.

What is the Consumer Protection Act, 2019?

  • Consumer Protection Act, 2019 repeals the Consumer Protection Act, 1986.
  • The 2019 Act has substantially enhanced the scope of protection of the consumers by including advertising claims, endorsements and product liabilities, all of which play a critical role in influencing consumer behaviour and retail trends in the current times.

What are the salient features of the recent Act?

Definition of Consumer:

  • A consumer is defined as the one who buys any good or accesses service for consideration.
  • It does not include the individual who obtains the good for resale or service for commercial purposes.
  • It also covers transactions through all modes including offline and online through electronic means, teleshopping, multi-level marketing and direct selling.

Consumer rights: The Act consists of the following consumer rights:

  • Right to be protected against the marketing of goods and services that are hazardous to life and property;
  • Right to be informed of the quality, quantity, potency, purity, standard and price of the goods or services;
  • Rights to be assured of access to a variety of goods or service at competitive prices;
  • Right to seek redressal against unfair or restrictive trade practices.

Central Consumer Protection Authority:

  • The Central government will establish the Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of the consumers.
  • It will regulate matters related to:
  1. violation of consumer rights
  2. unfair trade practices
  3. Misleading advertisements.
  • The CCPA will have an investigation wing, headed by a Director-General, which may conduct enquiry or investigation into such violation.
  • CCPA’s functions include:
  1. Inquiring into the violation of consumer rights, investigating and launching prosecution at the appropriate forum
  2. Passing orders to recall goods and withdraw hazardous services, reimbursement of the price paid and discontinuation of the unfair trade practices, as defined in the Act
  3. Issuing directions to the concerned trader/manufacturer/endorser/advertiser/publisher to either discontinue a false or misleading advertisement or modify it.
  4. Imposing penalties
  5. Issuing notices to consumers against unsafe goods and services.

Penalties for misleading ads:

  • The CCPA may enforce a penalty on a manufacturer/endorser of up to Rs.10 lakh and imprisonment up to 2-years for false or misleading advertisements.
  • In case of a subsequent offence, the fine may increase to Rs.50 lakh and imprisonment up to 5-years.
  • CCPA can also prohibit the endorser of a misleading advertisement from endorsing that particular product or service for a period of up to one year.
  • For every subsequent offence, the period of prohibition may extend to 3-years.
  • There are exceptions where endorsers will not be held liable for such a penalty.

Consumer Disputes Redressal Commission:

  • CDRCs will be established at the district, state and national levels.
  • The consumer can file complaints with CDRCs regarding:
  1. Unfair or restrictive trade practice
  2. Defective goods or services
  3. Overcharging or deceptive charging
  4. An offering of goods or services for sale which may be hazardous to life or safety
  • Complaints against unfair contract can be filed only at the state and national levels.
  • Appeals from District CDRC will be heard by the State CRDC.
  • Appeals from State CDRC will be heard by Nation CDRC.
  • Final Appeal will be handled by the Supreme Court.

CDRCs’ jurisdiction:

  • The District CDRC will deal with complaints where goods and services’ value does not exceed Rs. 1 crore.
  • The State CDRC will entertain complaints when the value is more than Rs.1 crore but does not exceed Rs.10 crore.
  • The National CDRC will deal with Complaints related to goods and services with a value of over Rs.10 crore.

Product Liability:

  • It means the liability of the product manufacturer, service provider or the seller to compensate a consumer for any harm or injury caused by a defective good or deficient service.
  • The consumer, to claim the compensation, must prove any of the mentioned conditions for defect or deficiency that is given in the Act.

Most probable and repeated topics of upsc prelims

What are the limitations of this current Act?

  • The current Act has created a CCPA to “regulate matters relating to the violation of rights of the consumers, unfair trade practices and false and misleading ads that are prejudicial to the interests of the public and consumers and to promote, protect and enforce the rights of the consumers as a class”.
  • To implement this provision, the CCPA is empowered to inquire and investigate, which it does through the investigative wing that is headed by a Director-General, similar to the Competition Commission.
  • Also, the CCPA can file complaints and intervene in matters before the Consumer Commissions.
  • However, it is unclear how the CCPA will function, especially since existing District Collectors have been tasked to undertake certain functions related to inquiries and investigations.
  • There is considerable overlap between the investigative wing and the search and seizure functions of the District Collector. This may lead to a conflict of interest.
  • Also, the CCPA is empowered to recall goods, reimbursement price paid for goods or services, as well as issuing of directions and penalize manufacturers or endorsers for misleading ads.
  • Appeals against such orders can only be referred to before the National Commission.
  • The basis on which the National Commission may hear such appeals is not clear.
  • It is also unclear whether matters currently pending before the Consumer Commissions will continue or if they are likely to get transferred on account of the recent changes in monetary jurisdiction.
  • This ambiguity may lead to delays.

Conclusion:

The Consumer Protection Act 2019 is a positive step towards reformation and development of the consumer laws in India. However, measures must be taken to narrow down some of the ambiguities within the Act while the scope is given to actualize the relief for the consumers.

Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments
0
Would love your thoughts, please comment.x