Abstract:-

Even before India attained independence, the rulers were accountable for consumer protection. In 1986, a consumer protection law that only focuses on protecting consumers was enacted. The Consumer Protection Act of 1986 (CPA 1986), which was approved by Parliament in 1986, was regarded as one of the finest legislation for protecting consumers. However, dishonesty had become a common practice among greedy sellers and manufacturers to make unreasonable profits, without paying attention to consumer rights and their interests. This includes overcharging, black marketing, false advertising, unfair trade practices at e-commerce platforms, etc. So the government has time and again made major changes in the Consumer Protection Act through various amendments. The latest amendment was introduced in the year 2019. The objective of this paper is to provide insight into newly added provisions and give an in-depth analysis of the Consumer Protection Law (1986-2019)

Introduction:

How did the Consumer Protection Act,1986 come into the picture?

From the very beginning of human development, we can see the presence of Consumer Protection in various other laws. Before 1986, consumers often used to face many problems like adulteration, low quality of products, overpricing of goods, etc. So in order to have a smooth functioning between the Consumers and the producers it became a primary concern of the government to prioritize consumer satisfaction and make sure that there is no exploitation of their rights. In 1950, when the Constitution came into force, the Central Government  implemented many pieces of legislations like- The Drugs Control Act, 1950, The Prevention Of Food Adulteration Act, 1954, The Trade and Merchandise Marks Act, of 1958, etc. These legislations were implemented to safeguard the interest of Consumers, resolve the issues of consumers, and to fulfill their needs.

However, none of the laws succeeded in fulfilling the interest of consumers due to limited access to deal with the grievances of consumers and lack of a redressal mechanism. There was no particular act to safeguard consumers, the aggrieved party had to go through a  lot of nuisance in order to initiate a civil action. As a result, the aggrieved party was not satisfied by the compensation granted. These all-above-mentioned reasons led to the implementation of the Consumer Protection act, 1986. The Government of India introduced a bill called ‘The Consumer Protection Bill, 1986’ before both houses of parliament, and the same was passed by the parliament. The bill finally received the assent of the President on 24th December 1986.

Aim  & Objective Of Consumer Protection Act, 1986.

 It is quite evident that the Indian legal system experienced a  revolution with the enactment of the Consumer Protection Act, 1986 as it was established with the objective to provide justice that is less formal, to give justice expeditiously which involves less paperwork and incurring less expense. This act was implemented to promote the rights of consumers and to demolish the exploitation of consumers’ interests in the best possible way.

The Consumer Protection Act, of 1986 has some rights for consumers, provided under section 6 of the act, such as:-

1. The right to Information:- This right enforces an obligation on the seller to provide consumers with all the essential information about the quality, quantity, potency, purity, standard, and price of goods or services rendered by him. This right also protects the consumer against unfair trade practices.

Case laws:-

• Standard automobiles v. Syed Ashrat^[1]: The right to be informed about the price of the goods was deemed to have been violated when an item had a price of Rs. 75 inclusive of taxes but was actually sold for Rs. 88. Consequently, a 500 rupee compensation was granted.
• Consumer Protection Council v. National Dairy Development Board^[2]: The consumer was curious to know how the Board was utilising palm oil. The Board declined to give the details. In this case, the court held that consumers had the right to know.

2. The right to Safety:- This right protects consumers against the marketing of goods and services which are hazardous to life and property.

Case laws:-

• Achla Dalvi v. Lipton India^[3]: The court held that “Adulterated food was held to be dangerous to life and hence a violation of the consumer’s right to be protected against hazardous goods”.
• Consumer Expectation Test: The test requires the identification of expectations of a reasonably prudent consumer in the context and circumstance of use of that product in order to assess the degree of safety of that product. The test evolved in Fanning v. Le May ^[4]

3. The right to consumer education:- Consumers should be aware of their rights so that they would step forward to implement them. Hence due to this purpose, the commissions have set up consumer cells to create legal awareness among consumers and to promote the same.
4. The right to be heard:- This right ensures that the consumer’s interests will receive due consideration at appropriate forums without any
5. The right to seek redressal:- This right safeguards the Consumer against unfair trade practices, restrictive trade practices, or unethical exploitation of the consumer and provides an appropriate redressal mechanism in the form of consumer courts and forums at the national and district level.
6. The right to choose:- The consumer has the right to choose from a variety of goods and services at competitive prices which according to him is in his best interest.^[5]

The Consumer Protection Act, of 1986 has been widely recognized by the Indians as a “Poor Man’s Legislation, securing easy access to justice”. In fact, the act creates a sense of  legal awareness among consumers and has been utilized by the consumers for its user-friendliness and cost-effectiveness.

What were the changes brought by the amendments to the Consumer Protection Act, 1986, and why?

The Indian Government has time and again amended the act several times. It was first amended by Act no.34 of 1991, the amendment made in 1991 was mainly to incorporate provisions for appointing people to preside over State Commissions/District Forums, for the quorum of District Forums, and in case of the absence of the president to enable the court function uninterruptedly.

In 1993, the Act was again amended by Act No.50 to address the inadequacies in the coverage of the main act. It sought to plug loopholes and enhance the scope of areas covered and offer more power to the redressal agencies under the Act.

The Act was again amended by Act No.62 of 2002 to facilitate quicker disposal of complaints, boosting the capability of redressal agencies, powering them, streamlining the procedure, and widening the scope of the Act to make it more functional and efficient.

Just to ease quick disposal of consumer cases, the Indian Government over the years has amended the act multiple times but there was a need for more  comprehensive legislation to protect the interest of consumers and to cure the exploitation of consumers as these changes in acts were unable to provide appropriate remedies to the consumers. To do so, the new act; the consumer protection act of 2019 finally came into the picture.

Implementation Of The Consumer Protection Act, 2019.

The enactment of The Consumer Protection Act, 2019 is undoubtedly a turning point in India’s journey toward Consumer Protection Laws. The Act came into effect on July 24, 2020, by repealing and replacing the Three-decade-year-old Consumer Protection Act, 1986. This Act aims at empowering the consumers with complete transparency in its implementation. It has introduced many provisions such as the formation of Consumer Protection Councils, Mediation Panels, Dispute Redressal Commissions, strict penal Provisions against the Unfair Trade practices, etc. Now let us look into the details of the above mentioned provisions.

What Changes have been introduced by the Consumer Protection Act,2019?

1. Change in the Definition Of Consumer:

According to the Consumer Protection Act, 2019 the definition of “Consumer” has been expanded, It includes persons who engage in online or offline transactions via electronic means or by direct selling, teleshopping, and multi-level marketing. Earlier the liability was imposed mainly on the manufacturer of the product but as per the new act, all the entities involved at various stages of production and marketing i.e  the seller at each level of multi-level marketing can be subjected to liability. The person availing the services for free and personal consumption is excluded from the definition of Consumers.^[6]

2. Enhancement of Jurisdiction:

The Consumer Protection Act, 2019 has implemented key amendments in both the territorial and Pecuniary jurisdiction which are as follows:-

• Territorial Jurisdiction:-

In the provisions of the Consumer Protection Act, 1986 the consumers were under an obligation to file the complaints where the opposite party lives or do business. Now, the new act  provides consumers the benefit of filing a complaint wherever the consumer resides. The New act has also emphasized on e-filing of consumer Complaints which will aid consumers to seek justice in a smooth and effective way. Also, if the claim is within Rs. 5 lakhs then the consumers are not required to pay any fees. With this feature, consumers who were unable to file complaints due to financial difficulties will now be able to seek justice.

• Pecuniary Jurisdiction:-

Prior to the amendment, the pecuniary thresholds for the District Consumer Forum, State Consumer Forum, and National Consumer Forum were 20 lakhs, 1 crore, and 1 crore, respectively.

The new act extended the limits for District Forum, State Forum, and National Forum to 1 crore, 10 crores, and above 10 crores, respectively^[7]. This increase in the pecuniary jurisdiction of all the commissions is a step toward reducing the number of claims before appellate commissions, which will ensure that cases are resolved more quickly.

3. Introduction of Alternate Dispute Redressal Mechanism:

The Act of 2019 has introduced Part V which solely talks about  mediation. This provision was introduced with the objective to ensure the speedy disposal of disputes so that the parties involved can reach an amicable settlement. The 2019 act also emphasizes the need to build a consumer mediation cell in every district, state, and National Commission. According to the National Consumer Disputes Redressal Commission, over 4.8 lakh consumer cases are pending in the country.^[8]This new mechanism, as an out-of-court settlement has definitely proven to be fruitful as it reduces the burden of Consumer Courts which have a massive pendency of cases.^[9]

4. No more misleading advertisements:-

The CPA, 2019, has updated its definition of misleading advertisements to include all the information that advertisers purposely withhold. For such deceptive or misleading advertisements, the producer as well as the sellers at the various stages of marketing have been made liable. Not only that, but this Act now extends its protection to include prominent people or celebrities who support such products.

The Central Consumer Protection Authority has the authority to impose fines and take action against such violations by the traders. The CCPA has the authority to impose fines of Rs. 10 lakhs for the first offence and Rs. 50 lakh for any subsequent offences. Additionally, the promoter and manufacturer may be sentenced to imprisonment for up to two years.^[10]

5. Introduction of unfair Contracts & Empowerment of State and National Commission:

The provisions in Sections 49(2) and 59(2) entrust both the State and the National commission with the power to deem any terms of a contract between a customer and a manufacturer or service provider as the case that may be unfair to any consumer,  superfluous, or void. This new provision, which did not exist in the previous Consumer Protection Act, is entrusted  to the State Consumer Disputes Redressal Commissions (SCDRC) and National Consumer Disputes Redressal Commissions (NCDRC).^[11]

6. Setting up of a Central Consumer Protection Authority:

The 1986 Act did not have a regulatory body to guard consumers’ interests and prevent instances of unfair trade practices and deceptive advertising. Consumers’ rights and interests have always been violated by selfish and greedy producers. However, under the new Act, the Central Consumer Protection Authority would monitor, uphold, and safeguard consumer interests. Additionally, a Director-General will oversee the investigation wing of the organization. In instances of violations of Consumer Law, the DG would be authorised to conduct an independent inquiry and investigation.^[12]

7. Inclusion of Product Liability:

            Product liability is a concept introduced in Chapter VI of the CPA 2019. It is described as “the obligation of a product manufacturer or product seller, of any goods or service, to compensate for any harm caused to a consumer.”Relevantly, CPA 2019 imposes severe liability for damages brought on by defective products on producers.

The CPA, 2019, also makes “product sellers” accountable for any defects in the goods they are selling. A seller on an e-commerce platform as well as the e-commerce platforms themselves would fall under this category. It would not be sufficient to use the standard justification that e-commerce platforms just serve as “platforms” or “aggregators.” Relevantly, if the name of the product’s manufacturer is unknown, the seller would be liable. Given that the terms “product manufacturer” and “product seller” are defined independently, the commission may, in some circumstances, hold both parties jointly and severally accountable. Given that the terms “product manufacturer” and “product seller” are defined independently, the commission may, in some circumstances, hold both parties jointly and severally liable.

The biggest challenge of a product liability claim is determining who is responsible. If it can be demonstrated that a consumer used the goods carelessly,  then the “res ipsa loquitur” would apply shifting  the onus of proof from the businesses  to the consumer. A consumer’s voluntary acceptance of the risks associated with using a product would also assist businesses to reduce their liability risk.^[13]

8. Enlarged definition of “Unfair Trade Practises” & Stringent Penalties:

            The definition of “unfair trade practice” has been expanded, which is the most important change to consumer law. Providing the safety of personal data has been a major concern with the rise in transactions on digital marketplaces and platforms. It has been observed that many organizations, including hospitals, travel agencies, banks, and supermarkets, hold the personal information of their customers, and this information is often exploited or disclosed to third parties.^[14]

            Now, under CPA 2019, a consumer may file a complaint if his or her personal information has been disclosed to any third parties unless such disclosure is made in compliance with any laws that are now in effect. Businesses would need to develop a secure method to prevent any leakage of customer’s personal information. It is now necessary to modify existing contracts to add clauses limiting a company’s liability for any such leak and/or waiving a consumer’s objections to revealing their personal information.

Additionally, CPA 2019 includes provisions for penalties against storing, selling and distributing specious and adulterated goods. The same has been mentioned in the tabular format below:-

In a Nutshell:- Comparative Analysis of Consumer Protection Act: 1986 & 2019

Challenges faced by the New Act of 2019

• As we can see the Act covers only those services where consideration is included. As a result, free public services are exempted from the scope of the Act, by ignoring the fact that such services might pose considerable risks for unsuspecting consumers.
• There is a possibility of Conflict between the “to be established CCPA” and the existing Consumer Forums in situations involving a specific class of consumers or a subject that might be tackled by both bodies. To prevent this type of clash, a prescribed hierarchy or different classes should be created. Additionally, the CCPA’s autonomy is restricted by Section 99 of the Act, which orders it to follow the Central Government’s instructions.
• Since 2013, the number of consumer complaints received at the National Consumer Helpline has been exponentially increasing every year.^[15]While the E-commerce regulations have laid the groundwork for consumer protection in the digital age, many issues remain unresolved, which could compromise the effectiveness of regulatory measures. Can the current regulatory system handle the ever-growing demands of the digital age? The issue demands prompt attention.
• Additionally, it is not clear if cases already before the Consumer Commissions would remain there or if the change in pecuniary jurisdiction will require them to be transferred. This ambiguity will prolong delays even more.

CONCLUSION:-

India has made significant progress toward providing justice to all citizens. A crucial step in this process is the introduction of new laws to replace the outdated ones that cannot deliver justice in the wake of modern issues. Market practices have been changed by globalization and digitization. To keep up with the pace of this constantly changing environment, we had to make sure of specific, positive changes—the CPA, 2019 being one of them. The Consumer Protection Act of 2019 is a positive move that will eventually pay off. The act contains a number of new concepts that were urgently required, and their use in a nation like India will provide positive outcomes. In the world of Digitalization, steps like proceedings through video conferencing, and e-filing of cases will significantly improve, develop and upgrade consumer rights to great heights. However, one cannot deny and contest the practical application and implementation of the provisions. In order to make any law successful, it is pertinent to see that it is implemented hassle-free and effectively. Therefore, for the act of 2019 to become more effective it needs to resolve its shortcomings and headway should be given to actualize the relief for the consumers.

^[1] (1991) 11 CPJ 626 Ker

^[2] 1992 (23) DRJ 92

^[3]  (1992) CPJ 105 148

^[4]  230 N.E.2d 182 (111. 1967)

^[5] The Consumer Protection Act, 1986 $ 6

^[6] Consumer Protection The Act, 2019 $ 2(7)

^[7] The Consumer Protection Act, 1986 $ 34, 47 & 58

^[8] Statistics, National Consumer Disputes Redressal Commission, http://ncdrc.nic.in/stats.html, last seen on 24/08/2020.

^[9] Chapter V, The Consumer Protection Act, 2019; The Consumer Protection (Mediation) Regulations, 2020

^[10] The Consumer Protection Act, 1986 $ 89

^[11] The Consumer Protection Act, 1986 $ 49(2) & 59(2).

^[12] Chapter III, The Consumer Protection Act, 2019.

^[13] Chapter VI, The Consumer Protection Act, 2019.

^[14] The Consumer Protection Act, 2019 $ 2(47).

^[15] Cheating By E-commerce Companies, Unstarred Questions No. 384, Ministry of Consumer Affairs, Food and Public Distribution, Department of Consumer Affairs, https://164.100.158.235/question/annex/246/Au384.pdf, last seen on 24/08/2020.