Introduction

The Consumer Protection Act (CPA) serves as a fundamental piece of legislation designed to safeguard consumer interests, provide effective redressal mechanisms, and ensure that corporations adhere to fair trade practices. The Consumer Protection Act, 1986, and its subsequent amendment in 2019, mark significant milestones in India’s consumer protection landscape. This article delves into the mechanisms of regulatory oversight under the CPA, highlighting its role in promoting accountability among corporations and protecting consumer rights.

Legislative Framework

Consumer Protection Act, 1986 and 2019

The CPA, 1986, was a pioneering legislation, laying the groundwork for consumer rights in India. The Consumer Protection Act has undergone significant evolution since its inception. Initially crafted to address the imbalances between consumers and businesses, the CPA has been periodically updated to adapt to changing market dynamics, technological advancements, and emerging consumer issues. The Act of 2019 introduced important amendments to address contemporary challenges.

Key features include:

1. Introduction of E-commerce Provisions– Reflecting the rise of online shopping, amendments have included specific provisions to regulate e-commerce, addressing issues such as misleading advertisements, unfair trade practices, and the safety of online transactions.
2. Enhanced Penalties– To deter corporate malpractices, the CPA has progressively increased the penalties for violations, ensuring that the cost of non-compliance acts as a significant deterrent.
3. Expansion of Consumer Rights– The act has expanded the scope of consumer rights, incorporating aspects such as the right to information, right to choose, right to seek redressal, right to be protected against hazardous goods and services.
4. Regulatory Bodies– Establishment of the Central Consumer Protection Authority (CCPA) for promoting, protecting, and enforcing the rights of consumers.
5. Dispute Resolution Mechanisms– Formation of Consumer Disputes Redressal Commissions at the District, State, and National levels.

Mechanisms of Regulatory Oversight

1. Consumer Protection Councils

Consumer Protection Councils (CPCs) operates at Central, State, and District levels to promote and protect consumer rights. These councils play a vital role in reviewing consumer grievances, advising on policy matters, and ensuring the implementation of consumer protection laws.

1. Central Consumer Protection Authority (CCPA)

Established under Chapter III of CPA, 2019, the Central Consumer Protection Authority (CCPA) is tasked with regulating matters related to consumer rights violations, unfair trade practices, and misleading advertisements. The CCPA has the authority to:

• Investigate misconduct of consumer rights.
• Order recalls for dangerous goods and services.
• Issue directions to discontinuing unfair trade practices.
• Impose penalties on violators.

1. Consumer Dispute Redressal Commissions

The CPA, 2019 under Chapter IV delivers for a three-tier structure of Consumer Dispute Redressal Commissions at the district, state, and national levels. These commissions adjudicate consumer complaints and provide remedies, including compensation for losses incurred due to corporate malpractices. These include:

• District Commissions– Handling cases involving claims up to ₹1 crore.
• State Commissions– Addressing claims between ₹1 crore and ₹10 crore and hearing appeals from District Commissions.
• National Commission– Dealing with claims exceeding ₹10 crore and appeals from State Commissions and Central Authority.

1. Surveillance and Monitoring

Regular monitoring and surveillance of corporate practices are vital components of regulatory oversight. The CPA mandates periodic audits and inspections to ensure compliance with consumer protection norms. These measures help in identifying and rectifying malpractices promptly.

Ensuring Accountability

1. Corporate Responsibility and Compliance

The CPA imposes stringent compliance requirements on corporations. Companies are obligated to:

• Give accurate and authentic information about their products and services.
• Ensure that goods sold are safe and meet quality standards.
• Establish robust mechanisms for addressing consumer grievances.

2. Role of Consumer Organizations

Consumer organizations play an active role in promoting accountability. They engage in activities such as awareness campaigns, consumer education, and advocacy, working alongside regulatory bodies to protect consumer interests.

3. Judicial Precedents

Judicial decisions under the CPA have set important precedents that enhance corporate accountability. Courts have consistently supported the principles of fairness, transparency, and responsibility, strengthening the regulatory structure.

Consumer Rights Protection

Section 2(9) of the Act provides the following consumer rights:

1. Right to Safety–

Consumers are entitled to protection against products and services that pose health and safety hazards. The CPA ensures that corporations adhere to safety standards and provides mechanisms for redress in case of violations.

1. Right to Information–

Transparency is a cornerstone of the CPA. Consumers have the right to receive accurate information regarding the quality, quantity, potency, purity, standard, and cost of goods and services.

• Right to Choose–

The CPA protects the consumer’s right to choose from a wide range of goods and services at reasonable rates. This right is protected against unfair practices such as monopolies and restrictive trade practices.

1. Right to be Heard–

The right to be heard and to be certain that the interests of consumers will be taken into account in suitable forums.

1. Right to Seek Redressal–

Consumers have the right to seek redress against unfair practices or exploitation. The CPA gives a framework for addressing grievances and obtaining compensation or replacement for faulty goods and services.

1. Right to Education–

The right to receive consumer awareness.

Case Studies

1. Sapient Corporation Employees Provident Fund Trust v. HDFC Bank Ltd. & Ors. (2012)

The Sapient Corporation Employees Provident Fund Trust has filed a consumer complaint against HDFC Bank Ltd. In the above case, the complaint claimed that by debiting the complainant’s account, OP-Bank offered inadequate services. The court also concluded that there was no service error on the part of OP-bank and that the complainant’s concerns were without merit. Compliance with regulatory body directives cannot be classified as carelessness or a lack of quality service.

1. Samruddhi Co-Operative Housing Society Ltd. v. Mumbai Mahalaxmi Construction Pvt. Ltd. (2022)

The Supreme Court ruled that in this instance, the respondent was liable for transferring the title to the flats to the society, together with the occupancy certificate. The respondent’s inability to get the occupation certificate constitutes a defect in service for which he is responsible. Members of the appellant society have every right as ‘consumers’ to seek reimbursement for the subsequent liability (such as increased taxes and water charges by the owners) caused by the lack of an occupancy certificate. The Court held that Section 2(1)(d) of the Consumer Protection Act defines a ‘consumer’ as a person that avails of any service for a consideration. A ‘deficiency’ is defined in Section 2(1)(g) as a defect or inadequacy in the quality of service required by law.

1. Rajiv Shukla v. Gold Rush Sales and Services Ltd. & Anr. (2022)

The Supreme Court ruled that failing to deliver the new car while receiving the full selling amount and/or delivering the defective car constitutes unfair trade practice. The Court ruled that non-delivery of a new car constitutes an unfair trade practice, as well as dishonesty on the part of the dealer, which undermines morality and ethics. Once the new car was booked and the whole sale price was paid, the dealer was required to deliver a new car that was not defective; hence, the District Forum and the State Commission were justified in instructing the dealer to deliver a new car.

1. Bar of Indian Lawyers through its President Jasbir Singh Malik v. D.K. Gandhi PS National Institute of Communicable Diseases & Anr. (2024)

The court overruled a 2007 National Consumer Disputes Redressal Commission (NCDRC) decision that concluded that lawyer’s services are covered by Section 2 (o) of the Consumer Protection Act, 1986 (Section 2(42) in CPA, 2019), which defines ‘service’. The Supreme Court held that advocates cannot be held accountable under the Consumer Protection Act of 1986 (as re-enacted in 2019) for inadequate services. The Court ruled that professionals must be handled differently than those conducting commerce and trade. As a result, complaints against advocates alleging insufficiency in services are not maintainable before the Consumer Forum.

Conclusion

The Consumer Protection Act is a pivotal tool in ensuring corporate accountability and safeguarding consumer rights. Through comprehensive regulatory oversight, stringent compliance requirements, and active consumer participation, the CPA continues to evolve, addressing contemporary challenges and reinforcing the trust between consumers and businesses. Ensuring the effectiveness of this act requires a dynamic approach, adapting to new market trends and technological advancements while steadfastly upholding consumer rights.

References

1. Consumer Protection Act, 1986
2. Consumer Protection Act, 2019
3. https://consumeraffairs.nic.in/sites/default/files/file-uploads/latestnews/Landmark_Judgements.pdf
4. https://www.legitquest.com/legal-guide/top-7-consumer-protection-act-cases
5. https://blog.ipleaders.in/consumer-protection-act-2019-2/
6. https://www.livelaw.in/supreme-court/advocates-liable-under-consumer-protection-act-for-deficieency-of-services-supreme-court-257837

By-

AARCHI TIBDEWAL