Author : Gautam Badlani – 1 st Year, Chanakya National Law University.
The Consumer Protection Act, 2019 which came into effect on 20 th July, 2019 aims at empowering the consumers. This Act has brought about some significant changes in the domain of consumer protection laws by bringing electronic and e-commerce transactions within the domain of these laws. It stipulates mediation as an alternate dispute redressal mechanism and provides for stringent punishments for misleading advertisements. The Act increases the scope of the District and State level Commissions by increasing their pecuniary jurisdictions. This article analyzes the consumer-friendly approach of the Act as well as some of the salient features of the Act. Lastly, the article also makes certain suggestions regarding the steps to be taken to achieve the desired objectives of the Act.
The Consumer Protection Act, 2019 (hereafter CPA) which replaced the 1986 Act and became applicable on 20th July, 2020, is aimed at empowering the consumers to protect them from exploitation at the hands of modern-day firms. The previous 1986 Act was more than 3 decades old and was considered to be ineffective at protecting the customer’s interests in view of the transformation that the business firms and practices have undergone in the recent decades. The CPA envisages a robust mechanism for the timely and effective settlement of consumer grievances.
INCREASE IN SCOPE
The new Act expands the definition of a consumer by including persons engaging in offline or online transactions through teleshopping, direct selling electronic means or multi-stage marketing. By bringing e-commerce under its ambit, the 2019 Act has adjusted the consumer protection law to the contemporary needs.
While the 1986 Act identified only 6 types of unfair trade practices, the 2019 Act adds three more additional unfair trade practices, the most significant of which is the refusal to withdraw or take back damaged or defective goods or services. Since in online transactions, the consumers are not in direct contact with the seller, this provision will protect them from exploitation by the e-commerce websites that deliver defective, damaged or spurious goods or services to the consumers. The said provision is reiterated in the Consumer Protection (E-Commerce) Rules, 2020.
The CPA brings about several consumer-friendly changes and lays special emphasis on easing the redressal mechanism for the consumers. Unlike the 1986 Act, the new Act provides that grievance complaints can be lodged at the consumer’s place of work or residence. Thus, now the consumers will not have to travel to the district/state where the purchase took place or where the registered office of the seller is located, to lodge the complaint. This is likely to encourage the consumers to raise their voices against exploitative trade practices or against the violations of their consumer rights. Furthermore, section 17 of the CPA gives the consumers the choice to lodge grievance complaints in electronic form. The primary intention behind these changes is to make the grievance redressal process more consumer-friendly. Section 38(6) of the CPA provides the option for the use of video conferencing for examining the parties to a dispute.
However, the government must undertake ambitious awareness campaigns to make the consumers aware of their rights. Ignorance is one of the major reasons why business firms are able to exploit consumers. Now that the “right to consumer awareness” has been recognized as a consumer right, the government must ensure that this right is enjoyable by all. Considering the success of the “Jago Grahak Jago” campaign, further campaigns on similar lines must be initiated by the government.
DISTRICT AND STATE CONSUMER DISPUTE REDRESSAL COMMISSIONS
The new Act also aims at empowering the District Consumer Dispute Redressal Commissions (hereafter DCDRC) and State Consumer Disputes Redressal Commissions (hereafter SCDRC) by increasing their pecuniary jurisdictions. Section 34(1) limits the pecuniary jurisdiction of DCDRC to a maximum ceiling of 1 crore. Section 47(1)(a)(i) provides that the SCDRC will have the jurisdiction to hear cases where the value of goods and services exceeds 1 crore but is below 10 crores. Section 58(1)(a)(i) provides that the cases beyond the value of 10 crores will be heard by National Consumer Dispute Redressal Commissions.
However, there is an urgent need to fill the vacancies at the various commissions for the timely and effective administration of justice. In December last year, a plea was filed before the Supreme Court for filing the vacancies at the DCDRCs and SCDRCs. From time to time, the various High Courts such as Madras High Court, Bombay High Court, Delhi High Court have directed their respective state governments to fill the vacant posts at the Consumer Redressal Forums.
Furthermore, the new Act broadens the definition of a consumer. This increase in scope is likely to lead to an increase in the number of appeals being filed before the various Commissions. If the Commissions suffer from a lack of manpower, then it will lead to prolonged delays in deciding the cases and a huge backlog in the various commissions.
The Act aims for “timely and effective” settlement of consumer grievances. If this trend of vacancies not getting filled continues, then the new Act is likely to fail in achieving its objectives.
CENTRAL CONSUMER PROTECTION AUTHORITY
The CPA stipulates a robust mechanism for the timely redressal of consumer grievances. It provides for the setting up of a Central Consumer Protection Authority (hereafter CCPA) as a regulatory body for the protection and promotion of consumer rights. The CCPA will carry out investigations in the cases of violation of rights of the consumers, unsafe goods and services provided by the business, etc. Section 18(2)(a) of the CPA empowers the CCPA to initiate suo moto proceedings, on behalf of a class of consumers, against businesses involved in unfair business practices or exploiting the rights of the consumers. According to a survey conducted by Local Circles, around 95% of people that such a mechanism will protect the consumers from the menace of defective or damaged products and services, misguiding advertisements, etc.
The CPA empowers the three dispute redressal commissions to refer a dispute for mediation, provided that the concerned parties give written consent to the commission. Section 74 empowers the state governments to attach a mediation cell to the district and state-level commissions and the Central Government to attach a mediation cell to the national level commission and its regional benches. This provision is aimed at reducing the huge backlog of cases in the redressal commissions by giving recognition to alternative dispute redressal mechanisms.
However, mediation is a new concept in India and people, in general, are not aware of it. The consumers might refuse to sit for mediation if they are unfamiliar with the process. The government must ensure that the consumers are made familiar with the advantages of the mediation process.
MISLEADING ADVERTISEMENTS AND INFORMED CHOICES
Section 28 of the CPA states that falsely concealing information, giving false guarantee regarding the quality, attributes and nature of product or service, falsely describing the product and service or giving such representation on behalf of the seller, manufacturer or service provider which would amount to unfair trade practice if done by the seller, manufacturer or service provider themselves, constitutes a misleading advertisement. The manufacturer or service provider of the falsely advertised product or service are punishable with a fine of up to 50 lakh and imprisonment which may extend up to 5 years.
This provision will put an end to such advertisements which make false and factually incorrect promises to the customers. Resultantly, the consumers will be able to make more informed choices. As per section 21(2), even the endorsers of the misleading advertisements are punishable with up to a fine of rupees 50 lakh. Thus, even if the manufacturers or sellers are willing to spread misleading information about their product for want of profit, they are not likely to find endorsers who will be willing to promote their product.
In order to make sure that the consumers make informed choices, the government has mandated for the e-commerce websites to provide information regarding the return and refund, payment methods, guarantee and warrantee, country of origin, etc. Furthermore, Consumer Protection (E-Commerce) Rules, 2020 and the Legal Metrology (Packaged Commodities) Rules, 2011 also provide that the e-commerce websites must provide information about the country of origin. However, the government must ensure that the e-commerce websites comply with the legal provisions in their letter and spirit and do not try to find loopholes in the laws in order to escape liability. Recently a PIL was filed in the Delhi High Court stating that there were several ambiguities in regards to the “country of origin” display on the e-commerce websites where the country of origin and manufacturing country were shown to be different.
The CPA is certainly a progressive and reformatory Act. The government has taken the right step by bringing e-commerce websites within the ambit of the new Act. This will enable the consumers to protect themselves from exploitation at the hand of the mighty multinational businesses.
However, in order to achieve the desired results, it is necessary to implement the Act in its letter and spirit. Firstly, the outstanding vacancies at the various Commissions must be filled. The government must also ensure that any vacancies arising in the future are filled in a time-bound manner. The Commissions must be provided with the necessary social and infrastructural capital to efficiently discharge their duties. Secondly, the government must undertake large-scale awareness campaigns to make the consumers more aware of their rights. The very purpose of the CPA will fail if the consumers are not aware of their rights.
Furthermore, the new Act sets a strict timeline of 30 days for the redressal Commissions to dispose of consumer grievance cases. Considering the increase in the caseload of DCDRC as well as SCDRC due to an increase in pecuniary jurisdiction, the timeline should be made discretionary. Hasty disposal of cases might lead to injustice or incomplete justice.