Consumer Protection Act, 2019

The Consumer Protection Act, 1986, served as a pivotal foundation for safeguarding consumer rights in India, offering a simple, fast, and cost-effective mechanism for addressing grievances related to defective products, unfair trade practices, and services. With the establishment of Consumer Dispute Redressal Forums at the district, state, and national levels, the Act aimed to protect essential consumer rights, such as the right to safety, information, and redressal. However, with evolving market dynamics, technological advancements, and the rise of e-commerce, the need for a more comprehensive legal framework became evident, leading to the introduction of the Consumer Protection Act, 2019. This new Act enhances consumer rights and provides more robust mechanisms to address modern challenges, including those posed by digital platforms and online transactions.

Need for the Consumer Protection Act, 2019

Over the years, with the rapid expansion of e-commerce, online transactions, and direct selling, the 1986 Act became outdated in addressing the complexities of modern consumer markets. Key factors that led to the introduction of the Consumer Protection Act, 2019 include:

1. Technological Advances: The rise of digital platforms and online shopping introduced new challenges like misleading advertisements, delayed deliveries, and counterfeit products, which the 1986 Act did not adequately cover.
2. Consumer Awareness: With growing consumer awareness, the need for quicker, more efficient redressal mechanisms, like e-filing of complaints and video conferencing for hearings, became essential.
3. Increased Consumer Complaints: The complexity and volume of consumer complaints necessitated the formation of the Central Consumer Protection Authority (CCPA) to conduct independent investigations and enforce penalties.
4. Unfair Trade Practices: The 2019 Act addressed new unfair trade practices such as misleading advertisements and product liabilities, including making endorsers accountable.

The 2019 Act modernized consumer rights protection, adapting to the digital age and making it more comprehensive, efficient, and accessible for consumers.

Consumer Protection Act, 2019: A Comprehensive Overview

The Consumer Protection Act, 2019 is a landmark piece of legislation enacted in India to enhance consumer rights and interests. It replaces the Consumer Protection Act of 1986, offering a more robust framework to address the evolving needs of the modern marketplace. This Act aims to safeguard consumers against unfair trade practices and ensures better protection of their rights. Let us understand the key features and objectives of the Act, including its chapters, which outline the steps for consumer protection.

Key Features of the Consumer Protection Act, 2019

1. Objective: The primary aim of the Consumer Protection Act, 2019, is to establish a legal framework that safeguards consumers from unfair trade practices, ensuring their rights and promoting fair competition.
2. Establishment of Authorities: The Act has established several key authorities to oversee consumer protection:
   • Central Consumer Protection Authority (CCPA): Responsible for ensuring consumer rights, preventing unfair practices, and addressing grievances.
   • State Commissions and District Commissions: Handle consumer complaints at different levels for timely and effective redressal.
3. Consumer Rights: The Act enshrines the following six consumer rights:
   • Right to safety
   • Right to be informed
   • Right to choose
   • Right to be heard
   • Right to seek redressal
   • Right to consumer education
4. Regulatory Powers of CCPA: The CCPA has the power to:
   • Investigate violations of consumer rights.
   • Issue safety notices and recommend actions to curb unfair practices.
   • Impose penalties for misleading advertisements.
   • Promote awareness of consumer rights.
5. Complaint Mechanism: The Act provides consumers with a streamlined process for filing complaints related to defective goods, deficient services, and unfair trade practices. These complaints are handled by district, state, and national commissions depending on the value involved.
6. Penalties and Enforcement: The Act imposes strict penalties for violations, including hefty fines for manufacturers or endorsers of misleading advertisements. Penalties are credited to a designated fund, and the Act protects individuals acting in good faith from legal proceedings.
7. Repeal of the Consumer Protection Act, 1986: The 2019 Act replaces the 1986 Act, ensuring that actions taken under the older legislation remain valid as long as they align with the new provisions.

Objectives of the Central Consumer Protection Council (CCPC)

The Central Consumer Protection Council (CCPC), established under the Act, plays an advisory and guiding role for consumer protection in India. Its main objectives include:

• Promotion of Consumer Rights: Ensuring consumers are aware of their rights and can exercise them effectively.
• Advisory Role: Providing recommendations to the Central Government on consumer-related policies.
• Awareness and Education: Promoting consumer awareness, making them informed about their rights and the available redressal mechanisms.
• Coordination with Other Bodies: Collaborating with State Councils and other authorities to ensure uniform consumer protection efforts across the country.
• Review of Policies: Reviewing consumer protection policies and suggesting improvements for enhancing consumer welfare.

How the Central Consumer Protection Authority (CCPA) Handles Complaints

The Central Consumer Protection Authority (CCPA) has been empowered with the responsibility of addressing complaints from consumers, including those related to unfair trade practices and misleading advertisements. Here’s a step-by-step overview of how it handles complaints:

1. Receiving Complaints: Consumers can directly file complaints with the CCPA regarding violations of their rights. Complaints can also be initiated based on information received from other sources.
2. Preliminary Inquiry: The CCPA conducts a preliminary investigation to determine whether there is a valid case.
3. Detailed Investigation: If the initial inquiry indicates a potential violation, a more detailed investigation is carried out, typically involving the Director-General or District Collector.
4. Issuing Directions: Based on the investigation, the CCPA can issue directions to stop unfair practices or misleading advertisements.
5. Imposing Penalties: In cases of violations, the CCPA can impose fines or sanctions to deter future violations.
6. Referral to Regulators: If necessary, the CCPA can refer cases to other regulatory bodies.

Powers of CCPA Regarding False or Misleading Advertisements

The Act grants the CCPA several significant powers concerning false or misleading advertisements:

• Investigation: The CCPA can investigate advertisements suspected of being false or misleading.
• Issuing Directions: The authority can order the manufacturer or publisher of the misleading advertisement to stop the practice and issue corrections.
• Penalties: Manufacturers or endorsers of misleading advertisements may be fined up to ₹10 lakh for the first violation and up to ₹50 lakh for subsequent violations.
• Prohibition of Endorsements: The CCPA can ban endorsers from promoting any product for up to 1 year, with subsequent violations extending up to 3 years.
• Public Awareness: The CCPA educates consumers on the impact of false advertisements and encourages them to report such instances.

Summary of the Various Chapters of the Act

• Chapter I: Preliminary
  Defines key terms such as “consumer,” “unfair trade practices,” and “misleading advertisements,” laying the groundwork for the rest of the Act.
• Chapter II: Central Consumer Protection Authority (CCPA)
  Establishes the CCPA and defines its powers to protect consumer rights and prevent unfair trade practices.
• Chapter III: Consumer Rights
  Enumerates consumer rights, emphasizing the importance of awareness and education in consumer protection.
• Chapter IV: Consumer Disputes Redressal Commissions
  Establishes a three-tiered system (National, State, and District Commissions) to resolve consumer disputes efficiently.
• Chapter V: Mediation
  Introduces mediation as an alternative dispute resolution mechanism, promoting quicker and amicable settlements of disputes.
• Chapter VI: Offences and Penalties
  Outlines penalties for offences, such as misleading advertisements and unfair trade practices, including fines and imprisonment.
• Chapter VII: Miscellaneous
  Contains provisions related to the implementation of the Act, including rules and regulations, and the roles of various authorities.

The Consumer Protection Act, 2019 has significantly strengthened the legal framework for protecting consumer rights in India. By establishing new authorities like the Central Consumer Protection Authority (CCPA), empowering consumers with clear rights, and providing mechanisms for efficient dispute resolution, the Act represents a comprehensive effort to safeguard the interests of consumers in today’s rapidly evolving marketplace. It also ensures that manufacturers, service providers, and advertisers adhere to fair trade practices, with strict penalties for violations.

Key Differences Between the Consumer Protection Act, 1986 and the Consumer Protection Act, 2019

1. Introduction of E-commerce and Direct Selling:
   The 2019 Act recognizes the growing importance of e-commerce and direct selling. Definitions such as “consumer,” “complaint,” “misleading advertisement,” “unfair trade practices,” “defect,” and “deficiency” now encompass transactions conducted through e-commerce platforms and direct selling channels.
2. Expanded Definitions:
   The definitions of key terms, including “advertisement” and “consumer,” have been broadened to cover new-age business models like e-commerce. This ensures that consumers engaging with digital marketplaces and direct sellers are also protected.
3. E-filing of Complaints:
   The 2019 Act introduces the option for consumers to file complaints electronically through the E-Dakhil portal. This has made it convenient for consumers to file complaints from their homes, making the redressal process more accessible.
4. Video Conferencing for Hearings:
   To further ease the process for consumers, the new Act allows participation in redressal hearings via video conferencing, making it easier and more convenient for consumers to engage in the resolution process.
5. Mediation as Alternative Dispute Resolution (ADR):
   The introduction of mediation under the 2019 Act has made the redressal process quicker and more efficient. This alternative dispute resolution mechanism helps resolve disputes amicably, without going through the formal court process.
6. Revised Financial Limits for Complaint Filing:
   The monetary jurisdiction for filing complaints has been revised:
   • District Consumer Commission: Up to ₹1 crore.
   • State Consumer Commission: ₹1 crore to ₹10 crore.
   • National Consumer Commission: Above ₹10 crore. This revision allows for a more organized distribution of cases based on their value.
7. Formation of Central Consumer Protection Authority (CCPA):
   A key feature of the new Act is the establishment of the CCPA, which is empowered to conduct independent investigations into violations of consumer rights, misleading advertisements, and unfair trade practices. It acts as a regulatory body to safeguard consumer interests.
8. Penalties for Misleading Advertisements:
   The CCPA under the 2019 Act can impose penalties on manufacturers and endorsers (including celebrities) for misleading advertisements. This helps ensure that false claims made in advertisements are held accountable.
9. Appointment of Members and Presidents:
   The new Act empowers the Central Government to appoint the President and Members of the District, State, and National Commissions. This standardizes and centralizes the appointment process across different levels.
10. Advisory Role for Promotion of Consumer Rights:
    The 2019 Act also serves as an advisory body, playing an active role in promoting and protecting consumer rights, ensuring fair practices in the marketplace.
11. Product Liability:
    For the first time, the Act introduces the concept of product liability, making the manufacturer, seller, or service provider responsible for compensation if the product or service causes harm to the consumer.
12. New Provisions under Unfair Trade Practices:
    The new Act adds three new provisions under unfair trade practices to address evolving marketplace dynamics and provide greater protection to consumers.

These updates in the Consumer Protection Act, 2019, reflect a more consumer-centric approach, addressing the challenges of modern commerce while enhancing consumer rights and providing faster, more efficient redressal mechanisms.

Consumer Protection Act, 1986 and the Consumer Protection Act, 2019:

Aspect	Consumer Protection Act, 1986	Consumer Protection Act, 2019
Recognition of E-commerce & Direct Selling	Not included	Includes e-commerce and direct selling in definitions such as consumer, complaint, unfair practices.
Expanded Definitions	Narrow definitions limited to traditional commerce	Expanded to cover modern business models like e-commerce and direct selling.
E-filing of Complaints	Not available	Allows e-filing of complaints via E-Dakhil portal for easy access from home.
Video Conferencing for Hearings	Not provided	Hearings can be conducted via video conferencing, enhancing consumer convenience.
Mediation for Dispute Resolution	No mediation provision	Introduces mediation for faster, alternate dispute resolution.
Monetary Jurisdiction	District: Up to ₹20 lakh State: ₹20 lakh – ₹1 crore National: Above ₹1 crore	District: Up to ₹1 crore State: ₹1 crore – ₹10 crore National: Above ₹10 crore
Central Consumer Protection Authority (CCPA)	Not present	Establishes the CCPA to investigate violations and unfair practices independently.
Penalties for Misleading Advertisements	No specific provision for penalties on endorsers	CCPA can impose penalties on misleading ads and hold endorsers, including celebrities, liable.
Appointment of Commission Members	Not clearly centralized	The Central Government appoints Presidents and Members of District, State, and National Commissions.
Advisory Role	No explicit advisory role	Acts as an advisory body for promotion and protection of consumer rights.
Product Liability	Not included	Introduces product liability for manufacturers, sellers, and service providers.
Unfair Trade Practices	Limited to existing practices	Adds three new provisions to address modern unfair trade practices.