Analysing the Consumer Protection Acts of 1986 & 2019

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The industrial revolution and International Trade and Commerce have led to the expansion of business and trade across the globe. As a result variety of consumer goods have appeared in the market to cater to the consumers in a host of services like insurance, transport, electricity, housing, entertainment, finance, and banking. A well-organized sector of manufacturers and traders with better knowledge of the market has come into existence building relationships between traders and consumers. Advertisements of the products influences in the increase in the demand of the product between the consumers, though there may be defect or imperfections or shortcomings occurred in the quantity, quality or purity of the goods and services rendered. For the welfare of the public, the glut of adulterated and sub-standard articles in the market have to be checked.

Despite various provisions providing protection to the consumer and providing stringent action against adulterated and sub-standard articles in the different enactments like Code of Civil Procedure, 1908, the Indian Contract Act, 1872, the Sale of Goods Act, 1930, the Indian Penal Code, 1860, the Standards of Weights and Measures Act, 1976 and the Motor Vehicles Act, 1988, very little could be achieved in the field of Consumer Protection. Though the Monopolies and Restrictive Trade Practices Act, 1969 and the Prevention of Food Adulteration Act, 1954 have provided relief to the consumers yet it became necessary to protect the consumers from the exploitation and to save them from adulterated and sub-standard goods and services and to safeguard the interests of the consumers. To provide for better protection of the interests of the consumer, the Consumer Protection Bill, 1986 was introduced in the Lok Sabha on 5th December 1986. The Consumer Protection Bill, 1986 was passed by both the Houses of Parliament and received the assent of the President on 24th December 1986. It came on the Statutes Book as THE CONSUMER PROTECTION ACT, 1986 (68 of 1986).  

The Consumer Protection Act, 1986 seeks to provide better protection of the consumer’s interests and for the purpose, to make provision for the settlement of consumer disputes and to establish Consumer councils and other authorities for the connected issues.  These objects are sought to be promoted and protected by the Consumer Protection Council at the Central and State level. 

The Consumer Protection Act seeks inter alia to promote and protect the rights of consumers such as-

(a) the right to be protected against the marketing of goods which are hazardous to life and property;

(b) the right to be informed about the quality, quantity, potency, purity, standard and price of goods to protect the consumer against unfair trade practices;

(c) The right to be assured, wherever possible, access to an authority of goods at competitive prices;

(d) The right to be heard and to be assured that consumers interests will receive due consideration at appropriate forums;

(e) The right to seek redressal against unfair trade practices or unscrupulous exploitation of consumers; and

(f) Right to consumer education.

Quasi-judicial machinery has been formed at the District, State, and Central level to provide speedy and simple redressal to consumer disputes. These quasi-judicial bodies will observe the principles of natural justice and have empowered to give relief of a specific nature and to award appropriate compensation to consumers. Penalties for noncompliance with the orders given by the quasi-judicial bodies have been provided in the Consumer Protection Act, 1986.

Mahatma Gandhi, the father of the Nation, has rightly pointed out as published in ‘Harijan’ dated 4th May 1935 that business, ethics, honesty, and truthfulness should go together in the following words: – “It is wrong to think that business is incompatible with ethics. I know that it is perfectly possible to carry business profitably and yet honestly and truthfully. The plea that business and ethics never agree is advanced only by those who are actuated by nothing higher than narrow self-interest. He, who will serve his own ends, will do so by all kinds of questionable means, but he, who will earn to serve the community, will never sacrifice truth or honesty. You must bear in mind that you have the right to earn as much as you like, but not the right to spend as much as you like. Anything that remains, after the needs of a decent living are satisfied, belongs to the community.”

Although honesty, integrity, and trust are three pillars on which the sound system of trade and commerce should rest; yet nowadays honesty, integrity, truthfulness, and trust are lacking to some extent in business and trade posing a serious challenge to the rule of law and the obligations of the society to adopt and inculcate moral values. This is due to dominating position acquired by the traders and the suppliers of goods and services who can dictate their terms to the consumers, having the sole aim to earn wealth by fair or foul means and even at the cost of health and life of consumers.

The Consumer Protection Act has been amended in the year 1991, and further amended in the years 1993, 2002, and 2019 respectively. The Consumer Protection Bill, 2019 has been passed by the Lok Sabha on Jul 30, 2019, and Rajya Sabha passed on Aug 06, 2019. This bill was introduced in the parliament by the Minister of Consumer Affairs, Food and Public Distribution, Mr.  Ram Vilas Paswan.

The Consumer Protection Act, 2019 came into force on 20th July 2020 and it will empower consumers and help them in protecting their rights through its various notified rules and provisions. Consumer Protection Act, 2019 was inevitable to resolve a large number of pending consumer complaints in consumer courts across the country. It has ways and means to solve the consumer grievances speedily. The new act will be swift and less time consuming compared to the older Consumer Protection Act, 1986 in which single-point access to justice was given making it a time-consuming exercise.

The Consumer Protection Act 2019 establishes the Central Consumer Protection Authority (CCPA) whose primary objective will be to promote, protect, and enforce the rights of consumers. It empowers to conduct investigations into violations of consumer rights and institute complaints or prosecution. It orders to recall of unsafe goods and services. It orders discontinuance of unfair trade practices and misleading advertisements. It imposes penalties on manufacturers, endorsers, publishers for misleading advertisements.

Misleading advertising and Endorsers: The bill lays down guidelines for any misleading advertisements for a product or service which affects the consumer. It could lead to a prison term of two years and a fine which can be up to Rs. 10 Lakhs. Any subsequent offence could lead to an imprisonment of up to 5 years and a fine extending to Rs. 50 Lakhs.

The new bill has provisions that allow CCPA to fix the liability even on the endorser of any misleading advertisement. It can also prohibit an endorser from making an endorsement for any product or service for one year if found necessary. Any subsequent violation could result in prohibition from endorsing any product or service for 3 years. This is expected to make the brand ambassadors exercise due diligence on the veracity of the claims being made about a product or a service before choosing brands to endorse.

The government will notify the Rules on E-commerce and Unfair Trade Practices under the Consumer Protection (E-commerce) Rule, 2020 where the E-commerce entities will require to provide information to consumers, relating to return, refund, exchange, warranty, guarantee, delivery, shipment, modes of payment, grievance redressal mechanism, payment methods, the security of payment methods, charge-back options and country of origin. These are necessary for enabling the consumer to make an informed decision at the pre-purchase stage. They will have to acknowledge the receipt of any complaint filed by a consumer within 48 hours from the date and time of registering the complaint and have to redress the complaint within one month from the date of receipt. Sellers cannot refuse to take back goods or withdraw services or refuse refunds, if such goods or services are defective, deficient, delivered late, or if they do not meet the description on the platform. The rules also prohibit the e-commerce companies from manipulating the price of goods or services to gain unreasonable profit through unjustified prices.

Product Liability falls on the manufacturer or product service provider or product seller will be held responsible to compensate for injury or damage caused by defective products or deficiency in services. 

The basis Product liability shall be a manufacturing defect, Design defect, Deviation from manufacturing specifications, Not conforming to express warranty, Failing to contain adequate instructions for correct use, Service provided-faulty, imperfect, or deficient.

Punishment in case of Manufacture or Sale of Adulterated/Spurious Goods may be to suspend any license issued to the person for a period of up to two years and in case of second or subsequent conviction, may cancel the license permanently.

Alternate Dispute Resolution Mechanism of Mediation arises when a complaint referred by Consumer Commission for mediation, wherever scope for early settlement exists with the consent of both the parties. The mediation will be held in the Mediation Cells established under the aegis of the Consumer Commissions. There will be no appeal against settlement through mediation.

Simplification of the Consumer Dispute Adjudication Process: Enabling a consumer to file complaints electronically and in consumer commissions that have jurisdiction over the place of his/her residence. Video-conferencing for hearing and deemed admissibility of complaints if the question of admissibility is not decided within the specified period of 21 days. As per the Consumer Disputes Redressal Commission Rules, there will be no fee for filing cases up to Rs. 5 lakh. The credit of the amount due to unidentifiable consumers will go to the Consumer Welfare Fund (CWF). State Commissions will furnish information to the Central Government on a quarterly basis on vacancies, disposal, the pendency of cases, and other matters.

The Consumer Protection Act 1986 had no provisions of a special regulator body whereas the amended Consumer Protection Act 2019 has formed a regulatory body under known as the Central Consumer Protection Authority (CCPA). It will be an advisory body on consumer issues, headed by the Union Minister of Consumer Affairs, Food and Public Distribution with the Minister of State as Vice Chairperson and 34 other members from different fields. It will have a three-year tenure and will have Minister-in-charge of consumer affairs from two States from each region- North, South, East, West, and North-East Region. Apart from these general rules, there are Central Consumer Protection Council Rules, provided for the constitution of the Central Consumer Protection Council (CCPC). 

The Consumer Protection Act 1986, sets out that the complaint could be filed in a consumer court where the seller’s office is located or within the jurisdiction of the seller’s office whereas in the Consumer Protection Act 2019 enables the consumer to file complaints electronically and the complaint should be filed in the jurisdiction where the complainant or the consumer resides or works.

The Act of 1986, had no provisions for Mediation whereas in the Act of 2019 amendment states that courts can work towards settlement through mediation cells with the consent of both the parties.

The Consumer Protection Act of 1986 had no provisions for Product Liability where the consumer could approach a civil court but not a consumer court. Whereas in the Consumer Protection Act of 2019 amendment states that the consumer can seek compensation for the harm caused by a product or service. 

Pecuniary Jurisdiction given in the Consumer Protection Act 1986 provides the Jurisdiction at District level was complaints worth of Rs.20 lakh; State level was from Rs.20 lakh to Rs.1 cr; National level was from Rs.1 cr and above. Whereas in the Consumer Protection Act 2019 provides the jurisdiction at the District level authorities can take up complaints with goods and services worth up to Rs.1 cr; State level will be from Rs.1cr to rs.10cr; National level will be from Rs.10cr and above.

The Consumer Protection Act of 1986, had no provisions for e-commerce whereas in the Consumer Protection Act in 2019 empowers all rules of direct selling extends to e-commerce.  E-commerce is a platform for buying and selling goods and services including digital products over the digital or electronic network across the globe. Where the e-commerce transactions will come under the provisions involving direct sales. To prevent unfair trade practices in e-commerce, direct selling, and also to protect the interest and rights of consumers, the Central Government may take such measures in the manner as may be prescribed. In this regard is that the E-Commerce platforms (like Amazon, Flipkart, etc.) are required to disclose the details of the sellers. Apart from the manufacturers, product liability would also include the sellers as well as the service providers i.e. the e-commerce aggregators.

In the Consumer Protection Act of 1986, there were no provisions for Video Conferencing. Whereas in the Consumer Protection Act 2019 amends provision for Video Conferencing for hearing and deemed admissibility of complaints if the question of admissibility is not decided within the specified period of 21 days.

The Consumer Protection Act of 1986 and 2019 indicates the evolution of the economy, technology, and networking of this era where the production, supply, and consumption of goods and services are very high. With the boom of e-commerce and advertisements, the demand for consumption of products has increased. The electronic filing of complaints and granting permission to attend the hearing through video conferences are very important steps in simplifying the process of complaints. Further, the idea of mediation, conciliation, arbitration methods along with fast track courts and other courts adapting to the e-courts, e-filing, and online hearing could also help in quicker disposal of cases. Due to the current crises of Covid-19 using electronics for court procedures have been successful.  With the inclusion of E-commerce under the Consumer Protection Laws, the current amended bill of the Consumer Protection Act of 2019 takes cognizance of the emerging trends in the marketplace. However, it remains to be seen how all the new provisions will be implemented.


This Article is written by Advocate Radhika Menon. Advocate Radhika Menon is an Advocate and Independent Practitioner. She specialises in Consumer & Corporate Laws. She is currently based in New Delhi.

 


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