An overview on the recent developments of Consumer Protection Act, 2019
Updated: Jul 20, 2020
The Ministry of Consumer Affairs, Food and Publication Distribution presented the Consumer Protection Bill, 2019 (hereinafter referred to as the “Bill”) on July 8, 2019 before the Parliament of India. The Bill was passed by the parliament on August 06, 2019, and thereafter received the assent of the President of India. The Consumer Protection Act, 2019 (“CPA 2019”) has repealed and replaced the three-decade old Consumer Protection Act, 1986 (“CPA 1986”).
Subsequent to the notification of CPA 2019, the Ministry of Consumer Affairs on July 15, 2020 had notified, with effect from July 20 2020, majority of the provisions, including the establishment of State-level consumer protection councils and district consumer redressal commissions, and provisions relating to mediation and product liability. This article aims to throw some insights into newly notified provisions of the CPA 2019.
· Change in the name of District Forum
The nomenclature of the District forum has been changed to District Commission.
· Enhanced deposit amount before filing an appeal
For filing appeal before State Commission, opposite party shall deposit 50% (Fifty percent) of the amount ordered by the District Commission. In CPA 1986, the opposite party had to deposit amounts with a prescribed ceiling limit of maximum of INR 25,000/-.
· Increase in the limitation period for appeal
The limitation period of filing of appeal to Sate Commission has been increased from 30 days to 45 days. However, any delay in filing of the appeal may be condoned by the State Commission.
· Composition of the State Commission
Each State Commission shall consist of one President and not less than four members and not more of such members, as may be prescribed in consultation with the Central Government. In CPA 1986, each State Commission consisted of one President and not less than two and not more than such number of members as may prescribed by the Central Government.
· Increase in the pecuniary jurisdiction of the commissions
The limit of pecuniary jurisdiction has been increased in the following manner:
· Additional ground for territorial jurisdiction
In addition to what was prescribed under CPA 1986, now the complainant can also institute the complaint within the territorial jurisdiction of the commission where the complainant resides or personally work for gain.
· Power of Commission to declare any terms of contract, which is unfair to any consumer, to be null and void.
As per Section 49(2) and 59(2) of the CPA 2019, the State Commission and National Commission respectively shall have the power to declare any terms of contract, which is unfair to any consumer, to be null and void in the eyes of law.
· Second appeal to National Consumer Dispute Redressal Commission (“NCDRC”)
As per Section 51(3) of the CPA 2019, a party shall have the right to file second appeal to NCDRC, only if the subject matter involved in a dispute possesses substantial question of law.
· Limitation for filing of complaint
The provision related to limitation period to file a complaint before commission under the CPA 2019, remains the same as that of CPA 1986, viz., the complainant shall file a complaint before the commission within 2 years from the date on which the cause of action has arisen.
· Consumer mediation
The CPA 2019 has now opened the doors to provide settlement of disputes with the help of mediation, in case there is a possibility of settlement at the stage of complaint or at any stage, if acceptable to both the parties involved in the dispute. The introduction of Section 74 of CPA, 2019, has paved the way to statutory recognition of mediation as alternative dispute redressal mechanism in matter involving consumer disputes. In this regard, a mediation cell shall be established in each District, State and National Commission and its regional branches for speedy resolution of disputes. In light of the above, the Central Government has also notified the Consumer Protection (Mediation) Rules, 2020, (“Rules”). Amongst many, the most significant feature of the Rules, is the list of matters which shall not be referred to mediation.
· Product liability
Prior to the enactment of CPA 2019, there was no specific statutory provisions prescribed for product liability in India. The courts had to take recourse to the principles of justice, equity, good conscience while hearing matter of product liability. With the introduction of CPA 2019, in matters related to product liability, the manufacturer along with product seller/product service provider, as the case may be, shall be liable to compensate for any harm to an aggrieved consumer.
As per Section 2(34) of the CPA 2019, Product Liability means the responsibility of a product manufacturer or product seller, of any product or service, to compensate for any harm caused to a consumer by such defective product manufactured or sold or by deficiency in services relating thereto. In this regard, harm has also been defined in Section 2(22) of the CPA 2019, to include (i) damage to any property, other than the product itself; (ii) personal injury, illness or death; (iii) mental agony or emotional distress attendant to personal injury or illness or damage to property; or (iv) any loss of consortium or services or other loss resulting from a harm referred to in sub-clause (i) or sub-clause (ii) or sub-clause (iii), but shall not include any harm caused to a product itself or any damage to the property on account of breach of warranty conditions or any commercial or economic loss, including any direct, incidental or consequential loss relating thereto.
· Central Consumer Protection Authority as the new regulator
Central Consumer Protection Authority (“CCPA”) has been established vide Section 10(1) of the CPA 2019, with the aim and object to promote, protect and enforce the rights of consumers qua misleading advertisement and unfair trade practices. The CCPA shall have the power to inquire or investigate into the dispute relating to violation of consumer rights or unfair trade practices suo moto, or on a complaint received, or on a direction from the Central Government. The CCPA shall also have an investigation wing which shall be headed by a Director General appointed by the Central Government.
Chapter VII of the CPA 2019 deals with the offences which has made violation of consumer rights, a punishable offence. The CPA 2019 has widen the ambit of offences including misleading advertisements, adulteration, unfair trade practice.