The increasing interdependence of the global economy as well as the global nature of many corporate activities has contributed to a universal emphasis on consumer rights protection and promotion. Consumers are demanding better products and services. Although recent technical advancements have had a considerable impact in this direction, the reality is that consumers are still victims of unscrupulous and exploitative activities. In India, despite the fact that Consumer Protection Act, 2019, applies to the whole country, consumer exploitation continues in a variety of ways, including food adulteration, counterfeit drugs, dubious hire purchase plans, high prices, poor quality, deficient services, deceptive advertisements, hazardous products, black marketing, and so on.
It has been realised and rightly so that consumer protection is a socio-economic programme to be pursued by the government as well as business industry as the satisfaction of the consumers is in the interest of both. In this context, the government, however, has a primary responsibility to protect the consumers’ interests and rights through appropriate policy measures, legal structure and administrative framework.
In the year 2019, a new Act was enacted namely Consumer Protection Act, 2019, which replaced the three-decade-old Consumer Protection Act, 1986. The new Act proposes a slew of measures and tightens the existing rules to further safeguard consumer rights. Introduction of a central regulator, strict penalties for misleading advertisements and guidelines for e-commerce and electronic service providers are some of the key highlights. A new era of commerce and digital branding, as well as a new set of customer expectations, has arrived with the Digital Age. Easy access, a wide range of options, convenient payment mechanisms, improved services, and shopping as per convenience have all been made possible by digitisation. However, as technology advanced, so did the number of challenges related to consumer protection, prompting the government to pass the Consumer Protection Act, 2019, with the goal of addressing the new set of issues that consumers face in the digital age.
Under the new legislation, the overall process of consumer grievance redressal has been eased. It also recommends setting up of a Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of consumers as a class, as well as to make interventions to prevent consumer detriment arising from unfair trade practices. The agency can also initiate class action, including enforcing recall, refund and return of products. By virtue of the Act, a manufacturer or product service provider or product seller will now be responsible to compensate for injury or damage caused by defective product or deficiency in services. Additionally, the Bill allows for the notification of legislation on E-commerce and direct selling, with a focus on consumer protection.
The Act envisages the creation of a Central Consumer Protection Authority but vests too much power and control in it, without proposing adequate administrative safeguards. Endorsement of goods and services, normally done by celebrities, are also covered within the ambit of the 2019 Act. In fact, an additional onus has been placed on endorsers, apart from manufacturers and service providers, to prevent false or misleading advertisements. Unlike the 1986 Act, the definition of “goods” has been amended to include “food” as defined by the Food Safety and Standards Act of 2006. This will also bring the rapidly growing number of food delivery platforms within the Act’s umbrella.
Interestingly, “telecom” has been added to the definition of “services” to bring telecom service providers within the purview of the 2019 Act. However, the term “telecommunication service” as defined by the Telecom Regulatory Authority of India Act, which would have encompassed internet, cellular, and data services, has not been used.
A significant addition to the 2019 Act is the introduction of “product liability” whereby manufacturers and sellers of products or services have been made responsible to compensate for any harm caused to a consumer by defective products, manufactured or sold, or for deficiency in services. Another newly introduced concept is that of “unfair contracts” aimed to protect consumers from unilaterally skewed and unreasonable contracts which lean in favour of manufacturers or service providers. The definition of “unfair trade practices” has also been enlarged. It is now also an offence if any personal information, given in confidence and gathered in the course of a transaction, gets disclosed.
These changes signify an attempt to increase market openness through statutory protection, with the goal of ensuring that consumer interests come first. The 2019 Act continues to have Consumer Dispute Redressal Commissions at the District, State and National levels (Consumer Commissions), however the pecuniary jurisdiction of each of these commissions has been substantially increased to reduce the burden on the State and National Commissions by encouraging consumers to approach the District Commission for complaints valued up to Rupees 1 crore.
Furthermore, the jurisdiction of the Consumer Commissions has also been expanded to allow complaints to be made where the complainant resides or personally works for gain, as opposed to the 1986 Act where complaints had to be instituted where the opposite party resides or conducted business, or where the cause of action arose. This will ease the burden on consumers who will now be able to institute complaints at the district level where they reside and will not be compelled to travel to other parts to pursue their complaints.
Notably, the admissibility of complaints made to Consumer Commissions are to be decided within twenty-one days. Though such a provision existed in the 1986 Act as well, the 2019 Act adds that if the issue of the complaint’s admissibility is not resolved within such time, the complaint is presumed to have been admitted. Regrettably, corresponding procedural amendments have not been introduced, which raise some doubts about the practical efficacy of the changes. The 2019 Act introduces the power of judicial review allowing Consumer Commissions to review their orders, thereby reducing the burden faced on account of appeals being preferred to rectify errors apparent on the face of the record. In contrast to the 1986 Act, appeals from the State Commission to the National Commission are now limited to cases involving substantial questions of law. Appeals from the National Commission to the Supreme Court can only be made against complaints which originated in the National Commission. The time limit for preferring appeals has now also been made more stringent, with a view to tightening the noose regarding timely filing of appeals.
When compared to the 1986 Consumer Protection Act and the Jammu and Kashmir Consumer Protection Act of 1987, the Consumer Protection Act of 2019 provides for enhanced protection of consumer interests, taking into account the current age of digitisation. The 2019 Act also deals with the technological advancements in the industry, provides for easier filing of complaints and also imposes strict liability on business including endorsers for violating the interests of the consumers. However, only time will prove the fate of the 2019 Act which prima facie, appears to be much more consumer friendly than the 1986 Act.
—The writer is a research scholar at Aligarh Muslim University. [email protected]