Know your Rights & Responsibilities :

CS Muhammed Sahal
Director, Company Secretary

07-Nov-2020

Preamble of Consumer Protection Act 2019

“An Act to provide for protection of the interests of consumers and for the said purpose, to establish authorities for timely and effective administration and settlement of consumers' disputes and for matters connected therewith or incidental thereto”

As the preamble rightly quotes, new Consumer Protection Act 2019 provides a 360 degree protection to a consumer . The new Consumer Protection Act, 2019 came into force on 20^th July 2020 and it will empower consumers and help them in protecting their rights through its various notified rules and provisions. The new act will be swift and less time consuming compared to the old Consumer Protection Act, 1986 ,wherein a single-point access to justice was given ,making it a time-consuming exercise.The new act consisting of around 39 pages and the rules there under has been drafted considering all the perspective of current business scenario especially in the e-tail world days. It also brings e-commerce companies under the ambit of a structured consumer redressal mechanism and prevents unfair trade practice by e-commerce platforms

The Act includes establishment of the Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of consumers. The CCPA will be empowered to conduct investigations into violations of consumer rights and institute complaints / prosecution, order recall of unsafe goods and services, order discontinuance of unfair trade practices and misleading advertisements, impose penalties on manufacturers / endorsers /publishers of misleading advertisements.

The following are some of the key features and take away from the said act from the perspective of both seller and buyer

1. There will be no fee for filing cases of up to Rs. 500,000/-

• Complaints can be filed electronically and from where the complainant resides or works
• Specific provision for deemed admissibility of complaints, if the question of admissibility is not decided within the specified period of 21 days.
• The Consumer Protection Act 1986- single point of access to justice,it was time consuming. Additional swift executive remedies provided through CCPA
• The Act establishes Consumer Protection Councils at the district, state, and national levels to render advice on consumer protection in addition to the consumer Disputes Redressal Commissions
• Deterrent punishment to check misleading advertisements and adulteration of products
• Only appeal related to question of law will be admitted after second stage

2. Introduces The Concept Of Product Liability

A manufacturer or product service provider or product seller shall be responsible to compensate for injury or damage caused by defective product or deficiency in services.

The new Act introduces the concept of product liability and brings the product manufacturer, product service provider and product seller within its scope for any claim for compensation.

Following are considered as product liability and the basis for product liability action are:

• 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
• “Under the new Act, e-commerce will be governed similar to direct selling in India and online platforms for selling goods or services, or aggregating services will be held liable for any violation of consumer rights or adopting any unfair trade practices.

3. Stricter Watch On E-Commerce

As part of widening the scope of protection to be provided for consumers and to make sure proper addressing of various grievances arising from purchase of products/availing services in electronic platforms, new Consumer Protection (E-Commerce) Rules 2020 also notified recently.  Under this act every e-commerce entity is required to provide information relating to;

1. • Return of goods
   • Refund
   • Exchange
   • Warranty and guarantee
   • Delivery and shipment
   • Modes of payment
   • Grievance redressal mechanism
   • Payment methods
   • Security of payment methods

Importantly, the rules stipulate that e-commerce entities must also include country of origin. This will enable the consumer to make an informed decision at the pre-purchase stage on its platform.

Further  e-commerce platforms have to acknowledge the receipt of any consumer complaint within forty-eight hours and redress the complaint within one month from the date of receipt under this Act.

4. What are the Change in the Dispute Resolution Process under the new Act?

A number of changes have been introduced to the dispute resolution process, including the pecuniary jurisdiction of the commissions and empowering them to review their own orders.

The major changes in the pecuniary jurisdiction are as follows:

• The pecuniary jurisdiction of District Commissions has increased from ₹20 lakh (earlier) to up to ₹1 crore.
• Pecuniary jurisdiction of State Commissions increased from ₹1 crore to Rs 10 crore.
• National Commission can hear cases above ₹10 crore, up from the earlier threshold of ₹1 crore.

Conclusion

During this changing business era , there is a requirement for a realistic act to cater to the needs of the end consumers, which is a welcome step. By introducing e filings and other user friendly plat forms like hearing through video conference facilities, the end customers can easily access the system without much technical issues and higher penalty provisions will enable the sellers to be more careful during their sale.

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