Effective from 20 July 2020, the Consumer Protection Act, of 2019 replaces the more than three decades old Consumer Protection Act, of 1986. The new Consumer Protection Act 2019 seeks to revamp the process of administration and settlement of consumer disputes, with strict penalties, including jail terms for adulteration and misleading ads by firms. Among other things, the law includes setting up a Central Consumer Protection Authority (CCPA) to promote, protect, and prevent unfair trade practices and enforce the rights of consumers as a class. The CCPA will be empowered to conduct investigations into violations of consumer rights and institute complaints/prosecution, order recalls of unsafe goods and services, order discontinuance of unfair trade practices and misleading advertisements, and impose penalties on manufacturers/endorsers/publishers of misleading advertisements. The rules for the prevention of unfair trade practices by e-commerce platforms will also be covered under this Act. There is also a provision for a class action lawsuit to ensure that the rights of consumers are not infringed upon. The authority will have the power to impose a penalty on a manufacturer or an endorser of up to 10 lakh rupees and imprisonment for up to two years for a false or misleading advertisement.
The Consumer Protection Act, 2019 when compared with the 1986 Act shows that it provides for greater protection of consumer interests taking into consideration the current age of digitization. The major changes in the new Consumer Protection Act 2019 are as follows:
| Key Points | 1986 Act | 2019 New Act |
| Pecuniary Jurisdiction | District forum – up to 20 lakhs | District Commission – up to 1 crore |
| State commission | from 20 lakhs to 1 crore | from 1 crore to 10 crore |
| from 10 crores and above | from 1 crore and above | Courts can refer to settlement through mediation. |
| Territorial Jurisdiction | Where the complainant resides or works | Where the seller has an office |
| Regulator | No such provision | Central Consumer Protection Authority is formed. |
| Mediation | No such provision | Courts can refer settlement through mediation. |
| E-Commerce | No such provision | National Commission |
| Product Liability | No such provision | The Consumer Protection Act (CPA) of 2019 holds manufacturers, sellers, and service providers liable for compensating consumers if their products or services are defective and cause harm. |
| Video Conferencing | No such provision | E-commerce transactions will come under the provisions involving direct sales |
In the Act, 2019, an exclusive law will deal with Product Liability. A manufacturer product service provider or product seller will now be responsible for compensating for injury or damage caused by defective products or service deficiency. The act provides real teeth to courts against such errant businesses as they can be awarded up to 6 months in jail or a fine of up to Rs 1 lakh in cases where the consumer is not injured. In cases where the consumer is injured, the fine to the manufacturer, seller, or distributor could be up to Rs 5 lakh along with up to seven years imprisonment. If the case pertains to the death of the consumer, then a minimum fine of Rs 10 lakh and seven years in prison, extendable to life imprisonment, can be imposed.
According to section 90 sub-section 1 whoever, by himself or by any other person on his behalf, manufactures for sale or stores or sells or distributes or imports any product containing an adulterant shall be punished, if such act—
(a) does not result in any injury to the consumer, with imprisonment for a term which may extend to six months and with a fine which may extend to one lakh rupees;
(b) causing injury not amounting to grievous hurt to the consumer, with imprisonment for a term which may extend to one year and with a fine which may extend to three lakh rupees;
(c) causing injury resulting in grievous hurt to the consumer, with imprisonment for a term which may extend to seven years and with a fine which may extend to five lakh rupees; and
(d) Results in the death of a consumer, with imprisonment for a term which shall not be less than seven years, but which may extend to imprisonment for life and with a fine which shall not be less than ten lakh rupees.
Under the above sub-section (1) the offences under clauses (c) and (d) of sub-section (1) shall be cognizable and non-bailable.
(3) Notwithstanding the punishment under sub-section (1), the court may, in case of the first conviction, suspend any licence issued to the person referred to in that sub-section, under any law for the time being in force, for a period up to two years, and in case of second or subsequent conviction, cancel the licence.
The complaints can be filed at the nearest consumer commission at the location where the complainant resides, rather than from where the service or product was bought. A consumer need not hire a lawyer to represent his case. For mediation, there will be a strict timeline fixed in the rules. For misleading advertisements, there is a provision for jail terms and fines for manufacturers. However, the act does not hold a provision to jail celebrities but they could be banned for endorsing products if it is found to be misleading.
The gazette notification for establishing the Central Consumer Protection Authority rules for the prevention of unfair trade practices in e-commerce, and accountability for celebrity endorsements are yet to be published.
Originally posted on 21.07.2024 edited and reposted on 09.03.2024
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