Highlight of Consumer Protection Act, 2019 which is effective from July 20, 2020

Effective from 20 July 2020, the Consumer Protection Act, 2019 which replaces the more than three decades old Consumer Protection Act, 1986. The new Consumer Protection Act 2019 seeks to revamp the process of administration and settlement of consumer disputes, with strict penalties, including jail term for adulteration and misleading ads by firms. Among other things, the law includes setting up a Central Consumer Protection Authority (CCPA) to promote, protect, prevent unfair trade practice 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 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 rules for prevention of unfair trade practice by e-commerce platforms will also be covered under this Act. There is also a provision for a class action lawsuit for ensuring that the rights of consumers are not infringed upon. The authority will have 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.

In the Act, 2019, there will be an exclusive law dealing with Product Liability. A manufacturer or product service provider or product seller will now be responsible to compensate for injury or damage caused by defective products or deficiency in services. 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 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 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 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 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 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 strict timeline fixed in the rules. On misleading advertisements there is provision for jail term and fine for manufacturers. However, 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 establishment of the Central Consumer Protection Authority and rules for prevention of unfair trade practice in e-commerce, accountability for celebrity endorsements are yet to be published.