Safeguarding Consumer Rights

Dr. Sheetal Kapoor

The consumer movement is a social movement which involves all actions by the manufacturers, service providers and the government to protect the rights of the consumers. ‘Consumer protection’ involves assurance against anti-consumer practices by the traders and producers. Anti-consumer practices may include providing defective products, deficiency in services, adulterated products, sub-standard quality, restrictive trade practices, fractional weights and measures, overcharging, counterfeits and duplicate products, fake websites, misleading and unfair trade practices. Thus, curbing such wrong practices and providing speedy redressal to consumers is a part of consumer protection.

24th December is celebrated as the National Consumer Day. On this day in 1986, the Consumer Protection Act, received the accent of the President of India and became a leaistation. The Consumer Protection Act, 1986, has been a benevolent legislation protecting the rights of the consumers and providing compensation to them through quasi-judicial authorities popularly known as consumer courts or consumer forums. But of late, there has been a sea change in market practices and the consumers today face new challenges in case of direct selling, online shopping and E-Commerce transactions. The Consumer Protection Act, 1986 in present times had thus, become outdated creating a need for a new law. Thus the Consumer Protection Act, 2019 came into force on 9th August 2019. The Consumer Protection Act, 2019, provides mechanisms for making the consumer complaint system more robust. The earlier Act faced certain anomalies where the problems of consumers related to e-commerce, product liability, a burden of more than 4.3 lakh pending consumer cases in the consumer courts, misleading advertisements were not attended instantly. Since, Justice delayed is justice denied’ any delay in seeking redressal by consumers reduces their trust in the system.

New mechanisms such as Central Consumer Protection Authority, product liability, mediation centres attached to consumer commissions, class action suits are now a part of the Consumer Protection Act, 2019.

Another innovative mechanism aimed at protecting consumer rights is the Consumer App. In order to help consumers to seek advice and register their complaints, the Department of Consumer Affairs launched a Consumer App on 01-10-2019. The App is available in both Hindi and English on Android as well as iOS platform. Through the Consumer App, a consumer can register its complaint/grievance and also give suggestions. In the month of October, almost 3020 complaints were received, out of which 2000 complaints have been resolved. The App aims at giving a fair resolution within 60 days.

Key highlights of the Consumer Protection Act.

1. Establishment of Consumer Commissions: To provide inexpensive, speedy and summary redressal of

consumer disputes, quasi-judicial bodies have been set up in each district and state and at the national level, which would be called as the District Commissions, the State Commissions and the National Commissions respectively.   At present, there are more than 600 District Forums and 35 State Commissions with the National Consumer Disputes Redressal Commission (NCDRC) at the apex. NCDRC has its office at Janpath Bhawan, A Wing, 5th Floor, Janpath, New Delhi.

Thus, the three-tier system in the New Act would be the same as set up in the Consumer Protection Act, 1986 at district, state and national levels. The pecuniary jurisdiction of adjudicatory bodies increased in case of District Commission to Rs 1 Crore, in case of State Commission between 1 Crore to 10 Crore and National Commission Above Rs 10 Crore. Since the access to District Commissions is better compared to State and National commissions, the increase in limit to Rs 1 crore of District Commissions would be a welcome step in terms of convenience and accessibility.

2. Central Consumer Protection Authority (CCPA): The Act proposes establishment of a central regulator, Central Consumer Protection Authority (CCPA). The Authority would address matters related to consumer rights, unfair trade practices, misleading advertisements and impose penalties for selling faulty and fake products. As a regulator CCPA would have the powers to take suo-motu actions against manufacturers, sellers and service providers. Thus, CCPA can act on:
3. a) Complaints of unfair trade practices,
4. b) Issue safety guidelines,
5. c) Order product recall or discontinuation of services,
6. d) Refer complaints to other regulators,
7. e) Has punitive powers such as imposing penalties, and
8. f) Can file actions before consumer commissions
9. g) Intervene in proceeding in matters of consumer rights or unfair trade practices

The Central Authority will have an Investigation Wing headed by a Director-General for the purpose of conducting inquiry or investigation under the Act which is a new addition in the Consumer Protection Act, 2019.

3. Consumer Councils: Chapter II of the Consumer Protection Act, 2019 envisages setting up of the Consumer Protection Councils at the Centre, in all the States and in each district. As in the 1986 Act the New legislature also provides for establishment of Advisory councils at three levels: National, State and District. The Councils are very important and potent deliberative bodies for the consumers and play an important role in spreading the consumer movement, especially in rural areas. The Councils act as the catalyst for change so that the present market system functions for the welfare of the consumers and for satisfying their needs.
4. Product Liability: Chapter VI applies to every claim for compensation under product liability action by a complainant for any harm caused by a defective product manufactured by a product manufacturer or serviced by a product service provider or sold by a product seller. A product liability action may be brought by a complainant against a product manufacturer or a product service provider or a product seller, as the case may be, for any harm caused to him on account of a defective product.

 A product manufacturer shall be liable in product liability action, if—

(a)          the product contains a manufacturing defect; or

(b)          the product is defective in design; or

(c)           there is a deviation from manufacturing specific-ations; or

(d)          the product does not conform to the express warranty; or

(e)          the product fails to contain adequate instructions of correct usage to prevent any harm or any warning regarding improper or incorrect usage.

5. Mediation: Chapter V of the Act introduces the concept of mediation for providing speedy redressal to consumers. The State Government, by notification, would open a consumer mediation cell which would be attached to each of the District Commissions and the State Commissions of that State. The Central Government would also establish, by notification, a consumer mediation cell to be attached to the National Commission and each of the regional benches. A consumer mediation cell would consist of persons as may be prescribed who would act as mediators and try to resolve complaints between the business and the consumers with a win-win situation for both the parties. Every consumer mediation cell would maintain—

(a)          a list of empanelled mediators;

(b)          a list of cases handled by the cell;

(c)           record of proceeding; and

(d)          any other information as may be specified by regulations.

Every consumer mediation cell would submit a quarterly report to the District Commission, State Commission or the National Commission to which it would be attached.

6. Unfair Contracts: It means a contract between a manufacturer or trader or service provider on one hand, and a consumer on the other, having such terms which cause significant change in the rights of such consumer, including the following:

(i) requiring manifestly excessive security deposits to be given by a consumer for the performance of contractual obligations.

(ii)           imposing any penalty on the consumer, for the breach of contract thereof which is wholly disproportionate to the loss occurred due to such breach to the other party to the contract.

(iii)          refusing to accept early repayment of debts on payment of applicable penalty.

(iv)         entitling a party to the contract to terminate such contract unilaterally, without reasonable cause.

(v)          permitting or has the effect of permitting one party to assign the contract to the detriment of the other party who is a consumer, without his consent.

(vi)         imposing on the consumer any unreasonable charge, obligation or condition which puts such consumer to disadvantage.

7. Ease in Filing of Complaints: Several provisions aimed at simplifying the consumer dispute adjudication process in the consumer commissions have been added. These include, among others, enhancing the pecuniary jurisdiction of the consumer disputes redressal agencies, increasing minimum number of members in the consumer fora to facilitate quick disposal of complaints, power to review their own orders by the state and district commission, constitution of ‘circuit bench’ to facilitate quicker disposal of complaints, reforming the process for the appointment of the president and members of the district fora, and deemed admissibility of complaints if the question of admissibility is not decided within the specified period of 21 days.

The Act now allows consumers to file their complaints with the consumer courts from anywhere. This is a big relief as earlier consumers were required to file complaint in the area where the seller or service provider was located or where the transaction had taken place. This is a welcome change, especially with the rise in e-commerce purchases, where the seller could be located anywhere. In addition, the Act also enables the consumer to file complaints electronically and in the Consumer Commissions and seek a hearing through video conferencing, saving both money and time and also a big relief to physically challenged consumers.

8. E-Commerce and Direct Selling Guidelines: E-commerce guidelines would be mandatory under consumer protection law which would include 14-day deadline to effect refund request. It would mandate e-tailers to display details of sellers supplying goods and services on their websites and moot the procedure to resolve consumer complaints. The e-commerce companies would also be required to ensure that personally identifiable information of customers are protected. Display terms of contract between e-Commerce entity and the seller relating to return, refund, exchange, warranty / guarantee, delivery / shipment, mode of payments, grievance redressal mechanism etc. to enable consumers to make informed decisions.
9. Strict penalties for Endorsers: Under the New legislature if the Central Consumer Protection Authority is satisfied after investigation that any advertisement is false or misleading and is prejudicial to the interest of any consumer or is in contravention of consumer rights, it may issue directions to the concerned trader or manufacturer or endorser or advertiser or publisher, as the case may be, to discontinue such advertisement or to modify the same.

The Central Authority may also have the powers to impose a penalty in respect of false or misleading advertisement, by a manufacturer or an endorser, which may extend to ten lakh rupees. For every subsequent contravention by a manufacturer or endorser, it may impose a penalty, which may extend to fifty lakh rupees. Further, the Central Authority if it deems it necessary, it may, by order, prohibit the endorser of a false or misleading advertisement from making endorsement of any product or service for a period which may extend to one year.

(The author teaches at Kamla Nehru College, University of Delhi. Email: sheetal_kpr@hot mail.com)

Views expressed are personal.

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