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Analysis of Consumer Protection Act, 2019

Article · April 2020

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Vivek Sable
Symbiosis International University
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 Subject: Consumer Protection Act, 2019

Topic: Analysis of Consumer Protection Act, 2019

Researcher Name: Vivek Vilas Sable.

Email ID: VIVEKSABLE123@GMAIL.COM

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Contents
Introduction: .................................................................................................................................... 2

Key highlights of Consumer Protection Act, 2019 ......................................................................... 2

Definition of Consumer:.............................................................................................................. 2

Regulatory Authority: ................................................................................................................. 2

Improvements in Pecuniary Jurisdiction: .................................................................................... 3

Product Liability:......................................................................................................................... 3

Unfair Trading Practices: ............................................................................................................ 4

Misleading Advertisements: ........................................................................................................ 4

Mediation: ................................................................................................................................... 4

E-commerce Platforms: ............................................................................................................... 5

Suggestions and Recommendations:............................................................................................... 5

Conclusion: ..................................................................................................................................... 6

1
Introduction:
Finally a 3 decade old Consumer Protection Act 1986 has been replaced by Consumer
Protection Act, 2019. This replacement was the need of modern Indian consumer. If we look at
statistics it is projected that nearly 329 million Indian citizens are going to buy products online,
which means 70% of mobile internet users will shop online1. If we look at this number then we
can say that new consumer protection act 2019 is going to be very helpful to Indian consumers.

New consumer protection bill has many new provisions for customers. It is designed to
help customers and it tries to overcome problems in providing basic rights to consumers of a
major sector called e-commerce. There are six basic rights of a consumer in India, Right to
safety, Right to Choose, Right to be informed, Right to consumer education, Right to be heard
and Right to seek redressal2. New consumer protection bill helps to protect these rights by
applying new methods and procedures.

Key highlights of Consumer Protection Act, 2019

Definition of Consumer:
In Old consumer protection act definition of consumer was only limited to buying goods
or services, it did not talk about online purchase or offline purchase or teleshopping etc. New act
has expanded the definition of consumer it includes description about online transactions and
offline tractions, teleshopping and multi-level marketing and direct selling3. Now new act also
covers online transactions old act was also covering online transactions but there was not
description included about online and offline transaction in old consumer protection act.

Regulatory Authority:
In Consumer protection act 1986 there was no dedicated regulating authority for
protection of consumer rights, but in Consumer protection act 2019 Government of India is
planning to start new regulating authority named Central Consumer Protection Authority
(CCPA)4. CCPA will develop easy process or plans for protecting consumers from harms arising
from defective products or services and it will also develop process for protecting consumers

1
https://www.statista.com/topics/2454/e-commerce-in-india/
2
http://vikaspedia.in/social-welfare/social-awareness/consumer-education/consumer-rights
3
http://egazette.nic.in/WriteReadData/2019/210422.pdf
4
https://pib.gov.in/newsite/PrintRelease.aspx?relid=192499

2
from unfair trade practices. Main objective of Central Consumer Protection Authority is going to
be render advice on promotion and protection of the consumers' rights under this Act. Also
CCPA will have highest powers for recalling of products or withdrawal of services which are
dangerous and hazardous or unsafe etc.

Under new Consumer Protection Act, 2019 each state will have State Consumer
Protection Council also known as State Council. Also each district will have its own district
council which will be governed by District collector5.

Improvements in Pecuniary Jurisdiction:

Old limits of pecuniary has been improved in new consumer protection act. In old act
district consumer court was allowed to handle cases for goods or services worth value up to 20
lacs only not this limit has been increased up to 1 crore. State Consumer courts were allowed to
handle cases for goods or services worth value 20 lac to 1 crore, now in new act this limit has
been increased now state consumer court can handle cases having value worth 1 crore to 10 crore
and national court will handle cases in which value of goods or services is more than 10 crore.

If we look at new act then we can see that new act has given district and state courts more
power now. Consumers will not have to go to national court for getting help which is a really
nice improvement.

Product Liability:
Concept of Product Liability has been introduced in new Consumer Protection act, 2019.
Old act was talking about only physical injuries6 but new act also talks about mental agony or
emotional distress caused by product. For example a product does not injures you but it injures
your property and because of that you get into emotional distress then also you can file case
against the manufacturer of product7. Product manufacturer will also held liable even if
manufacturer was not included while selling of the product. So manufacturers will have to
manufacture good quality products only.

5
http://egazette.nic.in/WriteReadData/2019/210422.pdf
6
http://legislative.gov.in/sites/default/files/A1986-68_0.pdf
7
http://egazette.nic.in/WriteReadData/2019/210422.pdf

3
 If we look of this new concept product liability then we can see that government is now
forcing manufactures to make good products so consumers can stay protected which a really nice
improvement is in new act.

Unfair Trading Practices:

One of the biggest improvement is that new act has broaden the definition of unfair
trading practices. New act tells that customer’s private data such should not be disclosed to any
other person or organization without discloser from the customer.

I find this improvement very good because when you visit any car showroom or bank etc.
they collect your personal data such as your phone number, email, how much money you earn
etc. and they sell this data to other companies or people for money which is a really bad and
unfair trade practice because when they sell this personal data to other people then other
companies starts calling you, emailing you about their products which is really big mental
harassment for consumers.

Misleading Advertisements:
New act talks in detail about misleading advertisements or false representation of
products. Now not only manufacturer but also endorser will be held liable for misleading or false
advertisements. This is a big improvement. Old act did not talk about it in detail. According to
new act the fine for misleading or false advertisement for endorser is 10 lac rupees which can
extend up to 50 lac rupees and ban on endorser or endorser manufacturer. Also endorser will
have to verify the claims that product is claiming before endorsing thet product. If endorser
found guilty in investigation of CCPA then he/she will have to pay fine of 10 lac rupees which
can be extended up to 50 lac rupees. New act also says that if manufacturer or endorser found
guilty they are liable for 2 years imprisonment.

Mediation:
New consumer protection act provides mediation for resolving disputes quickly which
makes solving disputes easier than before. Now each state will have mediation cell branches
which will help consumer courts to reduce their pressure who already have many pending old
cases.

4
E-commerce Platforms:
New consumer protecting act tell that ecommerce will be governed under by all laws that
applies to direct selling of product or service8. Now ecommerce sites will have to disclose their
seller’s details such as seller’s contact number, email id, website and detained address etc. to the
buyers. Also there are strict penalties for selling counterfeit products on these ecommerce
platforms.

Suggestions and Recommendations:

Government of India has taken a huge step by updating a 30 years old consumer
protection law this is a very good thing that Government has done. But there are so many
loopholes like the new law says online selling platforms will be also held liable for selling of
faulty products or services. Now if we consider this thing then all online ecommerce giants like
flipkart, amazon, myntra, snapdeal etc will have to setup mechanism which will help to reduce
sell of counterfeit products or faulty on their platforms. Which is really threatening to our
economy if some of them don’t find it easy then they might stop doing business in our country so
my suggestion is that government of India should also help them in designing a uniformed
mechanism which will create win-win situation for both parties.

Also this law is new I asked few people about it they didn’t know about this law, I also
asked them about their basic rights they did not know so government of India has implemented
this law but at some point they are lacking spreading awareness about it in their citizens. So my
advice is to spread awareness about it and instead of spreading awareness only via TV, online
and newspapers they should include basic things about this law in school teachings which will
really help to spread awareness about it.

Also there is no deadline for establishment of Central Consumer Protection Authority,

which makes me ask a question that they have defined importance of it but why they have not
defined any date for establishing it? Government of India needs to spread awareness about this
new department in their citizens then only citizens will be able to get help from this department
otherwise how citizens will know that this thing exist?

8
http://egazette.nic.in/WriteReadData/2019/210422.pdf

5
 Conclusion:
Finally government has taken consumers seriously. If we look at the new consumer
protection act then we can see that many new terms have been added to law. Government is
taking online frauds seriously. But there is no mention about banking frauds because many banks
say that open account in their banks with 0Rs. you don’t have to worry about any charges but
after opening bank account if you don’t maintain certain amount in your bank account then they
charge you with some fine. Fine is not huge in most cases it is around 50Rs. but if we calculate
fine for many citizens then amount becomes huge. Government need to specific guidelines for
banks for these kind of misleading advertisements.

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