Once Mahatma Gandhi had said "Customer is like a God". In early time also the concept was "the customer is the king" but this concept has been changed by passing of time. We know that for success of any organisation the end users play a very important role. The end users are the main decision making for successes of products of companies. The companies are also developing or producing their products keeping in mind, the choice, demand and test of customers. Now a days the size of business houses has been increased and protection of customer practices have been decreased.
The emergence of e-commerce has brought a boon for traders, manufacturers, suppliers and as well as customers. The digital economy has created a new type of world, in which we can purchase or sale, whatever we want by using online portals. The new era has introduced new type of large base e-commerce companies, which are providing a worldwide platform to suppliers as well as consumers to purchase or sale their products in digital domain. This is called third type of economy i.e. Digital Economic.
This has increased expectations of customers. The use of digital method provides easy access, a large variety of choices, convenient payment mechanism, improved services and shopping as per decision of customers. This digital economy provides easy access for customers to purchase a large variety of products they want of various companies and from many e-commerce companies. These e-commerce companies are big business houses, though they are customer centric but also there are many glitches and mis-selling of spurious products found these days. The digital economy brought easy access for customers as well as various types of other difficulties, such as selling of spurious products, duplicate products, expired products, inconsistency in return of products, return of payments, etc.
Keeping in view above difficulties and to protect rights or customers, the Consumer Protection Act, 2019 has received ascent of President of India on 9th August,2019 and notified in Official Gazette of India on 9th August,2019 through Notification No. 54/09-08-2019.This new Consumer Protection Act,2019 has replaced The Consumer Protection Act, 1986.
The Consumer Protection Act, 2019 came into force from 20th July,2020. New Act will empower consumers and help them in protecting their rights through its various notified Rules and provisions like Consumer Protection Councils, Consumer Disputes Redressal Commissions, Mediation, Product Liability and punishment for manufacture or sale of products containing adulterant or spurious goods.
The preamble of amended act is "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.
LET'S CONSIDER SOME DEFINITIONS;
Section 2(1) defines: "Advertisement", means any audio or visual publicity, representation, endorsement or pronouncement made by means of light, sound, smoke, gas, print, electronic media, internet or website and includes any notice, circular, label, wrapper, invoice or such other documents.
Section 2(4): "Central Authority", means the Central Consumer Protection Authority established under section 10;
Section 2(5): "complainant" means:
- a consumer; or
- any voluntary consumer association registered under any law for the time being in force; or
- the Central Government or any State Government; or
- the Central Authority; or
- one or more consumers, where there are numerous consumers having the same interest; or
- in case of death of a consumer, his legal heir or legal representative; or
- in case of a consumer being a minor, his parent or legal guardian.
Note: Clause (vii) has been inserted in new act expanding definition of complainant.
Section 2 (6): "complaint" means any allegation in writing, made by a complainant for obtaining any relief provided by or under this Act, that:
- an unfair contract or unfair trade practice or a restrictive trade practice has been adopted by any trader or service provider;
- the goods bought by him or agreed to be bought by him suffer from one or more defects;
- the services hired or availed of or agreed to be hired or availed of by him suffer from any deficiency;
- a trader or a service provider, as the case may be, has charged for the goods or for the services mentioned in the complaint, a price in excess of the price:
(a) fixed by or under any law for the time being in force; or
(b) displayed on the goods or any package containing such goods; or
(c) displayed on the price list exhibited by him by or under any law for the time being in force; or
(d) agreed between the parties;
(v) the goods, which are hazardous to life and safety when used, are being offered for sale to the public—
(a) in contravention of standards relating to safety of such goods as required to be complied with, by or under any law for the time being in force;
(b) where the trader knows that the goods so offered are unsafe to the public;
(vi) the services which are hazardous or likely to be hazardous to life and safety of the public when used, are being offered by a person who provides any service and who knows it to be injurious to life and safety;
(vii) a claim for product liability action lies against the product manufacturer, product seller or product service provider, as the case may be;
Section 2(7): "consumer" means any person who:
- buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment, when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or
- hires or avails of any service for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such service other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person, but does not include a person who avails of such service for any commercial purpose.
Explanation. For the purposes of this clause:
(a) the expression "commercial purpose" does not include use by a person of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self-employment;
(b) the expressions "buys any goods" and "hires or avails any services" includes offline or online transactions through electronic means or by teleshopping or direct selling or multi-level marketing;
Section 2 (8): "consumer dispute" means a dispute where the person against whom a complaint has been made, denies or disputes the allegations contained in the complaint;
Section2 (9): "consumer rights" includes,
- the right to be protected against the marketing of goods, products or services which are hazardous to life and property;
- the right to be informed about the quality, quantity, potency, purity, standard and price of goods, products or services, as the case may be, so as to protect the consumer against unfair trade practices;
- the right to be assured, wherever possible, access to a variety of goods, products or services at competitive prices;
- the right to be heard and to be assured that consumer's interests will receive due consideration at appropriate fora;
- the right to seek redressal against unfair trade practice or restrictive trade practices or unscrupulous exploitation of consumers; and
- the right to consumer awareness;
Section 2(10): "defect" means any fault, imperfection or shortcoming in the quality, quantity, potency, purity or standard which is required to be maintained by or under any law for the time being in force or under any contract, express or implied or as is claimed by the trader in any manner whatsoever in relation to any goods or product and the expression "defective" shall be construed accordingly.
Section 2(11): "deficiency" means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service and includes—
- any act of negligence or omission or commission by such person which causes loss or injury to the consumer; and
- deliberate withholding of relevant information by such person to the consumer.
Section 2(13): "direct selling" means marketing, distribution and sale of goods or provision of services through a network of sellers, other than through a permanent retail location.
Section 2(16): "e-commerce" means buying or selling of goods or services including digital products over digital or electronic network.
Section 2(17): "electronic service provider" means a person who provides technologies or processes to enable a product seller to engage in advertising or selling goods or services to a consumer and includes any online market place or online auction sites.
Section 2(28): "misleading advertisement" in relation to any product or service, means an advertisement, which—
- falsely describes such product or service; or
- gives a false guarantee to, or is likely to mislead the consumers as to the nature, substance, quantity or quality of such product or service; or
- conveys an express or implied representation which, if made by the manufacturer or seller or service provider thereof, would constitute an unfair trade practice; or
- deliberately conceals important information.
Section (34): "product liability" means the responsibility of a product manufacturer or product seller, of any product or service, to compensate for any harm caused to a consumer by such defective product manufactured or sold or by deficiency in services relating thereto.
Section 2(35) "product liability action" means a complaint filed by a person before a District Commission or State Commission or National Commission, as the case may be, for claiming compensation for the harm caused to him.
Section 2(46): "unfair contract" 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, namely: —
- requiring manifestly excessive security deposits to be given by a consumer for the performance of contractual obligations; or
- 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; or
- refusing to accept early repayment of debts on payment of applicable penalty; or
- entitling a party to the contract to terminate such contract unilaterally, without reasonable cause; or
- 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; or
- imposing on the consumer any unreasonable charge, obligation or condition which puts such consumer to disadvantage.
Section 2(47): "unfair trade practice" means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice including any of the following practices, namely: —
(i) making any statement, whether orally or in writing or by visible representation including by means of electronic record, which—
(a) falsely represents that the goods are of a particular standard, quality, quantity, grade, composition, style or model;
(b) falsely represents that the services are of a particular standard, quality or grade;
(c) falsely represents any re-built, second-hand, renovated, reconditioned or old goods as new goods;
(d) represents that the goods or services have sponsorship, approval, performance, characteristics, accessories, uses or benefits which such goods or services do not have;
(e) represents that the seller or the supplier has a sponsorship or approval or affiliation which such seller or supplier does not have;
(f) makes a false or misleading representation concerning the need for, or the usefulness of, any goods or services;
(g) gives to the public any warranty or guarantee of the performance, efficacy or length of life of a product or of any goods that is not based on an adequate or proper test thereof:
Provided that where a defence is raised to the effect that such warranty or guarantee is based on adequate or proper test, the burden of proof of such defence shall lie on the person raising such defence;
(h) makes to the public a representation in a form that purports to be—
(A) a warranty or guarantee of a product or of any goods or services; or
(B) a promise to replace, maintain or repair an article or any part thereof or to repeat or continue a service until it has achieved a specified result, if such purported warranty or guarantee or promise is materially misleading or if there is no reasonable prospect that such warranty, guarantee or promise will be carried out;
(i) materially misleads the public concerning the price at which a product or like products or goods or services, have been or are, ordinarily sold or provided, and, for this purpose, a representation as to price shall be deemed to refer to the price at which the product or goods or services has or have been sold by sellers or provided by suppliers generally in the relevant market unless it is clearly specified to be the price at which the product has been sold or services have been provided by the person by whom or on whose behalf the representation is made;
(j) gives false or misleading facts disparaging the goods, services or trade of another person. Explanation. —For the purposes of this sub-clause, a statement that is, —
(A) expressed on an article offered or displayed for sale, or on its wrapper or container; or
(B) expressed on anything attached to, inserted in, or accompanying, an article offered or displayed for sale, or on anything on which the article is mounted for display or sale; or
(C) contained in or on anything that is sold, sent, delivered, transmitted or in any other manner whatsoever made available to a member of the public, shall be deemed to be a statement made to the public by, and only by, the person who had caused the statement to be so expressed, made or contained;
(ii) permitting the publication of any advertisement, whether in any newspaper or otherwise, including by way of electronic record, for the sale or supply at a bargain price of goods or services that are not intended to be offered for sale or supply at the bargain price, or for a period that is, and in quantities that are, reasonable, having regard to the nature of the market in which the business is carried on, the nature and size of business, and the nature of the advertisement.
Explanation. —For the purpose of this sub-clause, "bargain price" means, — (A) a price that is stated in any advertisement to be a bargain price, by reference to an ordinary price or otherwise; or
(B) a price that a person who reads, hears or sees the advertisement, would reasonably understand to be a bargain price having regard to the prices at which the product advertised or like products are ordinarily sold;
(a) the offering of gifts, prizes or other items with the intention of not providing them as offered or creating impression that something is being given or offered free of charge when it is fully or partly covered by the amount charged, in the transaction as a whole;
(b) the conduct of any contest, lottery, game of chance or skill, for the purpose of promoting, directly or indirectly, the sale, use or supply of any product or any business interest, except such contest, lottery, game of chance or skill as may be prescribed;
(c) withholding from the participants of any scheme offering gifts, prizes or other items free of charge on its closure, the information about final results of the scheme.—For the purpose of this sub-clause, the participants of a scheme shall be deemed to have been informed of the final results of the scheme where such results are within a reasonable time published, prominently in the same newspaper in which the scheme was originally advertised;
(iv) permitting the sale or supply of goods intended to be used, or are of a kind likely to be used by consumers, knowing or having reason to believe that the goods do not comply with the standards prescribed by the competent authority relating to performance, composition, contents, design, constructions, finishing or packaging as are necessary to prevent or reduce the risk of injury to the person using the goods;
- permitting the hoarding or dest ruction of goods, or refusal to sell the goods or to make them available for sale or to provide any service, if such hoarding or destruction or refusal raises or tends to raise or is intended to raise, the cost of those or other similar goods or services;
- manufacturing of spurious goods or offering such goods for sale or adopting deceptive practices in the provision of services;
- not issuing bill or cash memo or receipt for the goods sold or services rendered in such manner as may be prescribed;
- refusing, after selling goods or rendering services, to take back or withdraw defective goods or to withdraw or discontinue deficient services and to refund the consideration thereof, if paid, within the period stipulated in the bill or cash memo or receipt or in the absence of such stipulation, within a period of thirty days;
- disclosing to other person any personal information given in confidence by the consumer unless such disclosure is made in accordance with the provisions of any law for the time being in force.
LET'S DISCUSS SOME IMPORTANT FEATURE OF ACT;
- Under the new Act, "consumer " is defined as a person who "buys any goods" and "hires or avails of any service" for consideration but does not include a person who obtains goods for resale or goods or service for any commercial purpose.
- The Act seeks to widen the scope of this definition . Thus, a consumer will now mean any person who "buys any goods" and "hires any services" which shall include both online and offline transactions through electronic means, teleshopping, direct selling or multi-level marketing.
- The concept of "product liability" has been newly introduced and is defined as the responsibility of a product manufacturer or product seller of any product or service to compensate for any harm caused to a consumer due to defective product manufactured, sold or deficiency in services relating thereto.
- The "Product Liability" in order to discourage the manufacturers and service providers from delivering defective or deficient services. A product liability action may be brought against a product manufacturer or a product service provider for any harm caused to a consumer on account of a defective product.
- It is important to note that a product manufacturer shall be liable even if he proves that he was not negligent or did not act fraudulently in making the express warranty of a product.
- Rights of the consumer-
- be protected against the marketing of goods, products or services which are hazardous to life and property;
- be informed about the quality, quantity, potency, purity, standard and price of goods, products or services;
- be assured, wherever possible, access to a variety of goods, products or services at competitive prices;
- be heard and to be assured that consumers' interests will receive due consideration at appropriate fora;
- seek redressal against unfair trade practice or restrictive trade practices or unscrupulous exploitation of consumers; and
- consumer awareness.
- Introduction of "e-commerce" and "electronic service provider" The Act has inserted the definition of "e-commerce" which means buying or selling of goods or services including digital products over digital or electronic network.
Section 94 of the Act refers to the prevention of unfair trade practices in e-commerce and direct selling and also deals with protection of interest and rights of consumers.
- Further, the Act has also introduced a vital concept of "electronic service provider" which is defined as a person who provides technologies or processes to enable a product seller to engage in advertising or selling goods or services to a consumer and includes any online marketplace or online auction sites.
Further, an electronic service provider is now included under the definition of a product seller. These online marketplaces and auction sites can now be held in product liability action under the circumstances as stated in Section 86 of the Act.
By including e-commerce within its purview, the Act seeks to protect rights of e-consumers and also enable them to proceed against the e-commerce websites in the event of any violation of their rights.
- Central Consumer Protection Authority: The Act introduces the establishment of a Central Consumer Protection Authority (CCPA) by the Central government. The CCPA is a regulatory authority and shall be empowered to impose penalties, recall goods, cause withdrawal of services, provide refunds and investigate into matters. It shall also be responsible for protecting the rights of consumers as a class and shall further ensure that no person engages in unfair trade practices and that no misleading advertisements are made.
The Act provides for establishing an investigation wing which shall be headed by the director general who shall be appointed by the central government for conducting investigations as per the order of the CCPA.
- The Act also introduces electronic mode for filing complaint for unfair trade practices or false or misleading advertisements to the district collector, the commissioner of the regional office or the CCPA.
- Strict penalties for false and misleading advertisements : The Act has defined the term" misleading advertisement" in relation to any product or service as, "an advertisement which falsely describes the product or service which gives a false guarantee and is likely to mislead the consumer as to the nature substance, quantity or quality of such product or service and conveys an express or implied representation which, if made by the manufacturer or seller or service provider, would constitute an unfair trade practice and shall also include information which is concealed deliberately" .
The CCPA may impose a penalty of;
- up to INR 1,000,000 (Indian Rupees One Million) on a manufacturer or an endorser, for a false or misleading advertisement and imprisonment for up to 2 (two) years for the same;
- In case of a subsequent offence, the fine may extend to INR 5,000,000 (Indian Rupees Five Million) and imprisonment of up to 5 (five) years;
- The CCPA can also prohibit the endorser of a misleading advertisement from endorsing that particular product or service for a period of up to 1 (one) year. For every subsequent offence, the period of prohibition may extend to 3 (three) years.
- Consumer Dispute Redressal Commission: The Act provides for setting up of a Consumer Dispute Redressal Commission (CDRC), which shall be set up at the district, state and national level (Commissions). The CDRC is empowered to resolve complaints with respect to unfair and restrictive trade practices, defective goods and services, overcharging and goods which are a hazardous to life and safety.
- A Central Consumer Protection Authority ("Central Authority") shall be acts to regulate matters relating to violation of rights of consumers, unfair trade practices and false or misleading advertisements which are prejudicial to the public interest and the consumers.
- Central Authority shall have an "Investigation Wing" for the purpose of conducting inquiry or investigation.
- Amongst the various powers held by the Central Authority, the most relevant ones are; -
- Inquire into a matter, suo motu or on a complaint received or on direction of Central Government;
- File Complaints or intervene in any proceedings before District or State or National Commission;
- After a preliminary inquiry, the Central Authority will further have a right to refer the matter for investigation or refer the same to some other competent Regulator established under any other law for the time being in force;
- Recall of goods, withdrawal of services which are dangerous or unsafe, reimbursement of prices of goods or services etc.
- Issue directions and penalties against false or misleading advertisements.
- Jurisdiction of the CDRC:
The pecuniary jurisdiction of the Commissions has been enhanced in comparison with the Consumer Protection Act, 1986.
The district commission now has the jurisdiction to entertain complaints where the value of the goods or services paid as consideration (Consideration) does not exceed INR1 crore.
The state commission shall have the jurisdiction to entertain complaints where the Consideration exceeds INR1 crore but does not exceed INR10 crores; and
The national commission shall have the jurisdiction to entertain complaints where the Consideration paid exceeds INR10 crores.
Where the value of the goods or services paid as consideration does not exceed one crore rupees (1 Crore).
Where the value of the goods or services paid as consideration, exceeds rupees one crore (1 Crore), but does not exceed rupees ten crore (10 Crores).
Where the value of the goods or services paid as consideration exceeds rupees ten crore (10 Crores).
The jurisdiction in which the complaint is to be filed is now based on the value of the goods or services paid unlike in the earlier Act, where it was on value of the goods or services and the compensation, if any, claimed.
Further, the Act has inserted a crucial aspect with respect to the jurisdiction of the district commission, i.e., Section 34(2)(d). This section categorically states that the complaint can now also be instituted in a district commission within the local limits of whose jurisdiction the complainant resides or personally works for gain, apart from filing in the jurisdiction where the other side actually or voluntarily resides, or carries on business, or has a branch office or personally works for gain.
- Mediation: The Act has introduced a new chapter on mediation as an alternate dispute resolution mechanism, in order to resolve the consumer dispute faster without having to approach the Commissions. The dispute can be resolved either in whole or in parts.
- The CP Act provides for the establishment of a Consumer Mediation Cell at each level i.e. District, State and National Commission.
- The Commissions can, at any stage of the proceedings, direct the parties to have their matter settled by mediation, where it appears that there exists a possibility of resolution of the dispute through mediation.
- Thus, in the event, the mediation is successful, the terms of such agreement shall be reduced into writing accordingly.
- Where the consumer dispute is settled only in part, the Commission, shall record the settlement of the issues which have been settled, and shall continue to hear the remaining issues involved in the dispute.
- In the event the mediation is not successful, the respective commission shall within seven days of the receipt of the settlement report, pass a suitable order and dispose the matter accordingly.
- E-Filing of Complaints: The New Act provides flexibility to the consumer to file complaints with the jurisdictional consumer forum located at the place of residence or work of the consumer. This is unlike the current practice of filing it at the place of purchase or where the seller has its registered office address.
The New Act also contains enabling provisions for consumers to file complaints electronically and for hearing and/or examining parties through video-conferencing. This is aimed to provide procedural ease and reduce inconvenience and harassment for the consumers.
- Unfair Trade Practices: The New Act introduces a specific broad definition of Unfair Trade Practices, which also includes sharing of personal information given by the consumer in confidence, unless such disclosure is made in accordance with the provisions of any other law.
Conclusion: Implementation of the amendment Act, 2019 is a welcome change in favour of customers. The Act provides a simple and effective mechanism to consumers to resolved their disputes in fast track way. The filing of complaints through electronic medium is a boon for consumers. Online market places and online auction sites, which have been included in the Act will place more responsibility on them with respect to goods and services to be sold by them. The Act also make responsible to manufacturers, producers as well as endorsers of the goods and services, this will help to a large extent to protect rights of consumers. Now a consumer must be treated as a king and the concept of "consumer was asked to beware", is now an old one.
Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation and published in Official Gazette of India on 9th August,2019 and other available details at the internet sites. Although care has been taken to ensure the accuracy, completeness, and reliability of the information provided, author assume no responsibility, therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws and take appropriate advice of consultants. The user of the information agrees that the information is not professional advice and is subject to change without notice. The author assumes no responsibility for the consequences of the use of such information.
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