To address the new set of challenges faced by consumers in the digital age, the Consumer Protection Bill, 2019 was passed by Parliament on 6th August 2019 and received the President’s assent on 9th August 2019 replacing Consumer Protection Act, 1986 that did not cover ecommerce transactions.
The definition of 'consumer' is widened to include any person who buys goods, through offline or online transactions, electronic means, teleshopping, direct selling or multi-level marketing.
Revised pecuniary limits have been fixed. District forum can now entertain consumer complaints where the value of goods or services paid does not exceed INR 10,000,000, the State Commission - between INR 10,000,000 and INR 100,000,000, and the National Commission – more than INR 100,000,000.
The consumer now has flexibility to file complaints with the jurisdictional consumer forum located at the place of residence or work of the consumer, unlike the current practice of filing it at the place of purchase or where the seller has its registered office address. Enabling provisions introduced for consumers to file complaints electronically and for hearing and/or examining parties through video-conferencing.
Establishment of a regulatory authority - Central Consumer Protection Authority (CCPA), with wide powers of enforcement, including an investigation wing, headed by a Director-General, which may conduct inquiry or investigation into consumer law violations. It has wide powers to take suo-moto actions, recall products, order reimbursement of the price of goods/services, cancel licenses and file class action suits, if a consumer complaint affects more than 1 individual.
Product liability now includes the product manufacturer, service provider and seller, for any claim for compensation. Product seller includes a person involved in placing the product for a commercial purpose and would include e-commerce platforms as well. There are increased liability risks for manufacturers as compared to service providers and sellers, considering that manufacturers will be liable even where he proves that he was not negligent or fraudulent in making the express warranty of a product.
Unfair Trade Practices now also include sharing of personal information given by the consumer in confidence, unless such disclosure is made in accordance with the provisions of any other law.
The CCPA may impose a penalty of up to INR 1,000,000 on a manufacturer or an endorser, for a false or misleading advertisement. The CCPA may also sentence them to imprisonment for up to 2 years for the same. Fine for subsequent offence may extend to INR 5,000,000 and imprisonment up to 5 years. The CCPA can also prohibit the endorser of a misleading advertisement from endorsing that particular product/service for upto 1 year.
The New Act provides for mediation as an Alternate Dispute Resolution mechanism, making the process of dispute adjudication simpler and quicker. This will help with the speedier resolution of disputes and reduce pressure on consumer courts, who already have numerous cases pending before them.
Q. Ganesh ordered a N95 mask from zipkart.com however he received a KN95 by mistake. Director general of the CCPA had the knowledge of this incident and initiated a suo moto action against the company. Can such an action be taken by the CCPA?