What’s new in the new Consumer Protection Act, 2019

Note: Every reference in this article to “new act” shall be construed as a reference to The Consumer Protection Act, 2019 and every reference to “old act” shall be construed as a reference to The Consumer Protection Act, 1986.

Additions

New Definitions

“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(1)]

“Central Authority” has been defined as the Central Consumer Protection Authority established under section 10; [Section 2(4)]

Meaning of Complainant as given in Section 2(5) of the new act also includes “the Central Authority”. Also as per Section 2(5)(vii) of the new act, in case of a consumer being a minor, complainant shall mean such minor’s parent or legal guardian.

The meaning of “complaint” shall also include a claim for product liability action lies against the product manufacturer, product seller or product service provider, as the case may be [Section 2(6)(vii)]

Meaning of deficiency[Section 2(11) of the new act] now includes—

(i) any act of negligence or omission or commission by such person which causes loss or injury to the consumer; and

(ii) deliberate withholding of relevant information by such person to the consumer;

“design”, in relation to a product, means “the intended or known physical and material characteristics of such product and includes any intended or known formulation or content of such product and the usual result of the intended manufacturing or other process used to produce such product” [Section 2(12)]

“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(13)]

“Director-General” means the Director-General appointed under sub-section (2) of section 15; [Section 2(14)]

“District Commission” means a District Consumer Disputes Redressal Commission established under sub-section (1) of section 28; [Section 2(15)]

“e-commerce” means buying or selling of goods or services including digital products over digital or electronic network. [Section 2(16)]

“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(17)]

“endorsement”, in relation to an advertisement, means— (i) any message, verbal statement, demonstration; or (ii) depiction of the name, signature, likeness or other identifiable personal characteristics of an individual; or (iii) depiction of the name or seal of any institution or organisation, which makes the consumer to believe that it reflects the opinion, finding or experience of the person making such endorsement [Section 2(18)]

“establishment” includes an advertising agency, commission agent, manufacturing, trading or any other commercial agency which carries on any business, trade or profession or any work in connection with or incidental or ancillary to any commercial activity, trade or profession, or such other class or classes of persons including public utility entities in the manner as may be prescribed [Section 2(19)]

“express warranty” means any material statement, affirmation of fact, promise or description relating to a product or service warranting that it conforms to such material statement, affirmation, promise or description and includes any sample or model of a product warranting that the whole of such product conforms to such sample or model; [Section 2(20)]

“goods” means every kind of movable property and includes “food” as defined in clause (j) of sub-section (1) of section 3 of the Food Safety and Standards Act, 2006. [Section 2(21)]

“harm”, in relation to a product liability, includes— (i) damage to any property, other than the product itself; (ii) personal injury, illness or death; (iii) mental agony or emotional distress attendant to personal injury or illness or damage to property; or (iv) any loss of consortium or services or other loss resulting from a harm referred to in sub-clause (i) or sub-clause (ii) or sub-clause (iii), but shall not include any harm caused to a product itself or any damage to the property on account of breach of warranty conditions or any commercial or economic loss, including any direct, incidental or consequential loss relating thereto. [Section 2(22)]

“injury” means any harm whatever illegally caused to any person, in body, mind or property [Section 2(23)]

“mediation” means the process by which a mediator mediates the consumer disputes [Section 2(25)]

“mediator” means a mediator referred to in section 75 [Section 2(26)]

“misleading advertisement” in relation to any product or service, means an advertisement, which— (i) falsely describes such product or service; or (ii) 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 (iii) 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 (iv) deliberately conceals important information [Section 2(28)]

Person now includes (i) an individual (vi) any corporation, company or a body of individuals whether incorporated or not; (vii) any artificial juridical person, not falling within any of the preceding sub-clauses [Section 2(31)]

“product” means any article or goods or substance or raw material or any extended cycle of such product, which may be in gaseous, liquid, or solid state possessing intrinsic value which is capable of delivery either as wholly assembled or as a component part and is produced for introduction to trade or commerce, but does not include human tissues, blood, blood products and organs [Section 2(33)]

“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(34)]

“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(35)]

“product manufacturer” means a person who— (i) makes any product or parts thereof; or (ii) assembles parts thereof made by others; or (iii) puts or causes to be put his own mark on any products made by any other person; or (iv) makes a product and sells, distributes, leases, installs, prepares, packages, labels, markets, repairs, maintains such product or is otherwise involved in placing such product for commercial purpose; or (v) designs, produces, fabricates, constructs or re-manufactures any product before its sale; or (vi) being a product seller of a product, is also a manufacturer of such product [Section 2(36)]

“product seller”, in relation to a product, means a person who, in the course of business, imports, sells, distributes, leases, installs, prepares, packages, labels, markets, repairs, maintains, or otherwise is involved in placing such product for commercial purpose and includes— (i) a manufacturer who is also a product seller; or (ii) a service provider, but does not include— (a) a seller of immovable property, unless such person is engaged in the sale of constructed house or in the construction of homes or flats; (b) a provider of professional services in any transaction in which, the sale or use of a product is only incidental thereto, but furnishing of opinion, skill or services being the essence of such transaction; (c) a person who— (I) acts only in a financial capacity with respect to the sale of the product; (II) is not a manufacturer, wholesaler, distributor, retailer, direct seller or an electronic service provider; (III) leases a product, without having a reasonable opportunity to inspect and discover defects in the product, under a lease arrangement in which the selection, possession, maintenance, and operation of the product are controlled by a person other than the lessor [Section 2(37)]

“product service provider”, in relation to a product, means a person who provides any service in respect of such product [Section 2(38)]

“Regulator” means a body or any authority established under any other law for the time being in force [Section 2(40)]

“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:— (i) requiring manifestly excessive security deposits to be given by a consumer for the performance of contractual obligations; or (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; or (iii) refusing to accept early repayment of debts on payment of applicable penalty; or (iv) entitling a party to the contract to terminate such contract unilaterally, without reasonable cause; or (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; or (vi) imposing on the consumer any unreasonable charge, obligation or condition which puts such consumer to disadvantage [Section 2(46)]

Unfair trade practice now includes (vii) not issuing bill or cash memo or receipt for the goods sold or services rendered in such manner as may be prescribed; (viii) 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; (ix) 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. [Section 2(47)]

Central Consumer Protection Authority

As per Section 10, The Central Government shall, by notification, establish with effect from such date as it may specify in that notification, a Central Consumer Protection Authority to be known as the Central Authority to regulate matters relating to violation of rights of consumers, unfair trade practices and false or misleading advertisements which are prejudicial to the interests of public and consumers and to promote, protect and enforce the rights of consumers as a class. The headquarters of the Central Authority shall be at such place in the National Capital Region of Delhi, and it shall have regional and other offices in any other place in India as the Central Government may decide. The Central Government may, by notification, make rules to provide for the qualifications for appointment, method of recruitment, procedure for appointment, term of office, salaries and allowances, resignation, removal and other terms and conditions of the service of the Chief Commissioner and Commissioners of the Central Authority

No act or proceeding of the Central Authority shall be invalid merely by reason of any vacancy in, or any defect in the constitution of, the Central Authority; or any defect in the appointment of a person acting as the Chief Commissioner or as a Commissioner; or any irregularity in the procedure of the Central Authority not affecting the merits of the case. [Section 12]

As per Section 15, The Central Authority shall have an Investigation Wing headed by a Director General for the purpose of conducting inquiry or investigation under this Act as may be directed by the Central Authority. The Central Government may appoint a Director-General and such number of Additional Director-General, Director, Joint Director, Deputy Director and Assistant Director, from amongst persons who have experience in investigation and possess such qualifications, in such manner, as may be prescribed. Every Additional Director-General, Director, Joint Director, Deputy Director and Assistant Director shall exercise his powers, and discharge his functions, subject to the general control, supervision and direction of the Director-General. The inquiries or the investigations made by the Director- General shall be submitted to the Central Authority in such form, in such manner and within such time, as may be specified by regulations.

As per Section 16, The District Collector (by whatever name called) may, on a complaint or on a reference made to him by the Central Authority or the Commissioner of a regional office, inquire into or investigate complaints regarding violation of rights of consumers as a class, on matters relating to violations of consumer rights, unfair trade practices and false or misleading advertisements, within his jurisdiction and submit his report to the Central Authority or to the Commissioner of a regional office, as the case may be.

As per Section 17. A complaint relating to violation of consumer rights or unfair trade practices or false or misleading advertisements which are prejudicial to the interests of consumers as a class, may be forwarded either in writing or in electronic mode, to any one of the authorities, namely, the District Collector or the Commissioner of regional office or the Central Authority.

Functions of Central Authority

As per Section 18, The Central Authority shall:

(a) protect, promote and enforce the rights of consumers as a class, and prevent violation of consumers rights under the Act;

(b) prevent unfair trade practices and ensure that no person engages himself in unfair trade practices;

(c) ensure that no false or misleading advertisement is made of any goods or services which contravenes the provisions of the Act or the rules or regulations made thereunder;

(d) ensure that no person takes part in the publication of any advertisement which is false or misleading.

Powers of Central Authority

Without prejudice to the generality of the provisions contained in Section 18(1), the Central Authority may, for any of the purposes aforesaid,

(a) inquire or cause an inquiry or investigation to be made into violations of consumer rights or unfair trade practices, either suo motu or on a complaint received or on the directions from the Central Government;

(b) file complaints before the District Commission, the State Commission or the National Commission, as the case may be, under the Act;

(c) intervene in any proceedings before the District Commission or the State Commission or the National Commission, as the case may be, in respect of any allegation of violation of consumer rights or unfair trade practices;

(d) review the matters relating to, and the factors inhibiting enjoyment of, consumer rights, including safeguards provided for the protection of consumers under any other law for the time being in force and recommend appropriate remedial measures for their effective implementation;

(e) recommend adoption of international covenants and best international practices on consumer rights to ensure effective enforcement of consumer rights;

(f) undertake and promote research in the field of consumer rights;

(g) spread and promote awareness on consumer rights;

(h) encourage non-Governmental organisations and other institutions working in the field of consumer rights to co-operate and work with consumer protection agencies;

(i) mandate the use of unique and universal goods identifiers in such goods, as may be necessary, to prevent unfair trade practices and to protect consumers’ interest;

(j) issue safety notices to alert consumers against dangerous or hazardous or unsafe goods or services;

(k) advise the Ministries and Departments of the Central and State Governments on consumer welfare measures;

(l) issue necessary guidelines to prevent unfair trade practices and protect consumers’ interest.

Preliminary inquiry by Central Authority: As per Section 19, The Central Authority may, after receiving any information or complaint or directions from the Central Government or of its own motion, conduct or cause to be conducted a preliminary inquiry as to whether there exists a prima facie case of violation of consumer rights or any unfair trade practice or any false or misleading advertisement, by any person, which is prejudicial to the public interest or to the interests of consumers and if it is satisfied that there exists a prima facie case, it shall cause investigation to be made by the Director General or by the District Collector. Where, after preliminary inquiry, the Central Authority is of the opinion that the matter is to be dealt with by a Regulator established under any other law for the time being in force, it may refer such matter to the concerned Regulator along with its report. For the purposes of such investigation, the Central Authority, the Director General or the District Collector may call upon such person referred to hereinabove and also direct him to produce any document or record in his possession. Where the Central Authority is satisfied on the basis of investigation that there is sufficient evidence to show violation of consumer rights or unfair trade practice by a person, it may pass such order as may be necessary, including

(a) recalling of goods or withdrawal of services which are dangerous, hazardous or unsafe;

(b) reimbursement of the prices of goods or services so recalled to purchasers of such goods or services; and

(c) discontinuation of practices which are unfair and prejudicial to consumers’ interest. However, the Central Authority shall give the person an opportunity of being heard before passing an order under this section. [Section 20]

False advertisements: As per Section 21, where the Central 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, by order, 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 in such manner and within such time as may be specified in that order. If the Central Authority is of the opinion that it is necessary to impose a penalty in respect of such false or misleading advertisement, by a manufacturer or an endorser, it may, by order, impose on manufacturer or endorser a penalty which may extend to ten lakh rupees. The Central Authority may, for every subsequent contravention by a manufacturer or endorser, impose a penalty, which may extend to fifty lakh rupees. Where the Central Authority 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. Also the Central Authority may, for every subsequent contravention, prohibit such endorser from making endorsement in respect of any product or service for a period which may extend to three years.

Where the Central Authority is satisfied after investigation that any person is found to publish, or is a party to the publication of, a misleading advertisement, it may impose on such person a penalty which may extend to ten lakh rupees. However, no endorser shall be liable to a penalty if he has exercised due diligence to verify the veracity of the claims made in the advertisement regarding the product or service being endorsed by him.

No person shall be liable to such penalty if he proves that he had published or arranged for the publication of such advertisement in the ordinary course of his business, however, no such defence shall be available to such person if he had previous knowledge of the order passed by the Central Authority for withdrawal or modification of such advertisement. The Central Authority shall give the person an opportunity of being heard before an order under section 21 is passed.

Search & Seizure: As per Section 22, For the purpose of conducting an investigation after preliminary inquiry under sub-section (1) of section 19, the Director-General or any other officer authorised by him in this behalf, or the District Collector, as the case may be, may, if he has any reason to believe that any person has violated any consumer rights or committed unfair trade practice or causes any false or misleading advertisement to be made, shall—

(a) enter at any reasonable time into any such premises and search for any document or record or article or any other form of evidence and seize such document, record, article or such evidence;

(b) make a note or an inventory of such record or article; or

(c) require any person to produce any record, register or other document or article. (2) The provisions of the Code of Criminal Procedure, 1973, relating to search and seizure shall apply, as far as may be, for search and seizure under the new Act.

Every document, record or article seized or produced under this section shall be returned to the person, from whom they were seized or who produced the same, within a period of twenty days of the date of such seizure or production, as the case may be, after copies thereof or extracts therefrom certified by that person, in such manner as may be prescribed, have been taken. Where any article seized under this section are subject to speedy or natural decay, the Director-General or such other officer may dispose of the article in such manner as may be prescribed. However, as per Section 93, The Director General or any other officer, exercising powers under section 22, who knows that there are no reasonable grounds for so doing, and yet searches, or causes to be searched any premises; or seizes any record, register or other document or article, shall, for every such offence, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to ten thousand rupees or with both.

As per Section 23, The Central Government may, if it considers necessary, by notification, designate any statutory authority or body to exercise the powers and perform the functions of the Central Authority referred to in section 10.

Appeal against orders of Central Authority passed u/ss. 20&21:A person aggrieved by any order passed by the Central Authority under sections 20 and 21 may file an appeal to the National Commission within a period of thirty days from the date of receipt of such order. [Section 24]

Annual Report by Central Authority: As per Section27, The Central Authority shall prepare once in every year, in such form, manner and at such time as may be prescribed, an annual report giving full account of its activities during the previous year and such other reports and returns, as may be directed, and copies of such report and returns shall be forwarded to the Central Government. A copy of such annual report received shall be laid, as soon as may be after it is received, before each House of Parliament.

As per Section 32 of the new act, If, at any time, there is a vacancy in the office of the President or member of a District Commission, the State Government may, by notification, direct-

(a) any other District Commission specified in that notification to exercise the jurisdiction in respect of that district also; or

(b) the President or a member of any other District Commission specified in that notification to exercise the powers and discharge the functions of the President or member of that District Commission also.

Officers and other employees of Commissions:As per Section 33 of the new act, the State Government shall provide the District Commission with such officers and other employees as may be required to assist the District Commission in the discharge of its functions. Such officers and other employees of the District Commission shall discharge their functions under the general superintendence of the President of the District Commission. As per Section 46 of the new act, the State Government shall provide the State Commission with such officers and other employees as may be required to assist the State Commission in the discharge of its functions. Such officers and other employees of the State Commission shall discharge their functions under the general superintendence of the President of the State Commission. As per Section 57 of the new act, the Central Government shall provide the National Commission with such officers and other employees as may be required to assist the National Commission in the discharge of its functions. Such officers and other employees of the National Commission shall discharge their functions under the general superintendence of the President of the National Commission.

Mediation Process: In Section 37, it has been provided that at the first hearing of the complaint after its admission, or at any later stage, if it appears to the District Commission that there exists elements of a settlement which may be acceptable to the parties, except in such cases as may be prescribed, it may direct the parties to give in writing, within five days, consent to have their dispute settled by mediation. Where the parties agree for settlement by mediation and give their consent in writing, the District Commission shall, within five days of receipt of such consent, refer the matter for mediation.

[Section 80] Pursuant to mediation, if an agreement is reached between the parties with respect to all of the issues involved in the consumer dispute or with respect to only some of the issues, the terms of such agreement shall be reduced to writing accordingly, and signed by the parties to such dispute or their authorised representatives. The mediator shall prepare a settlement report of the settlement and forward the signed agreement along with such report to the concerned Commission. Where no agreement is reached between the parties within the specified time or the mediator is of the opinion that settlement is not possible, he shall prepare his report accordingly and submit the same to the concerned Commission. As per Section 81, the District Commission or the State Commission or the National Commission, as the case may be, shall, within seven days of the receipt of the settlement report, pass suitable order recording such settlement of consumer dispute and dispose of the matter accordingly. Where the consumer dispute is settled only in part, the District Commission or the State Commission or the National Commission, as the case may be, shall record settlement of the issues which have been so settled and continue to hear other issues involved in such consumer dispute. Where the consumer dispute could not be settled by mediation, the District Commission or the State Commission or the National Commission, as the case may be, shall continue to hear all the issues involved in such consumer dispute.

No more dismissal in default: Now as per Section 38(3)(c) of the new act, that where the complaint admitted by it relates to goods in respect of which the procedure specified in 38(2) cannot be followed, or if the complaint relates to any services and the complainant fails to appear on the date of hearing before the District Commission, in such eventuality, the District Commission shall decide the case on merits. The change being that now, in such cases, the District Commission does not have the power to dismiss the complaint for default. Also, now the District Commission has the power to,by order, require an electronic service provider to provide such information, documents or records, as may be specified in that order.

Evidence in District Commision: Also, as per Section 38(6) of the new act, every complaint shall be heard by the District Commission on the basis of affidavit and documentary evidence placed on record. However, where an application is made for hearing or for examination of parties in person or through video conferencing, the District Commission may, on sufficient cause being shown, and after recording its reasons in writing, allow the same.

Power to take action on misleading advertisement: Section 39(1)(n) confers a new power on the District Commission as per which now, where the District Commission is satisfied that the goods complained against suffer from any of the defects specified in the complaint or that any of the allegations contained in the complaint about the services or any unfair trade practices, or claims for compensation under product liability are proved, it can order the opposite party to cease and desist from issuing any misleading advertisement.

Time limit in cases where matter referred to other member: In any proceeding conducted by the President and a member of a District Commission, if they differed on any point or points, they had to state the point or points on which they differed and refer the same to another member for hearing on such point or points. The opinion of the majority was the order of the District Commission. Now, as per the new act, it has been provided that the other member shall give his opinion on such point or points referred to him within a period of one month from the date of such reference and where the order is made as per majority opinion as described above, such order shall also be signed by the other member.

Power of review: The District/State/National Commission shall have the power to review any of the order passed by it if there is an error apparent on the face of the record, either of its own motion or on an application made by any of the parties within thirty days of such order.

Institution of complaint: Now, the complaint can be instituted in a district/state commission within the local limits of whose jurisdiction the complainant resides or personally works for gain.

E-filing:A provision for e-filing has also been made. However it is subject to the manner as may be prescribed.

Exercise of power of State Commission by benches: As per Section 47(2) The jurisdiction, powers and authority of the State Commission may be exercised by Benches thereof, and a Bench may be constituted by the President with one or more members as the President may deem fit. The senior-most member shall preside over the Bench. As per Section 47(3) Where the members of a Bench differ in opinion on any point, the points shall be decided according to the opinion of the majority, if there is a majority, but if the members are equally divided, they shall state the point or points on which they differ, and make a reference to the President who shall either hear the point or points himself or refer the case for hearing on such point or points by one or more of the other members and such point or points shall be decided according to the opinion of the majority of the members who have heard the case, including those who first heard it. However, it has also been provided that the President or the other members, as the case may be, shall give opinion on the point or points so referred within a period of one month from the date of such reference.

Power of National/State Commission to declare terms of contract to be null and void: As per the new act the National/State Commission may also declare any terms of contract, which is unfair to any consumer, to be null and void.

Substantial question of Law: As per Section 51 of the new Act, an appeal shall lie to the National Commission from any order passed in appeal by any State Commission, if the National Commission is satisfied that the case involves a substantial question of law In an appeal involving a question of law, the memorandum of appeal shall precisely state the substantial question of law involved in the appeal. Where the National Commission is satisfied that a substantial question of law is involved in any case, it shall formulate that question and hear the appeal on that question.

Regional Benches of National Commission: The Central Government may, by notification, establish regional Benches of the National Commission, at such places, as it deems fit.

Neither the salary and allowances nor the other terms and conditions of service of President and members of the National Commission shall be varied to his disadvantage after his appointment.

Exercise of power of State Commission by benches: The jurisdiction, powers and authority of the National Commission may be exercised by Benches thereof and a Bench may be constituted by the President with one or more members as he may deem fit. The senior-most member of the Bench shall preside over the Bench. Where the members of a Bench differ in opinion on any point, the points shall be decided according to the opinion of the majority, if there is a majority, but if the members are equally divided, they shall state the point or points on which they differ, and make a reference to the President who shall either hear the point or points himself or refer the case for hearing on such point or points by one or more of the other members and such point or points shall be decided according to the opinion of the majority of the members who have heard the case, including those who first heard it. The President or the other member, as the case may be, shall give opinion on the point or points so referred within a period of two months from the date of such reference.

Vacancy in the office of President of National Commission: As per Section 63 of the new act, when the office of President of the National Commission is vacant or a person occupying such office is, by reason of absence or otherwise, unable to perform the duties of his office, these shall be performed by the senior-most member of the National Commission. Where a retired Judge of a High Court or a person who has been a Judicial Member is a member of the National Commission, such member or where the number of such members is more than one, the senior-most person amongst such members, shall preside over the National Commission in the absence of President of that Commission.

Service of notices to complainant through electronic means or speed post: As per Section 65 of the new act, all notices, required to be  served by the new Act, shall be served to the complainant by speed post or by such courier service, approved by the District Commission, the State Commission or the National Commission, as the case may be, or by any other mode of transmission of documents including electronic means.

Notices to electronic service provider: The notice required by this Act may be served on an electronic service provider at the address provided by it on the electronic platform from where it provides its services as such and for this purpose, the electronic service provider shall designate a nodal officer to accept and process such notices.

Monitoring:There shall be a monitoring cell to be constituted by the President of the National Commission to oversee the functioning of the State Commissions from the administrative point of view. The National Commission and the State Commissions shall furnish to the Central Government periodically or as and when required, any information including the pendency of cases in such form and manner as may be prescribed. The State Commission shall furnish, periodically or as and when required to the State Government any information including pendency of cases in such form and manner as may be prescribed.

Product Liability: As per Section 83, 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. As far as the liability of the product manufacturer is concerned, as per Section 84, a product manufacturer shall be liable in a product liability action, if the product contains a manufacturing defect; or the product is defective in design; or there is a deviation from manufacturing specifications; or the product does not conform to the express warranty; or the product fails to contain adequate instructions of correct usage to prevent any harm or any warning regarding improper or incorrect usage. A product manufacturer shall be liable in a product liability action even if he proves that he was not negligent or fraudulent in making the express warranty of a product. As far as services are concerned, Section 85 provides that a product service provider shall be liable in a product liability action, if the service provided by him was faulty or imperfect or deficient or inadequate in quality, nature or manner of performance which is required to be provided by or under any law for the time being in force, or pursuant to any contract or otherwise; or there was an act of omission or commission or negligence or conscious withholding any information which caused harm; or the service provider did not issue adequate instructions or warnings to prevent any harm; or the service did not conform to express warranty or the terms and conditions of the contract.

Liability of product sellers: As per Section 86, a product seller who is not a product manufacturer shall be liable in a product liability action, if he has exercised substantial control over the designing, testing, manufacturing, packaging or labelling of a product that caused harm; or he has altered or modified the product and such alteration or modification was the substantial factor in causing the harm; or he has made an express warranty of a product independent of any express warranty made by a manufacturer and such product failed to conform to the express warranty made by the product seller which caused the harm; or the product has been sold by him and the identity of product manufacturer of such product is not known, or if known, the service of notice or process or warrant cannot be effected on him or he is not subject to the law which is in force in India or the order, if any, passed or to be passed cannot be enforced against him; or he failed to exercise reasonable care in assembling, inspecting or maintaining such product or he did not pass on the warnings or instructions of the product manufacturer regarding the dangers involved or proper usage of the product while selling such product and such failure was the proximate cause of the harm

Exceptions to product liability action:As per Section 87, a product liability action cannot be brought against the product seller if, at the time of harm, the product was misused, altered, or modified. A product manufacturer shall not be liable for failure to instruct or warn about a danger which is obvious or commonly known to the user or consumer of such product or which, such user or consumer, ought to have known, taking into account the characteristics of such product.

In any product liability action based on the failure to provide adequate warnings or instructions, the product manufacturer shall not be liable, if:

(a) the product was purchased by an employer for use at the workplace and the product manufacturer had provided warnings or instructions to such employer;

(b) the product was sold as a component or material to be used in another product and necessary warnings or instructions were given by the product manufacturer to the purchaser of such component or material, but the harm was caused to the complainant by use of the end product in which such component or material was used;

(c) the product was one which was legally meant to be used or dispensed only by or under the supervision of an expert or a class of experts and the product manufacturer had employed reasonable means to give the warnings or instructions for usage of such product to such expert or class of experts; or

(d) the complainant, while using such product, was under the influence of alcohol or any prescription drug which had not been prescribed by a medical practitioner

Offences and Penalties:

Non-compliance of direction of Central Authority:As per Section 88, Whoever, fails to comply with any direction of the Central Authority under sections 20 and 21, shall be punished with imprisonment for a term which may extend to six months or with fine which may extend to twenty lakh rupees, or with both. Offence under this section is compoundable on payment of such amount as may be prescribed.However, such sum shall not, in any case, exceed the maximum amount of the fine, which may be imposed under the new act for the offence so compounded, but if same offence is committed within 3 years, then this condition won’t apply. Also compounding shall be permissible only with the leave of the court before which a complaint had been filed under section 92. Once an offence is compounded, no proceeding or further proceeding, as the case may be, shall be taken against the offender in respect of the offence so compounded. The acceptance of the sum of money for compounding an offence by the Central Authority or an officer of the Central Authority empowered in this behalf shall be deemed to amount to an acquittal within the meaning of the Code of Criminal Procedure, 1973.

False or misleading advertisement: As per Section 89, any manufacturer or service provider who causes a false or misleading advertisement to be made which is prejudicial to the interest of consumers shall be punished with imprisonment for a term which may extend to two years and with fine which may extend to ten lakh rupees; and for every subsequent offence, be punished with imprisonment for a term which may extend to five years and with fine which may extend to fifty lakh rupees. Offence under this section is compoundable. on payment of such amount as may be prescribed.However, such sum shall not, in any case, exceed the maximum amount of the fine, which may be imposed under the new act for the offence so compounded. compounded, but if same offence is committed within 3 years, then this condition won’t apply. Also compounding shall be permissible only with the leave of the court before which a complaint had been filed under section 92. Once an offence is compounded, no proceeding or further proceeding, as the case may be, shall be taken against the offender in respect of the offence so compounded. The acceptance of the sum of money for compounding an offence by the Central Authority or an officer of the Central Authority empowered in this behalf shall be deemed to amount to an acquittal within the meaning of the Code of Criminal Procedure, 1973.

Manufacturing for sale or storing, selling or distributing or importing products containing adulterant: As per Section 90, 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(any material including extraneous matter which is employed or used for making a product unsafe) 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(as defined in the IPC) 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.

The offences under clauses (c) and (d) shall be cognizable and non-bailable. In addition to the punishment mentioned above in this section, the court may, in case of first conviction, suspend any licence issued to such offender, 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.

Status of “Public Servant”: As per Section 95, The Presidents and members of the District Commission, the State Commission and the National Commission, and officers and other employees thereof, the Chief Commissioner and the Commissioner of the Central Authority, the Director General, the Additional Director General, the Director, the Joint Director, the Deputy Director and the Assistant Director and all other officers and employees of the Central Authority and other persons performing any duty under the new Act, while acting or purporting to act in pursuance of any of the provisions of the new Act, shall be deemed to be public servants within the meaning of section 21 of the Indian Penal Code.

Central Government’s power to frame measures to prevent unfair trade practices in e-commerce, direct selling, etc.: As per Section 94, for the purposes of preventing unfair trade practices in e-commerce, direct selling and also to protect the interest and rights of consumers, the Central Government may take such measures in the manner as may be prescribed.

Rules and regulations to be laid before each House of Parliament: As per Section 105, every rule and every regulation made under the new Act shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or regulation or both Houses agree that the rule or regulation shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule or regulation. Also every rule made by a State Government under this Act shall be laid as soon as may be after it is made, before the State Legislature.

Alterations

Meaning of consumer

OLD ACT – 2b(v)  in case of death of a consumer, his legal heir or representative; who or which makes a complaint; NEW ACT – 2(5)(vi) in case of death of a consumer, his legal heir or legal representative

Effect: Earlier in case of death of a consumer, the meaning of consumer included his legal heir or representative who or which makes a complaint but now the requirement of “who or which makes a complaint” has been removed.

OLD ACT – 2(n) prescribed” means prescribed by rules made by the State Gov­ernment, or as the case may be, by the Central Government under the Consumer Protection Act, 1986; NEW ACT 2(32) “prescribed” means prescribed by rules made by the Central Government, or, as the case may be, the State Government

Effect: Earlier, the word prescribed meant prescribed by rules made by the State Gov­ernment, or as the case may be, by the Central Government under the Consumer Protection Act, 1986, but now as per the new act, the such rules may be made by the State Gov­ernment, or as the case may be, by the Central Government under any other law as well.

OLD ACT Section 2(nn)“regulation” means the regulations made by the National Commission under the old act NEW ACT – Section 2(39) “regulations” means the regulations made by the National Commission, or as the case may be, the Central Authority;

Effect: Regulations can now be made by the Central Authority. Also the regulations could be made under any other law as well.

OLD ACT Section 2(oo) “spurious goods and services” mean such goods and services which are claimed to be genuine but they are actually not so; NEW ACT Section 2(43) “spurious goods” means such goods which are falsely claimed to be genuine;

Effect: Now in the new act, there is no such thing as “spurious services”

The object of Central, State and District Consumer Protection Councilshas been changed from promoting and protecting the rights of consumers to rendering advice on promoting and protecting the rights of consumers. They have been now conferred the status of advisory councils.

District Forum has been renamed to District Commission.As per the proviso to Section 28 of the new act the State Government may, if it deems fit, establish more than one District Commission in a district. Also, the state government has now been conferred the power to appoint more than 2 members in a district commission. The State Government, in consultation with the Central Government can also fix the upper limit of the members of the District Commission while the lower limit is still 2.

Members of District Commission: In the old act, qualifications, method of recruitment, procedure for appointment, term of office, of the President and members of the District Forum were defined in the act itself however, as per the new act the qualifications, method of recruitment, procedure for appointment, term of office, resignation and removal of the President and members of the District Commission may be made by the Central Government [Section 29 of the new act]. However, the State Government may, by notification, make rules to provide for salaries and allowances and other terms and conditions of service of the President, and members of the District Commission. [Section 30 of the new act]

Pecuniary jurisdiction of the District Forum (now renamed as District Commission): Earlier as per Section 11 of the old act the District Forum had jurisdiction to entertain complaints where the value of the goods or services and the compensation, if any, claimed did not exceed rupees twenty lakhs. But now as per Section 34 of the new act, the District Commission shall have jurisdiction to entertain complaints where the value of the goods or services paid as consideration is upto one crore rupeesOne more major change is that while computing the pecuniary jurisdiction, now, compensation claimed shall not be included. Also it has been provided that where the Central Government deems it necessary so to do, it may prescribe such other value, as it deems fit.

Transfer of complaints: Proviso to Section 12 of the old act provided that where a complaint has been admitted by the District Forum, it shall not be transferred to any other court or tribunal or any authority set up by or under any other law for the time being in force. However, now this provision has been removed.

Changes in filing an appeal to State Commission: As per the new act, the time for filing appeal to the State Commission is now 45 days. However, it has also been provided that the State Commission may entertain an appeal after the expiry of the said period of forty-five days, if it is satisfied that there was sufficient cause for not filing it within that period. Also, as per the new act, no appeal by a person, who is required to pay any amount in terms of an order of the District Commission, shall be entertained by the State Commission unless the appellant has deposited fifty per cent. of that amount in the manner as may be prescribed. It has also been provided also that no appeal shall lie from any order passed by the District Commission pursuant to a settlement by mediation under section 80.

Members of State Commission: In the old act, qualifications, method of recruitment, procedure for appointment, term of office, of the President and members of the State Commission were defined in the act itself however, as per the new act the qualifications, method of recruitment, procedure for appointment, term of office, resignation and removal of the President and members of the State Commission may be made by the Central Government [Section 43 of the new act] . However, the State Government may, by notification, make rules to provide for salaries and allowances and other terms and conditions of service of the President, and members of the District Commission. [Section 44 of the new act] Also, the minimum number of members has been prescribed as 4 whereas the upper limit can be decided by the State Government, in consultation with the Central Government.

Pecuniary jurisdiction of the State Commission: Earlier as per Section 17 of the old act the State Commission had jurisdiction to entertain complaints where the value of the goods or services and the compensation, if any, claimed exceeded rupees twenty lakhs but did not exceed rupees one crore. But now as per Section 47 of the new act, the State Commission shall have jurisdiction to entertain complaints where the value of the goods or services paid as consideration exceeds rupees one crore, but does not exceed rupees ten crore.One more major change is that while computing the pecuniary jurisdiction, now, compensation claimed shall not be included. Also it has been provided that where the Central Government deems it necessary so to do, it may prescribe such other value, as it deems fit.

Appeal against ex-parte orders of State Commission: An appeal may lie to the National Commission from an order passed ex parte by the State Commission.

Retirement age of members of National Commission: It has been reduced from 70 years to 67 years.

President of National Commission: The President of the National Commission shall hold office for such term as specified in the rules made by the Central Government but not exceeding five years from the date on which he enters upon his office and he/she shall be eligible for re-appointment

Pecuniary jurisdiction of the National Commission: The National Commission shall have jurisdiction to entertain complaints where the value of the goods or services paid as consideration exceeds rupees ten crore. However where the Central Government deems it necessary so to do, it may prescribe such other value, as it deems fit.

Jurisdiction of National Commission: The National Commission shall have jurisdiction to entertain appeals against the orders of the Central Authority. It shall also have the jurisdiction to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any State Commission where it appears to the National Commission that such State Commission has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity.

Administrative control: As per Section 70, The National Commission shall have the authority to lay down such adequate standards in consultation with the Central Government from time to time, for better protection of the interests of consumers and for that purpose, shall have administrative control over all the State Commissions in the following matters, namely:

(a) monitoring performance of the State Commissions in terms of their disposal by calling for periodical returns regarding the institution, disposal and pendency of cases;

(b) investigating into any allegations against the President and members of a State Commission and submitting inquiry report to the State Government concerned along with copy endorsed to the Central Government for necessary action;

(c) issuance of instructions regarding adoption of uniform procedure in the hearing of matters, prior service of copies of documents produced by one party to the opposite parties, furnishing of english translation of judgments written in any language, speedy grant of copies of documents;

(d) overseeing the functioning of the State Commission or the District Commission either by way of inspection or by any other means, as the National Commission may like to order from time to time, to ensure that the objects and purposes of the Act are best served and the standards set by the National Commission are implemented without interfering with their quasi-judicial freedom.

The State Commission shall have administrative control over all the District Commissions within its jurisdiction in all matters referred to in Section 70(1).

Enforcement of orders of District Commission, State Commission and National Commission: As per Section 71, every order made by a District Commission, State Commission or the National Commission shall be enforced by it in the same manner as if it were a decree made by a Court in a suit before it and the provisions of Order XXI of the First Schedule to the Code of Civil Procedure, 1908 shall, as far as may be, applicable, subject to the modification that every reference therein to the decree shall be construed as reference to the order made under the new Act.

Copy of bare provisions: Consumer Protection Act, 2019

-Adv. Tushar Kaushik

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