ANALYSIS OF CONSUMER PROTECTION ACT, 2019

I. INTRODUCTION

“Any person from purchaser to user can become consumer who plays key role in the economic
activities of a country, thereby; it addresses the need of providing a speedy and efficient dispute
redressal mechanism for the protection of consumer rights.”

Historically, consumer has been treated as the King of the Market and supported by principle of
Consumer Sovereignty. With the Industrialization, the mass production has been increased, focus
has been shifted from providing quality product to profit making, and these all factors compel
lead the shifting of approach from Consumer being the King to awareness of Consumer
regarding fraudulent practices. The Advancement brings with itself various changes. Similarly,
as soon as Market has been developed, the role of person in the market has also been shifted. The
development allowed the consumer to fulfill their needs by availing the services so rendered by
the service providers.

As coin has two sides, similarly the advancement also has two sides. The negative and the
positive, The positive would be the availability of goods easily to consumer, the accessibility to
goods and services while the negative would be the fraudulent practices of trading which is
against the rights of the consumers so granted to them. Such affect highlighted the need of
regulatory framework so that consumer’s rights would not be hampered. The consumer
Protection Act, 1986 is the umbrella legislation dealing with the rights of consumers; provide the
three tier dispute redressal mechanism as well as other provisions.

As it is established proposition that law is dynamic, it keeps on changing. Based on that, the
Consumer Protection Act, 2019 was enacted in order to address the online transactions and
including the e commerce within the ambit of law.
II. HISTORICAL BEACKGROUND OF CONSUMER PROTECTION ACT, 1986

Having regard to the need to protect consumers from deceitful suppliers, several laws have been
made for this purpose. There was the Indian Contract Act, 1872, the Sale of Goods Act, 1930,
the Dangerous Drugs Act, 1930, the Agricultural Produce (Grading and Marketing) Act, 1937,
the Drugs and Cosmetics Act, 1940, the Indian Standards Institution (Certification Marks) Act,
1952, the Prevention of Food Adulteration Act, 1954, the Drugs and Magic Remedies
(Objectionable Advertisements) Act, 1954 and the Essential Commodities Act, 1955 etc.

Though, these legislations were protecting the consumer interests to some extent, but there was
need of a law which can attain prominence for being directly and specifically concerned with the
subject of consumer Interest. The remedy under such these laws was only to initiate the civil
action against the wrongdoer and nothing also which ultimately was very lengthy, costly and
time consuming remedy.1

Therefore, it became obligatory to develop consumer protection Laws to provide a simple, easy
and quick remedy to consumers. In the Year 1985, the first effort to enact a comprehensive
legislation for the protection of the interests of consumers was made when the UN Guidelines on
Consumer Protection were being adopted in New York. Then, the National Consumer Protection
Council consisted of various ministry representatives, decided to convene a National Workshop
on Consumer Protection on March 11-15, 1985 with consumer representations. Further, a draft
bill of Consumer Protection was also discussed and Thereafter, Consumer Protection Act, 1986
was passed on December 17, 1986 and notified in May 1987.2

The Consumer Protection Act, 1986 applies to all goods and services unless specifically
exempted by the Union and Incorporates the consumer’s rights related to safety, information,
choice, representation, and redress and consumer education.

III. BACKGROUND OF CONSUMER PROTECTION ACT, 2019

With the advancement of economic liberalization, globalization of markets and digitalization of

products and services, the need of changing the Consumer Protection Act, 1986 was realized. In
1
https://iritm.indianrailways.gov.in/instt/uploads/files/1436167821091-Notes%20on%20Consumer%20Protection
%20Law.pdf.
2
http://14.139.60.114:8080/jspui/bitstream/123456789/687/31/The%20Consumer%20Protection%20Act%2C
%201986.pdf.
furtherance of that, The Consumer Protection Bill, 2018 was introduced in the Lok Sabha and
passed but was lapsed due to 2019 Lok Sabha elections. Thereafter, The bill was reintroduced in
the Lok Sabha as the Consumer Protection Bill, 2019 and passed eventually by both the houses
and received the President’s assent on 9 August, 2019 to become the Consumer Protection Act,
2019. Principally, the consumer protection Act, 2019 (hereinafter referred as The New Act)
repeals the previous consumer protection legislation of 1986 which had been in force from 1986.

The New Legislation was introduced with the prime objective of being a socio-economic
legislation which sought “to provide for better protection of the interests of consumers.” The
New Legislation was introduced rather than a mere Amendment in the old Act with an objective
to substantially strengthen the scope of protection granted to consumers, by introducing new
concepts as to Mediation, Product Liability, advertising claims and effective measures to prevent
modern forms of unfair trade and unethical business practices in the e - commerce world.

IV. KEY FEATURES OF THE CONSUMER PROTECTION ACT, 2019

The Consumer Protection Act, 2019 is a law which replaced the Consumer protection Act, 1986.
The Consumer Protection Act has more inclination toward the protection the interests of the
consumers by providing various new concepts which are as follows-

1. Unfair Contracts

In order to prevent the consumers from such contractual obligation which is unfair and against
the rights of consumers, the newly concept of unfair contracts has been added in this Consumer
Protection Act, 2019. Unfair contract is that contract between the manufacturer, trader or service
provider and consumer by which there would be significant changes in the rights of contract. 3
The consumer is entitled to file complaint against such unfair Contracts before the state or
National Commission only.

2. Product liability
Another provision which was introduced to protect consumer interest is the liability of
Manufacturer, seller and a product service provider for their faulty product. The
Consumer Protection Act, 2019 prescribes stringent liability norms on traders.

3
The Consumer Protection Act, 2019, section 2(46).
The Liability of manufacturer is extended to Manufacturing design, defects,
specifications, Instructions and express warranty. The primary liability would be of
Manufacturer only. However, the seller can be held as liable where he had substantial
control over the design. Manufacturing patterns or he has modified the product which is
the ultimate cause of harm to Consumer. If the product is not faulty but the services so
provided of a product by the Product service provider is faulty, then he would be liable
for the same.
However, there are exceptions where the Product Manufacturer or the seller can be
exempted from the stringent liability as provided under the Act.4

3. Definitions
3.1 E-commerce : The most important and dynamic aspect of the Consumer Protection
Act, 2019 is the inclusion of definition of E-commerce and direct selling under its ambit.
The expression e-commerce means buying or selling of goods or services over digital or
electronic network including digital products. 5
It defines electronic service provider as, one who provides technological support so that
product can be sold to consumer and they can purchase it which includes any online
market place or online auction sites.6

3.2 Consumer : The expression consumer has been defined as a person who purchases
goods or avails a service for consideration. The ambit of definition has been expanded to
involve into it online transactions also. Thereby, it now covers the E-commerce
businesses within its ambit.7
4. False advertisement
As the market is growing, the different promotion methods including Advertisements are
being widely used by the Traders. For the sake of profit, they even publish false and

4
The Consumer Protection Act, 2019, section 87.
5
The Consumer Protection Act, 2019, section 2(16).
6
The Consumer Protection Act, 2019, section 2(17).
7
The Consumer Protection Act, 2019, Section 2(7).
misleading Advertisements which are detrimental against the consumer’s interest. There
are provisions which are preventive in nature which prevent the trader or manufacturer or
endorser or advertiser or publisher, to discontinue such advertisement which is false or
misleading and is prejudicial to the interest of any consumer.  In addition to that, it empowers
the central authority to impose the liability on such concerned trader, a manufacturer, an
endorser, an advertiser or a publisher.8

5. Bodies established under the Consumer Protection Act, 2019

5.1 Consumer protection councils : This Consumer Protection Act, 2019 provides for
the establishment of Central Consumer Protection Council by the central government,
State Consumer Protection Council and a District Consumer Protection Council by the
state government.9 These councils have been entitled as Advisory Board to render advice
on promotion and protection of the consumers’ rights at their respective levels.
5.2 Consumer protection authority : For the purpose of regulating matters as to violation of
rights of consumers, unfair trade practices and false or misleading advertisements which are
detrimental to the consumer’s interests, the Consumer Protection Act, 2019 empowers the
central government to establish a Central Consumer Protection Authority.10

6. Alternate Dispute Resolution 

Another New provision which has been added by the 2019 Act is the establishment of Mediation
cells in each District Commission and State Commission as well as at the National Commission
by the Central Government. There are provisions for the Empanelment of mediators by the
respective commission for the purpose of resolving disputes between the parties. The Act
empowers the commission to refer the dispute to the selected mediator to resolve the consumer
dispute.

7. Pecuniary jurisdiction

8
The Consumer Protection Act, 2019, Section 21.
9
The Consumer Protection Act, 2019, Section 3.
10
The Consumer Protection Act, 2019, Section 10.
The key feature of the Consumer protection Act, 2019 is the three tier consumer redressal
commissions at district, state and national level. Though, old Act also provided for the same, but
various changes have been brought by this Consumer Protection Act.
One of the changes is the extension of pecuniary jurisdiction of all levels of redressal
Commissions. The District Consumer Dispute Redressal Commissions shall have a jurisdiction
over matters involving goods or service of value up to INR 1 crore from INR 20 lakh. 11 The State
Consumer Dispute Redressal Commissions shall have a jurisdiction over matters involving
goods or service of value up to INR 10 crores as again from INR 1 crore. 12 The National
Consumer Dispute Redressal Commissions has jurisdiction over matters involving goods or
service of value above INR 10 crores from INR 1 crore. 13

8. Territorial Jurisdiction 
Though, the old Act also had provisions which conferred the territorial jurisdiction upon
commissions, but the Consumer Protection Act has extended the jurisdiction to include a place
also where the complainant resides or personally works for gain as place of suing. This provision
is for removing difficulty faced by consumers regarding the place of suing.14

V. CHALLENGES FOR FUTURE

The Consumer Protection Act, 2019 has various provisions some of which are totally new in the
domain of Consumer protection Laws. The Consumer Protection Act, 2019 has been enacted but
has not been enforced yet. Thereby, the old Act is in force currently. Therefore, there is neither
interpretation of provision nor true practical applicability of provisions. The Consumer
Protection Act, 2019 emphasizes more on safeguarding the consumer interest and to covers the
e- commerce transactions within the purview of this Consumer Protection Act, 2019. The
Consumer Protection Act, 2019 will bring challenges when it comes into force.

 The Central Consumer Protection Authority 

11
The Consumer Protection Act, 2019, Section 28.
12
The Consumer Protection Act, 2019, Section 47.
13
The Consumer Protection Act, 2019, Section 58.
14
Rishwin Chandra Jethi, The Consumer Protection Act, 2019, IKIGAI LAW, (June 08, 2020),
https://www.ikigailaw.com/the-consumer-protection-act-2019/.
The New Act has provided for the establishment of central Consumer protection Authority which
shall regulate the rights of consumers, it can even file complaints and become party to the
consumer dispute. Such powers allow it to intervene in the matters before any commission which
would be challenging to be dealt with. There can even be overlapping of functions of the
authority to investigate the matter and of the district collector to order the search and seizure and
further investigation.

 The Pecuniary Jurisdiction

As observed from the earlier discussion that the pecuniary jurisdiction of all the commissions
have been extended. This change has empowered the district commission to entertain the matter
where the value of goods and services up to 1 crore, it means now the district commission will
entertain more matters and there would be significant change in the approach of resolving the
dispute. Though the Consumer Protection Act, 2019 has tried to look into that aspect by
providing the establishment of Mediation cells, but how much it would be effective to resolve the
consumer dispute, sounds challenging.

There is a question also that whether the extension of pecuniary limit allow the commissions to
transfer the matters pending before another commission. There would be ambiguity regarding the
practical aspect until the Consumer Protection Act, 2019 comes into force.15

VI. CONCLUSION

The historical aspect of the consumer protection legislation clearly stipulates that the social and
economic development has also changes the position of consumer fro, king to the careful person.
Such Changes always highlighted the need of protecting the interest of consumer by providing
them a forum to approach if they are aggrieved. The consumer Protection Act, 1986 is the
umbrella legislation as it has addressed the issues of consumers from 1986 to till now. But as the
social changes occur, the law needs to be amended. In that direction only, the step was taken to
introduce a Consumer Protection Act, 2019 which was in discussion. The changes which have
been brought by the Consumer Protection Act, 2019 are for the better protection of consumer
interest even in the online transactions which is the basis of this Consumer Protection Act, 2019.

15
Satvik Varma, Consumer Protection Act 2019: Enhancing Consumer Rights, BAR & BENCH (June 08, 2020)
https://www.barandbench.com/columns/consumer-protection-act-2019-enhancing-consumer-rights.
This Consumer Protection Act, 2019 will bring significant changes in the present approach,
whether this Consumer Protection Act, 2019 would be for the betterment of the society or not, is
such question which can only be answered by the Implementation of this Act.