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The Consumer Protection Act 2019

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The Consumer Protection Act 2019

 Objective of a consumer protection law

 (a) Providing better and all round protection to consumer
 (b) Providing machinery for the speedy redressal of the grievances.
 (c) Creating framework for consumers to seek redressal.
 (d) Providing rights to consumers.
 (e) Safeguarding rights of Consumers.
 https://www.youtube.com/watch?v=R-eCBuWzL_8

 The new Act was notified on August 9th 2019.

 came into effect from July 20th 2020.

 Main features
 While retaining certain old provisions,
 New Act has certain new provisions that tightens the existing rules to further
safeguard consumer rights and create exhaustive consumer protection law.
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Who is a consumer ?

 A person who buys any goods or services for a consideration,

 which has been paid or promised or partly paid and partly promised, or under
any system of deferred payment
 also includes the user with approval of such goods or beneficiary of services.

 “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

 What are goods

 every kind of movable property and includes food

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Who is a not a consumer?
 A person who;
◦ obtains goods free of charge
◦ avails services free of charge
◦ obtains goods for resale or for any commercial purposes
◦ avails services for any commercial purposes
◦ avails services under contract of service

 Commercial purpose does not include use by a person of goods bought and
used by him exclusively for the purposes of earning his livelihood by means of
self-employment.

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New Provisions
 New provisions under Consumer Protection Act 2019
◦ inclusion of E- commerce, Direct selling Establishment of Central Consumer
Protection Authority (CCPA)
◦ Strict Norms for Misleading Advertisement
◦ Strict Norms for product liability
◦ Changes in the Pecuniary Jurisdiction
◦ Greater ease to dispute resolution

 Addition in the clause of “Unfair Trade Practice

◦ Unfair Contract
◦ Alternate Dispute Resolution through mediation

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Guaranteed Consumers Rights
 Right to Safety
 Right to be Informed
 Right to Choose
 Right to be heard
 Right to seek Redressal
 Right to Consumer Awareness

 https://youtu.be/KAGWjGzo-28

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Who can make complaint
 a consumer
 any voluntary consumer association registered under any law for the time
being in force
 the Central Government or any State Government
 the Central Authority
 one or more consumers, where there are numerous consumers having the
same interest
 in case of death of a consumer, his legal heir or legal representative
 in case of a consumer being a minor, his parent or legal guardian;

 No person buying goods or hiring services for business purpose can make a
complaint

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Deficiency
 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;

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Unfair Trade Practice
 In the CPA of 1986, a complaint could be filed only if

◦ an unfair trade practice or

◦ a restrictive trade practice was adopted by any trader or service

provide.”

 In the new act, i.e. CPA of 2019, we see that the term
◦ ‘unfair contract’
has been added to the definitions to broaden the scope for grounds for
filling complaints.

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Unfair Trade Practice
 manufacturing or offering spurious goods for sale or adopting
deceptive practices for providing service,
 not issuing proper cash memo or bill for the services rendered
and the good sold,
 refusing to withdraw, take back or discontinue defective goods
and services and refund the consideration taken thereof within
the time period stipulated in the bill or within 30 days if there is
no such provision in the bill,
 disclosing personal information of the consumer to any other
person not in accordance with the prevailing laws.

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Unfair contract
 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:
 requiring manifestly excessive security deposits to be given by a consumer for
the performance of contractual obligations;
 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;
 refusing to accept early repayment of debts on payment of applicable penalty;
 entitling a party to the contract to terminate such contract unilaterally, without
reasonable cause;
 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;
 imposing on the consumer any unreasonable charge, obligation or condition
which puts such consumer to disadvantage
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Misleading advertisement
 in relation to any product or service:
 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

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e-Commerce
 buying or selling of goods or services Including digital products
over digital or electronic network
 e commerce entity
 any person who owns, operates or manages digital or electronic
facility or platform for electronic commerce, but does not include
a seller offering his goods or services for sale on a marketplace

 Scope and Applicability of Rules. –

 (a) all goods and services bought or sold over digital or electronic
network including digital products;
 (b) all models of e-commerce, including marketplace and
inventory models of e-commerce;
 (c) all e-commerce retail, including multi-channel single brand
retailers and single brand retailers in single or multiple formats;
and

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e-Commerce
 d) all forms of unfair trade practices across all models of e-commerce
 Rules shall not apply to any activity of a natural person carried out in a
personal capacity not being part of any professional or commercial
activity undertaken on a regular or systematic basis.
 shall apply to a e-commerce entity which is not established in India, but
systematically offers goods or services to consumers in India.
 “e-commerce entity” means any person who owns, operates or manages
digital or electronic facility or platform for electronic commerce, but does
not include a seller offering his goods or services for sale on a
marketplace e-commerce entity;
 “inventory e-commerce entity means an e-commerce entity which owns
the inventory of goods or services and sells such goods or services
directly to the consumers and shall include single brand retailers and
multi-channel single brand retailers;
 “marketplace e-commerce entity” means an e-commerce entity which
provides an information technology platform on a digital or electronic
network to facilitate transactions between buyers and sellers;

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e-Commerce
 Every e-commerce entity appoint a nodal person of contact or an
alternate senior designated functionary who is resident in India,
to ensure compliance
 Every e-commerce entity shall provide the following information
in a clear and accessible manner on its platform, displayed
prominently to its users, namely:--
 legal name of the e-commerce entity;
 principal geographic address of its headquarters and all
branches;
 name and details of its website; and
 contact details like e-mail address, fax, landline and mobile
numbers of customer care as well as of grievance officer.
 No e-commerce entity shall adopt any unfair trade practice,
whether in the course of business on its platform or otherwise.

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e-Commerce
 Every e-commerce entity shall establish an adequate grievance
redressal mechanism having regard to the number of grievances
ordinarily received by such entity from India, and shall appoint a
grievance officer for consumer grievance redressal, and shall
display the name, contact details, and designation of such officer
on its platform
 Where an e-commerce entity offers imported goods or services
for sale, it shall mention the name and details of any importer
from whom it has purchased such goods or services, or who may
be a seller on its platform.
 No e-commerce entity shall impose cancellation charges on
consumers cancelling after confirming purchase unless similar
charges are also borne by the e- commerce entity, if they cancel
the purchase order unilaterally for any reason.

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e-Commerce
 Every e-commerce entity shall effect all payments towards
accepted refund requests of the consumers as prescribed by the
Reserve Bank of India or any other competent authority under any
law for the time being in force, within a reasonable period of
time, or as prescribed under applicable laws.
 No e-commerce entity shall-- (a) manipulate the price of the
goods or services offered on its platform in such a manner as to
gain unreasonable profit by imposing on consumers any
unjustified price having regard to the prevailing market
conditions, the essential nature of the good or service, any
extraordinary circumstances under which the good or service is
offered, and any other relevant consideration in determining
whether the price charged is justified;
 (b) discriminate between consumers of the same class or make
any arbitrary classification of consumers affecting their rights
under the Act

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 The Consumer Protection Act, 2019 aims to provide a strong legal
framework for consumer protection and empower consumers to seek
redressal against unfair trade practices.

 The act defines a consumer as a person who buys goods or services for
personal use or for commercial purposes.

 It recognizes six basic consumer rights:

 the right to be protected against marketing of goods and services that
are hazardous to life and property,
 the right to be informed about the quality, quantity, potency, purity,
standard, and price of goods and services,
 the right to seek redressal against unfair trade practices and restrictive
trade practices,
 the right to be heard and to be assured that consumer’s interests will
receive due consideration,
 the right to consumer education, and the right to a healthy environment.
 The act establishes a CCPA to promote, protect, and enforce consumer rights.
 The CCPA has the power to investigate, recall, and impose penalties on companies
that violate consumer rights.
 the concept of product liability, which means that manufacturers, sellers, and
service providers will be held liable for any harm caused to consumers due to
defective products or services.
 Consumers can seek compensation for damages caused by such products or
services.
 The new act promotes mediation as a dispute resolution mechanism. Consumers
can approach mediation cells to resolve disputes with companies.
 The act specifically addresses issues related to e-commerce, such as misleading
advertisements, unfair trade practices, and the obligation of e-commerce
companies to provide complete and accurate information about products and
services.
 The act introduces higher penalties for manufacturers and sellers who violate
consumer rights. The penalties can range from a fine of up to Rs. Ten lakhs to
imprisonment for up to seven years.
Consumer Disputes Redressal Agencies
 Quasi-judicial bodies established under the Act to provide simple, speedy and
inexpensive redressal to the grievances of the consumers

 Established at three levels: District, State and National known as:

◦ District Consumer Disputes Redressal Commission or District Commission
◦ State Consumer Disputes Redressal Commission or State Commission
◦ National Consumer Disputes Redressal Commission or National Commission

Pecuniary jurisdiction
 District Commission: Upto 1 Crore
 State Commission: more than 1 Crore – 10 Crores
 National Commission: above 10 cr

Filing of Complaint –in District Commission local limits of jurisdiction

• Place of business or residence of opposite parties, or
• Place of business or residence of complainant, or
• where the cause of action, wholly or in part, arises
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CCPA
 Power to Central Government to establish Central Consumer Protection
Authority (CCPA) 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 Consumer and to promote,
protect and enforce the rights of Consumer as a Class.

 Constitution of the Central Authority:

 a Chief Commissioner and such number of other Commissioner to be
appointed by the Central Government.
 shall have an Investigation Wing headed by a Director General for the purpose
of conducting inquiry or investigation.
 shall protect, promote and enforce the rights of the consumers as a class, and
prevent violation of Consumers Rights under the Act
 https://pib.gov.in/PressReleasePage.aspx?PRID=1642422

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Powers of CCPA
 the Central Authority may inquire or cause an inquiry or
investigation to be made into violations of Consumer Rights,
either Suo motu or on a complaint received or on the directions
from the Central Government

 the Central Authority can also file complaints before the District
Commission, the State Commission or the National Commission
as the case may be

 A person aggrieved by any order passed by the Central Authority

may file an appeal to the National Commission within a period of
thirty days from the date of receipt of such order.

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Product seller
 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—
 a manufacturer who is also a product seller; or
 a service provider,

 but does not include—

 a seller of immovable property, unless such person is engaged in the sale of constructed
house or in the construction of homes or flats;
 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;
 a person who—
 acts only in a financial capacity with respect to the sale of the product
 is not a manufacturer, wholesaler, distributor, retailer, direct seller or an electronic
service provider;
 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 the23
Product liability
 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;

 "product liability action“:

 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;
 "harm", in relation to a product liability includes—
 damage to any property, other than the product itself;
 personal injury, illness or death;
 mental agony or emotional distress attendant to personal injury or illness or
damage to property; or

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Compensation Claim
 Who all can be liable in a product liability action:
 Manufacturer or a product service provider or a product seller,

 Grounds of claim compensation for product manufacturer:

 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.

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Compensation claim
 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.

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Compensation claim
 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.
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Defence in a product liability action
 The product was misused, altered, or modified.
 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.
 The product was purchased and the product manufacturer had provided
warnings or instructions to such employer;
 The product was sold as a component of an end product and necessary warnings
or instructions were given by the product manufacturer but the harm was caused
to the complainant by use of the end product in which such component or
material was used;
 The product was legally meant to be used or dispensed only by or under the
supervision of an expert 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
 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

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procedure for filing the complaint
 A complaint:
 Should be in writing
 Can be filed in a regular way (offline)
 Can be filed online – http://edaakhil.nic.in
 A complaint can be presented by the complainant in person or by his agent.
 It can even be sent by registered post
 Normally three copies of the complaint are required to be submitted out of
which
 one retained for the official purpose,
 one is forwarded to the opposite party and
 one is the for the complainant.
 In case the number of opposite parties is more correspondingly more copies of
the complaint are required.

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Mediation
 Consumer complaint can also be resolved through mediation
 Either at the first hearing after admission, or at later stage if the District
Commission is of the view that, there exists an element of settlement, can refer
the complaint to Mediation with the consent of the parties.
 Also, parties at any stage of the complaint can opt for settlement through
mediation.
 No fee to be paid for Mediation
 No appeal lies after the settlement of dispute through mediation.

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Mediation (Rules)
 Mediation Cell.---Every Mediation Cell set up in a Commission,
shall have a panel of mediators on the recommendation of a
selection committee consisting of the President and a member of
that Commission.
 Matters not to be referred to mediation.---The following matters
shall not be referred to mediation, namely:—
 (a) the matters relating to proceedings in respect of medical
negligence resulting in grievous injury or death;
 (b) matters which relate to defaults or offences for which
applications for compounding of offences have been made by one
or more parties;
 (c) cases involving serious and specific allegations of fraud,
fabrication of documents, forgery, impersonation, coercion;
 (d) cases relating to prosecution for criminal and non-
compoundable offences;

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Mediation (Rules)
 Refund of fee.
 Where the Commission refers the parties to mediation, the
complainant shall be entitled to receive full amount of application
fee paid in respect of such complaint, if a settlement is reached
between such parties.
 Resort to arbitral or judicial proceedings.—The parties shall not
initiate any arbitral or judicial proceedings in respect of a matter
which is the subject-matter of the mediation and also when such
parties have expressly undertaken not to initiate any such
proceeding.
 A settlement agreement shall not be discharged by the death of any
party thereto and shall be enforceable by or against the legal
representative of the deceased party
 .

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Representation
 Consumer Commissions are quasi-judicial bodies to provide simple and speedy
justice.
 These have been kept free from the complicated judicial procedures.
 The manner is quite informal and free from the shackles of the Civil Court.
 There is no need for an advocate or any other pleader and consumer can himself
or through his representative file and represent his complaint.

 Particulars to be furnished in the complaint:

 Name, description and address of the complainant;
 Name, description and address of the opposite party or parties;
 Facts relating the complaint and when and where it arose;
 Documents, if any in support of allegations

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Limitation period
 The complaint shall be filed within two years from the date on which the cause of
action has arisen.
 This would mean two years from the day the deficiency in service or defect in
goods has arisen/detected.
 This is known as the limitation period for filing the complaint.

 How to make the payment of the Court fee:

 Every complaint filed before District Commission/ State Commission/ National
Commission shall be accompanied by a fee as specified, in the form of crossed
Demand Draft drawn on a nationalized bank or through a crossed Indian Postal
Order drawn in favour of the Registrar of the State Commission and payable at
the respective place where the State Commission or the National Commission is
situated.

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Reliefs
 Removal of defects from the goods;
 Replacement of the goods;
 Refund of the price paid;
 Removal of defects or deficiencies in the services;
 Award of compensation for the loss or injury suffered;
 Discontinue and not to repeat unfair trade practice or restrictive trade practice;
 Withdraw hazardous goods from being offered for sale;
 To cease manufacture of hazardous goods and desist from offering services which
are hazardous in nature;
 If the loss or injury has been suffered by a large number of consumers who are
not identifiable conveniently, to pay such sum (not less than 25% of the value of
such defective goods or services provided) which shall be determined by the
Commission;
 To issue corrective advertisement to neutralize the effect of misleading
advertisement;
 To provide adequate costs to parties

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Appeal
 Any consumer who is aggrieved by the order of a commission can prefer an
appeal in the higher commission within a period of thirty days from the date of
the order.
 The appeal can be preferred
 against order of the District Commission before the State Commission
 against order of the State Commission before the National Commission
 against order of the National Commission before the Supreme Court

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Case Laws
 Manjeet Singh Vs. National Insurance Company Ltd. & Anr: In this case, the
appellant had purchased a second - hand truck under a Hire Purchase
agreement. The vehicle was insured by the respondent insurance company. One
day when he was driving the truck, a passenger asked him to stop the truck and
give him a lift. When he stopped the truck, the passenger brutally assaulted the
driver and fled with the vehicle. An FIR was lodged and the respondent finance
company was intimated about the theft. However, the insurance company
rejected the claim on the ground of breach of terms of the policy. The
complainant approached District Consumer Disputes Forum, State Commission
and National Commission to compensate him for the loss. All of them had
rejected the case. So, finally he approached the Supreme Court.
 Judgment: The Supreme Court held that the appellant was not at all in fault. It
can be considered as a breach of the policy, but not a fundamental breach to
bring the insurance policy to an end and terminate the insurance policy. The two
- judge bench of Supreme Court directed the respondent insurance company to
pay 75% of the insured amount along with 9% interest p.a. from the date of filing
the claim. The court also directed the insurance company to pay sum of Rs. 1, 00,
000 as compensation.
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Case Laws
 Karnataka Power Transmission Corporation (KPTC) Vs. Ashok Iron Works Private Limited
 Ashok Iron Works, a private company which manufactures iron had applied for obtaining
electricity from the state’s power generation company - the Karnataka Power Transmission
Corporation (hereinafter KTPC) for commencing its iron production. Inspite of paying
charges and obtaining confirmation for the supply of 1500 KVA energy in February 1991,
the actual supply did not begin until ten months later, in November 1991. This delay
incurred a huge loss for Ashok Iron Works. This company had filed a complaint to the
Belgaum Consumer Dispute Forum and later Karnataka High Court. The legal argument by
KTPC was that the complaint was not maintainable as the consumer Protection Act 1986
excludes commercial supply of goods. It also made an argument that the company in
engaged in manufacturing iron and intended to use it for commercial consumption which
is excluded under the Act. He also said that, the complainant is not a `person’
under Section 2(1)(m) of the Act, 1986.
 Judgment: In this case, Supreme Court gave his rulings. The Supreme Court mentioned the
General Clause Act that includes a private company within the purview of the definition of
a “Person.” It was also held that the supply of electricity by the KPTC to a consumer would
be covered under Section 2(1)(o) being ‘service.’ Also, if the electrical energy consumer is
not provided to a consumer in time as is agreed upon, then under Section (2)(1)(g), then
there can be a case for deficiency in service. Therefore, the clause stating “supply” of
goods for commercial purpose would not be applied. The Supreme Court sent this case
back to District Forum for retrial on these grounds. 38
 https://youtu.be/kbNSS-DJSGs
 https://
www.youtube.com/watch?v=eyPqLidvu7I
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