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CONSUMER PROTECTION ACT, 2019- CRITICAL ANALYSIS
Author: U. Sai Sahithi Sri, II year of B.A.,LL.B. from Symbiosis Law School, Hyderabad
A consumer is the one who buys goods and services, therefore consumer protection is nothing but protecting rights of consumers against malpractices practiced in the market. The term consumerism emerged in the 1960s and was denoted as a set of social forces which aimed to create pressures on business entities in order to ensure marketplace practices are in the interest of consumers. In order to maintain this kind of pressure on business entities so that consumer’s interest can be upheld, consumer protection laws were formed in the interest of consumers. One of the main reasons behind framing such laws is to curb the increasing unfair market malpractices. Some of these unfair practices are- misbranding, adulteration, spurious products, fictitious pricing, deceptive packaging, black marketing, false and misleading advertisements etc…..
Well the other reason behind bringing such laws is to empower the consumers and to safeguard consumer’s life from the hazards of spurious goods and adulteration etc... These laws also make sure that the consumer gets to know about the information which is required regarding that particular service or product so that he can decide whether he can choose it or not. These are the reasons behind bringing consumer laws and policies. When it comes to the case of India the evolution of consumer protection laws can be divided into 3 parts. Pre- 1950, 1950-1986 and 1986- present. Before 1950, the issues regarding consumer protection was managed through the provisions present in the English Common Law. The English Common Law provided three categories under which different aspects of consumer protection were dealt, but these categories were not named explicitly. Those three categories which were granted by the British legal structure were a) Torts, b) Contracts and c) Fiduciary Obligations.
Later on, after 1950, when the constitution came into force, the central government enacted several laws to deal with different problems of consumer protection. These provisions were limited to the subject matter of each statute. The consumer had to establish relevance with at least one of these laws and if suppose he was unable to establish such thing then he had to file the matter under torts or contracts or under fiduciary obligations. There were totally ten kinds of different acts which were enacted to take care of different aspects of consumer protection but none of them were unable to properly achieve the objective of safeguarding consumer rights. Later on, based on the frame work laid down by the United Nations, CPA, 1986 was enacted by the parliament. This act created separate platforms for the redressal by mandating a series of courts to deal with problems faced by the consumers. Further the act was amended three times in the years 1991, 1993 and 2002. These amendments enhanced the scope of authority given to the consumer courts.
Since then nearly after 3 decades the act got replaced by Consumer Protection Act, 2019. The aim of this new act is to deal with consumer problems in an efficient and quick manner. The idea of the legislature behind enacting new act instead of amending the old act was to grant a high degree of security to the interests of consumer. The need of this new act arises from the very fact that due to rapid growth of digital technology, e- commerce etc… the nature of business modes has changed which have adversely affected the interests of consumers. Adding to this, the frame work of consumer protection act, 1986 and guidelines set by consumer affairs ministry were not adequate to deal with such issues, hence new act addressing these issues is enacted. Hence, the old act got replaced by the new act based on the need of current society. These days most of the population in our country is doing online shopping at a large scale; it means that there is a dire need of laws which protect consumers who does online shopping.
According to a particular statics it was projected that nearly 329 million Indian citizens are buying online which means that nearly 70% of the population shop online. Recently during the pandemic according to a study it was shown that 86% Indians have adopted online shopping which indicates accelerated adoption of E-Commerce in the country. So by this it can be deciphered that there is a need of consumer laws which also mentions about E- commerce as well. Hence, Consumer Protection Act, 2019 has been introduced with inclusion of new aspects and modified characteristics to protect the rights of consumer in current Indian Scenario. The researcher tries to study about the Consumer Protection Act, 2019 in detail and tries to find out its advantages and disadvantages.
Main Features of Consumer Protection Act, 2019
Consumer Protection Act, 2019 is a replacement of Consumer Protection Act, 1986. Let us know what are the aspects which are replaced by this amendment act?
The following aspects are introduced through the act-
Change in the term Consumer- Through 2019 act, the definition of consumer has been widened. These days online shopping is randomly increasing in India. So, in this case to protect the people who shop online, online customers are also included in the definition of Consumer. Through this e-commerce market is included in the act and consumer protection laws are made applicable to it. This definition considers a person as consumer if he/she avails a service or buys any goods for their self use. All kinds of online/offline transactions done through teleshopping or direct selling or multi-level marketing or through electronic means are mentioned as ways through which a consumer can buy or hire any goods, services etc...
Change in the definition of goods- According to CPA, 1986, definition of goods does not include food. Now through the CPA 2019 act, food is also included under the definition of goods. Now all the food selling platforms are included under the ambit of CPA, 2019. This step is a progressive one because these day’s people are buying lots of food from outside due to busy life schedule; in this case through this act their rights are protected to ensure that they have a good food.
Change in the term services- These day’s people are turned towards telecom services hence telecom has been added under the definition of services through 2019 act. It would be still better if they would have added as telecommunication services instead of telecom as per TRA, act.
Pecuniary Jurisdiction of Consumer courts- Now the limit of the amount in a case has been increased to be dealt by the consumer courts. Now a district forum can deal with a case which involves a sum of Rs.20 lakh to Rs.1cr. In the same way a state commission can deal with the cases which includes an amount of Rs.1cr to Rs. 10cr. Now, the cases which are dealt by National commission involve a sum which is above Rs.10cr.
Unfair trades/ Contracts- If there is a contract between a supplier/ manufacturer/ serviced provider and consumer which might cause harm to the consumer then such contracts can be called as unfair contracts. For ex- If one of the parties terminates the contract without even informing the other party due to which the party suffers loss then such contracts are called as unfair contracts.
Product Liability- Through this act now a person can even sue for the emotional pain which he suffered through the product service which he brought. Now the person can file a suit against both manufacturer and seller for the emotional distress which he/she suffered due to the product.
Misleading Advertisements- If there is a false representation of the products through advertisements then in that case endorser who advertised that product and manufacturer of that product will be punished under this CPA, 2019. Before endorsing the product endorser needs to verify all the claims of the product, in case if the endorser is proved guilty in CCPA investigation then he/she may be fined with Rs10 lakhs which may increase up to Rs.50 lakhs. The act also stated that the endorser and manufacturer may also be punished with an imprisonment of 2years.
Mediation- This new act introduces mediation cell branches in each state which helps in resolving the disputes easily. This branch helps to reduce the burden on consumer courts which have to deal with many cases. This kind of mode helps in resolving the disputes quickly.
Central Consumer Protection Authority (CCPA) – Through CPA,2019, CCPA has been established to deal with protection of consumer rights. CCPA is the authority which deals with the protection of consumer rights. This authority is responsible for introducing new plans and process through which consumers can be protected from the harms arising from the products/ from unfair trade practices etc... The main objective behind setting this authority is to render suggestions regarding promotion and protection of consumer rights under CPA, 2019.
At the same time CCPA possess powers through which they can recall products or withdrawal from services which are dangerous in nature. Through the means of CPA, 2019 each state shall have a State Consumer Protection Council also known as State Council. At the same time each district will consist of District Council which shall be governed by that respective District Collector.
Provisions regarding appeals
Only if the case involves substantial law of question, then such cases can be appealed from state commission to national commission. On the other hand appeals can be made from National Commission to Supreme Court only if the case is originated in National Commission.
Jurisdiction- Consumer can file cases in the place where he/she resides or works. Now consumer commission jurisdictions are expanded in order to accept the complaints made by the complainant where he/she resides or works. This has been introduced through the Consumer Protection Act, 2019.
Inclusion of E-Commerce Platforms
According to Consumer Protection Act, 2019, e-commerce shall be governed by all those laws which are applicable in case of direct selling of a service or product. Now all the e-commerce sites are supposed to disclose the details of seller’s number, email Id, website etc… There are also penalties if counterfeit products are sold on these platforms.
The New act also mention s few rights of the consumers, they are-
Right to be protected against the marketing of goods or services which can be hazardous to life and property
Right to be informed about the quality, quantity, potency, purity, standard and price of goods, products and services
Right to be assured of access to goods, products and services at competitive prices.
Right to be heard at appropriate forums
Right to seek redressel against unfair trade practices that are involved in exploitation of customers
Right to consumer awareness[i]
Challenges Present in Consumer Protection Act, 2019
Central Consumer Protection Authority- In case of CCPA the authority to investigate and head the investigative wing is vested upon Director General. Now this authority is given to District Collectors who are supposed to govern these issues. This makes the functions of this authority as vague because collector is given with all these responsibilities. Now he/she is supposed to take care of this investigative wing and as well as job of collector which might overlap and in turn it would result into the clash of his/her interests.
Ambiguity in case of Appealing- CCPA has authority to penalize endorsers, manufactures for misleading advertisements etc… But to appeal against such orders, it can only be done in national commission. But for the basis for hearing such appeals is uncertain which leaves the consumers and legal fraternity in a great confusion. It is also ambiguous whether the disputes with the present consumer commission will be heard by the same or will it be transferred to the courts having pecuniary jurisdictions as per the new act. This kind of loophole may lead to further delay of the cases.
Mediation- In the case of mediation, time period is not mentioned within which a case must be resolved. This may lead to delay in the disposal of a case.
Services- Under the definition of services the new act fails to include medical and educational services. Since, the 1986 acts there were several conflicting judgments regarding medical services, but the act did not include these services. This act could include those educational services which can be treated as consumer service, but it failed to mention them. On the other hand the definition services include “Telecom Services’ which may prove as a drawback. This is because according to the Telecom Regulatory Authority of India Act, 1997[ii] uses the term telecommunication service and provides a wider definition which consists of all the matters related to it. When it comes to the CPA, 2019, it is mentioned as only ‘Telecom Service’ which has a narrow coverage and also may exclude internet, cellular and other related services.
Exclusion of Health Care Services- In the case of Indian Medical Association v V.P. Shantha[iii] and others, the apex court stated that services rendered by medical practitioners come under the purview of service under CPA, 1986. But if suppose the service was of free of charge then it shall not be considered under the Act. Now it can be said that even apex court has recognized these services under the act, but still 2019 act fails to expressly mention the same under the definition of services. It is said that at first, when health care services was included in consumer protection bill, 2018, medical professionals and communities opposed that stating this can be misused against them if these services are placed under the ambit of the act.
Hence, the term ‘health care services” was deleted from the definition of services. When this is being questioned, the govt. officials are stating that though the term is not mentioned still consumers can go to consumer forums and file complaint in the case of medical negligence or deficiency in medical services. According to the phrase “includes, but not limited to” mentioned under sec 2(42) of CPA, 2019, it can be said that this is an inclusive section and still medical services can be added to it.
If govt. authority leaves this section without including medical services and on the other hand if it mentions that consumers can still file complaints in case of deficiency in medical services, then such things might collide with each other during the interpretation of the clause.
Exclusion of Educational Services- According to CPA, 2019, these services are not mentioned under the ambit of service definition. When it was claimed that why can’t they can be mentioned under the ambit of CPA, 1986. It was referred to a judgment delivered by the Hon’ble Supreme Court in the case of Maharshi Dayanand University v. Surjeet Kaur[iv], in which it stated that educational institutions cannot be treated as commodities, and mentioned that these institutions are not providing any kind of services, hence there can be no question of deficiency of service. Hence they cannot fall under the purview of CPA, 1986. But on the other hand National and State consumer forums gave several judgments in the favor of students recognizing them as consumers.
In the case of Jai Kumar Mittal vs. Briliant Tutorials,[v] it was held that defective study material sent by institution falls under the ambit of deficiency of service. In the case of Sonal Matapurkar v. S. Niglingappa Institute,[vi] a dental institute had taken admissions more than sanctioned seats due to which students were not allowed to take examinations. In this case, National Commission held that even though the students had paid the money they were not allowed to take exam which indicates that there was a deficiency in the service of Institution. Hence the institution was ordered to return back donations to the students.
From the above case laws it can be deciphered that educational services can be included under the ambit of CPA, 2019. This is because students are beneficiaries in case of availing these services but at the same time all kind of educational services cannot be included under the act. If it is a case of giving defective study materials, negligence in allotting roll numbers, hall tickets and other activities etc… it may fall under the ambit of deficiency in service. But when a complaint is filed upon unreasonable grounds then such cases can be excluded from the act. Hence a clear demarcation must be placed in between educational activities which may fall under CPA, 2019 and which may not. This may help to protect consumer rights and increases efficiency in educational services.
District consumer commissions are established for the sake of convenience of consumers who want to file a case, but the same thing is lacking in the case of filing suits in case of unfair trades. This is because any complaints regarding unfair trades or contracts can only be filed in state or national commissions. This might impose hurdles on the consumers who are comfortable in approaching District Commission.
Conclusion and Suggestions
Consumer Protection Act, 2019 is really appreciable because it includes several aspects which are required in present situation. This act has made several progressive steps by introducing CCPA, widening the ambit of pecuniary jurisdictions, mediation and increasing the scope of services etc… All these things are required in order to protect consumer rights in today’s digital world. Though this act has come up with several progressive steps, it also failed to mention few aspects which cannot be made unseen. For example this act has not provided with the duties and power possessed by the Director-General of CCPA. The kind of power he/she shall possess is still unclear. The act also doesn’t mention medical & educational services under the definition of the term “services”. Hence, inclusion of such services might end the ambiguity and conflicts arising from the interpretation of the provision. To make this act successful it must be properly implemented.
Following are few suggestions which can be implemented-
1) Services like medical and education must be included under the definition of Services under the Consumer Protection Act, 2019.
2) Instead of mentioning as “telecom services” under the ambit of services in the CPA, 2019, they can be mentioned as telecommunication services which may widen its ambit and mentions all other related services.
3) A proper period of time must be stipulated in case of mediation which ensures that cases get resolved within a particular period of time. This may reduce the delay in deciding cases.
4) Govt. should not favor few professionals as it was done in the case of deleting medical services from the CPA, 2019. Govt. should give utmost importance to the consumer’s rights.
5) People should be made aware of this act by conducting awareness programs and campaigns, in order to make people realize their rights and to have a successful implementation of this act.
6) A clear demarcation should be laid down upon the types of educational services which can be included under CPA, 2019 through which consumer rights can be availed by the students.
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[i]Vineet Kumar, All you need to know about Consumer Protection Laws in India, All You Need To Know [Jun. 18, 2021, 03:10 AM],https://blog.ipleaders.in/analysis-consumer-protection-laws-india/ [ii] Telecom Regulatory Authority of India Act, NO. 24, Acts of Parliament, 1997 (India). [iii] Indian Medical Association v V.P. Shantha, 1996 AIR 550. [iv] Maharshi Dayanand University v. Surjeet Kaur, (2010) 11 SCC 159. [v] Jai Kumar Mittal vs. Briliant Tutorials, 2005 SCC OnLine NCDRC 23 [vi] Matapurkar v. S. Niglingappa Institute, 1997(2) CPJ 5 (NC).