Consumer Protection Act

Legal Framework of the Consumer Protection Act in India

• The Consumer Protection Act, 2019: Primary legislation in India aimed at protecting the interests of consumers. This Act replaces the Consumer Protection Act, 1986, and provides a broader scope and more effective measures for consumer protection. Not only these, but the Act establishes various authorities at the national, state, and district levels to oversee consumer protection. These authorities are responsible for adjudicating consumer complaints, ensuring fair trade practices, and promoting consumer education and awareness. Key features of the 2019 Act include:
  • Broader Definition of a Consumer: Section 2(7) of the Consumer Protection Act defines a 'consumer' as any person who buys goods or services for consideration, either for personal use or to earn their livelihood, but excludes a person who purchases goods or services for resale or commercial purposes. It is explicitly mentioned in the definition of "consumer" that the terms "buys any goods" and "hires or avails of any services" also cover any electronic transactions made online, as well as direct selling, teleshopping, and multi-level marketing.
  • Establishment of the Central Consumer Protection Authority (CCPA): The CCPA is empowered to regulate matters related to the violation of consumer rights, unfair trade practices, and misleading advertisements under Section 10 of the Act.
  • Consumer Dispute Redressal Commissions (CDRCs): The Act provides for the establishment of District, State, and National Consumer Dispute Redressal Commissions to adjudicate consumer complaints. These commissions serve as quasi-judicial bodies to handle consumer complaints and disputes, ensuring a speedy and cost-effective resolution process.
  • E-commerce Regulations: Section 94 of the Act includes specific provisions for e-commerce transactions, ensuring that online consumers receive the same level of protection as those purchasing through traditional means. The Act specifically addresses the issues related to e-commerce and direct selling. It imposes obligations on e-commerce platforms to disclose important information about products and sellers, and it regulates direct selling activities to protect consumers from fraudulent schemes.
  • Product Liability: Manufacturers, service providers, and sellers are held accountable for any harm caused by defective products or deficient services under Section 82 to 87 of the Act. The Act introduces the concept of product liability, making manufacturers, sellers, and service providers liable for any damage caused to consumers due to defective products or deficient services. This provision enhances consumer safety and encourages businesses to maintain high standards of product and service quality.
  • Consumer Rights: Section 2(9) of the Act outlines six consumer rights, including the right to safety, information, choice, redressal, consumer education, and the right to be heard. These rights empower consumers to make informed decisions and seek remedies when they are aggrieved.
  • Consumer Education and Awareness: The Act emphasizes the importance of consumer education and awareness by promoting programs and campaigns that educate consumers about their rights and responsibilities. 

Significant Amendments 

• Inclusion of E-commerce: The 2019 Act explicitly includes provisions for e-commerce and online transactions. The amendment also outlines that, to prevent unfair trade practices in e-commerce and direct selling, and to safeguard consumer rights and interests, the Central Government will take all required steps and measures to achieve this.
• Revised Pecuniary Jurisdiction: The pecuniary jurisdiction for District, State, and National Commissions has been revised as follows:
  • District Commission – up to ₹1 crore 
  • State Commission – between ₹1 crore and ₹10 crore 
  • National Commission – more than ₹10 crore
• E-Filing of Complaints: The Consumer Protection Act of 2019 facilitates the online filing of complaints by consumers. To help with this, the Central Government has established the E-Daakhil Portal, which provides a budget-friendly and efficient means for consumers across India to connect with the relevant consumer forums in the event of a dispute. This is introduced to make the process smoother and more user-friendly for everyone.
• Establishment of the Central Consumer Protection Authority: The Act empowers the Central Government to establish a Central Consumer Protection Authority (CCPA) under Section 10. This body will oversee issues related to breaches of consumer rights, unfair trade practices, and misleading advertisements that harm the public and consumers. It aims to promote, protect, and uphold the rights of consumers as a whole.
• Enhanced Penalties: The Act introduces stricter penalties for false or misleading advertisements and unfair trade practices, as outlined in Section 89 of the Act. 
• Product Liability: Clear provisions are in place to hold manufacturers, service providers, and sellers accountable for harm caused by defective products or services.
• Alternate Dispute Resolution: The Act promotes mediation as an alternative dispute resolution mechanism to settle consumer disputes amicably. For mediation, a strict timeline will be in place, as outlined in the rules.
• Expansion of Consumer Rights: The Act broadens the scope of consumer rights to include the right to be heard and the right to seek redress against unfair trade practices.

Compensation and Penalties 

• False or Misleading Advertisement: Section 89 of the Act prescribes monetary penalties and imprisonment for individuals and entities who cause false or misleading advertisements. Up to 2 years of imprisonment and a fine of up to ₹10 lakh can be imposed, and this may extend to 5 years of imprisonment and a fine of up to ₹50 lakh for every subsequent offense. 
• Products Containing Adulterants: If someone manufactures, stores, sells, distributes, or imports products with adulterants, they could face serious consequences under Section 90. Depending on the level of harm caused, offenders may face fines or even prison time.
  • In the event of no injury to the consumer, imprisonment for up to 6 months and a fine of up to ₹1 lakh. 
  • In the event of an injury not amounting to grievous hurt, imprisonment for up to 1 year, and a fine of up to ₹3 lakhs.
  • In the event of injury resulting in grievous hurt, imprisonment for up to 7 years, and a fine of up to ₹5 lakhs. 
  • In the event of the death of the consumer, imprisonment of not less than 7 years, which may extend to life imprisonment, and a fine of not less than ₹10 lakhs.
• Spurious Goods: If someone manufactures, sells, stores, imports, or distributes spurious goods, whether personally or through another person, they may face severe penalties under Section 91. Depending on the level of harm caused, offenders may face fines or even prison time.
  • In the event of an injury not amounting to grievous hurt, imprisonment for up to 1 year and a fine of up to ₹3 lakh.
  • In the event of injury amounting to grievous hurt, imprisonment up to 7 years, and a fine up to ₹5 lakh.
  • In the event of the death of the consumer, imprisonment of not less than 7 years, possibly extending to life, along with a hefty fine of at least ₹10 lakhs.
• Compensation to Consumers: Offenders may be required to compensate consumers for any harm or loss they have suffered as a result of their actions.
• Cancellation of Licences: For any offences included under Section 90(1) or 91(1), which are for the manufacturing, selling, importing of the adulterated or spurious goods, the court is authorized to suspend any license issued to a convict for up to 2 years and cancel the permit in case of subsequent conviction.
• Banning of Hazardous Goods: The CCPA has the authority to ban the sale of goods that pose a risk to consumer safety.

How to Report a Violation?

• Online Portals and Consumer Helpline: The National Consumer Helpline (NCH) is a central government initiative launched in 2011, enabling consumers to file complaints online. The National Consumer Helpline (NCH) is a toll-free number (1800-11-4000) that consumers can call to register complaints about defective products or services. Alternatively, they can file a complaint by signing up on https://consumerhelpline.gov.in/user/ or through the NCH App.
• Consumer Courts: Consumers can file formal complaints with the District, State, or National Consumer Dispute Redressal Commissions. The complainant or their representative should file the complaint, along with the relevant documents and prescribed fees, with the appropriate forum. The complaint should be filed within 2 years of the date of the cause of action arising. The complaints can be filed in any one of the three jurisdictions: where the cause of action arose, where the complainant resides, or where the opposite party resides or carries on business.
• Online Filing through the e-Daakhil Portal: The e-Daakhil portal is a digital innovation introduced by the Indian government for facilitating the lodging of consumer complaints. The online portal enables consumers to seek redress without needing to be physically present at the consumer forums. Consumers can easily file their complaints by filling out the required form and uploading the necessary documents.
• Consumer Organisations: Various non-governmental organisations (NGOs) assist consumers in filing complaints and seeking redressal. Various non-governmental organisations (NGOs) assist consumers in filing complaints and seeking redressal. Akhil Bhartiya Grahak Panchayat, Consumer Guidance Society of India, The, Grahak Shakti are some Consumer Organizations working for the cause of customers getting abused by manufacturers or service providers., The Ministry of Consumer Affairs, Government of India, has also started a consumer awareness program called 'Jago Grahak Jago'.

How Can Seasoned Advocates Help You?

• Legal Advice: Providing expert legal advice on consumer rights and the appropriate course of action for resolving disputes.
• Representation: Representing consumers in consumer courts and other legal forums to ensure their interests are protected.
• Negotiation: Assisting in mediation and negotiation with businesses to settle disputes amicably.
• Documentation: Helping with the preparation and filing of necessary documents and evidence to support consumer complaints.
• Awareness and Education: Conduct awareness programs and workshops to educate consumers about their rights and the mechanisms available for grievance redressal.

Conclusion

Although the procedure for filing complaints and seeking compensation for damages with the Consumer Forum under the Consumer Protection Act is simplified, defining your claims can be crucial in terms of legal language and may include some technicalities. To know more, contact us.