The Parliament passed the Consumer Protection Bill, 2019 on August 6, 2019 to replace the Consumer Protection Act, 1986 ("1986 Act"). The President of India gave its assent to the Consumer Protection Act, 2019 ("2019 Act") on August 9, 2019 and the 2019 Act came into force on the date notified by the Central Government.
By notification dated July 15, 2020, the Central Government has notified majority of the provisions of the 2019 Act which have come into force from July 20, 2020. The notification can be accessed here.
Differences between the 1986 Act and the 2019 Act are detailed in the table below:
Sl.No. |
Provision |
1986 Act |
2019 Act |
|
Unfair contracts |
No Provision |
A contract between a manufacturer or trader and consumer will be deemed to be unfair if it causes a significant change in rights of a consumer, namely:
|
|
Product liability |
No Provision |
Claim for product liability can be made against the manufacturer, service provider, and/or seller to compensate for any harm caused to the consumer because of a defective product or service. Compensation can be obtained by proving one of the several specified conditions in the 2019 Act. |
|
Consumer |
Did not expressly include online transactions and teleshopping. |
Expressly includes goods or services availed through online transactions using any electronic means, teleshopping, direct selling and multi-level marketing. |
|
Goods |
Included goods defined in the Sale of Goods Act, 1930. |
Includes 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. |
|
Unfair trade practices |
Defined to include false or misleading representation, assigning the product or service a warranty/guarantee that is not based on adequate testing, materially misleads the public and indulges in false advertising. |
Widens the scope of unfair trade practice by including even the following within its ambit:
|
|
Alternate dispute redressal mechanism |
No Provision |
Mediation cells will be attached to the District, State and National Commissions. If the Commissions opine that there is a scope for settlement between the parties, the parties may be referred to mediation. The rules and procedure for the meditation proceedings will be as laid down in the Consumer Protection (Mediation) Rules, 2020 which will come into effect from July 20, 2020. |
|
Jurisdiction for filing of a complaint |
Had to be filed before the Commission within whose jurisdiction the opposite party resides/carries on business. |
Complaint can also be filed before the Commission within whose jurisdiction the Complainant resides or works. |
|
Pecuniary jurisdiction of Commissions |
District: Up to Rs. 20 lakhs; State: Between Rs. 20 lakhs and Rs. 1 crore; National: Above Rs. 1 crore. |
District: Up to Rs. 1 crore; State: Between Rs. 1 crore and Rs. 10 crores; National: Above Rs. 10 crores. |
|
Appeal from an order of District Commission |
Time limit to file an appeal before the State Commission was 30 days. No appeal will be entertained until a deposit is made i.e. 50% of the amount or Rs. 25,000, whichever is lesser. |
Time limit to file an appeal before the State Commission has been increased to 45 days. No appeal will be entertained before the State Commission unless 50% of the amount is deposited. |
10. |
Appeal from order of State Commission |
No appeal will be entertained until a deposit is made - 50% of the amount or Rs. 50,000, whichever is lesser. |
No appeal will be entertained before the National Commission unless 50% of the amount is deposited. Time limit to file an appeal under both Acts remain the same - 30 days. |
11. |
Appeal when there is a substantial question of law involved |
No provision |
An appeal can now be filed before the National Commission from any order passed in appeal by any State Commission in cases that involve a substantial question of law. |
12. |
Power to declare terms of any contract as void |
No provision |
The State and National Commissions now have the power to declare the terms of any contract, which may be unfair to the consumer, to be null and void. |
13. |
Power to review orders |
The National Commission can review any order passed by it if there is an error apparent on the face of record. |
The District Commission, State Commission and National Commission have the power to review orders passed by them if there is an error apparent in the face of record. |
14. |
Penalties |
Where any person does not comply with orders of the Commissions, they may be punishable with imprisonment between one month and three years, or a fine between Rs. 2,000 and Rs. 10,000, or both. |
Where any person does not comply with orders of the Commissions, they may be punishable with imprisonment between one month and three years, or a fine between Rs. 25,000 and Rs. 1 Lac, or both. There are other offences for which penalties are imposed such as, sale of products containing adulterant and sale/distribution/import of spurious goods. |
15. |
Quorum |
District Commission: The President shall be a person who is or has been a District Judge along with two members. State Commission: The President shall be a person who is or has been a Judge of the High Court along with at least 2 members. National Commission: The President shall be a person who is or has been a Judge of the Supreme Court along with at least four members. |
District Commission: President and at least two members. State Commission: The President and at least four members. National Commission: The President and at least four members. |
16. |
The Central Consumer Protection Authority (Yet to be constituted) |
No Provision.
|
Establishes the Central Consumer Protection Authority (CCPA) to regulate matters relating to violation of rights of consumers, unfair trade practices and false or misleading advertisements and to promote, protect and enforce the rights of consumers as a class. It has vast powers to make an inquiry (suo motu or on receipt of a complaint), file complaints before the District, State or National Commission, intervene in proceedings before the Commissions, issue necessary guidelines to prevent unfair trade practice etc. |
17. |
E-commerce
|
No Provision. |
Defines direct selling, e-commerce and electronic service provider. E-commerce has been defined to include buying and selling of goods and services over any digital or electronic network. The Central Government is empowered to prescribe rules for preventing unfair trade practices in e-commerce and direct selling. |
The Ministry of Consumer Affairs has also notified the Consumer Protection (Consumer Disputes Redressal Commissions) Rules, 2020 (“the Rules”) which will come into effect from July 20, 2020. The Rules can be accessed here.
The Rules, inter alia, prescribe:
This update has been contributed by Maneesha Kongovi (Partner), Sheetal Srikanth and Yamini Harish (Associates).
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