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The Consumer Protection Act, 2019 compared with the Act of 1986

S. 2(7) Consumer means any person who:

  1. buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment, when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or
     
  2. hires or avails of any service for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such service other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person, but does not include a person who avails of such service for any commercial purpose.

Explanation: For the purposes of this clause,
  1. the expression "commercial purpose" does not include use by a person of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self-employment;
     
  2. the expressions "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;
     
As compared to the Consumer Protection Act, 1986 The New Act has included within the definition of the term Consumer, any person who buys goods or avails any services online or through the internet using electronic mode of purchase. This provides protection to the consumers against the grievances that happen during online purchase transactions.

The New Act of 2019 has also widened the scope of the term 'UNFAIR TRADE PRACTICES The new definition of Unfair Trade Practices has included within its ambit the unfair practices caused by the Online Service Providers.

The term includes unfair practices such as online misleading advertisements; the practice of not issuing invoices for the good and services availed by the consumers; failing to take back defective goods or deactivate defective services and to give a refund for such defective good/services as mentioned on the invoice or warranty cards or within 30 days time period in the absence of any such stipulation; and disclosing personal information of a consumer unless such disclosure is in accordance with law.

All or any of the activities as mentioned above, if conducted by the service provider or seller, will be considered as Unfair Trade Practice conducted by the service provider or seller, as under the Consumer Protection Act 2019.


Another difference between the Old Act and the New Act is that of the inclusion of the term - Unfair Contracts.

Unfair Contracts as the name suggests is a contract -the terms of which are unfair toward the consumer. The Section 2 (46) defines an Unfair Contract as : 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, namely:
  1. requiring manifestly excessive security deposits to be given by a consumer for the performance of contractual obligations; or
  2. 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; or
  3. refusing to accept early repayment of debts on payment of applicable penalty; or
  4. entitling a party to the contract to terminate such contract unilaterally, without reasonable cause; or
  5. 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; or
  6. imposing on the consumer any unreasonable charge, obligation or condition which puts such consumer to disadvantage;

As we all know, many a times, the consumers have to accept the terms and conditions as set by the service provider before buying the goods or services. Some of the terms of the contract might be very unfair but still the consumer accepts it due to the necessity of the service or product. For Eg., when a consumer borrows loan from a bank, the bank is a service provider who provides the loan at X rate of interest, to be repaid in Y number of years. Now, if the borrower is capable of repaying off the debt before the tenure of Y years, the Bank does not allow him to do so. In certain cases, the bank may even impose heavy penalty for making early repayment and will accept the repayment only along with the penalty sum.

In another instance, if a consumer has entered into a contract of availing services from a service provider, the consumer may not have the right to terminate the services from that provider. However, the provider has full liberty to terminate the services provided to the consumer, at any given point of time, leaving the consumer at loss. Also, the service provider may transfer the contract to any other provider, without obtaining any prior consent from the consumer. It should be the decision of the consumer whether they want to transfer their service provider or choose another provider.

Another major malpractice followed by the Service provider is of levying hidden charges on consumers. AT the time of selling the product or services, the consumers are not made fully aware of the charges that shall be levied upon them but later on they are forced to pay those charges.

Such malpractices are now covered under the Consumer Protection Act, 2019 and the consumer can file a complaint against any such act done by the provider.

The Old Act did not have any provision for "Product Liability" which is now included in the New Act of 2019. Section 2(34) of the Consumer Protection Act, 2019 states that:
"product liability" means 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;

The term Product Liability protect the consumers from the fraudulent practices that are conducted by the providers. If any such defective product or services is provided by the provider, the consumer can claim compensation for the loss occurred to him because of the defective product or services. The provider is liable to pay such compensation.

Another major inclusion made in the New Act is that of the Central Consumer Protection Authority (CCPA). Section 10 to 27 are laid down to explain the provisions of the CCPA.
  • The CCPA is established protect, promote and enforce the rights of the consumers as a Class. The Act has levied onto the CCPA a wide range of powers to conduct inquiry, investigation and to take action against the providers who violate the rights of the Consumers. The CCPA can take action against misleading advertisements and false claims made for the promotion of the product, to attract buyers.

    For example:
    A particular seller may promote its food product by saying that it is 100% pure and healthy but it may not be so. The CCPA has the right to take action against such seller and the endorser of the advertisement for the cause of misleading the consumers. The CCPA has the right to impose penalty upto Rs. 10 Lakhs for a first time violator and upto Rs. 50 Lakhs for a repeating violator. Also, the CCPA has the authority to recall the defective products from the markets, to conduct Suo-Moto proceedings against the violators and also to direct the violators to give refund to the consumers.

A few more changes regarding the Consumer Redressal Commissions have also been made.Let us observe all of those as well.

Composition of the Commissions: As per the New Act:

  • The Distrct Commission will be headed by a president and at least 2 members.
  • The State Commission will be headed by a President and at least 4 members
  • The National Commission will be headed by a President and at least 4 members.
As compared to the Old Act, there shall be no provision for the selection Committee. The Central Government shall appoint the members through an official notification.

Territorial Jurisdiction:

The Old Act allowed the consumer to file a complaint only in the jurisdiction of the Service provider or seller. In the New Act of 2019, the Consumer can now file a complaint even in the area where the consumer resides or works. This makes it easier for the consumer to file a complaint, thereby encouraging consumers to raise their voice against any violation of their rights.

Pecuniary Jurisdiction:

There has been a significant change in the pecuniary jurisdiction of the Commissions.
  • As compared to 20 Lakhs in the Old Act, the Pecuniary Jurisdiction of the District Commission has been increased to amount upto 1 Crore.
  • The Jurisdiction of the State Commission is now increased from Rs 1 Crore to upto Rs. 10 Crore.
  • That of National Commission has increased to an amount more than Rs. 10 Crores.

Alternate Dispute Resolution:

There was no provision for an Alternate Dispute Resolution in the Old Act. The New Act of 2019 provides for Alternate Dispute Resolution by the mode of Mediation cells. Multiple Mediation cells shall be established and attached to the District, State and National Commissions. The respective State Governments shall establish these cells in their respective Districts and States and the Central Government shall establish the mediation cell attached to the National Commission.

E-Filing:

A facility that was not provided in the Old Act, the consumer can now file his complaint by the Electronic Modes i.e. Online mode; thus making it easier for the consumer to file their complaints without much hassle.

By all the comparisons and observations, we can say that the Consumer Protection Act, 2019 has been brought into force for enhanced protection of the rights of the consumers. It has covered within its ambit, the many possibilities of the violations that can happen along with the digitization of most services. Therefore, along with the growth of the society and the nation at large, care has been taken to make reformation in the Laws to keep up with the fast paced and advanced mannerism of the people at large.

Written By: Adv.Miss Payal Mehta

Awarded certificate of Excellence
Authentication No: AG30828785316-18-820

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