Consumer Protection Act 2019 Summary | Download PDF

Consumer Protection Act 2019 Summary | Download PDF

On 20th July 2020, the Consumer Protection Act 2019 came into force. The Consumer Protection Bill, 2019 was introduced in Lok Sabha by the Minister of Consumer Affairs, Food and Public Distribution, Mr. Ram Vilas Paswan on July 8, 2019. The Bill replaces the Consumer Protection Act, 1986.  

The new Consumer Protection Act 2019 seeks to revamp the process of administration and settlement of consumer disputes, with strict penalties, including jail term for adulteration and misleading ads by firms.

Salient Features of the Consumer Protection Act 2019

Definition of consumer:

A consumer is defined as a person who buys any good or avails a service for a consideration.  It does not include a person who obtains a good for resale or a good or service for commercial purpose.  It covers transactions through all modes including offline, and online through electronic means, teleshopping, multi-level marketing or direct selling. 

Rights of consumers:

Six consumer rights have been defined in the Bill, including the right to:

  1. The right to be protected against the marketing of goods, products or services which are hazardous to life and property
  2. The right to be assured, wherever possible, access to a variety of goods, products or services at competitive prices;
  3. The right to be informed about the quality, quantity, potency, purity, standard and price of goods, products or services, as the case may be, so as to protect the consumer against unfair trade practices;
  4. The right to be heard and to be assured that consumer’s interests will receive due consideration at appropriate fora
  5. The right to seek redressal against unfair trade practice or restrictive trade practices or unscrupulous exploitation of consumers;
  6. The right to consumer awareness;

Central Consumer Protection Authority:

The central government will set up a Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of consumers.  It will regulate matters related to violation of consumer rights, unfair trade practices, and misleading advertisements.  The CCPA will have an investigation wing, headed by a Director-General, which may conduct inquiry or investigation into such violations. The headquarters of the Central Authority shall be at such place in the National Capital Region of Delhi.

CCPA will carry out the following functions, including:

  • (i) inquiring into violations of consumer rights, investigating and launching prosecution at the appropriate forum;
  • (ii) passing orders to recall goods or withdraw services that are hazardous, reimbursement of the price paid, and discontinuation of the unfair trade practices, as defined in the Bill;
  • (iii) issuing directions to the concerned trader/ manufacturer/ endorser/ advertiser/ publisher to either discontinue a false or misleading advertisement, or modify it;
  • (iv) imposing penalties, and;
  • (v) issuing safety notices to consumers against unsafe goods and services.

Penalties for misleading advertisement: The CCPA may impose a penalty on a manufacturer or an endorser of up to Rs 10 lakh and imprisonment for up to two years for a false or misleading advertisement.  In case of a subsequent offence, the fine may extend to Rs 50 lakh and imprisonment of up to five years.

CCPA can also prohibit the endorser of a misleading advertisement from endorsing that particular product or service for a period of up to one year. For every subsequent offence, the period of prohibition may extend to three years.  However, there are certain exceptions when an endorser will not be held liable for such a penalty.

Consumer Disputes Redressal Commission:

Consumer Disputes Redressal Commissions (CDRCs) will be set up at the district, state, and national levels.  A consumer can file a complaint with CDRCs in relation to: 

  • (i) unfair or restrictive trade practices;
  • (ii) defective goods or services;
  • (iii) overcharging or deceptive charging; and
  • (iv) the offering of goods or services for sale which may be hazardous to life and safety. 

Complaints against an unfair contract can be filed with only the State and National   Appeals from a District CDRC will be heard by the State CDRC.  Appeals from the State CDRC will be heard by the National CDRC.  Final appeal will lie before the Supreme Court.

Jurisdiction of CDRCs: The District CDRC will entertain complaints where value of goods and services does not exceed Rs one crore.  The State CDRC will entertain complaints when the value is more than Rs one crore but does not exceed Rs 10 crore.  Complaints with value of goods and services over Rs 10 crore will be entertained by the National CDRC.

Product liability:

Product liability means the liability of a product manufacturer, service provider or seller to compensate a consumer for any harm or injury caused by a defective good or deficient service.  To claim compensation, a consumer has to prove any one of the conditions for defect or deficiency, as given in the Bill.

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