Changes to the Consumer Protection Act- An Overview of the 2019 Act to understand the recent amendments to COPRA
This article provides details about the changes in the Consumer protection Act that seeks to evolve consumer complaint mechanism with the evolving e-commerce and d-commerce markets. It is important to ensure that consumer complaints are heard to ensure smooth operation of business and commerce, while businesses maintain goodwill for their products.
The Consumer Protection Act, 1986 (old Act) came into force in 1986 to protect the interests of consumers in India for the first time. This Act gave tranquil and quick advantages to consumer complaints and helped safeguard their rights. Consumers could address insufficiency and imperfections in various goods and services and gain compensation for the same. It covered goods and services in public, private, or cooperative sectors and provided a platform for any consumer to file a complaint, which would be redressed by the Consumer Forums. The aim of the Act was to protect the interest of the consumers.
Disadvantages of the 1986 Act:
Under the old Act, there were certain disadvantages encountered and the same are enumerated below because of which the said Act had to be amended to give certain advantages to the Consumer :-
- The 1986 Act never allowed a consumer to approach the Consumer Forum, if they had another solution or remedy to the problem/deficiency under law.
- It was forlorn that a consumer could only approach the Forum, if he suffered a loss or damage due to any unfair trade practice or a deficiency in service.
- The Act dealt with dangerous or hazardous goods but failed to place any liability on the supplier of such goods. It also never elaborated on safety requirements and permitted levels of hazardous substances in goods.
- Over a period of time, there has been advancement in technology and with the introduction of e-commerce and d-commerce, as an additional manner of conducting business, the changes to the existing legislation became crucial to protect consumer interests under these new modes of business. The old Act never had the provisions to deal with electronic goods or technological goods and these modern forms of doing business. Hence, a change was needed to catch up with this growing trend of technology and technology driven services.
- The average consumer spending power has increased and hence it was important that the Forums be given higher pecuniary jurisdiction to avoid crowding and pendency in other courts.
- The 1986 Act never permitted the Forums to grant interim injunctions, which meant that there was no restraint from doing anything detrimental to the interest of the consumer The Forums also lacked power to take up cases suo-moto.
The Act was good to address consumer grievances but had the above disadvantages and hence, needed amendments to suit the existing changes in business models.
The Consumer Protection Act 2019:
The 2019 Act was notified on 15th July 2020 and was brought into effect on 20th July 2020 and has established consumer councils, amongst other such mechanisms, to settle consumer's grievances and matters connected therewith. This Act was enacted to resolve a large pendency of consumer complaints in Consumer Forums and Courts across the country. The Act defined the jurisdiction of the Consumer Disputes Redressal Commission (CDRCs). Under the new Act, the National CDRC is empowered to hear complaints worth more than Rs. 10 crores and the State CDRC was given jurisdiction for the value of more than Rs 1 crore but less than Rs 10 crore. This empowered the District CDRC to entertain complaints where the value of goods or service is up to Rs 1 crore.
The features of the new Act were as under:-
- Commencement of E-filing:- The New Act lays down provisions permitting consumers to file complaints electronically or through the process of E-filing. The proceedings and evidence can be done through video-conferencing, thereby giving procedural leverage and reducing hassle for the consumers. Further, a consumer can also file the complaint from wherever he resides rather than relying on territorial jurisdiction.
- Inclusion of Unfair Trade practices: The 2019 Act introduces Unfair Trade Practices definition, and gives privacy to Consumers for information they share in confidence. Any disclosure has to be made in accordance with the provisions of any other law.
- Procedure for Appeal altered: The Opposing Party has to deposit 50% of the amount ordered by the District Commission before filing an appeal to the State Consumer Disputes Redressal Commission, as opposed to the earlier maximum amount of Rs. 25,000/-, as the old ceiling has been made redundant.
- Inclusion of E-commerce transactions: Under the 2019 Act, E-commerce transactions are included for adjudication under direct sales.
- Mediation as an ADR: Under the 2019 Act, Mediation has been introduced as an alternate mode of dispute resolution.
- Augmented Penalties: In the New Act, the CCPA imposes a penalty of up to Rs. 1,000,000 on a producer or an endorser, for a false or deceiving advertisement, as also a sentence for imprisonment for up to two years is provided for. A repeat offender may get penalised Rs. 5,000,000 and face imprisonment of up to 5 (five) years.
Way ahead with the 2019 Act
As consumers cannot examine the goods in move-away selling, the vendor has an all-encompassing obligation to disclose information about his products and the consumer has the right of withdrawal in many cases, which is a good protection for the consumer. The 2019 Act establishes central regulator viz. the Central Consumer Protection Authority (CCPA), to tackle issues related to consumer rights, unfair trade practices, misleading advertisements and imposes penalties for selling damaged or simulated products. Therefore, it is believed that the new Act gives stringent measures and stiffens existing rules to safeguard the consumer.
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