Consumer Protection Act, 1986 [As amended in 2019]

Consumer Protection Act, 1986 seeks to protect the rights and interests of consumers. It was first enacted in 1986 and later revised in 2019 to address the changing consumer landscape and to provide a more effective and efficient mechanism for consumer protection and dispute resolution.

Background

The Consumer Protection Act, 1986 was enacted to provide a simpler and quicker remedy to consumers for the redressal of their grievances. The act was based on the principles of the United Nations Guidelines for Consumer Protection and aimed to promote and protect the rights of consumers.

In 2019, the Consumer Protection Act was revised to address the challenges posed by the growing e-commerce industry and to provide a more comprehensive framework for consumer protection. The new act came into force on July 20, 2020.

Key Features

The Consumer Protection Act provides several key features to protect the rights and interests of consumers, including:

1. Six basic consumer rights: The act provides six basic rights to consumers, including the right to safety, the right to be informed, the right to choose, the right to be heard, the right to seek redressal, and the right to consumer education.
2. Consumer Disputes Redressal Commissions: The act establishes Consumer Disputes Redressal Commissions at the district, state, and national levels to adjudicate consumer complaints and disputes.
3. Central Consumer Protection Authority: The act establishes a Central Consumer Protection Authority (CCPA) to regulate matters related to violation of consumer rights, unfair trade practices, and misleading advertisements.
4. Regulation of e-commerce: The act brings e-commerce platforms under its purview and provides for the regulation of their activities to protect the interests of consumers.
5. Penalties: The act provides for stricter penalties for violating consumer rights, including imprisonment and monetary fines.

Central Consumer Protection Authority

The act provides for setting up a Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of consumers.  It regulates matters related to violation of consumer rights, unfair trade practices, and misleading advertisements.  The CCPA has  an investigation wing to conduct inquiry or investigation into violations. The CCPA carries out the functions which include:

• Inquiring into violations of consumer rights, investigating and launching prosecution at the appropriate forum.
• 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.
• Issuing directions to the concerned trader/ manufacturer/ endorser/ advertiser/ publisher to either discontinue a false or misleading advertisement or modify it.
• Imposing penalties, and.
• Issuing safety notices to consumers against unsafe goods and services.

Penalties for Misleading Advertisement

The law provides for CCPA to impose a penalty on a manufacturer or an endorser up to Rs 10 lakh and imprisonment for up to two years for a false or misleading advertisement and the fine may extend to Rs 50 lakh and imprisonment of up to five years in case of a subsequent offence.  It also also empowers CCPA to prohibit the endorser of a misleading advertisement from endorsing that particular product or service for a period of up to one year and the period of prohibition may extend to three years for every subsequent offence.  The act also lists certain exceptions on when an endorser will not be held liable for such a penalty.

Consumer Disputes Redressal Mechanism

The Consumer Protection Act provides for a three-tier consumer disputes redressal mechanism, consisting of:

1. District Consumer Disputes Redressal Commission: Deals with complaints where the value of goods or services does not exceed Rs. 1 crore.
2. State Consumer Disputes Redressal Commission: Deals with complaints where the value of goods or services exceeds Rs. 1 crore but does not exceed Rs. 10 crores.
3. National Consumer Disputes Redressal Commission: Deals with complaints where the value of goods or services exceeds Rs. 10 crores.

Consumers can file complaints with these commissions against manufacturers, sellers, or service providers for any defect in goods or deficiency in services.

Consumer Disputes Redressal Commission

As mentioned above, the law provides for setting up of Consumer Disputes Redressal Commissions (CDRCs) at the district, state, and national levels. A consumer can file a complaint with CDRCs in relation to:

• Unfair or restrictive trade practices.
• Defective goods or services.
• Overcharging or deceptive charging; and
• 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.  The final appeal will lie before the Supreme Court.

Jurisdiction of CDRCs

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

Impact

The Consumer Protection Act has had a significant impact on consumer protection in India. It has empowered consumers by providing them with a mechanism for redressal of their grievances and has helped to promote fair trade practices and consumer awareness.

The act has also helped to regulate the activities of businesses and has encouraged them to be more transparent and accountable to consumers. The establishment of the Central Consumer Protection Authority has further strengthened the regulatory framework for consumer protection in India.