This Article is written by Shambhavi Singh (a student of Symbiosis Law School, Hyderabad doing a BA.LLB.)
Table of Contents
Consumer Protection Act, 1986
The Consumer Protection Act of 1986 is a law that protects buyers’ interests by allowing for the establishment of buyer commissions and other experts who assist in the resolution of buyer questions and matters. This act aims to protect the interests of individual consumers by recommending specific solutions to mitigate the loss or damage caused to customers as a result of out-of-line exchange practices. For the assurance of consumer engrossment, numerous legislations in countries have been designed with the aim of making regulatory facilities infringe. The public’s attention to be on the lookout for being covered and assisted, as well as a three-tier quasi-judicial redressal system for customer disputes and complaints at the District, State, and National levels. Things were smooth with this 1986 act but consequently, when things became online and there was more prevalence of e-commerce in the picture, the government decided to make changes and replace it with a new one.
Consumer Protection Act, 2019
The government as opposed to acquiring change in the 1986 demonstration, sanctioned another demonstration by and large to give improved insurance to the buyers taking into thought the thriving web-based business industry and the advanced techniques for giving labour and products. Through its various educated guidelines and arrangements, such as Consumer Protection Councils, Consumer Disputes Redress Commissions, Mediation, Product Liability, and discipline for assembling or offering products containing defilement/false goods, this new Act will involve consumers and assist them in ensuring their rights. This new act will authorize inspections to be held to keep a check on whether any violations of rights of the consumers are there in the society or work towards any complaints. It was also mentioned that this Act would cover the criteria for anticipating ludicrous exchange practices by online business platforms. The warning paper for the establishment of the Central Consumer Protection Authority, as well as rules for avoiding uncalled for exchange, practices in the internet industry, is currently being distributed. For any case for pay, the new act introduces the concept of item danger and brings the item manufacturer, item specialist company, and item merchant within its scope.
Why was there a need for replacement?
Finally, the Consumer Protection Act of 1986, which had been in place for decades, has now been amended with the Consumer Protection Act of 2019. The contemporary Indian customer has to have this alternative. According to estimates, almost 329 million Indian individuals will purchase things on the internet, implying that 70 per cent of mobile netizens will shop online. Based on this data, we can conclude that the revised Consumer Protection Act of 2019 will be extremely beneficial to the Indian market. Buyers will benefit from various new measures in the forthcoming consumer rights statute. It is intended to assist customers and to address issues with giving fundamental rights to clients in a major area known as e-commerce. Earlier, The Consumer Protection Act of 1986 was enacted with the primary goal of safeguarding consumer rights. However, with the advancement of technology and the proliferation of e-commerce and other business processes, an overhaul of current laws appeared inevitable and prudent to better protect modern-day customers. The business environment in India has changed dramatically over the last 20 years, with the economy opening up in the early 1990s and the introduction of online marketplaces and e-commerce. The average Indian consumer’s affordability and willingness to spend have also increased. As a result, the Consumer Protection Act of 2019 was passed, which attempts to modernize the old act by rewriting it. The Act is a welcome step because it appears to fill in the gaps left by the previous Act, and it comes at a critical time when consumers and their rights must be secured as global markets become more consumer-centric.
There are many things that have been improved in the Consumer Protection Act 2019 from 1986, and the main prospects will be discussed here in detail.
The consumer is defined as:
The notion of the customer in the old Consumer Protection Act was confined to purchasing goods or services; it did not include internet, local, or television advertising purchases. The term of the client has been broadened by the amended law, which now includes descriptions of real and virtual commerce, sponsored content, cross-business, and personal marketing. The legislation now includes electronic banking as well. The former law embraced internet purchases as well, and there was no classification of digital and physical sales in the prior consumer protection act.
There has been no specific regulatory institution for the prevention of any infringement of the rights of the consumers under the Consumer Protection Act of 1986, but the Indian government plans to set up a new supervising organization called the Central Consumer Protection Authority under the Consumer Protection Act of 2019. (CCPA). The CCPA will create simple procedures or programs to protect users from damage caused by defective products or ministrations, as well as procedures to safeguard unfair trade practices and commercial practices. The immediate aim of the Central Consumer Protection Authority will be to provide guidance on the prevention and control of consumers’ entitlements within this Act. Every region will now have a State Consumer Protection Council, often referred to as State Council, under the new Consumer Protection Act of 2019. Additionally, the territories will have their own district council, which can be led by the District Collector.
Monetary Realm Improvements:
In the updated consumer protection act, the previous economic limits have been tightened. The prior act permitted district consumer tribunals to hear complaints involving items and/or services up to 20 lacs, but this ceiling has now been raised to one crore. State consumer tribunals were previously trained to access legal cases, goods or services valued between 20 lacs and 1 crore; however, under the amended law, this constraint has indeed been raised, and state consumer courts too can actually control cases involving commodities valued between Rs1 crore and 10 crores, while domestic courts would then manage cases involving products or services valued at much more than Rs10 crore. When we examine the new constitutional amendment, we will see that it has granted district and local justices more authority. Clients will no longer be required to seek assistance from a national court, which seems to be a great increase.
Accountability for Products:
In the proposed Consumer Protection Act of 2019, the prototype design accountability was added. The older statute solely addressed bodily damage, whereas the new law also addresses mental anguish or intellectual damage wrought via an item. Even though the producer was not involved in the sale of products, the producer will be held accountable. As a result, firms may only be able to produce high-quality goods. Looking at this expanded notion of product responsibility, we can see that the current regime is already pressuring manufacturers to develop quality stuff so that buyers are secured, which is a remarkable effort in the amended law.
Unfair Deal Transactions:
The updated statute has broadened the explanation of illegal searches and seizures, which are among the most significant improvements. Individuals’ confidential data shall not be released to every other person or entity without their consent, according to the legislation.
I think this is great progress even though when you’re at a car dealership or a financial institution, they gather your confidential info including your contact number, email address, as well as how much tax you pay, and those who sell that information to other interested parties for funds, and that’s a really bad and unjust business practice because they advertise your personally identifiable information to other people or organizations for financial resources.
Commercials that are deceptive:
The amendment law goes into great detail addressing deceptive promotional misrepresentation. For deceiving or fraudulent commercials, not only all the makers but also the sponsor will indeed be held accountable. This is a significant advancement. The old act didn’t go into great depth regarding it. As per the proposed statute, the penalties for misrepresenting or fraudulent advertising for endorsers is 10 lac rupees, with a hefty punishment of 50 lac rupees, as well as a suspension on endorsers and supporter manufacturers. In addition, prior to actually recommending a brand, the publicist must validate the allegations by the commodity. If an influencer is convicted accused of committing the CCPA, he or she shall be fined a minimum of ten lakh rupees and a maximum of fifty lakh rupees. The proclamation also stipulates that just because a maker or promoter is proven guilty, they would be sentenced to two years in prison.
The revamped consumer protection act includes mediation as a means of promptly settling issues, making it easier to resolve them than it used to be. Every other jurisdiction will then have a conciliation cell, which could aid public courts in reducing their workload, as they currently have a large number of cases filed.
Platforms for e- procurements:
According to the new Consumer Protection Act, cyberspace will be covered by all regulations that apply to straight goods or service sales. Ecommerce websites would now be required to provide buyers with information on their sellers, including the merchant’s phone number, email, homepage, and mailing address. There are also stiff consequences for supplying pirated products on these eCommerce platforms.
Illegalized Misdeeds Underneath Consumer Protection Act
- Violation of rights of the consumers- The act’s section 2(9) transfers knowledge of a wide range of consumer rights, including the following:
- right to be shielded from the promotion of items, commodities, or operations that endanger personal safety.
- The right to be safeguarded from unjust business practices.
- right to merchandise characteristics, comprising brand, availability, efficacy, integrity, grade, and value
- Right to be ensured of availability of a wide range of commodities, items, or facilities at reasonable rates, among other things.
- Deceptive trade practices- Unethical business practice is defined in Section 2(47) of the Act; as the employment of every other unjust means or false and misleading practice for the development of the acquisition, usage, or distribution of any items and/or services.
- The commercial that is inaccurate or fraudulent- The term “misrepresentative advert” is defined broadly under Section 2(28). It encompasses every representation for an item or brand that fraudulently characterizes or guarantees the product, so deceiving users well about the character, content, size, or performance of the goods or service. Ad campaigns that transmit an illustrative example are also included.
In addition, certain industries in India willingly conducted refunds. Indeed the Food Safety and Standards Authority of India established recommendations in 2019 that made it mandatory for food makers to refund dangerous items. ‘Food Business Operators bear primary authority to implement the alert and maintain compliance,’. In the time period between 2010 and 2017, there were roughly 29 recollect instances in India in the vehicle, drug, and food industries, although the figures suggest that this is a small amount when compared to the number of harmful and defective items on the market. As a result, a better criminal justice procedure for “recall” instructions was necessary.
The monitoring of the Indian Penal Code can be used to prosecute food and drug malpractices:
- Section 272 – improper handling of any meal or liquid product that makes it toxic with the knowledge that it will be offered as foods and beverages;
- Section 273 – selling or offering for sale any hazardous object that really is unsuited for use as foods and beverages and is in a manner that renders it improper for use as foodstuff despite knowing or possessing evidence to suggest it is;
- Contamination of whatever drug or pharmaceutical mixture is prohibited under Section 274 of the Criminal Code.
- Section 275 – auction of medication or therapeutic treatment that has been tampered with.
Under the IPC, most of the above violations are criminal by up to 6 months in detention, a sentence of up to Rs. 1000/-, or sometimes both. They’ve been made non-cognizable and buggery, so they’re no longer an impediment.
Acts’ Monopolisation Program
The amendment law is primarily concerned with criminalizing different types of wrongdoings. The majority of these wrongdoings have been addressed together under the old law but through legal action. The decision to criminalize or not criminalize conduct must all be made based on specific sentencing grounds. Criminalization should be the final choice, which indicates then there will be no sensible options for prosecution. These constraints on criminality are indeed due to the fact that it entails harsh penalties such as criminal culpability in the guise of incarceration. The criminalization consequence can be seen from the newly modified marketing codification of penalties and regulations governing. While Consumer Commissions have the same authority as a criminal trial, punishments like jail and fines make the wrongdoings “felon.”Criminalization is often limited in scope because it entails the use of State machinery and apparatus in the conduct of the survey and interrogation, putting additional strain on the institution. As a result, the use of prosecutions must be limited. Nonetheless, the notion that consumers today are bearing the brunt of numerous sorts of deception and unethical marketing practices both at people and devices can indeed be discounted. Despite the fact that the new legislation gives the government more authority to pursue the above-mentioned goals, the prosecution issue happens to be defensible for a variety of reasons, as addressed in this paper. Furthermore, the relevant provisions are complex, which may add to the new requirements. In relation to current branches, new ones are being built.
The Consumer Protection Act of 1986 has had a limited influence and is ineffectual to a large degree because of bad planning and complacency among national and local authorities, even users. The necessity of the day was for greater law enforcement and law updates only to the extent necessary. Though some particular rules were expected to protect individual rights in their true sense, this necessitated some adjustment. Thus, despite earlier legislation, the Act not only establishes consumer protection but also includes legal requirements necessary to preserve those rights, such as designating violations of some of those rights to be offences. It was also necessary to restrict advertising endorsements that were deceptive, as well as to enforce liability coverage for goods that caused injury to customers.
In the case Jyoti Mishra vs Indian Railwaysthe Supreme Court cites the Consumer Protection Act as the only law that allows consumers to be compensated for mental anguish, bullying, mental distress, physical pain, and other forms of harm. While widening the term reimbursement, the Supreme Court has conclusively retained in countless cases, most recent times in Ghaziabad Development Authority v. Balbir Singh, that every component of significant risk while using a facility as a purchaser must be taken into account when reimbursing him for the damage, damage, or other harm suffered immensely of malpractice or deficit in service.
Suggestions and Recommendations
The Government of India has taken a significant step forward by revising a 30-year-old customer protection statute. This is a significant step Government has taken. However, there are some other flaws, such as the new regulation stating that internet marketing venues will indeed be held to account for the sale of defective services and products. If we examine this, all digital retail companies would have to build up mechanisms to help decrease the sale of imitation or malfunctioning merchandise on their sites. That is really dangerous to our commerce because if any of those do not easily be able, they may cease doing deals in our nation. My recommendation is that the Indian government assist them in establishing a standardized procedure that would produce a fly zone for both stakeholders.
As this is a new law. I questioned a few folks about that, and they had no idea what this policy was about. I also queried them asking about their fundamental human rights, and they had no idea. So the Indian government has adopted this legislation, but they are still weak in disseminating information among its inhabitants. So my proposal is to raise knowledge about it, rather than just doing so solely through television, the internet, and publications, they must have key info about the law in school curricula, which will assist to educate people about it. Additionally, there seems to be no timeline for such foundation of the Central Consumer Protection Authority, which leads me to wonder how they have identified its necessity and not a timeline for its inception. The Government of India must educate its inhabitants about this new agency; else, residents would not be able to receive assistance from it.
Eventually, the authority recognized the importance of customers. When we examine the current Consumer Protection Act, we can observe that several terms and conditions have been introduced to the statute. Digital piracy is being taken very seriously by the government. However, there is no reference to financial fraud because many lenders advertise that you may open a bank account with zero rupees. You won’t have to worry about any fees, but if you don’t keep a fixed sum in your financial institution after starting one, they will cost you a penalty. The fine is usually approximately 50Rs in most circumstances. However, if we estimate the fee for a large number of citizens, the total cost turns enormous. For such deceptive ads, the government should establish particular requirements for banks.
Jyoti Mishra vs Indian Railways, 1986 2(1)
Ghaziabad Development Authority v. Balbir Singh, No. 7790/2002, C.A. No. 7672/2002, C.A.