In a welcome change, India is migrating to a new Consumer Protection Act from Monday. The Consumer Protection Bill, 2019 was introduced in the Rajya Sabha on July 8, 2019, by Union Minister Ram Vilas Paswan. Despite being passed soon and getting the President's nod in August 2019, it has taken almost a year for the new act to be notified. Until now, the Consumer Protection Act (1986) has been in force.
The act aims to protect and strengthen the rights of the consumers by establishing authorities, imposing strict liabilities and penalties on product manufacturers, electronic service providers, misleading advertisers, and by providing additional settlement of consumer disputes through mediation. In addition, the act has also brought in structural changes in the consumer courts in number of members, honorarium, and staff cadre.
The new Consumer Protection Act guarantees six consumer rights:
1. Right to Safety, which involves the right to be protected from the marketing of goods and services that can pose a threat to one's life and property.
2. Right to be Informed: In order to save the consumer from unfair trade practices, he has all the right to be informed about the quality, quantity, potency, purity, standard and price of goods or services.
3. Right to Choose, which ensures he has the right to access varieties of goods as well as services.
4. Right to be heard, where the consumer has all the right to be heard and all his interests will receive due consideration at appropriate forums.
5. Right to seek Redressal against any unfair trade practices or anything which may lead to customers exploitation.
6. Right to Consumer Education, which helps one to be an informed consumer throughout their life and which may also prevent them from exploitation.
Increased compensation
The new act allows consumers to get an increased amount as compensation from errant sellers, while the punishment for the latter instances has also been made more stringent. The compensation amount is higher to the point that the consumer even can receive up to Rs 1 lakh, in case they are sold an adulterated or spurious product. The seller may also be sentenced to up to six months of jail. However, this compensation is only in the case where the consumer has not been damaged by the product.
In case they are directly or indirectly harmed by the product sold, the consumer can even receive up to Rs 5 lakh as compensation, and the jail term for the seller could extend up to seven years. If the consumer dies, the compensation could range up to Rs 10 lakh and the seller could be sentenced to a life imprisonment term.
In case of a subsequent offense, the fine may extend to Rs 50 lakh and imprisonment of up to five years.
Structural changes
The district forum has been renamed to district commission. 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 District CDRC will entertain complaints where the 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 the value of goods and services over Rs 10 crore will be entertained by the National CDRC.
Other changes
The opposite party needs to deposit 50 per cent of the amount ordered by the district commission before filing an appeal before the state commission. Earlier, the ceiling was of maximum of Rs 25,000 which has been removed. The limitation period for filing of appeal to state commission has been increased to 45 days from 30 days, while retaining power to condone the delay.