Consumer Protection Act: Act includes establishment of the Central Consumer Protection Authority (CCPA) and rules for prevention of unfair trade practice by e-commerce platforms

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By SRELJ Bureau

The Consumer Protection Act,2019 comes in to force from today i.e. 20th July 2020. While briefing the media about the Consumer Protection Act, 2019 through video conference here today, the Union Minister for Consumer Affairs, Food & Public Distribution Shri Ram Vilas Paswan said that this new Act will empower consumers and help them in protecting their rights through its various notified Rules and provisions like Consumer Protection Councils, Consumer Disputes Redressal Commissions, Mediation, Product Liability and punishment for manufacture or sale of products containing adulterant / spurious goods.

He said that the Act includes establishment of the Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of consumers.  The CCPA will be empowered to conduct investigations into violations of consumer rights and institute complaints / prosecution, order recall of unsafe goods and services, order discontinuance of unfair trade practices and misleading advertisements, impose penalties on manufacturers/endorsers/publishers of misleading advertisements. Shri Paswan further said that the rules for prevention of unfair trade practice by e-commerce platforms will also be covered under this Act. The gazette notification for establishment of the Central Consumer Protection Authority and rules for prevention of unfair trade practice in e-commerce are under publication.

Shri Paswan further said under this act every e-commerce entity is required to provide information relating to return, refund, exchange, warranty and guarantee, delivery and shipment, modes of payment, grievance redressal mechanism, payment methods, security of payment methods, charge-back options, etc. including country of origin which are necessary for enabling the consumer to make an informed decision at the pre-purchase stage on its platform.  He said that e-commerce platforms have to acknowledge the receipt of any consumer complaint within forty-eight hours and redress the complaint within one month from the date of receipt under this Act. He further added that the New Act introduces the concept of product liability and brings within its scope, the product manufacturer, product service provider and product seller, for any claim for compensation.

Shri Paswan further informed that the new Act provides for simplifying the consumer dispute adjudication process in the consumer commissions, which include, among others,  empowerment of the State and District Commissions to review their own orders, enabling a consumer to file complaints electronically and file complaints in consumer Commissions that have jurisdiction over the place of his residence, videoconferencing for hearing and deemed admissibility of complaints if the question of admissibility is not decided within the specified period of 21 days.

The Minister said an Alternate Dispute Resolution mechanism of Mediation has been provided in the new Act.  This will simplify the adjudication process.  A complaint will be referred by a Consumer Commission for mediation, wherever scope for early settlement exists and parties agree for it. Mediation will be held in the Mediation Cells to be established under the aegis of the Consumer Commissions.  There will be no appeal against settlement through mediation.

He said, as per the Consumer Disputes Redressal Commission Rules, there will be no fee for filing cases upto Rs. 5 lakh. There are provisions for filing complaints electronically, credit of amount due to unidentifiable consumers to Consumer Welfare Fund (CWF).  The State Commissions will furnish information to Central Government on a quarterly basis on vacancies, disposal, pendency of cases and other matters.

Shri Paswan further informed that the New Act also introduces the concept of product liability and brings within its scope, the product manufacturer, product service provider and product seller, for any claim for compensation. The Act provides for punishment by a competent court for manufacture or sale of adulterant/spurious goods. The court may, in case of first conviction, suspend any licence issued to the person for a period of up to two years, and in case of second or subsequent conviction, cancel the licence.

Under this new Act, besides general rules, there are Central Consumer Protection Council Rules, Consumer Disputes Redressal Commission Rules, Appointment of President & Members in State/District Commission Rules, Mediation Rules, Model Rules and E-Commerce Rules and Consumer Commission Procedure Regulations, Mediation Regulations and Administrative control over State Commission & District Commission Regulations.

Shri Paswan said that the Central Consumer Protection Council Rules are provided for constitution of the Central Consumer Protection Council, an advisory body on consumer issues, headed by the Union Minister of Consumer Affairs, Food and Public Distribution with the Minister of State as Vice Chairperson and 34 other members from different fields. The Council, which has a three-year tenure, will have Minister-in-charge of consumer affairs from two States from each region- North, South, East, West, and NER. There is also provision for having working groups from amongst the members for specific tasks.

In his concluding remarks, Shri Paswan said that in earlier Consumer Protection Act, 1986a single point access to justice was given, which is also time consuming. The new act has been introduced after many amendments to provide protection to buyers not only from traditional sellers but also from the new e-commerce retailers/platforms. He said that this Act will prove a significant tool in protecting consumer rights in the country.

Click here for presentation on salient features of CPA 2019

New Consumer Protection Act to come into force from 20th July 2020: State Commission to have limit upto 10cr

By SRELJ Bureau

The salient features of The Consumer Protection Act, 2019 :

1. All the District forums are renamed as District Commissions. Hence forth all the District Forum now be called as Commissions.

2. To file an appeal, Opposite Party needs to deposit upto 50% of the amount ordered by District Commission.

3. An appeal can be now filed within 45 days of Order.

4. The original pecuniary jurisdiction of District Commission shall be uptil Rs. 1 Crore, State Commission from 1 Cr – 10 Cr. and NCDRC to be more than Rs. 10 crore. All Orders for aggregations of consumer will be applicable.

5. Now complainant can also institute the complaint within the territorial jurisdiction of the Commission where the complainant resides or personally works for gain besides what was provided earlier

6. Very important provisions under Section 49(2) and 59(2) of the new act gives power to the State Commission and NCDRC respectively to declare any terms of contract, which is unfair to any consumer, to be null and void.

7. A second appeal to NCDRC has been provided U/s 51(3) if there is a substantial question of law involved in the matter

8. Power of revision can still be exercised by NCDRC U/s 58(1)(b) and by State commission under 47(1)(b) of the Act.

9. Power of review has been conferred to District Commission, State Commission and NCDRC U/s 40, 50 and 60 of the Act respectively

10. NCDRC can hear appeals against the order of Central Authority by virtue of Section 58 of the Act

11. Period of limitation in filing of complaint remains 2 years with a provision for condonation of delay power U/s 69 of the Act

12. Section 70 provides for administrative control of State Commission over District Commission and that of NCDRC over State Commission. It inter alia provides for investigation into any allegations against the President and members of a State Commission / District Commission and submitting inquiry report to the State Government concerned along with copy endorsed to the Central Government for necessary action

13. Mediation is given statutory status by way of introduction of Section 74 in the new Act. As a new measures to solve problems out of court and through mediation, this new initiative has been provided.

14. A product liability action may be brought by a complainant against a product manufacturer or a product service provider or a product seller, as the case may be, for any harm caused to him on account of a defective product.

15. Chapter III of the Act provides for creation of Central Authority to regulate matters relating to violation of rights of consumers, unfair trade practices and false or misleading advertisements which are prejudicial to the interests of public and consumers and to promote, protect and enforce the rights of consumers as a class

16. The Central Authority shall have an Investigation Wing headed by a Director General for the purpose of conducting inquiry or investigation under this Act as may be directed by the Central Authority.

With new New Consumer Protection Act, which was awaited long back there was huge confusion as to financial jurisdiction. Now after the notifications, State Commission now can deal with transactions up to 10 cr.