New Consumer Protection Act

1. Consumer Protection Bill, 2019
By
Dr.Prasanna Kumar T M
Professor & HOD, MBA | PESITM, Shivamogga
National Level Round Table Discussion on the
Consumer Protection Bill, 2019
&
Silver Jubilee Celebrations of CREAT
B M S College of Law , Bengaluru

2. Key Highlights
Mid-August, the Consumer Protection Act, 2019 (2019 Act) received Presidential assent
and came into effect
2019 Act, has substantially enhanced the scope of protection afforded to consumers, by
bringing within its purview advertising claims, endorsements and product liability, all of
which play a fundamental role in altering consumer behavior and retail trends in the
21st century.
The definition of “consumer” under the 2019 Act includes those who make purchases
online.
Endorsement of goods and services, normally done by celebrities, are also covered
within the ambit of the 2019 Act. In fact, an additional onus has been placed on
endorsers, apart from manufacturers and service providers, to prevent false or
misleading advertisements.

3. Key Highlights
In contrast to the 1986 Act, the definition of “goods” has been amended to include
“food” as defined in the Food Safety and Standards Act, 2006. This would also bring the
meteorically rising number of food delivery platforms within the fold of the 2019 Act.
Interestingly, “telecom” has been added to the definition of “services” to bring telecom
service providers within the purview of the 2019 Act. (not clear about inclusion of
internet, cellular and data services)
A significant addition to the 2019 Act is the introduction of “product liability” whereby
manufacturers and sellers of products or services have been made responsible to
compensate for any harm caused to a consumer by defective products, manufactured or
sold, or for deficiency in services

4. Key Highlights
Another newly introduced concept is that of “unfair contracts” aimed to protect
consumers from unilaterally skewed and unreasonable contracts which lean in favour of
manufacturers or service providers.
The definition of “unfair trade practices” has been enlarged to include electronic
advertising which is misleading, as well as refusing to take back or withdraw defective
goods, or to withdraw or discontinue deficient services, and to refund the consideration
within the period stipulated or in the absence of such stipulation, within a period of
thirty days.
It is now also an offence if any personal information, given in confidence and gathered
in the course of a transaction, gets disclosed.

5. Key Highlights
The 2019 Act continues to have Consumer Dispute Redressal Commissions at the
District, State and National levels (Consumer Commissions), however the pecuniary
jurisdiction, i.e. the monetary value of complaints that can be entertained, of each of
these commissions have been substantially increased to reduce the burden on the State
and National Commissions by encouraging consumers to approach the District
Commission for complaints valued up to Rupees 1 Crore.
Furthermore, the jurisdiction of the Consumer Commissions has also been expanded to
allow complaints to be made where the complainant resides or personally works for
gain, as opposed to the 1986 Act where complaints had to be instituted where the
opposite party resides or conducted business, or where the cause of action arose.

6. Key Highlights
The new legislation has created a Central Consumer Protection Authority (Authority) to
inter alia “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.” To enforce this provision, the Authority is empowered to inquire and investigate,
which it does through a dedicated investigative wing set-up headed by a Director-
General, analogous to the Competition Commission. Additionally, the Authority can also
file complaints and intervene in matters before the Consumer Commissions.

7. Comparison
1986 Act and 2019 Bill

8. Provision : Ambit of law
1986 Act
All goods and services for
consideration
Free and personal services are
excluded
2019 Bill
All goods and services, including
telecom and housing construction,
and all modes of transactions
(online, teleshopping, etc.) for
consideration.
Free and personal services are
excluded

9. Provision : Unfair trade practices
1986 Act
Includes six types of such practices,
like false representation, misleading
advertisements.
2019 Bill
Adds three types of practices to the
list, namely: (i) failure to issue a bill
or receipt; (ii) refusal to accept a
good returned within 30 days; and
(iii) disclosure of personal
information given in confidence,
unless required by law or in public
interest.
Contests/ lotteries may be notified
as not falling under the ambit of
unfair trade practices

10. Provision : Product liability
1986 Act
No provision.
2019 Bill
Claim for product liability can be
made against manufacturer, service
provider, and seller.
Compensation can be obtained by
proving one of the several specified
conditions in the Bill.

11. Provision : Unfair contracts
1986 Act
No provision.
2019 Bill
Defined as contracts that cause
significant change in consumer
rights.
Lists six contract terms which may be
held as unfair.

12. Provision : Central Protection Councils (CPCs)
1986 Act
CPCs promote and protect the rights
of consumers.
CPCs established at the district,
state, and national level.
2019 Bill
Makes CPCs advisory bodies for
promotion and protection of
consumer rights.
Establishes CPCs at the district, state
and national level

13. Provision : Regulator
1986 Act
No provision.
2019 Bill
Establishes the Central Consumer
Protection Authority (CCPA) to
promote, protect, and enforce the
rights of consumers as a class.
CCPA may: (i) issue safety notices; (ii)
pass orders to recall goods, prevent
unfair practices, and reimburse
purchase price paid; and (iii) impose
penalties for false and misleading
advertisements.

14. Provision : Pecuniary Jurisdiction of Commissions
1986 Act
District: Up to Rs 20 lakh.
State: Between Rs 20 lakh and up to
Rs one crore.
National: Above Rs one crore.
2019 Bill
District: Up to Rs one crore
State: Between Rs one crore and up
to Rs 10 crore.
National: Above Rs 10 crore.

15. Provision : Composition of Commissions
1986 Act
District: Headed by current or
former District Judge and two
members.
State: Headed by a current or
former High Court Judge and at least
two members.
National: Headed by a current or
former Supreme Court Judge and at
least four members.
2019 Bill
District: Headed by a President and
at least two members
State: Headed by a President and at
least four members
National: Headed by a President and
at least four members.

16. Provision : Appointment
1986 Act
Selection Committee (comprising a
judicial member and other officials)
will recommend members on the
Commissions.
2019 Bill
No provision for Selection
Committee. Central government will
appoint through notification.

17. Provision :
Alternate dispute redressal mechanism
1986 Act
No provision.
2019 Bill
Mediation cells will be attached to
the District, State, and National
Commissions.

18. Provision : Penalties
1986 Act
If a person does not comply with
orders of the Commissions, he may
face imprisonment between one
month and three years or fine
between Rs 2,000 to Rs 10,000, or
both..
2019 Bill
If a person does not comply with
orders of the Commissions, he may
face imprisonment up to three years,
or a fine not less than Rs 25,000
extendable to Rs one lakh, or both.

19. Provision : E-commerce
1986 Act
No provision
2019 Bill
Defines direct selling, e-commerce
and electronic service provider.
The central government may
prescribe rules for preventing unfair
trade practices in e-commerce and
direct selling.

20. Issue 1
It is unclear on how the Consumer Protection Authority will practically function,
especially since existing District Collectors have been tasked to undertake certain
functions pertaining to inquiries and investigations. There is also considerable overlap
between the investigative wing and the search and seizure functions of the District
Collector, which are likely to lead to a potential conflict of interest..

21. Few Issues
It is unclear on how the Consumer Protection Authority will practically function,
especially since existing District Collectors have been tasked to undertake certain
functions pertaining to inquiries and investigations. There is also considerable overlap
between the investigative wing and the search and seizure functions of the District
Collector, which are likely to lead to a potential conflict of interest.
At this point, one is also unclear on whether matters currently pending before the
Consumer Commissions will continue or if they are likely to get transferred on account
of the change in pecuniary jurisdiction. This ambiguity will further add to delays.

22. Thank you