Consumer Protection Act 1986 vs 2019: A Detailed Comparison

Introduction

The dawn of July 20, 2020, marked an important milestone in India’s journey towards consumer-centric Consumer Protection Laws. The Consumer Protection Act, 2019, which the Lok Sabha passed on July 30 2019, and later on by the Rajya Sabha on August 6, 2019, got enforced from this date as notified through the Gazette of India after the President gave his assent on August 9, 2019. Some of the other provisions of this Act came into effect on July 24, 2020. This new Act repeals and replaces the three-decades-old Consumer Protection Act, 1986. This new Act focuses on empowering the customers with complete transparency in its implementation. It also proposed to establish The Central Consumer Protection Authority to protect the customers’ rights against unfair trade practices. Further, this Act has provisions such as the establishment of Consumer Protection Councils, Dispute Redressal Commissions, Mediation panels and punishment for selling degraded or contaminated products. But while reading this article, one must be wondering that-

1. What makes this Act of 2019 different from its predecessor?
2. Was the previous Act missing specific provisions?
3. What was the need to replace and repeal the 1986 Act?
4. What new provisions have been added in the 2019 Act to deal with contemporary Consumer Protection Cases?
5. To answer all these questions, let us look into an analysis of the provisions of the present and previous Act.

What changes have been introduced?

• Online registration of complaints

The Consumer Protection Act, 2019 enables Consumers to file their complaints online, which prevents them from performing lengthy procedures and decreases their inconvenience. It further allows hearing and examination of the parties through video-conferencing. Unlike the 1986 Act, this Act of 2019 does not have any bar to filing the complaint at the place of purchase or the registered office address of the seller. Instead, it permits the consumer to file their complaint at their jurisdictional consumer forum close to their residence or place of work.

• Provisions for inclusion and regulation of Online or E-Commerce transactions

The latest Act of 2019 has provisions for all purchases or transactions done through any mode, either offline or online. The scope of the definition of a “consumer” has been widened in The Consumer Protection Act, 2019 with the addition of Goods or services obtained through online transactions utilising any electronic means, teleshopping, direct selling, and multi-level marketing in the “mediums of purchase”. The CPA, 1986, did not mention anything specifically about online transactions and teleshopping under its definition of a Consumer, which prevented e-commerce from coming under its ambit. Now, it will be mandatory for the e-commerce companies to display the details of the seller supplying the product. They would need to ensure the complete protection of the customer’s information so that it could not influence the rise and fall in the price of a product based on the choices of the customers obtained from their data. These e-commerce companies also now require displaying the ‘country of origin’ for all the available products on their platforms. Further, these firms need to set up a proper grievance redressal mechanism, and the exact needs to be reflected on their websites. The grievance redressal officer appointed by the company needs to solve the customers’ grievances and work upon the complaints within a month of the filing of the complaint.

• Setting up of a Central Consumer Protection Authority

The New Act proposes the setting up a regulatory authority known as Central Consumer Protection Authority (CCPA) under Section 10 of CPA, 2019, with broad powers to ensure protection, promotion, and enforcement of buyers’ privileges against misdirecting promotions unjustifiable trade practices. It will also have an investigation wing which a Director-General will head. The DG would be free to conduct independent enquiry and investigation in cases of Consumer Law violations. There were no such provisions in all the Acts before this new Act.

• Concept of Product Liability

A new concept of “Product Liability” was introduced in The Consumer Protection Act of 2019 under Section 34 of CPA,2019. This provision now brings the product manufacturer, service provider and the product seller under its scope to pay the compensation for the damage arising out of any defective or adulterated product. The consumer needs to prove one of the many specified conditions for claiming any compensation against a manufacturer, service provider or seller in a case of product liability. The CPA,1986, did not have any such specific provisions for making these people liable.

• Definition of Goods

Until 2019, only the products defined in the Sale of Goods Act, 1930, were recognized as “Goods” in a Consumer Case. However, after enacting the new Act, it includes all types of movable properties, including “food” defined under the Food Safety and Standards Act, 2006.

• Increased scope of the term “Unfair Trade Practices“

The CPA, 1986, had a list of six unfair trade practices under it, but the CPA, 2019, has widened the scope of Unfair Trade Practices with three new practices under that list. These three practices include: –

1. The non-issuance of a bill or a cash memo or the receipt of the goods purchased or services provided,
2. Refusal to withdraw or to make a return or withdraw defective goods or to give back the consideration, if paid within the period mentioned in the bill or cash memo or case the period is not mentioned in the bill or cash memo then within thirty days,
3. Disclosing the consumer’s details or information to any other person unless mandated by law or done in the public interest.

• Provision for Unfair Contracts

If a contract between the manufacturer or trader and the consumer requires the consumer to deposit an exorbitant security deposit for the performance of the contract or if it imposes a penalty on the consumer for any breach of contract or imposes any unjustified charges, obligations, terms and conditions from which the consumer could be in a disadvantaged position or puts any other impositions on the consumer; then this type of contract would be deemed to be unfair under the 2019 Act. The State and National Commission have the authority to declare such contracts null and void. Before this Act, there was no significant provision to protect the consumers from these unjust contracts and the traders’ monopoly.

• No more Misleading Advertisements

The CPA, 2019 now clearly defines the misleading advertisements covering all the information that the advertisers intentionally hide. The liability for the manufacturer and the sellers at the different levels of marketing has been fixed for such false or misleading advertisements. Not only this, even the famous personalities or celebrities involved in the endorsement of such products are now covered under the ambit of this Act. The powers to impose penalties and take actions against such irregularities by the traders rests in the hands of the Central Consumer Protection Authority. The CCPA may put a fine of Rs.10 lakhs on the very first violation and then Rs.50 lakhs on any further violation. Also, both the manufacturer and endorser may be imprisoned for up to two years.

• New Dispute Resolution Mechanism

Disputes originating from a consumer case can now be settled quickly and easily by way of Alternate Dispute Resolution, and the parties involved can reach a mutual settlement. Each District, State and National Commission will have a particular mediation cell for this purpose. This new mechanism will ensure fast resolutions and will also benefit the consumer courts by reducing their backlogs. Such provisions for quick resolution and mediation were not part of the CPA, 1986, due to which there was a massive pendency of cases in the consumer courts.

• Increased Penalties for non-compliance of an order

If a trader, a manufacturer, or any person fails to comply with the Commission’s orders, they can be imprisoned for one month to three years, or a fine between Rs. Twenty-five thousand to Rs. 1 lakh can be imposed, or both under the CPA, 2019. Earlier, under the CPA, 1986, the period of imprisonment was the same, but the fines were much less, i.e., between Rs. 2,000 to Rs. 10,000. This increased penalty ensures strict implementation of the orders issued by the Commissions.

• Increased number of members in Commissions

The present Act has significantly increased the number of members in the District, State and National Commissions. A District Commission can now have at least two members and a President, who has been a District Judge. The State Commission will have a President, a present, or a retired High Court Judge, and at least four members. The National Commission would comprise a President, who should be a present or a retired Supreme Court Judge, and at least four other members.

• Increased timeline for filing Appeal against an order

An appeal against an order of the District Commission can be filed before the State Commission within 45 days of the passing of the order after depositing 50 per cent of the amount. Previously, this timeline was of 30 days only.

The timeline to file an appeal against an order of the State Commission in the National Commission is 30 days with the deposit of 50 per cent of the amount of Rs. 50,000, whichever is less. This provision was also present in the CPA, 1986, and no specific change has been made in the new Act.

• Power to review orders to every Commission

The District, State, and National Commissions will now have the ability to survey or check the orders passed by them if there is a mistake notwithstanding the record. Also, the parties may file Appeals before the National Commission against the State Commission’s orders in cases that involve a substantial question of law.

Conclusion

India has come a long way to ensure the delivery of justice to every citizen. Introducing new laws for replacing the age-old ones that cannot serve the purpose of justice delivery against the problems of a modernised world is a significant step in this journey. Globalisation and Digitalisation have changed the market practices. To match the pace of this ever-changing world, we needed to adopt specific positive changes, the CPA, 2019 being one of them. The Consumer Protection Act, 2019 has included some of the significant provisions that are the hour’s need for ensuring fair trade practices and empowering the consumers. For obvious reasons, the terms like e-commerce and Alternate Dispute Resolution were some of the alien terms for the Consumer Protection Act, 1986. However, these shortcomings were felt as hindrances in the path to progress for a dynamic country like ours and the same were mitigated through this new Act. Since every coin has two sides, so against all the benefits of this new Act, there could be certain imperfections and limitations in it, and we can expect new amendments to the CPA, 2019. Nonetheless, The Consumer Protection Act, 2019 endeavours to ease and affix the course of customer complaints, and it has augmented the range of consumer assurance systems in India.

This article is authored by Pranshu Shandilya, student at Institute of Law, Nirma University.

References

• https://egazette.nic.in/WriteReadData/2019/210422.pdf
• http://ncdrc.nic.in/bare_acts/Consumer%20Protection%20Act-1986.html
• https://consumeraffairs.nic.in/acts-and-rules/consumer-protection
• https://prsindia.org/billtrack/the-consumer-protection-bill-2019
• https://en.wikipedia.org/wiki/Consumer_Protection_Act,_2019
• https://en.wikipedia.org/wiki/Consumer_Protection_Act,_1986