Analysis of Consumer Protection Act, 2019

Abstract

The Consumer Protection Act of 1986, which was passed three decades ago, has now been replaced by the Consumer Protection Act of 2019. At present most of the Indian people use online platform for their shopping needs. Accordingly, this substitution was needed by the modern Indian consumer. As per the report of stastica. Com[1], nearly 700 million Indians will shop online this year, with 70% of mobile internet users participating. We can conclude, based on this knowledge, that the new Consumer Protection Act of 2019 would be extremely beneficial to Indian consumers.

Customers will be benefited from several new protections under the new Consumer Protection Act. It is intended to assist customers and to address issues with offering basic rights to consumers in a major field known as e-commerce. In India, consumers have six fundamental rights: the right to protection, the right to choose, the right to be educated about the general laws, the right to consumer education about the product, the right to be heard, and the right to seek redress. By implementing modern methods and processes, the new consumer protection “THE NEW CONSUMER PROTECTION ACT 2019 (the “New Act”) aids in the protection of these rights.

Introduction

The Consumer Protection Act of 1986 was enacted to resolve consumer concerns and safeguard their rights. It was a commendable step at that time, and it was modified from time to time. However, the country’s three-decade-old law has not kept up with industry and emerging technology innovations. For example, the Act did not provide the right to prosecute a person who had violated a consumer’s rights who are doing shopping by using electronic mode, so consumer had normally to resort to the State and District Consumer Redressal Forums, which only compensated them only financially  for their damages suffered.

There was no data collection and no investigation into injuries or deaths caused by faulty goods or services. In short, there was no regulatory body in place to track or regulate violations of consumer rights. With the passage of the Consumer Protection Act, 2019 and the repeal of the Consumer Protection Act, 1986, a new era in Indian consumer rights has begun, giving consumers more power and control over the market than ever before.

The Consumer Protection Act of 2019 is notable for establishing a Central Consumer Protection Authority, which will act as a regulatory agency to “promote, defend, and enforce consumer rights as a class.” The new rules show a simple change from Caveat emptor (let the buyer beware) to Caveat venditor (let the seller beware), as unfair trade practices and fraud committed by the seller would now be punished. The most recent Act also includes provisions for penalties for unfair trade practices and misleading ads, as well as a slew of other improvements that hold consumer protection current with market  trends/changes.[2]

Key words- Central Consumer Protection Councils (CCPC), Central Consumer Protection Authority (CCPA), Consumer Dispute Redressal Commission (CDRC), Consumer Welfare Fund (CWF).

Journey towards the new Consumer Protection Act, 2019

2014	Drafting of new Consumer Protection Bill by a committee constituted by the Union Ministry of Consumer Affairs
10 August 2015	The Consumer Protection Bill, is referred to Parliamentary Standing Committee by Lok Sabha.
26 April 2016	Report submitted by the Standing Committee giving certain recommendations
5 January 2018	The Consumer Protection Bill, is re-introduced in Lok Sabha after incorporating the recommendations given by Standing Committee
20 December 2018	Lok Sabha passes the bill but it lapses as the term of 16th Lok Sabha comes to an end
8 July 2019	The Consumer Protection Bill is re-introduced in Lok Sabha on 30 July 2019 Lok Sabha passes the bill
6 August 2019	Rajya Sabha passes the bill
9 August 2019	President gives his assent and The Consumer Protection Act, 2019 is published in The Gazette of India.

Structure of the Act is divided into Eight Chapters.

Chapter I – Preliminary

This chapter includes main concepts of the Consumer Protection Act of 2019. This chapter describes terms like customers, false ads, product liability, e-commerce, direct sale, unfair contract, unfair trade practice, and so on. The following are the consumer rights listed in this chapter:

1. the right to be shielded from the marketing of goods, products, or services that are harmful to life or property;
2. the right to be informed about the quality, quantity, potency, purity, standard, and price of goods, products, or services, as the case may be, in order to protect the customer from unfair trade practices,
3. the right to be guaranteed, whenever possible, access to a variety of goods, products, or services;
4. The right to seek redress for unfair trade practices restrictive trade practices, or unscrupulous consumer exploitation; and
5. The right to consumer education.

Chapter II – Consumer Protection Councils

Chapter II establishes Consumer Protection Councils at the federal, state, and local levels. This chapter contains provisions regarding the formation, meeting, and position of Consumer Protection Councils. According to the Act, these councils will have advisory role.

Chapter III – Central Consumer Protection Authority (CCPA)

One of the major flaws of the previous Act was the lack of consumer protection authorities to track, control, and respond to consumer complaints in a timely and efficient manner. The Central Consumer Protection Authority (CCPA) has been added to Chapter III of the 2019 Act in order to control matters relating to consumer rights abuses, unfair trade practices, and deceptive or misleading ads that are detrimental to the public and consumers’ interests, as well as to encourage, defend, and enforce the rights of consumers as a class.

To exercise the powers and discharge the duties under “New Act” the Central Authority shall be comprised of a Chief Commissioner and such number of other Commissioners as may be prescribed by the Central Government. It will have an investigation wing led by a Director-General for the purpose of conducting inquiries and investigations as directed by the Central Authority under this Act.

The Central Consumer Protection Authority will act as a central regulator to regulate the following:

1. Protect, promote, and enforce consumer rights as a class, and prevent violations of consumer rights under the New Act;
2. Prevent unfair trade practices and ensure that no one engages in unfair trade practices; and
3. Ensure that no false or misleading advertisement of a product is made.
4. Ensure that no one participates in the publishing of any fraudulent or misleading advertising.

An appeal to a CCPA order on this issue may be filed with the National Commission within 30 days of receiving the order.

Chapter IV – Consumer Dispute Redressal Commission

The Consumer Protection Act, 2019 provides for establishment of Consumer Dispute Redressal Commissions at three levels: District, State and National. The hierarchy remains similar to what was contained in the previous Act. This chapter provides for the establishment, powers and functions of the Consumer Dispute Redressal Commissions at all the levels.

Chapter V – Mediation

The New Act has introduced a new chapter (Chapter V) on mediation as an alternate dispute resolution mechanism in order to resolve the consumer dispute in a much faster way without having to approach the Commissions. Thus, in the events where the mediation is successful in whole, the terms of such agreement shall be reduced into writing accordingly. Where the dispute is settled only in part, the Commission shall record the statement of the issues which have been settled, and shall continue to hear the remaining issues involved in the dispute. In case of unsuccessful mediation the respective Commission shall within seven days of the receipt of the settlement report, pass a suitable order and dispose of the matter accordingly.[3]

Chapter VI – Product Liability

Chapter VI deals with every claim for compensation under a product liability action by a complainant for any harm caused by a defective product manufactured by a product manufacturer or serviced by a product service provider or sold by a product seller.

The chapter provides for liabilities of the product manufacturer, product service provider and product sellers. Product liability action is a complaint filed against a product manufacturer or product seller, of any product or service, to compensate for any harm caused to a consumer by such defective product manufactured or sold or by deficiency in services relating thereto. This is a newly introduced concept under the Consumer Protection Act, 2019.

APPEAL

District Commission to State Commission

1. 45 days (earlier 30 day)
2. Fees shall be 50%  of pre-deposit (earlier 25000 INR)
3. No appeal applicable if decision passed through mediation

State Commission to National Commission

1. 30 days From the date of the receipt of the order
2. Fees shall be 50% of pre deposit (earlier 35000 INR)
3. Ex-parte order

National Commission to Supreme Court

1. 30 days
2. Fess shall be 50 % of pre deposit (earlier 50000 INR)
3. Ex- parte order 

Chapter VII – Offences and Penalties

Section 21(2) and Section 89 of the 2019 Act provides the Central Authority with the power to impose a penalty in respect of any false or misleading advertisement, by a manufacturer or an endorser, it may, by order, impose on manufacturer or endorser a penalty which may extend to ten lakh rupees. Apart from this, a separate chapter (Chapter VII) for offences and penalties has been introduced where detailed penalties and punishments have been mentioned in relation to non-compliance, or manufacturing for sale or storing, selling or distributing or importing products that are adulterated or spurious.[4]

The New Act has enhanced the penalties in comparison to its old counterpart.

Penalties for non-compliance of orders

District/State/National Commission	Central Authority
Imprisonment from 1 month to 3 years	Imprisonment up to 6 months
Fine from Rs. 25,000/- to Rs. 1,00,000 /-	Fine up to Rs. 20,00,000/-
Or Both	Or Both

Punishment (Products Containing Adulterant)

Does not result in injury	Imprisonment: Up to 6 months, Fine: Up to Rs. 1,00,000/-
Injury not amounting to grievous hurt	Imprisonment: Up to 1 Year, Fine: Up to Rs. 3,00,000/-
Injury resulting in grievous hurt	Imprisonment: Up to 7 years, Fine: Up to Rs. 5,00,000/-
Death of Consumer	Imprisonment: 7 years to life , Fine: Up to Rs. 10,00,000/-

 Punishment (Spurious Goods)

Injury not amounting to grievous hurt	Imprisonment: 1 year Fine: Up to Rs. 3,00,000/-
Injury resulting in grievous hurt	Imprisonment: 7 years Fine: Up to Rs. 5,00,000/-
Death of Consumer	Imprisonment: 7 years to life Fine: Up to Rs. 10,00,000/-

Chapter VIII – Miscellaneous

The last chapter of the new Act is titled as miscellaneous. It deals with powers of Central Government and State Government to make rules and powers of the Central Authority and National Commission to make regulations. It also provides for compounding of offences under section 96 of the New Act.

Related Rules and Regulations

• The Consumer Protection (E-Commerce) Rules, 2020 which are mandatory and are not advisory, lay down all the important information relating to the e-commerce entities keeping in mind both the consumer and the product/service provider.
• Key highlights are:
  • E-commerce entities according to Rule 5, are required to provide information to consumers, relating to return, refund, exchange, warranty and guarantee, delivery and shipment, modes of payment, grievance redressal mechanism, payment methods, and security of payment methods, charge-back options and country of origin.
  • These platforms will have to acknowledge the receipt of any consumer complaint within 48 hours and redress the complaint within one month from the date of receipt. They will also have to appoint a grievance officer for consumer grievance redressal.
  • Sellers cannot refuse to take back goods or withdraw services or refuse refunds,if such goods or services are defective, deficient, delivered late, or if they do not meet the description of the goods shown on the platform.
  • The rules also prohibit the e-commerce companies from manipulating the priceof the goods or services to gain unreasonable profit through unjustified prices.
• As per the Consumer Protection (Consumer Disputes Redressal Commissions) Rules, 2020 which came into force on 20^th July 2020, the amount of fee payable for filing the complaint in the District Commission up to Rs 5 lakhs has been made Nilaccording to Rule 7.
• The credit of the amount due to unidentifiable consumers will go to the Consumer Welfare Fund (CWF).
• State Commissions will furnish information to the Central Government on a quarterly basis on vacancies, disposal, the pendency of cases and other matters.
• Apart from these general rules, there are Central Consumer Protection Council Rules, provided for the constitution of the Central Consumer Protection Council (CCPC).
  • It will be 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.
  • It will have a three-year tenure and will have Minister-in-charge of consumer affairs from two States from each region: North, South, East, West, and North-East Region.[5]

Major changes under the New Act

When it comes to reforms in Consumer Protection Legislation, the Consumer Protection Act of 2019 is truly a landmark moment. The legislators attempted to modernize the previous Act by bringing it up to date with today’s customers. Some of the updates are illustrated in the subheadings below.

Market dispute resolution forums: monetary caps and other updates while the Act retains the three levels of customer dispute resolution forums, the pecuniary limits of all three levels have been expanded.

1. District Commission (established under section 28) – Upto 1 crore (earlier 20 lakhs)
2. State Commission (established under section 42) – 1 crore to 10 crores (earlier 20 lakhs to 1 crore)
3. National Commission (established under section 53) – More than 10 crores (earlier more than 1 crore) The District, State and National Commissions shall have the power to review any of the order passed by them if there is an error apparent on the face of the record, either of their own motion or on an application made by any of the parties within thirty days of such order (sections 40, 50 and 60)

Establishment of a Regulator

For the first time, the Consumer Protection Act of 2019 creates a consumer affairs regulator. A chief commissioner and other commissioners will make up the regulator. The regulator will have its own investigation branch. The regulator’s key responsibilities are as follows:

1. To inquire or cause an inquiry or investigation to be made into violations of consumer rights or unfair trade practices, either suo motu or on a complaint received or on the directions from the Central Government;
2. To file complaints before the District Commission, the State Commission or the National Commission, as the case may be, under this Act;
3. To Intervene in any proceedings before the District Commission or the State Commission or the National Commission, as the case may be, in respect of any allegation of violation of consumer rights or unfair trade practices;
4. To Review the matters relating to, and the factors inhibiting enjoyment of, consumer rights, including safeguards provided for the protection of consumers under any other law for the time being in force and recommend appropriate remedial measures for their effective implementation;
5. To recommend adoption of international covenants and best international practices on consumer rights to ensure effective enforcement of consumer rights;
6. To undertake and promote research in the field of consumer rights;
7. To spread and promote awareness on consumer rights;
8. To encourage non-Governmental organizations and other institutions working in the field of consumer rights to co-operate and work with consumer protection agencies;
9. To mandate the use of unique and universal goods identifiers in such goods, as may be necessary, to prevent unfair trade practices and to protect consumers’ interest;
10. To issue safety notices to alert consumers against dangerous or hazardous or unsafe goods or services;
11. To advise the Ministries and Departments of the Central and State Governments on consumer welfare measures;
12. To issue necessary guidelines to prevent unfair trade practices and protect consumers’ interest.

The establishment of a regulator along with an investigative wing shall prove to be a major milestone in the protection of consumer rights.

Statutory Recognition of Alternative Dispute Redressal Mechanism

The biggest issue with the Indian legal system is the lengthy adjudication process, which requires parties to wait years for their rights. The new Act recommends the creation of mediation cells alongside the Central Consumer Protection Authority, in view of the existing situation in India’s courts, where people must wait several years for a court decision. Since the parties can enter the mediation cells at any point during the dispute, the process of addressing customer disputes would be sped up.

Introduction of new concepts

The provision of product liability has been added to the New Act to ensure that customers receive high-quality goods and services. According to product liability, sellers are responsible for refunding purchase price to the customers if the services or products they provide are faulty and infringe upon customer’s rights. This will increase the sellers’ liability and act as a deterrent to them selling defective products. Furthermore, the concept of unfair trade practices has been expanded to include the term unfair trade deal.

Comparison between the old Act and the New Act

After going through the structure of the New Act and some important changes brought under this Act, we can carve out certain points of differences between the old and new Act in Table A

Comparison Between Consumer Protection Act, 1986 and Consumer Protection Act, 2019

Points 1986 Act 2019 Act Unfair trade practices / Deceptive practices Narrower in scope. Only 6 types of practices were covered Broader in scope. Adds three new practices Product liability There were no provisions for product liability Contain provisions for Product liability Unfair contracts There were no provisions for Unfair contracts Contain provisions for Unfair Contracts E-commerce and direct selling There were no provisions for Ecommerce Contains specific provisions for Ecommerce and direct selling Mediation There was no provision for alternative dispute redressal mechanism Contain provisions for mediation cells attached to National Commission, State Commission and District Commissions Pecuniary limits Lower pecuniary limits of District forum – up to 20 lakhs; State commission – 20 lakhs to 1 crore; and National commission – above 1 crore Higher pecuniary limits of District commission – up to 1 crore; State commission – 1 crore to 10 crores; and National commission – above 10 crores Role of Central Protection Councils Role of CPCs was to promote and protect the rights of consumers Role of CPCs is to act as advisory bodies for the promotion and protection of consumer rights.   Selection of members in consumer dispute redressal commissions.   Different committees were prescribed for different commissions There is no provision for selection committees. Central Government has the power to appoint the members Regulator No regulator was in existence A regulator by the name of Central Consumer Protection Authority shall be established Penalties A person failing to comply with the orders of commission could face imprisonment between one month and three years or fine between Rs 2,000 to Rs 10,000, or both A person failing to comply with the orders of commission can face imprisonment up to three years, or a fine not less than Rs 25,000 extendable to Rs one lakh, or both

Institution of Consumer Complaint:[6]

The New Act introduces the “Online Filing” of Consumer Complaint.

Step 1 (Issuance of Notice): It is recommended that the Complainant/plaintiff submit a notice to the opposing party outlining the flaws or shortcomings in the products or services rendered before filing the complaint. If the parties are unable to reach an agreement, the plaintiff may file a complaint with a jurisdiction authority or forum. 

 Step 2 (Determining the Jurisdiction): The Complaint has to be filed within the Pecuniary and Territorial Jurisdiction.

Pecuniary Jurisdiction: (as per the New Act)

• District Commission: Amount not exceeding 1 crore
• State Commission: Rupees 1 Crore to 10 Crore
• National Commission: Amount exceeding Rupees 10 Crore

Whereas, under old Act, the pecuniary jurisdiction was as below:

• District Commission : Amount not exceeding Rupees 20 lakhs
• State Commission: Rupees 20 Lakhs to 1 Crore.
• National Commission: Amount exceeding 1 Crore.

Territorial Jurisdiction:

Place where the opposite party resides or if there are more than one opposite party, then the place where opposite parties reside or carry on business or personally works for gain.

Step 3 (Submission of Complaint): Complaint can be submitted in the form of Writing or through Online.

Registration of Online Complaint

• Aggrieved Party can register complaints on https://consumerhelpline.gov.in/ .
• Complaints can be registered by filling essentials details like name, email, contact number & password.
• Complainant will receive login credentials though which he can register a complaint by uploading required documents.
• There are different portals available for different sectors.
• A consumer can also register complaints through Mobile Apps namely the NCH app, Umang App or Consumer App.
• Post-registration of the complaint, complainant will be provided with a unique identification number through which he can determine the status of the complaint.
• Fees for the complaint can be submitted through online payment portal.

Step 4: (Contents of the Complaint): Complaint should contain the following information

• Name and complete details of complainant and opposite party.
• Date and time of purchase of goods/ availing of services.
• Necessary Facts of the case establishing the cause of action.
• Particulars of dispute: Defect in goods/ deficiency in service.
• Relief sought
• Copies of the documents supporting the contention of the complainant. (Invoice, Warranty receipt, etc)

Step 5 (Limitation for filing Complaint/Appeal): The Complaint before the District Commission needs to be filed within the 2 years from the date of dispute. Further, appeal before State Commission to be filed within 45 days from the date of order of District Commission. Further, appeal to the National Commission should be made within 30 days from the date of receipt of the order from the lower forum.

Step 6 (Court Fees): The Court fees have to be paid in the form of Demand Draft, in respect of the Registrar of respective Commissions. In respect of the National Commission, the appellant has to make the Demand Draft of Rupees as per the price mention hereunder.[7]

Serial. No	Total Value of goods or services and the compensation claimed	Amount of fee payable
	District Forum
1.	Up to one lakh rupees – For complainants who are under the Below Poverty Line holding Antyodaya Anna Yojana Cards	Nil
2.	Up to one lakh rupees – For complainants other than Antyodaya Anna Yojana card holders.	Rs. 100
3.	Above one lakh and up to five lakh rupees	Rs.200
4.	Above five lakh and up to ten lakh rupees	Rs.400
5.	Above ten lakh and up to twenty lakh rupees	Rs.500
	State commission
6.	Above twenty lakh and up to fifty lakh rupees	Rs. 2000
7.	Above fifty lakh and up to one crore rupees	Rs.4000
	National Commission
8.	Above one crore rupees	Rs. 5000

Scope of E-commerce in Consumer Protection Act 2019

New consumer protection act, 2019 provides that e-commerce will be governed under the applicable laws that applies to direct selling of product or services. Now ecommerce sites will have to disclose their seller’s details such as seller’s contact number, email id, website and detained address etc. to the buyers.  Also  there  are  strict  penalties  for  selling  counterfeit  products  on  these  ecommerce platforms.[8]

The new additions include “e-commerce” Section 2(16), “electronic service provider” Section 2(17) along with the prescribed liabilities in relation to internet frauds. This has broadened the scope of the Act and it looks after the better protection of the rights of e-consumers and also enables them to proceed against e-commerce websites in the event of any infringement or violation.

Thereafter, a series of new terminologies have been added to Section 2 of the Act, for example a brand new concept of “product liability” has been included in the new Act which has been defined under Section 2(34) of the Consumer Protection Act, 2019 as “the responsibility of a product manufacturer or product seller, of any product or service, to compensate for any harm caused to a consumer by such defective product manufactured or sold or by deficiency in services relating thereto;” and in lieu of which the concepts of “product liability action”, “product manufacturer” etc. have also been included in the Act.

The Consumer Protection Act, 2019 was recently passed by the government with the aim of further improving consumer rights and enhancing the legal structure for the prompt and efficient administration and resolution of consumer disputes.

The 2019 Act has officially incorporated B2C e-commerce (manufacture to customer) within its scope and reach in order to keep up with the rapid changes in modern-day retail trade. The 2019 Act describes e-commerce as “the purchasing and sale of goods/services, including digital products, over a digital/electronic network.” Anyone who purchases products or receives services, whether in a brick-and-mortar store or online at a digital/electronic network by electronic means, teleshopping, direct sale, or multi-level marketing, will now be covered under the 2019 Act. The main impacts of the 2019 Act on the B2C e-commerce sector are discussed hereunder.

What are the implications of the 2019 Act?

Unfair trade practices

The draught Consumer Protection (E-Commerce) Guidelines have been launched by the Ministry of Consumer Affairs, Food and Public Distribution (Department of Consumer Affairs), Government of India, with a specific emphasis on B2C e-commerce. The guidelines aim to prevent fraud and unfair trade practices in the B2C e-commerce space (E-Commerce Guidelines).

The E-Commerce Guidelines, on the other hand, mandate E-commerce companies to maintain a level playing field and forbid them from manipulating the price of products or services listed for sale on their website, either directly or indirectly. So far, the foreign exchange control law only allowed E-commerce companies with foreign investment to comply with the aforementioned obligations. If these guidelines are made public, any E-commerce player, whether with or without foreign investment, will be forced to ensure that all vendors have a level playing field and that no unfair or misleading tactics are used to manipulate customers’ transactional decisions.

Statutory recognition to product liability claims

The New Act establishes a disciplinary regime for product liability lawsuits for the first time in India. Prior to the New Act, a consumer in India had to rely on a number of laws (including the Indian Contract Act of 1872 and the Selling of Goods Act of 1930) as well as judicial activism to bring a product liability claim against the manufacturer. In India, the strict product liability doctrine does not prevail, as even the courts have acknowledged. A customer may now claim compensation from a product manufacturer, a product seller, or a product service provider for any harm, injury, death, or damage caused by a defective product under the New Act. Subject to such exceptions, the statute now holds a dealer or service provider liable for defective products. This is being heralded as a big change.

This development will have a significant and immediate impact on E-commerce sites that operate on an inventory-based model and have exercised significant control over the design, testing, packaging, or labelling of a product, failed to inspect or preserve the products while in their possession/storage, or have rendered an express warranty of a product. Nonetheless, E-commerce vendors can heavily rely on contractual back-to-back indemnity arrangements with product suppliers in some shape or form under this regime to reduce their potential product liability risk exposure.

Sale of spurious products

Faced with the swelling malpractice of spurious goods invading households across all product segments including FMCG and drugs, the government has sought to curtail this menace by introducing a penal regime in this regard under the New Act. The 2019 Act imposes a penalty on the manufacturing for sale, selling, storing, distributing or importing of any spurious goods.

The e-Commerce Guidelines as well seek to impose a contributory or secondary liability on E-commerce entities for guarantying the authenticity of the goods sold on their platforms if such goods are in fact spurious in nature. Additionally, these guidelines also obligate an E-commerce entity to accept the return of spurious goods and refund the underlying purchase amount within a maximum period of 14 days from the return of a spurious goods. The ensuing filtering process, in our opinion, will be an immediate concern, especially for large e-commerce players, due to the amount of stock/sellers involved, and will result in increased compliance costs for already overburdened E-commerce Companies.

Unfair contracts

A new concept of ‘unfair contract’ has been introduced under New Act and it extends to all contracts which are entered into between a manufacturer/seller/ service provider on one hand and a consumer on the other hand. A consumer can now file a complaint and challenge contracts which are unfair, arbitrary and which cause significant change in the rights of the consumers. Some of the specific instances of unfair contracts that are indicated under the 2019 Act are the contracts which.

 (a) To seek to impose a penalty on the consumer for the breach of contract that is disproportionate to the loss occurred due to such breach;

 (b) To Provide for the unilateral assignment of the contract without the consent of the consumer; and

 (c) To impose any unreasonable or disadvantageous charge, obligation or condition on the consumer.

These terms and conditions are typically in the form of a click wrap agreement and become binding on the consumer at the time of the registration on the platform and/or the purchase of goods or services on such platform. These are the standard terms and conditions which a customer needs to accept without any scope of negotiation or customization. However, now with the introduction of the regime on ‘unfair contracts’, an e-commerce platform would have to ensure that the terms and conditions set out in its click wrap agreement or otherwise displayed on its platform are sanitized and kosher from the New Act perspective.

Typically, these term and conditions entitle the e-commerce platform to terminate a contract unilaterally without assigning any reason whatsoever. While this right serves to protect an E-commerce platform from genuine instances where the performance of a contract becomes impossible due to the acts of a third party seller (who has listed its products or services on the platform), it can, nevertheless, be argued that such a unilateral termination right is in fact disadvantageous to a consumer and hence should render the render a contact unfair under the New Act.

Misleading advertising

A manufacturer and an endorser of a product can now be penalized with imprisonment under the New Act for a misleading advertisement. The scope of the expression ‘misleading advertisement’ is quite broad and extends to penalize advertisements which conceal important information (for instance any potential side effects), contain a false description of goods or service or give a false guarantee to mislead a consumer. Interestingly, in cases where the warranty or the guarantee of a product is challenged by a consumer, the burden of proof is on the defendant (and not the consumer) to prove that the warranty or guarantee in question was provided basis the adequate or proper tests which were performed on the product. Having said that the New Act provides an exception from liability in favor of certain persons who can prove that the publication of the advertisement was in the ordinary course of business of such a person.

Conclusion

In this era of digitization, the New Act is a much-needed shift in favor of customers. It provides them with clearly established rights and a conflict settlement mechanism, enabling them to get their complaints resolved quickly. To gain a better understanding of the principles, review some of the seminal decisions issued by our courts under the Consumer Protection Act, 1986, which has since been repealed, but the standards developed in those cases aided in the formulation of the current Consumer Protection Act, 2019.

Finally, the government has recognized the importance of customers. When we look at the current Consumer Protection Act, we will see that it contains a lot of new words. Online fraud is being taken seriously by the government. The government has taken a step forward in rapidly resolving/addressing customer concerns by implementing an online form of complaint. particularly during the pandemic period , the online procedure can be considered one of the most pleasant and fruitful procedures. Furthermore, including an alternate conflict resolution process is a step toward finding a peaceful resolution between the parties, which would have a longer-term effect on both customers and service providers. The Dispute Resolution Mechanism will save the parties’ time and efforts by assisting them in finding a solution at the outset of the process.

References

1. Consumer Protection http://egazette.nic.in/WriteReadData/2019/210422.pdf

• Consumer Protection Act, 1986, https://legislative.gov.in/sites/default/files/A1986-68_0.pdf
  • Paper of by Vipin Kumar, Rjiv Gandhi national university of Law. Available at https://papers.ssrn.com/sol3/papers.cfmabstract_id=3630775#:~:text=The%20main%20highlight%20of%20the,seller%20be%20aware)%20can%20be.
  • Article by Suchita Shukla. Available at

Consumer Protection Act, 2019: A Primer

• Article by Prof. (Dr.) Chitrapu Kama Raju and Abhishek Sharma. Available at https://www.latestlaws.com/articles/consumer-protection-act-2019-analysis-and-challenges-for-future/

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[1] https://www.statista.com/statistics/255146/number-of-internet-users-in-india/#:~:text=Number%20of%20internet%20users%20in%20India%202015%2D2025&text=In%202020%2C%20India%20had%20nearly,for%20the%20south%20Asian%20country.

[2]Available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3630775#:~:text=The%20main%20highlight%20of%20the,seller%20be%20aware)%20can%20be

[3] https://www.scconline.com/blog/post/2020/12/24/consumer-protection-act-2019-a-primer/

[4] https://www.scconline.com/blog/post/2020/12/24/consumer-protection-act-2019-a-primer/

[5] Available at https://www.scconline.com/blog/post/2020/12/24/consumer-protection-act-2019-a-primer/

[6] https://taxguru.in/corporate-law/consumer-court-complaint-consumer-protection-act-2019.html

[7] https://gama.gov.in/ConsumerGrivences.aspx

[8] https://www.researchgate.net/publication/340939875_Analysis_of_Consumer_Protection_Act_2019