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A Critical analysis of the NEW Consumer protection Act 2019 (20)

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In 2019, Johnson & Johnson agreed to pay nearly $117 million to resolve allegations that it deceptively marketed surgical mesh devices in US.

The above are examples of Class Litigation stemming from Consumer Rights. Does India have a provision of Class litigation for protecting Consumer rights? Read more to know about it...

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In countries like Brazil the Local Consumer Protection Law mandatorily requires that every commercial establishment keeps a updated Hard Copy book of the Consumer Protection Code at the Cash Counter, easily visible and accessible to every customer of that establishment, so that when in doubt, they can instantly have a look at it to verify their rights regarding the subject under dispute and call the consumer protection toll free help line to lodge a complaint from there and then itself! Sounds amazing and it works! Several developing and developed countries have similar strict consumer protection laws and rules in place since past two to three decades.

Historical Perspective of Consumer rights:
Caveat Emptor: In the olden days, the application of the Latin Maxim 'Caveat Emptor' (Let the buyer beware) came to be recognized first in England around 1523. Caveat Emptor meant that the buyers were fully responsible for their decisions. Thus, it was an established duty of the buyers during those times to themselves make sure of the quality and other aspects of the goods and services being purchased. Concept of Caveat emptor had severely restricted the rights of consumers and had put them at the mercy of the sellers.
However, in the course of time, several exemptions to the maxim were recognised, which curtailed the impact of this rule on the hapless buyer. The need to protect the consumer started to gain momentum, as more and more unscrupulous traders, and service providers, armed with market knowledge and manipulation skills, exploited the gullible consumer. Moreover, the consumer was bombarded from all sides with tempting advertisements in TV, and other media which contained more untruth than the truth. Guarantees given at the time of sale were dishonoured with impunity. The consumers were also exposed to a glut of adulterated and spurious products in the market in addition to sub-standard services for which they were fleeced.

Beginning of Consumer Protection movement in India.
In India, the problem is that the hapless consumer is exploited not only by the private enterprise - but even by government companies. It is well known that the Indian consumers often prefer to suffer in silence rather than knock the doors of justice.
In India even before the Consumer Protection Act was passed, the consumer was not totally without a remedy under various other laws. Thus, provisions did exist and they still do, for the protection of consumer in the Law of Torts and in various Acts like the Indian Penal Code, the Prevention of Food Adulteration Act, the Essential Commodities Act, the Drugs and Cosmetics Act, the Trade and Merchandise Act, the Bureau of Indian Standards Act, etc. However, such remedies are, very often not only illusionary and unsatisfactory, but also involve a lot of time and expenses. Therefore, a need was thus felt to enact a comprehensive piece of legislation dedicated to the protection of the consumers and recognition of their rights. The passing of the Consumer Protection Act filled this lacuna in 1986.

From Caveat Emptor to Caveat Venditor - The Consumer Protection Act 2019 (20).
The modernization of market space and modern trade practices, emergence of e-commerce required that the Consumer Protection laws in India to be upgraded. Indian market has come a long way from the doctrine of Caveat Emptor. Thanks to the global movement of consumerism, where the consumer is sought to be put on a pedestal, the maxim that seems to be more appropriate today is 'Caveat Venditor' which means 'Let the seller beware!' Tremendous responsibility is now fixed on the seller.
Accordingly, the Government of India notified and The Consumer Protection Act, 2019 came into force from 20 July 2020.

How does the new Consumer Protection Act empower the consumer?

A) The act provides 6 rights to the consumers.
1. To be protected from hazardous goods and services.
2. To have information about the quantity, quality, purity, potency, price, and standard of goods or services.
3. To have a variety of goods or services at competitive prices.
4. To be heard and to be assured that consumer's interests will receive due consideration
5. To be protected from unfair or restrictive trade practices.
6. The right to consumer awareness.

B) Establishment of Central Consumer Protection Authority (CCPA)
The Act enables the 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 and prosecution, order recall of unsafe goods and services as well as discontinue unfair trade practices and misleading advertisements.

C) Stricter rules for E-Commerce.
Under the new 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, 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. The E-commerce platforms must now 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.

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 on the platform.

D) How does the new Act differ from the Old Act?
1) Time limit for filing complaint has been increased from 30 days to 45 days.
2) Earlier the District could accept complaint for causes up to 20 lakh INR, now the District commission has a jurisdiction over complaints with amounts involving up to 1 Crore, State Commission from 1 Crore up to 10 Crore and the National commission from 10 Crore and above.
3) Now the complainant can also file a complaint at the place where they reside or works for gain.
4) Extra powers of the Commission: The State Commission and the NC can respectively declare any clauses in consumer contracts which are unfair to the consumer as null and void.
5) Provisions of Class action suits and mediation introduced for the first time.
6) Concept of Product liability is introduced for the first time.

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.

Conclusion:
While the Consumer protection Act 2019 (20) and related rules are a big step towards the protection of Consumers interest in our country, the gap is big and India still has a long way to go in order to attain parity with laws of other nations which have contributed immensely towards protecting consumer interest. As a direct effect, one may see a faster shift from un-organised market to organized market which helps developing a healthy ecosystem for further progress of Consumer interest protection movement. Nevertheless, the introduction of the concept of Product liability in Indian system will help gain momentum towards holding manufacturers, distributors, suppliers, and retailers responsible for any injuries/losses their products may cause.

Satya Muley
Satya is a leading lawyer from Western India.
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Access the Consumer Protection Act 2019 here