some advocates
argued, that the government has carried out a technical amendment to the Act by
removing the term ‘healthcare service’ but in the complete definition of
services the medical profession is still rendering a service only. Under that
clause an aggrieved patient can approach the consumer court and a case can be
filed against the doctor or the hospital.”
Whether the term
exists or not, a consumer who has been offered a service has the right to
approach the court if he is not happy with the service. The Consumer court
cannot state that it will not take the complaint of the consumer. Whichever
consumer has taken any service has the right to approach the court if not
happy.”
medical community
expressed,"“If a critically ill patient dies the doctor is pulled up for
negligence, which is not right. The patient’s family does not want to pay the
bill. They either vandalise or go to the consumer court and want an
out-of-court settlement. In 98 per cent of the cases it is purely extraction of
money, nothing else".
so,let us examine
the act:
The Ministry of Consumers Affair on 15th.july2020, notified a majority of the provisions, including the establishment of State-level consumer protection councils and district consumer redressal commissions, and clauses relating to mediation and product liability.
But the provisions relating to e-commerce and direct selling have not been addressed.
The Act provides for mediation as an alternative dispute settlement mechanism so that disputes can be resolved faster without having to approach the commissions. Interestingly, the Act has a provision to use mediation to resolve disputes either in whole or in parts.
The Act provides for a powerful national consumer protection body – the Central Consumer Protection Authority – and an independent investigation wing headed by a Director General, but these provisions, too, are yet to be notified.
Likewise, many provisions relating to the liabilities of and penalties on product manufacturers, misleading advertisers and personalities who endorse products and services without proper due diligence, have not been notified.
The Parliament
passed the Consumer Protection Bill, 2019 on 06.08.2019 to replace the Consumer
Protection Act, 1986 ("1986 Act"). The President of India gave its
assent to the Consumer Protection Act, 2019 ("2019 Act") on
09.08.2019 and the same will come into force on the date it is notified on
20th.july 2020 by the Central Government.
The 2019 Act has
been enacted for the purpose of providing timely and effective administration
and settlement of consumer disputes and related matters.
The Government
instead of bringing an amendment in the 1986 Act, enacted a new Act altogether
so as to provide enhanced protection to the consumers taking into consideration
the booming e-commerce industry and the modern methods of providing goods and
services such as online sales, tele-shopping, direct selling and multi-level
marketing in addition to the traditional methods.
The 2019 Act has
brought in some major changes and provides for more protection to the consumers
in parimateria to the earlier 1986 Act which can be seen from the comprehensive
definition provided for the term 'Consumer' and 'Unfair Trade Practice'. The
2019 Act expands the scope of the definition of Consumer so as to include the
consumers involved in online transactions and it now squarely covers the
E-commerce businesses within its ambit. The 2019 Act has also widened the
definition of Unfair Trade Practices as compared to the 1986 Act which now
includes within its ambit online misleading advertisements; the practice of not
issuing bill/memo for the goods and services; failing to take back defective
goods or deactivate defective services and refund the amount within the
stipulated time mentioned in the bill or memo or within 30 days in the absence
of such stipulation; and disclosing personal information of a consumer unless
such disclosure is in accordance with law.
The 2019 Act has
also introduced the concept of 'unfair contract' which includes those
contracts, which favor the manufacturers or service providers and are against
the interest of the consumers such as contracts requiring manifestly excessive
security deposits to be given by a consumer for the performance of contractual
obligations; imposing any penalty on the consumer for a breach of the contract,
which is wholly disproportionate to the loss occurred due to such breach to the
other party to the contract; refusing to accept early repayment of debts on
payment of applicable penalty; entitlement of a party to the contract to
terminate such contract unilaterally, without reasonable cause; permitting or
has the effect of permitting one party to assign the contract to the detriment
of the other party who is a consumer, without his consent; and imposing on the
consumer any unreasonable charge, obligation or condition which puts such a
consumer to any disadvantage. Such unfair consumer contracts are now covered
under the 2019 Act and a complaint in this regard can now be filed by a
consumer. This would help to keep a check on businesses including banks and
e-commerce sites that take advantage of their dominance in the market and
mandatorily require the helpless consumers to sign such unfair contracts and
accept their standard terms before selling them goods or providing services.
One of the most
significant additions to the 2019 Act is the proposal to establish Central
Consumer Protection Authority ("CCPA") so as to regulate, protect and
enforce the interest of the consumers and matters related to unfair trade
practices.
The CCPA has been
provided with vast powers to inquire, investigate and take action against
violations of the 2019 Act.
Another significant
power the CCPA has been showered with, is the power to take action and impose
penalty against misleading and false advertisement as well as against any endorser of such advertisement, which means the CCPAcan now initiate action against
the celebrities who have endorsed such misleading and false advertisement
provided such celebrities failed to carry out any due diligence before
participating in such advertisements.
The CCPA may impose
a penalty of up to Rs.10 Lakhs for first violation and up to Rs.50 Lakhs on
every subsequent violation on a manufacturer or an endorser, for a false or
misleading advertisement. In addition to this, such manufacturer or endorser
may be sentenced to imprisonment for upto two years.
The CCPA has
also been granted the authority to initiate suo-moto proceedings against
violators; pass directions to recall products or discontinue services and provide refund to consumers; and file class action
suits on behalf of multiple consumers which makes it an effective tool to curb
mass violation of consumer interest.
Another major
introduction in the 2019 Act is the concept of Product Liability which covers
within its ambit the product manufacturer, product service provider and product
seller, for any claim for compensation. The term 'product liability' is defined
by the 2019 Act as the responsibility of a product manufacturer or product
seller, of any product or service, related to the product to compensate for any
harm caused to a consumer by such defective product manufactured or sold or by
deficiency in services relating to the product. Also, since the product seller
has now been defined to include a person who is involved in placing the product
for a commercial purpose and as such would include e-commerce platforms as
well. Therefore, the ground commonly taken by E-commerce websites that they merely act as 'platforms' or 'aggregators'
will now not be tenable before the court anymore. There are increased liability
risks for manufacturers as compared to product service providers and product
sellers, considering that under the 2019 Act, manufacturers will be liable in
product liability action even where they successfully prove that they were not
negligent or fraudulent in making the express warranty of a product. However,
certain exceptions have been provided under the 2019 Act from liability claims,
such as, that the product seller will not be liable where the product has been
misused, altered or modified.
As far as the Consumer
Redressal Forums are concerned, certain key changes have been brought by the
2019 Act such as:-
i.
Territorial
Jurisdiction – The 2019
Act now provides an added advantage to the consumers by providing for filing of
complaints where the complainant resides or personally works for gain as
against the 1986 Act which only provides for filing of complaint where the
opposite party resides or carry on business. This would help in removing the
difficulties faced by the consumers in seeking redressal of their grievances
against businesses who may not have an office or branch in their state.
ii.
Pecuniary
Jurisdiction – The 2019
Act also changed the pecuniary jurisdiction for the District, State and
National Commissions, respectively. The pecuniary limit for the District
Commission has been increased to up to Rs.1 Crore from up to Rs.20 Lakhs; for
State Commission it has been increased to up to Rs.10 Crores from up to Rs.1
Crore; and for National Commission the pecuniary jurisdiction has been
increased to over and above Rs.10 Crores as against Rs.1 Crore in the 1986 Act.
In addition to this, the 2019 Act has also changed the manner for determining
the pecuniary jurisdiction for filing the Complaint. Now the pecuniary
jurisdiction will be determined on the basis of the value of goods or services
paid as consideration as against the 1986 Act wherein, the pecuniary
jurisdiction was determined as per the value of goods and services as well as
compensation claimed. This would help in doing away the practice of inflating
the compensation claimed so as to bring the complaint within the jurisdiction
of State or National Commission.
iii.
Alternate Dispute
Resolution – Another
provision introduced by the 2019 Act to ensure speedy resolution of disputes is
to provide for referring the disputes to mediation. As per the 2019 Act, the
Consumer Forum shall refer the matter to mediation on written consent of both
the parties. For this purpose, the 2019 Act also provides for establishment of
a consumer mediation cell by the respective State Governments in each District
Commission and State Commission as well as at the National Commission by the
Central Government.
iv.
E-Complaints - The 2019 Act also provides for filing of
Complaints before the District Forums electronically in accordance with the
rules which are yet to be prescribed by the Government.
Conclusively, the
Consumer Protection Act, 2019 when compared with the 1986 Act shows that it
provides for greater
protection of consumer interests taking into consideration the current age of
digitization. The 2019 Act also
deals with the technological advancements in the industry, provides for easier
filing of complaints and also imposes strict liability on businesses including
endorsers for violating the interest of the consumers. However, the test of time
will prove the fate of the 2019 Act as and when it is notified by the Central
Government, which, prima-facie, appears to be much more consumer-friendly than
the 1986 Act and also includes the current industry trends of e-commerce.
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