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All that you must know about the Consumer Protection Act, 2019

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The New Act talk about consumer concerns come up from the digitization of the trade environment… The Consumer Protection Act, 2019 (hereinafter known as “New Act”) was passed by the Parliament on 06.08.2019 and obtained the assent of the President on 09.08.2019. The Act, inter alia, provides for the safety of the pursuits of consumers, the establishment of a central shopper safety authority, a mechanism to settle shopper disputes and specifically regulates product legal responsibility and deceptive ads. The New Act has changed the three decades’ old Consumer Protection Act of 1986. The New Act has been introduced for effective administration and well-timed disposal of consumer grievances and complaints. On 15.07.2020, the Central Government issued a notification by which it appointed 20.07.2020 as the date on which the new Consumer Protection Act, 2019 has now come into power. The next provisions have come into power with impact from 20.07.2020:

• Section 2 (Definition Section) [Except Clauses (4), (13), (14), (16), (40)]

• Sections 3 to 9 (Both inclusive)

• Sections 28 to 73 (both inclusive) [Except sub-clause (iv) of clause (a) of sub-section (1) of section 58.]

• Sections 74 to 81 (both inclusive)

• Sections 82 to 87 (both inclusive)

• Sections 90 and 91 • Sections 95, 98, 100

• Section 101 [Except Clauses (f) to (m) and clauses (zg), (zh) and (zi) of sub-section 2]

• Sections 102, 103, 105, 106, 107 [Except Sections 94, 96, 97, 99, 104]

1. KEY HIGHLIGHTS:

• Widened the definition of ‘consumer’: The definition now contains any one that buys any items, whether or not by means of offline or on-line transactions, digital means, teleshopping, direct promoting or multi-level advertising and marketing. The sooner Act didn’t particularly embrace E-Commerce transactions, and this lacuna has been addressed by the New Act.

• Enhancement of Territorial Jurisdiction [Section 34(2)]: The Consumer Protection Act, 2019 now provides an added advantage to consumers by offering for filing of complaints the place the Complainant resides or personally works for beneficial properties as against the 1986 Act which solely supplies for filing of complaints the place the Opposite Get together resides or carries on business or the place the reason for action arose. This may help in removing the difficulties confronted by the shoppers in searching for redressal of their grievances against companies who could not have a workplace or branch of their state.

1.1 ENHANCEMENT OF PECUNIARY JURISDICTION:

• Revised economic limits have been fixed under the New Act. Therefore, the District Forum can now hold consumer complaints where the value of products or services paid doesn’t exceed Rs. 1 Crore.

• The State Commission can entertain disputes the place such worth exceeds Rs. 1 Crore however doesn’t exceed Rs. 10 Crores.

• The National Commission can exercise jurisdiction the place such worth exceeds Rs. 10 Crores.

1.2 ALTERNATE DISPUTE RESOLUTION:

• The 2019 Act accommodates intercession as an Alternate Dispute Resolution instrument, making the cycle of contest arbitration easier and quicker. This can help with the speedier goal of questions and cut back weight on shopper courts, which as of now have many conditions forthcoming sooner than them.

• According to the 2019 Act, the Consumer Forum will allude the issue to intervention (according to Section 37(1) on the composed assent of each the gatherings inside 5 days). For this reason, the 2019 Act furthermore supplies for the organization of a customer intercession cell by the individual State Governments in each District Forum and State Fee notwithstanding inside the National Commission by the Central Government.

1.3 E-FILING OF COMPLAINTS:

• The New Act likewise contains empowering arrangements for purchasers to document grumblings electronically and for tuning in to and additionally analyzing parties through video-conferencing. That is the motivation behind giving cycle straightforwardness and bother free and badgering for the purchasers (stipulation to Section 35(1)).

• The electronic filing of complaints will likely be efficient from such date and for such category of cases as could also be notified by the President of the National Commission (Rule 8 of CP Rules).

1.4 PRODUCT LIABILITY & PENAL CONSEQUENCES:

• There was no different enactment overseeing ‘item obligation’ in India, however it was tended to beneath CPA 1986, if occasions were incorporated inside the ambit of ‘customer’. Inclusion of “Item Legal duty” as a different part in CPA 2019 and another floor for recording a grumbling has been one of the most critical increases to the New Act.

• The New Act has launched the idea of product legal responsibility and brings inside its scope, the product manufacturer, product service provider and product seller, for any claim for compensation.

• The term ‘product seller’ is defined to include a person who’s involved in placing the product for an industrial function and as such would come with e-commerce platforms as nicely.

• There are increased liability risks for producers as compared to product service providers and product sellers, considering that below the New Act manufacturers will likely be liable in product legal responsibility action even the place he proves that he was not negligent.

• Exceptions have been provided below the New Act from legal responsibility claims, such as, that the product seller is not going to be liable the place the product has been misused, altered or modified.

1.5 EXPANDING GROUNDS OF FILING COMPLAINT:

• While the provisions of the Consumer Protection Act, 1986 prescribed six (6) main grounds to file Complaints, the New Act has elevated the rely to seven (7), and likewise considerably modified one of many present grounds to file Complaints as provided below Part 2(c)(i) of CPA 1986. The 2 key modifications are:

• Introduction of Unfair Contracts as a ground.

• Expansion of Unfair Trade Practices (Section 2(47) explanation).

• The New Act introduces a specific broad definition of Unfair Trade Practices, which includes refusal to issue invoice, refusal to take again faulty items, sharing of personal info given by the consumer in confidence, until such disclosure is made in accordance with the provisions of any other law.

• Endorsers’ Legal responsibility: The New Act puts the legitimate obligation on individuals/superstars who embrace makers since there have been various cases already the spot beneath the effect of VIPs supporting sure product/suppliers, customers have fallen prey to unjustifiable business rehearses. In such a case, it transforms into the legitimate duty of the endorser to take the responsibility to affirm the honesty of the cases made inside the business to stop lawful obligation claims.

2. COMPARATIVE ANALYSIS OF CONSUMER PROTECTION ACT, 1986 AND CONSUMER PROTECTION ACT, 2019:

BASISConsumer Protection Act, 1986Consumer Protection Act, 2019
Ambit of LawOnline Transactions and Teleshopping were previously not mentioned.All merchandise and enterprises bought/benefited through all methods of exchanges (web based, mail order shopping, and so forth.) for which thought was paid are incorporated. Free and individual administrations are prohibited.
Unfair trade practices (Defined as deceptive practices to promote the sale, use or supply of a goods or service)Incorporates six sorts of such practices, for example, assembling of fake merchandise, allowing deal/gracefully of products that don’t follow the guidelines recommended by the Competent Authority, misdirecting promotions, and so on.The New Act added three new practices that may be termed as “Unfair Trade Practice”. They are:
i. failure to issue a bill or receipt to the consumer;
ii. refusal to accept goods returned within 30 days by the consumer;
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.
Product LiabilityNo ProvisionA Product Liability guarantee might be made by the Consumer against the maker, specialist co-op and additionally the merchant.
Unfair ContractsNo Provision“Unfair Contract” is defined as a contract which causes significant change in the rights of a consumer. The New Act lays down 6 terms of contract which may be held as unfair to the consumer.
Central Protection CouncilsCentral Protection Councils, established at the district, state, and national level, protect and promote the rights of consumers.Central Protection Councils, established at the district, state, and national level, protect and promote the rights of consumers.
E-CommerceNo ProvisionThe New Act defines direct selling, E-Commerce and Electronic Service Provider, which brings them under the purview of Consumer Laws.
Furthermore, the Central Government is empowered to prescribe Rules for Regulating E-Commerce entities. However, the Rules have not yet been notified.
RegulatorNo ProvisionThe New Act has established the Central Consumer Protection Authority (CCPA), which has the sole purpose of promoting, protecting, and enforcing the rights of consumers as a class.
The CCPA is empowered to issue safety notices, pass orders to recall goods, take steps to prevent unfair practices, reimburse purchase price paid and impose penalties for false and misleading advertisements.
Pecuniary Jurisdiction of CommissionsDistrict Commission: Up to Rs. 20 lakh; State Commission: Between Rs. 20 lakh and up to Rs. 1 crore; National Commission: Above Rs. 1 crore.District Commission: Up to Rs. 1 Crore; State Commission: Between Rs. 1 Crore and up to Rs. 10 Crore; National Commission: Above Rs. 10 Crore.
Composition of CommissionsDistrict Commission: Headed by current or former District Judge and two members. State Commission: Headed by a current or former High Court Judge and at least two members. National Commission: Headed by a current or former Supreme Court Judge and at least four members.District Commission: Headed by a president and at least two members. State Commission: Headed by a president and at least four members. National Commission: Headed by a president and at least four members.
AppointmentA Selection Committee, which comprises a Judicial Member and other Officials, recommended Members on the Commissions.There is no provision for a Selection Committee in the New Act. It states that the Central Government shall appoint Members through Notification.
Alternate Dispute Redressal MechanismNo ProvisionThe New Act has mandated that Mediation Cells be attached to the District, State, and National Commissions.
PenaltiesNon-compliance of the Orders of the Commissions may lead to imprisonment between one month and three years or fine between Rs. 2,000 and Rs. 10,000, or both.As per the New Act, non-compliance of the Orders of the Commission may lead to imprisonment up to three years, or a fine not less than Rs. 25,000 extendable to Rs. 1 Lakh, or both.
Limitation Period for filing AppealThe limitation period for filling an Appeal to State Commission is 30 days.The New Act has increased the limitation period from 30 days to 45 days while additionally empowering the Commission to condone delay in appropriate cases.
Change in deposit amount to file an Appeal before the State CommissionThe Appellant had to deposit the amount ordered by the District Commission before filing Appeal before the State Commission, up to a maximum of Rs. 25,000/-.As per the New Act, the Appellant shall deposit 50% of the decretal amount ordered by the District Commission before filing an Appeal before the State Commission.
Appeal to National CommissionAppeal to National CommissionA second appeal to the NCDRC has been provided U/s 51(3) only if there is a substantial question of law involved in the matter.
Power of RevisionYesPower of revision can still be exercised by the National Commission under Section 58(1)(b) of the New Act and by the State Commission under Section 47(1)(b) of the New Act
Power of ReviewPower of review has been given only to National Commission under Section 22.Power of review has been conferred to District Commission, State Commission and National Commission under Sections 40, 50 and 60 of the New Act, respectively.

3. ISSUES WITH THE CONSUMER PROTECTION ACT, 2019:

• Possibility of a conflict between the ‘to be set up CCPA’ and the predominant Consumer Forums in conditions of a definite class of customers or a subject which can be taken up by each the our bodies. There must be an endorsed chain of command or making of independent class as an approach to avoid such a fight. Extra, Part 99 of the New Act coordinates the CCPA to carry on with regards to the directions of the Central Authorities in this way banishing its self-sufficiency.

• In case of product legal responsibility, it may be anticipated that there could also be frivolous claims solely on the premise of discrepancy in designs, even when it ends in no precise injury to the buyer or is completed as a way to enhance performance.

• Part 2(47) on Unfair Commerce Practices pre-determines the existence of a faulty product or poor service. Individually, even when withdrawn or discontinued, Firms might nonetheless be held liable below ‘product legal responsibility’ or for ‘deficiency of providers’.

• In case of deceptive ads the place even the endorsers could also be held liable, the New Act has supplied merely one strait-jacketed punishment for various lessons of endorsers which can fluctuate when it comes to remunerations in addition to social attain.

• The New Act doesn’t empower the Consumer Redressal Commissions to issue either interim injunctions or “stop and desist” Orders.

• Under the New Act, exclusively these suppliers are incorporated for which specific expense is made, taking after telephone, electrical energy, banking, etc. Consequently, the docs, notwithstanding medical clinics along with these the spot treatment is given at no expense looking like specialists clinics, don’t come inside the ambit of the Act. The New Act doesn’t unequivocally determine medical care inside the record of suppliers recorded inside the meaning of ‘administration’.

• Moreover, the necessary civil providers, resembling sanitation, water provide, and so forth., supplied by the State or the native authorities should not coated by the New Act;

• It is typically muddled whether issues right now forthcoming sooner than the Consumer Commissions will continue or in the event that they’re bound to get moved because of the difference in their monetary wards. This vagueness will furthermore add to delays. The Consumer Protection Act, 2019 is surely a stage toward more comprehensive laws. With the presentation of E-Commerce and e-recording arrangements, the laws is finding popular techniques and improving the strategy for buyers. The New Act tends to purchaser contemplations which have emerged because of the digitization of the business climate. It likewise rearranges the way toward recording a Complaint and supplies for quick redressal of the indistinguishable beside presenting new grounds on which a purchaser can start activity contrary to the merchant/specialist organization.

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