Most Provisions Of Consumer Protection Act To Come Into Force On 20 July 2020

The Central Government has issued a notification by which it appoints the 20th day of July, 2020 as the date on which the many provisions of the Consumer Protection Act , 2019 shall come into force.

The following provisions will be coming into force with effect from the aforesaid date:

• Section 2 [Except clauses (4), (13), (14), (16), (40)] [DEFINITIONS]
• Sections 3 to 9 (both inclusive); [CONSUMER PROTECTION COUNCILS]
• Sections 28 to 73 (both inclusive); [Except sub-clause (iv) of clause (a) of sub-section (1) of section 58.] {CONSUMER DISPUTES REDRESSAL COMMISSION}
• Sections 74 to 81 (both inclusive); [MEDIATION]
• Sections 82 to 87 (both inclusive); [PRODUCT LIABILITY]
• Sections 90 and 91; [Except sections 88,89,92 & 93] [OFFENCES AND PENALTIES]
• Sections 95, 98, 100, [MISCELLANEOUS]
• Section 101 [Except clauses (f) to (m) and clauses (zg), (zh) and (zi) of sub –section 2 ]. [MISCELLANEOUS]
• Sections 102, 103, 105, 106, 107 [ Except sections 94, 96,97,99, 104] [MISCELLANEOUS]

Some of the salient features of the new Consumer Protection Act are as follows:

Misleading advertisements

The Consumer Protection Act contains provisions to deal with misleading advertisements. ‘Misleading advertisements’ are defined under Clause 2(28) as advertisement, which—(i) falsely describes such product or service; or (ii) gives a false guarantee to, or is likely to mislead the consumers as to the nature, substance, quantity or quality of such product or service; or (iii) conveys an express or implied representation which, if made by the manufacturer or seller or service provider thereof, would constitute an unfair trade practice; or (iv) deliberately conceals important information.

Misleading advertisements can attract penalty upto rupees ten lakhs from the CCPA under Clause 21. It is also an offence punishable with with imprisonment for a term which may extend to five years and with fine which may extend to fifty lakh rupees as per Clause 89.

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Liability of celebrity endorsers

The Consumer Protection Act addresses the liability of endorsers. “Endorsement”,is defined under Clause 2(18) to mean:- (i) any message, verbal statement, demonstration; or (ii)depiction of the name, signature, likeness or other identifiable personal characteristics of an individual; or (iii)depiction of the name or seal of any institution or organisation,which makes the consumer to believe that it reflects the opinion, finding or experience of the person making such endorsement. The endorser can be levied with penalty up to rupees ten lakhs by the CCPA for false and misleading advertisements, under Clause 21. However, the endorser will not be liable if he has exercised due diligence to verify the veracity of the claims made in the advertisement regarding the product or service being endorsed by him.

Product liability

The Consumer Protection Act incorporates a special chapter-Chapter VI- to deal with ‘product liability’. As per Clause 2(34) “product liability” means 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; According to 2(22) of Consumer Protection Act , “harm”, in relation to a product liability, includes— (i) damage to any property, other than the product itself; (ii) personal injury, illness or death; (iii) mental agony or emotional distress attendant to personal injury or illness or damage to property; or (iv) any loss of consortium or services or other loss resulting from a harm referred above. But it will not include any harm caused on account of breach of warranty conditions or any commercial or economic loss, including any direct, incidental or consequential loss relating thereto;’

A product liability action may be brought by a complainant against a product manufacturer or a product service provider or a product seller, as the case may be, for any harm caused to him on account of a defective product. It can be brought against even the product seller in certain circumstances like seller exercising substantial control over designing, packing, testing, manufacturing etc, or seller altering or modifying the product. The seller will also be liable if he failed to exercise reasonable care in assembling, inspecting or maintaining such product or he did not pass on the warnings or instructions of the product manufacturer regarding the dangers involved or proper usage of the product while selling such product.

Expanded definition of ‘deficiency’

The Consumer Protection Act expands the definition of ‘deficiency’ in Clause 2(11) to include :-(i) any act of negligence or omission or commission by such person which causes loss or injury to the consumer; and(ii) deliberate withholding of relevant information by such person to the consumer;

Enhanced pecuniary jurisdiction

The limits of pecuniary jurisdiction has been expanded in the following manner :-

District Forum :- Rs.One Crore from Rs. Twenty Lakhs

State Commission :- Rs. Ten Crores from Rs. One Crore

National Commission :- Above Rs. Ten Crores from Rs.One Crores

Offences

The Consumer Protection Act makes violation of consumer rights punishable offences and has Chapter VII dealing with them . As stated above, misleading advertisements are made punishable. The Act also addresses the menace of adulteration, by making manufacture, sale, storage of products mixed with adulterants punishable offences. Cognizance of offence can be taken by a court only on a complaint filed by CCPA. The Act also contains expanded definitions for “unfair trade practise” and “unfair contracts” under Clauses 2(47) and 2(46) respectively. The Central Government is empowered to make rules to regulate direct selling, multi-level marketing, e-commerce, tele-shopping etc

Central Consumer Protection Council

However, the Rules on Composition of Central Council., their term etc has been notified. As per these Rules, the Central Council which shall consist of the following members, not exceeding thirty-six, namely: —

1. the Minister in-charge of Consumer Affairs in the Central Government who shall be the Chairperson of the Central Council.
2. the Minister of State (where he is not holding independent charge) or Deputy Minister in charge of Consumer Affairs in the Central Government who shall be the Vice-Chairperson of the Central Council;
3. the Minister in-charge of Consumer Affairs of two of the States from each region as mentioned in Schedule I to be changed by rotation on expiration of the term of the Central Council on each occasion;
4. an administrator (whether designated as administrator or Lieutenant Governor) of a Union territory, to represent that Union territory, as mentioned in Schedule II, to be changed by rotation on expiration of the term of the Central Council on each occasion;
5. two Members of Parliament—one from the Lok Sabha and one from the Rajya Sabha;
6. representatives of Departments of the Central Government, autonomous organisations or regulators concerned with consumer interests, not exceeding five to be nominated by the Central Government;
7. the Chief Commissioner of the Central Consumer Protection Authority;
8. the Registrar, National Consumer Disputes Redressal Commission, New Delhi;
9. representatives of consumer organisations not exceeding five, to be nominated by the Central Government;
10. representatives with proven expertise and experience who are capable of representing consumer interests, drawn from amongst consumer organisations, consumer activists, research and training organisations, academicians, farmers, trade or industry, not exceeding five, one from each of the regions specified in Schedule I, of whom at least one shall be a woman; (k) the Secretaries in-charge of Consumer Affairs in the States, not exceeding three, to be nominated by the Central Government;
11. the Secretary in-charge of Consumer Affairs in the Central Government shall be the Member-Secretary of the Central Council.

State Commission and District Commission

The Department of Consumer Affairs has also issued notification regarding framing of Consumer Protection (Salary, allowances and conditions of service of President and Members of the State Commission and District Commission) Model Rules, 2020. Consumer Protection (Qualification for appointment, method of recruitment, procedure of appointment, term of office, resignation and removal of the President and members of the State Commission and District Commission) Rules, 2020 has also been notified. These Rules would also come into force on July 20.

As per these Rules following are the Qualifications for appointment of President and members of the State Commission.—

1. A person shall not be qualified for appointment as President, unless he is, or has been, a Judge of the High Court;
2. A person shall not be qualified for appointment as a member unless he is of not less than forty years of age and possesses– (a) an experience of at least ten years as presiding officer of a district court or of any tribunal at equivalent level or combined service as such in the district court and tribunal: Provided that not more than fifty percent of such members shall be appointed; or (b) a bachelor’s degree from a recognised university and is a person of ability, integrity and standing, and has special knowledge and professional experience of not less than twenty years in consumer affairs, law, public affairs, administration, economics, commerce, industry, finance, management, engineering, technology, public health or medicine:
3. At least one member or the President of the State Commission shall be a woman.

Qualifications for appointment of President and member of District Commission are:

A person shall not be qualified for appointment as President, unless he is, or has been , or is qualified to be a District Judge.

A person shall not be qualified for appointment as member unless he- (a) is of not less than thirty-five years of age; (b) possesses a bachelor’s degree from a recognised University; and (c) is a person of ability, integrity and standing, and having special knowledge and professional experience of not less than fifteen years in consumer affairs, law, public affairs, administration, economics, commerce, industry, finance, management, engineering, technology, public health or medicine .

At least one member or the President of the District Commission shall be a woman

Consumer Mediation

The Consumer Protection Act also mandates the Consumer Fora and Commissions to explore mediation possibilities before adjudicating the complaint. Consumer Protection (Mediation) Rules, 2020 have also been notified. The Rules provides a list of matters not to be referred to mediation The following matters shall not be referred to mediation, namely:—

The matters relating to proceedings in respect of medical negligence resulting in grievous injury or death;

Matters which relate to defaults or offences for which applications for compounding of offences have been made by one or more parties;

Cases involving serious and specific allegations of fraud, fabrication of documents, forgery, impersonation, coercion;

Cases relating to prosecution for criminal and non-compoundable offences;

Cases which involve public interest or the interest of numerous persons who are not parties before the Commission:

Provided that, in any case other than those mentioned in this rule, the Commission before which the case is pending may choose not to refer it to mediation if it appears to the Commission that no elements of a settlement exist which may be acceptable to the parties or that mediation is otherwise not appropriate having regard to the circumstances of the case and the respective positions of the parties.