Consumer Protection Act Fills Gaping Need but the Test will be Implementation

The long-awaited Consumer Protection Act 2019 now replaces decades-old legislation. The new law is to deal with not just a changing buyer-seller dynamic but also combat the large pendencies that the forums face today. So far the legislation has received a lot of good press. The real test of implementation, however, might not be as easy. The author looks at key features of the new law and underlines the possible areas of concern.

Will the Indian consumer become a king under the new Consumer Protection Act, 2019? The Act which recently came into effect is being heralded as progressive legislation that fills a gaping need. However, in resolving the lacunae in the erstwhile 1986 legislation, what remains to be seen it how it will deal with the challenges of implementation.

The Act increases its purview by including e-commerce websites within its ambit. Under the new law, e-commerce websites are made liable for the products they sell.

The Act does this by introducing the concept of ‘product liability’. This entails that manufacturers, as well as sellers, shall be liable to pay reparations for injury or inconvenience caused by their products. This signifies a conscious and welcome shift to a ‘let the seller beware’ regime.

In a similar vein, the Act obligates e-commerce companies to have a return policy in place. It also asks them to update their listings with more information about the product and the seller.

Better Regulation?

The Act also creates a Central Authority. This is in addition to the pre-existing Dispute Redressal Commission and Consumer Councils. The new authority is tasked with regulating matters of unfair trade practices and false or misleading advertisements among other associated matters. The authority shall have an Investigation Wing, the focus of which is to safeguard consumer rights as a class. Class action suits are another welcome feature of the new law.

The Act also rejigs the jurisdictions of Dispute Redressal Forums. The most significant of these new brackets are at the district level. District Forums are now empowered to hear complaints where the consumer has paid up to Rs. 1 crore. This should be a cause of concern for the small litigant.

The Consumer Forums at present hold heavy pendency. According to government sources, despite a near 93% disposal rate, 3.4 crore cases lie pending at the district level. With the newly increased purview of the Act, the inclusion of product liabilities, and class action suits, this statistic is bound to shoot up. Add to that the expanded pecuniary jurisdiction of the Commission and you get an unending deluge of cases.

Small Litigants Lose Out

The Consumer movement has always been about the rights of the average consumer. This expansion of jurisdiction, however, would dwarf the small litigant even at the first forum of redressal.

The Act however does in principle at least, seek to remedy this by bringing about a mediation process and increasing the number of District Forums. The current infrastructure of the District Commission is woeful. Short-staffed and overburdened, the forums are ill-equipped to handle the new inflow of cases.

While it would be commendable to establish new forums, it should be preceded by a practical assessment of the existing state of affairs. A reality check will help.

While the idea of including a mediation process is welcomed, it is still confined to being a court-annexed mediation. In such a situation, the mediation process shall be initiated only at the discretion of the Commission. This harkens us to the age-old qualm of the Indian mediation process- delays and parallel procedures.

Regardless, many place high hopes on it. Bejon Misra, a law professor, and an international consumer policy expert told The Leaflet: “The act will bring in a breath of fresh air in terms of disposal of cases. The mechanism of mediation would ensure only intellectually disputable matters will go before the district, state, and national commissions.”

Making mediation the necessary first step before reaching the forum would have instead allowed for a reduced burden on the District Commissions, but the Act misses the chance. Moreover, the option of mediation is predictably limited to exclude cases of grievous hurt and medical negligence. Misra is however hopeful that ethical practitioners of business will encourage mediation at their own level.

The Act and the subsequently released E-Commerce regulations necessitate online merchants and e-commerce marketplaces to provide information regarding the country of origin of the goods being sold. The regulations state that the source of the import of the goods needs to be provided.

A similar requirement was sounded by the Department of Promotion of Industry and Internal Trade a few weeks ago. This is a step towards increased consumer awareness if nothing else. However, there is still ambiguity with regards to how this shall play out, especially in instances of a protracted global value addition chain.

However, the Act takes several important steps in furthering the rights of the consumer. Points out Misra: “It is a newborn baby of the modern technological world, which needs the adequate nurturing.”

To actually ensure that the consumer enjoys a place of prominence, it would have to achieve the tall order that it proposes, while filling up potholes along the way.

Shivam Parashar is a law student at the University School of Law and Legal Studies, Guru Gobind Singh Indraprastha University, New Delhi. Views expressed are personal).