Consumer Laws in India and the Consumer Protection Act, 2020

The Consumer Rights in India are largely governed by the Consumer Protection Act of 1986. Coupled with growing awareness in consumers, the Consumer Cat of 1986 ushered in a new era of vigilant consumers. Yet, the act failed in many aspects, especially with respect to the growing E-commerce industry and consumer rights. The new Consumer Protection Act, 2019 has introduced many new provisions enhancing the scope of consumer rights and address contemporary issues. Apart from providing considerable rights to e-commerce consumers, the Act has also introduced strong penalties against misleading advertisements and simultaneously increased pecuniary jurisdiction (a legal term referring to the power of Court of Law to entertain a claim w.r.t amount claimed as compensation or penalty).

The New Consumer Protection Act has come into effect from 20th July 2020. Some of the major changes introduced by the act that will immensely benefit the new-age consumer are:

1.   The appeal provisions have been changed and now the opposite party must deposit 50% of the amount (ordered by the District Disputes Redressal Commission) before it applies to appeal to the higher authority. Earlier, only a maximum of Rs. 25,000 were to be deposited. This often led to the exploitation of the consumers fighting bigger and more powerful goods/service/product providers. The time for filing an appeal has also been increased to 45 days.

2.  One of the major changes has been w.r.t pecuniary jurisdiction of the court. The District Disputes Redressal Commission can now hear cases up to Rs. 1 crore, while its State Counterpart can hear cases up to Rs. 10 crores. Cases beyond Rs. 10 crores shall lie with the National Consumer Disputes Redressal Commission.

3. For e-commerce consumers, where the location of the seller is often indeterminable or out of the consumer's accessible area, a major relief has been provided. E-commerce consumers can now file complaints about relief and other remedies in their own district. 

4.  Another significant provision is in form of empowering the State as well as the National Commission to declare any unfair terms of contract (between the consumer and the goods/services provider) as void or ineffective.

5. The National Commission can now hear second appeals on substantial questions of law. This is a considerable change and it earlier lay only with the State High Court.

6.   However, the period for filing complaints remains unchanged. An aggrieved consumer has two years to file a complaint.

7.  The New Act has also introduced provisions for facilitating consumer dispute resolution through Mediation.

8.  A consumer aggrieved by a defective product can now bring a claim against the product manufacturer, service provider as well as the product seller.

As the Indian market is swiftly becoming globalized, with consumers fast shifting to online avenues for daily needs, the new Consumer Protection Act (2019) is a welcome move. It is expected to increase the scope of consumer rights. A Central Authority to act as a vigilante of the goods, services, and product sector has been set-up to keep unfair trade practices under check. The simultaneous increase in the District Commission's pecuniary jurisdiction is also a welcome move and will significantly enhance Consumer Rights Quotient. Earlier, many claims were dropped due to the largely inaccessible nature of District Forum, especially in cases of out of city claims. The new provision will allow many consumers to file cases in their own districts. This is expected to cover bigger industries like property, retail, etc. as well. The New Consumer Protection Act has extended all rules of direct selling to e-commerce, finally addressing the demands and needs of the e-commerce consumer. The introduction of mediation and video conferencing for hearing complaints is a welcome move, especially w.r.t. expanding Commission accessibility. Since the pecuniary and territorial jurisdictions have been expanded, the Consumer Disputes Redressal Forums will see increasing case-load. It remains to be seen how the forum will decide to cope with the same.