Provisions of New Consumer Protection Act to come into force from July 20th [Read Notification]

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For consumers here is good news amidst the coronavirus (COVID-19) pandemic. The new Consumer Protection Act, that has provisions to deal with class actions, product liability, misleading advertisements and liability for celebrity endorsements, while addressing new age developments like e-commerce, direct selling and tele-marketing, will come into force from 20 July 2020.

With the new law, district commission are empowered to handle consumer cases with claims of up to Rs1 crore. State commission will handle cases with claims of between Rs1 crore and Rs10 crore while the National Consumer Disputes Redressal Commission (NCDRC) will handle all cases above Rs10 crore.

Most importantly, with the new Act, any terms of a contract that are not fair to any consumer, can be declared as null and void by the state commission and NCDRC. This will help many consumers who are victims of one-sided agreements or terms and conditions imposed by the seller. 

In addition, a consumer can take action about product liability against the product manufacturer or product service-provider or product seller, as the case may be, for any harm caused to him due to defective product. Till now, product-service provider or seller used to get away by putting the entire blame for defective product on the manufacturer. This new provision will help control mainly online sellers.

While provisions relating to constitution and powers of central consumer protection council (CCPC) are not included in the notification, the rules on composition of the central council and its term have been notified.

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In a gazette notification, the ministry of consumer affairs, food and public Distribution (https://consumeraffairs.nic.in/acts-and-rules/consumer-protection), says, “…the Central Government hereby appoints the 20 July 2020 as the date on which the following provisions of the said Act shall come into force, namely Section 2 [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 [Except sections 88,89,92 & 93]; 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]”.

Last year, the Parliament had passed the Consumer Protection Bill 2019 that would replace the Consumer Protection Act 1986. The new act seeks to provide for protection of the interests of consumers and to establish authorities for timely and effective administration and settlement of consumers’ disputes.

Here are the main features of the new Consumer Protection Act.

The main features of The Consumer Protection Act, 2019 are as follows.

1. District forum is renamed as district commission.

2. The opposite party needs to deposit 50% of the amount ordered by district commission before filing appeal before state commission. Earlier, the ceiling was of maximum of Rs25,000 which has been removed. 

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3. The limitation period for filing of appeal to state commission is increased to 45 days from 30 days, while retaining power to condone the delay. 

4. State commission shall have a minimum of one president and four members

5. The original pecuniary jurisdiction of district commission will be up to Rs1 crore, state commission from Rs1 crore to Rs10 crore and the NCDRC above Rs10 crore.

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6. Complainant can institute the complaint within the territorial jurisdiction of the commission where the complainant resides or personally works for gain besides what was provided earlier.

7. Section 49(2) and 59(2) of the new act gives power to the state commission and NCDRC respectively to declare any terms of contract, which is unfair to any consumer, to be null and void.\

8. A second appeal to NCDRC has been provided under section 51(3) if there is a substantial question of law involved in the matter.

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9. Power of revision can still be exercised by NCDRC under Section 58(1)(b) and by State commission under Section 47(1)(b) of the Act.

10. Power of review has been conferred to district commission, state commission and NCDRC under Section 40, 50 and 60 of the Act, respectively.

11. NCDRC can hear appeals against the order of central authority by virtue of Section 58 of the Act. 

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12. Period of limitation in filing of complaint remains two years with a provision for condonation of delay power under Section 69 of the Act.

13. Section 70 provides for administrative control of state commission over district commission and that of NCDRC over state commission. It inter alia provides for investigation into any allegations against the president and members of a state commission / district commission and submitting inquiry report to the state government concerned along with copy endorsed to the central government for necessary action.

14. Section 71 confers power of execution as provided under order XXI, the Code of Civil Procedure (CPC), 1908 with such limitation as provided in the section.

15. Mediation is given statutory status by way of introduction of Section 74 in the new Act.

16. 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.

17. Chapter III of the Act provides for creation of central authority to regulate matters relating to violation of rights of consumers, unfair trade practices and false or misleading advertisements, which are prejudicial to the interests of public and consumers and to promote, protect and enforce the rights of consumers as a class.

18. The central authority will have an investigation wing headed by a director general for the purpose of conducting inquiry or investigation under this Act as may be directed by the central authority.

Read Notification Here:

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