New protections offered by the Consumer Protection Act of 2019

 An Introduction to the Consumer Protection Act of 2019 and its predecessors in 1986 and 1993

Aranmula, July 31, 2019 
“A customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption of our work. He is the purpose of it. He is not an outsider of our business. He is part of it. We are not doing him a favour by serving him. He is doing us a favour by giving us the opportunity to do so.”
Quote attributed to Mahatma Gandhi in 1890

Customer-centric thinking needed:                                                                                    The idea of consumer protection flows naturally when one remembers the customer’s place in the economic order. History is replete with examples of failed companies who played fast and footloose with their customers. By taking them for granted and not holding their best interests to heart, these companies lost the respect, love and commercial loyalty of the customer. 

The Advertising Guru, “David Ogilvy in his book, “Confessions of an Advertising Man” even went so far as to say, “Good Advertising will kill a bad product or poor service faster.” By bad product we mean one that does not live up to its claims.

Indian thought leaders have always known this and from the Manu Smriti era (800-600 BC) have taken steps to protect the consumer. For a brief note on the evolution of consumer protection, please refer our companion article by clicking on the link below:

Given the plethora of choices available to the consumer these days, and the power of media, it is particularly important to regulate commercial behavior. The Consumer Protection Act of 2019 is a repackaging of an elaborate process that already exists but is an improvement on its predecessors even though most of its provisions are already available in the Consumer Protection Acts of 1986 and 1993.

Refurbished Customer Protection:                                                                                       The Bill establishes what it calls “a Central Consumer Protection Authority” (which already exists in similar form at the National, State and District levels) for efficient and speedier disposal of consumer grievances.

The Authority is vested with regulatory and Suo moto powers (acting on its own cognizance) to investigate violations of consumer rights. An aggrieved party in response to any order passed by the new Central Consumer Protection Authority can appeal to the National Commission. The Bill also confers advisory powers on the existing Consumer Protection Councils and supports the establishment of these Councils at district, state and national level.

New Customer Protections Built into the Act: 

The Consumer Protection Act of 2019 will widen the scope of the previous Act to include new protections for the following: 

- Telecommunications consumers, and also protect types of purchases including those made online, while teleshopping, etc.) BJP MP Rajiv Pratap has reqested that the Act also cover issues like dropped calls and utility outages.

-       -- Purchasers of housing.
     - Consumers who are swayed by celebrity endorsements (celebrities will need to be much more careful when endorsing a product). The endorser and even the publishers of such misleading advertisements are now liable under the law which provides a penalty of up to Rs 50 Lakh and ban up to three years on a subsequent offence. 

      There is also provision in the Act for a manufacturer or service provider to be punished for making misleading statements that hurt consumer interests.

-       Customers now need not make a complaint to receive protection as the Central Consumer Protection authority is now recognized as a bona fide complainant.

-       New concepts such as 'product liability' have been introduced
     In the words of Gaurav Dani, writing for “Business Today:”

“Perhaps the introduction of 'product liability' provision is one of the most important features of the Bill. The existing Act has no provision in relation to 'product liability' which allows a complainant to make a claim of product liability against a product manufacturer or service provider for any deficiency in a service or defect in the product.

The product manufacturer shall be liable in a product liability action if the product contains a manufacturing defect, is defective in design, deviates from the manufacturing specifications or express warranty, or does not contain adequate instructions for usage.”

Just as in various International consumer protection laws, the product manufacturer can be held liable even if he proves that he was not negligent or fraudulent in making the express warranty of a product. This is an area where many are calling Internationally for “Tort reform” as in the 1992 case of the woman who was awarded $3 million dollars after she carelessly spilt hot coffee from McDonalds in her lap.

The Act also provides for liability for those who may only market a product manufactured by others. This is vital in India as many large marketing companies (including multinationals, outsource their manufacturing to smaller units).

-       Contracts between corporates and consumers are deemed “unfair” provided:

o   It causes “significant” change in the rights of consumers.
o   Requires “excessive” deposits.
o   Imposes a “disproportionate” penalty for breach of contract.
o   Disallows early payment of debts.
o   Terminates a contract without “sufficient cause”
o   Transfers a contract to a third party to the detriment of the consumer.

Under the Act, both State and National Commissions can act on these issues 
and declare the provisions of a contract unfair.

The Union Food & Consumer Affairs Minister, Ram Vilas Paswan introduced the Bill as a means of protecting the consumer through a national Consumer Disputes Redressal Commission that functions at the national, state and district levels.

 As before, consumers (as a first step) can file their complaints online at after registering. The public can also access the Consumer Helpline toll free at 1800114000 or 14404. The portal is described as an Integrated Grievance Redressal Mechanism. The web site explains the redressal process thus;

Any (consumer) grievance received either through online registration or call center is entered in the portal and a unique docket number is generated and given. Grievances received are sent to the concerned company / agency / regulator / ombudsman, as the case maybe, for speedy redress. Action taken is updated on real time basis by the concerned agency. As a follow up action, these agencies are reminded at stipulated intervals.

The Consumer Protection Act has also broadened the scope of the term "unfair trade practice" to include the following:
-       - Non-issuance of a receipt
-       - Refusing to refund goods or services within 30 days of sale
-       - A complaint as to the violation of consumer rights or misleading advertisements which are against consumers as a class may be made to one of the consumer dispute redressal authorities.

Finally, the Act also empowers the government to make rules for preventing unfair trade practices in e-commerce, direct selling and to protect the interest and rights of the consumers. This will result in effective resolution of issues arising out of online transactions and emerging e-commerce market.

The following material has been culled from a previous article on consumer protection, written and published on CitizenzNews, several months ago:

If the Consumer Helpline fails to solve the problem, you can contact the "National Consumer Disputes Commission which according to their web-site has 35 State offices. State Office addresses are available at There are also District offices in each state. All disputes are subject to the provisions of the Consumer Protection Act of 1986. 

Consumer cases can be filed at the National, State or District level. 
 Each District Forum is headed by a person who is or has been or is eligible to be appointed as a District Judge and each State Commission is headed by a person who is or has been a Judge of High Court. The National Commission is usually headed by a sitting or retired Judge of the Supreme Court.

It should be noted that people who obtain goods and services free or for re-sale are not covered by the provisions of the Consumer Protection Act of 1986.

This redressal system has been disposing off cases effectively since 1988: 
4,885, 877 case have been filed since 1988 at the National, State and District level. Not surprisingly, the districts have processed many more cases.

In conclusion, the Consumer Protection Act of 2019 is an improvement on the provisions of the Consumer Protection Act of 1986 and 1993. A review of the performance of these consumer courts several months ago (as of 2018) provides the following insights:

-       National cases represent only 2.54 percent of the total with an 84.45 percent disposal rate.
-       State cases represent only 16.62 percent of the total with an 85.77 percent disposal rate.
-       District cases represent a whopping 80.83 percent of cases with a 92.32 percent disposal.
Strong consumer protection laws are an indicator of a maturing economy as India continues to grow. The people of India will also need to rise to the occasion and utilize the provisions of this legislation by holding errant companies to account

For an outline of the evolution of Consumer protection in India, please click on the link below:


Thanks for stopping by and caring enough to comment.Anyone with a Google account can comment.

Also, please subscribe to this blog if the content pleases you.

Powered by Blogger.