This article has been written by Ruchi Mulye, from the University of Mumbai Law Academy.
Nitish Bagri has been practising in Jaipur since 2013. He graduated in 2011 from Bharati Vidyapeeth University and joined the chambers of Mr Sajjan Singh Rajpurohit Sinha in Jodhpur. He then joined the chambers of Mr Virendra Ludha, Senior Advocate in Jaipur. He started his practice in 2015 and has appeared for various government corporations, insurance companies, builders, media houses, etc.
Mayur Sachdeva is the Head of Sales at LawSikho and has an experience of six years in editing and publishing books as a proprietor of Rajasthan Law House which is the first legal publishing house in Rajasthan and was established in 1958. He is an author of over one hundred published law books on different subjects of State and Central laws in English and Hindi languages.
A brief introduction about the Consumer Protection Act, 1986
Before 1986, no specific laws were governing the grievances of consumers. If a consumer was aggrieved by misrepresentation or product default, the only remedy was to file suit for damages. The suit of damages would go to the civil court and it would take a long time for it to get resolved. Therefore, a need was felt to establish specific forums that will deal with consumers at large. The act was introduced by the government in 1986 and was brought to force with five important things in mind, i.e. right to choice, right against the marketing of hazardous goods, right to know the price, quality, quantity of the goods, right to consumer education and that consumer issues would be adjudicated at a proper level. It provided a three-tier adjudicating process for consumer issues, i.e. the district forum, the state commission and the national commission. These three forums were established to look into redressal of consumer issues. They were divided on pecuniary and territorial basis.
The district consumer forum deals with issues of the value of products up to Rupees twenty lacs, the state jurisdiction deals with issues up to Rupees one crore and the national commission deals with issues over rupees one crore. The pecuniary jurisdiction is decided based on the value of the claim. If a consumer claims mental harassment and a product loss, the jurisdiction will be decided on the total amount that the claim comes to. The consumers have to approach the forums themselves when they are aggrieved by any product or service. Appeals are made in a time-bound manner within a period of thirty days. If the filing of an appeal goes beyond thirty days, an explanation has to be provided to the respective forum for each day.
The Consumer Protection Act, 1986 did not provide for e-commerce and hence, it is inadequate in today’s age. The government enacted the Consumer Protection Act, 2019 which has received the president’s assent but is yet to be notified, and will repeal the act of 1986. A lot of changes have been made in the new act.
In the act of 1986, there was no administrative body that would look into the grievance of the consumer. The consumer only had the opportunity to file a complaint before the consumer forums of appropriate hierarchy and go for litigation. However, in the act of 2019, they have established the Central Consumer Protection Authority (CCPA). CCPA will appoint chief commissioners and additional chief commissioners in the CCPA authority and will have a superintendent and general powers to protect the interest of the consumers. The appeal for the CCPA would lie directly to the national commission. It is a procedure that intends to reduce litigation to a certain extent.
The CCPA has been provided with three major powers, i.e. recalling of goods and withdrawal of services, reimbursement of prices and discontinuation of practices which are unfair and detrimental to consumers. Earlier, the consumer would be uncomfortable for approaching the forum for a petty amount and contest the case for one to two years. The establishment of authority would reduce time.
The scope of the Consumer Protection Act, 1986 has been enhanced through judicial pronouncements but the statutory provisions were limited. Now, the scope of the statutory provisions have been increased. A big problem of misleading advertisements was faced to which there was no resolution, but it has been brought into the picture in the Act of 2019.
The three-tier system that existed in the Act of 1986 has been reincorporated in 2019 by changing the pecuniary jurisdiction of the courts. As per the Act of 2019, the district courts shall have jurisdiction of issues up to Rupees one crore, the state commission would have jurisdiction from rupees one to ten crores and the national commission would have jurisdiction above rupees ten crores. The procedure to determine court fees and claims has also been changed. The court fees and pecuniary jurisdiction will be decided on the value of the claim, and the claim will be determined on the amount that has been paid for goods or services. There have been objections on the fact that most claims would not exceed rupees one crore and therefore it would burden the district forums to a great extent.
Earlier, mediation was not the prescribed form in consumer laws. Mediation and arbitration are the most proactive methods that are followed by the judiciary at all levels, including high courts and civil courts. There were no provisions for sending a matter to mediation under the Consumer Protection Act, 1986. In the new act, the matter can be sent to mediation and no appeal can arise out of the mediation. Mediators will be provided by the forums itself.
In the Consumer Protection Act, 1986 the time to file a reply or a written statement is 45 days. The appeal can be filed in 45 days as opposed to the earlier 30 days. There are specific statutory provisions for e-filing, even by consumers themselves.
If the consumer was aggrieved by the order of a commission, he had to file a revision petition before the higher forum. A provision of second appeal has been provided in the Act of 2019. If there is a question of law which needs to be addressed, a second appeal can be filed. The usage of this provision can only be determined when the Act comes into practice. A second appeal might address the issues of law which were not addressed before.
In the Consumer Protection Act, 1986 the limitation period was two years from the cause of action. If the consumer is aggrieved by the deficiency in services or defective products, he can institute a complaint within two years from the cause of action. This remain the same in the new Act.
An appeal could be filed from the district consumer commission to state commission in a period of 30 days, now it has been extended to 45 days. There are additional powers conferred upon consumer forums i.e. they can issue an award to rectify errors, give financial awards for defective goods and can ask to stop the production of defective goods. The scope of the consumer forums has been enlarged. E-commerce has been given statutory provisions as a recourse for the grievances and consumers can file a complaint directly to the CCPA or the forums.
Is drug control considered to be an important part of consumer protection?
Laws regarding drugs are completely different and are not related to consumer laws. Therefore, it does not fall under the purview of the Consumer Protection Act, 2019.
How has this area of law been affected by Covid-19?
Covid-19 has had an impact on businesses across the globe. Earlier in the case of accidents, insurance companies would investigate the claims made by consumers and then accept or reject the claims. This is not happening during Covid-19 as there are no vehicles on the road. The activity of shopping has come to a halt and therefore, there are fewer grievances of products and services. It is a temporary obstacle.
Is medical negligence a liability under the Consumer Protection Act?
Medical negligence covers 30% of the litigation proceedings under consumer forums and it is the most approached reason for consumer forums. Medical negligence is a very wide term. The law is extremely strict for medical practitioners and has been very favourable to consumers. In many cases, consumers have been granted huge amounts in compensation for medical negligence. The criteria for such cases is that the consumer should be able to explain in the complaint and prove beyond a reasonable doubt that medical negligence was attributable to the hospital due to which the consumer has a disability.
How to take up the grievances with telecom companies when the consumer does not get facilities under network packages?
The consumer can file a complaint before the consumer forum if he can prove under reasonable doubt. The consumer can also approach the Telecom Regulatory Authority of India (TRAI).
What will happen to the cases filed under the Consumer Protection Act, 1986 once the new act of 2019 comes into force?
The Consumer Protection Act, 2019 is prospective and not retrospective at all. The act would apply to the complaints which would be filed after the act is notified or any pending complaints. The law is very clear that unless there are specific provisions for retrospective applicability, the law is always prospective.
How many forums have gone for e-filing?
As of now, the High Courts, Supreme Court and certain district courts have started the process of e-filing. The State Consumer Forum in Rajasthan started e-filing of urgent matters. After the new act is officially notified, the administration would have to provide for a big change in the e-filing process. E-filing is a process that needs encouragement.
Would the advocate doing e-filing have to be registered under the local bar association?
The Supreme Court has said that an advocate registered anywhere can practice anywhere in the country. No bar association restricts an advocate from practising elsewhere.
Can the provision for punishment be exercised by commission or the courts?
The consumer forums are three-tier commissions, i.e., the district consumer forum, state consumer commission and national consumer commission. There are no civil courts in them. If an award of the consumer forum is not complied with by the respondent, a contempt petition can be filed under Section 27 which gives the forum the power to punish the person with imprisonment from one month to three years and a penalty up to Rupees 25 thousand. The penalty has been kept the same in the new act but the penalty can be anywhere up to Rupees 1 lakh. If the consumer is aggrieved by the inaction of the respondent, they can file a contempt petition before the respective forum.
How is the jurisdiction determined if the seller and the buyer are from different states?
In the CPA, 1986, the jurisdiction would be where the respondent resides or operates. If a product was purchased from an e-commerce company, then the place of that company would be the jurisdiction. If respondents have an office in any other place, the complaint can be filed in that jurisdiction too. In the new act, the complaint can be filed at the place of residence of the complainant, where the defendant resides and where the cause of action has raised in part or whole.
Will e-filing encourage the consumers to become independent and thus cause a loss to advocates?
There is no loss of income as advocates would be required for legal assistance and has to be engaged. Advocates can argue online through video conferencing. A consumer can choose to file a complaint and argue themselves but they can also have an advocate file the complaint online and argue the matter. Clientele of advocates will not be affected. Even with e-filing currently in place, 98% consumers engage advocates.
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