This article is written by Shambhavi Shree, a student of KIIT School of Law, Bhubaneswar (4th year).

INTRODUCTION

Indian Parliament introduced a completely new act by replacing the Consumer Protection Act, 1986. It came into effect on 20th July 2020. The main objective of this act is to provide convenience and to look after the unfair trade practices that can cause harm or injury to the customers. This act consists of more stringent punishment if there is a violation of consumers right by the person who is providing services. If there is any defect or act of omission in terms of warranty or terms and conditions or failed to exercise reasonable care or due diligence or modification of the product then there is a liability of:

  • Product manufacturer under section 84 of the Consumer Protection Act, 2019.
  • Product service provider under section 85 of the Consumer Protection Act, 2019.
  • Product seller under section 86 of the Consumer Protection Act, 2019.

Who is a Consumer?

The word consumer is defined under section 2(7) of the Consumer Protection Act, 2019. A consumer is a person who buys goods for their consumption. The goods are stored for their personal use. World Consumer Rights Day is celebrated on 15th March every year. It is celebrated to create awareness and to protect the rights of the customers at large. The consumer has the following rights under section 2(9) of the Consumer Protection Act, 2019:

  • Right to safety.
  • The consumer has the right to receive information about the products and services.
  • Right to be heard if they are deprived of their rights and file a complaint in Consumer Redressal Forums.
  • The right to access a variety of goods at reasonable prices.
  • The right to get compensation for a wrongful act.
  • The right to full information about the quality, quantity, nature, price, and description of the goods purchased.

Important Terminologies

  1. Goods: Any movable property defined under section 2(21) of Consumer Protection Act, 2019, and section 3(1)(j) of the Food Safety and Standard Act, 2006 which is for the consumption of human beings.
  2. Services: Any description which is made available to the consumers such as transport, entertainment, construction, banking, and many more which is defined under section 2(42) of the Consumer Protection Act, 2019. In the new act, telecom has also been added to the definition of services.
  3. Product: Defined under section 2(33) of the Consumer Protection Act, 2019 which states any article, goods, substance, or raw material that is manufactured for sale.
  4. Person: It has been defined under section 2(31) of the Consumer Protection Act, 2019. It is an individual, artificial person, firm, Hindu Undivided Family, cooperative society, or association of persons that is registered under the Societies Registration Act, 1860.
  5. Unfair Contract: It is a contract between a manufacturer or trader or service provider that obligates the right of consumers defined under section 2(46) of the Consumer Protection Act, 2019.
  6. Unfair Trade Practice: According to section 2(47) of the Consumer Protection Act, 2019 any trade practice which is for the promotion of the sale, supply of goods or services, adopts any unfair means including a misleading or false statement about the product, promise to repair or replacement, warranty or guarantee of performance is known as unfair trade practice.

Difference between Consumer Protection Act 1986 and Consumer Protection Act 2019

  • In Consumer Protection Act, 1986 there were no provisions for E-commerce but it has been defined under the new act. E-commerce or electronic commerce refers to the buying and selling of goods and services through electronic media. The customers find it more convenient to avail of the services through an online mode without stepping out of their homes.
  • Now a complainant can file a complaint in their nearest Consumer Redressal Forum through an online mode. It is a time-consuming process.
  • Section 10 of the Consumer Protection Act, 2019 includes the establishment of a regulator known as the Central Consumer Protection Authority (CCPA). It includes: (i) If there is a violation of consumer rights in terms of buying of the products and services from the manufacturer, dealer, or seller then it is the responsibility of CCPA and a director-general to investigate the matter. (ii) CCPA has the authority to take action against any individual involved in the false spreading of the advertisement which may cause harm to the customers. The accused person shall be liable with a penalty of ‎₹10 lakhs and which may extend to ‎₹50 lakhs. (iii) If the manufacturer found in misleading statements or advertisements shall be liable with imprisonment for up to 2 years.
  • District Commission is supposed to take action if there is a complaint and the cost paid by the complainant to the seller does not exceed ₹1 crore. In the previous act, the limit of District Forum was up to ₹20 lakhs.
  • State Commission is supposed to take action against the consumer complaints if the cost paid to the seller does not exceeds ₹10 crores. In the previous act, the limit was up to ₹ 1crore.
  • National Commission is authorized to take action against the consumer complaints if the cost paid to the seller exceeds ₹10 crores. In the previous act, the limitation was up to ₹1 crore.
  • Unfair trade practices are considered to be unlawful as it is a deceptive and fraudulent act practiced to cause harm or injury to consumers. Earlier there were six provisions for unfair trade practices but three more have been added in the new act. If the goods bought don’t have a bill or cash memo or the service provider refused to take back the defective product or refused to refund the amount paid or refused to refund goods and services within 30 days or disclosure of customer’s information leads to unfair trade practices.
  • Courts can resolve the matter by settlement through mediation. No such legal provisions for mediation existed earlier.
  • Section 34 of the Consumer Protection Act, 2019 states that compensation shall be awarded in case of any inconvenience caused by the product manufacturer, service provider, and the seller.
  • If a person found liable not agreeing with the orders of the commissions then he shall be liable with imprisonment up to 3 years or with a fine, not less than ₹25,000 which may exceed ₹1 lakh or with both. Earlier there was punishment ranging between 1 month and 3 years or with a fine ₹2,000 to ₹10,000 or with both.
  • In case of death of the customer caused due to products containing adulterant or false products then the accused person shall be liable with imprisonment from 7 years to life or a fine up to ₹10,00,000 or both.

Case Analysis

  1. Dharangadhara Chemical Works Limited V. State of Saurashtra 1957 AIR 264, 1957 SCR 152

In this case, a thin line of difference was drawn between a contract for services and a contract of service. In a contract for services, a master instructs how a work should be done in exchange for monetary consideration. In a contract of services, the master commands its agent in exchange for money.

  1. R. D. Saxena V. Balram Prashad Sharma 22nd August, 2000

The relative term misconduct means wrong conduct or improper conduct. It was further contended by the Supreme Court that the service provider is involved in wrongful conduct to gain an advantage arising out of it.

  1. Indian Medical Association V. V.P. Shantha and Ors on 13th November, 1995

Issues

  1. Whether a medical practitioner could be regarded as rendering service under section 2(1)(0) of the Consumer Protection Act, 1986?
  1. Whether the service rendered at a hospital could be regarded as a service?

In this case, if a doctor is unable to provide appropriate service then the patient can claim compensation. Supreme Court stated that a patient is a customer as long as they are making payment for the services rendered. Service rendered by the medical practitioner by way of consultation, diagnosis, and treatment, both medical and surgical would fall under the ambit of service. But the service rendered free of cost not to be considered as service under this act.

CONCLUSION

The consumer is often deprived of their rights in modern days and ages. Justice must be provided to the customers facing problems regarding their regular needs and demands. However, the introduction of electronic commerce and addressing complaints through online technologies like video conferencing, online video application, face to face interaction, voice messages, sending images and videos online have helped a lot. Because of the amendment of the new act, there are fewer misunderstandings, miscommunications, and assumptions.

REFERENCE

  • http://angelalagu.blogspot.com/2016/04/contract-of-services-vs-contract-for.html#:~:text=The%20law%20makes%20a%20distinction,of%20an%20independent%20sub%2Dcontractor.
  • https://www.google.com/search?q=Protector+%26+Gamble+Home+Products+V+Raj+Dev+Bharadwaj+detrgent+case&sxsrf=ALeKk00VXRJTyIYoPGeAxzZeYFa4t1Mpig:1597082945347&source=lnms&tbm=isch&sa=X&ved=2ahUKEwi6j4nNnZHrAhUDOSsKHWLvAvgQ_AUoAnoECAwQBA&biw=1271&bih=568
  • https://indiankanoon.org/doc/66903437/
  • https://www.google.com/search?q=K.+Vishnu+v+National+Consumer+Disputes+Redressal+Commission+%26+Anr&oq=K.+Vishnu+v+National+Consumer+Disputes+Redressal+Commission+%26+Anr&aqs=chrome..69i57.260j0j7&sourceid=chrome&ie=UTF-8
  • https://www.lexology.com/library/detail.aspx?g=592f2bfc-30c8-4af6-88a8-61ad1f104492

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