On 30th July 2019, Lok Sabha passed the Consumer Protection Bill, 2019. Presumably the said bill will be passed in the Rajya Sabha and shall receive the assent of the President of India soon as well. Upon the said Bill becoming effective and subject to the notification passed by the Government, the present Consumer Protection Act, 1986 will stand repealed.

On a basic review, the bill does seem to pass the muster and in many respects seems to elevate the standard in favour of consumers. Some of the provisions of the Bill which requires specific attention and understanding are as follows:

A. JURISDICTION OF THE CONSUMER DISPUTES REDRESSAL COMMISSIONS

As in the Consumer Protection Act 1986, the Bill also provides for the adjudication of consumer disputes by statutory commissions set up at the district levels and state levels and with a national commission. The pecuniary jurisdiction for such redressal commissions have been enhanced in comparison with the Consumer Protection Act 1986, with the Bill specifically providing that the Central Government, where it deems it necessary to do, may prescribe other values for the said forum, as it deems fit, enabling the government to change the pecuniary jurisdiction, as per the requirement of the place or time.
However, what is interesting in terms of the pecuniary jurisdiction is the specific language employed in the Bill. Pertinently, such a clause in the Consumer Protection Act 1986 was stated as : “where the value of the goods or services and compensation, if any, claimed,….”. Whereas in the Bill, the language of the provision is as follows: “where the value of the goods and services paid as consideration…”

Therefore, firstly the compensation being claimed by the complainant does not seem to factor in the assessment of the pecuniary jurisdiction. But more importantly, the phrase ‘paid as consideration’ would seem to imply that the pecuniary jurisdiction is determined by what has been actually paid already by the complainant and not the total value of the good / service. Such a reading of the section may particularly impact complaints being made by flat owners, etc., where even though the value of the property may be above 1 Crore, the allottee having made payment of only a certain percentage of the total value (i.e. less than 1 crore) in terms of the construction milestones, would be denied from approaching the State Commission or the National Commission.

However, it is also relevant to note that, what is different from the Consumer Protection Act 1986 is that the Bill also grants jurisdiction to the relevant district or state commission where the Complainant resides or personally works for gain. This becomes especially beneficial for consumers, since consumers would no longer be required to file and pursue the complaint where the seller or service provider is located, which has significant time and cost implications on the complainant. The said provision also becomes relevant since e–commerce and e–transactions are on the rise and the service providers or sellers could have their registered offices anywhere else in the world.

B. ESTABLISHMENT OF THE CENTRAL CONSUMER PROTECTION AUTHORITY

The Bill in section 10 contemplates the establishment of a central authority i.e. the Central Consumer Protection Authority to ‘regulate matters’ relating to violation of consumer rights, unfair trade practices and false or misleading advertisements which are prejudicial to the interest of ‘public’ and ‘consumers’. The said Authority is also authorised to ‘promote, protect and enforce’ the rights of the consumers as a class.

The objective is to set up the Authority with a large mandate and with wide powers, which is further demonstrated from the fact that the Bill also provides for the Authority to have an Investigation Wing for the purpose of conducting inquiry or investigation under the Act and also grants search and seizure powers.

Section 10 of the Bill makes the Authority responsible to regulate matters which are prejudicial to the interest of the ‘public’ in addition to the interest of the consumer. The said Authority may well be a shot in the arm for consumers, especially since the Authority is also vested with vide powers to pass orders as it deems fit and the Bill also provides for penal consequences for the non-adherence of the directions of the Central Authority in terms of Sections 88 & 89 of the Bill. Even apart from the above, there is no prescribed limitation period or threshold pecuniary value, providing a seemingly approachable and powerful platform to consumers.

C. RECOGNITION AND TREATMENT OF UNFAIR CONTRACTS

In a much needed move, for consumers, the Bill recognizes and addresses the menace of unilateral and unfair contracts. It has been held in number of judgments of the Supreme Court as well as of the National Commission that courts will not enforce and will when called upon to do so, strike down an unfair and unreasonable contract or an unfair and unreasonable clause in a contract, entered into between parties who are not equal in bargaining power.

D. PRODUCT LIABILITY AND PENAL CONSEQUENCES

The Bill in Chapter VI introduces the concept of product liability for a defective product and brings within its scope the product manufacturer, the product service provider and a product seller. The bill intends for this chapter VI to apply to every claim for compensation under a product liability action.

Interestingly the term “product seller” has been defined broadly enough to include “a person who is involved in placing such product for commercial purpose”. As such, the bill can be read to bring within the scope even the e-commerce platforms, which have so far taken the defence of being ‘aggregators only’. In fact the introduction of the definition of “electronic service provider” seems specifically intended in this regard.
What is significant however is that in Chapter VII of the bill “Offences And Penalties”, any grievous injury or death caused due to adulterated goods or spurious goods has been made into a punishable offence with imprisonment and fine. The offence is also cognizable and non-bailable.

Section 39 (1) of THE CONSUMER PROTECTION ACT, 2019 covers the repair, replace or refund of the faulty product delivered by the company. The consumer forum should be satisfied that the goods complained against suffer from any of the defects specified in the complaint or that any of the allegations contained in the complaint about the services or any unfair trade practices, or claims for compensation under product liability are proved.