The Consumer Protection Act (CPA) 2019, passed by the Indian parliament on 6th August 2019, has finally come into force on 20th July, 2020. This replaced the three-decade old CPA 1986.
What is the CPA?
The basic aim of the CPA is to save the rights of the consumers by establishing authorities for timely and effective administration and settlement of consumers’ disputes. The 1986 Act did not have a specific legal regime relating to product liability. CPA 2019 has changed that and introduced a slew of measures and tightened the existing rules to further safeguard consumer rights.
What’s new in CPA 2019?
Product liability is the single most important provision introduced by this act. It holds the product manufacturer or seller responsible if the consumer is harmed by their product. Consumers now have the right to seek compensation in such a case. The 1986 Act required the case to be filed at the defendant’s location. This was especially cumbersome if a consumer wished to complain against a seller who resided in a different city or state. The new act allows the consumer to file a complaint where they reside or work. Further, all rules of direct selling are now applicable to e-commerce websites, which obviously were not accounted for, back in 1986.
A manufacturer will be liable if:
There exists a manufacturing or a design defect.
There is a deviation from manufacturing specifications.
The product does not conform to warranty.
The product does not contain clear instructions of usage to prevent incorrect usage.
A seller will be liable if they have:
Exercised substantial control over design and manufacture of a product that caused harm.
Altered the product such that it is no longer usable as intended by the manufacturer.
Not conformed to the warranty.
Failed to exercise reasonable care of a product which caused harm.
Central Consumer Protection Authority (CCPA)
The establishment of a regulatory authority, CCPA, is another major aspect of this act. The CCPA which will protect, promote and enforce the rights of consumers. It will have the power to:
Regulate cases related to unfair trade practices, misleading advertisements, and violation of consumer rights.
Impose a penalty on the violators and passing orders to recall goods or withdraw services, discontinuation of the unfair trade practices and reimbursement of the price paid by the consumers.
Impose fines on the endorser or manufacturer up to 2-year imprisonment for misleading or false advertisement.
Impose a fine of Rs 50 lakh and imprisonment of up to 5 years on repeated offense.
CPA 2019 is far more comprehensive and powerful than the 1986 version. It squarely puts power in the hands of the consumer which will help bring down the increasing number of unfair practices by manufacturers and sellers. While the existing infrastructure to handle consumer grievances does need to be upgraded, this act is a strong step towards protecting consumer rights.