Table of Contents Hide
- Need of the Act
- Objectives of the Act
- Rights of a consumer
- Responsibilities of a consumer
- Meaning of consumer
- Meaning of sale
- Meaning of service
- Meaning of defect
- When can you file a case in Consumer Court?
- Landmark Judgments
The long-gone Consumer Protection Act of 1986 has been replaced by the Consumer Protection Act of 2019 (referred to as the “Act hereinafter”). The Consumer Protection Act of 2019 was passed into law with the full intent of expanding the scope of consumer freedoms to include mail order shopping, online selling, web-based businesses, and other staggering advertising methodologies in the era of digitization. The Act reached its conclusion on July 20, 2020. This act seeks to modernize the relationship between the executives and the settlement by imposing more severe punishments.
Need of the Act
A new era of digital branding, commerce, and customer expectations has all been introduced by the advent of the digital age. Through digitization, we now have simple access to a wide range of options; practical payment methods; better services; and convenience-based shopping. But there are additional difficulties about consumer safety.
The important Consumer Protection Bill, 2019, was approved by the Indian Parliament and aims to provide prompt and professional organization and resolution of customer disputes to address the new range of issues faced by customers in the modern world.
Objectives of the Act
- Defend consumers from the promotion of goods that pose a risk to property and life.
- To protect consumers from deceptive business practices, provide information about the potential, volume, guidelines, purity, and cost of the product.
- To safeguard the rights and interests of consumers, consumer protection councils should be established.
- Whenever possible, ensure that customers can access a trusted source of products at reasonable costs.
- Redress should be sought for any unethical business practices or consumer manipulation.
- By designating organizations to handle the management and resolution of consumer disputes in a timely and adequate manner, consumers can be protected.
- Organize investigations into consumer rights violations and file complaints or bring legal action.
- Recall any services or products that are unsafe.
- To stop using deceptive advertising and unfair business practices.
- Charge those responsible for creating, endorsing, or publishing deceptive advertisements with disciplinary action.
Rights of a consumer
- The right to information on a variety of attributes of goods and services is a fundamental right of consumers. This could be data about the amount, caliber, potency, purity, cost, and guidelines of goods or services.
- to safeguard against potentially harmful products and services.
- The legal right to be guarded against products and services that pose a risk to property or human life.
- To enjoy defense against unethical or constrictive business practices.
- Access to a wide range of products, services, and goods at reasonable prices is a fundamental right of consumers.
- The ability to file a complaint with the appropriate authorities about unfair and repressive business practices.
- Receiving education and awareness is a right.
Responsibilities of a consumer
- Consumers have to exercise awareness and care when selecting goods and services, particularly concerning their safety and quality.
- Independent decision-making is a consumer’s responsibility because they must be concerned about their requirements and desires and take responsibility for their decisions.
- Responsibilities include speaking up and being unafraid to express concerns and specific desires to traders.
- Consumer’s obligation to complain – The customer now must express and submit a complaint about their unhappiness with products or services genuinely and rationally.
- Consumers must behave ethically and to avoid engaging in any dishonest behavior.
Meaning of consumer
The term “consumer” under this act means an individual whose “intent” to buy a product is not for commercial trade. According to Section 2(7) of the 2019 Act, a consumer is a person who purchases goods or uses services in exchange for payment, including users, apart from those who have purchased or used goods or services with the intention of reselling them or use them commercially.
According to the definition’s explanation, “buys any goods” and “hires or affords any services” refer to all electronic transactions, including those made through direct selling, shopping channels, and multi-level marketing, as well as all online transactions. An exclusive component of this act is online transactions, which was added in consideration of the expanding e-commerce industry and technological advancement.
Meaning of sale
Under the Act, “sale” is defined as anything which is offered to the consumer in exchange for money or money’s worth or any other valuable consideration. This includes-
(i) offer to sell;
(ii) exposing with a view to selling
(iii) soliciting in order to sell, and
(iv) importation of goods with the expectation that they will be sold.
(Note: Nothing said above in (ii), (iii), and (iv) would apply where the importation of goods is under a duty-free shop license).
The term “sale” also includes all the transactions related to a contract of sale, such as-
(i) any agreement, whether express or implied, in which consideration is promised for the future sale, delivery, or transfer of goods or service; and
(ii) any agreement in which the trader transfers or confers rights, creates obligations, or effects of a nature similar to that of an agreement about the transfer of property in that property.
The bill adds online agreements to sell goods and services electronically to consumers.
Meaning of goods “Good” means any tangible property, including immovable property, and excludes actionable claims, but includes actionable claims by way of monetary compensation by way of damages.
(Note: The Act does not apply to services that are neither sold nor intended to be sold, such as services provided free of charge or those provided at subsidized rates under a contract.)
Meaning of service
Service means anything other than goods and includes-
(i) labor for hire;
(ii) works contract; and
(iii) inter-alia the following activities, namely:
- the provision of digital content,
- the performance of dance, drama, music, or other artistic activity;
- broadcasting of television or radio programs;
- providing access to electronic databases and digital content.
The term “anything” in this clause refers to every sort of property.
The law also provides flexibility to make rules regarding the time limits within which any amount received by the consumer goods seller or service provider has to be paid back to the consumer.
Meaning of defect
According to Section 2, Clause (10) of the 2019 Act, a defect means a condition of goods or services which renders it-
(i) less safe than other similar goods or services;
(ii) substantially unfit for its normal use;
(iii) markedly different from the sample shown;
(iv) not durable, such that it is likely to break or wear out quickly under normal use; or,
(v) not as described by the seller.
When can you file a case in Consumer Court?
The Consumer Protection Act of 2019’s Section 2 defines a complaint as any written allegation made by a consumer seeking relief under the Consumer Protection Act in the event of an unfair contract, unfair trade practice, restrictive trade practice, defective goods, deficiency of services, or hazardous goods or services. The manufacturer, seller, or provider of the service may also be held accountable for a written allegation contained in a complaint. Any registered voluntary consumer association, one or more consumers, the Central or State government, the consumer’s heirs or legal representatives, or any other registered party are all eligible to file a complaint. The complainant’s parent or legal guardian may file the complaint on behalf of a minor consumer.
In Nipun Nagar v. Symbiosis Institute of International Business, 2007, following his acceptance into another institution, the complainant had to give up his seat. The defendant vehemently rejected the complainant’s request for a full refund of the fees. The University Grants Commission’s notice directing institutions to refund the full tuition to students who drop out of a course before it begins, less a processing fee of Rs. 1000, was the basis for the National Commission’s decision.
In Yashumati Devi v. Christian Medical College, Vellore, 2020, according to the NCDRC, a hospital always has the right to demand payment, but it also has a primary duty to care for a patient experiencing a medical emergency. As a result, the hospital conferred a compensation of Rs. 25 lakh to the complainant. The patient required a brain CT scan immediately, according to the court, but it took longer than three hours to complete because the hospital was awaiting a new receipt for the procedure fee of Rs. ₹1850. An inadequacy or act of negligence was thus amply demonstrated.
To “send a message” to doctors, the SC awards ₹10 lakh in damages in a medical negligence case.
In Puneet Phutela, S/o. Sh. Roshan Lal v. The Oriental Insurance Company Ltd., 2014, during the validity of the insurance policy, on June 14, 2004, the truck owned by the complainant was involved in an accident. The amount of ₹1,39,587/- was the surveyor’s estimate for the truck’s loss in terms of repairs. The Oriental Insurance Co. Ltd., or OP, denied the complainant’s claim because the driver’s license was found to be ineligible. The District Forum accepted the grievance and ordered the OP to pay the amount of ₹1,99,591 that the complainant had requested, plus interest at the rate of 9 percent per year from the date the claim was filed until it was paid. The insurance company’s appeal, however, was approved by the State Commission, and the complaint was dropped.
Travel and Hospitality Sector (Including Indian Railways)
In Taj Mahal Hotel v. United India Insurance Company, 2018, the Commission believed that the transfer of the complainant’s possession and control of the car to the hotel constituted a bailment. The warning label of responsibility on the parking tag was not sufficient to mitigate the hotel’s liability because the obligation of due care was breached by it. A parking receipt cannot be retained simply for reference purposes without giving notice of the terms thereon. The question of whether the car owner is a “consumer” is not raised because the hotel has acknowledged that the complainant had dinner at their establishment.
According to the National Commission, in Chief Commercial Officer (Manager) & 2 Ors. v. Hargovind Chaudhury, 2018, the respondent did not use a chain to lock the suitcases before he went to sleep. Since the train would be stopping at several stations between Bhopal and Howrah, this was the most that could be presumed of the complainant before he went to sleep. Additionally, the FIR reveals that there is no claim that an unidentified person entered the compartment where the complainant was riding. The claim that several unauthorized people had entered the compartment in which he was traveling would therefore be highly unlikely, let alone accepted.
The infringing orders, ordering payment of compensation to the respondent due to the theft of his belongings, cannot be upheld in the absence of any evidence that the petitioner was irresponsible and that this carelessness ended up causing damage to the respondent solely as a result of such negligence. This results in the complaint being dismissed and the contested orders from the State Commission and District Forum being overturned.
Real Estate Sector
The Supreme Court held in Wg. Cdr. Arifur Rahman Khan and Aleya Sultana and Ors. v. DLF Southern Homes Pvt. Ltd. (now known as BEGUR OMR Homes Pvt. Ltd.), 2019 and Ors., that a deficiency results from the developer’s inability to meet the agreement’s requirement that the developer delivers the apartment to a buyer within the time frame specified in the agreement. The terms of a rate in a builder’s agreement do not limit the consumer forum’s ability to grant just and sensible compensatory damages in situations where there is a blatant postponement in possession beyond the period specified by the contract.
Banking and Financial Sector
In State Bank of India v. B. S. Agricultural Industries, 2009, a grievance against the State Bank of India was brought by the complainant and was accepted. When the case went to the Supreme Court on appeal, it was noted that the Forum had disregarded the bank’s specific argument regarding the question of limitation. The Court determined that Section 24A of the Consumer Protection Act of 1986, which established a two-year limitation period for the filing of complaints, was a compulsory component that had to be taken into account by the consumer before recognizing a complaint, though it could excuse the postponement of making a complaint if sufficient cause was shown. The complaint was filed after the statute of limitations had expired, and the case was dismissed by the court.
In General Manager, Telecom v. M. Krishnan and Another, 2019, the Telegraph Act, a special law, was declared by the Supreme Court to take precedence over the Consumer Protection Act, a general law. According to the ruling in (1995), 2 SCC 479, which was upheld by the court, the National Commission lacks the authority to decide on compensation claims resulting from auto accidents. The High Court’s order and judgment were therefore quashed as a result of the appeal being granted.
In Noor Islam Mondal v. Anklist Exim Inc. and others, 2014, it was held according to the Commission that a litigant cannot receive equity relief if they approach a Judicial Fora by making unsubstantiated claims in their complaint and trying to deceive the Judicial Fora. Such a petition ought to be dismissed at the door. Due to the complaint’s false statements and unwarranted criticism of the State Commission, the current petition is thus rejected with compensatory damages of ₹50,000/-. Within two weeks of today, the petitioner must deposit the cost via demand draught in the name of this Commission’s “Consumer Legal Aid Account.” He will be responsible for paying interest at a rate of 9% per year until realization if he doesn’t make a payment within the allotted time.
In the case of Horlicks Ltd v. Zydus, 2020, the products of Horlicks Ltd. were downplayed in a Zydus advertisement, even though both parties, in this case, are manufacturers of nutritional beverages. Multiple languages, including Bengali, Tamil, and English were used to broadcast the advertisement. As a result, the Delhi High Court held that the advertisement is belittling because it offers no conclusive evidence regarding the performance of the goods, citing several decisions on defamation, misleading advertisements, and the law governing the publication of advertisements on television. Additionally, because viewers of electronic media are left with a lasting belief, these kinds of advertisements would harm consumers as well as the complainant in irreversible ways.