Several sections of the New Consumer Protection Act (Act/CPA), which were passed by the Parliament in 2019, are set to come into force today.
As per the new Act, the District Forum has been renamed as the District Commission and is empowered to handle consumer cases with claims of up to INR 1 crore. The earlier amount was limited to INR 20 Lakhs. The State Commission can now handle cases with claims between INR 1 crore and INR 10 crore while the National Consumer Disputes Redressal Commission (NCDRC) will handle all cases higher than INR 10 crore.
The new provisions of the Act intend to protect consumers against manufacturers, sellers or distributors who are found dealing with adulterated and/or spurious products. They can now, file complaints in consumer commissions claiming compensation for receiving such products. It also empowers the district and state consumer courts to take better action against malpractices regarding transactions in which the consumer is directly or indirectly affected.
However, an entire chapter of the Act dealing with a separate Consumer Protection Authority for advertisements, e-commerce rules for websites, and making celebrity endorsers liable, is yet to be notified.
Another important feature of the new Act is that terms of a contract that are not fair to any consumer can be declared as null and void by the State Commission and the NCDRC under Section 49(2) and 59(2) of the new Act. This will assist consumers who are victims of one-sided agreements or unfair terms and conditions imposed by the seller.
In addition, a consumer can take action when dealing with product liability against the manufacturer or the service provider or product seller, as the case may be, for any harm caused to him due to a defective product. Till now, product-service provider or seller would not face any repercussions for supplying a faulty product and would get away by putting the entire blame for the defective product on the manufacturer. This new provision will provide a much-needed balance and help make online sellers liable.
Furthermore, consumers can now file a case in the city of their residence instead of filing a case at the location of the other party.
While provisions relating to the constitution and powers of the central consumer protection council (CCPC) are not included in the notification, the rules on the composition of the central council and its term have been notified.
The new CPA highlights the following:
- The District Forum has been renamed as the District Commission.
- The District Commission can now hear cases with a value of up to INR 1crore.
- The State Commission can now hear cases up to INR 10 crore.
- The National Consumer Disputes Redressal Commission (NCDRC) can hear cases up to INR 10 crore.
- The State Commission and the NCDRC have the power to declare null and void the allegedly unfair terms of the contract.
- Consent terms entered between the parties before a professional mediator will be treated as an order of the court.
- Product sellers to be held liable for faulty goods.
- A consumer can file a case wherever he resides.