Obituary To: “The #Consumer #Protection #Act, 1986” & Welcoming the rise of Phoenix “The Consumer Protection Act, 2019” By Advocate Md. Zaryab J Rizvi

Year 2020 has brought a sea change in the modus in which the world runs its affairs and in furtherance of the said series of changes, India is also bidding a final goodbye to one of its most admired and trendy legislations, which had brought immense confidence and positive change in the lives of the common man, while wearing cap of a consumer

Yes, Goodbye our dear most “Consumer Protection Act, 1986 (68 of 1986)”, you will be dearly and surely missed and remembered by the laymen and legal professionals equally.

The Consumer Protection Act, 1986 (hereinafter lovingly referred to as “the Act of 1986”) came to be passed by the both Houses of the Indian Parliament and received assent of the President on 24^th of December 1986 in the Thirty-Seventh year of the Republic of India. Chapter I, II and IV of the Act came into force on 15^th April, 1987 and the Chapter III of the Act of 1986 came into force on 1^st July, 1987. The act introduces itself as:

“An Act to provide for better protection of the interests of consumers and for that purpose to make provision for the establishment of consumer councils and other authorities for the settlement of consumers’ disputes and for matters connected therewith”

Coming into Existence of this Act, was not an isolated event, infact the entire world had got conscious of the plight and miseries of a class of people defined as ‘the consumer’, reason whereof the United Nations had formulated, “The United Nations Guidelines for Consumer Protection” (hereinafter referred to as “UNGCP”). UNGCP are “a valuable set of principles for setting out the main characteristics of effective consumer protection legislation, enforcement institutions and redress systems and for assisting interested Member States in formulating and enforcing domestic and regional laws, rules and regulations that are suitable to their own economic and social and environmental circumstances, as well as promoting international enforcement cooperation among Member States and encouraging the sharing of experiences in consumer protection.” The guidelines were first adopted by the United Nations General Assembly (hereinafter referred to as “UNGA”) in Resolution No. “39/248” of 16^th April 1985, which were later expanded by the Economic and Social Council in Resolution No. “E/1999/INF/2/Add.2” of 26^th July 1999, and recently revised by the UNGA in Resolution “70/186” of 22^nd December 2015. It is pertinent to mention that even though the Resolution No. “39/248” was adopted in the year 1985, it was on account of rigorous efforts made by various stakeholders, over a decade.

The Indian Parliament, as stated above, enacted the Act of 1986, the very next year i.e. 1986, of the adoption of the Resolution of UNGA Resolution “39/248” of 16^th April 1985. The necessity of enacting the said legislation in India arose in view of the rapid changes in the dynamics of the trading environment in the country, due to the exponential growth in industrial production and the potential opening of world markets to the consumers in India. The aforementioned changes in the late 20^th century were driven by a rise in the per capita income of individuals, which in turn, created a healthy market for new and better products as the appetite for consumption of better services and products increased with the growth in purchasing power of the consumers. However, the sudden burst in the market consumption of goods and services also brought along with it the associated risks posed to the consumers, due to the higher probability of supply of defective or deficient services and products to the consumers.

The requirement of a special law to deal with the grievances of the consumers and to govern the relationship between the consumer and the manufacturer/service provider was felt necessary as the existing legal framework at the time of the execution of the Act of 1986 was inadequate and inapt to provide for effective and speedy Redressal of consumer disputes. The consumers, prior to the enactment of the Act of 1986, never had a proper forum or law to seek redressal of their grievances and were forced to seek refuge under the generic provisions of either the Code of Civil Procedure, 1908, the Indian Contract Act, 1872, the Sale of Goods Act 1930, the Indian Penal Code, 1860, the Standards of Weights and Measures Act, 1976 or the Motor Vehicles Act, 1988 amongst other laws, but the said provisions under the aforementioned enactments failed to provide any efficacious remedy as the same were grossly inadequate, time consuming and generic.

The Act of 1986 brought about a paradigm shift in the manner in which the consumer and consumer affairs were being dealt with, and it irrefutably instilled a new confidence in the consumers. Principal objective of the Act of 1986 was to provide for a statutory mechanism, wherein a special class, “Consumer” was created by fiction of law and the same was conferred with statutory rights and for protection of the said rights a Redressal mechanism was devised. The Act of 1986, amongst the other rights, primarily provided for right to be protected against marketing of goods and services which were hazardous to life and property of the Consumers; right of being informed about the quality, quantity, potency, purity, standard and price of goods, so as to protect the Consumer from unfair trade practices; right of Redressal in the event the products or services were deficient etc. The Act of 1986 also addressed the problem of long drawn litigation and provided for summary proceedings with strict and defined timelines for disposal of consumer complaints. The adjudication bodies were enabled with powers for enforcement of its order and ensure compliances.

The Act of 1986 was a small enactment comprising of only 31 sections divided into 4 chapters and for smooth implementation of the said provisions, the Act was buoyed by ‘The Consumer Protection Rules, 1987’ and ‘The Consumer Protection Regulations, 2005’. It is pertinent to mention that the concise format of the Act only acted as strength and never caused any hindrance in providing justice to the parties. The Act had a lifespan of just over 33 years, during which period the Act was amended by the Indian Parliament on 3 occasions, the same being; The Consumer Protection (Amendment) Act, 1991 (34 of 1991) (w.r.e.f. 15^th June 1991), The Consumer Protection (Amendment) Act, 1993 (50 of 1993) (w.r.e.f. 18^th June 1993), and The Consumer Protection (Amendment) Act, 2002 (62 of 2002) (w.r.e.f. 15^th March 2003).

During the life span of 33 years, the class of people defined as consumers by the Act of 1986, were not only protected from the abuse, exploitation and manipulation, but also empowered by the provisions of the Act. Legislature, quasi judicial bodies established under the Act of 1986, and the Hon’ble Supreme Court, actively ensured that the provisions of the Act, achieve the main objective it was formulated for. The legislature, from time to time, made the necessary amendments in the Act and the adjudicatory bodies ensured that the legislative intent of the beneficial legislation is not diluted. During this period, several disputes and conflicts in respect of the Act of 1986 arose, some of the disputes being the extent of the application of the general provisions of the Code of Civil Procedure, 1908; The conflict of the Act of 1986 with other special legislations like the Arbitration and Conciliation Act, 1996, The Electricity Act, 2003, the Real Estate (Regulation and Development) Act, 2016, etc. That on most of the occasions the adjudicatory bodies held that the rights under the Act of 1986, prevail over the others. Initial years of adjudication under the Act of 1986 were smooth and hassle-free, certain unscrupulous irregularities, in the form of disputes of a commercial nature, marred and desecrated the essence of the Act and resulted in gross abuse of the process of law. That upon realization of this grave issue which had crept up from the crevices in the Act, the Parliament sought to deal with this issue vide the Consumer Protection (Amendment) Act, 2002, wherein commercial disputes were specifically excluded from the domain of the Act of 1986. The huge popularity of the Act also had some unforeseen consequences, as the number of consumer disputes over the years amplified, resulting into delay in adjudication of disputes. Successively, the adjudicatory bodies, passed important judgments addressing the said issue and strict construction of provisions defining timelines were re-iterated.

The Act of 1986 rendered justice to the consumers who were victims of the deficient product & services and of unfair trade practices. The beneficiaries of the provisions of the Act were spread over many sectors i.e insurance, automobile, transport, housing, real estate, electricity, telecommunications, entertainment, hospitality, banking, finance, airline, education etc, but one sector which is of great significance is Medical negligence. The consumers who were victims of medical negligence were greatly benefitted from the Act of 1986, as the said Act proved to be an effective tool in rendering justice to the victims.

It is not that the Act of 1986 and its implementation was not marred with challenges and difficulties. Challenges faced by the adjudicatory machinery as per the Act included being undermanned at many instances, shortage of sufficient financial assistance, lack of proper infrastructure to cope up with the increased burden, and ever snowballing cases which saw an exponential rise in pendency. However, it will be unfair to even suggest that various stake holders made no effort to address the said issues. On the contrary, regular efforts were made to address each and every issue which was faced in the implementation of the Act of 1986 and all the stake holders made significant contributions to the same.

At this juncture, when we say a final adieu to The Consumer Protection Act, 1986, we should cherish the positive changes that it has brought to the society at large. The Act of 1986 has left behind a legacy, which will not only be remembered forever, but has also laid down a fertile ground for the implementation of the new Legislation which succeeds the Act of 1986.

The necessity of this obituary to ‘The Consumer Protection Act, 1986’ arose as the same is now being replaced by ‘The Consumer Protection Act, 2019’ (35 of 2019) (herein after referred to as the “Act of 2019”). The Act of 2019 received, assent of the President of India and was published in the official gazette on 9^th August 2019. Further, in exercise of the powers conferred by sub-section (3) of section 1 of the Act of 2019, the Central Government vide notification dated 15^th July, 2020 has appointed the 20^th July, 2020 as the date on which the provisions under Chapter I: Section 2 – [Except clauses (4), (13), (14), (16), (40)]; Chapter II: Sections 3 to 9 (both inclusive); Chapter IV: Sections 28 to 73 (both inclusive) [Except sub-clause (iv) of clause (a) of sub-section (1) of section 58]; Chapter V: Sections 74 to 81 (both inclusive); Chapter VI: Sections 82 to 87 (both inclusive); Chapter VII: Sections 90 and 91 [Except sections 88, 89, 92 & 93] and Chapter VIII: -Sections 95, 98, 100, -Section101 [Except clauses (f) to (m) and clauses (zg), (zh) and (zi) of sub–section 2] – Sections 102, 103, 105, 106, 107 [Except sections 94, 96,97,99, 104], of the Act of 1986 shall come into force. Hence, with the said provisions ‘The Consumer Protection Act, 1986’ comes to an end for prospective disputes, but at the same time from the rich legacy of the Act of 1986, the rise of the Phoenix i.e the Act of 2019 also takes place simultaneously.

Even though ‘The Consumer Protection Act, 1986’ was a good legislation, the same was found inapt to handle the changes in the new world order, as carrying out a plethora of amendments would have been very difficult task and would have resulted in more of confusion and chaos than any reprieve. Hence, the Central Government in its considered opinion decided to enact a fresh law, to replace the old law and lay out a fresh scheme of law, apt for the modern times and capable to provide Redressal to the new age grievances of the Consumers.

It is ostensible by a quick glance of the provisions of the Act of 2019, that same covers facets which were not dealt with in the Act,1986. Some of the salient features of the Act of 2019 are as follows:

• The definition of ‘Consumer’ has been broadened to include any person who buys any goods or services, whether through physical or electronic means, teleshopping, direct selling or multi-level marketing.
• The ‘District Consumer Dispute Redressal Forum’ shall now be known as the ‘District Consumer Dispute Redressal Commission’.
• A Pre-deposit of 50% of the amount ordered by District Commission has been made mandatory for preferring an appeal before the State Commission and the ceiling of Rs. 25,000/- as was provided in the Act of 1986 has been done away with.
• Limitation for preferring an Appeal before the State Commission has been revised to 45 days from the earlier limit of 30 days as was provided in the Act of 1986, while not touching the power of the Forum to condone the delay.
• The Composition of the State Commission and the National Commission has been revised and the same shall now have atleast 4 Members apart from the President. However the maximum number of members can also be prescribed in consultation with the Central Government.
• The Original Pecuniary Jurisdiction has been revised:
  • District Commission: From 0 – Rs.20 Lacs the same shall now be from 0 – Rs. 1 Crore.
  • State Commission: From Rs. 20 Lacs – Rs. 1 Crore the same shall now be from Rs. 1 Crore – Rs. 10 Crore.
  • National Commission: From Rs. 1 Crore and above, the same shall now be from Rs. 10 Crore and above
• The territorial jurisdiction to institute a Consumer Complaint shall now also be over the area where the complainant resides or personally works for in addition to the existing place of jurisdiction.
• The Consumer has been granted liberty to institute Complaints electronically through e-filing mode and to conduct hearings/lead evidence/advance final arguments through video conferencing.
• The State Commission and the National Commission have been empowered to declare any term/provision of any contract between the parties, same of which is unfair to any consumer, as null and void.
• The power to review its own orders have now been conferred upon the District and the State Commission, which was not there earlier.
• Provision for conducting investigation into allegations against the President and members of a State Commission/District Commission has been introduced and provided for.
• Redressal of disputes through Mediation has been given a statutory status.
• A complainant against a product manufacturer or a product service provider or a product seller may bring a product liability action, as the case may be, for any harm caused to him on account of a defective product.
• A regulatory authority known as the ‘Central Consumer Protection Authority’ (herein after referred to as “CCPA”), has been provided for, which shall have wide powers of enforcement, and shall regulate matters relating to violation of rights of consumers, unfair trade practices and false or misleading advertisements which are prejudicial to the interests of public and consumers, thereby promoting, protecting and enforcing the rights of consumers as a class.
• The CCPA will consist of an investigation wing headed by a Director-General, which may conduct inquiry or investigation into consumer law violations. The National Commission is empowered to hear appeals against the order of the CCPA. The CCPA has further been granted wide powers to take suo-moto actions, to recall products, order reimbursement of the price of goods/services, cancel licenses, and file class action suits if a consumer complaint affects more than 1 (one) individual.
• As per the definition of Unfair Trade Practices, sharing of personal information given by the consumer in confidence shall also be included, unless such disclosure is made in accordance with the provisions of any other law.
• The Act of 2019 further imposes liabilities on endorsers, in addition to the pre-existent liability of manufacturers, considering that numerous instances have mushroomed in the recent past where consumers have been subjected to unfair trade practices under the influence of celebrities who act as brand ambassadors. In such cases, it becomes important for the endorser to take the onus and exercise due diligence to verify the veracity of the claims made in the advertisement to refute liability claims. In addition, the CCPA may impose heavy penalties on a manufacturer or an endorser for a false or misleading advertisement, with provisions for imprisonment.

This is a crucial juncture where we enter into a phase of transition from widely popular system established as per the provisions of the Act of 1986, to the ambitious and rich provisions as laid down in the Act of 2019. The transition phase shall not be easy, and all the stakeholders shall have to face some amount of challenges in the coming time. However, the bona fide steps initiated by the Government of India needs due appreciation as most of the provisions in the Act of 2019, have been incorporated after due deliberation, rigorous efforts involving wide consultations, with the noble intentions to formulate a better system to ensure protection of the rights of the consumer. We sincerely hope that the efforts of the Government of India bear fruits.

About The Author:

Md. Zaryab  J Rizvi, is Founder Partner of L.C.Z.F (Law Firm),  having rich and diverse experience in the field of Law for more than one and a half decade, more specifically Civil , Consumer , Service  and Alternative dispute resolution laws. He is an alumni of prestigious Symbiosis Law College, Pune & is representing multiple corporate clients, private individual clients as well as statutory bodies. He has been conferred with the award for being a Young Achiever in the Field of Law under the age of 40, by Hon’ble Justice Rajiv Sahai Endlaw, Delhi High Court, in the august presence of Shri Suresh Prabhu, Former Hon’ble Union Cabinet Minister, Government of India. 

Author’s Contact: [email protected], [email protected]