Consumers can file cases where they reside and courts can now hear cases with value higher than Rs 10 crore under the new Consumer Protection Act 2019 which came into force from Monday replacing the more than three- decade-old Consumer Protection Act 1986. Under the new Act, the District Forum has been renamed the District Commission and can now hear cases with a value of up to Rs 1crore while the State Commission can now hear cases up to Rs 10 crore. Under the new Act, the National Consumer Disputes Redressal Commission (NCDRC) can hear cases with value higher than Rs 10 crore, keeping with the inflation in the country.
The new Act aims to enforce and protect the rights of consumers, and provide an effective mechanism to address consumer grievances. The Act provides for a simplified dispute resolution mechanism, with a provision for mediation and e-filing of cases.
Another important feature of the new Act is that a consumer can file a case wherever he resides, instead of filing a case at the location of the opposite party. Section 49(2) and 59(2) of the new Act gives power to the State Commission and the NCDRC, respectively, to declare the allegedly unfair terms of contract to be null and void.
Additionally, a professional mediator can now be appointed and consent terms entered between the parties before him will be treated as an order of the court. The opposite party will now need to deposit 50 per cent of the amount ordered by District Commission before filing an appeal before the State Commission. The earlier ceiling of Rs 25,000 has been removed.
Under the aegis of the new Act, a product manufacturer and seller will be liable to provide compensation for injury or damage caused by a defective product or service. The errant businesses will be penalized with up to 6 months in jail or a fine of up to Rs 1 lakh if the consumers do not suffer any injuries. In cases where the consumer is injured, the fine to the manufacturer, seller or distributor could go up to Rs 5 lakh and up to seven years in jail. In case of death of the consumer, the culprit will have to pay a minimum fine of Rs 10 lakh and spend seven years in jail, which can be extended to life imprisonment.
The new consumer Act allows mediation, hearing of cases of a much higher value and a provision to challenge unfair conditions of service providers. However, an entire chapter of the Act dealing with a separate Consumer Protection Authority for advertisements, e-commerce rules for websites, making celebrity endorsers liable is yet to be notified. The Act, was introduced in the Upper House of Parliament by the Minister of Consumer Affairs, Food and Public Distribution, Ram Vilas Paswan, on July 8, 2019. It was passed by the Lok Sabha on July 30, 2019 and Rajya Sabha on August 6, 2019.
The Bill was then signed into law by President Ram Nath Kovind on August 9 last year.