0% found this document useful (0 votes)
51 views23 pages

Mahapatra vs Amazon: Unfair Trade Practices

The document discusses the concept of 'Unfair Trade Practices' under the Consumer Protection Act, 2019, defining it as deceptive methods used by businesses to promote sales, including false representations and non-compliance with standards. It outlines various unfair practices, landmark case laws, and the role of the judiciary in addressing these issues. Additionally, it covers the functions of the Consumer Protection Council in India, emphasizing consumer education, complaint handling, and advocacy for consumer rights.

Uploaded by

Ramakrishnan R
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
0% found this document useful (0 votes)
51 views23 pages

Mahapatra vs Amazon: Unfair Trade Practices

The document discusses the concept of 'Unfair Trade Practices' under the Consumer Protection Act, 2019, defining it as deceptive methods used by businesses to promote sales, including false representations and non-compliance with standards. It outlines various unfair practices, landmark case laws, and the role of the judiciary in addressing these issues. Additionally, it covers the functions of the Consumer Protection Council in India, emphasizing consumer education, complaint handling, and advocacy for consumer rights.

Uploaded by

Ramakrishnan R
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

LAW OF CONTRACT – II TA2A II - Semester

UNIT –VII CONSUMER PROTECTION

Define and explain the term “Unfair Trade Practices”


under Consumer Production Act

Synopsis

1. INTRODUCTION
2. DEFINITION OF UNFAIR TRADE PRACTICES
3. False Representation:
4. False offer of Bargain Price:
5. Free Gift Offer and Prize scheme:
6. Non-compliance of Prescribed Standards:
7. Hoarding or destruction:
8. ROLE OF JUDICIAL JUDGEMENTS

Landmark case Laws


i. Mr. Supriyo Ranjan Mahapatra v. Amazon Centre
Development Centre India Pvt Ltd,
ii. Baglekar Akash Kumar v. More megastore Retail Limited
iii. Yash Raj Films (P) Ltd v. Afreen Fatima Zaidi
iv. Ireo Grace Real Tech Pvt Ltd v. Abhishek Khanna and others
v. Pooja Toy v. Krishna Bhattacharya
9. CONCLUSION

INTRODUCTION

The unfair trade practice is a business practice, when a


manufacturer uses unfair method or any fraudulent and deceptive
methods, to promote his sale or services, which are prohibited by a
statute or any law. In simpler terms illegal methods used by the
employer to increase his profit by cheating the customers, through
misleading information regarding price, quality etc. At present in India
Consumer Protection Act, 2019 governs unfair trade practice. Until
2002, Metropolitan and Restrictive Trade Practices Act , 1969 was
followed in cases of unfair trade practices. This Act was repealed in the
year 2002, by the Competition Act, 2002 and therefore all the cases of
unfair trade Practices which MRTPC Act was dealing with was
transferred to Competition commission (CCI) for adjudication. But there
was no provision in Competition Act, regarding unfair trade practices,
hence all the cases came under the jurisdiction of Consumer Protection
Act, 1986, which is currently replaced by Consumer Protection Act,
2019.

DEFINITION OF UNFAIR TRADE PRACTICES:

Section 2(47) of the Consumer Protection Act, 2019 defines the


term unfair trade practices. It states that “unfair trade practice means a
trade practice which, for the purpose of the promoting the sale, use or
supply of any goods or for the provision of any services, adopts any
unfair method or unfair or deceptive practice including any of the
following practices, namely”, and specifies the unfair trade practices.
These can be classified as under

False Representation: It states that any person/ business which makes


the practice of any oral or written statements or representations of the
following will be Unfair trade practice:

i. When suggests falsely that goods are of particular standard


quality, quantity, grade, composition, style or model.
ii. When falsely suggests that the services are of particular
standard quality or quantity or grade.
iii. Falsely represent any old , rebuild or second hand goods as a
new one.
iv. Falsely represents that goods or services have sponsorship or
approval, performance, characteristics, accessories, uses or
benefits which they do not have.
v. Represents falsely that the seller has any sponsorship or
affiliation.
vi. When makes a false misleading presentation about the
usefulness or need for any goods or services.
vii. Provides any warranty or guarantee about the performance
or efficiency or length of life of goods that is not based on
proper test.
viii. If a promise is made which is materially misleading,
regarding to replace, maintain or repair the goods , where
such promises are not reasonable to fulfill.
ix. Misleads about the price of the goods or services, available in
market
x. Gives false or misleading facts disparaging the goods services
or trade of another person

False offer of Bargain Price:

It is a practice when an advertisement is published in a newspaper or


otherwise it states that goods or services are offered at bargain prices,
but in reality there is no such intention to offer the same to offer or for a
reasonable period or reasonable quantity it may amount to unfair trade
practice.

The bargaining price here means :


i. The price which is stated in the advertisement which may suggest
that the price is actually the lesser than the ordinary price.
ii. Any person who sees the advertisement believes that the price is
actually better than the price which they are ordinary sold.

Free Gift Offer and Prize scheme:

Unfair trade practices can also include gifts and prize schemes, the
business offer to the customers with ulterior motive.

This may include when:

i. When gifts, prizes or any other items are offered along with the
goods under which intention is different,
ii. Representing that something is given for free but in actual the cost
or part of the cost is being charged.
iii. Offering any prizes by conducting contest, lottery or any game of
chances to the buyers but with the real intention was to promote
sales or business.

Non-compliance of Prescribed Standards: When any goods are sold or


supplied to the customer which does not adhere with the standards
prescribed by the competent authority, with regards to its performance,
packaging, finishing, content, design etc, in order to prevent risk and
injury of the consumer using it, then such a practice shall amount to
Unfair Trade practice.

Hoarding or destruction:
Any person practicing any activity that permits the hoarding or
destruction of goods or refusing to sell the goods , with the intention to
increase the price of the good in future or increase the price of similar
goods future is shall be an unfair trade practice.

ROLE OF JUDICIAL JUDGEMENTS:

Any person, who is subjected to unfair trade practice, can get


remedied under the Consumer Protection Act, under which there are
Consumer forum which have been set up for speedy redressal and
remedy. As per the act, there are three commissions set up at district,
state and central level, which are District Dispute Redressal commission,
State Dispute Redressal Commission and National Dispute Redressal
commission. This courts have the jurisdiction to try the cases on Unfair
trade and practices. Along with them, people can also approach, district,
High Court or Supreme court for the same. Judiciary time to time have
given judgements by interpreting the laws, and expanding the ambit for
the unfair trade practices in India. Therefore judiciary plays a very
significant role, as the scope of unfair trade practices is very wide and it
can only be possible for judiciary to address them, as a statute can not
incorporate all the practices. Some of the judgements are:

In case of Mr. Supriyo Ranjan Mahapatra v. Amazon Centre


Development Centre India Pvt Ltd, commission held that cancelling a
confirmed order amount to unfair trade practice, and directed Amazon to
pay Rs. 40,000 as the compensation.

In Baglekar Akash Kumar v. More megastore Retail Limited case,


the forum held that supermarkets which charge for carry bags that have
the logo of the company will be considered Unfair trade practices.
Further in case of Yash Raj Films (P) Ltd v. Afreen Fatima Zaidi,
the commission held that it is unfair trade practice, if a song included in
trailer is excluded from the movie. Therefore the NCRDC directed the
respondent to pay compensation.

In case of Ireo Grace Real Tech Pvt Ltd v. Abhishek Khanna and
others, the supreme court held that incorporation of one sided and
unreasonable clauses in Apartment Buyer’s Agreement constitutes an
unfair trade practice. Further, unfair trade in pharmaceutical sector was
held

In case Pooja Toy v. Krishna Bhattacharya, where the respondent


had been altering the original labels with new one extending the star of
expiry. Many such decisions are provided. by courts and consumer
forums, which helps in evolving the laws on unfair trade practice.

CONCLUSION:

Consumers have been exploited by the Unfair Trade Practices


followed by the business/manufacturers, such as false representation
about the quality, content, standard of care, designing, packaging etc. To
safeguard the consumers from such exploitation, in India there is a
statute administrating such unfair trade practice. Many consumers does
not know about such rights provided to them. Hence educating
consumers, is very important regarding these rights available to them,
and different forums they can approach. As ultimately the consumer is
able to keep a check in all this unfair trade practices in the initial stage.

Discuss about the Consumer Protection Council in


India in detail

Consumer Protection Council in India


Synopsis

1. INTRODUCTION
2. FUNCTIONS OF CONSUMER PROTECTION COUNCIL
i. CONSUMER EDUCATION
ii. COMPLAINTS HANDLING
iii. PRODUCT STANDARDS AND QUALITY CONTROL
iv. MARKET TRACKING
v. ADVOCACY AND STAKEHOLDER ENGAGEMENT
3. CONCLUSION

INTRODUCTION
India’s Consumer Protection Council is a statutory organization
created in accordance with the Consumer Protection Act of 1986. The
council is in charge of advancing and defending Indian consumer rights.
The council’s principal goal is to make sure that customers
understand their rights and can exercise them. Also, the council offers a
forum for customers to protest about dishonest business practices, faulty
goods, and subpar services. The central government appoints the
president and several other members of the Consumer Protection
Council. The council has the authority to look into complaints, give
directives to companies, and file lawsuits against anyone who breaks
consumer protection rules.
The council also promotes consumer understanding of their rights
and obligations through a number of awareness initiatives and
campaigns. Moreover, it works along with other departments, offices,
and groups to advance consumer protection and raise standards for all
products and services. The council has experienced considerable
changes recently, including the replacement of the 1986 statute with a
new Consumer Protection Act in 2019. The new act has a number of
measures aimed at enhancing consumer rights and supplying more
effective channels for grievance redressal.
FUNCTIONS OF CONSUMER PROTECTION COUNCIL
Following are some of the important functions of the Consumer
Protection Council:
CONSUMER EDUCATION
The main task of the Consumer Protection Council is to inform
customers of their rights and obligations. The organization conducts a
number of consumer education initiatives to disseminate knowledge
about the risks associated with the use of shoddy goods and services. To
educate consumers about their rights, the council also distributes
resources including brochures, leaflets, and instructions.
For example, In Lagos, Nigeria, the Consumer Protection Council
launched a consumer education campaign to teach people how to spot
substandard products. The campaign is designed to raise awareness of
the risks associated with the use of counterfeit and substandard goods
and how to avoid them.
COMPLAINTS HANDLING
Consumers who feel that businesses or service providers have
taken full advantage of or treated them unfairly, file a complaint with the
Consumer Protection Department. The organization reviews complaints
and takes necessary measures to protect the interests of customers.
Council also provides a venue for customers to report fraud, false
advertising, and unfair business practices.
For example, A customer spoke to Consumer Protection about a
furniture manufacturer who, upon receipt of full payment, supplied a
substandard product. The company was deemed to have committed fraud
when the agency reviewed the situation. The company was fined and
refunded the consumer’s money by the board.
PRODUCT STANDARDS AND QUALITY CONTROL
Customer Protection may enforce product standards and quality
control procedures. An agency that prescribes requirements for goods
and services to ensure that they meet basic quality requirements. The
items are also tested and controlled by the Board to verify their safety.
For example, The Consumer Protection Council examined a well-
known brand of bottled water and discovered that it contained hazardous
germs. The FDA mandated a recall of all tainted items as well as
compensation for impacted customers. The council has issued new
bottled water rules to ensure that firms fulfill minimal quality standards.

MARKET TRACKING
The Consumer Protection Council monitors the market to identify
corporations and service providers who participate in deceptive business
practices. Organizes market surveillance and conducts investigations for
price fixing, price manipulation, and other anti-competitive acts. The
board also works with other government agencies to ensure companies
comply with regulations.
For example, In Abuja, Nigeria, the Consumer Protection Council
conducted market surveillance and determined that some gas stations
were selling fuel at a price higher than the government-approved price.
The agency has ordered gas stations to reduce prices to the allowable
level or face penalties for price abuse.
ADVOCACY AND STAKEHOLDER ENGAGEMENT
The Consumer Protection Council works with stakeholders such as
trade associations, government agencies, and civil society groups to
protect the rights and interests of consumers. The agency encourages
dialogue and cooperation among stakeholders to achieve the common
goal of protecting the interests of consumers.
For example, The Manufacturers Association of Nigeria (MAN)
and the Consumer Protection Council collaborated to promote the use of
standardized goods throughout the country. The agency encouraged
businesses to follow the criteria created in partnership with MAN for the
development of safe, high-quality products.
CONCLUSION
The CPC is responsible for a variety of activities, including
consumer education, consumer complaint resolution, product standards
and quality maintenance, market monitoring, and stakeholder
engagement. Because of these traits, the CPC can protect customers
against poor goods and services, fraud, misleading advertising, unfair
business practices, and other forms of exploitation. Ultimately, the
Consumer Protection Board plays an important role in ensuring that
consumers are protected and have access to fair and transparent
marketplaces. The board helps prevent fraudulent or misleading
practices, as well as other forms of exploitation that can affect
consumers, by implementing consumer protection laws and regulations.
Questions:
1. Define Complaint and explain the power and functions
of the state Consumer Dispute redressed
commission ?

2. Define Consumer who is not consumer, Service and


Deficiency in service as per the provision of the
Consumer Production Act. Explain their constituents?

3. Who is Consumer ? Define the locus standi of


consumer and describe the procedure to file compliant
in District Consumer Forum ?

4. Explain three – tier Consumer Dispute Redressal


Machinery, Established under the Consumer
Protection Act. Discusses the composition and
jurisdiction of the National Commission . Where can
an appeal lie against the order of the National
Commission ?
INTRODUCTION

Consumer Protection Act, 2019 is an Act of the Parliament of India.


It replaces the Consumer Protection Act, 1986. The Consumer Protection
Bill, 2019 was introduced in the Lok Sabha on 8 July 2019 and passed by
Lok Sabha on 30 July 2019 and later passed in Rajya Sabha on 6 August
2019. The Act came into force on 20 July 2020, while certain other
provisions of the Act like establishing the Central Consumer Protection
Authority came into effect from 24 July 2020. This act was introduced by
the by the Minister of Consumer Affairs, Food and Public Distribution,
Ram Vilas Paswan. This act explains the various measures to aware the
consumers regarding consumer rights and policies. The Consumer
Protection Act, 2019 is an important piece of legislation enacted to
provide effective safeguards to consumers against various types of
exploitations and unfair dealings. The consumer protection act has
developed a well organizational setup at the central, state level and
district level for the redressal of consumer grievances and promotion of
standard of goods and services etc. and introduced ADR mechanism for
settlement of consumer disputes. To spread consumer awareness the
government has established consumer protection council. The paper
analyses the changes introduced in the CPA 2019.

MAJOR CHANGES INTRODUCED BY THE CPA, 2019:


Definition of “CONSUMER”
The definition of “consumer” has been expanded to include persons
who engage in offline or online transactions through electronic means or
by tele-shopping or direct selling or multi-level marketing. The seller at
each level of multi-level marketing can be subjected to liability under
CPA, 2019 and not limited to only the manufacturer of the product but
all entities involved at various stages of production and marketing.
NOTE: The person availing the services for free will not be
considered as consumer under this act. It is a question of fact to decide
whether the services being provided was free or not and will depend on
case to case
PECUNIARY JURISDICTION
The amount of limit (Pecuniary Jurisdiction) to entertain complaints
where the value of the goods or services paid as consideration has been
increased. The changes are shown in the table below:

Pecuniary jurisdiction
COMMISSION CPA,1986 CPA, 2019
DISTRICT FORUM Upto 20 lakh Upto 1 crore
STATE COMMISSION More than 20 lakh but More than 1 crore but
does not exceed 1 doesnot exceed 10
crore crore
NATIONAL More than 1 crore More than 10 crore
COMMISSION
The increase in the pecuniary jurisdiction of all three commissions
is a step towards the lesser number of claims in appellate commissions
which ensures the swifter disposal of cases.
TERRITORIAL JURISDICTION
A complaint shall be instituted in a Commission within the limits of
whose jurisdiction -
i. the opposite party or each of the opposite parties ordinarily resides
or carries on business or personally works for gain
ii. the cause of action, wholly or in part, arises
iii. the complainant resides or personally works for gain.
Under CPA, 2019 the Territorial jurisdiction now extends to where the
complainant resides and personally works for gain before it was only
limited to where opposite party resides and personally works for gain
and where cause of action arises.

Note: Consumer can complaint electronically in consumer commission


and through video conferencing hearing can be done and complaints be
deemed admissible if the question of admissibility is not decided within
the period of 21 days.

CCPA (CENTRAL CONSUMER PROTECTION AUTHORITY)

CCPA has established to regulate the matters relating to the


violation of the rights of the consumers, to institute complaints, to stop
unfair trade practices and to impose penalty for manufacturers ,
publishers for publishing false or misleading advertisements.
Under the provisions of CPA 2019, CCPA is to carry out the
following functions :
i. protect, promote and enforce the rights of consumers as a
class, and prevent violation of consumers rights and inquire
or cause an inquiry or investigation to be made into violations
of consumer rights or unfair trade practices, either suo motu
or on a complaint received or on the directions from the
Central Government
ii. prevent unfair trade practices and ensure that no person
engages himself in unfair trade practices and can issue
necessary guidelines to prevent unfair trade practices and
protect consumers' interest.
iii. ensure that no false or misleading advertisement is made of
any goods or services and also ensure that no person takes
part in the publication of any advertisement which is false or
misleading
iv. file complaints before the District Commission, the State
Commission or the National Commission and may intervene
in any proceedings before the District Commission or the
State Commission or the National Commission, as the case
may be, in respect of any allegation of violation of consumer
rights or unfair trade practices
v. review the matters relating to, and the factors inhibiting
enjoyment of, consumer rights, including safeguards provided
for the protection of consumers under any other law for the
time being in force and recommend appropriate remedial
measures for their effective implementation
vi. undertake and promote research in the field of consumer
rights
vii. spread and promote awareness on consumer rights
viii. issue safety notices to alert consumers against dangerous or
hazardous or unsafe goods or services
ix. advise the Ministries and Departments of the Central and
State Governments on consumer welfare measures
x. imposition of penalties,

The district collectors have also been empowered to conduct such


investigations that affect interests of consumer under CPA 2019. They
can investigate or inquire at the instance of a complaint or on a
reference made by CCPA but they cannot initiate action suo moto.
PRODUCT LIABILITY
The concept of product liability is introduced in CPA, 2019 for any harm
on account of defective product and brings within its scope, the product
manufacturer, product service provider and product seller, for any claim
for compensation. There was no separate legislation governing ‘product
liability’ in India.

Section 2(35) of CPA 2019 allows a person to make a claim of product


liability against such manufacturer, seller or service provider for such
defective products. Product liability means the responsibility of a product
manufacturer or product seller, of any product or service, related to the
product to compensate for any harm caused to a consumer by such
defective product manufactured or sold or by deficiency in services
relating to the product.

Product manufacturer
A product manufacturer shall be liable in a product liability action, if

i. the product contains a manufacturing defect or defective in design


ii. there is a deviation from manufacturing specifications
iii. the product does not conform to the express warranty
iv. the product fails to contain adequate instructions of correct usage
to prevent any harm or any warning regarding improper usage
NOTE: A product manufacturer shall be liable even if he proves that he
was not negligent or fraudulent in making the express warranty of a
product.
Product service provider
A product service provider shall be liable in a product liability action, if-

i. the service provided by him was faulty or imperfect or deficient or


inadequate in quality
ii. there was an act of omission or commission or negligence or
conscious withholding any information which caused harm
iii. the service provider did not issue adequate instructions or
warnings to prevent any harm and the service did not conform to
express warranty or the terms and conditions of the contract.
Product seller
A product seller who is not a product manufacturer shall be liable in a
product liability action, if-
i. he has exercised substantial control over the designing, testing,
manufacturing, packaging or labeling of a product that caused
harm
ii. he has altered or modified the product and such alteration or
modification was the substantial factor in causing the harm
iii. he has made an express warranty of a product independent of any
express warranty made by a manufacturer and such product failed
to conform to the express warranty made by the product seller
which caused the harm (e) he failed to exercise reasonable care in
assembling, inspecting or maintaining such product
iv. he did not pass on the warnings or instructions of the product
manufacturer regarding the dangers involved or proper usage of
the product while selling such product and such failure was the
proximate cause of the harm
NOTE: CPA, 2019 also lay down certain exceptions to “product liability”
action, where the products have been misused, or if the product
purchased by the employer for use at the workplace did not comply with
the installation warnings, or if the product is of such nature that the user
should have known the associated dangers, etc.
MEDIATION
ADR mechanism of mediation has been introduced. The consumer
commission can referred the case for mediation if it appears to them that
there exists a scope of early settlement and parties do not have objection
in settling their disputes through mediation. Mediation will be done in
mediation cells which are to be established under the directions of
consumer commission and no appeal can be made against the settlement
through mediation.
Where the consumer dispute could not be settled by mediation, the
District Commission or the State Commission or the National
Commission, as the case may be, shall continue to hear all the issues
involved in such consumer dispute.

E-COMMERCE
E-commerce has been defined as buying or selling of goods or
services including digital products over digital or electronic network.
Every E-commerce entity like Amazon, flipkart, myntra, etc. is required
to provide information relating to return, refund, exchange, warranty
and guarantee, delivery and shipment, modes of payment, grievance
redressal mechanism, payment methods, security of payment methods,
charge-back options, etc. including country of origin which are necessary
for enabling the consumer to make a decision before purchasing on its
platform. Ecommerce platforms have to acknowledge the receipt of
consumer complaint within 48 hours and redress the complaint within 1
month from the date of receipt. E-commerce retailers offering goods and
services to the Indian consumers whether registered in india or outside
the territory of india have to comply with the rules , if not then strict
penal actions will be taken against them. The central government has
been authorized to take measures and make rules to prevent unfair trade
practices in e-commerce.

CONSUMER PROTECTION COUNCIL


At central level
The Central Government shall establish the Central Consumer
Protection Council to be known as the Central Council. Its objects shall
be to render advice on promotion and protection of the consumers'
rights.
At state level
Every State Government shall establish a State Consumer
Protection Council for such State to be known as the State Council. The
objects of every State Council shall be to render advice on promotion and
protection of consumer rights under this Act within the State
At district level
The State Government shall establish for every District with a
District Consumer Protection Council to be known as the District
Council. The objects of every District Council shall be to render advice
on promotion and protection of consumer rights under this Act within the
district

UNFAIR CONTRACTS
CPA, 2019 has added the ground to file the complaints and allow
the consumers to challenge the contracts which are unfair and
unreasonable while under CPA, 1986 a consumer can only file complaint
against the trader or service provider if he adopts any of the unfair trade
practices and restrictive trade practices.

Unfair contract includes the contracts on such terms between a


manufacturer or trader or service provider and a consumer which cause
significant change in the rights of such consumer, including the
following:
i. requiring manifestly excessive security deposits to be given
by a consumer for the performance of contractual
obligations; or
ii. imposing any penalty on the consumer, for the breach of
contract thereof which is wholly disproportionate to the loss
occurred due to such breach to the other party to the
contract; or
iii. refusing to accept early repayment of debts on payment of
applicable penalty; or entitling a party to the contract to
terminate suchcontract unilaterally, without reasonable
cause; or
iv. permitting or has the effect of permitting one party to assign
the contract to the detriment of the other party who is a
consumer, without his consent; or
v. Imposing on the consumer any unreasonable charge,
obligation or condition which puts such consumer to
disadvantage.
NOTE: State commission and NCRDC has been given extra powers
to declare any terms of contract null and void If it is found unfair to the
consumers.

POWER OF REVIEW
Power of review of their own orders has been also given to District
Forum and State commission under CPA, 2019. While under CPA, 1986
only National commission is empowered to do review.
PENALTIES
Any manufacturer or service provider who causes a false or
misleading advertisement to be made which is prejudicial to the interest
of consumers.
i. On first conviction: imprisonment for a term which may
extend to two years and with fine which may extend to ten
lakh rupees

ii. On second/ subsequent conviction: with imprisonment for a


term which may extend to five years and with fine which may
extend to fifty lakh rupees.
The competent court may give punishment for selling or
manufacturing adulterant/ spurious goods.
i. On first conviction: suspend any license issued to any person upto 2
years
ii. On second/ subsequent conviction : cancel the license issued to any
person

RIGHTS OF CONSUMERS
i. the right to be protected against the marketing of goods, products
or services which are hazardous to life and property
ii. the right to be informed about the quality, quantity, potency,
purity, standard and price of goods, products or services, as the
case may be, so as to protect the consumer against unfair trade
practices
iii. the right to be assured, wherever possible, access to a variety of
goods, products or services at competitive prices
iv. the right to be heard and to be assured that consumer's interests
will receive due consideration at appropriate for a
v. the right to seek redressal against unfair trade practice or
restrictive trade practices or unscrupulous exploitation of
consumers
NOTE: The “HEALTHCARE” was included in the services. The consumer
affairs ministry came across the Supreme Court judgment of 1995 which
said that medical services to the patient, for which fees are charged,
come under the purview of Consumer Protection act. (Indian Medical
Association vs. V.P. Shantha, 1995 SCALE 273)
COMPARATIVE CHART OF CPA, 1986 and CPA, 2019
Table2: Comparison between Act of 1986 & 2002
TITLE CPA,1986 CPA, 2019
TERRITORIAL the opposite party or the opposite party or
JURISDICTION each of the opposite each of the opposite
parties ordinarily parties ordinarily
resides or carries on resides or carries on
business or personally business or personally
works for gain. works for gain.

the cause of action, the cause of action,


wholly or in part, wholly or in part,
arises arises.

the complainant
resides or personally
works for gain.
PECUNIARY District forum: upto 20 District forum: upto 1
JURISDICTION lakh crore
State commission : State commission :
more than 20 lakh but more than 1 crore but
less than 1 crore less than 10 crore
National commission: National commission:
more than 1 crore more than 10 crore
TIME LIMIT FOR 30 DAYS 45 DAYS
FILING COMPLAINT
EXTRA POWER OF No such provision. State commission and
COMMISSION NCDRC to declare any
terms of contract null
and void if found
unfair to any consumer
POWER OF REVIEW Conferred on only Conferred on state,
National commission district and national
commission.
CENTRAL AUTHORITY No such provision Established central
ESTABLISHED authority to regulate
the matters relating to
violation of consumer
rights, unfair trade
practices, false or
misleading
advertisements
PRODUCT LIABILITY No such provision A product liability
action may be brought
by the complainant
against manufacturer
or services provider or
a seller for any harm
on account of defective
product.
MEDIATION No such provision The consumer
commission can
referred the case for
mediation if it appears
to them that there
exists a scope of early
settlement.
E-COMMERCE No such provision e-commerce
transaction also
covered under this act
VIDEO No such provision Consumers can seek
CONFERENCING hearing through video
conferencing.

CONCLUSIONS:
The Consumer Protection Act,2019 is a positive step towards
reformation
and development of consumer laws. This act has introduced many
changes and widens the scope of consumer laws. It introduced those
concepts which were not even touched by CPA, 1986 like the ADR
mechanism, establishment of statutory authority, hearings through video
conferencing. By increasing the pecuniary jurisdiction of the
commissions, imposing higher penalties is a step towards the lesser
number of claims in appellate commissions which ensures the swifter
disposal of cases. This act of 2019 gave more power to the consumers to
protect their rights. Now everyone has to be more cautions and careful
in dealing with consumers than ever before.

Common questions

Powered by AI

The CCPA is pivotal in protecting consumer rights by preventing unfair trade practices, halting misleading advertisements, and instituting legal proceedings against wrongdoers. It also advises government departments and promotes research and awareness regarding consumer rights .

Key components of 'Unfair Trade Practices' under the Consumer Protection Act, 2019 include: false representation about goods or services, false offer of bargain price, misleading free gift offers and prize schemes, non-compliance with prescribed standards, and hoarding or destruction of goods to manipulate prices .

Inclusion of e-commerce transactions ensures that consumer protections extend to digital marketplaces, providing remedies for unfair practices and addressing the modern landscape of goods and services sales, which is crucial given the rise of online shopping .

The Act categorizes false representation as an unfair trade practice when it involves suggesting falsely that goods or services are of a particular standard, falsely representing old goods as new, misleading endorsements, or misrepresentation of goods' sponsorship or affiliation .

Practices under 'False Offer of Bargain Price' include advertising goods or services at bargain prices without the intention of offering them or for the advertised period, essentially misleading consumers about the actual pricing benefits .

Territorial jurisdiction now includes where the complainant resides or works for gain, while pecuniary jurisdiction has increased thresholds for district, state, and national commissions—up to 1 crore for district, 1-10 crore for state, and above 10 crore for national commissions .

‘Non-compliance of Prescribed Standards’ is crucial as it addresses the sale of goods that fail to meet legal standards for performance, design, or safety, ensuring manufacturers adhere to regulations intended to protect consumers from potential harm .

The Act introduces product liability, allowing consumers to file claims against manufacturers, service providers, or sellers for harm caused by defective products, which enhances accountability across the entire supply chain .

Judicial judgments have significantly shaped consumer protection laws by interpreting and expanding the scope of what constitutes unfair trade practices. For example, Amazon was directed to pay compensation for canceling confirmed orders, which was deemed unfair. Similarly, a supermarket was penalized for charging for branded carry bags, and film producers were held accountable when trailer content was excluded from movies .

The definition now includes individuals engaging in both offline and online transactions, such as e-commerce, direct selling, and multi-level marketing, thus broadening the reach of consumer protection .

You might also like