20.7.20

New consumer protection Act comes into force today

Beginning today, several sections of the new Consumer Protection Act 2019 will come into force, allowing 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, and making celebrity endorsers liable is yet to be notified.

It has taken almost a year for the new Act to be notified, despite the President’s nod in August 2019. Until now, the Consumer Protection Act (1986) has been in force.

As per the new Act, the District Forum has been renamed the District Commission and can now hear cases with a value of up to Rs.1 crore. The earlier limit was Rs.20 lakh. In comparison, the State Commission can now hear cases up to Rs.10 crore, while the National Consumer Disputes Redressal Commission can hear cases with value higher than Rs.10 crore, keeping with the inflation in the country.

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.

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.

Even though these provisions are now in force, functioning of the consumer commissions in Mumbai and have virtually come to a halt since March, when the pandemic struck. “The new Act only provides for e-filing, with no provisions for virtual hearing. We were expecting the State and the Central government to come with rules regarding this,” said Uday Warunjikar, the president of the Consumer Courts Advocates Association.

The Mumbai Grahak Panchayat, a city-based consumer body, had written to the Minister of Food, Civil Supplies and Consumer Protection regarding the non-functioning of consumer commissions, asking for the rules to be framed.

The District Forum has been renamed the District Commission.

It can now hear cases with a value of up to Rs.1 crore.

The State Commission can now hear cases up to Rs.10 crore.

The National Consumer Disputes Redressal Commission can hear cases with value higher than Rs.10 crore.

Consent terms entered between the parties before a professional mediator will be treated as an order of the court.

A consumer can file a case wherever he resides.

The State Commission and the NCDRC can declare null and void the allegedly unfair terms of contract.

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