Consumer Dispute Redressal Commission (CDRC)

Chapter IV of the Act deals with the Establishment, Qualifications, Jurisdiction, Manner of Complaint, Proceedings etc. regarding the Consumer Disputes Redressal Commission. CDRC is empowered to resolve complaints with respect to unfair and restrictive trade practices, defective goods and services, overcharging and goods which are a hazard to life and safety. It has to be set up at three levels, i.e. the District, State and National levels (commissions). In comparison to the old Act, the jurisdictions of the commissions have been enhanced.

• The Act proposes the establishment of the Central Consumer Protection Authority (CCPA) as a regulatory authority.
• The CCPA will protect, promote and enforce the rights of consumers and regulate cases related to unfair trade practices, misleading advertisements, and violation of consumer rights.
• CCPA would be given wide-ranging powers.
  • The CCPA will have the right to take suo-moto actions, recall products, order reimbursement of the price of goods/services, cancel licenses, impose penalties and file class-action suits.
  • The CCPA will have an investigation wing to conduct independent inquiry or investigation into consumer law violations.

POWERS AND FUNCTIONS OF CENTRAL CONSUMER PROTECTION AUTHORITY

The Central Authority enjoys wide powers under the Act and can discharge regulatory, investigative or adjudicatory functions.

Under section 18(1) the Central Authority has the power to:

• Protect, promote and enforce the rights of consumers as a class, and prevent violation of consumers rights under this Act.
• Prevent unfair trade practices and ensure that no person engages himself in unfair trade practices.
• Ensure that no false or misleading advertisement is made of any goods or services which contravenes the provisions of this Act or the rules or regulations made under this Act.
• Ensure that no person takes part in the publication of any advertisement which is false or misleading.

For the above-mentioned purposes, the Central Authority under section 18(2) has the power to:

• 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.
• File complaints before the District Commission, the State Commission or the National Commission, as the case may be, under this Act.
• 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.
• 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.
• Recommend adoption of international covenants and best international practices on consumer rights to ensure effective enforcement of consumer rights.
• Undertake and promote research in the field of consumer rights.
• Spread and promote awareness on consumer rights.
• Encourage non-Governmental organisations and other institutions working in the field of consumer rights to co-operate and work with consumer protection agencies.
• Mandate the use of unique and universal goods identifiers in such goods, as may be necessary, to prevent unfair trade practices and to protect consumers’ interest.
•  issue safety notices to alert consumers against dangerous or hazardous or unsafe goods or services.
• advise the Ministries and Departments of the Central and State Governments on consumer welfare measures.
•  issue necessary guidelines to prevent unfair trade practices and protect consumers’ interest.

      District Consumer Disputes Redressal Commission (previously known as the District Forum):

District Commission shall consist of a President and not less than two and not more than such number of members as may be prescribed, in consultation with the Central Government. The District Commission now has the jurisdiction to entertain complaints where the value of the goods and services paid as consideration does not exceed one crore rupees. Section 34 (2) (d) categorically states that the complaint can now also be instituted in a District Commission within the local limits of whose jurisdiction the complainant resides or personally works for gain, apart from filing in the jurisdiction where the other side actually or voluntarily resides, or carries a business, or has a branch office or personally works for gain.

      State Consumer Disputes Redressal Commission (previously known as the State Commission):

The State Commission shall have jurisdiction to entertain the complaints where the consideration exceeds one crore rupees but does not exceed ten crore rupees.

      National Consumer Disputes Redressal Commission (previously known as the National Commission):

The National Commission shall have the jurisdiction to entertain complaints where the consideration paid exceeds ten crore rupees. The jurisdiction in which the complaint is to be filed is now on the basis of the value of the goods and services paid, which was not the case in the 1986 Act where it was on the value of the goods and services and the compensation, if any, claimed. A great emphasis has been placed on mediation which will be dealt with further.

Basis	District Commission	State Commission	National Commission
Composition	A district commission includes a president and two other members, and one of the members has to be a woman.	A state commission includes a president and at least two other members, and one of the members has to be a woman.	A national commission includes a president and four other members one of whom shall be a woman.
Who can be a President	A working or retired judge of the District Court can be a president of the District Commission.	A working or retired judge of the High Court can be a president of the State Commission.	A working or retired judge of the Supreme Court can be a president of the National Commission.
Appointment of President	By taking the recommendation of the selection committee, the state government appoints the president of the District Commission.	After consulting with the Chief Justice of the High Court, the state government appoints the president of the State Commission.	After consulting with the Chief Justice of India, the central government appoints the president of the National Commission.
Jurisdiction	One can file a complaint for goods and services of ₹1 crore or less.	One can file a complaint of goods and services worth less than ₹10 crores and more than ₹1 crore.	One can file a complaint of goods and services worth more than ₹10 crores.
Appeal against orders	If the aggrieved party is not happy with the jurisdiction of the district commission, then they can appeal against its judgment in the State Commission within 45 days.	If the aggrieved party is not happy with the jurisdiction of the state commission, then they can appeal against its judgment in the National Commission within 30 days by depositing 50% of the fine money.	If the aggrieved party is not happy with the jurisdiction of the national commission, then they can appeal against its judgment in the Supreme Court within 30 days by depositing 50% of the fine money. However, one can file the complaint only when the value of goods and services exceeds ₹10 crores.

Mediation

The Act has introduced a new chapter (Chapter V) on mediation as an alternate dispute resolution mechanism in order to resolve the consumer dispute in a much faster way without having to approach the Commissions. Thus, in the events where the mediation is successful in whole, the terms of such agreement shall be reduced into writing accordingly. Where the dispute is settled only in part, the Commission shall record the statement of the issues which have been settled, and shall continue to hear the remaining issues involved in the dispute. In case of unsuccessful mediation the respective Commission shall within seven days of the receipt of the settlement report, pass a suitable order and dispose of the matter accordingly.

Offences and Penalties

Section 21(2) and Section 89 of the 2019 Act provides the Central Authority with the power to impose a penalty in respect of any false or misleading advertisement, by a manufacturer or an endorser, it may, by order, impose on manufacturer or endorser a penalty which may extend to ten lakh rupees. Apart from this, a separate chapter (Chapter VII) for offences and penalties has been introduced where detailed penalties and punishments have been mentioned in relation to non-compliance, or manufacturing for sale or storing, selling or distributing or importing products that are adulterated or spurious.

Related Rules and Regulations

• The Consumer Protection (E-Commerce) Rules, 2020 which are mandatory and are not advisories, lay down all the important information relating to the e-commerce entities keeping in mind both the consumer and the product/service provider. Key highlights are:
  • E-Commerce entities according to Rule 5 are required to provide information to consumers, 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 and country of origin.
  • These platforms will have to acknowledge the receipt of any consumer complaint within 48 hoursand redress the complaint within one month from the date of receipt. They will also have to appoint a grievance officer for consumer grievance redressal.
  • Sellers cannot refuse to take back goods or withdraw services or refuse refunds,if such goods or services are defective, deficient, delivered late, or if they do not meet the description on the platform.
  • The rules also prohibit the e-commerce companies from manipulating the priceof the goods or services to gain unreasonable profit through unjustified prices.
• As per the Consumer Protection (Consumer Disputes Redressal Commissions) Rules, 2020 which came into force on 20^th July 2020, the amount of fee payable for filing the complaint in the District Commission up to Rs 5 lakhs has been made Nil according to Rule 7.
• The credit of the amount due to unidentifiable consumers will go to the Consumer Welfare Fund(CWF).
• State Commissions will furnish information to the Central Government on a quarterly basis on vacancies, disposal, the pendency of cases and other matters.
• Apart from these general rules, there are Central Consumer Protection Council Rules, provided for the constitution of the Central Consumer Protection Council(CCPC).
  • It will be an advisory body on consumer issues, headed by the Union Minister of Consumer Affairs, Food and Public Distribution with the Minister of State as Vice Chairperson and 34 other members from different fields.
  • It will have a three-year tenure and will have Minister-in-charge of consumer affairs from two States from each region: North, South, East, West, and North-East Region.

Conclusion

The 2019 Act is a much required change in favor of the consumers considering the current age of digitization. It empowers them with clearly defined rights and dispute resolution process which will enable them to get their grievance addressed with a fast track mechanism.

In order to have a better understanding of the concepts have a glance over some of the landmark judgments given by our Courts according to the Consumer Protection Act, 1986 which is now repealed but the guidelines laid down in those cases helped in framing the new Consumer Protection Act, 2019.

• The Delhi High Court while examining the concept of advertisement decided the case of,

 Horlicks Ltd. v. Zydus Wellness Products Ltd., 2020 SCC Online Del 873

The High Court passed an interim order restraining Zydus from telecasting its advertisement comparing Complan to Horlicks on the grounds that the same was misleading and disparaging. The Court relied on various judgments on misleading advertisements, disparagement and law governing publication of advertisements on television. Major decisions were:

Dabur (India) Ltd. v.  Colortek (Meghalaya) (P) Ltd., 2010 SCC Online Del 391

The Delhi High Court culled out the principles governing disparagement in the advertisements and held:

On the basis of the law laid down by the Supreme Court, the guiding principles for us should be the following:

(i) An advertisement is commercial speech and is protected by Article 19(1)(a) of the Constitution.

(ii) An advertisement must not be false, misleading, unfair or deceptive.

(iii) Of course, there would be some grey areas but these need not necessarily be taken as serious representations of fact but only as glorifying one’s product.

To this extent, in our opinion, the protection of Article 19(1)(a) of the Constitution is available. However, if an advertisement extends beyond the grey areas and becomes a false, misleading, unfair or deceptive advertisement, it would certainly not have the benefit of any protection.

 Pepsi Co. Inc. v. Hindustan Coca Cola Ltd.,2003 SCC Online Del 802

In Pepsi Co. it was held that certain factors had to be kept in mind while deciding the question of disparagement. Those factors were:

(i) Intent of the commercial,

(ii) Manner of the commercial, and

(iii) Story line of the commercial and the message sought to be conveyed.

These factors were amplified or restated in the following terms:

“(1) The intent of the advertisement – this can be understood from its story line and the message sought to be conveyed.

(2) The overall effect of the advertisement – does it promote the advertiser’s product or does it disparage or denigrate a rival product?

In this context it must be kept in mind that while promoting its product, the advertiser may, while comparing it with a rival or a competing product, make an unfavorable comparison but that might not necessarily affect the story line and message of the advertised product or have that as its overall effect.

(3) The manner of advertising – is the comparison by and large truthful or does it falsely denigrate or disparage a rival product? While truthful disparagement is permissible, untruthful disparagement is not permissible.”