INTRODUCTION: Parliament passed the revised Consumer Protection Act in 2019 and it took effect on July 20, 2020. The Act updates the 1986 Consumer Protection Act, which had outlived its usefulness in the face of modern consumerism and rising consumer disputes. The act’s goal is to safeguard consumers’ interests while also ensuring that complaints are handled quickly and effectively. Consumer rights must be enforced in a holistic manner, according to the new law.
Caveat Emptor is a Latin phrase that literally translates to “let the buyer beware.” It is a time-honored principle for resolving conflicts over commodities, services, and property. This principle holds the seller harmless if the goods are damaged, defective, or fails to satisfy the buyer’s expectations. According to the original idea, the buyer was supposed to use his expertise to make an informed and careful purchase. It evolved into a tool for sellers to abuse, as well as an acceptable defence for judges. Even in circumstances where information asymmetry was maintained, the onus was shifted to the consumers to conduct due diligence.
The present Caveat Venditor rule arose from the judicial debate and the recognition that the former was incompatible with equity law. Caveat Venditor simply means “let the seller beware,” implying that vendors bear a greater responsibility for the products and services they provide. According to this law, each product comes with an implicit warranty, therefore the customer does not have to do any due diligence to ensure that the product is of good quality. The sellers are now responsible for ensuring that the buyer makes an informed decision and compensating for defective goods.
With the implementation of the new consumer protection act, India has completed the transition from caveat emptor to caveat venditor and adhered to the progressive ideals required in modern trade and commerce.
WHAT HAS CHANGED?: Section 2(7) of the Act expands the definition of “consumer” to include customers who were previously excluded from the concept of “consumer” and had no redress, such as those who buy goods and services through direct selling, e-commerce, MLM, and teleshopping.
Under Section 10 of the Act, a Central Consumer Protection Authority is established to protect and enforce consumers’ rights. The authority will function as a regulatory agency, with the power to take action against unfair trade practices, recall dangerous items, and levy penalties for deceptive or misleading advertising.
Section 83 of the legislation also introduces the idea of “product liability,” which was not present in the prior law. Consumers can now seek compensation from manufacturers, retailers, and service providers for a ‘damage’ they have suffered as a result of a defective product or a shortcoming in service. It is worth noting that under Section 2(22), the term “hurt” is interpreted extensively to include mental anguish and emotional suffering, as well as other bodily damages and personal injuries.
There was no provision in the 1986 Act relating to unjust contractual terms. However, under the new rule, unjust contracts that benefit producers at the expense of consumers’ interests can be contested. In support of all of these rules, this Act establishes a complete set of fines and punishments for any infraction committed by the seller or manufacturers.
HOW WILL IT BENEFIT THE CONSUMERS?: The legal framework is designed in such a way that it benefits consumers in a systematic way. Consumers can now make complaints from wherever they live, which is a substantial change from the previous law, which required complaints to be filed only where the transaction occurred. The act also allows for the electronic submission of complaints. Such provisions give consumers more choices and aim to eliminate complaints that are unmaintainable due to technological or jurisdictional issues.
The Act also gives the Central Consumer Protection Authority the authority to initiate complaints on behalf of customers who have had their rights violated. This is done to ensure that customers’ rights to file class-action lawsuits are not infringed upon. As a result, the new act protects consumer interests by eliminating the age-old caveat emptor clause.
WHAT FUNCTION DOES IT PLAY IN THE PANDEMIC’S PROMOTION OF CONSUMERISM?: Because the new act recognizes e-commerce markets and considers those who make online transactions to be consumers, it is self-evident that e-commerce platforms will be held to the same standards as traditional vendors when it comes to their products, services, and ads. There has been a significant shift in consumer behavior as a result of the Covid-19 outbreak and the ensuing lockdowns implemented across the country. Consumers are ditching physical stores in favor of purchasing online. As a result, a significant portion of transactions takes place online. Previously, a consumer making an online purchase had no recourse against unfair commercial practices by internet platforms. However, this deliberate adjustment brought about in the midst of a pandemic is certainly beneficial, since it broadens the scope of protection for all consumers who have had problems acquiring goods from online platforms.
CONCLUSION: The new statute is a positive step forward in the area of consumer protection. By expanding the scope of consumers, commodities, and conflicts, it correctly completes the shift from caveat emptor to caveat venditor. Although, because the scope has been enlarged, it is anticipated that the number of consumer complaints would arise. Section 37 of the Act, on the other hand, deals with a remedy through alternative conflict resolution methods including mediation.
Chapter V also proposes the creation of a Consumer Mediation Cell to expedite the administration of justice. It is also expected to result in a rise in consumerist attitudes in enterprises and commercial interactions. As a result, vendors will be more cautious, enhancing their services, product quality, and avoiding fraudulent acts. As a result of the newly enacted law, we observe a substantial shift from the caveat emptor concept to the caveat venditor.
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