CAIIB BRBL Module C Unit 19 : The Consumer Protection Act, 2019

09/11/2023

Table of Contents

CAIIB Paper 4 BRBL Module C Unit 19 : The Legal Services Authorities Act, 1987: Lok Adalats (New Syllabus)

IIBF has released the New Syllabus Exam Pattern for CAIIB Exam 2023. Following the format of the current exam, CAIIB 2023 will have now four papers. The CAIIB Paper 4 (BANKING REGULATIONS AND BUSINESS LAWS) includes an important topic called “The Consumer Protection Act, 2019”. Every candidate who are appearing for the CAIIB Certification Examination 2023 must understand each unit included in the syllabus.

In this article, we are going to cover all the necessary details of CAIIB Paper 4 (BRBL) Module C (IMPORTANT ACTS/LAWS & LEGAL ASPECTS OF BANKING OPERATIONS – PART B) Unit 19 : The Consumer Protection Act, 2019, Aspirants must go through this article to better understand the topic, The Consumer Protection Act, 2019 and practice using our Online Mock Test Series to strengthen their knowledge of The Consumer Protection Act, 2019. Unit 19 : The Consumer Protection Act, 2019

Introduction

The Consumer Protection Act 2019 was enacted on August 9th 2019.
It aims to provide for protection of the interests of consumers and for the said purpose, to establish authorities for timely and effective administration and settlement of consumers’ disputes and for matters connected therewith or incidental thereto.

Important Definitions

Consumer” means any person who:

Buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and
Includes any user of such goods other than the person who buys such goods for consideration paid, when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or
Hires or avails of any service for a consideration which has been paid or promised or partly paid and partly promised, and includes any beneficiary of such service, but does not include a person who avails of such service for any commercial purpose.

Consumer Rights” includes:

The right to be protected against the marketing of goods, products or services which are hazardous to life and property;
The right to be informed about the quality, quantity, potency, purity, standard and price of goods, products or services, so as to protect the consumer against unfair trade practices;
The right to be assured, wherever possible, access to a variety of goods, products or services at competitive prices;
The right to be heard and to be assured that consumer’s interests will receive due consideration at appropriate for a
The right to seek redressal against unfair trade practice or restrictive trade practices or unscrupulous exploitation of consumers; and
The right to consumer awareness.

Unfair Contract And Unfair Trade Practice

An Unfair Contract has been defined in detail in Section 2(46) and Unfair Trade Practice in Section 2(47).

In terms of Section 2(46) “unfair contract” means a contract between a manufacturer or trader or service provider on one hand, and a consumer on the other, having such terms which cause significant change in the rights of such consumer, including the following,

Requiring manifestly excessive security deposits to be given by a consumer for the performance of contractual obligations; or
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
Refusing to accept early repayment of debts on payment of applicable penalty, or
Entitling a party to the contract to terminate such contract unilaterally, without reasonable cause; or
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
Imposing on the consumer any unreasonable charge, obligation or condition which puts such consumer to disadvantage;”
Thus, an unfair contract is one which seeks to curtail rights which should normally be available to all consumers.

In terms of Section 2(47) “unfair trade practice” means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice including any of the following practices, namely :—

i)Making any statement, whether orally or in writing or by visible representation including by means of electronic record, which:

Falsely represents that the goods are of a particular standard, quality, quantity, grade, composition, style or model
Falsely represents that the services are of a particular standard, quality or grade;
Falsely represents any re-built, second-hand, renovated, reconditioned or old goods as new goods.
Represents that the goods or services have sponsorship, approval, performance, characteristics, accessories, uses or benefits which such goods or services do not have.
Represents that the seller or the supplier has a sponsorship or approval or affiliation which such seller or supplier does not have.
Makes a false or misleading representation concerning the need for, or the usefulness of, any goods or services;
Gives to the public any warranty or guarantee of the performance, efficacy or length of life of a product or of any goods that is not based on an adequate or proper test.
Materially misleads the public concerning the price at which a product or like products or goods or services, have been or are, ordinarily sold or provided.

ii)Permitting the publication of any advertisement, whether in any newspaper or otherwise, including by way of electronic record, for the sale or supply at a bargain price of goods or services that are not intended to be offered for sale or supply at the bargain price.

iii)Permitting the offering of gifts, prizes or other items with the intention of not providing them as offered or creating impression that something is being given or offered free of charge when it is fully or partly covered by the amount charged, in the transaction as a whole.

iv)Permitting the sale or supply of goods intended to be used, or are of a kind likely to be used by consumers, knowing or having reason to believe that the goods do not comply with the standards prescribed by the competent authority.

v)Permitting the hoarding or destruction of goods, or refusal to sell the goods, if such hoarding or destruction or refusal raises or tends to raise or is intended to raise,

vi)Manufacturing of spurious goods or offering such goods for sale or adopting deceptive practices in the provision of service.

vii) Not issuing bill or cash memo or receipt for the goods sold or services rendered in such manner as may be prescribed

viii)Refusing, after selling goods or rendering services, to take back or withdraw defective goods and to refund the consideration thereof, if paid, within the period stipulated in the bill or cash memo or receipt or in the absence of such stipulation, within a period of thirty days

ix)Disclosing to other person any personal information given in confidence by the consumer.

Central Consumer Protection Council

Section 3, 4 and 5 of the statute details about the establishment, working and objects of the Central Consumer Protection Council.

According to the provisions of Section 3

The Central Government shall, by notification, establish the Central Consumer Protection Council to be known as the Central Council.
The Central Council shall be an advisory council and consist of the following members, namely:—

(a)The Minister-in-charge of the Department of Consumer Affairs in the Central Government, who shall be the Chairperson; and

(b)Such number of other official or non-official members representing such interests as may be prescribed.

Section 4 states

The Central Council shall meet as and when necessary, but atleast one meeting of the Council shall be held every year.
The Central Council shall meet at such time and place as the Chairperson may think fit and shall observe such procedure in regard to the transaction of its business as may be prescribed.

Section 5 states

The object of the council would be to render advice on promotion and protection of the consumers’ rights under the statute.

State Consumer Protection Council

The State Consumer Protection Council is established under Section 6 of the Act. As per Section 6

Every State Government shall, by notification, establish with effect from such date as it may specify in such notification, a State Consumer Protection Council for such State to be known as the State Council.

The State Council shall be an advisory council and consist of the following members, namely:—

The Minister-in-charge of Consumer Affairs in the State Government who shall be the Chairperson
Such number of other official or non-official members representing such interests as may be prescribed
Such number of other official or non-official members, not exceeding ten, as may be nominated by the Central Government.

The State Council shall meet as and when necessary but not less than two meetings shall be held every year.

The State Council shall meet at such time and place as the Chairperson may think fit and shall observe such procedure in regard to the transaction of its business, as may be prescribed.

Section 7 describes the object of the State Council to be to render advice on promotion and protection of consumer rights under this Act within the State.

District Consumer Protection Council

Section 8 and 9 of the Consumer Protection Act 2019 deals with the establishment and object of the District Consumer Protection Council. As per Section 8-

The State Government shall, by notification, establish for every District with effect from such date as it may specify in such notification, a District Consumer Protection Council to be known as the District Council.
The District Council shall be an advisory council and consist of the following members, namely:

The Collector of the district, who shall be the Chairperson; and

Such number of other official and non-official members representing such interests as may be prescribed.

The District Council shall meet as and when necessary but not less than two meetings shall be held every year.
The District Council shall meet at such time and place within the district as the Chairperson may think fit and shall observe such procedure in regard to the transaction of its business as may be prescribed.

According to Section 8: The objects of every District Council shall be to render advice on promotion and protection of consumer rights under this Act within the district.

Central Consumer Protection Authority

Establishment

The Central Consumer Protection Authority is formed under Section 10 of the statute. As per Section 10

The Central Government shall, by notification, establish with effect from such date as it may specify in that notification, a Central Consumer Protection Authority to be known as the Central Authority to regulate matters relating to violation of rights of consumers, unfair trade practices and false or misleading advertisements which are prejudicial to the interests of public and consumers and to promote, protect and enforce the rights of consumers as a class.
The Central Authority shall consist of a Chief Commissioner and such number of other Commissioners as may be prescribed, to be appointed by the Central Government to exercise the powers and discharge the functions under this Act.
The headquarters of the Central Authority shall be at such place in the National Capital Region of Delhi, and it shall have regional and other offices in any other place in India as the Central Government may decide.

Investigation Wing

The Central Authority has an Investigation Wing for the purpose of conducting inquiry or investigation under this Act as may be directed by the Central Authority.

Functions

To protect, promote and enforce the rights of consumers as a class
To prevent violation of consumers rights under the Act
To prevent unfair trade practices
To ensure no false or misleading advertisement is made
To ensure no person publishes false or misleading advertisement.
Inquiries/ investigations into violations of consumer rights, unfair trade practices
Intervene in any proceedings before a District/ State/ National Commission in any matter

Review the matters relating to, and the factors inhibiting enjoyment of, consumer rights
Recommend adoption of international covenants and best international practices
Undertake and promote research in the field of consumer rights
Spread and promote awareness on consumer rights
Issue notices to alert consumers against dangerous or hazardous or unsafe goods or services
Issue necessary guidelines to prevent unfair trade practices and protect consumers’ interest.

Note: The Central Authority has been given powers under the Act to issue directions and levy penalties under Section 20 and 21 and any person aggrieved by an order passed by the Central authority under the aforesaid sections’ may file an appeal to the National Commission within a period of thirty days from the date of receipt of such order.” Section 24.

District Consumer Disputes Redressal Commission

As per Section 28 of the Act, The State Government, by notification establishes a District Consumer Disputes Redressal Commission in each district.
It comprises president and at least two members and not more than prescribed number of members. One of the members or president must be woman.
It shall have jurisdiction to entertain complaints where the value of the goods or services paid as consideration does not exceed Rs. 1 crore.
The District Commission shall ordinarily function in the district headquarters and may perform its functions at such other place in the district, as the State Government may, in consultation with the State Commission, notify in the Official Gazette from time to time.

A person may appeal against order of District Commission to the State Commission on the grounds of facts or law within 45 days from the date of the order, or extended period permitted.
No appeal by a person, who is required to pay any amount in terms of an order of the District Commission, shall be entertained by the State Commission unless the appellant has deposited fifty per cent of that amount in the manner as may be prescribed.

State Consumer Disputes Redressal Commission

The State Consumer Disputes Redressal Commission is established under Section 42 of the Consumer Protection Act 2019.

The State Government shall, by notification, establish a State Consumer Disputes Redressal Commission, to be known as the State Commission, in the State.
The State Commission shall ordinarily function at the State capital and perform its functions at such other places as the State Government may in consultation with the State Commission notify in the Official Gazette.

Each State Commission shall consist of—

A President; and
Not less than four or not more than such number of members as may be prescribed in consultation with the Central Government

The functions of the state Commission has been detailed in Section 47 of the Act.

To entertain

Complaints where the value of the goods or services paid as consideration, exceeds Rs. 1 crore, but does not exceed Rs. 10 crores, Provided that where the Central Government deems it necessary so to do, it may prescribe such other value, as it deems fit
Complaints against unfair contracts, where the value of goods or services paid as consideration does not exceed Rs. 10 crores
Appeals against the orders of any District Commission within the State.

To call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any District Commission within the State, where it appears to the State Commission that such District Commission has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested.
As per Section 51 of the Act– Any person aggrieved by an order made by the State Commission in exercise of its powers, may prefer an appeal against such order to the National Commission within a period of 30 days from the date of the order in such form and manner as may be prescribed
No appeal by a person, who is required to pay any amount in terms of an order of the State Commission, shall be entertained by the National Commission unless the appellant has deposited 50% of that amount in the manner as may be prescribed.

Term of Office of the President

The President of the State Commission shall hold office for a term of four years or upto the age of sixty-seven years, whichever is earlier and shall be eligible for reappointment for another term of four years subject to the age limit of sixty-seven years, and such reappointment shall be made on the basis of the recommendation of the Selection Committee.
Every member of the State Commission and the President and every member of the District Commission shall hold office for a term of four years or upto the age of sixty-five years, whichever is earlier and shall be eligible for reappointment for another term of four years subject to the age limit of sixty-five years, and such reappointment shall be made on the basis of the recommendation of the Selection Committee.

National Consumer Disputes Redressal Commission

Section 53 of the statute deals with the establishment of a National Consumer Disputes Redressal Commission. Section 53 states:

The Central Government shall, by notification, establish a National Consumer Disputes Redressal Commission, to be known as the National Commission.
The National Commission shall ordinarily function at the National Capital Region and perform its functions at such other places as the Central Government may in consultation with the National Commission notify in the Official Gazette.
The National Commission shall also have a President plus not less than 4 members. The President and members of the National Commission hold office for such term as specified in the rules made by the Central Government but not exceeding five years from the date on which he enters upon his office and shall be eligible for re-appointment up to the age of 70 for the President and 67 for other members.

As per Section 58 of the statute which details the functions of the National Commission- the National Commission shall have jurisdiction—to entertain

Complaints where the value of the goods or services paid as consideration exceeds Rs. 10 crores.
Complaints against unfair contracts, where the value of goods or services paid as consideration exceeds Rs. 10 crores
Appeals against the orders of any State Commission
Appeals against the orders of the Central Authority

As per Section 67: Any person, aggrieved by an order made by the National Commission, may prefer an appeal against such order to the Supreme Court within a period of 30 days from the date of the order

Jurisdiction Of Commission

Jurisdiction of District Commission: District Commission shall have jurisdiction to entertain complaints where the value of the goods or services paid as consideration does not exceed fifty lakh rupees.
Jurisdiction of State Commission: The State Commission shall have jurisdiction to entertain complaints where the value of the goods or services paid as consideration exceeds fifty lakh but does not exceed two crore rupees.
Jurisdiction of National Commission: The National Commission shall have jurisdiction to entertain complaints where the value of the goods or services paid as consideration, exceeds two crore rupees.

Finality Of Orders And Limitation Period

Section 68: states that every order of a District Commission or the State Commission or the National Commission, as the case may be, shall, if no appeal has been preferred against such order under the provisions of this Act, be final.
Section 69: The District Commission, the State Commission or the National Commission shall not admit a complaint unless it is filed within two years from the date on which the cause of action has arisen.

Consumer Mediation Cell

The Act envisages the establishment of a Consumer Mediation Cell by each state to be attached to each of the District Commissions and the State Commissions of that State.
The Central Government shall establish, by notification, a consumer mediation cell to be attached to the National Commission and each of the regional Benches.
A consumer mediation cell shall consist of such persons as may be prescribed.

Every consumer mediation cell shall maintain—

A list of empaneled mediators;
A list of cases handled by the cell;
Record of proceeding; and
Any other information as may be specified by regulations
The panel of mediators is valid for five years. It shall submit a quarterly report to the Commission to which it is attached.
The mediator shall be guided by the principles of natural justice and fair play but shall not be bound by the provisions of the Code of Civil Procedure, 1908 or the Indian Evidence Act, 1872. The record of the proceedings shall be prepared by the mediator on every date and shall be signed by the parties or their counsel, authorised representatives.
The agreement executed between the parties is submitted by the mediator, to the Commission, in a sealed cover, with a forwarding letter. If no agreement is executed between the parties, within three months from the date of first appearance, the mediator shall inform the Commission about the matter.
The Commission within seven days of receiving the settlement report, pass suitable order recording such settlement of consumer dispute and dispose of the matter