JAIIB PPB Paper-2 Module-A Unit 20: The Consumer Protection Act, 2019-Preamble, Extent and Definitions

09/03/2023

JAIIB Paper 2 (PPB) Module A Unit 20: The Consumer Protection Act, 2019-Preamble, Extent and Definitions (New Syllabus)

The Institute of Indian Banking and Finance (IIBF) has recently announced the revised syllabus and exam format for the JAIIB Exam 2023. The upcoming exam will comprise of four papers, with Paper 2 (Principles & Practices of Banking) covering Unit 20: The Consumer Protection Act, 2019-Preamble, Extent and Definitions. This particular unit holds significant importance for candidates, as it will greatly impact their performance in the exam.

To assist candidates in comprehending the topic, we will provide all the necessary details related to Unit 20: The Consumer Protection Act, 2019-Preamble, Extent and Definitions of JAIIB Paper 2 (PPB) Module A: General Banking Operations. We strongly recommend candidates to refer to this article and also utilize our Online Mock Test Series to enhance their understanding of Foreign Currency Accounts for Residents and other related aspects.

For candidates appearing for the JAIIB Certification Examination 2023, it is essential to comprehend each unit in the syllabus, including the Marketing unit. This unit holds great importance in the banking industry, and candidates must prepare thoroughly to excel in the exam and establish a successful career in the banking sector.

Consumer Protection Act, 2019

Salient New Aspects of CPA, 2019

Defines specifically ‘Consumer Rights’
Adds feature of ‘Unfair contract’
Introduces ‘Product liability action’
Defines ‘Design’ and includes related aspects
Includes ‘e-Commerce’ and ‘Electronic service provider’
Includes ‘Advertising’ and ‘Endorsement’
Adds the ‘Express warranty’ parameter
Distinguishes: Manufacturer, Product manufacturer, Product seller, Product service provider

Who Is A Consumer?

Consumer is any person, who for a consideration paid or to be paid:

Has bought any goods for other than resale or commercial purposes, or
Hired or availed any service, other than for commercial purposes, and that under a contract for personal services, or
Has used any goods other than for commercial purposes or benefited from any service, other than for commercial purposes, and that under a contract for personal services.

Consumer’s Rights

“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, as the case may be, 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
The right to consumer awareness.”

Various Fora

The CPA 2019 has built upon the framework for handling of consumer disputes established under the preceding Act. Broadly, the framework comprises following bodies:

Consumer Protection Councils: These are at all three levels viz. the Central, the State and the District levels. They render advice on promotion and protection of consumer rights under the Act.
Central Consumer Protection Authority: It is an authority to regulate matters relating to violation of rights of consumers.
Consumer Disputes Redressal Commissions: These are at all three levels viz. the Central, the State and the District levels. These handle the consumer complaints filed under the Act.
Consumer Mediation Cells: These are attached to each of the Redressal Commissions and the Regional Benches. These Cells try to get the disputes settled through mediation.

Consumer Protection Council

Central Consumer Protection Council

The Central Government establishes CPC. The object of CPC is to render advice on promotion and protection of the consumers’ rights under this Act.
CPC can have maximum 36 members with Secretary in-charge of Consumer Affairs as Member Secretary and Minister in-charge of Consumer Affairs Central Govt. as Chairperson.

State Consumer Protection Council

The State Government establishes a SPC. It has official and non-official members representing prescribed interests, other official and non-official members (maximum 10) and Minister-in-Charge of the Consumer Affairs, State Govt. as Chairperson.

District Consumer Protection Councils

For every district, State Government establishes, by notification, the District Consumer Protection Council (DPC): comprising official and no-official members representing prescribed interests, and chaired by the District Collector.

Central Consumer Protection Authority

Main 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.

Ancillary Functions

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 right
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.

Powers of CCPA

Power to Conduct Inquiry
Power to Order Recall of Goods
Power to Order Discontinuing Advertisement
Power of Search and Seizure

A person aggrieved by any order passed by the Central Authority may file an appeal to the National Commission within a period of 30 days from the date of receipt of such order.

Penalty

A person, who fails to comply with any direction of the Central Authority, shall be punished with imprisonment for a term which may extend to six months or with fine which may extend to Rs. 20 lakh, or with both.
Any manufacturer or service provider who causes a false or misleading advertisement to be made shall be punished with imprisonment up to two years and with fine up to Rs. 10 lakh; and for every subsequent offence, with imprisonment up to five years and with fine up to Rs. 50 lakh.

Consumer Disputes Redressal Commissions

District Consumer Disputes Redressal Commission

The State Government 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. 50 lakh.
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 is permitted against an order passed pursuant to a settlement by mediation.

State Consumer Disputes Redressal Commission

The State Government establishes a State Consumer Disputes Redressal Commission in the state.
It comprises president and at least four members and not more than prescribed number of members. One of the members or president must be woman.
The President and every member of the State/ District Commission shall hold office for a term of four years or up to the age of sixty-five years, whichever is earlier.
It shall have jurisdiction to entertain complaints where the value of the goods or services paid as consideration exceeds Rs.50 lakh but does not exceed Rs.2 crore. Complaints against unfair contracts, where the value of goods or services paid as consideration does not exceed Rs. 10 crore and appeals against the orders of any District Commission within the State.
Any person may appeal against order of State Commission within 30 days from the date of the order or extended period permitted to National Commission. Appeal should be disposed within 90 days from the date of its admission.

National Consumer Disputes Redressal Commission

The Central Government establishes a National Consumer Disputes Redressal Commission.
It comprises president and at least four 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 exceeds Rs.2 crore. Complaints against unfair contracts, where the value of goods or services paid as consideration exceeds Rs. 10 crore are entertained.
The National Commission has powers to set aside an order passed ex parte by either a District/ State Commission, on application being made by the aggrieved party.
A person may appeal against order of National Commission to the Supreme Court within 30 days from the date of the order, or extended time permitted.

Admission of Complaint

Every complaint filed shall be accompanied by a fee, as notified by Central Government in this regard. No fee is prescribed if the value of goods and services paid as consideration is upto Rs.5 lakh.
The proceeding should be conducted by the President and at least one member sitting together.
The admissibility of complaint should be decided within 21 days from the date of filing. If no decision is taken within specified period, the complaint is deemed to have been admitted.
Copy of the admitted complaint is sent to the opposite party, within 21 days of admission, directing him to give his version within 30 days or granted extended period not exceeding 15 days.
If the opposite party denies or disputes the allegations, or omits or fails to represent his case within the allowed time, the District Commission will proceed to settle the dispute.
For goods required testing, a sample of the goods obtained, sealed and authenticated is referred to an appropriate laboratory to make an analysis or test. It has to report its findings within a period of 45 day
The laboratory report is sent to the opposite party, along with remarks of District Commission. Any party disputing the correctness of the findings or the methods of analysis or test shall submit its objections in writing. After giving a reasonable opportunity of being heard to the complainant and the opposite party the District Commission shall issue an appropriate order.

Other Aspects

Limitation Period

The District/, State/ National Commission shall not admit a complaint unless it is filed within 2 years from the date on which the cause of action has arisen.

Penalty for Non-compliance of Order (Section 72)

Punishment for failure to comply with any order made by the District/ State/ National Commission is imprisonment for minimum one month and maximum, three years, or with fine of minimum, 25,000/-, an up to Rs. lakh, or with both.

Power of Review

Under the 2019 Act the District/State Commissions have been vested with the power to review its own Orders to set right the errors, if an application is filed within 30 days of such Order

Mediation Process

The State Government establishes consumer mediation cells attached to each District Commission and the State Commission. The Central Government establishes consumer mediation cells attached to the National Commission and Regional Benches.
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, authorized 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

Product Liability

The CPA 2019 has introduced the concept of product liability and brings within its scope, the product manufacturer, product service provider and product seller, for any claim for compensation.
The term ‘product seller’ includes e-commerce platforms as well.

Unfair Contracts

CPA 2019 enables consumers to seek remedy under the statute against such unfair contracts.
All the complaints against the Unfair Contracts, where the value of goods or services paid as consideration does not exceed Rs. 10 Crore, are to be filed before the State Commission. Complaints where the consideration exceeds Rs. 10 Crore are to be preferred before the National Commission.

Data Protection

CPA 2019 has brought Data Protection also under its scope by making any disclosure of personal information given in confidence by a consumer an unfair trade practice, unless such disclosure is in accordance with the provision of any law.