The Consumer Protection Act, 2019 has taken away the power to initiate class actions from individuals and vested them into the hands of the regulator. Do you agree with this statement ? Comment.
CS Professional · Resolution of Corporate Disputes, Non-Compliances & Remedies · PYQS · June 2023
The Consumer Protection Act, 2019 has taken away the power to initiate class actions from individuals and vested them into the hands of the regulator. Do you agree with this statement ? Comment.
Answer & Explanation:
Yes, I agree with the statement that the Consumer Protection Act, 2019 has taken away the power to initiate class actions from individuals and vested them into the hands of the regulator. Commentary: India enacted a new consumer protection law in 2019, replacing the erstwhile law. The key change in this context is the establishment of a new regulator, the Central Consumer Protection Authority (CCPA) , within the consumer protection regime. Role of CCPA: The CCPA is tasked with protecting and enforcing the rights of consumers as a class. Complaint Mechanism: As per Section 17 of the Consumer Protection Act, 2019 , a complaint relating to violations of consumer rights prejudicial to the interests of consumers as a class is to be forwarded to either the District Collector or to the CCPA. Process: The CCPA would then conduct a preliminary inquiry to ascertain if a prima facie case of violation of consumer rights exists and instruct for an investigation to be conducted. Shift in Power: This mechanism effectively takes away the power to initiate class actions from individuals and vests it into the hands of the regulator. Unlike the earlier law, where a class of consumers could directly approach consumer commissions with their common grievance, they are now required to meet the subjective satisfaction of the CCPA. This then leads to an investigation and consequent orders, if any. Impact on Enforcement: This shift introduces difficulties in public management, potentially impacting the enforcement process for consumer grievances. Individuals who have suffered harm now act as supplicants before the regulator, requesting it to enforce consumer law. The added steps in the process could lead to a lesser filing of class action suits, as it introduces an additional layer of bureaucratic process and reliance on the regulator's discretion. In view of the above, the Consumer Protection Act, 2019 has indeed centralized the power to initiate class actions, moving it from individual consumers to the regulatory authority.
Topics: Consumer Protection Act (CPA)
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