'Unlike the Consumer Protection Act, 1986 which permitted a class to initiate a case before a consumer commission in cases of mis-selling, the Consumer Protection Act, 2019 provides for different solution'. Explain wheth
CS Professional · Resolution of Corporate Disputes, Non-Compliances & Remedies · PYQS · December 2021
'Unlike the Consumer Protection Act, 1986 which permitted a class to initiate a case before a consumer commission in cases of mis-selling, the Consumer Protection Act, 2019 provides for different solution'. Explain whether the new mechanism provided under the Consumer Protection Act, 2019 will strengthen the class action or will dilute the class action suits.
Answer & Explanation:
India enacted a new consumer protection law in 2019. Unlike the erstwhile law which permitted a class to initiate a case before a consumer commission in cases of mis-selling, the 2019 law establishes a new regulator in the regime of consumer protection i.e. the Central Consumer Protection Authority (CCPA). The CCPA is tasked with protecting and enforcing the rights of consumers as a class. As per section 17 of the new Act, a complaint relating to violations of consumer rights prejudicial to the interests of consumers as a class is to be forwarded to the CCPA. It would then conduct a preliminary inquiry as to whether there exists a prima facie case of violation of consumer rights and instruct for an investigation to be conducted. This has taken away the power to initiate class actions from individuals and vested them into the hands of the regulator. Unlike earlier, where a class of consumers could approach consumer commissions with their common grievance, they are now required to meet the subjective satisfaction of the CCPA. This is then meant to result in an investigation, and consequent orders, if any. The difficulties of public management now impact the enforcement process in consumer grievances. Persons who have suffered harm are now supplicants before the regulator, requesting it to enforce consumer law. Several steps have been added in the process, which could lead to a lesser filing of class action suits.
Topics: Consumer Protection Law
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