Class action in Consumer Act

 · 5 mins read

‘Consumer’ is a class or group of people who buys any kind of goods or physical products for consumption and avails any kind of services in exchange of certain consideration. The law tends to protect from any deceit or fraud related to the perceived product traits or service in terms of quality, price, and purity etc safeguarding rights of innocent consumers.

“Class Action” can be considered as a mode of action taken or pursued in a form of joint or collective legal suit in a court of Law, initiated by a single person or a small group of people representing the concerns, claims and interests of a bigger group of numerous people having common grievances against a same “legal person” offering product or service provider.

Even though the term ‘Class Action’ is an alien law concept predominantly from US and UK. The Indian legislatures and the judiciary has adopted and further amended this concept under section18 to avoid numerous litigations by many people and consumer separately having the similar grievances against any specific product or service seeking for a common relief. The main purpose is to minimize the cost, time and the sufferings of the consumer and to facilitate convenience. It is very difficult for the judiciary to consider the sustainability of any pecuniary award as a remedy in favor of the applicant, if the product or service value in dispute is less for a single consumer.

The Consumer Protection Act of 1986 has had provisions for Class action under section 12(1)(c) where oneness of the interest is a required criterion for common grievance against the same legal person or service provider.

In the case of Anjum Hussain & Ors v Intellicity Business Park Pvt Ltd & Ors, over 40 people booked the same office space which was not delivered by Intellicity Business Park within 4 years. The NCDRC was approached by many of them including Anjum Hussain seeing refund of the paid amount with interest to get compensated. The Application was filed under section 12(1)(c) of the consumer protection Act 1986 seeking the compensation for all the buyers of the commercial space with Intellicity, however the NCDRC rejected the application citing non maintainability of the class action due to absence of clarity on total number of allottees in the project .

An appeal was initiated in the Supreme Court against the NCDRC order which the Apex court allowed and set aside the NCDRC’s order eventually holding the maintainability of the application to NCDRC under section 12(1)(c) of the consumer protection Act of 1986.

To administer timely, proper and effective care towards dynamic and growing consumer disputes, the Consumer Protection Act of 1986 got amended in the year 2019 when the Indian Parliament passed the Consumer Protection Bill 2019.A new Consumer Protection Act 2019 came in force by replacing the old Act to manage and redress the challenging nature of consumer disputes in this digital era where business is being conducted over the cyber space and the undesirable and unfair situation is prevalent.

The amended Act is aimed to cater disputes happening in the ecommerce platform incorporating online and digital sales. The pecuniary jurisdictions of the District forum, State Commissions and National commission also got enhanced. Consumer disputes of up to 1 Crore are now under the purview of the district forum, whereas complaints of above 1 Crore and up to 10 Crores are now under the purview of the state commission and the National commission got empowered to redress any complaints exceeding 10 Crores.

Violation of any consumer law is now catered by Central Consumer Protection Authority (CCPA) which is a new regulating authority having extensive enforcement and investigation powers such as product recall, reimbursement, cancellation of licenses and suo-moto measures by the investigation wing headed by a Director General, in cases of apprehension of misconduct.

Under this New Act, the consumers are empowered to file electronic complaints from any place instead of place of purchase. Video conference option for hearing parties in disputes enabling better consumer convenience and consumer expectations by minimizing the harassment is a boon for the consumers.

This New Act also protects the interest of the seller’s, manufacturer’s and the service provider’s if the product is misused by changing or altering the product. Thus the concept of Product Liability got adopted in a broader sense under this new Act.

The consumer personal data, details and information protection got incorporated to enhance the consumer confidence towards e-commerce. The concept of ethical endorsement by the celebrities is now under the purview of this Act in order to avoid any unfair trade practices of influencing the consumer mind space with false and malicious advertisements. The endorser or the manufacturer can also be penalized and the CCPA can impose penalty of upto Rs 10 Lakhs if the advertisement is found misleading and against the consumer interest and rights. Instances of repeat offence includes enhanced fine extended upto 50 Lakhs. The CCPA is empowered to prohibit the endorser of such misleading advertisement up to 1 year and for repeat offence the prohibition gets extended to 3 years under the amended Act.

To facilitate speedy dispute settlement and to reduce the burden on the consumer courts, the new Act has incorporated Alternate Dispute Resolutions (ADR) through mediation which is a win-win situation for the consumers, seller’s, manufacturer’s and the service provider’s.

In addition to the above pecuniary remedies, the amended Act also advocates criminal liabilities for offences of spurious and adulterated goods manufacturing, selling, importing and distributing. In case of death, hurt and injury by consuming such goods, the Act has provisions for imprisonment. Section 89 of the Act imposes criminal liability for ensuring enhanced consumer protection. The amendment includes provisions for up to 2 years of imprisonment for false and misleading advertisements and for repeat offence it improvises imprisonment up to 5 years.

Now the above revolutionary amendment in the Consumer Protection Act puts the entire onus on the Judiciary to act firmly and protect the innocent consumers so that the consumer remains a King.