The Consumer Protection Bill, 2018

An Overview

The Consumer Protection Bill, 2018
The Consumer Protection Bill, 2018

The emergence of globalization coupled with modern business mechanism has had a substantial impact on consumer experience in India. As online transactions and digital marketing are becoming a way of life, immediate action was imperative to cover the lacunae in the three-decade old Consumer Protection Act 1986. The Consumer Protection Bill 2018 was introduced in the Lok Sabha on 5th January, 2018 as a replacement of the 1986 Act. It was passed in the lower house on 20th December, 2018.

The Bill implements an analytical system of bodies possessing a gamut of powers, thus providing for possibly all the available mechanism of grievance redressal to a potential aggrieved. It seeks to set up Central Consumer Protection Authority for promoting, protecting and enforcing consumer rights. It also seeks to provide Consumer Dispute Redressal Commission as quasi-judicial bodies at national, state and district levels for adjudicating consumer complaints. The members of this commission shall be appointed by the central government.

The Bill specifies that the commission will be headed by a “President” and will comprise of other members. According to the Bill, the central government has the power of deciding the qualifications of the president and the other members but does not specify anything regarding the minimum judicial qualifications. This is in contrast to the existing 1986Act, which states that the District, the State and the National Commission will be headed by the person qualified to be a District judge, a High Court judge or a Supreme Court judge respectively. There were also minimum qualifications specified about the members of the commission.

The Bill establishes Consumer Protection Council [CPC] to render advice on promotion and protection of consumer rights. These councils are to be headed by ministers-in-charge of Consumer Affairs at central and state level, respectively and by the District Collector at the district level. An advisory role being given to a body headed by a Minister or District Collector (who are implementing authorities) is something bizarre. Moreover, whom the CPCs will render advice to is not stated in the Bill. Such councils were also provided in the 1986 Act but their role was to protect and promote the consumer rights (which were not advisory roles). Now, the Bill establishes Central Consumer Protection Authority [CCPA] which may issue safety notices, prevent unfair practices, impose penalties for false and misleading advertisements, etc.

The Bill envisages provisions for product liability on account of harm caused to consumers due to defective product or by deficiency in service. The CCPA has the authority to direct the removal of a misleading advertisement, take punitive action such as imprisonment or imposing penalties on the manufacturer, advertiser, seller or service provider, and even bar a person from endorsing the product or service for a year. The legislature was keen on introducing this after the Maggi noodles controversy. Introduction of such criminal prosecution for misleading advertisement will positively compel people to release advertisement with caution and within contours of prescribed legal framework. Further, six contract terms have also been listed which may be held as unfair and three types of practices have been added to the list of unfair trade practices. Statements have also been prescribed on contests and lotteries that may be notified as not falling under the ambit of unfair trade practices.

The Bill seeks to widen the scope of pecuniary jurisdiction of the District Commissions from 20 lakhs to 1 crore, the State Commission from 1 crore to 10 crores and that of National Commissions above 10 crores. Additionally, the Bill also provides for resolution of disputes by resorting to alternative mechanism like Mediation, the provision of which was absent in the Act. The Bill also increases penalties for people who do not comply with the orders of the commissions. They may face imprisonment up to three years or a fine not less than Rs 25000, extendable to one lakh, or both.

In summation, by introducing specific provisions governing pressing issues like misleading advertisements, creation of a regulator, mediation and product liability, for the first time, the Bill has done fairly well. It aspires to substantially reduce the time taken for adjudication of disputes by Consumer Forums. However, certain issues like a definition of endorsers, design defects under product liability and overlapping jurisdiction of CCPA and Consumer Forums for grievances affecting a class of consumers are some areas, that needs to be revisited. The most promising change that the Bill seeks to bring about is to extend its scope to online modes of transactions such as teleshopping and electronic commerce. With the growing popularity of e-commerce websites, it is only essential that the central legislation dealing with consumer grievance takes into account all possible modes through which a consumer may be wronged. While the Bill is definitely a step in the right direction and shall strengthen consumer rights and sentiment in the foreseeable future, it is yet to see the light of day.

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